Ddr Corp (DDR) SEC Filing 10-Q Quarterly report for the period ending Saturday, March 31, 2018

Exhibit 99.1

 

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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
DDR and Retail Value Inc. Financial Information			11
Leasing Summary			12-13
Top 50 Tenants			14
Lease Expirations			15
Investments
Developments/Redevelopments			16
Transactions			17
Debt Summary
Debt Summary			18
Consolidated Debt Detail			19
Unconsolidated Debt Detail			20-21
Debt/Adjusted EBITDA			22
Unconsolidated Joint Ventures
Unconsolidated Joint Ventures			23-25
Shopping Center Summary
Top 20 MSA Exposure			26
Property List			27-34
Reporting Policies and Other Notable Accounting and Supplemental Policies			35-36
Non-GAAP Measures and Reconciliations			37-39
Leasing Metrics for Wholly-Owned and Unconsolidated Joint Ventures at 100%			40-44

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, property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from extreme weather conditions in locations where we own properties, and the ability to estimate accurately the amounts thereof; sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions; 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 change in strategy; our ability to complete our previously announced plan to spin-off certain of our assets in a timely manner; the impact of such spin-off on our business and that of the spun-off company; and the ability of the Company and the spin-off company to execute their respective strategies following consummation of the spin-off, including the ability of the spin-off company to sell assets on commercially reasonable terms; entering into management agreements with RVI on commercially reasonable terms; and the finalization of the financial statements for the period ended March 31, 2018. 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, 2017. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

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For immediate release:

DDR REPORTS FIRST QUARTER 2018 OPERATING RESULTS

BEACHWOOD, OHIO, April 24, 2018 – DDR Corp. (NYSE: DDR) today announced operating results for the quarter ended March 31, 2018.

“I am thrilled with our progress in the first quarter, both operationally and with the execution of our strategic transformation through the planned spin-off of RVI. Our strong same store NOI and operating FFO results were ahead of our budget, and demonstrate the strength of our high-quality portfolio. The completion of the securitization of the $1.35 billion mortgage loan secured by the RVI assets represented the last significant hurdle ahead of the expected July spin-off. Finally, we closed the disposition of our first RVI asset at a compelling price, an auspicious beginning for the execution of RVI’s business plan,” commented David R. Lukes, president and chief executive officer.

Results for the Quarter

 

•

First quarter net loss attributable to common shareholders was $62.5 million, or $0.17 per diluted share, as compared to net loss of $59.8 million, or $0.16 per diluted share, in the year ago-period. The year-over-year increase in net loss is primarily attributable to debt extinguishment charges and transaction costs of $61.6 million partially offset by lower impairment charges and the reserve on preferred equity interests in 2017.

 

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First quarter operating funds from operations attributable to common shareholders (“Operating FFO” or “OFFO”) was $97.8 million, or $0.26 per diluted share, compared to $108.5 million, or $0.30 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 partially offset by a reduction in general and administrative expenses.

Significant First Quarter Activity

 

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Sold 15 shopping centers and land parcels for an aggregate sales price of $365.9 million, totaling $208.7 million at DDR’s share, including $36.1 million from the repayment of the Company’s preferred equity investment in its two joint ventures with Blackstone.

 

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In February 2018, in connection with the previously announced planned spin-off of 38 continental U.S. assets and all 12 Puerto Rico assets into RVI, completed $1.35 billion of mortgage financing and repaid $452 million of mortgage debt, $900 million aggregate principal amount of senior unsecured notes and $200 million of unsecured term loan using proceeds from the new financing and asset sales. DDR recorded approximately $5.2 million of costs related to the planned RVI spin-off in the first quarter of 2018.

 

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Sold Silver Spring Square in Harrisburg, PA, for $80.8 million on April 17, 2018 marking the completion of the first RVI asset sale.

Key Quarterly Operating Results

 

•

Reported 2.6% same store net operating income growth on a pro rata basis for New DDR. The results of “New DDR” represent the results of the assets that will remain in DDR after the completion of both the spin-off of RVI and the previously announced $900 million disposition program.

 

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Generated new leasing spreads of 21.2% and renewal leasing spreads of 6.4%, both on a pro rata basis for New DDR for the quarter, and new leasing spreads of 21.6% and renewal leasing spreads of 7.2%, both on a pro rata basis for New DDR for the trailing twelve-month period.

 

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Reported a leased rate of 93.7% at March 31, 2018 for New DDR on a pro rata basis, compared to 93.6% at December 31, 2017.

 

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Annualized base rent per occupied square foot on a pro rata basis was $17.29 at March 31, 2018 for New DDR, compared to $17.00 at March 31, 2017.

 

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Guidance

There has been no change in the Company’s Operating FFO per share guidance since the initial release on February 15, 2018 and the related assumptions. The Company continues to estimate Operating FFO for the third quarter of 2018 to be at least $0.15 per diluted share, after an assumed spin-off date of July 2018.

Reconciliation of Net Income Attributable to DDR to FFO and Operating FFO Estimate

 

		3Q2018E Per Share - Diluted
Net income attributable to Common Shareholders			$0.02 - $0.03
Depreciation and amortization of real estate			0.11 - 0.13
Equity in net income of JVs			(0.01	)
JVs’ FFO			0.02
FFO (NAREIT) and Operating FFO			$0.15

About DDR Corp.

DDR is an owner and manager of 258 value-oriented shopping centers representing 89 million square feet in 32 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 5:00 p.m. Eastern Time. To participate with access to the slide presentation, please visit the Investors portion of DDR’s website, ir.ddr.com, or for audio only, dial 888-317-6003 (U.S.), 866-284-3684 (Canada) or 412-317-6061 (international) using pass code 3646421 at least ten minutes prior to the scheduled start of the call. A replay of the conference call will also be available at ir.ddr.com for one year after the call. A copy of the Company’s Supplemental package is available on the Company’s website.

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.

 

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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. SSNOI also excludes activity associated with development and major redevelopment and includes assets owned in comparable periods (15 months for quarter comparisons). In addition, due to the impact of Hurricane Maria on its properties in Puerto Rico in 2017, the Company also excludes its Puerto Rico NOI from SSNOI. 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, property damage, expenses related thereto and other business and economic consequences (including the potential loss of rental revenues) resulting from extreme weather conditions in locations where we own properties, and the ability to estimate accurately the amounts thereof; sufficiency and timing of any insurance recovery payments related to damages from extreme weather conditions; 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 change in strategy; our ability to complete our previously announced plan to spin-off certain of our assets in a timely manner; the impact of such spin-off on our business and that of the spun-off company; and the ability of the Company and the spin-off company to execute their respective strategies following consummation of the spin-off, including the ability of the spin-off company to sell assets on commercially reasonable terms; entering into management agreements with RVI on commercially reasonable terms; and the finalization of the financial statements for the period ended March 31, 2018. 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, 2017. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

 

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DDR Corp.

Income Statement: Consolidated Interests

 

		$ in thousands, except per share
				1Q18				1Q17
		Revenues (1):
		Minimum rents (2)		$	146,887			$	167,229
		Percentage rent			1,808				1,699
		Recoveries			51,354				57,476
		Other property revenues (3)			4,908				4,577
		Business interruption income			2,000				0
					206,957				230,981
		Expenses (4):
		Operating and maintenance			29,757				32,991
		Real estate taxes			32,023				34,329
					61,780				67,320
		Net operating income			145,177				163,661
		Other income (expense):
		Fee income			8,111				9,440
		Interest income			5,341				8,392
		Interest expense			(44,040	)			(51,827	)
		Depreciation and amortization			(74,424	)			(90,884	)
		General and administrative (5)			(16,115	)			(31,072	)
		Other income (expense), net (6)			(61,607	)			(4	)
		Impairment charges			(30,444	)			(21,973	)
		Hurricane casualty loss			(750	)			0
		Loss before earnings from JVs and other			(68,751	)			(14,267	)
		Equity in net income (loss) of JVs			8,786				(1,665	)
		Reserve of preferred equity interests			(3,961	)			(76,000	)
		Tax benefit (expense)			18				(223	)
		Gain on disposition of real estate, net			10,011				38,127
		Net loss			(53,897	)			(54,028	)
		Non-controlling interests			(256	)			(213	)
		Net loss DDR			(54,153	)			(54,241	)
		Preferred dividends			(8,383	)			(5,594	)
		Net loss Common Shareholders		($	62,536	)		($	59,835	)
		Weighted average shares – Basic & Diluted – EPS			369,120				366,430
		Earnings per common share – Basic & Diluted		($	0.17	)		($	0.16	)
		Revenue items:
(1)		Lost revenue related to hurricanes		($	3,784	)		$	0
(2)		Ground lease revenue			9,970				10,892
(3)		Lease termination fees			521				178
(4)		Operating expenses:
		Recoverable expenses			(57,579	)			(62,117	)
		Non-recoverable expenses			(4,104	)			(4,280	)
		Bad debt expense			(97	)			(923	)
(5)		General and administrative expenses:
		Separation charges			0				(11,471	)
		Internal leasing expenses			(1,196	)			(1,592	)
		Construction administrative costs (capitalized)			1,370				2,388
(6)		Other income (expense), net
		Debt extinguishment costs, net			(56,432	)			0
		Transaction and other (income) expense, net			(5,175	)			(4	)
					(61,607	)			(4	)

 

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DDR Corp.

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

and Other Financial Information

 

		$ in thousands, except per share
				1Q18				1Q17
		Net loss attributable to Common Shareholders		($	62,536	)		($	59,835	)
		Depreciation and amortization of real estate			72,859				88,649
		Equity in net (income) loss of JVs			(8,786	)			1,665
		JVs’ FFO			7,170				6,582
		Non-controlling interests			53				76
		Impairment of depreciable real estate			30,444				21,973
		Gain on disposition of depreciable real estate, net			(9,688	)			(36,898	)
		FFO attributable to Common Shareholders		$	29,516			$	22,212
		Reserve of preferred equity interests			3,961				76,000
		Hurricane casualty loss (1)			2,535				0
		Separation charges			0				11,471
		Debt extinguishment, transaction, other, net			61,607				(1	)
		Joint ventures—debt extinguishment, transaction, other			454				80
		Gain on disposition of non-depreciable real estate, net			(323	)			(1,229	)
		Total non-operating items, net			68,234				86,321
		Operating FFO attributable to Common Shareholders		$	97,750			$	108,533
		Weighted average shares and units – Basic – FFO & OFFO			369,471				366,976
		Assumed conversion of dilutive securities			15				89
		Weighted average shares and units – Diluted – FFO & OFFO			369,486				367,065
		FFO per share – Basic & Diluted		$	0.08			$	0.06
		Operating FFO per share – Basic & Diluted		$	0.26			$	0.30
		Common stock dividends declared, per share		$	0.19			$	0.19
		Certain non-cash items (DDR share):
		Straight-line rent, net		($	380	)		$	433
		Amortization of (above)/below-market rent, net			1,843				3,851
		Straight-line ground rent (expense) income			(50	)			269
		Debt fair value and loan cost amortization			(2,473	)			(990	)
		Capitalized interest expense			323				398
		Stock compensation expense			(1,692	)			(1,908	)
		Non-real estate depreciation expense			(1,523	)			(2,135	)
		Non-cash interest income			0				1,283
		Capital expenditures (DDR share):
		Development and redevelopment costs			20,474				9,655
		Maintenance capital expenditures			521				824
		Tenant allowances and landlord work			9,418				18,124
		Leasing commissions			897				859
(1)		Hurricane casualty loss (DDR Share):
		Lost tenant revenue			(3,784	)			0
		Business interruption income			2,000				0
		Clean up costs and other expenses, net			(751	)			0
					(2,535	)			0

 

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DDR Corp.

Balance Sheet: Consolidated Interests

 

		$ in thousands
				At Period End
				1Q18				4Q17
		Assets:
		Land		$	1,700,502			$	1,738,792
		Buildings			5,599,708				5,733,451
		Fixtures and tenant improvements			696,787				693,280
					7,996,997				8,165,523
		Depreciation			(1,963,427	)			(1,953,479	)
					6,033,570				6,212,044
		Construction in progress and land			77,033				82,480
		Real estate, net			6,110,603				6,294,524
		Investments in JVs			96,734				106,037
		Receivable – preferred equity interests, net			236,925				277,776
		Cash			16,560				92,611
		Restricted cash			49,257				2,113
		Notes receivable, net			19,675				19,675
		Receivables, net (1)			100,464				108,695
		Casualty insurance receivable			65,547				58,583
		Intangible assets, net			167,834				182,407
		Other assets, net			46,847				27,652
		Total Assets			6,910,446				7,170,073
		Liabilities and Equity:
		Revolving credit facilities			120,000				0
		Unsecured debt			1,917,833				2,810,100
		Unsecured term loan			198,452				398,130
		Secured debt			1,505,235				641,082
					3,741,520				3,849,312
		Dividends payable			78,687				78,549
		Other liabilities (2)			317,916				344,774
		Total Liabilities			4,138,123				4,272,635
		Preferred shares			525,000				525,000
		Common shares			36,934				36,851
		Paid-in capital			5,522,874				5,513,197
		Distributions in excess of net income			(3,315,974	)			(3,183,134	)
		Deferred compensation			7,668				8,777
		Other comprehensive income			(1,311	)			(1,106	)
		Common shares in treasury at cost			(7,774	)			(8,653	)
		Non-controlling interests			4,906				6,506
		Total Equity			2,772,323				2,897,438
		Total Liabilities and Equity		$	6,910,446			$	7,170,073
(1)		Straight-line rents receivable, net		$	57,733			$	59,439
(2)		Below-market leases, net			123,571				127,513

 

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DDR Corp.

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

 

$ in thousands
										At DDR Share (Non-GAAP)
		1Q18				1Q17				1Q18				1Q17
GAAP Reconciliation:
Net loss attributable to DDR		($	54,153	)		($	54,241	)		($	54,153	)		($	54,241	)
Fee income			(8,111	)			(9,440	)			(8,111	)			(9,440	)
Interest income			(5,341	)			(8,392	)			(5,341	)			(8,392	)
Interest expense			44,040				51,827				44,040				51,827
Depreciation and amortization			74,424				90,884				74,424				90,884
General and administrative			16,115				31,072				16,115				31,072
Other expense, net			61,607				4				61,607				4
Impairment charges			30,444				21,973				30,444				21,973
Hurricane casualty loss			750				0				750				0
Equity in net income (loss) of joint ventures			(8,786	)			1,665				(8,786	)			1,665
Reserve of preferred equity interests			3,961				76,000				3,961				76,000
Tax (benefit) expense			(18	)			223				(18	)			223
Gain on disposition of real estate			(10,011	)			(38,127	)			(10,011	)			(38,127	)
Income from non-controlling interests			256				213				256				213
Consolidated NOI			145,177				163,661				145,177				163,661
DDR’s consolidated JV			0				0				(398	)			(410	)
Consolidated NOI, net of non-controlling interests			145,177				163,661				144,779				163,251
Net income (loss) from unconsolidated joint ventures			23,405				(52,377	)			8,452				(5,237	)
Interest expense			24,243				30,130				3,749				4,883
Depreciation and amortization			39,677				45,096				5,181				5,548
Impairment charges			16,910				52,657				846				6,260
Preferred share expense			6,508				8,128				325				406
Other expense, net			7,421				6,573				1,289				1,073
(Gain) loss on disposition of real estate, net			(38,020	)			173				(7,448	)			8
Unconsolidated NOI			80,144				90,380				12,394				12,941
Total Consolidated + Unconsolidated NOI			225,321				254,041				157,173				176,192
Less: Non-Same Store NOI adjustments including Puerto Rico NOI			(34,068	)			(64,224	)			(30,594	)			(51,511	)
Total SSNOI		$	191,253			$	189,817			$	126,579			$	124,681
Less: RVI – continental U.S. and disposition assets			(37,794	)			(38,158	)			(37,794	)			(38,158	)
Total New DDR SSNOI		$	153,459			$	151,659			$	88,785			$	86,523
SSNOI % Change – DDR at share (excluding Puerto Rico)			0.8	%							1.5	%
SSNOI % Change – New DDR at share			1.2	%							2.6	%

 

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

 

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DDR Corp.

Portfolio Summary

 

GLA in thousands
		3/31/2018				12/31/2017				9/30/2017				6/30/2017				3/31/2017
Shopping Center Count
Operating Centers—100%			258				273				286				298				309
Wholly Owned—DDR (ex RVI as of 4Q17)			82				86				131				136				144
JV Portfolio			126				137				143				150				151
Wholly Owned RVI—continental U.S.			38				38				n/a				n/a				n/a
Wholly Owned—Puerto Rico (RVI as of 4Q17)			12				12				12				12				14
Gross Leasable Area (GLA)
Owned and Ground Lease—100%			65,254				67,410				71,118				72,686				74,400
Owned and Ground Lease—DDR Share			43,999				45,118				47,039				48,053				49,633
Wholly Owned—DDR (ex RVI as of 4Q17)			23,535				24,476				38,314				39,307				40,515
JV Portfolio—DDR Share			3,994				4,167				4,284				4,305				4,311
Wholly Owned—RVI—continental U.S.			12,040				12,034				n/a				n/a				n/a
Wholly Owned—Puerto Rico (RVI as of 4Q17)			4,431				4,441				4,441				4,441				4,807
Unowned—100%			23,604				24,758				26,104				27,352				28,586
Quarterly Operational Overview
DDR Share
Base Rent PSF		$	16.49			$	16.46			$	16.16			$	16.09			$	15.83
Base Rent PSF < 10K		$	27.29			$	27.11			$	26.93			$	26.72			$	26.43
Base Rent PSF > 10K		$	13.41			$	13.36			$	13.09			$	13.01			$	12.83
Leased Rate			92.9	%			93.2	%			93.4	%			93.7	%			94.3	%
Commenced Rate			90.8	%			91.3	%			91.4	%			91.5	%			92.5	%
Leased Rate < 10K SF			87.1	%			87.6	%			87.8	%			87.9	%			88.3	%
Leased Rate > 10K SF			94.6	%			94.9	%			95.1	%			95.4	%			96.2	%
Wholly Owned DDR (ex RVI as of 4Q17)
Base Rent PSF		$	17.52			$	17.41			$	15.87			$	15.79			$	15.49
Leased Rate			93.6	%			93.5	%			93.7	%			94.0	%			94.7	%
Leased Rate < 10K SF			90.7	%			90.3	%			89.1	%			89.4	%			89.5	%
Leased Rate > 10K SF			94.5	%			94.4	%			95.0	%			95.3	%			96.2	%
Joint Venture DDR Share
Base Rent PSF		$	15.02			$	14.93			$	14.81			$	14.71			$	14.63
Leased Rate			93.3	%			93.6	%			93.3	%			93.8	%			94.6	%
Leased Rate < 10K SF			85.4	%			86.3	%			86.1	%			86.2	%			87.7	%
Leased Rate > 10K SF			96.2	%			96.4	%			96.0	%			96.6	%			97.2	%
Wholly Owned RVI—continental U.S.
Base Rent PSF		$	13.63			$	13.60				n/a				n/a				n/a
Leased Rate			93.4	%			93.6	%			n/a				n/a				n/a
Leased Rate < 10K SF			85.0	%			86.4	%			n/a				n/a				n/a
Leased Rate > 10K SF			95.8	%			95.6	%			n/a				n/a				n/a
Wholly Owned —Puerto Rico (RVI as of 4Q17)
Base Rent PSF		$	20.89			$	21.12			$	20.60			$	20.82			$	20.31
Leased Rate			87.0	%			89.6	%			90.7	%			90.4	%			90.9	%
Leased Rate < 10K SF			79.3	%			80.6	%			81.3	%			80.5	%			82.0	%
Leased Rate > 10K SF			90.7	%			93.9	%			95.1	%			95.1	%			95.1	%
Operational Statistics
% of Aggregate Property NOI—Wholly Owned – DDR Share			90.6	%			90.5	%			91.6	%			91.7	%			91.9	%
% of Aggregate Property NOI—Joint Venture – DDR Share			9.4	%			9.5	%			8.4	%			8.3	%			8.1	%
Same Store NOI
DDR at share (excluding Puerto Rico)			1.5	%			-0.4	%			0.0	%			0.0	%			0.5	%
New DDR at share			2.6	%			0.8	%			n/a				n/a				n/a
TTM Total Leasing—DDR Share (000s)			5,987				6,663				6,730				6,710				6,175
TTM Blended New and Renewal Rent Spreads—DDR Share			5.9	%			6.0	%			6.1	%			6.9	%			7.8	%

 

8

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DDR Corp.

Capital Structure

 

$, shares and units in thousands, except per share
		March 31, 2018				December 31, 2017				December 31, 2016
Capital Structure
Market Value Per Share		$	7.33			$	8.96			$	15.27
Common Shares Outstanding			369,272				368,474				366,264
Operating Partnership Units			281				372				399
Total Outstanding Common Shares			369,553				368,846				366,663
Common Shares Equity		$	2,708,824			$	3,304,857			$	5,598,939
Perpetual Preferred Stock—Class J			200,000				200,000				200,000
Perpetual Preferred Stock—Class K			150,000				150,000				150,000
Perpetual Preferred Stock—Class A			175,000				175,000				0
Total Perpetual Preferred Stock		$	525,000			$	525,000			$	350,000
Unsecured Credit Facilities			120,000				0				0
Unsecured Term Loan			200,000				400,000				400,000
Unsecured Notes Payable			1,929,635				2,827,052				2,927,185
Mortgage Debt (includes JVs at DDR share)			1,861,258				988,740				1,382,483
Total Debt (includes JVs at DDR share)			4,110,893				4,215,792				4,709,668
Less: Cash (including restricted cash)			65,817				94,724				39,225
Net Debt		$	4,045,076			$	4,121,068			$	4,670,443
Total Market Capitalization		$	7,278,900			$	7,950,925			$	10,619,382
Leverage / Public Debt Covenants
Consolidated Net Effective Debt			3,710,468				3,763,739				4,457,227
Consolidated Adjusted EBITDA—annualized			605,996				622,576				683,852
Consolidated Net Debt / Adjusted EBITDA (1)			6.1X				6.0X				6.5X
Pro-Rata Net Effective Debt			4,032,284				4,102,455				4,863,392
Pro-Rata Adjusted EBITDA—annualized			621,152				637,736				705,480
Pro-Rata Net Debt / Adjusted EBITDA (1)			6.5X				6.4X				6.9X
Outstanding Debt & Obligations			3,802,649				3,884,947				4,533,536
Undepreciated Real Estate Assets			8,407,689				8,631,815				9,698,190
Total Debt to Real Estate Assets Ratio			45	%			45	%			47	%
Covenant			65	%			65	%			65	%
Secured Debt & Obligations			1,535,687				640,553				1,183,277
Total Assets			8,866,505				9,115,651				10,188,963
Secured Debt to Assets Ratio			17	%			7	%			12	%
Covenant			40	%			40	%			40	%
Unencumbered Real Estate Assets			4,839,278				6,973,787				7,066,505
Unsecured Debt & Obligations			2,266,961				3,244,394				3,350,259
Unencumbered Assets to Unsecured Debt			213	%			215	%			211	%
Covenant			135	%			135	%			135	%
Net Income Available for Debt Service			497,240				560,295				692,499
Maximum Annual Service Charge			204,754				217,754				257,057
Fixed Charge Coverage Ratio			2.4X				2.6X				2.7X
Covenant			1.5X				1.5X				1.5X
Net Income Available for Debt Service Excluding Debt Extinguishment Costs			609,133				623,575				692,982
Fixed Charge Coverage Ratio Excluding Debt Extinguishment Costs			3.0X				2.9X				2.7X
Credit Ratings (Outlook)
Moody’s			Baa3 (Stable	)			Baa3 (Stable	)			Baa2 (Stable	)
S&P			BBB- (Stable	)			BBB- (Stable	)			BBB- (Stable	)
Fitch			BBB- (Positive	)			BBB- (Positive	)			BBB- (Stable	)

 

(1)	Excludes Perpetual Preferred Stock. See definition in the Non-GAAP Measures section.

 

9

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DDR Corp.

Same Store Metrics (1)

 

$ in thousands
		Same Store at 100%												Same Store at DDR Share
DDR at share (excluding Puerto Rico)			1Q18				1Q17				Change				1Q18				1Q17				Change
Leased Rate			92.9	%			94.1	%			(1.2	%)			92.9	%			94.1	%			(1.2	%)
Commenced Rate			91.0	%			92.4	%			(1.4	%)			91.0	%			92.6	%			(1.6	%)
Revenues:
Base Rents		$	201,382			$	200,486				0.4	%		$	132,612			$	131,543				0.8	%
Recoveries			67,165				67,622				(0.7	%)			45,261				46,061				(1.7	%)
Other			2,308				2,081				10.9	%			1,420				1,345				5.6	%
			270,855				270,189				0.2	%			179,293				178,949				0.2	%
Expenses:
Operating			(34,915	)			(35,817	)			(2.5	%)			(22,649	)			(23,587	)			(4.0	%)
Real Estate Taxes			(43,908	)			(43,810	)			0.2	%			(29,785	)			(30,088	)			(1.0	%)
Bad Debt Expense			(779	)			(745	)			4.6	%			(280	)			(593	)			(52.8	%)
			(79,602	)			(80,372	)			(1.0	%)			(52,714	)			(54,268	)			(2.9	%)
Total SSNOI (2)		$	191,253			$	189,817				0.8	%		$	126,579			$	124,681				1.5	%
Non-Same Store NOI including Puerto Rico NOI (3)			34,068				64,224								30,594				51,511
Total Consolidated + Unconsolidated NOI		$	225,321			$	254,041							$	157,173			$	176,192
		Same Store at 100%												Same Store at DDR Share
New DDR at share			1Q18				1Q17				Change				1Q18				1Q17				Change
Leased Rate			93.3	%			94.1	%			(0.8	%)			93.7	%			94.0	%			(0.3	%)
Commenced Rate			90.7	%			91.6	%			(0.9	%)			90.4	%			91.4	%			(1.0	%)
Revenues:
Base Rents		$	161,924			$	160,602				0.8	%		$	93,154			$	91,659				1.6	%
Recoveries			53,116				53,114				0.0	%			31,212				31,554				(1.1	%)
Other			2,058				1,868				10.2	%			1,170				1,132				3.4	%
			217,098				215,584				0.7	%			125,536				124,345				1.0	%
Expenses:
Operating			(28,146	)			(28,912	)			(2.6	%)			(15,880	)			(16,682	)			(4.8	%)
Real Estate Taxes			(34,677	)			(34,615	)			0.2	%			(20,554	)			(20,894	)			(1.6	%)
Bad Debt Expense			(816	)			(398	)			105.0	%			(317	)			(246	)			28.9	%
			(63,639	)			(63,925	)			(0.4	%)			(36,751	)			(37,822	)			(2.8	%)
Total SSNOI		$	153,459			$	151,659				1.2	%		$	88,785			$	86,523				2.6	%

 

(1)	See calculation definition in the Non-GAAP Measures section. Excludes impact of all hurricane related lost revenues, costs and bad debt expense.

(2)	Excludes 12 assets in Puerto Rico.

(3)	See Investments section for detail on major redevelopment activity. Includes results of Puerto Rico. Represents 19.5% of 1Q18 total NOI at DDR share.

 

10

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DDR Corp.

DDR and Retail Value Inc. Financial Information

 

$ in thousands
		Income Statement — 1Q18
		Consolidated				RVI								DDR
		DDR - Ex RVI (1)				continental U.S.				Puerto Rico				As Reported (2)
Revenues:
Minimum rents		$	95,286			$	36,949			$	14,652			$	146,887
Percentage rent			731				224				853				1,808
Recoveries			32,634				13,163				5,557				51,354
Other property revenues			2,046				630				2,232				4,908
Business interruption income			0				0				2,000				2,000
			130,697				50,966				25,294				206,957
Expenses:
Operating and maintenance			17,749				6,474				5,534				29,757
Real estate taxes			22,129				8,702				1,192				32,023
			39,878				15,176				6,726				61,780
Net operating income (3)		$	90,819			$	35,790			$	18,568			$	145,177
Certain non-cash items:
Straight-line rent, net		($	127	)		$	137			($	384	)		($	374	)
Amortization of (above)/below-market rent, net			1,166				535				79				1,780
Straight-line ground rent income (expense)			(36	)			(2	)			0				(38	)
Capital expenditures:
Development and redevelopment costs			15,287				2,489				2,690				20,466
Maintenance capital expenditures			351				30				53				434
Tenant allowances and landlord work			5,273				3,294				21				8,588
Leasing commissions			660				195				0				855
		Balance Sheet — March 31, 2018
		Consolidated								DDR
		DDR - Ex RVI (1)				RVI				As Reported (2)
Assets:
Land		$	989,191			$	711,311			$	1,700,502
Buildings			3,696,050				1,903,658				5,599,708
Fixtures and tenant improvements			499,943				196,844				696,787
			5,185,184				2,811,813				7,996,997
Depreciation			(1,248,976	)			(714,451	)			(1,963,427	)
			3,936,208				2,097,362				6,033,570
Construction in progress and land			68,501				8,532				77,033
Real estate, net		$	4,004,709			$	2,105,894			$	6,110,603
Number of assets at period end (4)			83				50				133

 

(1)	Includes NOI from assets sold in the quarter as well as NOI and real estate assets from properties expected to be sold as part of the Company’s $900 million disposition program. Excludes DDR’s share of joint venture NOI of $12.4 million as reported in Unconsolidated Joint Ventures section.

(2)	Represents DDR Corp. as presented elsewhere herein.

(3)	See definition and reconciliation in Non-GAAP Measures section presented elsewhere herein.

(4)	Does not include 125 assets owned through unconsolidated joint ventures. Includes one consolidated joint venture asset in which the Company has an effective 67% interest.

 

11

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DDR Corp.

Leasing Summary

At DDR share except for count

 

Leasing Activity
		Comparable Pool																												Total Pool
		Count				GLA				New Rent PSF				Prior Rent PSF				Rent Spread				Wtd Avg Term (Years)								Count				GLA				New Rent PSF				Wtd Avg Term (Years)
New Leases
1Q18			34				69,370			$	23.81			$	19.94				19.4	%			7.6								68				266,988			$	17.72				8.8
4Q17			44				178,799			$	22.10			$	17.83				23.9	%			9.3								92				306,057			$	20.85				9.3
3Q17			35				75,716			$	21.18			$	19.83				6.8	%			8.3								76				258,889			$	18.49				8.8
2Q17			28				147,505			$	15.16			$	13.78				10.0	%			9.2								73				410,093			$	16.29				9.7
			141				471,390			$	20.03			$	17.19				16.5	%			8.8								309				1,242,027			$	18.18				9.2
Renewals
1Q18			163				811,411			$	15.04			$	14.51				3.7	%			5.2								163				811,411			$	15.04				5.2
4Q17			186				895,619			$	17.45			$	17.07				2.2	%			4.8								186				895,619			$	17.45				4.8
3Q17			239				1,533,448			$	15.63			$	14.73				6.1	%			5.0								239				1,533,448			$	15.63				5.0
2Q17			185				1,504,824			$	13.77			$	13.03				5.7	%			5.2								185				1,504,824			$	13.77				5.2
			773				4,745,302			$	15.28			$	14.60				4.7	%			5.0								773				4,745,302			$	15.28				5.0
New + Renewals
1Q18			197				880,781			$	15.73			$	14.94				5.3	%			5.5								231				1,078,399			$	15.71				6.2
4Q17			230				1,074,418			$	18.22			$	17.20				5.9	%			5.7								278				1,201,676			$	18.32				6.1
3Q17			274				1,609,164			$	15.90			$	14.97				6.2	%			5.2								315				1,792,337			$	16.05				5.6
2Q17			213				1,652,329			$	13.89			$	13.10				6.0	%			5.6								258				1,914,917			$	14.31				6.3
			914				5,216,692			$	15.71			$	14.83				5.9	%			5.5								1,082				5,987,329			$	15.88				6.0

 

Net Effective Rents
		GLA				Avg Rent PSF				TA Capex PSF				LL Work Capex PSF				Commission Capex PSF				Total Capex PSF				Net Effective Rent PSF				Wtd Avg Term (Years)
New Leases (1)
1Q18			259,946			$	18.52			$	2.34			$	3.39			$	0.49			$	6.22			$	12.30				8.7
4Q17			288,692			$	21.71			$	1.89			$	2.09			$	0.43			$	4.41			$	17.30				9.3
3Q17			189,846			$	19.76			$	2.17			$	1.66			$	0.61			$	4.44			$	15.32				8.5
2Q17			261,257			$	17.07			$	3.42			$	3.79			$	0.35			$	7.56			$	9.51				8.8
			999,741			$	19.30			$	2.45			$	2.79			$	0.46			$	5.70			$	13.60				8.9
Renewals
1Q18			811,411			$	15.18			$	0.05			$	0.00			$	0.00			$	0.05			$	15.13				5.2
4Q17			895,619			$	17.57			$	0.03			$	0.01			$	0.00			$	0.04			$	17.53				4.8
3Q17			1,533,448			$	15.76			$	0.01			$	0.00			$	0.00			$	0.01			$	15.75				5.0
2Q17			1,504,824			$	13.93			$	0.07			$	0.00			$	0.00			$	0.07			$	13.86				5.2
			4,745,302			$	15.42			$	0.04			$	0.00			$	0.00			$	0.04			$	15.38				5.0
New + Renewals
1Q18			1,071,357			$	15.99			$	0.84			$	1.16			$	0.17			$	2.17			$	13.82				6.2
4Q17			1,184,311			$	18.58			$	0.73			$	0.79			$	0.16			$	1.68			$	16.90				6.0
3Q17			1,723,294			$	16.20			$	0.38			$	0.29			$	0.11			$	0.78			$	15.42				5.5
2Q17			1,766,081			$	14.39			$	0.82			$	0.85			$	0.08			$	1.75			$	12.64				5.8
			5,745,043			$	16.10			$	0.68			$	0.74			$	0.12			$	1.54			$	14.56				5.8

 

(1)	New Leases exclude development and redevelopment activity.

 

12

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DDR Corp.

Leasing Summary – New DDR

At DDR share except for count    

 

Leasing Activity
		Comparable Pool																												Total Pool
		Count				GLA				New Rent PSF				Prior Rent PSF				Rent Spread				Wtd Avg Term (Years)								Count				GLA				New Rent PSF				Wtd Avg Term (Years)
New Leases
1Q18			33				57,075			$	24.73			$	20.40				21.2	%			7.7								57				172,133			$	19.32				8.7
4Q17			34				153,972			$	21.79			$	17.59				23.9	%			9.6								77				253,180			$	20.79				9.6
3Q17			27				27,179			$	29.99			$	27.23				10.1	%			7.5								57				141,472			$	21.86				8.8
2Q17			23				68,526			$	17.23			$	13.86				24.3	%			8.6								58				269,396			$	17.87				9.9
			117				306,752			$	22.04			$	18.13				21.6	%			8.8								249				836,181			$	19.73				9.4
Renewals
1Q18			127				458,232			$	15.87			$	14.92				6.4	%			5.2								127				458,232			$	15.87				5.2
4Q17			150				550,204			$	17.98			$	17.07				5.3	%			4.9								150				550,204			$	17.98				4.9
3Q17			180				770,729			$	19.35			$	17.89				8.2	%			5.1								180				770,729			$	19.35				5.1
2Q17			135				674,081			$	17.60			$	16.28				8.1	%			5.1								135				674,081			$	17.60				5.1
			592				2,453,246			$	17.91			$	16.71				7.2	%			5.1								592				2,453,246			$	17.91				5.1
New + Renewals
1Q18			160				515,307			$	16.85			$	15.52				8.6	%			5.6								184				630,365			$	16.81				6.3
4Q17			184				704,176			$	18.81			$	17.18				9.5	%			6.1								227				803,384			$	18.86				6.5
3Q17			207				797,908			$	19.71			$	18.21				8.2	%			5.2								237				912,201			$	19.74				5.7
2Q17			158				742,607			$	17.57			$	16.06				9.4	%			5.4								193				943,477			$	17.68				6.5
			709				2,759,998			$	18.37			$	16.87				8.9	%			5.6								841				3,289,427			$	18.37				6.2

 

Net Effective Rents
		GLA				Avg Rent PSF				TA Capex PSF				LL Work Capex PSF				Commission Capex PSF				Total Capex PSF				Net Effective Rent PSF				Wtd Avg Term (Years)
New Leases (1)
1Q18			165,091			$	20.39			$	1.59			$	3.30			$	0.57			$	5.46			$	14.93				8.6
4Q17			235,815			$	21.56			$	1.88			$	1.62			$	0.42			$	3.92			$	17.64				9.6
3Q17			72,429			$	27.41			$	2.88			$	4.18			$	0.75			$	7.81			$	19.60				8.1
2Q17			120,560			$	20.66			$	2.57			$	6.04			$	0.38			$	8.99			$	11.67				8.7
			593,895			$	21.76			$	2.06			$	3.24			$	0.49			$	5.79			$	15.97				8.9
Renewals
1Q18			458,232			$	16.03			$	0.04			$	0.00			$	0.00			$	0.04			$	15.99				5.2
4Q17			550,204			$	18.13			$	0.04			$	0.01			$	0.00			$	0.05			$	18.08				4.9
3Q17			770,729			$	19.54			$	0.02			$	0.00			$	0.00			$	0.02			$	19.52				5.1
2Q17			674,081			$	17.80			$	0.06			$	0.00			$	0.00			$	0.06			$	17.74				5.1
			2,453,246			$	18.09			$	0.04			$	0.00			$	0.00			$	0.04			$	18.05				5.1
New + Renewals
1Q18			623,323			$	17.19			$	0.60			$	1.20			$	0.21			$	2.01			$	15.18				6.3
4Q17			786,019			$	19.16			$	0.86			$	0.73			$	0.19			$	1.78			$	17.38				6.4
3Q17			843,158			$	20.22			$	0.39			$	0.54			$	0.10			$	1.03			$	19.19				5.4
2Q17			794,641			$	18.24			$	0.64			$	1.41			$	0.09			$	2.14			$	16.10				5.7
			3,047,141			$	18.81			$	0.63			$	0.96			$	0.14			$	1.73			$	17.08				5.9

 

(1)	New Leases exclude development and redevelopment activity.

 

13

---

DDR Corp.

Top 50 Tenants

 

$ and GLA in thousands
				Number of Units												Base Rent												Owned GLA												Credit Ratings
		Tenant		WO				JV				Total				Pro Rata				% of Total				At 100%				Pro Rata				% of Total				At 100%				(S&P/Moody’s/Fitch)
1		TJX Companies (1)			68				36				104			$	27,813				4.4	%		$	37,784				2,262				5.1	%			3,221			A+/A2/NR
2		Bed Bath & Beyond (2)			51				27				78				20,970				3.3	%			29,086				1,666				3.8	%			2,323			BBB/Baa2/NR
3		PetSmart			46				28				74				17,001				2.7	%			24,731				1,045				2.4	%			1,589			CCC+/B2/NR
4		AMC Theatres			7				5				12				16,144				2.6	%			22,310				646				1.5	%			936			B+/B2/B
5		Dick’s Sporting Goods (3)			21				16				37				15,514				2.5	%			23,930				1,068				2.4	%			1,811			NR
6		Best Buy			24				10				34				15,010				2.4	%			20,696				992				2.3	%			1,339			BBB/Baa1/BBB-
7		Ross Stores (4)			40				32				72				14,057				2.2	%			22,263				1,288				2.9	%			2,093			A-/A3/NR
8		Kohl’s			16				9				25				12,907				2.0	%			18,219				1,548				3.5	%			2,211			BBB-/Baa2/BBB
9		Michaels			36				22				58				12,553				2.0	%			17,535				930				2.1	%			1,368			BB-/NR/NR
10		Gap (5)			37				20				57				11,304				1.8	%			15,354				663				1.5	%			927			BB+/Baa2/BB+
11		Walmart (6)			12				3				15				10,202				1.6	%			12,833				1,597				3.6	%			1,922			AA/Aa2/AA
12		Ulta			37				18				55				9,992				1.6	%			13,822				416				0.9	%			585			NR
13		Ascena (7)			63				20				83				7,908				1.3	%			9,908				397				0.9	%			500			B/Ba3/NR
14		Barnes & Noble			14				8				22				7,836				1.2	%			10,752				381				0.9	%			544			NR
15		Toys “R” Us (8)			14				5				19				7,494				1.2	%			8,324				639				1.5	%			780			NR
16		Kroger (9)			7				11				18				6,987				1.1	%			10,824				590				1.3	%			1,067			BBB/Baa1/BBB
17		Office Depot (10)			20				13				33				6,822				1.1	%			10,284				467				1.1	%			701			B/B1/NR
18		Nordstrom Rack			10				2				12				6,686				1.1	%			7,881				367				0.8	%			431			BBB+/Baa1/BBB+
19		Lowe’s			7				1				8				6,568				1.0	%			7,339				935				2.1	%			1,047			A-/A3/NR
20		Petco			22				9				31				6,468				1.0	%			8,302				323				0.7	%			430			B-/B2/NR
21		LA Fitness			9				2				11				6,045				1.0	%			7,102				438				1.0	%			509			NR
22		Jo-Ann			16				10				26				5,845				0.9	%			8,437				528				1.2	%			807			B/B1/NR
23		Five Below			35				19				54				5,740				0.9	%			7,985				331				0.8	%			467			NR
24		DSW			15				9				24				5,579				0.9	%			8,180				340				0.8	%			514			NR
25		Mattress Firm			38				15				53				5,575				0.9	%			7,293				193				0.4	%			258			NR
26		Pier 1 Imports			21				13				34				5,525				0.9	%			7,736				241				0.5	%			349			B/NR/NR
27		Home Depot			6				3				9				5,343				0.8	%			6,818				685				1.6	%			1,042			A/A2/A
28		Cinemark			4				3				7				5,286				0.8	%			7,161				345				0.8	%			463			BB/NR/NR
29		Regal Cinemas			5				1				6				5,177				0.8	%			7,277				261				0.6	%			330			NR
30		Party City			21				15				36				4,929				0.8	%			7,618				278				0.6	%			455			NR
31		Burlington			8				3				11				4,903				0.8	%			6,546				508				1.2	%			735			BB/NR/NR
32		Whole Foods			3				2				5				4,895				0.8	%			5,636				208				0.5	%			259			A+/Baa1/NR
33		Dollar Tree Stores			36				25				61				4,833				0.8	%			7,367				414				0.9	%			623			BBB-/Baa3/NR
34		AT&T			47				18				65				4,704				0.7	%			5,851				123				0.3	%			164			BBB+/Baa1/A-
35		Staples			12				15				27				4,593				0.7	%			7,999				311				0.7	%			548			B+/B1/NR
36		Hobby Lobby			9				7				16				4,307				0.7	%			7,131				546				1.2	%			873			NR
37		Famous Footwear			22				9				31				3,959				0.6	%			4,949				192				0.4	%			242			BB/Ba2/NR
38		Carter’s Childrenswear			27				9				36				3,139				0.5	%			3,799				122				0.3	%			150			BB+/NR/NR
39		Panera			20				10				30				3,118				0.5	%			4,285				102				0.2	%			143			NR
40		Tailored Brands (11)			18				8				26				2,978				0.5	%			4,090				127				0.3	%			180			B+/NR/NR
41		Total Wine & More			6				4				10				2,889				0.5	%			4,000				159				0.4	%			219			NR
42		Rainbow Apparel			25				6				31				2,832				0.4	%			3,328				129				0.3	%			170			NR
43		Footlocker			20				0				20				2,814				0.4	%			2,814				78				0.2	%			78			BB+/Ba1/NR
44		Sprint			28				14				42				2,804				0.4	%			3,583				69				0.2	%			99			B/B2/B+
45		Chili’s Restaurant			18				4				22				2,796				0.4	%			3,323				114				0.3	%			135			BB+/Ba1/BB+
46		Stein Mart			7				6				13				2,718				0.4	%			4,013				302				0.7	%			446			NR
47		Publix			2				23				25				2,666				0.4	%			10,623				313				0.7	%			1,195			NR
48		T-Mobile			26				21				47				2,629				0.4	%			3,638				57				0.1	%			90			BB+/NR/NR
49		L Brands (12)			22				13				35				2,627				0.4	%			3,583				94				0.2	%			127			BB+/Ba1/BB+
50		Giant Eagle			2				3				5				2,587				0.4	%			5,289				219				0.5	%			449			NR
		Top 50 Total			1,080				585				1,665			$	364,071				57.8	%		$	509,631				26,047				59.2	%			37,944
		Total Portfolio														$	629,970				100.0	%		$	902,586				43,999				100.0	%			65,254

 

(1)  T.J. Maxx (35) / Marshalls (43) / HomeGoods (21) / Sierra Trading (3) / HomeSense (2)		(7)  Ann Taylor (4) / Catherine’s (4) / Dress Barn (23) / Justice (18) / Lane Bryant (23) / Maurice’s (10) / Roz & Ali (1)
(2)  Bed Bath (48) / World Market (19) / buybuy Baby (9) / CTS (2)		(8)  Toys “R” Us (4) / Babies “R” Us (12) / Toys-Babies Combo (3)
(3)  Dick’s Sporting Goods (34) / Golf Galaxy (3)		(9)  Kroger (10) / Harris Teeter (4) / King Soopers (1) / Pick ‘n Save (2) Mariano’s (1)
(4)  Ross Dress For Less (69) / dd’s Discounts (3)		(10)   Office Depot (14) / OfficeMax (19)
(5)  Gap (4) / Old Navy (51) / Banana Republic (2)		(11)   Men’s Wearhouse (17) / Jos. A. Bank (7) / K&G Fashion Superstore (2)
(6)  Walmart (11) / Sam’s Club (2) / Neighborhood Market (2)		(12)   Bath & Body Works (30) / Victoria’s Secret (5)

 

14

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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			3				66			$	929			$	14.08				0.3	%							157				310			$	8,480			$	27.35				3.9	%							160				376			$	9,409			$	25.02				1.6	%
2018			34				970				12,302			$	12.68				3.3	%							386				632				17,177			$	27.18				8.0	%							420				1,602				29,479			$	18.40				5.0	%
2019			164				3,550				42,767			$	12.05				11.5	%							693				1,192				31,763			$	26.65				14.8	%							857				4,742				74,530			$	15.72				12.7	%
2020			160				3,267				42,748			$	13.08				11.5	%							657				1,079				29,638			$	27.47				13.8	%							817				4,346				72,386			$	16.66				12.3	%
2021			203				3,945				51,985			$	13.18				14.0	%							622				1,088				28,114			$	25.84				13.1	%							825				5,033				80,099			$	15.91				13.7	%
2022			225				5,009				62,979			$	12.57				17.0	%							594				1,068				30,123			$	28.21				14.0	%							819				6,077				93,102			$	15.32				15.9	%
2023			213				4,201				54,691			$	13.02				14.7	%							386				889				23,347			$	26.26				10.9	%							599				5,090				78,038			$	15.33				13.3	%
2024			104				2,133				25,965			$	12.17				7.0	%							199				532				13,747			$	25.84				6.4	%							303				2,665				39,712			$	14.90				6.8	%
2025			64				1,173				18,133			$	15.46				4.9	%							146				364				9,903			$	27.21				4.6	%							210				1,537				28,036			$	18.24				4.8	%
2026			54				843				12,683			$	15.05				3.4	%							140				401				11,854			$	29.56				5.5	%							194				1,244				24,537			$	19.72				4.2	%
2027			52				926				14,668			$	15.84				3.9	%							113				244				7,350			$	30.12				3.4	%							165				1,170				22,018			$	18.82				3.8	%
Thereafter			65				1,974				31,502			$	15.96				8.5	%							55				144				3,578			$	24.85				1.7	%							120				2,118				35,080			$	16.56				6.0	%
Total			1,341				28,057			$	371,352			$	13.24				100.0	%							4,148				7,943			$	215,074			$	27.08				100.0	%							5,489				36,000			$	586,426			$	16.29				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			2				12			$	177			$	14.75				0.0	%							144				290			$	7,938			$	27.37				3.7	%							146				302			$	8,115			$	26.87				1.4	%
2018			10				124				1,602			$	12.92				0.4	%							267				398				11,598			$	29.14				5.4	%							277				522				13,200			$	25.29				2.3	%
2019			23				332				4,252			$	12.81				1.1	%							429				722				20,194			$	27.97				9.4	%							452				1,054				24,446			$	23.19				4.2	%
2020			26				318				5,237			$	16.47				1.4	%							385				579				17,483			$	30.20				8.1	%							411				897				22,720			$	25.33				3.9	%
2021			27				321				5,611			$	17.48				1.5	%							373				533				14,871			$	27.90				6.9	%							400				854				20,482			$	23.98				3.5	%
2022			36				452				7,427			$	16.43				2.0	%							343				523				15,863			$	30.33				7.4	%							379				975				23,290			$	23.89				4.0	%
2023			20				233				4,561			$	19.58				1.2	%							277				462				12,951			$	28.03				6.0	%							297				695				17,512			$	25.20				3.0	%
2024			24				409				5,776			$	14.12				1.6	%							241				406				11,668			$	28.74				5.4	%							265				815				17,444			$	21.40				3.0	%
2025			28				419				5,456			$	13.02				1.5	%							223				404				10,874			$	26.92				5.1	%							251				823				16,330			$	19.84				2.8	%
2026			34				444				7,242			$	16.31				2.0	%							210				390				11,035			$	28.29				5.1	%							244				834				18,277			$	21.91				3.1	%
2027			34				634				9,469			$	14.94				2.5	%							215				344				10,718			$	31.16				5.0	%							249				978				20,187			$	20.64				3.4	%
Thereafter			1,077				24,359				314,542			$	12.91				84.7	%							1,041				2,892				69,881			$	24.16				32.5	%							2,118				27,251				384,423			$	14.11				65.6	%
Total			1,341				28,057			$	371,352			$	13.24				100.0	%							4,148				7,943			$	215,074			$	27.08				100.0	%							5,489				36,000			$	586,426			$	16.29				100.0	%

 

15

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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	%		$	154,675			$	67,737			$	86,938			$	50,691			$	17,046
Redevelopments – Tactical (3)							9	%			41,550				28,364				13,186				10,029				18,335
Other (4)							N/A				N/A				20,228				0				0				20,228
Undeveloped land (5)							N/A				N/A				21,424				0				0				21,424
										$	196,225			$	137,753			$	100,124			$	60,720			$	77,033
Redevelopments – Major
Kenwood Square (Cincinnati, OH)			100	%						$	30,928			$	25,474			$	5,454			$	23,768			$	1,706				4Q16				2Q18			Dick’s Sporting Goods, T.J. Maxx, Five Below, Marshalls, Michaels
Lee Vista Promenade (Orlando, FL)			100	%							39,241				29,816				9,425				26,923				2,893				1Q18				1Q19			Academy Sports, Bealls
West Bay Plaza (Cleveland, OH)			100	%							27,792				9,208				18,584				0				9,208				4Q18				3Q19			Fresh Thyme, Kirklands, Pet Supplies Plus, Ulta, HomeSense
Kmart Shopping Center (Tampa, FL)			100	%							27,732				1,991				25,741				0				1,991				4Q19				4Q20
Shoppers World (Boston, MA)			100	%							20,426				395				20,031				0				395				TBD				TBD
Sandy Plains Village (Atlanta, GA)			100	%							8,556				853				7,703				0				853				TBD				TBD
										$	154,675			$	67,737			$	86,938			$	50,691			$	17,046

 

(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. Includes large-scale shopping center expansion and repurposing projects.

(3)	Projects included in same store NOI. Includes outparcels, first generation space and small-scale shopping center expansions and other capital improvements.

(4)	Includes predevelopment and retenanting expenditures.

(5)	Balance is in addition to owned land adjacent to existing centers with an estimated value of $31 million and cost basis of the headquarters (non-income producing) of $41 million.

 

16

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DDR Corp.

Transactions

 

$ and GLA in thousands
								DDR				Total Owned				At 100%								At DDR Share
		Property Name		City, State				Own%				GLA				Price				Debt				Price				Debt
Dispositions
01/09/18		Indian Lakes Crossing (BRE DDR Retail Holdings III)			Virginia Beach, VA				5.0	%			71			$	14,700			$	7,178			$	735			$	359
01/18/18		Fortuna Center Plaza			Dumfries, VA				100.0	%			105				20,225				0				20,225				0
02/07/18		Meridian Crossroads			Meridian, ID				100.0	%			527				78,700				0				78,700				0
02/28/18		Lakewood Ranch Plaza (DDRM Properties)			Bradenton, FL				20.0	%			85				17,963				10,500				3,593				2,100
02/28/18		Crystal Springs (DDRM Properties)			Crystal River, FL				20.0	%			67				10,567				6,750				2,113				1,350
02/28/18		Paraiso Plaza (DDRM Properties)			Hialeah, FL				20.0	%			61				15,743				10,250				3,149				2,050
02/28/18		Plaza del Paraiso (DDRM Properties)			Miami, FL				20.0	%			85				21,581				13,000				4,316				2,600
02/28/18		Southwood Village (DDRM Properties)			Tallahassee, FL				20.0	%			63				9,693				6,750				1,939				1,350
02/28/18		Shoppes at Lithia (DDRM Properties)			Valrico, FL				20.0	%			71				16,614				9,500				3,323				1,900
02/28/18		Shoppes at Lake Dow (DDRM Properties)			McDonough, GA				20.0	%			73				13,874				7,200				2,775				1,440
03/15/18		Shoppes of Citrus Hills (DDRM Properties)			Hernando, FL				20.0	%			69				12,098				6,470				2,420				1,294
03/15/18		Bardmoor Promenade (DDRM Properties)			Largo, FL				20.0	%			158				31,868				19,000				6,374				3,800
03/22/18		Pioneer Hills			Aurora, CO				100.0	%			138				21,100				0				21,100				0
03/27/18		Naugatuck Valley SC (BRE DDR Retail Holdings III)			Waterbury, CT				5.0	%			383				24,500				31,491				1,225				1,575
03/29/18		Southern Tier Crossing			Horseheads, NY				100.0	%			175				18,500				0				18,500				0
		Non-operating sales															2,100								2,100
		Preferred equity repayment															36,072								36,072
					1Q 2018 Total								2,131			$	365,898			$	128,089			$	208,659			$	19,818
04/05/18		Hobby Lobby Center (BRE DDR Retail Holdings III)			Greenville, SC				5.0	%			69			$	6,000			$	5,191			$	300			$	260
04/17/18		Silver Spring Square (RVI)			Mechanicsburg, PA				100.0	%			343				80,810				65,730				80,810				65,730
04/20/18		Sherwood Retail Center (BRE DDR Retail Holdings III)			Sherwood, AR				5.0	%			123				4,148				5,249				207				262
04/20/18		Valley Bend (BRE DDR Retail Holdings III)			Huntsville, AL				5.0	%			425				66,000				43,500				3,300				2,175
04/23/18		The Shops at Fox River			McHenry, IL				100.0	%			341				32,000				0				32,000				0
					2Q 2018 Quarter to Date								1,301			$	188,958			$	119,670			$	116,617			$	68,427
					Total 2018								3,432			$	554,856			$	247,759			$	325,276			$	88,245

 

17

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DDR Corp.

Debt Summary

 

$ in thousands
		Consolidated												Unconsolidated												Total Pro Rata
		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 DDR Share
Debt Composition
Unsecured Credit Facilities		$	120,000			$	120,000				3.08	%														$	120,000				3.08	%
Unsecured Term Loan			200,000				200,000				3.23	%															200,000				3.23	%
Unsecured Public Debt			1,929,635				1,929,635				4.40	%															1,929,635				4.40	%
Fixed Rate Mortgage Loans			185,688				175,965				4.11	%		$	907,423			$	152,870				4.37	%			328,835				4.23	%
Variable Rate Mortgage Loans			1,350,000				1,350,000				5.36	%			1,458,860				182,423				3.76	%			1,532,423				5.17	%
Subtotal		$	3,785,323			$	3,775,600				4.62	%		$	2,366,283			$	335,293				4.04	%		$	4,110,893				4.58	%
Fair Market Value Adjustment			2,292				2,292								7,630				381								2,673
Unamortized Loan Costs, Net			(46,095	)			(46,009	)							(15,948	)			(2,898	)							(48,907	)
Total		$	3,741,520			$	3,731,883				4.62	%		$	2,357,965			$	332,776				4.04	%		$	4,064,659				4.58	%

 

		Principal Payments				Secured Maturities				Unsecured Maturities				Total 100%				Total Pro Rata				Pro Rata GAAP Interest Rate
Consolidated Maturity Schedule (1)
2018		$	3,351			$	0			$	22,231			$	25,582			$	25,582				7.54	%
2019			2,521				94,720				0				97,241				97,241				3.57	%
2020			1,750				39,934				0				41,684				41,684				5.00	%
2021			1,214				14,637				0				15,851				15,851				4.12	%
2022			0				27,561				570,000				597,561				587,838				4.33	%
2023			0				1,350,000				287,209				1,637,209				1,637,209				5.00	%
2024			0				0				65,614				65,614				65,614				4.06	%
2025			0				0				457,142				457,142				457,142				3.79	%
2026			0				0				400,000				400,000				400,000				4.43	%
2027 and beyond			0				0				450,000				450,000				450,000				4.81	%
Unsecured debt discount											(2,561	)			(2,561	)			(2,561	)
Total		$	8,836			$	1,526,852			$	2,249,635			$	3,785,323			$	3,775,600				4.62	%
		Principal Payments				Secured Maturities				Unsecured Maturities				Total 100%				Total Pro Rata				Pro Rata GAAP Interest Rate
Unconsolidated Maturity Schedule (1)
2018		$	3,234			$	100,849			$	0			$	104,083			$	14,672				4.54	%
2019			4,426				443,235				0				447,661				23,279				3.77	%
2020			5,092				339,523				0				344,615				52,356				3.43	%
2021			4,596				255,172				0				259,768				58,251				4.83	%
2022			3,390				898,252				0				901,642				136,482				3.98	%
2023			2,930				78,677				0				81,607				4,636				4.24	%
2024			1,352				83,688				0				85,040				11,854				4.31	%
2025			903				0				0				903				452				0.00	%
2026			935				0				0				935				467				0.00	%
2027 and beyond			1,214				138,815				0				140,029				32,844				3.67	%
Total		$	28,072			$	2,338,211			$	0			$	2,366,283			$	335,293				4.04	%
		Consolidated				Wtd Avg GAAP Rate				Unconsolidated				Wtd Avg GAAP Rate				Total				Wtd Avg GAAP Rate
% of Total (2)
Fixed			55.8	%			4.4	%			45.6	%			4.4	%			54.9	%			4.4	%
Variable			44.2	%			4.9	%			54.4	%			3.8	%			45.1	%			4.8	%
Recourse to DDR			59.6	%			4.2	%			0.0	%			0.0	%			54.7	%			4.2	%
Non-recourse to DDR			40.4	%			4.1	%			100.0	%			4.0	%			45.3	%			4.1	%

 

(1)	Assumes borrower extension options are exercised.

(2)	Calculations based on DDR share.

 

18

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DDR Corp.

Consolidated Debt Detail

 

$ in thousands
		Balance 100%				Balance DDR Share				Maturity Date (1)				GAAP Interest Rate (2)
Bank Debt (3)
Unsecured Revolver ($950m)		$	120,000			$	120,000				09/22				L + 120
Unsecured Revolver ($50m)			0				0				09/22				L + 120
Unsecured Term Loan ($200m)			200,000				200,000				01/23				L + 135
		$	320,000			$	320,000
Public Debt
Unsecured Notes		$	22,232			$	22,232				07/18				7.54	%
Unsecured Notes			453,724				453,724				07/22				4.63	%
Unsecured Notes			86,937				86,937				05/23				3.52	%
Unsecured Notes			65,437				65,437				08/24				4.06	%
Unsecured Notes			454,830				454,830				02/25				3.79	%
Unsecured Notes			397,230				397,230				02/26				4.43	%
Unsecured Notes			449,245				449,245				06/27				4.81	%
		$	1,929,635			$	1,929,635
Mortgage Debt
Nassau Park Pavilion, NJ		$	53,445			$	53,445				02/19				3.56	%
Bandera Pointe, TX			23,253				23,253				02/19				3.59	%
Presidential Commons, GA			19,878				19,878				02/19				3.57	%
Polaris Towne Center, OH			41,448				41,448				04/20				5.00	%
Chapel Hills West, CO			10,864				10,864				06/21				3.70	%
Chapel Hills East, CO			7,336				7,336				12/21				4.74	%
Paradise Village Gateway, AZ (DDR 67%)			29,464				19,741				01/22				4.89	%
Retail Value Inc. (38 assets) (4)			1,350,000				1,350,000				02/23				5.36	%
		$	1,535,688			$	1,525,965
Consolidated Debt Subtotal		$	3,785,323			$	3,775,600
FMV Adjustment – Assumed Debt			2,292				2,292
Unamortized Loan Costs, Net			(46,095	)			(46,009	)
Total Consolidated Debt		$	3,741,520			$	3,731,883
Rate Type
Fixed		$	2,115,323			$	2,105,600				6.4 years				4.37	%
Variable			1,670,000				1,670,000				4.8 years				4.94	%
		$	3,785,323			$	3,775,600				5.7 years				4.62	%
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	%

 

(1)	Assumes borrower extension options are exercised.

(2)

L = LIBOR

(3)	Excludes loan fees and unamortized loan costs.

(4)	LIBOR subject to a 3.0% cap.

(5)	Earliest redemption date.

 

19

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DDR Corp.

Unconsolidated Debt Detail

 

$ in thousands
		Balance 100%				Balance DDR Share				Maturity Date (1)				GAAP Interest Rate
BRE DDR Retail Holdings III (DDR 5%)
Camp Creek, GA		$	42,000			$	2,100				12/18				3.65	%
Powell Center, OH			7,315				366				05/19				3.28	%
November 2019 Loan Pool (23 assets)			436,065				21,803				11/19				3.78	%
January 2022 Loan Pool (2 assets)			18,684				934				01/22				3.76	%
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	%
July 2022 Loan Pool (2 assets)			4,635				232				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	%
Valley Bend, AL			43,500				2,175				06/23				4.22	%
		$	715,585			$	35,780
BRE DDR Retail Holdings IV (DDR 5%)
Ashbridge Square, PA		$	35,000			$	1,750				01/22				4.39	%
The Hub, NY			29,262				1,463				01/22				4.41	%
Fountains of Miramar, FL			24,093				1,205				01/22				4.32	%
Southmont Plaza, PA			33,163				1,658				01/22				4.44	%
Millenia Crossing, FL			21,969				1,098				01/23				4.20	%
Concourse Village, FL			13,760				688				02/24				4.32	%
		$	157,247			$	7,862
DDRM Properties (DDR 20%)
July 2022 Loan Pool (13 assets)		$	218,730			$	43,746				07/22				4.20	%
July 2022 Loan Pool (21 assets)			274,760				54,952				07/22				3.84	%
July 2022 Loan Pool (9 assets)			112,275				22,455				07/22				3.92	%
		$	605,765			$	121,153
DDRTC Core Retail Fund (DDR 15%)
July 2020 Loan Pool (9 assets) (2)		$	185,587			$	27,838				07/20				3.33	%
July 2020 Loan Pool (5 assets) (2)			153,936				23,090				07/20				3.54	%
November 2021 Loan Pool (7 assets)			174,719				26,208				11/21				3.95	%
Birkdale Village, NC			81,238				12,186				04/24				4.31	%
Overlook at King of Prussia, PA			40,800				6,120				09/27				3.88	%
Marketplace at Millcreek, GA			39,600				5,940				09/27				3.88	%
Winslow Bay Commons, NC			25,800				3,870				09/27				3.89	%
		$	701,680			$	105,252
DDR-SAU Retail Fund (DDR 20%)
September 2017 Loan Pool (7 assets) (3)		$	27,972			$	5,595				04/18				4.75	%
April 2018 Loan Pool (5 assets) (3)			30,877				6,176				04/18				4.66	%
		$	58,849			$	11,771
Other Joint Ventures
Sun Center Limited, OH (DDR 79%)		$	20,770			$	16,502				05/21				6.14	%
RVIP IIIB, Deer Park, IL (DDR 26%)			66,887				17,223				09/21				4.91	%
Lennox Town Center Limited, OH (DDR 50%)			39,500				19,750				04/28				3.49	%
		$	127,157			$	53,475
Unconsolidated Debt Subtotal		$	2,366,283			$	335,293
FMV Adjustment – Assumed Debt			7,630				381
Unamortized Loan Costs, Net			(15,948	)			(2,898	)
Total Unconsolidated Debt		$	2,357,965			$	332,776

 

20

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DDR Corp.

Unconsolidated Debt Detail

 

$ in thousands
		Balance 100%				Balance DDR Share				Maturity Date (1)				GAAP Interest Rate
Rate Type
Fixed		$	907,423			$	152,870				5.1 years				4.37	%
Variable			1,458,860				182,423				3.3 years				3.76	%
		$	2,366,283			$	335,293				4.1 years				4.04	%
		Notional Amount				Rate Hedged				Fixed Rate				Termination Date
Interest Rate Swaps
Mortgage Loan Camp Creek		$	42,000				1 mo. LIBOR				1.87	%			12/18

 

(1)	Assumes borrower extension options are exercised.

(2)	LIBOR subject to a 0.25% floor.

(3)	Six properties were refinanced in April 2018 with gross proceeds of $41.6MM and a 04/28 maturity.

 

21

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DDR Corp.

Debt/Adjusted EBITDA

 

$ in thousands
		1Q18				1Q17
Consolidated
Net loss to DDR		($	54,153	)		($	54,241	)
Interest expense			44,040				51,827
Income tax expense			(18	)			223
Depreciation and amortization			74,424				90,884
Adjustments for non-controlling interests			(167	)			(224	)
EBITDA – current quarter			64,126				88,469
Separation charges			0				11,471
Impairments			30,444				21,973
Equity in net (income) loss of JVs			(8,786	)			1,665
Reserve of preferred equity interests			3,961				76,000
Gain on disposition of real estate, net			(10,011	)			(38,127	)
Other expense, net			61,607				0
Hurricane casualty loss			4,533				0
Business interruption income			(2,000	)			0
JV OFFO (at DDR Share)			7,625				6,662
Adjusted EBITDA – current quarter (1)			151,499				168,113
Adjusted EBITDA – annualized			605,996				672,452
Consolidated debt			3,741,520				4,520,926
Partner share of consolidated debt			(9,723	)			(9,873	)
Loan costs, net			46,095				17,368
Face value adjustments			(2,292	)			(5,465	)
Cash and restricted cash			(65,132	)			(65,755	)
Net effective debt		$	3,710,468			$	4,457,201
Debt/Adjusted EBITDA – Consolidated (2)			6.1x				6.6x
Pro rata including JVs
Adjusted EBITDA – current quarter			155,288				173,165
Adjusted EBITDA – annualized			621,152				692,660
Consolidated net debt			3,710,468				4,457,201
JV debt (at DDR Share)			335,293				398,078
Cash and restricted cash			(13,477	)			(12,944	)
Net effective debt		$	4,032,284			$	4,842,335
Debt/Adjusted EBITDA – Pro Rata (2)			6.5x				7.0x

 

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

(2)	Excludes perpetual preferred stock.

 

22

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DDR Corp.

Unconsolidated Joint Ventures

 

$ and GLA in thousands
		Partner		DDR Own%				Operating Properties				Owned GLA				1Q18 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	%			35				6,722			$	21,822			$	1,028,327			$	715,585			$	185,446	(3)
BRE DDR Retail Holdings IV		Blackstone Real Estate Partners			5	%			6				1,259				4,039				206,111				157,247				51,479	(4)
DDRM Properties		Madison International Realty			20	%			43				6,259				15,930				1,073,191				605,765				0
DDRTC Core Retail Fund		TIAA-CREF			15	%			23				8,069				23,691				1,512,610				701,680				0
DDR–SAU Retail Fund		State of Utah			20	%			12				976				2,412				133,555				58,849				0
Other		Various			Various				6				1,666				6,498				299,963				127,157				0
Total									125	(5)			24,951			$	74,392			$	4,253,757			$	2,366,283			$	236,925
Property management fees																	3,803	(1)
Assets sold in 1Q2018																	1,949	(1)
Net operating income																$	80,144	(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 and DDRM is adjusted to reflect the impact of assets sold in 1Q18.

(2)	Fair market value of debt adjustment and net unamortized loan costs ($0.4 million or $2.9 million at DDR’s Share) are excluded from above.

(3)

Amount is net of $48.7 million valuation allowance and $84.3 million of face value repaid through March 31, 2018. Face value of $234.1 million including accrued interest of $3.9 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 are allocated 52.2% to the preferred member unless certain financial covenants have been triggered, in which event 100% to the preferred member.

(4)

Amount is net of $16.3 million valuation allowance and $17.9 million of face value repaid through March 31, 2018. Face value of $67.8 million including accrued interest of $1.1 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 are first subject to a minimum sales threshold of $4.9 million, of which $1.1 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 three 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.

 

23

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DDR Corp.

Unconsolidated Joint Ventures

 

Combined DDR JV Pro Rata Adjustments (1)
Income Statement Pro Rata Adjustments 1Q18						Balance Sheet Pro Rata Adjustments 1Q18
Revenues:						Assets:
Minimum rents		$	13,029			Land		$	154,072
Percentage rent			48			Buildings			420,424
Recoveries			4,043			Improvements			35,120
Other property revenue			477						609,616
			17,597			Depreciation			(165,828	)
Expenses:									443,788
Operating and maintenance			2,545			Construction in progress and land			6,010
Real estate taxes			2,658			Real estate, net			449,798
			5,203			Investment in JVs			1,106
Net Operating Income			12,394			Cash and restricted cash			13,444
Other Income (expense):						Receivables, net			6,539
Fee income			(794	)		Other assets, net			14,985
Interest income			(325	)		Total Assets		$	485,872
Impairment charges			(846	)		Liabilities and Equity:
Interest expense			(3,749	)		Mortgage debt		$	332,776
Depreciation and amortization			(5,181	)		Notes payable to DDR			438
Other income (expense), net			(495	)		Other liabilities			14,578
Income before earnings from JVs			1,004			Total Liabilities			347,792
Equity in net income of JVs			(8,786	)		JVs share of equity			16,593
Basis differences of JVs			334			Distributions in excess of net income			121,487
Gain on disposition of real estate			7,448			Total Equity			138,080
Net income		$	0			Total Liabilities and Equity		$	485,872
FFO Reconciliation 1Q18
Income before earnings from JVs		$	1,004
Depreciation and