Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Urban Edge Properties Reports Third Quarter 2022 Results and Provides Full-Year 2022 Guidance


Urban Edge Properties (NYSE: UE) (the "Company") today announced its results for the quarter ended September 30, 2022 and provided its outlook for the full-year 2022.

"We are very pleased with the third quarter performance including the continued momentum in our leasing velocity, which reflects strong demand from a broad set of retailers, especially throughout the suburbs around New York City, our largest market," said Jeff Olson, Chairman and CEO. "Our recently executed lease with Target at Bruckner Commons and the improvement in shop occupancy this quarter with the addition of high-quality tenants including First Watch and Shake Shack are among the recent highlights. Notably, future gross rent from leases executed but not yet commenced grew to $28 million representing 12% of current annualized NOI, with one million square feet under active negotiation representing an additional 10% of annualized NOI."

Financial Results(1)(2)

Operating Results(1)(3)

Balance Sheet and Liquidity(1)(4)

Balance sheet highlights as of September 30, 2022 include:

Leasing, Development and Redevelopment

The Company commenced $54.7 million of redevelopment projects and now has $260.9 million of active redevelopment projects under way, with estimated remaining costs to complete of $174.9 million. The active redevelopment projects are expected to generate an approximate 10% unleveraged yield.

Subsequent to the quarter, a lease was executed with Target to backfill 139,000 sf of the former Kmart space at Bruckner Commons, located in the Bronx, NY, and is included in the Company's active development, redevelopment and anchor repositioning projects. The addition of Target is expected to serve as a catalyst to further upgrade the tenant mix as additional junior anchors are added to the property.

As of September 30, 2022, the Company has signed leases that have not yet rent commenced that are expected to generate $23.8 million of future annual gross rent, representing approximately 10% of current annualized NOI. Approximately $0.6 million of this amount is expected to be recognized in the fourth quarter of 2022.

Financing Activity

On August 9, 2022, the Company restated and amended its revolving credit agreement which increased the credit facility size by $200 million to $800 million, and extended the maturity date to February 9, 2027 with two six-month extension options. Company borrowings under the amended agreement are subject to interest at SOFR plus 1.10% with an annual facility fee of 0.15% based on the Company's current leverage ratio as defined in the facility.

2022 Full-Year Outlook

The Company has provided its outlook for full-year performance estimating net income of $0.36 to $0.38 per diluted share, FFO of $1.16 to $1.17 per diluted share, and FFO as Adjusted of $1.17 to $1.19 per diluted share. A reconciliation of net income to FFO and FFO as Adjusted, as well as the assumptions related to the 2022 outlook are included on the following page.

Dividend Declaration

On November 2, 2022, the Board of Trustees declared a regular quarterly dividend of $0.16 per common share. The dividend will be payable on December 30, 2022 to common shareholders of record on December 15, 2022.

Earnings Conference Call Information

The Company will host an earnings conference call and audio webcast on November 3, 2022 at 8:30am ET. All interested parties can access the earnings call by dialing 1-877-407-9716 (Toll Free) or 1-201-493-6779 (Toll/International) using conference ID 13732646. The call will also be webcast and available in listen-only mode on the investors page of our website: www.uedge.com. A replay will be available at the webcast link on the investors page for one year following the conclusion of the call. A telephonic replay of the call will also be available starting November 3, 2022 at 11:30am ET through November 17, 2022 at 11:59pm ET by dialing 1-844-512-2921 (Toll Free) or 1-412-317-6671 (Toll/International) using conference ID 13732646.

(1) Refer to "Non-GAAP Financial Measures" and "Operating Metrics" for definitions and additional detail.
(2) Refer to page 9 for a reconciliation of net income to FFO and FFO as Adjusted for the quarter ended September 30, 2022.
(3) Refer to page 10 for a reconciliation of net income to NOI and Same-Property NOI for the quarter ended September 30, 2022.
(4) Net debt as of September 30, 2022 is calculated as total consolidated debt of $1.7 billion less total cash and cash equivalents, including restricted cash, of $152 million.

2022 Earnings Guidance

The Company has provided 2022 earnings guidance, estimating net income of $0.36 to $0.38 per diluted share, NAREIT FFO of $1.16 to $1.17 per diluted share, and FFO as Adjusted of $1.17 to $1.19 per diluted share. Below is a summary of the Company's 2022 outlook, assumptions used in our forecasting, and a reconciliation of the range of estimated earnings, NAREIT FFO, and FFO as Adjusted per diluted share.

2022 Full Year Outlook:

The Company's full year outlook is based on the following assumptions (in thousands):

 

Guidance 2022E

 

Per Diluted Share(1)

(in thousands, except per share amounts)

Low

 

High

 

Low

 

High

Net income

$

44,200

 

 

$

46,200

 

 

$

0.36

 

 

$

0.38

 

Less net (income) loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

Operating partnership

 

(1,800

)

 

 

(1,800

)

 

 

(0.01

)

 

 

(0.01

)

Consolidated subsidiaries

 

1,000

 

 

 

1,000

 

 

 

0.01

 

 

 

0.01

 

Net income attributable to common shareholders

 

43,400

 

 

 

45,400

 

 

 

0.35

 

 

 

0.37

 

Adjustments:

 

 

 

 

 

 

 

Rental property depreciation and amortization

 

97,000

 

 

 

97,000

 

 

 

0.79

 

 

 

0.79

 

Gain on sale of real estate

 

(400

)

 

 

(400

)

 

 

?

 

 

 

?

 

Limited partnership interests in operating partnership

 

1,800

 

 

 

1,800

 

 

 

0.01

 

 

 

0.01

 

FFO Applicable to diluted common shareholders

 

141,800

 

 

 

143,800

 

 

 

1.16

 

 

 

1.17

 

Adjustments to FFO:

 

 

 

 

 

 

 

Transaction, severance and other expenses

 

1,800

 

 

 

1,800

 

 

 

0.01

 

 

 

0.01

 

Reinstatement of receivables arising from the straight-lining of rents, net of write-offs

 

(200

)

 

 

(200

)

 

 

?

 

 

 

?

 

FFO as Adjusted applicable to diluted common shareholders

$

143,400

 

 

$

145,400

 

 

$

1.17

 

 

$

1.19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Amounts may not foot due to rounding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Company's projections are based on management's current beliefs and assumptions about the Company's business, and the industry and the markets in which it operates; there are known and unknown risks and uncertainties associated with these projections. There can be no assurance that our actual results will not differ from the guidance set forth above. The Company assumes no obligation to update publicly any forward-looking statements, including its 2022 earnings guidance, whether as a result of new information, future events or otherwise. Please refer to the "Forward-Looking Statements" disclosures on page 6 of this document and "Risk Factors" disclosed in the Company's annual and quarterly reports filed with the Securities and Exchange Commission for more information.

Non-GAAP Financial Measures

The Company uses certain non-GAAP performance measures, in addition to the primary GAAP presentations, as we believe these measures improve the understanding of the Company's operational results. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP performance measures to determine how best to provide relevant information to the investing public, and thus such reported measures are subject to change. The Company's non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results. Additionally, the Company's computation of non-GAAP metrics may not be comparable to similarly titled non-GAAP metrics reported by other REITs or real estate companies that define these metrics differently and, as a result, it is important to understand the manner in which the Company defines and calculates each of its non-GAAP metrics. The following non-GAAP measures are commonly used by the Company and investing public to understand and evaluate our operating results and performance:

The Company believes net income is the most directly comparable GAAP financial measure to the non-GAAP performance measures outlined above. Reconciliations of these measures to net income have been provided in the tables accompanying this press release.

Operating Metrics

The Company presents certain operating metrics related to our properties, including occupancy, leasing activity and rental rates. Operating metrics are used by the Company and are useful to investors in facilitating an understanding of the operational performance for our properties.

Occupancy metrics represent the percentage of occupied gross leasable area based on executed leases (including properties in development and redevelopment) and include leases signed, but for which rent has not yet commenced. Same-property portfolio leased occupancy includes properties that have been owned and operated for the entirety of the reporting periods being compared, which total 69 and 68 properties for the three and nine months ended September 30, 2022 and 2021, respectively. Occupancy metrics presented for the Company's same-property portfolio excludes properties under development, redevelopment or that involve anchor repositioning where a substantial portion of the gross leasable area is taken out of service and also excludes properties acquired within the past 12 months or properties sold during the periods being compared.

Executed new leases, renewals and exercised options are presented on a same-space basis. Same-space leases represent those leases signed on spaces for which there was a previous lease.

ADDITIONAL INFORMATION

For a copy of the Company's supplemental disclosure package, please access the "Investors" section of our website at www.uedge.com. Our website also includes other financial information, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports.

The Company uses, and intends to continue to use, the "Investors" page of its website, which can be found at www.uedge.com as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the "Investors" page, in addition to following the Company's press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

ABOUT URBAN EDGE

Urban Edge Properties is a NYSE listed real estate investment trust focused on managing, acquiring, developing, and redeveloping retail real estate in urban communities, primarily in the Washington, D.C. to Boston corridor. Urban Edge owns 76 properties totaling 17.2 million square feet of gross leasable area.

FORWARD-LOOKING STATEMENTS

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition, business and targeted occupancy may differ materially from those expressed in these forward-looking statements. You can identify many of these statements by words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this Press Release. Many of the factors that will determine the outcome of forward-looking statements are beyond our ability to control or predict and include, among others: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic and related COVID-19 variants, including its potential impact on our retail tenants and their ability to make rent and other payments or honor their commitments under existing leases; (ii) the loss or bankruptcy of major tenants; (iii) the ability and willingness of the Company's tenants to renew their leases with the Company upon expiration and the Company's ability to re-lease its properties on the same or better terms, or at all, in the event of non-renewal or in the event the Company exercises its right to replace an existing tenant; (iv) the impact of e-commerce on our tenants' business; (v) macroeconomic conditions, such as rising inflation and disruption of, or lack of access to, the capital markets, as well as potential volatility in the Company's share price; (vi) the Company's success in implementing its business strategy and its ability to identify, underwrite, finance, consummate and integrate diversifying acquisitions and investments; (vii) changes in general economic conditions or economic conditions in the markets in which the Company competes, and their effect on the Company's revenues, earnings and funding sources, and on those of its tenants; (viii) increases in the Company's borrowing costs as a result of changes in interest rates, rising inflation, and other factors, including the discontinuation of USD LIBOR, which is currently anticipated to occur in 2023; (ix) the Company's ability to pay down, refinance, restructure or extend its indebtedness as it becomes due and potential limitations on the Company's ability to borrow funds under its existing credit facility as a result of covenants relating to the Company's financial results; (x) potentially higher costs associated with the Company's development, redevelopment and anchor repositioning projects, and the Company's ability to lease the properties at projected rates; (xi) the Company's liability for environmental matters; (xii) damage to the Company's properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiii) the Company's ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; (xiv) information technology security breaches; (xv) the loss of key executives; and (xvi) the accuracy of methodologies and estimates regarding our environmental, social and governance ("ESG") metrics, goals and targets, tenant willingness and ability to collaborate towards reporting ESG metrics and meeting ESG goals and targets, and the impact of governmental regulation on our ESG efforts. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for any forward-looking statements included in this Press Release. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Press Release. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Press Release.

 

URBAN EDGE PROPERTIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

 

 

September 30,

 

December 31,

 

2022

 

2021

ASSETS

 

 

 

Real estate, at cost:

 

 

 

Land

$

544,358

 

 

$

543,827

 

Buildings and improvements

 

2,464,901

 

 

 

2,441,797

 

Construction in progress

 

271,898

 

 

 

212,296

 

Furniture, fixtures and equipment

 

8,303

 

 

 

7,530

 

Total

 

3,289,460

 

 

 

3,205,450

 

Accumulated depreciation and amortization

 

(790,414

)

 

 

(753,947

)

Real estate, net

 

2,499,046

 

 

 

2,451,503

 

Operating lease right-of-use assets

 

64,078

 

 

 

69,361

 

Cash and cash equivalents

 

108,437

 

 

 

164,478

 

Restricted cash

 

43,954

 

 

 

55,358

 

Tenant and other receivables

 

16,398

 

 

 

15,812

 

Receivable arising from the straight-lining of rents

 

64,214

 

 

 

62,692

 

Identified intangible assets, net of accumulated amortization of $39,307 and $37,361, respectively

 

65,974

 

 

 

71,107

 

Deferred leasing costs, net of accumulated amortization of $19,621 and $17,641, respectively

 

21,742

 

 

 

20,694

 

Prepaid expenses and other assets

 

77,649

 

 

 

74,111

 

Total assets

$

2,961,492

 

 

$

2,985,116

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

Liabilities:

 

 

 

Mortgages payable, net

$

1,695,776

 

 

$

1,687,190

 

Operating lease liabilities

 

59,581

 

 

 

64,578

 

Accounts payable, accrued expenses and other liabilities

 

78,710

 

 

 

84,829

 

Identified intangible liabilities, net of accumulated amortization of $39,040 and $35,029, respectively

 

95,371

 

 

 

100,625

 

Total liabilities

 

1,929,438

 

 

 

1,937,222

 

Commitments and contingencies

 

 

 

Shareholders' equity:

 

 

 

Common shares: $0.01 par value; 500,000,000 shares authorized and 117,440,748 and 117,147,986 shares issued and outstanding, respectively

 

1,173

 

 

 

1,170

 

Additional paid-in capital

 

1,006,348

 

 

 

1,001,253

 

Accumulated other comprehensive income

 

554

 

 

 

?

 

Accumulated deficit

 

(30,982

)

 

 

(7,091

)

Noncontrolling interests:

 

 

 

Operating partnership

 

41,387

 

 

 

39,616

 

Consolidated subsidiaries

 

13,574

 

 

 

12,946

 

Total equity

 

1,032,054

 

 

 

1,047,894

 

Total liabilities and equity

$

2,961,492

 

 

$

2,985,116

 

URBAN EDGE PROPERTIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2022

 

2021

 

2022

 

2021

REVENUE

 

 

 

 

 

 

 

Rental revenue

$

98,175

 

 

$

105,985

 

 

$

295,045

 

 

$

294,257

 

Other income

 

115

 

 

 

854

 

 

 

1,300

 

 

 

2,249

 

Total revenue

 

98,290

 

 

 

106,839

 

 

 

296,345

 

 

 

296,506

 

EXPENSES

 

 

 

 

 

 

 

Depreciation and amortization

 

24,343

 

 

 

23,171

 

 

 

73,561

 

 

 

68,534

 

Real estate taxes

 

16,231

 

 

 

15,862

 

 

 

47,662

 

 

 

47,826

 

Property operating

 

17,672

 

 

 

15,692

 

 

 

56,473

 

 

 

51,874

 

General and administrative

 

9,852

 

 

 

10,134

 

 

 

31,607

 

 

 

28,286

 

Casualty and impairment loss

 

?

 

 

 

372

 

 

 

?

 

 

 

372

 

Lease expense

 

3,109

 

 

 

3,164

 

 

 

9,327

 

 

 

9,665

 

Total expenses

 

71,207

 

 

 

68,395

 

 

 

218,630

 

 

 

206,557

 

Gain on sale of real estate

 

?

 

 

 

6,926

 

 

 

353

 

 

 

18,648

 

Interest income

 

294

 

 

 

77

 

 

 

713

 

 

 

303

 

Interest and debt expense

 

(15,266

)

 

 

(14,638

)

 

 

(43,511

)

 

 

(44,193

)

Income before income taxes

 

12,111

 

 

 

30,809

 

 

 

35,270

 

 

 

64,707

 

Income tax expense

 

(646

)

 

 

(704

)

 

 

(2,262

)

 

 

(905

)

Net income

 

11,465

 

 

 

30,105

 

 

 

33,008

 

 

 

63,802

 

Less net (income) loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

Operating partnership

 

(455

)

 

 

(1,149

)

 

 

(1,348

)

 

 

(2,608

)

Consolidated subsidiaries

 

373

 

 

 

(1,190

)

 

 

835

 

 

 

(961

)

Net income attributable to common shareholders

$

11,383

 

 

$

27,766

 

 

$

32,495

 

 

$

60,233

 

 

 

 

 

 

 

 

 

Earnings per common share - Basic:

$

0.10

 

 

$

0.24

 

 

$

0.28

 

 

$

0.51

 

Earnings per common share - Diluted:

$

0.10

 

 

$

0.24

 

 

$

0.28

 

 

$

0.51

 

Weighted average shares outstanding - Basic

 

117,382

 

 

 

117,087

 

 

 

117,359

 

 

 

117,009

 

Weighted average shares outstanding - Diluted

 

121,683

 

 

 

117,137

 

 

 

121,472

 

 

 

122,212

 

 

 

 

 

 

 

 

 

Reconciliation of Net Income to FFO and FFO as Adjusted

The following table reflects the reconciliation of net income to FFO and FFO as Adjusted for the three and nine months ended September 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 4 for a description of FFO and FFO as Adjusted.

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands, except per share amounts)

2022

 

2021

 

2022

 

2021

Net income

$

11,465

 

 

$

30,105

 

 

$

33,008

 

 

$

63,802

 

Less net (income) loss attributable to noncontrolling interests in:

 

 

 

 

 

 

 

Operating partnership

 

(455

)

 

 

(1,149

)

 

 

(1,348

)

 

 

(2,608

)

Consolidated subsidiaries

 

373

 

 

 

(1,190

)

 

 

835

 

 

 

(961

)

Net income attributable to common shareholders

 

11,383

 

 

 

27,766

 

 

 

32,495

 

 

 

60,233

 

Adjustments:

 

 

 

 

 

 

 

Rental property depreciation and amortization

 

24,100

 

 

 

22,941

 

 

 

72,855

 

 

 

67,898

 

Limited partnership interests in operating partnership

 

455

 

 

 

1,149

 

 

 

1,348

 

 

 

2,608

 

Gain on sale of real estate

 

?

 

 

 

(6,926

)

 

 

(353

)

 

 

(18,648

)

Real estate impairment loss

 

?

 

 

 

372

 

 

 

?

 

 

 

372

 

FFO Applicable to diluted common shareholders

 

35,938

 

 

 

45,302

 

 

 

106,345

 

 

 

112,463

 

FFO per diluted common share(1)

 

0.29

 

 

 

0.37

 

 

 

0.87

 

 

 

0.92

 

Adjustments to FFO:

 

 

 

 

 

 

 

Transaction, severance and other expenses

 

674

 

 

 

526

 

 

 

1,806

 

 

 

271

 

Reinstatement of receivables arising from the straight-lining of rents, net of write-offs

 

(102

)

 

 

(716

)

 

 

(235

)

 

 

(82

)

Impact of lease terminations(2)

 

?

 

 

 

(11,078

)

 

 

?

 

 

 

(11,078

)

Tenant bankruptcy settlement income

 

?

 

 

 

(464

)

 

 

(36

)

 

 

(752

)

Tax impact of Puerto Rico transactions

 

?

 

 

 

37

 

 

 

?

 

 

 

(453

)

FFO as Adjusted applicable to diluted common shareholders

$

36,510

 

 

$

33,607

 

 

$

107,880

 

 

$

100,369

 

FFO as Adjusted per diluted common share(1)

$

0.30

 

 

$

0.28

 

 

$

0.88

 

 

$

0.82

 

 

 

 

 

 

 

 

 

Weighted Average diluted common shares(1)

 

122,413

 

 

 

121,987

 

 

 

122,372

 

 

 

122,212

 

(1)

Weighted average diluted shares used to calculate FFO per share and FFO as Adjusted per share for the three months ended September 30, 2022 and 2021 and the nine months ended September 30, 2022 are higher than the GAAP weighted average diluted shares as a result of the dilutive impact of LTIP and OP units which may be redeemed for our common shares.

(2)

During the third quarter of 2021, net income includes $12.5 million of accelerated amortization of below-market lease intangibles resulting from the termination of our leases with Kmart and Sears. The $11.1 million adjustment to FFO in calculating FFO as Adjusted is net of the $1.4 million attributable to the noncontrolling interest in Sunrise Mall.

Reconciliation of Net Income to NOI and Same-Property NOI

The following table reflects the reconciliation of net income to NOI, same-property NOI and same-property NOI including properties in redevelopment for the three and nine months ended September 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 4 for a description of NOI and same-property NOI.

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands)

2022

 

2021

 

2022

 

2021

Net income

$

11,465

 

 

$

30,105

 

 

$

33,008

 

 

$

63,802

 

Other (income) expense

 

230

 

 

 

(75

)

 

 

(300

)

 

 

(524

)

Depreciation and amortization

 

24,343

 

 

 

23,171

 

 

 

73,561

 

 

 

68,534

 

General and administrative expense

 

9,852

 

 

 

10,134

 

 

 

31,607

 

 

 

28,286

 

Gain on sale of real estate

 

?

 

 

 

(6,926

)

 

 

(353

)

 

 

(18,648

)

Interest income

 

(294

)

 

 

(77

)

 

 

(713

)

 

 

(303

)

Interest and debt expense

 

15,266

 

 

 

14,638

 

 

 

43,511

 

 

 

44,193

 

Income tax expense

 

646

 

 

 

704

 

 

 

2,262

 

 

 

905

 

Real estate impairment loss

 

?

 

 

 

372

 

 

 

?

 

 

 

372

 

Non-cash revenue and expenses

 

(1,922

)

 

 

(15,237

)

 

 

(6,287

)

 

 

(18,992

)

NOI

 

59,586

 

 

 

56,809

 

 

 

176,296

 

 

 

167,625

 

Adjustments:

 

 

 

 

 

 

 

Non-same property NOI and other(1)

 

(8,466

)

 

 

(6,273

)

 

 

(23,677

)

 

 

(18,143

)

Sunrise Mall net operating loss

 

1,637

 

 

 

1,023

 

 

 

3,338

 

 

 

2,661

 

Tenant bankruptcy settlement income and lease termination income

 

(7

)

 

 

(533

)

 

 

(117

)

 

 

(1,294

)

Same-property NOI

$

52,750

 

 

$

51,026

 

 

$

155,840

 

 

$

150,849

 

NOI related to properties being redeveloped

 

4,964

 

 

 

5,829

 

 

 

13,930

 

 

 

16,083

 

Same-property NOI including properties in redevelopment

$

57,714

 

 

$

56,855

 

 

$

169,770

 

 

$

166,932

 

 

(1) Non-same property NOI includes NOI related to properties being redeveloped and properties acquired or disposed in the period.

Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre

The following table reflects the reconciliation of net income to EBITDAre and Adjusted EBITDAre for the three and nine months ended September 30, 2022 and 2021. Net income is considered the most directly comparable GAAP measure. Refer to "Non-GAAP Financial Measures" on page 4 for a description of EBITDAre and Adjusted EBITDAre.

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(in thousands)

2022

 

2021

 

2022

 

2021

Net income

$

11,465

 

 

$

30,105

 

 

$

33,008

 

 

$

63,802

 

Depreciation and amortization

 

24,343

 

 

 

23,171

 

 

 

73,561

 

 

 

68,534

 

Interest and debt expense

 

15,266

 

 

 

14,638

 

 

 

43,511

 

 

 

44,193

 

Income tax expense

 

646

 

 

 

704

 

 

 

2,262

 

 

 

905

 

Gain on sale of real estate

 

?

 

 

 

(6,926

)

 

 

(353

)

 

 

(18,648

)

Real estate impairment loss

 

?

 

 

 

372

 

 

 

?

 

 

 

372

 

EBITDAre

 

51,720

 

 

 

62,064

 

 

 

151,989

 

 

 

159,158

 

Adjustments for Adjusted EBITDAre:

 

 

 

 

 

 

 

Transaction, severance and other expenses

 

674

 

 

 

526

 

 

 

1,806

 

 

 

271

 

Reinstatement of receivables arising from the straight-lining of rents, net of write-offs

 

(102

)

 

 

(716

)

 

 

(235

)

 

 

(82

)

Impact of lease terminations(1)

 

?

 

 

 

(12,481

)

 

 

?

 

 

 

(12,481

)

Tenant bankruptcy settlement income

 

?

 

 

 

(464

)

 

 

(36

)

 

 

(752

)

Adjusted EBITDAre

$

52,292

 

 

$

48,929

 

 

$

153,524

 

 

$

146,114

 

 

 

 

 

 

 

 

 

(1) Amount reflects accelerated amortization of $12.5 million of below-market lease intangibles related to the termination of our leases with Kmart and Sears in the third quarter of 2021 (classified within rental revenue in the consolidated statements of income).

 


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