BEACHWOOD, Ohio, Nov. 4,
2013 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today announced
operating results for the third quarter ended September 30, 2013.
(Logo: http://photos.prnewswire.com/prnh/20110912/CL65938LOGO
)
SIGNIFICANT THIRD QUARTER ACTIVITY
- Generated Operating FFO of $0.28
per diluted share, an increase of 3.7% compared to third quarter of
2012
- Revised guidance upward to $1.10 to
$1.12 of Operating FFO per diluted share based on strong
year-to-date operating results
- Executed 443 new leases and renewals for 3.0 million square
feet
- Increased the portfolio leased rate by 20 basis points to 94.8%
at September 30, 2013 from 94.6% at
June 30, 2013 and by 80 basis points
from 94.0% at September 30, 2012
- Generated positive leasing spreads, with new leases up 12.3% at
100% ownership and 14.5% on a pro rata basis, and renewals up 7.4%
at 100% ownership and 7.0% on a pro rata basis; blended spreads
were up 8.4% at 100% ownership and 8.6% on a pro rata basis
- Generated same store net operating income growth of 3.3% at
100% ownership and 3.1% on a pro rata basis as compared to the
prior year
- Acquired $259 million of
wholly-owned prime shopping centers
- Closed on a new unconsolidated joint venture with Blackstone
that acquired a portfolio of seven prime power centers with a total
value of $332 million
- Completed the disposition of $138
million of non-prime assets; DDR's pro rata gross proceeds
were $104 million
"We are very pleased with the consistent execution of our
strategic initiatives and the solid operating results produced
during the third quarter. We are optimistic regarding future
performance and look forward to continued momentum," commented
DDR's chief executive officer, Daniel B.
Hurwitz.
FINANCIAL HIGHLIGHTS
The Company's third quarter
Operating Funds From Operations attributable to common shareholders
("Operating FFO") increased to $90.0
million, or $0.28 per diluted
share, which compares to $82.9
million, or $0.27 per diluted
share, for the prior-year comparable period. The increase in
Operating FFO for the three-month period ended September 30, 2013, as compared to the same
period in 2012, primarily is due to organic growth as well as
shopping center acquisitions, partially offset by asset
dispositions.
Funds From Operations attributable to common shareholders
("FFO") for the three-month period ended September 30, 2013 decreased to $89.9 million, or $0.28 per diluted share, which compares to
$112.7 million, or $0.37 per diluted share, for the prior-year
comparable period. The decrease in FFO for the three-month
period ended September 30, 2013, as
compared to the same period in 2012, primarily is due to the gain
on change in control of interests recorded in 2012 partially offset
by organic growth and net shopping center acquisition
activity.
Operating FFO for the nine-month period ended September 30, 2013 increased to $262.2 million, or $0.82 per diluted share, which compares to
$221.3 million, or $0.76 per diluted share, for the prior-year
comparable period. The increase in Operating FFO for the
nine-month period ended September 30,
2013, as compared to the same period in 2012, primarily is
due to the same factors impacting Operating FFO for the three-month
period.
FFO for the nine-month period ended September 30, 2013 increased to $252.4 million, or $0.79 per diluted share, which compares to
$250.5 million, or $0.86 per diluted share, for the prior-year
comparable period. The increase in FFO for the nine-month
period ended September 30, 2013, as
compared to the same period in 2012, primarily is due to the same
factors impacting FFO for the three-month period, as well as a
reduction in impairment charges of non-depreciable assets and the
loss on debt retirement related to the Company's repurchase of
unsecured senior notes in 2012.
Net loss attributable to common shareholders for the three-month
period ended September 30, 2013 was
$7.0 million, or $0.02 per diluted share, which compares to net
income of $13.3 million, or
$0.04 per diluted share, for the
prior-year comparable period. Net loss attributable to common
shareholders for the nine-month period ended September 30, 2013 was $43.7 million, or $0.14 per diluted share, which compares to net
loss of $53.2 million, or
$0.19 per diluted share, for the
prior-year comparable period. The change in net loss
attributable to common shareholders for both the three- and
nine-month periods ended September 30,
2013, as compared to the same periods in 2012, primarily is
due to the same factors impacting FFO for such period.
LEASING & PORTFOLIO OPERATIONS
The following
results for the three-month period ended September 30, 2013, highlight continued strong
leasing activity throughout the portfolio:
- Executed 210 new leases aggregating approximately 0.9 million
square feet and 233 renewals aggregating approximately 2.1 million
square feet
- Generated positive leasing spreads for the third quarter, with
new leases up 12.3% at 100% ownership and 14.5% on a pro rata
basis, and renewals up 7.4% at 100% ownership and 7.0% on a pro
rata basis; blended spreads were up 8.4% at 100% ownership and 8.6%
on a pro rata basis
- The portfolio leased rate increased to 94.8% at September 30, 2013, as compared to 94.6% at
June 30, 2013 and 94.0% at
September 30, 2012
- Same store net operating income ("NOI") increased by 3.3% at
100% ownership for the three-month period ended September 30, 2013 as compared to the prior-year
comparable period and 3.1% on a pro rata basis
- Total portfolio average annualized base rent per occupied
square foot as of September 30, 2013
was $14.00, as compared to
$13.79 at September 30, 2012
ACQUISITIONS & FINANCINGS
In July 2013, the Company acquired two regional
power centers in Orlando, Florida
and Atlanta, Georgia, with a
combined gross leasable area of 1.4 million square feet for a gross
purchase price of $258.5
million. The Company assumed two mortgages aggregating
$139.4 million.
In August 2013, a joint venture
between consolidated affiliates of the Company and Blackstone
acquired a portfolio of seven prime shopping centers totaling
approximately 2.4 million square feet for $332 million. An affiliate of Blackstone
owns 95% of the common equity of the joint venture, and the
remaining 5% interest is owned by the Company. The joint
venture assumed $207 million of
mortgage debt and entered into $28
million of additional mortgage debt. In addition, the
Company's investment includes $30
million in preferred equity with a fixed distribution rate
of 9%. The Company provides leasing and management services
and has the right of first offer to acquire four of the assets
under specified conditions.
In October 2013, the Company
acquired sole ownership of a portfolio of 30 prime power centers
that were previously owned by an existing joint venture with
Blackstone Real Estate Partners VII L.P. ("Blackstone"). The
investment was funded through a combination of proceeds from the
issuance of new common equity, unsecured debt, preferred equity and
mezzanine loan repayments, and the assumption of existing mortgage
debt.
DISPOSITIONS
In the third quarter of 2013, the
Company sold 11 consolidated operating shopping centers,
aggregating approximately 1.1 million square feet, and non-income
producing assets generating gross proceeds of approximately
$66.8 million. The Company
recorded an aggregate net gain of approximately $10.6 million related to asset sales in the third
quarter of 2013. During the same period, the Company's
unconsolidated joint ventures sold five operating shopping centers
aggregating approximately 1.1 million square feet, and non-income
producing assets generating gross proceeds of approximately
$71.1 million, of which the Company's
pro rata share was $37.0 million.
2013 GUIDANCE
As a result of strong year-to-date
operating metrics, the Company is revising 2013 guidance for
Operating FFO to a range between $1.10 and
$1.12 per diluted share from $1.08 to
$1.11 per diluted share.
NON-GAAP DISCLOSURES
FFO is a supplemental non-GAAP
financial measurement used as a standard in the real estate
industry and a widely accepted measure of real estate investment
trust ("REIT") performance. Management believes that 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. Neither FFO
nor Operating FFO represents cash generated from operating
activities in accordance with generally accepted accounting
principles ("GAAP"), is necessarily indicative of cash available to
fund cash needs and should be considered as an alternative to net
income computed in accordance with GAAP as an indicator of the
Company's operating performance or as an alternative to cash flow
as a measure of liquidity.
FFO is defined and calculated by the Company as net income,
adjusted to exclude: (i) preferred share dividends,
(ii) gains and losses from disposition of depreciable real
estate property, which are presented net of taxes, (iii) impairment
charges on depreciable real estate property and related
investments, (iv) extraordinary items and (v) certain non-cash
items. These non-cash items principally include real property
depreciation and amortization of intangibles, equity income from
joint ventures and equity income 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 calculates
Operating FFO by excluding the non-operating charges and gains
described above. The Company computes FFO in accordance with the
NAREIT definition. Other real estate companies may calculate
FFO and Operating FFO in a different manner. Operating FFO is
useful to investors as the Company removes these charges and gains
to analyze the results of its operations and assess performance of
the core operating real estate portfolio. A reconciliation of
net income (loss) to FFO and Operating FFO is presented in the
financial highlights section of the Company's quarterly
supplement.
SAFE HARBOR
DDR 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,
local conditions such as oversupply of space or a reduction in
demand for real estate in the area; competition from other
available space; dependence on rental income from real property;
the loss of, significant downsizing of or bankruptcy of a major
tenant; constructing properties or expansions that produce a
desired yield 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; our ability to enter into definitive agreements with regard to
our financing and joint venture arrangements or our failure to
satisfy conditions to the completion of these arrangements; the
success of our capital recycling strategy; and the finalization of
the financial statements for the three-month period ended
September 30, 2013. 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 Form 10-K for the year
ended December 31, 2012, as
amended. The Company undertakes no obligation to publicly
revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof.
ABOUT DDR CORP.
DDR is an owner and manager of 431
value-oriented shopping centers representing 117 million square
feet in 39 states, Puerto Rico and
Brazil. The Company's assets are
concentrated in high barrier-to-entry markets with stable
populations and high growth potential and its portfolio is actively
managed to create long-term shareholder value. DDR 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 DDR. Additional
information about the company is available at www.ddr.com, as well
as on Twitter, LinkedIn, Facebook and Pinterest.
CONFERENCE CALL INFORMATION & SUPPLEMENTAL
MATERIALS
A copy of the Company's Supplemental
Financial/Operational package is available to all interested
parties upon request to Samir
Khanal, at the Company's corporate office, 3300 Enterprise
Parkway, Beachwood, Ohio 44122 or
at www.ddr.com.
The Company will hold its quarterly conference call tomorrow,
November 5, 2013, at 10:00 a.m. Eastern Time. To participate,
please dial 800.798.2864 (domestic), or 617.614.6206
(international) at least ten minutes prior to the scheduled start
of the call. When prompted, provide the passcode:
34370884. Access to the live call and replay will also be
available through the Company's website. The replay will be
available through November 12,
2013.
|
DDR Corp.
Financial Highlights
(In Thousands)
|
|
|
|
|
|
Three-Month
Periods
Ended September
30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
Revenues:
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Minimum
rents
|
$
150,654
|
|
$ 134,046
|
|
$ 436,950
|
|
$ 387,299
|
|
Percentage and
overage rents
|
885
|
|
296
|
|
3,261
|
|
2,433
|
|
Recoveries from
tenants
|
48,443
|
|
41,839
|
|
140,896
|
|
123,953
|
|
Ancillary and other
property income
|
7,979
|
|
6,832
|
|
21,090
|
|
19,424
|
|
Management,
development and other fee income
|
10,283
|
|
10,152
|
|
31,195
|
|
33,127
|
|
Other
(A)
|
1,124
|
|
4,112
|
|
6,649
|
|
4,818
|
|
219,368
|
|
197,277
|
|
640,041
|
|
571,054
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Operating and
maintenance
|
34,728
|
|
31,287
|
|
101,412
|
|
93,215
|
|
Real estate
taxes
|
28,541
|
|
24,668
|
|
82,940
|
|
73,326
|
|
Impairment charges
(B)
|
24,136
|
|
2,560
|
|
54,134
|
|
44,692
|
|
General and
administrative
|
19,246
|
|
18,547
|
|
59,123
|
|
56,691
|
|
Depreciation and
amortization
|
74,141
|
|
59,620
|
|
211,200
|
|
178,535
|
|
180,792
|
|
136,682
|
|
508,809
|
|
446,459
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
6,691
|
|
5,661
|
|
20,365
|
|
9,829
|
|
Interest expense
(C)
|
(57,936)
|
|
(53,724)
|
|
(166,990)
|
|
(161,203)
|
|
Loss on debt
retirement, net
|
—
|
|
—
|
|
—
|
|
(13,495)
|
|
Other income
(expense), net (D)
|
(2,282)
|
|
(1,868)
|
|
(3,288)
|
|
(7,100)
|
|
(53,527)
|
|
(49,931)
|
|
(149,913)
|
|
(171,969)
|
|
(Loss) income before
earnings from equity method investments and other
items
|
(14,951)
|
|
10,664
|
|
(18,681)
|
|
(47,374)
|
|
Equity in net income
of joint ventures
|
3,780
|
|
5,486
|
|
5,543
|
|
16,966
|
|
Impairment of joint
venture investments (B)
|
—
|
|
(26,111)
|
|
—
|
|
(26,671)
|
|
Gain on change in
control of interests
|
—
|
|
40,645
|
|
1,066
|
|
79,993
|
|
Tax expense of
taxable REIT subsidiaries and state franchise and income
taxes
|
(406)
|
|
(263)
|
|
(2,481)
|
|
(798)
|
|
(Loss) income from
continuing operations
|
(11,577)
|
|
30,421
|
|
(14,553)
|
|
22,116
|
|
Income (loss) from
discontinued operations (E)
|
9,443
|
|
(3,816)
|
|
(2,623)
|
|
(53,671)
|
|
(Loss) income before
gain on disposition of real estate
|
(2,134)
|
|
26,605
|
|
(17,176)
|
|
(31,555)
|
|
Gain on disposition
of real estate, net of tax
|
1,929
|
|
261
|
|
347
|
|
6,161
|
|
Net (loss)
income
|
(205)
|
|
26,866
|
|
(16,829)
|
|
(25,394)
|
|
Loss attributable to
non-controlling interests
|
(170)
|
|
(128)
|
|
(556)
|
|
(424)
|
|
Net (loss) income
attributable to DDR
|
$
(375)
|
|
$
26,738
|
|
$
(17,385)
|
|
$
(25,818)
|
|
Write-off of
preferred share original issuance costs
|
—
|
|
(5,804)
|
|
(5,246)
|
|
(5,804)
|
|
Preferred
dividends
|
(6,608)
|
|
(7,681)
|
|
(21,113)
|
|
(21,616)
|
|
Net (loss) income
attributable to common shareholders
|
$
(6,983)
|
|
$
13,253
|
|
$
(43,744)
|
|
$
(53,238)
|
|
Funds From
Operations ("FFO"):
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to common shareholders
|
$
(6,983)
|
|
$
13,253
|
|
$
(43,744)
|
|
$
(53,238)
|
|
Depreciation and
amortization of real estate investments
|
72,421
|
|
59,102
|
|
207,560
|
|
179,246
|
|
Equity in net income
of joint ventures
|
(3,780)
|
|
(5,486)
|
|
(5,543)
|
|
(16,966)
|
|
Impairment of
depreciable joint venture investments
|
—
|
|
26,111
|
|
—
|
|
26,671
|
|
Joint ventures'
FFO
|
12,731
|
|
13,843
|
|
37,103
|
|
40,461
|
|
Non-controlling
interests (OP Units)
|
54
|
|
48
|
|
162
|
|
144
|
|
Impairment of
depreciable real estate assets
|
24,136
|
|
5,698
|
|
64,237
|
|
77,752
|
|
(Gain) loss on
disposition of depreciable real estate, net
|
(8,701)
|
|
153
|
|
(7,417)
|
|
(3,527)
|
|
FFO attributable
to common shareholders
|
89,878
|
|
112,722
|
|
252,358
|
|
250,543
|
|
Non-operating items,
net (F)
|
147
|
|
(29,819)
|
|
9,814
|
|
(29,222)
|
|
Operating
FFO
|
$
90,025
|
|
$
82,903
|
|
$262,172
|
|
$ 221,321
|
|
|
|
|
|
|
|
|
|
Earnings per share –
Diluted (G)
|
$
(0.02)
|
|
$
0.04
|
|
$
(0.14)
|
|
$
(0.19)
|
|
Funds From Operations
– Diluted (G)
|
$
0.28
|
|
$
0.37
|
|
$
0.79
|
|
$
0.86
|
|
Operating Funds From
Operations – Diluted (G)
|
$
0.28
|
|
$
0.27
|
|
$
0.82
|
|
$
0.76
|
|
DDR
Corp.
Financial Highlights
(In
Thousands)
|
|
|
|
|
|
Selected Balance
Sheet Data
|
|
|
|
|
September 30,
2013
|
|
December 31,
2012
|
|
Assets:
|
|
|
|
|
Real estate and
rental property:
|
|
|
|
|
Land
|
$
1,902,915
|
|
$
1,900,401
|
|
Buildings
|
5,970,428
|
|
5,773,961
|
|
Fixtures and tenant
improvements
|
542,226
|
|
489,626
|
|
8,415,569
|
|
8,163,988
|
|
Less: Accumulated
depreciation
|
(1,779,865)
|
|
(1,670,717)
|
|
6,635,704
|
|
6,493,271
|
|
Land held for
development and construction in progress
|
496,368
|
|
475,123
|
|
Real estate held for
sale, net
|
7,369
|
|
—
|
|
Real estate,
net
|
7,139,441
|
|
6,968,394
|
|
|
|
|
|
Investments in and
advances to joint ventures
|
631,983
|
|
613,017
|
|
Cash
|
35,351
|
|
31,174
|
|
Restricted
cash
|
25,853
|
|
23,658
|
|
Notes receivable,
net
|
77,857
|
|
68,718
|
|
Receivables,
including straight-line rent, net
|
119,061
|
|
126,228
|
|
Other assets,
net
|
315,597
|
|
224,648
|
|
$
8,345,143
|
|
$
8,055,837
|
|
|
|
|
|
Liabilities &
Equity:
|
|
|
|
|
Indebtedness:
|
|
|
|
|
Revolving credit
facilities
|
$
42,869
|
|
$
147,905
|
|
Unsecured
debt
|
2,453,336
|
|
2,147,097
|
|
Unsecured term
loan
|
350,000
|
|
350,000
|
|
Mortgage and other
secured debt
|
1,749,852
|
|
1,674,141
|
|
4,596,057
|
|
4,319,143
|
|
Dividends
payable
|
49,826
|
|
44,210
|
|
Other
liabilities
|
346,933
|
|
326,024
|
|
Total
liabilities
|
4,992,816
|
|
4,689,377
|
|
|
|
|
|
Preferred
shares
|
405,000
|
|
405,000
|
|
Common
shares
|
32,422
|
|
31,524
|
|
Paid-in-capital
|
4,789,730
|
|
4,629,257
|
|
Accumulated
distributions in excess of net income
|
(1,867,741)
|
|
(1,694,822)
|
|
Deferred compensation
obligation
|
16,492
|
|
15,556
|
|
Accumulated other
comprehensive income
|
(29,866)
|
|
(27,925)
|
|
Less: Common
shares in treasury at cost
|
(17,484)
|
|
(16,452)
|
|
Non-controlling
interests
|
23,774
|
|
24,322
|
|
Total
equity
|
3,352,327
|
|
3,366,460
|
|
$
8,345,143
|
|
$
8,055,837
|
|
DDR
Corp.
Financial
Highlights
|
|
|
|
|
|
|
|
(A) Other revenues
were comprised of the following (in millions):
|
|
|
|
|
|
|
|
Three-Month
Periods
Ended September 30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Lease termination
fees
|
|
$ 1.0
|
|
$ 4.0
|
|
$ 6.2
|
|
$ 4.5
|
|
Other
miscellaneous
|
|
0.1
|
|
0.1
|
|
0.4
|
|
0.3
|
|
|
$ 1.1
|
|
$ 4.1
|
|
$ 6.6
|
|
$ 4.8
|
|
|
|
|
|
|
|
|
(B) The Company
recorded impairment charges on the following (in
millions):
|
|
|
|
|
|
|
|
Three-Month
Periods
Ended September 30,
|
|
Nine-Month
Periods
Ended September 30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Land held for
development
|
|
$
—
|
|
$
1.6
|
|
$
—
|
|
$
8.0
|
|
Undeveloped
land
|
|
—
|
|
1.0
|
|
2.6
|
|
20.1
|
|
Assets marketed for
sale
|
|
24.1
|
|
—
|
|
51.5
|
|
16.6
|
|
Total continuing
operations
|
|
24.1
|
|
2.6
|
|
54.1
|
|
44.7
|
|
|
|
|
|
|
|
|
|
|
Sold
assets
|
|
—
|
|
5.7
|
|
12.7
|
|
61.1
|
|
Total discontinued
operations
|
|
—
|
|
5.7
|
|
12.7
|
|
61.1
|
|
Joint venture
investments
|
|
—
|
|
26.1
|
|
—
|
|
26.7
|
|
Total impairment
charges
|
|
$ 24.1
|
|
$ 34.4
|
|
$ 66.8
|
|
$132.5
|
|
|
|
|
|
|
|
|
(C) The Company
recorded the following in connection with its outstanding
convertible debt (in millions):
|
|
|
|
|
|
|
|
Three-Month
Periods
Ended September 30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Non-cash interest
expense related to
amortization of the debt discount
|
|
$ 2.7
|
|
$ 2.6
|
|
$ 8.0
|
|
$ 8.3
|
|
|
|
|
|
|
|
|
(D) Other income
(expenses) were comprised of the following (in
millions):
|
|
|
|
|
|
|
|
Three-Month
Periods
Ended September 30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Transaction and other
(expenses) income
|
|
$
(1.9)
|
|
$
0.1
|
|
$ (2.4)
|
|
$ (3.0)
|
|
Litigation-related
expenses
|
|
(0.4)
|
|
(2.0)
|
|
(1.2)
|
|
(3.5)
|
|
Debt extinguishment
gain (costs), net
|
|
—
|
|
—
|
|
0.3
|
|
(0.6)
|
|
|
$ (2.3)
|
|
$ (1.9)
|
|
$ (3.3)
|
|
$ (7.1)
|
|
|
|
|
|
|
|
|
(E) The operating
results related to assets classified as discontinued operations are
summarized as follows (in millions):
|
|
|
|
|
|
|
|
Three-Month
Periods
Ended September
30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Revenues from
operations
|
|
$
2.2
|
|
$
7.8
|
|
$
12.0
|
|
$
27.1
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
0.6
|
|
2.5
|
|
3.6
|
|
9.5
|
|
Impairment
charges
|
|
—
|
|
5.7
|
|
12.7
|
|
61.1
|
|
Interest,
net
|
|
0.4
|
|
1.5
|
|
2.6
|
|
6.0
|
|
Depreciation and
amortization
|
|
0.5
|
|
1.7
|
|
2.9
|
|
7.3
|
|
Total
expenses
|
|
1.5
|
|
11.4
|
|
21.8
|
|
83.9
|
|
Income (loss) before
gain (loss) on disposition of real estate
|
|
0.7
|
|
(3.6)
|
|
(9.8)
|
|
(56.8)
|
|
Gain (loss) on
disposition of real estate, net
|
|
8.7
|
|
(0.2)
|
|
7.2
|
|
3.1
|
|
Net income
(loss)
|
|
$ 9.4
|
|
$ (3.8)
|
|
$ (2.6)
|
|
$ (53.7)
|
|
|
|
|
|
|
|
|
(F) The gains and
charges excluded from Operating FFO for the three- and nine-month
periods ended September 30, 2013 and 2012, respectively, are
summarized as follows (in millions):
|
|
|
|
|
|
|
|
Three-Month
Periods
Ended September
30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Non-cash impairment
charges – non-depreciable consolidated assets
|
|
$ —
|
|
$
2.6
|
|
$ 2.6
|
|
$
28.1
|
|
Loss on debt
retirement
|
|
—
|
|
—
|
|
—
|
|
13.5
|
|
Other expense
(income), net – transaction costs, litigation costs debt
extinguishment (gain) costs and other expenses
|
|
2.4
|
|
2.9
|
|
4.0
|
|
8.1
|
|
Equity in net
(income) loss of joint ventures – currency adjustments, debt
extinguishment costs, gain on sale of assets and other
expenses
|
|
(0.4)
|
|
(0.3)
|
|
(0.7)
|
|
0.8
|
|
Non-cash gain on
disposition of non-depreciable real estate, net
|
|
(1.9)
|
|
(0.2)
|
|
(0.2)
|
|
(5.8)
|
|
Non-cash gain on
change in control of interests
|
|
—
|
|
(40.6)
|
|
(1.1)
|
|
(80.0)
|
|
Non-cash loss on debt
extinguishment – discontinued operations
|
|
—
|
|
—
|
|
—
|
|
0.3
|
|
Non-cash write-off of
preferred share original issuance costs
|
|
—
|
|
5.8
|
|
5.2
|
|
5.8
|
|
Total adjustments
from FFO to Operating FFO
|
|
$ 0.1
|
|
$ (29.8)
|
|
$ 9.8
|
|
$ (29.2)
|
|
|
|
|
|
|
|
|
|
|
(G) The Company's per
share information is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
At September
30,
|
|
|
|
|
|
|
2013
|
|
2012
|
|
|
|
Common shares
outstanding
|
|
|
|
324.1
|
|
309.7
|
|
|
|
OP Units outstanding
("OP Units")
|
|
|
|
0.4
|
|
0.4
|
|
|
|
Three-Month
Periods
Ended September
30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(0.02)
|
|
$ 0.04
|
|
$
(0.14)
|
|
$ (0.19)
|
|
Diluted
|
$
(0.02)
|
|
$ 0.04
|
|
$
(0.14)
|
|
$ (0.19)
|
|
Basic – average
shares outstanding
|
318.2
|
|
302.2
|
|
316.1
|
|
286.0
|
|
Diluted – average
shares outstanding
|
318.2
|
|
302.9
|
|
316.1
|
|
287.7
|
|
Dividends
Declared:
|
$ 0.135
|
|
$
0.12
|
|
$
0.405
|
|
$
0.36
|
|
|
|
|
|
|
|
|
|
FFO per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
0.28
|
|
$
0.37
|
|
$
0.79
|
|
$
0.87
|
|
Diluted
|
$
0.28
|
|
$
0.37
|
|
$
0.79
|
|
$
0.86
|
|
Weighted average
common shares outstanding
|
320.2
|
|
304.5
|
|
318.3
|
|
288.2
|
|
Assumed conversion of
OP Units
|
0.4
|
|
0.4
|
|
0.4
|
|
0.4
|
|
FFO Weighted average
common shares and OP Units – Basic
|
320.6
|
|
304.9
|
|
318.7
|
|
288.6
|
|
Assumed conversion of
dilutive securities
|
0.5
|
|
0.7
|
|
0.5
|
|
1.6
|
|
FFO Weighted average
common shares and OP Units – Diluted
|
321.1
|
|
305.6
|
|
319.2
|
|
290.2
|
|
|
|
|
|
|
|
|
|
Operating
FFO:
|
|
|
|
|
|
|
|
|
Diluted
|
$
0.28
|
|
$
0.27
|
|
$
0.82
|
|
$
0.76
|
|
Operating FFO
Weighted average common shares and OP Units – Diluted
|
321.1
|
|
305.6
|
|
319.2
|
|
290.2
|
|
DDR
Corp.
Summary Results of Combined Unconsolidated Joint Ventures
(In Thousands)
|
|
|
|
|
|
Combined condensed
income statements
|
|
|
|
|
|
Three-Month
Periods
Ended September
30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Minimum
rents
|
$ 131,599
|
|
$ 133,008
|
|
$
395,823
|
|
$ 357,415
|
|
Percentage and
overage rents
|
394
|
|
272
|
|
1,474
|
|
444
|
|
Recoveries from
tenants
|
32,887
|
|
32,268
|
|
98,396
|
|
80,083
|
|
Other
|
16,791
|
|
17,639
|
|
49,910
|
|
60,076
|
|
181,671
|
|
183,187
|
|
545,603
|
|
498,018
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Operating and
maintenance
|
43,729
|
|
40,935
|
|
126,637
|
|
121,491
|
|
Real estate
taxes
|
21,706
|
|
21,256
|
|
64,752
|
|
52,761
|
|
Net operating
income
|
116,236
|
|
120,996
|
|
354,214
|
|
323,766
|
|
Impairment charges
(A)
|
21,875
|
|
—
|
|
66,438
|
|
840
|
|
Depreciation and
amortization of real estate investments
|
58,080
|
|
64,491
|
|
179,027
|
|
142,361
|
|
Interest
expense
|
58,433
|
|
58,876
|
|
175,840
|
|
167,740
|
|
(Loss) income before
other items
|
(22,152)
|
|
(2,371)
|
|
(67,091)
|
|
12,825
|
|
Income tax
expense
|
(6,446)
|
|
(6,591)
|
|
(20,299)
|
|
(18,781)
|
|
Loss from continuing
operations
|
(28,598)
|
|
(8,962)
|
|
(87,390)
|
|
(5,956)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Loss from
operations
|
(2,403)
|
|
(42,976)
|
|
(7,054)
|
|
(57,661)
|
|
(Loss) gain on
disposition, net
|
(21,228)
|
|
1,183
|
|
(27,133)
|
|
1,290
|
|
Loss before gain on
disposition of assets
|
(52,229)
|
|
(50,755)
|
|
(121,577)
|
|
(62,327)
|
|
Gain on disposition
of assets, net
|
151
|
|
1,128
|
|
794
|
|
14,230
|
|
Net loss
|
$ (52,078)
|
|
$ (49,627)
|
|
$
(120,783)
|
|
$
(48,097)
|
|
Non-controlling
interests
|
(5,800)
|
|
(6,155)
|
|
(19,715)
|
|
(19,689)
|
|
Net loss attributable
to unconsolidated joint ventures
|
$ (57,878)
|
|
$ (55,782)
|
|
$
(140,498)
|
|
$
(67,786)
|
|
Net income (loss) at
DDR's ownership interests
|
$
2,800
|
|
$
(1,613)
|
|
$
4,328
|
|
$
11,739
|
|
Basis
differences
|
980
|
|
7,099
|
|
1,215
|
|
5,227
|
|
Equity in net income
of joint ventures
|
$
3,780
|
|
$
5,486
|
|
$
5,543
|
|
$
16,966
|
|
FFO at DDR's
ownership interests (B)
|
$
12,731
|
|
$
13,843
|
|
$
37,103
|
|
$
40,461
|
|
Operating FFO at
DDR's ownership interests (B)
|
$
12,331
|
|
$
13,579
|
|
$
36,413
|
|
$
41,238
|
|
DDR
Corp.
Summary Results of Combined Unconsolidated Joint
Ventures
(In Thousands)
|
|
|
|
|
|
Combined condensed
balance sheets
|
|
|
|
|
|
September 30,
2013
|
|
December 31,
2012
|
|
|
|
|
|
Land
|
$
1,552,832
|
|
$
1,569,548
|
|
Buildings
|
4,653,035
|
|
4,681,462
|
|
Fixtures and tenant
improvements
|
284,451
|
|
244,293
|
|
6,490,318
|
|
6,495,303
|
|
Less: Accumulated
depreciation
|
(873,212)
|
|
(833,816)
|
|
5,617,106
|
|
5,661,487
|
|
Land held for
development and construction in progress (C)
|
283,241
|
|
348,822
|
|
Real estate,
net
|
5,900,347
|
|
6,010,309
|
|
Cash and restricted
cash
|
355,283
|
|
467,200
|
|
Receivables,
including straight-line rent, net
|
104,422
|
|
99,098
|
|
Other assets,
net
|
410,985
|
|
427,014
|
|
$
6,771,037
|
|
$
7,003,621
|
|
|
|
|
|
Mortgage debt
(D)
|
$
4,210,034
|
|
$
4,246,407
|
|
Notes and accrued
interest payable to DDR
|
156,743
|
|
143,338
|
|
Other
liabilities
|
293,711
|
|
342,614
|
|
4,660,488
|
|
4,732,359
|
|
Redeemable preferred
equity
|
198,521
|
|
154,556
|
|
Accumulated
equity
|
1,912,028
|
|
2,116,706
|
|
$
6,771,037
|
|
$
7,003,621
|
|
DDR
Corp.
Summary Results of
Combined Unconsolidated Joint Ventures
|
|
|
|
|
|
(A) For the three-
and nine-month periods ended September 30, 2013, impairment charges
were recorded of which the Company's proportionate share was
approximately $2.7 million and $7.5 million,
respectively.
|
|
|
|
|
|
(B) FFO and Operating
FFO from unconsolidated joint ventures are summarized as follows
(in millions):
|
|
|
|
|
|
Three-Month
Periods
Ended September
30,
|
|
Nine-Month
Periods
Ended September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Net loss attributable
to unconsolidated joint ventures
|
$ (57.9)
|
|
$ (55.8)
|
|
$ (140.5)
|
|
$
(67.8)
|
|
Depreciation and
amortization of real estate investments
|
58.6
|
|
68.3
|
|
180.9
|
|
157.7
|
|
Impairment of
depreciable real estate assets
|
21.9
|
|
39.4
|
|
66.4
|
|
47.6
|
|
Loss (gain) on sale
of depreciable real estate
|
21.2
|
|
(1.2)
|
|
26.7
|
|
(14.4)
|
|
FFO
|
$
43.8
|
|
$
50.7
|
|
$
133.5
|
|
$ 123.1
|
|
FFO at DDR ownership
interests
|
$
12.7
|
|
$
13.8
|
|
$
37.1
|
|
$
40.5
|
|
Operating FFO at
DDR's ownership interests (1)
|
$
12.3
|
|
$
13.6
|
|
$
36.4
|
|
$
41.2
|
|
DDR joint venture
distributions received, net
|
$
4.3
|
|
$
3.5
|
|
$
18.7
|
|
$
19.9
|
|
|
|
|
|
|
|
|
|
(1) Excluded from
Operating FFO is the Company's proportionate share of net activity
related to foreign currency adjustments, debt extinguishments gains
and losses and other expenses as disclosed above in this press
release in Note F.
|
|
(C) The Company's
proportionate share of land held for development and construction
in progress is
as follows (in millions):
|
|
|
|
|
|
September
30,
2013
|
|
December 31,
2012
|
|
Company's
proportionate share
|
$ 78.5
|
|
$ 100.9
|
|
(D) Mortgage debt
consists of the following (in millions):
|
|
|
|
|
|
September
30,
2013
|
|
December 31,
2012
|
|
Company's
proportionate share
|
$ 692.8
|
|
$ 724.9
|
|
Non-recourse debt
included above for which the Company has written its investment
down to zero and is receiving no allocation of income, loss or
FFO
|
22.0
|
|
48.2
|
SOURCE DDR