Exhibit 99.1
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Equity One, Inc. 1600 NE Miami Gardens Drive North Miami Beach, FL 33179 | For additional information: Mark Langer, EVP and Chief Financial Officer |
FOR IMMEDIATE RELEASE:
Equity One Reports Second Quarter 2012 Operating Results and Raises 2012 Guidance
North Miami Beach, FL, August 1, 2012 – Equity One, Inc. (NYSE:EQY), an owner, developer, and operator of shopping centers, announced today its financial results for the three and six months ended June 30, 2012.
Highlights of the quarter and recent activity include:
| • | Generated Funds From Operations (FFO) of $0.28 per diluted share for the quarter and $0.54 for the six months ended June 30, 2012 |
| • | Generated Recurring FFO of $0.28 per diluted share for the quarter and $0.55 for the six months ended June 30, 2012 |
| • | Increased same property net operating income for the second quarter by 0.7% as compared to 2011 and 2.7% for the six months ended June 30, 2012 as compared to 2011 |
| • | Increased core occupancy to 91.8%, up 60 basis points from March 31, 2012 |
| • | Increased same property occupancy by 30 basis points to 91.8% from March 31, 2012 |
| • | Executed 131 new leases, renewals, and options totaling 431,596 square feet at an average rent spread of 6.5%, which included 50 new leases totaling 118,290 square feet at an average rent spread of 12.3% |
| • | Acquired a retail development site in the Bronx, New York from the New York City Economic Development Corporation |
| • | Entered into a contract to acquire a retail condominium in New York City for $27.5M |
| • | Raised 2012 Recurring FFO guidance to $1.08 to $1.12 per diluted share |
“We are pleased with our year to date results driven by stronger fundamentals and a robust development and redevelopment pipeline,” said Jeff Olson, CEO. “Our strategy remains concentrated on simplifying and purifying our portfolio with an intense focus on improving retail assets in urban communities.”
Financial Highlights
In the second quarter 2012, the company generated FFO of $34.3 million, or $0.28 per diluted share, as compared to $35.1 million, or $0.29 per diluted share for the same period in 2011. Recurring FFO was $34.6 million, or $0.28 per diluted share in the second quarter of 2012 as compared to $34.8 million, or $0.29 per diluted share in the second quarter of 2011.
For the six months ended June 30, 2012, the company generated FFO of $67.6 million, or $0.54 per diluted share, as compared to $96.1 million, or $0.81 per diluted share for the same period in 2011. Recurring FFO was $68.9 million, or $0.55 per diluted share for the six months ended June 30, 2012 as compared to $67.9 million, or $0.57 per diluted share for the comparable period of 2011. A reconciliation of net income to FFO and the reconciling components of FFO to Recurring FFO is provided in the tables accompanying this press release.
Net income attributable to Equity One was $2.3 million and earnings per diluted share was $0.02 for the quarter ended June 30, 2012 as compared to net income of $7.0 million, or $0.06 per diluted share, for the second quarter of 2011. Net income for the second quarter of 2012 includes $5.4 million of impairment losses on income producing properties. Net income for the second quarter of 2011 included a gain on the sale of real estate of $4.6 million and impairment losses on income producing properties of $1.3 million.
Net income attributable to Equity One was $21.3 million and earnings per diluted share was $0.18 for the six months ended June 30, 2012 as compared to net income of $42.0 million, or $0.38 per diluted share, for the comparable period in 2011. Net income for the six months ended June 30, 2012 includes a gain on the sale of real estate of $14.3 million and impairment losses on income producing properties of $7.4 million. Net income for the six months ended June 30, 2011 included a gain on bargain purchase of $30.6 million resulting from the Capital & Counties acquisition and impairment losses on income producing properties of $1.3 million.
Operating Highlights
As of June 30, 2012, occupancy for the company’s consolidated core portfolio was 91.8% as compared to 91.2% at March 31, 2012 and 90.2% as of June 30, 2011. On a same property basis, occupancy increased 30 basis points to 91.8% as compared to March 31, 2012 and increased 30 basis points as compared to June 30, 2011.
Same property net operating income increased 0.7% for the second quarter of 2012 as compared to the second quarter of 2011 driven by the West Coast (+4.8%), the Southeast (+1.8%), the Northeast (+0.1%) and Florida (-1.3%). This increase was primarily attributable to an increase in minimum rental income as well as a decrease in bad debt expense, partially offset by a decrease in recovery income. Excluding a cumulative revision to the estimated recovery ratios recognized in the second quarter of 2011 pertaining to tenant retention assumptions and the timing of recoverable expenses, same property net operating income would have increased 1.6% this quarter when compared to the second quarter of 2011.
Same property net operating income increased 2.7% for the six months ended June 30, 2012 as compared to the comparable period of 2011 driven by the West Coast (+8.4%), the Southeast (+1.9%), Florida (+1.5%) and the Northeast (+1.0%).
During the second quarter of 2012, the company executed 131 new leases, renewals, and options totaling 431,596 square feet at an average rent spread of 6.5%. This included 50 new leases in the core portfolio totaling 118,290 square feet at an average rental rate of $20.04 per square foot, representing a 12.3% increase from prior rents on a same space, cash basis. Excluding spaces that were vacant for more than one year, the average rental rate on new leases increased by 19%. The company renewed 81 leases in its core portfolio for 313,306 square feet at an average rental rate of $17.64 per square foot which was a 4.3% increase to prior rents on a same space, cash basis.
Development and Redevelopment Activities
At June 30, 2012, the company had approximately $238.6 million of active development and redevelopment projects underway. The Company’s largest development project is The Gallery at Westbury Plaza, a $145 million development located on Old Country Road in Nassau County, New York. The project will be anchored by many leading retailers including Saks Fifth Avenue OFF 5TH, Nordstrom Rack, Bloomingdale’s Outlet, Trader Joe’s, The Container Store, SA Elite, Old Navy, Ulta, and The Shake Shack. The project is expected to open later this month.
The company announced that it will begin phase one of the expansion of Serramonte Mall during the third quarter of this year with the construction of a two story, 83,000 square foot store for Dick’s Sporting Goods. Total costs are estimated to be approximately $18 million for this phase.
The company has nine additional projects under redevelopment at an expected cost of $39.0 million. These projects will include retailers such as LA Fitness, Publix, CVS Pharmacy, Marshalls, Academy Sports, and Burlington Coat Factory.
During the quarter, the company acquired a development site in the Bronx, New York on 230th Street and Broadway from the New York City Economic Development Corporation. The site is directly off the Major Deagon Expressway and is one block from the 231st Street subway station. The area is heavily populated with over 850,000 people living within a three mile radius. The development plan anticipates constructing 130,000 square feet of big box retail on two levels with an initial project budget of approximately $55 million, including the cost of the land. The company anticipates the project will open in late 2014.
Investing and Financing Activities
During the quarter, the company entered into a contract to acquire an 18,474 square foot urban retail condominium located on Second Avenue, between 64th and 65th Street, in New York City for $27.5M. The property has four tenants including a CVS Pharmacy and a 7-Eleven, and includes retail frontage covering an entire city block.
Subsequent to quarter end, the company increased its unsecured seven year term loan by $50 million through the exercise of the accordion feature. The term loan bears interest at the annual rate of LIBOR plus 190 basis points subject to a pricing grid for changes in the company’s credit ratings. The company also entered into an interest rate swap to convert the $50 million term loan’s LIBOR rate to a fixed interest rate, providing the company an effective fixed interest rate of 3.0% per annum for this portion of the loan based on the company’s current credit ratings.
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Balance Sheet Highlights
At June 30, 2012, the company’s total market capitalization (including debt and equity) was $4.1 billion, comprising 125.4 million shares of common stock outstanding (on a fully diluted basis) valued at approximately $2.7 billion and approximately $1.4 billion of debt (excluding any debt premium/discount). The company’s ratio of net debt to total market capitalization was 33.9%. In addition, at June 30, 2012, the company had approximately $32.5 million of cash and cash equivalents on hand (including cash in escrow and restricted cash) and $101.0 million drawn on its revolving credit facilities.
FFO and Earnings Guidance
The company updated and raised its guidance for 2012 estimating that Recurring FFO per diluted share will be $1.08 to $1.12 per diluted share as compared to its previous guidance of $1.04 to $1.12 per diluted share. Recurring FFO excludes debt extinguishment gains/losses, land sale gains, impairment charges, transaction costs and other non-recurring income or charges. The updated guidance reflects operating results achieved during the first six months and reflects the company’s expectations for the remainder of the year including:
| • | Same property net operating income growth of 1.5% to 2.5% for 2012; |
| • | Same property occupancy growth of 50 basis points as compared to December 31, 2011; and |
| • | Incremental dispositions of $75 million. |
The following table provides a reconciliation of the range of estimated net income per diluted share to estimated FFO and Recurring FFO per diluted share for the full year 2012:
| For the year ended December 31, 2012 | ||||||||
| Low | High | |||||||
Estimated net income attributable to Equity One | $ | 0.36 | $ | 0.39 | ||||
Adjustments: | ||||||||
Rental property depreciation and amortization including impairments and pro rata share of joint ventures | 0.74 | 0.75 | ||||||
Net adjustment for unvested shares and non-controlling interest(1) | 0.06 | 0.07 | ||||||
Gain on disposal of depreciable assets, net of tax | (0.10 | ) | (0.11 | ) | ||||
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Estimated FFO attributable to Equity One | $ | 1.06 | $ | 1.10 | ||||
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Transaction costs | 0.04 | 0.04 | ||||||
Gain on land sales | (0.02 | ) | (0.02 | ) | ||||
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Estimated Recurring FFO attributable to Equity One | $ | 1.08 | $ | 1.12 | ||||
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| (1) | Includes effect of distributions paid with respect to unissued shares held by a non-controlling interest which are already included for purposes of calculating earnings per diluted share. |
Dividend Declared
On July 30, 2012, the company’s Board of Directors declared a cash dividend of $0.22 per share of its common stock for the quarter ending September 28, 2012, payable on September 30, 2012 to stockholders of record on September 14, 2012.
ACCOUNTING AND OTHER DISCLOSURES
We believe FFO (combined with the primary GAAP presentations) is a useful, supplemental measure of our operating performance that is a recognized metric used extensively by the real estate industry, particularly REITs. The National Association of Real Estate Investment Trusts (“NAREIT”) stated in its April 2002 White Paper on Funds from Operations, “Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” We also believe that Recurring FFO is a useful measure of our core operating performance that facilitates comparability of historical financial periods.
FFO, as defined by NAREIT, is “net income (computed in accordance with GAAP), excluding gains (or losses) from sales of, or impairment charges related to, depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.” NAREIT states further that “adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.” We believe that financial analysts, investors and stockholders are better served by the presentation of comparable period operating results generated from our FFO measure. Our method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. In October 2011, NAREIT clarified that FFO should exclude the impact of impairment losses on depreciable operating properties, either wholly-owned or in joint ventures. The company has calculated FFO for all periods presented in accordance with this clarification.
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FFO and Recurring FFO is presented to assist investors in analyzing our operating performance. Neither FFO nor Recurring FFO (i) represents cash flow from operations as defined by GAAP, (ii) is indicative of cash available to fund all cash flow needs, including the ability to make distributions, (iii) is an alternative to cash flow as a measure of liquidity, or (iv) should be considered as an alternative to net income (which is determined in accordance with GAAP) for purposes of evaluating our operating performance. We believe net income is the most directly comparable GAAP measure to FFO and Recurring FFO.
CONFERENCE CALL/WEB CAST INFORMATION
Equity One will host a conference call on Thursday, August 2, 2012 at 9:00 a.m. Eastern Time to review its 2012 second quarter earnings and operating results. Stockholders, analysts and other interested parties can access the earnings call by dialing (866) 277-1184 (U.S./Canada) or (617) 597-5360 (international) using pass code 66461067. The call will also be web cast and can be accessed in a listen-only mode on Equity One’s web site atwww.equityone.net.
A replay of the conference call will be available on Equity One’s web site for future review. Interested parties may also access the telephone replay by dialing (888) 286-8010 (U.S./Canada) or (617) 801-6888 (international) using pass code 35824520 through August 9, 2012.
FOR ADDITIONAL INFORMATION
For a copy of the company’s second quarter supplemental information package, please access the “Investors” section of Equity One’s web site atwww.equityone.net. To be included in the company’s e-mail distributions for press releases and other company notices, please send e-mail addresses to Investor Relations atinvestorrelations@equityone.net.
ABOUT EQUITY ONE, INC.
As of June 30, 2012, our consolidated property portfolio comprised 165 properties totaling approximately 16.8 million square feet of gross leasable area, or GLA, and included 142 shopping centers, 11 development or redevelopment properties, five non-retail properties and seven land parcels. As of June 30, 2012, our core portfolio was 91.8% leased and included national, regional and local tenants. Additionally, we had joint venture interests in 17 shopping centers and two office buildings totaling approximately 2.8 million square feet.
FORWARD LOOKING STATEMENTS
Certain matters discussed by Equity One in this press release constitute forward-looking statements within the meaning of the federal securities laws. Although Equity One believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that these expectations will be achieved. Factors that could cause actual results to differ materially from current expectations include changes in macro-economic conditions and the demand for retail space in the states in which Equity One owns properties; the continuing financial success of Equity One’s current and prospective tenants; the risks that Equity One may not be able to proceed with or obtain necessary approvals for development or redevelopment projects or that it may take more time to complete such projects or incur costs greater than anticipated; the availability of properties for acquisition; the extent to which continuing supply constraints occur in geographic markets where Equity One owns properties; the success of its efforts to lease up vacant space; the effects of natural and other disasters; the ability of Equity One to successfully integrate the operations and systems of acquired companies and properties; changes in Equity One’s credit ratings; and other risks, which are described in Equity One’s filings with the Securities and Exchange Commission.
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EQUITY ONE, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 2012 and December 31, 2011
(Unaudited)
(In thousands, except share par value amounts)
| June 30 2012 | December 31 2011 | |||||||||
ASSETS | ||||||||||
Properties: | ||||||||||
Income producing | $ | 3,101,916 | $2,931,756 | |||||||
Less: accumulated depreciation | (322,589 | ) | (294,023) | |||||||
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Income producing properties, net | 2,779,327 | 2,637,733 | ||||||||
Construction in progress and land held for development | 160,290 | 111,844 | ||||||||
Properties held for sale or properties sold | 8,616 | 58,498 | ||||||||
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Properties, net | 2,948,233 | 2,808,075 | ||||||||
Cash and cash equivalents | 31,276 | 10,963 | ||||||||
Cash held in escrow and restricted cash | 1,252 | 92,561 | ||||||||
Accounts and other receivables, net | 12,636 | 17,790 | ||||||||
Investments in and advances to unconsolidated joint ventures | 53,781 | 50,158 | ||||||||
Mezzanine loans receivable, net | 64,690 | 45,279 | ||||||||
Goodwill | 8,401 | 8,406 | ||||||||
Other assets | 178,765 | 189,339 | ||||||||
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TOTAL ASSETS (including $111,500 and $109,200 of consolidated variable interest entities at June 30, 2012 and December 31, 2011, respectively*) | $ | 3,299,034 | $3,222,571 | |||||||
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LIABILITIES AND EQUITY | ||||||||||
Liabilities: | ||||||||||
Notes payable: | ||||||||||
Mortgage notes payable | $ | 429,693 | $470,687 | |||||||
Unsecured senior notes payable | 681,136 | 691,136 | ||||||||
Term loan | 200,000 | — | ||||||||
Unsecured revolving credit facilities | 101,000 | 138,000 | ||||||||
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| 1,411,829 | 1,299,823 | |||||||||
Unamortized premium on notes payable, net | 6,104 | 8,181 | ||||||||
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Total notes payable | 1,417,933 | 1,308,004 | ||||||||
Other liabilities: | ||||||||||
Accounts payable and accrued expenses | 54,889 | 50,514 | ||||||||
Tenant security deposits | 8,878 | 8,455 | ||||||||
Deferred tax liability | 14,529 | 14,709 | ||||||||
Other liabilities | 184,415 | 164,188 | ||||||||
Liabilities associated with assets held for sale or sold | — | 28,695 | ||||||||
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Total liabilities (including $63,600 and $61,900 of consolidated variable interest entities at June 30, 2012 and December 31, 2011, respectively*) | 1,680,644 | 1,574,565 | ||||||||
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Redeemable noncontrolling interests | 22,621 | 22,804 | ||||||||
Commitments and contingencies | — | — | ||||||||
Stockholders’ Equity: | ||||||||||
Preferred stock, $0.01 par value – 10,000 shares authorized but unissued | — | — | ||||||||
Common stock, $0.01 par value – 150,000 shares authorized, 112,727 and 112,599 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively | 1,127 | 1,126 | ||||||||
Additional paid-in capital | 1,592,136 | 1,587,874 | ||||||||
Distributions in excess of earnings | (199,422 | ) | (170,530) | |||||||
Accumulated other comprehensive loss | (6,003 | ) | (1,154) | |||||||
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Total stockholders’ equity of Equity One, Inc. | 1,387,838 | 1,417,316 | ||||||||
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Noncontrolling interests | 207,931 | 207,886 | ||||||||
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Total equity | 1,595,769 | 1,625,202 | ||||||||
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TOTAL LIABILITIES AND EQUITY | $ | 3,299,034 | $ | 3,222,571 | ||||||
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* The assets of these entities can only be used to settle obligations of the variable interest entities and the liabilities include third party liabilities of the variable interest entities for which the creditors or beneficial interest holders do not have recourse against us other than for customary environmental indemnifications and non-recourse carve-outs.
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EQUITY ONE, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
For the three and six months ended June 30, 2012 and 2011 (Unaudited)
(In thousands, except per share data)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
REVENUE: | ||||||||||||||||
Minimum rent | $ | 62,591 | $ | 55,000 | $ | 123,318 | $ | 108,006 | ||||||||
Expense recoveries | 18,641 | 16,882 | 36,562 | 32,609 | ||||||||||||
Percentage rent | 791 | 621 | 2,745 | 2,075 | ||||||||||||
Management and leasing services | 500 | 641 | 1,304 | 1,107 | ||||||||||||
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Total revenue | 82,523 | 73,144 | 163,929 | 143,797 | ||||||||||||
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COSTS AND EXPENSES: | ||||||||||||||||
Property operating | 21,983 | 20,495 | 44,008 | 40,988 | ||||||||||||
Rental property depreciation and amortization | 23,024 | 20,745 | 44,704 | 39,473 | ||||||||||||
General and administrative | 10,627 | 13,336 | 22,187 | 25,316 | ||||||||||||
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Total costs and expenses | 55,634 | 54,576 | 110,899 | 105,777 | ||||||||||||
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INCOME BEFORE OTHER INCOME AND EXPENSE, TAX AND DISCONTINUED OPERATIONS | 26,889 | 18,568 | 53,030 | 38,020 | ||||||||||||
OTHER INCOME AND EXPENSE: | ||||||||||||||||
Investment income | 1,584 | 967 | 3,029 | 1,660 | ||||||||||||
Equity in (loss) income of unconsolidated joint ventures | (152 | ) | (98 | ) | (340 | ) | 268 | |||||||||
Other (loss) income | (7 | ) | 25 | 134 | 156 | |||||||||||
Interest expense | (17,843 | ) | (17,389 | ) | (35,212 | ) | (34,940 | ) | ||||||||
Amortization of deferred financing fees | (616 | ) | (558 | ) | (1,209 | ) | (1,097 | ) | ||||||||
Gain on bargain purchase | — | — | — | 30,561 | ||||||||||||
Gain on sale of real estate | — | 4,606 | — | 4,606 | ||||||||||||
Gain on extinguishment of debt | 436 | 213 | 343 | 255 | ||||||||||||
Impairment loss | (3,948 | ) | (145 | ) | (3,948 | ) | (145 | ) | ||||||||
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INCOME FROM CONTINUING OPERATIONS BEFORE TAX AND DISCONTINUED OPERATIONS | 6,343 | 6,189 | 15,827 | 39,344 | ||||||||||||
Income tax benefit of taxable REIT subsidiaries | 15 | 174 | 61 | 307 | ||||||||||||
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INCOME FROM CONTINUING OPERATIONS | 6,358 | 6,363 | 15,888 | 39,651 | ||||||||||||
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DISCONTINUED OPERATIONS: | ||||||||||||||||
Operations of income producing properties sold or held for sale | 156 | 3,669 | (16 | ) | 7,324 | |||||||||||
(Loss) gain on disposal of income producing properties | — | (13 | ) | 14,269 | (13 | ) | ||||||||||
Impairment loss on income producing properties held for sale | (1,493 | ) | (1,277 | ) | (3,425 | ) | (1,277 | ) | ||||||||
Income tax benefit of taxable REIT subsidiaries | — | 379 | — | 811 | ||||||||||||
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(LOSS) INCOME FROM DISCONTINUED OPERATIONS | (1,337 | ) | 2,758 | 10,828 | 6,845 | |||||||||||
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NET INCOME | 5,021 | 9,121 | 26,716 | 46,496 | ||||||||||||
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Net income attributable to noncontrolling interests – continuing operations | (2,753 | ) | (2,148 | ) | (5,466 | ) | (4,547 | ) | ||||||||
Net loss attributable to noncontrolling interests – discontinued operations | — | 13 | — | 30 | ||||||||||||
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NET INCOME ATTRIBUTABLE TO EQUITY ONE, INC. | $ | 2,268 | $ | 6,986 | $ | 21,250 | $ | 41,979 | ||||||||
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EARNINGS (LOSS) PER COMMON SHARE – BASIC: | ||||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.04 | $ | 0.09 | $ | 0.32 | ||||||||
Discontinued operations | (0.01 | ) | 0.03 | 0.10 | 0.06 | |||||||||||
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| $ | 0.02 | $ | 0.06 | * | $ | 0.18 | * | $ | 0.38 | |||||||
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Number of Shares Used in Computing Basic Earnings per Share | 112,715 | 108,942 | 112,682 | 107,605 | ||||||||||||
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EARNINGS (LOSS) PER COMMON SHARE – DILUTED: | ||||||||||||||||
Continuing operations | $ | 0.03 | $ | 0.04 | $ | 0.09 | $ | 0.32 | ||||||||
Discontinued operations | (0.01 | ) | 0.03 | 0.09 | 0.06 | |||||||||||
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| $ | 0.02 | $ | 0.06 | * | $ | 0.18 | $ | 0.38 | ||||||||
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Number of Shares Used in Computing Diluted Earnings per Share | 113,210 | 109,112 | 112,940 | 107,768 | ||||||||||||
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| * | Note: EPS does not foot due to the rounding of the individual calculations. |
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EQUITY ONE, INC. AND SUBSIDIARIES
Reconciliation of Net Income Attributable to Equity One to Funds from Operations (FFO) and to Recurring FFO
The following table reflects the reconciliation of FFO and Recurring FFO to net income attributable to Equity One, the most directly comparable GAAP measure, for the periods presented. In October 2011, NAREIT clarified that FFO should exclude the impact of impairment losses on depreciable operating properties, either wholly-owned or in joint ventures. The company has calculated FFO for all periods presented in accordance with this clarification.
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| (In thousands) | (In thousands) | |||||||||||||||
Net income attributable to Equity One, Inc. | $ | 2,268 | $ | 6,986 | $ | 21,250 | $ | 41,979 | ||||||||
Adjustments: | ||||||||||||||||
Rental property depreciation and amortization, including discontinued operations, net of noncontrolling interest | 23,022 | 24,781 | 44,780 | 47,774 | ||||||||||||
Net adjustment for unvested shares and noncontrolling interest(1) | 2,499 | 2,108 | 4,998 | 4,523 | ||||||||||||
Pro rata share of real estate depreciation from unconsolidated joint ventures | 1,086 | 835 | 2,243 | 1,440 | ||||||||||||
Impairments of depreciable real estate, net of tax(2) | 5,441 | 1,277 | 7,373 | 1,277 | ||||||||||||
Gain on disposal of depreciable assets, net of tax(2) | — | (930 | ) | (13,086 | ) | (930 | ) | |||||||||
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Funds From Operations | $ | 34,316 | $ | 35,057 | $ | 67,558 | $ | 96,063 | ||||||||
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Transaction costs associated with acquisition and disposition activity, net of tax | 711 | 3,472 | 2,170 | 6,181 | ||||||||||||
Impairment of goodwill, net of tax | — | 145 | — | 145 | ||||||||||||
Gain on debt extinguishment, net of tax | (436 | ) | (213 | ) | 373 | (255 | ) | |||||||||
Gain on land sales(2) | — | (3,663 | ) | (1,183 | ) | (3,663 | ) | |||||||||
Gain on bargain purchase | — | — | — | (30,561 | ) | |||||||||||
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Recurring Funds From Operations | $ | 34,591 | $ | 34,798 | $ | 68,918 | $ | 67,910 | ||||||||
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| (1) | Includes net effect of: (a) distributions paid with respect to unissued shares held by a noncontrolling interest which have already been included for purposes of calculating earnings per diluted share for the three months ended June 30, 2012 and 2011; and (b) an adjustment to compensate for the rounding of the individual calculations. |
| (2) | Includes amounts classified as discontinued operations. |
Funds from operations and Recurring FFO are non-GAAP financial measures. We believe that FFO, as defined by NAREIT, is a widely used and appropriate supplemental measure of operating performance for REITs, and that it provides a relevant basis for comparison among REITs. We believe that Recurring FFO provides additional comparability between historical financial periods.
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Reconciliation of Net Income Attributable to Equity One to Funds from Operations per Diluted Share
The following table reflects the reconciliation of FFO per diluted share and Recurring FFO per diluted share to earnings per diluted share attributable to Equity One, the most directly comparable GAAP measure, for the periods presented.
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
Earnings per diluted share attributable to Equity One, Inc. | $ | 0.02 | $ | 0.06 | $ | 0.18 | $ | 0.38 | ||||||||
Adjustments: | ||||||||||||||||
Rental property depreciation and amortization, including discontinued operations, net of noncontrolling interest | 0.18 | 0.21 | 0.36 | 0.40 | ||||||||||||
Net adjustment for unvested shares and noncontrolling interest(1) | 0.03 | 0.01 | 0.03 | 0.02 | ||||||||||||
Pro rata share of real estate depreciation from unconsolidated joint ventures | 0.01 | 0.01 | 0.02 | 0.01 | ||||||||||||
Impairments of depreciable real estate, net of tax | 0.04 | 0.01 | 0.06 | 0.01 | ||||||||||||
Gain on disposal of depreciable assets | — | (0.01 | ) | (0.11 | ) | (0.01 | ) | |||||||||
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Funds From Operations per Diluted Share | $ | 0.28 | $ | 0.29 | $ | 0.54 | $ | 0.81 | ||||||||
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Transaction costs associated with acquisition and disposition activity, net of tax | 0.01 | 0.03 | 0.02 | 0.05 | ||||||||||||
Impairment of goodwill and land held for development, net of tax | — | — | — | — | ||||||||||||
Gain on debt extinguishment, net of tax | (0.01 | ) | — | — | — | |||||||||||
Gain on land sales | — | (0.03 | ) | (0.01 | ) | (0.03 | ) | |||||||||
Gain on bargain purchase | — | — | — | (0.26 | ) | |||||||||||
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Recurring Funds From Operations per Diluted Share | $ | 0.28 | $ | 0.29 | $ | 0.55 | $ | 0.57 | ||||||||
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Weighted average diluted shares(2) | 124,567 | 120,470 | 124,298 | 118,875 | ||||||||||||
| (1) | Includes net effect of: (a) distributions paid with respect to unissued shares held by a noncontrolling interest which have already been included for purposes of calculating earnings per diluted share for the three months ended June 30, 2012 and 2011; and (b) an adjustment to compensate for the rounding of the individual calculations. |
| (2) | Weighted average diluted shares for the three months ended June 30, 2012 are higher than GAAP diluted weighted average shares as a result of the 11.4 million units held by Liberty International Holdings, Ltd. which are convertible into our common stock and also as a result of employee stock options. These convertible units are not included in the diluted weighted average share count for GAAP purposes because their inclusion is anti-dilutive. |
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