DDR FFO per share increases by 10.0% for 4th quarter 1996 compared to 4th quarter 1995 and 14.6% for the year ended December 31, 1996 as compared to 1995.CLEVELAND--(BUSINESS WIRE)--Feb. 25, 1997--Developers Diversified diversified (di·verˑ·s Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Corporation (NYSE NYSE See: New York Stock Exchange :DDR (Double Data Rate) Refers to an SDRAM memory chip that increases performance by doubling the effective data rate of the frontside bus. For more details, see SDRAM. DDR - Double Data Rate Random Access Memory ) announces that fourth quarter Funds From Operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. ("FFO FFO See: Funds from operations "), a widely accepted measure of REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). performance, grew 25.8% to $16.6 million or $.77 per share for the fourth quarter of 1996, a 10.0% increase on a per share basis over adjusted fourth quarter 1995 FFO of $13.2 million or $.70 per share. Net income and income before extraordinary item for the fourth quarter of 1996 increased 46.4% to $12.3 million, or $.40 per share, an increase of 5.3% on a per share basis over fourth quarter 1995 of $8.4 million, or $.38 per share. FFO for the year ended December 31, 1996 grew 28.9% to $64.6 million or $3.06 per share, an increase of 14.6% on a per share basis over the year ended December 31, 1995 adjusted FFO of $50.1 million or $2.67 per share. Income before extraordinary item for the year ended December 31, 1996 increased 70.1% to $49.5 million or $1.67 per share, as compared to $29.1 million or $1.48 per share in 1995, an increase of 12.8% on a per share basis. Net income for the year ended December 31, 1996 was $49.5 million, or $1.67 per share, as compared to $25.5 million or $1.29 per share in 1995. Commenting on the fourth quarter results, Scott A. Wolstein, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. stated, "We are pleased with the Company's Fourth Quarter results, particularly in light of the significant amount of retenanting activity which has been ongoing during the year. During the past year the Company has executed an unprecedented number of new anchor tenant leases at its shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into , the majority of which will not contribute to base rental revenues until 1997. Our continued ability to retenant and expand our retail properties is a tribute both to the quality of our portfolio and the proactive approach of our management team." Leasing: Leasing and expansion activity continued to result in increased rental revenues. Aggregate base and percentage revenues from the 1995 Core Portfolio Properties (i.e. shopping center properties owned since January 1, 1995) increased approximately $2.5 million for the year ended December 31, 1996 as compared to the same period in 1995, representing a 3.3% increase. At December 31, 1996 the occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) of the Company's shopping centers was at 94.8% as compared to 96.3% at December 31, 1995. Contributing to the decrease in occupancy was the Company's decision to terminate the leases of two Wal-Mart stores in Winchester and Martinsville, Virginia Martinsville is an independent city located within the confines of Henry County, Virginia. The population was 15,416 at the 2000 census. The Bureau of Economic Analysis combines the city of Martinsville with Henry county for statistical purposes. at the end of June 1996. The former Wal-Mart space in each center has been leased to a variety of tenants at higher rents commencing in the fourth quarter of 1996 and first half of 1997. The Company has entered into additional leases with anchor tenants aggregating in excess of 240,000 square feet of vacant space which includes the above mentioned Wal-Mart space which brings the existing occupancy rate to 96.0%. The average annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. base rent per leased square foot, including those properties owned through joint ventures, was $7.85 at December 31, 1996 as compared to $7.61 at December 31, 1995. Expansions: During 1996, the Company completed a 137,346 square foot Kohl's and Dick's Sporting Goods Dick's Sporting Goods (NYSE: DKS) is the largest full-line sporting goods retailer in the world. It is headquartered in Pittsburgh, Pennsylvania, USA and has locations in thirty-four states with 314 stores. expansion in Highland Heights, Ohio Highland Heights is a city in Cuyahoga County, Ohio in the United States. Highland Heights is a suburb of Cleveland, Ohio. Highland Heights was originally part of Mayfield Township. The population was 8,082 at the 2000 census. and a 73,294 square foot Cinemark expansion in Erie, Pennsylvania “Erie” redirects here. For other uses, see Erie (disambiguation). Erie (pronounced IPA: /ˈɪəri/) is a major industrial city on the shore of Lake Erie in the northwestern corner of the U.S. , a 40,000 square foot Wal-Mart expansion in North Charleston, South Carolina North Charleston is a suburban city in the metropolitan area of Charleston, South Carolina. As of 2005 estimates, the city had a total population of 86,313. This ranks as 3rd in city limit populations within the state, after Columbia and Charleston. As defined by the U.S. , a 60,000 square foot expansion in Birmingham, Alabama Birmingham (pronounced [ˈbɝmɪŋˌhæm]) is the largest city in the U.S. state of Alabama and is the county seat of Jefferson County. , and the addition of new movie theaters at the Company's shopping centers in Brainerd, Minnesota Brainerd is a city in Crow Wing County, Minnesota, United States. The population was 13,178 at the 2000 census. It is the county seat of Crow Wing County6 and one of the largest cities in Central Minnesota. Brainerd has been assigned ZIP code 56401. and Watertown, South Dakota Watertown is a city in Codington County, South Dakota, USA. The population was 20,237 at the 2000 census. It is the county seat of Codington CountyGR6. Paul S. Fox is the current Mayor. Watertown has one public high school, Watertown Sr. . The Company has also commenced expansions at seven of its shopping centers including a 50,000 square foot expansion in Birmingham, Alabama; a 98,000 square foot expansion in Spring Hill, Florida Spring Hill is a census-designated place (CDP) in Hernando County, Florida, United States. The population was 69,078 at the 2000 census, and was estimated to be 85,894 in 2005 by the American Community Survey. ; a 30,000 square foot supermarket expansion in Chillicothe, Ohio Chillicothe is a city in the U.S. state of Ohio and the county seat of Ross CountyGR6. The municipality is located in southern Ohio along the Scioto River. The name comes from the Shawnee name Chalahgawtha, meaning "principal town. ; a 44,000 square foot expansion in Marietta, Georgia Marietta is a city located in central Cobb County, Georgia GR6, and is its county seat. As of the 2000 census, the city had a total population of 58,748, making it one of metro Atlanta's largest suburbs. ; a 79,000 square foot expansion and redevelopment in Martinsville, Virginia, a 130,000 square foot redevelopment in Winchester, Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). and an 18,000 square foot retail expansion in East Norriton, Pennsylvania. Acquisitions: On July 2, 1996, the Company acquired four shopping centers located in Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. ; Minneapolis, Minnesota “Minneapolis” redirects here. For other uses, see Minneapolis (disambiguation). Minneapolis (pronounced IPA: /ˌmɪniˈæpəlɪs/) is the largest city in the U.S. ; Highland, Indiana Highland is the name of some places in the U.S. state of Indiana:
Developments: During 1996, the Company completed the first phase of a 520,000 square foot shopping center development in Canton, Ohio Canton is a city in the U.S. state of Ohio and the county seat of Stark CountyGR6. The municipality is located in northeastern Ohio and is situated on the Nimishillen Creek, approximately 24 miles (38 km) south of Akron[4] which includes Target (not owned by the Company), Kohl's, and Dick's Sporting Goods as anchor tenants. The Company is also in the final stages of construction of an 84,000 square foot community shopping center in Aurora, Ohio Aurora is a city located in Portage County, Ohio, United States. It is co-extant with, and formed from, the former township of Aurora, which was formed from the Connecticut Western Reserve. As of the 2000 census, the city had a total population of 13,556. with a Heinen's Supermarket (not owned by the Company) and Revco Drug Store as anchor tenants. Development activity also continues to progress at the Company's shopping centers in Independence, Missouri Independence is the fourth largest city in Missouri, USA. It is part of the Kansas City Metropolitan Area. As of the 2006, the city had a total population of 109,400[1]. It is the county seat of Jackson CountyGR6. ; Atlanta, Georgia and Framingham, Massachusetts Framingham is a town in Middlesex County, Massachusetts. As of the 2000 census, the population was 66,910, making it the most populous town in New England. The 2005 population estimate is 65,598. which were acquired in connection with the Community Center Joint Ventures in November 1995. The Independence shopping center is substantially complete and the Atlanta and Framingham centers are scheduled to be completed by the second quarter of 1997. Several tenants have already opened at each center and others will be opening at each center in the first quarter of 1997. Construction has also commenced on the development of four additional shopping centers which include: (i) a 235,000 square foot Phase II development of the Canton, Ohio center which will include Home Place, Service Merchandise Service Merchandise was a chain of large stores carrying fine jewelry, toys, sporting goods, and electronics that existed from 1934 to 2002. The company's former chairman, Raymond Zimmerman, resurrected Service Merchandise as an Internet-only retailer in 2004 after buying the name , Petsmart and JoAnn Fabrics as anchor tenants; (ii) a 500,000 square foot shopping center in Boardman, Ohio Boardman is a census-designated place (CDP) located in Mahoning County, Ohio, United States, just south of Youngstown. As of the 2000 census, the CDP had a total population of 37,215. Geography Boardman is located at 41°2'20" North, 80°39'55" West (41.038958, -80. which will include Wal-Mart, Lowe's, Dick's Sporting Goods, Giant Eagle Supermarket, Staples staples U-shaped stainless steel or vitallium units with sharp points used for surgical fixation. epiphyseal staples used to staple epiphysis to metaphysis; have metal bracing at the corners. and Petsmart as anchor tenants; (iii) a 475,000 square foot shopping center in Stow, Ohio Stow is a city in Summit County, Ohio, United States. The population was 32,139 at the 2000 census, and 34,404 as of 2005. It is a suburb of Akron, located adjacent to several other suburban communities in Summit and Portage counties. which will include Target (not owned by the Company), Kohl's, Giant Eagle Supermarket, Stein Mart Stein Mart NASDAQ: SMRT is a chain of department stores that sells boutique, apparel, footwear, linens and home decor. Stein Mart, Inc. is based in Jacksonville, Florida, and describes itself as "a hybrid between a better department/specialty store and a traditional and Office Max as anchor tenants and (iv) a 445,000 square foot shopping center in Merriam, Kansas Merriam is a city in the northeastern part of Johnson County, located in northeast Kansas, in the central United States. The population was estimated to be 10,769 in the year 2005.[1] As a suburb of Kansas City, it is included in the Kansas City Metropolitan Area. which is being developed through a joint venture formed in October 1996, 50% of which is owned by the Company. This center will include Home Depot The Home Depot (NYSE: HD) is an American retailer of home improvement and construction products and services. Headquartered in Vinings, just outside Atlanta in unincorporated Cobb County, Georgia, Home Depot employs more than 355,000 people and operates 2,164 big-box , Cinemark, Hen Hen, in the Bible, man who was to have a memorial in the temple. House Supermarket, and Petsmart as anchor tenants. All of the above shopping centers are scheduled for completion during the second half of 1997. Certain anchor tenants have opened during the fourth quarter of 1996 at the Stow, Ohio development and additional anchor tenants are opening in other developments as early as the first quarter of 1997. Financings: In March, 1996, the Company successfully completed a 2,611,500 common share offering and received net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of approximately $75.4 million which were primarily used to retire variable rate debt. The common share offering significantly strengthened the Company's balance sheet and positioned the Company to continue to take advantage of attractive acquisition, development and expansion opportunities. During 1996, the Company issued $111.7 million of senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. fixed rate notes through its Medium Term Note program with maturities ranging from five to seven years and interest rates ranging from 6.58% to 7.42%. The Company also repaid approximately $30 million of mortgage debt with a weighted average interest rate of 8.8% which also unencumbered Unencumbered Property that is not subject to any creditor claims or liens. Notes: For example, if a house is owned free and clear (meaning the owner owes no mortgage to anyone), it is unencumbered. three shopping center properties. In June 1996, the Company extended its $150 million unsecured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility, agented by the First National Bank of Chicago and the First National Bank of Boston, for an additional year, through May 1999, and reduced the interest rate 25 basis points. In September 1996, the Company restructured its $25 million secured revolving credit facility with National City Bank. This restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). resulted in an $18.6 million ten year non-recourse mortgage loan, which was transferred to the OSTRS OSTRS Ohio State Teachers Retirement System Joint Venture as discussed below, and a $10 million unsecured revolving credit facility which matures in November 1999. This restructuring resulted in the mortgage release of two of the three shopping centers which served as collateral for the $25 million secured revolving credit facility. In September 1996, the Company entered into a joint venture with Ohio State Teachers Retirement Systems (OSTRS) involving the ownership and management of two of the Company's recently developed shopping centers located in Macedonia, Ohio
Macedonia is a city in Summit County, Ohio, United States. The population was 9,224 at the 2000 census. Macedonia is part of Greater Cleveland. and Canton, Ohio. The Company transferred the shopping centers to the Joint Venture at an initial value of approximately $6 million in excess of the Company's cost basis. Developers Diversified Realty Corporation Developers Diversified Realty Corporation is one of the largest owners and developers of retail shopping centers in the U.S. Based in Beachwood, Ohio, an eastern suburb of Greater Cleveland, DDRC, a publicly traded company on the NYSE, leads the real estate industry in power is a self-administered and self-managed Real Estate Investment Trust ("REIT") operating as a fully-integrated real estate Company which acquires, develops, owns, leases and manages shopping centers and business centers. -0-
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(in thousands - except per share data)
Three Month Period Year Ended
Ended December 31, December 31,
__________________ __________________
1996 1995 1996 1995
________ ________ ________ ________
Revenues:
Minimum rent (1) $25,285 $21,829 $96,286 $82,722
Percentage and overage
rents 360 323 1,862 1,663
Recoveries from tenants 6,443 5,373 24,128 19,255
Management fee income 887 217 2,632 556
Other (2) 857 1,245 5,998 3,609
_______ _______ _______ _______
33,832 28,987 130,906 107,805
_______ _______ _______ _______
Expenses:
Operating and
maintenance 3,349 2,393 12,099 9,098
Real estate taxes 3,884 3,700 14,589 12,593
General and
administrative 2,424 1,519 8,436 6,378
Interest 7,967 8,082 29,888 29,595
Depreciation and
amortization 6,609 5,587 25,062 21,865
_______ _______ _______ _______
24,233 21,281 90,074 79,529
_______ _______ _______ _______
Income before equity in net
income of joint
ventures, net gain on sales
of land and
extraordinary item 9,599 7,706 40,832 28,276
Equity in net income
of joint ventures (3) 2,697 681 8,710 486
Gain on sales of land, net - - - 300
_______ _______ _______ _______
Income before
extraordinary item 12,296 8,387 49,542 29,062
Extraordinary item:
Loss on extinguishment
of debt - - - (3,557)
_______ _______ _______ _______
Net Income $12,296 $8,387 $49,542 $25,505
_______ _______ _______ _______
_______ _______ _______ _______
Net Income, applicable
to common shareholders $8,746 $7,132 $35,342 $24,250
_______ _______ _______ _______
_______ _______ _______ _______
Funds From Operations
("FFO"):
Net income applicable
to common shareholders $8,746 $7,132 $35,342 $24,250
Depreciation and
amortization of real
property (4) 6,537 5,543 24,832 21,706
Equity in net income
of joint ventures (2,697) (681) (8,710) (486)
Joint Ventures FFO (3) 3,973 1,253 13,172 1,364
Gain on sales of land - - - (300)
Extraordinary item - - - 3,557
_______ _______ _______ _______
$16,559 $13,247 $64,636 $50,091
_______ _______ _______ _______
_______ _______ _______ _______
Per share data:
Income before
extraordinary item:
Primary $0.40 $0.38 $1.67 $1.48
_______ _______ _______ _______
_______ _______ _______ _______
Fully diluted $0.40 $0.37 $1.66 $1.47
_______ _______ _______ _______
_______ _______ _______ _______
Net income:
Primary $0.40 $0.38 $1.67 $1.29
_______ _______ _______ _______
_______ _______ _______ _______
Fully diluted $0.40 $0.37 $1.66 $1.28
_______ _______ _______ _______
_______ _______ _______ _______
Dividends declared -
common shares $0.60 $0.54 $2.40 $2.16
_______ _______ _______ _______
_______ _______ _______ _______
Funds From Operations $0.77 $0.70 $3.06 $2.67
_______ _______ _______ _______
_______ _______ _______ _______
Weighted average shares
outstanding (in thousands) 21,642 18,965 21,142 18,780
_______ _______ _______ _______
_______ _______ _______ _______
(1) Increases in shopping center base and percentage and overage
rental revenues for the year ended December 31, 1996, as compared to
1995, aggregated $13.8 million and consisted of $2.5 million relating
to leasing and expansion of core portfolio properties (an increase of
3.3% over 1995), $10.5 million relating to 1995 and 1996 acquisitions
and $2.3 million relating to developments. The above increases were
offset by the transfer of two properties to joint ventures and
reduction of business center base rents aggregating $1.5 million.
Included in the rental revenues for the years ending December 31,
1996 and 1995 is approximately $0.7 million and $0.1 million,
respectively, of revenue resulting from the recognition of straight
line rents primarily associated with recent acquisitions and
developments.
(2) Other income for the years ending December 31, 1996 includes
approximately $3.0 million in lease termination revenues, none of
which is reflected in the fourth quarter of 1996 and $0.7 million of
development fee income of which approximately $0.1 million is
reflected in the three month period ended December 31, 1996. Other
income for the year ended December 31, 1995 includes approximately
$1.4 million of lease termination revenues and development fee income
of which $0.6 million is reflected in the three month period ended
December 31, 1995.
(3) The following is a summary of the Company's combined operating
results relating to the Company's joint ventures, including the
Community Center Joint Ventures purchased in November 1995 in
connection with the acquisitions of the Homart Community Center
Division of Sears, Roebuck & Company:
Three Month Period Year Ended
ended December 31, December 31,
_________________ __________________
1996 1995 1996 1995
_______ _______ _______ _______
Revenues from operations (a) $18,046 $ 6,947 $63,682 $ 9,357
_______ _______ _______ _______
Operating expenses 4,034 1,775 16,193 2,377
Depreciation 2,553 1,146 8,924 1,756
Interest expense 6,065 2,665 21,146 4,252
_______ _______ _______ _______
12,652 5,586 46,263 8,385
_______ _______ _______ _______
Net income 5,394 1,361 17,419 972
DDRC Ownership interests 50% 50% 50% 50%
_______ _______ _______ _______
$ 2,697 $ 681 $ 8,710 $ 486
_______ _______ _______ _______
_______ _______ _______ _______
Joint Venture Funds From Operations are summarized as follows:
Net income $ 5,394 $ 1,361 $17,419 $ 972
Depreciation of real property 2,553 1,146 8,924 1,756
_______ _______ _______ _______
7,947 2,507 26,343 2,728
DDRC Ownership interests 50% 50% 50% 50%
_______ _______ _______ _______
$ 3,973 $ 1,253 $13,172 $ 1,364
_______ _______ _______ _______
_______ _______ _______ _______
(a) Revenues for the three month periods ended December 31, 1996 and
1995 includes approximately $0.6 million and $0.4 million,
respectively, resulting from the recognition of straight line rents
of which the Company's proportionate share is $0.3 million and
$0.2 million, respectively. Revenues for the years ended
December 31, 1996 and 1995 includes approximately $2.3 million and
$0.4 million, respectively, resulting from the recognition of
straight line rents of which the Company's proportionate share is
$1.1 million and $0.2 million, respectively.
(4) The 1995 FFO amounts were adjusted to eliminate depreciation of
personal property.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Financial Highlights
(in thousands)
Selected Balance Sheet Data:
December 31, 1996 December 31, 1995
__________________ _________________
Assets:
Real estate and rental property
Land $ 122,696 $ 109,325
Land under development 27,305 18,441
Buildings 798,477 688,123
Fixtures and tenant improvements 14,805 13,678
Construction in progress 28,364 18,807
_____________ _____________
991,647 848,374
Less accumulated depreciation (142,039) (120,041)
_____________ _____________
849,608 728,333
Cash 12 12
Advances to and investments
in joint ventures 106,796 83,190
Other assets 18,710 18,525
_____________ _____________
$ 975,126 $ 830,060
_____________ _____________
_____________ _____________
Liabilities:
Indebtedness:
Revolving credit facilities $ 95,500 $ 87,500
Senior unsecured fixed rate debt 215,493 103,731
Mortgage debt 107,439 154,495
Subordinated debentures 60,000 60,000
_____________ _____________
478,432 405,726
Other liabilities 27,358 20,173
_____________ _____________
505,790 425,899
Shareholders' Equity 469,336 404,161
_____________ _____________
$ 975,126 $ 830,060
_____________ _____________
_____________ _____________
Note: In January 1997, the Company issued 3.4 million common
shares at an offering price of $36.625. The net proceeds of
approximately $116 million were used to repay revolving credit debt
and for general corporate purposes.
CONTACT: Developers Diversified Realty Corporation Scott A. Wolstein, 216/247-4700 |
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