Highlights
- Funds From Operations (FFO) was $0.10 per diluted share for the
first quarter of 2010.
- Cash and availability under the credit facility was approximately
$72 million at quarter end.
- 23 new leases and renewals for 345,600 square feet were executed
during the quarter.
- All remaining 2010 debt maturities were refinanced or extended.
- Operating retail portfolio was 90% leased at quarter end.
INDIANAPOLIS--(BUSINESS WIRE)--
Kite Realty Group Trust (NYSE: KRG) (the “Company”) today announced
results for its first quarter ended March 31, 2010. Financial statements
and exhibits attached to this release include results for the three
months ended March 31, 2010 and 2009.
Financial and Operating Results
For the three months ended March 31, 2010, funds from operations (FFO),
a widely accepted supplemental measure of REIT performance established
by the National Association of Real Estate Investment Trusts, was $7.1
million for the Kite Portfolio, or $0.10 per diluted share. In the first
quarter of 2009, FFO for the Kite Portfolio was $8.3 million, or $0.20
per diluted share. The decrease in diluted FFO per share between years
was primarily a result of the dilution from the issuance of 28.8 million
shares in the Company’s May 2009 common share offering as well as lower
gains on sales of land and outlot parcels of $0.6 million.
FFO allocable to the Company for the first quarter of 2010 was $6.3
million compared to $6.7 million for the same period of the prior year.
The Company’s total revenue for the first quarter of 2010 was $25.6
million, down from $30.2 million for the same period in 2009. This
decrease was primarily a result of lower construction activity ($4.3
million) and lower gains on sales of land and outlot parcels ($0.6
million). The Company recorded a net loss of $1.1 million for the first
quarter of 2010, compared to net income of $0.7 million in the prior
year. The decline reflects higher depreciation charges of $1.1 million,
lower construction activity and lower gains on land and outlot sales.
John A. Kite, Kite Realty Group’s Chairman and Chief Executive Officer
said, “We posted another strong quarter of leasing activity, and
operating results in the quarter met our expectations. The leasing
environment continues to improve, and we are diligently working to
capitalize on opportunities. We remain focused on further strengthening
our balance sheet, increasing occupancy in our operating portfolio and
completing our in-process developments.”
Operating Portfolio
As of March 31, 2010, the Company owned interests in 51 retail operating
properties totaling approximately 8.4 million square feet. The owned
gross leasable area (“GLA”) in the Company’s retail operating portfolio
was 90.0% leased as of March 31, 2010, compared to 90.1% leased as of
the end of the prior quarter.
In addition, the Company owns four commercial operating properties
totaling approximately 499,200 square feet. As of March 31, 2010, the
owned net rentable area of the commercial operating portfolio was
unchanged from the prior quarter at 96.2% leased. For the combined
retail and commercial operating portfolio, the leased percentage was
90.6% as of March 31, 2010, compared to 90.7% at the end of the prior
quarter.
On a same property basis, the leased percentage of the Company’s 52
operating properties was 90.6% at March 31, 2010 and 91.7% at March 31,
2009. Same property net operating income for these properties decreased
2.9% in the first quarter of 2010 compared to the same period in the
prior year. Same store NOI growth will be positively impacted in the
latter half of 2010 by rent from recently executed junior anchor leases.
Leasing Activities
During the first quarter of 2010, the Company executed 23 new and
renewal leases totaling 345,600 square feet. New leases were signed with
12 tenants for approximately 53,100 square feet of GLA and represent a
5.4% cash rent spread. A total of 11 leases for 292,500 square feet were
renewed during the quarter. Rental rates for these renewals were
approximately 0.3% below previous rents. The renewal production includes
the 237,500 square foot lease with Macy’s at Glendale Town Center.
The Company is currently in various stages of negotiations for 40 new
and renewal leases with tenants for a total of approximately 200,000
square feet.
Development Activities
As of March 31, 2010, the Company owned interests in two projects under
construction that are expected to total approximately 297,700 owned
square feet. The total estimated cost of these projects is approximately
$87 million, of which approximately $78million had been incurred
as of March 31, 2010. The Company also has five properties in
redevelopment representing a total of approximately 493,800 square feet.
Financing Activities
As previously announced, the Company has satisfied all of its 2010 debt
maturities. During the quarter, the Company completed the following
financing activities:
- The South Elgin Commons loan was reduced to a balance of $9.4 million.
The maturity date was extended to September 2013 at an interest rate
of LIBOR plus 325 basis points, subject to a LIBOR floor of 2.0%.
-
The construction loan on Cobblestone Plaza was reduced to a balance of
$28 million and the maturity date was extended to February 2013 at an
interest rate of LIBOR plus 350 basis points.
-
The Shops at Rivers Edge loan was reduced to a balance of $14.3
million and the maturity date was extended to February 2013 at an
interest rate of LIBOR plus 400 basis points.
These loan extensions were completed with an average 9% paydown of the
outstanding balances at the date of the extensions.
Distributions
On March 16, 2010, the Board of Trustees declared a quarterly cash
distribution of $0.06 per common share for the quarter ended March 31,
2010 to shareholders of record as of April 7, 2010. This distribution
was paid on April 16, 2010. The Board of Trustees continues to evaluate
current economic and market conditions and anticipates declaring a
quarterly cash distribution for the quarter ending June 30, 2010 later
in the second quarter.
FFO Guidance
The Company is reaffirming its earnings and FFO guidance for the year
ending December 31, 2010 in a range $0.42 to $0.47 per diluted share.
Following is a reconciliation of net income per common share to diluted
FFO per share:
|
Guidance Range for 2010
|
|
Low
|
|
High
|
| | | |
|
|
Diluted net income per share
| |
$0.00
| |
$0.05
|
| | | |
|
|
Depreciation and amortization of consolidated and unconsolidated
entities
| |
0.42
|
|
0.42
|
|
Diluted FFO per share
| |
$0.42
|
|
$0.47
|
| | | |
|
Funds From Operations
The Company’s business is the ownership, operation and management of
real estate. It believes that Funds From Operations (FFO) is helpful to
investors when measuring operating performance because it excludes
various items that are considered in the determination of net income
that do not relate to or are not indicative of operating performance,
such as gains or losses from sales of operating properties and
depreciation and amortization, which can make periodic and peer analyses
of operating performance more difficult. A reconciliation of net income
to FFO is included in the attached table.
Earnings Conference Call
Management will host a conference call on Thursday, May 6, 2010 at 1:00
p.m. EDT to discuss financial and operating results for the quarter
ended March 31, 2010. A live webcast of the conference call will be
available online on the Company’s corporate website at www.kiterealty.com.
The dial-in numbers are (800) 299-9086 for domestic callers and (617)
786-2903 for international callers (passcode 39183577). In addition, a
telephonic replay of the call will be available until August 5, 2010.
The replay dial-in telephone numbers are (888) 286-8010 for domestic
callers and (617) 801-6888 for international callers (passcode 39636268).
About Kite Realty Group Trust
Kite Realty Group Trust is a full-service, vertically integrated real
estate investment trust engaged in the ownership, operation, management,
leasing, acquisition, construction, expansion and development of high
quality neighborhood and community shopping centers in selected growth
markets in the United States. The Company owns interests in a portfolio
of operating retail properties, retail properties under development,
operating commercial properties, a related parking garage, and parcels
of land that may be used for future development of retail or commercial
properties.
Safe Harbor
This annual report contains certain statements that are not historical
fact and may constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results of
the Company to differ materially from historical results or from any
results expressed or implied by such forward-looking statements,
including, without limitation: national and local economic, business,
real estate and other market conditions, particularly in light of the
current recession; financing risks, including the availability of and
costs associated with sources of liquidity; the Company’s ability to
refinance, or extend the maturity dates of, its indebtedness; the level
and volatility of interest rates; the financial stability of tenants,
including their ability to pay rent and the risk of tenant bankruptcies;
the competitive environment in which the Company operates; acquisition,
disposition, development and joint venture risks; property ownership and
management risks; the Company’s ability to maintain its status as a real
estate investment trust (“REIT”) for federal income tax purposes;
potential environmental and other liabilities; impairment in the value
of real estate property the Company owns; risks related to the
geographical concentration of our properties in Indiana, Florida and
Texas; and other factors affecting the real estate industry generally.
The Company refers you the documents filed by the Company from time to
time with the Securities and Exchange Commission, specifically the
section titled “Business Risk Factors” in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2009, which discuss these and
other factors that could adversely affect the Company’s results. The
Company undertakes no obligation to publicly update or revise these
forward-looking statements (including the FFO and net income estimates),
whether as a result of new information, future events or otherwise.
|
|
Kite Realty Group Trust Condensed Consolidated Balance Sheets (Unaudited) |
|
| | |
| | |
| | March 31,
2010 | | | December 31,
2009 | |
| Assets: | | | | | | | | |
|
Investment properties, at cost:
| | | | | | | | |
|
Land
| |
$
|
225,757,328
| | |
$
|
226,506,781
| |
|
Land held for development
| | |
27,546,315
| | | |
27,546,315
| |
|
Buildings and improvements
| | |
748,796,271
| | | |
736,027,845
| |
|
Furniture, equipment and other
| | |
5,066,184
| | | |
5,060,233
| |
|
Construction in progress
| | |
174,450,987
| | | |
176,689,227
| |
| | |
1,181,617,085
| | | |
1,171,830,401
| |
|
Less: accumulated depreciation
| | |
(133,897,398
|
)
| | |
(127,031,144
|
)
|
| | |
1,047,719,687
| | | |
1,044,799,257
| |
| | | | | | | |
|
|
Cash and cash equivalents
| | |
14,573,549
| | | |
19,958,376
| |
|
Tenant receivables, including accrued straight-line rent of
$8,653,383 and $8,570,069, respectively, net of allowance for
uncollectible accounts
| | |
16,934,791
| | | |
18,537,031
| |
|
Other receivables
| | |
6,673,716
| | | |
9,326,475
| |
|
Investments in unconsolidated entities, at equity
| | |
10,799,782
| | | |
10,799,782
| |
|
Escrow deposits
| | |
14,280,004
| | | |
11,377,408
| |
|
Deferred costs, net
| | |
21,453,876
| | | |
21,509,070
| |
|
Prepaid and other assets
| | |
5,792,437
| | | |
4,378,045
| |
| Total Assets | |
$
|
1,138,227,842
| | |
$
|
1,140,685,444
| |
| | | | | | | |
|
| Liabilities and Equity: | | | | | | | | |
|
Mortgage and other indebtedness
| |
$
|
661,750,296
| | |
$
|
658,294,513
| |
|
Accounts payable and accrued expenses
| | |
33,641,574
| | | |
32,799,351
| |
|
Deferred revenue and other liabilities
| | |
18,424,897
| | | |
19,835,438
| |
| Total Liabilities | | |
713,816,767
| | | |
710,929,302
| |
|
Commitments and contingencies
| | | | | | | | |
|
Redeemable noncontrolling interests in the Operating Partnership
| | |
46,742,082
| | | |
47,307,115
| |
| Equity: | | | | | | | | |
| Kite Realty Group Trust Shareholders’ Equity: | | | | | | | | |
|
Preferred Shares, $.01 par value, 40,000,000 shares authorized, no
shares issued and outstanding
| | |
—
| | | |
—
| |
Common Shares, $.01 par value, 200,000,000 shares authorized
63,200,556 shares and 63,062,083 shares issued and outstanding at
March 31, 2010 and December 31, 2009, respectively
| | |
632,006
| | | |
630,621
| |
|
Additional paid in capital
| | |
450,021,883
| | | |
449,863,390
| |
|
Accumulated other comprehensive loss
| | |
(5,763,256
|
)
| | |
(5,802,406
|
)
|
|
Accumulated deficit
| | |
(74,480,761
|
)
| | |
(69,613,763
|
)
|
| Total Kite Realty Group Trust Shareholders’ Equity | | |
370,409,872
| | | |
375,077,842
| |
| Noncontrolling Interests | | |
7,259,121
| | | |
7,371,185
| |
| Total Equity | | |
377,668,993
| | | |
382,449,027
| |
| Total Liabilities and Equity | |
$
|
1,138,227,842
| | |
$
|
1,140,685,444
| |
| | | | | | | |
|
|
|
Kite Realty Group Trust Condensed Consolidated Statements of Operations For the Three Months Ended March 31, 2010 and 2009 (Unaudited) |
|
| | |
| | Three Months Ended March 31, | |
| | 2010 | |
| 2009 | |
| Revenue: | | | | | | | | |
|
Minimum rent
| |
$
|
17,735,211
| | |
$
|
17,934,500
| |
|
Tenant reimbursements
| | |
4,841,261
| | | |
4,538,087
| |
|
Other property related revenue
| | |
1,099,812
| | | |
1,590,004
| |
|
Construction and service fee revenue
| | |
1,879,350
| | | |
6,148,995
| |
| Total revenue | | |
25,555,634
| | | |
30,211,586
| |
| Expenses: | | | | | | | | |
|
Property operating
| | |
4,574,352
| | | |
5,275,713
| |
|
Real estate taxes
| | |
3,376,314
| | | |
2,735,650
| |
|
Cost of construction and services
| | |
1,758,318
| | | |
5,559,316
| |
|
General, administrative, and other
| | |
1,375,970
| | | |
1,343,080
| |
|
Depreciation and amortization
| | |
8,544,855
| | | |
7,461,062
| |
| Total expenses | | |
19,629,809
| | | |
22,374,821
| |
| | | | | | | |
|
| Operating income | | |
5,925,825
| | | |
7,836,765
| |
|
Interest expense
| | |
(7,096,863
|
)
| | |
(6,776,508
|
)
|
|
Income tax expense of taxable REIT subsidiary
| | |
(25,836
|
)
| | |
(37,952
|
)
|
|
Income from unconsolidated entities
| | |
—
| | | |
31,500
| |
|
Other income, net
| | |
65,750
| | | |
48,884
| |
| (Loss) income from continuing operations | | |
(1,131,124
|
)
| | |
1,102,689
| |
| Loss from discontinued operations | | |
—
| | | |
(216,711
|
)
|
| Consolidated net (loss) income | | |
(1,131,124
|
)
| | |
885,978
| |
| Net loss (income) attributable to noncontrolling interests | | |
56,444
| | | |
(184,736
|
)
|
| Net (loss) income attributable to Kite Realty Group Trust | |
$
|
(1,074,680
|
)
| |
$
|
701,242
| |
| | | | | | | |
|
| (Loss) income per common share – basic and diluted | | | | | | | | |
|
(Loss) income from continuing operations attributable to Kite Realty
Group Trust common shareholders
| |
$
|
(0.02
|
)
| |
$
|
0.03
| |
|
Loss from discontinued operations attributable to Kite Realty Group
Trust common shareholders
| | |
—
| | | |
(0.01
|
)
|
|
Net (loss) income attributable to Kite Realty Group Trust common
shareholders
| |
$
|
(0.02
|
)
| |
$
|
0.02
| |
| | | | | | | |
|
| Weighted average common shares outstanding - basic | | |
63,121,498
| | | |
34,184,305
| |
| Weighted average common shares outstanding - diluted | | |
63,121,498
| | | |
34,220,160
| |
| Dividends declared per common share | |
$
|
0.0600
| | |
$
|
0.1525
| |
| | | | | | | |
|
| Net (loss) income attributable to Kite Realty Group Trust common
shareholders: | | | | | | | | |
| (Loss) income from continuing operations | |
$
|
(1,074,680
|
)
| |
$
|
876,778
| |
| Discontinued operations | | |
—
| | | |
(175,536
|
)
|
| Net (loss) income attributable to Kite Realty Group Trust common
shareholders | |
$
|
(1,074,680
|
)
| |
$
|
701,242
| |
| | | | | | | |
|
|
|
Kite Realty Group Trust Funds From Operations For the Three Months Ended March 31, 2010 and 2009 (Unaudited) |
|
| | |
| | Three Months Ended March 31, | |
| | 2010 | |
| 2009 | |
|
Consolidated net (loss) income
| |
$
|
(1,131,124
|
)
| |
$
|
885,978
| |
|
Less net income attributable to noncontrolling interests in
properties
| | |
(79,089
|
)
| | |
(20,247
|
)
|
|
Add depreciation and amortization of consolidated entities, net of
noncontrolling interests
| | |
8,322,513
| | | |
7,380,243
| |
|
Add depreciation and amortization of unconsolidated entities
| | |
—
| | | |
52,136
| |
|
Funds From Operations of the Kite Portfolio1 | | |
7,112,300
| | | |
8,298,110
| |
|
Less redeemable noncontrolling interests in Funds From Operations
| | |
(796,578
|
)
| | |
(1,576,641
|
)
|
|
Funds From Operations allocable to the Company1 | |
$
|
6,315,722
| | |
$
|
6,721,469
| |
| | | | | | | |
|
|
Basic and Diluted FFO per share of the Kite Portfolio
| |
$
|
0.10
| | |
$
|
0.20
| |
| | | | | | | |
|
|
Basic weighted average Common Shares outstanding
| | |
63,121,498
| | | |
34,184,305
| |
|
Diluted weighted average Common Shares outstanding
| | |
63,317,031
| | | |
34,220,160
| |
|
Basic weighted average Common Shares and Units outstanding
| | |
71,095,552
| | | |
42,236,784
| |
|
Diluted weighted average Common Shares and Units outstanding
| | |
71,291,084
| | | |
42,272,639
| |
____________________
|
|
1
|
|
|
|
“Funds From Operations of the Kite Portfolio” measures 100% of the
operating performance of the Operating Partnership’s real estate
properties and construction and service subsidiaries in which the
Company owns an interest. “Funds From Operations allocable to the
Company” reflects a reduction for the redeemable noncontrolling
weighted average diluted interest in the Operating Partnership.
|
Source: Kite Realty Group Trust
Contact:
Kite Realty Group Trust
Dan Sink, 317-577-5609
Chief Financial
Officer
dsink@kiterealty.com
or
Adam
Chavers, 317-713-5684
Vice President of Investor Relations
achavers@kiterealty.com