Welcome!

News Feed Item

Washington Prime Group Reports Second Quarter 2014 Results and Announces Dividend

BETHESDA, Md., Aug. 8, 2014 /PRNewswire/ -- Washington Prime Group (NYSE:WPG) today reported results for the quarter ended June 30, 2014.

On May 28, 2014, Simon Property Group (Simon) spun off 98 shopping centers to form Washington Prime Group (the Company). The Company is well positioned with several competitive advantages, including a well-diversified portfolio with a track record of stable operating performance and a strong foundation from which to grow cash flow, one of the lowest levered balance sheets among its peer group and the flexibility to act as an acquirer, developer and redeveloper of shopping centers regardless of format.  The Company intends to leverage its expertise across the entire shopping center sector to increase value for its shareholders. 

CEO Mark Ordan commented, "While we just began two months ago, we are excited by our potential growth opportunities both within the portfolio and through acquisitions. We will discuss these opportunities further on our first regular quarterly earnings call in November."

Results for the Second Quarter

Same property net operating income ("NOI") for the second quarter of 2014 increased 3.1 percent from the second quarter of 2013. Ending occupancy for the portfolio rose 90 basis points to 92.4 percent from the second quarter of 2013.

Funds from Operations ("FFO") was $41.3 million, or $0.22 per diluted share, compared to $87.5 million, or $0.47 per diluted share, in the prior year period. Results for the second quarter of 2014 include $39.9 million or $0.21 per diluted share of transaction expenses and costs related to the spin off from Simon on May 28 and increased interest expense of $8.9 million or $0.05 per diluted share associated with the new capital structure.

Net income attributable to common stockholders for the second quarter was $69.8 million, or $0.45 per diluted share, compared to $34.3 million, or $0.22 per diluted share in the prior year period. Also included in net income for the second quarter of 2014 are additional gains of $91.3 million or $0.49 per diluted share from acquisitions of controlling property interests and sales of property interests.

Results for the Six Months

Year-to-date same property NOI increased 0.9 percent over the first six months of 2013.  

FFO for the six months ending June 30, 2014 was $129.7 million or $0.69 per diluted share; for the same period in the prior year FFO was $175.7 million or $0.94 per diluted share. Year-to-date results include $39.9 million or $0.21 per diluted share of transaction expenses and costs related to the spin off from Simon on May 28 and increased interest expense of $9.1 million or $0.05 per diluted share associated with the new capital structure.

For the six months ended June 30, 2014, net income attributable to common shareholders was $104.2 million or $0.67 per diluted share compared to $80.5 million or $0.52 per diluted share for the same period in the prior year. Increased gains on acquisitions of controlling property interests and sales of property interests of $77.4 million or $0.41 per diluted share are included in the results for the six months ended June 30, 2014.  

Dividends

Washington Prime's Board of Directors declared a quarterly cash dividend of $0.25 per common share, payable on September 15, 2014, to shareholders of record on August 27, 2014, with an ex-dividend date of August 25, 2014. 

Investment Activity

Acquisitions and Dispositions

Since completing the spin-off on May 28, 2014, Washington Prime has increased its interest in eight previously unconsolidated properties for an aggregate price of approximately $326 million including approximately $141 million of debt. On June 20, the Company acquired its partner's 50 percent interest in Clay Terrace, a 577,000 square foot lifestyle center located in Carmel, Indiana, in exchange for partnership units. On June 18, the Company acquired a partner's interest in a portfolio of seven open-air shopping centers, consisting of four centers located in Florida, and one each in Indiana, Connecticut and Virginia. All eight properties are now consolidated post acquisition.

Additionally, on June 23, Washington Prime sold New Castle Plaza, a wholly owned strip center in New Castle, Indiana. Subsequent to quarter end, the Company sold Highland Lakes Center, an open-air center in Orlando, FL, for approximately $21.5 million for an estimated gain of approximately $9.1 million.

Redevelopment

Washington Prime currently has approximately 15 projects totaling more than $100 million under redevelopment.  Additionally, the Company's pipeline includes six projects in the approval stages totaling approximately $125 million as well as another five to eight projects already targeted for redevelopment over the next three years.  

Additionally, the Company has commenced redevelopment activities at Jefferson Valley Mall, a 556,000 square foot mall located in the New York City area.  The estimated cost of the redevelopment is approximately $44 million and includes the addition of a major sporting goods store.

Non-GAAP Financial Measures

This press release includes FFO and NOI, including same property NOI growth, which are financial performance measures not defined by generally accepted accounting principles in the United States ("GAAP"). Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures are included in this press release. FFO and same property NOI growth are financial performance measures widely used by securities analysts, investors and other interested parties in the evaluation of REITs. These measures should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of financial performance and are not alternatives to cash flow from operating activities (determined in accordance with GAAP) as a measure of liquidity. 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 these non-GAAP measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs. Investors are cautioned that items excluded from these measures are significant components in understanding and addressing financial performance.

For a reconciliation of these measures and other information, please refer to the attached tables.

Regulation Fair Disclosure ("FD")

We routinely post important information online on our investor relations website, investors.washingtonprime.com. We use this website, press releases, SEC filings, conference calls, presentations and webcasts to disclose material, non-public information in accordance with Regulation FD. We encourage members of the investment community to monitor these distribution channels for material disclosures. Any information accessed through our website is not incorporated by reference into, and is not a part of, this document.

Forward Looking Statements

Certain statements made in this press release may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be attained, and it is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks, uncertainties and other factors. Such factors include, but are not limited to: the Company's ability to meet debt service requirements, the availability and terms of financing, changes in the Company's credit rating, changes in market rates of interest, the ability to hedge interest rate and currency risk, risks associated with the acquisition, development, expansion, leasing and management of properties, general risks related to retail real estate, the liquidity of real estate investments, environmental liabilities, international, national, regional and local economic conditions, changes in market rental rates, trends in the retail industry, relationships with anchor tenants, the inability to collect rent due to the bankruptcy or insolvency of tenants or otherwise, risks relating to joint venture properties, costs of common area maintenance, the intensely competitive market environment in the retail industry, insurance costs and coverage, terrorist activities, changes in economic and market conditions and maintenance of our status as a real estate investment trust. The Company discusses these and other risks and uncertainties under the heading "Risk Factors" in our quarterly reports filed with the SEC. The Company undertakes no duty or obligation to update or revise these forward-looking statements, whether as a result of new information, future developments, or otherwise unless required by law.

About Washington Prime Group

Washington Prime Group (NYSE: WPG) is a retail REIT that owns and manages more than 95 shopping centers totaling more than 50 million square feet diversified by size, geography and tenancy.  Washington Prime combines a national real estate portfolio with an investment grade balance sheet.  The Company plans to leverage its expertise across the entire shopping center sector to increase cash flow through rigorous management of existing assets as well as select development and acquisitions of new assets with franchise value.  For more information visit washingtonprime.com.   

Contact: 
Barbara M Pooley
SVP, Finance & Administration
Washington Prime Group
1-240-630-0005

 

Washington Prime Group Inc.

Unaudited Consolidated and Combined Balance Sheets

(Dollars in thousands, except share amounts)








June 30,


December 31,


2014


2013

ASSETS:




Investment properties at cost

$ 5,260,411


$ 4,789,705

Less - accumulated depreciation

2,047,284


1,974,949


3,213,127


2,814,756

Cash and cash equivalents

93,646


25,857

Tenant receivables and accrued revenue, net

61,626


61,121

Investment in unconsolidated entities, at equity

5,175


3,554

Deferred costs and other assets

113,740


97,370

  Total assets

$ 3,487,314


$ 3,002,658





LIABILITIES:




Mortgage notes payable

$ 1,506,427


$ 918,614

Unsecured term loan

500,000


-

Revolving credit facility

340,750


-

Accounts payable, accrued expenses, intangibles, and deferred revenues

145,687


151,011

Cash distributions and losses in partnerships and joint ventures, at equity

15,194


41,313

Other liabilities

6,342


7,195

  Total liabilities

2,514,400


1,118,133





EQUITY:




Stockholders' Equity




Common stock, $0.0001 par value, 300,000,000 shares authorized, 155,162,597 issued and outstanding in 2014

16


-

Capital in excess of par value

719,833


-

SPG Equity

-


1,560,989

Retained earnings

79,872


-

    Total stockholders' equity

799,721


1,560,989

Noncontrolling interests 

173,193


323,536

      Total equity

972,914


1,884,525

      Total liabilities and equity

$ 3,487,314


$ 3,002,658





 

 

Washington Prime Group Inc.

Unaudited Consolidated and Combined Statements of Operations

(Dollars in thousands, except per share amounts)











For the Three Months


For the Six Months


Ended June 30,


Ended June 30,


2014


2013


2014


2013









REVENUE:








Minimum rent

$ 108,374


$ 103,505


$ 215,011


$ 208,485

Overage rent

1,134


1,171


3,244


3,604

Tenant reimbursements

47,179


45,804


94,347


91,175

Other income

1,488


1,090


3,542


2,541

Total revenue

158,175


151,570


316,144


305,805









EXPENSES:








Property operating

26,219


25,455


52,359


49,820

Depreciation and amortization

47,288


45,101


93,256


90,400

Real estate taxes

18,752


18,395


38,699


38,357

Repairs and maintenance

4,934


5,503


12,084


10,889

Advertising and promotion

1,932


1,808


3,884


3,945

Provision for (recovery of) credit losses

619


(806)


1,405


(116)

General and administrative

1,865


0


1,865


0

Transaction and related costs

39,931


0


39,931


0

Ground rent and other costs

1,281


1,163


2,400


2,354

Total operating expenses

142,821


96,619


245,883


195,649









OPERATING INCOME

15,354


54,951


70,261


110,156









Interest expense

(22,677)


(13,737)


(36,594)


(27,456)

Income and other taxes

(66)


(24)


(141)


(102)

Income from unconsolidated entities

402


206


747


499

Gain upon acquisition of controlling interests and on sale of interests in properties

91,268


0


91,510


14,152









NET INCOME

84,281


41,396


125,783


97,249









Net income attributable to noncontrolling interests

14,480


7,145


21,590


16,769









NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ 69,801


$ 34,251


$ 104,193


$ 80,480









EARNINGS PER COMMON SHARE, BASIC AND DILUTED








Net income attributable to common stockholders

$                   0.45


$                   0.22


$                   0.67


$                   0.52

 

 

Washington Prime Group Inc.

Unaudited Consolidated and Combined Statements of Cash Flows

(Dollars in thousands)






For the Six Months


Ended June 30,


2014


2013





CASH FLOWS FROM OPERATING ACTIVITIES:




Net Income

$ 125,783


$ 97,249

Adjustments to reconcile net income to net cash




provided by operating activities -




Depreciation and amortization

93,749


91,428

Gain upon acquisition of controlling interests and on sale of interests in properties

(91,510)


(14,152)

Loss on debt extinguishment

2,894


0

Provision for (recovery of) credit losses

1,405


(116)

Straight-line rent

(240)


229

Equity in income of unconsolidated entities

(747)


(499)

Distributions of income from unconsolidated entities

537


634

Changes in assets and liabilities - 




Tenant receivables and accrued revenue, net

280


5,383

Deferred costs and other assets

(12,353)


165

Accounts payable, accrued expenses, intangibles, deferred revenues and other liabilities

(5,576)


(20,832)

Net cash provided by operating activities

114,222


159,489





CASH FLOWS FROM INVESTING ACTIVITIES:




Acquisitions, net of cash acquired

(154,370)


0

Capital expenditures, net

(41,454)


(42,178)

Net proceeds from sale of assets

4,436


0

Investments in unconsolidated entities

(2,493)


(1,457)

Distributions of capital from unconsolidated entities 

1,440


2,827

Net cash used in investing activities

(192,441)


(40,808)





CASH FLOWS FROM FINANCING ACTIVITIES:




Distributions to SPG, net

(1,060,187)


(117,663)

Distributions to noncontrolling interest holders in properties

(845)


(236)

Proceeds from issuance of debt, net of transaction costs

1,384,370


-

Repayments of debt including prepayment penalties

(177,330)


(5,101)

Net cash provided by (used in) financing activities

146,008


(123,000)





INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

67,789


(4,319)

CASH AND CASH EQUIVALENTS, beginning of period

25,857


30,986

CASH AND CASH EQUIVALENTS, end of period

$ 93,646


$ 26,667

 

 


Washington Prime Group Inc.

Unaudited Reconciliation of Non-GAAP Financial Measures

(Dollars in thousands, except share/unit amounts)


























For the Three Months Ended


For the Six Months Ended






June 30,


June 30,






2014


2013


2014


2013













Net Income

$                 84,281


$          41,396


$           125,783


$          97,249

Adjustments to Arrive at FFO:









Depreciation and amortization from consolidated properties 

 

47,286


 

45,101


 

93,254


 

90,400


Our share of depreciation and amortization from unconsolidated entities

 

970


 

1,150


 

2,136


 

2,425


Gain upon acquisition of controlling interests and on sale of interests in properties

 

(91,268)


 

0


 

(91,510)


 

(14,152)


Net income attributable to noncontrolling interest holders in properties

 

0


 

(65)


 

0


 

(132)


Noncontrolling interests portion of depreciation and amortization

 

0


 

(38)


 

0


 

(77)













FFO of the Operating Partnership (1)

$                 41,269


$          87,544


$           129,663


$         175,713

FFO allocable to limited partners

7,097


14,997


22,256


30,101

FFO allocable to shareholders

$                 34,172


$          72,547


$           107,407


$         145,612













Diluted net income per share

$                    0.45


$              0.22


$                 0.67


$              0.52

Adjustments to arrive at FFO per share:









Depreciation and amortization from consolidated properties and our share of depreciation and amortization from unconsolidated properties

0.26


0.25


0.51


0.50


Gain upon acquisition of controlling interests and on sale of interests in properties

(0.49)


-


(0.49)


(0.08)













Diluted FFO per share

$                    0.22


$              0.47


$                 0.69


$              0.94













Basic and diluted weighted average shares outstanding

155,162,597


155,162,597


155,162,597


155,162,597

Weighted average limited partnership units outstanding

32,227,488


32,075,487


32,151,908


32,075,487

Diluted weighted average shares and units outstanding

187,390,085


187,238,084


187,314,505


187,238,084













(1)

FFO includes transaction costs related to WPG's separation from SPG of $39.9 million, or $0.21 per share, in the three and six months ended June 30, 2014.



 

 


Washington Prime Group Inc.

Unaudited Reconciliation of Non-GAAP Financial Measures

(Dollars in thousands)


























For the Three Months Ended June 30,


For the Six Months Ended June 30,





2014


2013


2014


2013


Reconciliation of NOI of consolidated properties:









Net Income

$               84,281


$               41,396


$             125,783


$               97,249


Income and other taxes

66


24


141


102


Interest expense

22,677


13,737


36,594


27,456


Gain upon acquisition of controlling interests and on sale of interests in properties

(91,268)


--


(91,510)


(14,152)


Income from unconsolidated entities 

(402)


(206)


(747)


(499)


General and administrative

1,865


--


1,865


--


Transaction costs

39,931


--


39,931


--


Operating Income

57,150


54,951


112,057


110,156


Depreciation and amortization 

47,288


45,101


93,256


90,400


NOI of consolidated properties

$             104,438


$             100,052


$             205,313


$             200,556













Reconciliation of NOI of unconsolidated entities:









Net Income

$                 2,939


$                 2,918


$                 5,924


$                 6,975


Interest expense

3,273


3,605


6,824


7,075


NOI of properties sold

(15)


104


8


(545)


Operating Income

6,197


6,627


12,756


13,505


Depreciation and amortization 

3,372


3,656


7,250


7,410


NOI of unconsolidated entities

$                 9,569


$               10,283


$               20,006


$               20,915













Total consolidated and unconsolidated NOI from continuing operations

$             114,007


$             110,335


$             225,319


$             221,471


Adjustments to NOI:









NOI of properties sold

15


(23)


54


1,154


Total NOI of our portfolio

$             114,022


$             110,312


$             225,373


$             222,625


Change in NOI from prior period

3.4%




1.2%















Less:  Joint venture partners' share of NOI

(5,678)


(8,461)


(13,872)


(18,304)


Our Share of NOI

$             108,344


$             101,851


$             211,501


$             204,321


Increase in our share of NOI from prior period

6.4%




3.5%















Total NOI of our portfolio

$             114,022


$             110,312


$             225,373


$             222,625


NOI from non comparable properties (1)

3,168


2,792


6,948


6,206


Total NOI of comparable properties (2)

$             110,854


$             107,520


$             218,425


$             216,419


Change in NOI of comparable properties

3.1%




0.9%















(1)

NOI excluded from comparable property NOI relates to properties not owned and operated in both periods under comparison and excluded income noted in footnote 2 below.





(2)

Comparable properties are malls and strip centers that were owned in both of the periods under comparison. Seven properties were considered non comparable for the periods under comparison. Excludes lease termination income, interest income, land sale gains and the impact of significant redevelopment activities.





 

 

 

SOURCE Washington Prime Group

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
StackIQ has announced the release of Stacki 3.2. Stacki is an easy-to-use Linux server provisioning tool. Stacki 3.2 delivers new capabilities that simplify the automation and integration of site-specific requirements. StackIQ is the commercial entity behind this open source bare metal provisioning tool. Since the release of Stacki in June of 2015, the Stacki core team has been focused on making the Community Edition meet the needs of members of the community, adding features and value, while ...
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
Ixia (Nasdaq: XXIA) has announced that NoviFlow Inc.has deployed IxNetwork® to validate the company’s designs and accelerate the delivery of its proven, reliable products. Based in Montréal, NoviFlow Inc. supports network carriers, hyperscale data center operators, and enterprises seeking greater network control and flexibility, network scalability, and the capacity to handle extremely large numbers of flows, while maintaining maximum network performance. To meet these requirements, NoviFlow in...
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
The competitive landscape of the global cloud computing market in the healthcare industry is crowded due to the presence of a large number of players. The large number of participants has led to the fragmented nature of the market. Some of the major players operating in the global cloud computing market in the healthcare industry are Cisco Systems Inc., Carestream Health Inc., Carecloud Corp., AGFA Healthcare, IBM Corp., Cleardata Networks, Merge Healthcare Inc., Microsoft Corp., Intel Corp., an...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Continuous testing helps bridge the gap between developing quickly and maintaining high quality products. But to implement continuous testing, CTOs must take a strategic approach to building a testing infrastructure and toolset that empowers their team to move fast. Download our guide to laying the groundwork for a scalable continuous testing strategy.
Early adopters of IoT viewed it mainly as a different term for machine-to-machine connectivity or M2M. This is understandable since a prerequisite for any IoT solution is the ability to collect and aggregate device data, which is most often presented in a dashboard. The problem is that viewing data in a dashboard requires a human to interpret the results and take manual action, which doesn’t scale to the needs of IoT.
SYS-CON Events announced today that 910Telecom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Housed in the classic Denver Gas & Electric Building, 910 15th St., 910Telecom is a carrier-neutral telecom hotel located in the heart of Denver. Adjacent to CenturyLink, AT&T, and Denver Main, 910Telecom offers connectivity to all major carriers, Internet service providers, Internet backbones and ...
CenturyLink has announced that application server solutions from GENBAND are now available as part of CenturyLink’s Networx contracts. The General Services Administration (GSA)’s Networx program includes the largest telecommunications contract vehicles ever awarded by the federal government. CenturyLink recently secured an extension through spring 2020 of its offerings available to federal government agencies via GSA’s Networx Universal and Enterprise contracts. GENBAND’s EXPERiUS™ Application...
“Being the one true cloud-agnostic and storage-agnostic software solution, more and more customers are coming to Commvault and saying ' What do you recommend? What's your best practice for implementing cloud?” explained Randy De Meno, Chief Technologist at Commvault, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Security, data privacy, reliability and regulatory compliance are critical factors when evaluating whether to move business applications from in-house client hosted environments to a cloud platform. In her session at 18th Cloud Expo, Vandana Viswanathan, Associate Director at Cognizant, In this session, will provide an orientation to the five stages required to implement a cloud hosted solution validation strategy.