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DDR Reports a 6.2% Increase in Operating FFO Per Diluted Share to $1.03 for the Year Ended December 31, 2012



 DDR Reports a 6.2% Increase in Operating FFO Per Diluted Share to $1.03 for
                       the Year Ended December 31, 2012

PR Newswire

BEACHWOOD, Ohio, Feb. 12, 2013

BEACHWOOD, Ohio, Feb. 12, 2013 /PRNewswire/ -- DDR Corp. (NYSE: DDR) today
announced operating results for the fourth quarter ended December 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20110912/CL65938LOGO )

SIGNIFICANT 2012 ACTIVITY

  o Generated Operating FFO of $1.03 per diluted share for the full year 2012
    and $0.27 per diluted share for the fourth quarter, an increase of 6.2%
    compared to the full year 2011
  o Executed 1,958 new leases and renewals for 11.3 million square feet in
    2012, which includes 471 new leases and renewals for 2.4 million square
    feet in the fourth quarter
  o Increased the portfolio leased rate by 60 basis points to 94.2% at
    December 31, 2012, from 93.6% at December 31, 2011 and by 20 basis points
    from 94.0% at September 30, 2012
  o Generated positive leasing spreads for the full year 2012, with new leases
    up 9.7% at 100% ownership and 13.6% on a pro rata basis, and renewals up
    6.1% at 100% ownership and 6.0% on a pro rata basis; blended spreads were
    up 6.7% at 100% ownership and 7.0% on a pro rata basis
  o Generated same store net operating income growth of 4.0% at 100% ownership
    and 3.4% on a pro rata basis for the full year 2012 as compared to 2011
  o Generated same store net operating income growth of 4.3% at 100% ownership
    and 4.4% on a pro rata basis for the fourth quarter as compared to the
    fourth quarter of 2011
  o Acquired $760 million of prime assets on a pro rata basis in 2012 of which
    $151 million were acquired in the fourth quarter
  o Issued $511 million of common equity to fund the net investment in prime
    assets in 2012 of which 4.8 million shares were issued in the fourth
    quarter for gross proceeds of $75 million
  o Completed the disposition of $347 million of non-prime assets in 2012 of
    which $255 million were sold in the fourth quarter; DDR's pro rata share
    of the gross proceeds was $143 million, $62 million of which was in the
    fourth quarter

"We continue to be pleased with our performance metrics, access to capital and
overall tenant operating and financial strength within our portfolio.  We
expect these positive trends to continue in 2013," commented DDR's chief
executive officer, Daniel B. Hurwitz. 

FINANCIAL HIGHLIGHTS   
The Company's fourth quarter Operating Funds From Operations attributable to
common shareholders ("Operating FFO") increased to $84.0 million, or $0.27 per
diluted share, which compares to $72.1 million, or $0.26 per diluted share,
for the prior-year comparable period.  The increase in Operating FFO for the
three-month period ended December 31, 2012, as compared to the same period in
2011, is primarily due to organic growth and shopping center acquisitions and
related investments partially offset by asset dispositions.

Funds From Operations attributable to common shareholders ("FFO") for the
three-month period ended December 31, 2012, increased to $61.8 million, or
$0.20 per diluted share, which compares to $47.4 million, or $0.17 per diluted
share, for the prior-year comparable period.  The increase in FFO for the
three-month period ended December 31, 2012, as compared to the same period in
2011, is primarily due to the same factors impacting Operating FFO as well as
lower impairment charges on non-depreciable assets partially offset by higher
transaction costs and a loss on change in control and sale of interests.

Operating FFO for the year ended December 31, 2012 increased to $305.3
million, or $1.03 per diluted share, which compares to $267.1 million, or
$0.97 per diluted share, for the prior year.  The increase in Operating FFO
for the year ended December 31, 2012, is primarily due to the same factors
impacting Operating FFO for the three-month period.

FFO for the year ended December 31, 2012 increased to $312.4 million, or $1.06
per diluted share, which compares to $227.6 million, or $0.75 per diluted
share, for the prior year.  The increase in FFO for the year ended December
31, 2012, is primarily due to the same factors impacting FFO for the
three-month period as well as gains on change in control and sale of interests
partially offset by the loss on debt retirement related to the Company's
repurchase of a portion of its 9.625% unsecured senior notes in 2012 and the
effect of the valuation adjustment associated with the warrants that were
exercised in full for cash in the first quarter of 2011.

Net loss attributable to common shareholders for the three-month period ended
December 31, 2012, was $7.0 million, or $0.02 per diluted share, which
compares to net loss of $1.8 million, or $0.01 per diluted share, for the
prior-year comparable period.  Net loss attributable to common shareholders
for the year ended December 31, 2012, was $60.3 million, or $0.21 per diluted
share, which compares to net loss of $53.8 million, or $0.28 per diluted
share, for the prior year.  The increase in net loss attributable to common
shareholders for the three-month period and year ended December 31, 2012, is
primarily due to the same factors impacting FFO as well as higher impairment
charges on depreciable assets and depreciation expense.

LEASING & PORTFOLIO OPERATIONS   
The following results for the full year and fourth quarter of 2012, highlight
continued strong leasing activity throughout the portfolio:

  o Executed 189 new leases aggregating 0.7 million square feet and 282
    renewals aggregating approximately 1.7 million square feet in the fourth
    quarter   
  o Generated positive leasing spreads for the fourth quarter, with new leases
    up 11.7% at 100% ownership and 14.3% on a pro rata basis, and renewals up
    6.8% at both 100% ownership and on a pro rata basis; blended spreads were
    up 7.6% at 100% ownership and 7.8% on a pro rata basis  
  o The portfolio leased rate was 94.2% at December 31, 2012, as compared to
    94.0% at September 30, 2012 and 93.6% at December 31, 2011  
  o Same store net operating income ("NOI") increased by 4.0% at 100%
    ownership for the full year 2012 and 4.3% for the fourth quarter as
    compared to the same periods in 2011 and 3.4% and 4.4% on a pro rata basis
    for the full year and fourth quarter 2012, respectively

ACQUISITIONS  
In the fourth quarter of 2012, the Company acquired two prime power centers
located in North Carolina. The Company funded these acquisitions through a
combination of proceeds from asset sales and the issuance of new common equity
and the senior unsecured notes.

Carolina Pavilion, in Charlotte, North Carolina, was purchased for $106
million. This 94% leased 852,000 square foot prime power center features
anchor tenants such as Target, Kohl's, Nordstrom Rack, Ross Dress for Less,
buybuy BABY, Bed Bath & Beyond, Jo-Ann Fabric and Craft Stores and AMC
Theatres. In addition, new leasing activity with national anchors including
PetSmart and Golfsmith will soon fill 85,000 square feet of currently vacant
space.

Poyner Place, in Raleigh, North Carolina, was purchased for $45 million. This
96% leased 434,000 square foot prime power center is anchored by Target, Ross
Dress for Less, Old Navy, World Market, Shoe Carnival and Pier 1 Imports.

FINANCINGS    
In January 2013, the Company refinanced its primary $750 million unsecured
revolving credit facility arranged by J.P. Morgan Securities LLC and Wells
Fargo Securities, LLC.  The $65 million unsecured revolving credit facility
provided solely by PNC Bank, National Association was refinanced to match the
terms of the primary facility.  The Company also refinanced its $400 million
secured term loan arranged by KeyBanc Capital Markets and RBC Capital Markets.

The refinanced $750 million unsecured revolving credit facility has an initial
maturity of April 2017 with borrower options to extend an additional year, and
contains an accordion feature that provides for $1.25 billion of potential
total capacity.  Pricing on both refinanced revolving credit facilities was
reduced and is currently set at LIBOR plus 140 basis points, a decrease of 25
basis points from the previous rate, and is determined based upon DDR's credit
ratings from Moody's and S&P. Further, the annual facility fee for both
revolving credit facilities has been reduced from 35 basis points to 30 basis
points.

The refinanced secured term loan has an initial maturity of April 2017 with
borrower options to extend an additional year.  Pricing on the secured term
loan is currently set at LIBOR plus 155 basis points, a decrease of 15 basis
points from the previous rate, and is determined based upon DDR's credit
ratings from Moody's and S&P.

The Company accessed its at-the-market common equity program and issued 4.8
million new common shares during the fourth quarter of 2012 at an average
price of $15.50, generating gross proceeds of $75 million.

In addition in December 2012, the Company closed $365 million of new long-term
financings, comprised of a $265 million mortgage loan and a $100 million
increase in the unsecured term loan that initially closed in January 2012.
 The mortgage is a 3.5% fixed rate, seven-year loan collateralized by four
prime shopping centers.  DDR had previously entered into interest rate swap
contracts that fix LIBOR on the $100 million of additional unsecured term loan
proceeds resulting in a fixed interest rate of 2.98%.  Proceeds from these
financings were primarily used to repay a $350 million mortgage loan, secured
by six prime shopping centers, that was set to mature in April 2013 with a 5%
fixed rate.  

In November 2012, the Company issued $150 million aggregate principal amount
of 4.625% senior unsecured notes due July 2022 at a premium to par of 109.2%
and yield-to-maturity of 3.46%. 

DISPOSITIONS    
The Company sold five consolidated operating shopping centers, aggregating
approximately 0.4 million square feet, in the fourth quarter of 2012,
generating gross proceeds of approximately $13.7 million.  In addition, the
Company sold $60.6 million of non-income producing assets.  The Company
recorded an aggregate net gain of approximately $0.4 million related to asset
sales in the fourth quarter of 2012. 

In the fourth quarter of 2012, the Company's unconsolidated joint ventures
sold five assets generating gross proceeds of approximately $219.4 million
($51.5 million at DDR's share).  The aggregate gain on sale in the fourth
quarter of 2012 was approximately $50.8 million ($10.7 million at DDR's
share).  The joint venture disposition activity included the sale by Sonae
Sierra Brasil of its 10% ownership interest in Patio Brasil, its 51% interest
in Shopping Penha, and its 30% interest in Tivoli Shopping, for approximately
$103 million ($34 million at DDR's share).  Sonae Sierra Brasil will continue
to manage Shopping Penha and Tivoli Shopping for at least three years.

2013 GUIDANCE
There has been no change in Operating FFO per share guidance since the last
update provided on January 7, 2013.  The Company continues to estimate
Operating FFO for 2013 between $1.07 and $1.11 per diluted share. 

NON-GAAP DISCLOSURES   
FFO is a supplemental non-GAAP financial measurement used as a standard in the
real estate industry and a widely accepted measure of real estate investment
trust ("REIT") performance. Management believes that FFO and Operating FFO
provide additional indicators of the financial performance of a REIT. The
Company also believes that FFO and Operating FFO more appropriately measure
the core operations of the Company and provide benchmarks to its peer group.
Neither FFO nor Operating FFO represents cash generated from operating
activities in accordance with generally accepted accounting principles
("GAAP"), is necessarily indicative of cash available to fund cash needs and
should be considered as an alternative to net income computed in accordance
with GAAP as an indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity.

FFO is defined and calculated by the Company as net income, adjusted to
exclude: (i) preferred share dividends, (ii) gains and losses from disposition
of depreciable real estate property, which are presented net of taxes, (iii)
impairment charges on depreciable real estate property and related
investments, (iv) extraordinary items and (iv) certain non-cash items. These
non-cash items principally include real property depreciation and amortization
of intangibles, equity income from joint ventures and equity income from
non-controlling interests and adding the Company's proportionate share of FFO
from its unconsolidated joint ventures and non-controlling interests,
determined on a consistent basis. The Company calculates Operating FFO by
excluding the non-operating charges and gains described above. The Company
computes FFO in accordance with the NAREIT definition as affirmed by NAREIT on
October 31, 2011.  Other real estate companies may calculate FFO and Operating
FFO in a different manner.  FFO excluding the net non-operating items detailed
in this release is useful to investors as the Company removes these charges
and gains to analyze the results of its operations and assess performance of
the core operating real estate portfolio. A reconciliation of net income
(loss) to FFO and Operating FFO is presented in the financial highlights
section of the Company's quarterly supplement.

SAFE HARBOR    
DDR considers portions of the information in this press release to be
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, both as
amended, with respect to the Company's expectation for future periods. 
Although the Company believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it can give
no assurance that its expectations will be achieved.  For this purpose, any
statements contained herein that are not historical fact may be deemed to be
forward-looking statements.  There are a number of important factors that
could cause our results to differ materially from those indicated by such
forward-looking statements, including, among other factors, local conditions
such as oversupply of space or a reduction in demand for real estate in the
area; competition from other available space; dependence on rental income from
real property; the loss of, significant downsizing of or bankruptcy of a major
tenant; constructing properties or expansions that produce a desired yield on
investment; our ability to buy or sell assets on commercially reasonable
terms; our ability to complete acquisitions or dispositions of assets under
contract; our ability to secure equity or debt financing on commercially
acceptable terms or at all; our ability to enter into definitive agreements
with regard to our financing and joint venture arrangements or our failure to
satisfy conditions to the completion of these arrangements; the success of our
capital recycling strategy; and the finalization of the financial statements
for the three-month period ended and year ended December 31, 2012.  For
additional factors that could cause the results of the Company to differ
materially from those indicated in the forward-looking statements, please
refer to the Company's Form 10-K for the year ended December 31, 2011, as
amended.  The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date hereof.

ABOUT DDR     
DDR is an owner and manager of 454 value-oriented shopping centers
representing 116 million square feet in 39 states, Puerto Rico and Brazil. The
Company's assets are concentrated in high barrier-to-entry markets with stable
populations and high growth potential and its portfolio is actively managed to
create long-term shareholder value. DDR is a self-administered and
self-managed REIT operating as a fully integrated real estate company, and is
publicly traded on the New York Stock Exchange under the ticker symbol DDR.
Additional information about the company is available at www.ddr.com.

CONFERENCE CALL INFORMATION & SUPPLEMENTAL MATERIALS   
A copy of the Company's Supplemental Financial/Operational package is
available to all interested parties upon request to Samir Khanal, at the
Company's corporate office, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or
at www.ddr.com.

The Company will hold its quarterly conference call tomorrow, February 13,
2013, at 10:00 a.m. Eastern Time.  To participate, please dial 866.362.4831
(domestic), or 617.597.5347 (international) at least ten minutes prior to the
scheduled start of the call.  When prompted, provide the passcode: 96140797. 
Access to the live call and replay will also be available through the
Company's website.  The replay will be available through February 20, 2013.

DDR Corp.
Financial Highlights
(In Thousands)

                         Three-Month Periods        Years Ended

                         Ended December 31,         December 31,
Revenues:                2012          2011         2012          2011
Minimum rents ^(A)       $  142,328    $  126,626   $  542,900    $  498,079
Percentage and overage   2,702         2,573        5,117         6,057
rents ^(A)
Recoveries from tenants  46,453        37,896       174,097       163,123
Ancillary and other      8,011         7,787        27,665        28,527
property income
Management, development  10,579        12,296       43,706        47,148
and other fee income
Other ^(B)               797           2,179        6,890         6,895
                         210,870       189,357      800,375       749,829
Expenses:
Operating and            32,856        29,507       128,821       128,873
maintenance
Real estate taxes        28,091        22,842       104,256       97,382
Impairment charges ^(C)  20,615        17,077       105,395       67,912
General and              19,753        19,911       76,444        85,221
administrative
Depreciation and         65,159        57,957       248,781       215,928
amortization
                         166,474       147,294      663,697       595,316
Other income (expense):
Interest income          5,970         2,154        15,799        9,832
Interest expense ^(D)    (56,148)      (56,245)     (221,424)     (224,024)
Gain (loss) on debt      —             45           (13,495)      (89)
retirement, net ^(E)
Gain on equity           —             —            —             21,926
derivative instruments
Other income (expense),  (10,737)      (177)        (17,880)      (5,002)
net ^(F)
                         (60,915)      (54,223)     (237,000)     (197,357)
Loss before earnings                                               
from equity method       (16,519)      (12,160)
investments and other                               (100,322)     (42,844)
      items 
Equity in net income
(loss) of joint ventures 18,284        (2,217)      35,250        13,734
^(G)
Impairment of joint      —             (1,250)      (26,671)      (2,921)
venture investments ^(C)
(Loss) gain on change in
control and sale of      (1,866)       2,461        78,127        25,170
interests, net ^(H)
Tax expense of taxable
REIT subsidiaries and    (350)         (19)         (1,160)       (1,025)
state franchise and
      income taxes
Loss from continuing     (451)         (13,185)     (14,776)      (7,886)
operations
Income (loss) from
discontinued operations  813           19,740       (16,416)      (18,590)
^(I)
Income (loss) before
(loss) gain on           362           6,555        (31,192)      (26,476)
disposition of real
estate
(Loss) gain on
disposition of real      (298)         (1,380)      5,863         7,079
estate, net of tax
Net income (loss)        64            5,175        (25,329)      (19,397)
(Income) loss
attributable to          (68)          31           (493)         3,543
non-controlling
interests
Net (loss) income        $             $            $   (25,822)  $   (15,854)
attributable to DDR      (4)            5,206
Write-off of preferred
share original issuance  —             —            (5,804)       (6,402)
costs ^(J)
Preferred dividends      (7,030)       (6,967)      (28,645)      (31,587)
Net loss attributable to $    (7,034)  $            $  (60,271)   $   (53,843)
common shareholders                     (1,761)
Funds From Operations
("FFO"):
Net loss attributable to $    (7,034)  $            $  (60,271)   $   (53,843)
common shareholders                     (1,761)
Depreciation and
amortization of real     63,577        58,081       242,822       221,278
estate investments
Equity in net (income)
loss of joint ventures   (18,284)      2,217        (35,250)      (13,734)
^(G)
Impairment of
depreciable joint        —             1,250        26,671        1,285
venture investments
Joint ventures' FFO ^(G) 13,142        14,234       53,603        57,604
Non-controlling          48            32           191           88
interests (OP Units)
Impairment of
depreciable real estate
assets, net of           18,566        29,037       96,319        62,683
non-controlling
interests
Gain on disposition of
depreciable real estate, (8,178)       (55,675)     (11,705)      (47,751)
net
FFO attributable to      61,837        47,415       312,380       227,610
common shareholders
Non-operating items, net 22,160        24,680       (7,062)       39,497
^(K)
Operating FFO            $    83,997   $    72,095  $  305,318    $  267,107
Earnings per share –     $             $            $             $    
Diluted ^(L)              (0.02)        (0.01)       (0.21)        (0.28)
Funds From Operations –  $             $            $       1.06  $      
Diluted ^(L)              0.20          0.17                       0.75
Operating Funds From     $             $                          $      
Operations – Diluted      0.27          0.26        $       1.03   0.97
^(L)

 

DDR Corp.
Financial Highlights
(In Thousands)

Selected Balance Sheet Data
                                          December 31, 2012  December 31, 2011
Assets:
Real estate and rental property:
Land                                      $ 1,900,401        $ 1,844,125
Buildings                                 5,773,961          5,461,122
Fixtures and tenant improvements          489,626            379,965
                                          8,163,988          7,685,212
Less: Accumulated depreciation            (1,670,717)        (1,550,066)
                                          6,493,271          6,135,146
Land held for development and             475,123            581,627
construction in progress
Real estate held for sale, net            —                  2,290
Real estate, net                          6,968,394          6,719,063
Investments in and advances to joint      613,017            353,907
ventures
Cash                                      31,174             41,206
Restricted cash                           23,658             30,983
Notes receivable, net                     68,718             93,905
Receivables, including straight-line      126,228            117,463
rent, net
Other assets, net                         224,648            112,898
                                          $ 8,055,837        $ 7,469,425
Liabilities & Equity:
Indebtedness:
Revolving credit facilities               $   147,905        $   142,421
Unsecured debt                            2,147,097          2,139,718
Unsecured term loan                       350,000            —
Mortgage and other secured debt           1,674,141          1,822,445
                                          4,319,143          4,104,584
Dividends payable                         44,210             29,128
Other liabilities                         326,024            257,821
Total liabilities                         4,689,377          4,391,533
Preferred shares                          405,000            375,000
Common shares                             31,524             27,711
Paid-in-capital                           4,629,257          4,138,812
Accumulated distributions in excess of    (1,694,822)        (1,493,353)
net income
Deferred compensation obligation          15,556             13,934
Accumulated other comprehensive income    (27,925)           (1,403)
Less:  Common shares in treasury at cost  (16,452)           (15,017)
Non-controlling interests                 24,322             32,208
Total equity                              3,366,460          3,077,892
                                          $ 8,055,837        $ 7,469,425

 

DDR Corp.
Financial Highlights

(A)   The increase in base and percentage rental revenues for the year ended
      December 31, 2012, is as follows (in millions): 

 

                                         Increase
                                         (Decrease)
Acquisition of shopping centers          $ 32.7
Comparable portfolio properties          8.3
Development or redevelopment properties  (0.8)
                                         $ 40.2

 

Revenue resulting from the recognition of straight-line rents, including
discontinued operations, is as follows (in millions):

 

                     Years Ended
                     December 31,
                     2012   2011
Straight-line rents  $ 4.1  $ 0.9

 

(B)  Other revenues were comprised of the following (in millions):

 

                        Three-Month Periods  Years Ended
                        Ended December 31,   December 31,
                        2012        2011     2012   2011
Lease termination fees  $ 0.6       $ 2.0    $ 6.4  $ 5.9
Financing fees          0.1         0.1      0.1    0.4
Other miscellaneous     0.1         0.1      0.4    0.6
                        $ 0.8       $ 2.2    $ 6.9  $ 6.9

 

(C)     The Company recorded impairment charges on the following (in
     millions): 

                                
                                                    Years Ended
                               Three-Month Periods  December 31,
                               Ended December 31,
                               2012        2011     2012      2011
Land held for development      $  2.1      $ 14.0   $   10.1  $   54.2
Undeveloped land               —           3.1      20.1      9.0
Assets marketed for sale       18.5        —        72.6      4.7
Other shopping center assets   —           —        2.6       —
Total continuing operations    20.6        17.1     105.4     67.9
Sold assets                    —           29.0     21.1      57.9
Total discontinued operations  —           29.0     21.1      57.9
Joint venture investments      —           1.3      26.7      2.9
Total impairment charges       $ 20.6      $ 47.4   $ 153.2   $ 128.7

 

DDR Corp.
Financial Highlights

(D)   The Company recorded the following in connection with its outstanding
      convertible debt (in millions):

 

                                         Three-Month Periods  Years Ended
                                         Ended December 31,
                                                              December 31,
                                         2012        2011     2012    2011
Non-cash interest expense related to     $ 2.6       $ 3.4    $ 10.9  $ 14.9
      amortization of the debt discount

 

       For the year ended December 31, 2012, the Company repurchased $60.0
(E)    million aggregate principal amount of its 9.625% unsecured senior notes
       at a premium to par value.

 

(F)   Other income (expense) was comprised of the following (in millions):

 

                                        Three-Month Periods  Years Ended
                                        Ended December 31,
                                                             December 31,
                                        2012       2011      2012      2011
Transaction and other (expenses)        $  (4.8)   $   1.0   $  (7.7)  $   0.4
     income
Litigation-related expenses             (1.2)      (0.3)     (4.8)     (2.3)
Loss on sale or reserve of mezzanine    (4.3)      —         (4.3)     (5.0)
     note receivable
Debt extinguishment costs, net          (0.4)      (0.9)     (1.1)     (0.7)
Settlement of lease liability           —          —         —         2.6
obligation
                                        $ (10.7)   $  (0.2)  $ (17.9)  $ (5.0)

 

      At December 31, 2012 and 2011, the Company had investments in joint
      ventures, excluding consolidated joint ventures, in 206 and 177 shopping
(G)   center properties, respectively. 

       

       In the fourth quarter of 2012, the Company sold its interest in a joint
       venture investment with the Coventry II Fund.  The Company also sold a
       portion of its interest in a previously consolidated joint venture that
       owns land held for development in Canada.  The Company recorded a net
       loss related to these sales.  In addition in 2012, the Company acquired
(H)    its partners' interests in five shopping centers.  The Company
       accounted for these transactions as step acquisitions.  Due to the
       change in control that occurred, the Company recorded an aggregate gain
       for the year ended 2012 associated with the difference between the
       Company's carrying value and fair value of the previously held equity
       interest.

 

DDR Corp.
Financial Highlights

(I)   The operating results related to assets classified as discontinued
      operations are summarized as follows (in millions):

 

                                       Three-Month Periods  Years Ended

                                       Ended December 31,   December 31,
                                       2012       2011      2012      2011
Revenues from operations               $ 0.6      $  8.6    $   9.3   $  49.0
Operating expenses                     0.3        3.3       4.2       19.7
Impairment charges                     —          29.0      21.1      57.9
Interest, net                          0.1        2.1       2.0       13.2
Debt extinguishment costs, net         —          7.7       —         7.2
Depreciation and amortization          0.1        2.4       2.3       14.4
Total expenses                         0.5        44.5      29.6      112.4
Income (loss) before disposition of    0.1        (35.9)    (20.3)    (63.4)
real estate
Gain on deconsolidation of interests   —          —         —         4.7
Gain on disposition of real estate,    0.7        55.6      3.9       40.1
net
Net income (loss)                      $ 0.8      $ 19.7    $ (16.4)  $ (18.6)

 

      In August 2012, the Company redeemed all of its Class I Preferred
      Shares.  The Company recorded a non-cash charge of $5.8 million to net
(J)   loss available to common shareholders in the third quarter of 2012
      related to the write-off of the original issuance costs. 

       

DDR Corp.
Financial Highlights

    The gains and charges excluded from Operating FFO for the three-month
(K) periods and years ended December 31, 2012 and 2011, respectively, are
    summarized as follows (in millions):

 

                                          Three-Month Periods  Years Ended

                                          Ended December 31,   December 31,
                                          2012        2011     2012     2011
Non-cash impairment charges – non-        $  2.1      $ 17.1   $ 30.2   $ 63.2
     depreciable consolidated assets
Loss on debt retirement, net              —           —        13.5     0.1
Other expense (income), net – transaction
     costs, loss on sale/reserve of 
     mezzanine note receivable,           10.7        0.2      17.9     5.0
litigation 
     costs, debt extinguishment costs and
     lease liability settlement gain
Equity in net (income) loss of joint 
     ventures – currency adjustments,     (0.2)       (0.5)    0.6      (1.2)
     transaction and other expenses
Non-cash impairment of joint venture
     investments on non-depreciable       —           —        —        1.6
assets
Non-cash loss (gain) on disposition of    0.3         1.4      (5.5)    0.9
     non-depreciable real estate, net
Executive separation charges              —           1.4      1.0      12.4
Non-cash gain on equity derivative        —           —        —        (21.9)
     instruments (Otto Family warrants)
Debt extinguishment costs, (gain) on 
     deconsolidation of interests, and    —           7.7      0.2      2.1
loss 
     on sales – discontinued operations
Non-cash loss (gain) on change in
control                                   9.3         (2.5)    (70.8)   (25.2)
     and sale of interests, net
Non-controlling interest – portion of
     impairment charges allocated to      —           (0.1)    —        (3.9)
     outside partners
Non-cash write-off of preferred share     —           —        5.8      6.4
     original issuance costs
Total adjustments from FFO                $ 22.2      $ 24.7   $ (7.1)  $ 39.5
     to Operating FFO

 

DDR Corp.
Financial Highlights

(L)    The Company's per share information is as follows:

 

                                  At December 31,
                                  2012     2011
Common shares outstanding         315.1    276.9
OP Units outstanding ("OP Units") 0.4      0.4

 

                                   Three-Month Periods   Years Ended
                                   Ended December 31,    December 31,
                                   2012       2011       2012       2011
Earnings per common share:
Basic                              $  (0.02)  $  (0.01)  $  (0.21)  $  (0.20)
Diluted                            $  (0.02)  $  (0.01)  $  (0.21)  $  (0.28)
Basic – average shares outstanding 307.9      274.7      291.7      270.3
Diluted – average shares           307.9      274.7      291.7      271.5
outstanding
Dividends Declared:                $  0.12    $  0.08    $  0.48    $  0.22
FFO per share:
Basic                              $  0.20    $  0.17    $  1.06    $  0.84
Diluted                            $  0.20    $  0.17    $  1.06    $  0.75
Weighted average common shares     310.0      277.0      293.6      272.1
          outstanding
Assumed conversion of OP Units     0.4        0.4        0.4        0.4
FFO Weighted average common 
          shares and OP Units –    310.4      277.4      294.0      272.5
Basic
Assumed conversion of dilutive     0.4        0.7        1.3        1.9
          securities
FFO Weighted average common 
          shares and OP Units –    310.8      278.1      295.3      274.4
Diluted
Operating FFO:
Diluted                            $  0.27    $  0.26    $  1.03    $  0.97
Operating FFO Weighted
average common shares and OP Units 310.8      278.1      295.3      274.4
–  Diluted

 

 

DDR Corp.
Summary Results of Combined Unconsolidated Joint Ventures
(In Thousands)

 

Combined condensed income statements
                            Three-Month Periods       Years Ended
                            Ended December 31,        December 31,
                            2012        2011          2012         2011
Revenues:
Minimum rents ^(A)          $ 137,098   $  118,310    $ 508,250    $  466,820
Percentage and overage      856         865           1,958        2,387
rents
Recoveries from tenants     32,573      25,502        116,660      105,939
Other                       17,818      23,489        78,942       84,832
                            188,345     168,166       705,810      659,978
Expenses:
Operating and maintenance   43,162      37,423        173,122      150,988
Real estate taxes           21,443      15,140        76,418       66,685
Impairment charges ^(B)     9,562       208,843       10,402       208,843
                            74,167      261,406       259,942      426,516
Net operating income (loss) 114,178     (93,240)      445,868      233,462
Depreciation and
amortization of real        54,270      42,197        203,412      171,634
        estate investments
Interest expense            60,670      55,294        237,138      217,676
(Loss) income before other  (762)       (190,731)     5,318        (155,848)
items
Income tax expense          (6,715)     (11,818)      (25,444)     (38,598)
Loss from continuing        (7,477)     (202,549)     (20,126)     (194,446)
operations
Discontinued operations:
Loss from operations ^(B)   (1,651)     (252)         (52,619)     (64,056)
Gain on debt forgiveness    —           —             —            2,976
Gain (loss) on disposition, 10,449      (2,595)       11,739       18,705
net
Income (loss) before gain
on disposition of           1,321       (205,396)     (61,006)     (236,821)
     assets
Gain on disposition of      40,352      1,751         54,582       1,733
assets, net
Net income (loss)           $   41,673  $ (203,645)   $   (6,424)  $ (235,088)
Non-controlling interests   (23,306)    (4,568)       (42,995)     (16,132)
Net income (loss)
attributable to             $   18,367  $ (208,213)   $ (49,419)   $ (251,220)
     unconsolidated joint
ventures
Net income (loss) at DDR's
ownership                   $   21,774  $   (27,219)  $   33,512   $  (12,979)
     interests ^(C)
FFO at DDR's ownership      $   13,142  $     14,234  $   53,603   $    57,604
interests ^(D)
Operating FFO at DDR's
ownership                   $   12,982  $     13,780  $   54,220   $   56,390
     interests ^(D)

 

DDR Corp.
Summary Results of Combined Unconsolidated Joint Ventures
(In Thousands)

 

Combined condensed balance sheets
                                          December 31, 2012  December 31, 2011
Land                                      $ 1,569,548        $ 1,400,469
Buildings                                 4,681,462          4,334,097
Fixtures and tenant improvements          244,293            189,940
                                          6,495,303          5,924,506
Less: Accumulated depreciation            (833,816)          (808,352)
                                          5,661,487          5,116,154
Land held for development and             348,822            239,036
construction in progress ^(E)
Real estate, net                          6,010,309          5,355,190
Cash and restricted cash                  467,200            308,008
Receivables, including straight-line      99,098             108,038
rent, net
Other assets, net                         427,014            177,251
                                          $ 7,003,621        $ 5,948,487
Mortgage debt ^(F)                        $ 4,246,407        $ 3,742,241
Notes and accrued interest payable to DDR 143,338            100,470
Other liabilities                         342,614            214,370
                                          4,732,359          4,057,081
Redeemable preferred equity               154,556            —
Accumulated equity                        2,116,706          1,891,406
                                          $ 7,003,621        $ 5,948,487

 

DDR Corp.
Summary Results of Combined Unconsolidated Joint Ventures 

 

(A)   Revenue resulting from the recognition of straight-line rents, including
      discontinued operations, is as follows (in millions):

 

                           Three-Month Periods  Years Ended
                           Ended December 31,
                                                 December 31,
                           2012        2011     2012    2011
Straight-line rents        $ 1.2       $ 1.0    $ 4.9   $ 4.6
DDR's proportionate share  0.1         —        0.8     0.9

 

      For the three-month period and year ended December 31, 2012, impairment
      charges were recorded primarily on an asset that is in the process of
      being marketed for sale of which the Company's proportionate share was
(B)   not material.  For the three-month period and year ended December 31,
      2011, impairment charges were recorded primarily on assets that were
      being recapitalized of which the Company's proportionate share of the
      charges was approximately $6.7 million.
      Adjustments to the Company's share of joint venture equity in net income
(C)   primarily is related to basis differences impacting amortization and
      depreciation, impairment charges and (loss) gain on dispositions as
      follows (in millions): 

 

                  Three-Month Periods  Years Ended
                                       December 31,
                  Ended December 31,
                  2012        2011     2012   2011
Net (loss) income $ (3.5)     $ 25.0   $ 1.7  $ 26.7

 

(D)   FFO and Operating FFO from unconsolidated joint ventures are summarized
      as follows (in millions):

 

                                      Three-Month Periods  Years Ended

                                      Ended December 31,    December 31,
                                      2012      2011       2012      2011
Net income (loss) attributable to     $  18.4   $ (208.2)  $ (49.4)  $ (251.2)
     unconsolidated joint ventures
Depreciation and amortization of
real                                  71.0      44.2       228.7     182.7
     estate investments
Impairment of depreciable real
estate                                9.6       209.4      57.2      272.5
     assets
(Gain) loss on sale of depreciable    (50.7)    2.6        (65.1)    (18.7)
     real estate
FFO                                   $  48.3   $   48.0   $ 171.4   $  185.3
FFO at DDR ownership interests        $  13.1   $   14.2   $   53.6  $    57.6
Operating FFO at DDR's ownership      $  13.0   $   13.8   $   54.2  $    56.4
     interests ^(1)
DDR joint venture distributions       $   23.3  $    6.1   $   43.2  $    63.2
     received, net ^(2)

    Excluded from Operating FFO is the Company's proportionate share of net
(1) activity related to foreign currency adjustments, transaction costs and
    other expenses as above in this press release.
(2) Includes loan repayments in 2011 of $22.4 million from the Company's
    unconsolidated joint venture which has assets located in Brazil.

DDR Corp.
Summary Results of Combined Unconsolidated Joint Ventures

(E) Land held for development and construction in progress consists of the
following (in millions):
                                       December 31,          December 31,
                                       2012                  2011
Company's proportionate share          $ 100.9               $ 75.9

(F)   Mortgage debt consists of the following (in millions):

                                                    December 31,  December 31,
                                                    2012          2011
Company's proportionate share                       $ 724.9       $ 772.9
Non-recourse debt included above for which the 
     Company has written its investment down to
zero                                                48.2          48.1
     and is receiving no allocation of income, loss
or 
     FFO

SOURCE DDR Corp.

Website: http://www.ddr.com
Contact: Media Contact: Matt Schuler, Communications Manager, +1-216-755-5500,
mschuler@ddr.com; Investor Contact: Samir Khanal, Senior Director of Investor
Relations, +1-216-755-5500, skhanal@ddr.com
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