Exhibit 99.1
Contact:
Jon W. Clark
Chief Financial Officer
(888) 686-0112
-Or-
Brittany A. Sanders
Investor Relations
(888) 686-0112
Gramercy Property Trust Reports Third Quarter 2016 Financial Results
NEW YORK, N.Y. – November 2, 2016 – Gramercy Property Trust (NYSE: GPT) today reported financial results for the third quarter of 2016.
Operating Results:
|
| | | | | | | | | | | | | |
| ($ in thousands, except per share data) | Quarter Ended | | Nine Months Ended |
| (All per share amounts in this press release are presented on a diluted basis) | September 30, | | September 30, |
| | 2016 | 2015 | | 2016 | 2015 |
| Net income (loss) to common shareholders | $ | (2,508 | ) | $ | 431 |
| | $ | 22,355 |
| $ | (2,947 | ) |
| Net income (loss) per common share | $ | (0.01 | ) | $ | — |
| | $ | 0.05 |
| $ | (0.02 | ) |
| | | | | | |
| FFO available to common shareholders | $ | 60,775 |
| $ | 25,184 |
| | $ | 205,391 |
| $ | 64,658 |
|
| FFO per common share | $ | 0.14 |
| $ | 0.13 |
| | $ | 0.48 |
| $ | 0.37 |
|
| | | | | | |
| Core FFO available to common shareholders | $ | 76,596 |
| $ | 31,707 |
| | $ | 242,097 |
| $ | 78,363 |
|
| Core FFO per common share | $ | 0.18 |
| $ | 0.17 |
| | $ | 0.57 |
| $ | 0.45 |
|
| | | | | | |
| AFFO available to common shareholders | $ | 69,075 |
| $ | 26,750 |
| | $ | 219,691 |
| $ | 66,662 |
|
| AFFO per common share | $ | 0.16 |
| $ | 0.14 |
| | $ | 0.51 |
| $ | 0.38 |
|
Highlights
| |
| • | Acquired sixteen properties in eleven separate transactions for an aggregate purchase price of approximately $264.8 million (6.8% initial cash cap rate; 7.3% annualized straight-line cap rate) with a weighted average remaining lease term of approximately 12.5 years at closing. |
| |
| • | Disposed of three single and multi-tenant office buildings and one single-tenant industrial facility for aggregate gross proceeds of $206.7 million. The weighted average remaining lease term for the four sold properties was 10.1 years at closing and the blended exit cap rate was 7.4%. |
| |
| • | Formed the Strategic Office Partners joint venture with TPG Real Estate by contributing six assets valued at $187.5 million, with a weighted average remaining lease term of 3.6 years at closing. The Company received a 25% interest in the joint venture. |
| |
| • | Received a BBB issuer default rating with a stable outlook from Fitch Ratings. |
| |
| • | Priced $350.0 million in senior unsecured notes, resulting in a weighted average maturity of 8.0 years and a weighted average fixed interest rate of 4.12%. The note sale is subject to finalization of documentation and is expected to close on December 15, 2016. |
| |
| • | Narrowed full-year 2016 guidance for Core FFO to between $0.72 and $0.74, and for AFFO to between $0.66 and $0.68. |
| |
| • | Declared a fourth quarter 2016 common share dividend of $0.125 per share, a 13.6% increase over the prior quarter. |
Summary
NEW YORK, N.Y. – November 2, 2016 – Gramercy Property Trust (NYSE: GPT) today reported a net loss to common shareholders of $2.5 million, or $0.01 per diluted common share, for the three months ended September 30, 2016. For the quarter, the Company generated NAREIT defined FFO of $60.8 million, or $0.14 per diluted common share. The Company also reported Core FFO of $76.6 million, or $0.18 per diluted common share during the quarter. The Company generated adjusted funds from operations, or AFFO, of $69.1 million, or $0.16 per diluted common share during the quarter. A reconciliation of FFO, Core FFO and AFFO to net income available to common shareholders is included on page 8 of this press release.
For the third quarter of 2016, the Company recognized total revenues of approximately $131.1 million, a decrease of 5.9% over total revenues of $139.4 million reported in the prior quarter, primarily attributable to incremental asset management incentive fees recorded in the second quarter of 2016.
The Company narrowed full-year 2016 guidance for Core FFO to between $0.72 and $0.74, and for AFFO to between $0.66 and $0.68. The Company expects to provide 2017 guidance on December 15, 2016.
As of September 30, 2016, the Company owned interests in 295 properties containing an aggregate of approximately 53.3 million rentable square feet.
Property Acquisitions
In the third quarter of 2016, the Company acquired sixteen properties in eleven separate transactions for an aggregate purchase price of approximately $264.8 million (6.8% initial cap rate; 7.3% annualized straight-line cap rate) with a weighted average remaining lease term of approximately 12.5 years at closing.
With these acquisitions, the Company has acquired approximately $809.3 million of single and multi-tenant assets in the United States and Canada in 2016. The weighted average entry cap rate for these acquisitions is 7.0%. Currently, the Company has approximately $138.3 million in acquisitions under contract or under signed LOI.
Third quarter 2016 property acquisitions are summarized in the chart below:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| (Dollar amount in thousands) |
| Acq. Date | | Location | | MSA | | | Property Type | | Square Feet | | Purchase Price | | Occupancy | | Acq. Cash NOI | | S/L NOI |
| 7/14/2016 | | Houston, TX | | Houston | | | Industrial | | 56,713 | | $ | 6,538 |
| | 100% | | $ | 456 |
| | $ | 483 |
|
| 7/20/2016 | | Fridley, MN | | Minneapolis | | | Industrial | | 213,117 | | 17,750 |
| | 100% | | 1,106 |
| | 1,168 |
|
| 7/26/2016 | | Largo, FL | | Tampa | | | Industrial | | 29,203 | | 2,994 |
| | 100% | | 195 |
| | 226 |
|
| 8/10/2016 | | Littleton, MA | | Boston | | | Industrial | | 448,470 | | 39,750 |
| | 100% | | 2,710 |
| | 2,751 |
|
| 8/15/2016 | | Byhalia, MS | | Memphis | | | Industrial | | 677,160 | | 28,000 |
| | 100% | | 1,778 |
| | 1,847 |
|
| 8/19/2016 | | McCook, IL | | Chicago | | | Industrial | | 147,923 | | 39,500 |
| | 100% | | 2,607 |
| | 2,607 |
|
| 8/29/2016 | | Hanover Park, IL | | Chicago | | | Industrial | | 238,423 | | 20,702 |
| | 100% | | 1,371 |
| | 1,545 |
|
| 9/8/2016 | | Durham, NC | | Durham | | | Industrial | | 115,500 | | 11,400 |
| | 100% | | 675 |
| | 775 |
|
| 9/9/2016 | | Santa Fe Springs, CA | | Los Angeles | | | Industrial | | 208,167 | | 27,000 |
| | 100% | | 1,588 |
| | 1,684 |
|
| 9/23/2016 | | Atlanta, GA & Anaheim, CA | | Atlanta Los Angeles | | | Industrial | | 420,000 | | 40,000 |
| | 100% | | 3,070 |
| | 3,249 |
|
| 9/29/2016 | | Summerville, SC(1) | | Charleston | | | Industrial | | 240,800 | | 31,183 |
| | 100% | | 2,423 |
| | 2,999 |
|
| | | | | | | | | | 2,795,476 | | $ | 264,817 |
| | 100% | | $ | 17,979 |
| | $ | 19,334 |
|
| |
1. | Summerville, SC property is a build-to-suit transaction. Lease commencement is anticipated for October 2017. Metrics shown are for stabilized asset. |
Strategic Office Partners
During the quarter, the Company announced a partnership with TPG Real Estate to form Strategic Office Partners, a joint venture that will acquire and manage a portfolio of single tenant office assets in high growth cities in the United States. The platform was seeded by the acquisition of six office assets owned by the Company, valued at $187.5 million. The Company sold the seed assets into the joint venture in exchange for cash proceeds of $140.6 million and a 25% interest in the joint venture with an initial equity investment of $16.0 million. Together, TPG and the Company have committed $400.0 million in equity capital including $100.0 million from the Company. At formation, the venture secured a $200.0 million non-recourse
secured credit facility from Morgan Stanley of which $125.0 million was funded at closing and the Company received a prorata distribution of the draw of $30.6 million.
The seed portfolio is comprised of six single tenant office assets totaling approximately 1.0 million square feet in the Los Angeles, San Francisco, San Diego, Nashville and Minneapolis MSAs. The seed portfolio had a weighted average remaining lease term of 3.6 years at closing and was sold to the venture at an exit cap rate of 9.5%.
Property Dispositions
Pursuant to the Company's previously announced disposition plan, during the quarter, the Company disposed of three single-tenant office buildings in Princeton, New Jersey, Burlington, Massachusetts and Bloomington, Minnesota and one single-tenant industrial facility in Phoenix, Arizona for aggregate gross proceeds of $206.7 million. The weighted average remaining lease term for the four sold properties was 10.1 years at closing and the blended exit cap rate was 7.4% on next twelve months NOI.
With these dispositions, the Company has sold approximately $1.4 billion of single and multi-tenant assets in the United States and Europe in 2016, inclusive of the Company's pro-rata share of properties from and into joint ventures in addition to single property transactions within joint ventures. These property sales are a part of the Company’s previously announced plan to dispose of select non-core assets following the merger with Chambers Street Properties. The weighted average exit cap rate for these dispositions is 6.9%. Currently, the Company has approximately $119.5 million in dispositions under contract or awarded to a buyer.
Third quarter 2016 property dispositions are summarized in the chart below:
|
| | | | | | | | | | | | | | | | |
| (Dollar amount in thousands) |
| Disp. Date | | Location | | MSA | | Property Type | | Square Feet | | Sale
Price | | Disp. Cash
NOI |
| 8/4/2016 | | Princeton, NJ | | New York/New Jersey | | Office | | 110,765 | | $ | 30,600 |
| | $ | 1,961 |
|
| 8/10/2016 | | Burlington, MA | | Boston | | Office | | 200,605 | | 67,400 |
| | 5,212 |
|
| 8/18/2016 | | Phoenix, AZ | | Phoenix | | Industrial | | 820,384 | | 56,200 |
| | 4,725 |
|
| 8/29/2016 | | Bloomington, MN(1) | | Minneapolis | | Office | | 322,551 | | 52,500 |
| | 3,457 |
|
| | | | | | | | | 1,454,305 | | $ | 206,700 |
| | $ | 15,355 |
|
| |
1. | Disposition NOI for Bloomington, MN asset is July 2016 NOI, annualized. Excludes impact of prior tenant's lease expiration and new tenant's free rent. |
During the third quarter of 2016, the Company completed the dissolution of its joint venture with Duke Realty Corporation (NYSE: DRE). The remaining asset located in Phoenix, Arizona was sold in July and the Company received its final liquidating distribution of $41.1 million.
European Joint Ventures
During the third quarter of 2016, Gramercy Europe acquired three properties in two separate transactions. Since inception, Gramercy Europe has acquired 33 properties for €640.0 million.
Leasing Activity
During the third quarter of 2016, the Company executed four new leases and three lease renewals aggregating approximately 402.2 thousand square feet for an average lease term of 10.6 years. In addition, four new leases and two renewals commenced during the third quarter of 2016 aggregating approximately 195.5 thousand square feet for an average lease term of 8.0 years.
Gramercy Asset Management
The Company's asset and property management business, which operates under the name Gramercy Asset Management, currently manages approximately $1.2 billion of commercial properties for third parties, including $870.8 million in Europe.
In the third quarter of 2016, Gramercy Asset Management recognized fee revenues of $7.2 million in property management, asset management, and administrative fees, as compared to $18.3 million for the prior quarter. The decrease in fees of approximately $11.1 million for the third quarter of 2016 is primarily attributable to incremental incentive fees earned on the managed portfolio during the second quarter of 2016. Gramercy Asset Management recorded $2.9 million in incentive fees earned from the Company's third-party asset management business for the third quarter of 2016, compared to $14.2 million for the prior quarter.
Corporate
As of September 30, 2016, the Company maintained approximately $900.3 million of liquidity, as compared to approximately $908.1 million of liquidity reported at the end of the prior quarter. Liquidity includes $56.4 million of unrestricted cash as compared to approximately $185.1 million reported at the end of the prior quarter. Additionally, liquidity includes $157.3 million of cash from sold properties, which is held in escrow for future acquisitions as of September 30, 2016. During the quarter, the Company drew down $132.8 million and repaid $140.0 million previously drawn on the Senior Unsecured Revolving Credit Facility. As of September 30, 2016, there were $163.4 million of borrowings outstanding under the revolving credit facility.
During the third quarter of 2016, the Company reduced secured debt by $156.3 million, including the defeasance of a $124.6 million mortgage loan with an interest rate of 5.45% which had encumbered 11 properties. The Company used cash on hand and borrowings under the senior unsecured revolving credit facility at an effective rate of 1.51% to extinguish the secured mortgage loans. The Company recorded a loss on extinguishment of debt of $13.8 million for the quarter.
Management, general and administrative ("MG&A") expenses were $8.2 million for the quarter ended September 30, 2016 compared to $8.0 million in the prior quarter. MG&A expenses included non-cash stock compensation costs of approximately $1.3 million for both the three months ended September 30, 2016 and June 30, 2016. Acquisition costs for the quarter ended September 30, 2016 included no merger related costs compared to acquisition costs for the quarter ended September 30, 2015, which included $5.2 million of merger-related costs.
During the quarter, the Company received a BBB issuer default rating with a stable outlook from Fitch Ratings. Previously, the Company was issued a Baa3 and BBB- issuer rating from Moody's Investors Service and Standard & Poor's Rating Services respectively, both with a stable outlook.
The Company priced $350.0 million in senior unsecured notes, consisting of $150.0 million of notes with a six-year term priced at a fixed interest rate of 3.89%, $100.0 million of notes with a nine-year term priced at a fixed interest rate of 4.26%, and $100.0 million of notes with a ten-year term priced at a fixed interest rate of 4.32%, resulting in a weighted average maturity of 8.0 years and a weighted average fixed interest rate of 4.12%. The note sale is subject to finalization of documentation and is expected to close on December 15, 2016.
The Company’s Board of Trustees approved the establishment of an “at-the-market” equity issuance program. The Company expects to file a prospectus supplement to its currently effective shelf registration statement with the Securities and Exchange Commission in November 2016, pursuant to which the Company may offer and sell common shares with an aggregate gross sales price of up to $375.0 million.
The Company initiated a dividend reinvestment and share purchase plan available to shareholders to reinvest dividends on all or a portion of their common shares at a discount. The program is available to both registered and beneficial shareholders. For additional information, interested parties may visit our website at www.gptreit.com.
Dividends
The Company declared a dividend of $0.11 per common share for the third quarter of 2016. The third quarter dividend was paid on October 14, 2016 to holders of record as of September 30, 2016.
The Company also declared a third quarter 2016 dividend on the Company’s 7.125% Series A Cumulative Redeemable Preferred Shares in the amount of $0.44531 per share, which was paid on September 30, 2016 to preferred shareholders of record as of the close of business on September 20, 2016.
The Company declared a fourth quarter 2016 dividend on the Company’s common shares in the amount of $0.125 per share - a 13.6% increase over the prior quarter - payable on January 13, 2017, to common shareholders of record as of the close of business on December 30, 2016.
The Company also declared a fourth quarter 2016 dividend on the Company’s 7.125% Series A Cumulative Redeemable Preferred Shares in the amount of $0.44531 per share, payable on December 30, 2016 to preferred shareholders of record as of the close of business on December 20, 2016.
Company Profile
Gramercy Property Trust 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. The Company focuses on income producing properties leased to high quality tenants in major markets in the United States and Europe.
To review the Company’s latest news releases and other corporate documents, please visit the Company's website at www.gptreit.com or contact Investor Relations at 888-686-0112.
Conference Call
The Company's executive management team will host a conference call and audio webcast on Wednesday, November 2, 2016, at 11:00 AM EDT to discuss third quarter 2016 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 1-888-317-6003, or for international participants 1-412-317-6061, using passcode 4753229. Additionally, the live call will be webcast in listen-only mode on the Company’s website at www.gptreit.com in the Investor Relations section.
A replay of the call will be available at 5:00 PM EDT, November 2, 2016 through midnight, November 16, 2016 by dialing 1-877-344-7529, or for international participants 1-412-317-0088, using the access code 10093024.
Disclaimer
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 8 of this release.
Gramercy Property Trust
Condensed Consolidated Balance Sheets
(Unaudited, dollar amounts in thousands, except per share data)
|
| | | | | | | |
| | September 30, 2016 | | December 31, 2015 |
| Assets: | |
| | |
|
| Real estate investments, at cost: | |
| | |
|
| Land | $ | 734,058 |
| | $ | 702,557 |
|
| Building and improvements | 3,538,377 |
| | 3,313,747 |
|
| Less: accumulated depreciation | (169,103 | ) | | (84,627 | ) |
| Total real estate investments, net | 4,103,332 |
| | 3,931,677 |
|
| Cash and cash equivalents | 56,352 |
| | 128,031 |
|
| Restricted cash | 171,895 |
| | 17,354 |
|
| Investment in unconsolidated equity investments | 120,176 |
| | 580,000 |
|
| Servicing advances receivable | — |
| | 1,382 |
|
| Retained CDO bonds | 8,439 |
| | 7,471 |
|
| Assets held for sale, net | 11,009 |
| | 420,485 |
|
| Tenant and other receivables, net | 69,131 |
| | 34,234 |
|
| Acquired lease assets, net of accumulated amortization of $123,754 and $54,323 | 584,856 |
| | 682,174 |
|
| Deferred costs, net of accumulated amortization of $3,074 and $892 | 24,835 |
| | 13,950 |
|
| Goodwill | 3,141 |
| | 3,568 |
|
| Other assets | 30,064 |
| | 14,192 |
|
| Total assets | $ | 5,183,230 |
| | $ | 5,834,518 |
|
| Liabilities and Equity: | |
| | |
|
| Liabilities: | |
| | |
|
| Senior unsecured revolving credit facility | $ | 163,365 |
| | $ | 296,724 |
|
| Exchangeable senior notes, net | 108,186 |
| | 106,581 |
|
| Mortgage notes payable, net | 368,386 |
| | 530,222 |
|
| Senior unsecured notes, net | 148,978 |
| | 99,124 |
|
| Senior unsecured term loans, net | 1,225,000 |
| | 1,225,000 |
|
| Total long-term debt, net | 2,013,915 |
| | 2,257,651 |
|
| Accounts payable and accrued expenses | 48,412 |
| | 59,808 |
|
| Dividends payable | 46,740 |
| | 8,980 |
|
| Accrued interest payable | 5,180 |
| | 4,546 |
|
| Deferred revenue | 31,343 |
| | 36,031 |
|
| Below market lease liabilities, net of accumulated amortization of $27,055 and $17,083 | 224,643 |
| | 242,456 |
|
| Liabilities related to assets held for sale | 129 |
| | 291,364 |
|
| Derivative instruments, at fair value | 28,613 |
| | 3,442 |
|
| Other liabilities | 10,080 |
| | 8,271 |
|
| Total liabilities | 2,409,055 |
| | 2,912,549 |
|
| Commitments and contingencies | — |
| | — |
|
| Noncontrolling interest in the Operating Partnership | 9,076 |
| | 10,892 |
|
| Equity: | | | |
|
| Common shares, par value $0.01, 421,978,800 and 420,523,153 issued and outstanding at September 30, 2016 and December 31, 2015, respectively. | 4,220 |
| | 4,205 |
|
| Series A cumulative redeemable preferred shares, par value $0.01, liquidation preference $87,500, 3,500,000 shares authorized, issued and outstanding at September 30, 2016 and December 31, 2015. | 84,394 |
| | 84,394 |
|
| Additional paid-in-capital | 3,883,873 |
| | 3,879,932 |
|
| Accumulated other comprehensive loss | (38,717 | ) | | (5,751 | ) |
| Accumulated deficit | (1,168,502 | ) | | (1,051,454 | ) |
| Total shareholders' equity | 2,765,268 |
| | 2,911,326 |
|
| Noncontrolling interest in other partnerships | (169 | ) | | (249 | ) |
| Total equity | 2,765,099 |
| | 2,911,077 |
|
| Total liabilities and equity | $ | 5,183,230 |
| | $ | 5,834,518 |
|
Gramercy Property Trust
Condensed Consolidated Statements of Operations
(Unaudited, dollar amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Revenues | |
| | |
| | |
| | |
|
| Rental revenue | $ | 100,847 |
| | $ | 47,235 |
| | $ | 291,459 |
| | $ | 117,990 |
|
| Third-party management fees | 7,172 |
| | 5,153 |
| | 30,528 |
| | 17,571 |
|
| Operating expense reimbursements | 21,231 |
| | 11,237 |
| | 65,718 |
| | 29,113 |
|
| Investment income | 544 |
| | 445 |
| | 1,490 |
| | 1,208 |
|
| Other income | 1,298 |
| | 1,143 |
| | 1,867 |
| | 1,413 |
|
| Total revenues | 131,092 |
| | 65,213 |
| | 391,062 |
| | 167,295 |
|
| Operating Expenses | |
| | |
| | | | |
| Property operating expenses | 22,685 |
| | 11,051 |
| | 70,364 |
| | 29,006 |
|
| Property management expenses | 4,810 |
| | 4,780 |
| | 14,922 |
| | 14,557 |
|
| Depreciation and amortization | 62,863 |
| | 25,120 |
| | 181,649 |
| | 68,534 |
|
| General and administrative expenses | 8,165 |
| | 4,748 |
| | 23,892 |
| | 14,299 |
|
| Acquisition and merger-related expenses | 1,272 |
| | 6,547 |
| | 5,994 |
| | 13,508 |
|
| Total operating expenses | 99,795 |
| | 52,246 |
| | 296,821 |
| | 139,904 |
|
| Operating Income | 31,297 |
| | 12,967 |
| | 94,241 |
| | 27,391 |
|
| Other Expense: | | | | | | | |
| Interest expense | (18,409 | ) | | (9,227 | ) | | (57,271 | ) | | (23,225 | ) |
| Equity in net loss of unconsolidated equity investments | (1,138 | ) | | (1,096 | ) | | (4,061 | ) | | (974 | ) |
| Gain on dissolution of previously held U.S. unconsolidated equity investment interests | — |
| | — |
| | 7,229 |
| | — |
|
| Loss on extinguishment of debt | (13,777 | ) | | — |
| | (20,890 | ) | | — |
|
| Impairment of real estate investments | (1,053 | ) | | — |
| | (1,053 | ) | | — |
|
| Income (loss) from continuing operations before provision for taxes | (3,080 | ) | | 2,644 |
| | 18,195 |
| | 3,192 |
|
| Provision for taxes | (331 | ) | | (985 | ) | | (3,734 | ) | | (2,116 | ) |
| Income (loss) from continuing operations | (3,411 | ) | | 1,659 |
| | 14,461 |
| | 1,076 |
|
| Income (loss) from discontinued operations | 347 |
| | (41 | ) | | 5,045 |
| | 17 |
|
| Income (loss) before net gains on disposals | (3,064 | ) | | 1,618 |
| | 19,506 |
| | 1,093 |
|
| Net gains on disposals | 2,336 |
| | 392 |
| | 2,336 |
| | 593 |
|
| Gain on sale of European unconsolidated equity investment interests held with a related party | — |
| | — |
| | 5,341 |
| | — |
|
| Net income (loss) | (728 | ) | | 2,010 |
| | 27,183 |
| | 1,686 |
|
| Net income (loss) attributable to noncontrolling interest | (221 | ) | | (20 | ) | | (152 | ) | | 43 |
|
| Net income (loss) attributable to Gramercy Property Trust | (949 | ) | | 1,990 |
| | 27,031 |
| | 1,729 |
|
| Preferred share dividends | (1,559 | ) | | (1,559 | ) | | (4,676 | ) | | (4,676 | ) |
| Net income (loss) available to common shareholders | $ | (2,508 | ) | | $ | 431 |
| | $ | 22,355 |
| | $ | (2,947 | ) |
| Basic earnings per share: | |
| | |
| | | | |
| Net income (loss) from continuing operations, after preferred dividends | $ | (0.01 | ) | | $ | — |
| | $ | 0.04 |
| | $ | (0.02 | ) |
| Net income from discontinued operations | — |
| | — |
| | 0.01 |
| | — |
|
| Net income (loss) available to common shareholders | $ | (0.01 | ) | | $ | — |
| | $ | 0.05 |
| | $ | (0.02 | ) |
| Diluted earnings per share: | |
| | |
| | | | |
| Net income (loss) from continuing operations, after preferred dividends | $ | (0.01 | ) | | $ | — |
| | $ | 0.04 |
| | $ | (0.02 | ) |
| Net income from discontinued operations | — |
| | — |
| | 0.01 |
| | — |
|
| Net income (loss) available to common shareholders | $ | (0.01 | ) | | $ | — |
| | $ | 0.05 |
| | $ | (0.02 | ) |
| Basic weighted average common shares outstanding | 420,772,508 |
| | 183,945,495 |
| | 423,542,467 |
| | 169,781,590 |
|
| Diluted weighted average common shares and common share equivalents outstanding | 420,772,508 |
| | 187,683,631 |
| | 427,163,126 |
| | 169,781,590 |
|
Gramercy Property Trust
Reconciliation of Non-GAAP Financial Measures
(Unaudited, dollar amounts in thousands, except per share data)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended
September 30, | | Nine Months Ended
September 30, |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Net income (loss) attributable to common shareholders | $ | (2,508 | ) | | $ | 431 |
| | $ | 22,355 |
| | $ | (2,947 | ) |
| Add: | |
| | | | |
| | |
|
| Depreciation and amortization | 62,863 |
| | 25,120 |
| | 181,649 |
| | 68,534 |
|
| FFO adjustments for unconsolidated equity investments | 2,034 |
| | 178 |
| | 20,805 |
| | 377 |
|
| Net (income) loss attributed to noncontrolling interest | 221 |
| | 20 |
| | 152 |
| | (43 | ) |
| Net (income) loss from discontinued operations | (347 | ) | | 41 |
| | (5,045 | ) | | (17 | ) |
| Impairment of real estate investments | 1,053 |
| | — |
| | 1,053 |
| | — |
|
| Less: |
|
| | | | | | |
| Non real estate depreciation and amortization | (205 | ) | | (214 | ) | | (672 | ) | | (653 | ) |
| Gain on dissolution of previously held U.S. unconsolidated equity investment interests | — |
| | — |
| | (7,229 | ) | | — |
|
| Gain on sale of European unconsolidated equity investment interests held with a related party | — |
| | — |
| | (5,341 | ) | | — |
|
| Net gain from disposals | (2,336 | ) | | (392 | ) | | (2,336 | ) | | (593 | ) |
| Funds from operations attributable to common shareholders and unitholders | $ | 60,775 |
| | $ | 25,184 |
| | $ | 205,391 |
| | $ | 64,658 |
|
| Add: | |
| | |
| | | | |
| Acquisition costs | 1,272 |
| | 1,352 |
| | 5,994 |
| | 5,960 |
|
| Core FFO adjustments for unconsolidated equity investments | 508 |
| | 1,047 |
| | 7,429 |
| | 1,047 |
|
| Merger related costs | — |
| | 5,195 |
| | — |
| | 7,548 |
|
| Loss on extinguishment of debt | 13,777 |
| | — |
| | 18,960 |
| | — |
|
| European Fund setup costs | — |
| | — |
| | — |
| | 221 |
|
| Net income from discontinued operations related to properties | 347 |
| | — |
| | 5,140 |
| | — |
|
| Mark-to-market on interest rate swaps | (83 | ) | | — |
| | (817 | ) | | — |
|
| Less: |
|
| | | | | | |
| Recovery of servicing advances | — |
| | (1,071 | ) | | — |
| | (1,071 | ) |
| Core funds from operations attributable to common shareholders and unitholders | $ | 76,596 |
| | $ | 31,707 |
| | $ | 242,097 |
| | $ | 78,363 |
|
| Add: | |
| | |
| | | | |
| Non-cash share-based compensation expense | 1,282 |
| | 1,048 |
| | 3,704 |
| | 2,731 |
|
| Amortization of market lease assets | 3,578 |
| | 699 |
| | 11,254 |
| | 2,632 |
|
| Amortization of deferred financing costs and non-cash interest | (409 | ) | | 404 |
| | (214 | ) | | 1,270 |
|
| Amortization of lease inducement costs | 86 |
| | 87 |
| | 259 |
| | 183 |
|
| Non-real estate depreciation and amortization | 205 |
| | 214 |
| | 672 |
| | 653 |
|
| Amortization of free rent received at property acquisition | 481 |
| | 1,161 |
| | 1,237 |
| | 2,886 |
|
| Less: | |
| | |
| | | | |
| AFFO adjustments for unconsolidated equity investments | 1,761 |
| | (117 | ) | | 1,352 |
| | (119 | ) |
| Straight-lined rent | (6,368 | ) | | (3,456 | ) | | (19,084 | ) | | (8,940 | ) |
| Amortization of market lease liabilities | (8,137 | ) | | (4,997 | ) | | (21,586 | ) | | (12,997 | ) |
| Adjusted funds from operations attributable to common shareholders and unitholders | $ | 69,075 |
| | $ | 26,750 |
| | $ | 219,691 |
| | $ | 66,662 |
|
| Funds from operations per share – basic | $ | 0.14 |
| | $ | 0.14 |
| | $ | 0.48 |
| | $ | 0.38 |
|
| Funds from operations per share – diluted | $ | 0.14 |
| | $ | 0.13 |
| | $ | 0.48 |
| | $ | 0.37 |
|
| Core funds from operations per share – basic | $ | 0.18 |
| | $ | 0.17 |
| | $ | 0.57 |
| | $ | 0.46 |
|
| Core funds from operations per share – diluted | $ | 0.18 |
| | $ | 0.17 |
| | $ | 0.57 |
| | $ | 0.45 |
|
| Adjusted funds from operations per share – basic | $ | 0.16 |
| | $ | 0.14 |
| | $ | 0.52 |
| | $ | 0.39 |
|
| Adjusted funds from operations per share – diluted | $ | 0.16 |
| | $ | 0.14 |
| | $ | 0.51 |
| | $ | 0.38 |
|
| | | | | | | | |
| Basic weighted average common shares outstanding – EPS | 420,772,508 |
| | 183,945,495 |
| | 423,542,467 |
| | 169,781,590 |
|
| Weighted average non-vested share based payment awards | 3,170,302 |
| | — |
| | — |
| | — |
|
| Weighted average partnership units held by noncontrolling interest | 1,017,326 |
| | 1,498,785 |
| | 1,199,312 |
| | 1,582,067 |
|
| Weighted average common shares and units outstanding | 424,960,136 |
| | 185,444,280 |
| | 424,741,779 |
| | 171,363,657 |
|
Diluted weighted average common shares and common share equivalents outstanding – EPS (1) | 420,772,508 |
| | 187,683,631 |
| | 427,163,126 |
| | 169,781,590 |
|
| Weighted average partnership units held by noncontrolling interest | 1,017,326 |
| | — |
| | — |
| | 1,582,067 |
|
| Weighted average non-vested share based payment awards | 3,519,584 |
| | — |
| | — |
| | 2,969,744 |
|
| Weighted average share options | 58,270 |
| | — |
| | — |
| | 44,624 |
|
| Phantom shares | — |
| | — |
| | — |
| | 514,834 |
|
| Dilutive effect of Exchangeable Senior Notes | 3,336,987 |
| | — |
| | — |
| | 658,380 |
|
| Diluted weighted average common shares and units outstanding | 428,704,675 |
| | 187,683,631 |
| | 427,163,126 |
| | 175,551,239 |
|
Gramercy Property Trust
Reconciliation of Non-GAAP Financial Measure - continued
(Unaudited, dollar amounts in thousands, except per share data)
| |
| 1. | For the three months ended September 30, 2016 and the nine months ended September 30, 2015, the Company has a net loss available to common shareholders and therefore 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. |
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 9 of this release.
Funds 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 and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to noncontrolling 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, loss on extinguishment of debt, other-than-temporary impairments on retained bonds and other one-time charges. AFFO of the Company also excludes non-cash share-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, straight-line rent, and these AFFO adjustments as they pertain to the Company's unconsolidated equity investments. 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 alternatives to net income (determined in accordance with GAAP), as indications of our financial performance, or to cash flow from operating activities as measures of our liquidity, nor are they entirely indicative of funds available to fund our cash needs, including our ability to make cash distributions. Our calculations of FFO, Core FFO and AFFO may be different from the calculations 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.
No Solicitation
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities, nor shall there be any sale of these securities, in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
