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Section 1: 8-K (8-K)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): February 20, 2018

RAMCO-GERSHENSON PROPERTIES TRUST
(Exact name of registrant as specified in its Charter)

Maryland
 
1-10093
 
13-6908486
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

31500 Northwestern Highway, Suite 300, Farmington Hills, Michigan
48334
(Address of principal executive offices)
(Zip Code)

Registrant's telephone number, including area code         (248) 350-9900

Not applicable
(Former name or former address, if changed since last report)

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:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o








Section 2     Financial Information

Item 2.02    Results of Operations and Financial Condition.

On February 20, 2018, Ramco-Gershenson Properties Trust (the “Company”) announced its financial results for the three and twelve months ended December 31, 2017. A copy of the Company’s February 20, 2018 press release is furnished as Exhibit 99.1 to this report on Form 8-K. A copy of the Company’s Quarterly Financial and Operating Supplement Package is available on the Company's corporate website at www.rgpt.com. The information contained in this report on Form 8-K, including Exhibit 99.1 shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed or to be filed by the Company under the Securities Act of 1933, as amended.

Item 7.01    Regulation FD Disclosure.

On February 20, 2018, the Company announced its financial results for the three and twelve months ended December 31, 2017. A copy of the Company’s press release is furnished as Exhibit 99.1 to this report on Form 8-K. A copy of the Company’s Quarterly Financial and Operating Supplement Package is available on the Company's corporate website at www.rgpt.com. The information contained in this report on Form 8-K, including Exhibit 99.1 shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed or to be filed by the Company under the Securities Act of 1933, as amended.


Item 9.01(d)    Exhibits

(d)
Exhibits

99.1
Press release of Ramco-Gershenson Properties Trust dated February 20, 2018.









SIGNATURES

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 hereunto duly authorized.

    
 
 
RAMCO-GERSHENSON PROPERTIES TRUST
 
 
 
 
 
 
Date:
February 20, 2018
By:/s/ GEOFFREY BEDROSIAN
 
 
           Geoffrey Bedrosian
 
 
           Executive Vice President, Chief Financial Officer and Secretary






EXHIBIT INDEX

Exhibit No.    Description

99.1
Press release of Ramco-Gershenson Properties Trust dated February 20, 2018.



(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

Exhibit 99.1

RAMCO-GERSHENSON PROPERTIES TRUST REPORTS
FINANCIAL AND OPERATING RESULTS FOR THE FOURTH QUARTER 2017

FARMINGTON HILLS, Michigan – February 20, 2018 - Ramco-Gershenson Properties Trust (NYSE:RPT) today announced its financial and operating results for the three and twelve months ended December 31, 2017.

FOURTH QUARTER FINANCIAL AND OPERATING RESULTS:

Net income available to common shareholders of $0.24 per diluted share, compared to $0.07 per diluted share for the same period in 2016.
Funds from Operations ("FFO") of $0.30 per diluted share, compared to $0.33 per diluted share for the same period in 2016.
Operating Funds from Operations (“Operating FFO”) of $0.31 per diluted share, compared to $0.34 per diluted share for the same period in 2016.
Generated same property NOI growth with redevelopment of 2.3% for the three months ended December 31, 2017.
Sold $101.4 million of non-core shopping centers.
Signed 40 comparable leases encompassing 206,502 square feet at a positive leasing spread of 8.9% with an annualized base rent ("ABR") of $14.47 per square feet, including seven new leases with an ABR of $18.06 per square feet and positive leasing spread of 16.8%.
Increased ABR to $15.16 per square foot, excluding ground leases, compared to $14.20 for the same period in 2016.

2017 FULL-YEAR HIGHLIGHTS

Generated same-center NOI growth with redevelopment of 2.4% for the twelve months ended December 31, 2017. 
Signed 186 comparable leases encompassing 1,073,197 square feet at a positive leasing spread of 8.8%, including 24 new leases with an ABR of $19.38 per square feet and positive leasing spread of 18.0%.
Acquired one dynamic town center and one urban in-fill property for a purchase price totaling $168.3 million.
Sold $225.7 million of non-core shopping centers.
Completed approximately $15.5 million in redevelopment projects.
Posted portfolio leased occupancy of 93.3%, compared to 94.4% for the same period in 2016, primarily the result of bankruptcy closures in 2017.
Reduced Michigan rental exposure to 20.0% of total ABR.

"In 2017, we completed the sale of $226 million of non-core properties diversifying our portfolio in strategic non-coastal markets,"  said Dennis Gershenson, President and Chief Executive Officer.  "In 2018, our focus is on operating fundamentals, including growing occupancy, increasing our portfolio ABR and completing in-process redevelopment projects to maximize the value of our rebalanced portfolio."

FINANCIAL RESULTS:
For the three months ended December 31, 2017:
Net income available to common shareholders of $19.2 million, or $0.24 per diluted share, compared to $5.2 million, or $0.07 per diluted share for the same period in 2016.
FFO of $26.5 million, or $0.30 per diluted share, compared to $29.1 million, or $0.33 per diluted share for the same period in 2016.

i



Operating FFO of $27.7 million, or $0.31 per diluted share, compared to $29.5 million or $0.34 per diluted share for the same period in 2016.
For the twelve months ended December 31, 2017:
Net income available to common shareholders of $62.4 million, or $0.78 per diluted share, compared to $53.0 million, or $0.66 per diluted share for the same period in 2016.
FFO of $118.6 million, or $1.34 per diluted share, compared to $118.7 million, or $1.35 per diluted share for the same period in 2016.
Operating FFO of $119.6 million, or $1.36 per diluted share, compared to $119.9 million or $1.36 per diluted share for the same period in 2016.

BALANCE SHEET METRICS AND CAPITAL MARKETS ACTIVITY:

Net debt to annualized proforma adjusted EBITDA of 6.7X, interest coverage of 3.6X, and fixed charge coverage of 3.0X.

INVESTMENT ACTIVITY:
Dispositions

During the fourth quarter, the Company sold four shopping centers which are not part of the Company’s long-term portfolio strategy, at a gross sales price of $101.4 million. The properties sold are:

Millennium Park, Livonia, Michigan, a 273,000 square foot power center anchored by Meijer (shadow), Costco (shadow), The Home Depot, Marshalls, Michaels and Five Below;
Village Plaza, Lakeland, Florida, a 158,000 square foot center anchored by Hobby Lobby, Big Lots and Party City;
Liberty Square, Wauconda, Illinois, a 107,000 square foot Jewel-Osco anchored center; and
Rolling Meadows, Rolling Meadows, Illinois, a 134,000 square foot Jewel-Osco anchored center.

The Company’s total shopping center dispositions for the year totaled $225.7 million.

Redevelopment
At December 31, 2017, the Company's active redevelopment pipeline consisted of seven projects with an estimated total cost of $73.7 million, which are expected to stabilize in 2018 at an estimated weighted average return on cost of between 9% - 10%.

FINANCING ACTIVITY:

The Company closed a $75.0 million private placement of senior unsecured notes in December 2017. The notes were issued in three tranches with terms of 5, 10, and 12 years and a weighted average interest rate of 4.46%. Proceeds were used to pay off two mortgages totaling $36.7 million with an average interest rate of 4.64% as well as for general corporate purposes.

In addition, during the quarter, the Company amended and repriced its $75.0 million term loan due 2021. The transaction reduced the loan's interest rate by 35 basis points for the remainder of the term.


ii


DIVIDEND:

In the fourth quarter, the Company declared a regular cash dividend of $0.22 per common share for the period October 1, 2017 through December 31, 2017 and a Series D convertible perpetual preferred share dividend of $0.90625 per share for the same period. The dividends were paid on January 2, 2018 to shareholders of record as of December 20, 2017. During the year, the Company declared dividends of $0.88 per common share. The Operating FFO payout ratio for the full year was 64.7%.

GUIDANCE:

The Company affirmed its 2018 FFO and Operating FFO guidance of $1.31 to $1.37 per share, as well as certain other key assumptions:

Same Property NOI growth including redevelopment of 2.25% to 3.75%.
Redevelopment Expenditures of $40.0 to $50.0 million.
Year End Physical Occupancy of 93% - 94%.

 
 
 
 
 
Measure
 
Low
 
High
Cash NOI
 
$1.99
 
$2.02
Non-cash adjustments
 
0.08
 
0.08
General and administrative
 
(0.26)
 
(0.24)
Interest expense
 
(0.50)
 
(0.49)
Total Operating FFO
 
$1.31
 
$1.37
 
 
 
 
 

CONFERENCE CALL/WEBCAST:

Ramco-Gershenson Properties Trust will host a live broadcast of its fourth quarter conference call on Wednesday, February 21, 2018 at 10:00 a.m. eastern time, to discuss its financial and operating results as well as its 2018 guidance. The live broadcast will be available on-line at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-9205, no pass code needed. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 481-4010, (Conference ID: 23919) through February 28, 2018.

SUPPLEMENTAL MATERIALS:

The Company’s quarterly financial and operating supplement is available on its corporate web site at www.rgpt.com. If you wish to receive a copy via email, please send requests to dhendershot@rgpt.com.


iii


ABOUT RAMCO-GERSHENSON PROPERTIES TRUST:

Ramco-Gershenson Properties Trust (NYSE:RPT) is a premier, national publicly-traded shopping center real estate investment trust (REIT) based in Farmington Hills, Michigan.  The Company's primary business is the ownership and management of regional dominant and urban-oriented, infill shopping centers in key growth markets in the 40 largest metropolitan markets in the United States.  At December 31, 2017, the Company owned interests in and managed a portfolio of 56 shopping centers and three joint venture properties. At December 31, 2017, the Company's consolidated portfolio was 93.3% leased. Ramco-Gershenson is a fully-integrated qualified REIT that is self-administered and self-managed. For additional information about the Company please visit www.rgpt.com or follow Ramco-Gershenson on Twitter @RamcoGershenson and facebook.com/ramcogershenson/. This press release may contain forward-looking statements that represent the Company’s expectations and projections for the future. Management of Ramco-Gershenson believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing ability to qualify as a REIT and other factors discussed in the Company’s reports filed with the Securities and Exchange Commission.


Company Contact:
Dawn L. Hendershot, Senior Vice President Investor Relations and Public Affairs
31500 Northwestern Highway, Suite 300
Farmington Hills, MI 48334
dhendershot@rgpt.com
(248) 592-6202



iv


RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
 
 
 
 
 
December 31, 2017
 
December 31, 2016
 
 
ASSETS
 
 
(as revised)
Income producing properties, at cost:
 
 
 
Land
$
397,935

 
$
374,889

Buildings and improvements
1,732,844

 
1,757,781

Less accumulated depreciation and amortization
(351,632
)
 
(345,204
)
Income producing properties, net
1,779,147

 
1,787,466

Construction in progress and land available for development or sale
58,243

 
61,224

Real estate held for sale

 
8,776

Net real estate
1,837,390

 
1,857,466

Equity investments in unconsolidated joint ventures
3,493

 
3,150

Cash and cash equivalents
8,081

 
3,582

Restricted cash and escrows
4,810

 
11,144

Accounts receivable, net
26,145

 
24,016

Acquired lease intangibles, net
59,559

 
72,424

Other assets, net
90,916

 
89,716

TOTAL ASSETS
$
2,030,394

 
$
2,061,498

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
Notes payable, net
$
999,215


$
1,021,223

Capital lease obligation
1,022

 
1,066

Accounts payable and accrued expenses
56,750

 
57,357

Acquired lease intangibles, net
60,197

 
63,734

Other liabilities
8,375

 
9,893

Distributions payable
19,666

 
19,627

TOTAL LIABILITIES
1,145,225

 
1,172,900

 
 
 
 
Commitments and Contingencies
 
 
 
 
 
 
 
Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity:
 
 
 

Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 1,849 shares issued and outstanding as of December 31, 2017 and 2016, respectively
92,427

 
92,427

Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 79,366 and 79,272 shares issued and outstanding as of December 31, 2017 and 2016, respectively
794

 
793

Additional paid-in capital
1,160,862

 
1,158,430

Accumulated distributions in excess of net income
(392,619
)
 
(384,934
)
Accumulated other comprehensive income
2,858

 
985

TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT
864,322

 
867,701

Noncontrolling interest
20,847

 
20,897

TOTAL SHAREHOLDERS' EQUITY
885,169

 
888,598

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
2,030,394

 
$
2,061,498










Page 1



RAMCO-GERSHENSON PROPERTIES TRUST
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(In thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
Three Months
 
Twelve Months
 
 
December 31,
 
December 31,
 
 
2017
 
2016
 
2017
 
2016
 
REVENUE
 
 
 
 
 
 
 
 
Minimum rent
$
48,392

 
$
48,253

 
$
198,362

 
$
192,793

 
Percentage rent
134

 
90

 
704

 
600

 
Recovery income from tenants
14,603

 
14,774

 
61,258

 
62,841

 
Other property income
993

 
1,239

 
4,303

 
4,167

 
Management and other fee income
141

 
98

 
455

 
529

 
TOTAL REVENUE
64,263

 
64,454

 
265,082

 
260,930

 
 
 
 
 
 
 
 
 
 
EXPENSES
 
 
 
 
 
 
 
 
Real estate tax expense
10,012

 
10,029

 
42,683

 
41,739

 
Recoverable operating expense
6,954

 
8,355

 
27,653

 
29,581

 
Non-recoverable operating expense
1,233

 
1,014

 
4,449

 
3,575

 
Depreciation and amortization
22,053

 
21,986

 
91,335

 
91,793

 
Acquisition costs


198

 

 
316

 
General and administrative expense
7,383

 
4,967

 
26,159

 
22,041

 
Provision for impairment
982

 

 
9,404

 
977

 
TOTAL EXPENSES
48,617

 
46,549

 
201,683

 
190,022

 
 
 
 
 
 
 
 
 
 
OPERATING INCOME
15,646


17,905

 
63,399

 
70,908

 
 
 
 
 
 
 
 
 
 
OTHER INCOME AND EXPENSES
 
 
 
 
 
 
 
 
Other expense, net
(96
)
 
129

 
(708
)
 
(177
)
 
Gain on sale of real estate
16,843

 
96

 
52,764

 
35,781

 
Earnings from unconsolidated joint ventures
50

 
117

 
273

 
454

 
Interest expense
(10,995
)
 
(10,696
)
 
(44,866
)
 
(44,514
)
 
Other gain on unconsolidated joint ventures

 

 

 
215

 
(Loss) on extinguishment of debt

 
(409
)
 

 
(1,256
)
 
INCOME BEFORE TAX
21,448

 
7,142

 
70,862

 
61,411

 
Income tax provision
(24
)
 
(65
)
 
(143
)
 
(299
)
 
 
 
 
 
 
 
 
 
 
NET INCOME
21,424


7,077


70,719

 
61,112

 
Net income attributable to noncontrolling partner interest
(501
)
 
(166
)
 
(1,659
)
 
(1,448
)
 
NET INCOME ATTRIBUTABLE TO RPT
20,923


6,911


69,060

 
59,664

 
Preferred share dividends
(1,675
)
 
(1,676
)
 
(6,701
)
 
(6,701
)
 
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS
$
19,248


$
5,235


$
62,359

 
$
52,963

 
 
 
 
 
 
 
 
 
 
EARNINGS PER COMMON SHARE
 
 
 
 
 
 
 
 
Basic
$
0.24

 
$
0.07

 
$
0.78

 
$
0.66

 
Diluted
$
0.24

 
$
0.07

 
$
0.78

 
$
0.66

 
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
 
 
 
 
 
 
 
 
Basic
79,366

 
79,268

 
79,344

 
79,236

 
Diluted
79,550

 
79,461

 
79,530

 
79,435

 







Page 2



RAMCO-GERSHENSON PROPERTIES TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FUNDS FROM OPERATIONS
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
Twelve Months Ended December 31,
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Net income
$
21,424

 
$
7,077

 
$
70,719

 
$
61,112

Net income attributable to noncontrolling partner interest
(501
)
 
(166
)
 
(1,659
)
 
(1,448
)
Preferred share dividends
(1,675
)
 
(1,676
)
 
(6,701
)
 
(6,701
)
Net income available to common shareholders
19,248

 
5,235


62,359

 
52,963

Adjustments:
 
 
 
 
 

 
 

Rental property depreciation and amortization expense
21,993

 
21,931

 
91,097

 
91,610

Pro-rata share of real estate depreciation from unconsolidated joint ventures
73

 
73

 
302

 
310

Gain on sale of depreciable real estate
(16,945
)
 

 
(51,977
)
 
(34,108
)
Gain on sale of joint venture depreciable real estate

 

 

 
(26
)
Provision for impairment on income-producing properties

 

 
8,422

 

Other gain on unconsolidated joint ventures

 

 

 
(215
)
FFO available to common shareholders
24,369

 
27,239


110,203

 
110,534

 
 
 
 
 
 
 
 
Noncontrolling interest in Operating Partnership (1)
501

 
166

 
1,659

 
1,448

Preferred share dividends (assuming conversion) (2)
1,675

 
1,676

 
6,701

 
6,701

FFO available to common shareholders and dilutive securities
$
26,545

 
$
29,081


$
118,563

 
$
118,683

 
 
 
 
 
 
 
 
(Gain) loss on sale of land
102

 
(96
)
 
(787
)
 
(1,673
)
Provision for impairment on land available for development or sale
982

 

 
982

 
977

Severance expense
60

 
43

 
715

 
492

Loss on early extinguishment of debt



 

 
1,256

Acquisition costs

 
198

 

 
316

Cost associated with early extinguishment of debt
30


281

 
110

 
(128
)
Operating FFO available to common shareholders and dilutive securities
$
27,719

 
$
29,507


$
119,583

 
$
119,923

 
 
 
 
 
 
 
 
Weighted average common shares
79,366

 
79,268

 
79,344

 
79,236

Shares issuable upon conversion of Operating Partnership Units (1)
1,916

 
1,917

 
1,917

 
1,943

Dilutive effect of restricted stock
184

 
193

 
186

 
199

Shares issuable upon conversion of preferred shares (2)
6,740

 
6,630

 
6,740

 
6,630

Weighted average equivalent shares outstanding, diluted
88,206

 
88,008


88,187

 
88,008

 
 
 
 
 
 
 
 
FFO available to common shareholders and dilutive securities per share, diluted
$
0.30

 
$
0.33

 
$
1.34

 
$
1.35

 
 
 
 
 
 
 
 
Operating FFO available to common shareholders and dilutive securities per share, diluted
$
0.31

 
$
0.34

 
$
1.36

 
$
1.36

 
 
 
 
 
 
 
 
Dividend per common share
$
0.22

 
$
0.22

 
$
0.88

 
$
0.86

Payout ratio - Operating FFO
71.0
%

64.7
%

64.7
%
 
63.2
%
 
 
 
 
 
 
 
 

(1) 
The total noncontrolling interest reflects OP units convertible 1:1 into common shares.
(2) 
Series D convertible preferred shares are paid annual dividends of $6.7 million and are currently convertible into approximately 6.7 million shares of common stock. They are dilutive only when earnings or FFO exceed approximately $0.25 per diluted share per quarter and $1.00 per diluted share per year. The conversion ratio is subject to adjustment based upon a number of factors, and such adjustment could affect the dilutive impact of the Series D convertible preferred shares on FFO and earning per share in future periods.



Page 3



RAMCO-GERSHENSON PROPERTIES TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(amounts in thousands)
Reconciliation of net income available to common shareholders to Same Property NOI
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2017
 
2016
 
2017
 
2016
Net income available to common shareholders
$
19,248

 
$
5,235

 
$
62,359

 
$
52,963

Preferred share dividends
1,675

 
1,676

 
6,701

 
6,701

Net income attributable to noncontrolling partner interest
501

 
166

 
1,659

 
1,448

Income tax provision
24


65

 
143

 
299

Interest expense
10,995

 
10,696

 
44,866

 
44,514

Costs associated with early extinguishment of debt

 
409

 

 
1,256

Earnings from unconsolidated joint ventures
(50
)

(117
)
 
(273
)
 
(454
)
Gain on sale of real estate
(16,843
)

(96
)
 
(52,764
)
 
(35,781
)
Gain on remeasurement of unconsolidated joint venture

 

 

 
(215
)
Other expense, net
96


(129
)
 
708

 
177

Management and other fee income
(141
)

(98
)
 
(455
)
 
(529
)
Depreciation and amortization
22,053

 
21,986

 
91,335

 
91,793

Acquisition costs

 
198

 

 
316

General and administrative expenses
7,383

 
4,967

 
26,159

 
22,041

Provision for impairment
982

 

 
9,404

 
977

Lease termination fees
(23
)

(71
)
 
(83
)
 
(139
)
Amortization of lease inducements
44


44

 
175

 
221

Amortization of acquired above and below market lease intangibles, net
(1,130
)

(1,069
)
 
(4,397
)
 
(3,397
)
Straight-line ground rent expense
70


63

 
281

 
63

Amortization of acquired ground lease intangibles
6


6

 
25

 
6

Straight-line rental income
(872
)

(948
)
 
(2,669
)
 
(2,383
)
NOI
44,018

 
42,983

 
183,174

 
179,877

NOI from Other Investments
(4,951
)
 
(4,788
)
 
(25,529
)
 
(25,866
)
Same Property NOI with Redevelopment
39,067

 
38,195

 
157,645

 
154,011

NOI from Redevelopment (1)
(6,016
)
 
(5,850
)
 
(23,991
)
 
(21,954
)
Same Property NOI without Redevelopment
$
33,051

 
$
32,345

 
$
133,654

 
$
132,057

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) The NOI from Redevelopment adjustments represent 100% of the NOI related to Deerfield Towne Center, Hunter’s Square, Woodbury Lakes and West Oaks, and a portion of the NOI related to specific GLA at Spring Meadows, The Shoppes at Fox River II, The Shops on Lane Avenue, Mission Bay, River City Marketplace and Town & Country for the periods presented. Because of the redevelopment activity, the center or specific space is not considered comparable for the periods presented and adjusted out of Same Property NOI with Redevelopment in arriving at Same Property NOI without Redevelopment.
 
 
 
 
 
 
 
 









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RAMCO-GERSHENSON PROPERTIES TRUST
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(amounts in thousands)
 
Three Months Ended December 31,
 
2017
 
2016
Reconciliation of net income to proforma adjusted EBITDA
 
 
 
Net income
$
21,424

 
$
7,077

Gain on sale of real estate
(16,843
)
 
(96
)
Depreciation and amortization
22,053

 
21,986

Pro-rata share of depreciation from unconsolidated joint venture
73

 
73

Provision for impairment
982

 

Severance expense
60

 
43

Costs associated with early extinguishment of debt

 
409

Interest expense
10,995

 
10,696

Income tax provision
24

 
65

Lease termination income
(23
)
 
(71
)
Acquisition costs

 
198

Adjusted EBITDA
38,745

 
40,380

Proforma adjustments (1)
(1,324
)
 
(251
)
Proforma adjusted EBITDA
$
37,421

 
$
40,129

Annualized proforma adjusted EBITDA
$
149,684

 
$
160,516

 
 
 
 
 
 
 
 
Reconciliation of Notes Payable, net to Net Debt
 
 
 
Notes payable, net
$
999,215

 
$
1,021,223

Unamortized premium
(3,967
)
 
(5,120
)
Deferred financing costs, net
3,821

 
3,740

Consolidated notional debt
999,069

 
1,019,843

Pro-rata share of debt from unconsolidated joint venture
12,699

 

Capital lease obligation
1,022

 
1,066

Cash and cash equivalents
(8,081
)
 
(3,582
)
Net debt
$
1,004,709

 
$
1,017,327

 
 
 
 
 
 
 
 
Reconciliation of interest expense to total fixed charges
 
 
 
Interest expense
$
10,616

 
$
10,351

Preferred share dividends
1,675

 
1,676

Scheduled mortgage principal payments
758

 
777

Total fixed charges
$
13,049

 
$
12,804

 
 
 
 
 
 
 
 
Net debt to annualized proforma adjusted EBITDA
6.7
X
 
6.3
X
Interest coverage ratio (Adjusted EBITDA / interest expense)
3.6
X
 
3.9
X
Fixed charge coverage ratio (Adjusted EBITDA / fixed charges)
3.0
X
 
3.2
X
 
 
 
 
(1) 4Q17 excludes $1.3 million from acquisitions and dispositions including our Millennium Park joint venture. 4Q16 excludes $0.3 million related to miscellaneous income.
 


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Ramco-Gershenson Properties Trust
Non-GAAP Financial Definitions

 

Certain of our key performance indicators are considered non-GAAP financial measures. Management uses these measures along with our GAAP financial statements in order to evaluate our operations results. We believe these additional measures provide users of our financial information additional comparable indicators of our industry, as well as our performance.
Funds From Operations (FFO) Available to Common Shareholders
As defined by the National Association of Real Estate Investment Trusts (NAREIT), Funds From Operations (FFO) represents net income computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of depreciable property and impairment provisions on depreciable real estate or on investments in non-consolidated investees that are driven by measurable decreases in the fair value of depreciable real estate held by the investee, plus depreciation and amortization, (excluding amortization of financing costs). Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. We have adopted the NAREIT definition in our computation of FFO available to common shareholders.
Operating FFO Available to Common Shareholders
In addition to FFO available to common shareholders, we include Operating FFO available to common shareholders as an additional measure of our financial and operating performance. Operating FFO excludes acquisition costs and periodic items such as gains (or losses) from sales of land and impairment provisions on land available for development or sale, bargain purchase gains, severance expense, accelerated amortization of debt premiums and gains or losses on extinguishment of debt that are not adjusted under the current NAREIT definition of FFO. We provide a reconciliation of FFO to Operating FFO. FFO and Operating FFO should not be considered alternatives to GAAP net income available to common shareholders or as alternatives to cash flow as measures of liquidity.
While we consider FFO available to common shareholders and Operating FFO available to common shareholders useful measures for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs, our computations of FFO and Operating FFO may differ from the computations utilized by other real estate companies, and therefore, may not be comparable. We recognize the limitations of FFO and Operating FFO when compared to GAAP net income available to common shareholders. FFO and Operating FFO available to common shareholders do not represent amounts available for needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. In addition, FFO and Operating FFO do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the payment of dividends. FFO and Operating FFO are simply used as for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs, our computations of FFO and Operating FFO may differ from the computations utilized by other real estate companies, and therefore, may not be comparable.
Adjusted EBITDA/Proforma Adjusted EBITDA
Adjusted EBITDA is net income or loss plus depreciation and amortization, interest expense net of deferred financing costs, severance expense, income taxes, gain or loss on sale of real estate, and impairments of real estate, if any. Adjusted EBITDA should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. Proforma Adjusted EBITDA further adjusts for the effect of the acquisition or disposition of properties during the period.
Same Property Operating Income
Same Property Operating Income ("Same Property NOI with Redevelopment") is a supplemental non-GAAP financial measure of real estate companies' operating performance. Same Property NOI with Redevelopment is considered by management to be a relevant performance measure of our operations because it includes only the NOI of comparable properties for the reporting period. Same Property NOI with Redevelopment excludes acquisitions and dispositions. Same Property NOI with Redevelopment is calculated using consolidated operating income and adjusted to exclude management and other fee income, depreciation and amortization, general and administrative expense, provision for impairment and non-comparable income/expense adjustments such as straight-line rents, lease termination fees, above/below market rents, and other non-comparable operating income and expense adjustments.

In addition to Same Property NOI with Redevelopment, the Company also believes Same Property NOI without Redevelopment to be a relevant performance measure of our operations. Same Property NOI without Redevelopment follows the same methodology as Same Property NOI with Redevelopment, however it excludes redevelopment activity that significantly impacts the entire property, as well as lesser redevelopment activity where we are adding GLA or retenanting a specific space. A property is designated as redevelopment when projected costs exceed $1.0 million, and the construction impacts approximately 20% or more of the income producing property's gross leasable area ("GLA") or the location and nature of the construction significantly impacts or disrupts the daily operations of the property. Redevelopment may also include a portion of certain properties designated as same property for which we are adding additional GLA or retenanting space.

Same Property NOI should not be considered an alternative to net income in accordance with GAAP or as a measure of liquidity. Our method of calculating Same Property NOI may differ from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

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