INDIANAPOLIS--(BUSINESS WIRE)--
Kite Realty Group Trust (NYSE: KRG) (the “Company”) announced operating
results for the third quarter ended September 30, 2016. The attached
financial statements, exhibits and reconciliations of non-GAAP measures
provide the details of these results.
Third Quarter Highlights
-
Net loss attributable to common shareholders was $1.7 million, or
$0.02 per diluted common share.
-
Funds From Operations (“FFO”), as adjusted, was $0.52 per diluted
common share, or $44.7 million.
-
FFO, as defined by NAREIT, was $0.51 per diluted common share, or
$43.6 million.
-
Weighted average debt maturities increased to 6.6 years from 5.0 years
in the prior quarter.
-
The Company’s operating partnership, Kite Realty Group, L.P.,
completed its inaugural public offering for $300 million of 4.00%
Senior Notes due 2026.
-
Small shop occupancy was 88.7%, an increase of 120 basis points
compared to the same period in the prior year.
-
Same-property Net Operating Income (“NOI”) increased 2.1% for the
comparable operating portfolio, or 2.9% excluding the impact of the
Company’s Redevelopment, Repurpose and Reposition ("3-R") initiative,
both percentages compared to the same period in the prior year.
-
The Company commenced construction on four additional 3-R projects,
for a total of 12 projects in process. These 12 projects have an
estimated incremental return averaging approximately 9% to 10%, and
aggregate costs for all of these projects are expected to range
between $58.1 million and $67.0 million.
“Our third quarter performance marks another successful quarter for
Kite and has positioned us to finish 2016 on a strong note,” said John
A. Kite, Chairman and CEO. “Our team’s aggressive efforts further
improved our small shop leasing by 120 basis points compared to last
year, reaching 88.7%. The momentum also continued for our anchor tenants
as we opened over 180,000 square feet of space since the end of the
second quarter. Finally, we executed on several balance sheet
initiatives, furthering our strong position, including our inaugural
$300 million public bond offering as we continue to enhance our balance
sheet flexibility.”
Financial & Portfolio Results
Net loss attributable to common shareholders for the three months ended
September 30, 2016, was $1.7 million compared to net income of $0.4
million for the same period in 2015. Net loss attributable to common
shareholders for the nine months ended September 30, 2016, was $2.2
million compared to net income of $10.1 million for the same period in
2015.
FFO, as adjusted, for the three months ended September 30, 2016, was
$44.7 million, or $0.52 per diluted common share, for the Kite
Portfolio, compared to $43.9 million, or $0.51 per diluted common share,
for the same period in the prior year. FFO, as adjusted, was $132.9
million, or $1.56 per diluted common share, for the nine months ended
September 30, 2016, compared to $127.8 million, or $1.50 per diluted
common share, for the same period in 2015.
FFO, as defined by NAREIT, was $43.6 million, or $0.51 per diluted
common share, for real estate properties in which the Company’s
operating subsidiaries own an interest (to which we refer as the “Kite
Portfolio”), compared to $42.8 million, or $0.50 per diluted common
share, for the same period in the prior year. For the nine months ended
September 30, 2016, FFO, as defined by NAREIT, was $128.5 million, or
$1.50 per diluted common share, compared to $130.7 million, or $1.53 per
diluted common share, for the same period in 2015.
Same-property NOI increased 2.1% for the comparable operating portfolio,
which includes 103 retail operating properties. If the impact of the
Company’s 3-R initiative is excluded, same-property NOI increased 2.9%.
Both of these percentages are based on comparisons to the same period in
the prior year.
As of September 30, 2016, the Company owned interests in 121 operating,
development and redevelopment properties totaling approximately 24
million square feet. The owned gross leasable area in the Company’s
retail operating portfolio was 95.2% leased as of September 30, 2016.
The Company executed leases on 110 individual spaces for a total of
627,925 square feet during the third quarter of 2016, including 84
comparable new and renewal leases for 519,271 owned square feet. The
Company generated positive cash spreads of 13.1% on comparable new
leases executed during the quarter and 8.7% on comparable renewals, for
a blended spread of 9.7%.
Balance Sheet
During the third quarter, the Company refinanced $700 million in
unsecured bank facilities, including the extensions of $200 million of
its $400 million term loan for an additional five years to mature in
2021 and its $500 million revolving credit facility to mature in 2021,
including extension options. The revised terms of the unsecured
financings improved the Company’s borrowing base, lowered the interest
rate and extended the term to maturity.
The Company also completed its inaugural $300 million public bond
offering of 4.00% Senior Notes due 2026. The majority of the net
proceeds from the offering were used to repay the $200 million term loan
maturing July 1, 2019 (or January 1, 2020, with the six-month
extension). The remaining net proceeds were used, along with funds from
the line of credit, to pay off approximately $70 million of CMBS debt
that matured in the third quarter and $76 million attributable to the
Parkside construction loan. As a result of these initiatives, the
Company’s weighted average debt maturity extended from 5 years in the
prior period to 6.6 years at the end of the third quarter.
Redevelopment and Development
The Company’s 3-R initiative, which includes a total of 24 different
projects in various stages, continued to progress during the third
quarter. The Company commenced construction at Burnt Store Promenade
(Punta Gorda, FL), Centennial Gateway (Las Vegas, NV), Traders Point
(Indianapolis, IN), and Trussville Promenade (Birmingham, AL). Combined
with projects already in process, the Company now has 12 3-R projects
under construction, with an estimated incremental return averaging
approximately 9% to 10% and aggregate estimated costs of $58.1 million
to $67.0 million.
Earnings Guidance
The Company is updating its guidance for 2016 FFO, as adjusted, to $2.05
to $2.07 from $2.04 to $2.08 per diluted common share. This guidance
excludes certain non-recurring items such as transaction costs, debt
extinguishment gains/losses and certain other income and charges. Please
refer to the full list of guidance assumptions on page 37 of the
Company’s Quarterly Financial Supplemental.
|
|
|
| |
|
|
| |
| Guidance Range For Full Year 2016 | | | | Low | | | | High |
|
Consolidated net loss per diluted common share
| | | |
$
|
(0.04
|
)
| | | |
$
|
(0.02
|
)
|
|
Add: Depreciation, amortization and other
| | | |
2.03
|
|
|
|
|
2.03
|
|
|
FFO, per diluted common share, as defined by NAREIT
| | | |
1.99
| | | | |
2.01
| |
|
Add: Transaction costs and certain other charges
| | | |
0.06
|
|
|
|
|
0.06
|
|
| FFO, as adjusted, per diluted common share | | | |
$
|
2.05
|
|
|
|
|
$
|
2.07
|
|
| | | | | | | | | | | |
|
Earnings Conference Call
The Company will conduct a conference call to discuss its financial
results on Friday, October 28, 2016, at 1:00 p.m. EDT. 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 (574) 990-9933 for domestic callers and (844)
309-0605 for toll-free (passcode 67725615). In addition, a webcast
replay link will be available on the corporate website.
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, redevelopment and development of
neighborhood and community shopping centers in selected markets in the
United States. As of September 30, 2016, the Company owned interests in
a portfolio of 121 operating, development and redevelopment properties
totaling approximately 24 million total square feet across 20 states.
For more information, please visit the Company’s website at www.kiterealty.com.
Safe Harbor
This press release contains certain 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. Such statements are based on
assumptions and expectations that may not be realized and are inherently
subject to risks, uncertainties and other factors, many of which cannot
be predicted with accuracy and some of which might not even be
anticipated. Future events and actual results, performance, transactions
or achievements, financial or otherwise, may differ materially from the
results, performance, transactions or achievements, financial or
otherwise, expressed or implied by the forward-looking statements.
Risks, uncertainties and other factors that might cause such
differences, some of which could be material, include, but are not
limited to: national and local economic, business, real estate and other
market conditions, particularly in light of low growth in the U.S.
economy, as well as economic uncertainty caused by fluctuations in the
prices of oil and other energy sources, 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, joint venture, property
ownership and management risks, the Company’s ability to maintain its
status as a real estate investment trust 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 the Company’s properties in Florida,
Indiana and Texas, insurance costs and coverage, risks associated with
cybersecurity attacks and the loss of confidential information and other
business interruptions, the dilutive effects of future offerings of
issuing additional securities, and other factors affecting the real
estate industry generally. The Company refers you to the documents filed
by the Company from time to time with the SEC, specifically the section
titled “Risk Factors” in the Company’s and the Operating Partnership’s
Annual Report on Form 10-K for the year ended December 31, 2015, 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, whether as a result
of new information, future events or otherwise.
|
|
| |
|
| |
| Kite Realty Group Trust |
| Consolidated Balance Sheets |
| (Unaudited) |
| | | | | |
|
| ($ in thousands) | | | | | | |
| | | September 30, | | | December 31, |
| | | 2016 | | | 2015 |
| Assets: | | | | | | |
|
Investment properties, at cost
| | |
$
|
3,990,208
| | | |
$
|
3,933,140
| |
|
Less: accumulated depreciation
| | |
(531,946
|
)
| | |
(432,295
|
)
|
| | |
3,458,262
| | | |
3,500,845
| |
| | | | | |
|
|
Cash and cash equivalents
| | |
28,793
| | | |
33,880
| |
|
Tenant and other receivables, including accrued straight-line rent
of $27,875 and $23,809 respectively, net of allowance for
uncollectible accounts
| | |
50,350
| | | |
51,101
| |
|
Restricted cash and escrow deposits
| | |
9,585
| | | |
13,476
| |
|
Deferred costs and intangibles, net
| | |
133,114
| | | |
148,274
| |
|
Prepaid and other assets
| | |
10,814
|
| | |
8,852
|
|
| Total Assets | | |
$
|
3,690,918
|
| | |
$
|
3,756,428
|
|
| Liabilities and Shareholders’ Equity: | | | | | | |
|
Mortgage and other indebtedness, net
| | |
$
|
1,732,344
| | | |
$
|
1,724,449
| |
|
Accounts payable and accrued expenses
| | |
93,440
| | | |
81,356
| |
|
Deferred revenue and other liabilities
| | |
120,550
|
| | |
131,559
|
|
| Total Liabilities | | |
1,946,334
| | | |
1,937,364
| |
|
Commitments and contingencies
| | | | | | |
|
Limited Partners’ interests in the Operating Partnership and other
redeemable noncontrolling interests
| | |
99,478
| | | |
92,315
| |
| Shareholders’ Equity: | | | | | | |
| Kite Realty Group Trust Shareholders’ Equity: | | | | | | |
Common Shares, $.01 par value, 225,000,000 shares authorized,
83,545,486 and 83,334,865 shares issued and outstanding at
September 30, 2016 and December 31, 2015, respectively
| | |
835
| | | |
833
| |
|
Additional paid in capital
| | |
2,049,702
| | | |
2,050,545
| |
|
Accumulated other comprehensive loss
| | |
(8,738
|
)
| | |
(2,145
|
)
|
|
Accumulated deficit
| | |
(397,391
|
)
| | |
(323,257
|
)
|
| Total Kite Realty Group Trust Shareholders’ Equity | | |
1,644,408
| | | |
1,725,976
| |
|
Noncontrolling Interests
| | |
698
|
| | |
773
|
|
| Total Equity | | |
1,645,106
|
| | |
1,726,749
|
|
| Total Liabilities and Shareholders' Equity | | |
$
|
3,690,918
|
| | |
$
|
3,756,428
|
|
| | | | | | | | | |
|
|
|
| |
|
| |
|
| |
|
| |
| Kite Realty Group Trust |
| Consolidated Statements of Operations |
| For the Three and Nine Months Ended September 30, 2016 and 2015 |
| (Unaudited) |
| | | | | | | | | | | |
|
| ($ in thousands, except per share data) | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended |
| | | September 30, | | | September 30, |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 |
| Revenue: | | | | | | | | | | | | |
|
Minimum rent
| | |
$
|
69,518
| | | |
$
|
66,279
| | | |
$
|
205,436
| | | |
$
|
196,656
| |
|
Tenant reimbursements
| | |
17,531
| | | |
16,787
| | | |
52,691
| | | |
51,891
| |
|
Other property related revenue
| | |
2,073
|
| | |
4,081
|
| | |
7,120
|
| | |
9,163
|
|
| Total revenue | | |
89,122
| | | |
87,147
| | | |
265,247
| | | |
257,710
| |
| Expenses: | | | | | | | | | | | | |
|
Property operating
| | |
11,916
| | | |
11,994
| | | |
35,454
| | | |
36,519
| |
|
Real estate taxes
| | |
10,690
| | | |
10,045
| | | |
32,327
| | | |
29,821
| |
|
General, administrative, and other
| | |
5,081
| | | |
4,559
| | | |
15,228
| | | |
14,131
| |
|
Transaction costs
| | |
—
| | | |
1,089
| | | |
2,771
| | | |
1,550
| |
|
Depreciation and amortization
| | |
45,543
|
| | |
42,549
|
| | |
131,625
|
| | |
124,196
|
|
| Total expenses | | |
73,230
|
| | |
70,236
|
| | |
217,405
|
| | |
206,217
|
|
| Operating income | | |
15,892
| | | |
16,911
| | | |
47,842
| | | |
51,493
| |
|
Interest expense
| | |
(17,139
|
)
| | |
(13,881
|
)
| | |
(47,964
|
)
| | |
(40,995
|
)
|
|
Income tax expense of taxable REIT subsidiary
| | |
(15
|
)
| | |
(9
|
)
| | |
(763
|
)
| | |
(134
|
)
|
|
Gain on settlement
| | |
—
| | | |
—
| | | |
—
| | | |
4,520
| |
|
Other expense, net
| | |
—
|
| | |
(60
|
)
| | |
(94
|
)
| | |
(189
|
)
|
| (Loss) income from continuing operations | | |
(1,262
|
)
| | |
2,961
| | | |
(979
|
)
| | |
14,695
| |
|
Gain on sales of operating properties
| | |
—
|
| | |
—
|
| | |
194
|
| | |
3,363
|
|
| Net (loss) income | | |
(1,262
|
)
| | |
2,961
| | | |
(785
|
)
| | |
18,058
| |
|
Net income attributable to noncontrolling interest
| | |
(420
|
)
| | |
(435
|
)
| | |
(1,391
|
)
| | |
(1,626
|
)
|
|
Dividends on preferred shares
| | |
—
|
| | |
(2,114
|
)
| | |
—
|
| | |
(6,342
|
)
|
| Net (loss) income attributable to Kite Realty Group Trust common
shareholders | | |
$
|
(1,682
|
)
| | |
$
|
412
|
| | |
$
|
(2,176
|
)
| | |
$
|
10,090
|
|
| | | | | | | | | | | |
|
| (Loss) income per common share - basic and diluted | | |
$
|
(0.02
|
)
| | |
$
|
0.00
|
| | |
$
|
(0.03
|
)
| | |
$
|
0.12
|
|
| | | | | | | | | | | |
|
|
Weighted average common shares outstanding - basic
| | |
83,474,348
|
| | |
83,325,074
|
| | |
83,399,813
|
| | |
83,453,660
|
|
|
Weighted average common shares outstanding - diluted
| | |
83,474,348
|
| | |
83,433,379
|
| | |
83,399,813
|
| | |
83,566,554
|
|
| Common dividends declared per common share | | |
$
|
0.2875
|
| | |
$
|
0.2725
|
| | |
$
|
0.8625
|
| | |
$
|
0.8175
|
|
| | | | | | | | | | | | | | | | | | | |
|
|
|
| |
|
| |
|
| |
|
| |
| Kite Realty Group Trust |
| Funds From Operations |
| For the Three and Nine Months Ended September 30, 2016 and 2015 |
| (Unaudited) |
| | | | | | | | | | | |
|
| ($ in thousands, except per share data) | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended |
| | | September 30, | | | September 30, |
| | | 2016 | | | 2015 | | | 2016 | | | 2015 |
| Funds From Operations | | | | | | | | | | | | |
|
Consolidated net (loss) income
| | |
$
|
(1,262
|
)
| | |
$
|
2,961
| | | |
$
|
(785
|
)
| | |
$
|
18,058
| |
|
Less: cash dividends on preferred shares
| | |
—
| | | |
(2,114
|
)
| | |
—
| | | |
(6,342
|
)
|
|
Less: net income attributable to noncontrolling interests in
properties
| | |
(461
|
)
| | |
(415
|
)
| | |
(1,383
|
)
| | |
(1,416
|
)
|
|
Less: gains on sales of operating properties
| | |
—
| | | |
—
| | | |
(194
|
)
| | |
(3,363
|
)
|
|
Add: depreciation and amortization of consolidated entities, net of
noncontrolling interests
| | |
45,310
|
| | |
42,387
|
| | |
130,909
|
| | |
123,812
|
|
|
Funds From Operations of the Operating Partnership1 | | |
43,587
| | | |
42,819
| | | |
128,547
| | | |
130,749
| |
|
Less: Limited Partners' interests in Funds From Operations
| | |
(918
|
)
| | |
(967
|
)
| | |
(2,708
|
)
| | |
(2,698
|
)
|
|
Funds From Operations attributable to Kite Realty Group Trust common
shareholders
| | |
$
|
42,669
|
| | |
$
|
41,852
|
| | |
$
|
125,839
|
| | |
$
|
128,051
|
|
|
FFO per share of the Operating Partnership - basic
| | |
$
|
0.51
|
| | |
$
|
0.50
|
| | |
$
|
1.51
|
| | |
$
|
1.53
|
|
|
FFO per share of the Operating Partnership - diluted
| | |
$
|
0.51
|
| | |
$
|
0.50
|
| | |
$
|
1.50
|
| | |
$
|
1.53
|
|
| | | | | | | | | | | |
|
|
Funds From Operations of the Operating Partnership1 | | |
$
|
43,587
| | | |
$
|
42,819
| | | |
$
|
128,547
| | | |
$
|
130,749
| |
|
Less: gain on settlement
| | |
—
| | | |
—
| | | |
—
| | | |
(4,520
|
)
|
|
Add: accelerated amortization of debt issuance costs (non-cash)
| | |
1,121
| | | |
—
| | | |
1,121
| | | |
—
| |
|
Add: transaction costs
| | |
—
| | | |
1,089
| | | |
2,771
| | | |
1,550
| |
|
Add: severance charge
| | |
—
|
| | |
—
|
| | |
500
|
| | |
—
|
|
|
Funds From Operations of the Operating Partnership, as adjusted
| | |
$
|
44,708
|
| | |
$
|
43,908
|
| | |
$
|
132,939
|
| | |
$
|
127,779
|
|
|
FFO per share of the Operating Partnership, as adjusted - basic
| | |
$
|
0.52
|
| | |
$
|
0.52
|
| | |
$
|
1.56
|
| | |
$
|
1.50
|
|
|
FFO per share of the Operating Partnership, as adjusted - diluted
| | |
$
|
0.52
|
| | |
$
|
0.51
|
| | |
$
|
1.56
|
| | |
$
|
1.50
|
|
| | | | | | | | | | | |
|
|
Weighted average Common Shares outstanding - basic
| | |
83,474,348
|
| | |
83,325,074
|
| | |
83,399,813
|
| | |
83,453,660
|
|
|
Weighted average Common Shares outstanding - diluted
| | |
83,565,227
|
| | |
83,433,379
|
| | |
83,488,618
|
| | |
83,566,554
|
|
|
Weighted average Common Shares and Units outstanding - basic
| | |
85,417,753
|
| | |
85,238,537
|
| | |
85,336,859
|
| | |
85,214,390
|
|
|
Weighted average Common Shares and Units outstanding - diluted
| | |
85,508,632
|
| | |
85,346,842
|
| | |
85,425,664
|
| | |
85,327,283
|
|
| | | | | | | | | | | |
|
| | | | | | | | | | | |
|
| Funds From Operations per diluted share | | | | | | | | | | | | |
|
Consolidated net (loss) income
| | |
$
|
(0.01
|
)
| | |
$
|
0.03
| | | |
$
|
(0.01
|
)
| | |
$
|
0.21
| |
|
Less: cash dividends on preferred shares
| | |
—
| | | |
(0.02
|
)
| | |
—
| | | |
(0.07
|
)
|
|
Less: net income attributable to noncontrolling interests in
properties
| | |
(0.01
|
)
| | |
(0.01
|
)
| | |
(0.02
|
)
| | |
(0.02
|
)
|
|
Less: gains on sales of operating properties
| | |
—
| | | |
—
| | | |
—
| | | |
(0.04
|
)
|
|
Add: depreciation and amortization of consolidated entities, net of
noncontrolling interests
| | |
0.53
|
| | |
0.50
|
| | |
1.53
|
| | |
1.45
|
|
|
Funds From Operations of the Operating Partnership per diluted share1 | | |
$
|
0.51
|
| | |
$
|
0.50
|
| | |
$
|
1.50
|
| | |
$
|
1.53
|
|
| | | | | | | | | | | |
|
|
Funds From Operations of the Operating Partnership per diluted share1 | | |
$
|
0.51
| | | |
$
|
0.50
| | | |
$
|
1.50
| | | |
$
|
1.53
| |
|
Less: gain on settlement
| | |
—
| | | |
—
| | | |
—
| | | |
(0.05
|
)
|
|
Add: accelerated amortization of debt issuance costs
| | |
0.01
| | | |
—
| | | |
0.01
| | | |
—
| |
|
Add: transaction costs
| | |
—
| | | |
0.01
| | | |
0.04
| | | |
0.02
| |
|
Add: severance charge
| | |
—
|
| | |
—
|
| | |
0.01
|
| | |
—
|
|
|
Funds From Operations of the Operating Partnership per diluted
share, as adjusted
| | |
$
|
0.52
|
| | |
$
|
0.51
|
| | |
$
|
1.56
|
| | |
$
|
1.50
|
|
| | | | | | | | | | | | | | | | | | | |
|
|
____________________
|
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 attributable to
Kite Realty Group Trust common shareholders” reflects a reduction
for the redeemable noncontrolling weighted average diluted interest
in the Operating Partnership.
|
| |
|
Funds from Operations (FFO) is a widely used performance measure for
real estate companies and is provided here as a supplemental measure of
operating performance. We calculate FFO in accordance with the best
practices described in the April 2002 National Policy Bulletin of the
National Association of Real Estate Investment Trusts (NAREIT), which we
refer to as the White Paper. The White Paper defines FFO as net income
(determined in accordance with generally accepted accounting principles
(GAAP)), excluding gains (or losses) from sales and impairments of
depreciated property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures.
Considering the nature of our business as a real estate owner and
operator, we believe that FFO is helpful to investors in measuring our
operational performance because it excludes various items included in
net income that do not relate to or are not indicative of our operating
performance, such as gains or losses from sales of depreciated property
and depreciation and amortization, which can make periodic and peer
analyses of operating performance more difficult. For informational
purposes, we have also provided FFO adjusted for a severance charge,
accelerated amortization of debt issuance costs and transaction costs in
2016 and a gain on settlement and transaction costs in 2015. We believe
this supplemental information provides a meaningful measure of our
operating performance. We believe our presentation of FFO, as adjusted,
provides investors with another financial measure that may facilitate
comparison of operating performance between periods and among our peer
companies. FFO should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indicator of our financial
performance, is not an alternative to cash flow from operating
activities (determined in accordance with GAAP) as a measure of our
liquidity, and is not indicative of funds available to satisfy our cash
needs, including our ability to make distributions. Our computation of
FFO may not be comparable to FFO reported by other REITs that do not
define the term in accordance with the current NAREIT definition or that
interpret the current NAREIT definition differently than we do.
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Kite Realty Group Trust |
| Same Property Net Operating Income |
| For the Three and Nine Months Ended September 30, 2016 and 2015 |
| (Unaudited) |
| | | | | | | | | | | | | | | | | |
|
| ($ in thousands) | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, |
| | | 2016 | | | 2015 | | | % Change | | | 2016 | | | 2015 | | | % Change |
|
Number of properties for the quarter1 | | |
103
| | |
103
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
| Leased percentage | | |
95.3
|
%
| | |
95.4
|
%
| | | | | |
95.3
|
%
| | |
95.2
|
%
| | | |
| Economic Occupancy percentage2 | | |
93.6
|
%
| | |
93.7
|
%
| | | | | |
93.8
|
%
| | |
93.6
|
%
| | | |
| | | | | | | | | | | | | | | | | |
|
|
Minimum rent
| | |
$
|
55,630
| | | |
$
|
54,828
| | | | | | |
$
|
164,809
| | | |
$
|
162,155
| | | | |
|
Tenant recoveries
| | |
14,973
| | | |
14,931
| | | | | | |
44,865
| | | |
45,038
| | | | |
|
Other income
| | |
614
|
| | |
551
|
| | | | | |
1,177
|
| | |
1,120
|
| | | |
| | |
71,217
| | | |
70,310
| | | | | | |
210,851
| | | |
208,313
| | | | |
| | | | | | | | | | | | | | | | | |
|
|
Property operating expenses
| | |
(8,619
|
)
| | |
(8,689
|
)
| | | | | |
(25,360
|
)
| | |
(27,517
|
)
| | | |
|
Real estate taxes
| | |
(8,936
|
)
| | |
(9,042
|
)
| | | | | |
(27,123
|
)
| | |
(26,576
|
)
| | | |
| | |
(17,555
|
)
| | |
(17,731
|
)
| | | | | |
(52,483
|
)
| | |
(54,093
|
)
| | | |
| Net operating income - same properties3 | | | $ | 53,662 |
| | | $ | 52,579 |
| | | 2.1 | % | | | $ | 158,368 |
| | | $ | 154,220 |
| | | 2.7 | % |
| Net operating income - same properties excluding the impact of
the 3-R initiative4 | | | | | | | | | 2.9 | % | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
|
| Reconciliation of Same Property NOI to Most Directly Comparable
GAAP Measure: | | | | | | | | | | | | | | | | | | |
|
Net operating income - same properties
| | |
$
|
53,662
| | | |
$
|
52,579
| | | | | | |
$
|
158,368
| | | |
$
|
154,220
| | | | |
|
Net operating income - non-same activity5 | | |
12,854
| | | |
12,529
| | | | | | |
39,098
| | | |
37,150
| | | | |
|
Other expense, net
| | |
(15
|
)
| | |
(69
|
)
| | | | | |
(857
|
)
| | |
(323
|
)
| | | |
|
General, administrative and other
| | |
(5,081
|
)
| | |
(4,559
|
)
| | | | | |
(15,228
|
)
| | |
(14,131
|
)
| | | |
|
Transaction costs
| | |
—
| | | |
(1,089
|
)
| | | | | |
(2,771
|
)
| | |
(1,550
|
)
| | | |
|
Depreciation expense
| | |
(45,543
|
)
| | |
(42,549
|
)
| | | | | |
(131,625
|
)
| | |
(124,196
|
)
| | | |
|
Interest expense
| | |
(17,139
|
)
| | |
(13,881
|
)
| | | | | |
(47,964
|
)
| | |
(40,995
|
)
| | | |
|
Gain on settlement
| | |
—
| | | |
—
| | | | | | |
—
| | | |
4,520
| | | | |
|
Gains on sales of operating properties
| | |
—
| | | |
—
| | | | | | |
194
| | | |
3,363
| | | | |
|
Net income attributable to noncontrolling interests
| | |
(420
|
)
| | |
(435
|
)
| | | | | |
(1,391
|
)
| | |
(1,626
|
)
| | | |
|
Dividends on preferred shares
| | |
—
|
| | |
(2,114
|
)
| | | | | |
—
|
| | |
(6,342
|
)
| | | |
|
Net (loss) income attributable to common shareholders
| | |
$
|
(1,682
|
)
| | |
$
|
412
|
| | | | | |
$
|
(2,176
|
)
| | |
$
|
10,090
|
| | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
____________________
|
1 |
|
Same property analysis excludes operating properties in
redevelopment as well as office properties (Thirty South Meridian
and Eddy Street Commons).
|
2 | |
Excludes leases that are signed but for which tenants have not yet
commenced the payment of cash rent. Calculated as a weighted average
based on the timing of cash rent commencement during the period.
|
3 | |
Same property net operating income excludes net gains from outlot
sales, straight-line rent revenue, bad debt expense and recoveries,
lease termination fees, amortization of lease intangibles and
significant prior year expense recoveries and adjustments, if any.
|
4 | |
See pages 27 and 28 for further detail of the properties included
in the 3-R initiative.
|
5 | |
Includes non-cash activity across the portfolio as well as net
operating income from properties not included in the same property
pool.
|
The Company believes that Net Operating Income ("NOI") is helpful to
investors as a measure of its operating performance because it excludes
various items included in net income that do not relate to or are not
indicative of its operating performance, such as depreciation and
amortization, interest expense, and impairment, if any. The Company
believes that Same Property NOI is helpful to investors as a measure of
its operating performance because it includes only the NOI of properties
that have been owned for the full period presented, which eliminates
disparities in net income due to the redevelopment, acquisition or
disposition of properties during the particular period presented and
thus provides a more consistent metric for the comparison of the
Company's properties. NOI and Same Property NOI should not, however, be
considered as alternatives to net income (calculated in accordance with
GAAP) as indicators of the Company's financial performance. The
Company’s computation of Same Property NOI may differ from the
methodology used by other REITs, and therefore, may not be comparable to
such other REITs.
View source version on businesswire.com: http://www.businesswire.com/news/home/20161027006638/en/
Kite Realty Group Trust
Maggie Daniels, CFA Investor Relations and
Strategy
317-713-7644
mdaniels@kiterealty.com
Source: Kite Realty Group Trust