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Section 1: 8-K (FORM 8-K 9/24/2018)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): September 24, 2018
 
KITE REALTY GROUP TRUST
(Exact name of registrant as specified in its charter)
 
Maryland
1-32268
11-3715772
(State or other jurisdiction
(Commission
(IRS Employer
of incorporation)
File Number)
Identification Number)
 
 
 
30 S. Meridian Street
Suite 1100
Indianapolis, IN 46204
(Address of principal executive offices) (Zip Code)
 
 
(317) 577-5600
(Registrant’s telephone number, including area code)
 
 
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 7.01 Regulation FD Disclosure 

Kite Realty Group Trust (the “Company”) intends to distribute copies of certain printed materials (the “Materials”) to analysts, institutional investors and other persons in connection with meetings to be held by the Company on September 25, 2018. A copy of these Materials is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein solely for purposes of this Item 7.01 disclosure. 

This presentation, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements, financial or otherwise, expressed or implied by the forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: national and local economic, business, real estate and other market conditions, particularly in light of low growth in the U.S. economy as well as economic uncertainty caused by fluctuations in the prices of oil and other energy sources; financing risks, including the availability of, and costs associated with, sources of liquidity; our ability to refinance, or extend the maturity dates of, our indebtedness; the level and volatility of interest rates; the financial stability of tenants, including their ability to pay rent and the risk of tenant bankruptcies; the competitive environment in which we operate; acquisition, disposition, development and joint venture risks; property ownership and management risks; our ability to maintain our status as a real estate investment trust for federal income tax purposes; potential environmental and other liabilities; impairment in the value of real estate property we own; the impact of online retail and the perception that such retail has on the value of shopping center assets; risks related to the geographical concentration of our properties in Florida, Indiana and Texas; insurance costs and coverage; risks associated with cybersecurity attacks and the loss of confidential information and other business disruptions; other factors affecting the real estate industry generally; and other risks identified in our Annual Report on Form 10-K and, from time to time, in other reports we file with the Securities and Exchange Commission (the “SEC”) or in other documents that we publicly disseminate. The Company undertakes no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise.
 
The information in this Item 7.01 disclosure, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section. In addition, the information in this Item 7.01 disclosure, including Exhibit 99.1, shall not be incorporated by reference into the filings of the Company under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 
Item 9.01. Financial Statements and Exhibits.
 
(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits.
 
Exhibit No.
 
Description
99.1
 
Presentation Materials of Kite Realty Group Trust, dated September 25, 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.

 
KITE REALTY GROUP TRUST
 
 
Date: September 24, 2018
By:
/s/ David E. Buell
 
 
David E. Buell
 
 
Senior Vice President and
 
 
Chief Accounting Officer































EXHIBIT INDEX

Exhibit
 
Document
99.1
 



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Section 2: EX-99.1 (KRG PRESENTATION MATERIALS)

a20180921krginvestorpres


 
Kite Realty Group Trust is a full-service, vertically integrated real estate investment trust (REIT) that provides communities with convenient and beneficial shopping experiences. We connect consumers to tenants in desirable markets through our portfolio of open-air shopping centers. Using operational, development, and redevelopment expertise, we continuously optimize our portfolio to maximize value and return to our shareholders. ____________________________ PUBLICLY TRADED SINCE 2004 with a successful history in the real estate industry ___________________________dating back to the 1960s. $3.4 BILLION+ ___________________________in assets across our portfolio. 115 PROPERTIES ___________________________in desirable markets across the country. 22.5 MILLION SF plus two developments (0.7mm SF) currently under ___________________________construction. 19 STATES Arizona, Connecticut, Florida, Georgia,Illinois, Indiana, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, and Wisconsin *Information as of 6/30/18 kiterealty.com 888 577 5600 30 South Meridian Street, Suite 1100, Indianapolis, IN 46204


 
WHY KITE? KRG FACTS • High-quality, geographically Number of Properties 115 September 2018 balanced portfolio with Total GLA (SF) 22.5mm INVESTOR UPDATE diverse tenant base Total Retail Operating Portfolio Leased 93.6% • Self-funded redevelopment, Percent Leased Anchors 95.0% Percent Leased Shops repurpose, and reposition 90.4% Annualized Base Rent (ABR) ("3-R") program1 Per SF, Including 3-R $16.66 Properties1 COMPANY • Investment grade, flexible Average Center Size (SF) ~200,000 balance sheet Dividend Yield2 7.4% SNAPSHOT FFO Payout 61.1% Moody's / S&P Ratings Community-Driven • Well-covered dividend with Baa3 / BBB- Open-Air Shopping attractive yield2 NET DEBT TO EBITDA RATIO Centers 7.0x 7.0x • Experienced, disciplined 6.9x team focused on operational excellence 6.5x 2015 2016 2017 2018 Note: Unless otherwise indicated, the source of all Company data is publicly available information that has been filed with the Securities and Exchange Commission as of June 30, 2018. (1) 3-R Properties are assets that are in the process of being redeveloped, repositioned, or repurposed, as described in our Quarterly Financial Supplement. (2) Dividend yield calculated as most recent quarterly dividend, annualized and expressed as a percentage of the share price. Future dividends will be declared solely at the discretion of the Board of Trustees. 3


 
BUILDING VALUE AND CRITICAL MASS AROUND REGIONAL FOOTPRINTS September 2018 INVESTOR UPDATE Focused on experiential and diverse tenant offerings % of ABR derived from top 50 MSAs HIGH-QUALITY 75 and destination locations1 PORTFOLIO 93% of tenants are service/specialty/multi-channel % of ABR derived from community centers / 81 neighborhood centers / lifestyle centers Completed joint venture with TH Real Estate and will continue CORE to capitalize on portfolio-strengthening opportunities STRATEGY of additional cash NOI from in-process OPERATIONS $3.9mm 3-R and transitional projects AND GROWTH average annual same-property NOI growth OPPORTUNITIES % 3.2 over the last four years2 % annualized return on three completed 8.1 2018 3-R projects All-time high liquidity level of close to $500 million INVESTMENT in debt maturities through 2020 GRADE $37.7mm BALANCE % SHEET 7 floating rate debt exposure 6.5x Net Debt to EBITDA ratio (1) Destination locations include Naples, FL properties and college markets. (2) Historical numbers adjusted to include bad debt expense. 4


 
HIGH-QUALITY STRATEGIC PORTFOLIO DISPOSITIONS $155 MILLION IN DISPOSITIONS OVER THE LAST SEVEN QUARTERS IMPROVED ABR IMPROVED HOUSEHOLD INCOME IMPROVED POPULATION DENSITY $89,325 164,932 $16.66 $64,430 114,530 $11.78 DISPOSITIONS KRG Q2’18 OPERATING DISPOSITIONS KRG Q2’18 OPERATING DISPOSITIONS KRG Q2’18 OPERATING RETAIL PORTFOLIO RETAIL PORTFOLIO RETAIL PORTFOLIO Note: Demographic data source: STI: Popstats based on estimated 2018 data on a 5-mile radius from the US Census Bureau. Dispositions during this period were Publix at St. Cloud, Cove Center, Clay Marketplace, The Shops at Village Walk, Wheatland Town Crossing, Trussville Promenade I & II, and Memorial Commons. 5


 
HIGH-QUALITY GEOGRAPHIC PORTFOLIO DIVERSITY 75% OF ABR FROM TOP 50 MSAs AND DESTINATION LOCATIONS, INCLUDING HIGH-GROWTH MARKETS NEW YORK AVERAGE PROJECTED HOUSEHOLD INCOME: POPULATION GROWTH: $153,291 1.5% INDIANAPOLIS AVERAGE PROJECTED HOUSEHOLD INCOME: POPULATION GROWTH: $99,357 6.0% CHARLOTTE/RALEIGH AVERAGE PROJECTED LAS VEGAS HOUSEHOLD INCOME: POPULATION GROWTH: AVERAGE PROJECTED $101,616 13.0% HOUSEHOLD INCOME: POPULATION GROWTH: $77,943 6.0% NAPLES AVERAGE PROJECTED HOUSEHOLD INCOME: POPULATION GROWTH: DALLAS/ $96,681 10.5% NATIONAL AVERAGE FORT WORTH/ AVERAGE PROJECTED HOUSTON HOUSEHOLD INCOME: POPULATION GROWTH: AVERAGE PROJECTED $79,995 4.0% HOUSEHOLD INCOME: POPULATION GROWTH: $97,455 8.0% Note: Demographic data source: STI: Popstats based on estimated 2018 data on a 5-mile radius from the US Census Bureau, weighted by ABR. Projected Population Growth 2018-2023. 6


 
HIGH-QUALITY STRATEGIC PORTFOLIO ASSET MIX PROPERTY CLASSIFICATION BY ABR1 COMMUNITY % NEIGHBORHOOD CENTER/ % POWER CENTER % 57 LIFESTYLE CENTER/ 24 19 CENTER PORTFOLIO OF ABR OTHER PORTFOLIO OF ABR PORTFOLIO OF ABR Average 2018 Average 2018 Average 2018 Household Income $90,918 Household Income $88,796 Household Income $84,954 Average 2018 Average 2018 Average 2018 Population 164,356 Population 152,959 Population 183,074 PARKSIDE TOWN COMMONS MSA: Raleigh, NC COBBLESTONE PLAZA MSA: Pembroke Pines, FL LANDSTOWN COMMONS MSA: Virginia Beach, VA (1) STI: Popstats based on estimated 2018 data on a 5-mile radius from the U.S. Census Bureau, weighted by ABR. Property classification based on definition by the International Council of Shopping Centers (ICSC). In summary: Neighborhood Center: Convenience-oriented center often anchored by a grocery that comprises 30-50% of GLA. Trade Area: 1-3 miles. Community Center: Larger center with general merchandise or convenience-oriented offerings. Trade Area: 3-6 miles. Power Center: Category-dominant anchors, including discount, off-price, and wholesale clubs with minimal small shop tenants. Trade area: 5-10 miles. 7


 
HIGH-QUALITY DIVERSE PORTFOLIO TENANT BASE Top 10 Tenants by ABR1 Credit Rating2 # Stores1 % ABR1 RECENT LEASE ACTIVITY EXAMPLES 1 Publix Supermarkets, Inc. NR 14 2.5% 2 The TJX Companies, Inc. A+ 21 2.5% 3 Bed Bath & Beyond, Inc. BBB- 19 2.3% 4 Petsmart, Inc. CCC 18 2.1% 5 Ross Stores, Inc. A- 17 2.1% 6 Lowe's Companies, Inc. A- 5 1.9% 7 Dick's Sporting Goods, Inc. NR 8 1.6% 8 Nordstrom, Inc. BBB+ 6 1.5% 9 Ascena Retail Group B 32 1.5% 10 Michaels Stores, Inc. B+ 14 1.4% TOTAL 154 19.4% (1) Per the Q2'18 supplemental. (2) Credit Rating from S&P, as of 9/18/18 8


 
HIGH-QUALITY DIVERSE PORTFOLIO TENANT BASE WELL-POSITIONED TO MANAGE EVOLVING CONSUMER PREFERENCES % 17.3 RESTAURANTS % SERVICES, ENTERTAINMENT 21.6 % 15.5 GROCER, SPECIALTY STORES TENANT TYPE % OFFICE SUPPLIES 1.9 COMPOSITION BY ABR % SPORTING GOODS 3.4 % ELECTRONICS / BOOKS 5.0 % 12.9 SOFT GOODS % DISCOUNT RETAILERS 10.8 % 11.6 HOME IMPROVEMENT GOODS 9


 
EMBEDDED NOI GROWTH OPPORTUNITIES IN PORTFOLIO September 2018 INVESTOR UPDATE • $3.9mm of additional cash NOI from in-process 3-R 3-R INITIATIVE / and transitional projects DEVELOPMENT / ACQUISITIONS • Identified 3-R opportunities with a total cost of$40mm - $56mm and projected returns of 9-11% OPERATIONS • Formed strategic partnership with TH Real Estate to capitalize AND GROWTH OPPORTUNITIES on portfolio-strengthening opportunities CONTRACTUAL • ABR of leases executed in last four quarters is 13.2% higher than RENT STEPS / the ABR for the operating retail portfolio, including 3-R properties FIXED CAM INCREASING RECOVERY • Embedded average contractual rent bumps of ~1.5% VALUE • Fixed CAM recovery initiative, ~26% of current operating portfolio with goal to increase to ~50% • Big Box Surge Initiative - executed 4 anchor leases through Q2'18 OCCUPANCY • A 1% increase in anchor lease percentage at average ABR would GROWTH create additional revenue of $1.3mm • Small shops leased at 90.4%, with a goal of 92% • Executed new leases at 30 South Meridian headquarters building, growing office portfolio leased percentage 5.7% to 96.2% • Attractive NOI Margin: 74.3%, trailing twelve months OPERATING PROPERTIES • Efficient G&A / Revenues: 6.3%, trailing twelve months • Opportunity Areas: Operating expense savings, overage rent, and ancillary income 10


 
KITE'S 3-R PLATFORM HAS GENERATED ATTRACTIVE RISK-ADJUSTED RETURNS, IMPROVING CASH FLOW AND ASSET QUALITY. September 2018 REDEVELOP REPURPOSE REPOSITION INVESTOR UPDATE Substantial renovations, Significant property Less substantial asset including teardowns, alterations, including enhancements, generally remerchandising, product-type changes representing investment and exterior/interior of $5mm or less improvements OPERATIONS IDENTIFIED AND GROWTH COMPLETED IN-PROCESS OPPORTUNITIES OPPORTUNITIES $33.6mm of 3-R projects $36.5mm - $40mm of $40mm - $56mm of in 2018 with 8.1% Return projects with 9.5-10.5% ROI projects with 9-11% ROI on Investment (ROI) 3-R OVERVIEW CITY CENTER MSA: White Plains, NY PORTOFINO SHOPPING CENTER MSA: Houston, TX SOURCES OF CAPITAL Free cash flow + strategic property sales 11


 
3-R RETURN ON INVESTMENT SUPPORTED BY NEW, HIGH-QUALITY TENANTS September 2018 INVESTOR UPDATE Property Former Tenants/Spaces Replacement Tenants Beechwood Promenade Underutilized Shop Space MSA: Athens, GA Bolton Plaza Vacant Shops OPERATIONS MSA: Jacksonville, FL AND GROWTH OPPORTUNITIES Burnt Store Marketplace Vacant Shops and MSA: Punta Gorda, FL Old Format Publix New Format Castleton Crossing MSA: Indianapolis, IN 3-R New Small Shop Building ENHANCEMENTS Northdale Promenade Underutilized/Vacant MSA: Tampa, FL Small Shop Space Portofino Shopping Center - Phases I/II MSA: Houston, TX Vacant Land/ Two New Small Shop Buildings Outdated Water Features Rampart Commons Vacant Shops MSA: Las Vegas, NV 12


 
INVESTMENT STRONG GRADE BALANCE Well-Staggered Debt Maturity Profile SHEET BALANCE SHEET SCHEDULE OF DEBT MATURITIES ($ IN MILLIONS)1 200.0 375.0 200.0 95.0 213.5 9.1 181.9 Only $37.7mm of debt 167.0 maturing through 2020 80.0 37.7 7.8 10.4 10.4 2018 2019 2020 2021 2022 2023 2024 2025 2026+ MORTGAGE DEBT UNCONSOLIDATED LINE OF CREDIT UNSECURED TERM LOAN UNSECURED DEBT (1) Excludes annual principal payments and net premiums on fixed rate debt. 13


 
DISCLAIMER FORWARD-LOOKING STATEMENTS This supplemental information package, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are based on assumptions and expectations that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, performance, transactions or achievements, financial or otherwise, may differ materially from the results, performance, transactions or achievements, financial or otherwise, expressed or implied by the forward-looking statements. Risks, uncertainties and other factors that might cause such differences, some of which could be material, include but are not limited to: • national and local economic, business, real estate and other market conditions, particularly in light of low growth in the U.S. economy as well as economic uncertainty caused by fluctuations in the prices of oil and other energy sources and inflationary trends or outlook; • financing risks, including the availability of, and costs associated with, sources of liquidity; • our ability to refinance, or extend the maturity dates of, our indebtedness; • the level and volatility of interest rates; • the financial stability of tenants, including their ability to pay rent and the risk of tenant bankruptcies; • the competitive environment in which the Company operates; • acquisition, disposition, development and joint venture risks; • property ownership and management risks; • our ability to maintain our status as a real estate investment trust for federal income tax purposes; • potential environmental and other liabilities; • impairment in the value of real estate property the Company owns; • the impact of online retail and the perception that such retail has on the value of shopping center assets; • risks related to the geographical concentration of our properties in Florida, Indiana and Texas; • insurance costs and coverage; • risks associated with cybersecurity attacks and the loss of confidential information and other business disruptions; • other factors affecting the real estate industry generally; and • other risks identified in reports the Company files with the Securities and Exchange Commission (“the SEC”) or in other documents that it publicly disseminates, including, in particular, the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and in our quarterly reports on Form 10-Q. The Company undertakes no obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. 14


 
NON-GAAP FINANCIAL MEASURES FUNDS FROM OPERATIONS Funds from Operations (FFO) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. The Company calculates FFO, a non-GAAP financial measure, in accordance with the best practices described in the April 2002 National Policy Bulletin of the National Association of Real Estate Investment Trusts ("NAREIT"). The NAREIT white paper defines FFO as net income (determined in accordance with GAAP), excluding gains (or losses) from sales and impairments of depreciated property, plus de- preciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Considering the nature of our business as a real estate owner and operator, the Company believes that FFO is helpful to investors in measuring our operational performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as gains or losses from sales of depreciated property and depreciation and amortization, which can make periodic and peer analyses of operating performance more difficult. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of our financial performance, is not an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, and is not indicative of funds available to satisfy our cash needs, including our ability to make distribu- tions. Our computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do. A reconciliation of net income (computed in accordance with GAAP) to FFO is included in the Q2'18 Financial Supplement. 15


 
NON-GAAP FINANCIAL MEASURES NET OPERATING INCOME AND SAME PROPERTY NET OPERATING INCOME The Company uses property net operating income (“NOI”), a non-GAAP financial measure, to evaluate the performance of our properties. The Company defines NOI as income from our real estate, including lease termination fees received from tenants, less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions and certain corporate level expenses. The Company believes that NOI is helpful to investors as a measure of our operating performance because it excludes various items included in net income that do not relate to or are not indicative of our operating performance, such as depreciation and amortization, interest expense, and impairment, if any. The Company also uses same property NOI ("Same Property NOI"), a non-GAAP financial measure, to evaluate the performance of our prop- erties. Same Property NOI excludes properties that have not been owned for the full period presented. It also excludes net gains from outlot sales, straightline rent revenue, lease termination fees, amortization of lease intangibles and significant prior period expense recoveries and adjustments, if any. The Company believes that Same Property NOI is helpful to investors as a measure of our operating performance because it includes only the NOI of properties that have been owned and fully operational for the full quarters presented. The Company believes such presentation eliminates disparities in net income due to the acquisition or disposition of properties during the particular quarters presented and thus provides a more consistent comparison of our properties. The year-to-date results represent the sum of the individual quarters, as reported. NOI and Same Property NOI should not, however, be considered as alternatives to net income (calculated in accordance with GAAP) as indicators of our financial performance. Our computation of NOI and Same Property NOI may differ from the methodology used by other REITs, and therefore may not be comparable to such other REITs. When evaluating the properties that are included in the same property pool, the Company has established specific criteria for determining the inclusion of properties acquired or those recently under development. An acquired property is included in the same property pool when there is a full quarter of operations in both years subsequent to the acquisition date. Development and redevelopment properties are included in the same property pool four full quarters after the properties have been transferred to the operating portfolio. A redevelopment property is first excluded from the same property pool when the execution of a redevelopment plan is likely and the Company begins recapturing space from tenants. For the quarter ended June 30, 2018, the Company excluded six redevelopment properties and the recently completed City Center, Northdale Promenade, and Burnt Store Marketplace redevelopments from the same property pool that met these criteria and were owned in both comparable periods. 16


 
APPENDIX – RECONCILIATION OF SAME PROPERTY NOI TO NET INCOME SAME PROPERTY NET OPERATING INCOME (NOI) ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, % % 2018 2017 Change 2018 2017 Change Number of properties for the quarter1 102 102 Leased percentage at period end 93.7% 94.7% 93.7% 94.7% Economic Occupancy percentage2 93.0% 93.9% 93.1% 93.9% Minimum rent $ 58,168 $ 57,500 $ 115,820 $ 114,628 Tenant recoveries 16,451 16,217 33,133 32,534 Other income 240 173 510 457 74,859 73,890 149,463 147,619 Property operating expenses (10,795) (9,988) (21,467) (20,505) Bad debt expense (452) (865) (816) (1,463) Real estate taxes (9,743) (9,940) (19,690) (19,711) (20,990) (20,793) (41,973) (41,679) Same Property NOI3 $ 53,869 $ 53,097 1.5% $ 107,490 $ 105,940 1.5% Reconciliation of Same Property NOI to Most Directly Comparable GAAP Measure: Net operating income - same properties $ 53,869 $ 53,097 $ 107,490 $ 105,940 Net operating income - non-same activity4 13,891 16,185 25,447 30,172 Other income (expense), net 876 (83) 2,111 (189) General, administrative and other (5,553) (5,488) (11,499) (10,958) Impairment charges (14,777) — (38,847) (7,411) Depreciation and amortization expense (40,451) (42,710) (79,006) (88,540) Interest expense (16,746) (16,433) (33,084) (32,878) Gains on sales of operating properties 7,829 6,290 8,329 15,160 Net income attributable to noncontrolling interests (304) (678) (225) (1,110) Net (loss) income attributable to common shareholders $ (1,366) $ 10,180 $ (19,284) $ 10,186 ____________________ 1 Same Property NOI excludes six properties in redevelopment, the recently completed City Center, Northdale Promenade, Burnt Store Marketplace, and Parkside Town Commons - Phase II, as well as office properties (Thirty South Meridian and Eddy Street Commons). 2 Excludes leases that are signed but for which tenants have not yet commenced the payment of cash rent. Calculated as a weighted average based on the timing of cash rent commencement and expiration during the period. (1) Same Property NOI excludes six properties in redevelopment, the recently completed City Center, Northdale Promenade, Burnt Store Marketplace, and Parkside Town Commons - Phase II, as well as office properties (Thirty South Meridian and Eddy Street Commons). (2) Excludes leases that are signed but for which3 tenantsSame have Property not yet commenced NOI excludes the payment net of gains cash rent.from Calculated outlot sales,as a weighted straight-line average based rent onrevenue, the timing lease of cash termination rent commencement fees, amortization and expiration duringof lea these period.intangibles and (3) Same Property NOI excludes net gains from outlot significantsales, straight-line prior rent period revenue, expense lease termination recoveries fees, and amortization adjustments, of lease intangiblesif any. and significant prior period expense recoveries and adjustments, if any. (4) Includes non-cash activity across the portfolio as well as net operating income from properties not included in the same property pool. 17 4 Includes non-cash activity across the portfolio as well as net operating income from properties not included in the same property pool. p. 16 Kite Realty Group Trust Supplemental Financial and Operating Statistics –6/30/18


 
30 S MERIDIAN STREET SUITE 1100 INDIANAPOLIS, IN 46204 888 577 5600 kiterealty.com


 
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