Acadia Realty Trust Reports Fourth Quarter and Full Year 2013 Operating Results

  Acadia Realty Trust Reports Fourth Quarter and Full Year 2013 Operating
  Results

Business Wire

WHITE PLAINS, N.Y. -- February 12, 2014

Acadia Realty Trust (NYSE:AKR) today reported operating results for the
quarter and year ended December 31, 2013. All per share amounts are on a fully
diluted basis. Acadia’s core portfolio (“Core Portfolio”) as discussed below
is comprised of properties that are owned in whole or in part by Acadia other
than those it owns through its opportunity fund platform (the “Funds”).

Fourth Quarter and Full Year 2013 Highlights

Earnings

  *Funds from operations (“FFO”) of $0.27 per share for the fourth quarter
    and $1.20 for the full year, net of $0.04 of non-cash executive retirement
    and $0.06 of acquisition related costs for the year
  *Full year 2013 FFO per share represents a 15% increase over 2012 FFO of
    $1.04
  *Earnings per share (“EPS”) from continuing operations of $0.14 for the
    fourth quarter and $0.61 for the full year
  *The Company forecasts a 2014 range for FFO per share of $1.30 to $1.40 and
    EPS of $0.68 to $0.77

Dividend Increase

  *The Company increased its quarterly dividend 9.5%, from $0.21 to $0.23 for
    the fourth quarter 2013. This follows a 17% increase which was effective
    for the quarter ended March 31, 2013

Core Portfolio – $221 Million of Acquisitions and Strong Portfolio Performance

  *During and subsequent to the fourth quarter, Acadia closed on $100.0
    million of acquisitions
  *Including the above activity, Acadia acquired $220.9 million of street
    retail properties located in Chicago, Manhattan and Washington D.C. for
    the full year 2013
  *Additional current pipeline under contract of $92.1 million
  *Same store net operating income (“NOI”) for the fourth quarter up 4.3%
    compared to 2012 and up 7.2% on a year-to-date basis
  *December 31, 2013 portfolio occupancy of 95.2%; 97.1% including leased
    space not yet occupied
  *In connection with Core Portfolio recycling activities, sold an A&P
    supermarket-anchored shopping center for $18.4 million during the fourth
    quarter

Fund Platform – Fund IV Completes Acquisitions, Fund II Monetization Continues

  *During 2013, Fund IV closed on $123.2 million in new acquisitions,
    including $57.3 million during the fourth quarter
  *During the fourth quarter, Fund II completed the sale of Fordham Place and
    Pelham Manor Shopping Plaza for $192.4 million

Balance Sheet – Achieving Growth While Maintaining Low Leverage

  *Core Portfolio debt, net of cash on hand and restricted cash related to
    financings (“Net Debt”), to EBITDA ratio of 4.3x at December 31, 2013;
    4.9x including pro-rata share of Opportunity Funds
  *Combined Net Debt to total equity and debt capitalization (“Total Market
    Capitalization”) of 24% at December 31, 2013
  *Issued $114.3 million of new equity at an average net share price of
    $26.92 during 2013 to fund Core and Fund acquisition activities

Fourth Quarter and Full Year 2013 Operating Results

FFO for the quarter and year ended December 31, 2013 was $15.1 million and
$67.2 million, respectively, up from $14.7 million and $48.8 million for the
quarter and year ended December 31, 2012.

FFO for the quarter ended December 31, 2013 of $0.27 per share included $0.04
of non-cash retirement and $0.02 of acquisition related costs and compares to
$0.29 for the quarter ended December 31, 2012. FFO of $1.20 for the year ended
December 31, 2013 includes an additional $0.04 of acquisition related costs
and represents a 15% increase over 2012 of $1.04.

Net Income from Continuing Operations for the quarter and year ended December
31, 2013 was $7.6 million and $34.0 million, respectively, as compared to $8.4
million and $23.6 million for the quarter and year ended December 31, 2012.

EPS from continuing operations for the quarter and year ended December 31,
2013 was $0.14 and $0.61, respectively, as compared to $0.17 and $0.51 for the
same periods for 2012.

The primary driver behind 2013 earnings growth was income from new investments
and Core Portfolio re-anchorings. This was partially offset by 2013 non-cash
executive retirement costs and a non-recurring gain in 2012 relating to the
receipt of property casualty insurance proceeds in excess of carrying costs.

Refer to the Financial Highlights below for further detail on operating
results and additional disclosures related to FFO.

Core Portfolio – Closes on $221 Million of Street Retail in Chicago, Manhattan
and Washington D.C.; Strong Operating Results

Fourth Quarter Acquisitions in Manhattan and Chicago; Sells A&P Anchored
Shopping Center

During and subsequent to the fourth quarter, Acadia closed on four previously
announced Core Portfolio acquisitions for an aggregate purchase price of
$100.0 million. These acquisitions, combined with those previously announced
earlier during 2013, account for $220.9 million of Core Portfolio acquisitions
for the year.

In addition, the Company has an additional $92.1 million of Core Portfolio
acquisitions currently under contract. Although the Company anticipates
completing these closings during the first quarter of 2014, these transactions
are subject to customary closing conditions, including lender approval for the
assumption of existing mortgage debt, and, as such, no assurance can be given
that the Company will successfully complete these acquisitions.

Details of the fourth quarter acquisitions are as follows:

New York

120 West Broadway – During December, Acadia purchased the master lease for the
retail portion of this cooperative located in the Manhattan neighborhood of
Tribeca for $37.0 million. The building has 14,000 square feet of retail space
with frontage on West Broadway, Hudson, Duane and Reade Streets. The property
is anchored by high quality tenants including HSBC and Citibank. The Company
acquired the asset off-market as part of a private negotiation and funded its
investment primarily with Operating Partnership Units.

868 Broadway – The Company acquired this retail condominium unit for $13.5
million during December. The 2,000 square foot retail asset is located just
north of Union Square in Manhattan’s prime Midtown-South submarket, and is
100% leased to Dr. Martens, a 50 year old British footwear and apparel brand.

313-315 Bowery – Additionally, during December, Acadia purchased a long-term
leasehold interest in this 7,900 square foot street retail property for $5.5
million. The property is currently occupied by John Varvatos and Patagonia and
is located in the heart of the Bowery corridor.

Chicago

11 East Walton Street – During the fourth quarter, Acadia entered into a
contract to acquire approximately 6,700 square feet of luxury retail space at
the base of the Waldorf Astoria Chicago, formerly the Elysian Hotel, for $44.0
million. The property is located at the corner of Rush and Walton Streets,
proximate to several prior Acadia acquisitions, and is 100% occupied by Marc
Jacobs, Saint Laurent and Perchance Boutique. The Company closed on this
acquisition during January 2014.

Same-Store NOI and Occupancy

Core Portfolio same-store NOI increased 7.2% year-to-date and 4.3% for the
fourth quarter of 2013 as compared to the same periods in 2012.

At December 31, 2013, Acadia’s Core Portfolio was 95.2% occupied and 97.1%
leased when including space leased but not yet occupied. This was up from
94.0% occupied and 95.7% leased as of September 30, 2013.

Rent Spreads on New and Renewal Leases

The Company realized an increase in average rents on a GAAP basis, which
includes the effect of the straight-lining of rents, of 18.3% on 340,000
square feet of new and renewal leases executed during the year ended December
31, 2013. On a contractual rent basis, which excludes straight-line rent, the
Company experienced an increase of 6.8% in average rents for these same
leases. For the fourth quarter of 2013, the Company realized an increase in
average rents of 9.9% on a GAAP basis and 4.4% on a cash basis.

Core Portfolio Asset Recycling

During the fourth quarter, the Company completed the sale of the A&P Shopping
Center located in Boonton, New Jersey for $18.4 million. Acadia purchased a
60% interest in this property during 2006 for $8.4 million, consisting of $3.2
million of cash and its $5.2 million share of the existing mortgage debt.

Structured Financing Portfolio

As of December 31, 2013, the Company’s structured financing portfolio totaled
$126.7 million. During the year ended December 31, 2013, the portfolio,
excluding those investments in the Funds, increased a net $27.7 million. This
was a result of the origination of $45.0 million in new notes and preferred
equity investments, offset by $17.3 million of repayments.

Of the year-end outstanding balance, $7.2 million was repaid during January
2014 and $38.0 million is anticipated to be converted into an equity
investment during the first quarter of 2014, following which, the remaining
balance of the portfolio will be $81.5 million.

Fund Platform – 2013 Year-to-date Acquisitions totaling $123.2 Million;
Continued Monetization of Fund II Assets

Fund IV New Investments

During the fourth quarter 2013, consistent with its location-driven
acquisition strategies, Fund IV invested in two street retail value-add assets
and one opportunistic, high-yield property.

1151 Third Avenue – During October, Fund IV completed the acquisition of this
street retail property in Manhattan located on the northeast corner of 67^th
Street and Third Avenue for a purchase price of $18.0 million. This 12,300
square foot property is currently occupied by Lucky Brand Jeans and Flywheel.

938 W. North Avenue – During November, Fund IV, in partnership with an
unaffiliated entity, completed the acquisition of 938 W. North Avenue, located
in Chicago for $20.0 million. This 33,000 square foot street retail property
located on the northeast corner of North Avenue and Sheffield Road in the
Lincoln Park neighborhood of Chicago is currently occupied by Sephora and
Restoration Hardware and includes an underground parking garage.

Lake Montclair – During October, Fund IV completed the opportunistic
acquisition of a 106,000 square foot Food Lion anchored property located in
Prince William County, Virginia, for a purchase price of $19.3 million.

Fund II Continued Monetization

During the fourth quarter, Fund II completed the disposition of Fordham Place
and the retail portion of the Pelham Manor Shopping Plaza for a combined sales
price of $192.4 million. The Fund developed these properties in connection
with its New York Urban/Infill Redevelopment Initiative.

Balance Sheet – Achieving Growth While Maintaining Low Leverage

Consistent with its conservative balance sheet management practices, Acadia
funded the above-mentioned Core Portfolio and co-investment share of Fund
acquisitions during 2013 with approximately two-thirds equity. This was
sourced primarily through a combination of (i) Common Shares issued under the
Company’s at-the-market (“ATM”) stock offering program and Operating
Partnership Units aggregating $114.3 million at an average net price of $26.92
per share/unit, and (ii) $46.9 million of recycled capital from fourth quarter
Core Portfolio and Fund asset sales.

Acadia continues to maintain a solid balance sheet with available liquidity
and low leverage, providing it with additional flexibility in using the most
efficient source of capital based on pricing and availability to fund its
acquisition activities during 2014. This is evidenced by the following as of
December 31, 2013:

  *Combined Net Debt to Total Market Capitalization of 24%
  *Core Portfolio Net Debt to EBITDA ratio of 4.3x
  *Including the Company’s Core Portfolio debt and pro-rata share of the
    Company’s Fund debt (“Combined”), a Combined Net Debt to EBITDA ratio of
    4.9x
  *Combined fixed-charge coverage ratio of 3.1x to 1
  *During the fourth quarter, the Company amended its $150.0 million
    unsecured credit facility, which it closed on in January 2013 to include
    an additional $50.0 million term loan. The term loan bears interest at
    rates which vary from LIBOR plus 140 basis points to LIBOR plus 215 basis
    points depending on the level of the Company’s leverage.
  *The Company had total liquidity of $218.0 million, including $35.5 million
    of cash on hand and $182.5 million available under its existing credit
    facilities, excluding the Funds’ cash and credit facilities.

Outlook –Earnings Guidance for 2014

The Company forecasts its 2014 annual FFO will range from $1.30 to $1.40 per
share and 2014 EPS from $0.68 to $0.77. The following table summarizes
management’s 2014 guidance (dollars in millions, except per share amounts):


                                      2014                      2013
                                         Low         High        Actual
Core and pro-rata share of Funds’        $ 80.5      $ 85.0        $ 70.3
portfolio income
Asset and property management fee          14.5          15.0          17.6
income, net of taxes
Transactional fee income, net of           6.0           6.5           6.3
taxes
Promote income from Funds, RCP
Venture and
other income, net of taxes                 0.5           1.0           (0.6  )
General and administrative                (25.5 )    (25.0 )    (26.4 )
expenses
FFO                                      $ 76.0     $ 82.5     $ 67.2  
FFO per share                            $ 1.30     $ 1.40     $ 1.20  


The following is a reconciliation of the calculation of forecasted earnings
per diluted share and FFO per diluted share:


Guidance Range for 2014                                   Low      High
Earnings per share                                           $ 0.68   $ 0.77
Depreciation of real estate and amortization of
leasing costs:
Wholly owned and consolidated partnerships                     0.55       0.55
Unconsolidated partnerships                                    0.06       0.07
Noncontrolling interest in Operating Partnership              0.01    0.01
FFO per share                                                $ 1.30   $ 1.40


Forecasted new Core Portfolio and Fund investments are anticipated to be key
drivers of 2014 earnings growth. In addition, the Company is assuming an
increase in same-store NOI for the Core Portfolio between 3.5% and 4.5% for
the year. Management will discuss its 2014 earnings guidance and related
assumptions in further detail on its scheduled year-end investor conference
call.

Management Comments

“During 2013, we made continued progress on both our core and fund
strategies,” stated Kenneth F. Bernstein, President and CEO of Acadia Realty
Trust. “For example, we continued to elevate our core portfolio, completing
$221 million of street-retail acquisitions in the metro areas of New York,
Chicago, and Washington DC, where more than 70% of our portfolio value is now
concentrated. Together with our already-strong asset base, our core portfolio
is well positioned to deliver reliable – and ultimately, above-average –
growth both in the near and long term, as demonstrated by our fourth quarter
operating results. Just as importantly, we are pleased with the assets
acquired to date through Fund IV. These new acquisitions, coupled with our
well-balanced existing fund portfolio of ground-up developments,
re-anchorings, and high-yielding assets, should generate a significant amount
of organic growth over the next few years, further magnified by the deployment
of Fund IV’s remaining capital commitments.”

Investor Conference Call

Management will conduct a conference call on Thursday, February 13, 2014 at
12:00 PM ET to review the Company’s earnings and operating results. The live
conference call can be accessed by dialing 888-771-4371. The pass code is
“36518610” or “Acadia Realty”. The call will also be webcast and can be
accessed in a listen-only mode at Acadia’s web site at www.acadiarealty.com.
If you are unable to participate during the live webcast, the call will be
archived and available on Acadia’s website. Alternatively, to access the
replay by phone, dial 888-843-7419, and the passcode will be “36518610#”. The
phone replay will be available through Thursday, February 20, 2014.

About Acadia Realty Trust

Acadia Realty Trust, a fully-integrated equity real estate investment trust,
is focused on the acquisition, ownership, management and redevelopment of
high-quality retail properties located primarily in high-barrier-to-entry,
densely-populated metropolitan areas along the East Coast and in Chicago.
Acadia owns, or has an ownership interest in, these properties through its
core portfolio and its opportunistic/value-add investment funds. Additional
information may be found on the Company’s website at www.acadiarealty.com.

Certain matters in this press release may constitute forward-looking
statements within the meaning of federal securities law and as such may
involve known and unknown risks, uncertainties and other factors that may
cause the actual results, performances or achievements of Acadia to be
materially different from any future results, performances or achievements
expressed or implied by such forward-looking statements. These forward-looking
statements include statements regarding Acadia’s future financial results and
its ability to capitalize on potential opportunities arising from continued
economic uncertainty. Factors that could cause the Company’s forward-looking
statements to differ from its future results include, but are not limited to,
those discussed under the headings “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in the
Company’s most recent annual report on Form 10-K filed with the SEC on
February 27, 2013 (“Form 10-K”) and other periodic reports filed with the SEC,
including risks related to: (i) the current global financial environment and
its effect on retail tenants; (ii) the Company’s reliance on revenues derived
from major tenants; (iii) the Company’s limited control over joint venture
investments; (iv) the Company’s partnership structure; (v) real estate and the
geographic concentration of the Company’s properties; (vi) market interest
rates; (vii) leverage; (viii) liability for environmental matters; (ix) the
Company’s growth strategy; (x) the Company’s status as a REIT; (xi) uninsured
losses and (xii) the loss of key executives. Copies of the Form 10-K and the
other periodic reports Acadia files with the SEC are available on the
Company’s website at www.acadiarealty.com. Any forward-looking statements in
this press release speak only as of the date hereof. Acadia expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to reflect any
change in Acadia’s expectations with regard thereto or change in events,
conditions or circumstances on which any such statement is based.

                        (Financial Highlights Follow)


ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights ^1
For the Quarters and Years ended December 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)

                  For the Quarters ended      For the Years ended
                     December 31,                  December 31,
Revenues             2013         2012           2013          2012
                                                                   
Rental income        $ 32,633       $ 22,947       $ 122,730       $ 84,002
Interest               2,535          1,900          11,800          8,027
income
Expense                7,394          6,500          28,373          20,433
reimbursements
Other property         1,479          469            2,299           1,070
income
Management fee         62             --             122             1,455
income
Other income          --           --           2,962         --      
Total revenues        44,103       31,816       168,286       114,987 
                                                                   
Operating
expenses
                                                                   
Property               8,375          7,311          25,631          21,329
operating
Real estate            4,973          4,217          20,922          16,387
taxes
General and            8,292          4,586          25,555          21,223
administrative
Reserve for
notes                  --             405            --              405
receivable
Depreciation
and                   11,021       7,762        40,299        27,888  
amortization
Total
operating             32,661       24,281       112,407       87,232  
expenses
                                                                   
Operating              11,442         7,535          55,879          27,755
income
                                                                   
Equity in
earnings
(losses) of            5,108          (750   )       12,382          1,579
unconsolidated
affiliates
Loss on
extinguishment         (765   )       (198   )       (765    )       (198    )
of debt
Gain on
involuntary            --             2,368          --              2,368
conversion of
asset
Impairment of          --             --             (1,500  )       --
asset
Interest
expense and           (9,668 )      (5,996 )      (39,474 )      (22,811 )
other finance
costs
Income from
continuing
operations             6,117          2,959          26,522          8,693
before income
taxes
Income tax
benefit               38           1,698        (19     )      574     
(provision)
Income from
continuing            6,155        4,657        26,503        9,267   
operations



ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights ^1
For the Quarters and Years ended December 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)

                  For the Quarters ended       For the Years ended
                     December 31,                   December 31,
                     2013         2012            2013          2012
                                                                    
Operating
income from            1,424          4,216           6,818           12,007
discontinued
operations
Impairment of          (6,683 )       --              (6,683  )       --
asset
Loss on
extinguishment         (800   )       (2,541  )       (800    )       (2,541  )
of debt
Gain on sale          14,611       62,618        18,802        71,203  
of properties
Income from
discontinued          8,552        64,293        18,137        80,669  
operations
Net income            14,707       68,950        44,640        89,936  
Loss (income)
attributable
to
noncontrolling
interests:
Continuing             1,420          3,783           7,523           14,352
operations
Discontinued           (3,877 )       (51,457 )       (12,048 )       (64,582 )
operations
Net (income)
attributable                                                     
to
noncontrolling
interests              (2,457 )       (47,674 )       (4,525  )       (50,230 )
                                                                 
Net income
attributable         $ 12,250      $ 21,276       $ 40,115       $ 39,706  
to Common
Shareholders
                                                                    
Income from
continuing
operations
attributable
to
Common               $ 7,575        $ 8,440         $ 34,026        $ 23,619
Shareholders
Income from
discontinued
operations
attributable
to Common             4,675        12,836        6,089         16,087  
Shareholders
Net income
attributable          12,250       21,276        40,115        39,706  
to Common
Shareholders
                                                                    
Less: Net
Income
attributable          (189   )      (417    )      (685    )      (783    )
to
participating
securities
Net Income
attributable
to Common            $ 12,061       $ 20,859        $ 39,430        $ 38,923
Shareholders –
basic
Weighted
average shares
for basic             55,576       50,046        54,919        45,854  
earnings per
share
Net Earnings
per share –          $ 0.22        $ 0.42         $ 0.72         $ 0.85    
basic and
diluted
                                                                    
Basic and
diluted
earnings per         $ 0.14        $ 0.17         $ 0.61         $ 0.51    
share –
Continuing
Operations ^2
Basic and
diluted
earnings per         $ 0.08        $ 0.25         $ 0.11         $ 0.34    
share –
Discontinued
Operations ^2
                                                                              


ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights ^1
For the Quarters and Years ended December 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS ^3

                  For the Quarters ended       For the Years ended
                     December 31,                   December 31,
                     2013         2012            2013         2012
                                                                   
                                                                   
Net income
attributable         $ 12,250       $ 21,276        $ 40,115       $ 39,706
to Common
Shareholders
                                                                   
Depreciation
of real estate
and
amortization
of leasing
costs
(net of
noncontrolling
interests'
share):
Consolidated           7,607          6,782           28,752         23,090
affiliates
Unconsolidated         702            426             2,680          1,581
affiliates
Impairment of          --             --              1,500          --
asset
Gain on sale
(net of
noncontrolling
interests’
share):
Consolidated           (5,602 )       (14,060 )       (6,378 )       (15,451 )
affiliates
Unconsolidated         --             --              --             (609    )
affiliates
Income
attributable
to
noncontrolling
interests’ in
Operating              141            241             470            510
Partnership
Distributions
– Preferred OP        6            4             22           18      
Units
                                                                             
Funds from           $ 15,104      $ 14,669       $ 67,161      $ 48,845  
operations
Funds from
operations per
share –
Diluted
Weighted
average Common        56,572       51,150        55,954       46,940  
Shares and OP
Units ^4
Funds from
operations,          $ 0.27        $ 0.29         $ 1.20        $ 1.04    
per share
                                                                             


ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights ^1
For the Quarters and Years ended December 31, 2013 and 2012
(dollars in thousands)

RECONCILIATION OF OPERATING INCOME TO NET PROPERTY
OPERATING INCOME (“NOI”) ^3

                           For the Quarters ended   For the Years ended
                           December 31,              December 31,
                           2013        2012         2013         2012
                                                                   
Operating income           $ 11,442     $ 7,535      $ 55,879      $ 27,755
                                                                   
Add back:
General and administrative   8,292        4,586        25,555        21,223
Depreciation and             11,021       7,762        40,299        27,888
amortization
Less:
Management fee income        (62    )     --           (122    )     (1,455  )
Interest income              (2,535 )     (1,900 )     (11,800 )     (8,027  )
Straight line rent and      (1,624 )    3,008      (5,788  )    2,815   
other adjustments
                                                                   
Consolidated NOI             26,534       20,991       104,023       70,199
                                                                   
Noncontrolling interest in  (8,367 )    (6,596 )    (33,856 )    (19,370 )
NOI
Pro-rata share of NOI        18,167       14,395       70,167        50,829
Operating Partnerships’
interest in Opportunity      (1,314 )     (1,467 )     (5,342  )     (4,212  )
Funds
Operating Partnerships’
share of unconsolidated     711        1,004      2,792       6,113   
joint ventures ^1
NOI – Core Portfolio       $ 17,564    $ 13,932    $ 67,617     $ 52,730  
                                                                   
Note:
^1 Does not include share
of unconsolidated joint
ventures within
Opportunity Funds
                                                                   


SELECTED BALANCE SHEET INFORMATION
                             As of
                                December 31,   December 31,
                                2013             2012
                                (dollars in thousands)
                                              
Cash and cash equivalents       $  79,189        $  91,813
Rental property, at cost           1,481,700        1,065,315
Total assets                       2,264,957        1,908,440
Notes payable                      1,039,997        613,181
Total liabilities                  1,143,369        838,184


Notes:

^1 For additional information and analysis concerning the Company’s results of
operations, reference is made to the Company’s Quarterly Supplemental
Disclosure furnished on Form 8-K to the SEC and included on the Company’s
website at www.acadiarealty.com.


ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Years ended December 31, 2013 and 2012
(dollars and Common Shares in thousands, except per share data)


Notes (continued):

^2 Diluted earnings per share reflects the potential dilution that could occur
if securities or other contracts to issue Common Shares were exercised or
converted into Common Shares. The effect of the conversion of Common OP Units
is not reflected in the above table as they are exchangeable for Common Shares
on a one-for-one basis. The income allocable to such units is allocated on the
same basis and reflected as noncontrolling interests in the consolidated
financial statements. As such, the assumed conversion of these units would
have no net impact on the determination of diluted earnings per share.

^3 The Company considers funds from operations (“FFO”) as defined by the
National Association of Real Estate Investment Trusts (“NAREIT”) and net
property operating income (“NOI”) to be appropriate supplemental disclosures
of operating performance for an equity REIT due to their widespread acceptance
and use within the REIT and analyst communities. FFO and NOI are presented to
assist investors in analyzing the performance of the Company. They are helpful
as they exclude various items included in net income that are not indicative
of the operating performance, such as gains (losses) from sales of depreciated
property, depreciation and amortization, and impairment of depreciable real
estate. In addition, NOI excludes interest expense. The Company’s method of
calculating FFO and NOI may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. FFO does not represent
cash generated from operations as defined by generally accepted accounting
principles (“GAAP”) and is not indicative of cash available to fund all cash
needs, including distributions. It should not be considered as an alternative
to net income for the purpose of evaluating the Company’s performance or to
cash flows as a measure of liquidity. Consistent with the NAREIT definition,
the Company defines FFO as net income (computed in accordance with GAAP),
excluding gains (losses) from sales of depreciated property, plus depreciation
and amortization, impairment of depreciable real estate, and after adjustments
for unconsolidated partnerships and joint ventures.

^4 In addition to the weighted average Common Shares outstanding, basic and
diluted FFO also assume full conversion of a weighted average 620 and 566 OP
Units into Common Shares for the quarters ended December 31, 2013 and 2012,
respectively and 618 and 604 OP Units into Common Shares for the years ended
December 31, 2013 and 2012, respectively. Diluted FFO also includes the
assumed conversion of Preferred OP Units into 25 Common Shares for each of the
quarters and years ended December 31, 2013 and 2012. In addition, diluted FFO
also includes the effect of 350 and 511 employee share options, restricted
share units and LTIP units for the quarters ended December 31, 2013 and 2012,
respectively and 392 and 456 employee share options, restricted share units
and LTIP units for the years ended December 31, 2013 and 2012, respectively.

Contact:

For Acadia Realty Trust
Jon Grisham, 914-288-8100
 
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