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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):  May 1, 2018
RETAIL PROPERTIES OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
Maryland
 
001-35481
 
42-1579325
(State or other jurisdiction of
incorporation)
 
(Commission File Number)
 
(IRS Employer
Identification No.)
2021 Spring Road, Suite 200, Oak Brook, Illinois
 
60523
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code:  (630) 634-4200
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 (see General Instruction A.2. below):
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))
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





Item 2.02 Results of Operations and Financial Condition.
The information in this Item 2.02 – “Results of Operations and Financial Condition” is being furnished. Such information, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibits 99.1 and 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.
On May 1, 2018, Retail Properties of America, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2018. A copy of this press release as well as a copy of the supplemental financial information referred to in the press release are made available on the Company’s website and are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits
The following Exhibits are included in this Report:
99.1    Press Release dated May 1, 2018.
99.2    Retail Properties of America, Inc. Supplemental Information for the quarter ended March 31, 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, thereunto duly authorized.

 
 
 
RETAIL PROPERTIES OF AMERICA, INC.
 
 
(Registrant)
 
 
 
 
 
By:
/s/ JULIE M. SWINEHART
 
 
 
 
 
 
 
Julie M. Swinehart
Date:
May 1, 2018
 
Executive Vice President,
 
 
 
Chief Financial Officer and Treasurer


(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit

Exhibit 99.1

393284768_rpailogoq12018.jpg 
 
RETAIL PROPERTIES OF AMERICA, INC.
REPORTS FIRST QUARTER 2018 RESULTS
Oak Brook, IL – May 1, 2018 – Retail Properties of America, Inc. (NYSE: RPAI) (the “Company”) today reported financial and operating results for the quarter ended March 31, 2018.
FINANCIAL RESULTS
For the quarter ended March 31, 2018, the Company reported:
Net income attributable to common shareholders of $41.8 million, or $0.19 per diluted share, compared to net loss attributable to common shareholders of $11.5 million, or $0.05 per diluted share, for the same period in 2017;
Funds from operations (FFO) attributable to common shareholders of $55.0 million, or $0.25 per diluted share, compared to $0.5 million, or $0.00 per diluted share, for the same period in 2017; and
Operating funds from operations (Operating FFO) attributable to common shareholders of $55.8 million, or $0.25 per diluted share, compared to $66.9 million, or $0.28 per diluted share, for the same period in 2017.
OPERATING RESULTS
For the quarter ended March 31, 2018, the Company’s portfolio results were as follows:
1.5% increase in same store net operating income (NOI) over the comparable period in 2017;
Total same store portfolio percent leased, including leases signed but not commenced: 94.4% at March 31, 2018, down 50 basis points from 94.9% at December 31, 2017 and down 40 basis points from 94.8% at March 31, 2017;
Retail portfolio percent leased, including leases signed but not commenced: 94.3% at March 31, 2018, down 60 basis points from 94.9% at December 31, 2017 and flat at March 31, 2017;
Retail portfolio annualized base rent (ABR) per occupied square foot of $19.06 at March 31, 2018, up 8.8% from $17.52 ABR per occupied square foot at March 31, 2017;
637,000 square feet of retail leasing transactions comprised of 97 new and renewal leases; and
Positive comparable cash leasing spreads of 31.2% on new leases and 5.6% on renewal leases for a blended re-leasing spread of 6.4%.
“Our predominantly mixed-use, lifestyle and grocery-anchored portfolio is well-positioned to navigate this transitional time in retail real estate as we look to continue to grow shareholder value,” stated Steve Grimes, president and chief executive officer. “In acknowledgment of our success to date in this mission, we were able to enhance our financial flexibility by significantly improving the economics and structure of our recently closed $1.1 billion unsecured credit facility. We thank our bank group for their continued confidence, support and recognition of the great things happening here at RPAI.”

n Retail Properties of America, Inc.
T: 855.247.RPAI
www.rpai.com    2021 Spring Road, Suite 200
Oak Brook, IL 60523


INVESTMENT ACTIVITY
Dispositions
To date in 2018, the Company has completed or is under contract for property dispositions totaling $193.0 million. During the quarter, the Company completed $104.8 million of retail property dispositions, which included the sales of five multi-tenant retail assets for $96.1 million and two single-user retail assets for $8.7 million. Additionally, during the quarter, the Company completed the sale of development air rights for $12.0 million.
Subsequent to quarter end, the Company completed the sale of one single-user retail asset for $1.6 million. In addition, the Company is under contract to sell its one remaining office complex, Schaumburg Towers, for a purchase price of $86.6 million. Schaumburg Towers is classified as held for sale as of March 31, 2018 and the sale is expected to close during the second quarter of 2018, subject to satisfaction of customary closing conditions. The Company is also under contract to sell land and the rights to develop 30 residential units at One Loudoun Downtown for $6.8 million. This transaction is expected to close in three phases with the first phase closing during 2018, subject to satisfaction of customary closing conditions.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of March 31, 2018, the Company had approximately $1.6 billion of consolidated indebtedness with a weighted average contractual interest rate of 3.93%, a weighted average maturity of 5.1 years and a net debt to adjusted EBITDA ratio of 5.4x.
During the quarter, the Company repaid a $10.8 million mortgage payable, excluding amortization, which had an interest rate of 4.82% and incurred a prepayment penalty of $1.0 million.
Subsequent to quarter end, as previously announced, the Company closed on a $1.1 billion amended and restated unsecured credit facility (2018 Unsecured Credit Facility). The 2018 Unsecured Credit Facility was amended and restated as follows:
$850 Million Unsecured Revolving Line of Credit
Increased the capacity on the existing unsecured revolver by $100 million to $850 million;
Set pricing, which is based on the Company’s leverage, at LIBOR plus 105 basis points, a 30 basis point improvement from the previous rate;
Extended the maturity date to April 22, 2022 from January 5, 2020; and
Retained two six-month extension options.
$250 Million Unsecured Term Loan Due 2021
Set pricing, which is based on the Company’s leverage, at LIBOR plus 120 basis points, a 10 basis point improvement from the previous rate; and
Retained the maturity date of January 5, 2021.
$100 Million Unsecured Term Loan Due 2018
Repaid the remaining $100 million unsecured term loan that matures on May 11, 2018.
In recognition of the completion of the Company’s portfolio transformation and its improved portfolio quality, the capitalization rate used to calculate certain financial covenants under the 2018 Unsecured Credit Facility was set at 6.50%, a 25 basis point improvement from the previous rate.



GUIDANCE
The Company expects to generate net income attributable to common shareholders of $0.34 to $0.38 per diluted share in 2018. The Company is maintaining its 2018 Operating FFO attributable to common shareholders guidance range of $0.98 to $1.02 per diluted share, based, in part, on the following assumptions:
Same store NOI growth of 2.0% to 3.0%;
Property acquisitions of $50 to $150 million;
Property dispositions of approximately $200 million; and
General and administrative expenses of $40 to $43 million, excluding the impact on earnings from executive separation.
DIVIDEND
On April 24, 2018, the Company declared the second quarter 2018 quarterly cash dividend of $0.165625 per share on its outstanding Class A common stock, which will be paid on July 10, 2018 to Class A common shareholders of record on June 26, 2018.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company’s management team will hold a webcast on Wednesday, May 2, 2018 at 11:00 AM (ET), to discuss its quarterly financial results and operating performance, as well as business highlights and outlook. In addition, the Company may discuss business and financial developments and trends and other matters affecting the Company, some of which may not have been previously disclosed.
A live webcast will be available online on the Company’s website at www.rpai.com in the INVEST section. A replay of the webcast will be available. To listen to the replay, please go to www.rpai.com in the INVEST section of the website and follow the instructions.
The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 for international participants. Please dial in at least ten minutes prior to the start of the call to register. A replay of the call will be available from 2:00 PM (ET) on May 2, 2018 until midnight (ET) on May 16, 2018. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13677165.
SUPPLEMENTAL INFORMATION
The Company has posted supplemental financial and operating information and other data in the INVEST section of its website.
ABOUT RPAI
Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located shopping centers in the United States. As of March 31, 2018, the Company owned 106 retail operating properties representing 19.5 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.
SAFE HARBOR LANGUAGE
The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “should,” “intends,” “plans,” “estimates,” “continue” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations



or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company’s industry and changes in the real estate markets in particular, rental rates and/or vacancy rates, frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants, bankruptcy or insolvency of a major tenant or a significant number of smaller tenants, interest rates or operating costs, real estate valuations, the availability, terms and deployment of capital, general volatility of the capital and credit markets and the market price of the Company’s Class A common stock, risks generally associated with real estate acquisitions and dispositions, including the Company’s ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns, the Company’s ability to lease redeveloped space and identify and pursue redevelopment opportunities, competitive and cost factors, the Company’s ability to enter into new leases or renew leases on favorable terms, the Company’s ability to create long-term shareholder value, satisfaction of closing conditions to the pending transactions described herein, regulatory changes and other risk factors, including those detailed in the sections of the Company’s most recent Forms 10-K and 10-Q filed with the SEC titled “Risk Factors.” The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income (loss) computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends.
The Company also reports Operating FFO attributable to common shareholders, which is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the impact on earnings from gains or losses associated with the early extinguishment of debt or other liabilities, gain on sale and impairment charges on assets other than depreciable real estate, litigation involving the Company, including actual or anticipated settlement and associated legal costs, the impact on earnings from executive separation and the excess of redemption value over carrying value of preferred stock redemption, which are not otherwise adjusted in the Company’s calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends. Comparison of the Company’s presentation of Operating FFO attributable to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
The Company also reports Net Operating Income (NOI), which it defines as all revenues other than straight-line rental income (non-cash), amortization of lease inducements, amortization of acquired above and below market lease intangibles and lease termination fee income, less real estate taxes and all operating expenses other than straight-line ground rent expense (non-cash) and amortization of acquired ground lease intangibles (non-cash). NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI for the three months ended March 31, 2018 represents NOI from the Company’s same store portfolio consisting of 103 retail operating properties acquired or placed in service and stabilized prior to January 1, 2017. NOI from Other Investment Properties for the three months ended March 31, 2018 represents NOI primarily from properties acquired during 2017, Schaumburg Towers, which is classified as held for sale as of March 31, 2018, two properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment, the redevelopment portion of Circle East, formerly known as Towson Circle, which has been combined with the Company’s neighboring retail operating property formerly known as Towson Square, the properties that were sold or held for sale in 2017 and 2018 and the net income from the Company’s wholly-owned captive insurance company. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective



not immediately apparent from “Operating income” or “Net income attributable to common shareholders” in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company’s operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to “Net income” or “Net income attributable to common shareholders” in accordance with GAAP as indicators of the Company’s financial performance. Comparison of the Company’s presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Adjusted EBITDA is a supplemental non-GAAP financial measure and represents net income attributable to common shareholders before interest, income taxes, depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing performance. The Company believes that Adjusted EBITDA is useful because it allows investors and management to evaluate and compare the Company’s performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. Adjusted EBITDA should not be considered an alternative to “Net income attributable to common shareholders” as an indicator of the Company’s financial performance. Comparison of the Company’s presentation of Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Debt to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company’s total notional debt, excluding unamortized premium, discount and capitalized loan fees, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges (1031 Exchanges) divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company’s presentation of Net Debt to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
CONTACT INFORMATION
Michael Fitzmaurice
Senior Vice President – Finance
Retail Properties of America, Inc.
(630) 634-4233




Retail Properties of America, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except par value amounts)
(unaudited)
 

 
 
March 31,
2018
 
December 31,
2017
Assets
 
 
 
 
Investment properties:
 
 
 
 
Land
 
$
1,042,260

 
$
1,066,705

Building and other improvements
 
3,553,298

 
3,686,200

Developments in progress
 
19,805

 
33,022

 
 
4,615,363

 
4,785,927

Less accumulated depreciation
 
(1,210,147
)
 
(1,215,990
)
Net investment properties
 
3,405,216

 
3,569,937

 
 
 
 
 
Cash and cash equivalents
 
33,533

 
25,185

Accounts and notes receivable (net of allowances of $6,675 and $6,567, respectively)
 
66,893

 
71,678

Acquired lease intangible assets, net
 
116,141

 
122,646

Assets associated with investment properties held for sale
 
68,799

 
3,647

Other assets, net
 
67,139

 
125,171

Total assets
 
$
3,757,721

 
$
3,918,264

 
 
 
 
 
Liabilities and Equity
 
 
 
 
Liabilities:
 
 
 
 
Mortgages payable, net (includes unamortized premium of $962 and $1,024,
respectively, unamortized discount of $(569) and $(579), respectively, and
unamortized capitalized loan fees of $(527) and $(615), respectively)
 
$
275,316

 
$
287,068

Unsecured notes payable, net (includes unamortized discount of $(823) and $(853),
respectively, and unamortized capitalized loan fees of $(3,275) and $(3,399), respectively)
 
695,902

 
695,748

Unsecured term loans, net (includes unamortized capitalized loan fees of $(2,371)
and $(2,730), respectively)
 
547,629

 
547,270

Unsecured revolving line of credit
 
91,000

 
216,000

Accounts payable and accrued expenses
 
53,270

 
82,698

Distributions payable
 
36,353

 
36,311

Acquired lease intangible liabilities, net
 
94,911

 
97,971

Liabilities associated with investment properties held for sale
 
2,673

 

Other liabilities
 
66,023

 
69,498

Total liabilities
 
1,863,077

 
2,032,564

 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
 
 
Equity:
 
 
 
 
Preferred stock, $0.001 par value, 10,000 shares authorized, none issued or outstanding
 

 

Class A common stock, $0.001 par value, 475,000 shares authorized,
219,489 and 219,237 shares issued and outstanding as of March 31, 2018
and December 31, 2017, respectively
 
219

 
219

Additional paid-in capital
 
4,575,191

 
4,574,428

Accumulated distributions in excess of earnings
 
(2,684,606
)
 
(2,690,021
)
Accumulated other comprehensive income
 
3,840

 
1,074

Total equity
 
1,894,644

 
1,885,700

Total liabilities and equity
 
$
3,757,721

 
$
3,918,264








Retail Properties of America, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share amounts)
(unaudited)


 
 
Three Months Ended March 31,
 
 
2018
 
2017
Revenues
 
 

 
 

Rental income
 
$
94,455

 
$
109,974

Tenant recovery income
 
28,090

 
30,786

Other property income
 
2,297

 
2,933

Total revenues
 
124,842

 
143,693

 
 
 
 
 
Expenses
 
 

 
 

Operating expenses
 
20,255

 
21,864

Real estate taxes
 
20,468

 
21,879

Depreciation and amortization
 
45,228

 
53,474

Provision for impairment of investment properties
 
592

 

General and administrative expenses
 
12,495

 
11,213

Total expenses
 
99,038

 
108,430

 
 
 
 
 
Operating income
 
25,804

 
35,263

 
 
 
 
 
Interest expense
 
(18,765
)
 
(85,532
)
Other income, net
 
222

 
5

Income (loss) from continuing operations
 
7,261

 
(50,264
)
Gain on sales of investment properties
 
34,519

 
41,164

Net income (loss)
 
41,780

 
(9,100
)
Preferred stock dividends
 

 
(2,362
)
Net income (loss) attributable to common shareholders
 
$
41,780

 
$
(11,462
)
 
 
 
 
 
Earnings (loss) per common share – basic and diluted
 
 

 
 

Net income (loss) per common share attributable to common shareholders
 
$
0.19

 
$
(0.05
)
 
 
 
 
 
Weighted average number of common shares outstanding – basic
 
218,849

 
236,294

 
 
 
 
 
Weighted average number of common shares outstanding – diluted
 
219,403

 
236,294







Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands, except per share amounts)
(unaudited)


Funds From Operations (FFO) Attributable to Common Shareholders and
Operating FFO Attributable to Common Shareholders
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
 
 
 
Net income (loss) attributable to common shareholders
 
$
41,780

 
$
(11,462
)
Depreciation and amortization of depreciable real estate
 
44,950

 
53,079

Provision for impairment of investment properties
 
592

 

Gain on sales of depreciable investment properties
 
(32,340
)
 
(41,164
)
FFO attributable to common shareholders
 
$
54,982

 
$
453

 
 
 
 
 
FFO attributable to common shareholders per common share outstanding – diluted
 
$
0.25

 
$
0.00

 
 
 
 
 
 
 
 
 
 
FFO attributable to common shareholders
 
$
54,982

 
$
453

Impact on earnings from the early extinguishment of debt, net
 
1,028

 
66,357

Provision for hedge ineffectiveness
 

 
6

Gain on sale of non-depreciable investment property
 
(2,179
)
 

Impact on earnings from executive separation (a)
 
1,737

 

Other (b)
 
207

 
130

Operating FFO attributable to common shareholders
 
$
55,775

 
$
66,946

 
 
 
 
 
Operating FFO attributable to common shareholders per common share outstanding – diluted
 
$
0.25

 
$
0.28

 
 
 
 
 
Weighted average number of common shares outstanding – diluted
 
219,403

 
236,294



(a)
Reflected as an increase to "General and administrative expenses" in the condensed consolidated statements of operations.
(b)
Primarily consists of the impact on earnings from litigation involving the Company, including actual or anticipated settlement and associated legal costs, which are included in "Other income, net" in the condensed consolidated statements of operations.



FFO Attributable to Common Shareholders and Operating FFO Attributable to Common Shareholders Guidance
 
 
Per Share Guidance Range
Full Year 2018
 
 
Low
 
High
 
 
 
 
 
Net income attributable to common shareholders
 
$
0.34

 
$
0.38

Depreciation and amortization of depreciable real estate
 
0.785

 
0.785

Provision for impairment of investment properties
 

 

Gain on sales of depreciable investment properties
 
(0.14
)
 
(0.14
)
FFO attributable to common shareholders
 
$
0.985

 
$
1.025

 
 
 
 
 
Impact on earnings from the early extinguishment of debt
 
0.005

 
0.005

Gain on sale of non-depreciable investment property
 
(0.02
)
 
(0.02
)
Impact on earnings from executive separation
 
0.01

 
0.01

Other
 

 

Operating FFO attributable to common shareholders
 
$
0.98

 
$
1.02







Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(amounts in thousands)
(unaudited)


Reconciliation of Net Income (Loss) Attributable to Common Shareholders to Same Store NOI
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
 
 
 
Net income (loss) attributable to common shareholders
 
$
41,780

 
$
(11,462
)
Adjustments to reconcile to Same Store NOI:
 
 

 
 

Preferred stock dividends
 

 
2,362

Gain on sales of investment properties
 
(34,519
)
 
(41,164
)
Depreciation and amortization
 
45,228

 
53,474

Provision for impairment of investment properties
 
592

 

General and administrative expenses
 
12,495

 
11,213

Interest expense
 
18,765

 
85,532

Straight-line rental income, net
 
(2,479
)
 
(341
)
Amortization of acquired above and below market lease intangibles, net
 
(854
)
 
(731
)
Amortization of lease inducements
 
241

 
323

Lease termination fees
 
(1,019
)
 
(1,612
)
Straight-line ground rent expense
 
666

 
686

Amortization of acquired ground lease intangibles
 
(140
)
 
(140
)
Other income, net
 
(222
)
 
(5
)
NOI
 
80,534

 
98,135

NOI from Other Investment Properties
 
(3,737
)
 
(22,495
)
Same Store NOI
 
$
76,797

 
$
75,640









Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures (continued)
(amounts in thousands, except ratios)
(unaudited)


Reconciliation of Mortgages Payable, Net, Unsecured Notes Payable, Net,
Unsecured Term Loans, Net and Unsecured Revolving Line of Credit to Total Net Debt
 
 
March 31,
2018
 
December 31,
2017
 
 
 
 
 
Mortgages payable, net
 
$
275,316

 
$
287,068

Unsecured notes payable, net
 
695,902

 
695,748

Unsecured term loans, net
 
547,629

 
547,270

Unsecured revolving line of credit
 
91,000

 
216,000

Total
 
1,609,847

 
1,746,086

Mortgage premium, net of accumulated amortization
 
(962
)
 
(1,024
)
Mortgage discount, net of accumulated amortization
 
569

 
579

Unsecured notes payable discount, net of accumulated amortization
 
823

 
853

Capitalized loan fees, net of accumulated amortization
 
6,173

 
6,744

Total notional debt
 
1,616,450

 
1,753,238

Less: consolidated cash and cash equivalents
 
(33,533
)
 
(25,185
)
Less: disposition proceeds temporarily restricted related to potential
Internal Revenue Code Section 1031 tax-deferred exchanges
 

 
(54,087
)
Total net debt
 
$
1,582,917

 
$
1,673,966

Net Debt to Adjusted EBITDA (a)
 
5.4x

 
5.5x




Reconciliation of Net Income Attributable to Common Shareholders to Adjusted EBITDA
 
 
 
Three Months Ended
 
 
March 31, 2018
 
December 31, 2017
 
 
 
 
 
Net income attributable to common shareholders
 
$
41,780

 
$
103,144

Preferred stock dividends
 

 
6,780

Interest expense
 
18,765

 
18,015

Depreciation and amortization
 
45,228

 
46,598

Gain on sales of investment properties
 
(34,519
)
 
(107,101
)
Provision for impairment of investment properties
 
592

 
8,147

Impact on earnings from executive separation
 
1,737

 

Adjusted EBITDA
 
$
73,583

 
$
75,583

Annualized
 
$
294,332

 
$
302,332



(a)
For purposes of this ratio calculation, annualized three months ended figures were used.


(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

Exhibit

Exhibit 99.2

393284768_supplementalq12018.jpg



393284768_supplementaltocq12018.jpg



393284768_rpailogoq12018.jpg

RETAIL PROPERTIES OF AMERICA, INC.
REPORTS FIRST QUARTER 2018 RESULTS
Oak Brook, IL – May 1, 2018 – Retail Properties of America, Inc. (NYSE: RPAI) (the “Company”) today reported financial and operating results for the quarter ended March 31, 2018.
FINANCIAL RESULTS
For the quarter ended March 31, 2018, the Company reported:
Net income attributable to common shareholders of $41.8 million, or $0.19 per diluted share, compared to net loss attributable to common shareholders of $11.5 million, or $0.05 per diluted share, for the same period in 2017;
Funds from operations (FFO) attributable to common shareholders of $55.0 million, or $0.25 per diluted share, compared to $0.5 million, or $0.00 per diluted share, for the same period in 2017; and
Operating funds from operations (Operating FFO) attributable to common shareholders of $55.8 million, or $0.25 per diluted share, compared to $66.9 million, or $0.28 per diluted share, for the same period in 2017.
OPERATING RESULTS
For the quarter ended March 31, 2018, the Company’s portfolio results were as follows:
1.5% increase in same store net operating income (NOI) over the comparable period in 2017;
Total same store portfolio percent leased, including leases signed but not commenced: 94.4% at March 31, 2018, down 50 basis points from 94.9% at December 31, 2017 and down 40 basis points from 94.8% at March 31, 2017;
Retail portfolio percent leased, including leases signed but not commenced: 94.3% at March 31, 2018, down 60 basis points from 94.9% at December 31, 2017 and flat at March 31, 2017;
Retail portfolio annualized base rent (ABR) per occupied square foot of $19.06 at March 31, 2018, up 8.8% from $17.52 ABR per occupied square foot at March 31, 2017;
637,000 square feet of retail leasing transactions comprised of 97 new and renewal leases; and
Positive comparable cash leasing spreads of 31.2% on new leases and 5.6% on renewal leases for a blended re-leasing spread of 6.4%.
“Our predominantly mixed-use, lifestyle and grocery-anchored portfolio is well-positioned to navigate this transitional time in retail real estate as we look to continue to grow shareholder value,” stated Steve Grimes, president and chief executive officer. “In acknowledgment of our success to date in this mission, we were able to enhance our financial flexibility by significantly improving the economics and structure of our recently closed $1.1 billion unsecured credit facility. We thank our bank group for their continued confidence, support and recognition of the great things happening here at RPAI.”

n Retail Properties of America, Inc.
T: 855.247.RPAI
www.rpai.com    2021 Spring Road, Suite 200
Oak Brook, IL 60523


INVESTMENT ACTIVITY
Dispositions
To date in 2018, the Company has completed or is under contract for property dispositions totaling $193.0 million. During the quarter, the Company completed $104.8 million of retail property dispositions, which included the sales of five multi-tenant retail assets for $96.1 million and two single-user retail assets for $8.7 million. Additionally, during the quarter, the Company completed the sale of development air rights for $12.0 million.
Subsequent to quarter end, the Company completed the sale of one single-user retail asset for $1.6 million. In addition, the Company is under contract to sell its one remaining office complex, Schaumburg Towers, for a purchase price of $86.6 million. Schaumburg Towers is classified as held for sale as of March 31, 2018 and the sale is expected to close during the second quarter of 2018, subject to satisfaction of customary closing conditions. The Company is also under contract to sell land and the rights to develop 30 residential units at One Loudoun Downtown for $6.8 million. This transaction is expected to close in three phases with the first phase closing during 2018, subject to satisfaction of customary closing conditions.
BALANCE SHEET AND CAPITAL MARKETS ACTIVITY
As of March 31, 2018, the Company had approximately $1.6 billion of consolidated indebtedness with a weighted average contractual interest rate of 3.93%, a weighted average maturity of 5.1 years and a net debt to adjusted EBITDA ratio of 5.4x.
During the quarter, the Company repaid a $10.8 million mortgage payable, excluding amortization, which had an interest rate of 4.82% and incurred a prepayment penalty of $1.0 million.
Subsequent to quarter end, as previously announced, the Company closed on a $1.1 billion amended and restated unsecured credit facility (2018 Unsecured Credit Facility). The 2018 Unsecured Credit Facility was amended and restated as follows:
$850 Million Unsecured Revolving Line of Credit
Increased the capacity on the existing unsecured revolver by $100 million to $850 million;
Set pricing, which is based on the Company’s leverage, at LIBOR plus 105 basis points, a 30 basis point improvement from the previous rate;
Extended the maturity date to April 22, 2022 from January 5, 2020; and
Retained two six-month extension options.
$250 Million Unsecured Term Loan Due 2021
Set pricing, which is based on the Company’s leverage, at LIBOR plus 120 basis points, a 10 basis point improvement from the previous rate; and
Retained the maturity date of January 5, 2021.
$100 Million Unsecured Term Loan Due 2018
Repaid the remaining $100 million unsecured term loan that matures on May 11, 2018.
In recognition of the completion of the Company’s portfolio transformation and its improved portfolio quality, the capitalization rate used to calculate certain financial covenants under the 2018 Unsecured Credit Facility was set at 6.50%, a 25 basis point improvement from the previous rate.

ii


GUIDANCE
The Company expects to generate net income attributable to common shareholders of $0.34 to $0.38 per diluted share in 2018. The Company is maintaining its 2018 Operating FFO attributable to common shareholders guidance range of $0.98 to $1.02 per diluted share, based, in part, on the following assumptions:
Same store NOI growth of 2.0% to 3.0%;
Property acquisitions of $50 to $150 million;
Property dispositions of approximately $200 million; and
General and administrative expenses of $40 to $43 million, excluding the impact on earnings from executive separation.
DIVIDEND
On April 24, 2018, the Company declared the second quarter 2018 quarterly cash dividend of $0.165625 per share on its outstanding Class A common stock, which will be paid on July 10, 2018 to Class A common shareholders of record on June 26, 2018.
WEBCAST AND CONFERENCE CALL INFORMATION
The Company’s management team will hold a webcast on Wednesday, May 2, 2018 at 11:00 AM (ET), to discuss its quarterly financial results and operating performance, as well as business highlights and outlook. In addition, the Company may discuss business and financial developments and trends and other matters affecting the Company, some of which may not have been previously disclosed.
A live webcast will be available online on the Company’s website at www.rpai.com in the INVEST section. A replay of the webcast will be available. To listen to the replay, please go to www.rpai.com in the INVEST section of the website and follow the instructions.
The conference call can be accessed by dialing (877) 705-6003 or (201) 493-6725 for international participants. Please dial in at least ten minutes prior to the start of the call to register. A replay of the call will be available from 2:00 PM (ET) on May 2, 2018 until midnight (ET) on May 16, 2018. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering pin number 13677165.
SUPPLEMENTAL INFORMATION
The Company has posted supplemental financial and operating information and other data in the INVEST section of its website.
ABOUT RPAI
Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located shopping centers in the United States. As of March 31, 2018, the Company owned 106 retail operating properties representing 19.5 million square feet. The Company is publicly traded on the New York Stock Exchange under the ticker symbol RPAI. Additional information about the Company is available at www.rpai.com.
SAFE HARBOR LANGUAGE
The statements and certain other information contained in this press release, which can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “should,” “intends,” “plans,” “estimates,” “continue” or “anticipates” and variations of such words or similar expressions or the negative of such words, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. These forward-looking statements reflect the Company’s current views about its plans, intentions, expectations, strategies and prospects, which are based on the information currently available to the Company and on assumptions it has made. Although the Company believes that its plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, the Company can give no assurance that such plans, intentions, expectations

iii


or strategies will be attained or achieved. Furthermore, these forward-looking statements should be considered as subject to the many risks and uncertainties that exist in the Company’s operations and business environment. Such risks and uncertainties could cause actual results to differ materially from those projected. These uncertainties include, but are not limited to, economic, business and financial conditions, and changes in the Company’s industry and changes in the real estate markets in particular, rental rates and/or vacancy rates, frequency and magnitude of defaults on, early terminations of or non-renewal of leases by tenants, bankruptcy or insolvency of a major tenant or a significant number of smaller tenants, interest rates or operating costs, real estate valuations, the availability, terms and deployment of capital, general volatility of the capital and credit markets and the market price of the Company’s Class A common stock, risks generally associated with real estate acquisitions and dispositions, including the Company’s ability to identify and pursue acquisition and disposition opportunities, risks generally associated with redevelopment, including the impact of construction delays and cost overruns, the Company’s ability to lease redeveloped space and identify and pursue redevelopment opportunities, competitive and cost factors, the Company’s ability to enter into new leases or renew leases on favorable terms, the Company’s ability to create long-term shareholder value, satisfaction of closing conditions to the pending transactions described herein, regulatory changes and other risk factors, including those detailed in the sections of the Company’s most recent Forms 10-K and 10-Q filed with the SEC titled “Risk Factors.” The Company assumes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
As defined by the National Association of Real Estate Investment Trusts (NAREIT), an industry trade group, Funds From Operations (FFO) means net income (loss) computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of depreciable real estate, plus depreciation and amortization and impairment charges on depreciable real estate. The Company has adopted the NAREIT definition in its computation of FFO attributable to common shareholders. The Company believes that, subject to the following limitations, FFO attributable to common shareholders provides a basis for comparing its performance and operations to those of other real estate investment trusts (REITs). The Company believes that FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends.
The Company also reports Operating FFO attributable to common shareholders, which is defined as FFO attributable to common shareholders excluding the impact of discrete non-operating transactions and other events which the Company does not consider representative of the comparable operating results of its real estate operating portfolio, which is its core business platform. Specific examples of discrete non-operating transactions and other events include, but are not limited to, the impact on earnings from gains or losses associated with the early extinguishment of debt or other liabilities, gain on sale and impairment charges on assets other than depreciable real estate, litigation involving the Company, including actual or anticipated settlement and associated legal costs, the impact on earnings from executive separation and the excess of redemption value over carrying value of preferred stock redemption, which are not otherwise adjusted in the Company’s calculation of FFO attributable to common shareholders. The Company believes that Operating FFO attributable to common shareholders, which is a supplemental non-GAAP financial measure, provides an additional and useful means to assess the operating performance of REITs. Operating FFO attributable to common shareholders does not represent an alternative to (i) “Net income” or “Net income attributable to common shareholders” as an indicator of the Company’s financial performance, or (ii) “Cash flows from operating activities” in accordance with GAAP as a measure of the Company’s capacity to fund cash needs, including the payment of dividends. Comparison of the Company’s presentation of Operating FFO attributable to common shareholders to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
The Company also reports Net Operating Income (NOI), which it defines as all revenues other than straight-line rental income (non-cash), amortization of lease inducements, amortization of acquired above and below market lease intangibles and lease termination fee income, less real estate taxes and all operating expenses other than straight-line ground rent expense (non-cash) and amortization of acquired ground lease intangibles (non-cash). NOI consists of Same Store NOI and NOI from Other Investment Properties. Same Store NOI for the three months ended March 31, 2018 represents NOI from the Company’s same store portfolio consisting of 103 retail operating properties acquired or placed in service and stabilized prior to January 1, 2017. NOI from Other Investment Properties for the three months ended March 31, 2018 represents NOI primarily from properties acquired during 2017, Schaumburg Towers, which is classified as held for sale as of March 31, 2018, two properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment, the redevelopment portion of Circle East, formerly known as Towson Circle, which has been combined with the Company’s neighboring retail operating property formerly known as Towson Square, the properties that were sold or held for sale in 2017 and 2018 and the net income from the Company’s wholly-owned captive insurance company. The Company believes that NOI, Same Store NOI and NOI from Other Investment Properties, which are supplemental non-GAAP financial measures, provide an additional and useful operating perspective

iv


not immediately apparent from “Operating income” or “Net income attributable to common shareholders” in accordance with GAAP. The Company uses these measures to evaluate its performance on a property-by-property basis because they allow management to evaluate the impact that factors such as lease structure, lease rates and tenant base have on the Company’s operating results. NOI, Same Store NOI and NOI from Other Investment Properties do not represent alternatives to “Net income” or “Net income attributable to common shareholders” in accordance with GAAP as indicators of the Company’s financial performance. Comparison of the Company’s presentation of NOI, Same Store NOI and NOI from Other Investment Properties to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Adjusted EBITDA is a supplemental non-GAAP financial measure and represents net income attributable to common shareholders before interest, income taxes, depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of its ongoing performance. The Company believes that Adjusted EBITDA is useful because it allows investors and management to evaluate and compare the Company’s performance from period to period in a meaningful and consistent manner in addition to standard financial measurements under GAAP. Adjusted EBITDA should not be considered an alternative to “Net income attributable to common shareholders” as an indicator of the Company’s financial performance. Comparison of the Company’s presentation of Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
Net Debt to Adjusted EBITDA is a supplemental non-GAAP financial measure and represents (i) the Company’s total notional debt, excluding unamortized premium, discount and capitalized loan fees, less cash and cash equivalents and disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges (1031 Exchanges) divided by (ii) Adjusted EBITDA for the prior three months, annualized. The Company believes that this ratio is useful because it provides investors with information regarding its total notional debt net of cash and cash equivalents and disposition proceeds temporarily restricted related to potential 1031 Exchanges, which could be used to repay debt, compared to its performance as measured using Adjusted EBITDA. Comparison of the Company’s presentation of Net Debt to Adjusted EBITDA to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
CONTACT INFORMATION
Michael Fitzmaurice
Senior Vice President – Finance
Retail Properties of America, Inc.
(630) 634-4233

v



Retail Properties of America, Inc.
FFO Attributable to Common Shareholders and
Operating FFO Attributable to Common Shareholders Guidance
 
 
 
 
Per Share Guidance Range
Full Year 2018
 
 
Low
 
High
 
 
 
 
 
Net income attributable to common shareholders
 
$
0.34

 
$
0.38

Depreciation and amortization of depreciable real estate
 
0.785

 
0.785

Provision for impairment of investment properties
 

 

Gain on sales of depreciable investment properties
 
(0.14
)
 
(0.14
)
FFO attributable to common shareholders
 
$
0.985

 
$
1.025

 
 
 
 
 
Impact on earnings from the early extinguishment of debt
 
0.005

 
0.005

Gain on sale of non-depreciable investment property
 
(0.02
)
 
(0.02
)
Impact on earnings from executive separation
 
0.01

 
0.01

Other
 

 

Operating FFO attributable to common shareholders
 
$
0.98

 
$
1.02




vi



Retail Properties of America, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except par value amounts)
(unaudited)
 

 
 
March 31,
2018
 
December 31,
2017
Assets
 
 

 
 

Investment properties:
 
 

 
 

Land
 
$
1,042,260

 
$
1,066,705

Building and other improvements
 
3,553,298

 
3,686,200

Developments in progress
 
19,805

 
33,022

 
 
4,615,363

 
4,785,927

Less accumulated depreciation
 
(1,210,147
)
 
(1,215,990
)
Net investment properties
 
3,405,216

 
3,569,937

 
 
 
 
 
Cash and cash equivalents
 
33,533

 
25,185

Accounts and notes receivable (net of allowances of $6,675 and $6,567, respectively)
 
66,893

 
71,678

Acquired lease intangible assets, net
 
116,141

 
122,646

Assets associated with investment properties held for sale
 
68,799

 
3,647

Other assets, net
 
67,139

 
125,171

Total assets
 
$
3,757,721

 
$
3,918,264

 
 
 
 
 
Liabilities and Equity
 
 

 
 

Liabilities:
 
 

 
 

Mortgages payable, net (includes unamortized premium of $962 and $1,024,
respectively, unamortized discount of $(569) and $(579), respectively, and
unamortized capitalized loan fees of $(527) and $(615), respectively)
 
$
275,316

 
$
287,068

Unsecured notes payable, net (includes unamortized discount of $(823) and $(853),
respectively, and unamortized capitalized loan fees of $(3,275) and $(3,399), respectively)
 
695,902

 
695,748

Unsecured term loans, net (includes unamortized capitalized loan fees of $(2,371)
and $(2,730), respectively)
 
547,629

 
547,270

Unsecured revolving line of credit
 
91,000

 
216,000

Accounts payable and accrued expenses
 
53,270

 
82,698

Distributions payable
 
36,353

 
36,311

Acquired lease intangible liabilities, net
 
94,911

 
97,971

Liabilities associated with investment properties held for sale
 
2,673

 

Other liabilities
 
66,023

 
69,498

Total liabilities
 
1,863,077

 
2,032,564

 
 
 
 
 
Commitments and contingencies
 
 

 
 

 
 
 
 
 
Equity:
 
 

 
 

Preferred stock, $0.001 par value, 10,000 shares authorized, none issued or outstanding
 

 

Class A common stock, $0.001 par value, 475,000 shares authorized,
219,489 and 219,237 shares issued and outstanding as of March 31, 2018
and December 31, 2017, respectively
 
219

 
219

Additional paid-in capital
 
4,575,191

 
4,574,428

Accumulated distributions in excess of earnings
 
(2,684,606
)
 
(2,690,021
)
Accumulated other comprehensive income
 
3,840

 
1,074

Total equity
 
1,894,644

 
1,885,700

Total liabilities and equity
 
$
3,757,721

 
$
3,918,264



1st Quarter 2018 Supplemental Information
 
1



Retail Properties of America, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per share amounts)
(unaudited)
 

 
 
Three Months Ended March 31,
 
 
2018
 
2017
Revenues
 
 
 
 
Rental income
 
$
94,455

 
$
109,974

Tenant recovery income
 
28,090

 
30,786

Other property income
 
2,297

 
2,933

Total revenues
 
124,842

 
143,693

 
 
 
 
 
Expenses
 
 
 
 
Operating expenses
 
20,255

 
21,864

Real estate taxes
 
20,468

 
21,879

Depreciation and amortization
 
45,228

 
53,474

Provision for impairment of investment properties
 
592

 

General and administrative expenses
 
12,495

 
11,213

Total expenses
 
99,038

 
108,430

 
 
 
 
 
Operating income
 
25,804

 
35,263

 
 
 
 
 
Interest expense
 
(18,765
)
 
(85,532
)
Other income, net
 
222

 
5

Income (loss) from continuing operations
 
7,261

 
(50,264
)
Gain on sales of investment properties
 
34,519

 
41,164

Net income (loss)
 
41,780

 
(9,100
)
Preferred stock dividends
 

 
(2,362
)
Net income (loss) attributable to common shareholders
 
$
41,780

 
$
(11,462
)
 
 
 
 
 
Earnings (loss) per common share – basic and diluted
 
 
 
 
Net income (loss) per common share attributable to common shareholders
 
$
0.19

 
$
(0.05
)
 
 
 
 
 
Weighted average number of common shares outstanding – basic
 
218,849

 
236,294

 
 
 
 
 
Weighted average number of common shares outstanding – diluted
 
219,403

 
236,294



1st Quarter 2018 Supplemental Information
 
2




Retail Properties of America, Inc.
Funds From Operations (FFO) Attributable to Common Shareholders,
Operating FFO Attributable to Common Shareholders and Additional Information
(dollar amounts in thousands, except per share amounts)
(unaudited)


FFO attributable to common shareholders and Operating FFO attributable to common shareholders (a)
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
 
 
 
 
Net income (loss) attributable to common shareholders
 
$
41,780

 
$
(11,462
)
Depreciation and amortization of depreciable real estate
 
44,950

 
53,079

Provision for impairment of investment properties
 
592

 

Gain on sales of depreciable investment properties
 
(32,340
)
 
(41,164
)
FFO attributable to common shareholders
 
$
54,982

 
$
453

 
 
 
 
 
FFO attributable to common shareholders per common share outstanding – diluted
 
$
0.25

 
$
0.00

 
 
 
 
 
FFO attributable to common shareholders
 
$
54,982

 
$
453

Impact on earnings from the early extinguishment of debt, net
 
1,028

 
66,357

Provision for hedge ineffectiveness
 

 
6

Gain on sale of non-depreciable investment property
 
(2,179
)
 

Impact on earnings from executive separation (b)
 
1,737

 

Other (c)
 
207

 
130

Operating FFO attributable to common shareholders
 
$
55,775

 
$
66,946

 
 
 
 
 
Operating FFO attributable to common shareholders per common share outstanding – diluted
 
$
0.25

 
$
0.28

 
 
 
 
 
Weighted average number of common shares outstanding – diluted
 
219,403

 
236,294

Dividends declared per common share
 
$
0.165625

 
$
0.165625

 
 
 
 
 
Additional Information (d)
 
 
 
 
Lease-related expenditures (e)
 
 
 
 
Same store
 
$
5,497

 
$
5,553

Other investment properties (f)
 
$
1,957

 
$
1,336

 
 
 
 
 
Capital expenditures (g)
 
 
 
 
Same store
 
$
4,238

 
$
6,057

Other investment properties
 
$
2,147

 
$
1,638

 
 
 
 
 
Straight-line rental income, net
 
$
2,479

 
$
341

Amortization of above and below market lease intangibles and lease inducements
 
$
613

 
$
408

Non-cash ground rent expense (h)
 
$
526

 
$
546



(a)
Refer to page 19 for definitions of FFO attributable to common shareholders and Operating FFO attributable to common shareholders.
(b)
Reflected as an increase to "General and administrative expenses" in the condensed consolidated statements of operations.
(c)
Primarily consists of the impact on earnings from litigation involving the Company, including actual or anticipated settlement and associated legal costs, which are included in "Other income, net" in the condensed consolidated statements of operations.
(d)
The same store portfolio for the three months ended March 31, 2018 consists of 103 retail operating properties. Refer to pages 19 – 22 for definitions and reconciliations of non-GAAP financial measures.
(e)
Consists of payments for tenant improvements, lease commissions and lease inducements and excludes developments in progress.
(f)
Expenditures are primarily associated with Schaumburg Towers, the Company's one remaining office complex, which is classified as held for sale as of March 31, 2018.
(g)
Consists of payments for building, site and other improvements, net of anticipated recoveries, and excludes developments in progress.
(h)
Includes amortization of acquired ground lease intangibles and straight-line ground rent expense.

1st Quarter 2018 Supplemental Information
 
3



Retail Properties of America, Inc.
Supplemental Financial Statement Detail
(amounts in thousands)
(unaudited)

 
Supplemental Balance Sheet Detail
 
March 31,
2018
 
December 31,
2017
Accounts and Notes Receivable
 
 

 
 

Accounts and notes receivable (net of allowances of $5,691 and $5,618, respectively)
 
$
21,760

 
$
25,605

Straight-line receivables (net of allowances of $984 and $949, respectively)
 
45,133

 
46,073

Total
 
$
66,893

 
$
71,678

 
 
 
 
 
Other Assets, Net
 
 

 
 

Deferred costs, net
 
$
27,034

 
$
32,146

Restricted cash – 1031 Exchanges (a)
 

 
54,087

Restricted cash – other (b)
 
9,198

 
7,063

Fair value of derivatives
 
3,840

 
1,086

Other assets, net
 
27,067

 
30,789

Total
 
$
67,139

 
$
125,171

 
 
 
 
 
Other Liabilities
 
 

 
 

Unearned income
 
$
15,157

 
$
14,976

Straight-line ground rent liability
 
29,292

 
32,513

Other liabilities
 
21,574

 
22,009

Total
 
$
66,023

 
$
69,498

 
 
 
 
 
Developments in Progress
 
 

 
 

Active developments/redevelopments (c)
 
$
19,805

 
$
33,022


 
Supplemental Statements of Operations Detail
 
 
 
 
Three Months Ended March 31,
 
2018
 
2017
Rental Income
 

 
 

Base rent
$
89,941

 
$
107,017

Percentage and specialty rent
1,422

 
2,208

Straight-line rent
2,479

 
341

Amortization of above and below market lease intangibles and lease inducements
613

 
408

Total
$
94,455

 
$
109,974

 
 
 
 
Other Property Income
 

 
 

Lease termination income
$
1,019

 
$
1,612

Other property income
1,278

 
1,321

Total
$
2,297

 
$
2,933

 
 
 
 
Operating Expense Supplemental Information
 
 
 
Bad debt expense
$
512

 
$
863

Non-cash ground rent expense (d)
$
526

 
$
546

 
 
 
 
General and Administrative Expense Supplemental Information
 
 
 
Non-cash amortization of stock-based compensation
$
2,133

 
$
1,793

 
 
 
 
Additional Supplemental Information
 
 
 
Capitalized compensation costs - development and capital projects
$
581

 
$
478

Capitalized internal leasing incentives
$
37

 
$
97

Capitalized interest
$
173

 
$
78



(a)
Represents disposition proceeds temporarily restricted related to potential Internal Revenue Code Section 1031 tax-deferred exchanges (1031 Exchanges).
(b)
Consists of lenders' escrows and funds restricted through lender or other agreements.
(c)
Represents the active redevelopments at Reisterstown Road Plaza and Circle East, formerly known as Towson Circle. See page 10 for further details.
(d)
Includes amortization of acquired ground lease intangibles and straight-line ground rent expense.

1st Quarter 2018 Supplemental Information
 
4



Retail Properties of America, Inc.
Same Store Net Operating Income (NOI)
(dollar amounts in thousands)
(unaudited)


Same store portfolio (a)
 
 
 
 
 
 
 
 
Based on Same store portfolio
as of March 31, 2018
 
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
Number of retail operating properties in same store portfolio
 
103

 
103

 

 
 
 
 
 
 
 
Occupancy
 
93.1
%
 
93.8
%
 
(0.7
)%
 
 
 
 
 
 
 
Percent leased (b)
 
94.4
%
 
94.8
%
 
(0.4
)%
 
 
 
 
 
 
 

Same Store NOI (c)
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
2018
 
2017
 
Change
 
 
 
 
 
 
 
Base rent
 
$
82,186

 
$
81,309

 
 
Percentage and specialty rent
 
1,095

 
1,407

 
 
Tenant recovery income
 
26,150

 
24,460

 
 
Other property operating income (d)
 
1,150

 
948

 
 
 
 
110,581

 
108,124

 
 
 
 
 
 
 
 
 
Property operating expenses (e)
 
15,327

 
15,204

 
 
Bad debt expense
 
498

 
657

 
 
Real estate taxes
 
17,959

 
16,623

 
 
 
 
33,784

 
32,484

 
 
 
 
 
 
 
 
 
Same Store NOI (c)
 
$
76,797

 
$
75,640

 
1.5
%


(a)
For the three months ended March 31, 2018, the Company's same store portfolio consists of 103 retail operating properties and excludes properties acquired or placed in service and stabilized during 2017 and 2018, Schaumburg Towers, which is classified as held for sale as of March 31, 2018, two properties where the Company has begun redevelopment and/or activities in anticipation of future redevelopment, the redevelopment portion of Circle East, formerly known as Towson Circle, which has been combined with the Company's neighboring retail operating property formerly known as Towson Square, and investment properties sold or classified as held for sale during 2017 and 2018.
(b)
Includes leases signed but not commenced.
(c)
Refer to pages 19 – 22 for definitions and reconciliations of non-GAAP financial measures. Comparison of the Company's presentation of Same Store NOI to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in definition and application by such REITs.
(d)
Consists of all operating items included in "Other property income" in the condensed consolidated statements of operations, which include all items other than lease termination fee income.
(e)
Consists of all property operating items included in "Operating expenses" in the condensed consolidated statements of operations, which include all items other than straight-line ground rent expense (non-cash) and amortization of acquired ground lease intangibles (non-cash).

1st Quarter 2018 Supplemental Information
 
5



Retail Properties of America, Inc.
Capitalization
(dollar amounts in thousands, except share price and ratios)
 

Capitalization Data
 
 
 
 
 
 
March 31,
2018
 
December 31,
2017
Equity Capitalization
 
 

 
 

Common stock shares outstanding (a)
 
219,489

 
219,237

Common stock share price
 
$
11.66

 
$
13.44

Total equity capitalization
 
$
2,559,242

 
$
2,946,545

 
 
 
 
 
Debt Capitalization
 
 

 
 

Mortgages payable (b)
 
$
275,450

 
$
287,238

Unsecured notes payable (c)
 
700,000

 
700,000

Unsecured term loans (d)
 
550,000

 
550,000

Unsecured revolving line of credit
 
91,000

 
216,000

Total debt capitalization
 
$
1,616,450

 
$
1,753,238

 
 
 
 
 
Total capitalization at end of period
 
$
4,175,692

 
$
4,699,783

 

Calculation of Net Debt to Adjusted EBITDA Ratio (e)
 
 
March 31,
2018
 
December 31,
2017
 
 
 
 
 
Total notional debt
 
$
1,616,450

 
$
1,753,238

Less: consolidated cash and cash equivalents
 
(33,533
)
 
(25,185
)
Less: disposition proceeds temporarily restricted related to potential 1031 Exchanges
 

 
(54,087
)
Total net debt
 
$
1,582,917

 
$
1,673,966

Adjusted EBITDA (f)
 
$
294,332

 
$
302,332

Net Debt to Adjusted EBITDA
 
5.4x

 
5.5x



(a)
Excludes performance restricted stock units and options outstanding, which could potentially convert into common stock in the future.
(b)
Mortgages payable excludes mortgage premium of $962 and $1,024, discount of $(569) and $(579), and capitalized loan fees of $(527) and $(615), net of accumulated amortization, as of March 31, 2018 and December 31, 2017, respectively.
(c)
Unsecured notes payable excludes discount of $(823) and $(853) and capitalized loan fees of $(3,275) and $(3,399), net of accumulated amortization, as of March 31, 2018 and December 31, 2017, respectively.
(d)
Unsecured term loans exclude capitalized loan fees of $(2,371) and $(2,730), net of accumulated amortization, as of March 31, 2018 and December 31, 2017, respectively.
(e)
Refer to pages 19 – 22 for definitions and reconciliations of non-GAAP financial measures.
(f)
For purposes of this ratio calculation, annualized three months ended figures were used.

1st Quarter 2018 Supplemental Information
 
6





Retail Properties of America, Inc.
Covenants
 
Unsecured Credit Facility, Term Loan Due 2023 and Notes Due 2021, 2024, 2026 and 2028
 
 
 
 
 
 
 
 
 
 
 
 
Covenant
 
March 31, 2018 (a)
 
Pro forma 2018
Unsecured Credit
Facility as of
March 31, 2018 (b)
 
 
 
 
 

 
 
Leverage ratio (c)
 
< 60.0%
(c)
33.4
%
 
32.2
%
 
 
 
 
 
 
 
Secured leverage ratio (c)
Unsecured Credit Facility and
Term Loan Due 2023:
Notes Due 2021, 2024, 2026 and 2028:

< 45.0%
 < 40.0%

(c)

5.7%

 

5.5%

 
 
 
 
 
 
 
Fixed charge coverage ratio (d)
 
> 1.50x
 
3.4x

 
3.4x

 
 
 
 
 

 
 

Interest coverage ratio (e)
 
> 1.50x
 
4.2x

 
4.2x

 
 
 
 
 
 
 
Unencumbered leverage ratio (c)
 
< 60.0%
(c)
32.0
%
 
30.9
%
 
 
 
 
 

 
 

Unencumbered interest coverage ratio
 
> 1.75x
 
4.9x

 
4.9x



Notes Due 2025 (f)
 
 
 
 
 
 
Covenant
 
March 31, 2018
 
 
 
 
 
 

 
 
Leverage ratio (g)
< 60.0%
 
33.0
%
 
 
 
 
 
 

 
 
Secured leverage ratio (g)
< 40.0%
 
5.6
%
 
 
 
 
 
 
 
 
Debt service coverage ratio (h)
> 1.50x
 
4.5x

 
 
 
 
 
 
 
 
Unencumbered assets to unsecured debt ratio
> 150%
 
319
%
 
 


(a)
For a complete listing of all covenants related to the Company's Unsecured Credit Facility (comprised of the unsecured term loans and unsecured revolving line of credit) as well as covenant definitions, refer to the Fourth Amended and Restated Credit Agreement filed as Exhibit 10.8 to the Company's Annual Report on Form 10-K for the year ended December 31, 2015, filed on February 17, 2016. For a complete listing of all covenants as well as covenant definitions related to the Company's Term Loan Due 2023, refer to the credit agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated November 29, 2016. The Term Loan Due 2023 closed during the year ended December 31, 2016 and funded on January 3, 2017. For a complete listing of all covenants related to the Company's 4.12% senior unsecured notes due 2021 and 4.58% senior unsecured notes due 2024 (Notes Due 2021 and 2024) as well as covenant definitions, refer to the Note Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated May 22, 2014. For a complete listing of all covenants related to the Company's 4.08% senior unsecured notes due 2026 and 4.24% senior unsecured notes due 2028 (Notes Due 2026 and 2028) as well as covenant definitions, refer to the Note Purchase Agreement filed as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated October 5, 2016.
(b)
Subsequent to March 31, 2018, the Company entered into its fifth amended and restated unsecured credit agreement with a syndicate of financial institutions to provide for an unsecured credit facility aggregating $1,100,000 (2018 Unsecured Credit Facility). Pro forma calculations are based on the terms of the 2018 Unsecured Credit Facility. For a complete listing of all covenants related to the Company's 2018 Unsecured Credit Facility as well as covenant definitions, refer to the Fifth Amended and Restated Credit Agreement, which will be filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, dated May 2, 2018.
(c)
Based upon a capitalization rate of 6.75% for March 31, 2018 and 6.50% for pro forma 2018 Unsecured Credit Facility covenant calculations.
(d)
Applies only to the Company's Unsecured Credit Facility, Term Loan Due 2023 and Notes Due 2026 and 2028. This ratio is based upon consolidated debt service, including interest expense and principal amortization, excluding interest expense related to defeasance costs and prepayment premiums.
(e)
Applies only to the Company's Notes Due 2021, 2024, 2026 and 2028.
(f)
For a complete listing of all covenants related to the Company's 4.00% senior unsecured notes due 2025 (Notes Due 2025) as well as covenant definitions, refer to the First Supplemental Indenture filed as Exhibit 4.2 to the Company's Current Report on Form 8-K, dated March 12, 2015.
(g)
Based upon the book value of Total Assets as defined in the First Supplemental Indenture referenced in footnote (f) above.
(h)
Based upon interest expense and excludes principal amortization. This ratio is calculated on a pro forma basis with the assumption that debt and property transactions occurred on the first day of the preceding four-quarter period.

1st Quarter 2018 Supplemental Information
 
7




Retail Properties of America, Inc.
Consolidated Debt Summary as of March 31, 2018
(dollar amounts in thousands)


 
 
Balance
 
Weighted
Average (WA)
Interest Rate (a)
 
WA Years to
Maturity
 
 
 
 
 
 
 
Fixed rate mortgages payable (b)
 
$
275,450

 
5.00
%
 
4.8 years
 
 
 
 
 
 
 
Unsecured notes payable:
 
 
 
 
 
 
Senior notes – 4.12% due 2021
 
100,000

 
4.12
%
 
3.3 years
Senior notes – 4.58% due 2024
 
150,000

 
4.58
%
 
6.3 years
Senior notes – 4.00% due 2025
 
250,000

 
4.00
%
 
7.0 years
Senior notes – 4.08% due 2026
 
100,000

 
4.08
%
 
8.5 years
Senior notes – 4.24% due 2028
 
100,000

 
4.24
%
 
10.8 years
Total unsecured notes payable (b)
 
700,000

 
4.19
%
 
7.0 years
 
 
 
 
 
 
 
Unsecured credit facility:
 
 

 
 

 
 
Term loan due 2021 – fixed rate (c)
 
250,000

 
3.30
%
 
2.8 years
Term loan due 2018 – variable rate
 
100,000

 
3.23
%
 
0.1 years
Revolving line of credit – variable rate
 
91,000

 
3.23
%
 
1.8 years
Total unsecured credit facility (b)
 
441,000

 
3.27
%
 
2.0 years
 
 
 
 
 
 
 
Term Loan Due 2023 – fixed rate (b) (d)
 
200,000

 
2.96
%
 
5.6 years
 
 
 
 
 
 
 
Total consolidated indebtedness
 
$
1,616,450

 
3.93
%
 
5.1 years


Consolidated Debt Maturity Schedule as of March 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year
 
Fixed
Rate (b)
 
WA Rates on
Fixed Debt
 
Variable
Rate (b)
 
WA Rates on
Variable Debt (e)
 
Total
 
% of Total
 
WA Rates on
Total Debt (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
$
3,128

 
5.08
%
 
$
100,000

 
3.23
%
 
$
103,128

 
6.4
%
 
3.28
%
2019
 
25,257

 
7.29
%
 

 

 
25,257

 
1.5
%
 
7.29
%
2020
 
3,923

 
4.62
%
 
91,000

 
3.23
%
 
94,923

 
5.9
%
 
3.28
%
2021
 
372,820

 
3.63
%
 

 

 
372,820

 
23.1
%
 
3.63
%
2022
 
157,216

 
5.00
%
 

 

 
157,216

 
9.7
%
 
5.00
%
2023
 
231,758

 
3.12
%
 

 

 
231,758

 
14.3
%
 
3.12
%
2024
 
151,737

 
4.57
%
 

 

 
151,737

 
9.4
%
 
4.57
%
2025
 
251,809

 
4.00
%
 

 

 
251,809

 
15.6
%
 
4.00
%
2026
 
101,884

 
4.08
%
 

 

 
101,884

 
6.3
%
 
4.08
%
2027
 
21,409

 
4.46
%
 

 

 
21,409

 
1.3
%
 
4.46
%
Thereafter
 
104,509

 
4.22
%
 

 

 
104,509

 
6.5
%
 
4.22
%
Total
 
$
1,425,450

 
4.02
%
 
$
191,000

 
3.23
%
 
$
1,616,450

 
100.0
%
 
3.93
%


(a)
Interest rates presented exclude the impact of premium, discount and capitalized loan fee amortization. As of March 31, 2018, the Company's overall weighted average interest rate for consolidated debt including the impact of premium, discount and capitalized loan fee amortization was 4.14%.
(b)
Fixed rate mortgages payable excludes mortgage premium of $962, discount of $(569) and capitalized loan fees of $(527), net of accumulated amortization, as of March 31, 2018. Unsecured notes payable excludes discount of $(823) and capitalized loan fees of $(3,275), net of accumulated amortization, as of March 31, 2018. Term loans exclude capitalized loan fees of $(2,371), net of accumulated amortization, as of March 31, 2018. In the consolidated debt maturity schedule, maturity amounts for each year include scheduled principal amortization payments.
(c)
Reflects $250,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 2.00% plus a credit spread based on a leverage grid ranging from 1.30% to 2.20% through January 5, 2021. The applicable credit spread was 1.30% as of March 31, 2018.
(d)
Reflects $200,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 1.26% plus a credit spread based on a leverage grid ranging from 1.70% to 2.55% through November 22, 2018. The applicable credit spread was 1.70% as of March 31, 2018.
(e)
Represents interest rates as of March 31, 2018.

1st Quarter 2018 Supplemental Information
 
8



Retail Properties of America, Inc.
Summary of Indebtedness as of March 31, 2018
(dollar amounts in thousands)


Description
 
Maturity
Date
 
Interest
Rate (a)
 
Interest
Rate Type
 
Secured or
Unsecured
 
Balance as of
3/31/2018
Consolidated Indebtedness
 
 
 
 
 
 
 
 
 
 
Shops at Park Place
 
05/01/19
 
7.48%
 
Fixed
 
Secured
 
$
7,363

Shoppes of New Hope
 
06/01/19
 
7.75%
 
Fixed
 
Secured
 
3,261

Village Shoppes at Simonton
 
06/01/19
 
7.75%
 
Fixed
 
Secured
 
3,010

Plaza at Marysville
 
09/01/19
 
8.00%
 
Fixed
 
Secured
 
8,302

Sawyer Heights Village
 
07/01/21
 
5.00%
 
Fixed
 
Secured
 
18,700

Ashland & Roosevelt (bank pad)
 
02/25/22
 
7.48%
 
Fixed
 
Secured
 
773

Gardiner Manor Mall
 
03/01/22
 
4.95%
 
Fixed
 
Secured
 
33,969

Peoria Crossings
 
04/01/22
 
4.82%
 
Fixed
 
Secured
 
24,131

Southlake Corners
 
04/01/22
 
4.89%
 
Fixed
 
Secured
 
20,945

Tollgate Marketplace
 
04/01/22
 
4.84%
 
Fixed
 
Secured
 
35,000

Reisterstown Road Plaza
 
06/01/22
 
5.25%
 
Fixed
 
Secured
 
45,840

Gateway Village
 
01/01/23
 
4.14%
 
Fixed
 
Secured
 
34,070

Northgate North
 
06/01/27
 
4.50%
 
Fixed
 
Secured
 
25,728

The Shoppes at Union Hill
 
06/01/31
 
3.75%
 
Fixed
 
Secured
 
14,358

Mortgages payable (b)
 
 
 
 
 
 
 
 
 
275,450

 
 
 
 
 
 
 
 
 
 
 
Senior notes – 4.12% due 2021
 
06/30/21
 
4.12%
 
Fixed
 
Unsecured
 
100,000

Senior notes – 4.58% due 2024
 
06/30/24
 
4.58%
 
Fixed
 
Unsecured
 
150,000

Senior notes – 4.00% due 2025
 
03/15/25
 
4.00%
 
Fixed
 
Unsecured
 
250,000

Senior notes – 4.08% due 2026
 
09/30/26
 
4.08%
 
Fixed
 
Unsecured
 
100,000

Senior notes – 4.24% due 2028
 
12/28/28
 
4.24%
 
Fixed
 
Unsecured
 
100,000

Unsecured notes payable (b)
 
 
 
 
 
 
 
 
 
700,000

 
 
 
 
 
 
 
 
 
 
 
Term loan due 2021
 
01/05/21
 
3.30%
(c)
Fixed
 
Unsecured
 
250,000

Term loan due 2018
 
05/11/18
 
3.23%
 
Variable
 
Unsecured
 
100,000

Revolving line of credit
 
01/05/20
 
3.23%
 
Variable
 
Unsecured
 
91,000

Unsecured credit facility (b)
 
 
 
 
 
 
 
 
 
441,000

 
 
 
 
 
 
 
 
 
 
 
Term Loan Due 2023 (b)
 
11/22/23
 
2.96%
(d)
Fixed
 
Unsecured
 
200,000

 
 
 
 
 
 
 
 
 
 
 
Total consolidated indebtedness
 
05/06/23
 
3.93%
 
 
 
 
 
$
1,616,450



(a)
Interest rates presented exclude the impact of the premium, discount and capitalized loan fee amortization. As of March 31, 2018, the Company's overall weighted average interest rate for consolidated debt including the impact of premium, discount and capitalized loan fee amortization was 4.14%.
(b)
Mortgages payable excludes mortgage premium of $962, discount of $(569) and capitalized loan fees of $(527), net of accumulated amortization, as of March 31, 2018. Unsecured notes payable excludes discount of $(823) and capitalized loan fees of $(3,275), net of accumulated amortization, as of March 31, 2018. Term loans exclude capitalized loan fees of $(2,371), net of accumulated amortization, as of March 31, 2018.
(c)
Reflects $250,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 2.00% plus a credit spread based on a leverage grid ranging from 1.30% to 2.20% through January 5, 2021. The applicable credit spread was 1.30% as of March 31, 2018.
(d)
Reflects $200,000 of LIBOR-based variable rate debt that has been swapped to a fixed rate of 1.26% plus a credit spread based on a leverage grid ranging from 1.70% to 2.55% through November 22, 2018. The applicable credit spread was 1.70% as of March 31, 2018.

1st Quarter 2018 Supplemental Information
 
9



Retail Properties of America, Inc.
Development Projects as of March 31, 2018
(dollar amounts in thousands)