Retail Properties of America, Inc. Reports Fourth Quarter Results

  Retail Properties of America, Inc. Reports Fourth Quarter Results

Business Wire

OAK BROOK, Ill. -- February 19, 2013

Retail Properties of America, Inc. (NYSE: RPAI) today reported financial and
operating results for the quarter and year ended December 31, 2012.

FINANCIAL RESULTS

For the quarter ended December 31, 2012, Retail Properties of America
reported:

  *Operating Funds From Operations (Operating FFO) of $51.2 million, or $0.22
    per share, compared to $46.8 million, or $0.24 per share for the same
    period in 2011;
  *Funds From Operations (FFO) of $60.0 million, or $0.26 per share, compared
    to $48.5 million, or $0.25 per share for the same period in 2011;
  *Net income available to common shareholders of $13.9 million, or $0.06 per
    share, compared to net loss available to common shareholders of $(13.8)
    million, or $(0.07) per share for the same period in 2011.

For the year ended December 31, 2012, the Company reported:

  *Operating FFO of $202.1 million, or $0.92 per share, compared to $173.6
    million, or $0.90 per share for the same period in 2011;
  *FFO of $235.8 million, or $1.07 per share, compared to $195.1 million, or
    $1.01 per share for the same period in 2011;
  *Net loss available to common shareholders of $(0.7) million, or $(0.00)
    per share, compared to net loss available to common shareholders of
    $(72.6) million, or $(0.38) per share for the same period in 2011.

OPERATING RESULTS

For the quarter ended December 31, 2012, the Company’s results for its
consolidated portfolio were as follows:

  *0.6% increase in total same store net operating income (NOI) over the
    comparable period in 2011, based on same-store occupancy of 91.2% at
    December 31, 2012, up 90 basis points from 90.3% at December 31, 2011;
  *Total portfolio percent leased, including leases signed but not commenced:
    92.9% at December 31, 2012, up 110 basis points from 91.8% at September
    30, 2012 and up 170 basis points from 91.2% at December 31, 2011;
  *Retail portfolio percent leased, including leases signed but not
    commenced: 92.4% at December 31, 2012, up 130 basis points from 91.1% at
    September 30, 2012 and up 200 basis points from 90.4% at December 31,
    2011;
  *1,094,000 square feet of retail leasing transactions comprised of 178 new
    and renewal leases, including the Company’s pro rata share of
    unconsolidated joint ventures; and,
  *Positive comparable leasing spreads, including the Company’s pro rata
    share of joint ventures, on a cash basis, of 5.5%.

For the year ended December 31, 2012, the Company’s results for its
consolidated portfolio were as follows:

  *1.7% increase in total same store NOI over the comparable period in 2011;
  *3,573,000 square feet of retail leasing transactions comprised of 672 new
    and renewal leases, including the Company’s pro rata share of
    unconsolidated joint ventures; and,
  *Positive comparable leasing spreads, including the Company’s pro rata
    share of joint ventures, on a cash basis, of 4.5%.

“We are pleased with the substantial progress we have made repositioning
RPAI’s portfolio and balance sheet during 2012. This year has been
representative of our ability to consistently deliver on the ambitious goals
we set out to achieve. We look forward to building on this positive momentum
as we execute on our 2013 operational and financial objectives,” stated Steve
Grimes, president and chief executive officer.

INVESTMENT ACTIVITY

During the quarter, asset dispositions totaled $258.0 million, and included
the sale of two non-core office assets for $153.5 million, eight single-tenant
retail assets for $67.7 million, and two non-strategic retail assets for $36.8
million. Net proceeds from asset sales in the fourth quarter, before
transaction expenses, were $139.6 million.

For the full year 2012, the Company reached its stated asset disposition
objective, selling 36 properties for gross proceeds of $492.2 million,
including its pro rata share of joint ventures. Sales for the year included
$240.1 million of non-core office and industrial assets, including a
deed-in-lieu transaction. In addition, the Company culled its portfolio of
$187.4 million of single-tenant retail properties, which included 18 of the 23
former Mervyns assets for $134.3 million. The remainder of dispositions for
the year included $59.2 million of non-strategic retail assets and $5.5
million from earnouts and an outlot sale. Net proceeds from asset sales in
2012, before transaction expenses, including the Company’s pro rata share of
joint ventures, were $232.3 million.

As a result of the 2012 disposition program, the Company successfully reduced
its exposure to non-retail assets from 9.6% to 5.5% of total portfolio
annualized base rent (ABR) and single-tenant retail assets from 8.7% to 6.6%
of ABR.

CAPITAL MARKETS

During the fourth quarter 2012, the Company closed on its first preferred
equity offering, with the issuance of 5,400,000 shares of 7.00% Series A
Cumulative Redeemable Preferred Stock at $25 per share, resulting in proceeds
of $130.3 million, net of underwriters discount and offering costs. On
February 1, 2013, the Company used the net proceeds from the issuance to repay
outstanding borrowings under two mezzanine loans, scheduled to mature on
December 1, 2019, with outstanding principal balances as of December 31, 2012
of $85.0 million and $40.0 million and fixed interest rates of 12.24% and
14.00%, respectively. As a result, the Company incurred a 5% prepayment fee.

BALANCE SHEET ACTIVITY

As of December 31, 2012, the Company had $2.6 billion of consolidated
indebtedness, which resulted in a net debt to adjusted EBITDA ratio of 6.6x,
or a net debt and preferred stock to adjusted EBITDA ratio of 7.0x, down from
8.2x as of December 31, 2011. Consolidated indebtedness, as of December 31,
2012, had a weighted average contractual interest rate of 5.98% and a weighted
average maturity of 5.2 years.

During the quarter, the Company repaid $214.5 million of mortgage loans,
excluding amortization. The mortgages repaid during the quarter had a weighted
average interest rate of 5.23%. The Company also completed one $37.6 million
mortgage financing, with a term of 10 years and a rate of 4.14%.

OPERATIONAL PLATFORM

During the quarter, the Company completed the planned enhancements to its
operating platform. Included in these plans was the move of the Company’s
headquarters to a new open and collaborative space in Oak Brook, IL. In
addition, during the quarter, the Company internalized the remaining shared
services and successfully migrated to an independent IT platform.

“Our ability to make such a large transition in a relatively short period of
time speaks to the discipline and high quality nature of our team,” stated
Steve Grimes, president and chief executive officer. “We are pleased with the
positive response we have received from our shareholders regarding these
changes and believe that we will reap the rewards of these efforts in 2013 and
beyond.”

GUIDANCE

The Company is providing initial guidance for 2013 as follows:

Operating FFO per share:                                $0.88- $0.92
FFO per share:                                             $0.82- $0.86
Net income available to common shareholders per            $0.02- $0.06
share:
Same-store NOI growth:                                     2.0% - 2.5%
Disposition Activity:                                      $400 - $450 million
Acquisition Activity:                                      $100 - $200 million

B-1 SHARE CONVERSION

On October 5, 2012, each share of Class B-1 common stock automatically
converted into one share of Class A common stock. The Class B-2 and B-3 common
shares are set to automatically convert on April 5, 2013 and October 7, 2013,
respectively.

DIVIDEND

On Februrary 13, 2013, the Company’s Board of Directors declared the first
quarter 2013 Series A preferred distribution of $0.4861 per preferred share,
for the period beginning December 20, 2012, which will be paid on April 1,
2013, to shareholders of record on March 21, 2013.

On February 13, ^ 2013, the Company’s Board of Directors also declared the
first quarter 2013 quarterly cash dividend of $0.165625 per share on all
classes of outstanding common shares of RPAI. The common dividend will be paid
on April 10, 2013, to common shareholders of record on March 29, 2013. The
effective record date will be March 28, 2013, as March 29, 2013 is a NYSE
holiday.

WEBCAST AND SUPPLEMENTAL INFORMATION

Retail Properties of America’s management team will hold a webcast, on
Wednesday, February 20, 2013 at 11:00 AM EST, to discuss its quarterly
financial results and operating performance, business highlights and outlook.
In addition, the Company may discuss business and financial developments and
trends and other matters affecting the Company, some of which may not have
been previously disclosed.

A live webcast will be available online on the Company’s website at
www.rpai.com in the Investor Relations section. The conference call can be
accessed by dialing (877) 705-6003 or (201) 493-6725 for international
participants. Please dial in at least ten minutes prior to the start of the
call to register.

A replay of the webcast will be available. To listen to the replay, please go
to www.rpai.com in the Investor Relations section of the website and follow
the instructions. A replay of the call will be available from 2:00 PM EST on
February 20, 2013, until midnight EST on May 31, 2013. The replay can be
accessed by dialing (877) 870-5176 or (858) 384-5517 for international
callers, and enter pin number 407373.

The Company has also posted supplemental financial and operating information
and other data in the Investor Relations section of its website.

ABOUT RPAI

Retail Properties of America, Inc. is a fully integrated, self-administered
and self-managed real estate investment trust that owns and operates high
quality, strategically located shopping centers across 35 states. The Company
is one of the largest owners and operators of shopping centers in the United
States. The Company is publicly traded on the New York Stock Exchange under
the ticker symbol RPAI. Additional information about the Company is available
at www.rpai.com.

SAFE HARBOR LANGUAGE

The statements and certain other information contained in this press release,
which can be identified by the use of forward-looking terminology such as
“may,” “expect,” “continue,” “remains,” “intend,” “aim,” “should,”
“prospects,” “could,” “future,” “potential,” “believes,” “plans,” “likely,”
“anticipate,” and “probable,” or the negative thereof or other variations
thereon or comparable terminology, constitute “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, and are
subject to the safe harbors created thereby. These forward-looking statements
reflect our current views about our plans, intentions, expectations,
strategies and prospects, which are based on the information currently
available to us and on assumptions we have made. Although we believe that our
plans, intentions, expectations, strategies and prospects as reflected in or
suggested by those forward-looking statements are reasonable, we can give no
assurance that such plans, intentions, expectations or strategies will be
attained or achieved. Furthermore, these forward-looking statements should be
considered as subject to the many risks and uncertainties that exist in the
Company’s operations and business environment. Such risks and uncertainties
could cause actual results to differ materially from those projected. These
uncertainties include, but are not limited to, general economic, business and
financial conditions, changes in the Company’s industry and changes in the
real estate markets in particular, market demand for and pricing of the
Company’s common and preferred stock, general volatility of the capital and
credit markets, competitive and cost factors, the ability of the Company to
enter into new leases or renew leases on favorable terms, defaults on, early
terminations of or non-renewal of leases by tenants, bankruptcy or insolvency
of a major tenant or a significant number of smaller tenants, the effects of
declining real estate valuations and impairment charges on the Company’s
operating results, increased interest rates and operating costs, decreased
rental rates or increased vacancy rates, the uncertainties of real estate
acquisitions, dispositions and redevelopment activity, the Company’s failure
to successfully execute its non-core disposition program and capital recycling
efforts, the Company’s ability to create long-term shareholder value, the
Company’s ability to manage its growth effectively, the availability, terms
and deployment of capital, regulatory changes and other risk factors,
including those detailed in the sections of the Company’s most recent Form
10-K and Form 10-Qs filed with the SEC titled “Risk Factors”. We assume no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.

NON-GAAP FINANCIAL MEASURES

As defined by the National Association of Real Estate Investment Trusts
(NAREIT), an industry trade group, FFO means net (loss) income computed in
accordance with generally accepted accounting principles (GAAP), excluding
gains (or losses) from sales of depreciable investment properties, plus
depreciation and amortization and impairment charges on depreciable investment
properties, including amounts from continuing and discontinued operations, as
well as adjustments for unconsolidated joint ventures in which the Company
holds an interest. The Company has adopted the NAREIT definition in its
computation of FFO and believes that, subject to the following limitations,
FFO, which is a non-GAAP performance measure, provides a basis for comparing
the Company’s performance and operations to those of other REITs. Depreciation
and amortization related to investment properties for purposes of calculating
FFO includes a portion of loss on lease terminations encompassing the
write-off of tenant-related assets, including tenant improvements and in-place
lease values, as a result of early lease terminations.

The Company also reports Operating FFO, which is defined as FFO excluding the
impact to earnings from the early extinguishment of debt and other items as
denoted within the calculation that management does not believe are
representative of the operating results of the Company’s core business
platform. Management considers Operating FFO a meaningful, additional measure
of operating performance primarily because it excludes the effects of
transactions and other events which management does not consider
representative of the operating results of the Company’s core business
platform. Neither FFO nor Operating FFO represent alternatives to "Net Income"
as an indicator of the Company’s performance, and "Cash Flows from Operating
Activities" as determined by GAAP as a measure of the Company’s capacity to
fund cash needs, including the payment of dividends. Further, comparison of
the Company’s presentation of Operating FFO to similarly titled measures for
other REITs may not necessarily be meaningful due to possible differences in
definition and application by such REITs.

The Company also reports same store NOI. The Company defines NOI as operating
revenues (rental income, tenant recovery income, other property income,
excluding straight-line rental income, amortization of lease inducements and
amortization of acquired above and below market lease intangibles) less
property operating expenses (real estate tax expense and property operating
expense, excluding straight-line ground rent expense and straight-line bad
debt expense). Same store NOI represents NOI from the Company’s same store
portfolio consisting of 239 operating properties acquired or placed in service
prior to January 1, 2011, except for the three operating properties that were
classified as held for sale as of December 31, 2012, which are accounted for
as discontinued operations. In addition, University Square, the property for
which the Company has ceased making the monthly debt service payment and for
which the Company has attempted to negotiate with the lender, is excluded, due
to the uncertainty of the timing of transfer of ownership of this property.
Management believes that NOI and same store NOI are useful measures of the
Company’s operating performance. Other REITs may use different methodologies
for calculating NOI, and accordingly, the Company’s NOI may not be comparable
to other REITs. Management believes that NOI and same store NOI provide an
operating perspective not immediately apparent from GAAP operating income or
net (loss) income. Management uses NOI and same store NOI to evaluate the
Company’s performance on a property-by-property basis because these measures
allow management to evaluate the impact that factors such as lease structure,
lease rates and tenant base, which vary by property, have on the Company’s
operating results. However, these measures should only be used as an
alternative measure of the Company’s financial performance.

Adjusted EBITDA represents net income (loss) before interest, income taxes,
depreciation and amortization, as further adjusted to eliminate the impact of
certain items that the Company does not consider indicative of its ongoing
performance. Management believes that Adjusted EBITDA is useful because it
allows investors and management to evaluate and compare the Company’s
performance from period to period in a meaningful and consistent manner in
addition to standard financial measurements under GAAP. Adjusted EBITDA is not
a measurement of financial performance under GAAP and should not be considered
as an alternative to net income, as an indicator of operating performance or
any measure of performance derived in accordance with GAAP. The Company’s
calculation of Adjusted EBITDA may be different from the calculation used by
other companies and, accordingly, comparability may be limited.

Net Debt to Adjusted EBITDA represents (i) total debt less cash and cash
equivalents divided by (ii) Adjusted EBITDA for the prior 3 months,
annualized. Net Debt and Preferred Stock to Adjusted EBITDA represents (i)
total debt, plus preferred stock, less cash and cash equivalents divided by
(ii) Adjusted EBITDA for the prior 3 months, annualized. The Company believes
that these ratios are useful because they provide investors with information
regarding total debt net of cash and cash equivalents, and total debt and
preferred stock, net of cash and cash equivalents, which could be used to
repay debt, compared to the Company’s performance as measured using Adjusted
EBITDA.

Retail Properties of America, Inc.

Consolidated Balance Sheets

(amounts in thousands, except par value amounts)

(unaudited)

                                               December 31,  December 31,
                                                   2012           2011
Assets
Investment properties:
     Land                                          $ 1,209,523    $ 1,334,363
     Building and other improvements               4,703,859      5,057,252
     Developments in progress                      49,496         49,940
                                                   5,962,878      6,441,555
     Less accumulated depreciation                 (1,275,787)    (1,180,767)
Net investment properties                          4,687,091      5,260,788
                                                                  
Cash and cash equivalents                          138,069        136,009
Investment in marketable securities, net           -              30,385
Investment in unconsolidated joint ventures        56,872         81,168
Accounts and notes receivable (net of allowances   85,431         94,922
of $6,452 and $8,231, respectively)
Acquired lease intangibles, net                    125,706        174,404
Assets associated with investment properties       8,922          -
held for sale
Other assets, net                                  135,336        164,218
           Total assets                            $ 5,237,427    $ 5,941,894
                                                                  
Liabilities and Equity
Liabilities:
     Mortgages and notes payable, net (includes
     unamortized
           premium of $0 and $10,858,
           respectively, and unamortized
           discount of $(1,492) and $(2,003),      $ 2,212,089    $ 2,926,218
           respectively)
     Credit facility                               380,000        555,000
     Accounts payable and accrued expenses         73,983         83,012
     Distributions payable                         38,200         31,448
     Acquired below market lease intangibles,      74,648         81,321
     net
     Other financings                              -              8,477
     Co-venture obligation                         -              52,431
     Liabilities associated with investment        60             -
     properties held for sale
     Other liabilities                             82,694         66,944
           Total liabilities                       2,861,674      3,804,851
                                                                  
Redeemable noncontrolling interests                -              525
                                                                  
Commitments and contingencies
                                                                  
Equity (a):
     Preferred stock, $0.001 par value, 10,000
     shares authorized
           7.00% Series A cumulative redeemable
           preferred stock,
                 5,400 and 0 shares issued and
                 outstanding at December 31,
                 2012
                 and 2011, respectively;           5              -
                 liquidation preference $135,000
     Class A common stock, $0.001 par value,
     475,000 shares authorized,
           133,606 and 48,382 shares issued and
           outstanding at
           December 31, 2012 and 2011,             133            48
           respectively
     Class B-1 common stock, $0.001 par value,
     55,000 shares authorized,
           0 and 48,382 shares issued and
           outstanding at
           December 31, 2012 and 2011,             -              48
           respectively
     Class B-2 common stock, $0.001 par value,
     55,000 shares authorized,
           48,518 and 48,382 shares issued and
           outstanding at
           December 31, 2012 and 2011,             49             49
           respectively
     Class B-3 common stock, $0.001 par value,
     55,000 shares authorized,
           48,519 and 48,383 shares issued and
           outstanding at
           December 31, 2012 and 2011,             49             49
           respectively
     Additional paid-in capital                    4,835,370      4,427,977
     Accumulated distributions in excess of        (2,460,093)    (2,312,877)
     earnings
     Accumulated other comprehensive (loss)        (1,254)        19,730
     income
           Total shareholders' equity              2,374,259      2,135,024
     Noncontrolling interests                      1,494          1,494
           Total equity                            2,375,753      2,136,518
           Total liabilities and equity            $ 5,237,427    $ 5,941,894

(a) On March 20, 2012, we effectuated a ten-to-one reverse stock split of our
then outstanding common stock. Immediately following the reverse stock split,
we redesignated all of our common stock as Class A common stock. On March 21,
2012, we paid a stock dividend pursuant to which each then outstanding share
of our Class A common stock received one share of Class B-1 common stock, one
share of Class B-2 common stock and one share of Class B-3 common stock. These
transactions are referred to as the Recapitalization. All common stock share
amounts and related dollar amounts give retroactive effect to the
Recapitalization.

Retail Properties of America, Inc.

Consolidated Statements of Operations

(amounts in thousands, except per share amounts)

(unaudited)

                    Three Months Ended         Year Ended
                       December 31,                December 31,
                        2012       2011        2012        2011     
Revenues:
    Rental income      $ 113,416     $ 112,631     $ 450,629      $ 449,401
    Tenant recovery      27,923        27,993        106,696        106,939
    income
    Other property      2,194       2,261       9,698        10,095   
    income
Total revenues          143,533     142,885     567,023      566,435  
                                                                  
Expenses:
    Property
    operating            25,517        25,220        95,812         99,114
    expenses
    Real estate taxes    18,952        20,189        76,193         76,580
    Depreciation and     54,447        54,266        217,303        218,833
    amortization
    Provision for
    impairment of        -             7,650         1,323          7,650
    investment
    properties
    Loss on lease        322           520           6,872          8,590
    terminations
    General and
    administrative      8,187       4,223       26,878       20,605   
    expenses
Total expenses          107,425     112,068     424,381      431,372  
                                                                  
Operating income         36,108        30,817        142,642        135,063
                                                                  
Dividend income          98            762           1,880          2,538
Interest income          16            156           72             663
(Loss) gain on
extinguishment of        -             (84     )     3,879          15,345
debt
Equity in loss of
unconsolidated joint     (840    )     (409    )     (6,307   )     (6,437   )
ventures, net
Interest expense         (43,414 )     (53,245 )     (179,237 )     (216,423 )
Co-venture obligation    -             (1,792  )     (3,300   )     (7,167   )
expense
Recognized gain on
marketable               9,467         -             25,840         277
securities, net
Other income, net       635         709         296          2,032    
Income (loss) from      2,070       (23,086 )    (14,235  )    (74,109  )
continuing operations
                                                                  
Discontinued
operations:
    (Loss) income,       (2,767  )     1,691         (24,196  )     (28,884  )
    net
    Gain on sales of
    investment          13,623      5,831       30,141       24,509   
    properties, net
Income (loss) from
discontinued             10,856        7,522         5,945          (4,375   )
operations
Gain on sales of
investment              1,191       1,735       7,843        5,906    
properties, net
Net income (loss)        14,117        (13,829 )     (447     )     (72,578  )
Net income
attributable to         -           (8      )    -            (31      )
noncontrolling
interests
Net income (loss)
attributable to the      14,117        (13,837 )     (447     )     (72,609  )
Company
Preferred stock         (263    )    -           (263     )    -        
dividends
Net income (loss)
available to common    $ 13,854     $ (13,837 )   $ (710     )   $ (72,609  )
shareholders
                                                                  
Earnings (loss) per
common share - basic
and diluted (a):
    Continuing         $ 0.01        $ (0.11   )   $ (0.03    )   $ (0.35    )
    operations
    Discontinued        0.05        0.04        0.03         (0.03    )
    operations
Net income (loss) per
common share available $ 0.06       $ (0.07   )   $ -           $ (0.38    )
to common shareholders
                                                                  
Weighted average
number of common
shares
    outstanding -
    basic and diluted   230,597     193,444     220,464      192,456  
    (a)
                                                                  
                                                                  
(a) All common stock share amounts and per share amounts give retroactive
effect to the Recapitalization.

Retail Properties of America, Inc.

Funds From Operations (FFO) and Operating FFO (a)

(amounts in thousands, except per share amounts)

(unaudited)

                  Three Months Ended             Year Ended
                     December 31,                    December 31,
                       2012          2011        2012       2011    
                                                                   
Net income (loss)
available to         $  13,854         $ (13,837 )   $ (710    )   $ (72,609 )
common
shareholders
Depreciation and        58,508           61,797        247,108       255,182
amortization
Provision for
impairment of           2,439            8,288         27,369        43,937
investment
properties
Gain on sales of
investment              (14,814  )       (7,566  )     (37,984 )     (30,415 )
properties
Noncontrolling
interests' share
of depreciation
   related to
   consolidated        -              (178    )    -           (990    )
   joint ventures
   FFO               $  59,987        $ 48,504     $ 235,783    $ 195,105 
                                                                   
FFO per common       $  0.26           $ 0.25        $ 1.07        $ 1.01
share outstanding
                                                                   
                                                                   
FFO                  $  59,987         $ 48,504      $ 235,783     $ 195,105
Impact on
earnings from the
early                   641              (1,276  )     (10,860 )     (20,813 )
extinguishment of
debt, net
Excise tax              -                -             4,594         -
accrual
Recognized gain
on marketable           (9,467   )       -             (25,840 )     (277    )
securities
Other                  -              (453    )    (1,627  )    (453    )
   Operating FFO     $  51,161        $ 46,775     $ 202,050    $ 173,562 
                                                                   
Operating FFO per
common share         $  0.22           $ 0.24        $ 0.92        $ 0.90
outstanding
                                                                   
                                                                   
(a) Includes amounts from discontinued operations and our pro rata share from
our investment property unconsolidated joint ventures.

Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands)
                                                            
                                                                  
Reconciliation of Net Income (Loss) to NOI
                                                                  
                      Three Months Ended           Year Ended
                      December 31,                 December 31,
                       2012        2011         2012         2011     
Revenues:
  Same store
  investment
  properties (239
  properties):
        Rental        $ 111,235     $ 109,945      $ 439,021      $ 434,680
        income
        Tenant
        recovery        27,374        26,801         104,711        103,317
        income
        Other
        property        2,124         2,198          9,239          9,776
        income
  Other investment
  properties:
        Rental          2,047         1,923          9,455          13,296
        income
        Tenant
        recovery        549           1,192          1,985          3,622
        income
        Other
        property        70            63             459            319
        income
Expenses:
  Same store
  investment
  properties (239
  properties):
        Property
        operating       (23,785 )     (23,261  )     (89,198  )     (90,766  )
        expenses
        Real estate     (18,408 )     (17,711  )     (71,622  )     (71,404  )
        taxes
  Other investment
  properties:
        Property
        operating       (810    )     (866     )     (2,830   )     (4,595   )
        expenses
        Real estate     (544    )     (2,478   )     (4,571   )     (5,176   )
        taxes
                                                                  
Net operating
income:
  Same store
  investment            98,540        97,972         392,151        385,603
  properties
  Other investment     1,312       (166     )    4,498        7,466    
  properties
Total net operating    99,852      97,806       396,649      393,069  
income
                                                                  
Other (expense)
income:
  Straight-line         (106    )     201            809            (109     )
  rental income, net
  Amortization of
  acquired above and    269           446            1,415          1,611
  below market lease
  intangibles, net
  Amortization of       (29     )     (29      )     (71      )     (29      )
  lease inducements
  Straight-line
  ground rent           (922    )     (948     )     (3,784   )     (3,801   )
  expense
  Depreciation and      (54,447 )     (54,266  )     (217,303 )     (218,833 )
  amortization
  Provision for
  impairment of         -             (7,650   )     (1,323   )     (7,650   )
  investment
  properties
  Loss on lease         (322    )     (520     )     (6,872   )     (8,590   )
  terminations
  General and
  administrative        (8,187  )     (4,223   )     (26,878  )     (20,605  )
  expenses
  Dividend income       98            762            1,880          2,538
  Interest income       16            156            72             663
  (Loss) gain on
  extinguishment of     -             (84      )     3,879          15,345
  debt
  Equity in loss of
  unconsolidated        (840    )     (409     )     (6,307   )     (6,437   )
  joint ventures,
  net
  Interest expense      (43,414 )     (53,245  )     (179,237 )     (216,423 )
  Co-venture            -             (1,792   )     (3,300   )     (7,167   )
  obligation expense
  Recognized gain on
  marketable            9,467         -              25,840         277
  securities
  Other income, net    635         709          296          2,032    
Total other expense    (97,782 )    (120,892 )    (410,884 )    (467,178 )
                                                                  
Income (loss) from
continuing              2,070         (23,086  )     (14,235  )     (74,109  )
operations
                                                                  
Discontinued
operations:
  (Loss) income, net    (2,767  )     1,691          (24,196  )     (28,884  )
  Gain on sales of
  investment           13,623      5,831        30,141       24,509   
  properties, net
Income (loss) from
discontinued            10,856        7,522          5,945          (4,375   )
operations
Gain on sales of
investment             1,191       1,735        7,843        5,906    
properties, net
Net income (loss)       14,117        (13,829  )     (447     )     (72,578  )
Net income
attributable to        -           (8       )    -            (31      )
noncontrolling
interests
Net income (loss)
attributable to the     14,117        (13,837  )     (447     )     (72,609  )
Company
Preferred stock        (263    )    -            (263     )    -        
dividends
Net income (loss)
available to common   $ 13,854     $ (13,837  )   $ (710     )   $ (72,609  )
shareholders

Retail Properties of America, Inc.
Reconciliation of Non-GAAP Financial Measures
(amounts in thousands)
                                                          
                                                             
Reconciliation of Net Income (Loss) to Adjusted EBITDA
                                                             
                                         Three Months Ended
                                         December 31, 2012   December 31, 2011
                                                             
Net income (loss)                        $  14,117           $   (13,829    )
Interest expense                            43,414               53,245
Interest expense (discontinued              1,430                3,789
operations)
Depreciation and amortization               54,447               54,266
Depreciation and amortization               969                  4,301
(discontinued operations)
Gain on sales of investment properties      (1,191     )         (1,735     )
Gain on sales of investment properties,     (13,623    )         (5,831     )
net (discontinued operations)
Loss on extinguishment of debt, net         -                    84
Gain on extinguishment of debt, net         -                    (1,360     )
(discontinued operations)
Loss on lease terminations (a)              458                  555
Loss on lease terminations (a)              -                    22
(discontinued operations)
Provision for impairment of investment      -                    7,650
properties
Provision for impairment of investment      2,352                579
properties (discontinued operations)
Recognized gain on marketable              (9,467     )        -          
securities
Adjusted EBITDA                          $  92,906          $   101,736    
Annualized                               $  371,624         $   406,944    
                                                             
                                                             
Reconciliation of Debt to Total Net Debt and Net Debt and Preferred Stock
                                                             
                                         December 31,        December 31,
                                           2012               2011       
                                                             
Total debt                               $  2,592,089        $   3,481,218
          Less: cash and cash              (138,069   )        (136,009   )
          equivalents
Net debt                                    2,454,020            3,345,209
Preferred stock                            135,000            n/a        
Net debt and preferred stock                2,589,020            3,345,209
Net Debt to Adjusted EBITDA                 6.6x                8.2x
Net Debt and Preferred Stock to             7.0x                8.2x
Adjusted EBITDA
                                                             
                                                             
FFO and Operating FFO Guidance (b)
                                                             
                                         Per Share Guidance Range
                                         Full Year 2013
                                         Low                 High
                                                             
Net income available to common           $  0.02             $   0.06
shareholders
Depreciation and amortization               0.98                 0.98
Provision for impairment of investment      -                    -
properties
Gain on sales of investment properties      (0.18      )         (0.18      )
Noncontrolling interests' share of
depreciation
          related to consolidated          -                  -          
          joint ventures
          FFO                            $  0.82            $   0.86       
                                                             
Impact on earnings from the early           0.06                 0.06
extinguishment of debt, net
Other                                      -                  -          
          Operating FFO                  $  0.88            $   0.92       

(a) Loss on lease terminations in the reconciliation of Net Income (Loss) to
Adjusted EBITDA above excludes the write-off of tenant-related above and below
market lease intangibles and lease inducements that are otherwise included in
"Loss on lease terminations" in the Consolidated Statements of Operations.

(b) Includes amounts from discontinued operations and our pro rata share from
our investment property unconsolidated joint ventures.

Contact:

Retail Properties of America, Inc.
Sarah Byrnes, VP Investor Relations
630-634-4243
 
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