NEW YORK--(BUSINESS WIRE)--
Urban Edge Properties (NYSE:UE) (the "Company") today announced its
results for the quarter ended June 30, 2018.
Financial Results(1)(2)
-
Generated net income of $59.8 million, or $0.47 per diluted share, for
the quarter compared to net income of $14.9 million, or $0.13 per
diluted share for the second quarter of 2017 and $82.8 million, or
$0.65 per diluted share, for the six months ended June 30, 2018
compared to $69.7 million, or $0.63 per diluted share, for the six
months ended June 30, 2017.
-
Generated Funds from Operations applicable to diluted common
shareholders ("FFO") of $39.6 million, or $0.31 per share, for the
quarter compared to $38.7 million, or $0.34 per share, for the second
quarter of 2017 and $83.7 million, or $0.66 per share, for the six
months ended June 30, 2018 compared to $112.1 million, or $1.01 per
share, for the six months ended June 30, 2017.
-
Generated FFO as Adjusted of $41.6 million, or $0.33 per share, for
the quarter compared to $38.3 million, or $0.33 per share, for the
second quarter of 2017 and $82.9 million, or $0.65 per share, for the
six months ended June 30, 2018 compared to $73.9 million, or $0.66 per
share, for the six months ended June 30, 2017.
Operating Results(1)
Toys "R" Us Bankruptcy
The Company had nine Toys “R” Us (“Toys”) leases comprising
approximately 400,000 square feet which generated approximately $7.0
million in annual gross rents. Rents were paid in full through June 30,
2018.
The status of the nine Toys leases is as follows:
-
The Company paid $6.0 million to recapture the lease at Hudson Mall in
Jersey City, NJ to accelerate the redevelopment of the property. The
previous rent was well under-market at $0.43 per sf annually.
-
Raymour & Flanigan acquired the lease at Manalapan Commons in
Manalapan, NJ.
-
Toys rejected its leases in Woodbridge, NJ, Union, NJ, Amherst, NY and
Wilkes-Barre, PA in July 2018. Annual gross rent on these leases
amounted to approximately $4.0 million. The Company is in active
discussions to lease these spaces.
-
The remaining three leases are held in a separate Toys entity for
which bankruptcy proceedings are ongoing and rent is current through
July 2018. The three properties are located in the Bronx, NY, Cherry
Hill, NJ, and Salem, NH.
Development, Redevelopment and Anchor Repositioning Activity
During the second quarter, the Company completed two redevelopment
projects totaling $12.4 million at a blended yield of 13.6%, consisting
of a 40,000 sf build-to-suit for Best Buy at Bergen Town Center and a
new outparcel building at Marlton Commons for Shake Shack and honeygrow.
The Company has $207 million of active redevelopment projects underway
expected to generate a 7% unleveraged yield of which $87 million remains
to be funded.
The Company’s largest projects include Bergen Town Center and Bruckner
Commons. At Bergen, construction is underway on a 47,000 sf Burlington
expected to open in spring 2019. Enhanced food offerings include Cava
Grill, Ruth’s Chris Steakhouse and a daytime café. At Bruckner, ShopRite
opened in June and Burlington opened in July.
Disposition Activity
On April 26, 2018, the Company sold MacArthur Commons in Allentown, PA
for $55.3 million consistent with its plan to dispose of assets in
non-core markets. The Company recognized a $50.4 million gain in
connection with the sale.
Balance Sheet Highlights at June 30, 2018(1)(3)(4)
-
Total market capitalization of approximately $4.5 billion comprising
126.7 million, fully-diluted common shares valued at $2.9 billion and
$1.6 billion of debt.
-
Net debt to total market capitalization of 24%.
-
Net debt to Adjusted Earnings before interest, tax, depreciation and
amortization for real estate ("EBITDAre") of 4.6x.
- $514.0 million of cash and cash equivalents, including restricted
cash, and no amounts drawn on the $600 million revolving credit
facility.
|
| |
| (1) | |
Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for
definitions and additional detail.
|
| (2) | |
Refer to page 8 for a reconciliation of net income to FFO and FFO as
Adjusted for the quarter and six months ended June 30, 2018.
|
| (3) | |
Refer to page 10 for a reconciliation of net income to EBITDAre and
annualized Adjusted EBITDAre for the quarter and six months ended
June 30, 2018.
|
| (4) | |
Net debt as of June 30, 2018 is calculated as total consolidated
debt of $1.6 billion less total cash and cash equivalents, including
restricted cash, of $514.0 million.
|
| |
|
Non-GAAP Financial Measures
The Company uses certain non-GAAP performance measures, in addition to
the primary GAAP presentations, as we believe these measures improve the
understanding of the Company's operational results. We continually
evaluate the usefulness, relevance, limitations, and calculation of our
reported non-GAAP performance measures to determine how best to provide
relevant information to the investing public, and thus such reported
measures are subject to change. The Company's non-GAAP performance
measures have limitations as they do not include all items of income and
expense that affect operations, and accordingly, should always be
considered as supplemental financial results. The following non-GAAP
measures are commonly used by the Company and investing public to
understand and evaluate our operating results and performance:
-
FFO: The Company believes FFO is a useful, supplemental measure of its
operating performance that is a recognized metric used extensively by
the real estate industry and, in particular REITs. FFO, as defined by
the National Association of Real Estate Investment Trusts ("NAREIT")
and the Company, is net income (computed in accordance with GAAP),
excluding gains (or losses) from sales of depreciated real estate
assets, real estate impairment losses, rental property depreciation
and amortization expense. The Company believes that financial
analysts, investors and shareholders are better served by the
presentation of comparable period operating results generated from FFO
primarily because it excludes the assumption that the value of real
estate assets diminish predictably. FFO does not represent cash flows
from operating activities in accordance with GAAP, should not be
considered an alternative to net income as an indication of our
performance, and is not indicative of cash flow as a measure of
liquidity or our ability to make cash distributions.
-
FFO as Adjusted: The Company provides disclosure of FFO as Adjusted
because it believes it is a useful supplemental measure of its core
operating performance that facilitates comparability of historical
financial periods. FFO as Adjusted is calculated by making certain
adjustments to FFO to account for items the Company does not believe
are representative of ongoing core operating results including
non-comparable revenues and expenses. The Company's method of
calculating FFO as Adjusted may be different from methods used by
other REITs and, accordingly, may not be comparable to such other
REITs.
-
Cash NOI: The Company uses cash NOI internally to make investment and
capital allocation decisions and to compare the unlevered performance
of our properties to our peers. The Company believes cash NOI is
useful to investors as a performance measure because, when compared
across periods, cash NOI reflects the impact on operations from trends
in occupancy rates, rental rates, operating costs and acquisition and
disposition activity on an unleveraged basis, providing perspective
not immediately apparent from operating income or net income. The
Company calculates cash NOI using net income as defined by GAAP
reflecting only those income and expense items that are incurred at
the property level, adjusted for the following items: lease
termination fees, bankruptcy settlement income, non-cash rental income
and ground rent expense and income or expenses that we do not believe
are representative of ongoing operating results, if any.
-
Same-property Cash NOI: The Company provides disclosure of cash NOI on
a same-property basis, which includes the results of properties that
were owned and operated for the entirety of the reporting periods
being compared totaling 77 properties for the three months ended
June 30, 2018 and 2017 and 75 properties for the six months ended
June 30, 2018 and 2017. Information provided on a same-property basis
excludes properties under development, redevelopment or that involve
anchor repositioning where a substantial portion of the gross leasable
area ("GLA") is taken out of service and also excludes properties
acquired, sold, or under contract to be sold during the periods being
compared. As such, same-property cash NOI assists in eliminating
disparities in net income due to the development, redevelopment,
acquisition or disposition of properties during the periods presented,
and thus provides a more consistent performance measure for the
comparison of the operating performance of the Company's properties.
While there is judgment surrounding changes in designations, a
property is removed from the same-property pool when it is designated
as a redevelopment property because it is undergoing significant
renovation or retenanting pursuant to a formal plan that is expected
to have a significant impact on its operating income. A development or
redevelopment property is moved back to the same-property pool once a
substantial portion of the NOI growth expected from the development or
redevelopment is reflected in both the current and comparable prior
year period, generally one year after at least 80% of the expected NOI
from the project is realized on a cash basis. Acquisitions are moved
into the same-property pool once we have owned the property for the
entirety of the comparable periods and the property is not under
significant development or redevelopment. The Company has also
provided disclosure of cash NOI on a same-property basis adjusted to
include redevelopment properties. Same-property cash NOI may include
other adjustments as detailed in the Reconciliation of Net Income to
cash NOI and same-property cash NOI included in the tables
accompanying this press release.
-
EBITDAre and Adjusted EBITDAre: EBITDAre and Adjusted EBITDAre are
supplemental, non-GAAP measures utilized by us in various financial
ratios. The White Paper on EBITDAre, approved by NAREIT's Board of
Governors in September 2017, defines EBITDAre as net income (computed
in accordance with GAAP), adjusted for interest expense, income tax
expense, depreciation and amortization, losses and gains on the
disposition of depreciated property, impairment write-downs of
depreciated property and investments in unconsolidated joint ventures,
and adjustments to reflect the entity's share of EBITDAre of
unconsolidated joint ventures. EBITDAre and Adjusted EBITDAre are
presented to assist investors in the evaluation of REITs, as a measure
of the Company's operational performance as they exclude various items
that do not relate to or are not indicative of our operating
performance and because they approximate key performance measures in
our debt covenants. Accordingly, the Company believes that the use of
EBITDAre and Adjusted EBITDAre, as opposed to income before income
taxes in various ratios, provides meaningful performance measures
related to the Company's ability to meet various coverage tests for
the stated periods. The Company also presents the ratio of net debt
(net of cash) to annualized Adjusted EBITDAre as of June 30, 2018, and
net debt (net of cash) to total market capitalization, which it
believes is useful to investors as a supplemental measure in
evaluating the Company's balance sheet leverage. The presentation of
EBITDAre and Adjusted EBITDAre are consistent with EBITDA and Adjusted
EBITDA as presented in prior periods.
The Company believes net income is the most directly comparable GAAP
financial measure to the non-GAAP performance measures outlined above.
Reconciliations of these measures to net income have been provided in
the tables accompanying this press release.
Operating Metrics
The Company presents certain operating metrics related to our properties
including occupancy, leasing activity and rental rates. Operating
metrics are used by the Company and are useful to investors in
facilitating an understanding of the operational performance for our
properties.
Occupancy metrics represent the percentage of occupied gross leasable
area based on executed leases (including properties in development and
redevelopment) and includes leases signed, but for which rent has not
yet commenced. Same-property retail portfolio occupancy includes
shopping centers and malls that have been owned and operated for the
entirety of the reporting periods being compared totaling 77 properties
for the three months ended June 30, 2018 and 2017 and 75 properties for
the six months ended June 30, 2018 and 2017. Occupancy metrics presented
for the Company's same-property retail portfolio excludes properties
under development, redevelopment or that involve anchor repositioning
where a substantial portion of the gross leasable area is taken out of
service and also excludes properties acquired within the past 12 months,
properties sold, or under contract to be sold during the periods being
compared.
Executed new leases, renewals and exercised options are presented on a
same-space basis. Same-space leases represent those leases signed on
spaces for which there was a previous lease with comparable gross
leasable area.
ADDITIONAL INFORMATION
For a copy of the Company’s supplemental disclosure package, please
access the "Investors" section of UE’s website at www.uedge.com.
Our website also includes other financial information, including our
Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and amendments to those reports.
ABOUT URBAN EDGE
Urban Edge Properties is a NYSE listed real estate investment trust
focused on managing, acquiring, developing, and redeveloping retail real
estate in urban communities, primarily in the New York metropolitan
region. Urban Edge owns 88 properties totaling 16.3 million square feet
of gross leasable area.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Press Release constitute
forward-looking statements as such term is defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements are not
guarantees of future performance. They represent our intentions, plans,
expectations and beliefs and are subject to numerous assumptions, risks
and uncertainties. Our future results, financial condition and business
may differ materially from those expressed in these forward-looking
statements. You can find many of these statements by looking for words
such as “approximates,” “believes,” “expects,” “anticipates,”
“estimates,” “intends,” “plans,” “would,” “may” or other similar
expressions in this Press Release. Many of the factors that will
determine the outcome of these and our other forward-looking statements
are beyond our ability to control or predict; these factors include,
among others, the Company's ability to complete its active development,
redevelopment and anchor repositioning projects, the Company's ability
to pursue, finance and complete acquisition opportunities, the Company's
ability to engage in the projects in its planned expansion and
redevelopment pipeline, the Company's ability to achieve the estimated
unleveraged returns for such projects and acquisitions, the estimated
remediation and repair costs related to Hurricane Maria at the affected
properties. For further discussion of factors that could materially
affect the outcome of our forward-looking statements, see “Risk Factors”
in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended
December 31, 2017 and the other documents filed by the Company with the
Securities and Exchange Commission.
For these statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. You are cautioned not to place undue
reliance on our forward-looking statements, which speak only as of the
date of this Press Release. All subsequent written and oral
forward-looking statements attributable to us or any person acting on
our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. We do not undertake
any obligation to release publicly any revisions to our forward-looking
statements to reflect events or circumstances occurring after the date
of this Press Release.
|
|
URBAN EDGE PROPERTIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) |
|
|
|
| |
| |
| | | | June 30, | | December 31, |
| | | | 2018 | | 2017 |
| ASSETS | | | | | | |
|
Real estate, at cost:
| | | | | | |
|
Land
| | | |
$
|
530,658
| | |
$
|
521,669
| |
|
Buildings and improvements
| | | |
2,060,960
| | |
2,010,527
| |
|
Construction in progress
| | | |
125,664
| | |
133,761
| |
|
Furniture, fixtures and equipment
| | | |
6,615
|
| |
5,897
|
|
|
Total
| | | |
2,723,897
| | |
2,671,854
| |
|
Accumulated depreciation and amortization
| | | |
(616,284
|
)
| |
(587,127
|
)
|
|
Real estate, net
| | | |
2,107,613
| | |
2,084,727
| |
|
Cash and cash equivalents
| | | |
500,930
| | |
490,279
| |
|
Restricted cash
| | | |
13,057
| | |
10,562
| |
|
Tenant and other receivables, net of allowance for doubtful accounts
of $6,176 and $4,937, respectively
| | | |
23,017
| | |
20,078
| |
|
Receivable arising from the straight-lining of rents, net of
allowance for doubtful accounts of $562 and $494, respectively
| | | |
84,378
| | |
85,843
| |
|
Identified intangible assets, net of accumulated amortization of
$39,770 and $33,827, respectively
| | | |
76,310
| | |
87,249
| |
|
Deferred leasing costs, net of accumulated amortization of $15,809
and $14,796, respectively
| | | |
20,291
| | |
20,268
| |
|
Deferred financing costs, net of accumulated amortization of $2,252
and $1,740, respectively
| | | |
2,731
| | |
3,243
| |
|
Prepaid expenses and other assets
| | | |
12,228
|
| |
18,559
|
|
|
Total assets
| | | |
$
|
2,840,555
|
| |
$
|
2,820,808
|
|
| | | | | |
|
| LIABILITIES AND EQUITY | | | | | | |
|
Liabilities:
| | | | | | |
|
Mortgages payable, net
| | | |
$
|
1,551,788
| | |
$
|
1,564,542
| |
|
Accounts payable and accrued expenses
| | | |
80,768
| | |
69,595
| |
|
Identified intangible liabilities, net of accumulated amortization
of $68,938 and $65,832, respectively
| | | |
168,540
| | |
180,959
| |
|
Other liabilities
| | | |
17,527
|
| |
15,171
|
|
|
Total liabilities
| | | |
1,818,623
|
| |
1,830,267
|
|
|
Commitments and contingencies
| | | | | | |
|
Shareholders’ equity:
| | | | | | |
|
Common shares: $0.01 par value; 500,000,000 shares authorized and
114,004,276 and 113,827,529 shares issued and outstanding,
respectively
| | | |
1,140
| | |
1,138
| |
|
Additional paid-in capital
| | | |
950,958
| | |
946,402
| |
|
Accumulated deficit
| | | |
(33,307
|
)
| |
(57,621
|
)
|
|
Noncontrolling interests:
| | | | | | |
|
Operating partnership
| | | |
102,714
| | |
100,218
| |
|
Consolidated subsidiaries
| | | |
427
|
| |
404
|
|
|
Total equity
| | | |
1,021,932
|
| |
990,541
|
|
|
Total liabilities and equity
| | | |
$
|
2,840,555
|
| |
$
|
2,820,808
|
|
| | | | | | | | | |
|
|
|
URBAN EDGE PROPERTIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts) |
|
|
|
| |
| |
| | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | | 2018 |
| 2017 | | 2018 |
| 2017 |
| REVENUE | | | | | | | | | | |
|
Property rentals
| | | |
$
|
74,546
| | |
$
|
64,708
| | |
$
|
144,268
| | |
$
|
127,206
| |
|
Tenant expense reimbursements
| | | |
26,222
| | |
23,881
| | |
54,894
| | |
47,652
| |
|
Management and development fees
| | | |
347
| | |
351
| | |
689
| | |
830
| |
|
Income from acquired leasehold interest
| | | |
—
| | |
—
| | |
—
| | |
39,215
| |
|
Other income
| | | |
855
|
| |
561
|
| |
1,172
|
| |
662
|
|
|
Total revenue
| | | |
101,970
|
| |
89,501
|
| |
201,023
|
| |
215,565
|
|
| EXPENSES | | | | | | | | | | |
|
Depreciation and amortization
| | | |
30,441
| | |
23,701
| | |
51,711
| | |
39,529
| |
|
Real estate taxes
| | | |
15,587
| | |
14,711
| | |
31,362
| | |
28,103
| |
|
Property operating
| | | |
20,492
| | |
11,088
| | |
37,159
| | |
24,456
| |
|
General and administrative
| | | |
8,236
| | |
7,841
| | |
15,877
| | |
15,973
| |
|
Casualty and impairment loss (gain), net
| | | |
35
| | |
303
| | |
(1,306
|
)
| |
3,467
| |
|
Ground rent
| | | |
2,752
| | |
2,436
| | |
5,488
| | |
5,106
| |
|
Provision for doubtful accounts
| | | |
1,273
|
| |
906
|
| |
2,509
|
| |
1,099
|
|
|
Total expenses
| | | |
78,816
|
| |
60,986
|
| |
142,800
|
| |
117,733
|
|
|
Operating income
| | | |
23,154
| | |
28,515
| | |
58,223
| | |
97,832
| |
|
Gain on sale of real estate
| | | |
50,440
| | |
—
| | |
50,440
| | |
—
| |
|
Interest income
| | | |
2,031
| | |
336
| | |
3,555
| | |
463
| |
|
Interest and debt expense
| | | |
(15,659
|
)
| |
(13,627
|
)
| |
(31,303
|
)
| |
(26,742
|
)
|
|
Gain (loss) on extinguishment of debt
| | | |
—
|
| |
—
|
| |
2,524
|
| |
(1,274
|
)
|
|
Income before income taxes
| | | |
59,966
| | |
15,224
| | |
83,439
| | |
70,279
| |
|
Income tax expense
| | | |
(192
|
)
| |
(304
|
)
| |
(626
|
)
| |
(624
|
)
|
|
Net income
| | | |
59,774
| | |
14,920
| | |
82,813
| | |
69,655
| |
|
Less net income attributable to noncontrolling interests in:
| | | | | | | | | | |
|
Operating partnership
| | | |
(6,025
|
)
| |
(1,326
|
)
| |
(8,353
|
)
| |
(5,464
|
)
|
|
Consolidated subsidiaries
| | | |
(12
|
)
| |
(11
|
)
| |
(23
|
)
| |
(22
|
)
|
|
Net income attributable to common shareholders
| | | |
$
|
53,737
|
| |
$
|
13,583
|
| |
$
|
74,437
|
| |
$
|
64,169
|
|
| | | | | | | | | |
|
|
Earnings per common share - Basic:
| | | |
$
|
0.47
|
| |
$
|
0.13
|
| |
$
|
0.65
|
| |
$
|
0.63
|
|
|
Earnings per common share - Diluted:
| | | |
$
|
0.47
|
| |
$
|
0.13
|
| |
$
|
0.65
|
| |
$
|
0.63
|
|
|
Weighted average shares outstanding - Basic
| | | |
113,739
|
| |
104,063
|
| |
113,708
|
| |
101,863
|
|
|
Weighted average shares outstanding - Diluted
| | | |
113,942
|
| |
104,260
|
| |
114,151
|
| |
111,224
|
|
| | | | | | | | | | | | | |
|
Reconciliation of Net Income to FFO and FFO as Adjusted
The following table reflects the reconciliation of net income to FFO and
FFO as Adjusted for the three and six months ended June 30, 2018. Net
income is considered the most directly comparable GAAP measure. Refer to
"Non-GAAP Financial Measures" on page 3 for a description of FFO and FFO
as Adjusted.
|
|
|
| |
| |
| | | | Three Months Ended
June 30, 2018 | | Six Months Ended
June 30, 2018 |
| | | |
(in thousands)
|
|
(per share)
| |
(in thousands)
|
|
(per share)
|
|
Net income
| | | |
$
|
59,774
| | |
$
|
0.47
| | |
$
|
82,813
| | |
$
|
0.65
| |
|
Less net income attributable to noncontrolling interests in:
| | | | | | | | | | |
|
Operating partnership
| | | |
(6,025
|
)
| |
(0.05
|
)
| |
(8,353
|
)
| |
(0.07
|
)
|
|
Consolidated subsidiaries
| | | |
(12
|
)
| |
—
|
| |
(23
|
)
| |
—
|
|
|
Net income attributable to common shareholders
| | | |
53,737
| | |
0.42
| | |
74,437
| | |
0.58
| |
|
Adjustments:
| | | | | | | | | | |
|
Rental property depreciation and amortization
| | | |
30,258
| | |
0.24
| | |
51,330
| | |
0.41
| |
|
Gain on sale of real estate
| | | |
(50,440
|
)
| |
(0.40
|
)
| |
(50,440
|
)
| |
(0.40
|
)
|
|
Limited partnership interests in operating partnership
| | | |
6,025
|
| |
0.05
|
| |
8,353
|
| |
0.07
|
|
|
FFO applicable to diluted common shareholders
| | | |
39,580
| | |
0.31
| | |
83,680
| | |
0.66
| |
| | | | | | | | | |
|
|
Tenant bankruptcy settlement income
| | | |
(114
|
)
| |
—
| | |
(278
|
)
| |
—
| |
|
Casualty gain, net(3) | | | |
(108
|
)
| |
—
| | |
(688
|
)
| |
(0.01
|
)
|
|
Impact of Toys "R" Us, Inc. lease terminations(2) | | | |
1,875
| | |
0.02
| | |
1,875
| | |
0.02
| |
|
Environmental remediation costs
| | | |
334
| | |
—
| | |
584
| | |
—
| |
|
Tax impact from hurricane
| | | |
58
| | |
—
| | |
226
| | |
—
| |
|
Gain on extinguishment of debt
| | | |
—
|
| |
—
|
| |
(2,524
|
)
| |
(0.02
|
)
|
|
FFO as Adjusted applicable to diluted common shareholders
| | | |
$
|
41,625
|
| |
$
|
0.33
|
| |
$
|
82,875
|
| |
$
|
0.65
|
|
| | | | | | | | | |
|
|
Weighted average diluted shares used to calculate EPS
| | | |
113,942
| | | | |
114,151
| | | |
|
Assumed conversion of OP and LTIP Units to common shares(1) | | | |
12,660
|
| | | |
12,443
|
| | |
|
Weighted average diluted common shares - FFO
| | | |
126,602
|
| | | |
126,594
|
| | |
| (1) |
|
Operating Partnership ("OP") and Long-Term Incentive Plan ("LTIP")
Units are excluded from the calculation of earnings per diluted
share for the three and six months ended June 30, 2018 because their
inclusion is anti-dilutive. FFO includes earnings allocated to
unitholders as the inclusion of these units is dilutive to FFO per
share.
|
| (2) | |
Amount reflects a $6.0 million lease termination payment (classified
within property operating expense) and $1.0 million of a provision
for doubtful accounts for reserves recorded on straight-line rents,
partially offset by the write-off of $5.1 million of below-market
intangible liabilities (classified within property rental revenues).
|
| (3) | |
The following amount reflects insurance proceeds net of losses as a
result of Hurricane Maria in Puerto Rico, in September 2017, and a
tornado in Wilkes-Barre, PA, in June 2018:
|
| (in thousands) |
|
|
| Three Months Ended
June 30, 2018 |
| Six Months Ended
June 30, 2018 |
|
Insurance proceeds, net of casualty related expenses
| | | |
$
|
(35
|
)
| |
$
|
1,306
| |
|
Reversal of provision for doubtful accounts on previously reserved
balances
| | | |
408
| | |
227
| |
|
Property rental and tenant reimbursement losses
| | | |
(265
|
)
| |
(845
|
)
|
|
Casualty gain, net
| | | |
$
|
108
|
| |
$
|
688
|
|
| | | | | | | | | |
|
Reconciliation of Net Income to Cash NOI and Same-Property Cash NOI
The following table reflects the reconciliation of net income to cash
NOI, same-property cash NOI and same-property cash NOI including
properties in redevelopment for the three and six months ended June 30,
2018 and 2017. Net income is considered the most directly comparable
GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a
description of cash NOI and same-property cash NOI.
|
|
|
| |
| |
| | | | Three Months Ended
June 30, | | Six Months Ended
June 30, |
| (Amounts in thousands) | | | | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Net income
| | | |
$
|
59,774
| | |
$
|
14,920
| | |
$
|
82,813
| | |
$
|
69,655
| |
|
Management and development fee income from non-owned properties
| | | |
(347
|
)
| |
(351
|
)
| |
(689
|
)
| |
(830
|
)
|
|
Other expense (income)
| | | |
4
| | |
(22
|
)
| |
(73
|
)
| |
(86
|
)
|
|
Depreciation and amortization
| | | |
30,441
| | |
23,701
| | |
51,711
| | |
39,529
| |
|
General and administrative expense
| | | |
8,236
| | |
7,841
| | |
15,877
| | |
15,973
| |
|
Casualty and impairment loss (gain), net(5) | | | |
35
| | |
303
| | |
(1,306
|
)
| |
3,467
| |
|
Gain on sale of real estate
| | | |
(50,440
|
)
| |
—
| | |
(50,440
|
)
| |
—
| |
|
Interest income
| | | |
(2,031
|
)
| |
(336
|
)
| |
(3,555
|
)
| |
(463
|
)
|
|
Interest and debt expense
| | | |
15,659
| | |
13,627
| | |
31,303
| | |
26,742
| |
|
(Gain) loss on extinguishment of debt
| | | |
—
| | |
—
| | |
(2,524
|
)
| |
1,274
| |
|
Income tax expense
| | | |
192
| | |
304
| | |
626
| | |
624
| |
|
Non-cash revenue and expenses
| | | |
(6,792
|
)
| |
(1,452
|
)
| |
(9,081
|
)
| |
(42,253
|
)
|
|
Cash NOI(1) | | | |
54,731
|
| |
58,535
|
| |
114,662
|
| |
113,632
|
|
|
Adjustments:
| | | | | | | | | | |
|
Non-same property cash NOI(1)(2) | | | |
(11,095
|
)
| |
(9,073
|
)
| |
(25,029
|
)
| |
(19,099
|
)
|
|
Tenant bankruptcy settlement and lease termination income
| | | |
(813
|
)
| |
(486
|
)
| |
(977
|
)
| |
(513
|
)
|
|
Natural disaster related operating (gain) loss(3) | | | |
(128
|
)
| |
—
| | |
178
| | |
—
| |
|
Lease termination payment
| | | |
6,000
| | |
—
| | |
6,000
| | |
—
| |
|
Environmental remediation costs
| | | |
334
|
| |
—
|
| |
584
|
| |
—
|
|
|
Same-property cash NOI(6) | | | |
$
|
49,029
|
| |
$
|
48,976
|
| |
$
|
95,418
|
| |
$
|
94,020
|
|
|
Cash NOI related to properties being redeveloped(4) | | | |
4,830
|
| |
4,650
|
| |
9,721
|
| |
9,309
|
|
|
Same-property cash NOI including properties in redevelopment(6) | | | |
$
|
53,859
|
| |
$
|
53,626
|
| |
$
|
105,139
|
| |
$
|
103,329
|
|
| (1) |
|
Cash NOI is calculated as total property revenues less property
operating expenses excluding the net effects of non-cash rental
income and non-cash ground rent expense.
|
| (2) | |
Non-same property cash NOI includes cash NOI related to properties
being redeveloped and properties acquired or disposed.
|
| (3) | |
Amount reflects rental and tenant reimbursement losses as well as
provisions or reversal of provisions for outstanding amounts due
from tenants at Las Catalinas and Wilkes-Barre, PA that are subject
to reimbursement from the insurance company.
|
| (4) | |
The result for the six months ended June 30, 2018, excludes $0.5
million of rental and tenant reimbursement losses, partially offset
by a $0.1 million reversal of provisions for payments received from
tenants at Montehiedra that are subject to reimbursement from the
insurance company.
|
| (5) | |
The results for the three and six months ended June 30, 2018 reflect
insurance proceeds offset by hurricane-related expenses. The three
and six months ended June 30, 2017 reflect real estate impairment
losses recorded as a result of the sale of our property in
Eatontown, NJ.
|
| (6) | |
Results for the second quarter of 2018 were negatively impacted by
lower NOI at Las Catalinas Mall in Puerto Rico, primarily due to
tenant vacancies and rent reductions, and lower NOI at Bergen Town
Center and The Shops at Bruckner due to expected vacancies on spaces
planned for redevelopment. Excluding these amounts, same-property
cash NOI would have increased by 3.2% for the quarter and
same-property cash NOI including properties in redevelopment would
have increased by 3.3% for the quarter:
|
|
| |
|
|
| Three Months Ended June 30, |
|
|
| | | | | 2018 |
| 2017 | | Percent Change |
|
Same-property cash NOI
| | | |
$
|
49,029
| | |
$
|
48,976
| | |
0.1%
|
|
Less: Cash NOI of Las Catalinas, Bergen Town Center, and The Shops
at Bruckner
| | | |
(10,190
|
)
| |
(11,340
|
)
| |
|
|
Same-property cash NOI excluding items above
| | | |
38,839
|
| |
37,636
|
| |
3.2%
|
|
Cash NOI related to properties being redeveloped
| | | |
4,830
|
| |
4,650
|
| |
|
|
Same-property cash NOI including properties in redevelopment
excluding items above
| | | |
$
|
43,669
|
| |
$
|
42,286
|
| |
3.3%
|
| | | | | | | | | | | |
|
Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre
The following table reflects the reconciliation of net income to
EBITDAre and Adjusted EBITDAre for the three and six months ended
June 30, 2018. Net income is considered the most directly comparable
GAAP measure. Refer to "Non-GAAP Financial Measures" on page 3 for a
description of EBITDAre and Adjusted EBITDAre.
|
|
|
| |
| |
| | | | Three Months Ended June 30, | | Six Months Ended June 30, |
| (Amounts in thousands) | | | | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Net income
| | | |
$
|
59,774
| | |
$
|
14,920
| | |
$
|
82,813
| | |
$
|
69,655
| |
|
Depreciation and amortization
| | | |
30,441
| | |
23,701
| | |
51,711
| | |
39,529
| |
|
Interest and debt expense
| | | |
15,659
| | |
13,627
| | |
31,303
| | |
26,742
| |
|
Income tax expense
| | | |
192
| | |
304
| | |
626
| | |
624
| |
|
Gain on sale of real estate
| | | |
(50,440
|
)
| |
—
| | |
(50,440
|
)
| |
—
| |
|
Real estate impairment loss
| | | |
—
|
| |
303
|
| |
—
|
| |
3,467
|
|
|
EBITDAre
| | | |
55,626
|
| |
52,855
|
| |
116,013
|
| |
140,017
|
|
|
Adjustments for Adjusted EBITDAre:
| | | | | | | | | | |
|
Casualty gain, net(1) | | | |
(108
|
)
| |
—
| | |
(688
|
)
| |
—
| |
|
Tenant bankruptcy settlement income
| | | |
(114
|
)
| |
(486
|
)
| |
(278
|
)
| |
(513
|
)
|
|
Impact of Toys "R" Us, Inc. lease terminations(2) | | | |
1,875
| | |
—
| | |
1,875
| | |
—
| |
|
Environmental remediation costs
| | | |
334
| | |
—
| | |
584
| | |
—
| |
|
Transaction costs
| | | |
—
| | |
132
| | |
—
| | |
183
| |
|
(Gain) loss on extinguishment of debt
| | | |
—
| | |
—
| | |
(2,524
|
)
| |
1,274
| |
|
Income from acquired leasehold interest
| | | |
—
|
| |
—
|
| |
—
|
| |
(39,215
|
)
|
|
Adjusted EBITDAre
| | | |
$
|
57,613
|
| |
$
|
52,501
|
| |
$
|
114,982
|
| |
$
|
101,746
|
|
| (1) |
|
Refer to footnote 3 on page 8, Reconciliation of Net Income to FFO
and FFO as Adjusted, for the adjustments included in this line item.
|
| (2) | |
Amount reflects a $6.0 million lease termination payment and a $1.0
million reserve against receivables from straight line rents,
partially offset by the write-off of $5.1 million of below-market
intangible liabilities.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180801005925/en/
Urban Edge Properties
Mark Langer, 212-956-2556
EVP and Chief
Financial Officer
Source: Urban Edge Properties