BLOOMFIELD HILLS, Mich., July 25, 2016 /PRNewswire/ -- Agree Realty Corporation (NYSE: ADC) (the "Company") today announced results for the quarter ended June 30, 2016. All per share amounts included herein are on a diluted per common share basis unless otherwise stated.
Second Quarter 2016 Financial and Operating Highlights:
- Raised approximately $110.1 million in net proceeds from the issuance of 2.9 million common shares
- Increased Net Income attributable to the Company 3.9% to $10.7 million
- Increased Funds from Operations ("FFO) 23.8% to $13.8 million
- Increased Adjusted Funds from Operations ("AFFO") 24.3% to $13.7 million
- Increased rental revenue 23.6% to $19.9 million
- Invested $153.5 million in 36 retail net lease properties
- Announced three new developments or Partner Capital Solutions ("PCS") projects
- Declared a dividend of $0.48 per share, an increase of 3.2% over the dividend per share declared in the second quarter of 2015
Financial Results
Total Rental Revenue
Total rental revenue, which includes minimum rents and percentage rents, for the three months ended June 30, 2016 increased 23.6% to $19.9 million, compared to total rental revenue of $16.1 million for the comparable period in 2015.
Total rental revenue for the six months ended June 30, 2016 increased 25.8% to $38.6 million, compared to total rental revenue of $30.7 million for the comparable period in 2015.
Net Income
Net income attributable to the Company for the three months ended June 30, 2016 increased 3.9% to $10.7 million, compared to $10.3 million for the comparable period in 2015. Net income per share attributable to the Company for the three months ended June 30, 2016 decreased 17.4% to $0.48, compared to $0.58 per share for the comparable period in 2015.
Net income attributable to the Company for the six months ended June 30, 2016 increased 9.0% to $18.1 million, compared to $16.6 million for the comparable period in 2015. Net income per share attributable to the Company for the six months ended June 30, 2016 decreased 10.8% to $0.85, compared to $0.95 per share for the comparable period in 2015.
Funds from Operations
FFO for the three months ended June 30, 2016 increased 23.8% to $13.8 million, compared to FFO of $11.1 million for the comparable period in 2015. FFO per share for the three months ended June 30, 2016 decreased 1.8% to $0.61, compared to FFO per share of $0.62 for the comparable period in 2015.
FFO for the six months ended June 30, 2016 increased 25.4% to $26.4 million, compared to FFO of $21.1 million for the comparable period in 2015. FFO per share for the six months ended June 30, 2016 increased 3.0% to $1.22, compared to FFO per share of $1.18 for the comparable period in 2015.
Adjusted Funds from Operations
AFFO for the three months ended June 30, 2016 increased 24.3% to $13.7 million, compared to AFFO of $11.0 million for the comparable period in 2015. AFFO per share for the three months ended June 30, 2016 decreased 1.4% to $0.61, compared to AFFO per share of $0.62 for the comparable period in 2015.
AFFO for the six months ended June 30, 2016 increased 25.4% to $26.5 million, compared to AFFO of $21.1 million for the comparable period in 2015. AFFO per share for the six months ended June 30, 2016 increased 3.0% to $1.22, compared to AFFO per share of $1.18 for the comparable period in 2015.
Dividend
The Company paid a cash dividend of $0.48 per share on July 15, 2016 to stockholders of record on June 30, 2016, a 3.2% increase over the $0.465 quarterly dividend declared in the second quarter of 2015. The quarterly dividend represents payout ratios of approximately 78.9% of FFO per share and 79.1% of AFFO per share, respectively.
CEO Comments
"We're extremely pleased with our performance during the quarter as we continue to strategically execute all phases of our business," said Joey Agree, President and Chief Executive Officer of Agree Realty Corporation. "Throughout the quarter we invested in 36 high-quality retail net lease properties across our three external growth platforms. These investments were concentrated among industry-leaders in e-commerce resistant sectors. As we shift our focus to the second half of 2016, both our investment pipeline as well as our balance sheet are well-positioned to continue to execute our operating strategy and create value for our shareholders."
Portfolio Update
As of June 30, 2016, the Company's portfolio consisted of 326 properties located in 42 states and totaling 6.3 million square feet of gross leasable space. Properties ground leased to tenants accounted for 7.8% of annualized base rent.
The portfolio was approximately 99.6% leased, had a weighted-average remaining lease term of approximately 11.0 years, and generated approximately 46.1% of annualized base rents from investment grade tenants.
The table below provides a summary of the Company's portfolio as of June 30, 2016:
Property Type | Number of
Properties |
| Annualized
Base Rent (1) |
| Percent of
Annualized
Base Rent |
| Percent
Investment
Grade (2) |
| Weighted
Average
Lease Term |
|
|
|
|
|
|
|
|
|
|
Retail Net Lease | 294 |
| $77,801 |
| 90.2% |
| 42.8% |
| 10.9 yrs |
Retail Net Lease Ground Leases | 29 |
| 6,691 |
| 7.8% |
| 88.5% |
| 13.2 yrs |
Total Retail Net Lease | 323 |
| 84,493 |
| 98.0% |
| 46.4% |
| 11.1 yrs |
Total Portfolio | 326 |
| $86,243 |
| 100.0% |
| 46.1% |
| 11.0 yrs |
Annualized base rent is in thousands; any differences are the result of rounding.
(1) Represents annualized straight-line rent as of June 30, 2016.
(2) Reflects tenants, or parent entities thereof, with investment grade credit ratings from Standard & Poor's, Moody's, Fitch and/or NAIC.
Acquisitions and Dispositions
Total acquisition volume for the second quarter of 2016 was approximately $151.5 million and included 34 assets net leased to a number of notable retailers operating in the discount apparel, home improvement, grocery, crafts and novelties, farm and rural supply, specialty retail, quick service restaurant, discount and auto service sectors. The properties are located in 15 states and leased to 23 distinct tenants operating across 15 retail sectors. These properties were acquired at a weighted-average cap rate of 7.8% and with a weighted-average remaining lease term of approximately 11.6 years.
During the quarter, the Company sold its Walgreens in Port St. John, Florida for approximately $7.3 million, or a 5.5% cap rate on in-place net operating income.
Development and Partner Capital Solutions
In the second quarter of 2016, the Company, through its PCS program, completed its previously announced Burger King in Farr West Utah. This project is part of the Company's previously announced partnership with Meridian Restaurants and has a total project cost of approximately $1.6 million.
Also within the quarter, the Company finalized its newly announced Family Fare Quick Stop in Marshall, Michigan. This project has a total project cost of approximately $0.4 million and is subject to a new 10-year ground lease.
The Company continues to execute on a number of active development and Partner Capital Solutions projects on behalf of industry-leading retail tenants, including the following completed or commenced projects:
Tenant |
| Location |
| Lease Structure |
| Lease Term |
| Actual or Anticipated Rent Commencement |
| Status |
|
|
|
|
|
|
|
|
|
|
|
Hobby Lobby |
| Springfield, OH |
| Build-to-Suit |
| 15 Years |
| Q1 2016 |
| Completed |
Burger King(1) |
| Farr West, UT |
| Build-to-Suit |
| 20 Years |
| Q2 2016 |
| Completed |
Family Fare Quick Stop |
| Marshall, MI |
| Ground Lease |
| 10 Years |
| Q2 2016 |
| Completed |
Burger King(1) |
| Devils Lake, ND |
| Build-to-Suit |
| 20 Years |
| Q3 2016 |
| Under Construction |
Wawa |
| Orlando, FL |
| Ground Lease |
| 20 Years |
| Q3 2016 |
| Under Construction |
Chick-fil-A |
| Frankfort, KY |
| Ground Lease |
| 20 Years |
| Q3 2016 |
| Under Construction |
Starbucks |
| North Lakeland, FL |
| Build-to-Suit |
| 10 Years |
| Q1 2017 |
| Under Construction |
Texas Roadhouse |
| Mount Pleasant, MI |
| Ground Lease |
| 15 Years |
| Q2 2017 |
| Under Construction |
Camping World |
| Tyler, TX |
| Build-to-Suit |
| 20 Years |
| Q2 2017 |
| Under Construction |
(1) Franchise restaurants operated by Meridian Restaurants Unlimited, LC.
Leasing
During the second quarter of 2016 the Company executed new leases, extensions or options on over 20,000 square feet of gross leasable area throughout the existing portfolio. The Company has no remaining lease maturities in 2016.
Top Tenants
The following table presents annualized base rents for all tenants that represent 1.5% or greater of the Company's total annualized base rent as of June 30, 2016:
Tenant |
| Annualized
Base Rent (1) |
| Percent of Annualized
Base Rent |
|
|
|
|
|
Walgreens |
| $12,161 |
| 14.1% |
Wal-Mart |
| 4,224 |
| 4.9% |
Lowe's |
| 3,099 |
| 3.6% |
Mister Car Wash |
| 2,580 |
| 3.0% |
Smart & Final |
| 2,518 |
| 2.9% |
Wawa |
| 2,465 |
| 2.9% |
CVS |
| 2,463 |
| 2.9% |
Academy Sports |
| 1,982 |
| 2.3% |
Rite Aid |
| 1,886 |
| 2.2% |
Dollar General |
| 1,795 |
| 2.1% |
Tractor Supply |
| 1,791 |
| 2.1% |
Hobby Lobby |
| 1,786 |
| 2.1% |
24 Hour Fitness |
| 1,759 |
| 2.0% |
BJ's Wholesale |
| 1,709 |
| 2.0% |
LA Fitness |
| 1,694 |
| 2.0% |
Taco Bell(2) |
| 1,537 |
| 1.8% |
Dollar Tree |
| 1,427 |
| 1.7% |
Burger King(3) |
| 1,376 |
| 1.6% |
Other(4) |
| 37,991 |
| 43.8% |
Total Top Tenants |
| $86,243 |
| 100.0% |
Annualized base rent is in thousands; any differences are the result of rounding.
(1) Represents annualized straight-line rent as of June 30, 2016.
(2) Franchise restaurants operated by Charter Foods North, LLC.
(3) Franchise restaurants operated by Meridian Restaurants Unlimited, LC.
(4) Includes tenants generating less than 1.5% of annualized base rent.
Retail Sectors
The following table presents annualized base rents for the Company's top retail sectors that represent 2.5% or greater of the Company's total annualized base rent as of June 30, 2016:
Sector |
| Annualized
Base Rent (1) |
| Percent of Annualized
Base Rent |
|
|
|
|
|
Pharmacy |
| $16,510 |
| 19.1% |
Restaurants - Quick Service |
| 5,887 |
| 6.8% |
Grocery Stores |
| 5,851 |
| 6.8% |
Auto Service |
| 4,711 |
| 5.5% |
Discount Apparel |
| 4,706 |
| 5.5% |
Specialty Retail |
| 4,000 |
| 4.6% |
General Merchandise |
| 3,956 |
| 4.6% |
Warehouse Clubs |
| 3,749 |
| 4.3% |
Home Improvement |
| 3,720 |
| 4.3% |
Health & Fitness |
| 3,562 |
| 4.1% |
Sporting Goods |
| 3,149 |
| 3.7% |
Crafts and Novelties |
| 2,865 |
| 3.3% |
Convenience Stores |
| 2,630 |
| 3.0% |
Restaurants - Casual Dining |
| 2,388 |
| 2.8% |
Farm and Rural Supply |
| 2,324 |
| 2.7% |
Dollar Stores |
| 2,280 |
| 2.6% |
Auto Parts |
| 2,257 |
| 2.6% |
Other(2) |
| 11,698 |
| 13.7% |
Total Portfolio |
| $86,243 |
| 100.0% |
Annualized base rent is in thousands; any differences are the result of rounding.
(1) Represents annualized straight-line rent as of June 30, 2016.
(2) Includes sectors generating less than 2.5% of annualized base rent.
Lease Expiration
The following table presents contractual lease expirations within the Company's portfolio as of June 30, 2016, assuming that no tenants exercise renewal options:
Year | Leases |
| Annualized
Base Rent (1) |
| Percent of
Annualized
Base Rent |
| Gross
Leasable Area |
| Percent of Gross
Leasable Area |
|
|
|
|
|
|
|
|
|
|
2016 | 0 |
| $0 |
| 0.0% |
| 0 |
| 0.0% |
2017 | 10 |
| 1,617 |
| 1.9% |
| 114 |
| 1.8% |
2018 | 15 |
| 2,257 |
| 2.6% |
| 356 |
| 5.6% |
2019 | 12 |
| 4,326 |
| 5.0% |
| 372 |
| 5.9% |
2020 | 17 |
| 2,521 |
| 2.9% |
| 237 |
| 3.8% |
2021 | 28 |
| 5,674 |
| 6.6% |
| 354 |
| 5.6% |
2022 | 19 |
| 4,077 |
| 4.7% |
| 370 |
| 5.9% |
2023 | 26 |
| 4,696 |
| 5.4% |
| 437 |
| 6.9% |
2024 | 33 |
| 8,151 |
| 9.5% |
| 779 |
| 12.3% |
2025 | 32 |
| 6,118 |
| 7.1% |
| 436 |
| 6.9% |
Thereafter | 178 |
| 46,806 |
| 54.3% |
| 2,864 |
| 45.3% |
Total Portfolio | 370 |
| $86,243 |
| 100.0% |
| 6,319 |
| 100.0% |
Annualized base rent and gross leasable area are in thousands; any differences are the result of rounding.
(1) Represents annualized straight-line rent as of June 30, 2016.
Capital Markets and Balance Sheet
Capital Markets
On May 10, 2016, the Company announced it completed a follow-on public offering of 2,875,000 shares of common stock, which included the underwriters' full exercise of their option to purchase additional shares. Total net proceeds were approximately $109.7 million after deducting the underwriting discount and offering expenses.
During the three months ended June 30, 2016, the Company issued 15,156 shares of common stock under its at-the-market equity program ("ATM program"), realizing gross proceeds of approximately $0.6 million.
Subsequent to the end of the second quarter, on July 6, 2016 the Company announced it has entered into agreements for the issuance of $100 million of long-term, unsecured, fixed rate debt. The combined $100 million of unsecured financings will have a weighted average term of 10 years and a blended interest rate of 3.87%.
Balance Sheet
As of June 30, 2016, the Company's total debt to total enterprise value was approximately 25.2%. Total enterprise value is calculated as the sum of total debt and the market value of the Company's outstanding shares of common stock, assuming conversion of operating partnership units into common stock.
For the three and six months ended June 30, 2016, the Company's fully diluted weighted-average shares outstanding were 22.3 million and 21.4 million, respectively. The basic weighted-average shares outstanding for the three and six months ended June 30, 2016 were 22.2 million and 21.3 million, respectively.
The Company's assets are held by, and its operations are conducted through, Agree Limited Partnership, of which the Company is the sole general partner. As of June 30, 2016, there were 347,619 operating partnership units outstanding and the Company held a 98.6% interest in the operating partnership.
2016 Outlook
The Company's outlook for acquisition volume in 2016, which assumes continued growth in economic activity, positive business trends and other significant assumptions, remains between $250 and $275 million of high-quality retail net lease properties.
Conference Call/Webcast
The Company will host its quarterly analyst and investor conference call on Tuesday, July 26, 2016 at 11:00 AM ET. To participate in the conference call, please dial (866) 363-3979 approximately ten minutes before the call begins.
Additionally, a webcast of the conference call will be available through the Company's website. To access the webcast, visit www.agreerealty.com ten minutes prior to the start time of the conference call and go to the Invest section of the website. A replay of the conference call webcast will be archived and available online through the Invest section of www.agreerealty.com.
About Agree Realty Corporation
Agree Realty Corporation is a publicly traded real estate investment trust primarily engaged in the acquisition and development of properties net leased to industry-leading retail tenants. The Company currently owns and operates a portfolio of 330 properties, located in 42 states and containing approximately 6.4 million square feet of gross leasable space. The common stock of Agree Realty Corporation is listed on the New York Stock Exchange under the symbol "ADC". For additional information, please visit www.agreerealty.com.
Forward-Looking Statements
This press release may contain certain "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "assume," "plan," references to "outlook" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties are described in greater detail in the Company's filings with the Securities and Exchange Commission, including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and in subsequent quarterly reports. Except as required by law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Invest section of the Company's website at www.agreerealty.com.
All information in this press release is as of July 25, 2016. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company's expectations.
Agree Realty Corporation |
Consolidated Balance Sheet |
($ in thousands, except per share data) |
|
| June 30, 2016 |
| December 31, 2015 |
Assets: | (Unaudited) |
|
|
Real Estate Investments: |
|
|
|
Land | $ 284,938 |
| $ 225,274 |
Buildings | 628,219 |
| 526,912 |
Accumulated depreciation | (62,944) |
| (56,401) |
Property under development | 4,091 |
| 3,663 |
Net real estate investments | 854,304 |
| 699,448 |
Cash and cash equivalents | 4,035 |
| 2,712 |
Accounts receivable - Tenants, net of allowance of $35 for possible losses at June 30, 2016 and December 31, 2015, respectively | 9,974 |
| 7,418 |
Unamortized Deferred Expenses: |
|
|
|
Credit facility financing Costs, net of accumulated amortization of $1,637 and
$1,532 at June 30, 2016 and December 31, 2015, respectively | 438 |
| 506 |
Leasing costs, net of accumulated amortization of $599 and $554 at June 30,
2016 and December 31, 2015, respectively | 1,140 |
| 664 |
Lease intangibles, net of accumulated amortization of $14,290 and $10,578
at June 30, 2016 and December 31, 2015, respectively | 100,511 |
| 76,552 |
Other assets | 2,702 |
| 2,570 |
Total Assets | $ 973,104 |
| $ 789,870 |
|
|
|
|
Liabilities: |
|
|
|
Mortgage notes payable, net | $ 90,464 |
| $ 100,359 |
Unsecured Term Loans, net | 99,418 |
| 99,156 |
Senior Unsecured Notes, net | 99,197 |
| 99,390 |
Unsecured Revolving Credit Facility | 98,000 |
| 18,000 |
Dividends and Distributions Payable | 11,513 |
| 9,758 |
Deferred Revenue | 309 |
| 540 |
Accrued Interest Payable | 878 |
| 963 |
Accounts Payable and Accrued Expense: |
|
|
|
Capital Expenditures | 289 |
| 122 |
Operating | 5,734 |
| 3,927 |
Interest Rate Swaps | 7,815 |
| 3,301 |
Deferred Income Taxes | 705 |
| 705 |
Tenant Deposits | 94 |
| 29 |
Total Liabilities | 414,416 |
| 336,250 |
|
|
|
|
Stockholders' Equity: |
|
|
|
Common stock, $.0001 par value, 45,000,000 shares authorized, 23,637,843 and 20,637,301 shares issued and outstanding, respectively | 2 |
| 2 |
Preferred stock, $.0001 par value per share, 4,000,000 shares authorized |
|
|
|
Series A junior participating preferred stock, $.0001 par value, 200,000 authorized, no shares issued and outstanding | - |
| - |
Additional paid-in capital | 595,106 |
| 482,514 |
Dividends in excess of net income | (31,137) |
| (28,262) |
Accumulated other comprehensive loss | (7,669) |
| (3,130) |
Total Stockholders' Equity - Agree Realty Corporation | 556,302 |
| 451,124 |
Non-controlling interest | 2,386 |
| 2,496 |
Total Stockholders' Equity | 558,688 |
| 453,620 |
Total Liabilities and Stockholders' Equity | $ 973,104 |
| $ 789,870 |
Agree Realty Corporation |
Consolidated Statements of Operations and Comprehensive Income |
($ in thousands, except per share data) |
|
|
|
|
|
|
|
|
| Three months ended
June 30, |
| Six months ended
June 30, |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
| (Unaudited) |
| (Unaudited) |
Revenues |
|
|
|
|
|
|
|
Minimum rents | $ 19,912 |
| $ 15,972 |
| $ 38,403 |
| $ 30,526 |
Percentage rents | 7 |
| 141 |
| 190 |
| 151 |
Operating cost reimbursement | 1,934 |
| 1,098 |
| 3,523 |
| 2,276 |
Other income | (9) |
| 8 |
| (48) |
| 10 |
Total Revenues | 21,844 |
| 17,219 |
| 42,068 |
| 32,963 |
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
Real estate taxes | 1,438 |
| 863 |
| 2,561 |
| 1,626 |
Property operating expenses | 929 |
| 416 |
| 1,501 |
| 987 |
Land lease payments | 163 |
| 137 |
| 327 |
| 269 |
General and administrative | 2,042 |
| 1,744 |
| 4,087 |
| 3,412 |
Depreciation and amortization | 5,665 |
| 4,117 |
| 10,750 |
| 7,671 |
Total Operating Expenses | 10,237 |
| 7,277 |
| 19,226 |
| 13,965 |
|
|
|
|
|
|
|
|
Income from Operations | 11,607 |
| 9,942 |
| 22,842 |
| 18,998 |
|
|
|
|
|
|
|
|
Other (Expense) Income |
|
|
|
|
|
|
|
Interest expense, net | (3,497) |
| (2,933) |
| (7,146) |
| (5,394) |
Gain on sale of assets | 2,718 |
| 3,456 |
| 2,718 |
| 3,535 |
Loss on debt extinguishment | - |
| - |
| - |
| (180) |
|
|
|
|
|
|
|
|
Net Income | 10,828 |
| 10,465 |
| 18,414 |
| 16,959 |
|
|
|
|
|
|
|
|
Less Net Income Attributable to Non-Controlling Interest | 167 |
| 201 |
| 292 |
| 327 |
|
|
|
|
|
|
|
|
Net Income Attributable to Agree Realty Corporation | $ 10,661 |
| $ 10,264 |
| $ 18,122 |
| $ 16,632 |
|
|
|
|
|
|
|
|
Net Income Per Share Attributable to Agree Realty Corporation |
|
|
|
|
|
|
|
Basic | $ 0.48 |
| $ 0.59 |
| $ 0.85 |
| $ 0.95 |
Diluted | $ 0.48 |
| $ 0.58 |
| $ 0.85 |
| $ 0.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income |
|
|
|
|
|
|
|
Net income | $ 10,828 |
| $ 10,465 |
| $ 18,415 |
| $ 16,959 |
Other Comprehensive Income (Loss) | (1,677) |
| 1,621 |
| (4,613) |
| (391) |
Total Comprehensive Income | 9,151 |
| 12,086 |
| 13,802 |
| 16,568 |
Comprehensive Income Attributable to Non-Controlling Interest | (140) |
| (232) |
| (219) |
| (319) |
Comprehensive Income Attributable to Agree Realty Corporation | $ 9,011 |
| $ 11,854 |
| $ 13,583 |
| $ 16,249 |
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares Outstanding - Basic | 22,186 |
| 17,539 |
| 21,316 |
| 17,458 |
Weighted Average Number of Common Shares Outstanding - Diluted | 22,265 |
| 17,587 |
| 21,385 |
| 17,511 |
Agree Realty Corporation |
Reconciliation of Net Income to FFO and Adjusted FFO |
($ in thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
| Three months ended
June 30, |
| Six months ended
June 30, |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
|
|
|
|
|
|
|
Net income | $ 10,828 |
| $ 10,465 |
| $ 18,414 |
| $ 16,959 |
Depreciation of real estate assets | 3,595 |
| 2,922 |
| 6,957 |
| 5,478 |
Amortization of leasing costs | 24 |
| 29 |
| 47 |
| 58 |
Amortization of lease intangibles | 2,027 |
| 1,150 |
| 3,712 |
| 2,103 |
(Gain) loss on sale of assets | (2,718) |
| (3,456) |
| (2,718) |
| (3,535) |
Funds from Operations | $ 13,756 |
| $ 11,110 |
| $ 26,412 |
| $ 21,063 |
Straight-line accrued rent | (656) |
| (608) |
| (1,305) |
| (1,206) |
Deferred revenue recognition | (116) |
| (116) |
| (232) |
| (232) |
Stock based compensation expense | 601 |
| 521 |
| 1,309 |
| 1,045 |
Amortization of financing costs | 122 |
| 117 |
| 239 |
| 225 |
Non-real estate depreciation | 19 |
| 15 |
| 34 |
| 31 |
Debt extinguishment costs | - |
| - |
| - |
| 180 |
Adjusted Funds from Operations | $ 13,726 |
| $ 11,039 |
| $ 26,457 |
| $ 21,106 |
|
|
|
|
|
|
|
|
FFO per common share - Basic | $ 0.61 |
| $ 0.62 |
| $ 1.22 |
| $ 1.18 |
FFO per common share - Diluted | $ 0.61 |
| $ 0.62 |
| $ 1.22 |
| $ 1.18 |
|
|
|
|
|
|
|
|
Adjusted FFO per common share - Basic | $ 0.61 |
| $ 0.62 |
| $ 1.22 |
| $ 1.19 |
Adjusted FFO per common share - Diluted | $ 0.61 |
| $ 0.62 |
| $ 1.22 |
| $ 1.18 |
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares and Units Outstanding - Basic | 22,533 |
| 17,887 |
| 21,663 |
| 17,805 |
Weighted Average Number of Common Shares and Units Outstanding - Diluted | 22,613 |
| 17,935 |
| 21,733 |
| 17,859 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Supplemental Information: |
|
|
|
|
|
|
|
Scheduled principal repayments | $ 728 |
| $ 683 |
| $ 1,448 |
| $ 1,360 |
Capitalized interest | 6 |
| 2 |
| 13 |
| 3 |
Capitalized building improvements | 29 |
| - |
| 29 |
| - |
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
FFO
The Company considers the non-GAAP measures of FFO and FFO per share/unit)to be key supplemental measures of the Company's performance and should be considered along with, but not as alternatives to, net income or loss as a measure of the Company's operating performance. 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, most real estate industry investors consider FFO to be helpful in evaluating a real estate company's operations.
The White Paper on FFO approved by NAREIT in April 2002, as revised in 2011, defines FFO as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of properties and items classified by GAAP as extraordinary, plus real estate-related depreciation and amortization and impairment writedowns, and after comparable adjustments for the Company's portion of these items related to unconsolidated entities and joint ventures. The Company computes FFO consistent with standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company.
The Company believes that excluding the effect of extraordinary items, real estate-related depreciation and amortization and impairments, which are based on historical cost accounting and which may be of limited significance in evaluating current performance, can facilitate comparisons of operating performance between periods and between REITs, even though FFO does not represent an amount that accrues directly to common shareholders. However, FFO may not be helpful when comparing the Company to non-REITs.
FFO does not represent cash generated from operating activities as determined by GAAP and should not be considered as alternatives to net income or loss, cash flows from operations or any other operating performance measure prescribed by GAAP. FFO is not a measurement of the Company's liquidity, nor is FFO indicative of funds available to fund the Company's cash needs, including its ability to make cash distributions. These measurement does not reflect cash expenditures for long-term assets and other items that have been and will be incurred. FFO may include funds that may not be available for management's discretionary use due to functional requirements to conserve funds for capital expenditures, property acquisitions, and other commitments and uncertainties. To compensate for this, management considers the impact of these excluded items to the extent they are material to operating decisions or the evaluation of the Company's operating performance.
Adjusted FFO
The Company presents adjusted FFO (including adjusted FFO per share/unit), which adjusts for certain additional items including straight-line accrued rent, deferred revenue recognition, stock based compensation expense, non-real estate depreciation and debt extinguishment costs and certain other items. The Company excludes these items as it believes it allows for meaningful comparisons with other REITs and between periods and is more indicative of the ongoing performance of its assets. As with FFO, the Company's calculation of adjusted FFO may be different from similar adjusted measures calculated by other REITs.
Any differences a result of rounding. |
CONTACT: Matthew M. Partridge, Chief Financial Officer, Agree Realty Corporation, (248) 737-4190
