PR Newswire
NEW YORK, Feb. 13, 2017
NEW YORK, Feb. 13, 2017 /PRNewswire/ -- Brixmor Property Group Inc. (NYSE: BRX) ("Brixmor" or the "Company") announced today its operating results for the three and twelve months ended December 31, 2016. For the three and twelve months ended December 31, 2016, net income attributable to common stockholders was $0.31 and $0.91 per diluted share, respectively, compared with $0.18 and $0.65 per diluted share, respectively, in the comparable 2015 period.
Key highlights for the twelve months ended December 31, 2016 include:
"2016 results demonstrate the strength of our core fundamentals and enhanced operating capabilities. With 7.9 million square feet of new and renewal leases executed during the year at blended rent spreads of 16.5%, we continue to see strong demand from dynamic and expanding retailers," commented James Taylor, Chief Executive Officer and President. "Importantly, we set new records in average base rent per square foot achieved, small shop occupancy and overall leasing volume, while also successfully ramping-up our value accretive redevelopment and capital recycling activity. We also refinanced over $900 million of debt and amended our $2.75 billion credit facility, extending our weighted average maturity and increasing our unencumbered asset base to 73% of the portfolio. I couldn't be more pleased with how this team has performed."
FINANCIAL HIGHLIGHTS
Net Income
NAREIT FFO
Same Property NOI Growth
Dividend
PORTFOLIO AND INVESTMENT ACTIVITY
Value Enhancing Reinvestment Opportunities
Acquisitions
Dispositions
CAPITAL STRUCTURE
GUIDANCE
2017E (dollars in millions, except per share amounts) |
||
NAREIT FFO per diluted share |
$2.05 - $2.12 | |
Key Underlying Assumptions |
||
Same property NOI growth |
2.0 - 3.0% | |
Straight-line rental income, amortization of above- and below-market rent and tenant inducements and straight-line ground rent expense |
$38 - $42 | |
General and administrative expenses (1) |
$86 - $90 | |
GAAP interest expense |
$224 - $230 | |
Value enhancing capital expenditures |
$120 - $150 |
(1) Does not include any expectations of additional one-time items, including, but not limited to, litigation, investigative and other non-routine legal expenses.
Low |
High | |||
2016 NAREIT FFO per diluted share |
$2.07 |
$2.07 | ||
Same property NOI growth |
$0.06 |
$0.09 | ||
Straight-line rental income, amortization of above- and below-market rent and tenant inducements and straight-line ground rent expense |
($0.04) |
($0.03) | ||
Lease termination fees |
($0.04) |
($0.04) | ||
General and administrative expenses |
$0.01 |
$0.02 | ||
GAAP interest expense |
($0.01) |
$0.01 | ||
Capital recycling, gain on extinguishment of debt and other |
$0.00 |
$0.00 | ||
2017E NAREIT FFO per diluted share
|
$2.05 |
$2.12 | ||
Growth excluding non-cash GAAP rental adjustments and lease termination fees |
3.3% |
6.3% |
(Unaudited, dollars in millions, except per share amounts) |
2017E |
2017E Per Diluted Share | ||
Net income attributable to common stockholders |
$275 - $296 |
$0.90 - $0.97 | ||
Depreciation and amortization |
$351 |
$1.15 | ||
NAREIT FFO |
$626 - $647 |
$2.05 - $2.12 |
CONNECT WITH BRIXMOR
CONFERENCE CALL AND SUPPLEMENTAL INFORMATION
The Company will host a teleconference on Tuesday, February 14, 2017 at 10:00 AM ET. To participate, please dial 888.317.6003 (domestic) or 412.317.6061 (international) at least ten minutes prior to the scheduled start of the call (Passcode: 6718936). The teleconference can also be accessed via a live webcast at www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on February 28, 2017 by dialing 877.344.7529 (domestic) or 412.317.0088 (international) (Passcode: 10097244) or via the web through February 14, 2018 at www.brixmor.com in the Investors section.
The Company's Supplemental Disclosure will be posted at www.brixmor.com in the Investors section. These materials are also available to all interested parties upon request to the Company at [email protected] or 800.468.7526.
NON-GAAP DISCLOSURES
NAREIT FFO
NAREIT FFO is a supplemental non-GAAP performance measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) in accordance with GAAP excluding (i) gain (loss) on disposition of operating properties, and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties, (iv) impairment of operating properties and real estate equity investments, and (v) after adjustments for joint ventures calculated to reflect FFO on the same basis.
The Company presents NAREIT FFO as it considers it an important supplemental measure of its operating performance and the Company believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. The Company believes NAREIT FFO assists investors in analyzing Brixmor's comparative operating and financial performance because, by excluding gains and losses related to dispositions of previously depreciated operating properties, real estate-related depreciation and amortization of continuing operations, impairment of operating properties, and after adjustments for joint ventures calculated to reflect FFO on the same basis, investors can compare the operating performance of a company's real estate between periods.
NAREIT FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of financial performance and is not an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of liquidity.
Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations and, accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of NAREIT FFO may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from NAREIT FFO are significant components in understanding and addressing financial performance. A reconciliation of NAREIT FFO to Net income is presented in the attached table.
Same Property NOI
Same property NOI is calculated (using properties owned for the entirety of both periods excluding properties under development or pending stabilization), as revenues (base rent, ancillary and other, expense reimbursements and percentage rents) less rental operating expenses (operating costs, real estate taxes and provision for doubtful accounts). Same Property NOI includes unconsolidated joint venture, Montecito Marketplace, at pro rata share. Same property NOI excludes corporate level income (including management, transaction and other fees), lease termination fees, straight-line rental income, amortization of above- and below-market rent and tenant inducements, straight-line ground rent expense and income / expense associated with the captive insurance entity.
Same property NOI is a supplemental, non-GAAP performance measure utilized to evaluate the operating performance of real estate companies and the Company believes it is frequently used by securities analysts, investors and other interested parties in understanding business and operating results regarding the underlying economics of Brixmor's business operations.
It includes only the net operating income of properties owned and stabilized for the full period presented, which eliminates disparities in net income due to the acquisition, disposition or stabilization of development properties during the period presented, and therefore, provides a more consistent metric for comparing the performance of properties. Management uses same property NOI to review operating results for comparative purposes with respect to previous periods or forecasts, and also to evaluate future prospects. Same property NOI is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, net income (determined in accordance with GAAP) or other GAAP financial measures. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of same property NOI may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs.
ABOUT BRIXMOR PROPERTY GROUP
Brixmor Property Group, a real estate investment trust (REIT), is a leading owner and operator of high-quality, open-air shopping centers. The Company's more than 500 retail centers comprise 86 million square feet in market-dominant locations across the nation and are supported by a diverse mix of highly productive non-discretionary and value-oriented retailers, as well as service and entertainment users. Brixmor is committed to maximizing the value of its portfolio by prioritizing investments, cultivating relationships and capitalizing on embedded growth opportunities through driving rents, increasing occupancy and pursuing repositioning and redevelopment projects. Headquartered in New York City, Brixmor is a partner to more than 5,500 best-in-class national, regional and local tenants and is the largest landlord to The TJX Companies and The Kroger Company.
SAFE HARBOR LANGUAGE
This press release may contain 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. These statements include, but are not limited to, statements related to the Company's expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "approximately," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
CONSOLIDATED BALANCE SHEETS |
|||||||
Unaudited, dollars in thousands, except share information |
|||||||
12/31/16 |
12/31/15 | ||||||
Assets |
|||||||
Real estate |
|||||||
Land |
$ 2,006,655 |
$ 2,011,947 | |||||
Buildings and tenant improvements |
8,043,855 |
7,976,529 | |||||
Construction in process |
121,817 |
66,797 | |||||
Lease intangibles |
836,731 |
877,577 | |||||
11,009,058 |
10,932,850 | ||||||
Accumulated depreciation and amortization |
(2,167,054) |
(1,880,685) | |||||
Real estate, net |
8,842,004 |
9,052,165 | |||||
Investments in and advances to unconsolidated joint venture |
7,921 |
5,019 | |||||
Cash and cash equivalents |
51,402 |
69,528 | |||||
Restricted cash |
51,467 |
41,462 | |||||
Marketable securities |
25,573 |
23,001 | |||||
Receivables, net of allowance for doubtful accounts of $16,756 and $16,587 |
178,216 |
180,486 | |||||
Deferred charges and prepaid expenses, net |
122,787 |
109,149 | |||||
Other assets |
40,315 |
17,197 | |||||
Total assets |
$ 9,319,685 |
$ 9,498,007 | |||||
Liabilities |
|||||||
Debt obligations, net |
$ 5,838,889 |
$ 5,974,266 | |||||
Accounts payable, accrued expenses and other liabilities |
553,636 |
603,439 | |||||
Total liabilities |
6,392,525 |
6,577,705 | |||||
Equity |
|||||||
Common stock, $0.01 par value; authorized 3,000,000,000 shares; |
|||||||
304,343,141 and 299,138,450 shares outstanding |
3,043 |
2,991 | |||||
Additional paid in capital |
3,324,874 |
3,270,246 | |||||
Accumulated other comprehensive income (loss) |
21,519 |
(2,509) | |||||
Distributions in excess of net income |
(426,552) |
(400,945) | |||||
Total stockholders' equity |
2,922,884 |
2,869,783 | |||||
Non-controlling interests |
4,276 |
50,519 | |||||
Total equity |
2,927,160 |
2,920,302 | |||||
Total liabilities and equity |
$ 9,319,685 |
$ 9,498,007 | |||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
Unaudited, dollars in thousands, except per share amounts |
|||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||
12/31/16 |
12/31/15 |
12/31/16 |
12/31/15 | ||||||||
Revenues |
|||||||||||
Rental income |
$ 253,538 |
$ 251,119 |
$ 998,118 |
$ 984,548 | |||||||
Expense reimbursements |
69,604 |
75,462 |
270,548 |
276,032 | |||||||
Other revenues |
892 |
(1,030) |
7,106 |
5,400 | |||||||
Total revenues |
324,034 |
325,551 |
1,275,772 |
1,265,980 | |||||||
Operating expenses |
|||||||||||
Operating costs |
35,922 |
35,698 |
133,429 |
129,477 | |||||||
Real estate taxes |
43,601 |
47,276 |
174,487 |
180,911 | |||||||
Depreciation and amortization |
92,668 |
102,511 |
387,302 |
417,935 | |||||||
Provision for doubtful accounts |
2,603 |
2,567 |
9,182 |
9,540 | |||||||
Impairment of real estate assets |
3,183 |
198 |
5,154 |
1,005 | |||||||
General and administrative |
22,539 |
25,424 |
92,248 |
98,454 | |||||||
Total operating expenses |
200,516 |
213,674 |
801,802 |
837,322 | |||||||
Other income (expense) |
|||||||||||
Dividends and interest |
61 |
74 |
542 |
315 | |||||||
Interest expense |
(55,189) |
(58,723) |
(226,671) |
(245,012) | |||||||
Gain on sale of real estate assets |
25,381 |
2,520 |
35,613 |
11,744 | |||||||
Gain (loss) on extinguishment of debt, net |
117 |
798 |
(832) |
1,720 | |||||||
Other |
(699) |
(233) |
(4,957) |
(348) | |||||||
Total other expense |
(30,329) |
(55,564) |
(196,305) |
(231,581) | |||||||
Income before equity in income of unconsolidated joint venture |
93,189 |
56,313 |
277,665 |
197,077 | |||||||
Equity in income of unconsolidated joint venture |
129 |
101 |
477 |
459 | |||||||
Net income |
93,318 |
56,414 |
278,142 |
197,536 | |||||||
Net (income) attributable to non-controlling interests |
(115) |
(1,002) |
(2,514) |
(3,816) | |||||||
Net income attributable to Brixmor Property Group, Inc. |
93,203 |
55,412 |
275,628 |
193,720 | |||||||
Preferred stock dividends |
(150) |
(150) |
(150) |
(150) | |||||||
Net income attributable to common stockholders |
$ 93,053 |
$ 55,262 |
$ 275,478 |
$ 193,570 | |||||||
Per common share: |
|||||||||||
Net income attributable to common stockholders: |
|||||||||||
Basic |
$ 0.31 |
$ 0.18 |
$ 0.91 |
$ 0.65 | |||||||
Diluted |
$ 0.31 |
$ 0.18 |
$ 0.91 |
$ 0.65 | |||||||
Weighted average shares: |
|||||||||||
Basic |
304,292 |
298,868 |
301,601 |
298,004 | |||||||
Diluted |
305,192 |
299,697 |
305,060 |
305,017 | |||||||
FUNDS FROM OPERATIONS (FFO) | ||||||||||||
Unaudited, dollars in thousands, except per share amounts | ||||||||||||
Three Months Ended |
Twelve Months Ended |
|||||||||||
12/31/16 |
12/31/15 |
12/31/16 |
12/31/15 |
|||||||||
Net income |
$ 93,318 |
$ 56,414 |
$ 278,142 |
$ 197,536 |
||||||||
Gain on disposition of operating properties |
(25,381) |
(2,520) |
(35,613) |
(11,744) |
||||||||
Depreciation and amortization- real estate related- continuing operations |
91,892 |
101,833 |
384,187 |
413,470 |
||||||||
Depreciation and amortization- real estate related- unconsolidated joint venture |
20 |
26 |
88 |
85 |
||||||||
Impairment of operating properties |
3,183 |
- |
5,154 |
807 |
||||||||
NAREIT FFO |
$ 163,032 |
$ 155,753 |
$ 631,958 |
$ 600,154 |
||||||||
NAREIT FFO per share/OP Unit - diluted |
$ 0.53 |
$ 0.51 |
$ 2.07 |
$ 1.97 |
||||||||
Weighted average shares/OP Units outstanding - basic and diluted (1) |
305,191 |
305,105 |
305,059 |
305,023 |
||||||||
Items that impact FFO comparability |
||||||||||||
Gain (loss) on extinguishment of debt, net |
$ 117 |
$ 798 |
$ (832) |
$ 1,720 |
||||||||
Litigation and other non-routine legal expenses |
(852) |
- |
(1,810) |
- |
||||||||
Transaction expenses |
(209) |
(652) |
(505) |
(2,139) |
||||||||
Shareholder equity offering expenses |
(84) |
(112) |
(848) |
(718) |
||||||||
Executive severance expenses |
- |
(1,405) |
(2,260) |
(1,405) |
||||||||
Executive equity based compensation (2) |
- |
- |
(88) |
- |
||||||||
Audit committee review expenses |
- |
- |
(3,711) |
- |
||||||||
Non-recurring charge related to pre-IPO compensation programs |
- |
- |
- |
(9,875) |
||||||||
Adjustment of tax reserves for pre-IPO transactions |
- |
781 |
- |
4,730 |
||||||||
Total items that impact FFO comparability |
$ (1,028) |
$ (590) |
$ (10,054) |
$ (7,687) |
||||||||
Items that impact FFO comparability, net per share |
$ (0.00) |
$ (0.00) |
$ (0.03) |
$ (0.03) |
||||||||
Additional Disclosures |
||||||||||||
Straight-line rental income, net (3) |
$ 4,625 |
$ 3,762 |
$ 14,463 |
$ 17,576 |
||||||||
Amortization of above- and below-market rent and tenant inducements, net (4) |
7,982 |
13,195 |
36,748 |
47,584 |
||||||||
Straight-line ground rent (expense) income (5) |
(60) |
11 |
(1,035) |
46 |
||||||||
Dividends declared per share/OP Unit |
$ 0.260 |
$ 0.245 |
$ 0.995 |
$ 0.920 |
||||||||
Shares/OP Unit dividends declared |
$ 79,245 |
$ 74,570 |
$ 303,177 |
$ 279,968 |
||||||||
Share/OP Unit dividend payout ratio (as % of NAREIT FFO) |
48.6% |
47.9% |
48.0% |
46.6% |
||||||||
(1) Basic and diluted shares/OP Units outstanding reflects an assumed conversion of vested OP Units to common stock of the Company and the vesting of certain equity awards. |
||||||||||||
(2) Represents equity based compensation expense associated with executive departures for the twelve months ended December 31, 2016. |
||||||||||||
(3) Includes unconsolidated joint venture Montecito Marketplace straight-line rental income of $14 and $19 at pro rata share for the three and twelve months ended December 31, 2016, |
||||||||||||
respectively; and straight-line rental expense of $11 and $19 at pro rata share for the three and twelve months ended December 31, 2015, respectively. |
||||||||||||
(4) Includes unconsolidated joint venture Montecito Marketplace amortization of above- and below-market rent and tenant inducements of $7 and $29 at pro rata share for the three and twelve |
||||||||||||
months ended December 31, 2016, respectively; and $8 and $30 at pro rata share for the three and twelve months ended December 31, 2015, respectively. |
||||||||||||
(5) Straight-line ground rent (expense) income is included in Operating costs on the Consolidated Statements of Operations. |
||||||||||||
SAME PROPERTY NOI ANALYSIS | |||||||||||||||||
Unaudited, dollars in thousands | |||||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||||
12/31/16 |
12/31/15 |
Change |
12/31/16 |
12/31/15 |
Change |
||||||||||||
Same Property NOI Analysis |
|||||||||||||||||
Number of properties |
511 |
511 |
- |
509 |
509 |
- |
|||||||||||
Percent billed |
90.4% |
90.9% |
(0.5%) |
90.6% |
90.9% |
(0.3%) |
|||||||||||
Percent leased |
92.8% |
92.6% |
0.2% |
92.8% |
92.6% |
0.2% |
|||||||||||
Revenues |
|||||||||||||||||
Base rent |
$ 230,673 |
$ 225,673 |
$ 907,375 |
$ 885,952 |
|||||||||||||
Ancillary and other |
3,951 |
5,252 |
16,078 |
18,157 |
|||||||||||||
Expense reimbursements |
69,381 |
74,814 |
267,871 |
273,189 |
|||||||||||||
Percentage rents |
526 |
(1,473) |
5,861 |
3,608 |
|||||||||||||
304,531 |
304,266 |
0.1% |
1,197,185 |
1,180,906 |
1.4% |
||||||||||||
Operating expenses |
|||||||||||||||||
Operating costs |
(37,010) |
(36,834) |
(132,597) |
(130,895) |
|||||||||||||
Real estate taxes |
(43,354) |
(46,814) |
(172,473) |
(178,959) |
|||||||||||||
Provision for doubtful accounts |
(2,686) |
(2,557) |
(9,113) |
(9,366) |
|||||||||||||
(83,050) |
(86,205) |
(3.7%) |
(314,183) |
(319,220) |
(1.6%) |
||||||||||||
Same property NOI (1) |
$ 221,481 |
$ 218,061 |
1.6% |
$ 883,002 |
$ 861,686 |
2.5% |
|||||||||||
Same property NOI excluding redevelopments (2) |
$ 211,961 |
$ 208,834 |
1.5% |
$ 845,636 |
$ 825,226 |
2.5% |
|||||||||||
NOI margin |
72.7% |
71.7% |
73.8% |
73.0% |
|||||||||||||
Expense recovery ratio |
86.3% |
89.4% |
87.8% |
88.2% |
|||||||||||||
Percent contribution to same property NOI growth: |
|||||||||||||||||
Change |
Percent Contribution |
Change |
Percent Contribution |
||||||||||||||
Base rent |
$ 5,000 |
2.4% |
$ 21,423 |
2.5% |
|||||||||||||
Ancillary and other |
(1,301) |
(0.6%) |
(2,079) |
(0.2%) |
|||||||||||||
Net recoveries |
(2,149) |
(1.0%) |
(534) |
(0.1%) |
|||||||||||||
Percentage rents |
1,999 |
0.9% |
2,253 |
0.3% |
|||||||||||||
Provision for doubtful accounts |
(129) |
(0.1%) |
253 |
0.0% |
|||||||||||||
1.6% |
2.5% |
||||||||||||||||
Reconciliation of Net Income Attributable to Common Stockholders to Same Property NOI |
|||||||||||||||||
Same property NOI (1) |
$ 221,481 |
$ 218,061 |
$ 883,002 |
$ 861,686 |
|||||||||||||
Adjustments: |
|||||||||||||||||
Non-same property NOI |
2,331 |
3,445 |
12,135 |
14,559 |
|||||||||||||
Lease termination fees |
5,383 |
1,264 |
12,920 |
3,530 |
|||||||||||||
Straight-line rental income, net |
4,611 |
3,773 |
14,444 |
17,595 |
|||||||||||||
Amortization of above- and below-market rent and tenant inducements, net |
7,975 |
13,187 |
36,719 |
47,554 |
|||||||||||||
Fee Income |
366 |
454 |
1,221 |
1,834 |
|||||||||||||
Straight-line ground rent (expense) income |
(60) |
11 |
(1,035) |
46 |
|||||||||||||
Depreciation and amortization |
(92,668) |
(102,511) |
(387,302) |
(417,935) |
|||||||||||||
Impairment of real estate assets |
(3,183) |
(198) |
(5,154) |
(1,005) |
|||||||||||||
General and administrative |
(22,539) |
(25,424) |
(92,248) |
(98,454) |
|||||||||||||
Total other expense |
(30,329) |
(55,564) |
(196,305) |
(231,581) |
|||||||||||||
Pro rata share of same property NOI of unconsolidated joint venture |
(179) |
(185) |
(732) |
(752) |
|||||||||||||
Equity in income of unconsolidated joint venture |
129 |
101 |
477 |
459 |
|||||||||||||
Net income attributable to non-controlling interests |
(115) |
(1,002) |
(2,514) |
(3,816) |
|||||||||||||
Preferred stock dividends |
(150) |
(150) |
(150) |
(150) |
|||||||||||||
Net income attributable to common stockholders |
$ 93,053 |
$ 55,262 |
$ 275,478 |
$ 193,570 |
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(1) Includes unconsolidated joint venture, Montecito Marketplace, at pro rata share. |
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(2) Excludes ten redevelopment properties for the three and twelve months ended December 31, 2016. |
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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/brixmor-property-group-reports-fourth-quarter-and-full-year-2016-results-300406298.html
SOURCE Brixmor Property Group Inc.
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