NEW YORK--(BUSINESS WIRE)--
Urban Edge Properties (NYSE:UE) (the "Company") today announced its
results for the quarter and year ended December 31, 2018.
Financial Results(1)(2)
-
Generated net income of $7.3 million, or $0.06 per diluted share, for
the quarter and $117.0 million, or $0.92 per diluted share, for the
year ended December 31, 2018.
-
Generated Funds from Operations applicable to diluted common
shareholders ("FFO") of $38.5 million, or $0.30 per share, for the
quarter compared to $5.6 million, or $0.04 per share, for the fourth
quarter of 2017 and $168.5 million, or $1.33 per share, for the year
ended December 31, 2018 compared to $157.6 million, or $1.33 per
share, for the year ended December 31, 2017.
-
Generated FFO as Adjusted of $40.7 million, or $0.32 per share, for
the quarter compared to $42.7 million, or $0.34 per share, for the
fourth quarter of 2017 and $165.4 million, or $1.31 per share, for the
year ended December 31, 2018 compared to $158.5 million, or $1.34 per
share, for the year ended December 31, 2017.
-
FFO as Adjusted excludes the effects of natural disasters, write-offs
related to tenant bankruptcies and other income and expenses that are
not representative of our ongoing core operating results.
Operating Results(1)
-
Increased same-property cash Net Operating Income ("NOI") including
properties in redevelopment by 0.1% compared to the fourth quarter of
2017 and by 1.4% compared to the year ended December 31, 2017. Fourth
quarter and year ended December 31, 2018 results were negatively
impacted by 370 basis points and 160 basis points, respectively, as a
result of store closures from tenant bankruptcies.
-
Reported a decline of same-property cash NOI excluding properties in
redevelopment of 0.2% over the fourth quarter of 2017. This metric
increased by 0.7% compared to the year ended December 31, 2017. Fourth
quarter and year ended December 31, 2018 results were negatively
impacted by 380 basis points and 160 basis points, respectively, as a
result of store closures from tenant bankruptcies.
-
Reported same-property retail portfolio occupancy of 93.2%, a decrease
of 340 basis points compared to December 31, 2017, which includes a
380 basis point decline attributable to vacancies from tenant
bankruptcies.
-
Reported consolidated retail portfolio occupancy of 92.6%, a decrease
of 340 basis points compared to December 31, 2017, which includes a
380 basis point decline attributable to vacancies from tenant
bankruptcies.
-
Executed 18 new leases, renewals and options totaling 189,000 square
feet ("sf") during the quarter. Same-space leases totaled 169,000 sf
and generated average rent spreads of 7.8% on a GAAP basis and 2.3% on
a cash basis.
In the past year, the Company has recaptured ten anchor leases due to
the bankruptcies of Toys “R” Us, Fallas and National Wholesale
Liquidators representing approximately 4% of total gross leasable area
("GLA") that contributed approximately 3% of cash NOI during 2018. The
Company views these vacancies as an opportunity to upgrade its spaces
with more vibrant retailers and to redevelop certain centers.
Active discussions are under way to release seven of these spaces
primarily to national retailers at comparable average rents. The Company
is exploring redevelopment opportunities for the remaining three spaces
at Bruckner Commons in the Bronx, NY, Hudson Mall in Jersey City, NJ and
Lodi Commons in Lodi, NJ.
Development, Redevelopment and Anchor Repositioning Activity
During the fourth quarter, the Company completed four redevelopment
projects totaling $8.9 million at Goucher Commons in Towson, MD,
Governors Commons in Glen Burnie, MD, Cherry Hill Commons in Cherry
Hill, NJ, and Bergen Town Center in Paramus, NJ, which are expected to
collectively generate an unleveraged yield of 7%.
The Company has $197 million of active redevelopment projects under way
expected to collectively generate a 7% unleveraged yield. Approximately
$51 million of that amount remains to be funded.
Balance Sheet Highlights at December 31, 2018(1)(3)(4)
-
Total market capitalization of approximately $3.7 billion comprised of
127.1 million fully-diluted common shares valued at $2.1 billion and
$1.6 billion of debt.
-
Net debt to total market capitalization of 30%.
-
Net debt to Adjusted Earnings Before Interest, Tax, Depreciation and
Amortization for real estate ("EBITDAre") of 4.7x.
- $457.5 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 year ended December 31, 2018.
|
| (3) | |
Refer to page 10 for a reconciliation of net income to EBITDAre and
Adjusted EBITDAre for the quarter and year ended December 31, 2018.
|
| (4) | |
Net debt as of December 31, 2018 is calculated as total consolidated
debt of $1.6 billion less total cash and cash equivalents, including
restricted cash, of $457.5 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 depreciable real estate and
land when connected to the main business of a REIT, impairments on
depreciable real estate or land related to a REIT's main business and
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 83 properties for the quarters ended
December 31, 2018 and 2017 and 75 properties for the years ended
December 31, 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 or properties
that involve anchor repositioning 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. Adjusted EBITDAre may include other adjustments
not indicative of operating results as detailed in the Reconciliation
of Net Income to EBITDAre and Adjusted EBITDAre included in the tables
accompanying this press release. The Company also presents the ratio
of net debt (net of cash) to annualized Adjusted EBITDAre as of
December 31, 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 is
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 83 properties
for the quarters ended December 31, 2018 and 2017 and 75 properties for
the years ended December 31, 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 our 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 natural disasters at the
affected properties and the loss of or bankruptcy of a major tenant and
the impact of any such event. 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, 2018 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) |
|
| |
| |
| | December 31, | | December 31, |
| | 2018 | | 2017 |
| ASSETS | | | | |
|
Real estate, at cost:
| | | | |
|
Land
| |
$
|
525,819
| | |
$
|
521,669
| |
|
Buildings and improvements
| |
2,156,113
| | |
2,010,527
| |
|
Construction in progress
| |
80,385
| | |
133,761
| |
|
Furniture, fixtures and equipment
| |
6,675
|
| |
5,897
|
|
|
Total
| |
2,768,992
| | |
2,671,854
| |
|
Accumulated depreciation and amortization
| |
(645,872
|
)
| |
(587,127
|
)
|
|
Real estate, net
| |
2,123,120
| | |
2,084,727
| |
|
Cash and cash equivalents
| |
440,430
| | |
490,279
| |
|
Restricted cash
| |
17,092
| | |
10,562
| |
Tenant and other receivables, net of allowance for doubtful
accounts of $6,486 and
$4,937, respectively
| |
28,563
| | |
20,078
| |
Receivable arising from the straight-lining of rents, net of
allowance for doubtful
accounts of $134 and $494, respectively
| |
84,903
| | |
85,843
| |
Identified intangible assets, net of accumulated amortization of
$39,526 and $33,827,
respectively
| |
68,422
| | |
87,249
| |
Deferred leasing costs, net of accumulated amortization of $16,826
and $14,796,
respectively
| |
21,277
| | |
20,268
| |
Deferred financing costs, net of accumulated amortization of
$2,764 and $1,740,
respectively
| |
2,219
| | |
3,243
| |
|
Prepaid expenses and other assets
| |
12,968
|
| |
18,559
|
|
|
Total assets
| |
$
|
2,798,994
|
| |
$
|
2,820,808
|
|
| | | |
|
| LIABILITIES AND EQUITY | | | | |
|
Liabilities:
| | | | |
|
Mortgages payable, net
| |
$
|
1,550,242
| | |
$
|
1,564,542
| |
|
Accounts payable, accrued expenses and other liabilities
| |
98,517
| | |
84,766
| |
Identified intangible liabilities, net of accumulated amortization
of $65,058 and
$65,832, respectively
| |
144,258
|
| |
180,959
|
|
|
Total liabilities
| |
1,793,017
|
| |
1,830,267
|
|
|
Commitments and contingencies
| | | | |
|
Shareholders’ equity:
| | | | |
Common shares: $0.01 par value; 500,000,000 shares authorized and
114,345,565
and 113,827,529 shares issued and outstanding,
respectively
| |
1,143
| | |
1,138
| |
|
Additional paid-in capital
| |
956,420
| | |
946,402
| |
|
Accumulated deficit
| |
(52,857
|
)
| |
(57,621
|
)
|
|
Noncontrolling interests:
| | | | |
|
Operating partnership
| |
100,822
| | |
100,218
| |
|
Consolidated subsidiaries
| |
449
|
| |
404
|
|
|
Total equity
| |
1,005,977
|
| |
990,541
|
|
|
Total liabilities and equity
| |
$
|
2,798,994
|
| |
$
|
2,820,808
|
|
URBAN EDGE PROPERTIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share and per share amounts) |
|
| |
| |
| | Quarter Ended December 31, | | Year Ended December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
| REVENUE | | | | | | | | |
|
Rental revenue
| |
$
|
100,403
| | |
$
|
96,661
| | |
$
|
411,298
| | |
$
|
365,082
| |
|
Management and development fees
| |
405
| | |
336
| | |
1,469
| | |
1,535
| |
|
Income from acquired leasehold interest
| |
—
| | |
—
| | |
—
| | |
39,215
| |
|
Other income
| |
115
|
| |
379
|
| |
1,393
|
| |
1,210
|
|
|
Total revenue
| |
100,923
|
| |
97,376
|
| |
414,160
|
| |
407,042
|
|
| EXPENSES | | | | | | | | |
|
Depreciation and amortization
| |
25,878
| | |
21,776
| | |
99,422
| | |
82,281
| |
|
Real estate taxes
| |
15,919
| | |
15,762
| | |
63,655
| | |
59,737
| |
|
Property operating
| |
14,814
| | |
15,036
| | |
74,222
| | |
50,894
| |
|
General and administrative
| |
9,405
| | |
7,693
| | |
34,984
| | |
30,691
| |
|
Casualty and impairment loss, net
| |
5,674
| | |
1,745
| | |
4,426
| | |
7,382
| |
|
Ground rent
| |
3,238
| | |
2,851
| | |
11,448
| | |
10,848
| |
|
Provision for doubtful accounts
| |
1,550
|
| |
1,771
|
| |
4,138
|
| |
3,445
|
|
|
Total expenses
| |
76,478
|
| |
66,634
|
| |
292,295
|
| |
245,278
|
|
|
Operating income
| |
24,445
| | |
30,742
| | |
121,865
| | |
161,764
| |
|
Gain on sale of real estate
| |
—
| | |
—
| | |
52,625
| | |
202
| |
|
Interest income
| |
2,393
| | |
1,066
| | |
8,336
| | |
2,248
| |
|
Interest and debt expense
| |
(16,809
|
)
| |
(14,839
|
)
| |
(64,868
|
)
| |
(56,218
|
)
|
|
Gain (loss) on extinguishment of debt
| |
—
|
| |
(34,062
|
)
| |
2,524
|
| |
(35,336
|
)
|
|
Income before income taxes
| |
10,029
| | |
(17,093
|
)
| |
120,482
| | |
72,660
| |
|
Income tax (expense) benefit
| |
(2,778
|
)
| |
1,220
|
| |
(3,519
|
)
| |
278
|
|
|
Net income (loss)
| |
7,251
| | |
(15,873
|
)
| |
116,963
| | |
72,938
| |
Less net (income) loss attributable to noncontrolling
interests
in:
| | | | | | | | |
|
Operating partnership
| |
(727
|
)
| |
1,607
| | |
(11,768
|
)
| |
(5,824
|
)
|
|
Consolidated subsidiaries
| |
(11
|
)
| |
(11
|
)
| |
(45
|
)
| |
(44
|
)
|
|
Net income (loss) attributable to common shareholders
| |
$
|
6,513
|
| |
$
|
(14,277
|
)
| |
$
|
105,150
|
| |
$
|
67,070
|
|
| | | | | | | |
|
|
Earnings (loss) per common share - Basic:
| |
$
|
0.06
|
| |
$
|
(0.13
|
)
| |
$
|
0.92
|
| |
$
|
0.62
|
|
|
Earnings (loss) per common share - Diluted:
| |
$
|
0.06
|
| |
$
|
(0.13
|
)
| |
$
|
0.92
|
| |
$
|
0.61
|
|
|
Weighted average shares outstanding - Basic
| |
114,140
|
| |
113,642
|
| |
113,863
|
| |
107,132
|
|
|
Weighted average shares outstanding - Diluted
| |
114,314
|
| |
113,642
|
| |
114,051
|
| |
118,390
|
|
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 quarters and years ended December 31, 2018 and
2017, respectively. 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.
|
| Quarter Ended
December 31, |
| Year Ended
December 31, |
| | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Net income (loss)
| |
$
|
7,251
| | |
$
|
(15,873
|
)
| |
$
|
116,963
| | |
$
|
72,938
| |
|
Less net (income) loss attributable to noncontrolling interests in:
| | | | | | | | |
|
Operating partnership
| |
(727
|
)
| |
1,607
| | |
(11,768
|
)
| |
(5,824
|
)
|
|
Consolidated subsidiaries
| |
(11
|
)
| |
(11
|
)
| |
(45
|
)
| |
(44
|
)
|
|
Net income (loss) attributable to common shareholders
| |
6,513
| | |
(14,277
|
)
| |
105,150
| | |
67,070
| |
|
Adjustments:
| | | | | | | | |
|
Rental property depreciation and amortization
| |
25,675
| | |
21,515
| | |
98,644
| | |
81,401
| |
|
Gain on sale of real estate
| |
—
| | |
—
| | |
(52,625
|
)
| |
(202
|
)
|
|
Real estate impairment loss
| |
5,574
| | |
—
| | |
5,574
| | |
3,467
| |
|
Limited partnership interests in operating partnership
| |
727
|
| |
(1,607
|
)
| |
11,768
|
| |
5,824
|
|
|
FFO Applicable to diluted common shareholders
| |
38,489
|
| |
5,631
|
| |
168,511
|
| |
157,560
|
|
|
FFO per diluted common share(1) | |
0.30
|
| |
0.04
|
| |
1.33
|
| |
1.33
|
|
|
Adjustments to FFO:
| | | | | | | | |
|
Tax impact from Hurricane Maria
| |
2,115
| | |
(1,767
|
)
| |
2,344
| | |
(1,767
|
)
|
|
Construction rental abatement
| |
127
| | |
902
| | |
291
| | |
902
| |
|
Transaction costs
| |
95
| | |
—
| | |
491
| | |
278
| |
|
Impact of tenant bankruptcies(2) | |
6
| | |
—
| | |
(5,075
|
)
| |
—
| |
|
Tenant bankruptcy settlement income
| |
(24
|
)
| |
(27
|
)
| |
(329
|
)
| |
(655
|
)
|
|
Casualty (gain) loss, net(4) | |
(86
|
)
| |
3,922
| | |
(777
|
)
| |
6,092
| |
|
Executive transition costs(3) | |
—
| | |
—
| | |
1,932
| | |
—
| |
|
Environmental remediation costs
| |
—
| | |
—
| | |
584
| | |
—
| |
|
(Gain) loss on extinguishment of debt
| |
—
| | |
34,062
| | |
(2,524
|
)
| |
35,336
| |
|
Income from acquired leasehold interest
| |
—
|
| |
—
|
| |
—
|
| |
(39,215
|
)
|
|
FFO as Adjusted applicable to diluted common shareholders
| |
$
|
40,722
|
| |
$
|
42,723
|
| |
$
|
165,448
|
| |
$
|
158,531
|
|
|
FFO as Adjusted per diluted common share(1) | |
$
|
0.32
|
| |
$
|
0.34
|
| |
$
|
1.31
|
| |
$
|
1.34
|
|
| | | | | | | |
|
|
Weighted Average diluted common shares(1) | |
126,537
| | |
126,665
| | |
126,584
| | |
118,392
| |
| (1) |
|
Weighted average diluted shares used to calculate FFO per share and
FFO as Adjusted per share for the quarter and year ended December
31, 2018 and the quarter ended December 31, 2017 are higher than the
GAAP weighted average diluted shares as a result of the dilutive
impact of LTIP and OP units which may be redeemed for our common
stock. These redeemable units are not included in the weighted
average diluted share count for GAAP purposes because their
inclusion is anti-dilutive. LTIP and OP units are included for the
year ended December 31, 2017 as their inclusion is dilutive.
|
| (2) | |
Amount for the quarter ended December 31, 2018 includes the
write-off of reserves on receivables from straight-line rents,
partially offset by the write-off of below-market intangible
liabilities. Amount for the year ended December 31, 2018, comprises
write-offs of below-market intangible liabilities, partially offset
by lease termination payments and write-offs of reserves on
receivables from straight-line rents.
|
| (3) | |
Amount reflects costs associated with hiring a new Chief Operating
Officer and a new President of Development and severance expenses
related to the termination of a prior executive.
|
| (4) | |
Amounts reflect insurance proceeds net of gains/(losses) as a result
of Hurricane Maria in Puerto Rico in September 2017 and a tornado in
Wilkes-Barre, PA, in June 2018:
|
|
|
Quarter Ended December 31,
|
|
Year Ended December 31,
|
|
(in thousands)
| |
2018
|
|
2017
| |
2018
|
|
2017
|
|
Insurance proceeds, net of casualty related expenses
| |
$
|
(100
|
)
| |
$
|
(1,745
|
)
| |
$
|
1,148
| | |
$
|
(1,745
|
)
|
Reversal of provision for doubtful accounts on previously reserved
balances
(provision for doubtful accounts)
| |
—
| | |
(1,249
|
)
| |
369
| | |
(1,249
|
)
|
|
Property rental and tenant reimbursement adjustments (losses)
| |
186
| | |
(928
|
)
| |
(740
|
)
| |
(928
|
)
|
|
Write-off of net book value of assets damaged
| |
—
|
| |
—
|
| |
—
|
| |
(2,170
|
)
|
|
Casualty gain (loss), net
| |
$
|
86
|
| |
$
|
(3,922
|
)
| |
$
|
777
|
| |
$
|
(6,092
|
)
|
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 quarters and years ended
December 31, 2018 and 2017, respectively. 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.
|
| Quarter Ended
December 31, |
| Year Ended
December 31, |
| (Amounts in thousands) | | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Net income (loss)
| |
$
|
7,251
| | |
$
|
(15,873
|
)
| |
$
|
116,963
| | |
$
|
72,938
| |
|
Management and development fee income from non-owned properties
| |
(405
|
)
| |
(336
|
)
| |
(1,469
|
)
| |
(1,535
|
)
|
|
Other (income) expense
| |
(27
|
)
| |
6
| | |
(146
|
)
| |
(118
|
)
|
|
Depreciation and amortization
| |
25,878
| | |
21,776
| | |
99,422
| | |
82,281
| |
|
General and administrative expense
| |
9,405
| | |
7,693
| | |
34,984
| | |
30,691
| |
|
Casualty and impairment loss, net(1) | |
5,674
| | |
1,745
| | |
4,426
| | |
7,382
| |
|
Gain on sale of real estate
| |
—
| | |
—
| | |
(52,625
|
)
| |
(202
|
)
|
|
Interest income
| |
(2,393
|
)
| |
(1,066
|
)
| |
(8,336
|
)
| |
(2,248
|
)
|
|
Interest and debt expense
| |
16,809
| | |
14,839
| | |
64,868
| | |
56,218
| |
|
(Gain) loss on extinguishment of debt
| |
—
| | |
34,062
| | |
(2,524
|
)
| |
35,336
| |
|
Income tax expense (benefit)
| |
2,778
| | |
(1,220
|
)
| |
3,519
| | |
(278
|
)
|
|
Non-cash revenue and expenses
| |
(3,522
|
)
| |
(2,354
|
)
| |
(32,117
|
)
| |
(47,161
|
)
|
|
Cash NOI(2) | |
61,448
|
| |
59,272
|
| |
226,965
|
| |
233,304
|
|
|
Adjustments:
| | | | | | | | |
|
Non-same property cash NOI(2)(3) | |
(6,878
|
)
| |
(6,427
|
)
| |
(51,132
|
)
| |
(44,623
|
)
|
|
Tenant bankruptcy settlement and lease termination income
| |
(24
|
)
| |
(347
|
)
| |
(1,028
|
)
| |
(975
|
)
|
|
Natural disaster related operating (gain) loss(4) | |
(132
|
)
| |
1,267
| | |
40
| | |
1,267
| |
|
Lease termination payments
| |
—
| | |
—
| | |
15,500
| | |
—
| |
|
Construction rental abatement
| |
127
| | |
902
| | |
291
| | |
902
| |
|
Environmental remediation costs
| |
—
|
| |
—
|
| |
584
|
| |
—
|
|
|
Same-property cash NOI(6) | |
$
|
54,541
|
| |
$
|
54,667
|
| |
$
|
191,220
|
| |
$
|
189,875
|
|
|
Cash NOI related to properties being redeveloped(5) | |
5,269
|
| |
5,066
|
| |
20,431
|
| |
18,937
|
|
|
Same-property cash NOI including properties in redevelopment(6) | |
$
|
59,810
|
| |
$
|
59,733
|
| |
$
|
211,651
|
| |
$
|
208,812
|
|
| (1) |
|
The quarter ended December 31, 2018 reflects impairment losses
recognized at our properties in Salem, NH and West Babylon, NY and
hurricane-related expenses. The year ended December 31, 2018
reflects these items, partially offset by insurance proceeds, net of
casualty-related expenses. The quarter ended December 31, 2017
includes hurricane-related expenses. The year ended December 31,
2017 also includes a write-off of net book value of assets damaged
and real estate impairment losses.
|
| (2) | |
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 but includes bad debt
expense.
|
| (3) | |
Non-same property cash NOI includes cash NOI related to properties
being redeveloped and properties acquired or disposed.
|
| (4) | |
The quarter ended December 31, 2018 excludes rental and tenant
reimbursement adjustments pertaining to Hurricane Maria at Las
Catalinas. The year ended December 31, 2018 reflects rental and
tenant reimbursement losses, offset by reversals of provisions for
payments received from tenants at Las Catalinas. The quarter and
year ended December 31, 2017 reflect rental and tenant reimbursement
losses and provisions for outstanding amounts due from tenants at
Las Catalinas.
|
| (5) | |
The quarter ended December 31, 2018 excludes rental and tenant
reimbursement adjustments pertaining to Hurricane Maria at
Montehiedra. The year ended December 31, 2018 excludes rental and
tenant reimbursement losses, partially offset by a reversal of
provisions for payments received from tenants at Montehiedra. The
quarter and year ended December 31, 2017 excludes rental and tenant
reimbursement losses as well as provisions for outstanding amounts
due from tenants at Montehiedra.
|
| (6) | |
The results for the quarter and year ended December 31, 2018 were
negatively impacted by store closures from tenant bankruptcies.
Excluding these amounts, same-property cash NOI would have increased
by 3.6% for the quarter and by 2.3% for the year ended December 31,
2018, and same-property cash NOI including properties in
redevelopment would have increased by 3.8% for the quarter and by
3.0% for the year ended December 31, 2018:
|
|
|
| |
| Quarter Ended
December 31, |
| Percent
Change |
| Year Ended
December 31, |
| Percent
Change |
| | | | 2018 |
| 2017 | | | 2018 |
| 2017 | |
|
Same-property cash NOI
| |
$
|
54,541
| | |
$
|
54,667
| | |
(0.2)%
| |
$
|
191,220
| | |
$
|
189,875
| | |
0.7%
|
|
Cash NOI lost due to tenant bankruptcies
| |
2,084
|
| |
—
|
| |
| |
3,087
|
| |
—
|
| |
|
|
Same-property cash NOI including item above
| |
56,625
|
| |
54,667
|
| |
3.6%
| |
194,307
|
| |
189,875
|
| |
2.3%
|
|
Cash NOI related to properties being redeveloped
| |
5,269
| | |
5,066
| | | | |
20,431
| | |
18,937
| | | |
|
Cash NOI lost due to tenant bankruptcies at
properties being
redeveloped
| |
120
|
| |
—
|
| |
| |
300
|
| |
—
|
| |
|
|
Same-property cash NOI including properties in
redevelopment
and including item above
| |
$
|
62,014
|
| |
$
|
59,733
|
| |
3.8%
| |
$
|
215,038
|
| |
$
|
208,812
|
| |
3.0%
|
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 quarter and year ended
December 31, 2018 and 2017, respectively. 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.
|
| Quarter Ended
December 31, |
| Year Ended
December 31, |
| (Amounts in thousands) | | 2018 |
| 2017 | | 2018 |
| 2017 |
|
Net income (loss)
| |
$
|
7,251
| | |
$
|
(15,873
|
)
| |
$
|
116,963
| | |
$
|
72,938
| |
|
Depreciation and amortization
| |
25,878
| | |
21,776
| | |
99,422
| | |
82,281
| |
|
Interest and debt expense
| |
16,809
| | |
14,839
| | |
64,868
| | |
56,218
| |
|
Income tax expense (benefit)
| |
2,778
| | |
(1,220
|
)
| |
3,519
| | |
(278
|
)
|
|
Gain on sale of real estate
| |
—
| | |
—
| | |
(52,625
|
)
| |
(202
|
)
|
|
Real estate impairment loss
| |
5,574
|
| |
—
|
| |
5,574
|
| |
3,467
|
|
|
EBITDAre
| |
58,290
|
| |
19,522
|
| |
237,721
|
| |
214,424
|
|
|
Adjustments for Adjusted EBITDAre:
| | | | | | | | |
|
Construction rental abatement
| |
127
| | |
902
| | |
291
| | |
902
| |
|
Transaction costs
| |
95
| | |
—
| | |
491
| | |
278
| |
|
Impact of tenant bankruptcies(2) | |
6
| | |
—
| | |
(5,075
|
)
| |
—
| |
|
Tenant bankruptcy settlement income
| |
(24
|
)
| |
(27
|
)
| |
(329
|
)
| |
(655
|
)
|
|
Casualty (gain) loss, net(1) | |
(86
|
)
| |
3,922
| | |
(777
|
)
| |
6,092
| |
|
Executive transition costs(3) | |
—
| | |
—
| | |
1,932
| | |
—
| |
|
Environmental remediation costs
| |
—
| | |
—
| | |
584
| | |
—
| |
|
(Gain) loss on extinguishment of debt
| |
—
| | |
34,062
| | |
(2,524
|
)
| |
35,336
| |
|
Income from acquired leasehold interest
| |
—
|
| |
—
|
| |
—
|
| |
(39,215
|
)
|
|
Adjusted EBITDAre
| |
$
|
58,408
|
| |
$
|
58,381
|
| |
$
|
232,314
|
| |
$
|
217,162
|
|
| (1) |
|
Refer to footnote 4 on page 8, Reconciliation of Net Income to FFO
and FFO as Adjusted, for the adjustments included in this line item.
|
| (2) | |
Refer to footnote 2 on page 8, Reconciliation of Net Income to FFO
and FFO as Adjusted, for the adjustments included in this line item.
|
| (3) | |
Amount reflects costs associated with hiring a new Chief Operating
Officer and a new President of Development and severance expenses
related to the termination of a prior executive.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190213005791/en/
For additional information:
Mark Langer, EVP and Chief
Financial Officer
212-956-2556
Source: Urban Edge Properties