Exhibit 99.1
Contact:
Jon W. Clark
Chief Financial Officer
(212) 297-1000
-Or-
Brittany A. Sanders
Investor Relations
(212) 297-1000
Gramercy Property Trust Inc. Reports Third Quarter 2015 Financial Results
Highlights
| · | Generated Core FFO of $31.7 million or $0.54 per diluted common share for the third quarter of 2015. |
| · | Generated NAREIT defined funds from operations (“FFO”) of $25.2 million or $0.43 per diluted common share for the third quarter of 2015. |
| · | Generated adjusted funds from operations (“AFFO”) of $26.8 million or $0.45 per diluted common share for the third quarter of 2015. |
| · | Announced with Chambers Street Properties (NYSE:CSG) (“Chambers Street”) a definitive agreement to merge, with the combined company having an expected enterprise value of approximately $5.6 billion. |
| · | Scheduled a special meeting of stockholders for December 15, 2015 to consider and vote upon the proposed merger with Chambers Street. If approved at the special meeting, the merger is expected to close on December 17, 2015. |
| · | During the third quarter of 2015, acquired four properties in four separate transactions for a total purchase price of approximately $111.5 million (initial cap rate 7.1% and annualized straight-line cap rate 8.0%) with a weighted average lease term of 11.9 years. |
| · | Disposed of two assets, in two separate transactions, during the third quarter of 2015. One asset was a fitness center located in Las Vegas, Nevada, and one asset was an office building located in Thousand Oaks, California. The assets were both 100% leased at time of sale and were sold for an aggregate sale price of approximately $70.1 million. The blended exit cap rate for these dispositions was 6.2%. |
| · | During the third quarter of 2015, Gramercy’s European Property Fund acquired five properties in two separate transactions for a total purchase price of approximately €85.6 million and partially funded with a new €47.8 million non-recourse first mortgage. Subsequent to quarter end, acquired one industrial property and one logistics, retail and office headquarters facility for an aggregate purchase price of approximately €49.7 million. To date, funded approximately €13.6 million of €50.0 million the Company committed to the venture. |
| · | In July 2015, exercised the accordion feature to expand the unsecured term loan from $200.0 million to $300.0 million and increase the unsecured revolving credit facility from $400.0 million to $500.0 million. |
| · | The Company declared a third quarter 2015 dividend of $0.22 per common share. The dividend was paid on October 15, 2015 to holders of record as of September 30, 2015. |
Summary
NEW YORK, N.Y. – November 4, 2015 – Gramercy Property Trust Inc. (NYSE: GPT) today reported net income to common stockholders of $0.4 million, or $0.01 per fully diluted common share, for the three months ended September 30, 2015. For the quarter, the Company generated FFO of $25.2 million, or $0.43 per fully diluted common share. FFO and net income to common stockholders includes merger costs relating to the Chambers Street merger, pro-rata acquisition costs for joint ventures and equity investments, and property acquisition costs aggregating $7.6 million, or $0.13 per fully diluted common share, as well as a one-time gain from the termination of a below-market lease of $1.7 million, or $0.03 per fully diluted common share, and the recovery of servicing advances of $1.1 million, or $0.02 per fully diluted common share. For the quarter, the Company generated Core FFO of $31.7 million, or $0.54 per fully diluted common share. The Company generated AFFO of $26.8 million, or $0.45 per fully diluted common share, during the third quarter of 2015. A reconciliation of FFO, Core FFO and AFFO to net income available to common stockholders is included on page 10 of the press release.
For the third quarter of 2015, the Company recognized total revenues of approximately $65.2 million, an increase of 21% over total revenues of $54.1 million reported in the prior quarter.
Merger with Chambers Street
On July 1, 2015, the Company announced with Chambers Street a definitive agreement to merge, with the combined company having an expected enterprise value of approximately $5.6 billion. Under the terms of the agreement, the Company’s stockholders will receive 3.1898 shares of Chambers Street common stock for each share of the Company’s common stock they own. Upon closing, Chambers Street’s shareholders will own approximately 56% of the combined company and the Company’s shareholders will own approximately 44%. The merged company will be renamed Gramercy Property Trust and is expected to trade on the New York Stock Exchange under the ticker symbol “GPT.” The stock-for-stock transaction is expected to be tax-free to shareholders.
The Company’s merger with Chambers Street brings together two complementary portfolios focused on industrial and office real estate, comprising 300 properties and approximately 56 million square feet in major markets throughout the U.S. and Europe. The combined company is expected to have larger size and scale, broader tenant diversification, increased financial flexibility, and a more efficient operating platform to drive growth.
Following the close of the transaction, the combined company also intends to pursue the disposition of certain suburban office properties in order to reduce the level of these holdings to approximately 25% of its total portfolio over the long term. In addition, the combined company expects to continue to be an active acquirer of single-tenant net leases and properties.
A special meeting of the Company’sstockholders has been scheduled for December 15, 2015 at 9:30 AM EST to consider and vote upon the proposed merger between the Company and Chambers Street. The Company’s common stockholders of record at the close of business on October 8, 2015 will be entitled to vote at the special meeting. The Company’s common stockholders may attend and vote at the meeting in person at the Andaz 5th Avenue, 485 5th Avenue, New York, New York, or via the internet at www.virtualshareholdermeeting.com/GPTSM15. Stockholders may also call in and listen only to the special meeting by dialing 1 (877) 317-6789 and asking to be joined to the Gramercy Property Trust Inc. call. If approved at the special meeting, the merger is expected to close on December 17, 2015.
Property Acquisitions & Sales
In the third quarter of 2015, the Company acquired four properties in four separate transactions for a total purchase price of approximately $111.5 million (7.1% initial cap rate; 8.0% annualized straight-line cap rate) with a weighted average lease term of approximately 11.9 years.
The Company’s 3Q 2015 property acquisitions are summarized in the chart below:
(Dollar amount in thousands)
| | | | | | | | | | | | | | Purchase | | | | | | Cash | | | S/L | |
| Acq. Date | | Location | | MSA | | Major Tenants | | Property Type | | Square Feet | | | Price | | | Occupancy | | | NOI | | | NOI | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| 7/6/2015 | | Vernon, CA | | Los Angeles | | Mikawaya | | Cold Storage | | | 106,631 | | | $ | 27,500 | | | | 100 | % | | $ | 1,791 | | | $ | 2,163 | |
| 7/21/2015 | | Philadelphia, PA | | Philadelphia | | Penn Jersey Paper Co | | Bulk Warehouse | | | 255,336 | | | | 26,100 | | | | 100 | % | | | 1,933 | | | | 2,071 | |
| 7/22/2015 | | Fridley, MN | | Minneapolis | | BAE Land & Armaments LP | | Manufacturing | | | 585,225 | | | | 46,800 | | | | 100 | % | | | 3,401 | | | | 3,738 | |
| 9/25/2015 | | Pinellas Park, FL | | Tampa/St. Petersburg | | Davidoff of Geneva Inc. | | Warehouse | | | 131,800 | | | | 11,100 | | | | 100 | % | | | 771 | | | | 922 | |
| | | | | | | | | | | | 1,078,992 | | | $ | 111,500 | | | | 100 | % | | $ | 7,897 | | | $ | 8,894 | |
During the third quarter of 2015, in two separate transactions, the Company disposed of two assets. One asset was located in Las Vegas, Nevada, and one asset was located in Thousand Oaks, California. The assets were 100% leased at time of sale and were sold for an aggregate sale price of approximately $70.1 million.
The Company’s 3Q 2015 property dispositions are summarized in the chart below:
(Dollar amount in thousands)
| | | | | | | | | | | | | | Sale | | | | | | Cash | | | S/L | |
| Disp. Date | | Location | | MSA | | Major Tenants | | Property Type | | Square Feet | | | Price | | | Occupancy | | | NOI | | | NOI | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| 7/29/2015 | | Thousand Oaks, CA | | Los Angeles | | Blue Cross of California | | Office | | | 106,560 | | | $ | 19,100 | | | | 100 | % | | $ | 1,381 | | | $ | 1,583 | |
| 9/15/2015 | | Summerlin, NV | | Las Vegas | | Life Time Fitness | | Fitness Center | | | 143,286 | | | | 51,000 | | | | 100 | % | | | 2,958 | | | | 3,431 | |
| | | | | | | | | | | | 249,846 | | | $ | 70,100 | | | | 100 | % | | $ | 4,339 | | | $ | 5,014 | |
Gramercy European Property Fund
During the third quarter of 2015, the Company contributed €11.2 million to the Gramercy European Property Fund (“the Fund”). In the third quarter of 2015, the Fund acquired five properties in two separate transactions for a total purchase price of approximately €85.6 million and partially funded with a new €47.8 million non-recourse mortgage. The Fund contributed a net loss of $1.2 million to the Company’s earnings, which is primarily comprised of the Company’s pro-rata share of property acquisition costs of $1.0 million.
Gramercy Asset Management
The Company’s asset and property management business, which operates under the name Gramercy Asset Management, currently manages for third parties approximately $800.0million of commercial properties throughout the United States and Europe.
In the third quarter 2015, Gramercy Asset Management recognized fee revenues of $5.2 million in property management, asset management, incentive, and administrative fees, as compared to $4.2 million during the prior quarter. The increase in fees is primarily attributable to additional disposition fees on properties sold in the U.S. managed portfolio and increased incentive and asset management fees from the Gramercy European Asset Management business.
Corporate
As of September 30, 2015, the Company maintained approximately $268.0million of liquidity at quarter end, as compared to approximately $93.6 million of liquidity reported the prior quarter end. Liquidity includes $38.1 million of unrestricted cash as compared to approximately $43.6 million reported at the end of the prior quarter. As of September 30, 2015, there were borrowings of $300.0 million outstanding under the term loan (“Term Loan”) and $270.1 million outstanding under the unsecured credit facility (“Credit Facility”), which includes borrowings of €9.0 million under the foreign currency-denominated tranche of the unsecured credit facility (“Credit Facility”). In July 2015, the Company exercised the accordion feature to expand the unsecured term loan from $200.0 million to $300.0 million and increased the unsecured revolving credit facility from $400.0 million to $500.0 million.
Management, general and administrative (“MG&A”) expenses were $4.7million for the quarter ended September 30, 2015, approximately the same as the prior quarter. The Company’s MG&A expenses were related to the following business lines:
| (Dollar amount in thousands) | | | |
| | | Three Months Ended | |
| | | September 30,
2015 | | | June 30,
2015 | |
| Corporate/Investments | | $ | 4,617 | | | $ | 4,642 | |
| Asset Management | | | 131 | | | | 136 | |
| Total | | $ | 4,748 | | | $ | 4,778 | |
MG&A expenses includes non-cash stock compensation costs of approximately $891,000for the three months ended September 30, 2015.
Dividends
The Board of Directors authorized and the Company declared a dividend of $0.22 per common share for the third quarter of 2015. The third quarter dividend was paid on October 15, 2015 to holders of record as of September 30, 2015.
The Board of Directors also authorized and the Company declared the Series B preferred stock quarterly dividend for the period of $0.44531per share. The preferred stock dividend was paid on September 30, 2015 to holders of record as of September 21, 2015.
Company Profile
Gramercy Property Trust Inc. is a leading global investor and asset manager of commercial real estate. The Company specializes in acquiring and managing single-tenant, net-leased industrial and office properties purchased through sale leaseback transactions or directly from property developers and owners. The Company focuses on income producing properties leased to high quality tenants in major markets in the United States and Europe. The Company is organized as a Real Estate Investment Trust.
To review the Company’s latest news releases and other corporate documents, please visit the Company's website atwww.gptreit.com or contact Investor Relations at (212) 297-1000.
Conference Call
The Company's executive management team will host a conference call and audio webcast on Wednesday, November 4, 2015 at 2:00 PM EST to discuss third quarter 2015 financial results. Presentation materials will be posted prior to the call on the Company’s website,www.gptreit.com.
Interested parties may access the live call by dialing 1-877-264-6786, or for international participants 1-412-542-4146, using confirmation code “Gramercy Property Trust GPT Call.” Additionally, the live call will be webcast in listen-only mode on the Company’s website atwww.gptreit.com in the Investor Relations section.
A replay of the call will be available from Wednesday, November 4, 2015 at 5:00 PM EST through midnight, November 18, 2015 by dialing 1-877-344-7529, or for international participants 1-412-317-0088, using pass code 10075097.
Selected Financial Data:
Gramercy Property Trust Inc.
Condensed Consolidated Balance Sheets
(Unaudited, dollar amounts in thousands, except per share data)
| | | Septmber 30, 2015 | | | December 31, 2014 | |
| Assets: | | | | | | | | |
| Real estate investments, at cost: | | | | | | | | |
| Land | | $ | 439,591 | | | $ | 239,503 | |
| Building and improvements | | | 1,623,447 | | | | 828,117 | |
| Less: accumulated depreciation | | | (66,336 | ) | | | (27,598 | ) |
| Total real estate investments, net | | | 1,996,702 | | | | 1,040,022 | |
| Cash and cash equivalents | | | 38,108 | | | | 200,069 | |
| Restricted cash | | | 9,128 | | | | 1,244 | |
| Joint ventures and equity investments | | | 13,928 | | | | - | |
| Servicing advances receivable | | | 1,515 | | | | 1,485 | |
| Retained CDO bonds | | | 11,568 | | | | 4,293 | |
| Tenant and other receivables, net | | | 26,429 | | | | 15,398 | |
| Acquired lease assets, net of accumulated amortization of $44,231 and $15,168 | | | 324,421 | | | | 200,231 | |
| Deferred costs, net of accumulated amortization of $4,309 and $1,908 | | | 15,566 | | | | 10,355 | |
| Goodwill | | | 3,663 | | | | 3,840 | |
| Other assets | | | 10,699 | | | | 23,063 | |
| Total assets | | $ | 2,451,727 | | | $ | 1,500,000 | |
| | | | | | | | | |
| Liabilities and Equity: | | | | | | | | |
| Liabilities: | | | | | | | | |
| Exchangeable senior notes, net | | $ | 108,997 | | | $ | 107,836 | |
| Senior unsecured term loan | | | 300,000 | | | | 200,000 | |
| Unsecured credit facility | | | 270,059 | | | | - | |
| Mortgage notes payable | | | 318,874 | | | | 161,642 | |
| Total long term debt | | | 997,930 | | | | 469,478 | |
| Accounts payable and accrued expenses | | | 25,762 | | | | 18,806 | |
| Dividends payable | | | 12,927 | | | | 9,579 | |
| Accrued interest payable | | | 2,302 | | | | 2,357 | |
| Deferred revenue | | | 15,985 | | | | 11,592 | |
| Below-market lease liabilities, net of accumulated amortization of $14,648 and $3,961 | | | 214,609 | | | | 53,826 | |
| Derivative instruments, at fair value | | | 6,437 | | | | 3,189 | |
| Other liabilities | | | 7,849 | | | | 8,263 | |
| Total liabilities | | | 1,283,801 | | | | 577,090 | |
| Commitments and contingencies | | | - | | | | - | |
| Noncontrolling interest in the Operating Partnership | | | 11,277 | | | | 16,129 | |
| | | | | | | | | |
| Equity: | | | | | | | | |
| Common stock, par value $0.001, 200,000,000 and 220,000,000 shares authorized, and 57,493,902 and 46,736,392 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively. | | | 57 | | | | 47 | |
| Series B cumulative redeemable preferred stock, par value $0.001, liquidation preference $87,500, 3,500,000 shares authorized, issued and outstanding at September 30, 2015 and December 31, 2014. | | | 84,394 | | | | 84,394 | |
| Additional paid-in-capital | | | 2,053,955 | | | | 1,768,977 | |
| Accumulated other comprehensive loss | | | (1,131 | ) | | | (3,703 | ) |
| Accumulated deficit | | | (980,781 | ) | | | (942,934 | ) |
| Total stockholders’ equity | | | 1,156,494 | | | | 906,781 | |
| Noncontrolling interest in other partnerships | | | 155 | | | | - | |
| Total equity | | | 1,156,649 | | | | 906,781 | |
| Total liabilities and equity | | $ | 2,451,727 | | | $ | 1,500,000 | |
Gramercy Property Trust Inc.
Condensed Consolidated Statements of Operations
(Unaudited, dollar amounts in thousands, except per share data)
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| Revenues | | | | | | | | | | | | | | | | |
| Rental revenue | | $ | 47,235 | | | $ | 19,921 | | | $ | 117,990 | | | $ | 37,691 | |
| Management fees | | | 5,153 | | | | 4,848 | | | | 17,571 | | | | 18,867 | |
| Operating expense reimbursements | | | 11,237 | | | | 8,960 | | | | 29,113 | | | | 12,338 | |
| Investment income | | | 445 | | | | 492 | | | | 1,208 | | | | 1,393 | |
| Other income | | | 1,143 | | | | 80 | | | | 1,413 | | | | 224 | |
| Total revenues | | | 65,213 | | | | 34,301 | | | | 167,295 | | | | 70,513 | |
| Expenses | | | | | | | | | | | | | | | | |
| Property operating expenses: | | | | | | | | | | | | | | | | |
| Property management expenses | | | 4,780 | | | | 3,293 | | | | 14,557 | | | | 13,425 | |
| Property operating expenses | | | 11,051 | | | | 9,238 | | | | 29,006 | | | | 13,011 | |
| Total property operating expenses | | | 15,831 | | | | 12,531 | | | | 43,563 | | | | 26,436 | |
| Net impairment recognized in earnings | | | - | | | | 743 | | | | - | | | | 743 | |
| Depreciation and amortization | | | 25,120 | | | | 12,306 | | | | 68,534 | | | | 22,451 | |
| Interest expense | | | 9,227 | | | | 4,934 | | | | 23,225 | | | | 11,070 | |
| Realized loss on derivative instruments | | | - | | | | - | | | | - | | | | 3,300 | |
| Management, general and administrative | | | 4,748 | | | | 4,819 | | | | 14,299 | | | | 13,658 | |
| Acquisition and merger-related expenses | | | 6,547 | | | | 1,323 | | | | 13,508 | | | | 3,246 | |
| Total expenses | | | 61,473 | | | | 36,656 | | | | 163,129 | | | | 80,904 | |
| Income (loss) from continuing operations before equity in net income from joint ventures and equity investments, gain on remeasurement of previously held joint venture, loss on extinguishment of debt, net gains on disposals, and provision for taxes | | | 3,740 | | | | (2,355 | ) | | | 4,166 | | | | (10,391 | ) |
| Equity in net income (loss) of joint ventures and equity investments | | | (1,096 | ) | | | 103 | | | | (974 | ) | | | 1,856 | |
| Net gains on disposals | | | 392 | | | | - | | | | 593 | | | | - | |
| Income (loss) from continuing operations before gain on remeasurement of previously held joint venture, loss on extinguishment of debt, provision for taxes, and discontinued operations | | | 3,036 | | | | (2,252 | ) | | | 3,785 | | | | (8,535 | ) |
| Gain on remeasurement of previously held joint venture | | | - | | | | - | | | | - | | | | 72,345 | |
| Loss on extinguishment of debt | | | - | | | | - | | | | - | | | | (1,925 | ) |
| Provision for taxes | | | (985 | ) | | | (165 | ) | | | (2,116 | ) | | | (971 | ) |
| Income (loss) from continuing operations | | | 2,051 | | | | (2,417 | ) | | | 1,669 | | | | 60,914 | |
| Income (loss) from discontinued operations | | | (41 | ) | | | (41 | ) | | | 17 | | | | (522 | ) |
| Net income (loss) | | | 2,010 | | | | (2,458 | ) | | | 1,686 | | | | 60,392 | |
| Net (income) loss attributable to noncontrolling interest | | | (20 | ) | | | 104 | | | | 43 | | | | 104 | |
| Net income (loss) attributable to Gramercy Property Trust Inc. | | | 1,990 | | | | (2,354 | ) | | | 1,729 | | | | 60,496 | |
| Preferred stock redemption costs | | | - | | | | (2,912 | ) | | | - | | | | (2,912 | ) |
| Preferred stock dividends | | | (1,559 | ) | | | (2,192 | ) | | | (4,676 | ) | | | (5,773 | ) |
| Net income (loss) available to common stockholders | | $ | 431 | | | $ | (7,458 | ) | | $ | (2,947 | ) | | $ | 51,811 | |
| Basic earnings per share: (1) | | | | | | | | | | | | | | | | |
| Net income (loss) from continuing operations, after preferred dividends | | $ | 0.01 | | | $ | (0.25 | ) | | $ | (0.06 | ) | | $ | 2.21 | |
| Net loss from discontinued operations | | | - | | | | - | | | | - | | | | (0.02 | ) |
| Net income (loss) available to common stockholders | | $ | 0.01 | | | $ | (0.25 | ) | | $ | (0.06 | ) | | $ | 2.19 | |
| Diluted earnings per share: (1) | | | | | | | | | | | | | | | | |
| Net income (loss) from continuing operations, after preferred dividends | | $ | 0.01 | | | $ | (0.25 | ) | | $ | (0.06 | ) | | $ | 2.15 | |
| Net loss from discontinued operations | | | - | | | | - | | | | - | | | | (0.02 | ) |
| Net income (loss) available to common stockholders | | $ | 0.01 | | | $ | (0.25 | ) | | $ | (0.06 | ) | | $ | 2.13 | |
| Basic weighted average common shares outstanding (1) | | | 57,666,780 | | | | 29,481,537 | | | | 53,226,406 | | | | 23,702,710 | |
| Diluted weighted average common shares and common share equivalents outstanding (1) | | | 58,838,683 | | | | 29,481,537 | | | | 53,226,406 | | | | 24,296,691 | |
Gramercy Property Trust Inc.
Reconciliation of Non-GAAP Financial Measure
(Unaudited, dollar amounts in thousands, except per share data)
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| Net income (loss) attributable to common stockholders and unitholders | | $ | 431 | | | $ | (7,458 | ) | | $ | (2,947 | ) | | $ | 51,811 | |
| Add: | | | | | | | | | | | | | | | | |
| Depreciation and amortization | | | 25,120 | | | | 12,306 | | | | 68,534 | | | | 22,451 | |
| FFO adjustments for joint ventures and equity investments | | | 178 | | | | 67 | | | | 377 | | | | 4,019 | |
| Net income (loss) attributed to noncontrolling interest | | | 20 | | | | (104 | ) | | | (43 | ) | | | (104 | ) |
| Net (income) loss from discontinued operations | | | 41 | | | | 41 | | | | (17 | ) | | | 522 | |
| Less: | | | | | | | | | | | | | | | | |
| Non real estate depreciation and amortization | | | (214 | ) | | | (204 | ) | | | (653 | ) | | | (580 | ) |
| Gain on remeasurement of previously held joint venture | | | - | | | | - | | | | - | | | | (72,345 | ) |
| Net gain from disposals | | | (392 | ) | | | - | | | | (593 | ) | | | - | |
| Funds from operations attributable to common stockholders and unitholders | | $ | 25,184 | | | $ | 4,648 | | | $ | 64,658 | | | $ | 5,774 | |
| Add: | | | | | | | | | | | | | | | | |
| Acquisition costs | | | 1,352 | | | | 1,323 | | | | 5,960 | | | | 3,246 | |
| Acquisition costs for joint ventures and equity investments | | | 1,047 | | | | - | | | | 1,047 | | | | - | |
| Net impairment recognized in earnings | | | - | | | | 743 | | | | - | | | | 743 | |
| Merger related costs | | | 5,195 | | | | - | | | | 7,548 | | | | - | |
| Loss on extinguishment of debt | | | - | | | | - | | | | - | | | | 1,925 | |
| Loss on derivative instruments | | | - | | | | - | | | | - | | | | 3,300 | |
| Preferred stock redemption costs | | | - | | | | 2,912 | | | | - | | | | 2,912 | |
| Change in preferred stock dividends | | | - | | | | 564 | | | | - | | | | 564 | |
| European Fund setup costs | | | - | | | | - | | | | 221 | | | | - | |
| Less: | | | | | | | | | | | | | | | | |
| Recovery of servicing advances | | | (1,071 | ) | | | - | | | | (1,071 | ) | | | - | |
| Core funds from operations attributable to common stockholders and unitholders | | $ | 31,707 | | | $ | 10,190 | | | $ | 78,363 | | | $ | 18,464 | |
| Add: | | | | | | | | | | | | | | | | |
| Non-cash stock-based compensation expense | | | 1,048 | | | | 864 | | | | 2,731 | | | | 2,098 | |
| Amortization of market lease assets | | | 699 | | | | 374 | | | | 2,632 | | | | 973 | |
| Amortization of deferred financing costs and non-cash interest | | | 404 | | | | 763 | | | | 1,270 | | | | 2,041 | |
| Amortization of lease inducement costs | | | 87 | | | | 44 | | | | 183 | | | | 132 | |
| Return on construction advances | | | - | | | | - | | | | - | | | | 358 | |
| Non-real estate depreciation and amortization | | | 214 | | | | 204 | | | | 653 | | | | 580 | |
| Amortization of free rent received at property acquisition | | | 1,161 | | | | 146 | | | | 2,886 | | | | 369 | |
| Less: | | | | | | | | | | | | | | | | |
| AFFO adjustments for joint ventures and equity investments | | | (117 | ) | | | (21 | ) | | | (119 | ) | | | (793 | ) |
| Straight-lined rent | | | (3,456 | ) | | | (1,100 | ) | | | (8,940 | ) | | | (2,832 | ) |
| Change in preferred stock dividends | | | - | | | | (564 | ) | | | - | | | | (564 | ) |
| Amortization of market lease liabilities | | | (4,997 | ) | | | (1,662 | ) | | | (12,997 | ) | | | (2,336 | ) |
| Adjusted funds from operations attributable to common stockholders and unitholders | | $ | 26,750 | | | $ | 9,238 | | | $ | 66,662 | | | $ | 18,490 | |
| Funds from operations per share - basic | | $ | 0.43 | | | $ | 0.15 | | | $ | 1.19 | | | $ | 0.24 | |
| Funds from operations per share - diluted | | $ | 0.43 | | | $ | 0.15 | | | $ | 1.17 | | | $ | 0.24 | |
| Core funds from operations per share - basic | | $ | 0.55 | | | $ | 0.34 | | | $ | 1.45 | | | $ | 0.77 | |
| Core funds from operations per share - diluted | | $ | 0.54 | | | $ | 0.33 | | | $ | 1.42 | | | $ | 0.76 | |
| Adjusted funds from operations per share - basic | | $ | 0.46 | | | $ | 0.31 | | | $ | 1.23 | | | $ | 0.78 | |
| Adjusted funds from operations per share - diluted | | $ | 0.45 | | | $ | 0.30 | | | $ | 1.21 | | | $ | 0.76 | |
Gramercy Property Trust Inc.
Reconciliation of Non-GAAP Financial Measure - continued
(Unaudited, dollar amounts in thousands, except per share data)
| | | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | | 2015 | | | 2014 | | | 2015 | | | 2014 | |
| Basic weighted average common shares outstanding - EPS | | | 57,666,780 | | | | 29,481,537 | | | | 53,226,406 | | | | 23,702,710 | |
| Weighted average non-vested share based payment awards | | | - | | | | 278,992 | | | | 402,282 | | | | - | |
| Weighted average partnership units held by noncontrolling interest | | | 469,868 | | | | 412,754 | | | | 495,977 | | | | 139,097 | |
| Weighted average common shares and units outstanding | | | 58,136,648 | | | | 30,173,283 | | | | 54,124,665 | | | | 23,841,807 | |
| | | | | | | | | | | | | | | | | |
| Diluted weighted average common shares and common share equivalents outstanding - EPS (1) | | | 58,838,683 | | | | 29,481,537 | | | | 53,226,406 | | | | 24,296,691 | |
| Weighted average partnership units held by noncontrolling interest | | | - | | | | 412,754 | | | | 495,977 | | | | - | |
| Weighted average non-vested share based payment awards | | | - | | | | 572,469 | | | | 931,012 | | | | - | |
| Weighted average stock options | | | - | | | | 17,491 | | | | 13,990 | | | | - | |
| Phantom shares | | | - | | | | 144,918 | | | | 161,400 | | | | - | |
| Dilutive effect of Exchangeable Senior Notes | | | - | | | | - | | | | 206,402 | | | | - | |
| Diluted weighted average common shares and units outstanding | | | 58,838,683 | | | | 30,629,169 | | | | 55,035,187 | | | | 24,296,691 | |
(1) For the nine months ended September 30, 2015 and three months ended September 30, 2014, the diluted weighted average share calculation, which is the denominator in diluted earnings per share, excludes potentially dilutive securities because they would have been anti-dilutive during those periods. The denominators for diluted earnings per share for the three months ended September 30, 2015 and the nine months ended September 30, 2014 are the same and include potentially dilutive securities.
Disclaimers
Non-GAAP Financial Measures
The Company has used non-GAAP financial measures as defined by SEC Regulation G in this press release. A reconciliation of each non-GAAP financial measure and the comparable GAAP financial measure can be found on page 10 of this release.
Fund from operations (“FFO”): The revised White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment write-downs of investments in depreciable real estate and investments in in-substance real estate investments, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to non-controlling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures.
Core FFO and adjusted funds from operations (“AFFO”):Core FFO and AFFO are presented excluding property acquisition costs, other-than-temporary impairments on retained bonds and other one-time charges. AFFO of the Company also excludes non-cash stock-based compensation expense, amortization of above and below market leases, amortization of deferred financing costs, amortization of lease inducement costs, non-real estate depreciation and amortization, amortization of free rent received at property acquisition and straight-line rent. The Company believes that Core FFO and AFFO are useful supplemental measures regarding the Company’s operating performances as they provide a more meaningful and consistent comparison of the Company’s operating performance and allows investors to more easily compare the Company’s operating results.
FFO, Core FFO and AFFO do not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, or to cash flow from operating activities as a measure of our liquidity, nor are they entirely indicative of funds available to fund our cash needs, including our ability to make cash distributions. Our calculation of FFO may be different from the calculation used by other companies and, therefore, comparability may be limited.
Forward-looking Information
This press release contains forward-looking information based upon the Company's current best judgment and expectations. Actual results could vary from those presented herein. The risks and uncertainties associated with forward-looking information in this release include, but are not limited to, factors that are beyond the Company's control, including the factors listed in the Company's Annual Report on Form 10-K, in the Company's Quarterly Reports on Form 10-Q and in the Company's Current Reports on Form 8-K. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For further information, please refer to the Company's filings with the Securities and Exchange Commission.
