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Section 1: 8-K (8-K)

8-K


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
May 4, 2016

URBAN EDGE PROPERTIES
(Exact name of Registrant as specified in its charter)
Maryland
 
No. 001-36523
 
47-6311266
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification Number)
 
888 Seventh Avenue
 
 
New York, NY 10019
 
 
(Address of Principal Executive offices) (Zip Code)
 
Registrant’s telephone number including area code: (212) 956-2556
 
Former name or former address, if changed since last report: N/A

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):
o  
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o  
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))







Item 2.02 Results of Operations and Financial Condition

On May 4, 2016, Urban Edge Properties (the "Company") announced its financial results for the three months ended March 31, 2016. A copy of the Company's earnings press release is furnished as Exhibit 99.1 to this report on Form 8-K. A copy of the Company's Supplemental Disclosure Package is furnished as Exhibit 99.2 to this report on Form 8-K. The information contained in this report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 7.01 Regulation FD Disclosure

On May 4, 2016, the Company announced its financial results for the three months ended March 31, 2016 and made available on its website the press release and Supplemental Disclosure Package described in Item 2.02 above. The information contained in this report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits:
99.1 - Earnings Press Release of Urban Edge Properties dated May 4, 2016.
99.2 - Supplemental Disclosure Package of Urban Edge Properties as of March 31, 2016.






SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
URBAN EDGE PROPERTIES
 
 
(Registrant)
 
 
 
 
 
 
Date: May 4, 2016
By:
/s/ Mark Langer
 
 
Mark Langer, Executive Vice President and Chief Financial Officer







INDEX TO EXHIBITS

Exhibit Number
 
Document
 
 
 
99.1
 
Earnings Press Release of Urban Edge Properties dated May 4, 2016
99.2
 
Supplemental Disclosure Package of Urban Edge Properties as of March 31, 2016



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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


 
Exhibit 99.1
 
 
 
 
Urban Edge Properties
For additional information:
888 Seventh Avenue
Mark Langer, EVP and
New York, NY 10019
Chief Financial Officer
212-956-2556
 
 
 
 
 
 
 
 
 
FOR IMMEDIATE RELEASE:
 
 
 
 
Urban Edge Properties Reports First Quarter 2016 Operating Results


                                    
NEW YORK, NY, May 4, 2016 - Urban Edge Properties (NYSE:UE) (the "Company") announced today its financial results for the three months ended March 31, 2016.

Highlights of the Quarter include:
Generated Recurring Funds from Operations of $32.4 million, or $0.31 per diluted share
Generated Funds from Operations ("FFO") of $33.5 million, or $0.32 per diluted share which includes $1.2 million of tenant bankruptcy settlement income
Net income attributable to common shareholders was $18.6 million, or $0.19 per diluted share. A reconciliation of net income attributable to common shareholders to FFO and the reconciling components to Recurring FFO are provided in the tables accompanying this press release
Same-property Net Operating Income (“NOI”) increased by 2.4% as compared to the first quarter of 2015 due to new rent commencements from higher occupancy and contractual rent increases. Same-property NOI excludes $1.2 million of tenant bankruptcy settlement income received during the quarter
Same-property NOI including properties in redevelopment increased by 1.8% for the first quarter of 2016 as compared to the first quarter in 2015. The expected loss of rents from former anchor tenants at Walnut Creek and Bruckner negatively impacted this result. New anchor tenants at Walnut Creek and Bruckner are expected to open in the fourth quarter of this year and the latter half of 2017, respectively. A reconciliation of income before income taxes to same-property NOI is provided in the tables accompanying this press release
Same-property retail portfolio occupancy increased by 50 basis points to 97.0% as compared to March 31, 2015 and decreased by 20 basis points as compared to December 31, 2015
Consolidated retail portfolio occupancy increased by 20 basis points to 96.0% as compared to March 31, 2015 and decreased by 20 basis points as compared to December 31, 2015
Executed new leases and renewals and exercised options totaling 168,000 square feet in 26 transactions. Same-space leases totaled 130,000 square feet at an average rental rate of $21.84 per square foot and an average rent spread of 22.0% from prior cash rents

Development, Redevelopment and Anchor Repositioning:
During the quarter, the Company completed the expansion of Home Depot in Freeport, NY and opened Panera Bread in East Hanover, NJ, for a total investment of $0.6 million. These two projects are expected to increase net operating income by $1.0 million annually upon stabilization, representing a 167% return on invested capital.

The Company commenced redevelopment on two projects during the quarter including recapturing a 38,900 square foot anchor box in Towson, MD and constructing a new building for Verizon in Turnersville, NJ. The Company expects to invest $9.1 million in these projects and generate a 13% incremental return.

As of March 31, 2016, the Company had approximately $131.0 million of active development, redevelopment and anchor repositioning projects underway of which $92.8 million remains to be funded. The Company expects to generate a 12% unleveraged return on these projects.


1



The Company continues to focus on its development and redevelopment pipeline, which includes an additional $172.0-$200.0 million of planned expansions and renovations expected to be completed over the next several years. The Company projects an unleveraged return of approximately 8% on these projects.

Balance Sheet Highlights:
At March 31, 2016:
Total market capitalization (including debt and equity) was approximately $4.0 billion comprised of 105.7 million shares of common shares outstanding (on a fully diluted basis) valued at $2.7 billion and $1.2 billion of debt
The ratio of net debt (net of cash) to total market capitalization was 27.1%
Net debt to annualized Adjusted Earnings before interest, tax, depreciation and amortization ("EBITDA") was 5.8x. A reconciliation of net income to EBITDA and Adjusted EBITDA are provided in the tables accompanying this press release
The Company had approximately $162.4 million of cash and cash equivalents and no amounts drawn on its $500.0 million revolving credit facility

Asset Disposition:
In March 2016, the Company executed a contract for the sale of a shopping center located in Waterbury, CT for $21.6 million, which is expected to be completed in the second quarter of 2016. This sale will be executed pursuant to a reverse Section 1031 exchange using the acquisition of the property in Queens, NY, completed in December 2015.


2



Non-GAAP Financial Measures
The Company believes FFO (combined with the primary GAAP presentations) 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. The National Association of Real Estate Investment Trusts ("NAREIT") stated in its April 2002 White Paper on FFO, "Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves." The Company also believes that Recurring FFO is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO, as defined by 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 makes certain adjustments to FFO, which it refers to as Recurring FFO, to account for items it does not believe are representative of ongoing operating results, including transaction costs associated with acquisition and disposition activity and non-recurring revenue and expenses. The Company believes that financial analysts, investors and stockholders are better served by the presentation of comparable period operating results generated from its FFO and Recurring FFO measures. The Company's method of calculating FFO and Recurring FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
The Company uses NOI, which is a non-GAAP financial measure, internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, 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.
In this release, the Company has provided 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. Information on a same-property basis 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, sold, or that are in the foreclosure process during the periods being compared. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally the first full year in which the property is 90% leased. 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 NOI on a same-property basis adjusted to include redevelopment properties. The Company calculates same-property NOI using operating 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.
EBITDA and Adjusted EBITDA are supplemental, non-GAAP measures utilized in various financial ratios. EBITDA and Adjusted EBITDA are presented to assist investors in the evaluation of REITs and 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. Accordingly, the Company believes that the use of EBITDA and Adjusted EBITDA as opposed to income before income taxes in various ratios, provides a meaningful performance measure as it relates to the Company's ability to meet various coverage tests for the stated periods.
FFO, Recurring FFO, NOI, same-property NOI, EBITDA and Adjusted EBITDA are presented to assist investors in analyzing the Company’s operating performance. Neither FFO nor Recurring FFO (i) represents cash flow from operations as defined by GAAP, (ii) is indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is an alternative to cash flow as a measure of liquidity, or (iv) should be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating the Company’s operating performance. The Company believes net income attributable to common shareholders is the most directly comparable GAAP financial measure to FFO and Recurring FFO while income before income taxes is the most directly comparable GAAP financial measure to NOI and same-property NOI and net income (loss) is the most directly comparable GAAP financial measure to EBITDA and Adjusted EBITDA. Reconciliations of these measures to their respective comparable GAAP measures have been provided in the tables accompanying this press release.
 

3



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 84 properties totaling 14.9 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 engage in the projects in its planned expansion and redevelopment pipeline and the Company's ability to achieve the estimated unleveraged returns for such projects. 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, 2015.

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.




4



URBAN EDGE PROPERTIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts) 
 
March 31,
 
December 31,
 
2016
 
2015
ASSETS
 
 
 

Real estate, at cost:
 

 
 

Land
$
382,513

 
$
389,080

Buildings and improvements
1,613,510

 
1,630,539

Construction in progress
94,506

 
61,147

Furniture, fixtures and equipment
3,891

 
3,876

Total
2,094,420

 
2,084,642

Accumulated depreciation and amortization
(519,775
)
 
(509,112
)
Real estate, net
1,574,645

 
1,575,530

Cash and cash equivalents
162,354

 
168,983

Cash held in escrow and restricted cash
8,081

 
9,042

Tenant and other receivables, net of allowance for doubtful accounts of $2,061 and $1,926, respectively
9,306

 
10,364

Receivable arising from the straight-lining of rents, net of allowance for doubtful accounts of $181 and $148, respectively
89,046

 
88,778

Identified intangible assets, net of accumulated amortization of $22,781 and $22,090, respectively
33,262

 
33,953

Deferred leasing costs, net of accumulated amortization of $13,503 and $12,987, respectively
18,479

 
18,455

Deferred financing costs, net of accumulated amortization of $887 and $709, respectively
2,661

 
2,838

Prepaid expenses and other assets
10,160

 
10,988

Total assets
$
1,907,994

 
$
1,918,931

 
 
 
 
LIABILITIES AND EQUITY
 

 
 

Liabilities:
 
 
 
Mortgages payable, net
$
1,230,349

 
$
1,233,983

Identified intangible liabilities, net of accumulated amortization of $67,117 and $65,220, respectively
152,958

 
154,855

Accounts payable and accrued expenses
39,508

 
45,331

Other liabilities
13,702

 
13,308

Total liabilities
1,436,517

 
1,447,477

Commitments and contingencies
 
 
 
Shareholders’ equity:
 
 
 
Common shares: $0.01 par value; 500,000,000 shares authorized and 99,381,500 and 99,290,952 shares issued and outstanding, respectively
994

 
993

Additional paid-in capital
476,227

 
475,369

Accumulated deficit
(39,638
)
 
(38,442
)
Noncontrolling interests:
 
 
 
Redeemable noncontrolling interests
33,541

 
33,177

Noncontrolling interest in consolidated subsidiaries
353

 
357

Total equity
471,477

 
471,454

Total liabilities and equity
$
1,907,994

 
$
1,918,931


5



URBAN EDGE PROPERTIES
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except share and per share data)
 
 
Three Months Ended March 31,
 
2016
 
2015
REVENUE
 
 
 
Property rentals
$
58,929

 
$
57,586

Tenant expense reimbursements
22,507

 
24,303

Management and development fees
455

 
535

Other income
1,177

 
1,359

Total revenue
83,068

 
83,783

EXPENSES
 
 
 
Depreciation and amortization
13,915

 
13,732

Real estate taxes
13,249

 
12,824

Property operating
12,859

 
16,523

General and administrative
6,720

 
12,326

Ground rent
2,538

 
2,514

Transaction costs
50

 
21,859

Provision for doubtful accounts
351

 
323

Total expenses
49,682

 
80,101

Operating income
33,386

 
3,682

Interest income
167

 
11

Interest and debt expense
(13,429
)
 
(15,169
)
Income (loss) before income taxes
20,124

 
(11,476
)
Income tax expense
(336
)
 
(541
)
Net income (loss)
19,788

 
(12,017
)
Less (net income) loss attributable to noncontrolling interests in:
 
 
 
Operating partnership
(1,154
)
 
560

Consolidated subsidiaries
4

 
(6
)
Net income (loss) attributable to common shareholders
$
18,638

 
$
(11,463
)
 
 
 
 
Earnings (loss) per common share - Basic:
$
0.19

 
$
(0.12
)
Earnings (loss) per common share - Diluted:
$
0.19

 
$
(0.12
)
Weighted average shares outstanding - Basic
99,265

 
99,248

Weighted average shares outstanding - Diluted
99,363

 
99,248



6



Reconciliation of Net Income Attributable to Common Shareholders to FFO and Recurring FFO

The following table reflects the reconciliation of FFO and Recurring FFO to net income attributable to common shareholders, the most directly comparable GAAP measure, for the three months ended March 31, 2016.
 
Three Months Ended
March 31, 2016
 
(in thousands)
Net income attributable to common shareholders
$
18,638

Adjustments:
 
Rental property depreciation and amortization
13,755

Limited partnership interests in operating partnership
1,154

FFO Applicable to diluted common shareholders
33,547

FFO per diluted common share(1)
0.32

 
 
Tenant bankruptcy settlement income
(1,150
)
Transaction costs
50

Recurring FFO Applicable to diluted common shareholders
$
32,447

Recurring FFO per diluted common share(1)
$
0.31

 
 
Weighted average diluted common shares(1)
105,649

(1) Weighted average diluted shares used to calculate FFO per share and Recurring FFO per share for the period presented is higher than the GAAP weighted average diluted shares as a result of the dilutive impact of the 6.2 million Operating Partnership and LTIP units which are redeemable into our common shares. These redeemable units are not included in the weighted average diluted share count for the period presented for GAAP purposes because their inclusion is anti-dilutive.

FFO and Recurring FFO are non-GAAP financial measures. The Company believes that FFO, as defined by NAREIT, is a widely used and appropriate supplemental measure of operating performance for REITs, and that it provides a relevant basis for comparison among REITs. The Company believes that Recurring FFO provides additional comparability between historical financial periods. Refer to “Non-GAAP Financial Measures” above.
 


7



Reconciliation of Income before Income Taxes to NOI and Same-Property NOI

The following table reflects the reconciliation of NOI and same-property NOI (with and without redevelopment) to income (loss) before income taxes, the most directly comparable GAAP measure, for the three months ended March 31, 2016 and 2015.

 
Three Months Ended March 31,
(Amounts in thousands)
2016
 
2015
Income (loss) before income taxes
$
20,124

 
$
(11,476
)
  Interest income
(167
)
 
(11
)
  Interest and debt expense
13,429

 
15,169

Operating income
33,386

 
3,682

Depreciation and amortization
13,915

 
13,732

General and administrative expense
6,720

 
12,326

Transaction costs
50

 
21,859

Subtotal
54,071

 
51,599

    Less: non-cash rental income
(2,142
)
 
(2,049
)
    Add: non-cash ground rent expense
331

 
349

NOI
52,260

 
49,899

Adjustments:
 
 
 
NOI related to properties being redeveloped
(3,974
)
 
(4,139
)
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Management and development fee income from non-owned properties
(455
)
 
(535
)
NOI related to properties acquired, disposed, or in foreclosure
(431
)
 
(110
)
Environmental remediation costs

 
1,379

Other
52

 

    Subtotal adjustments
(5,958
)
 
(4,665
)
Same-property NOI
$
46,302

 
$
45,234

Adjustments:

 

NOI related to properties being redeveloped
3,974

 
4,139

Same-property NOI including properties in redevelopment
$
50,276

 
$
49,373


NOI and same-property NOI are non-GAAP financial measures. The Company believes that same-property NOI is a widely used and appropriate supplemental measure of operating performance for comparison among REITs. Refer to “Non-GAAP Financial Measures” above.


8



Reconciliation of Net Income to EBITDA and Adjusted EBITDA

The following table reflects the reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, for the three months ended March 31, 2016 and 2015.
 
Three Months Ended
March 31,
(Amounts in thousands)
2016
 
2015
Net income (loss)
$
19,788

 
$
(12,017
)
Depreciation and amortization
13,915

 
13,732

Interest and debt expense
13,429

 
15,169

Income tax expense
336

 
541

EBITDA
47,468

 
17,425

Adjustments for Adjusted EBITDA:
 
 
 
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Transaction costs
50

 
21,859

One-time equity awards related to the spin-off

 
7,143

Environmental remediation costs

 
1,379

Adjusted EBITDA
$
46,368

 
$
46,546

 
 
 
 

EBITDA and Adjusted EBITDA are non-GAAP financial measures. Refer to “Non-GAAP Financial Measures” above.


9
(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit

Exhibit 99.2




 
 
URBAN EDGE PROPERTIES
 
SUPPLEMENTAL DISCLOSURE
PACKAGE
 
March 31, 2016
 
 







 
 
 
 
Urban Edge Properties
888 7th Avenue, New York, NY 10019
NY Office: 212-956-2556
www.uedge.com
 







URBAN EDGE PROPERTIES
SUPPLEMENTAL DISCLOSURE
March 31, 2016
(unaudited)
 
 
TABLE OF CONTENTS
 
Page
Press Release
 
First Quarter 2016 Earnings Press Release
1
Additional Disclosures
8
 
 
Overview
 
Summary Financial Results and Ratios
9
 
 
Consolidated and Combined Financial Statements
 
Consolidated Balance Sheets
10
Consolidated and Combined Statements of Income
11
 
 
Non-GAAP Financial Measures and Supplemental Data
 
Supplemental Schedule of Net Operating Income
12
Earnings Before Interest, Taxes, Depreciation and Amortization
13
Consolidated Statements of Funds from Operations
14
Market Capitalization, Debt Ratios and Liquidity
15
Additional Disclosures
16
 
 
Leasing Data
 
Tenant Concentration - Top Twenty-Five Tenants
17
Leasing Activity
18
Retail Portfolio Lease Expiration Schedules
19
 
 
Property Data
 
Property Status Report
21
Property Acquisitions and Dispositions
25
Development, Redevelopment and Anchor Repositioning Projects
26
 
 
Debt Schedules
 
Debt Summary
28
Mortgage Debt Summary and Maturity Schedule
29
 
 








 
 
 
 
 
 
Urban Edge Properties
For additional information:
888 Seventh Avenue
Mark Langer, EVP and
New York, NY 10019
Chief Financial Officer
212-956-2556
 
 
 
 
 
 
 
 
 
FOR IMMEDIATE RELEASE:
 
 
 
 
Urban Edge Properties Reports First Quarter 2016 Operating Results


                                    
NEW YORK, NY, May 4, 2016 - Urban Edge Properties (NYSE:UE) (the "Company") announced today its financial results for the three months ended March 31, 2016.

Highlights of the Quarter include:
Generated Recurring Funds from Operations of $32.4 million, or $0.31 per diluted share
Generated Funds from Operations ("FFO") of $33.5 million, or $0.32 per diluted share which includes $1.2 million of tenant bankruptcy settlement income
Net income attributable to common shareholders was $18.6 million, or $0.19 per diluted share. A reconciliation of net income attributable to common shareholders to FFO and the reconciling components to Recurring FFO are provided in the tables accompanying this press release
Same-property Net Operating Income (“NOI”) increased by 2.4% as compared to the first quarter of 2015 due to new rent commencements from higher occupancy and contractual rent increases. Same-property NOI excludes $1.2 million of tenant bankruptcy settlement income received during the quarter
Same-property NOI including properties in redevelopment increased by 1.8% for the first quarter of 2016 as compared to the first quarter in 2015. The expected loss of rents from former anchor tenants at Walnut Creek and Bruckner negatively impacted this result. New anchor tenants at Walnut Creek and Bruckner are expected to open in the fourth quarter of this year and the latter half of 2017, respectively. A reconciliation of income before income taxes to same-property NOI is provided in the tables accompanying this press release
Same-property retail portfolio occupancy increased by 50 basis points to 97.0% as compared to March 31, 2015 and decreased by 20 basis points as compared to December 31, 2015
Consolidated retail portfolio occupancy increased by 20 basis points to 96.0% as compared to March 31, 2015 and decreased by 20 basis points as compared to December 31, 2015
Executed new leases and renewals and exercised options totaling 168,000 square feet in 26 transactions. Same-space leases totaled 130,000 square feet at an average rental rate of $21.84 per square foot and an average rent spread of 22.0% from prior cash rents

Development, Redevelopment and Anchor Repositioning:
During the quarter, the Company completed the expansion of Home Depot in Freeport, NY and opened Panera Bread in East Hanover, NJ, for a total investment of $0.6 million. These two projects are expected to increase net operating income by $1.0 million annually upon stabilization, representing a 167% return on invested capital.

The Company commenced redevelopment on two projects during the quarter including recapturing a 38,900 square foot anchor box in Towson, MD and constructing a new building for Verizon in Turnersville, NJ. The Company expects to invest $9.1 million in these projects and generate a 13% incremental return.

As of March 31, 2016, the Company had approximately $131.0 million of active development, redevelopment and anchor repositioning projects underway of which $92.8 million remains to be funded. The Company expects to generate a 12% unleveraged return on these projects.


1


The Company continues to focus on its development and redevelopment pipeline, which includes an additional $172.0-$200.0 million of planned expansions and renovations expected to be completed over the next several years. The Company projects an unleveraged return of approximately 8% on these projects.

Balance Sheet Highlights:
At March 31, 2016:
Total market capitalization (including debt and equity) was approximately $4.0 billion comprised of 105.7 million shares of common shares outstanding (on a fully diluted basis) valued at $2.7 billion and $1.2 billion of debt
The ratio of net debt (net of cash) to total market capitalization was 27.1%
Net debt to annualized Adjusted Earnings before interest, tax, depreciation and amortization ("EBITDA") was 5.8x. A reconciliation of net income to EBITDA and Adjusted EBITDA are provided in the tables accompanying this press release
The Company had approximately $162.4 million of cash and cash equivalents and no amounts drawn on its $500.0 million revolving credit facility

Asset Disposition:
In March 2016, the Company executed a contract for the sale of a shopping center located in Waterbury, CT for $21.6 million, which is expected to be completed in the second quarter of 2016. This sale will be executed pursuant to a reverse Section 1031 exchange using the acquisition of the property in Queens, NY, completed in December 2015.


2


Non-GAAP Financial Measures
The Company believes FFO (combined with the primary GAAP presentations) 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. The National Association of Real Estate Investment Trusts ("NAREIT") stated in its April 2002 White Paper on FFO, "Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves." The Company also believes that Recurring FFO is a useful supplemental measure of its core operating performance that facilitates comparability of historical financial periods. FFO, as defined by 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 makes certain adjustments to FFO, which it refers to as Recurring FFO, to account for items it does not believe are representative of ongoing operating results, including transaction costs associated with acquisition and disposition activity and non-recurring revenue and expenses. The Company believes that financial analysts, investors and stockholders are better served by the presentation of comparable period operating results generated from its FFO and Recurring FFO measures. The Company's method of calculating FFO and Recurring FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
The Company uses NOI, which is a non-GAAP financial measure, internally to make investment and capital allocation decisions and to compare the unlevered performance of our properties to our peers. The Company believes NOI is useful to investors as a performance measure because, when compared across periods, 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.
In this release, the Company has provided 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. Information on a same-property basis 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, sold, or that are in the foreclosure process during the periods being compared. While there is judgment surrounding changes in designations, a property is removed from the same-property pool when a property is considered to be a redevelopment property because it is undergoing significant renovation or retenanting pursuant to a formal plan and is expected to have a significant impact on property operating income based on the retenanting that is occurring. A development or redevelopment property is moved back to the same-property pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period, generally the first full year in which the property is 90% leased. 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 NOI on a same-property basis adjusted to include redevelopment properties. The Company calculates same-property NOI using operating 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.
EBITDA and Adjusted EBITDA are supplemental, non-GAAP measures utilized in various financial ratios. EBITDA and Adjusted EBITDA are presented to assist investors in the evaluation of REITs and 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. Accordingly, the Company believes that the use of EBITDA and Adjusted EBITDA as opposed to income before income taxes in various ratios, provides a meaningful performance measure as it relates to the Company's ability to meet various coverage tests for the stated periods.
FFO, Recurring FFO, NOI, same-property NOI, EBITDA and Adjusted EBITDA are presented to assist investors in analyzing the Company’s operating performance. Neither FFO nor Recurring FFO (i) represents cash flow from operations as defined by GAAP, (ii) is indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is an alternative to cash flow as a measure of liquidity, or (iv) should be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating the Company’s operating performance. The Company believes net income attributable to common shareholders is the most directly comparable GAAP financial measure to FFO and Recurring FFO while income before income taxes is the most directly comparable GAAP financial measure to NOI and same-property NOI and net income (loss) is the most directly comparable GAAP financial measure to EBITDA and Adjusted EBITDA. Reconciliations of these measures to their respective comparable GAAP measures have been provided in the tables accompanying this press release.

3


Reconciliation of Net Income Attributable to Common Shareholders to FFO and Recurring FFO

The following table reflects the reconciliation of FFO and Recurring FFO to net income attributable to common shareholders, the most directly comparable GAAP measure, for the three months ended March 31, 2016.
 
Three Months Ended
March 31, 2016
 
(in thousands)
Net income attributable to common shareholders
$
18,638

Adjustments:
 
Rental property depreciation and amortization
13,755

Limited partnership interests in operating partnership
1,154

FFO Applicable to diluted common shareholders
33,547

FFO per diluted common share(1)
0.32

 
 
Tenant bankruptcy settlement income
(1,150
)
Transaction costs
50

Recurring FFO Applicable to diluted common shareholders
$
32,447

Recurring FFO per diluted common share(1)
$
0.31

 
 
Weighted average diluted common shares(1)
105,649

(1) Weighted average diluted shares used to calculate FFO per share and Recurring FFO per share for the period presented is higher than the GAAP weighted average diluted shares as a result of the dilutive impact of the 6.2 million Operating Partnership and LTIP units which are redeemable into our common shares. These redeemable units are not included in the weighted average diluted share count for the period presented for GAAP purposes because their inclusion is anti-dilutive.

FFO and Recurring FFO are non-GAAP financial measures. The Company believes that FFO, as defined by NAREIT, is a widely used and appropriate supplemental measure of operating performance for REITs, and that it provides a relevant basis for comparison among REITs. The Company believes that Recurring FFO provides additional comparability between historical financial periods. Refer to “Non-GAAP Financial Measures” above.
 


4


Reconciliation of Income before Income Taxes to NOI and Same-Property NOI

The following table reflects the reconciliation of NOI and same-property NOI (with and without redevelopment) to income (loss) before income taxes, the most directly comparable GAAP measure, for the three months ended March 31, 2016 and 2015.

 
Three Months Ended March 31,
(Amounts in thousands)
2016
 
2015
Income (loss) before income taxes
$
20,124

 
$
(11,476
)
  Interest income
(167
)
 
(11
)
  Interest and debt expense
13,429

 
15,169

Operating income
33,386

 
3,682

Depreciation and amortization
13,915

 
13,732

General and administrative expense
6,720

 
12,326

Transaction costs
50

 
21,859

Subtotal
54,071

 
51,599

    Less: non-cash rental income
(2,142
)
 
(2,049
)
    Add: non-cash ground rent expense
331

 
349

NOI
52,260

 
49,899

Adjustments:
 
 
 
NOI related to properties being redeveloped
(3,974
)
 
(4,139
)
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Management and development fee income from non-owned properties
(455
)
 
(535
)
NOI related to properties acquired, disposed, or in foreclosure
(431
)
 
(110
)
Environmental remediation costs

 
1,379

Other
52

 

    Subtotal adjustments
(5,958
)
 
(4,665
)
Same-property NOI
$
46,302

 
$
45,234

Adjustments:

 

NOI related to properties being redeveloped
3,974

 
4,139

Same-property NOI including properties in redevelopment
$
50,276

 
$
49,373


NOI and same-property NOI are non-GAAP financial measures. The Company believes that same-property NOI is a widely used and appropriate supplemental measure of operating performance for comparison among REITs. Refer to “Non-GAAP Financial Measures” above.


5


Reconciliation of Net Income to EBITDA and Adjusted EBITDA

The following table reflects the reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, for the three months ended March 31, 2016 and 2015.
 
Three Months Ended
March 31,
(Amounts in thousands)
2016
 
2015
Net income (loss)
$
19,788

 
$
(12,017
)
Depreciation and amortization
13,915

 
13,732

Interest and debt expense
13,429

 
15,169

Income tax expense
336

 
541

EBITDA
47,468

 
17,425

Adjustments for Adjusted EBITDA:
 
 
 
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Transaction costs
50

 
21,859

One-time equity awards related to the spin-off

 
7,143

Environmental remediation costs

 
1,379

Adjusted EBITDA
$
46,368

 
$
46,546

 
 
 
 

EBITDA and Adjusted EBITDA are non-GAAP financial measures. Refer to “Non-GAAP Financial Measures” above.


6


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 84 properties totaling 14.9 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 engage in the projects in its planned expansion and redevelopment pipeline and the Company's ability to achieve the estimated unleveraged returns for such projects. 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, 2015.

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.


7



URBAN EDGE PROPERTIES
 
 
 
ADDITIONAL DISCLOSURES
 
 
 
As of March 31, 2016
 
 
 
 
 
 
 

Basis of Presentation
The information contained in the Supplemental Disclosure Package does not purport to disclose all items required by GAAP and is unaudited information. This Supplemental Disclosure Package should be read in conjunction with the Company's most recent Form 10-K and Form 10-Q. The results of operations of any property acquired are included in the Company's financial statements since the date of its acquisition, although such properties may be excluded from certain metrics disclosed in this Supplemental Disclosure Package.
Non-GAAP Financial Measures and Forward Looking Statements
For additional information regarding non-GAAP financial measures and forward looking statements, please see pages 3 and 7 of this Supplemental Disclosure Package.




8



URBAN EDGE PROPERTIES
 
 
SUMMARY FINANCIAL RESULTS AND RATIOS
 
 
For the three months ended March 31, 2016 (unaudited)
 
(in thousands, except per share, sf, rent psf and financial ratio data)
 
 
 
 
 
 
 
Three months ended
 
 
March 31, 2016
Summary Financial Results
 
 
Total revenue
 
$
83,068

General & administrative expenses (G&A)
 
$
6,720

Adjusted EBITDA(7)
 
$
46,368

Net income attributable to common shareholders
 
$
18,638

Earnings per diluted share
 
$
0.19

Funds from operations (FFO)
 
$
33,547

FFO per diluted share
 
$
0.32

Recurring FFO
 
$
32,447

Recurring FFO per diluted share
 
$
0.31

Total dividends paid per share
 
$
0.20

Stock closing price low-high range
 
$22.22 to $25.99

Weighted average diluted shares used in EPS computations(1)
 
99,363

Weighted average diluted shares used in FFO computations(1)
 
105,649

 
 
 
Summary Property, Operating and Financial Data
 
 
# of Total properties / # of Retail properties
 
84 / 83

Gross leasable area (GLA) sf - retail portfolio(3)(5)
 
13,909,000

Weighted average annual rent psf - retail portfolio(3)(5)
 
$
16.85

Consolidated occupancy at end of period
 
94.9
%
Consolidated retail portfolio occupancy at end of period(5)
 
96.0
%
Same-property retail portfolio occupancy at end of period(5)(2)
 
97.0
%
Same-property retail portfolio physical occupancy at end of period(4)(5)(2)
 
95.4
%
Same-property NOI growth - cash basis(2)
 
2.4
%
Same-property NOI growth, including redevelopment properties
 
1.8
%
Cash NOI margin - Total portfolio
 
64.0
%
Expense recovery ratio - Total portfolio
 
94.5
%
New, renewal and option rent spread - cash basis
 
22.0
%
Net debt to total market capitalization(6)
 
27.1
%
Net debt to Adjusted EBITDA(6)
 
5.8
x
Adjusted EBITDA to interest expense(7)
 
3.6
x
Adjusted EBITDA to fixed charges(7)
 
2.6
x
 
 
 
(1) Weighted average diluted shares used to calculate FFO per share and Recurring FFO per share for the period presented is higher than the GAAP weighted average diluted shares as a result of the dilutive impact of the 6.2 million units of limited partnership interests in the operating partnership which are redeemable for our common shares. These redeemable units are not included in the weighted average diluted share count for GAAP purposes for the period presented because their inclusion is anti-dilutive.
(2) The same-property pool for both NOI and occupancy includes retail properties the Company consolidated, owned and operated for the entirety of both periods being compared and 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 excludes properties acquired, sold, or that are in the foreclosure process during the periods being compared.
(3) GLA - retail portfolio excludes 942,000 square feet of warehouses. Weighted average annual rent per square foot for our retail portfolio and warehouses was $16.21.
(4) Physical occupancy includes tenants that have access to their leased space and includes dark and paying tenants.
(5) Our retail portfolio includes shopping centers and malls and excludes warehouses.
(6) See computation on page 15.
(7) See computation on page 13.

9



URBAN EDGE PROPERTIES
 
 
CONSOLIDATED BALANCE SHEETS
 
 
As of March 31, 2016 (unaudited) and December 31, 2015
 
 
(in thousands)
 
 
 
 
 
 
March 31,
 
December 31,
 
2016
 
2015
ASSETS
 
 
 

Real estate, at cost:
 

 
 

Land
$
382,513

 
$
389,080

Buildings and improvements
1,613,510

 
1,630,539

Construction in progress
94,506

 
61,147

Furniture, fixtures and equipment
3,891

 
3,876

Total
2,094,420

 
2,084,642

Accumulated depreciation and amortization
(519,775
)
 
(509,112
)
Real estate, net
1,574,645

 
1,575,530

Cash and cash equivalents
162,354

 
168,983

Cash held in escrow and restricted cash
8,081

 
9,042

Tenant and other receivables, net of allowance for doubtful accounts of $2,061 and $1,926, respectively
9,306

 
10,364

Receivable arising from the straight-lining of rents, net of allowance for doubtful accounts of $181 and $148, respectively
89,046

 
88,778

Identified intangible assets, net of accumulated amortization of $22,781 and $22,090, respectively
33,262

 
33,953

Deferred leasing costs, net of accumulated amortization of $13,503 and $12,987, respectively
18,479

 
18,455

Deferred financing costs, net of accumulated amortization of $887 and $709, respectively
2,661

 
2,838

Prepaid expenses and other assets
10,160

 
10,988

Total assets
$
1,907,994

 
$
1,918,931

 
 
 
 
LIABILITIES AND EQUITY
 

 
 

Liabilities:
 
 
 
Mortgages payable, net
$
1,230,349

 
$
1,233,983

Identified intangible liabilities, net of accumulated amortization of $67,117 and $65,220, respectively
152,958

 
154,855

Accounts payable and accrued expenses
39,508

 
45,331

Other liabilities
13,702

 
13,308

Total liabilities
1,436,517

 
1,447,477

Commitments and contingencies
 
 
 
Shareholders’ equity:
 
 
 
Common shares: $0.01 par value; 500,000,000 shares authorized and 99,381,500 and 99,290,952 shares issued and outstanding, respectively
994

 
993

Additional paid-in capital
476,227

 
475,369

Accumulated deficit
(39,638
)
 
(38,442
)
Noncontrolling interests:
 
 
 
Redeemable noncontrolling interests
33,541

 
33,177

Noncontrolling interest in consolidated subsidiaries
353

 
357

Total equity
471,477

 
471,454

Total liabilities and equity
$
1,907,994

 
$
1,918,931


10



URBAN EDGE PROPERTIES
 
 
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
 
 
For the three months ended March 31, 2016 and 2015 (unaudited)
 
(in thousands, except per share amounts)
 
 
 
 
 

 
Three Months Ended March 31,
 
2016
 
2015
REVENUE
 
 
 
Property rentals
$
58,929

 
$
57,586

Tenant expense reimbursements
22,507

 
24,303

Management and development fees
455

 
535

Other income
1,177

 
1,359

Total revenue
83,068

 
83,783

EXPENSES
 
 
 
Depreciation and amortization
13,915

 
13,732

Real estate taxes
13,249

 
12,824

Property operating
12,859

 
16,523

General and administrative
6,720

 
12,326

Ground rent
2,538

 
2,514

Transaction costs
50

 
21,859

Provision for doubtful accounts
351

 
323

Total expenses
49,682

 
80,101

Operating income
33,386

 
3,682

Interest income
167

 
11

Interest and debt expense
(13,429
)
 
(15,169
)
Income (loss) before income taxes
20,124

 
(11,476
)
Income tax expense
(336
)
 
(541
)
Net income (loss)
19,788

 
(12,017
)
Less (net income) loss attributable to noncontrolling interests in:
 
 
 
Operating partnership
(1,154
)
 
560

Consolidated subsidiaries
4

 
(6
)
Net income (loss) attributable to common shareholders
$
18,638

 
$
(11,463
)
 
 
 
 
Earnings (loss) per common share - Basic:
$
0.19

 
$
(0.12
)
Earnings (loss) per common share - Diluted:
$
0.19

 
$
(0.12
)
Weighted average shares outstanding - Basic
99,265

 
99,248

Weighted average shares outstanding - Diluted
99,363

 
99,248



11



URBAN EDGE PROPERTIES
 
 
SUPPLEMENTAL SCHEDULE OF NET OPERATING INCOME
 
 
For the three months ended March 31, 2016 and 2015
 
(in thousands)
 
 
 
 
 
 
Three Months Ended
March 31,
 
Percent Change
 
2016
 
2015
 
Total cash NOI(1)
 
 
 
 
 
Total revenue
$
79,281

 
$
79,920

 
(0.8)%
Total property operating expenses
(28,574
)
 
(30,436
)
 
(6.1)%
Cash NOI - total portfolio
$
50,707

 
$
49,484

 
2.5%
 
 
 
 
 
 
NOI margin (NOI / Total revenue)
64.0
%
 
61.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-property cash NOI(2)
 
 
 
 
 
Property rentals
$
51,208

 
$
49,933

 
 
Tenant expense reimbursements
20,740

 
22,657

 
 
Percentage rent
266

 
371

 
 
Total revenue
72,214

 
72,961

 
(1.0)%
Real estate taxes
(12,292
)
 
(11,908
)
 
 
Property operating
(11,156
)
 
(13,319
)
 
 
Ground rent
(2,206
)
 
(2,165
)
 
 
Provision for doubtful accounts(4)
(258
)
 
(335
)
 
 
Total property operating expenses
(25,912
)
 
(27,727
)
 
(6.5)%
Same-property cash NOI(3)
$
46,302

 
$
45,234

 
2.4%
 
 
 
 
 
 
NOI related to properties being redeveloped
$
3,974

 
$
4,139

 
 
Same-property cash NOI including properties in redevelopment
$
50,276

 
$
49,373

 
1.8%
 
 
 
 
 
 
Same-property physical occupancy(3)
95.4
%
 
94.9
%
 
 
Same-property leased occupancy(3)
97.0
%
 
96.5
%
 
 
Number of properties included in same-property analysis
78

 
 
 
 
 
 
 
 
 
 
(1) Total revenue includes cash received from tenant bankruptcy settlements and lease termination fees and excludes management and development fee income and non-cash amounts. Property operating expense amounts have been adjusted to exclude non-cash amounts.
(2) Excludes management and development fee income, 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.
(3) The same-property pool for both NOI and occupancy includes retail properties the Company consolidated, owned and operated for the entirety of both periods being compared and 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 properties acquired, sold, or are in the foreclosure process during the periods being compared. Same-property occupancy includes dark and paying tenants.
(4)  
Excludes $0.1 million of bad debt expense related to non-cash straight-line rents for the three months ended March 31, 2016. No such reserve was recorded for the three months ended March 31, 2015.

12



URBAN EDGE PROPERTIES
 
 
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION and AMORTIZATION (EBITDA)
For the three months ended March 31, 2016 and 2015
 
(in thousands)
 
 
 
 
 

 
Three Months Ended March 31,
 
2016
 
2015
Net income (loss)
$
19,788

 
$
(12,017
)
Depreciation and amortization
13,915

 
13,732

Interest expense
12,770

 
14,485

Amortization of deferred financing costs
659

 
684

Income tax expense
336

 
541

EBITDA
47,468

 
17,425

Adjustments for Adjusted EBITDA:
 
 
 
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Transaction costs
50

 
21,859

One-time equity awards related to the spin-off

 
7,143

Environmental remediation costs

 
1,379

Adjusted EBITDA
$
46,368

 
$
46,546

 
 
 
 
Interest expense
$
12,770

 
$
14,485

 
 
 
 
Adjusted EBITDA to interest expense
3.6
x
 
3.2
x
 
 
 
 
Fixed charges
 
 
 
Interest and debt expense(1)
$
13,429

 
$
15,169

Scheduled principal amortization
4,130

 
3,687

Total fixed charges
$
17,559

 
$
18,856

 
 
 
 
Adjusted EBITDA to fixed charges
2.6
x
 
2.5
x
 
 
 
 
(1) Includes amortization of deferred financing costs


13



URBAN EDGE PROPERTIES
 
 
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
 
For the three months ended March 31, 2016 and 2015
 
(in thousands, except per share data)
 
 
 
 
 
 
Three Months Ended March 31,
 
2016
 
2015
Net income (loss) attributable to common shareholders
$
18,638

 
$
(11,463
)
Adjustments:
 
 
 
Rental property depreciation and amortization
13,755

 
13,538

Limited partnership interests in operating partnership(1)
1,154

 
(560
)
FFO Applicable to diluted common shareholders
33,547

 
1,515

FFO per diluted common share(2)
0.32

 
0.01

Adjustments for Recurring FFO:
 
 
 
Tenant bankruptcy settlement income
(1,150
)
 
(1,260
)
Transaction costs
50

 
21,859

One-time equity awards related to the spin-off

 
7,143

Environmental remediation costs

 
1,379

Debt restructuring expenses

 
1,034

Recurring FFO Applicable to diluted common shareholders
$
32,447

 
$
31,670

Recurring FFO per diluted common share(2)
$
0.31

 
$
0.30

 
 
 
 
Weighted Average diluted common shares(2)
105,649

 
105,170

(1) Represents earnings allocated to LTIP and OP unit holders for unissued common shares which have been excluded for purposes of calculating earnings per diluted share for the periods presented. FFO applicable to diluted common shareholders and Recurring FFO applicable to diluted common shareholders calculations include earnings allocated to LTIP and OP unit holders and the respective weighted average share totals include the redeemable shares outstanding as their inclusion is dilutive.
(2) Weighted average diluted shares used to calculate FFO per share and Recurring FFO per share for the periods presented are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of the 6.2 million and 6.1 million LTIP and OP units which are redeemable into our common stock for the quarters ended March 31, 2016 and 2015, respectively. These redeemable units are not included in the weighted average diluted share count for GAAP purposes because their inclusion is anti-dilutive.








14



URBAN EDGE PROPERTIES
 
 
MARKET CAPITALIZATION, DEBT RATIOS AND LIQUIDITY
 
 
As of March 31, 2016
 
 
(in thousands, except share data)
 
 
 
 
 

 
March 31, 2016
Closing market price of common shares
$
25.84

Common stock shares
 
Basic common shares
99,269,181

Diluted common shares:
 
OP and LTIP units
6,150,224

Unvested restricted common shares and OPP units
270,635

Diluted common shares
105,690,040

 
 
Equity market capitalization
$
2,731,031

 
 
 
 
Total consolidated debt(2)
$
1,239,842

Cash and cash equivalents
(162,354
)
Net debt
$
1,077,488

 
 
Net Debt to Adjusted EBITDA(1)
5.8
x
 
 
Total consolidated debt(2)
$
1,239,842

Equity market capitalization
2,731,031

Total market capitalization
$
3,970,873

 
 
Net debt to total market capitalization at applicable market price
27.1
%
 
 
 
 
Gross real estate investments, at cost(3)
$
2,090,529

 
 
Net debt to gross real estate investments
51.5
%
 
 
 
 
(1) Adjusted EBITDA for the period has been annualized.
(2) Total consolidated debt excludes unamortized debt issuance costs.
(3) Excludes Furniture, fixtures and equipment.

15



URBAN EDGE PROPERTIES
 
 
ADDITIONAL DISCLOSURES
 
(in thousands)
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2016
 
2015
Certain non-cash items:
 
 
 

Straight-line rental income(1)
 
$
301

 
$
83

Amortization of below-market lease intangibles, net(1)
 
1,875

 
1,986

Straight-line ground rent expense(2)
 
(88
)
 
(106
)
Amortization of below-market lease intangibles, lessee(2)
 
(243
)
 
(243
)
Amortization of deferred financing costs(4)
 
(659
)
 
(684
)
Capitalized interest
 
518

 

Share-based compensation expense(3)
 
(1,297
)
 
(7,441
)
 
 
 
 
 
Capital expenditures:(5)
 
 
 
 
Development and redevelopment costs
 
$
9,755

 
$
3,597

Maintenance capital expenditures
 
560

 
1,888

Leasing commissions
 
604

 
354

Tenant improvements and allowances
 
1,557

 
77

Total capital expenditures
 
$
12,476

 
$
5,916

 
 
 
 
 
 
 
March 31, 2016
 
December 31, 2015
Prepaid expenses and other assets:
 
 
 
 
Prepaid expenses
 
$
7,723

 
$
8,521

Other assets
 
2,437

 
2,467

Total prepaid expenses and other assets
 
$
10,160

 
$
10,988

 
 
 
 
 
Other Liabilities:
 
 
 
 
Deferred ground rent expense
 
$
6,126

 
$
6,038

Deferred tax liability, net
 
3,620

 
3,607

Other
 
3,956

 
3,663

Total other liabilities
 
$
13,702

 
$
13,308

 
 
 
 
 
Accounts payable and accrued expenses:
 
 
 
 
Tenant prepaid/deferred revenue
 
$
15,112

 
$
16,097

Accrued capital expenditures and leasing costs
 
7,329

 
10,261

Other
 
17,067

 
18,973

Total accounts payable and accrued expenses
 
$
39,508

 
$
45,331

(1) Amounts included in the financial statement line item "Property rentals" in the consolidated and combined statements of income.
(2) Amounts included in the financial statement line item "Ground rent" in the consolidated and combined statements of income.
(3) Amounts included in the financial statement line item "General and Administrative" in the consolidated and combined statements of income. Includes $7.1 million of one-time expenses associated with the issuance of LTIP awards during the three months ended March 31, 2015.
(4) Amounts included in the financial statement line item "Interest and debt expense" in the consolidated and combined statements of income.
(5) Amounts are reported on a GAAP basis.

16



URBAN EDGE PROPERTIES
 
 
TENANT CONCENTRATION - TOP TWENTY-FIVE TENANTS
 
As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant
Number of stores
Square feet
% of total square feet
Annualized base rent
% of total annualized base rent
Weighted average annual rent per square foot
Average remaining term of ABR(1)
The Home Depot
7

920,226

6.2%
$
15,801,538

7.1%
$
17.17

15.3

Wal-Mart/Sam's Wholesale
9

1,438,730

9.7%
10,726,552

4.8%
7.46

9.8

The TJX Companies, Inc.
15

542,522

3.7%
8,683,212

3.9%
16.01

5.6

Lowe's
6

976,415

6.6%
8,575,004

3.8%
8.78

11.5

Stop & Shop / Koninklijke Ahold NV
9

655,618

4.4%
7,949,895

3.6%
12.13

7.5

Best Buy & Co
7

312,952

2.1%
6,857,402

3.1%
21.91

8.0

Kohl's
8

716,345

4.8%
6,713,770

3.0%
9.37

5.6

ShopRite
5

336,612

2.3%
5,421,307

2.4%
16.11

7.6

BJ's Wholesale Club
4

454,297

3.1%
5,278,625

2.4%
11.62

10.6

Sears Holdings, Inc. (Sears and Kmart)
4

547,443

3.7%
5,154,142

2.3%
9.41

19.9

PetSmart, Inc.
9

235,309

1.6%
5,133,861

2.3%
21.82

4.5

Toys "R" Us
7

285,858

1.9%
3,685,514

1.7%
12.89

6.1

Staples, Inc.
8

167,554

1.1%
3,612,769

1.6%
21.56

3.5

Target
2

297,856

2.0%
3,448,666

1.5%
11.58

16.0

Whole Foods
2

100,682

0.7%
3,365,570

1.5%
33.43

11.7

Century 21
1

156,649

1.1%
3,085,619

1.4%
19.70

10.8

LA Fitness
4

181,342

1.2%
3,085,085

1.4%
17.01

11.4

Dick's Sporting Goods
3

151,136

1.0%
2,971,814

1.3%
19.66

2.8

Petco
8

132,210

0.9%
2,350,616

1.1%
17.78

5.0

24 Hour Fitness
1

53,750

0.4%
2,289,750

1.0%
42.60

15.8

National Wholesale Liquidator
1

171,216

1.2%
2,140,019

1.0%
12.50

6.8

Bed Bath & Beyond
4

143,973

1.0%
1,874,970

0.8%
13.02

4.8

The Gap, Inc.
5

67,768

0.5%
1,848,313

0.8%
27.27

4.7

Sleepy's
11

61,879

0.4%
1,738,693

0.8%
28.10

4.8

REI
2

48,237

0.3%
1,668,840

0.7%
34.60

4.4

 
 
 
 
 
 
 
 
Total/Weighted Average
142

9,156,579

61.9%
$
123,461,546

55.3%
$
13.48

9.5

 
 
 
 
 
 
 
 
(1) In years, excluding tenant renewal options. Total top twenty-five tenants is weighted based on annualized base rent ("ABR").

Note: Amounts shown in the table above include all retail properties, including those in redevelopment, on a cash basis other than tenants in a free rent period which are shown at their initial cash rent.


17



URBAN EDGE PROPERTIES
 
 
LEASING ACTIVITY
 
For the three months ended March 31, 2016
 
 
 
 
 
 
 
Category
Total Leases
Total Sq. Ft.
Same Space Leases
Same Space Sq. Ft.
Prior Rent PSF
New Rent PSF
Rent Spread
Same Space TIs PSF(1)
Same Space Avg Term
Three months ended March 31, 2016
 
 
 
 
 
 
(years)
New Leases
10
51,280

4
13,262

$
29.07

$
57.95

99.3
%
$
9.43

10.3

Renewals & Options
16
116,261

16
116,261

16.62

17.72

6.6
%

5.0

Totals/Average
26
167,541

20
129,523

$
17.90

$
21.84

22.0
%
$
0.97

5.6

 
 
 
 
 
 
 
 
 
 
(1) Includes both tenant improvements and landlord contributions.



18



URBAN EDGE PROPERTIES
 
 
RETAIL PORTFOLIO LEASE EXPIRATION SCHEDULE
 
As of March 31, 2016
 
 
 
 
 
 
 
 
 
ANCHOR TENANTS (SF>=10,000)
SHOP TENANTS (SF<10,000)
TOTAL TENANTS
Year(1)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
M-T-M
1

13,000

0.1
%
$
27.79

11
24,000

1.2
%
$
53.25

12
37,000

0.3
%
$
44.31

2016(3)
3

69,000

0.6
%
14.19

43
100,000

4.8
%
40.31

46
169,000

1.2
%
29.64

2017
9

282,000

2.4
%
16.66

72
211,000

10.2
%
34.24

81
493,000

3.5
%
24.19

2018
21

1,011,000

8.6
%
10.56

52
140,000

6.7
%
45.80

73
1,151,000

8.3
%
14.84

2019
27

973,000

8.2
%
17.81

76
223,000

10.8
%
40.15

103
1,196,000

8.6
%
21.97

2020
29

1,115,000

9.4
%
15.89

53
180,000

8.7
%
41.40

82
1,295,000

9.3
%
19.43

2021
23

706,000

6.0
%
16.45

49
150,000

7.2
%
34.53

72
856,000

6.2
%
19.62

2022
17

916,000

7.7
%
10.95

34
99,000

4.8
%
36.77

51
1,015,000

7.3
%
13.47

2023
16

986,000

8.3
%
16.89

30
105,000

5.1
%
34.66

46
1,091,000

7.8
%
18.60

2024
23

1,224,000

10.3
%
11.27

34
128,000

6.2
%
23.72

57
1,352,000

9.7
%
12.45

2025
6

450,000

3.8
%
13.87

32
94,000

4.5
%
35.78

38
544,000

3.9
%
17.65

2026
7

543,000

4.6
%
8.88

34
140,000

6.7
%
24.25

41
683,000

4.9
%
12.03

Thereafter
41

3,329,000

28.1
%
14.09

29
146,000

7.0
%
31.83

70
3,475,000

25.0
%
14.84

Subtotal/Average
223

11,617,000

98.1
%
$
13.93

549
1,740,000

83.9
%
$
35.76

772
13,357,000

96.0
%
$
16.77

Vacant
11

219,000

1.9
%
 N/A
116
333,000

16.1
%
 N/A
127
552,000

4.0
%
 N/A
Total/Average
234

11,836,000

100
%
 N/A
665
2,073,000

100
%
 N/A
899
13,909,000

100
%
 N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Year of expiration excludes tenant renewal options.
(2) Weighted average annual rent per square foot is calculated by annualizing tenant's base cash rent, including ground rent, and excludes tenant reimbursements and concessions and storage rent.
(3) Remainder of 2016.

Note: Amounts shown in table above include both current leases and signed leases that have not commenced on vacant spaces for all retail properties (including properties in redevelopment). The average base rent for our 942,000 square-foot warehouse property (excluded from the table above) is $5.40 per square foot as of March 31, 2016.


19



URBAN EDGE PROPERTIES
 
 
RETAIL PORTFOLIO LEASE EXPIRATION SCHEDULE ASSUMING EXERCISE OF ALL RENEWALS AND OPTIONS
As of March 31, 2016
 
 
 
 
 
 
 
 
 
ANCHOR TENANTS (SF>=10,000)
SHOP TENANTS (SF<10,000)
TOTAL TENANTS
Year(1)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
# of leases
Square Feet
% of Total SF
Weighted Avg Annual Base Rent PSF(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
M-T-M
1

13,000

0.1
%
$
27.79

11

24,000

1.1%
$
53.25

12

37,000

0.3
%
$
44.31

2016(3)
1

12,000

0.1
%
25.70

33

66,000

3.2%
37.10

34

78,000

0.6
%
35.35

2017
4

89,000

0.8
%
21.28

44

109,000

5.2%
37.21

48

198,000

1.4
%
30.05

2018
4

76,000

0.6
%
19.60

40

101,000

4.9%
54.32

44

177,000

1.3
%
39.41

2019
3

142,000

1.2
%
12.39

49

121,000

5.9%
48.69

52

263,000

1.9
%
29.16

2020
6

116,000

1.0
%
39.24

41

124,000

6.0%
53.01

47

240,000

1.7
%
46.35

2021
7

142,000

1.2
%
19.90

39

103,000

5.0%
37.25

46

245,000

1.7
%
27.19

2022
3

122,000

1.0
%
12.80

37

123,000

5.9%
34.44

40

245,000

1.7
%
23.66

2023
5

320,000

2.7
%
17.47

26

78,000

3.7%
37.07

31

398,000

2.9
%
21.31

2024
11

215,000

1.8
%
17.59

39

117,000

5.6%
39.28

50

332,000

2.4
%
25.23

2025
7

262,000

2.2
%
21.23

29

91,000

4.4%
38.13

36

353,000

2.5
%
25.59

2026
8

264,000

2.2
%
18.41

41

153,000

7.4%
36.73

49

417,000

3.0
%
25.13

Thereafter
163

9,844,000

83.2
%
19.02

120

530,000

25.6%
41.36

283

10,374,000

74.6
%
20.17

Subtotal/Average
223

11,617,000

98.1
%
$
19.09

549

1,740,000

83.9%
$
41.56

772

13,357,000

96.0
%
$
22.02

Vacant
11

219,000

1.9
%
 N/A

116

333,000

16.1%
 N/A

127

552,000

4.0
%
 N/A

Total/Average
234

11,836,000

100
%
 N/A

665

2,073,000

100%
 N/A

899

13,909,000

100
%
 N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Year of expiration includes tenant renewal options.
(2) Weighted average annual rent per square foot is calculated by annualizing tenant's base cash rent, including ground rent, and excludes tenant reimbursements and concessions and storage rent and is adjusted for assumed exercised options using option rents specified in the underlying leases. Weighted average annual base rent for leases whose future option rent is based on fair market value or CPI is reported at the last stated option rent in the respective lease.
(3) Remainder of 2016.

Note: Amounts shown in table above includes both current leases and signed leases that have not commenced on vacant spaces for all retail properties (including properties in redevelopment). The average base rent for our 942,000 square-foot warehouse property assuming exercise of all options at future tenant rent (excluded from the table above) is $5.55 per square foot as of March 31, 2016.


20