Exhibit 99.1

 

LOGO


DDR Corp.

Table of Contents

 

Section   Page

Earnings Release & Financial Statements

 

Press Release

  1–7

Company Summary

 

Portfolio Summary

  8

Capital Structure

  9

Same Store Metrics

  10

Leasing Summary

  11

Top 50 Tenants

  12

Lease Expirations

  13

Investments

 

Developments/Redevelopments

  14

Transactions

  15

Debt Summary

 

Debt Summary

  16

Consolidated Debt Detail

  17–18

Unconsolidated Debt Detail

  19–20

Debt/Adjusted EBITDA

  21

Unconsolidated Joint Ventures

 

Unconsolidated Joint Ventures

  22–23

Reporting Policies and Other

 

Notable Accounting and Supplemental Policies

  24–25

Non-GAAP Measures and Reconciliations

  26–29

Leasing Metrics for Wholly-Owned and Joint Ventures at 100%

  30–33

Property List

  34–40

DDR considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectations for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including among other factors, local conditions such as supply of space or a reduction in demand for real estate in the area; competition from other available space; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant; redevelopment and construction activities may not achieve a desired return on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements; the success of our deleveraging strategy; any impact or results from the Company’s portfolio transition or any change in strategy; and the finalization of the financial statements for the period ended June 30, 2017. For additional factors that could cause the results of the Company to differ materially from these indicated in the forward-looking statements, please refer to the Company’s Form 10-K for the year ended December 31, 2016. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.


LOGO

For immediate release:

DDR REPORTS SECOND QUARTER 2017 OPERATING RESULTS

BEACHWOOD, OHIO, July 26, 2017 – DDR Corp. (NYSE: DDR) today announced operating results for the quarter ended June 30, 2017.

“Our second quarter results were characterized by strong financial and operational execution. We made progress reducing leverage and lengthening our average debt maturity by selling assets and accessing the capital markets. Our operations were ahead of plan and we completed our portfolio review and strategic planning process over a compressed time-period. I am excited about continuing to execute on these plans, which should position the company for strong future growth,” commented David R. Lukes, president and chief executive officer.

Financial Highlights

    Second quarter net income attributable to common shareholders was $23.2 million, or $0.06 per diluted share, as compared to net income of $35.5 million, or $0.10 per diluted share, in the year ago-period. The year-over-year decline in net income attributable to common shareholders is primarily attributable to impairment charges aggregating $28.1 million recorded on one shopping center and two parcels of undeveloped land.
    Second quarter operating funds from operations attributable to common shareholders (“Operating FFO” or “OFFO”) was $108.8 million, or $0.30 per diluted share, compared to $122.4 million, or $0.33 per diluted share in the year ago-period. The year-over-year decrease in OFFO is primarily attributable to the dilutive impact of deleveraging asset sales.

Significant Second Quarter Activity

Asset Sales

    Generated total asset sales and loan repayment proceeds of $237.5 million, totaling $225.7 million at DDR’s share
    Sold two shopping centers in Puerto Rico for an aggregate sales price of $57.3 million
    Sold nine shopping centers in the U.S. for an aggregate sales price of $149.2 million, totaling $137.5 million at DDR’s share

Capital Markets and Investments

    Issued $450 million aggregate principal amount of 4.700% senior unsecured notes due 2027
    Issued $175 million aggregate principal amount of 6.375% Class A Cumulative Redeemable Preferred Shares
    Repaid in July 2017, $300 million 4.75% senior unsecured notes due April 2018
    Recapitalized the DDR Domestic Retail Fund I joint venture which included a new $707 million mortgage loan on 52 assets to repay all of the joint venture’s outstanding mortgage debt

Key Operating Results

    Reported a decrease in same store net operating income, including Puerto Rico, of -0.1% on a pro rata basis; and excluding Puerto Rico, same store net operating income was flat on a pro rata basis; presentation has been adjusted to include bad debt expense on a comparable basis
    Executed 258 new leases and renewals for 1.9 million square feet
    Generated new leasing spreads of 10.0% and renewal leasing spreads of 5.7%, both on a pro rata basis and including Puerto Rico for the quarter, and new leasing spreads of 10.4% and renewal leasing spreads of 6.5%, both on a pro rata basis and including Puerto Rico for the trailing twelve-month period
    Reported a portfolio leased rate of 93.7% at June 30, 2017, compared to 96.1% at June 30, 2016, on a pro rata basis
    Annualized base rent per occupied square foot on a pro rata basis was $16.09 at June 30, 2017, compared to $14.92 at June 30, 2016

 

1


Other Significant Activity

    Completed the previously announced portfolio review and strategic planning process.
    As a result of a full portfolio review and subsequent decision on asset sales, the Company recorded impairment charges on one shopping center and two parcels of undeveloped land aggregating $28.1 million in the second quarter.

Guidance

The Company’s 2017 operating assumptions remain as follows:

 

    Expected annual growth in same store net operating income range as follows:
        

DDR Share

    
  U.S. Portfolio    (1.0%) – 0.5%   
  Total Portfolio    (1.5%) – 0.0%   
    Expected leased rate at year end of 93.0% to 93.5%
    Expected General and Administrative expenses of $72 million to $75 million
    Expected Fee income of $30 million to $33 million
    Expected Interest income of $26 million to $29 million
    Expected redevelopment activity placed in service of $80 million (approximately $40 million of incremental same store NOI) weighted towards the second half of the year at high single-digit yields

About DDR Corp.

DDR is an owner and manager of 298 value-oriented shopping centers representing 100 million square feet in 34 states and Puerto Rico. The Company owns a high-quality portfolio of open-air shopping centers in major metropolitan areas that provide a highly-compelling shopping experience and merchandise mix for retail partners and consumers. The Company actively manages its assets with a focus on creating long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol DDR. Additional information about the Company is available at www.ddr.com.

Conference Call and Supplemental Information

The Company will hold its quarterly conference call today at 8:30 a.m. Eastern Time. To participate with access to the slide presentation, please visit the Investors portion of DDR’s website, www.ddr.com/events, or for audio only, dial 877-249-1119 (U.S.), 855-669-9657 (Canada) or 412-542-4143 (international) at least ten minutes prior to the scheduled start of the call. A replay of the conference call will also be available at www.ddr.com/events for one year after the call. A copy of the Company’s Supplemental package is available on the Company’s website at www.ddr.com.

Non-GAAP Measures

FFO is a supplemental non-GAAP financial measure used as a standard in the real estate industry and is a widely accepted measure of real estate investment trust (“REIT”) performance. Management believes that both FFO and Operating FFO provide additional indicators of the financial performance of a REIT. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group.

FFO is generally defined and calculated by the Company as net income (loss), adjusted to exclude: (i) preferred share dividends, (ii) gains and losses from disposition of depreciable real estate property and related investments, which are presented net of taxes, (iii) impairment charges on depreciable real estate property and related investments and (iv) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income (loss) from joint ventures and equity income (loss) from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company’s calculation of FFO is consistent with the NAREIT definition. The Company calculates Operating FFO by excluding certain non-operating charges and gains. Operating FFO is useful to investors as the Company removes non-comparable charges and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio. Other real estate companies may calculate FFO and Operating FFO in a different manner.

The Company also uses net operating income (“NOI”), a non-GAAP financial measure, as a supplemental performance measure. NOI is calculated as property revenues less property-related expenses. The Company believes NOI provides useful information to investors regarding the Company’s financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level and, when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and disposition activity on an unleveraged basis.

 

2


The Company presents NOI information herein on a same store basis or “SSNOI.” The Company defines SSNOI as property revenues less property-related expenses, which exclude straight-line rental income and expenses, lease termination income, management fee expense, fair market value of leases and expense recovery adjustments. The Company presents SSNOI both with and without provisions for uncollectible amounts and/or recoveries thereof. In addition, the Company presents SSNOI both with and without the results of its Puerto Rico portfolio. SSNOI also excludes activity associated with development and major redevelopment and single tenant assets and includes assets owned in comparable periods (15 months for quarter comparisons). SSNOI excludes all non-property and corporate level revenue and expenses. Other real estate companies may calculate NOI and SSNOI in a different manner. The Company believes SSNOI provides investors with additional information regarding the operating performances of comparable assets because it excludes certain non-cash and non-comparable items as noted above.

FFO, Operating FFO, NOI and SSNOI do not represent cash generated from operating activities in accordance with GAAP, are not necessarily indicative of cash available to fund cash needs and should not be considered as alternatives to net income computed in accordance with GAAP as indicators of the Company’s operating performance or as alternatives to cash flow as a measure of liquidity. Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures are included in this release and the accompanying financial supplement.

Safe Harbor

DDR Corp. considers portions of the information in this press release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company’s expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as supply of space or a reduction in demand for real estate in the area; competition from other available space; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant; redevelopment and construction activities may not achieve a desired return on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements; the success of our deleveraging strategy; any impact or results from the Company’s portfolio transition or any change in strategy; and the finalization of the financial statements for the period ended June 30, 2017. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company’s Form 10-K for the year ended December 31, 2016. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

 

3


DDR Corp.

Income Statement: Consolidated Interests

 

  $ in thousands, except per share    
                  2Q17                         2Q16                         6M17                         6M16            
 

Revenues:

       
 

Minimum rents (1)

    $164,623       $178,064       $331,852       $355,431  
 

Percentage rent

    1,823       1,654       3,522       3,590  
 

Recoveries

    55,633       61,376       113,109       122,975  
 

Other property revenues (2)

    5,321       4,762       9,899       10,105  
   

 

 

   

 

 

   

 

 

   

 

 

 
      227,400       245,856       458,382       492,101  
 

Expenses (3):

       
 

Operating and maintenance

    32,150       35,330       65,141       72,588  
 

Real estate taxes

    33,744       36,534       68,073       72,318  
   

 

 

   

 

 

   

 

 

   

 

 

 
      65,894       71,864       133,214       144,906  
 

Net operating income

    161,506       173,992       325,168       347,195  
 

Other income (expense):

       
 

Fee income

    8,787       11,465       18,226       19,643  
 

Interest income

    7,166       9,446       15,558       18,496  
 

Interest expense

    (48,908)       (54,012)       (100,735)       (111,909)  
 

Depreciation and amortization

    (90,276)       (97,698)       (181,160)       (194,600)  
 

General and administrative (4)

    (22,756)       (18,499)       (53,828)       (36,375)  
 

Other income (expense), net

    (954)       2,081       (958)       3,854  
 

Impairment charges

    (28,096)       0       (50,069)       0  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

(Loss) income before earnings from JVs and other

    (13,531)       26,775       (27,798)       46,304  
 

Equity in net (loss) income of JVs

    (717)       1,117       (2,382)       15,538  
 

Reserve of preferred equity interests

    0       0       (76,000)       0  
 

Tax expense

    (473)       (245)       (696)       (703)  
 

Gain on disposition of real estate, net

    44,599       13,721       82,726       26,102  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

Net income (loss)

    29,878       41,368       (24,150)       87,241  
 

Non-controlling interests

    (267)       (310)       (480)       (610)  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

Net income (loss) DDR

    29,611       41,058       (24,630)       86,631  
 

Preferred dividends

    (6,399)       (5,594)       (11,993)       (11,188)  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

Net income (loss) Common Shareholders

    $23,212       $35,464       ($36,623)       $75,443  
 

Weighted average shares – Basic – EPS

    366,987       364,976       366,710       364,834  
 

Assumed conversion of dilutive securities

    43       342       0       346  
   

 

 

   

 

 

   

 

 

   

 

 

 
 

Weighted average shares – Diluted – EPS

    367,030       365,318       366,710       365,180  
 

Earnings per common share – Basic & Diluted

    $0.06       $0.10       ($0.10)       $0.21  
 

Revenue items:

       

(1)

 

Ground lease revenue

    $10,796       $10,240       $21,688       $20,340  

(2)

 

Lease termination fees

    630       216       808       1,445  

(3)

 

Operating expenses:

       
 

Recoverable expenses

    (60,237)       (65,031)       (122,354)       (131,147)  
 

Non-recoverable expenses

    (5,325)       (5,633)       (9,604)       (11,532)  
 

Bad debt expense

    (332)       (1,200)       (1,256)       (2,227)  

(4)

 

General and administrative expenses:

       
 

Separation charges

    (5,081)       0       (16,552)       0  
 

Internal leasing expenses

    (1,258)       (1,979)       (2,850)       (4,061)  
 

Construction administrative costs (capitalized)

    1,830       1,948       4,218       3,900  

 

4


DDR Corp.

Reconciliation: Net Income (Loss) to FFO and Operating FFO

and Other Financial Information

 

$ in thousands, except per share

   
              2Q17                         2Q16                         6M17                         6M16            

Net income (loss) attributable to Common Shareholders

    $23,212       $35,464       ($36,623)       $75,443  

Depreciation and amortization of real estate

    88,423       95,626       177,073       190,480  

Equity in net loss (income) of JVs

    717       (1,117)       2,382       (15,538)  

JVs’ FFO

    6,212       6,426       12,794       12,576  

Non-controlling interests

    76       76       152       152  

Impairment of depreciable real estate

    19,010       0       40,982       0  

Gain on disposition of depreciable real estate, net

    (44,525)       (16,154)       (81,423)       (28,250)  
 

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to Common Shareholders

    $93,125       $120,321       $115,337       $234,863  

Reserve of preferred equity interests

    0       0       76,000       0  

Impairment charges

    9,086       0       9,086       0  

Separation charges

    5,081       0       16,552       0  

Transaction, debt extinguishment, other, net

    948       (333)       947       (361)  

Joint ventures - debt extinguishment, transaction, other

    604       20       684       20  

(Gain) loss on disposition of non-depreciable real estate, net

    (74)       2,433       (1,303)       2,148  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating items, net

    15,645       2,120       101,966       1,807  
 

 

 

   

 

 

   

 

 

   

 

 

 

Operating FFO attributable to Common Shareholders

    $108,770       $122,441       $217,303       $236,670  

Weighted average shares and units – Basic – FFO & OFFO

    367,482       365,851       367,231       365,774  

Assumed conversion of dilutive securities

    43       341       66       346  
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares and units – Diluted – FFO & OFFO

    367,525       366,192       367,297       366,120  

FFO per share – Basic & Diluted

    $0.25       $0.33       $0.31       $0.64  

Operating FFO per share – Basic & Diluted

    $0.30       $0.33       $0.59       $0.65  

Common stock dividends declared, per share

    $0.19       $0.19       $0.38       $0.38  

Certain non-cash items (DDR share):

       

Straight-line rent, net

    $223       $1,298       $657       $2,653  

Amortization of (above)/below-market rent, net

    4,383       1,159       8,233       1,556  

Straight-line ground rent income (expense)

    (53)       (182)       216       (276)  

Debt fair value and loan cost amortization

    (1,131)       (561)       (2,118)       (1,288)  

Capitalized interest expense

    478       703       876       1,947  

Stock compensation expense

    (1,584)       (1,690)       (3,492)       (3,298)  

Non-real estate depreciation expense

    (1,807)       (2,024)       (3,942)       (4,025)  

Non-cash interest income

    0       1,954       1,283       3,899  

Capital expenditures (DDR share):

       

Development and redevelopment costs

    14,041       26,415       29,965       50,887  

Maintenance capital expenditures

    3,200       6,031       4,024       7,048  

Tenant allowances and landlord work

    7,007       6,635       19,083       14,091  

Leasing commissions

    739       1,251       1,377       2,155  

 

5


DDR Corp.

Balance Sheet: Consolidated Interests

 

 

$ in thousands

   
        At Period End  
                  2Q17                         4Q16            
 

Assets:

   
 

Land

    $1,938,589       $1,990,406  
 

Buildings

    6,193,366       6,412,532  
 

Fixtures and tenant improvements

    726,721       735,685  
   

 

 

   

 

 

 
      8,858,676       9,138,623  
 

Depreciation

    (2,001,376)       (1,996,176)  
   

 

 

   

 

 

 
      6,857,300       7,142,447  
 

Construction in progress and land

    113,543       105,435  
   

 

 

   

 

 

 
 

Real estate, net

    6,970,843       7,247,882  
 

Investments in JVs

    117,304       60,793  
 

Receivable – preferred equity interests, net

    318,181       393,338  
 

Cash

    414,074       30,430  
 

Restricted cash

    61,462       8,795  
 

Notes receivable, net

    19,590       49,503  
 

Receivables, net (1)

    114,449       121,367  
 

Intangible assets, net

    216,602       241,598  
 

Other assets, net

    37,533       43,812  
   

 

 

   

 

 

 
 

Total Assets

    8,270,038       8,197,518  
 

Liabilities and Equity:

   
 

Unsecured debt

    3,060,345       2,913,217  
 

Unsecured term loan

    398,316       398,399  
 

Secured debt

    1,108,005       1,182,352  
   

 

 

   

 

 

 
      4,566,666       4,493,968  
 

Dividends payable

    76,744       75,245  
 

Other liabilities (2)

    368,412       382,293  
   

 

 

   

 

 

 
 

Total Liabilities

    5,011,822       4,951,506  
 

Preferred shares

    525,000       350,000  
 

Common shares

    36,715       36,630  
 

Paid-in capital

    5,499,103       5,487,212  
 

Distributions in excess of net income

    (2,809,110)       (2,632,327)  
 

Deferred compensation

    10,254       15,149  
 

Other comprehensive income

    (2,632)       (4,192)  
 

Common shares in treasury at cost

    (9,816)       (14,957)  
 

Non-controlling interests

    8,702       8,497  
   

 

 

   

 

 

 
 

Total Equity

 

   

 

3,258,216

 

 

 

   

 

3,246,012

 

 

 

   

 

 

   

 

 

 
 

Total Liabilities and Equity

    $8,270,038       $8,197,518  

(1)

 

Straight-line rents receivable, net

    $63,209       $65,072  

(2)

 

Below-market leases, net

    136,638       147,941  

 

6


DDR Corp.

Reconciliation of Net Income Attributable to DDR to Same Store NOI (1)

 

$ in thousands

       
               

At DDR Share

(Non-GAAP)

 
          2Q17                 2Q16                 2Q17                 2Q16        

GAAP Reconciliation:

       

Net income attributable to DDR

    $29,611       $41,058       $29,611       $41,058  

Fee income

    (8,787)       (11,465)       (8,787)       (11,465)  

Interest income

    (7,166)       (9,446)       (7,166)       (9,446)  

Interest expense

    48,908       54,012       48,908       54,012  

Depreciation and amortization

    90,276       97,698       90,276       97,698  

General and administrative

    22,756       18,499       22,756       18,499  

Other expense

    954       (2,081)       954       (2,081)  

Impairment charges

    28,096       0       28,096       0  

Equity in net loss (income) of joint ventures

    717       (1,117)       717       (1,117)  

Reserve of preferred equity interests

    0       0       0       0  

Tax expense

    473       245       473       245  

Gain on disposition of real estate

    (44,599)       (13,721)       (44,599)       (13,721)  

Income from non-controlling interests

    267       310       267       310  
 

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated NOI

    161,506       173,992       161,506       173,992  

DDR’s consolidated JV

    0       0       (396)       (454)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated NOI, net of non-controlling interests

    161,506       173,992       161,110       173,538  

Net (loss) income from unconsolidated joint ventures

    (33,702)       (4,933)       (1,163)       714  

Interest expense

    29,004       33,319       4,606       5,278  

Depreciation and amortization

    47,589       49,021       5,747       5,635  

Impairment charges

    27,850       0       1,392       0  

Preferred share expense

    8,239       8,305       412       415  

Other expense, net

    9,054       6,319       1,611       1,011  

Loss (gain) on disposition of real estate, net

    803       (114)       40       (22)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Unconsolidated NOI

    88,837       91,917       12,645       13,031  

Total Consolidated + Unconsolidated NOI

    250,343       265,909       173,755       186,569  

Less: Non-Same Store NOI adjustments

    (16,787)       (32,167)       (16,533)       (29,157)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total SSNOI (including Puerto Rico and bad debt expense)

    $233,556       $233,742       $157,222       $157,412  

Less: Puerto Rico Same Store NOI

    (20,562)       (20,776)       (20,562)       (20,776)  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total SSNOI excluding Puerto Rico (including bad debt expense)

    $212,994       $212,966       $136,660       $136,636  

Add: bad debt expense

    1,262       1,729       856       1,250  
 

 

 

   

 

 

   

 

 

   

 

 

 

Total SSNOI (excluding bad debt expense)

    $234,818       $235,471       $158,078       $158,662  

SSNOI % Change (including Puerto Rico and bad debt expense)

    (0.1%)         (0.1%)    

SSNOI % Change excluding Puerto Rico

    0.0%         0.0%    

SSNOI % Change (excluding bad debt expense)

    (0.3%)         (0.4%)    

(1) Excludes major redevelopment activity; see Investments section for additional detail. See calculation definition in the Non-GAAP Measures section.

 

7


DDR Corp.

Portfolio Summary

 

GLA in thousands                                   

 

               06/30/17                   03/31/17                   12/31/16                   09/30/16                   06/30/16   

Shopping Center Summary

              

Operating Centers - 100%

     298         309         319         327         349   

Wholly Owned - Domestic

     136         144         153         157         177   

Wholly Owned - Puerto Rico

     12         14         14         14         14   

JV Portfolio

     150         151         152         156         158   

Owned and Ground Lease GLA - 100%

     72,686         74,400         75,815         76,631         81,147   

Owned and Ground Lease GLA - DDR Share

     48,053         49,633         50,983         51,508         55,988   

Wholly Owned - Domestic

     39,307         40,515         41,871         42,380         46,857   

Wholly Owned - Puerto Rico

     4,441         4,807         4,807         4,807         4,807   

JV Portfolio - 100%

     28,938         29,078         29,137         29,444         29,483   

JV Portfolio - DDR Share

     4,305         4,311         4,305         4,321         4,324   

Unowned GLA - 100%

     27,352         28,586         29,933         30,622         31,390   
                                              

Quarterly Operational Overview

              

DDR Share

              

Base Rent PSF

     $16.09         $15.83         $15.46         $15.36         $14.92   

Base Rent PSF < 10K

     $26.72         $26.43         $26.16         $26.05         $25.53   

Base Rent PSF > 10K

     $13.01         $12.83         $12.49         $12.39         $12.08   

Leased Rate

     93.7%        94.3%        95.0%        95.4%        96.1%  

Commenced Rate

     91.5%        92.5%        93.8%        93.9%        94.4%  

Leased Rate < 10K SF

     87.9%        88.3%        89.4%        89.9%        89.6%  

Leased Rate > 10K SF

     95.4%        96.2%        96.6%        97.0%        98.1%  

Wholly Owned Domestic (100%)

              

Base Rent PSF

     $15.79         $15.49         $15.04         $15.01         $14.50   

Leased Rate

     94.0%        94.7%        95.2%        95.7%        96.6%  

Leased Rate < 10K SF

     89.4%        89.5%        90.5%        91.2%        90.4%  

Leased Rate > 10K SF

     95.3%        96.2%        96.5%        97.0%        98.3%  

Wholly Owned Puerto Rico (100%)

              

Base Rent PSF

     $20.82         $20.31         $20.59         $19.69         $19.93   

Leased Rate

     90.4%        90.9%        92.6%        92.6%        92.8%  

Leased Rate < 10K SF

     80.5%        82.0%        83.6%        83.3%        84.2%  

Leased Rate > 10K SF

     95.1%        95.1%        96.8%        96.8%        96.8%  

Joint Venture DDR Share

              

Base Rent PSF

     $14.71         $14.63         $14.62         $14.56         $14.55   

Leased Rate

     93.8%        94.6%        95.4%        94.9%        94.9%  

Leased Rate < 10K SF

     86.2%        87.7%        88.3%        88.0%        89.1%  

Leased Rate > 10K SF

     96.6%        97.2%        98.1%        97.5%        97.0%  

DDR (100%)

              

Base Rent PSF

     $15.46         $15.27         $15.00         $14.92         $14.63   

Base Rent PSF < 10K

     $25.39         $25.18         $24.95         $24.84         $24.43   

Base Rent PSF > 10K

     $12.54         $12.41         $12.17         $12.09         $11.90   

Leased Rate

     93.7%        94.4%        95.0%        95.1%        95.7%  

Commenced Rate

     91.7%        92.6%        93.6%        93.8%        94.1%  

Leased Rate < 10K SF

     87.6%        88.1%        88.9%        89.1%        89.1%  

Leased Rate > 10K SF

     95.7%        96.4%        96.9%        97.0%        97.7%  

Joint Venture (100%)

              

Base Rent PSF

     $14.34         $14.26         $14.17         $14.10         $14.09   

Leased Rate

     93.9%        94.7%        95.2%        94.7%        94.6%  

Leased Rate < 10K SF

     86.9%        87.8%        87.9%        87.6%        88.4%  

Leased Rate > 10K SF

     96.2%        96.9%        97.6%        97.1%        96.7%  
                                              

Operational Statistics

              

% of Aggregate Property NOI - Wholly Owned - Domestic - DDR Share

     79.3%        78.3%        79.5%        80.0%        80.9%  

% of Aggregate Property NOI - Wholly Owned - Puerto Rico - DDR Share

     12.4%        13.6%        12.7%        12.3%        11.8%  

% of Aggregate Property NOI - Joint Venture - DDR Share

     8.3%        8.1%        7.8%        7.7%        7.3%  

Same Store NOI

              

DDR Share

     -0.1%        -0.1%        2.0%        3.4%        3.1%  

Wholly Owned - Domestic

     0.1%        0.3%        1.7%        3.3%        3.1%  

Wholly Owned - Puerto Rico

     -1.0%        -3.3%        -1.1%        2.1%        -0.5%  

JV Portfolio at DDR Share

     -1.1%        2.2%        5.2%        4.2%        3.9%  

DDR - 100%

     -0.1%        0.5%        2.8%        3.3%        2.7%  

TTM Total Leasing - DDR Share (000s)

     6,710         6,175         5,848         6,057         6,160   

TTM Blended New and Renewal Rent Spreads - DDR Share

     6.9%        7.8%        9.1%        9.7%        9.3%  

 

8


DDR Corp.

Capital Structure

 

$, shares and units in thousands, except per share                                
     June 30, 2017          June 30, 2016  
  

 

 

      

 

 

 
Capital Structure    Amount      % of Total          Amount      % of Total  
  

 

 

      

 

 

 

Common Shares Equity

                 $3,333,613        38%                      $6,637,440        54%  

Perpetual Preferred Stock – Class J

     200,000        2%          200,000        2%  

Perpetual Preferred Stock – Class K

     150,000        2%          150,000        1%  

Perpetual Preferred Stock - Class A

     175,000        2%          0        0%  

Unsecured Credit Facilities

     0        0%          265,000        2%  

Unsecured Term Loan

     400,000        5%          400,000        3%  

Unsecured Public Debt

     3,076,797        35%          2,926,756        24%  

Secured Term Loan

     200,000        2%          200,000        2%  

DDR Share of Unconsolidated Debt

     359,281        4%          425,284        3%  

Fixed Rate Mortgage Debt (excludes partners’ share)

     870,451        10%          1,071,252        9%  

Variable Rate Mortgage Debt

     25,565        0%          77,325        0%  
  

 

 

      

 

 

 

Total Debt

     4,932,094        56%          5,365,617        43%  
             
  

 

 

      

 

 

 

Total

     $8,790,707        100%          $12,353,057        100%  

Capital Structure Detail

             

Common Shares Outstanding

     367,144             365,502     

Operating Partnership Units

     399             399     
  

 

 

         

 

 

    

Total Outstanding Common Shares

     367,543             365,901     

Market Value per Share

     $9.07             $18.14     
  

 

 

         

 

 

    

Common Shares Equity

     $3,333,613             $6,637,440     

Partners’ Share of Consolidated Debt (excluded above)

     $9,837             $9,900     

DDR Share of Unconsolidated Debt (included above)

     $359,281             $425,284     

Debt/Adjusted EBITDA – Consolidated (1)

     6.2x             6.7x     

Debt/Adjusted EBITDA – Pro Rata (1)

     6.5x             7.0x     

 

Credit Ratings           Public Debt Covenants            
           Debt Rating        Outlook                

Actual

 

      Covenant  

    

  Covenant      

 

  Threshold      

  

 

       

 

 

Moody’s

   Baa2     Negative      Total Debt to Real Estate Assets Ratio      49%      £ 65%

S&P

   BBB-    Stable      Secured Debt to Assets Ratio      11%      £ 40%

Fitch

   BBB-    Stable      Unencumbered Assets to Unsecured Debt      197%      ³ 135%
           Fixed Charge Coverage Ratio      2.7x      ³ 1.5x

(1) Excludes Perpetual Preferred Stock.

 

9


DDR Corp.

Same Store Metrics (1)

$ in thousands

 

    Same Store at 100%     Same Store at DDR Share  
 

 

 

   

 

 

 
                2Q17     2Q16                 Change                 2Q17     2Q16                 Change  
 

 

 

   

 

 

 

Leased Rate

    93.7%       95.5%       -1.8%       93.6%       96.0%       -2.4%  

Commenced Rate

    91.9%       94.0%       -2.1%       91.9%       94.4%       -2.5%  

Revenues:

           

Base Rents

    $242,337       $241,281       0.4%       $161,969       $161,284       0.4%  

Recoveries

    82,717       83,227       -0.6%       56,724       57,283       -1.0%  

Other

    5,725       5,163       10.9%       4,673       4,341       7.6%  
 

 

 

   

 

 

 
    330,779       329,671       0.3%       223,366       222,908       0.2%  

Expenses:

           

Operating

    (45,434     (45,313     0.3%       (30,992     (30,781     0.7%  

Real Estate Taxes

    (50,527     (48,887     3.4%       (34,296     (33,465     2.5%  

Bad Debt Expense

    (1,262     (1,729     -27.0%       (856     (1,250     -31.5%  
 

 

 

   

 

 

 
    (97,223     (95,929     1.3%       (66,144     (65,496     1.0%  
 

 

 

   

 

 

 

Total SSNOI including impact of bad debt expense

                $233,556       $233,742       -0.1%                   $157,222       $157,412       -0.1%  

Total SSNOI excluding impact of bad debt expense

    $234,818       $235,471       -0.3%       $158,078       $158,662       -0.4%  

Less: Puerto Rico Same Store NOI (2)

    (20,562     (20,776     -1.0%       (20,562     (20,776     -1.0%  
 

 

 

   

 

 

 

Total SSNOI excluding Puerto Rico

    $212,994       $212,966       0.0%       $136,660       $136,636       0.0%  

Non-Same Store NOI (3)

    16,787       32,167         16,533       29,157    
 

 

 

     

 

 

   

Total Consolidated + Unconsolidated NOI

    $250,343       $265,909         $173,755       $186,569    

(1) See calculation definition in the Non-GAAP Measures section.

(2) Excludes management fees that are eliminated in consolidation.

(3) See Investments section for detail on major redevelopment activity. Includes results of single-tenant assets. Represents 9.5% of total NOI at DDR share.

 

10


DDR Corp.

Leasing Summary

At DDR share except for count; $ and GLA in thousands

Leasing Activity

     Comparable Pool             Total Pool  
  

 

 

       

 

 

 
                  New      Prior            Wtd Avg                           New      Wtd Avg  
     Count            Rent      Rent      Rent     Term             Count             Rent      Term  
                 At 100%     GLA      PSF      PSF      Spread     (Years)                         At 100%      GLA      PSF      (Years)  
  

 

 

       

 

 

 

New Leases

                              

2Q17

     28       147,505        $15.16        $13.78        10.0%       9.2           73        410,093                    $16.29        9.7   

1Q17

     39       369,603        10.90        10.60        2.8% (1)      10.4           78        566,261        12.57        10.2   

4Q16

     37       117,938        18.12        15.86        14.2%       7.8           73        198,564        18.03        8.1   

3Q16

     42       126,485        19.95        16.47        21.1%       7.9           83        265,257        18.29        8.3   
  

 

 

       

 

 

 
     146       761,531        $14.35        $13.00        10.4%       9.0           307        1,440,175        $15.44        9.3   

Renewals

                              

2Q17

     185       1,504,824        $13.77        $13.03        5.7%       5.2           185        1,504,824        $13.77        5.2   

1Q17

     207       1,188,089        16.07        15.12        6.3%       4.8           207        1,188,089        16.07        4.8   

4Q16

     199       1,069,818        14.07        13.29        5.9%       5.2           199        1,069,818        14.07        5.2   

3Q16

     227       1,507,262        14.52        13.44        8.0%       5.6           227        1,507,262        14.52        5.6   
  

 

 

       

 

 

 
     818       5,269,993        $14.56        $13.67        6.5%       5.2           818        5,269,993        $14.56        5.2   

New + Renewals

 

                           

2Q17

     213       1,652,329        $13.89        $13.10        6.0%       5.6           258        1,914,917        $14.31        6.3   

1Q17

     246       1,557,692        14.84        14.05        5.6%       5.7           285        1,754,350        14.94        6.2   

4Q16

     236       1,187,756        14.48        13.55        6.9%       5.5           272        1,268,382        14.69        5.6   

3Q16

     269       1,633,747        14.94        13.67        9.3%       5.8           310        1,772,519        15.08        6.0   
  

 

 

       

 

 

 
     964       6,031,524        $14.53        $13.59        6.9%       5.7           1,125        6,710,168        $14.75        6.1   
Net Effective Rents                                                                      
                  Avg      TA      LL Work     Commission      Total      Net      Wtd Avg                
                  Rent      Capex      Capex     Capex      Capex      Effective      Term                
           GLA (2)      PSF      PSF      PSF     PSF      PSF      Rent PSF      (Years)                
    

 

 

       

New Leases (2)

 

                           

2Q17

       261,257        $17.07        $3.42        $3.79       $0.35        $7.56        $9.51        8.8          

1Q17

       411,594        12.67        1.91        1.38       0.22        3.51        9.16        9.8          

4Q16

       187,064        18.98        2.81        1.71       0.42        4.94        14.04        7.9          

3Q16

       253,944        18.91        2.58        2.43       0.39        5.40        13.51        8.2          
    

 

 

       
             1,113,859        $16.18        $2.56        $2.21       $0.32        $5.09        $11.09        8.8          

Renewals

                              

2Q17

       1,504,824        $13.93        $0.07        $0.00       $0.00        $0.07        $13.86        5.2          

1Q17

       1,188,089        16.19        0.01        0.00       0.00        0.01        16.18        4.8          

4Q16

       1,069,818        14.28        0.02        0.02       0.00        0.04        14.24        5.2          

3Q16

       1,507,262        14.67        0.71        0.00       0.03        0.74        13.93        5.6          
    

 

 

       
       5,269,993        $14.72        $0.24        $0.01       $0.01        $0.26        $14.46        5.2          

(1) Excluding the retenanting of a dark but rent-paying anchor box at Plaza del Norte, new leasing spreads for 1Q17 and TTM would be 15.8% and 15.4%, respectively. Excluding Puerto Rico, domestic new leasing spreads for 1Q17 and TTM would be 17.7% and 19.0%, respectively.

(2) New Leases exclude development and redevelopment activity.

 

11


DDR Corp.

Top 50 Tenants

$ and GLA in thousands

 

        Number of Units     Base Rent     Owned GLA     Credit Ratings
    Tenant   Wholly Owned     JV     Total     Pro Rata     % of Total     At 100%     Pro Rata     % of Total     At 100%                 (S&P/Moody’s/Fitch)
1   TJX Companies (1)     62       40       102     $ 25,711       3.8%     $ 36,883       2,112       4.4%       3,204                  A+/A2/NR
2   Bed Bath & Beyond (2)     56       30       86       22,600       3.4%       30,982       1,783       3.7%       2,479     BBB+/Baa1/NR
3   PetSmart     53       32       85       18,739       2.8%       28,161       1,178       2.5%       1,807     B+/B1/NR
4   Dick’s Sporting Goods (3)     23       17       40       16,766       2.5%       25,684       1,164       2.4%       1,891     NR
5   AMC Theatres     7       5       12       16,144       2.4%       22,310       646       1.3%       936     B+/B1/B
6   Walmart (4)     17       4       21       15,762       2.4%       19,102       2,397       5.0%       2,857     AA/Aa2/AA
7   Best Buy     25       13       38       15,532       2.3%       22,491       1,027       2.1%       1,450     BBB-/Baa1/BBB-
8   Kohl’s     20       9       29       15,024       2.2%       20,318       1,901       4.0%       2,565     BBB-/Baa2/BBB
9   Ross Stores (5)     40       34       74       13,172       2.0%       21,265       1,302       2.7%       2,170     A-/A3/NR
10   Michaels     37       25       62       12,749       1.9%       18,706       954       2.0%       1,453     BB-/Ba2/NR
11   Gap (6)     38       24       62       11,342       1.7%       16,492       682       1.4%       1,004     BB+/Baa2/BB+
12   Ulta     38       19       57       9,749       1.5%       13,950       422       0.9%       611     NR
13   Ascena (7)     70       26       96       8,941       1.3%       11,462       439       0.9%       572     BB-/Ba3/NR
14   Office Depot (8)     24       15       39       8,420       1.3%       12,405       548       1.1%       815     NR/B1/NR
15   Toys “R” Us (9)     16       6       22       8,240       1.2%       9,220       749       1.6%       919     B-/B3/CCC
16   Barnes & Noble     14       9       23       7,624       1.1%       10,814       382       0.8%       570     NR
17   Kroger (10)     7       12       19       6,974       1.0%       11,374       591       1.2%       1,116     BBB/Baa1/BBB
18   Nordstrom Rack     10       2       12       6,686       1.0%       7,881       367       0.8%       431     BBB+/Baa1/BBB+
19   Lowe’s     7       1       8       6,555       1.0%       7,257       935       1.9%       1,047     A-/A3/NR
20   Jo-Ann     18       10       28       6,524       1.0%       9,056       594       1.2%       873     B/Caa1/NR
21   Petco     22       10       32       6,373       1.0%       8,402       324       0.7%       443     B/B2/NR
22   Mattress Firm     44       17       61       6,340       0.9%       8,315       222       0.5%       297     NR
23   Five Below     39       18       57       6,137       0.9%       8,219       360       0.7%       488     NR
24   Cinemark     5       3       8       6,102       0.9%       7,976       403       0.8%       520     BB/NR/NR
25   LA Fitness     9       3       12       6,004       0.9%       8,246       440       0.9%       554     NR
26   DSW     16       10       26       5,934       0.9%       8,780       373       0.8%       564     NR
27   Regal Cinemas     7       1       8       5,903       0.9%       8,003       388       0.8%       457     B+/B1/B+
28   Pier 1 Imports     21       13       34       5,410       0.8%       7,620       240       0.5%       349     B/NR/NR
29   Home Depot     6       3       9       5,293       0.8%       6,768       685       1.4%       1,042     A/A2/A
30   Party City     23       15       38       5,214       0.8%       7,763       300       0.6%       470     NR
31   Dollar Tree Stores     37       28       65       5,035       0.8%       7,760       428       0.9%       654     BB+/Ba1/NR
32   Staples     13       16       29       5,031       0.8%       8,707       332       0.7%       588     BBB-/Baa2/BB+
33   AT&T     48       21       69       4,745       0.7%       6,078       126       0.3%       174     BBB+/Baa1/A-
34   Whole Foods     3       3       6       4,702       0.7%       6,363       210       0.4%       311     BBB-/Baa3/NR
35   Famous Footwear     27       11       38       4,439       0.7%       5,613       225       0.5%       287     BB/Ba3/NR
36   Burlington     7       3       10       4,340       0.6%       5,930       466       1.0%       693     BB/NR/NR
37   Hobby Lobby     8       8       16       3,902       0.6%       7,156       499       1.0%       877     NR
38   Publix     2       33       35       3,557       0.5%       15,457       405       0.8%       1,698     NR
39   Carter’s Childrenswear     28       10       38       3,316       0.5%       4,041       126       0.3%       158     BB+/Ba1/NR
40   Panera     21       14       35       3,247       0.5%       4,966       108       0.2%       168     NR
41   Tailored Brands (11)     20       8       28       3,082       0.5%       4,168       137       0.3%       190     B/NR/NR
42   Rainbow Apparel     26       8       34       2,915       0.4%       3,638       140       0.3%       188     NR
43   Ahold Delhaize (12)     4       6       10       2,911       0.4%       8,393       231       0.5%       539     BBB/Baa2/BBB
44   Chili’s Restaurant     20       5       25       2,910       0.4%       3,572       125       0.3%       152     BB+/Ba1/BB+
45   Footlocker     20       0       20       2,829       0.4%       2,829       78       0.2%       78     BB+/Ba1/NR
46   Stein Mart     7       8       15       2,759       0.4%       4,630       310       0.6%       521     NR
47   L Brands (13)     24       14       38       2,738       0.4%       3,751       101       0.2%       136     BB+/Ba1/BB+
48   Sprint     27       16       43       2,645       0.4%       3,616       66       0.1%       102     B/B2/B+
49   Giant Eagle     2       3       5       2,587       0.4%       5,289       219       0.5%       449     NR
50   BJ’s Wholesale Club     2       1       3       2,521       0.4%       3,780       229       0.5%       339     B-/B3/NR
  Top 50 Total     1,120       642       1,762     $ 382,175       57.0%     $ 551,642       28,469       59.2%       42,256    
  Total Portfolio         $ 670,635       100.0%     $ 985,592       48,053       100.0%       72,686    

 

(1) T.J. Maxx (38) / Marshalls (42) / HomeGoods (21) / Sierra Trading (1)

   (8) Office Depot (16) / OfficeMax (23)

(2) Bed Bath (52) / World Market (22) / buybuy Baby (10) / CTS (2)

   (9) Toys “R” Us (6) / Babies “R” Us (12) / Toys-Babies Combo (4)

(3) Dick’s Sporting Goods (37) / Golf Galaxy (3)

  

(10) Kroger (10) / Harris Teeter (5) / King Soopers (1) / Pick ‘n Save (2) / Mariano’s (1)

(4) Walmart (16) / Sam’s Club (2) / Neighborhood Market (3)

   (11) Men’s Wearhouse (19) / Jos. A. Bank (7) / K&G Fashion Superstore (2)

(5) Ross Dress for Less (71) / dd’s Discounts (3)

   (12) Stop & Shop (5) / Martin’s (2) / Food Lion (2) / Other (1)

(6) Gap (5) / Old Navy (55) / Banana Republic (2)

   (13) Bath & Body Works (33) / Victoria’s Secret (5)

(7) Ann Taylor (4) / Catherine’s (6) / Dress Barn (28) / Justice (21) / Lane Bryant (26) / Maurice’s (11)

  

 

12


DDR Corp.

Lease Expirations

At DDR share except for count; $ and GLA in thousands

 

Assumes no exercise of lease options                        
   

Greater than 10K SF

 

Less than 10K SF

 

Total

Year   # of
Leases
  Expiring
SF
  ABR   Rent
PSF
  % of ABR
> 10K
  # of
Leases
  Expiring
SF
  ABR   Rent
PSF
  % of ABR
< 10K
  # of
Leases
  Expiring
SF
  ABR   Rent
PSF
  % of ABR
Total

 

 

 

 

 

MTM

  6   142   $1,901   $13.39   0.5%    138   156   $4,755   $30.48   2.0%    144   298   $6,656   $22.34   1.1% 

2017

  27   678   6,570   $9.69   1.7%    296   456   10,867   $23.83   4.7%    323   1,134   17,437   $15.38   2.8% 

2018

  160   3,208   40,283   $12.56   10.3%    834   1,512   39,943   $26.42   17.2%    994   4,720   80,226   $17.00   12.9% 

2019

  189   4,162   50,639   $12.17   13.0%    731   1,177   31,321   $26.61   13.5%    920   5,339   81,960   $15.35   13.1% 

2020

  166   3,477   44,496   $12.80   11.4%    677   1,095   29,834   $27.25   12.8%    843   4,572   74,330   $16.26   11.9% 

2021

  227   4,645   57,952   $12.48   14.8%    706   1,160   29,662   $25.57   12.8%    933   5,805   87,614   $15.09   14.1% 

2022

  233   4,970   61,096   $12.29   15.6%    503   920   25,273   $27.47   10.9%    736   5,890   86,369   $14.66   13.9% 

2023

  140   2,845   34,058   $11.97   8.7%    212   601   15,231   $25.34   6.6%    352   3,446   49,289   $14.30   7.9% 

2024

  93   1,868   23,483   $12.57   6.0%    199   570   15,306   $26.85   6.6%    292   2,438   38,789   $15.91   6.2% 

2025

  65   1,188   17,736   $14.93   4.5%    160   418   11,137   $26.64   4.8%    225   1,606   28,873   $17.98   4.6% 

2026

  56   909   13,599   $14.96   3.5%    150   420   12,252   $29.17   5.3%    206   1,329   25,851   $19.45   4.1% 

Thereafter

  89   2,376   39,027   $16.43   10.0%    108   262   6,949   $26.52   3.0%    197   2,638   45,976   $17.43   7.4% 

 

 

 

 

 

Total

  1,451   30,468   $390,840   $12.83   100.0%    4,714   8,747   $232,530   $26.58   100.0%    6,165   39,215   $623,370   $15.90   100.0% 

 

Assumes all lease options are exercised                        
   

Greater than 10K SF

 

Less than 10K SF

 

Total

Year   # of
Leases
  Expiring
SF
  ABR   Rent
PSF
  % of ABR
> 10K
  # of
Leases
  Expiring
SF
  ABR   Rent
PSF
  % of ABR
< 10K
  # of
Leases
  Expiring
SF
  ABR   Rent
PSF
  % of ABR
Total

 

 

 

 

 

MTM

  4   61   $904   $14.82   0.2%    121   141   $4,487   $31.82   1.9%    125   202   $5,391   $26.69   0.9% 

2017

  7   115   1,059   $9.21   0.3%    187   285   6,895   $24.19   3.0%    194   400   7,954   $19.89   1.3% 

2018

  30   363   4,025   $11.09   1.0%    469   789   22,338   $28.31   9.6%    499   1,152   26,363   $22.88   4.2% 

2019

  19   244   3,649   $14.95   0.9%    422   650   18,331   $28.20   7.9%    441   894   21,980   $24.59   3.5% 

2020

  25   272   4,831   $17.76   1.2%    376   522   16,145   $30.93   6.9%    401   794   20,976   $26.42   3.4% 

2021

  26   322   5,566   $17.29   1.4%    415   550   15,117   $27.49   6.5%    441   872   20,683   $23.72   3.3% 

2022

  37   447   7,341   $16.42   1.9%    350   517   15,329   $29.65   6.6%    387   964   22,670   $23.52   3.6% 

2023

  20   290   4,937   $17.02   1.3%    289   511   13,886   $27.17   6.0%    309   801   18,823   $23.50   3.0% 

2024

  23   385   5,496   $14.28   1.4%    267   428   12,763   $29.82   5.5%    290   813   18,259   $22.46   2.9% 

2025

  27   467   5,862   $12.55   1.5%    252   444   11,710   $26.37   5.0%    279   911   17,572   $19.29   2.8% 

2026

  38   470   7,621   $16.21   1.9%    253   431   12,028   $27.91   5.2%    291   901   19,649   $21.81   3.2% 

Thereafter

  1,195   27,032   339,549   $12.56   86.9%    1,313   3,479   83,501   $24.00   35.9%    2,508   30,511   423,050   $13.87   67.9% 

 

 

 

 

 

Total

  1,451   30,468   $390,840   $12.83   100.0%    4,714   8,747   $232,530   $26.58   100.0%    6,165   39,215   $623,370   $15.90   100.0% 

 

13


DDR Corp.

Developments/Redevelopments

$ in thousands

 

     DDR
Own %
    Project
Yield
    Est.
Total Net
Cost
     Cost
Incurred
To Date
     Est.
Remain
Costs
     Placed
In Service
     CIP (1)      Initial
Occupancy
     Est.
Stabilized
Quarter
   Key Tenants

Consolidated Summary

                           

Redevelopments - Major (2)

       8     $133,557        $73,435        $60,122        $33,989        $39,446           

Redevelopments -Minor (3)

       11     108,076        36,138        71,938        18,412        17,726           

Other (4)

       N/A       N/A        27,301        0        0        27,301           

Undeveloped land (5)

       N/A       N/A        29,070        0        0        29,070           
      

 

 

          
         $241,633        $165,944        $132,060        $52,401        $113,543           

Redevelopments - Major

                           

Lee Vista Promenade

(Orlando, FL)

     100       $39,241        $22,937        $16,304        $0        $22,937        1Q18      1Q19    Academy Sports, Bealls

Kenwood Square

(Cincinnati, OH)

     100       30,928        20,936        9,992        19,384        1,552        4Q16      2Q18    Dick’s Sporting Goods, T.J. Maxx, Five Below, Marshalls

West Bay Plaza

(Cleveland, OH)

     100       27,792        1,474        26,318        0        1,474        4Q18      3Q19    Fresh Thyme

Belgate Shopping Center (expansion)

(Charlotte, NC)

     100       23,778        19,117        4,661        13,181        5,936        3Q16      4Q17    Burlington, T.J. Maxx

Plaza del Sol (expansion)

(San Juan, PR)

 

    

 

100

 

 

     

 

11,818

 

 

 

    

 

8,971

 

 

 

    

 

2,847

 

 

 

    

 

1,424

 

 

 

    

 

7,547

 

 

 

    

 

4Q17

 

 

 

  

4Q17

 

  

Dave & Busters

 

      

 

 

          
         $133,557        $73,435        $60,122        $33,989        $39,446           

 

(1) Balance is in addition to DDR’s pro rata share of joint venture CIP of $6 million.

 

(2) Projects excluded from same store NOI.

 

(3) Projects included in same store NOI.

 

(4) Includes predevelopment and retenanting expenditures.

 

(5) Balance is in addition to owned land adjacent to existing centers with an estimated value of $27 million and cost basis of the headquarters (non-income producing) of $41 million.

 

14


DDR Corp.

Transactions

$ and GLA in thousands

 

                     Total                                     
               DDR     Owned      At 100%             At DDR Share  
    Property Name    City, State     Own %     GLA      Price      Debt             Price      Debt  

Acquisitions

                     

01/10/17

  3030 North Broadway      Chicago, IL       100.0     132        $81,000        $0             $81,000        $0    

02/28/17

  Arrowhead Crossing outparcel      Phoenix, AZ       100.0     9        6,250        0             6,250        0    
        

 

 

       

 

 

 
       Total Year to Date         141        $87,250        $0             $87,250        $0    
        

 

 

       

 

 

 

Dispositions

                       

01/24/17

  The Junction      Jackson, MS       100.0     108        $7,000        $0             $7,000        $0    

01/25/17

  Morris Corners      Springfield, MO       100.0     56        1,500        0             1,500        0    

02/03/17

  Valley Park Centre      Russellville, AR       100.0     296        22,390        0             22,390        0    

02/16/17

  Chesterfield Crossing      Richmond, VA       100.0     89        14,350        0             14,350        0    

02/17/17

  Shops at Turner Hill/Turner Hill Marketplace      Lithonia, GA       100.0     157        8,750        0             8,750        0    

02/22/17

  Indian Springs Market Center      Cincinnati, OH       100.0     146        7,300        0             7,300        0    

03/24/17

  Southland Crossings      Youngstown, OH       100.0     537        41,700        23,403             41,700        23,403    

03/24/17

  Shelby Corners (BRE DDR Retail Holdings III)      Utica, MI       5.0     76        5,500        4,187             275        209    

03/28/17

  Barrington Town Center      Cleveland, OH       100.0     113        13,100        0             13,100        0    
       Non-operating sales            2,105              2,105     
        

 

 

       

 

 

 
       1Q Total         1,578        $123,695        $27,590             $118,470        $23,612    

04/07/17

  Warner Robins Place      Warner Robins, GA       100.0     119        $17,910        $0             $17,910        $0    

04/14/17

  Loan repayment (Northridge Plaza)      Olathe, KS       100.0        30,901              30,901     

05/08/17

  Telegraph Plaza (BRE DDR Retail Holdings III)      Monroe, MI       5.0     141        12,350        0             618        0    

05/26/17

  The Marketplace at Delta Township      Lansing, MI       100.0     174        19,000        0             19,000        0    

05/31/17

  Jefferson Plaza      Newport News, VA       100.0     47        7,887        0             7,887        0    

06/12/17

  New Tampa Commons      Tampa, FL       100.0     10        4,100        0             4,100        0    

06/13/17

  Northland Square      Cedar Rapids, IA       100.0     187        22,025        0             22,025        0    

06/27/17

  Mooresville Consumer Square      Mooresville, NC       100.0     472        48,230        0             48,230        0    

06/29/17

  Jefferson County Plaza      Arnold, MO       100.0     42        1,000        0             1,000        0    

06/29/17

  Walmart      Alliance, OH       100.0     200        16,710        0             16,710        0    

06/30/17

  Plaza del Oeste & Rexville Plaza      San German & Bayamon, PR       100.0     365        57,250        0             57,250        0    
       Non-operating sales            100              100     
        

 

 

       

 

 

 
       2Q Total         1,757        $237,463        $0             $225,731        $0    

07/13/17

  Cordova Commons (BRE DDR Retail Holdings III)      Pensacola, FL       5.0     164        $35,200        $26,096             $1,760        $1,305    

07/13/17

  Bellview Plaza (BRE DDR Retail Holdings III)      Pensacola, FL       5.0     83        11,555        4,145             578        207    

07/13/17

  Shops at Cedar Point (1)      Allentown, PA       0.3     131        19,150        12,000             57        36    

07/13/17

  Wedgewood Commons (1)      Stuart, FL       0.3     165        23,200        13,011             70        39    

07/14/17

  Del Monte Plaza (BRE DDR Retail Holdings III)      Reno, NV       5.0     83        24,100        9,616             1,205        481    
  Preferred equity repayment      Various       100.0        2,600              2,600     
        

 

 

       

 

 

 
      

 

3Q Total

 

 

 

     

 

626

 

 

 

    

 

$115,805

 

 

 

    

 

$64,868  

 

 

 

       

 

$6,270

 

 

 

    

 

$2,068  

 

 

 

        

 

 

       

 

 

 
       Total Year to Date         3,961        $476,963        $92,458             $350,471        $25,680    
        

 

 

       

 

 

 

 

(1) Asset included in the collateral for BRE DDR Retail Holdings IV preferred interest. The Company does not have a material interest, but provides property asset management services.

 

15


DDR Corp.

Debt Summary

$ in thousands

 

     Consolidated    Unconsolidated    Total Pro Rata
Debt Composition   

Total

100%

   

Total

DDR Share

   

GAAP

Interest Rate
DDR Share

  

Total

100%

  

Total

DDR Share

    GAAP
Interest Rate
DDR Share
  

Total

DDR Share

    GAAP
Interest Rate
  

 

 

Unsecured Credit Facilities

     $0       $0     2.22%                $0     2.22%

Unsecured Term Loan

     400,000       400,000     2.32%                400,000     2.32%

Unsecured Public Debt

     3,076,797       3,076,797     4.75%                3,076,797     4.75%

Secured Term Loan

     200,000       200,000     2.57%                200,000     2.57%

Fixed Rate Mortgage Loans

     880,288       870,451     4.50%    $984,089      $146,840     4.27%      1,017,291     4.47%

Variable Rate Mortgage Loans

     25,565       25,565     2.18%    1,714,243      212,441     3.12%      238,006     3.02%
  

 

 

Subtotal

     $4,582,650       $4,572,813     4.38%    $2,698,332      $359,281     3.59%      $4,932,094     4.32%

Fair Market Value Adjustment

     4,521       4,521          13,442      672            5,193      

Unamortized Loan Costs, Net

     (20,505     (20,402        (21,107)      (3,857          (24,259    
  

 

 

Total

     $4,566,666       $4,556,932     4.38%    $2,690,667      $356,096     3.59%      $4,913,028     4.32%
Consolidated Maturity Schedule (1)           Principal
Payments
   Secured
Maturities
   Unsecured
Maturities
   

Total

100%

   Total Pro
Rata
    Pro Rata GAAP
Interest Rate
      

 

2017

       $11,758    $126,465      $0     $138,223      $138,223     3.55%

2018 (2)

       19,359    302,605      382,196     704,160      704,160     4.49%

2019

       15,407    169,348      0     184,755      184,755     5.41%

2020

       7,314    279,894      700,000     987,208      987,208     4.61%

2021

       4,366    126,459      300,000     430,825      430,825     3.97%

2022

       59    42,819      450,000     492,878      483,041     4.68%

2023

       0    0      300,000     300,000      300,000     3.52%

2024

       0    0      0     0      0     0.00%

2025

       0    0      500,000     500,000      500,000     3.79%

2026 and beyond

       0    0      850,000     850,000      850,000     4.43%

Unsecured debt discount

               (5,399   (5,399)      (5,399  
      

 

Total

       $58,263    $1,047,590      $3,476,797     $4,582,650      $4,572,813     4.38%
Unconsolidated Maturity Schedule (1)     Principal
Payments
   Secured
Maturities
   Unsecured
Maturities
   

Total

100%

   Total Pro
Rata
    Pro Rata GAAP
Interest Rate
      

 

2017

       $2,968    $28,371      $0     $31,339      $5,684     4.75%

2018

       4,787    106,548      0     111,335      10,081     4.38%

2019

       4,824    623,088      0     627,912      31,187     2.91%

2020

       5,535    403,673      0     409,208      56,251     2.89%

2021

       5,057    255,172      0     260,229      60,521     4.58%

2022

       3,468    1,038,028      0     1,041,496      157,966     3.43%

2023

       2,930    93,177      0     96,107      4,803     4.25%

2024

       1,352    83,688      0     85,040      13,038     4.31%

2025

       903    0      0     903      0     0.00%

2026 and beyond

       2,148    32,615      0     34,763      19,750     0.00%
      

 

Total

       $33,972    $2,664,360      $0     $2,698,332      $359,281     3.59%
                   
% of Total (3)                Consolidated    Wtd Avg
GAAP Rate
   Unconsolidated     Wtd Avg
GAAP Rate
   Total     Wtd Avg
GAAP Rate
      

 

Fixed

       86.8%    4.7%      40.9%     4.3%      83.5%     4.7%

Variable

       13.2%    2.4%      59.1%     3.1%      16.5%     2.6%
   

Recourse to DDR

       81.0%    4.4%      0.0%     0.0%      75.1%     4.4%

Non-recourse to DDR

       19.0%    4.5%      100.0%     3.6%      24.9%     4.2%

 

(1) Assumes borrower extension options are exercised.

 

(2) Includes $300 million unsecured notes that were repaid in July 2017.

 

(3) Calculations based on Pro Rata.

 

16


DDR Corp.

Consolidated Debt Detail

 

$ in thousands   

Balance

100%

     Balance
DDR Share
     Maturity
Date (1)
    

GAAP Interest 

Rate (2) 

 
  

 

 

 

Bank Debt (3)

           

Unsecured Revolver ($750m)

     $0        $0          06/20        L+100   

Unsecured Revolver ($50m)

     0        0          06/20        L+100   

Secured Term Loan ($200m)

     200,000        200,000          04/18        L+135   

Unsecured Term Loan ($400m)

     400,000        400,000          04/20        L+110   
  

 

 

       
                 $600,000        $600,000          

Public Debt

           

Unsecured Notes (4)

     $299,773        $299,773          04/18        5.07%   

Unsecured Notes

     82,196        82,196          07/18        7.54%   

Unsecured Notes

     299,186        299,186          09/20        8.07%   

Unsecured Notes

     298,990        298,990          01/21        3.71%   

Unsecured Notes

     454,380        454,380          07/22        4.63%   

Unsecured Notes

     298,930        298,930          05/23        3.52%   

Unsecured Notes

     497,194        497,194          02/25        3.79%   

Unsecured Notes

     396,965        396,965          02/26        4.43%   

Unsecured Notes

     449,183        449,183          06/27        4.81%   
  

 

 

       
     $3,076,797        $3,076,797          

Mortgage Debt

           

Walmart Supercenter, NC

     $336        $336          08/17        8.89%   

Connecticut Commons, CT

     45,129        45,129          10/17        3.54%   

Riverdale Village, MN

     24,758        24,758          10/17        3.54%   

Riverdale Village Perimeter, MN

     31,028        31,028          10/17        3.54%   

Lake Brandon Village, FL

     8,919        8,919          10/17        3.54%   

Shoppers World Brookfield, WI

     5,574        5,574          10/17        3.54%   

Marketplace of Brown Deer, WI

     3,978        3,978          10/17        3.54%   

Brown Deer Center, WI

     7,527        7,527          10/17        3.54%   

Falcon Ridge Town Center, CA

     13,897        13,897          01/18        3.67%   

Walmart Supercenter, SC

     804        804          01/18        8.01%   

Fortuna Center, VA

     12,120        12,120          02/18        3.74%   

Johns Creek Town Center, GA

     23,277        23,277          03/18        5.20%   

The Promenade at Brentwood, MO

     29,544        29,544          03/18        5.18%   

DDR Headquarters, OH

     25,565        25,565          03/18        2.18%   

Lowe’s, TN

     1,974        1,974          01/19        1.34%   

Nassau Park Pavilion, NJ

     54,344        54,344          02/19        3.56%   

Bandera Pointe, TX

     23,644        23,644          02/19        3.59%   

Presidential Commons, GA

     20,212        20,212          02/19        3.57%   

Plaza Cayey, PR

     20,115        20,115          06/19        7.82%   

Plaza Fajardo, PR

     24,186        24,186          06/19        7.74%   

Plaza Isabela, PR

     21,245        21,245          06/19        7.75%   

Plaza Walmart, PR

     11,306        11,306          06/19        7.81%   

Mariner Square, FL

     1,368        1,368          09/19        10.08%   

 

17


DDR Corp.

Consolidated Debt Detail

 

$ in thousands   

Balance

 

100%

    

Balance 

 

DDR Share 

    

Maturity

 

Date (1)

    

GAAP Interest 

 

Rate (2) 

 
  

 

 

 

Plaza Rio Hondo, PR

     120,149        120,149          01/20        4.03%   

Easton Marketplace, OH

     47,983        47,983          01/20        4.05%   

The Fountains, FL

     43,778        43,778          01/20        4.16%   

Perimeter Pointe, GA

     41,388        41,388          01/20        4.03%   

Polaris Towne Center, OH

     41,988        41,988          04/20        5.00%   

Chapel Hills West, CO

     11,275        11,275          06/21        3.70%   

West Valley Marketplace, PA

     6,734        6,734          07/21        6.17%   

Plaza Escorial, PR

     69,300        69,300          07/21        3.72%   

Wrangleboro Consumer Sq, NJ

     56,855        56,855          10/21        5.37%   

Chapel Hills East, CO

     7,635        7,635          12/21        4.74%   

Paradise Village Gateway, AZ

     29,810        19,973          01/22        4.89%   

Macedonia Commons, OH

     18,108        18,108          02/22        5.83%   
  

 

 

       
     $905,853        $896,016          

Consolidated Debt Subtotal

     $4,582,650        $4,572,813          

FMV Adjustment – Assumed Debt

     4,521        4,521          

Unamortized Loan Costs, Net

     (20,505)        (20,402)         
  

 

 

       

Total Consolidated Debt

                     $4,566,666        $4,556,932          

Rate Type

           

Fixed

     $3,980,362        $3,970,525          5.0 years        4.68%   

Variable

     602,288        602,288          2.0 years        2.40%   
  

 

 

 
     $4,582,650        $4,572,813          4.7 years        4.38%  

Perpetual Preferred Stock

           

Class J

     $200,000        $200,000          August 2017 (5)        6.50%   

Class K

     150,000        150,000          April 2018 (5)        6.25%   

Class A

     175,000        175,000          June 2022 (5)        6.38%   
Interest Rate Swaps   

Notional

 

Amount

    

Rate

 

Hedged

    

Fixed

 

Rate

    

Termination 

 

Date 

 
  

 

 

 

Variable Rate Debt

     $76,098        1 mo. LIBOR        2.81%        09/17   

 

(1) Assumes borrower extension options are exercised.

   (4) Repaid in July 2017.

(2) L = LIBOR

   (5) Earliest redemption date.

(3) Excludes loan fees and unamortized loan costs.

  

 

18


DDR Corp.

Unconsolidated Debt Detail

 

$ in thousands   

Balance

 

100%

    

Balance 

 

DDR Share 

    

Maturity

 

Date (1)

    

GAAP Interest 

 

Rate 

 
  

 

 

 

BRE DDR Retail Holdings III

           

Camp Creek, GA

     $42,000        $2,100          12/18        3.65 %  

May 2019 Loan Pool (2 assets) (2)

     20,093        1,005          05/19        3.28 %  

November 2019 Loan Pool (28 assets) (3)

     603,650        30,183          11/19        2.90 %  

Whittwood Town Center, CA

     43,000        2,150          12/20        4.05 %  

January 2022 Loan Pool (3 assets)

     22,965        1,148          01/22        3.76 %  

Kyle Marketplace, TX

     24,750        1,238          03/22        3.70 %  

March 2022 Loan Pool (3 assets)

     23,400        1,170          03/22        4.14 %  

Eastland Center, CA

     90,000        4,500          07/22        3.97 %  

Greenway Commons, TX

     33,000        1,650          07/22        3.73 %  

July 2022 Loan Pool (4 assets) (4)

     17,035        852          07/22        3.74 %  

White Oak Village, VA

     34,250        1,713          09/22        1.93 %  

Midtowne Park, SC

     15,736        787          01/23        4.34 %  

Kingsbury Center, IL

     14,500        725          06/23        4.35 %  

Valley Bend, AL

     43,500        2,175          06/23        4.22 %  
  

 

 

       
                     $1,027,879        $51,396          

BRE DDR Retail Holdings IV

           

Ashbridge Square, PA

     $34,177        $1,709          03/18        4.22 %  

The Hub, NY

     28,500        1,425          01/22        3.84 %  

Fountains of Miramar, FL

     24,770        1,239          01/22        3.73 %  

Southmont Plaza, PA

     34,000        1,700          01/22        3.84 %  

Millenia Crossing, FL

     22,326        1,116          01/23        4.20 %  

Concourse Village, FL

     13,948        697          02/24        4.32 %  
  

 

 

       
     $157,721        $7,886          

DDRM Properties

           

July 2022 Loan Pool (13 Assets)

     $218,730        $43,746          07/22        3.77 %  

July 2022 Loan Pool (21 Assets)

     274,760        54,952          07/22        3.13 %  

July 2022 Loan Pool (18 Assets)

     213,170        42,634          07/22        3.39 %  
  

 

 

       
     $706,660        $141,332          

DDRTC Core Retail Fund

           

July 2020 Loan Pool (10 assets) (5)

     $195,373        $29,306          07/20        2.77 %  

July 2020 Loan Pool (6 assets) (5)

     165,300        24,795          07/20        2.94 %  

November 2021 Loan Pool (7 assets)

     174,719        26,208          11/21        3.37 %  

Birkdale Village, NC

     82,275        12,341          04/24        4.31 %  
  

 

 

       
     $617,667        $92,650          

 

19


DDR Corp.

Unconsolidated Debt Detail

 

$ in thousands   

Balance

 

100%

   

Balance 

 

DDR Share 

    

Maturity

 

Date (1)

   

GAAP Interest 

 

Rate 

 
  

 

 

 

DDR-SAU Retail Fund

         

September 2017 Loan Pool (7 assets)

     $28,420       $5,683          09/17       4.75%   

April 2018 Loan Pool (5 assets)

     31,359       6,271          04/18       4.66%   
  

 

 

      
     $59,779       $11,954         

Other Joint Ventures

         

Sun Center Limited, OH

     $21,160       $16,812          05/21       6.14%   

RVIP IIIB, Deer Park, IL

     67,966       17,501          09/21       4.91%   

Lennox Town Center Limited, OH

     39,500       19,750          04/28       3.49%   
  

 

 

      
     $128,626       $54,063         

Unconsolidated Debt Subtotal

                     $2,698,332       $359,281       

FMV Adjustment – Assumed Debt

     13,442       672         

Unamortized Loan Costs, Net

     (21,107     (3,857)        
  

 

 

      

Total Unconsolidated Debt

     $2,690,667       $356,096       

Rate Type

         

Fixed

     $984,089       $146,840        5.2 years       4.27%   

Variable

     1,714,243       212,441        4.0 years       3.12%   
  

 

 

 
     $2,698,332       $359,281        4.5 years       3.59%  
Interest Rate Swaps   

Notional

Amount

   

Rate

Hedged

     Fixed
Rate
    Termination 
Date 
 
  

 

 

 

Mortgage Loan Camp Creek

     $42,000       1 mo. LIBOR        1.87     12/18   

(1) Assumes borrower extension options are exercised.

(2) Repaid $12.6 million (at 100%) in July 2017.

(3) Repaid $28.9 million (at 100%) in July 2017.

(4) Repaid $4.1 million (at 100%) in July 2017.

(5) Loans have interest rate floors of 1 month LIBOR at 0.25%.

 

20


DDR Corp.

Debt/Adjusted EBITDA

 

$ in thousands                  
                             2Q17      2Q16   
    

 

 

 

Consolidated

       

Net income to DDR

       $29,611         $41,058    

Interest expense

       48,908         54,012    

Income tax expense

       473         245    

Depreciation and amortization

       90,276         97,698    

Adjustments for non-controlling interests

       (174)        (174)   
    

 

 

 

EBITDA – current quarter

       169,094         192,839    

Separation charges

       5,081         0    

Impairments

       28,096         0    

Equity in net loss (income) of JVs

       717         (1,117)   

Gain on disposition of real estate, net

       (44,599)        (13,721)   

Other expense (income), net

       948         (7)   

Adjustments for non-controlling interests

              (6)   

JV FFO (at DDR Share)

       6,816         6,446    
    

 

 

 

Adjusted EBITDA – current quarter (1)

       166,153         184,434    

Adjusted EBITDA – annualized

       664,612         737,736    

Consolidated debt

       4,566,666         4,938,807    

Partner share of consolidated debt

       (9,837)        (9,900)   

Loan costs, net

       20,505         21,148    

Face value adjustments

       (4,521)        (9,722)   

Cash and restricted cash

       (474,986)        (26,785)   
    

 

 

 

Net effective debt

       $4,097,827         $4,913,548    

Debt/Adjusted EBITDA – Consolidated (2)

       6.2x        6.7x   

Pro rata including JVs

       

Adjusted EBITDA – current quarter

       170,843         189,874    

Adjusted EBITDA – annualized

       683,372         759,496    

Consolidated net debt

       4,097,827         4,913,548    

JV debt (at DDR Share)

       359,281         425,284    

Cash and restricted cash

       (17,991)        (9,683)   
    

 

 

 

Net effective debt

       $4,439,117         $5,329,149    

Debt/Adjusted EBITDA – Pro Rata (2)

       6.5x        7.0x    

(1) See definition in the Non-GAAP Measures section.

(2) Excludes Perpetual Preferred Stock.

 

21


DDR Corp.

Unconsolidated Joint Ventures

$ and GLA in thousands

 

     Partner    DDR
Own %
     Operating
Properties
    Owned
GLA
     2Q17 NOI   
at 100% (1)   
    Gross
Book Value
     Face Value
Debt (2)
     DDR
Preferred Equity
(At 100%)
        

 

 

BRE DDR Retail

Holdings III

  

Blackstone Real

Estate Partners

     5%        48           9,521        $30,922         $1,473,403        $1,027,879        $249,649        (3)  

BRE DDR Retail

Holdings IV

  

Blackstone Real

Estate Partners

     5%        6           1,259        4,164         220,199        157,721        68,532        (4)  

DDRM Properties

   Madison International Realty      20%        52           7,012        17,337         1,208,481        706,660        0     

DDRTC Core

Retail Fund

   TIAA-CREF      15%        25           8,206        23,828         1,502,930        617,667        0     

DDR–SAU

   State of Utah      20%        12           979        2,373         135,365        59,779        0     

Retail Fund

                        

DDR Domestic

   Various      20%        3           620        1,250         98,799        0        0     

Retail Fund I

                        

Other

   Various      Various        3           1,046        4,270         195,488        128,626        0     

 

 

Total

           149    (5)       28,643        $84,144         $4,834,665        $2,698,332        $318,181     

Property management fees

                4,598     (1)            

Assets sold in 2017

                95     (1)            
             

 

 

            

Net operating income

                $88,837     (6)            

(1) Property management fees charged by DDR to the joint venture are included as an expense in NOI, although presented in the combined income statement on the next page in the line item Other Expense. The NOI for BRE DDR III is adjusted to reflect the impact of assets sold.

(2) Fair market value of debt adjustment and net unamortized loan costs ($7.7 million or $3.2 million at DDR’s Share) are excluded from above.

(3) Amount is net of $70.0 million valuation allowance. Face value of $319.6 million including accrued interest of $5.1 million. The 8.5% dividend rate has two components, a cash dividend rate of 6.5% and an accrued payment in kind (“PIK”) of 2.0%. The Company no longer recognizes the accrued PIK as income due to the valuation allowance. Repayment from net asset sale proceeds is first subject to a remaining minimum sales threshold of $34.3 million payable to common members; subsequent net asset sale proceeds are allocated 49.0% to the preferred member unless certain financial covenants have been triggered, in which event 100% to the preferred member.

(4) Amount is net of $6.0 million valuation allowance. Face value of $74.5 million including accrued interest of $1.2 million. The 8.5% dividend rate has two components, a cash dividend rate of 6.5% and an accrued PIK of 2.0%. The Company no longer recognizes the accrued PIK as income due to the valuation allowance. Repayment from net asset sale proceeds is first subject to a minimum sales threshold of $26.0 million of which $6.0 million is allocated to the preferred member; subsequent net asset sale proceeds are expected to be available to repay the preferred member. Included in the collateral for the preferred equity interest is 95% of the value of the six joint venture properties and 100% of the value of six properties in which the Company does not have a material interest, but to which DDR provides property asset management services.

(5) Excludes one consolidated joint venture asset in which the Company has an effective 67% interest.

(6) Amount agrees to the combined income statement of the joint ventures which includes a reconciliation of the Non-GAAP measure to the applicable GAAP measure. See calculation definition in the Non-GAAP Measures section.

Combined DDR JV Pro Rata Adjustments (7)

       
Income Statement Pro Rata Adjustments 2Q17           Balance Sheet Pro Rata Adjustments 2Q17       

Revenues:

         Assets:      

Minimum rents

     $13,565         Land      $169,030     

Percentage rent

     52         Buildings      453,042     

Recoveries

     4,328         Improvements      33,831     

Other property revenue

     207              655,903     
     18,152         Depreciation      (164,569)     

Expenses:

              491,334     

Operating and maintenance

     2,837         Construction in progress and land      6,076     

Real estate taxes

     2,670         Real estate, net      497,410     
     5,507         Investment in JVs      1,239     

Net Operating Income

     12,645         Cash and restricted cash      17,953     

Other Income (expense):

         Receivables, net      7,167     

Fee Income

     (951)         Other assets, net      17,687     

Interest income

     (412)         Total Assets      $541,456     

Impairment Charges

     (1,392)         Liabilities and Equity:      

Interest expense

     (4,606)         Mortgage debt      $356,096     

Depreciation and amortization

     (5,747)         Notes payable to DDR      501     

Other income (expense), net

     (660)         Other liabilities      17,546     

Loss before earnings from JVs

     (1,123)         Total Liabilities      374,143     

Equity in net loss of JVs

     717         JVs share of equity      21,078     

Basis differences of JVs

     446         Distributions in excess of net income      146,235     

Loss on disposition of real estate

     (40)         Total Equity      167,313     

Net income

     $0         Total Liabilities and Equity      $541,456     

 

   

FFO Reconciliation 2Q17

        

Loss before earnings from JVs

     ($1,123)  

Depreciation and amortization

     5,747  

Impairment of depreciable real estate

     1,392  

Basis differences of JVs

     196  

FFO at DDR’s Ownership Interests

     $6,212  

(7) Information provided for DDR’s share of JV investments and can be combined with DDR’s consolidated financial statements for the same period.

 

22


DDR Corp.

Unconsolidated Joint Ventures at 100%

 

$ in thousands

 

   Income Statement                       

 

 
             2Q17                      2Q16                      6M17                      6M16  

Revenues:

           

Minimum rents

     $94,609         $96,960         $190,052         $193,535   

Percentage rent

     567         573         959         904   

Recoveries

     29,930         30,312         59,745         60,281   

Other property revenues

     1,422         1,045         2,820         2,080   
  

 

 

    

 

 

    

 

 

    

 

 

 
     126,528         128,890         253,576         256,800   

Expenses:

           

Operating and maintenance

     18,805         18,644         36,612         37,643   

Real estate taxes

     18,886         18,329         37,747         36,986   
  

 

 

    

 

 

    

 

 

    

 

 

 
     37,691         36,973         74,359         74,629   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net operating income

     88,837         91,917         179,217         182,171   

Other income (expense):

           

Interest expense

     (29,004)         (33,319)         (59,1