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2 0 1 5 A N N U A L R E P O R T
Ramco-Gershenson Properties Trust (NYSE:RPT) is a fully integrated,
self-administered, publicly-traded real estate investment trust (REIT) based in Farmington
Hills, Michigan. The Company’s primary business is the ownership and management of
large, multi-anchor shopping centers in a number of the largest metropolitan markets in the
central United States. At December 31, 2015, the Company owned interests in and
managed a portfolio of 73 shopping centers and one office building with approximately
15.9 million square feet of gross leasable area.
Properties pictured above (clockwise): Buttermilk Towne Center, The Shops on Lane Avenue,
Hunter’s Square, The Shoppes at Fox River and Millennium Park
Ramco-Gershenson Properties Trust / 2015 Annual Report
1
The Company’s strategic focus is to
further STREAMLINE our portfolio of
high-quality, multi-anchor shopping
centers in select major metropolitan
markets that provide value creation and
long-term growth.
Long-Term Value Creation:
■ Invest in large, multi-anchor, metropolitan-based shopping centers in
the central United States to provide an ongoing pipeline of tactical and
strategic redevelopment opportunities.
■ Promote operating excellence and execute on embedded value creation
opportunities designed to deliver sustainable same-center NOI growth,
healthy rental increases, high occupancy and consistent growth in net
asset value.
■ Maintain a strong balance sheet and a solid capital structure to enable
us to execute on a strategic business plan and grow our dividend
through any economic cycle.
Dear Shareholders:
JOHN HENDRICKSON
DENNIS GERSHENSON
GEOFFREY BEDROSIAN
Executive Vice President and
Chief Operating Officer
President and Chief Executive Officer
Executive Vice President and
Chief Financial Officer
We are pleased to report that 2015 was another successful year for
our Company that capped a five-year period of transformation and
growth wherein we generated average annual increases in operating
FFO, excluding gains on land sales, of 9%, grew average base rents
by 34% and increased same-center net operating income 2.6% on
average each year.
Our activities in 2015 focused on the achievement of several strategic objectives, which we
believe provides a solid foundation for even greater success in the future.
• First, we simplified our portfolio structure by acquiring or selling all but three of our joint venture
shopping centers. We reasonably expect that these last three assets will be sold over the next 12 to 18
months. We believe that owning 100% of the interest in our shopping centers will provide the greatest
upside potential for our shareholders as we capitalize on the many value-add redevelopment, expansion
and re-anchoring opportunities in our portfolio.
Ramco-Gershenson Properties Trust / 2015 Annual Report 2/3
S T RONG
OPER AT I NG
M E T R IC S
3.9%SAME-CENTER
NOI GROWTH
(with redevelopments)
94.6%LEASED
OCCUPANCY
9.1%RENT
GROWTH
• Second, we exceeded our 2015 capital recycling
target by selling $88 million of non-core assets at
an average capitalization rate of 6.4%. These sales
provided two benefits for the Company. They
culled from our shopping center portfolio many of
those properties that did not reflect our focus on
the ownership of large, multi-anchor centers in
high-income, in-fill markets and they provided a
reliable and attractive source of capital to fund
our business activities.
• Third, we executed on an aggressive leasing plan
highlighted by the signing of 15 anchor leases
with best-in-class national retailers, including
Nordstrom Rack, Saks OFF 5TH, Stein Mart, Dick’s
Sporting Goods, Ross Dress for Less and DSW.
The signing of long term leases with this number
of exciting anchors, when our anchor occupancy
is near an all-time high, demonstrates our ability
to pro-actively create additional value and draw-
ing power at our shopping centers. Our leasing
success for the year also resulted in the signing of
286 leases, encompassing 1.8 million square feet,
at a comparable average rental increase of 9.1%.
• Fourth, we strengthened our executive manage-
ment team with the hiring of John Hendrickson as
Chief Operating Officer and Geoffrey Bedrosian
as Chief Financial Officer. We have formed a
strong partnership that not only enables our
Company to grow, but has broadened our skill
set, allowing us to envision the future in new ways.
Our plans for 2016 build upon our accomplishments
in 2015 with an added emphasis on prudent capital
sourcing and allocation. This year, we plan to com-
plete a number of current redevelopments that are
estimated to yield returns of between 9%–10%. We
are currently finalizing plans for several projects
scheduled to commence in 2016, with the goal of
maintaining an ongoing pipeline of $65–$80 million
Dear Shareholders (continued)
of active projects that further our goals of site densification, center expansions on adjacent land, and
replacing under-performing retailers with best-in-class tenancies. The funds for these capital expenditures
will be generated from our 2016 capital recycling program, which is planned to consist of selling $100–$125
million of fully-valued, slow growth assets in non-strategic markets. Additionally, these sales will help to
further improve our balance sheet as we build additional liquidity and lower overall leverage to 6.2x–6.4x
debt to EBITDA.
In summary, the streamlining of our shopping center portfolio, the enhancement of our corporate structure,
our concentrated market and asset focus, and our value-add redevelopment projects, combined with
our emphasis on producing superior operational and financial results, will continue to generate long term
value for our shareholders.
Dennis Gershenson
President and Chief Executive Officer
Selected Financial Highlights
Years Ended December 31,
(Dollars in thousands, except per share amounts)
2015
2014
2013
2012
2011
Total Revenues
Operating Funds from Operations
$ 251,790
$ 121,807
$ 218,363
$ 103,503
$ 170,068
81,850
$
$ 125,225
49,339
$
$ 114,386
41,813
$
Per Share
Operating Funds from Operations, Diluted
Operating Funds from Operations, Diluted
(without land sales)
Cash Distributions Declared
Total Assets
Mortgages and Notes Payable
Total Liabilities
Shareholders’ Equity
Number of Shopping Centers
$
$
$
1.39
$
1.27
$
1.19
$
1.05
$
1.01
1.34
0.82
$
$
1.26
0.78
$
$
1.13
0.71
$
$
1.05
0.66
$
$
0.95
0.65
$ 2,128,671
$ 1,083,711
$ 1,222,334
$ 884,223
73
$ 1,944,332
$ 917,658
$ 1,645,735
$ 746,661
$ 1,159,218
$ 535,208
$ 1,043,258
$ 512,947
$ 1,046,053
$ 847,775
$ 599,386
$ 562,084
$ 872,357
$ 770,097
$ 529,783
$ 449,075
80
80
78
83
Our Current Market Strategy Is to Expand
Our Presence in 10 of the Largest MSAs
Ramco-Gershenson Properties Trust / 2015 Annual Report 4/5
■ Primarily first-ring top 40 Metropolitan Statistical Area (MSA) sub-market locations
provide the opportunity for both tactical and strategic redevelopment as retailers look
to locate in our centers.
■ Our top 10 markets provide the opportunity for future growth supported by strong
regional leasing and asset management teams.
D
J
H
G
E
A
C
I
F
B
Market
SE Michigan
SE Florida
Cincinnati
Denver
St. Louis
Jacksonville
Chicago
A
B
C
D
E
F
G
H Milwaukee
I
Atlanta
J Minneapolis/St. Paul
*Based on a five-mile trade area.
Source: CoStar.
MSA Rank
14
8
28
21
19
40
3
39
9
16
% of
Annualized
Base Rent
25%
9%
9%
7%
6%
6%
5%
5%
3%
3%
Average*
Household Income
Population*
$ 82,000
$ 72,000
$ 77,000
$ 84,000
$ 103,000
$ 69,000
$ 101,000
$ 79,000
$ 94,000
$ 97,000
230,000
196,000
181,000
112,000
204,000
53,000
239,000
176,000
204,000
132,000
Our Strategic Focus:
Dominant, Multi-Anchor Shopping Centers:
■ Market Dominant—top 20 centers average 445,000 square feet and seven anchors per center
PLUS at least 100,000 square feet of small shop space
■ High Quality—top 20 centers have average rents per square foot of $17.32(1) and average cap
rates of approximately 6.0%
■ Strong Demographics—average household income of $84,000 and population of 170,000
(1) Excludes ground leases.
Intrinsic Value-Add Redevelopment Opportunities:
■ Significant Pipeline—goal is to maintain active projects of at least $65–$80 million each year
over the next five years
■ Dynamic Projects—significant opportunities in the portfolio including site densification,
expansions and re-anchorings
■ Portfolio Direction—goal is to convert all properties to fortress top tier shopping centers
Long-Term Capital Recycling Program:
■ Capital Generation—current plan involves dispositions of $100–$125 million in 2016 providing
significant capital to fund our business plan
■ Strategic Approach—selling low growth or fully-valued properties as the Company continues to
reposition its portfolio
■ Match Funding—consistently sell non-strategic properties to fund high-quality investments
A Strong, Flexible Balance Sheet:
■ Investment Grade Profile—well-positioned alongside credit rated peers with a goal of
maintaining net debt to EBITDA of 6.2x–6.4x
■ Risk Adverse—average term of 6.7 years and less than $132 million (5% of market cap) of debt
expiring in any given year through 2026
■ Flexible Structure and Ample Liquidity—unencumbered property pool of $2.0 billion and
substantial revolving line availability
Deerfield Towne Center
Bridgewater Falls
Ramco-Gershenson Properties Trust / 2015 Annual Report 6/7
Optimized Business Model:
~50% OF ABR
RPT’S 20 LARGEST PROPERTIES
~35% OF ABR
PROPERTIES WITH LONG-TERM
GROWTH PROFILES
10–15% OF ABR
LOW GROWTH OR
FULLY-VALUED
PROPERTIES
OPTIMIZING GROWTH
AND VALUE
CREATION
Lakeland Park
Woodbury Lakes
Our Community First Program Draws
Customers and Builds Community Loyalty
2015 was the first full year of our one-of-a-kind Community First Marketing Program, which we developed to reflect the
interests, tastes and desires of the communities where we operate. The program is intended to promote loyalty, increase foot
traffic and drive sales, which will result in higher rents. Seven guiding principals drive our Community First program:
1. Focus on a unique identity for each center.
2. Engage customers with proprietary signature event programming.
3.
Implement management efficiencies to keep costs low for our tenants.
4.
Include incentives that drive shoppers back to our centers.
5. Utilize technology and other measures to increase the effectiveness of the program.
6. Engage with the local municipality, schools and charities to demonstrate our commitment to corporate responsibility.
7. Encourage a strong customer experience that builds loyalty.
www.yourwalkingclub.com
2015 by the numbers:
■ 15 signature events implemented
at 6 centers
■ 742,600 website visits
■ 30,000 customer participants
■ 22,672 Facebook likes
■ 216 tenant partners
■ 35 community/charity partners
2 0 1 5 F O R M 1 0 - K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
Form 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10093
RAMCO-GERSHENSON PROPERTIES TRUST
(Exact Name of Registrant as Specified in its Charter)
Maryland
(State or Other Jurisdiction of
Incorporation or Organization)
31500 Northwestern Highway, Suite 300
Farmington Hills, Michigan
(Address of Principal Executive Offices)
13-6908486
(I.R.S. Employer Identification No.)
48334
(Zip Code)
Registrant’s Telephone Number, Including Area Code: 248-350-9900
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class
Common Shares of Beneficial Interest,
($0.01 Par Value Per Share)
Securities Registered Pursuant to Section 12(g) of the Act: None
Name of Each Exchange
On Which Registered
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [ ]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ X ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “large accelerated filer,” “accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer [X]
Accelerated Filer [ ]
Non-Accelerated Filer [ ]
Small Reporting Company [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
(Do not check if small reporting company)
The aggregate market value of the common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most
recently completed second fiscal quarter (June 30, 2015) was $1,267,495,868. As of February 16, 2016 there were outstanding 79,178,042 shares
of Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the annual meeting of shareholders to be held May 11, 2016 are in incorporated by reference into Part III.
TABLE OF CONTENTS
PART I
Page
Item
1.
Business
1A. Risk Factors
1B. Unresolved Staff Comments
2.
3.
Properties
Legal Proceedings
4. Mine Safety Disclosures
5. Market for Registrant’s Common Equity, Related Stockholder Matters and
PART II
Issuer Purchases of Equity Securities
6.
Selected Financial Data
7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
7A. Quantitative and Qualitative Disclosures About Market Risk
8.
9.
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
9A. Controls and Procedures
9B. Other Information
10. Directors, Executive Officers and Corporate Governance
PART III
11.
12.
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
13. Certain Relationships and Related Transactions, and Director Independence
14.
Principal Accountant Fees and Services
15.
Exhibits and Financial Statement Schedule
Consolidated Financial Statements and Notes
PART IV
1
5
13
14
23
23
24
26
27
39
39
40
40
40
41
41
41
41
41
42
F-1
Forward-Looking Statements
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our expectations,
plans or beliefs concerning future events and may be identified by terminology such as “may,” “will,” “should,” “believe,”
“expect,” “estimate,” “anticipate,” “continue,” “predict” or similar terms. Although the forward-looking statements made in
this document are based on our good-faith beliefs, reasonable assumptions and our best judgment based upon current information,
certain factors could cause actual results to differ materially from those in the forward-looking statements, including: our success
or failure in implementing our business strategy; economic conditions generally and in the commercial real estate and finance
markets specifically; the cost and availability of capital, which depends in part on our asset quality and our relationships with
lenders and other capital providers; our business prospects and outlook; changes in governmental regulations, tax rates and
similar matters; our continuing to qualify as a real estate investment trust (“REIT”); and other factors discussed elsewhere in
this document and our other filings with the Securities and Exchange Commission (the “SEC”). Given these uncertainties, you
should not place undue reliance on any forward-looking statements. Except as required by law, we assume no obligation to update
these forward-looking statements, even if new information becomes available in the future.
PART I
Item 1. Business
The terms “Company,” “we,” “our” or “us” refer to Ramco-Gershenson Properties Trust, Ramco-Gershenson Properties, L.P.,
and/or its subsidiaries, as the context may require.
General
Ramco-Gershenson Properties Trust is a fully integrated, self-administered, publicly-traded equity real estate investment trust
(“REIT”) organized in Maryland. Our primary business is the ownership and management of large multi-anchored shopping
centers primarily in twelve of the largest metropolitan markets in the United States. We aim to own multiple properties in each
of these metropolitan areas to leverage our management platform and to operate our centers efficiently in these markets. Our
target submarkets are affluent communities where our centers can offer value, convenience and a sense of place to the residents
of the trade area.
As of December 31, 2015, our property portfolio consisted of 70 wholly owned shopping centers and one office building comprising
approximately 15.3 million square feet. We also have ownership interests, ranging from 7% to 30%, in four joint ventures, three
of which own a single shopping center. Our joint ventures are reported using equity method accounting. We earn fees from the
joint ventures for managing, leasing, and redeveloping the shopping centers they own. In addition, we own various parcels of
land available for development or for sale, the majority of which are adjacent to certain of our existing developed properties.
We conduct substantially all of our business through our operating partnership, Ramco-Gershenson Properties, L.P. (the “Operating
Partnership”), a Delaware limited partnership. The Operating Partnership, either directly or indirectly through partnerships or
limited liability companies, holds fee title to all owned properties. As general partner of the Operating Partnership, we have the
exclusive power to manage and conduct the business of the Operating Partnership. As of December 31, 2015, we owned
approximately 97.6% of the interests in the Operating Partnership. The limited partners are reflected as noncontrolling interests
in our financial statements and are generally individuals or entities that contributed interests in certain assets or entities to the
Operating Partnership in exchange for units of limited partnership interest (“OP Units”). The holders of OP units are entitled to
exchange them for our common shares on a 1:1 basis or for cash. The form of payment is at our election.
We operate in a manner intended to qualify as a REIT pursuant to the provisions of the Internal Revenue Code of 1986, as amended
(the “Code”). Certain of our operations, including property and asset management, as well as ownership of certain land parcels,
are conducted through taxable REIT subsidiaries, (“TRSs”), which are subject to federal and state income taxes.
1
Business Objectives, Strategies and Significant Transactions
Our business objective is to own and manage high quality shopping centers that generate cash flow for distribution to our
shareholders and that have the potential for capital appreciation. To achieve this objective, we seek to acquire, develop, or redevelop
shopping centers that meet our investment criteria. We also seek to recycle capital through the sale of land or shopping centers
that we deem to be fully valued or that no longer meet our investment criteria. We use debt to finance our activities and focus on
managing the amount, structure, and terms of our debt to limit the risks inherent in debt financing. From time to time, we enter
into joint venture arrangements where we believe we can benefit by owning a partial interest in shopping centers and by earning
fees for managing the centers for our partners.
We invest primarily in large, multi-anchored shopping centers that include national chain store tenants and market dominant
supermarket tenants. National chain anchor tenants in our centers include, among others, TJ Maxx/Marshalls, Bed Bath and
Beyond, Home Depot and Dick's Sporting Goods. Supermarket anchor tenants in our centers include, among others, Publix Super
Market, Whole Foods, Kroger and Sprouts. Our shopping centers are primarily located in metropolitan markets such as Metro
Detroit, Southeast Florida, Greater Denver, Cincinnati, St. Louis, Jacksonville, Tampa/Lakeland, Milwaukee, Chicago and Atlanta.
We also own land which is available for development or sale. At December 31, 2015, we had one project in pre-development and
two projects where Phase I of the development was completed. The remaining future phases at those projects are in pre-development.
We estimate that if we proceed with the development of the projects, up to approximately 750,000 square feet of gross leasable
area ("GLA") could be developed, excluding various outparcels of land. It is our policy to start vertical construction on new
development projects only after the project has received entitlements, significant anchor commitments and construction financing,
if appropriate.
Our development and construction activities are subject to risks and uncertainties such as our inability to obtain the necessary
governmental approvals for a project, our determination that the expected return on a project is not sufficient to warrant continuation
of the planned development, or our change in plan or scope for the development. If any of these events occur, we may record an
impairment provision.
Operating Strategies and Significant Transactions
Our operating objective is to maximize the risk-adjusted return on invested capital at our shopping centers. We seek to do so by
increasing the property operating income of our centers, controlling our capital expenditures, monitoring our tenants’ credit risk
and taking actions to mitigate our exposure to that tenant credit risk.
During 2015, our consolidated properties reported the following leasing activity:
Renewals
New Leases - Comparable
New Leases - Non-Comparable (2)
Total
Leasing
Transactions
202
29
55
286
Square
Footage
1,321,966 $
101,669
371,416
1,795,051 $
Base Rent/
SF (1)
13.51 $
17.72
17.05
14.48
Prior Rent/
SF
12.47 $
15.11
N/A
N/A $
Tenant
Improvements
/SF
0.10 $
5.79
36.21
7.89 $
Leasing
Commissions/
SF
0.13
4.08
3.66
1.09
(1) Base rent represents contractual minimum rent under the new lease for the first 12 months of the term.
(2) Non-comparable lease transactions include leases for space vacant for greater than 12 months, leases for space which has been
combined from smaller spaces or demised from larger spaces, and leases structured differently from the prior lease. As a result,
there is no comparable prior rent per square foot to compare to the base rent per square foot of the new lease.
Investing Strategies and Significant Transactions
Our investing objective is to generate an attractive risk-adjusted return on capital invested in acquisitions and developments. In
addition, we seek to sell land or shopping centers that we deem to be fully valued or that no longer meet our investment criteria. We
underwrite acquisitions based upon current cash flow, projections of future cash flow, and scenario analyses that take into account
the risks and opportunities of ownership. We underwrite development of new shopping centers on the same basis, but also take
into account the unique risks of entitling land, constructing buildings, and leasing newly built space.
At December 31, 2015, we had ten redevelopment, expansion or re-anchoring projects in process with an anticipated cost of $76.8
million, of which $51.5 million remained to be invested. Completion dates are anticipated during 2016 and early 2017.
2
In July 2015, we acquired our partner's 80% interest in six properties held in the Ramco 450 Venture LLC ("Ramco 450") and
subsequently own 100% of the related properties. We consolidated the six properties based upon a value of approximately $191.1
million, together with the assumption of three mortgage loans with unpaid principal balances totaling approximately $60.1 million,
plus any related assets and liabilities. Total consideration paid for the properties was approximately $105.8 million, including
closing costs. As part of the same transaction, we sold our 20% interest in one property owned by the same joint venture to our
partner, which generated net cash proceeds to us of $10.6 million. The remaining property in the joint venture was sold to a third
party in October 2015, generating net proceeds to us of $5.9 million.
In August 2015, we acquired our partner's 70% interest in one property held in the Ramco/Lion Venture L.P. ("RLV"). We
consolidated the property based upon a value of approximately $47.0 million, with total consideration paid of $41.6 million,
including approximately $8.7 million of our proportionate share of $29.8 million debt repaid at closing.
As a result of the above transactions, we gained control of the properties and recognized a gain on remeasurement of unconsolidated
joint ventures of $7.9 million which represents the difference between the carrying value and the fair value of our previously held
equity investment in the properties. Refer to Note 7 for additional information regarding our joint venture activity.
In addition to the above, we completed $16.1 million of acquisitions and $49.8 million of dispositions in 2015. Refer to Note 4
for additional information related to acquisitions and dispositions.
Financing Strategies and Significant Transactions
Our financing objective is to maintain a strong and flexible balance sheet in order to ensure access to capital at a competitive
cost. In general, we seek to increase our financial flexibility by increasing our pool of unencumbered properties and borrowing
on an unsecured basis. In keeping with our objective, we routinely benchmark our balance sheet on a variety of measures to our
peers in the shopping center sector and to REITs in general.
Specifically, we completed the following financing transactions:
Debt
During 2015, we issued $150.0 million in senior unsecured notes, repaid $86.5 million in mortgage notes and assumed $60.1
million in mortgage notes related to our acquisitions. Refer to Note 9 for additional information related to our debt.
Equity
Through our controlled equity offering we issued 0.9 million common shares at an average share price of $19.28 and received
approximately $17.1 million in net proceeds during the twelve months ended December 31, 2015. As of December 31, 2015,
there were 3.1 million shares remaining under this program.
In April 2015, we converted preferred shares with a liquidation preference of $7.6 million into 532,628 common shares pursuant
to the terms set forth in the convertible preferred shares prospectus supplement dated April 27, 2011 and incurred conversion costs
of approximately $0.5 million.
As of December 31, 2015 we had net debt to total market capitalization of 42.3% as compared to 35.7%, at December 31, 2014. At
December 31, 2015 and 2014 we had $286.5 million and $335.9 million, respectively, available to draw under our unsecured
revolving line of credit.
Competition
See page 6 of Item 1A. “Risk Factors” for a description of competitive conditions in our business.
Environmental Matters
See page 12 of Item 1A. "Risk Factors" for a description of environmental risks for our business.
3
Employment
As of December 31, 2015, we had 120 full-time employees. None of our employees are represented by a collective bargaining
unit. We believe that our relations with our employees are good.
Available Information
All reports we electronically file with, or furnish to, the SEC, including our Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and amendments to such reports, are available, free of charge, on our website at
www.rgpt.com, as soon as reasonably practicable after we electronically file such reports with, or furnish those reports to, the
SEC. Our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Board of Trustees’ committee charters
also are available on our website.
Shareholders may request free copies of these documents from:
Ramco-Gershenson Properties Trust
Attention: Investor Relations
31500 Northwestern Highway, Suite 300
Farmington Hills, MI 48334
4
Item 1A. Risk Factors
You should carefully consider each of the risks and uncertainties described below and elsewhere in this Annual Report on Form
10-K, as well as any amendments or updates reflected in subsequent filings with the SEC. We believe these risks and uncertainties,
individually or in the aggregate, could cause our actual results to differ materially from expected and historical results and could
materially and adversely affect our business operations, results of operations and financial condition. Further, additional risks and
uncertainties not presently known to us or that we currently deem immaterial may also impair our results and business operations.
Operating Risks
National economic conditions and retail sales trends may adversely affect the performance of our properties.
Demand to lease space in our shopping centers generally fluctuates with the overall economy. Economic downturns often result
in a lower rate of retail sales growth, or even declines in retail sales. In response, retailers that lease space in shopping centers
typically reduce their demand for retail space during such downturns. As a result, economic downturns and unfavorable retail
sales trends may diminish the income, cash flow, and value of our properties.
Our concentration of properties in Michigan and Florida makes us more susceptible to adverse market conditions in these states.
Our performance depends on the economic conditions in the markets in which we operate. In 2015, our wholly-owned properties
located in Michigan and Florida accounted for approximately 29%, and 21%, respectively, of our annualized base rent. In 2014
Michigan and Florida accounted for approximately 29% and 23%, respectively. To the extent that market conditions in these or
other states in which we operate deteriorate, the performance or value of our properties may be adversely affected.
Changes in the supply and demand for the type of space we lease to our tenants could affect the income, cash flow, and value of
our properties.
Our shopping centers generally compete for tenants with similar properties located in the same neighborhood, community, or
region. Although we believe we own high quality centers, competing centers may be newer, better located, or have a better tenant
mix. In addition, new centers or retail stores may be developed, increasing the supply of retail space competing with our centers
or taking retail sales from our tenants. Our tenants also compete with alternate forms of retailing, including on-line shopping,
home shopping networks, and mail order catalogs. Alternate forms of retailing may reduce the demand for space in our shopping
centers.
As a result, we may not be able to renew leases or attract replacement tenants as leases expire. When we do renew tenants or
attract replacement tenants, the terms of renewals or new leases may be less favorable to us than current lease terms. In order to
lease our vacancies, we often incur costs to reconfigure or modernize our properties to suit the needs of a particular tenant. Under
competitive circumstances, such costs may exceed our budgets. If we are unable to lease vacant space promptly, if the rental
rates upon a renewal or new lease are lower than expected, or if the costs incurred to lease space exceed our expectations, then
the income and cash flow of our properties will decrease.
Our reliance on key tenants for significant portions of our revenues exposes us to increased risk of tenant bankruptcies that could
adversely affect our income and cash flow.
As of December 31, 2015, we received 39.5% of our combined annualized base rents from our top 25 tenants, including our top
four tenants: TJ Maxx/Marshalls (4.1%), Bed Bath & Beyond (2.8%), LA Fitness (2.4%) and Dick's Sporting Goods (2.0%).
No other tenant represented more than 2.0% of our total annualized base rent. The credit risk posed by our major tenants varies.
If any of our major tenants experiences financial difficulties or files for bankruptcy protection, our operating results could be
adversely affected. Bankruptcy filings by our tenants or lease guarantors generally delay our efforts to collect pre-bankruptcy
receivables and could ultimately preclude full collection of these sums. If a tenant rejects a lease, we would have only a general
unsecured claim for damages, which may be collectible only to the extent that funds are available and only in the same percentage
as is paid to all other holders of unsecured claims. In 2015, no key tenant of ours filed for bankruptcy protection.
5
Our properties generally rely on anchor tenants to attract customers. The loss of anchor tenants may adversely impact the
performance of our properties.
If any of our anchor tenants becomes insolvent, suffers a downturn in business, abandons occupancy, or decides not to renew its
lease, such event would adversely impact the performance of the affected center. An abandonment or lease termination by an
anchor tenant may give other tenants in the same shopping center the right to terminate their leases or pay less rent pursuant to
the terms of their leases. Our leases with anchor tenants may, in certain circumstances, permit them to transfer their leases to other
retailers. The transfer to a new anchor tenant could result in lower customer traffic to the center, which would affect our other
tenants. In addition, a transfer of a lease to a new anchor tenant could give other tenants the right to make reduced rental payments
or to terminate their leases.
We may be restricted from leasing vacant space based on existing exclusivity lease provisions with some of our tenants.
In a number of cases, our leases give a tenant the exclusive right to sell clearly identified types of merchandise or provide specific
types of services at a particular shopping center. In other cases, leases with a tenant may limit the ability of other tenants to sell
similar merchandise or provide similar services to that tenant. When leasing a vacant space, these restrictions may limit the number
and types of prospective tenants suitable for that space. If we are unable to lease space on satisfactory terms, our operating results
would be adversely impacted.
Increases in operating expenses could adversely affect our operating results.
Our operating expenses include, among other items, property taxes, insurance, utilities, repairs, and the maintenance of the common
areas of our shopping centers. We may experience increases in our operating expenses, some or all of which may be out of our
control. Most of our leases require that tenants pay for a share of property taxes, insurance and common area maintenance
costs. However, if any property is not fully occupied or if recovery income from tenants is not sufficient to cover operating
expenses, then we could be required to expend our own funds for operating expenses. In addition, we may be unable to renew
leases or negotiate new leases with terms requiring our tenants to pay all the property tax, insurance, and common area maintenance
costs that tenants currently pay, which would adversely affect our operating results.
If we suffer losses that are uninsured or in excess of our insurance coverage limits, we could lose invested capital and anticipated
profits.
Catastrophic losses, such as losses resulting from wars, acts of terrorism, earthquakes, floods, hurricanes, and tornadoes or other
natural disasters, pollution or environmental matters, generally are either uninsurable or not economically insurable, or may be
subject to insurance coverage limitations, such as large deductibles or co-payments. Although we currently maintain “all risk”
replacement cost insurance for our buildings, rents and personal property, commercial general liability insurance, and pollution
and environmental liability insurance, our insurance coverage may be inadequate if any of the events described above occurs to,
or causes the destruction of, one or more of our properties. Under that scenario, we could lose both our invested capital and
anticipated profits from that property.
Our real estate assets may be subject to additional impairment provisions based on market and economic conditions.
On a periodic basis, we assess whether there are any indicators that the value of our real estate properties and other investments
may be impaired. Under generally accepted accounting principles (“GAAP”) a property’s value is impaired only if the estimate
of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the
carrying value of the property. In our estimate of cash flows, we consider factors such as expected future operating income, trends
and prospects, the effects of demand, competition and other factors. We are required to make subjective assessments as to whether
there are impairments in the value of our real estate properties and other investments.
No assurance can be given that we will be able to recover the current carrying amount of all of our properties and those of our
unconsolidated joint ventures. There can be no assurance that we will not take charges in the future related to the impairment of
our assets. Any future impairment could have a material adverse effect on our results of operations in the period in which the
charge is taken. We recorded an impairment provision of $2.5 million in 2015 related to our real estate properties. Refer to Note
1 Organization and Summary of Significant Accounting Policies - Accounting for the Impairment of Long-Lived Assets of the
notes to the consolidated financial statements for a further information related to impairment provisions.
6
We do not control all decisions related to the activities of joint ventures in which we are invested, and we may have conflicts of
interest with our joint venture partners.
As of December 31, 2015, we had interests in unconsolidated joint ventures that collectively own three shopping centers. Although
we manage the properties owned by these joint ventures, we do not control the decisions for the joint ventures. Accordingly, we
may not be able to resolve in our favor any issues which arise, or we may have to provide financial or other inducements to our
joint venture partners to obtain such favorable resolution.
Various restrictive provisions and rights govern sales or transfers of interests in our joint ventures. We may be required to make
decisions as to the purchase or sale of interests in our joint ventures at a time that is disadvantageous to us. In addition, a bankruptcy
filing of one of our joint venture partners could adversely affect us because we may make commitments that rely on our partners
to fund capital from time to time. The profitability of shopping centers held in a joint venture could also be adversely affected by
the bankruptcy of one of our joint venture partners if, because of certain provisions of the bankruptcy laws, we were unable to
make important decisions in a timely fashion or were to became subject to additional liabilities.
We may invest in additional joint ventures, the terms of which may differ from our existing joint ventures. In general, we would
expect to share the rights and obligations to make major decisions regarding the venture with our partners, which would expose
us to the risks identified above.
Our equity investment in each of our unconsolidated joint ventures is subject to impairment testing in the event of certain triggering
events, such as a change in market conditions or events at properties held by those joint ventures. If the fair value of our equity
investment is less than our net book value on an other than temporary basis, an impairment charge is required to be recognized
under generally accepted accounting principles. Refer to Note 7 of the notes to the consolidated financial statements for further
information related to our equity investments.
Market and economic conditions may impact our partners’ ability to perform in accordance with our real estate joint venture and
partnership agreements resulting in a change in control.
Changes in control of our investments could result from events such as amendments to our real estate joint venture and partnership
agreements, changes in debt guarantees or changes in ownership due to required capital contributions. Any changes in control
will result in the revaluation of our investments to fair value, which could lead to impairment. We are unable to predict whether,
or to what extent, a change in control may occur or what the impact of adverse market and economic conditions might be to our
partners.
Our redevelopment projects may not yield anticipated returns, which would adversely affect our operating results.
Our redevelopment activities generally call for a capital commitment and project scope greater than that required to lease vacant
space. To the extent a significant amount of construction is required, we are susceptible to risks such as permitting, cost overruns
and timing delays as a result of the lack of availability of materials and labor, the failure of tenants to commit or fulfill their
commitments, weather conditions, and other factors outside of our control. Any substantial unanticipated delays or expenses
would adversely affect the investment returns from these redevelopment projects and adversely impact our operating results.
Investing Risks
We face competition for the acquisition and development of real estate properties, which may impede our ability to grow our
operations or may increase the cost of these activities.
We compete with many other entities for the acquisition of shopping centers and land suitable for new developments, including
other REITs, private institutional investors and other owner-operators of shopping centers. In particular, larger REITs may enjoy
competitive advantages that result from, among other things, a lower cost of capital. These competitors may increase the market
prices we would have to pay in order to acquire properties. If we are unable to acquire properties that meet our criteria at prices
we deem reasonable, our ability to grow will be adversely affected.
Commercial real estate investments are relatively illiquid, which could hamper our ability to dispose of properties that no longer
meet our investment criteria or respond to adverse changes in the performance of our properties.
Because real estate investments are relatively illiquid, our ability to promptly sell one or more properties in our portfolio in response
to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as
general economic conditions, supply and demand, availability of financing, interest rates and other factors that are beyond our
7
control. We cannot be certain that we will be able to sell any property for the price and other terms we seek, or that any price or
other terms offered by a prospective purchaser would be acceptable to us. We also cannot estimate with certainty the length of
time needed to find a willing purchaser and to complete the sale of a property. We may be required to expend funds to correct
defects or to make improvements before a property can be sold. Factors that impede our ability to dispose of properties could
adversely affect our financial condition and operating results.
We are seeking to develop new properties, an activity that has inherent risks including cost overruns related to entitling land,
improving the site, constructing buildings, and leasing new space.
We are seeking to develop and construct retail properties at several land parcels we own. Our development and construction
activities are subject to the following risks:
• The pre-construction phase for a development project typically extends over several years, and the time to obtain
anchor commitments, zoning and regulatory approvals, and financing can vary significantly from project to project;
• We may not be able to obtain the necessary zoning or other governmental approvals for a project, or we may determine
that the expected return on a project is not sufficient. If we abandon our development activities with respect to a
particular project, we may incur an impairment loss on our investment;
• Construction and other project costs may exceed our original estimates because of increases in material and labor costs,
delays and costs to obtain anchor and other tenant commitments;
• We may not be able to obtain financing for construction;
• Occupancy rates and rents at a completed project may not meet our projections; and
• The time frame required for development, construction and lease-up of these properties means that we may have to
wait years for a significant cash return.
If any of these events occur, our development activities may have an adverse effect on our results of operations, including additional
impairment provisions. For a detailed discussion of development projects, refer to Notes 3 and 6 of the notes to the consolidated
financial statements.
Financing Risks
We have no corporate debt limitations.
Our management and Board of Trustees (“Board”) have discretion to increase the amount of our outstanding debt at any
time. Subject to existing financial covenants, we could become more highly leveraged, resulting in an increase in debt service
costs that could adversely affect our cash flow and the amount available for distribution to our shareholders. If we increase our
debt, we may also increase the risk of default on our debt.
Our debt must be refinanced upon maturity, which makes us reliant on the capital markets on an ongoing basis.
We are not structured in a manner to generate and retain sufficient cash flow from operations to repay our debt at maturity. Instead,
we expect to refinance our debt by raising equity, debt, or other capital prior to the time that it matures. As of December 31, 2015,
we had $1.1 billion of outstanding indebtedness, net of deferred financing costs, including $1.1 million of capital lease obligations.
The availability and price of capital can vary significantly. If we seek to refinance maturing debt when capital market conditions
are restrictive, we may find capital scarce, costly, or unavailable. Refinancing debt at a higher cost would affect our operating
results and cash available for distribution. The failure to refinance our debt at maturity would result in default and the exercise
by our lenders of the remedies available to them, including foreclosure and, in the case of recourse debt, liability for unpaid
amounts.
Increases in interest rates may affect the cost of our variable-rate borrowings, our ability to refinance maturing debt, and the cost
of any such refinancings.
As of December 31, 2015, we had seven interest rate swap agreements in effect for an aggregate notional amount of $210.0 million
converting our floating rate corporate debt to fixed rate debt. In addition we have entered into three forward starting interest rate
swap agreements for an aggregate notional amount of $75.0 million. After accounting for these interest rate swap agreements,
we had $87.4 million of variable rate debt outstanding, net of deferred financing costs. Increases in interest rates on our existing
8
indebtedness would increase our interest expense, which would adversely affect our cash flow and our ability to distribute cash
to our shareholders. For example, if market rates of interest on our variable rate debt outstanding as of December 31, 2015 increased
by 1.0%, the increase in interest expense on our existing variable rate debt would decrease future earnings and cash flows by
approximately $0.9 million annually. Interest rate increases could also constrain our ability to refinance maturing debt because
lenders may reduce their advance rates in order to maintain debt service coverage ratios.
Our mortgage debt exposes us to the risk of loss of property, which could adversely affect our financial condition.
As of December 31, 2015, we had $322.5 million of mortgage debt, net of unamortized deferred financing costs, encumbering
our properties. A default on any of our mortgage debt may result in foreclosure actions by lenders and ultimately our loss of the
mortgaged property. We have entered into mortgage loans which are secured by multiple properties and contain cross-
collateralization and cross-default provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties
in the event that we default under the loan. Cross-default provisions allow a lender to foreclose on the related property in the
event a default is declared under another loan. For federal income tax purposes, a foreclosure of any of our properties would be
treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the
outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income
on foreclosure but would not receive any cash proceeds.
Financial covenants may restrict our operating, investing, or financing activities, which may adversely impact our financial
condition and operating results.
The financial covenants contained in our mortgages and debt agreements reduce our flexibility in conducting our operations and
create a risk of default on our debt if we cannot continue to satisfy them. The mortgages on our properties contain customary
negative covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage the applicable
property or to discontinue insurance coverage. In addition, if we breach covenants in our debt agreements, the lender can declare
a default and require us to repay the debt immediately and, if the debt is secured, can ultimately take possession of the property
securing the loan.
Our outstanding line of credit contains customary restrictions, requirements and other limitations on our ability to incur
indebtedness, including limitations on the maximum ratio of total liabilities to assets, the minimum fixed charge coverage, and
the minimum tangible net worth. Our ability to borrow under our line of credit is subject to compliance with these financial and
other covenants. We rely on our ability to borrow under our line of credit to finance acquisition, development, and redevelopment
activities and for working capital. If we are unable to borrow under our line of credit, our financial condition and results of
operations would be adversely impacted.
Because we must distribute a substantial portion of our income annually in order to maintain our REIT status, we may not retain
sufficient cash from operations to fund our investing needs.
As a REIT, we are subject to annual distribution requirements under the Code. In general, we must distribute at least 90% of our
REIT taxable income annually, excluding net capital gains, to our shareholders to maintain our REIT status. We intend to make
distributions to our shareholders to comply with the requirements of the Code.
Differences in timing between the recognition of taxable income and the actual receipt of cash could require us to sell assets or
borrow funds on a short-term or long-term basis to meet the 90% distribution requirement. In addition, the distribution requirement
reduces the amount of cash we retain for use in funding our capital requirements and our growth. As a result, we have historically
funded our acquisition, development and redevelopment activities by any of the following: selling assets that no longer meet our
investment criteria; selling common shares and preferred shares; borrowing from financial institutions; and entering into joint
venture transactions with third parties. Our failure to obtain funds from these sources could limit our ability to grow, which could
have a material adverse effect on the value of our securities.
9
There may be future dilution of our common shares
Our Declaration of Trust authorizes our Board to, among other things, issue additional common or preferred shares, or securities
convertible or exchangeable into equity securities, without shareholder approval. We may issue such additional equity or
convertible securities to raise additional capital. The issuance of any additional common or preferred shares or convertible securities
could be dilutive to holders of our common shares. Moreover, to the extent that we issue restricted shares, options or warrants to
purchase our common shares in the future and those options or warrants are exercised or the restricted shares vest, our shareholders
may experience further dilution. Holders of our common shares have no preemptive rights that entitle them to purchase a pro rata
share of any offering of shares of any class or series and, therefore, such sales or offerings could result in increased dilution to our
shareholders.
We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common
shares as to distributions and in liquidation, which could negatively affect the value of our common shares.
During 2015 we issued 0.9 million common shares through our controlled equity offering. In addition, there were 327,732 shares
of unvested restricted common shares and options to purchase 107,165 common shares outstanding at December 31, 2015.
Corporate Risks
The price of our common shares may fluctuate significantly.
The market price of our common shares fluctuates based upon numerous factors, many of which are outside of our control. A
decline in our share price, whether related to our operating results or not, may constrain our ability to raise equity in pursuit of
our business objectives. In addition, a decline in price may affect the perceptions of lenders, tenants, or others with whom we
transact. Such parties may withdraw from doing business with us as a result. An inability to raise capital at a suitable cost or at
any cost, or to do business with certain tenants or other parties, would affect our operations and financial condition.
Our failure to qualify as a REIT would result in higher taxes and reduced cash available for distribution to our shareholders.
We intend to operate in a manner so as to qualify as a REIT for federal income tax purposes. Our continued qualification as a
REIT will depend on our satisfaction of certain asset, income, investment, organizational, distribution, shareholder ownership and
other requirements on a continuing basis. Our ability to satisfy the asset requirements depends upon our analysis of the fair market
values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent
appraisals. In addition, our compliance with the REIT income and asset requirements depends upon our ability to manage
successfully the composition of our income and assets on an ongoing basis. Moreover, the proper classification of an instrument
as debt or equity for federal income tax purposes may be uncertain in some circumstances, which could affect the application of
the REIT qualification requirements. Accordingly, there can be no assurance that the Internal Revenue Service (“IRS”) will not
contend that our interests in subsidiaries or other issuers constitute a violation of the REIT requirements. Moreover, future
economic, market, legal, tax or other considerations may cause us to fail to qualify as a REIT.
If we were to fail to qualify as a REIT in any taxable year, we would be subject to federal income tax, including any applicable
alternative minimum tax, on our taxable income at regular corporate rates, and distributions to shareholders would not be deductible
by us in computing our taxable income. Any such corporate tax liability could be substantial and would reduce the amount of
cash available for distribution to our shareholders, which in turn could have an adverse impact on the value of, and trading prices
for, our common shares. Unless entitled to relief under certain Code provisions, we also would be disqualified from taxation as
a REIT for the four taxable years following the year during which we ceased to qualify as a REIT.
Even as a REIT, we may be subject to various federal income and excise taxes, as well as state and local taxes.
Even as a REIT, we may be subject to federal income and excise taxes in various situations, such as if we fail to distribute all of
our REIT taxable income. We also will be required to pay a 100% tax on non-arm’s length transactions between us and our TRSs
and on any net income from sales of property that the IRS successfully asserts was property held for sale to customers in the
ordinary course of business. Additionally, we may be subject to state or local taxation in various state or local jurisdictions, including
those in which we transact business. The state and local tax laws may not conform to the federal income tax treatment. Any taxes
imposed on us would reduce our operating cash flow and net income.
The rules dealing with federal income taxation are constantly under review by persons involved in the legislative process and by
the IRS and the United States Treasury Department. Changes to tax laws, which may have retroactive application, could adversely
affect our shareholders or us. We cannot predict how changes in tax laws might affect our shareholders or us.
10
We are party to litigation in the ordinary course of business, and an unfavorable court ruling could have a negative effect on us.
We are the defendant in a number of claims brought by various parties against us. Although we intend to exercise due care and
consideration in all aspects of our business, it is possible additional claims could be made against us. We maintain insurance
coverage including general liability coverage to help protect us in the event a claim is awarded; however, some claims may be
uninsured. In the event that claims against us are successful and uninsured or underinsured, or we elect to settle claims that we
determine are in our interest to settle, our operating results and cash flow could be adversely impacted. In addition, an increase
in claims and/or payments could result in higher insurance premiums, which could also adversely affect our operating results and
cash flow.
We are subject to various environmental laws and regulations which govern our operations and which may result in potential
liability.
Under various federal, state and local laws, ordinances and regulations relating to the protection of the environment, a current or
previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic
substances disposed, stored, released, generated, manufactured or discharged from, on, at, onto, under or in such property.
Environmental laws often impose such liability without regard to whether the owner or operator knew of, or was responsible for,
the presence or release of such hazardous or toxic substance. The presence of such substances, or the failure to properly remediate
such substances when present, released or discharged, may adversely affect the owner’s ability to sell or rent such property or to
borrow using such property as collateral. The cost of any required remediation and the liability of the owner or operator therefore
as to any property is generally not limited under such environmental laws and could exceed the value of the property and/or the
aggregate assets of the owner or operator. Persons who arrange for the disposal or treatment of hazardous or toxic substances may
also be liable for the cost of removal or remediation of such substances at a disposal or treatment facility, whether or not such
facility is owned or operated by such persons. In addition to any action required by federal, state or local authorities, the presence
or release of hazardous or toxic substances on or from any property could result in private plaintiffs bringing claims for personal
injury or other causes of action.
In connection with ownership (direct or indirect), operation, management and development of real properties, we have the potential
to be liable for remediation, releases or injury. In addition, environmental laws impose on owners or operators the requirement of
ongoing compliance with rules and regulations regarding business-related activities that may affect the environment. Such activities
include, for example, the ownership or use of transformers or underground tanks, the treatment or discharge of waste waters or
other materials, the removal or abatement of asbestos-containing materials (“ACMs”) or lead-containing paint during renovations
or otherwise, or notification to various parties concerning the potential presence of regulated matters, including ACMs. Failure to
comply with such requirements could result in difficulty in the lease or sale of any affected property and/or the imposition of
monetary penalties, fines or other sanctions in addition to the costs required to attain compliance. Several of our properties have
or may contain ACMs or underground storage tanks; however, we are not aware of any potential environmental liability which
could reasonably be expected to have a material impact on our financial position or results of operations. No assurance can be
given that future laws, ordinances or regulations will not impose any material environmental requirement or liability, or that a
material adverse environmental condition does not otherwise exist.
Our business and operations would suffer in the event of system failures or cyber security attacks.
We rely upon information technology network and systems, some of which are managed by third parties, to process, transmit and
store electronic information, and to manage and support a variety of business processes and activities. Despite the implementation
of security measures and the existence of a Disaster Recovery Plan for our internal information technology systems, our systems
are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war,
telecommunication failures and cyber security attacks, such as computer viruses or unauthorized access. Any system failure or
accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur
additional costs to remedy damages caused by such disruptions. Risks that could result from a cyber incident include operational
interruption, damage to our relationships with tenants and private data disclosures including, personally identifiable, confidential
or proprietary information. Any compromise of our security could result in a violation of applicable privacy and other laws,
significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in
our security measures, which could harm our business.
Restrictions on the ownership of our common shares are in place to preserve our REIT status.
Our Declaration of Trust restricts ownership by any one shareholder to no more than 9.8% of our outstanding common shares,
subject to certain exceptions granted by our Board. The ownership limit is intended to ensure that we maintain our REIT status
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given that the Code imposes certain limitations on the ownership of the stock of a REIT. Not more than 50% in value of our
outstanding shares of beneficial interest may be owned, directly or indirectly by five or fewer individuals (as defined in the Code)
during the last half of any taxable year. If an individual or entity were found to own constructively more than 9.8% in value of
our outstanding shares, then any excess shares would be transferred by operation of our Declaration of Trust to a charitable trust,
which would sell such shares for the benefit of the shareholder in accordance with procedures specified in our Declaration of
Trust.
The ownership limit may discourage a change in control, may discourage tender offers for our common shares, and may limit the
opportunities for our shareholders to receive a premium for their shares. Upon due consideration, our Board previously has granted
limited exceptions to this restriction for certain shareholders who requested an increase in their ownership limit. However, the
Board has no obligation to grant such limited exceptions in the future.
Certain anti-takeover provisions of our Declaration of Trust and Bylaws may inhibit a change of our control.
Certain provisions contained in our Declaration of Trust and Bylaws and the Maryland General Corporation Law, as applicable
to Maryland REITs, may discourage a third party from making a tender offer or acquisition proposal to us. These provisions and
actions may delay, deter or prevent a change in control or the removal of existing management. These provisions and actions also
may delay or prevent the shareholders from receiving a premium for their common shares of beneficial interest over then-prevailing
market prices.
These provisions and actions include:
•
•
•
•
•
•
the REIT ownership limit described above;
authorization of the issuance of our preferred shares of beneficial interest with powers, preferences or rights to be
determined by our Board;
special meetings of our shareholders may be called only by the chairman of our Board, the president, one-third of the
Trustees, or the secretary upon the written request of the holders of shares entitled to cast not less than a majority of all
the votes entitled to be cast at such meeting;
a two-thirds shareholder vote is required to approve some amendments to our Declaration of Trust;
our Bylaws contain advance-notice requirements for proposals to be presented at shareholder meetings; and
our Board, without the approval of our shareholders, may from time to time (i) amend our Declaration of Trust to increase
or decrease the aggregate number of shares of beneficial interest, or the number of shares of beneficial interest of any
class, that we have authority to issue, and (ii) reclassify any unissued shares of beneficial interest into one or more classes
or series of shares of beneficial interest.
In addition, the Trust, by Board action, may elect to be subject to certain provisions of the Maryland General Corporation Law
that inhibit takeovers such as the provision that permits the Board by way of resolution to classify itself, notwithstanding any
provision our Declaration of Trust or Bylaws.
Certain officers and trustees may have potential conflicts of interests with respect to properties contributed to the Operating
Partnership in exchange for OP Units.
Certain of our officers and members of our Board of Trustees own OP Units obtained in exchange for contributions of their
partnership interests in properties to the Operating Partnership. By virtue of this exchange, these individuals may have been able
to defer some, if not all, of the income tax liability they could have incurred if they sold the properties for cash. As a result, these
individuals may have potential conflicts of interest with respect to these properties, such as sales or refinancings that might result
in federal income tax consequences.
Our success depends on key personnel whose continued service is not guaranteed.
We depend on the efforts and expertise of our senior management team to manage our day-to-day operations and strategic business
direction. While we have retention and severance agreements with certain members of our executive management team that provide
for certain payments in the event of a change of control or termination without cause, we do not have employment agreements
with all of the members of our executive management team. Therefore, we cannot guarantee their continued service. The loss of
their services, and our inability to find suitable replacements, could have an adverse effect on our operations.
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Changes in accounting standards may adversely impact our financial results.
The Financial Accounting Standards Board, in conjunction with the SEC, has several key projects on its agenda that could impact
how we currently account for material transactions, including lease accounting and other convergence projects with the International
Accounting Standards Board. At this time, we are unable to predict with certainty which, if any, proposals may be passed or what
level of impact any such proposal could have on the presentation of our consolidated financial statements, results of operations
and financial ratios required by our debt covenants.
Item 1B. Unresolved Staff Comments.
None.
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Item 2. Properties
As of December 31, 2015, we owned and managed a portfolio of 73 shopping centers and one office building with approximately
15.9 million square feet ("SF") of GLA. Our wholly-owned properties consist of 70 shopping centers and one office building
comprising approximately 15.3 million SF.
Location
City
State
Ownership
%
Year Built /
Acquired /
Redeveloped
Total GLA
%
Leased
Average
base
rent per
leased
SF (1) Anchor Tenants (2)
Property Name
Colorado (3)
Front Range Village
Fort Collins
CO
100 %
2008/2014/NA
459,307
95.1 % $ 19.56 CA Technologies, Inc.,
Harvest Junction North
Longmont
CO
100 % 2006/2012/NA
183,155
100 %
Charming Charlie, Cost Plus
World Markets, DSW Shoe
Warehouse, Microsoft
Corporation, Party City,
Sports Authority, Sprouts
Farmers Market, Staples,
Toys "R" Us, Ulta Beauty,
(Fort Collins Library),
(Lowes), (Target)
16.88 Best Buy, Dick's Sporting
Goods, Dollar Tree, DSW
Shoe Warehouse, Staples
Harvest Junction South
Longmont
CO
100 % 2006/2012/NA
176,960
97.2 %
14.79 Bed Bath & Beyond,
Marshalls, Michaels, Petco,
Ross Dress for Less,
(Lowe's)
Florida (16)
Coral Creek Shops
Cypress Point
Coconut
Creek
Clearwater
FL
FL
100 % 1992/2002/NA
109,312
92.7 %
17.90
Publix
100 % 1983/2007/NA
167,280
95.3 %
12.27 Burlington Coat Factory,
Chuck E. Cheese's, The
Fresh Market
Lakeland Park Center
Lakeland
FL
100 %
2014
210,422
98.1 %
13.63 Dick's Sporting Goods,
FL
100 % 1981/2005/2010
241,715
95.8 %
13.80 Beall's Outlet, Dollar Tree,
Floor & Décor, Old Navy,
PetSmart, Ross Dress for
Less, Shoe Carnival, Ulta
Beauty
Marketplace of Delray
Delray
Beach
Mission Bay Plaza
Boca Raton
FL
100 % 1989/2004/NA
264,704
97.5 %
21.27
Office Depot, Ross Dress for
Less, Winn-Dixie
The Fresh Market,
Golfsmith, LA Fitness,
OfficeMax, Toys "R" Us
Parkway Shops
Jacksonville
River City Marketplace
Jacksonville
River Crossing Centre
Rivertowne Square
New Port
Richey
Deerfield
Beach
FL
FL
FL
FL
100 %
2013/2011/NA
144,114
100 %
11.15 Dick's Sporting Goods,
Marshalls
100 % 2005/2005/NA
557,087
99.1 %
17.19 Ashley Furniture
HomeStore, Bed Bath &
Beyond, Best Buy, Cracker
Barrel, Gander Mountain,
Michaels, OfficeMax, Old
Navy, PetSmart, Ross Dress
for Less, Hollywood
Theaters, (Lowe's), (Wal-
Mart Supercenter)
100 % 1998/2003/NA
62,038
98.5 %
12.69
Publix
100 % 1980/1998/2010
150,321
88.6 %
9.97 Beall's, Winn-Dixie
14
Property Name
Location
City
State
Ownership
%
Year Built /
Acquired /
Redeveloped
Total GLA
%
Leased
Average
base
rent per
leased
SF (1) Anchor Tenants (2)
Shoppes of Lakeland
Lakeland
FL
100 % 1985/1996/NA
183,842
93.3 % $ 12.34 Ashley Furniture
The Crossroads
Treasure Coast Commons
Village Lakes Shopping
Center
Royal Palm
Beach
Jensen
Beach
Land O'
Lakes
Village Plaza
Lakeland
Vista Plaza
Jensen
Beach
FL
FL
FL
FL
FL
100 % 1988/2002/NA
121,509
97.2 %
HomeStore, Dollar Tree,
Michaels, Petco, Staples,
T.J. Maxx, (Target)
15.98 Dollar Tree, Publix,
Walgreens
100 % 1996/2004/NA
92,979
100 %
12.26 Barnes & Noble, OfficeMax,
100 % 1987/1997/NA
168,751
83.1 %
Sports Authority
8.64 Beall's Outlet, Dollar Tree,
Marshalls, Ross Dress for
Less, You Fit Health Club
100 % 1989/2004/NA
158,956
95.1 %
11.62 Big Lots, Hobby Lobby,
Party City
100 % 1998/2004/NA
109,761
100 %
13.59 Bed Bath & Beyond,
Michaels, Total Wine &
More
Plantation
FL
100 % 1965/2005/NA
152,973
100 %
11.33 Badcock, DD's Discounts,
West Broward Shopping
Center
Georgia (4)
Centre at Woodstock
Woodstock
Holcomb Center
Peachtree Hill
Promenade at Pleasant
Hill
Illinois (5)
Roswell
Duluth
Duluth
Deer Grove Centre
Palatine
Liberty Square
Market Plaza
Mount Prospect Plaza
Wauconda
Glen Ellyn
Mount
Prospect
Rolling Meadows
Shopping Center
Rolling
Meadows
Indiana (1)
GA
GA
GA
GA
IL
IL
IL
IL
100 % 1997/2004/NA
100 % 1986/1996/2010
100 % 1986/2007/NA
100 % 1993/2004/NA
86,748
106,003
154,700
261,808
98.6 %
71.5 %
98.8 %
95.0 %
Dollar Tree, Save-A-Lot, US
Postal Service, Walgreens
12.04
Publix
12.58
Studio Movie Grill
13.34 Kroger, LA Fitness
9.67
Farmers Home Furniture,
K1 Speed, LA Fitness,
Publix
100 % 1997/2013/2013
237,876
88.1 %
8.46
Petco, Ross Dress for Less
(4),T.J. Maxx, (Target),
Hobby Lobby(4)
100 % 1987/2010/2008
100 % 1965/2007/2009
107,427
163,054
83.3 %
95.1 %
13.70
Jewel-Osco
15.53
Jewel-Osco, Ross Dress for
Less, Staples
100 % 1962/2013/2013
300,682
89.5 %
12.05 Aldi, Dollar Tree, LA
Fitness, Marshalls, Petco,
Ross Dress for Less,
Walgreens
IL
100 % 1956/2008/1995
134,012
90.7 %
11.50 Dollar Tree, Jewel-Osco,
Northwest Community
Hospital
12.91 Bang Fitness, Cost Plus, Flix
Brewhouse, Hancock
Fabrics, Petco, Tuesday
Morning, (Marsh
Supermarket)
Merchants' Square
Carmel
IN
100 % 1970/2010/2014
248,369
78.6 %
Kentucky (1)
Buttermilk Towne Center
Crescent
Springs
KY
100 % 2005/2014/NA
277,533
100 %
9.22
Field & Stream, Home
Depot, LA Fitness, Remke
Market
Maryland (1)
Crofton Centre
Michigan (22)
Clinton Pointe
Clinton Valley
Crofton
MD
100 % 1974/1996/NA
252,230
97.3 %
8.29 Gold's Gym, Goodwill,
Clinton
Township
Sterling
Heights
MI
MI
100 % 1992/2003/NA
135,330
97.6 %
9.66
Hibachi Grill & Supreme
Buffet, Kmart, Shoppers
Food Warehouse, United
Tile and Granite
Famous Footwear,
OfficeMax, Planet Fitness,
Sports Authority, (Target)
100 % 1977/1996/2009
205,435
98.2 %
12.04 DSW Shoe Warehouse,
Famous Furniture, Hobby
Lobby, Office Depot,
OptimEyes
15
Property Name
Gaines Marketplace
Hoover Eleven
Location
City
State
Ownership
%
Year Built /
Acquired /
Redeveloped
Total GLA
%
Leased
Average
base
rent per
leased
SF (1) Anchor Tenants (2)
Gaines
Township
Warren
MI
MI
100 % 2004/2004/NA
60,576
100 % $ 15.94
Staples, (Target), (Meijer)
100 % 1989/2003/NA
280,719
84.5 %
11.61 CVS, Dollar Tree, Dress
Barn/Dress Barn Woman,
Dunham's, Kroger,
Marshalls
Hunter's Square
Farmington
Hills
MI
100 % 1988/2005/NA
353,951
99.1 %
16.60 Bed Bath & Beyond,
buybuy Baby, Marshalls,
Old Navy, T.J. Maxx, Saks
Fifth Avenue(4)
Jackson Crossing
Jackson
MI
100 % 1967/1996/2002
420,530
92.6 %
11.39 Bed Bath & Beyond, Best
Buy, Citi Trends, Dollar
Tree, Jackson 10 Theater,
Kohl's, MC Sporting Goods,
T.J. Maxx, Toys "R" Us,
Ulta Beauty, (Sears),
(Target)
Jackson West
Jackson
MI
100 % 1996/1996/1999
209,800
97.7 %
7.41 GFS Marketplace, Lowe's,
Lakeshore Marketplace
Livonia Plaza
Millennium Park
Norton
Shores
Livonia
Livonia
New Towne Plaza
Oak Brook Square
Canton
Township
Flint
Roseville Towne Center
Roseville
MI
100 % 1996/2003/NA
342,991
96.0 %
Michaels, OfficeMax,
PetSmart
8.75 Barnes & Noble, Dollar
Tree, DSW Shoe
Warehouse, Dunham's,
Gordmans, Hobby Lobby,
Old Navy, Petco, T.J. Maxx,
Toys "R" Us, (Target)
MI
MI
MI
MI
MI
100 % 1988/2003/NA
137,391
98.6 %
11.29 Kroger, T.J. Maxx
100 % 2000/2005/NA
272,568
100 %
14.44
Five Below, Home Depot,
Marshalls, Michaels,
PetSmart, Ulta Beauty,
(Costco), (Meijer)
100 % 1975/1996/2005
192,587
99.0 %
10.93 DSW Shoe Warehouse, Jo-
Ann, Kohl's
100 % 1982/1996/2008
152,073
96.5 %
9.57 Dollar Tree, Hobby Lobby,
T.J. Maxx
100 % 1963/1996/2004
76,998
100 %
12.05 CVS, Dollar Tree, Five
Below, Marshalls, (Wal-
Mart)
Dearborn
MI
100 % 1987/2003/2007
157,225
100 %
13.53 Best Buy, Citi Trends,
Shoppes at Fairlane
Meadows
Southfield Plaza
Tel-Twelve
Southfield
Southfield
The Auburn Mile 1
Auburn Hills
The Shops at Old Orchard
Troy Marketplace
West
Bloomfield
Troy
MI
MI
MI
MI
MI
100 % 1969/1996/2003
190,099
100 %
8.87 Big Lots, Burlington Coat
100 % 1968/1996/2005
523,411
100 %
Factory, Forman Mills
11.27 Best Buy, DSW Shoe
David's Bridal, Dollar Tree,
(Burlington Coat Factory),
(Target)
100 % 2000/1999/NA
90,553
100 %
11.05
100 % 1972/2007/2011
96,768
100 %
18.04
Warehouse, Lowe's, Meijer,
Michaels, Office Depot,
PetSmart, Pier1 Imports
Jo-Ann, Staples, (Best Buy),
(Costco), (Meijer), (Target)
Plum Market, Witbeck
Home Appliance
100 % 2000/2005/2010
217,754
100 %
17.10 Airtime, Golfsmith, LA
Fitness, Nordstrom Rack,
PetSmart, Total Hockey,
(REI)
West Oaks I
Novi
MI
100 % 1979/1996/2004
252,170
95.3 %
12.65 Big Lots, David's Bridal,
West Oaks II
Novi
MI
100 % 1986/1996/2000
167,954
97.1 %
17.79
DSW Shoe Warehouse,
Gander Mountain, Home
Goods & Michaels-Sublease
of JLPK-Novi LLC, Old
Navy, Party City
Jo-Ann, Marshalls, (Bed
Bath & Beyond), (Kohl's),
(Toys "R" Us), (Value City
Furniture)
16
Minnesota (1)
Woodbury Lakes
Missouri (4)
Central Plaza
Deer Creek Shopping
Center
Heritage Place
Town & Country Crossing
Ohio (8)
Property Name
Winchester Center
Location
City
Rochester
Hills
State
MI
Ownership
%
Year Built /
Acquired /
Redeveloped
Total GLA
%
Leased
Average
base
rent per
leased
SF (1) Anchor Tenants (2)
100 % 1980/2005/NA
320,121
95.5 % $ 10.47 Bed Bath & Beyond, Dick's
Woodbury
MN
100 % 2005/2014/NA
305,086
89.7 %
22.31
Ballwin
MO
100 % 1970/2012/2012
166,431
100 %
11.60
Maplewood
MO
100 % 1975/2013/2013
208,144
93.6 %
10.38
Sporting Goods, Famous
Furniture, Legacy Volleyball
Club, Marshalls, Michaels,
Party City, PetSmart, Pier 1
Imports, Stein Mart
buybuy Baby, Charming
Charlie, DSW Shoe
Warehouse, Gap, H & M,
Michaels, Victoria's Secret
(Trader Joe's)
buybuy Baby, Five Below,
Jo-Ann, OfficeMax, Ross
Dress for Less, Tuesday
Morning
buybuy Baby, GFS
Marketplace, Jo-Ann,
Marshalls, Ross Dress for
Less, Shoe Carnival
Creve Coeur
(St Louis)
Town &
Country
MO
100 % 1989/2011/2005
269,105
92.5 %
13.50 Dierbergs Markets,
Marshalls, Office Depot,
Petco, T.J. Maxx
MO
100 % 2008/2011/2011
145,830
87.1 %
26.25 Whole Foods Market,
(Target)
Bridgewater Falls
Hamilton
OH
100 %
503,502
93.7 %
14.07 Bed Bath & Beyond, Best
Crossroads Centre 1
Rossford
OH
100 % 2001/2001/NA
344,045
98.6 %
Buy, Dick's Sporting Goods,
J.C. Penney, Michaels, Old
Navy, Party City, PetSmart,
Staples, T.J. Maxx, Ulta
Beauty, (Target)
8.83 Giant Eagle(3), Home Depot,
Michaels, T.J. Maxx,
Tuesday Morning, (Target)
Deerfield Towne Center
Mason
OH
100 % 2004/2013/2013
462,396
91.8 %
19.29 Ashley Furniture
Olentangy Plaza
Columbus
OH
100 % 1981/2007/1997
253,204
94.9 %
11.25
HomeStore, Bed Bath &
Beyond, buybuy Baby,
Charming Charlie's, Dick's
Sporting Goods, Regal
Cinemas, Ulta Beauty,
Whole Foods Market,
Crunch Fitness
Eurolife Furniture,
Marshalls, Metro Fitness,
Micro Center, Columbus
Asia Market-Sublease of
SuperValu, Tuesday
Morning
Rossford Pointe
Rossford
Spring Meadows Place
Holland
OH
OH
100 % 2006/2005/NA
47,477
100 %
10.20 MC Sporting Goods,
PetSmart
100 % 1987/1996/2005
311,396
81.9 %
10.79 Ashley Furniture
The Shops on Lane
Avenue
Upper
Arlington
OH
100 % 1952/2007/2004
169,035
92.3 %
HomeStore, Big Lots, Dollar
Tree, Guitar Center,
OfficeMax, Party City,
PetSmart, T.J. Maxx, (Best
Buy), (Dick's Sporting
Goods), (Sam's Club),
(Target)
22.00 Bed Bath & Beyond, Pier 1
Imports, Ulta, Whole Foods
Market
Troy Towne Center (5)
Troy
OH
100 % 1990/1996/2003
144,485
96.5 %
7.23 Kohl's, Petco, (Wal-Mart
Supercenter)
17
Property Name
Wisconsin (4)
East Town Plaza
Location
City
State
Ownership
%
Year Built /
Acquired /
Redeveloped
Total GLA
%
Leased
Average
base
rent per
leased
SF (1)
Anchor Tenants (2)
Madison
WI
100 % 1992/2000/2000
208,472
82.3 % $
9.79 Burlington Coat Factory,
Nagawaukee Center
Delafield
The Shoppes at Fox River
Waukesha
WI
WI
100 % 1994/2012-13/NA
219,538
97.4 %
100 % 2009/2010/2011
237,392
100 %
West Allis Towne Centre
West Allis
WI
100 % 1987/1996/2011
326,265
92.6 %
DSW Shoe Warehouse, Jo-
Ann, Kirkland's Home,
Marshalls, Party City, Ulta
Beauty, (Shopko), (Babies
"R" Us)
14.15 Kohl's, Marshalls, Sports
Authority, (Sentry Foods)
14.48 Hobby Lobby, Petco, Pick 'n
Save, T.J. Maxx, Ulta
Beauty, (Target)
8.93 Burlington Coat Factory,
Citi Trends, Dollar Tree,
Harbor Freight Tools,
Kmart, Lumber Liquidators,
Party City, Ross Dress for
Less, Xperience Fitness
WHOLLY OWNED SHOPPING CENTERS TOTAL/AVERAGE
15,224,435
94.7 % $ 13.22
Virginia (1)
The Town Center at Aquia
Office
Stafford
VA
100 % 1989/1998/2009
99,393
65.0 %
26.34 Cask Technologies, Davis
Defense Group
CONSOLIDATED PORTFOLIO / AVERAGE
15,323,828
94.6 %
$13.28
JOINT VENTURE PORTFOLIO
Kissimmee West
Nora Plaza
Martin Square
Total/Average
Osceola
Marion
Martin
FL
IN
FL
7 % 2005/2005/NA
115,586
97.2 % $ 12.69
7 % 1958/2007/2002
139,753
94.3 %
13.92
Jo-Ann, Marshalls, (Super
Target)
Firestone, Marshalls, Whole
Foods Market, (Target)
30 % 1981/2005/NA
330,134
85.6 %
6.64 Home Depot, Old Time
585,473
90.0 % $
9.75
Pottery, Paradise Home &
Patio, Staples, Walgreens
CONSOLIDATED AND JV PORTFOLIO TOTAL / AVERAGE
15,909,301
94.4 %
$13.16
Footnotes
(1) Average base rent per leased SF is calculated based on annual minimum contractual base rent pursuant to the tenant lease, excluding percentage rent, recovery
income from tenants, and is net of tenant concessions. Percentage rent and recovery income from tenants is presented separately in our consolidated statements
of operations and comprehensive income (loss) statement.
(2) Anchor tenant is defined as any tenant leasing 10,000 square feet or more. Tenants in parenthesis represent non-company owned GLA.
(3) Tenant closed - lease obligated.
(4) Space delivered to tenant.
(5) Center sold subsequent to December 31, 2015 in February 2016.
Our leases for tenant space under 10,000 square feet generally have terms ranging from three to five years. Tenant leases greater
than or equal to 10,000 square feet generally have lease terms of five years or longer, and are considered anchor leases. Many of
the anchor leases contain provisions allowing the tenant the option of extending the lease term at expiration at contracted rental
rates that often include fixed rent increases, consumer price index adjustments or other market rate adjustments from the prior base
rent. The majority of our leases provide for monthly payment of base rent in advance, percentage rent based on the tenant’s sales
volume, reimbursement of the tenant’s allocable real estate taxes, insurance and common area maintenance (“CAM”) expenses and
reimbursement for utility costs if not directly metered.
18
Major Tenants
The following table sets forth as of December 31, 2015 the GLA, of our existing properties leased to tenants for our wholly owned
properties portfolio:
Type of Tenant
Anchor (1)
Retail (non-anchor)
Total
Annualized Base
Rent
$ 110,167,972
81,085,431
$ 191,253,403
% of Total
Annualized Base
Rent
57.6%
42.4%
100%
GLA (2) % of Total GLA (2)
70.5%
29.5%
100%
10,807,484
4,516,344
15,323,828
(1) Anchor tenant is defined as any tenant leasing 10,000 square feet or more.
(2) GLA owned directly by us or our unconsolidated joint ventures.
19
The following table depicts, as of December 31, 2015, information regarding leases with the 25 largest retail tenants (in terms of
annualized base rent) for our wholly owned properties portfolio:
% of
Total
GLA
5.5 % $
Total
Annualized
Base Rent
7,909,159
Annualized
Base Rent
PSF
9.45
$
% of
Annualized
Base Rent
4.1 %
11.30
17.86
10.81
12.51
19.69
8.60
14.56
11.47
22.63
16.58
9.61
13.66
6.87
20.73
12.21
7.91
14.77
19.71
6.31
8.24
15.82
14.01
11.52
7.10
11.45
14.83
13.28
N/A
N/A
2.8 %
2.4 %
2.0 %
1.7 %
1.7 %
1.6 %
1.6 %
1.5 %
1.5 %
1.5 %
1.5 %
1.4 %
1.4 %
1.3 %
1.3 %
1.3 %
1.2 %
1.2 %
1.2 %
1.2 %
1.1 %
1.0 %
1.0 %
1.0 %
39.5 %
60.5 %
100%
N/A
100%
Tenant Name
TJX Companies (2)
Bed Bath & Beyond (3)
LA Fitness
Dick's Sporting Goods (4)
Office Depot (5)
Ascena Retail (6)
Home Depot
Petsmart
Michaels Stores
ULTA Salon
DSW Designer Shoe Warehouse
Dollar Tree
Best Buy
Hobby Lobby
Regal Cinemas
Jo-Ann Fabric and Craft Stores
Ross Stores (7)
Petco (8)
Whole Foods
Kohl's
Burlington Coat Factory
Gap, Inc.(9)
Gander Mountain
Sports Authority
Lowe's Home Centers
Sub-Total top 25 tenants
Remaining tenants
Sub-Total all tenants
Leased / Vacant
Credit Rating
S&P/Moody's (1)
A+/A2
BBB+/Baa1
B/B2
--/--
B-/B2
BB/Ba2
A/A2
B+/--
-/B2
--/--
--/--
BB/Ba2
BB+/Baa1
--/--
B+/B1
B/B3
A-/A3
B/B3
BBB-/Baa3
BBB/Baa1
BB-/--
BBB-/Baa2
--/--
--/Caa3
A-/A3
Number
of Leases
27
16
6
7
11
29
3
10
11
12
9
28
6
7
2
6
12
11
3
6
4
9
2
4
2
GLA
836,570
466,700
252,000
353,764
262,801
162,384
354,295
208,863
250,321
125,025
169,773
292,943
201,895
395,310
119,080
198,947
307,232
160,366
118,879
363,081
277,315
131,575
142,354
172,705
270,394
3.1 %
1.6 %
2.3 %
1.7 %
1.1 %
2.3 %
1.4 %
1.6 %
0.8 %
1.1 %
1.9 %
1.3 %
2.6 %
0.8 %
1.3 %
2.0 %
1.0 %
0.8 %
2.4 %
1.8 %
0.9 %
0.9 %
1.1 %
1.8 %
5,273,035
4,501,820
3,825,418
3,287,371
3,197,068
3,047,250
3,040,114
2,871,807
2,829,856
2,814,845
2,814,369
2,758,634
2,716,021
2,468,623
2,429,479
2,428,890
2,368,568
2,342,617
2,292,253
2,285,421
2,080,859
1,994,898
1,989,264
1,919,646
243
6,594,572
43.1 % $ 75,487,285
$
1,358
7,806,691
50.9 % 115,766,119
1,601
14,401,263
94.0% $ 191,253,404
$
240
922,565
6.0 %
N/A
Total including vacant
1,841
15,323,828
100% $ 191,253,404
(1) Source: Latest Company filings, as of December 31, 2015, per CreditRiskMonitor.
(2) Marshalls (15) / TJ Maxx (12)
(3) Bed Bath & Beyond (9) / Buy Buy Baby (5) / Cost Plus World Market (2)
(4) Dick's Sporting Goods (6) / Field & Stream (1)
(5) OfficeMax (7) / Office Depot (4)
(6) Ann Taylor (3) / Catherine's (3) / Dress Barn (6) / Justice (5) / Lane Bryant (6) / Maurice's (6)
(7) Ross Dress for Less (11) / DD's Discounts (1)
(8) Petco (10) / Unleashed (1)
(9) Old Navy (6) / Gap (2) / Banana Republic / (1)
20
Lease Expirations
The following tables set forth a schedule of lease expirations, for our wholly owned portfolio, for the next ten years and thereafter,
assuming that no renewal options are exercised:
ALL TENANTS
Expiring Leases As of December 31, 2015
Year
(3)
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027+
Sub-Total
Leased (4)
Vacant
Total
Number of
Leases
46
236
258
258
191
184
122
58
73
52
50
28
45
1,601
9
231
1,841
GLA (1)
148,856
1,164,981
1,590,652
1,420,174
1,424,017
1,556,763
1,552,029
880,516
1,168,594
768,750
805,162
727,642
1,193,127
14,401,263
87,985
834,580
15,323,828
Average
Annualized
Base Rent
Total
Annualized
Base Rent (2)
% of Total
Annualized
Base Rent
(per square foot)
10.01
14.40
14.81
15.58
13.99
12.67
12.31
12.07
12.60
11.40
13.41
12.27
12.33
13.28
N/A
N/A
13.28
$
$
$
$
$
$
1,490,750
16,780,738
23,565,221
22,126,998
19,924,036
19,724,988
19,098,606
10,626,087
14,724,454
8,761,993
10,795,112
8,926,361
14,708,059
191,253,403
N/A
N/A
191,253,403
0.7 %
6.7 %
14.6 %
12.9 %
10.3 %
9.7 %
7.9 %
5.8 %
5.8 %
7.8 %
4.6 %
4.0 %
9.2 %
100%
N/A
N/A
100%
ANCHOR TENANTS (greater than or equal to 10,000 square feet)
Expiring Anchor Leases As of December 31, 2015
Year
(3)
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027+
Sub-Total
Leased (4)
Vacant
Total
Number of
Leases
3
22
41
34
31
35
47
24
28
20
20
13
21
339
3
16
358
GLA (1)
47,010
604,072
977,791
824,684
890,899
1,093,586
1,302,629
755,265
924,225
640,133
647,675
668,377
1,095,603
10,471,949
63,934
271,601
10,807,484
Average
Annualized
Base Rent
Total
Annualized
Base Rent (2)
% of Total
Annualized
Base Rent
(per square foot)
6.23
9.41
11.24
11.56
10.09
9.35
10.68
10.42
10.46
9.77
11.46
11.02
10.92
10.52
N/A
N/A
10.52
$
$
$
$
$
$
293,000
5,683,463
10,988,911
9,530,471
8,991,994
10,220,929
13,916,454
7,873,216
9,665,271
6,252,221
7,424,425
7,366,643
11,960,974
110,167,972
N/A
N/A
110,167,972
0.3 %
5.2 %
10.0 %
8.7 %
8.2 %
9.3 %
12.6 %
7.1 %
8.8 %
5.7 %
6.6 %
6.7 %
10.8 %
100%
N/A
N/A
100%
(1) GLA owned directly by us or our unconsolidated joint ventures.
(2) Annualized Base Rent is based upon rents currently in place.
(3) Tenants currently under month to month lease or in the process of renewal.
(4) Lease has been executed, but space has not yet been delivered.
21
NON-ANCHOR TENANTS (less than 10,000 square feet)
Expiring Non-Anchor Leases As of December 31, 2015
Average
Annualized
Base Rent
(per square foot)
11.76
$
19.78
20.52
21.15
20.51
20.52
20.78
21.98
20.70
19.51
21.40
26.32
28.17
20.64
N/A
N/A
20.64
$
$
Total
Annualized
Base Rent (1)
% of Total
Annualized
Base Rent
$
$
$
1,197,750
11,097,275
12,576,310
12,596,527
10,932,042
9,504,059
5,182,152
2,752,871
5,059,183
2,509,772
3,370,687
1,559,718
2,747,085
81,085,431
N/A
N/A
81,085,431
1.5 %
13.7 %
15.5 %
15.5 %
13.5 %
11.7 %
6.4 %
3.4 %
6.2 %
3.1 %
4.2 %
1.9 %
3.4 %
100%
N/A
N/A
100%
Year
(3)
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027+
Sub-Total
Leased (4)
Vacant
Total
Number of
Leases
43
214
217
224
160
149
75
34
45
32
30
15
24
1,262
6
215
1,483
GLA (2)
101,846
560,909
612,861
595,490
533,118
463,177
249,400
125,251
244,369
128,617
157,487
59,265
97,524
3,929,314
24,051
562,979
4,516,344
(1) GLA owned directly by us or our unconsolidated joint ventures.
(2) Annualized Base Rent is based upon rents currently in place.
(3) Tenants currently under month to month lease or in the process of renewal.
(4) Lease has been executed, but space has not yet been delivered.
Land Available for Development and/or Sale
At December 31, 2015, we had one project in pre-development and two projects where Phase I of the development was completed.
The remaining future phases at those projects are in pre-development. We estimate that if we proceed with the development of the
projects, up to approximately 750,000 square feet of GLA could be developed, excluding various outparcels of land. It is our policy
to start vertical construction on new development projects only after the project has received entitlements, significant anchor
commitments and construction financing, if appropriate.
Our development and construction activities are subject to risks and uncertainties such as our inability to obtain the necessary
governmental approvals for a project, our determination that the expected return on a project is not sufficient to warrant continuation
of the planned development, or our change in plan or scope for the development. If any of these events occur, we may record an
impairment provision.
During 2015, we recorded an impairment provision of $2.5 million. We recorded impairment provisions of $23.3 million and $0.3
million in 2014 and 2013, respectively, related to developable land that we decided to market for sale. Refer to Note 1 Organization
and Summary of Significant Accounting Policies - Accounting for the Impairment of Long-Lived Assets of the notes to the
consolidated financial statements for a further information related to impairment provisions.
Insurance
Our tenants are generally responsible under their leases for providing adequate insurance on the spaces they lease. In addition we
believe our our properties are adequately covered by commercial general liability, fire, flood, terrorism, environmental, and where
necessary, hurricane and windstorm insurance coverages, which are all provided by reputable companies, with commercially
reasonable exclusions, deductibles and limits.
22
Item 3. Legal Proceedings
We are currently involved in certain litigation arising in the ordinary course of business.
Item 4. Mine Safety Disclosures
Not Applicable
23
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
PART II
Market Information
Our common shares are currently listed and traded on the New York Stock Exchange (“NYSE”) under the symbol “RPT”. On
February 16, 2016, the closing price of our common shares on the NYSE was $16.85.
Shareholder Return Performance Graph
The following line graph sets forth the cumulative total return on a $100 investment (assuming the reinvestment of dividends) in
each of our common shares, the NAREIT Equity Index, and the S&P 500 Index for the period December 31, 2010 through
December 31, 2015. The stock price performance shown is not necessarily indicative of future price performance.
The following table depicts high/low closing prices and dividends declared per share for each quarter in 2015 and 2014:
Quarter Ended
December 31, 2015
September 30, 2015
June 30, 2015
March 31, 2015
December 31, 2014
September 30, 2014
June 30, 2014
March 31, 2014
(1) Paid on January 4, 2016
(2) Paid on January 2, 2015
Stock Price
High
Low
Dividends
$
$
$
$
$
$
$
$
16.80
15.15
16.44
18.85
18.99
17.35
17.03
16.76
$
$
$
$
$
$
$
$
16.61
14.92
16.19
18.57
15.86
16.25
15.94
15.35
$
$
$
$
$
$
$
$
0.21000 (1)
0.21000
0.20000
0.20000
0.20000 (2)
0.20000
0.18750
0.18750
24
Holders
The number of holders of record of our common shares was 1,395 at February 16, 2016. A substantially greater number of holders
are beneficial owners whose shares of record are held by banks, brokers and other financial institutions.
Dividends
Under the Code, a REIT must meet requirements, including a requirement that it distribute to its shareholders at least 90% of its
REIT taxable income annually, excluding net capital gain. Distributions paid by us are at the discretion of our Board and depend
on our actual net income available to common shareholders, cash flow, financial condition, capital requirements, the annual
distribution requirements under REIT provisions of the Code and such other factors as the Board deems relevant.
Distributions on our 7.25% Series D Cumulative Convertible Perpetual Preferred Shares declared in 2015 totaled $3.625 per
share. We do not believe that the preferential rights available to the holders of our preferred shares or the financial covenants
contained in our debt agreements had or will have an adverse effect on our ability to pay dividends in the normal course of business
to our common shareholders or to distribute amounts necessary to maintain our qualification as a REIT.
For information on our equity compensation plans as of December 31, 2015, refer to Item 12 of Part III of this report and Note
16 of the notes to the consolidated financial statements for further information regarding our share-based compensation and other
benefit plans.
25
Item 6. Selected Financial Data
The following table sets forth our selected consolidated financial data and should be read in conjunction with the consolidated
financial statements and notes to the consolidated financial statements and Management’s Discussion and Analysis of Financial
Condition and Results of Operations (“MD&A”) included elsewhere in this report.
Year Ended December 31,
2015
2014
2013
(In thousands, except per share)
2012
2011
Operating Data:
Total revenue
Operating income
Income (loss) from continuing operations
Gain on sale of depreciable real estate
Gain on sale of land
Net income (loss)
Net (income) loss attributable to noncontrolling partner interest
Preferred share dividends
Net income (loss) available to common shareholders
Earnings (loss) per common share, basic
Continuing operations
Discontinued operations
Basic Earnings (loss)
Earnings (loss) per common share, diluted
Continuing operations
Discontinued operations
Diluted earnings (loss)
Weighted average shares outstanding:
Basic
Diluted
Cash dividends declared per RPT preferred share
Cash dividends declared per RPT common share
Cash distributions to RPT preferred shareholders
Cash distributions to RPT common shareholders
Balance Sheet Data (at December 31):
Investment in real estate (before accumulated depreciation)
Total assets
Total notes payable, net
Total liabilities
Total RPT shareholders' equity
Noncontrolling interest
Total shareholders' equity
$
$
$
$
$
$
$
$
$
251,790
65,497
66,895
13,529
4,041
66,895
(1,786)
(6,838)
57,771
0.73
—
0.73
0.73
—
0.73
78,848
79,035
0.004
0.8200
6,977
63,972
$
$
$
$
$
$
$
$
$
218,363
23,330
(2,412)
10,022
835
(2,412)
48
(7,250)
(9,614)
(0.14)
—
(0.14)
(0.14)
—
(0.14)
72,118
72,118
0.004
0.7750
7,250
54,149
$
$
$
$
$
$
$
$
$
170,068
35,460
8,371
2,120
4,279
11,462
(465)
(7,250)
3,747
0.01
0.05
0.06
0.01
0.05
0.06
59,336
59,728
0.004
0.7115
7,250
40,108
$
$
$
$
$
$
$
$
$
$
125,225
30,385
7,171
336
69
7,092
112
(7,250)
(46)
— $
—
— $
— $
—
— $
44,101
44,101
0.004
0.6600
7,250
28,333
$
$
$
$
2,184,481
2,128,671
1,083,711
1,222,334
884,223
22,114
906,337
1,934,032
1,944,332
917,658
1,046,053
872,357
25,922
898,279
1,625,217
1,645,735
746,661
847,775
770,097
27,863
797,960
1,119,171
1,159,218
535,208
599,386
529,783
30,049
559,832
Other Data:
Funds from operations ("FFO") available to common shareholders (1)
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by financing activities
$
119,556
$
70,324
$
79,861
$
47,816
$
105,158
(154,333)
46,484
110,592
(315,723)
208,671
85,583
(355,752)
271,731
62,194
(173,210)
103,094
114,386
942
(29,418)
7,197
2,440
(28,500)
1,742
(5,244)
(32,002)
(0.85)
0.01
(0.84)
(0.85)
0.01
(0.84)
38,466
38,466
—
0.6530
3,432
25,203
996,908
1,043,258
512,947
562,084
449,075
32,099
481,174
29,509
44,703
(79,747)
37,024
(1) Under the NAREIT definition, FFO represents net income available to common shareholders (computed in accordance with accounting principles generally accepted in the United
States of America (“GAAP”), excluding gains (losses) from sales of depreciable property and impairment provisions on depreciable property or on equity investments in depreciable
property plus real estate related depreciation and amortization (excluding amortization of financing costs), and adjustments for unconsolidated partnerships and joint ventures. See
“Funds From Operations” in Item 7 for a discussion of FFO and a reconciliation of FFO to net income.
26
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial statements, the notes thereto, and the
comparative summary of selected financial data appearing elsewhere in this report. Discontinued operations are discussed in Note
5 of the notes to the consolidated financial statements in Item 8. The financial information in this MD&A is based on results from
continuing operations.
Overview
We are a fully integrated, self-administered, publicly-traded REIT specializing in the ownership, management, development and
redevelopment of community shopping centers. Most of our properties are multi-anchored by supermarkets and/or national chain
stores. Our primary business is managing and leasing space to tenants in the shopping centers we own. We also manage centers
for our unconsolidated joint ventures for which we charge fees. Our credit risk, therefore, is concentrated in the retail industry.
At December 31, 2015, we owned and managed, either directly or through our interest in real estate joint ventures, a total of 73
shopping centers and one office building, with approximately 15.9 million square feet of gross leasable area owned by us and our
joint ventures. We also own various parcels of land available for development or for sale, the majority of which are adjacent to
certain of our existing developed properties.
We are predominantly a community shopping center company with a focus on managing and adding value to our portfolio of
centers that are primarily multi-anchored by grocery stores and/or nationally recognized discount department stores. We believe
that centers with a grocery and/or discount component attract consumers seeking value-priced products. Since these products are
required to satisfy everyday needs, customers often visit the centers on a weekly basis. Over half of our shopping centers are
anchored by tenants that sell groceries. Supermarket anchor tenants in our centers include, among others, Publix Super Market,
Whole Foods, Kroger and Sprouts. National chain anchor tenants in our centers include, among others, TJ Maxx/Marshalls, Bed
Bath and Beyond, Home Depot and Dick's Sporting Goods.
Our shopping centers are primarily located in a number of the largest metropolitan markets in the central United States. Our focus
on these markets has enabled us to develop a thorough understanding of their unique characteristics. Throughout our primary
regions, we have concentrated a number of centers in reasonable proximity to each other in order to achieve efficiencies in
management, leasing and acquiring new properties.
Critical Accounting Policies
Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial
statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to
make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure
of contingent assets and liabilities. Our estimates are based on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions
or conditions.
We believe the following critical accounting policies require our most subjective judgment and use of estimates in the preparation
of our consolidated financial statements.
Revenue Recognition and Accounts Receivable
Most of our leases contain non-contingent rent escalations for which we recognize income on a straight-line basis over the non-
cancelable lease term. This method results in rental income in the early years of a lease being higher than actual cash received,
creating a straight-line rent receivable asset which is included in the “Other Assets” line item in our consolidated balance sheets. We
review our unbilled straight-line rent receivable balance to determine the future collectability of revenue that will not be billed to
or collected from tenants due to early lease terminations, lease modifications, bankruptcies and other factors. An allowance to
write down the straight-line receivable balance is taken in the period that future collectability is uncertain.
27
Additionally, we provide for bad debt expense based upon the allowance method of accounting. We continuously monitor the
collectability of our accounts receivable from specific tenants, analyze historical bad debts, customer creditworthiness, current
economic trends and changes in tenant payment terms when evaluating the adequacy of the allowance for bad debts. Allowances
are taken for those balances that we have reason to believe will be uncollectible.
For more information refer to Note 1 Organization and Summary of Significant Accounting Policies, Revenue Recognition and
Accounts Receivable subtopics of the notes to the consolidated financial statements.
Acquisitions
Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the results of operations of an
acquired property are included in our results of operations from the date of acquisition. Estimates of fair values are based upon
future cash flows and other valuation techniques in accordance with our fair value measurements policy, which are used to allocate
the purchase price of acquired property among land, buildings on an “as if vacant” basis, tenant improvements, identifiable
intangibles and any gain on purchase. Identifiable intangible assets and liabilities include the effect of above-and below-market
leases, the value of having leases in place (“as-is” versus “as if vacant” and absorption costs), other intangible assets such as
assumed tax increment revenue bonds and out-of-market assumed mortgages. Depreciation and amortization are computed using
the straight-line method over the estimated useful lives of 40 years for buildings, and over the remaining terms of any intangible
asset contracts and the respective tenant leases, which may include bargain review options. The impact of these estimates, including
incorrect estimates in connection with acquisition values and estimated useful lives, could result in significant differences related
to the purchased assets, liabilities and subsequent depreciation or amortization expense. For more information, refer to Note 1,
Organization and Summary of Significant Accounting Policies - Real Estate of the notes to the consolidated financial statements.
Impairment
We review our investment in real estate, including any related intangible assets, for impairment on a property-by-property basis
whenever events or changes in circumstances indicate that the carrying value of the property may not be recoverable. These
changes in circumstances include, but are not limited to, changes in occupancy, rental rates, tenant sales, net operating income,
geographic location, real estate values and expected holding period. The viability of all projects under construction or development,
including those owned by unconsolidated joint ventures, is regularly evaluated under applicable accounting requirements, including
requirements relating to abandonment of assets or changes in use. To the extent a project, or individual components of the project,
are no longer considered to have value, the related capitalized costs are charged against operations.
Impairment provisions resulting from any event or change in circumstances, including changes in our intentions or our analysis
of varying scenarios, could be material to our consolidated financial statements.
We recognize an impairment of an investment in real estate when the estimated discounted or undiscounted cash flow is less than
the net carrying value of the property. If it is determined that an investment in real estate is impaired, then the carrying value is
reduced to the estimated fair value as determined by cash flow models and discount rates or comparable sales in accordance with
our fair value measurement policy. Refer to Note 1 Organization and Summary of Significant Accounting Policies - Accounting
for the Impairment of Long-Lived Assets for further information regarding impairment provisions.
28
Results of Operations
Comparison of the Year Ended December 31, 2015 to the Year Ended December 31, 2014
The following summarizes certain line items from our audited statements of operations which we believe are important in
understanding our operations and/or those items that have significantly changed during the year ended December 31, 2015 as
compared to 2014:
Year Ended December 31,
2015
(In thousands)
2014
Dollar
Change
Percent
Change
$
Total revenue
Operating expenses
Real estate taxes
Depreciation and amortization
General and administrative expense
Provision for impairment
Gain on sale of real estate
Earnings from unconsolidated joint ventures
Interest expense and amortization of deferred financing fees
Gain on remeasurement of unconsolidated joint ventures
Gain (loss) on extinguishment of debt
$
251,790
34,875
38,737
89,439
20,077
2,521
17,570
17,696
42,211
7,892
1,414
$
218,363
30,952
31,474
81,182
21,670
27,865
10,857
75
35,188
117
(860)
33,427
3,923
7,263
8,257
(1,593)
(25,344)
6,713
17,621
7,023
7,775
2,274
15.3 %
12.7 %
23.1 %
10.2 %
(7.4)%
(91.0)%
61.8 %
NM
20.0 %
NM
NM
NM - Not Meaningful
Total revenue in 2015 increased $33.4 million, or 15.3% from 2014. The increase is primarily due to the following:
•
•
•
•
$32.3 million increase related to acquisitions completed in 2015 and 2014;
$2.9 million increase due to the completion of Phase I of Lakeland Park Center;
$4.0 million increase at existing centers primarily related to redevelopment and re-tenanting activities; offset by
$5.8 million decrease related to properties sold in 2014 and reduced management fee income and lower office tenant revenue
in 2015.
Operating expense in 2015 increased $3.9 million, or 12.7%, from 2014 primarily due to our 2015 and 2014 acquisitions.
Real estate tax expense in 2015 increased $7.3 million, or 23.1%, from 2014, primarily due to our 2015 and 2014 acquisitions.
Depreciation and amortization expense in 2015 increased $8.3 million, or 10.2%, from 2014. The increase was primarily related
to a $14.8 million increase from our acquisitions in 2015 and 2014, new development completion and other capital activities offset
by a decrease of $6.5 million related to sold properties and accelerated depreciation for demolition of certain centers undergoing
redevelopment in 2014.
General and administrative expense in 2015 decreased $1.6 million, or 7.4%, from 2014. The decrease was primarily due to lower
costs associated with our long-term incentive plans which are based on our stock price performance relative to a group of our
peers. The reversal of share based and long-term compensation expense related to the previous Chief Financial Officer offset in
part by a bonus payment for a new Chief Financial Officer.
Impairment provisions of $2.5 million, recorded in 2015, related to developable land that was subsequently sold in the second
quarter of 2015. The adjustment was triggered by unforeseen increases in development costs and changes in the associated sales
price assumptions. In 2014 our impairment provisions totaled $27.9 million related to our plan to sell certain land parcels that we
had previously intended to develop. Refer to Note 1 Organization and Summary of Significant Accounting Policies - Accounting
for the Impairment of Long-Lived Assets of the notes to the consolidated financial statements for further information related to
impairment provisions.
Gain on sale of real estate was $17.6 million in 2015. In the comparable period in 2014 we had a gain of $10.9 million. Refer to
Note 4 of the notes to the consolidated financial statements for further detail on dispositions.
29
Earnings from unconsolidated joint ventures in 2015 increased $17.6 million from 2014. The increase was primarily related to
our proportionate share of gains totaling $16.5 million generated by the sale of ten properties owned by two of our joint ventures.
In addition, in 2014, we recorded accelerated depreciation expense as a result of the demolition of a portion of centers for
redevelopment and additional proceeds related to the 2011 sale of a joint venture property. Refer to Note 7 of the notes to the
consolidated financial statements for additional information regarding our unconsolidated joint venture sales activity.
Interest expense and amortization of deferred financing fees increased in 2015 by $7.0 million, or 20.0% from 2014, primarily
due to the issuance of new senior unsecured notes and higher average loan balances on our credit facility.
Gain on remeasurement of unconsolidated joint ventures in 2015 was $7.9 million, triggered by our acquisition of our partner's
equity interest in seven properties. The gain on remeasurement represents the difference between the carrying value and the fair
value of our previously held equity investment in the properties. In 2014 we recognized a similar gain of $0.1 million.
Gain on extinguishment of debt of approximately $1.4 million in 2015 was related to the write-off of debt premiums associated
with two mortgages that were repaid compared to a loss of $0.9 million in 2014 related to the write-off of deferred financing costs
associated with the early payoff of unsecured term loan debt.
Comparison of the Year Ended December 31, 2014 to the Year Ended December 31, 2013
The following summarizes certain line items from our audited statements of operations which we believe are important in
understanding our operations and/or those items which have significantly changed during the year ended December 31, 2014 as
compared to 2013:
Total revenue
Operating expense
Real Estate Tax
Depreciation and amortization
General and administrative expense
Provision for impairment
Gain on sale of real estate
Earnings (loss) from unconsolidated joint ventures
Interest expense and amortization of deferred financing fees
Gain on remeasurement of unconsolidated joint ventures
Loss on extinguishment of debt
NM - Not meaningful
Year Ended December 31,
2014
2013
(In thousands)
Dollar
Change
Percent
Change
$
218,363
$
170,068
$
48,295
30,952
31,474
81,182
21,670
27,865
10,857
75
35,188
117
(860)
23,200
23,161
56,305
20,951
9,669
4,279
(4,759)
30,522
5,282
(340)
7,752
8,313
24,877
719
18,196
6,578
4,834
4,666
(5,165)
(520)
28.4%
33.4%
35.9%
44.2%
3.4%
188.2%
153.7%
101.6%
15.3%
NM
NM
Total revenue in 2014 increased $48.3 million, or 28.4%, from 2013. The increase is primarily due to the following:
•
•
•
•
$43.7 million increase related to acquisitions completed in 2014 and 2013;
$4.6 million increase at existing centers; and
$1.8 million increase in lease termination income primarily due to the early departure of an office tenant at our office
building; offset by
$1.8 million decrease related to properties sold in 2014, reduced management fee income and properties in redevelopment.
Operating expense in 2014 increased $7.8 million, or 33.4%, from 2013. The increase is primarily due to the following:
$5.7 million related to increases in recoverable operating expenses due to our 2014 and 2013 acquisitions; and
$1.5 million related to increase in recoverable operating expenses at existing centers.
•
•
Real estate tax expense in 2014 increased $8.3 million, or 35.9%, from 2013, primarily due to our 2014 and 2013 acquisitions.
Depreciation and amortization expense in 2014 increased $24.9 million, or 44.2%, from 2013. The increase was primarily due to
our acquisitions in 2014 and 2013, new development completion and other capital activities.
30
General and administrative expense in 2014 increased $0.7 million, or 3.4%, from 2013. The increase was primarily due to:
•
•
$0.9 million related to an increase in costs associated with our long-term incentive plans which are based on our stock price
performance relative to a group of our peers (see Note 16 of the notes to the consolidated financial statements for additional
information); offset in part by
higher capitalization of development and leasing salaries and related costs in 2014. Salaries capitalized in 2014 and 2013
represented approximately 19% and 18%, respectively, of total salaries.
Impairment provisions of $27.9 million recorded in 2014 related to the decision to market certain income-producing properties
for sale that we had previously planned to develop and adjustments to the sales price assumptions for certain undeveloped land
parcels available for sale at several of our development properties. In 2013 our impairment provisions totaled $9.7 million. Refer
to Note 1 Organization and Summary of Significant Accounting Policies - Accounting for the Impairment of Long-Lived Assets
of the notes to the consolidated financial statements for further information related to impairment provisions.
Gain on sale of real estate was $10.9 million in 2014 primarily due to the sale of five income-producing properties and four
individual outparcel sales. In the comparable period in 2013 we had a gain of $4.3 million. Refer to Note 4 of the notes to the
consolidated financial statements for further detail on dispositions.
Earnings from unconsolidated joint ventures in 2014 increased $4.8 million from 2013. In 2013 we acquired our partner's 70%
interest in 12 shopping centers held in the Ramco/Lion Venture LP. The sale resulted in a loss of $21.5 million to the joint venture
of which our share was $6.4 million.
Interest expense and amortization of deferred financing fees increased in 2014 by $4.7 million, or 15.3% from 2013, primarily
due to the following:
•
•
•
$6.1 million increase in loan interest due to the issuance of $200.0 million in senior unsecured notes in the second half of
2014; offset in part by
$0.6 million increase in the amortization of mortgage premiums; and
$0.7 million increase in capitalized interest due to our development/redevelopment projects.
In 2014 we recorded a deferred gain of $0.1 million which related to a property sold in 2007 to a joint venture in which we had a
20% non-controlling interest. Due to our continuing involvement we deferred the portion of the gain related to our 20% interest.
The property was conveyed to the lender in 2014 and we recognized the previously deferred gain. In 2013, we recorded a deferred
gain of $5.3 million.
Loss on extinguishment of debt of approximately $0.9 million in 2014 related to the write-off of unamortized deferred financing
costs associated with the early payoff of $120.0 million in unsecured term loan debt. In 2013 we recorded a loss of $0.3 million
related to a prepayment penalty incurred to repay two mortgages.
Liquidity and Capital Resources
The majority of our cash is generated from operations and is dependent on the rents that we are able to charge and collect from
our tenants. The principal uses of our liquidity and capital resources are for operations, developments, redevelopments, including
expansion and renovation programs, acquisitions, and debt repayment. In addition, we make quarterly dividend payments in
accordance with REIT requirements for distributing the substantial majority of our taxable income on an annual basis. We anticipate
that the combination of cash on hand, cash from operations, availability under our credit facilities, additional financings, equity
offerings, and the sale of existing properties will satisfy our expected working capital requirements through at least the next 12
months. Although we believe that the combination of factors discussed above will provide sufficient liquidity, no such assurance
can be given.
At December 31, 2015 and 2014, we had $15.4 million and $17.5 million, respectively, in cash and cash equivalents and restricted
cash. Restricted cash was comprised primarily of funds held in escrow by lenders to pay real estate taxes, insurance premiums,
and certain capital expenditures.
Short-Term Liquidity Requirements
Our short-term liquidity needs are met primarily from rental income and recoveries and consist primarily of funds necessary to
pay operating expenses associated with our operating properties, interest and scheduled principal payments on our debt, quarterly
dividend payments (including distributions to OP unit holders) and capital expenditures related to tenant improvements and
31
redevelopment activities. We believe that our retained cash flow from operations along with availability under our revolving credit
facility is sufficient to meet these obligations.
We have two mortgages maturing in June 2016 totaling $35.8 million, which includes scheduled amortization payments. As
opportunities arise and market conditions permit, we will look to repay these mortgages by issuing unsecured debt, utilizing cash
flow from operating activities or funding from availability under our credit facility. As of December 31, 2015 we had $286.5
million available to be drawn on our $350.0 million unsecured revolving credit facility subject to our compliance with certain
covenants.
We will continue to pursue the strategy of selling mature properties or non-core assets that no longer meet our investment criteria.
Our ability to obtain acceptable selling prices and satisfactory terms and financing will impact the timing of future sales. We
anticipate using net proceeds from the sale of properties to reduce outstanding debt and support current and future growth initiatives.
We continually search for investment opportunities that may require additional capital and/or liquidity. As of December 31, 2015,
we had no proposed property acquisitions under contract and one property disposition under contract, subject to due diligence
contingencies.
Long-Term Liquidity Requirements
Our long-term liquidity needs consist primarily of funds necessary to pay indebtedness at maturity, potential acquisitions of
properties, redevelopment of existing properties, the development of land and non-recurring capital expenditures.
The following is a summary of our cash flow activities:
Cash provided by operating activities
Cash used in investing activities
Cash provided by financing activities
Operating Activities
$
2013
2015
Year Ended December 31,
2014
(In thousands)
110,592
$
(315,723)
208,671
105,158
(154,333)
46,484
$
85,583
(355,752)
271,731
We anticipate that cash on hand, operating cash flows, borrowings under our revolving credit facility, issuance of equity, as well
as other debt and equity alternatives, will provide the necessary capital that we require to operate. Net cash flow provided by
operating activities decreased $5.4 million in 2015 compared to 2014 primarily due to:
• Operating income, adjusted for non-cash activity, increased $17.4 million as a result of our acquisitions (net of
•
•
•
•
dispositions), redevelopment and leasing activities at our shopping centers;
net accounts receivable increased $4.4 million;
accounts payable and other liabilities decreased approximately $8.5 million;
long-term and share-based compensation expense decreased $3.0 million; and
net interest expense increased approximately $7.0 million primarily due to higher average loan balances as a result of
acquisitions.
Investing Activities
Net cash used for investing activities decreased $161.4 million compared to 2014 primarily due to:
• Acquisitions of real estate decreased $111.5 million;
• Additions to real estate decreased $19.8 million due to lower new construction activity;
• Net proceeds from the sale of real estate increased $11.8 million; and
• Distributions from sales of joint venture properties increased $14.1 million; and
• Restricted cash decreased $4.2 million.
32
Financing Activities
Cash flows provided by financing activities were $46.5 million as compared to $208.7 million in 2014. This difference of $162.2
million is primarily explained by:
•
•
•
•
net proceeds from common share issuances decreased $153.3 million;
an increase in cash dividends to common shareholders of $9.8 million due to additional shares issued as well as an increase
in our per share quarterly dividend payment; and
an increase in cash paid for OP unit conversions of $3.7 million; offset in part by
an increase in net borrowings of $5.3 million.
As of December 31, 2015, $286.5 million was available to be drawn on our $350.0 million unsecured revolving credit facility
subject to our compliance with certain covenants. It is anticipated that additional funds borrowed under our credit facilities will
be used for general corporate purposes, including working capital, capital expenditures, the repayment of indebtedness or other
corporate activities. For further information on the credit facilities and other debt, refer to Note 9 of notes to the consolidated
financial statements for further information regarding debt.
Dividends and Equity
We currently qualify, and intend to continue to qualify in the future, as a REIT under the Code. As a REIT, we must distribute to
our shareholders at least 90% of our REIT taxable income annually, excluding net capital gain. Distributions paid are at the
discretion of our Board and depend on our actual net income available to common shareholders, cash flow, financial condition,
capital requirements, restrictions in financing arrangements, the annual distribution requirements under REIT provisions of the
Code and such other factors as our Board deems relevant.
We paid cash dividends of $0.81 per common share to shareholders in 2015. In the third quarter we increased our quarterly
dividend 5.0% to $0.21 per share, or an annualized amount of $0.84 per share. Cash dividends for 2014 and 2013 were $0.7625
and $0.6923 per common share, respectively. Our dividend policy is to make distributions to shareholders of at least 90% of our
REIT taxable income, excluding net capital gain, in order to maintain qualification as a REIT. On an annualized basis, our current
dividend is above our estimated minimum required distribution. Distributions paid by us are funded from cash flows from operating
activities. To the extent that cash flows from operating activities were insufficient to pay total distributions for any period,
alternative funding sources would be used. Examples of alternative funding sources may include proceeds from sales of real estate
and bank borrowings. Although we may use alternative sources of cash to fund distributions in a given period, we expect that
distribution requirements for an entire year will be met with cash flows from operating activities.
Cash provided by operating activities
Cash distributions to preferred shareholders
Cash distributions to common shareholders
Cash distributions to operating partnership unit holders
Total distributions
Surplus
$
$
$
2015
Year Ended December 31,
2014
(In thousands)
110,592
$
$
105,158
2013
85,583
(6,977)
(63,972)
(1,804)
(72,753) $
(7,250)
(54,149)
(1,716)
(63,115) $
(7,250)
(40,108)
(1,580)
(48,938)
32,405
$
47,477
$
36,645
In addition, during 2015, we issued 0.9 million common shares through our controlled equity offering generating $17.2 million
in net proceeds, after sales commissions and fees of $0.3 million. We used the net proceeds for general corporate purposes including
the repayment of debt. We have registered up to 8.0 million common shares for issuance from time to time, at our sole discretion,
through our controlled equity offering sales agreement, of which 3.1 million shares remained unsold as of December 31, 2015.
The shares issued in the controlled equity offering are registered with the Securities and Exchange Commission (“SEC”) on our
registration statement on Form S-3.
33
Off Balance Sheet Arrangements
Real Estate Joint Ventures
We consolidate entities in which we own less than 100% equity interest if we have a controlling interest or are the primary
beneficiary in a variable interest entity, as defined in the Consolidation Topic of FASB ASC 810. From time to time, we enter
into joint venture arrangements from which we believe we can benefit by owning a partial interest in one or more properties.
As of December 31, 2015, our investments in unconsolidated joint ventures were approximately $4.3 million representing our
ownership interest in three shopping centers. We accounted for these entities under the equity method. Refer to Note 7 of the
notes to the consolidated financial statements for further information regarding our equity investments in unconsolidated joint
ventures.
We are engaged by our joint ventures to provide asset management, property management, leasing and investing services for such
ventures' respective properties. We receive fees for our services, including a property management fee calculated as a percentage
of gross revenues received.
Contractual Obligations
The following are our contractual cash obligations as of December 31, 2015:
Contractual Obligations
Mortgages and notes payable:
Scheduled amortization
Payments due at maturity
Total mortgages and notes payable (1)
Interest expense (2)
Employment contracts
Capital lease
Operating leases
Construction commitments
Total contractual obligations
Payments due by period
Less than 1
year
Total
1-3 years
(In thousands)
3-5 years
More than
5 years
$
21,942
1,058,640
1,080,582
292,365
2,677
1,700
2,316
10,602
$ 1,390,242
$
$
3,396
32,449
35,845
45,911
1,244
100
620
10,602
94,322
$
$
8,747
285,341
294,088
101,730
1,433
300
1,696
—
399,247
$
$
5,060
211,717
216,777
49,828
—
200
—
—
266,805
$
$
4,739
529,133
533,872
94,896
—
1,100
—
—
629,868
(1) Excludes $6.9 million of unamortized mortgage debt premium and $3.8 million in deferred financing costs.
(2) Variable rate debt interest is calculated using rates at December 31, 2015.
We anticipate that the combination of cash on hand, cash provided from operating activities, the availability under our credit
facility ($286.5 million at December 31, 2015 subject to our compliance with certain covenants), our access to the capital markets
and the sale of existing properties will satisfy our expected working capital requirements through at least the next 12 months.
At December 31, 2015, we did not have any contractual obligations that required or allowed settlement, in whole or in part, with
consideration other than cash.
Mortgages and notes payable
See the analysis of our debt included in “Liquidity and Capital Resources” above.
Employment Contracts
At December 31, 2015, we had employment contracts with our Chief Executive, Chief Financial and Chief Operating Officers,
that contain minimum guaranteed compensation. All other employees are subject to at-will employment.
34
Operating and Capital Leases
We lease office space for our corporate headquarters under an operating lease that expires in August 2019.
We have a capital lease at our Buttermilk Towne Center with the City of Crescent Springs, Kentucky. The lease provides for fixed
annual payments of $0.1 million through maturity in December 2032, at which time we can acquire the center for one dollar.
Construction Costs
In connection with the development and expansion of various shopping centers as of December 31, 2015, we have entered into
agreements for construction activities with an aggregate cost of approximately $10.6 million.
Planned Capital Spending
We are focused on our core strength of enhancing the value of our existing portfolio of shopping centers through successful leasing
efforts and the completion of our redevelopment projects currently in process.
For 2016, we anticipate spending approximately $62.5 million for capital expenditures, of which $10.6 million is reflected in the
construction commitments in the above contractual obligations table. The total anticipated spending relates to redevelopment
projects, tenant improvements, and leasing costs. Estimates for future spending will change as new projects are approved.
Capitalization
At December 31, 2015 our total market capitalization was $2.5 billion and is detailed below:
Net debt (including property-specific mortgages, unsecured revolving credit facility, term loans and capital
lease obligation net of $6.6 million in cash)
Common shares, OP units, and dilutive securities based on market price of $16.61 at December 31, 2015
Convertible perpetual preferred shares based on market price of $61.15 at December 31, 2015
Total market capitalization
Net debt to total market capitalization
(In thousands)
$ 1,075,046
1,351,224
113,066
$ 2,539,336
42.3%
At December 31, 2015, noncontrolling interests represented a 2.4% ownership in the Operating Partnership. The OP Units may,
under certain circumstances, be exchanged for our common shares of beneficial interest on a one-for-one basis. We, as sole general
partner of the Operating Partnership, have the option, but not the obligation, to settle exchanged OP Units held by others in cash.
Assuming the exchange of all OP Units, there would have been 81,163,819 of our common shares of beneficial interest outstanding
at December 31, 2015, with a market value of approximately $1.3 billion.
35
Non-GAAP Financial Measures
Certain of our key performance indicators are considered non-GAAP financial measures. Management uses these measures along
with our GAAP financial statements in order to evaluate our operations results. We believe these additional measures provide
users of our financial information additional comparable indicators of our industry, as well as our performance.
Funds From Operations
We consider funds from operations, also known as “FFO”, to be an appropriate supplemental measure of the financial performance
of an equity REIT. Under the NAREIT definition, FFO represents net income (computed in accordance with generally accepted
accounting principles), excluding gains (or losses) from sales of depreciable property and impairment provisions on depreciable
real estate or on investments in non-consolidated investees that are driven by measurable decreases in the fair value of depreciable
real estate held by the investee, plus depreciation and amortization, (excluding amortization of financing costs). Adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.
In addition to FFO available to common shareholders, we include Operating FFO available to common shareholders as an additional
measure of our financial and operating performance. Operating FFO excludes acquisition costs and periodic items such as
impairment provisions on land available for development or sale, bargain purchase gains, and gains or losses on extinguishment
of debt that are not adjusted under the current NAREIT definition of FFO. We provide a reconciliation of FFO to Operating FFO.
FFO and Operating FFO should not be considered alternatives to GAAP net income available to common shareholders or as
alternatives to cash flow as measures of liquidity.
While we consider FFO available to common shareholders and Operating FFO available to common shareholders useful measures
for reviewing our comparative operating and financial performance between periods or to compare our performance to different
REITs, our computations of FFO and Operating FFO may differ from the computations utilized by other real estate companies,
and therefore, may not be comparable.
36
We recognize the limitations of FFO and Operating FFO when compared to GAAP net income available to common
shareholders. FFO and Operating FFO available to common shareholders do not represent amounts available for needed capital
replacement or expansion, debt service obligations, or other commitments and uncertainties. In addition, FFO and Operating FFO
do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash
available to fund cash needs, including the payment of dividends. FFO and Operating FFO are simply used as additional indicators
of our operating performance. The following table illustrates the calculations of FFO and Operating FFO:
Years Ended December 31,
2013
2014
2015
(In thousands, except per share data)
$
57,771
$
(9,614) $
3,747
Net income (loss) available to common shareholders
Adjustments:
Rental property depreciation and amortization expense
Pro-rata share of real estate depreciation from unconsolidated joint ventures
Gain on sale of depreciable real estate
(Gain) loss on sale of joint venture depreciable real estate (1)
Provision for impairment on income-producing properties
Gain on remeasurement of unconsolidated joint ventures (2)
Noncontrolling interest in Operating Partnership (3)
FFO
Preferred share dividends (assuming conversion) (4)
FFO available to common shareholders
Provision for impairment for land available for development or sale
(Gain) loss on extinguishment of debt
Gain on extinguishment of joint venture debt, net of RPT expenses (1)
Acquisition costs
Preferred share dividends (assuming conversion) and conversion costs (5)
Operating FFO available to common shareholders
Weighted average common shares
Shares issuable upon conversion of Operating Partnership Units (3)
Dilutive effect of securities
Shares issuable upon conversion of preferred shares (4) (5)
Weighted average equivalent shares outstanding, diluted
$
89,289
1,782
(13,529)
(16,489)
—
(7,892)
1,786
112,718
6,838
119,556
2,521
(1,414)
—
644
$
80,826
4,719
(10,022)
—
4,580
(117)
(48)
70,324
—
70,324
23,285
860
(106)
1,890
$
500
121,807
$
7,250
103,503
$
$
78,848
2,187
187
81,222
6,692
87,914
72,118
2,250
217
74,585
7,019
81,604
Diluted earnings per share (6)
FFO per share adjustments to net income available to common shareholders
including preferred share dividends
FFO per share, diluted (7)
Per share adjustments to FFO
Operating FFO per share, diluted
$
$
$
0.73
$
(0.14) $
0.63
1.36
0.03
1.39
$
$
1.08
0.94
0.33
1.27
$
$
56,316
3,689
(2,120)
6,454
9,342
(5,282)
465
72,611
7,250
79,861
327
340
—
1,322
—
81,850
59,336
2,257
392
61,985
6,940
68,925
0.06
1.10
1.16
0.03
1.19
(4)
(3)
(1) Amount included in earnings (loss) from unconsolidated joint ventures.
(2) During the third quarter 2015, we purchased our partner's interest in six properties owned by Ramco 450 Venture LLC and one property owned by
Ramco/Lion Venture L.P. The total gain of $7.9 million represents the difference between the carrying value and the fair value of our previously held
equity investment in the properties.
The total noncontrolling interest reflects OP units convertible 1:1 into common shares.
Series D convertible preferred shares were dilutive for FFO for the years ended December 31, 2015 and 2013 and were anti-dilutive for the comparable
period in 2014. In 2015, our Series D convertible preferred shares paid annual dividends of $6.7 million and are currently convertible into approximately
6.7 million shares of common stock. They are dilutive only when earnings or FFO exceed approximately $1.04 per diluted share per year The conversion
ratio is subject to adjustment based upon a number of factors, and such adjustment could affect the dilutive impact of the Series D convertible preferred
shares on FFO and earnings per share in future periods.
Series D convertible preferred shares were dilutive for Operating FFO for year ended December 31, 2014.
The denominator to calculate diluted earnings per share excludes shares issuable upon conversion of Operating Partnership Units and preferred shares
for all periods reported.
The year ended December 31, 2015 includes $0.04 per share primarily attributable to gain on sale of land at Gaines Marketplace.
(5)
(6)
(7)
37
Same Property Operating Income
Same Property Operating Income ("Same Property NOI") is a supplemental non-GAAP financial measure of real estate companies'
operating performance. Same Property NOI is considered by management to be a relevant performance measure of our operations
because it includes only the NOI of comparable properties for the reporting period. Same Property NOI is calculated using
consolidated operating income as defined by GAAP adjusted to exclude management and other fee income, depreciation and
amortization, acquisition costs, general and administrative expense, provision for impairment, GAAP income adjustments such
as straight-line rents, net of reserves, above/below market rents, other non-comparable operating income/expense adjustments,
and the effect of lease termination income/expense.
Same Property NOI should not be considered an alternative to net income in accordance with GAAP or as a measure of liquidity. Our
method of calculating Same Property NOI may differ from methods used by other REITs and, accordingly, may not be comparable
to such other REITs.
The following is a summary of our wholly owned properties by classification:
Three Months Ended
December 31, 2015
Twelve Months Ended
December 31, 2015
Property Designation
Same property
Acquisitions (1)
Completed developments (1)
Non-retail properties (2)
Redevelopment (3)
Total wholly owned properties
57
7
1
1
5
71
52
11
1
1
6
71
(1) Properties were not owned in both comparable periods.
(2) Office building.
(3) Properties under construction primarily related to re-tenanting resulting in reduced rental income.
Acquisition and redevelopment/development properties removed from the pool will not be added until owned and operated or
construction is complete for the entirety of both periods being compared.
The following is a reconciliation of our Operating Income to Same Property NOI:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015
2014
2015
2014
(in thousands)
Operating income (loss)
$
16,102
$
(10,587)
$
65,497
$
23,330
Adjustments:
Management and other fee income
Depreciation and amortization
Acquisition costs
General and administrative expenses
Provision for impairment
Properties excluded from pool - Acquisitions
Properties excluded from pool - Development/Redevelopment
Properties excluded from pool - All others
Non-comparable income/expense adjustments (1)
Pro-rata share of joint venture properties NOI
Same Property NOI
$
(331)
25,042
70
5,709
—
(4,370)
(5,038)
(550)
(2,167)
956
35,423
$
(531)
20,605
168
5,575
27,865
—
(4,845)
(819)
(3,225)
838
35,044
(1,753)
89,439
644
20,077
2,521
(29,760)
(21,136)
(2,920)
(7,273)
3,634
$ 118,970
(2,059)
81,182
1,890
21,670
27,865
(8,108)
(18,453)
(6,502)
(7,939)
3,473
$ 116,349
(1)
Includes adjustments for items that affect the comparability of the same center NOI results. Such items include straight-line rents, net of reserves, above/
below market rents, other non-comparable operating income/expense adjustments, and the effect of lease termination income/expense.
38
Inflation
Inflation has been relatively low in recent years and has not had a significant detrimental impact on the results of our
operations. Should inflation rates increase in the future, substantially all of our tenant leases contain provisions designed to partially
mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require our tenants to reimburse
us for real estate taxes and many of the operating expenses we incur. Also, many of our leases provide for periodic increases in
base rent which are either of a fixed amount or based on changes in the consumer price index and/or percentage rents (where the
tenant pays us rent based on a percentage of its sales). Significant inflation rate increases over a prolonged period of time may
have a material adverse impact on our business.
Recent Accounting Pronouncements
Refer to Note 2 of the notes to the consolidated financial statements for a discussion of Recent Accounting Pronouncements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We have exposure to interest rate risk on our variable rate debt obligations. Based on market conditions, we may manage our
exposure to interest rate risk by entering into interest rate swap agreements to hedge our variable rate debt. We are not subject to
any foreign currency exchange rate risk or commodity price risk, or other material rate or price risks. Based on our debt and
interest rates and interest rate swap agreements in effect at December 31, 2015, a 100 basis point change in interest rates would
impact our future earnings and cash flows by approximately $0.9 million annually. We believe that a 100 basis point increase in
interest rates would decrease the fair value of our total outstanding debt by approximately $7.4 million at December 31, 2015.
We had interest rate swap agreements with an aggregate notional amount of $285.0 million as of December 31, 2015. The agreements
provided for fixed rates ranging from 1.2% to 2.2% and had expirations ranging from April 2016 to May 2021.
The following table sets forth information as of December 31, 2015 concerning our long-term debt obligations, including principal
cash flows by scheduled maturity, weighted average interest rates of maturing amounts and fair market value. Net debt premium
and unamortized deferred financing costs of approximately $3.1 million are excluded:
2016
2017
2018
2019
2020
Thereafter
Total
Fair Value
(In thousands)
$ 35,845
$129,096
$ 99,132
$ 5,860
$102,269
$ 620,255
$ 992,457
$1,010,980
5.8%
$ — $
—%
3.9%
5.5%
— $ 60,000
—%
1.6%
6.8%
$ — $
—%
4.2%
3.9%
— $ 28,125
—%
3.6%
4.4%
4.1%
$ 88,125
$
88,125
2.3%
2.3%
Fixed-rate debt
Average interest rate
Variable-rate debt
Average interest rate
We estimated the fair value of our fixed rate mortgages using a discounted cash flow analysis, based on borrowing rates for similar
types of borrowing arrangements with the same remaining maturity. Considerable judgment is required to develop estimated fair
values of financial instruments. The table incorporates only those exposures that exist at December 31, 2015 and does not consider
those exposures or positions which could arise after that date or firm commitments as of such date. Therefore, the information
presented therein has limited predictive value. Our actual interest rate fluctuations will depend on the exposures that arise during
the period and on market interest rates at that time.
Item 8. Financial Statements and Supplementary Data
Our consolidated financial statements and supplementary data are included as a separate section in this Annual Report on Form
10-K commencing on page F-1 and are incorporated herein by reference.
39
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in our reports under
the Securities Exchange Act of 1934, as amended (“Exchange Act”), such as this report on Form 10-K, is recorded, processed,
summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance
of achieving the design control objectives, and management was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.
We carried out an assessment as of December 31, 2015 of the effectiveness of the design and operation of our disclosure controls
and procedures. This assessment was done under the supervision and with the participation of management, including our Chief
Executive Officer and Chief Financial Officer. Based on such evaluation, our management, including our Chief Executive Officer
and Chief Financial Officer, concluded that such disclosure controls and procedures were effective at the reasonable assurance
level as of December 31, 2015.
Statement of Our Management
Our management has issued a report on its assessment of the Trust’s internal control over financial reporting, which appears on
page F-2 of this Annual Report on Form 10-K.
Statement of Our Independent Registered Public Accounting Firm
Grant Thornton LLP, our independent registered public accounting firm that audited the financial statements included in this
Annual Report on Form 10-K, has issued an attestation report on the Trust’s internal control over financial reporting, which
appears on page F-3 of this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting during the most recently completed fiscal quarter that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
40
Item 10. Directors, Executive Officers and Corporate Governance
PART III
Incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of our fiscal year covered
by this Form 10-K.
Item 11. Executive Compensation
Incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of our fiscal year covered
by this Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth information regarding our equity compensations plans as of December 31, 2015:
(A)
(B)
Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price of
outstanding options,
warrants and rights
(C)
Number of securities
remaining available for
future issuances under
equity compensation plans
(excluding securities
reflected in column (A))
121,098
—
121,098
$32.13
—
$32.13
1,559,160
—
1,559,160
Plan Category
Equity compensation plans
approved by security holders
Equity compensation plans not
approved by security holders
Total
The total in Column (A) above consisted of options to purchase 107,165 common shares and 13,933 deferred common shares (see
Note 16 of the notes to the consolidated financial statements for further information regarding options).
Additional information required by this Item is incorporated by reference from our definitive proxy statement to be filed within
120 days after the end of our fiscal year covered by this Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of our fiscal year covered
by this Form 10-K.
Item 14. Principal Accountant Fees and Services
Incorporated by reference from our definitive proxy statement to be filed within 120 days after the end of our fiscal year covered
by this Form 10-K.
41
Item 15. Exhibits and Financial Statement Schedules
PART IV
(a)(1)
Consolidated financial statements. See “Item 8 – Financial Statements and Supplementary Data.”
(2)
(3)
3.1
3.2*
3.3
3.4
3.5
3.6
4.1
4.2
4.3
4.4
4.5
10.1
10.2
Financial statement schedule. See “Item 8 – Financial Statements and Supplementary Data.”
Exhibits
Articles of Restatement of Declaration of Trust of the Company, effective June 8, 2010, incorporated
by reference Appendix A to the Company's 2010 Proxy dated April 30, 2010.
Amended and Restated Bylaws of the Company, effective February 23, 2012.
Articles of Amendment, as filed with the State Department of Assessments and Taxation of
Maryland on April 5, 2011, incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K
dated April 6, 2011.
Articles Supplementary, as filed with the State Department of Assessments and Taxation of
Maryland on April 5, 2011, incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K
dated April 6, 2011.
Articles Supplementary, as filed with the State Department of Assessments and Taxation of
Maryland on April 28, 2011, incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K
dated April 28, 2011.
Articles of Amendment, as filed with the State Department of Assessments and Taxation of
Maryland on July 31, 2013, incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K
dated July 31, 2013.
Amended and Restated Fixed Rate Note ($110 million), dated March 30, 2007, by and between
Ramco Jacksonville LLC and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.1
to Registrant’s Form 8-K dated April 16, 2007.
Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture
Filing, dated March 30, 2007, by and between Ramco Jacksonville LLC and JPMorgan Chase Bank,
N.A., incorporated by reference to Exhibit 4.2 to Registrant’s Form 8-K dated April 16, 2007.
Assignment of Leases and Rents, dated March 30, 2007, by and between Ramco Jacksonville LLC
and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.3 to Registrant’s Form 8-K
dated April 16, 2007.
Environmental Liabilities Agreement, dated March 30, 2007, by and between Ramco Jacksonville
LLC and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.4 to Registrant’s Form
8-K dated April 16, 2007.
Acknowledgment of Property Manager, dated March 30, 2007 by and between Ramco-Gershenson,
Inc. and JPMorgan Chase Bank, N.A., incorporated by reference to Exhibit 4.6 to Registrant’s Form
8-K dated April 16, 2007.
Registration Rights Agreement, dated as of May 10, 1996, among the Company, Dennis Gershenson,
Joel Gershenson, Bruce Gershenson, Richard Gershenson, Michael A. Ward U/T/A dated 2/22/77, as
amended, and each of the Persons set forth on Exhibit A attached thereto, incorporated by reference
to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30,
1996.
Exchange Rights Agreement, dated as of May 10, 1996, by and among the Company and each of the
Persons whose names are set forth on Exhibit A attached thereto, incorporated by reference to
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 1996.
42
10.3
10.4
10.5
10.6
10.7
10.8*
10.9
10.10
10.11
10.12
10.13
10.14
10.15
10.16
10.17
Amended and Restated Limited Partnership Agreement of Ramco/Lion Venture LP, dated as of
December 29, 2004, by Ramco-Gershenson Properties, L.P., as a limited partner, Ramco Lion LLC,
as a general partner, CLPF-Ramco, L.P. as a limited partner, and CLPF-Ramco GP, LLC as a general
partner, incorporated by reference Exhibit 10.62 to the Registrant’s Annual Report on Form 10-K for
the year ended December 31, 2004.
Second Amended and Restated Limited Liability Company Agreement of Ramco Jacksonville LLC,
dated March 1, 2005, by Ramco-Gershenson Properties , L.P. and SGC Equities LLC., incorporated
by reference Exhibit 10.65 to the Registrant’s Quarterly Report on Form 10-Q for the period ended
March 31, 2005.
Employment Agreement, dated as of August 1, 2007, between the Company and Dennis
Gershenson, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form
10-Q for the period ended June 30, 2007.**
Restricted Share Award Agreement Under 2008 Restricted Share Plan for Non-Employee Trustee,
incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the
period ended June 30, 2008.**
Restricted Share Plan for Non-Employee Trustees, incorporated by reference to Appendix A of the
Company’s 2008 Proxy Statement filed on April 30, 2008.**
Summary of Trustee Compensation Program.**
Ramco-Gershenson Properties Trust 2012 Omnibus Long-Term Incentive Plan, incorporated by
reference to Exhibit 10.1 to Registrant’s Form 8-K, dated June 12, 2012. **
Change in Control Policy, dated May 14, 2013, incorporated by reference to Exhibit 10.1 to
Registrant’s Form 8-K dated May 16, 2013.
Form of Non-Qualified Option Agreement Under 2012 Omnibus Long-Term Incentive Plan,
incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K dated June 12, 2012**
Form of Restricted Stock Award Agreement Under 2012 Omnibus Long-Term Incentive Plan,
incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K dated June 6, 2012**
Unsecured Term Loan Agreement, dated as of September 30, 2011 among Ramco-Gershenson
Properties, L.P., as Borrower, Ramco-Gershenson Properties Trust, as Guarantor, KeyBank National
Association, The Huntington National Bank, PNC Bank, National Association, KeyBank National
Association, as Agent, and KeyBanc Capital Markets, as Sole Lead Manager and Arranger
incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the
period ended September 30, 2011.
Unconditional Guaranty of Payment and Performance, dated as of September 30, 2011, by Ramco-
Gershenson Properties Trust, in favor of KeyBank National Association and the other lenders under
the Unsecured Term Loan Agreement incorporated by reference to Exhibit 10.2 to the Company’s
Quarterly Report on Form 10-Q for the period ended September 30, 2011.
2015 Executive Incentive Plan, dated February 23, 2015, incorporated by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K dated February 27, 2015.
Third Amended and Restated Unsecured Master Loan Agreement dated as of July 19, 2012 among
Ramco-Gershenson Properties, L.P., as Borrower, Ramco-Gershenson Properties Trust, as a
Guarantor, KeyBank National Association, as a Bank, the Other Banks which are a Party to this
Agreement, the Other Banks which may become Parties to this Agreement, KeyBank National
Association, as Agent, KeyBanc Capital Markets, as Sole Lead Manager and Arranger, JPMorgan
Chase Bank, N.A. and Bank of America, N.A. as Co-Syndication Agents, and Deutsche Bank
Securities Inc. and PNC Bank, National Association, as Co Documentation Agents incorporated by
reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q ended June 30, 2012.
Third Amended and Restated Unconditional Guaranty of Payment and Performance, dated as of July
19, 2012 by Ramco-Gershenson Properties Trust, as Guarantor, in favor of KeyBank National
Association and certain other lenders incorporated by reference to Exhibit 10.2 to the Company’s
Quarterly Report on Form 10-Q ended June 30, 2012.
43
10.18
10.18
10.20
10.21
10.22
10.23
10.24
10.25
10.26
10.27
10.28
10.29
10.30
$110 Million Note Purchase Agreement, by Ramco-Gershenson Properties, L.P. incorporated by
reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 2, 2013.
Agreement for the Acquisition of Partnership and Limited Liability Company Interests, dated March
5, 2013, between CLPF-Ramco, LLC, CLPF-Ramco L.P., Ramco Lion, LLC, Ramco-Gershenson
Properties, L.P. and Ramco GP incorporated by reference to Exhibit 10.1 to the Company's Quarterly
Report on Form 10-Q ended March 31, 2013.
Unsecured Term Loan Agreement, dated May 16, 2013 among Ramco-Gershenson Properties, L.P., as
borrower, Ramco-Gershenson Properties Trust, as Guarantor, Capital One, National Association, as
bank, The Other Banks Which Are A Party To this Agreement, The Other Banks Which May Become
Parties To This Agreement, Capital One, National Association, as Agent and Capital One, National
Association, as Sole Lead Manager and Arranger incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q ended June 30, 2013.
First Amendment To Third Amended And Restated Unsecured Master Loan Agreement, dated March
29, 2013 by and among Ramco-Gershenson Properties, L.P. and KeyBank National Association
incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q ended June
30, 2013.
Third Amendment To Unsecured Term Loan Agreement by and among Ramco-Gershenson Properties,
L.P. and KeyBank National Association incorporated by reference to Exhibit 10.4 to the Company's
Quarterly Report on Form 10-Q ended June 30, 2013.
Second Amendment To Third Amended And Restated Unsecured Master Loan Agreement, dated June
26, 2013 by and among Ramco-Gershenson Properties, L.P. and KeyBank National Association
incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q ended
September 30, 2013.
Third Amendment To Third Amended And Restated Unsecured Master Loan Agreement, dated August
27, 2013 by and among Ramco-Gershenson Properties, L.P. and KeyBank National Association
incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q ended
September 30, 2013.
$100 Million Note Purchase Agreement, by Ramco-Gershenon Properties, L.P. dated May 28, 2014
incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q ended June
30, 2014.
Unsecured Term Loan Agreement, dated May 29, 2014 among Ramco-Gershenson Properties, L.P., as
borrower, Ramco-Gershenson Properties Trust, as a Guarantor, Capital One, National Association, as
a Bank, The Other Banks Which Are A Party To This Agreement, The Other Banks Which May Become
Parties To This Agreement, Capital One, National Association, as Administrative Agent, and Capital
One, National Association, as Sole Lead Arranger and Sole Bookrunner incorporated by reference to
Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q ended June 30, 2014.
$100 Million Note Purchase Agreement, by Ramco-Gershenson Properties, L.P. dated September 8,
2014 incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q ended
September 30, 2014.
Fourth Amendment to Third Amended and Restated Unsecured Master Loan Agreement, dated October
10, 2014 by and among Ramco-Gershenson Properties, L.P. and KeyBank National Association
incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q ended
September 30, 2014.
Employment Agreement dated April 20, 2015, between Ramco-Gershenson Properties Trust and John
Hendrickson incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
dated April 23, 2015.
Agreement for Partial Liquidation of Joint Venture between Ramco HMW LLC, Ramco Gershenson
Properties, L.P., Ramco 450 Venture LLC and the State Board of Administration of Florida dated June
29, 2015 incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
ended June 30, 2015.
44
10.31
10.32
12.1*
21.1*
23.1*
31.1*
31.2*
32.2*
101.INS(1)
101.SCH(1)
101.CAL(1)
101.DEF(1)
101.LAB(1)
101.PRE(1)
$100 Million Note Purchase Agreement, by Ramco-Gershenson Properties, L.P. dated September 30,
2015 incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q ended
September 30, 2015.
Employment Agreement, dated December 16, 2015, between Ramco-Gershenson Properties Trust and
Geoffrey Bedrosian incorporated by reference to Exhibit 10.1 to the Company's Current Report on
Form 8-K dated December 18, 2015.
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Share Dividends.
Subsidiaries
Consent of Grant Thornton LLP.
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
XBRL Instance Document
XBRL Taxonomy Extension Schema
XBRL Extension Calculation
XBRL Extension Definition
XBRL Taxonomy Extension Label
XBRL Taxonomy Extension Presentation
* Filed herewith
** Management contract or compensatory plan or arrangement
(1) Pursuant to Rule 406T of Regulations S-T, these interactive data files are deemed not filed or part of a registration statement or
prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Sections 18 of the
Securities Exchange Act of 1924 and otherwise are not subject to liability thereunder.
15(b) The exhibits listed at item 15(a)(3) that are noted ‘filed herewith’ are hereby filed with this report.
15(c) The financial statement schedules listed at Item 15(a)(2) are hereby filed with this report.
45
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Dated: February 29, 2016
By: /s/ Dennis E. Gershenson
Ramco-Gershenson Properties Trust
Dennis E. Gershenson,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on
behalf of registrant and in the capacities and on the dates indicated.
Dated:
February 29, 2016
By: /s/ Stephen R. Blank
Stephen R. Blank,
Chairman
Dated:
February 29, 2016
By: /s/ Dennis E. Gershenson
Dennis E. Gershenson,
Trustee, President and Chief Executive Officer
(Principal Executive Officer)
Dated:
February 29, 2016
By: /s/ Alice M. Connell
Alice M. Connell
Trustee
Dated:
February 29, 2016
By: /s/ Arthur H. Goldberg
Arthur H. Goldberg,
Trustee
Dated:
February 29, 2016
By: /s/ David J. Nettina
David J. Nettina,
Trustee
Dated:
February 29, 2016
By: /s/ Joel M. Pashcow
Joel M. Pashcow,
Trustee
Dated:
February 29, 2016
By: /s/ Mark K. Rosenfeld
Mark K. Rosenfeld,
Trustee
Dated:
February 29, 2016
By: /s/ Laurie M. Shahon
Laurie M. Shahon,
Trustee
Dated:
February 29, 2016
By: /s/ Michael A. Ward
Michael A. Ward,
Trustee
Dated:
February 29, 2016
By: /s/ Geoffrey Bedrosian
Geoffrey Bedrosian,
Chief Financial Officer and Secretary
(Principal Financial Officer)
Dated:
February 29, 2016
By: /s/ Deborah R. Cheek
Deborah R. Cheek
Chief Accounting Officer
(Principal Accounting Officer)
46
RAMCO-GERSHENSON PROPERTIES TRUST
Index to Consolidated Financial Statements
Consolidated Financial Statements:
Management Assessment Report on Internal Control over Financial Reporting
Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets - December 31, 2015 and 2014
Page
F-2
F-3
F-4
F-5
Consolidated Statements of Operations and Comprehensive Income (Loss) - Years Ended December 31, 2015, 2014, and 2013
F-6
Consolidated Statements of Shareholders’ Equity - Years Ended December 31, 2015, 2014, and 2013
Consolidated Statements of Cash Flows – Years Ended December 31, 2015, 2014, and 2013
Notes to Consolidated Financial Statements
Schedule to Consolidated Financial Statements
F-7
F-8
F-9
F-34
F-1
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining effective internal control over financial reporting as such term is
defined under Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended.
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and preparation of our consolidated financial statements for external purposes in accordance with generally accepted
accounting principles.
Internal control over financial reporting includes those policies and procedures that pertain to our ability to record, process,
summarize and report reliable financial data. Management recognizes that there are inherent limitations in the effectiveness of
any internal control and effective internal control over financial reporting can provide only reasonable assurance with respect to
financial statement preparation. Additionally, because of changes in conditions, the effectiveness of internal control over financial
reporting may vary over time.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management conducted an assessment of our internal controls over financial reporting as of December 31, 2015 using the
framework established in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control
– Integrated Framework. Based on this assessment, management has concluded that our internal control over financial reporting
was effective as of December 31, 2015.
Our independent registered public accounting firm, Grant Thornton LLP, has issued an attestation report on our internal control
over financial reporting. Their report appears on page F-3 of this Annual Report on Form 10-K.
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Trustees and Shareholders
Ramco-Gershenson Properties Trust
We have audited the internal control over financial reporting of Ramco-Gershenson Properties Trust (a Maryland corporation) and
subsidiaries (the “Company”) as of December 31, 2015, based on criteria established in the 2013 Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s
management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control
Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting
based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2015, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated financial statements of the Company as of and for the year ended December 31, 2015, and our report dated February 29,
2016 expressed an unqualified opinion on those financial statements.
/s/ GRANT THORNTON LLP
Southfield, Michigan
February 29, 2016
F-3
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Trustees and Shareholders
Ramco-Gershenson Properties Trust
We have audited the accompanying consolidated balance sheets of Ramco-Gershenson Properties Trust (a Maryland corporation)
and subsidiaries (the “Company”) as of December 31, 2015 and 2014, and the related consolidated statements of operations and
comprehensive income (loss), shareholders’ equity, and cash flows for each of the three years in the period ended December 31,
2015. Our audits of the basic consolidated financial statements included the financial statement schedule listed in the index
appearing under Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on
our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position
of Ramco-Gershenson Properties Trust and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and
their cash flows for each of the three years in the period ended December 31, 2015 in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information
set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Company’s internal control over financial reporting as of December 31, 2015, based on criteria established in the 2013 Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and
our report dated February 29, 2016 expressed an unqualified opinion.
As discussed in Note 2 to the consolidated financial statements, the Company adopted new accounting guidance in 2015 and 2014,
related to the presentation of deferred financing costs.
/s/GRANT THORNTON LLP
Southfield, Michigan
February 29, 2016
F-4
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
ASSETS
Income producing properties, at cost:
Land
Buildings and improvements
Less accumulated depreciation and amortization
Income producing properties, net
Construction in progress and land available for development or sale
Real estate held for sale
Net real estate
Equity investments in unconsolidated joint ventures
Cash and cash equivalents
Restricted cash
Accounts receivable, net
Acquired lease intangibles, net
Other assets, net
TOTAL ASSETS
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable, net
Capital lease obligation
Accounts payable and accrued expenses
Acquired lease intangibles, net
Other liabilities
Distributions payable
TOTAL LIABILITIES
Commitments and Contingencies
Ramco-Gershenson Properties Trust ("RPT") Shareholders' Equity:
Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual
Preferred Shares, (stated at liquidation preference $50 per share), 1,849 and 2,000 shares issued and
outstanding as of December 31, 2015 and 2014, respectively
Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 79,162 and 77,573 shares
issued and outstanding as of December 31, 2015 and 2014, respectively
Additional paid-in capital
Accumulated distributions in excess of net income
Accumulated other comprehensive loss
TOTAL SHAREHOLDERS' EQUITY ATTRIBUTABLE TO RPT
Noncontrolling interest
TOTAL SHAREHOLDERS' EQUITY
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
The accompanying notes are an integral part of these consolidated financial statements.
F-5
December 31,
2015
2014
$
$
$
392,352
1,792,129
(331,520)
1,852,961
60,166
453
1,913,580
4,325
6,644
8,708
18,705
88,819
87,890
2,128,671
1,083,711
1,108
44,480
64,193
10,035
18,807
1,222,334
341,388
1,592,644
(287,177)
1,646,855
74,655
—
1,721,510
28,733
9,335
8,163
11,997
77,045
87,549
1,944,332
917,658
1,828
44,232
54,278
10,106
17,951
1,046,053
92,427
100,000
792
1,156,345
(363,937)
(1,404)
884,223
22,114
906,337
2,128,671
$
776
1,130,262
(356,715)
(1,966)
872,357
25,922
898,279
1,944,332
$
$
$
$
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except per share amounts)
Year Ended December 31,
2014
2013
2015
REVENUE
Minimum rent
Percentage rent
Recovery income from tenants
Other property income
Management and other fee income
TOTAL REVENUE
EXPENSES
Real estate taxes
Recoverable operating expense
Other non-recoverable operating expense
Depreciation and amortization
Acquisitions costs
General and administrative expense
Provision for impairment
TOTAL EXPENSES
OPERATING INCOME
OTHER INCOME AND EXPENSES
Other expense, net
Gain on sale of real estate
Earnings (loss) from unconsolidated joint ventures
Interest expense
Amortization of deferred financing fees
Gain on remeasurement of unconsolidated joint ventures
Gain (loss) on extinguishment of debt
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAX
Income tax provision
INCOME (LOSS) FROM CONTINUING OPERATIONS
DISCONTINUED OPERATIONS
Gain on sale of real estate
Income from discontinued operations
INCOME FROM DISCONTINUED OPERATIONS
NET INCOME (LOSS)
Net (income) loss attributable to noncontrolling partner interest
NET INCOME (LOSS) ATTRIBUTABLE TO RPT
Preferred share dividends
Preferred share conversion costs
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS
EARNINGS (LOSS) PER COMMON SHARE, BASIC
Continuing operations
Discontinued operations
EARNINGS (LOSS) PER COMMON SHARE, DILUTED
Continuing operations
Discontinued operations
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic
Diluted
OTHER COMPREHENSIVE INCOME (LOSS)
Net income (loss)
Other comprehensive income (loss):
Gain (loss) on interest rate swaps
Comprehensive income (loss)
Comprehensive (income) loss attributable to noncontrolling interest
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO RPT
$
$
$
$
$
$
$
$
183,198
539
61,561
4,739
1,753
251,790
38,737
30,604
4,271
89,439
644
20,077
2,521
186,293
65,497
(624)
17,570
17,696
(40,778)
(1,433)
7,892
1,414
67,234
(339)
66,895
—
—
—
66,895
(1,786)
65,109
(6,838)
(500)
57,771
0.73
—
0.73
0.73
—
0.73
$
$
$
$
$
$
$
157,691
264
52,828
5,521
2,059
218,363
31,474
27,319
3,633
81,182
1,890
21,670
27,865
195,033
23,330
(689)
10,857
75
(33,742)
(1,446)
117
(860)
(2,358)
(54)
(2,412)
—
—
—
(2,412)
48
(2,364)
(7,250)
—
(9,614) $
(0.14) $
—
(0.14) $
(0.14) $
—
(0.14) $
124,169
209
40,018
3,337
2,335
170,068
23,161
20,194
3,006
56,305
1,322
20,951
9,669
134,608
35,460
(965)
4,279
(4,759)
(29,075)
(1,447)
5,282
(340)
8,435
(64)
8,371
2,120
971
3,091
11,462
(465)
10,997
(7,250)
—
3,747
0.01
0.05
0.06
0.01
0.05
0.06
78,848
79,035
72,118
72,118
59,336
59,728
66,895
$
(2,412) $
11,462
570
67,465
(1,794)
65,671
$
(2,115)
(4,527)
113
(4,414) $
5,520
16,982
(660)
16,322
The accompanying notes are an integral part of these consolidated financial statements.
F-6
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share amounts)
Shareholders' Equity of Ramco-Gershenson Properties
Trust
Preferred
Shares
Common
Shares
Additional
Paid-in
Capital
Accumulated
Distributions
in Excess of
Net Income
Accumulated
Other
Comprehensive
(Loss) Income
Noncontrolling
Interest
Total
Shareholders’
Equity
$
683,609
$
(249,070) $
(5,241) $
30,049
$
559,832
Balance, December 31, 2012
Issuance of common shares
Conversion and redemption of OP unit holders
Share-based compensation and other expense,
net of shares withheld for employee taxes
Dividends declared to common shareholders
Dividends declared to preferred shareholders
Distributions declared to noncontrolling interests
Dividends paid on restricted shares
Other comprehensive income adjustment
Net income
Balance, December 31, 2013
Issuance of common shares
Conversion and redemption of OP unit holders
Share-based compensation and other expense,
net of shares withheld for employee taxes
Dividends declared to common shareholders
Dividends declared to preferred shareholders
Distributions declared to noncontrolling interests
Dividends declared to deferred shares
Other comprehensive loss adjustment
Net loss
Balance, December 31, 2014
Issuance of common shares
Conversion and redemption of OP unit holders
Conversion of preferred shares
Share-based compensation and other expense,
net of shares withheld for employee taxes
Dividends declared to common shareholders
Dividends declared to preferred shareholders
Distributions declared to noncontrolling interests
Dividends declared to deferred shares
Other comprehensive income adjustment
Net income
$ 100,000
$
—
—
—
—
—
—
—
—
—
100,000
—
—
—
—
—
—
—
—
—
485
181
—
1
—
—
—
—
—
—
667
107
—
2
—
—
—
—
—
—
273,568
—
2,006
—
—
—
—
—
—
959,183
170,265
—
814
—
—
—
—
—
—
—
—
—
(44,172)
(7,250)
—
(342)
—
10,997
(289,837)
—
—
—
(56,905)
(7,250)
—
(359)
—
(2,364)
100,000
776
1,130,262
(356,715)
—
—
(7,573)
—
—
—
—
—
—
—
9
—
5
2
—
—
—
—
—
—
17,101
—
7,568
1,414
—
—
—
—
—
—
—
—
(500)
—
(64,656)
(6,838)
—
(337)
—
65,109
—
—
—
—
—
—
—
5,325
—
84
—
—
—
—
—
—
—
(2,050)
—
(1,966)
—
—
—
—
—
—
—
—
562
—
—
(1,243)
—
—
—
(1,603)
—
195
465
27,863
—
(84)
—
—
—
(1,744)
—
(65)
(48)
25,922
—
(3,826)
—
—
—
—
(1,776)
—
8
273,749
(1,243)
2,007
(44,172)
(7,250)
(1,603)
(342)
5,520
11,462
797,960
170,372
(84)
816
(56,905)
(7,250)
(1,744)
(359)
(2,115)
(2,412)
898,279
17,110
(3,826)
(500)
1,416
(64,656)
(6,838)
(1,776)
(337)
570
1,786
66,895
Balance, December 31, 2015
$ 92,427
$
792
$ 1,156,345
$
(363,937) $
(1,404) $
22,114
$
906,337
The accompanying notes are an integral part of these consolidated financial statements.
F-7
RAMCO-GERSHENSON PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2014
2013
2015
OPERATING ACTIVITIES
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
$
66,895
$
(2,412) $
11,462
Depreciation and amortization, including discontinued operations
Amortization of deferred financing fees, including discontinued operations
Income tax provision
(Earnings) loss from unconsolidated joint ventures
Distributions received from operations of unconsolidated joint ventures
Provision for impairment, including discontinued operations
(Gain) loss on extinguishment of debt, including discontinued operations
Gain on remeasurement of unconsolidated joint ventures
Gain on sale of real estate, including discontinued operations
Amortization of premium on mortgages and notes payable, net
Share-based compensation expense
Long-term incentive cash compensation (benefit) expense
Changes in assets and liabilities:
Accounts receivable, net
Other assets, net
Accounts payable, accrued expenses and other liabilities
Net cash provided by operating activities
INVESTING ACTIVITIES
Acquisitions of real estate, net of assumed debt
Development and capital improvements
Net proceeds from sales of real estate
Distributions from sale of joint venture property
(Increase) decrease in restricted cash
Investment in unconsolidated joint ventures
Net cash used in investing activities
FINANCING ACTIVITIES
Proceeds on mortgages and notes payable
Repayment of mortgages and notes payable
Net proceeds (repayments) on revolving credit facility
Payment of debt extinguishment costs
Payment of deferred financing costs
Proceeds from issuance of common shares
Repayment of capitalized lease obligation
Conversion of operating partnership units for cash
Conversion of preferred shares
Dividends paid to preferred shareholders
Dividends paid to common shareholders
Distributions paid to operating partnership unit holders
Net cash provided by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY
Assumption of debt related to acquisitions
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest (net of capitalized interest of $1,613, $1,862 and $1,161 in 2015, 2014
and 2013, respectively)
Cash paid for federal income taxes
The accompanying notes are an integral part of these consolidated financial statements.
F-8
89,439
1,433
339
(17,696)
1,744
2,521
(1,414)
(7,892)
(17,570)
(1,687)
1,888
(271)
(6,708)
4,529
(10,392)
105,158
81,182
1,446
54
(75)
1,881
27,865
860
(117)
(10,857)
(1,138)
2,093
2,527
(2,349)
5,420
4,212
110,592
$
$
$
$
$
(152,923) $
(60,923)
45,960
14,098
(545)
—
(154,333)
(264,414) $
(80,742)
34,156
—
(4,709)
(14)
(315,723)
$
$
$
$
150,000
(92,305)
50,000
—
(522)
17,110
(720)
(3,826)
(500)
(6,977)
(63,972)
(1,804)
46,484
(2,691)
9,335
6,644
60,048
42,898
—
275,000
(153,795)
(17,000)
—
(2,379)
170,372
(328)
(84)
—
(7,250)
(54,149)
(1,716)
208,671
3,540
5,795
9,335
58,634
35,507
—
$
$
$
$
56,841
1,447
64
4,759
3,232
9,669
—
(5,282)
(6,399)
(541)
2,151
1,498
(1,672)
(689)
9,043
85,583
(342,189)
(44,625)
33,916
1,687
438
(4,979)
(355,752)
185,000
(121,817)
(13,000)
(340)
(1,889)
274,295
(337)
(1,243)
—
(7,250)
(40,108)
(1,580)
271,731
1,562
4,233
5,795
158,767
30,631
—
RAMCO-GERSHENSON PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2015, 2014 and 2013
1. Organization and Summary of Significant Accounting Policies
Ramco-Gershenson Properties Trust, together with our subsidiaries (the “Company”), is a real estate investment trust (“REIT”)
engaged in the business of owning, developing, redeveloping, acquiring, managing and leasing large multi-anchored shopping
centers primarily in a dozen of the largest metropolitan markets in the United States. Our property portfolio consists of 70 wholly
owned shopping centers and one office building comprising approximately 15.3 million square feet. We also have ownership
interests ranging from 7% to 30% in four joint ventures, three of which own a single shopping center. Our joint ventures are
reported using equity method accounting. We earn fees from the joint ventures for managing, leasing and redeveloping the shopping
centers they own. We also own interests in several land parcels that are available for development or sale. Most of our properties
are anchored by supermarkets and/or national chain stores. The Company's credit risk, therefore, is concentrated in the retail
industry.
We made an election to qualify as a REIT for federal income tax purposes. Accordingly, we generally will not be subject to federal
income tax, provided that we annually distribute at least 90% of our taxable income to our shareholders and meet other conditions.
Principles of Consolidation and Estimates
The consolidated financial statements include the accounts of us and our majority owned subsidiary, the Operating Partnership,
Ramco-Gershenson Properties, L.P. (97.6%, 97.2% and 96.8% owned by us at December 31, 2015, 2014 and 2013, respectively),
and all wholly-owned subsidiaries, including entities in which we have a controlling interest or have been determined to be the
primary beneficiary of a variable interest entity (“VIE”). The presentation of consolidated financial statements does not itself
imply that assets of any consolidated entity (including any special-purpose entity formed for a particular project) are available to
pay the liabilities of any other consolidated entity, or that the liabilities of any other consolidated entity (including any special-
purpose entity formed for a particular project) are obligations of any other consolidated entity. Investments in real estate joint
ventures over which we have the ability to exercise significant influence, but for which we do not have financial or operating
control, are accounted for using the equity method of accounting. Accordingly, our share of the earnings (loss) of these joint
ventures is included in consolidated net income (loss). All intercompany transactions and balances are eliminated in consolidation.
We own 100% of the non-voting and voting common stock of Ramco-Gershenson, Inc. (“Ramco”), and therefore it is included
in the consolidated financial statements. Ramco has elected to be a taxable REIT subsidiary for federal income tax
purposes. Ramco provides property management services to us and to other entities, including our real estate joint venture partners.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying
values of assets and liabilities and reported amounts that are not readily apparent from other sources. Actual results could differ
from those estimates.
Reclassifications and Revisions
Certain reclassifications of prior period amounts have been made in the consolidated financial statements and footnotes in order
to conform to the current presentation.
In previously filed quarterly reports, the Company erroneously calculated comprehensive income attributable to noncontrolling
interest. Accordingly, the Consolidated Statements of Comprehensive Income have been revised. The revision resulted in a
decrease to previously reported comprehensive income attributable to RPT as follows:
F-9
Year Ended
December 31,
2014
Year Ended
December 31,
2013
Comprehensive loss (income) attributable to non controlling interest as previously reported $
$
Comprehensive loss (income) attributable to non controlling interest as revised
(in thousands)
65
113
$
$
(195)
(660)
Comprehensive (loss) income attributable to RPT as previously reported
Comprehensive (loss) income attributable to RPT as revised
$
$
(4,462) $
(4,414) $
16,787
16,322
There was no impact to the Consolidated Balance Sheets, Consolidated Statements of Operations and Consolidated Statements
of Shareholders’ Equity or to the Company’s cash position.
Revenue Recognition and Accounts Receivable
Our shopping center space is generally leased to retail tenants under leases that are classified as operating leases. We recognize
minimum rents using the straight-line method over the terms of the leases commencing when the tenant takes possession of the
space or when construction of landlord funded improvements is substantially complete. Certain of the leases also provide for
contingent percentage rental income which is recorded on an accrual basis once the specified target that triggers this type of income
is achieved. The leases also provide for reimbursement from tenants for common area maintenance (“CAM”), insurance, real
estate taxes and other operating expenses ("Recovery Income"). The majority of our Recovery Income is estimated and recognized
as revenue in the period the recoverable costs are incurred or accrued. Revenues from management, leasing, and other fees are
recognized in the period in which the services have been provided and the earnings process is complete. Lease termination income
is recognized when a lease termination agreement is executed by the parties and the tenant vacates the space. When a lease is
terminated early but the tenant continues to control the space under a modified lease agreement, the lease termination fee is
generally recognized evenly over the remaining term of the modified lease agreement.
Current accounts receivable from tenants primarily relate to contractual minimum rent, percentage rent and Recovery Income.
We provide for bad debt expense based upon the allowance method of accounting. We monitor the collectability of our accounts
receivable from specific tenants on an ongoing basis, analyze historical bad debts, customer creditworthiness, current economic
trends and changes in tenant payment terms when evaluating the adequacy of the allowance for bad debts. Allowances are taken
for those balances that we have reason to believe may be uncollectible. When tenants are in bankruptcy, we make estimates of
the expected recovery of pre-petition and post-petition claims. The period to resolve these claims can exceed one
year. Management believes the allowance for doubtful accounts is adequate to absorb currently estimated bad debts. However,
if we experience bad debts in excess of the allowance we have established, our operating income would be reduced. At
December 31, 2015 and 2014, our accounts receivable were $18.7 million and $12.0 million, respectively, net of allowances for
doubtful accounts of $2.8 million and $2.3 million, respectively.
In addition, many of our leases contain non-contingent rent escalations for which we recognize income on a straight-line basis
over the non-cancelable lease term. This method results in rental income in the early years of a lease being higher than actual
cash received, creating a straight-line rent receivable asset which is included in the “Other assets, net” line item in our consolidated
balance sheets. We review our unbilled straight-line rent receivable balance to determine the future collectability of revenue that
will not be billed to or collected from tenants due to early lease terminations, lease modifications, bankruptcies and other
factors. Our evaluation is based on our assessment of tenant credit risk changes indicating that expected future straight-line rent
may not be realized. Depending on circumstances, we may provide a reserve against the previously recognized straight-line rent
receivable asset for a portion, up to its full value, that we estimate may not be received. The balance of straight-line rent receivable
at December 31, 2015 and 2014, net of allowances was $17.4 million and $15.8 million, respectively. To the extent any of the
tenants under these leases become unable to pay their contractual cash rents, we may be required to write down the straight-line
rent receivable from those tenants, which would reduce our operating income.
F-10
Real Estate
Real estate assets that we own directly are stated at cost less accumulated depreciation. Depreciation is computed using the straight-
line method. The estimated useful lives for computing depreciation are generally 10 – 40 years for buildings and improvements
and 5 – 30 years for parking lot surfacing and equipment. We capitalize all capital improvement expenditures associated with
replacements and improvements to real property that extend its useful life and depreciate them over their estimated useful lives
ranging from 15 – 25 years. In addition, we capitalize qualifying tenant leasehold improvements and depreciate them over the
lesser of the useful life of the improvements or the term of the related tenant lease. We also capitalize direct internal and external
costs of procuring leases and amortize them over the base term of the lease. If a tenant vacates before the expiration of its lease,
we charge unamortized leasing costs and undepreciated tenant leasehold improvements of no future value to expense. We charge
maintenance and repair costs that do not extend an asset’s life to expense as incurred.
Sale of a real estate asset is recognized when it is determined that the sale has been consummated, the buyer’s initial and continuing
investment is adequate, our receivable, if any, is not subject to future subordination, and the buyer has assumed the usual risks
and rewards of ownership of the asset. We will classify properties as held for sale when executed purchase and sales agreement
contingencies have been satisfied thereby signifying that the sale is guaranteed and legally binding.
We allocate the costs of acquisitions to assets acquired and liabilities assumed based on estimated fair values, replacement costs
and appraised values. The purchase price of the acquired property is allocated to land, building, improvements and identifiable
intangibles such as in-place leases, above/below market leases, out-of-market assumed mortgages, and gain on purchase, if any. The
value allocated to above/below market leases is amortized over the related lease term and included in rental income in our
consolidated statements of operations. Should a tenant terminate its lease prior to its stated expiration, all unamortized amounts
relating to that lease would be written off.
Real estate also includes costs incurred in the development of new operating properties and the redevelopment of existing operating
properties. These properties are carried at cost and no depreciation is recorded on these assets until the commencement of rental
revenue or no later than one year from the completion of major construction. These costs include pre-development costs directly
identifiable with the specific project, development and construction costs, interest, real estate taxes and insurance. Interest is
capitalized on land under development and buildings under construction based on the weighted average rate applicable to our
borrowings outstanding during the period and the weighted average balance of qualified assets under development/redevelopment
during the period. Indirect project costs associated with development or construction of a real estate project are capitalized until
the earlier of one year following substantial completion of construction or when the property becomes available for occupancy.
The capitalized costs associated with development and redevelopment projects are depreciated over the useful life of the
improvements. If we determine a development or redevelopment project is no longer probable, we expense all capitalized costs
which are not recoverable.
It is our policy to start vertical construction on new development projects only after the project has received entitlements, significant
anchor leasing commitments, construction financing and joint venture partner commitments, if appropriate. We are in the
entitlement and pre-leasing phases at our development projects.
Accounting for the Impairment of Long-Lived Assets
We review our investment in real estate, including any related intangible assets, for impairment on a property-by-property basis
whenever events or changes in circumstances indicate that the carrying value of the property may not be recoverable. These
changes in circumstances include, but are not limited to, changes in occupancy, rental rates, tenant sales, net operating income,
real estate values and expected holding period. The viability of all projects under construction or development, including those
owned by unconsolidated joint ventures, are regularly evaluated under applicable accounting requirements, including requirements
relating to abandonment of assets or changes in use. To the extent a project, or individual components of the project, are no longer
considered to have value, the related capitalized costs are charged against operations.
Impairment provisions resulting from any event or change in circumstances, including changes in management’s intentions or
management’s analysis of varying scenarios, could be material to our consolidated financial statements.
We recognize an impairment of an investment in real estate when the estimated undiscounted cash flow is less than the net carrying
value of the property. If it is determined that an investment in real estate is impaired, then the carrying value is reduced to the
estimated fair value as determined by cash flow models and discount rates or comparable sales in accordance with our fair value
measurement policy.
F-11
In the first quarter 2015, we recorded an impairment provision totaling $2.5 million related to developable land that was subsequently
sold in the second quarter of 2015. The adjustment was triggered by an unforeseen increase in development costs and changes in
the associated sales price assumptions.
Investments in Real Estate Joint Ventures
We have four equity investments in unconsolidated joint venture entities in which we own 30% or less of the total ownership
interest. Because we can influence but not make significant decisions without our partners' approval, these investments are
accounted for under the equity method of accounting. We provide leasing, development, asset and property management services
to these joint ventures for which we are paid fees. Refer to Note 7 of the notes to the consolidated financial statements for further
information regarding our equity investments in unconsolidated joint ventures.
We review our equity investments in unconsolidated entities for impairment on a venture-by-venture basis whenever events or
changes in circumstances indicate that the carrying value of the equity investment may not be recoverable. In testing for impairment
of these equity investments, we primarily use cash flow models, discount rates, and capitalization rates to estimate the fair value
of properties held in joint ventures, and mark the debt of the joint ventures to market. Considerable judgment by management is
applied when determining whether an equity investment in an unconsolidated entity is impaired and, if so, the amount of the
impairment. Changes to assumptions regarding cash flows, discount rates, or capitalization rates could be material to our
consolidated financial statements.
There were no impairment provisions on our equity investments in joint ventures recorded in 2015.
Other Assets, net
Other assets consist primarily of acquired lease intangibles, straight-line rent receivable, deferred leasing costs, deferred financing
costs related to our credit facility and prepaid expenses. Other assets also include the fair value of in-place public improvement
fee income and real estate tax exemption agreements associated with two properties acquired in 2014. Deferred financing and
leasing costs are amortized using the straight-line method over the terms of the respective agreements. Should a tenant terminate
its lease, the unamortized portion of the leasing cost is expensed. Unamortized financing costs are expensed when the related
agreements are terminated before their scheduled maturity dates. We review our unbilled straight-line rent receivable balance to
determine the future collectability of revenue that will not be billed to or collected from tenants due to early lease terminations,
lease modifications, bankruptcies and other factors. Our evaluation is based on our assessment of tenant credit risk changes
indicating that expected future straight-line rent may not be realized. Depending on circumstances, we may provide a reserve
against the previously recognized straight-line rent receivable asset for a portion, up to its full value, that we estimate may not be
received.
Cash and Cash Equivalents
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash balances
in individual banks may exceed the federally insured limit by the Federal Deposit Insurance Corporation (the “FDIC”). As of
December 31, 2015, we had $11.2 million in excess of the FDIC insured limit.
Recognition of Share-based Compensation Expense
We grant share-based compensation awards to employees and trustees in the form of restricted common shares and in the past we
have granted stock options to employees and trustees. Our share-based award costs are equal to each grant date fair value and are
recognized over the service periods of the awards using the graded vesting method. See Note 16 of the notes to the consolidated
financial statements for further information regarding our share based compensation.
Income Tax Status
We made an election to qualify, and believe our operating activities permit us to qualify as a REIT for federal income tax
purposes. Accordingly, we generally will not be subject to federal income tax, provided that we distribute at least 90% of our
taxable income annually to our shareholders and meet other conditions. We are obligated to pay state taxes, generally consisting
of franchise or gross receipts taxes in certain states which are not material to our consolidated financial statements.
Certain of our operations, including property and asset management, as well as ownership of certain land parcels, are conducted
through taxable REIT subsidiaries, (“TRSs”) which are subject to federal and state income taxes. During the years ended
F-12
December 31, 2015, 2014, and 2013, we sold various properties and land parcels at a gain, resulting in both a federal and state
tax liability. See Note 17 of the notes to the consolidated financial statements for further information regarding income taxes.
Variable Interest Entities
Certain entities that do not have sufficient equity at risk for the entity to finance its activities without additional subordinated
financial support from other parties or in which equity investors do not have the characteristics of a controlling financial interest
qualify as VIEs. VIEs are required to be consolidated by their primary beneficiary. The primary beneficiary of a VIE has both
(i) the power to direct the activities that most significantly impact economic performance of the VIE, and (ii) the obligation to
absorb losses or the right to receive benefits that could potentially be significant to the VIE.
We have evaluated our investments in joint ventures and determined that the joint ventures do not meet the requirements of a VIE
and, therefore, consolidation of these ventures is not required. Accordingly, these investments are accounted for using the equity
method.
Noncontrolling Interest in Subsidiaries
There are third parties who have certain noncontrolling interests in the Operating Partnership that are exchangeable for our common
shares on a 1:1 basis or cash, at our election. Noncontrolling interest is classified as a separate component of equity outside of
the permanent equity section of our consolidated balance sheets. Consolidated net income and comprehensive income includes
the noncontrolling interest’s share. The calculation of earnings per share is based on income available to common shareholders.
Segment Information
Our primary business is the ownership, management, redevelopment, development and operation of retail shopping centers. We
do not distinguish our primary business or group our operations on a geographical basis for purposes of measuring performance. We
review operating and financial data for each property on an individual basis and define an operating segment as an individual
property. The individual properties have been aggregated into one reportable segment based upon their similarities with regard
to both the nature and economics of the centers, tenants and operational processes, as well as long-term financial performance. No
one individual property constitutes more than 10% of our revenue or property operating income and none of our shopping centers
are located outside the United States. Accordingly, we have a single reportable segment for disclosure purposes.
2. Recent Accounting Pronouncements
In April 2015, the Financial Accounting Standards Board ("FASB") updated Accounting Standards Codification ("ASC") Topic
835 "Interest" with Accounting Standards Update ("ASU") No. 2015-03, "Interest - Imputation of Interest - Simplifying the
Presentation of Debt Issuance Costs." ASU 2015-03 modifies the treatment of debt issuance costs from a deferred charge to a
deduction of the carrying value of the financial liability. ASU 2015-03 is effective for periods beginning after December 15, 2015,
with early adoption permitted and retrospective application. In August 2015, the FASB issued an amendment to ASU 2015-03
pursuant to an SEC staff announcement which addresses the presentation and subsequent measurement of debt issuance costs
associated with line of credit arrangements. We early adopted the provisions of ASU 2015-03 beginning with the period ended
December 31, 2015, and have applied the provisions retrospectively. See Note 9 of the notes to the consolidated financial statements
for further information related to the adoption this standard.
In February 2015, the FASB updated ASC Topic 810 "Consolidation" with ASU 2015-02, "Amendments to the Consolidation
Analysis." ASU 2015-02 affects reporting entities that are required to evaluate whether they should consolidate certain legal
entities. ASU 2015-02 modifies the evaluation of whether limited partnerships and similar legal entities are Variable Interest
Entities ("VIEs") or voting interest entities, eliminates the presumption that a general partner should consolidate a limited
partnership and affects the consolidation analysis of reporting entities that are involved in VIEs, particularly those that have fee
arrangements and related party relationships. ASU 2015-02 is effective for annual reporting periods (including interim periods
within those periods), beginning after December 15, 2015. Early adoption is permitted. We believe the adoption of this guidance
will not have a material effect on our consolidated financial statements.
In May 2014, the FASB issued ASU 2014-09 "Revenue from Contract with Customers" as a new Topic, ASC Topic 606. The
objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from
contracts with customers and it will supersede most of the existing revenue recognition guidance, including industry-specific
guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. In applying the new standard, companies will perform a five-step analysis of transactions to determine when and how
revenue is recognized. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics
F-13
in the FASB ASC. Adoption shall be applied using either a full retrospective or modified retrospective approach. In July, the
FASB issued a one year deferral of the effective date making it effective for annual reporting periods (including interim periods
within those periods) beginning after December 15, 2017 while also providing for early adoption, but not before the original
effective date of December 15, 2016. We are currently assessing the impact the adoption of this standard may have on our
consolidated financial statements.
3. Real Estate
Included in our net real estate are income producing shopping center properties that are recorded at cost less accumulated
depreciation and amortization, construction in process and land available for development or sale.
Following is the detail of the construction in progress and land available for development or sale as of December 31, 2015 and
2014:
Construction in progress
Land available for development
Land available for sale
December 31,
2015
2014
(In thousands)
$
Total $
20,603
28,503
11,060
60,166
$
$
25,667
27,167
21,821
74,655
Construction in progress represents existing development, redevelopment and tenant build-out projects. When projects are
substantially complete and ready for their intended use, balances are transferred to land or building and improvements as appropriate.
Land available for development or sale includes real estate projects where vertical construction has yet to commence, but which
have been identified by us and are available for future development when market conditions dictate the demand for a new shopping
center. At December 31, 2015, we had three projects under pre-development.
F-14
4. Property Acquisitions and Dispositions
Acquisitions
The following table provides a summary of our acquisitions during 2015 and 2014:
Property Name
Location
2015
Millennium Park (1)
Livonia, MI
Spring Meadows - Kroger Building
Holland, OH
GA, IL, OH, & MD
Jackson, MI
Novi, MI
Gaines Township, MI
Lakeland, FL
Ramco 450 - 6 Income Producing
Properties (1)
Jackson Plaza
West Oaks II - Petco parcel
Total income producing acquisitions
Gaines Marketplace
Lakeland Park Center
Total land acquisitions
Total acquisitions
2014
Front Range Village
Fort Collins, CO
Buttermilk Towne Center
Crescent Springs (Cincinnati), KY
Woodbury Lakes
Woodbury (Minneapolis), MN
Bridgewater Falls Shopping Center
Hamilton (Cincinnati), OH
Total income producing acquisitions
The Shoppes at Fox River
Waukesha (Milwaukee), WI
Total land acquisitions
Total acquisitions
GLA
Acreage
Date
Acquired
Purchase
Price
Debt
(In thousands)
(In thousands)
Gross
273
51
1,126
15
26
1,491
N/A
N/A
1,491
459
278
305
504
1,546
N/A
1,546
N/A
N/A
N/A
N/A
N/A
1.9
1.6
3.5
3.5
N/A
N/A
2.4
N/A
2.4
9.9
9.9
12.3
08/15/15
$
47,000
$
08/06/15
4,110
—
—
07/21/15
06/22/15
06/10/15
02/12/15
01/23/15
191,090
60,048
5,000
5,500
—
—
252,700
60,048
1,000
$
475
1,475
—
—
—
$
254,175
$
60,048
09/04/14
$
128,250
$
08/22/14
07/22/14
07/10/14
09/08/14
41,900
66,200
85,542
321,892
1,216
1,216
—
—
—
58,634
58,634
—
—
$
323,108
$
58,634
(1) Acquired from related parties. See note 1 to the fair value of the acquisitions table following.
F-15
Dispositions
unencumbered:
Property Name
2015
Horizon Village
Cocoa Commons
Conyers Crossing
Pursuant to the criteria established under ASC Topic 360 we will classify properties as held for sale when executed purchase and
sales agreement contingencies have been satisfied thereby signifying that the sale is legally binding. Refer to Note 1 under Real
Estate for additional information regarding the classification criteria. As of December 31, 2015, we had one parcel of land classified
as held for sale which was sold in January 2016.
The following table provides a summary of our disposition activity during 2015 and 2014. All of the properties disposed of were
Location
GLA
Acreage
Date Sold
(In thousands)
Gross
Sales
Price
Gain (loss)
on Sale
(In thousands)
Total income producing dispositions
The Towne Center at Aquia - Commercial /
Residential Outparcels
Taylors Square - Outparcel
Suwanee, GA
Cocoa, FL
Conyers, GA
Stafford, VA
Taylors, SC
Gaines Marketplace-Target and Shell Oil Parcels
Gaines Township, MI
97
90
170
357
35
N/A
N/A
12/23/15
$
9,300
$
N/A
N/A
1.3
1.3
32.8
0.6
11.3
11/19/15
09/30/15
05/29/15
04/22/15
02/12/15
12,000
9,750
31,050
13,350
250
5,150
1,268
2,420
4,536
8,224
495
(16)
3,196
The total aggregate fair value of the acquisitions was allocated and is reflected in the following table in accordance with accounting
3,675
guidance for business combinations. At the time of acquisition, these assets and liabilities were considered Level 2 fair value
measurements:
The total aggregate fair value of the acquisitions was allocated and is reflected in the following table in accordance with accounting
Total outparcel dispositions
guidance for business combinations. At the time of acquisition, these assets and liabilities were considered Level 2 fair value
measurements:
Gain recognized on sale of joint venture real estate (1)
The total aggregate fair value of the acquisitions was allocated and is reflected in the following table in accordance with accounting
guidance for business combinations. At the time of acquisition, these assets and liabilities were considered Level 2 fair value
measurements:
18,750
5,671
44.7
—
35
Total dispositions
392
46.0
2015
2015
2015
December 31,
December 31,
December 31,
$
2014
2014
2014
49,800
Fraser, MI
Knoxville, TN
Lake Orion, MI
2014
Land
Land
Land
Lake Orion Plaza
Buildings and improvements
Buildings and improvements
Buildings and improvements
Northwest Crossing
Above market leases
Above market leases
Above market leases
Fraser Shopping Center
Lease origination costs
Lease origination costs
Lease origination costs
The Town Center at Aquia - El Gran Charro Outparcel
Other assets
Other assets
Other assets
Naples Town Center
Below market leases
Below market leases
Below market leases
Total income producing dispositions
Premium for above market interest rates on assumed debt
Longmont, CO
Harvest Junction Land - BioLife Outparcel
Capital lease obligation
Capital lease obligation
Parkway Land - Wendy's Outparcel
Total purchase price allocated
Total purchase price allocated
Total purchase price allocated
Parkway Land - Express Oil Change Outparcel
Mortgages notes assumed
Mortgages notes assumed
Mortgages notes assumed
Hartland Land - Taco Bell Outparcel
RPT's fair value of existing ownership (1)
RPT's fair value of existing ownership (1)
RPT's fair value of existing ownership (1)
Total land / outparcel dispositions
Net assets acquired
Net assets acquired
Net assets acquired
Total dispositions
Premium for above market interest rates on assumed debt
Capital lease obligation
Premium for above market interest rates on assumed debt
Jacksonville, FL
Jacksonville, FL
Stafford, VA
Naples, FL
Hartland Township, MI
$
$
141
$
124
68
6
135
474
N/A
N/A
N/A
N/A
$
$
474
$
1,730
3,250
15,550
10/21/14
04/17/14
05/28/14
10/17/14
(In thousands)
(In thousands)
(In thousands)
$
55,618
$
50,367
50,367
$
55,618
55,618
$
50,367
$
4,300
$
11/05/14
N/A
183,651
235,322
235,322
183,651
235,322
183,651
N/A
1,014
4,775
1,014
4,775
1,014
4,775
N/A
23,343
32,683
23,343
32,683
23,343
32,683
N/A
4,256
30,883
4,256
30,883
4,256
30,883
N/A
(18,836)
(16,616)
(18,836)
(16,616)
(18,836)
(16,616)
(1,180)
(6,830)
(1,180)
(6,830)
(1,180)
(6,830)
3.0
(1,167)
(1,167)
(1,167)
—
—
—
1.0
323,108
254,175
254,175
323,108
254,175
323,108
0.7
(60,048)
(58,634)
(58,634)
(60,048)
(58,634)
(60,048)
0.8
(41,204)
(41,204)
(41,204)
—
—
—
3,798
5.5
$
264,474
152,923
$
264,474
264,474
$
152,923
152,923
$
35,778
$
5.5
6/13/2014
12/5/2014
8/27/2014
5/1/2014
31,980
1,568
7,150
680
900
650
$
$
2013
2013
2013
17,570
$
$
122,963
122,963
122,963
288
$
406,743
406,743
406,743
7,082
6,977
6,977
6,977
186
50,577
50,577
50,577
123
10,196
10,196
10,196
2,343
(27,216)
(27,216)
(27,216)
10,022
(3,697)
(3,697)
(3,697)
371
—
—
—
258
566,543
566,543
566,543
215
(158,767)
(158,767)
(158,767)
(9)
(64,989)
(64,989)
(64,989)
835
342,787
342,787
342,787
10,857
$
(1) Represents the net proceeds from a joint venture property sale to a third party in October 2015.
(1) We acquired our partner's 80% interest in six properties owned by the Ramco 450 Venture LLC ("Ramco 450") and our
(1) We acquired our partner's 80% interest in six properties owned by the Ramco 450 Venture LLC ("Ramco 450") and our
(1) We acquired our partner's 80% interest in six properties owned by the Ramco 450 Venture LLC ("Ramco 450") and our
partner's 70% interest in Millennium Park owned by the Ramco/Lion Venture LP ("RLV").
partner's 70% interest in Millennium Park owned by the Ramco/Lion Venture LP ("RLV").
partner's 70% interest in Millennium Park owned by the Ramco/Lion Venture LP ("RLV").
Total revenue and net income for the 2015 acquisitions included in our consolidated statement of operations for the year ended
ended December 31, 2015 were $11.6 million and $1.4 million, respectively.
Total revenue and net income for the 2015 acquisitions included in our consolidated statement of operations for the year ended
ended December 31, 2015 were $11.6 million and $1.4 million, respectively.
Total revenue and net income for the 2015 acquisitions included in our consolidated statement of operations for the year ended
ended December 31, 2015 were $11.6 million and $1.4 million, respectively.
Unaudited Proforma Information
Unaudited Proforma Information
Unaudited Proforma Information
If the 2015 Acquisitions had occurred on January 1, 2014, our consolidated revenues and net income for the years ended
December 31, 2015 and 2014 would have been as follows:
If the 2015 Acquisitions had occurred on January 1, 2014, our consolidated revenues and net income for the years ended
December 31, 2015 and 2014 would have been as follows:
If the 2015 Acquisitions had occurred on January 1, 2014, our consolidated revenues and net income for the years ended
December 31, 2015 and 2014 would have been as follows:
F-17
December 31,
December 31,
2015
December 31,
2014
2014
2014
2015
2015
Consolidated revenue
Consolidated net income (loss) available to common shareholders
Consolidated revenue
Consolidated net income (loss) available to common shareholders
Consolidated revenue
Consolidated net income (loss) available to common shareholders
$
$
$
$
$
$
265,524
265,524
59,098
59,098
265,524
$
$
$
59,098
$
$
$
242,354
242,354
(7,494)
(7,494)
242,354
(7,494)
F-16
F-16
F-16
Dispositions
Pursuant to the criteria established under ASC Topic 360 we will classify properties as held for sale when executed purchase and
sales agreement contingencies have been satisfied thereby signifying that the sale is legally binding. Refer to Note 1 under Real
Estate for additional information regarding the classification criteria. As of December 31, 2015, we had one parcel of land classified
as held for sale which was sold in January 2016.
The following table provides a summary of our disposition activity during 2015 and 2014. All of the properties disposed of were
unencumbered:
Location
GLA
Acreage
Date Sold
(In thousands)
Gross
Sales
Price
Gain (loss)
on Sale
(In thousands)
Property Name
2015
Horizon Village
Cocoa Commons
Conyers Crossing
Total income producing dispositions
The Towne Center at Aquia - Commercial /
Residential Outparcels
Taylors Square - Outparcel
Suwanee, GA
Cocoa, FL
Conyers, GA
Stafford, VA
Taylors, SC
Gaines Marketplace-Target and Shell Oil Parcels
Gaines Township, MI
Total outparcel dispositions
97
90
170
357
35
N/A
N/A
35
N/A
N/A
1.3
1.3
32.8
0.6
11.3
44.7
12/23/15
$
9,300
$
11/19/15
09/30/15
05/29/15
04/22/15
02/12/15
12,000
9,750
31,050
13,350
250
5,150
18,750
1,268
2,420
4,536
8,224
495
(16)
3,196
3,675
Gain recognized on sale of joint venture real estate (1)
—
5,671
Total dispositions
2014
Lake Orion Plaza
Northwest Crossing
Fraser Shopping Center
Lake Orion, MI
Knoxville, TN
Fraser, MI
The Town Center at Aquia - El Gran Charro Outparcel
Stafford, VA
Naples Town Center
Naples, FL
Total income producing dispositions
Harvest Junction Land - BioLife Outparcel
Parkway Land - Wendy's Outparcel
Parkway Land - Express Oil Change Outparcel
Longmont, CO
Jacksonville, FL
Jacksonville, FL
Hartland Land - Taco Bell Outparcel
Hartland Township, MI
Total land / outparcel dispositions
Total dispositions
392
46.0
$
49,800
$
17,570
141
124
68
6
135
474
N/A
N/A
N/A
N/A
474
N/A
N/A
N/A
N/A
N/A
3.0
1.0
0.7
0.8
5.5
5.5
11/05/14
$
4,300
$
10/21/14
10/17/14
05/28/14
04/17/14
12/5/2014
8/27/2014
6/13/2014
5/1/2014
15,550
3,250
1,730
7,150
31,980
1,568
900
680
650
3,798
288
7,082
186
123
2,343
10,022
371
258
215
(9)
835
$
35,778
$
10,857
(1) Represents the net proceeds from a joint venture property sale to a third party in October 2015.
F-17
5. Discontinued Operations
During 2013 and prior to our adoption of ASU 2014-08, certain disposal transactions were considered discontinued operations.
A summary of the financial information for the discontinued operations is as follows:
Total revenue
Expenses:
Recoverable operating expenses and real estate taxes
Other non-recoverable property operating expenses
Depreciation and amortization
Operating income
Other expense
Gain on sale of properties
Income from discontinued operations
December 31,
2013
(In thousands)
2,175
$
570
2
537
1,066
(95)
2,120
3,091
$
6. Impairment Provisions
We established provisions for impairment for the following consolidated assets:
Land available for development or sale (1)
Income producing properties marketed for sale
Total
2015
$
$
2,521
—
2,521
$
$
Year Ended
December 31,
2014
(In thousands)
23,285
4,580
27,865
$
$
2013
327
9,342
9,669
(1)
In the first quarter of 2015, unforeseen increases in development costs and changes in associated sales price assumptions
related to land held for development or sale resulted in an impairment provision of $2.5 million. Refer to Note 1 under
Accounting for the Impairment of Long-Lived Assets for a discussion of inputs used in determining the fair value of long-
lived assets.
F-18
7. Equity Investments in Unconsolidated Joint Ventures
We have four joint venture agreements whereby we own between 7% and 30% of the equity in the joint venture. We and the joint
venture partners have joint approval rights for major decisions, including those regarding property operations. We cannot make
significant decisions without our partner’s approval. Accordingly, we account for our interest in the joint ventures using the equity
method.
Combined financial information of our unconsolidated joint ventures is summarized as follows:
Balance Sheets
ASSETS
Investment in real estate, net
Other assets
Total Assets
LIABILITIES AND OWNERS' EQUITY
Mortgage notes payable
Other liabilities
Owners' equity
Total Liabilities and Owners' Equity
RPT's equity investments in unconsolidated joint ventures
December 31,
2015
2014
(In thousands)
$
$
$
$
$
63,623
4,230
67,853
$
$
— $
750
67,103
67,853
$
394,740
23,102
417,842
170,194
7,625
240,023
417,842
4,325
$
28,733
Statements of Operations
2015
Total revenue
Total expenses
Gain on sale of real estate
Gain on extinguishment of debt
Income from continuing operations
Discontinued operations (1)
Gain (loss) on sale of real estate (2)
Income (loss) from discontinued operations
Income (loss) from discontinued operations
Net income (loss)
RPT's share of earnings (loss) from unconsolidated joint ventures
$
$
$
10,297
(7,113)
9,237
—
12,421
3,025
857
3,882
16,303
17,696
$
$
December 31,
2014
(In thousands)
14,038
$
(10,848)
740
529
4,459
$
—
(7,477)
(7,477)
(3,018) $
2013
14,674
(11,106)
—
—
3,568
(21,512)
1,157
(20,355)
(16,787)
75
$
(4,759)
(1) Discontinued operations reflects results of operations for those properties that meet the criteria for discontinued operations under ASU
2014-08.
(2) During 2015 Ramco 450 sold all of the properties from the joint venture. Ramco acquired its partners interest in six properties, our joint
venture partner acquired our interest in one property and the final property, Chester Springs, was sold to an unrelated third party. The
seven properties sold to partners in the venture generated a gain of $65.6 million, our share, $13.1 million, is recognized in the earnings
(loss) from unconsolidated joint ventures. Ramco 450 recognized the gain as a distribution to the partners.
F-19
Dispositions
The following table provides a summary of our unconsolidated joint venture property disposition activity during 2015. There
were no dispositions of shopping centers in 2014.
Property Name
Location
GLA
Date Sold Ownership %
2015
Ramco 450 Venture LLC
Chester Springs
Chester, NJ
Partners Portfolio - 7 Income Producing Properties
FL, GA, IL, OH, & MD
Ramco/Lion Venture LP
Millennium Park
Village of Oriole Plaza
Livonia, MI
Delray Beach, FL
Total 2015 unconsolidated joint venture's dispositions
10/08/15
07/21/15
08/11/15
03/24/15
223
1,440
1,663
273
156
429
2,092
20%
20%
30%
30%
Joint Venture Management and Other Fee Income
We are engaged by certain of our joint ventures to provide asset management, property management, leasing and investing services
for such venture’s respective properties. We receive fees for our services, including property management fees calculated as a
percentage of gross revenues received and recognize these fees as the services are rendered.
The following table provides information for our fees earned which are reported in our consolidated statements of operations:
Management fees
Leasing fees
Acquisition/disposition fees
Construction fees
Total
2015
1,149
311
108
185
1,753
$
$
December 31,
2014
(In thousands)
1,514
$
315
—
230
2,059
$
$
$
2013
1,875
390
—
61
2,326
F-20
8. Other Assets, Net and Acquired Lease Intangible Assets, Net
Other assets, net consisted of the following:
Deferred leasing costs, net
Deferred financing costs, net
Acquired development agreements (1)
Other, net
Total amortizable other assets
Straight-line rent receivable, net
Goodwill
Cash flow hedge marked-to-market asset
Prepaid and other deferred expenses, net
Other assets, net
December 31,
2015
2014
(In thousands)
$
$
35,282
1,871
22,194
2,655
62,002
17,366
2,089
642
5,791
87,890
$
$
33,557
2,551
23,238
2,718
62,064
15,805
2,089
537
7,054
87,549
(1) Represents the fair value of in-place public improvement fee of approximately $16.6 million and real estate tax exemption agreement of
approximately $5.6 million associated with two properties acquired in 2014.
Straight-line rent receivables are recorded net of allowances of $3.5 million and $4.3 million at December 31, 2015 and 2014,
respectively.
Acquired lease intangible assets, net consisted of the following:
Lease originations costs
Above market leases
Accumulated amortization
Net acquired lease intangibles
December 31,
2015
2014
(In thousands)
$
$
119,181
13,994
133,175
(44,356)
88,819
$
$
96,059
14,261
110,320
(33,275)
77,045
Acquired lease intangible assets have a remaining weighted-average amortization period of 4.3 years as of December 31,
2015. These intangible assets are being amortized over the lives of the applicable lease. Amortization of lease origination costs
is an increase to amortization expense and amortization of above-market leases is a reduction to minimum rent revenue over the
applicable terms of the respective leases. Amortization of the above market lease asset resulted in a reduction of revenue of
approximately $3.1 million, $2.7 million, and $2.1 million for the years ended December 31, 2015, 2014, and 2013, respectively.
F-21
Combined, amortizable other assets, net and acquired lease intangibles, net totaled $150.8 million. The following table
represents estimated aggregate amortization expense related to those assets as of December 31, 2015:
Year Ending December 31,
2016
2017
2018
2019
2020
Thereafter
Total (1)
9. Debt
(In thousands)
27,874
$
20,863
16,452
13,294
10,902
61,436
150,821
$
In April 2015, the FASB issued ASU 2015-03, which requires that debt issuance costs related to a recognized debt liability be
presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.
We adopted ASU 2015-03 effective December 15, 2015 and appropriately retrospectively applied the guidance to our Notes Payable
for all periods presented. Unamortized debt issuance costs of $3.8 million and $4.0 million are included in Notes Payable as of
December 31, 2015 and 2014, respectively (previously included in Other assets on our Consolidated Balance Sheets).
The following table summarizes our mortgages and notes payable and capital lease obligation as of December 31, 2015 and 2014:
Senior unsecured notes
Unsecured term loan facilities
Fixed rate mortgages
Unsecured revolving credit facility
Junior subordinated notes
Unamortized premium
Unamortized deferred financing costs
Capital lease obligation
December 31,
2015
2014
(In thousands)
$
$
$
460,000
210,000
322,457
60,000
28,125
1,080,582
6,935
(3,806)
1,083,711
1,108
$
$
$
310,000
210,000
354,714
10,000
28,125
912,839
8,866
(4,047)
917,658
1,828
Senior unsecured notes and unsecured term loans
We completed the following financing transactions during 2015:
•
•
In September 2015, we executed a $100.0 million private placement of senior unsecured notes. Series A consists of $50.0
million of notes, ten years term at a fixed interest rate of 4.09%, which funded on September 30, 2015. Series B, $25.0
million, nine years fixed interest rate of 4.05% and Series C, $25.0 million, eleven years fixed interest rate of 4.28%,
funded in November 2015; and
In July 2015, we funded the $50.0 million shelf facility related to the private placement of debt completed in May 2014.
The notes have ten years term at a fixed interest rate of 4.2%.
Our $670.0 million of senior unsecured notes and unsecured term loans have interest rates ranging from 2.9% to 4.7% and are
due at various maturity dates from September 2018 through November 2026.
F-22
Mortgages
During 2015 we had the following mortgage transactions:
•
In conjunction with our acquisition of the Ramco 450 portfolio, we assumed three mortgage loans with principal balances
totaling $60.1 million and an average interest rate of 4.1%. In addition, at closing, two additional mortgage loans were
repaid totaling $41.7 million, of which our pro rata share was $11.3 million. We recorded a premium of approximately
$1.2 million based upon the fair value of the loans on the date they were assumed. The mortgage premiums are being
amortized to interest expense over the remaining life of the loans; and
• We repaid mortgage notes secured by certain properties totaling $86.5 million, with an average weighted interest rate of
5.2%. In conjunction with the mortgage repayments we recognized a gain on extinguishment of debt of approximately
$1.4 million as a result of the write off of the associated debt premiums.
In addition, we modified the mortgage secured by the Aquia Town Center Office property. The modification extends the maturity
date one year with a fixed rate interest rate of 5.798%. Approximately $1.7 million of existing escrow balances were applied to
the principal balance. The modified balance of $12.0 million matures on June 1, 2016 and the loan is interest only.
Our $322.5 million of fixed rate mortgages have interest rates ranging from 2.9% to 7.4% and are due at various maturity dates
from June 2016 through June 2026. The fixed rate mortgage notes are secured by mortgages on properties that have an approximate
net book value of $403.2 million as of December 31, 2015.
We have no mortgage maturities until June 2016 and it is our intent to repay these mortgages using cash, borrowings under our
unsecured line of credit, or other sources of financing.
The mortgage loans encumbering our properties are generally nonrecourse, subject to certain exceptions for which we would be
liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan but generally include fraud or a
material misrepresentation, misstatement or omission by the borrower, intentional or grossly negligent conduct by the borrower
that harms the property or results in a loss to the lender, filing of a bankruptcy petition by the borrower, either directly or indirectly
and certain environmental liabilities. In addition, upon the occurrence of certain events, such as fraud or filing of a bankruptcy
petition by the borrower, we or our joint ventures would be liable for the entire outstanding balance of the loan, all interest accrued
thereon and certain other costs, including penalties and expenses.
We have entered into mortgage loans which are secured by multiple properties and contain cross-collateralization and cross-default
provisions. Cross-collateralization provisions allow a lender to foreclose on multiple properties in the event that we default under
the loan. Cross-default provisions allow a lender to foreclose on the related property in the event a default is declared under
another loan.
Revolving Credit Facility
During 2015 we had net borrowings of $50.0 million on our revolving credit facility and had outstanding letters of credit issued
under our revolving credit facility, not reflected in the accompanying consolidated balance sheets, totaling $3.5 million. These
letters of credit reduce borrowing availability under our bank facility. As of December 31, 2015, $286.5 million was available to
be drawn on our $350.0 million unsecured revolving credit facility subject to our compliance with certain covenants. As of
December 31, 2015 the variable interest rate was 1.6%.
The revolving credit and term loan facilities contain financial covenants relating to total leverage, fixed charge coverage ratio,
tangible net worth and various other calculations. As of December 31, 2015, we were in compliance with these covenants.
Junior Subordinated Notes
Our junior subordinated notes have a variable rate of LIBOR plus 3.30%. The maturity date is January 2038.
Capital lease
At December 31, 2015 we had a capital ground lease at our Buttermilk Towne Center with the City of Crescent Springs, Kentucky.
Additionally, at December 31, 2014 we had a capital ground lease at our Gaines Marketplace shopping center in Gaines Township,
Michigan which expired in early 2015. Total amounts expensed as interest relating to these leases were $0.1 million, $0.2 million
and $0.3 million for each of the years ended December 31, 2015, 2014, and 2013 respectively.
F-23
The following table presents scheduled principal payments on mortgages and notes payable and capital lease payments as of
December 31, 2015:
Year Ending December 31,
2016
2017
2018 (1)
2019
2020
Thereafter
Subtotal debt
Unamortized mortgage premium
Deferred financing costs
Amounts representing interest
Total
Principal
Payments
Capital
Lease
Payments
(In thousands)
$
$
35,845
129,096
159,132
5,860
102,269
648,380
1,080,582
6,935
(3,806)
—
1,083,711
$
$
100
100
100
100
100
1,200
1,700
—
—
(592)
1,108
(1)
Scheduled maturities in 2018 include the $60.0 million balance on the unsecured revolving credit facility drawn as of December 31, 2015.
10. Acquired Lease Intangible Liabilities, Net
Acquired lease intangible liabilities, net were $64.2 million and $54.3 million as of December 31, 2015 and 2014, respectively.
The increase was primarily due to the acquisitions that were completed in 2015 and the allocation of a portion of the purchase
price to lease intangible liabilities. The lease intangible liability relates to below-market leases and is being accreted over the
applicable terms of the acquired leases, which resulted in an increase of revenue of $5.8 million, $4.9 million, and $3.1 million
for the years ended December 31, 2015, 2014 and 2013, respectively.
11. Fair Value
We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value
disclosures. Derivative instruments (interest rate swaps) are recorded at fair value on a recurring basis. Additionally, we, from
time to time, may be required to record other assets at fair value on a nonrecurring basis. As a basis for considering market
participant assumptions in fair value measurements, GAAP establishes three fair value levels, based on the markets in which the
assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The assessed inputs used in
determining any fair value measurement could result in incorrect valuations that could be material to our consolidated financial
statements. These levels are:
Level 1
Valuation is based upon quoted prices for identical instruments traded in active markets.
Level 2
Level 3
Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions
are observable in the market.
Valuation is generated from model-based techniques that use at least one significant assumption not observable in
the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in
pricing the asset or liability.
The following is a description of valuation methodologies used for our assets and liabilities recorded at fair value.
Derivative Assets and Liabilities
All of our derivative instruments are interest rate swaps for which quoted market prices are not readily available. For those
derivatives, we measure fair value on a recurring basis using valuation models that use primarily market observable inputs, such
as yield curves. We classify derivative instruments as Level 2. Refer to Note 12 of notes to the consolidated financial statements
for additional information on our derivative financial instruments.
F-24
The table below presents the recorded amount of assets and liabilities measured at fair value on a recurring basis as of December 31,
2015 and 2014.
2015
Balance Sheet location
Total Fair
Value
Level 1
Level 2
Level 3
(In thousands)
Derivative assets - interest rate swaps
Other assets
Derivative liabilities - interest rate swaps
2014
Other liabilities
Derivative assets - interest rate swaps
Derivative liabilities - interest rate swaps
Other assets
Other liabilities
$
$
$
$
$
642
(2,241) $
— $
— $
$
642
(2,241) $
$
537
(2,705) $
— $
— $
$
537
(2,705) $
—
—
—
—
The carrying values of cash and cash equivalents, restricted cash, receivables and accounts payable and accrued liabilities are
reasonable estimates of their fair values because of the short maturity of these financial instruments.
We estimated the fair value of our debt based on our incremental borrowing rates for similar types of borrowing arrangements
with the same remaining maturity and on the discounted estimated future cash payments to be made for other debt. The discount
rates used approximate current lending rates for loans or groups of loans with similar maturities and credit quality, assumes the
debt is outstanding through maturity and considers the debt’s collateral (if applicable). Since such amounts are estimates that are
based on limited available market information for similar transactions, there can be no assurance that the disclosed value of any
financial instrument could be realized by immediate settlement of the instrument. Fixed rate debt (including variable rate debt
swapped to fixed through derivatives) with carrying values of $996.3 million and $880.3 million as of December 31, 2015 and
2014, respectively, have fair values of approximately $1.0 billion and $900.9 million, respectively. Variable rate debt’s fair value
is estimated to be the carrying values of $87.4 million and $37.4 million as of December 31, 2015 and 2014, respectively. We
classify our debt as Level 2.
Net Real Estate
Our net real estate, including any identifiable intangible assets, is subject to impairment testing on a nonrecurring basis. To estimate
fair value, we use discounted cash flow models that include assumptions of the discount rates that market participants would use
in pricing the asset. To the extent impairment has occurred, we charge to expense the excess of the carrying value of the property
over its estimated fair value. We classify impaired real estate assets as nonrecurring Level 3.
The table below presents the recorded amount of assets at the time they were marked to fair value during the years ended
December 31, 2015 and 2014 on a nonrecurring basis. We did not have any material liabilities that were required to be measured
at fair value on a nonrecurring basis during the years ended December 31, 2015 and 2014.
Assets
2015
Land available for sale
Total
2014
Income producing properties
Land available for sale
Total
Total Fair
Value
Level 1
Level 2
(In thousands)
Level 3
Total
Impairment
$
$
$
$
453
453
28,754
13,972
42,726
$
$
$
$
— $
— $
— $
—
— $
— $
— $
— $
—
— $
453
453
28,754
13,972
42,726
$
$
$
$
(2,521)
(2,521)
(4,580)
(23,285)
(27,865)
Equity Investments in Unconsolidated Entities
Our equity investments in unconsolidated joint venture entities are subject to impairment testing on a nonrecurring basis if a decline
in the fair value of the investment below the carrying amount is determined to be a decline that is other-than-temporary. To estimate
the fair value of properties held by unconsolidated entities, we use cash flow models, discount rates, and capitalization rates based
upon assumptions of the rates that market participants would use in pricing the asset. To the extent other-than-temporary impairment
F-25
has occurred, we charge to expense the excess of the carrying value of the equity investment over its estimated fair value. We
classify other-than-temporarily impaired equity investments in unconsolidated entities as nonrecurring Level 3.
12. Derivative Financial Instruments
We utilize interest rate swap agreements for risk management purposes to reduce the impact of changes in interest rates on our
variable rate debt. We may also enter into forward starting swaps to set the effective interest rate on planned fixed rate financing. On
the date we enter into an interest rate swap, the derivative is designated as a hedge against the variability of cash flows that are to
be paid in connection with a recognized liability. Subsequent changes in the fair value of a derivative designated as a cash flow
hedge that is determined to be highly effective are recorded in other comprehensive income (“OCI”) until earnings are affected
by the variability of cash flows of the hedged transaction. The differential between fixed and variable rates to be paid or received
is accrued, as interest rates change, and recognized currently as interest expense in our consolidated statements of operations. We
assess effectiveness of our cash flow hedges both at inception and on an ongoing basis. Our cash flow hedges become ineffective
if critical terms of the hedging instrument and the debt do not perfectly match such as notional amounts, settlement dates, reset
dates, calculation period and LIBOR rate. At December 31, 2015, all of our hedges were highly effective.
At December 31, 2015, we had seven interest rate swap agreements in effect for an aggregate notional amount of $210.0 million.
Additionally, in October 2015, we entered into three forward starting interest rate swap agreements for an aggregate notional
amount of $75.0 million. All of our interest rate swap agreements are designated as cash flow hedges The agreements provide
for swapping one-month LIBOR interest rates ranging from 1.2% to 2.2% on $210.0 million of unsecured term loans, and have
expirations ranging from April 2016 to May 2021.
The following table summarizes the notional values and fair values of our derivative financial instruments as of December 31,
2015:
Underlying Debt
Derivative Assets
Unsecured term loan facility
Unsecured term loan facility
Unsecured term loan facility
Derivative Liabilities
Unsecured term loan facility
Unsecured term loan facility
Unsecured term loan facility
Unsecured term loan facility
Unsecured term loan facility
Unsecured term loan facility
Unsecured term loan facility
Hedge
Type
Notional
Value
(In thousands)
Fixed
Rate
Fair
Value
(In thousands)
Expiration
Date
Cash Flow
Cash Flow
Cash Flow
Cash Flow
Cash Flow
Cash Flow
Cash Flow
Cash Flow
Cash Flow
Cash Flow
$
$
$
$
20,000
15,000
40,000
75,000
75,000
30,000
25,000
5,000
15,000
10,000
50,000
210,000
1.4980% $
1.4900%
1.4800%
$
1.2175% $
2.0480%
1.8500%
1.8400%
2.1500%
2.1500%
1.4600%
$
151
128
363
642
(180)
(729)
(472)
(93)
(451)
(301)
(15)
(2,241)
05/2021
05/2021
05/2021
04/2016
10/2018
10/2018
10/2018
05/2020
05/2020
05/2020
F-26
The effect of derivative financial instruments on our consolidated statements of operations for the year ended December 31, 2015
and 2014 is summarized as follows:
Amount of Gain (Loss)
Recognized in OCI on
Derivative
(Effective Portion)
Year Ended December 31,
2015
2014
(In thousands)
Location of Loss
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
$
$
1,008
2,589
3,597
$
$
(1,046)
1,996
Interest Expense
Interest Expense
950 Total
Amount of Loss Reclassified
from
Accumulated OCI into
Income (Effective Portion)
Year Ended December 31,
2015
2014
(In thousands)
(902) $
(2,125)
(3,027) $
(661)
(2,404)
(3,065)
$
$
Derivatives in Cash Flow Hedging
Relationship
Interest rate contracts - assets
Interest rate contracts - liabilities
Total
13. Leases
Revenues
Approximate future minimum revenues from rentals under non-cancelable operating leases in effect at December 31, 2015,
assuming no new or renegotiated leases or option extensions on lease agreements and no early lease terminations were as follows:
Year Ending December 31,
2016
2017
2018
2019
2020
Thereafter
Total
Expenses
(In thousands)
186,111
$
168,127
149,005
127,677
109,863
394,388
1,135,171
$
We have an operating lease for our corporate headquarters in Michigan for a term expiring in 2019. We recognized rent expense
of $0.6 million for the year ended December 31, 2015. For the years ended December 31, 2014 and 2013 we recognized $0.6
million and $0.7 million, respectively. Previous years expense included an operating lease adjacent to a former shopping center.
The associated outparcel and operating lease were sold in early 2015.
Approximate future rental payments under our non-cancelable leases, assuming no option extensions are as follows:
Year Ending December 31,
2016
2017
2018
2019
2020
Thereafter
Total
F-27
(In thousands)
620
$
629
638
429
—
—
2,316
$
14. Earnings per Common Share
The following table sets forth the computation of basic earnings per share (“EPS”):
Income (loss) from continuing operations
Net (income) loss from continuing operations attributable to noncontrolling interest
Preferred share dividends and conversion costs
Allocation of continuing income to restricted share awards
Income (loss) from continuing operations attributable to RPT
Income from discontinued operations
Net income from discontinued operations attributable to noncontrolling interest
Allocation of discontinued income to restricted share awards
Income from discontinued operations attributable to RPT
Net income (loss) available to common shareholders
Weighted average shares outstanding, Basic
Earnings (loss) per common share, Basic
Continuing operations
Discontinued operations
The following table sets forth the computation of diluted EPS:
Income (loss) from continuing operations
Net (income) loss from continuing operations attributable to noncontrolling interest
Preferred share dividends and conversion costs
Allocation of continuing income to restricted share awards
Income (loss) from continuing operations attributable to RPT
Income from discontinued operations
Net income from discontinued operations attributable to noncontrolling interest
Income from discontinued operations attributable to RPT
Net income (loss) available to common shareholders
Weighted average shares outstanding, Basic
Stock options and restricted share awards using the treasury method (1)
Weighted average shares outstanding, Diluted (2)(3)
Earnings (loss) per common share, Diluted
Continuing operations
Discontinued operations
Year Ended December 31,
2015
2013
2014
(In thousands, except per share data)
66,895
(1,786)
(7,338)
(336)
57,435
—
—
—
—
57,435
78,848
0.73
—
0.73
$
$
$
$
$
(2,412) $
48
(7,250)
(180)
(9,794) $
—
—
—
—
(9,794) $
8,371
(355)
(7,250)
(102)
664
3,091
(110)
(20)
2,961
3,625
72,118
59,336
(0.14) $
—
(0.14) $
0.01
0.05
0.06
Year Ended December 31,
2013
2014
2015
(In thousands, except per share data)
66,895
(1,786)
(7,338)
(336)
57,435
—
—
—
57,435
78,848
187
79,035
$
$
$
(2,412) $
48
(7,250)
(180)
(9,794) $
—
—
—
(9,794) $
72,118
—
72,118
8,371
(355)
(7,250)
(102)
664
3,091
(110)
2,981
3,645
59,336
392
59,728
0.73
—
0.73
$
$
(0.14) $
—
(0.14) $
0.01
0.05
0.06
$
$
$
$
$
$
$
$
$
$
(1)
(2)
(3)
For the year ended December 31, 2014 stock options and restricted stock awards are anti-dilutive and accordingly, have been excluded from the weighted
average common shares used to compute diluted EPS.
The assumed conversion of preferred shares are anti-dilutive for all periods presented and accordingly, have been excluded from the weighted average
common shares used to compute diluted EPS.
The effect of the conversion of Common OP Units is not reflected in the computation of basic and diluted earnings per share, as they are exchangeable
for Common Shares on a one-for-one basis. The income allocable to such units is allocated on this same basis and reflected as noncontrolling interests
in the accompanying consolidated financial statements. As such, the assumed conversion of these units would have no net impact on the determination
of diluted earnings per share.
F-28
15. Shareholders’ Equity
Underwritten public offerings
In 2015 we did not complete any underwritten public offerings.
In August 2014 we completed an underwritten public offering of 6.9 million newly issued common shares of beneficial interest
at $16.44 per share which included 0.9 million common shares sold in connection with the full exercise of the underwriters' option
to purchase additional shares. Our total net proceeds, after deducting expenses, were approximately $108.7 million.
Controlled equity offerings
In 2015, through our controlled equity offering we issued 0.9 million common shares, at an average price of $19.28, and received
approximately $17.1 million in net proceeds, after sales commissions and fees of $0.3 million.
In 2014, through our controlled equity offering we issued 3.8 million common shares, at an average share price of $16.50, and
received approximately $61.7 million in net proceeds, after sales commissions and fees of $0.9 million.
Our controlled equity offerings were issued under a registration statement filed in 2013 whereby we may sell up to 8.0 million
common shares of beneficial interest. As of December 31, 2015 we had 3.1 million shares available for issuance.
Non-Controlling Interests
As of December 31 2015 we had 2,001,461 OP Units outstanding. OP Unit holders are entitled to exchange their units for our
common shares on a 1:1 basis or for cash. The form of payment is at our election. During 2015, 245,734 units were converted
for cash in the amount of $3.8 million.
Preferred Shares
As of December 31, 2015 we had 1,848,539 shares of 7.25% Series D Cumulative Convertible Preferred Shares (“Preferred
Shares”) outstanding that have a liquidation preference of $50 per share and par value $0.01 per share. The Preferred Shares are
convertible at any time by the holders to our common shares at a conversion rate of $14.10 per share. The conversion rate is
adjusted quarterly. The Preferred Shares are also convertible under certain circumstances at our election. The holders of the
Preferred Shares have no voting rights.
In April 2015, we converted Preferred Shares with a liquidation preference of $7.6 million into 532,628 common shares pursuant
to the terms of the Convertible Preferred Shares prospectus supplement dated April 27, 2011 and incurred conversion costs of
approximately $0.5 million.
The following table provides a summary of dividends declared and paid per share:
Year Ended December 31,
2015
2014
2013
Declared
Paid
Declared
Paid
Declared
Paid
Common shares
Preferred shares
$
$
0.820
3.625
$
$
0.810
3.625
$
$
0.7750
3.625
$
$
0.7625
3.625
$
$
0.7115
3.625
$
$
0.6923
3.625
Dividend reinvestment plan
We have a dividend reinvestment plan that allows for participating shareholders to have their dividend distributions automatically
invested in additional shares of beneficial interest based on the average price of the shares acquired for the distribution.
F-29
16. Share-Based Compensation and Other Benefit Plans
Incentive and Stock Option Plans
As of December 31, 2015 we have one share-based compensation plan in effect, the 2012 Omnibus Long-Term Incentive Plan
(“2012 LTIP”). Under the plan our compensation committee may grant, subject to the Company’s performance conditions as
specified by the compensation committee, restricted shares, restricted share units, options and other awards for up to 2 million of
our common shares, units or stock options, of which 1.6 million is available for issuance as of December 31, 2015.
The following share-based compensation plans have been terminated, except with respect to awards outstanding under each plan:
• The 2009 Omnibus Long-Term Incentive Plan ("2009 LTIP") which allowed for the grant of restricted shares, restricted
share units, options and other awards to trustees, officers and other key employees;
• The 2008 Restricted Share Plan for Non-Employee Trustees (the "Trustees' Plan") which allowed for the grant of
•
•
restricted shares to non-employee trustees of the Company;
2003 LTIP which allowed for the grant of stock options to our executive officers and employees. As of December 31,
2015, there were 87,165 options exercisable; and
2003 Non-Employee Trustee Stock Option Plan – this plan provided for the annual grant of options to purchase our
shares to our non-employee trustees. As of December 31, 2015, there were 20,000 options exercisable.
We recognized total share-based compensation expense of $1.6 million, $4.6 million, and $3.6 million for 2015, 2014, and 2013,
respectively.
Restricted Stock Share-Based Compensation
Beginning in 2012 the compensation committee determined that the LTIP award would consist of 50% service based restricted
shares and 50% performance-based cash awards. The service-based restricted share awards include a five year vesting period and
the compensation expense is recognized on a graded vesting basis. We recognized expense related to restricted share grants of
$1.9 million for the year ended December 31, 2015 and $2.1 million for each of the years ended December 31, 2014 and 2013.
The performance shares are earned subject to a future performance measurement based on a three-year shareholder return peer
comparison (the “TSR Grants”). If the performance criterion is met the actual value of the grant earned will be determined and
50% of the award will be paid in cash immediately while the balance will be paid in cash the following year.
Pursuant to ASC 718 – Stock Compensation, we determine the grant date fair value of TSR Grants, and any subsequent re-
measurements, based upon a Monte Carlo simulation model. We recognize the compensation expense ratably over the requisite
service period and we are required to re-value the performance cash awards at the end of each quarter. We use the same methodology
as was used at the initial grant date and adjust the compensation expense accordingly. If it is determined that the performance
criteria will not be met, compensation expense previously recognized would be reversed. We recognized a compensation benefit
of $0.4 million during the year ended December 31, 2015 due to the change in value of the plans and expense reversal related to
our former Chief Financial Officer. Compensation expense of $2.5 million and $1.5 million related to the cash awards recorded
during the years ended December 31, 2014 and 2013, respectively.
A summary of the activity of service based restricted shares under the LTIP for the years ended December 31, 2015, 2014 and
2013 is presented below:
2015
2014
2013
Number of
Shares
Weighted-
Average
Grant Date
Fair Value
Outstanding, beginning of the year
365,524
$
Granted
Vested
Forfeited or expired
Outstanding, end of the year
180,914
(176,816)
(41,890)
327,732
14.92
17.77
14.29
16.17
16.39
F-30
Number of
Shares
375,813
$
286,954
(281,851)
(15,392)
365,524
Weighted-
Average
Grant Date
Fair Value
13.71
16.70
12.69
14.69
14.92
Number of
Shares
286,306
$
293,732
(197,014)
(7,211)
375,813
Weighted-
Average
Grant Date
Fair Value
11.83
15.68
10.07
13.38
13.71
As of December 31, 2015 there was approximately $4.1 million of total unrecognized compensation cost related to non-vested
restricted share awards granted under our various share-based plans that we expect to recognize over a weighted average period
of 4.5 years.
Stock Option Share-Based Compensation
When we grant options, the fair value of each option granted, used in determining the share-based compensation expense, is
estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for
inputs including risk-free rates, expected dividend yield of the underlying common shares, expected option life and expected
volatility.
No options were granted under the LTIP in the years ended December 31, 2015, 2014 and 2013.
The following table reflects the stock option activity for all plans described above:
2015
2014
2013
Shares
Under
Option
Weighted-
Average
Exercise Price
Shares
Under
Option
Weighted-
Average
Exercise Price
Shares
Under
Option
Weighted-
Average
Exercise Price
Outstanding, beginning of the year
155,248
$
30.94
190,993
$
30.34
Exercised
Forfeited or expired
Outstanding, end of the year
Exercisable, end of the year
—
(48,083)
107,165
107,165
$
$
—
28.29
32.13
32.13
—
(35,745)
155,248
155,248
$
$
—
27.73
30.94
30.94
227,743
(25,000)
(11,750)
190,993
190,993
$
$
$
27.81
9.61
25.34
30.34
30.34
The following table summarizes information about options outstanding at December 31, 2015:
Range of Exercise Price
Outstanding
Options Outstanding
Weighted-
Average
Remaining
Contractual Life
Options Exercisable
Weighted-
Average
Exercise Price
Exercisable
Weighted-
Average
Exercise Price
$23.77 - $27.96
$28.80 - $29.06
$34.30 - $36.50
10,000
34,025
63,140
107,165
0.5
0.2
1.2
0.8
$
$
26.68
29.06
34.65
32.13
10,000
$
34,025
63,140
107,165
$
26.68
29.06
34.65
32.13
We received cash of approximately $0.2 million from options exercised during the year ended December 31, 2013. The impact
of the cash receipt is included in financing activities in the accompanying consolidated statements of cash flows.
17. Taxes
Income Taxes
We conduct our operations with the intent of meeting the requirements applicable to a REIT under sections 856 through 860 of
the Internal Revenue Code. In order to maintain our qualification as a REIT, we are required to distribute annually at least 90%
of our REIT taxable income, excluding net capital gain, to our shareholders. As long as we qualify as a REIT, we will generally
not be liable for federal corporate income taxes.
Certain of our operations, including property management and asset management, as well as ownership of certain land, are
conducted through our TRSs which allows us to provide certain services and conduct certain activities that are not generally
considered as qualifying REIT activities.
F-31
Deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for
financial reporting purposes and the bases of such assets and liabilities as measured by tax laws. Deferred tax assets are reduced
by a valuation allowance to the amount where realization is more likely than not assured after considering all available evidence,
including expected taxable earnings and potential tax planning strategies. Our temporary differences primarily relate to deferred
compensation, depreciation, impairment charges and net operating loss carryforwards.
As of December 31, 2015, we had a federal and state deferred tax asset of $10.7 million and a valuation allowance of $10.7 million,
which represents a decrease of $0.2 million from December 31, 2014. Our deferred tax assets, such as net operating losses and
land basis differences, are reduced by an offsetting valuation allowance where there is uncertainty regarding their realizability.
We believe that it is more likely than not that the results of future operations will not generate sufficient taxable income to recognize
the deferred tax assets. These future operations are primarily dependent upon the profitability of our TRSs, the timing and amounts
of gains on land sales, and other factors affecting the results of operations of the TRSs.
If in the future we are able to conclude it is more likely than not that we will realize a future benefit from a deferred tax asset, we
will reduce the related valuation allowance by the appropriate amount. The first time this occurs, it will result in a net deferred
tax asset on our balance sheet and an income tax benefit of equal magnitude in our statement of operations in the period we made
the determination.
During the years ended December 31, 2015 and 2014, we recorded an income tax provision of approximately $339,000 and
$54,000, respectively.
We had no unrecognized tax benefits as of or during the three year period ended December 31, 2015. We expect no significant
increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2015. No
material interest or penalties relating to income taxes were recognized in the statement of operations for the years ended
December 31, 2015, 2014, and 2013 or in the consolidated balance sheets as of December 31, 2015, 2014, and 2013. It is our
accounting policy to classify interest and penalties relating to unrecognized tax benefits as tax expense. As of December 31, 2015,
returns for the calendar years 2012 through 2015 remain subject to examination by the Internal Revenue Service (“IRS”) and
various state and local tax jurisdictions. As of December 31, 2015, certain returns for calendar year 2011 also remain subject to
examination by various state and local tax jurisdictions.
Sales Tax
We collect various taxes from tenants and remit these amounts, on a net basis, to the applicable taxing authorities.
18. Commitments and Contingencies
Construction Costs
In connection with the development and expansion of various shopping centers as of December 31, 2015, we had entered into
agreements for construction costs of approximately $10.6 million.
Litigation
We are currently involved in certain litigation arising in the ordinary course of business.
Environmental Matters
We are subject to numerous federal, state and local environmental laws, ordinances and regulations in the areas where we own or
operate properties. We are not aware of any contamination which may have been caused by us or any of our tenants that would
have a material effect on our consolidated financial statements.
As part of our risk management activities, we have applied and been accepted into state sponsored environmental programs which
will expedite and assure satisfactory compliance with environmental laws and regulations should contaminants need to be
remediated. We also have an environmental insurance policy that covers us against third party liabilities and remediation costs.
While we believe that we do not have any material exposure to environmental remediation costs, we cannot give absolute assurance
that changes in the law or new discoveries of contamination will not result in additional liabilities to us.
F-32
19. Subsequent Events
We have evaluated subsequent events through the date that the consolidated financial statements were issued.
In February 2016 we completed the sale of a shopping center located in Troy, Ohio receiving net proceeds in the amount of
$12.0 million.
20. Selected Quarterly Financial Data (Unaudited)
The following table sets forth summarized quarterly financial data for the year ended December 31, 2015:
Total revenue
Operating income
Net income attributable to RPT
Net income available to common shareholders
Earnings per common share, basic: (1)
Earnings per common share, diluted:(1)
Quarters Ended 2015
March 31
June 30
September 30
December 31
(In thousands, except per share amounts)
$
$
$
$
$
$
59,417
14,631
9,667
7,855
0.10
0.10
$
$
$
$
$
$
59,735
15,910
7,090
4,915
0.06
0.06
$
$
$
$
$
$
64,060
18,854
33,666
31,991
0.39
0.38
$
$
$
$
$
$
68,578
16,102
14,686
13,010
0.16
0.16
(1)
EPS amounts are based on weighted average common shares outstanding during the quarter and, therefore, may not agree with the EPS calculated for
the year ended December 31, 2015.
The following table sets forth summarized quarterly financial data for the year ended December 31, 2014:
Total revenue
Operating income (loss)
Net income (loss) attributable to RPT
Net income (loss) available to common shareholders
Earnings (loss) per common share, basic: (1)
Earnings (loss) per common share, diluted:(1)
Quarters Ended 2014
March 31 (1)
June 30 (1)
September 30 (1)
(In thousands, except per share amounts)
December 31 (1)
$
$
$
$
$
$
50,133
12,403
2,672
860
0.01
0.01
$
$
$
$
$
$
49,930
6,732
1,086
$
$
$
(727) $
(0.01) $
(0.01) $
55,143
14,782
6,083
4,270
0.06
0.06
$
$
$
$
$
$
63,157
(10,587)
(12,205)
(14,017)
(0.18)
(0.18)
(1)
EPS amounts are based on weighted average common shares outstanding during the quarter and, therefore, may not agree with the EPS calculated for
the year ended December 31, 2014.
F-33
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Auburn Mile
Bridgewater Falls
Buttermilk Towne Center
Central Plaza
Centre at Woodstock
Clinton Pointe
Clinton Valley
Coral Creek Shops
Crofton Centre
Crossroads Centre
Cypress Point
Deer Creek Shopping Center
Deer Grove Centre
Deerfield Towne Center
East Town Plaza
Fairlane Meadows
Front Range Village
Gaines Marketplace
Harvest Junction North
Harvest Junction South
Heritage Place
Holcomb Center
Hoover Eleven
Hunters Square
Jackson Crossing
Jackson West
Lakeland Park Center
Lakeshore Marketplace
Liberty Square
Livonia Plaza
Marketplace of Delray
Market Plaza
Merchants' Square
Millennium Park
$
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$
I
RAMCO-GERSHENSON PROPERTIES TRUST
SCHEDULE III
SUMMARY OF REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2015
1
7
1
,
2
0
1
5
3
6
,
2
1
5
1
2
,
2
1
3
5
4
,
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2
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5
5
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6
8
6
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6
9
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5
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4
6
4
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4
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6
8
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(in thousands of dollars)
2
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4
6
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0
1
0
4
0
,
1
1
8
9
2
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1
INITIAL COST
,
,
4
3
2
2
TO COMPANY
5
5
0
,
5
1
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5
6
,
4
2
6
3
3
,
8
1
1
2
2
,
8
1
5
7
3
,
2
1
Land
Building &
Improvements
0
7
5
,
7
9
5
2
,
1
3
8
3
2
,
9
1
0
8
1
0
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6
3
7
2
Capitalized
,
,
,
9
2
1
Subsequent to
7
2
8
Acquisition or
Improvements,
Net of
Impairments
2
9
3
7
8
0
GROSS AMOUNTS AT WHICH
,
,
1
3
1
2
CARRIED AT CLOSE OF PERIOD
7
1
1
,
2
4
4
2
6
,
2
1
2
6
1
,
4
3
7
3
2
,
2
2
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7
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Land
Building &
Improvements
Total
Accumulated
Depreciation
Date Constructed
Date
Acquired
1
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6
4
4
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6
7
1
3
8
,
9
8
2
4
7
5
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3,536
3
0
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1997
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1967
1996
2014
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1965/2009
1970
2000
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2014
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2013
2000
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2004
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2012
2011
1996
2003
2013
1996
1996
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2003
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2003
2013
2015
2010
2015
$
2
0
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3
8,594
5
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86,486
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0
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6
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1
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2
3
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3
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7
9
7
3
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2
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1
2
6
6
,
1
1
INITIAL COST
5
8
TO COMPANY
5
,
6
2
4
6
0
,
8
1
2
3
6
,
5
7
5
7
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9
4
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5
,
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8
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4
,
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3
Location
Encumbrances
Land
Building &
Improvements
4
4
0
,
1
3
9
3
3
,
3
1
3
8
4
,
4
1
1
1
9
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5
3
9
,
8
1
—
0
0
4
5
1
7
—
,
,
7
8
1
2
7,926
—
—
9
3
2
,
1
9
7
5
6
,
6
8
0
7
,
0
1
33,975
4
2
6
8
3
4
11,633
,
,
5
7
1
7,549
5
3
8
,
4
2
8
0
,
1
2
0
2
3
,
7
1
7
6
3
,
5
2
48,159
9
5
4
21,767
,
1
1
30,898
817
955
7,354
8,591
5
0
4
,
4
1
5
8
3
,
9
1
Capitalized
1
7
9
8
0
9
Subsequent to
2
3
3
,
,
,
Acquisition or
9
7
6
7
4
5
Improvements,
Net of
Impairments
2
6
4
,
5
7
8
2
5
,
7
1
7
5
5
,
7
3
4,246
1
0
5
9
5
7
1,151
,
,
1
9
5
146
5,985
5,892
7
7
8
,
6
3
4
4
5
,
1
1
GROSS AMOUNTS AT WHICH
2
3
5
1
CARRIED AT CLOSE OF PERIOD
6
2
,
,
3
1
2
2
2
2
6
,
4
1
2
0
8
,
6
1
6
6
7
,
0
2
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8
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,
6
1
7
8
5
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3
3
3
6
3
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5
2
4
5
5
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4
1
8
5
3
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9
0
3
8
,
7
2
4
1
3
,
9
6
6
2
7
,
8
2
3
7
6
,
6
Land
Building &
Improvements
Total
Accumulated
Depreciation
$
2
8
4
,
8
2
0
2
6
,
8
1
7
0
,
9
1
33,975
4
5
6
4
7
5
11,633
,
,
0
8
1
7,549
0
6
7
,
3
1
1
7
2
,
4
1
9
9
0
,
7
1
52,405
9
1
4
2
6
7
22,918
,
,
1
1
1
3
31,044
7
3
5
,
2
2
2
2
8
,
9
1
3
0
9
,
8
5
86,380
3
6
1
34,551
,
2
2
38,593
3
2
2
—
4,471
2,174
2,847
2
3
7
,
2
1
8
,
1
0
0
1
,
5
4
2
,
2
Date
Acquired
Date Constructed
1989
1958/1987/2012
1994/2004/2008
2012/2013
1975
1982
1981
2013
1986
1993
2005
1998
1980
1956/2009
5
3
-
F
1963
2006
1985
1972/2011
1969
1987
1968
1988
2009
817
955
4,283
0
3
9
1
7
8
5,902
,
3
7,517
3,440
954
4,393
582
797
5,503
2
2
9
7
2
3
2,864
,
,
0
8
1
1,121
5,041
3,819
1,857
0
0
9
3
7
9
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Mount Prospect Plaza
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New Towne Plaza
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Parkway Shops
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River Crossing Centre
Rivertowne Square
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Roseville Towne Center
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Vista Plaza
West Broward
West Allis Towne Centre
West Oaks I
West Oaks II
Winchester Center
Woodbury Lakes
Land Held for Future Development (2)
Land Available for Sale (3)
TOTALS
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SCHEDULE III
5
1
1
2
1
(
REAL ESTATE INVESTMENT AND ACCUMULATED DEPRECIATION
,
2
December 31, 2015
7
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7
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Deductions during period:
Balance at beginning of year
n
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Balance at beginning of year
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2015
Year ended December 31,
2014
(In thousands)
2013
2,008,687
$
1,727,191
$
1,217,712
234,018
57,046
(52,130)
(2,521)
2,245,100
287,177
59,602
(15,259)
331,520
2,366,608
$
$
$
$
289,340
70,982
(50,961)
(27,865)
2,008,687
253,292
50,081
(16,196)
287,177
2,115,287
$
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530,697
38,613
(50,162)
(9,669)
1,727,191
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237,462
39,469
(23,639)
253,292
1,781,084
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F-36
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Property Summary
PROPERTY NAME
LOCATION
TOTAL
CENTER
GLA
TOTAL
OWNED
GLA
PROPERTY NAME
LOCATION
TOTAL
CENTER
GLA
TOTAL
OWNED
GLA
208,144
269,105
282,667
926,347
627,202
470,245
462,396
253,204
47,477
602,684
208,144
269,105
145,830
789,510
503,502
344,045
462,396
253,204
47,477
311,396
West Oaks II
Shopping Center
Winchester Center
Total
MINNESOTA (1)
Woodbury Lakes
Total
MISSOURI (4)
Central Plaza
Deer Creek
Novi
Rochester Hills
364,104
320,121
7,182,724
167,954
320,121
4,857,004
Woodbury
317,603
317,603
305,086
305,086
Ballwin
166,431
166,431
Shopping Center
Heritage Place
Town & Country Crossing
Total
Maplewood
Creve Coeur
Town & Country
Hamilton
Rossford
Mason
Columbus
Rossford
Holland
OHIO (8)
Bridgewater Falls
Crossroads Centre
Deerfield Towne Center
Olentangy Plaza
Rossford Pointe
Spring Meadows Place
The Shops on
Lane Avenue
Troy Towne Center
Total
WISCONSIN (4)
Upper Arlington
Troy
169,035
341,594
2,973,837
169,035
144,485
2,235,540
East Town Plaza
Nagawaukee Center
The Shoppes at Fox River Waukesha
West Allis
West Allis Towne Centre
Total
Madison
Delafield
341,467
279,538
369,774
326,265
1,317,044
208,472
219,538
237,392
326,265
991,667
WHOLLY OWNED SHOPPING CENTERS
19,897,722
15,224,435
The Town Center at
Stafford County,
Aquia Office
VA
99,393
99,393
CONSOLIDATED PORTFOLIO
19,997,115
15,323,828
JOINT VENTURE PORTFOLIO
Kissimmee West Kissimmee, FL
Indianapolis, IN
Nora Plaza
Martin Square
Stuart, FL
Total
OWNER-
SHIP %
7%
7%
30%
TOTAL
CENTER
GLA
COMPANY
OWNED
GLA
300,186
263,553
330,134
893,873
115,586
139,753
330,134
585,473
COLORADO (3)
Front Range Village
Harvest Junction North
Harvest Junction South
Total
FLORIDA (16)
Coral Creek Shops
Cypress Point
Lakeland Park Center
Marketplace of Delray
Mission Bay Plaza
Parkway Shops
River City Marketplace
River Crossing Centre
Rivertowne Square
Shoppes of Lakeland
The Crossroads
Treasure Coast Commons
Village Lakes
Shopping Center
Village Plaza
Vista Plaza
West Broward
Fort Collins
Longmont
Longmont
Coconut Creek
Clearwater
Lakeland
Delray Beach
Boca Raton
Jacksonville
Jacksonville
New Port Richey
Deerfield Beach
Lakeland
Royal Palm Beach
Jensen Beach
Land O’ Lakes
Lakeland
Jensen Beach
792,945
183,155
311,960
1,288,060
109,312
167,280
210,422
241,715
264,704
144,114
899,588
62,038
150,321
307,242
121,509
92,979
168,751
158,956
109,761
459,307
183,155
176,960
819,422
109,312
167,280
210,422
241,715
264,704
144,114
557,087
62,038
150,321
183,842
121,509
92,979
168,751
158,956
109,761
Shopping Center
Plantation
152,973
3,361,665
152,973
2,895,764
86,748
106,003
154,700
261,808
609,259
357,876
107,427
163,054
300,682
134,012
1,063,051
86,748
106,003
154,700
261,808
609,259
237,876
107,427
163,054
300,682
134,012
943,051
Woodstock
Roswell
Duluth
Duluth
Palatine
Wauconda
Glen Ellyn
Mount Prospect
Rolling Meadows
Carmel
328,369
328,369
248,369
248,369
Buttermilk Towne Center
Total
Crescent Springs
277,533
277,533
277,533
277,533
Crofton
252,230
252,230
252,230
252,230
Clinton Township
Sterling Heights
Gaines Township
Warren
Farmington Hills
Jackson
Jackson
Norton Shores
Livonia
Livonia
Canton Township
Flint
Roseville
248,206
205,435
392,169
280,719
353,951
674,772
209,800
469,791
137,391
625,209
192,587
152,073
212,857
358,525
190,099
523,411
624,212
96,768
238,354
135,330
205,435
60,576
280,719
353,951
420,530
209,800
342,991
137,391
272,568
192,587
152,073
76,998
157,225
190,099
523,411
90,553
96,768
217,754
Dearborn
Southfield
Southfield
Auburn Hills
Southfield Plaza
Tel-Twelve
The Auburn Mile 1
The Shops at Old Orchard West Bloomfield
Troy Marketplace
West Oaks I
Troy
Shopping Center
Novi
312,170
252,170
Total
GEORGIA (4)
Centre at Woodstock
Holcomb Center
Peachtree Hill
Promenade at
Pleasant Hill
Total
ILLINOIS (5)
Deer Grove Centre
Liberty Square
Market Plaza
Mount Prospect Plaza
Rolling Meadows
Shopping Center
Total
INDIANA (1)
Merchants’ Square
Total
KENTUCKY (1)
MARYLAND (1)
Crofton Centre
Total
MICHIGAN (22)
Clinton Pointe
Clinton Valley
Gaines Marketplace
Hoover Eleven
Hunter’s Square
Jackson Crossing
Jackson West
Lakeshore Marketplace
Livonia Plaza
Millennium Park
New Towne Plaza
Oak Brook Square
Roseville Towne Center
Shoppes at
Fairlane Meadows
Company Information
BOARD OF TRUSTEES:
Stephen R. Blank, Chairman
Senior Fellow, Finance
Urban Land Institute
Audit Committee—
Financial Expert and Member
Compensation Committee—Member
Nominating and Governance
Committee—Member
Alice M. Connell
Co-founder and Managing Principal
Bay Hollow Associates
Audit Committee—Financial Expert
and Member
Dennis Gershenson
President and CEO
Ramco-Gershenson Properties Trust
Executive Committee—Member
Arthur Goldberg
Managing Director
Corporate Solutions Group LLC
Audit Committee—
Financial Expert and Member
Compensation Committee—Chairman
David J. Nettina
President and Co-Chief Executive Officer
Career Management, LLC
Audit Committee—
Financial Expert and Chairman
Nominating and Corporate Governance
Committee—Member
Joel M. Pashcow
Managing Member
Nassau Capital LLC
Compensation Committee—Member
Executive Committee—Member
Nominating and Governance
Committee—Member
Mark K. Rosenfeld
Chairman and CEO
Wilherst Developers, Inc.
Audit Committee—
Financial Expert and Member
Compensation Committee—Member
Nominating and Corporate Governance
Committee—Chairman
Laurie M. Shahon
President of Wilton Capital Group
Compensation Committee—Member
Michael A. Ward
Private Investor
Executive Committee—Chairman
Nominating and Governance
Committee—Member
Compensation Committee—Member
PRINCIPAL EXECUTIVE OFFICERS:
Dennis Gershenson
President and CEO
Geoffrey Bedrosian
Executive Vice President,
Chief Financial Officer and
Secretary
John Hendrickson
Executive Vice President and
Chief Operating Officer
Corporate Information
Corporate Headquarters
31500 Northwestern Highway
Suite 300
Farmington Hills, MI 48334
Tel: (248) 350-9900
Fax: (248) 350-9925
www.rgpt.com
Stock Exchange Listing
New York Stock Exchange
NYSE:RPT
Independent Auditors
Grant Thornton LLP
Southfield, MI
Corporate Counsel
Honigman Miller Schwartz and
Cohn LLP
Detroit, MI
Transfer Agent and Registrar
American Stock Transfer &
Trust Company
Dividend Paying and Reinvestment
Plan Agent
59 Maiden Lane, Plaza Level
New York, NY 10038
Shareholder Services and Information:
(800) 937-5449
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Shareholder Information
Current and prospective
Ramco-Gershenson investors can
receive a copy of the Company’s
proxy statement, earnings announce-
ments as well as quarterly and annual
reports via the corporate web site,
www.rgpt.com or by contacting:
Dawn L. Hendershot
Vice President Investor Relations
and Corporate Communications
31500 Northwestern Highway
Suite 300
Farmington Hills, MI 48334
(248) 592-6202
dhendershot@rgpt.com
Member
National Association of Real Estate
Investment Trusts, Inc.
International Council of
Shopping Centers
Certifications
On May 29, 2015, the Company submit-
ted the Annual CEO Certification to the
NYSE, pursuant to Section 303A.12 of
the NYSE’s listing standards, whereby
our CEO certified that he is not aware of
any violation by the Trust of the NYSE’s
corporate governance listing standards
as of the date of the certification. In
addition, we have filed with the Securities
and Exchange Commission, as exhibits
to our Quarterly Reports on Form 10-Q
for the quarters ended March 31, June
30 and September 30, 2015, and our
Annual Report on Form 10-K for the year
ended December 31, 2015, certifications
by our CEO and CFO in accordance with
Sections 302 and 906 of the Sarbanes-
Oxley Act of 2002.
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31500 Northwestern Highway, Suite 300
Farmington Hills, MI 48334
Tel: (248) 350-9900 Fax: (248) 350-9925
www.rgpt.com