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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SITE Centers Corp | NYSE:SITC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.20 | -1.46% | 13.49 | 13.82 | 13.23 | 13.82 | 2,706,023 | 21:00:07 |
SITE Centers Corp. (NYSE: SITC) today announced operating results for the quarter ended June 30, 2020.
“Despite unprecedented operating conditions, second quarter results demonstrate the durability of our assets with 100% of our properties operational and over 90% of our tenants currently open for business,” commented David R. Lukes, President and Chief Executive Officer. “Our agreement with Blackstone to unwind our BRE DDR joint ventures further improves our Company’s financial position and outlook with substantial liquidity, no material near-term maturities, and no material capital commitments.”
Results for the Quarter
Significant Quarter and Recent Activity
Key Quarterly Operating Results
COVID-19 Update
BRE DDR Joint Ventures
The closings of the two transactions are not conditioned on one another and each transaction is expected to close as soon as all applicable conditions have been satisfied including receipt of lender consents.
DDR BRE Acquisition Properties
Center
MSA
Location
ST
SITE Own %
JV
Owned GLA
Total GLA
ABR PSF
Concourse Village
Miami-Fort Lauderdale-West Palm Beach, FL
Jupiter
FL
5%
BREDDR IV
134
134
$17.34
Millenia Crossing
Orlando-Kissimmee-Sanford, FL
Orlando
FL
5%
BREDDR IV
100
100
$26.30
Echelon Village Plaza
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Voorhees
NJ
0%
BREDDR IV
89
89
$20.58
The Hub
New York-Newark-Jersey City, NY-NJ-PA
Hempstead
NY
5%
BREDDR IV
249
249
$12.40
Southmont Plaza
Allentown-Bethlehem-Easton, PA-NJ
Easton
PA
5%
BREDDR IV
251
386
$16.51
Ashbridge Square
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Downingtown
PA
5%
BREDDR IV
386
386
$8.87
Larkin's Corner
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Boothwyn
PA
0%
BREDDR IV
225
225
$9.73
Midtowne Park
Greenville-Anderson-Mauldin, SC
Anderson
SC
5%
BREDDR III
167
174
$9.83
White Oak Village
Richmond, VA
Richmond
VA
5%
BREDDR III
432
956
$15.99
About SITE Centers Corp.
SITE Centers is an owner and manager of open-air shopping centers that provide a highly-compelling shopping experience and merchandise mix for retail partners and consumers. The Company is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol SITC. Additional information about the Company is available at https://www.sitecenters.com. To be included in the Company’s e-mail distributions for press releases and other investor news, please click here.
Conference Call and Supplemental Information
The Company will hold its quarterly conference call today at 8:00 a.m. Eastern Time. To participate with access to the slide presentation, please visit the Investor Relations portion of SITE's website, ir.sitecenters.com, or for audio only, dial 888-317-6003 (U.S.), 866-284-3684 (Canada) or 412-317-6061 (international) using pass code 2698100 at least ten minutes prior to the scheduled start of the call. The call will also be webcast and available in a listen-only mode on SITE Centers’ web site at ir.sitecenters.com. If you are unable to participate during the live call, a replay of the conference call will also be available at ir.sitecenters.com for further review. You may also access the telephone replay by dialing 877-344-7529 (U.S.), 855-669-9658 (Canada) or 412-317-0088 (international) using passcode 10146103 through August 28, 2020. A copy of the Company’s Supplemental package is available on the Company’s website.
Non-GAAP Measures
Funds from Operations (“FFO”) is a supplemental non-GAAP financial measure used as a standard in the real estate industry and is a widely accepted measure of real estate investment trust (“REIT”) performance. Management believes that both FFO and Operating FFO provide additional indicators of the financial performance of a REIT. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.
FFO is generally defined and calculated by the Company as net income (loss) (computed in accordance with GAAP), adjusted to exclude (i) preferred share dividends, (ii) gains and losses from disposition of real estate property and related investments, which are presented net of taxes, (iii) impairment charges on real estate property and related investments, including reserve adjustments of preferred equity interests, (iv) gains and losses from changes in control and (v) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the definition of FFO provided by NAREIT. The Company calculates Operating FFO as FFO excluding certain non-operating charges, income and gains. Operating FFO is useful to investors as the Company removes non-comparable charges, income and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio. Other real estate companies may calculate FFO and Operating FFO in a different manner.
The Company also uses net operating income (“NOI”), a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.
The Company presents NOI information herein on a same store basis or “SSNOI.” The Company defines SSNOI as property revenues less property-related expenses, which exclude straight-line rental income (including reimbursements) and expenses, lease termination income, management fee expense, fair market value of leases and expense recovery adjustments. SSNOI includes assets owned in comparable periods (15 months for quarter comparisons). In addition, SSNOI is presented both including and excluding activity associated with development and major redevelopment. SSNOI excludes all non-property and corporate level revenue and expenses. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI at its effective ownership interest provides investors with additional information regarding the operating performances of comparable assets because it excludes certain non-cash and non-comparable items as noted above.
FFO, Operating FFO, NOI and SSNOI do not represent cash generated from operating activities in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should not be considered as alternatives to net income computed in accordance with GAAP, as indicators of the Company’s operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures have been provided herein.
Safe Harbor
SITE Centers Corp. considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, the impact of the outbreak of COVID-19 on the Company’s ability to manage its properties and finance its operations and on tenants’ ability to operate their businesses, generate sales and meet their financial obligations, including the obligation to pay rent; the Company’s ability to pay dividends; local conditions such as the supply of, and demand for, retail real estate space in the area; the impact of e-commerce; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant and the impact of any such event on rental income from other tenants and our properties; redevelopment and construction activities may not achieve a desired return on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; impairment charges; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements and the Company’s ability to satisfy conditions to the completion of these arrangements; valuation and risks relating to our joint venture and preferred equity investments; the termination of any joint venture arrangements or arrangements to manage real property and the ability to satisfy conditions of such terminations; property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from extreme weather conditions or natural disasters in locations where we own properties, and the ability to estimate accurately the amounts thereof; sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions or natural disasters; any change in strategy and our ability to maintain REIT status; and the finalization of the financial statements for the period ended June 30, 2020. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company's most recent reports on Form 10-K and Form 10-Q. The impacts of the COVID-19 pandemic may also exacerbate the risks described therein, any of which could have a material effect on the Company. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
SITE Centers Corp.
Income Statement: Consolidated Interests
in thousands, except per share
2Q20
2Q19
6M20
6M19
Revenues:
Rental income (1)
$98,079
$112,274
$210,608
$224,495
Other property revenues
181
1,177
1,734
2,646
98,260
113,451
212,342
227,141
Expenses:
Operating and maintenance
16,519
18,743
34,999
37,584
Real estate taxes
17,348
17,798
35,005
35,541
33,867
36,541
70,004
73,125
Net operating income
64,393
76,910
142,338
154,016
Other income (expense):
Fee income (2)
9,311
15,206
24,539
32,538
Interest income
3,550
4,521
7,035
9,042
Interest expense
(19,811)
(21,087)
(40,398)
(42,813)
Depreciation and amortization
(40,873)
(40,060)
(83,866)
(82,668)
General and administrative (3)
(13,502)
(14,932)
(24,878)
(29,044)
Other (expense) income, net (4)
(612)
(85)
(18,021)
68
Impairment charges
0
0
0
(620)
Income before earnings from JVs and other
2,456
20,473
6,749
40,519
Equity in net (loss) income of JVs
(1,513)
1,791
658
2,834
Reserve of preferred equity interests
(4,878)
(4,634)
(22,935)
(5,733)
(Loss) gain on sale of joint venture interest
(128)
0
45,553
0
Gain on disposition of real estate, net
2
213
775
16,590
Tax expense
(342)
(306)
(575)
(578)
Net (loss) income
(4,403)
17,537
30,225
53,632
Non-controlling interests
(210)
(260)
(505)
(565)
Net (loss) income SITE Centers
(4,613)
17,277
29,720
53,067
Preferred dividends
(5,133)
(8,383)
(10,266)
(16,766)
Net (loss) income Common Shareholders
($9,746)
$8,894
$19,454
$36,301
Weighted average shares – Basic – EPS
193,170
180,551
193,448
180,548
Assumed conversion of diluted securities
0
658
0
826
Weighted average shares – Basic & Diluted – EPS
193,170
181,209
193,448
181,374
Earnings per common share – Basic
$(0.05)
$0.05
$0.10
$0.20
Earnings per common share – Diluted
$(0.05)
$0.05
$0.10
$0.20
(1)
Rental income:
Minimum rents
$77,040
$74,877
$151,681
$149,838
Ground lease minimum rents
5,432
5,023
10,900
10,041
Recoveries
27,340
27,987
54,539
55,448
Uncollectible revenue
(13,241)
768
(13,730)
327
Percentage and overage rent
363
910
964
2,286
Ancillary and other rental income
981
2,679
3,065
3,938
Lease termination fees
164
30
3,189
2,617
(2)
Fee Income:
JV and other fees
3,780
7,245
11,378
15,122
RVI fees
5,321
6,446
11,395
13,002
RVI disposition fees
210
1,515
1,766
2,614
RVI refinancing fee
0
0
0
1,800
(3)
Mark-to-market adjustment (PRSUs)
(261)
(501)
1,906
(1,400)
(4)
Other income (expense), net
Transaction and other expense, net
(612)
1
(835)
164
Debt extinguishment costs, net
0
(86)
(17,186)
(96)
SITE Centers Corp.
Reconciliation: Net (Loss) Income to FFO and Operating FFO and Other Financial Information
in thousands, except per share
2Q20
2Q19
6M20
6M19
Net (loss) income attributable to Common Shareholders
($9,746)
$8,894
$19,454
$36,301
Depreciation and amortization of real estate
39,456
38,638
81,075
79,595
Equity in net loss (income) of JVs
1,513
(1,791)
(658)
(2,834)
JVs' FFO
2,998
7,696
10,141
15,671
Non-controlling interests
0
28
28
56
Impairment of real estate
0
0
0
620
Reserve of preferred equity interests
4,878
4,634
22,935
5,733
Loss (gain) on sale of joint venture interest
128
0
(45,553)
0
Gain on disposition of real estate, net
(2)
(213)
(775)
(16,590)
FFO attributable to Common Shareholders
$39,225
$57,886
$86,647
$118,552
RVI disposition and refinancing fees
(210)
(1,515)
(1,766)
(4,414)
Mark-to-market adjustment (PRSUs)
261
501
(1,906)
1,400
Debt extinguishment, transaction, net
612
99
18,021
121
Joint ventures - debt extinguishment, other
0
32
42
46
Total non-operating items, net
663
(883)
14,391
(2,847)
Operating FFO attributable to Common Shareholders
$39,888
$57,003
$101,038
$115,705
Weighted average shares & units – Basic: FFO & OFFO
193,311
180,693
193,589
180,691
Assumed conversion of dilutive securities
0
658
0
826
Weighted average shares & units – Diluted: FFO & OFFO
193,311
181,351
193,589
181,517
FFO per share – Basic
$0.20
$0.32
$0.45
$0.66
FFO per share – Diluted
$0.20
$0.32
$0.45
$0.65
Operating FFO per share – Basic
$0.21
$0.32
$0.52
$0.64
Operating FFO per share – Diluted
$0.21
$0.31
$0.52
$0.64
Common stock dividends declared, per share
$0.00
$0.20
$0.20
$0.40
Capital expenditures (SITE Centers share):
Development and redevelopment costs
5,408
14,537
14,142
21,387
Maintenance capital expenditures
5,340
4,429
7,595
5,827
Tenant allowances and landlord work
5,208
6,696
15,591
15,006
Leasing commissions
658
1,240
1,626
2,083
Construction administrative costs (capitalized)
640
934
1,480
1,560
Certain non-cash items (SITE Centers share):
Straight-line rent
213
516
(1,129)
832
Straight-line fixed CAM
149
185
298
385
Amortization of (above)/below-market rent, net
1,148
1,074
2,550
2,270
Straight-line rent expense
(53)
(415)
(122)
(835)
Debt fair value and loan cost amortization
(1,243)
(1,140)
(2,353)
(2,262)
Capitalized interest expense
271
279
558
550
Stock compensation expense
(2,555)
(2,713)
(2,379)
(5,467)
Non-real estate depreciation expense
(1,351)
(1,372)
(2,668)
(2,930)
SITE Centers Corp.
Balance Sheet: Consolidated Interests
$ in thousands
At Period End
2Q20
4Q19
Assets:
Land
$881,581
$881,397
Buildings
3,302,821
3,277,440
Fixtures and tenant improvements
498,999
491,312
4,683,401
4,650,149
Depreciation
(1,358,535)
(1,289,148)
3,324,866
3,361,001
Construction in progress and land
56,203
59,663
Real estate, net
3,381,069
3,420,664
Investments in and advances to JVs
84,257
181,906
Investment in and advances to affiliate (1)
190,280
190,105
Receivable – preferred equity interests, net
89,049
112,589
Cash
128,486
16,080
Restricted cash
198
3,053
Notes receivable
0
7,541
Receivables and straight-line (2)
81,184
60,594
Intangible assets, net (3)
71,740
79,813
Other assets, net
22,268
21,277
Total Assets
4,048,531
4,093,622
Liabilities and Equity:
Revolving credit facilities
285,000
5,000
Unsecured debt
1,448,536
1,647,963
Unsecured term loan
99,548
99,460
Secured debt
53,765
94,874
1,886,849
1,847,297
Dividends payable
5,133
44,036
Other liabilities (4)
196,745
220,811
Total Liabilities
2,088,727
2,112,144
Preferred shares
325,000
325,000
Common shares
19,400
19,382
Paid-in capital
5,704,719
5,700,400
Distributions in excess of net income
(4,085,559)
(4,066,099)
Deferred compensation
5,434
7,929
Other comprehensive income
188
(491)
Common shares in treasury at cost
(12,669)
(7,707)
Non-controlling interests
3,291
3,064
Total Equity
1,959,804
1,981,478
Total Liabilities and Equity
$4,048,531
$4,093,622
(1)
Preferred investment in RVI
$190,000
$190,000
Receivable from RVI
280
105
(2)
SL rents (including fixed CAM), net
31,363
31,909
(3)
Operating lease right of use assets
21,588
$21,792
(4)
Operating lease liabilities
40,636
40,725
Below-market leases, net
44,437
46,961
SITE Centers Corp.
Reconciliation of Net Income Attributable to SITE to Same Store NOI
$ in thousands
2Q20
2Q19
2Q20
2Q19
SITE Centers at 100%
At SITE Centers Share
(Non-GAAP)
GAAP Reconciliation:
Net (loss) income attributable to SITE Centers
($4,613)
$17,277
($4,613)
$17,277
Fee income
(9,311)
(15,206)
(9,311)
(15,206)
Interest income
(3,550)
(4,521)
(3,550)
(4,521)
Interest expense
19,811
21,087
19,811
21,087
Depreciation and amortization
40,873
40,060
40,873
40,060
General and administrative
13,502
14,932
13,502
14,932
Other expense, net
612
85
612
85
Equity in net loss (income) of joint ventures
1,513
(1,791)
1,513
(1,791)
Reserve of preferred equity interests
4,878
4,634
4,878
4,634
Tax expense
342
306
342
306
Loss on sale of joint venture interest
128
0
128
0
Gain on disposition of real estate, net
(2)
(213)
(2)
(213)
Income from non-controlling interests
210
260
210
260
Consolidated NOI
64,393
76,910
64,393
76,910
SITE Centers' consolidated JV
0
0
(404)
(434)
Consolidated NOI, net of non-controlling interests
64,393
76,910
63,989
76,476
Net (loss) income from unconsolidated joint ventures
(13,053)
1,153
(1,674)
1,571
Interest expense
15,100
25,286
2,985
4,395
Depreciation and amortization
23,575
36,969
4,219
6,004
Impairment charges
1,520
0
304
0
Preferred share expense
4,554
5,484
227
274
Other expense, net
2,941
5,885
620
1,026
(Gain) loss on disposition of real estate, net
(4)
321
4
30
Unconsolidated NOI
$34,633
$75,098
6,685
13,300
Total Consolidated + Unconsolidated NOI
70,674
89,776
Less: Non-Same Store NOI adjustments
(899)
(4,543)
Total SSNOI including redevelopment
69,775
85,233
Less: Redevelopment Same Store NOI adjustments
(5,257)
(5,450)
Total SSNOI excluding redevelopment
$64,518
$79,783
SSNOI % Change including redevelopment
(18.1%)
SSNOI % Change excluding redevelopment
(19.1%)
SITE Centers Corp.
Reconciliation of Net Income Attributable to SITE to Same Store NOI
$ in thousands
6M20
6M19
6M20
6M19
SITE Centers at 100%
At SITE Centers Share
(Non-GAAP)
GAAP Reconciliation:
Net income attributable to SITE Centers
$29,720
$53,067
$29,720
$53,067
Fee income
(24,539)
(32,538)
(24,539)
(32,538)
Interest income
(7,035)
(9,042)
(7,035)
(9,042)
Interest expense
40,398
42,813
40,398
42,813
Depreciation and amortization
83,866
82,668
83,866
82,668
General and administrative
24,878
29,044
24,878
29,044
Other expense (income), net
18,021
(68)
18,021
(68)
Impairment charges
0
620
0
620
Equity in net income of joint ventures
(658)
(2,834)
(658)
(2,834)
Reserve of preferred equity interests
22,935
5,733
22,935
5,733
Tax expense
575
578
575
578
Gain on sale of joint venture interest
(45,553)
0
(45,553)
0
Gain on disposition of real estate, net
(775)
(16,590)
(775)
(16,590)
Income from non-controlling interests
505
565
505
565
Consolidated NOI
142,338
154,016
142,338
154,016
SITE Centers' consolidated JV
0
0
(881)
(878)
Consolidated NOI, net of non-controlling interests
142,338
154,016
141,457
153,138
Net (loss) income from unconsolidated joint ventures
(31,707)
7,819
307
2,345
Interest expense
32,855
50,942
6,314
8,824
Depreciation and amortization
53,679
76,473
9,415
12,171
Impairment charges
33,240
12,267
1,890
2,453
Preferred share expense
9,084
10,943
454
547
Other expense, net
7,598
11,341
1,556
2,022
Gain on disposition of real estate, net
(8,910)
(15,645)
(1,735)
(1,525)
Unconsolidated NOI
$95,839
$154,140
18,201
26,837
Total Consolidated + Unconsolidated NOI
159,658
179,975
Less: Non-Same Store NOI adjustments
(5,404)
(12,761)
Total SSNOI including redevelopment
154,254
167,214
Less: Redevelopment Same Store NOI adjustments
(10,497)
(11,003)
Total SSNOI excluding redevelopment
$143,757
$156,211
SSNOI % Change including redevelopment
(7.8%)
SSNOI % Change excluding redevelopment
(8.0%)
View source version on businesswire.com: https://www.businesswire.com/news/home/20200728005273/en/
Conor Fennerty, EVP and Chief Financial Officer 216-755-5500
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