Ramco-Gershenson Properties Trust Reports Financial Results For the Fourth Quarter and Full Year 201

Ramco-Gershenson Properties Trust Reports Financial Results For the Fourth Quarter and Full Year 2012

FARMINGTON HILLS, Mich.--(BUSINESS WIRE)-- Ramco-Gershenson Properties Trust (NYSE: RPT) today announced its financial results for the three and twelve months ended December 31, 2012.


Fourth Quarter and Full Year Highlights:

The Company's fourth quarter and full year 2012 highlights are reflective of its strategy to improve operations, build a higher-quality shopping center portfolio, and maintain a strong balance sheet.

Financial and Operating Results

  • Reported Funds from Operations ("FFO") as adjusted of $0.27 per diluted share for the fourth quarter 2012 and $1.04 per diluted share for the full year 2012.

  • Fourth quarter same-center net operating income ("NOI") increased by 3.8% and full-year same-center NOI increased 3.3%, compared to the same periods in 2011.

  • Core portfolio leased occupancy increased 110 basis points to 94.6%, compared to 93.5% at December 31, 2011.

  • During 2012, the Company signed a total of 330 leases, encompassing 1.8 million square feet achieving same-space rental growth of 4.6%, including 81 leases signed in the fourth quarter of 2012 at same-space rental growth of 5.7%.

Investment Activity

Acquisitions and Dispositions:

  • During 2012, the Company completed $150.0 million in acquisitions, bolstering its presence in targeted markets. Fourth quarter 2012 acquisitions included Phase II of The Shoppes at Fox River in Waukesha (Milwaukee), Wisconsin anchored by T.J. Maxx. In addition, the Company purchased 12 acres of land for a Phase III development in response to tenant interest at the center.

  • During 2012, the Company completed $79.0 million in dispositions of non-core assets, of which RPT's share was $29.0 million, including five properties in Michigan.

Development and Redevelopment:

  • During 2012, the Company commenced the development of Phase I of Parkway Shops in Jacksonville, Florida, anchored by Marshalls and Dick's Sporting Goods. The development is 98.2% leased and is slated to open in the second quarter of 2013.

  • In the fourth quarter of 2012, the Company completed the redevelopment of Peachtree Hill in Duluth, Georgia featuring a new 45,000 square foot LA Fitness.

Balance Sheet

  • During 2012, the Company closed a $360 million unsecured credit facility, including a $120 million 5-year term loan and a $240 million line of credit. At year-end, the Company had availability of $198.8 million under its line of credit.

  • As of December 31, 2012, the Company's unencumbered asset base was valued under the credit facility at approximately $765 million, compared to $569 million at the end of 2011.

  • Net debt to EBITDA decreased to 6.6x, compared to 7.7x for the same period in 2011.

  • Interest coverage was 3.2x and fixed charge coverage was 2.2x, representing increases compared to 2.3x and 1.6x, respectively, in the comparable period.

"I am pleased to report that 2012 was a very successful year for our Company as demonstrated by our solid financial and operating results," said Dennis Gershenson, President and Chief Executive Officer. "In 2013, we will continue to build on last year's achievements and pursue a number of additional growth opportunities that will positively impact long-term shareholder value."

Financial Results

FFO for the three months ended December 31, 2012, adjusted for provisions for impairment and gains on extinguishment of debt, was $13.4 million or $0.27 per diluted share, compared to FFO of $9.0 million, or $0.22 per diluted share for the same period in 2011.

FFO for the twelve months ended December 31, 2012, adjusted for provisions for impairment and gains on extinguishment of debt, was $49.0 million or $1.04 per diluted share, compared to FFO of $41.7 million, or $1.01 per diluted share for the same period in 2011.

FFO unadjusted was $0.24 and $1.02 per diluted share for the three and twelve months ended December 31, 2012, respectively.

Net loss available to common shareholders for the three months ended December 31, 2012 was $(0.2) million or $(0.01) per diluted share. Net loss available to common shareholders for the twelve months ended December 31, 2012 was $(0.05) million or $(0.00) per diluted share.

Operating Statistics

As of December 31, 2012, the Company owned equity interests in 78 retail shopping centers and one office building consisting of 53 wholly-owned properties and 26 joint venture properties totaling 15.0 million square feet. At year end, the Company's core portfolio improved to 94.6% leased, compared to a core portfolio leased rate of 93.5% at December 31, 2011. Its total portfolio, which includes redevelopment properties, improved to 93.8% leased, compared to a total portfolio leased rate of 91.4% at December 31, 2011.

At year end, the Company had 42 properties in its wholly-owned, same-center portfolio with occupancy of 94.7%, compared to 93.1% for the same period last year. Same-center net operating income for the wholly-owned portfolio increased by 3.8% for the quarter and 3.3% for the twelve months ended December 31, 2012.

During 2012, the Company signed a total of 330 leases, encompassing 1.8 million square feet, achieving same-space rental growth of 4.6%, including nine new anchor leases totaling 278,341 square feet. During the fourth quarter, the Company executed 81 lease transactions encompassing 431,295 square feet, achieving same-space rental growth of 5.7%.

Investment Activity

Acquisitions and Dispositions:

During 2012, the Company completed $150.0 million in acquisitions. Previously announced core acquisitions for the year include Central Plaza in St. Louis, Missouri, Harvest Junction North and South in Longmont (Boulder), Colorado, and Nagawaukee Shopping Center in Nagawaukee (Milwaukee), Wisconsin, for an aggregate 616,393 square feet. All of the shopping centers are multi-anchored and are the market dominant community centers in their respective trade areas.

During the fourth quarter, the Company acquired Phase II of The Shoppes at Fox River in Waukesha (Milwaukee), Wisconsin. The newly developed 47,058 square foot shopping center is leased to T.J. Maxx, Rue 21, ULTA Beauty and Charming Charlie. The Company also acquired 12 acres of land adjacent to the center for future development. The total acquisition price was $10.4 million. Also during the fourth quarter, the Company acquired a 49,644 square foot building adjoining its Spring Meadows Place shopping center in Holland (Toledo), Ohio for $2.4 million. Anchors at Spring Meadows, including anchor-owned space, are Target, Kroger, Sam's Club, T.J. Maxx, Dick's Sporting Goods and PetSmart. Spring Meadows is 95.6% leased.

The Company's 2012 disposition program focused on the least productive assets in its portfolio. During 2012, the company completed $79.0 million in dispositions of non-core assets, including five properties in Michigan. The Company's share was $29.0 million.

During the fourth quarter, the Company closed on the sale of the CVS Pharmacy at Collins Pointe Plaza in Cartersville (Atlanta), Georgia for $2.6 million, completing the full disposition of that shopping center. Additionally, Gratiot Crossing in Chesterfield, Michigan was conveyed to the lender for the release of $13.4 million in mortgage debt. Gratiot Crossing and Collins Pointe were both held in joint ventures.

Development/Redevelopment:

The development of Phase I of Parkway Shops in Jacksonville, Florida is proceeding on schedule for a spring 2013 opening. Parkway Shops is anchored by Dick's Sporting Goods and Marshalls and is currently 98.2% leased.

During the fourth quarter, the Company completed the redevelopment of the Peachtree Hill shopping center in Duluth (Atlanta), Georgia. The redevelopment included the construction of a 45,000 square foot LA Fitness. Peachtree Hill is also anchored by a market-dominant Kroger supermarket.

Financing Activities/Balance Sheet

Financing Activities:

During the year, the Company closed on a $360 million unsecured credit facility, including a $120 million term loan and a $240 million line of credit. At December 31, 2012, the Company had $198.8 million available under its line of credit and $4.2 million of cash on hand.

During the fourth quarter, the Company refinanced The Shops on Lane Avenue in Upper Arlington (Columbus), Ohio with a ten-year mortgage loan of $28.7 million at an interest rate of 3.76%. Subsequent to quarter-end, the Company refinanced Market Plaza in Glen Ellyn (Chicago), Illinois with a five-year mortgage loan of $16.0 million at an interest rate of 2.86%. The Shops on Lane Avenue and Market Plaza are both held in joint ventures.

Balance Sheet:

At December 31, 2012, the Company's total market capitalization equaled $1.3 billion, comprised of 51.2 million shares of common stock (or equivalents) valued at $681.7 million, 2.0 million shares of convertible perpetual preferred stock valued at $107.9 million and $543.1 million of consolidated debt and capital lease obligations, net of cash.

In 2012, the Company posted solid improvements in its debt metrics. At December 31, 2012, the Company's net debt to total market capitalization was 40.7%, compared to 51.0% for the same period in 2011. Its net debt to annualized EBITDA decreased to 6.6x, compared to 7.7x for the same period in 2011. At December 31, 2012, its unencumbered asset base was valued at approximately $765 million, compared to $569 million at December 31, 2011.

Dividend

During the fourth quarter, the Company increased its quarterly common share cash dividend by 3.0% to $0.16825 per share, or $0.6730 per share annualized, for the period of September 1, 2012 through December 31, 2012. Its common share dividend, along with its Series D convertible perpetual preferred dividend of $0.90625 per share, were paid on January 2, 2013 to shareholders of record on December 20, 2012. The Company's FFO (adjusted) payout ratio for the quarter was 62.3%.

2013 Guidance

The Company has affirmed its 2013 guidance for FFO of $1.03 to $1.09 per diluted share (excluding impairment charges and gains/losses on extinguishment of debt), based on the following:

  • A core portfolio year end leased occupancy of between 94% and 95%.

  • An increase in same-center NOI of between 2% and 3%.

  • General and administrative expense of approximately $20 million.

  • Transactional income from land sales, lease terminations, and insurance settlements of approximately $0.05 per diluted share, compared to $0.04 per diluted share of such income in 2012.

  • As-converted treatment of the Company's convertible preferred stock, if applicable.

The Company's 2013 FFO does not include the effect of any potential acquisitions and dispositions.

Conference Call/Webcast

Ramco-Gershenson Properties Trust will host a live broadcast of itsfourth quarter 2012 conference call on Wednesday, February 13, 2013, at 9:00 a.m. eastern time, to discuss its financial and operating results. The live broadcast will be available online at www.rgpt.com and www.investorcalendar.com and also by telephone at (877) 407-9205, no pass code needed. A replay will be available shortly after the call on the aforementioned websites (for ninety days) or by telephone at (877) 660-6853, (Conference ID # 407166), for one week.

Supplemental Materials

The Company's supplemental financial package is available on its corporate web site at www.rgpt.com in the investor info section, SEC filings tab. If you wish to receive a copy via email, please send requests to dhendershot@rgpt.com.

About Ramco-Gershenson Properties Trust

Ramco-Gershenson Properties Trust (NYS: RPT) is a fully integrated, self-administered, publicly-traded real estate investment trust (REIT) based in Farmington Hills, Michigan. The Company's business is the ownership and management of multi-anchor shopping centers in strategic, quality of life markets throughout the Eastern, Midwestern and Central United States. At December 31, 2012, the Company owned and managed a portfolio of 78 shopping centers and one office building with approximately 15.0 million square feet of gross leasable area owned by the Company or its joint ventures. The properties are located in Michigan, Florida, Ohio, Georgia, Missouri, Colorado, Wisconsin, Illinois, Indiana, New Jersey, Virginia, Maryland, and Tennessee. At December 31, 2012, the Company's core operating portfolio was 94.6% leased. For additional information regarding Ramco-Gershenson Properties Trust visit the Company's website at www.rgpt.com.

This press release may contain forward-looking statements that represent the Company's expectations and projections for the future. Management of Ramco-Gershenson believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing to ability to qualify as a REIT and other factors discussed in the Company's reports filed with the Securities and Exchange Commission.

RAMCO-GERSHENSON PROPERTIES TRUST

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

December 31,

2012

2011

ASSETS

Income producing properties, at cost:

Land

$

166,500

$

133,145

Buildings and improvements

952,671

863,763

Less accumulated depreciation and amortization

(237,462

)

(222,722

)

Income producing properties, net

881,709

774,186

Construction in progress and land held for development or sale

98,541

87,549

Net real estate

980,250

861,735

Equity investments in unconsolidated joint ventures

95,987

97,020

Cash and cash equivalents

4,233

12,155

Restricted cash

3,892

6,063

Accounts receivable, net

7,976

9,614

Note receivable

-

3,000

Other assets, net

72,953

59,236

TOTAL ASSETS

$

1,165,291

$

1,048,823

LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgages and notes payable:

Mortgages payable

$

293,156

$

325,887

Unsecured revolving credit facility

40,000

29,500

Unsecured term loan facilities

180,000

135,000

Junior subordinated notes

28,125

28,125

Total mortgages and notes payable

541,281

518,512

Capital lease obligation

6,023

6,341

Accounts payable and accrued expenses

21,589

18,662

Other liabilities

26,187

15,528

Distributions payable

10,379

8,606

TOTAL LIABILITIES

605,459

567,649

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

Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per share), 2,000 shares issued and outstanding as of December 31, 2012 and December 31, 2011

$

100,000

$

100,000

Common shares of beneficial interest, $0.01 par, 80,000 shares authorized, 48,489 and 38,735 shares issued and outstanding as of December 31, 2012 and 2011, respectively

485

387

Additional paid-in capital

683,609

570,225

Accumulated distributions in excess of net income

(249,070

)

(218,888

)

Accumulated other comprehensive loss

(5,241

)

(2,649

)

TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT

529,783

449,075

Noncontrolling interest

30,049

32,099

TOTAL SHAREHOLDERS' EQUITY

559,832

481,174

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,165,291

$

1,048,823

RAMCO-GERSHENSON PROPERTIES TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

Three Months Ended December 31,

Twelve Months Ended December 31,

2012

2011

2012

2011

REVENUE

Minimum rent

$

24,014

$

19,800

$

90,354

$

79,440

Percentage rent

223

30

601

244

Recovery income from tenants

8,394

8,254

31,664

29,673

Other property income

383

370

2,055

4,091

Management and other fee income

1,129

1,033

4,064

4,126

TOTAL REVENUE

34,143

29,487

128,738

117,574

EXPENSES

Real estate taxes

4,229

4,322

17,076

16,452

Recoverable operating expense

4,604

4,126

15,879

14,404

Other non-recoverable operating expense

882

1,272

2,838

3,540

Depreciation and amortization

10,489

9,089

39,479

34,594

General and administrative expense

4,699

4,381

19,445

19,646

TOTAL EXPENSES

24,903

23,190

94,717

88,636

INCOME BEFORE OTHER INCOME AND EXPENSES, TAX AND DISCONTINUED OPERATIONS

9,240

6,297

34,021

28,938

OTHER INCOME AND EXPENSES

Other expense, net

(237

)

(38

)

(66

)

(257

)

Gain on sale of real estate

-

-

69

231

Earnings (loss) from unconsolidated joint ventures

1,164

(3,667

)

3,248

1,669

Interest expense

(6,386

)

(6,893

)

(25,895

)

(27,636

)

Amortization of deferred financing fees

(341

)

(379

)

(1,449

)

(1,861

)

Provision for impairment

(1,766

)

(16,917

)

(1,766

)

(16,917

)

Provision for impairment on equity investments in unconsolidated joint ventures

(92

)

(9,611

)

(386

)

(9,611

)

Deferred gain recognized upon acquisition of real estate

-

-

845

-

Loss on extinguishment of debt

-

-

-

(1,968

)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAX

1,582

(31,208

)

8,621

(27,412

)

Income tax benefit (provision)

16

189

34

(795

)

INCOME (LOSS) FROM CONTINUING OPERATIONS

1,598

(31,019

)

8,655

(28,207

)

DISCONTINUED OPERATIONS

Gain on sale of real estate

-

1,020

336

9,406

Gain on extinguishment of debt

-

1,218

307