Exhibit 99.1
FOR IMMEDIATE RELEASE — October 27, 2010
Contact Information:
Cedar Shopping Centers, Inc.
Leo S. Ullman, Chairman, CEO and President
(516) 944-4525
lsu@cedarshoppingcenters.com
CEDAR SHOPPING CENTERS REPORTS THIRD QUARTER 2010 RESULTS
Port Washington, New York — October 27, 2010 — Cedar Shopping Centers, Inc. (NYSE: CDR) today
reported its financial results for the third quarter ended September 30, 2010.
Highlights
| • |
|
Revenues were $44.7 million (including all managed properties but excluding non-cash items)
compared to $39.9 million for the comparable quarter of 2009, an increase of 12.0%. |
| |
| • |
|
Net operating income (“NOI”) was $29.8 million (including all managed properties but
excluding non-cash items) compared to $26.6 million for the comparable quarter of 2009, an
increase of 11.9%. |
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| • |
|
Operating funds from operations (“FFO”), excluding non-cash items and transaction expenses,
was $0.14 per share/OP unit for the quarter. |
| |
| • |
|
The Company modified its full year 2010 FFO guidance to a range of $0.56 — $0.58 per
share/OP Unit to reflect, among other items, 2010 equity raises and joint venture activity. |
| |
| • |
|
Occupancy for all properties, including redevelopment properties, increased 80 basis points
to 91%. |
| |
| • |
|
Debt-to-total-market capitalization as of September 30, 2010 was reduced to 56.3% from
72.3% at September 30, 2009. |
Leo Ullman, Cedar’s CEO, stated, “The Company made solid progress enhancing its balance sheet
through a reduction in overall debt while also arranging long-term fixed-rate debt to replace
shorter-term floating-rate debt. Additionally, Cedar was able to establish meaningful long-term
future growth in income during the third quarter, in large part through accretive joint venture
acquisitions. This ongoing multi-focus positions the Company to effectively achieve future growth
in shareholder value.”
“During the third quarter, at the operating level, we executed well and this resulted in dramatic
improvement in our revenues and net operating income for our owned and managed properties”, Mr.
Ullman continued. “Our performance continues to reflect strong increases in leasing results, both
for renewals and new leases, along with occupancy gains in some of our key assets. We also have an
opportunity as we move ahead to positively impact our results as we successfully re-lease a couple
of larger vacancies and complete the lease-up of our remaining development properties.”
This release refers to certain non-GAAP amounts. Reconciliations of non-GAAP to GAAP
amounts are presented in the Company’s Supplemental Financial Information for the period ended
September 30, 2010 (page 9) filed contemporaneously with this release as an Exhibit to Form 8-K
and are also available on the Company’s website at www.cedarshoppingcenters.com.
1
Operating Activities
Leasing
In the third quarter of 2010, the Company signed 35 renewal leases, substantially all at stabilized
properties, totaling approximately 348,000 square feet of GLA with an average increase in base
rents of 3.6%. Renewals include two leases comprising 229,000 square feet that renewed with no
increase according to their terms. The average increase for the other 33 renewal leases was 7.5%.
The Company signed 31 new leases totaling approximately 88,000 square feet at an average base rent
of $14.74 per square foot, while the Company had 12 terminated leases, totaling approximately
73,000 square feet, at an average base rent of $10.76 per square foot.
The Company has substantially completed all renewal leases for 2010 and more than 50% of renewals
for 2011.
Occupancy
Occupancy on an overall basis, including redevelopment properties, increased by 80 basis points in
the third quarter of 2010 as compared to the prior quarter to approximately 91%. Of that amount,
occupancy at the Company’s stabilized core properties not undergoing major re-development or
re-tenanting activities was 93.1%. The overall results reflect the lease termination of a single
big box club store tenant at The Brickyard (Berlin, Connecticut) (where the Company expects to
replace a departed Sam’s Club with a new “big box” tenant) and a lease termination at Oakhurst
Plaza (Harrisburg, Pennsylvania) (where Giant Stores vacated its store in favor of a large new
prototype at the Company’s new ground-up development at Blue Mountain Commons, a quarter mile
away). The results also reflect continued lease-up at Crossroads II (Stroudsburg, Pennsylvania) and
Upland Square (Pottsgrove, Pennsylvania).
Same-Property Results
Same-property net operating income, comprising 101 consolidated properties, excluding straight-line
rents and amortization of intangible lease liabilities, was $21.8 million for the third quarter of
2010, unchanged from the second quarter of 2010 for the same 101 properties. Such same-property net
operating income was $22.7 million for the comparable period of 2009. The results in the 2010
periods, as described above, reflect the vacancies created at the beginning of 2010 in connection
with redevelopment and re-tenanting of Oakhurst Plaza and The Brickyard.
Financial Results
For the third quarter of 2010, excluding impairment charges and non-cash revenues from straight
line rents and amortization of intangible lease liabilities, as well as certain other non-cash
and/or non-recurring items, the Company had stable year-over-year operating results while
continuing to greatly improve its balance sheet strength and financial flexibility.
Revenues
Revenues for the quarter ended September 30, 2010 from all owned and managed properties, excluding
non-cash items, increased 12.0% to $44.7 million as compared to $39.9 million for the comparable
quarter of 2009. The increase resulted primarily from lease-up at development properties and the
acquisition of properties by the Cedar/RioCan joint venture, including fees related thereto.
Revenues for the nine months ended September 30, 2010 from all owned and managed properties,
excluding non-cash items, increased 8.5% to $131.3 million as compared to $121.1 million for the
comparable period of 2009.
2
As a result primarily of the exclusion of revenues during the 2010 periods attributable to the
contribution of seven properties previously 100% owned by Cedar to the Cedar/RioCan joint venture,
the Company’s revenues, as reported, were $40.4 million and $44.7 million, respectively, for the
three months ended September 30, 2010 and 2009, and $125.6 million and $133.7 million,
respectively, for the nine months ended September 30, 2010 and 2009.
Net Operating Income (NOI)
NOI attributable to all owned and managed properties, excluding non-cash revenues and
mark-to-market adjustments relating to stock-based compensation, increased 11.9% to $29.8 million
for the third quarter of 2010 as compared to $26.6 million for the comparable quarter of 2009. The
increase results primarily from the lease-up at development properties and the acquisition of
properties by the Cedar/RioCan joint venture, including fees earned from such transactions. The
Company’s NOI attributable to all properties, excluding non-cash revenues and mark-to-market
adjustments relating to stock-based compensation, increased 5.8% to $85.1 million for the nine
months ended September 30, 2010 as compared to $80.4 million for the comparable period of 2009.
As a result primarily of the exclusion of revenues during the 2010 periods attributable to the
contribution of seven properties previously 100% owned by Cedar to the Cedar/RioCan joint venture,
NOI, as reported, was $27.2 million for the third quarter of 2010 as compared to $31.3 million for
the comparable quarter of 2009. The Company’s NOI, as reported, was $83.5 million for the nine
months ended September 30, 2010 as compared to $93.3 million for the comparable period of 2009.
Net Income Attributable to Common Shareholders
As a result primarily of (i) the exclusion of income during the 2010 periods attributable to the
contribution of seven properties previously 100% owned by Cedar to the Cedar/RioCan joint venture,
(ii) higher preferred stock dividend expense from the issuance of preferred stock, and (iii) lower
non-cash revenues, the Company had a net loss, before impairments and mark-to-market adjustments
relating to stock-based compensation, of $1.4 million for the third quarter of 2010 as compared to
net income of $2.4 million for the comparable quarter of 2009. The decreases were partially offset
by lower interest expense from the repayment of debt with proceeds from the sale of common and
preferred stock, partially offset by higher interest expense and amortization of fees from the
renewal of the stabilized line of credit, and revenues from the lease-up at development properties.
Results on a per-share basis were also reduced as a result of the issuances of common stock as
described below. The Company had a net loss, before impairments and mark-to-market adjustments
relating to stock-based compensation, of $2.9 million for the nine months ended September 30, 2010
as compared to net income of $8.2 million for the comparable period of 2009.
In addition to the items discussed above, as a result primarily of the accelerated write-off of
deferred financing costs from the Company’s election to reduce the aggregate commitments from $285
million to $185 million under its stabilized property credit facility, transaction costs incurred
by the acquisition of properties in the Cedar/RioCan joint venture and impairment charges related
to the disposition of properties, the Company reported a net loss of $6.8 million ($0.10 per share)
for the third quarter of 2010 as compared to net income of $1.4 million ($0.03 per share) for the
third quarter of 2009 The Company reported a net loss of $14.5 million ($0.23 per share) for the
nine months ended September 30, 2010 as compared to net income of $5.0 million ($0.11 per share)
for the comparable period of 2009.
3
FFO
As a result primarily of (i) reduced income attributable to the contribution by Cedar of the seven
properties previously owned to the Cedar/RioCan joint venture, (ii) issuances of additional shares
of common and preferred stock and (iii) reduced revenue from straight-line rent and amortization of
intangible lease liabilities, operating FFO for the third quarter of 2010, before the
above-mentioned impairments and non-recurring items, was $9.3 million ($0.14 per share/OP unit), as
compared to $14.0 million ($0.30 per share/OP unit) for the comparable quarter of 2009. After the
transaction costs and non-recurring items, FFO as reported was $3.8 million ($0.06 per share/OP
unit) as compared to $13.0 million ($0.28 per share/OP unit) for the comparable quarter of 2009.
Operating FFO for the nine months ended September 30, 2010, before the above-mentioned impairments
and non-recurring items, was $28.8 million ($0.44 per share/OP unit), as compared to $42.6 million
($0.91 per share/OP unit) for the comparable period of 2009. After transaction costs, impairments
and non-recurring items, FFO as reported was $16.8 million ($0.26 per share/OP unit) as compared to
$39.2 million ($0.83 per share/OP unit) for the comparable period of 2009.
A reconciliation of net income attributable to common shareholders to FFO is contained in the table
accompanying this release.
Balance Sheet
The Company has continued to improve its balance sheet flexibility during 2010. In 2010, through
the end of the third quarter, the Company raised approximately $80 million through the issuance of
common stock, $33 million through the contribution of properties to the RioCan joint ventures and
other outright sales, and $67 million through the sale of 2.85 million shares of preferred stock.
In connection with property transfers and sales, the Company also removed approximately $102
million of debt from its balance sheet.
Through the third quarter of 2010, the Company used approximately $25 million of equity, to
purchase eight properties through its joint venture with RioCan at an aggregate purchase price of
approximately $226 million. The RioCan joint venture arranged $102.5 million of fixed rate
mortgage debt on six of the eight joint venture properties acquired in the third quarter of 2010,
another $33.0 million on three properties previously acquired and/or contributed to the joint
venture, and expects to place an additional $70 — $80 million of mortgage debt on seven other
properties acquired in the third and fourth quarters of 2010 of which 20% would be refunded to the
Company.
The cumulative effect of these transactions has been to reduce the Company’s debt-to-total-market
capitalization to 56.3% as of September 30, 2010 from 72.3% at September 30, 2009.
Total assets were $1.65 billion at September 30, 2010. The Company had total debt outstanding of
$812.6 million at September 30, 2010 as compared to $946.0 million at December 31, 2009 excluding
mortgage debt related to properties held for sale. The average interest rate on the Company’s total
debt was 5.1% per annum.
At September 30, 2010, the Company’s fixed-rate debt, excluding mortgage debt related to a property
held for sale, was approximately 74% of total indebtedness, with a weighted average remaining term
of 5.4 years and a weighted average interest rate of 5.8% per annum.
4
As of September 30, 2010, the Company had 67.6 million shares of common stock and OP Units and 6.4
million shares of preferred stock outstanding compared to 47.1 million shares and OP Units and 3.6
million shares of preferred stock at September 30, 2009.
Credit Facilities
The outstanding balance at September 30, 2010 under the Company’s $185 million stabilized property
credit facility (due 2012 with a one-year extension option) was $23.5 million with an availability
of approximately $140 million. This compares to $239 million outstanding at September 30, 2009. In
September 2010, the Company elected to reduce the total commitments under its stabilized property
credit facility from $285 million to $185 million. In this connection, the Company accelerated the
write-off of $2.6 million of deferred financing costs. As a result, the Company anticipates saving
$0.5 million annually related to the unused fees payable under the facility and having $1.2 million
of reduced amortization of deferred financing costs annually through the expected maturity of the
facility.
The outstanding balance as of September 30, 2010 under the Company’s $150 million credit facility
for development properties was approximately $103 million.
The Cedar/RioCan Joint Venture
Initial seven-property contribution. In the second quarter of 2010, the Company completed the
transfer of an 80% interest in all seven properties identified under the joint venture arrangement
with RioCan. In the aggregate, the transfers of properties generated net cash proceeds of
approximately $64 million and removed approximately $94 million of debt from the Company’s balance
sheet.
Property acquisitions in 2010. Through the date of this release, the Cedar/RioCan joint venture
has completed acquisitions in 2010 of 14 properties for an aggregate purchase price of
approximately $345 million excluding fees and expenses. They include in the third quarter of 2010
Exeter Commons (Exeter Township, Pennsylvania) for $53.0 million, Montville Commons (Uncasville,
Connecticut) for $19.6 million and a portfolio of five shopping centers purchased for approximately
$134 million in Pennsylvania, New Jersey and Virginia,. In October, the joint venture purchased
Cross Keys Place (Sewell, New Jersey) for $26.3 million and a portfolio of five shopping centers
located in Pennsylvania, Maryland and Virginia for $91.0 million.
Financial Guidance
The Company reported FFO of $0.14 per share/OP Unit for the third quarter of 2010 excluding
impairment charges and mark-to-market adjustments of stock-based compensation. The Company
modified its full year 2010 FFO guidance to $0.56 to $0.58 per share/OP Unit which excludes, as
previously disclosed, the following:
| |
• |
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Acquisitions or sales of properties not previously announced, whether by the Company
itself or in joint venture, as well as acquisition fees, financing fees and/or other fees
attributable thereto; |
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| |
• |
|
Mark-to-market adjustments relating to stock-based compensation; and |
| |
| |
• |
|
Other non-recurring transactions |
5
Supplemental Financial Information Package
The Company has issued “Supplemental Financial Information” for the period ended September 30, 2010
and has filed such information today as an exhibit to Form 8-K, which will also be available on the
Company’s website at www.cedarshoppingcenters.com.
Reference to Form 10-Q
Interested parties are urged to review the Form 10-Q to be filed with the Securities and Exchange
Commission for the period ended September 30, 2010, when available, for further details. The Form
10-Q can also be linked through the “Investor Relations” section of the Company’s website.
Investor Conference Call
The Company will host a conference call on Thursday, October 28, 2010, at 11:00 AM Eastern time to
discuss the third quarter results. The conference call can be accessed by dialing (877) 795-3647 or
(719) 325-4929 for international participants. A live webcast of the conference call will be
available online on the Company’s website at www.cedarshoppingcenters.com. A replay of the
call will be available from noon Eastern time on October 29, 2010, until midnight Eastern time on
November 12, 2010. The replay dial-in numbers are (888) 203-1112 or (719) 457-0820 for
international callers. Please use passcode 3235841 for the telephonic replay. A replay of the
Company’s webcast will be available on the Company’s website for a limited time.
About Cedar Shopping Centers
Cedar Shopping Centers, Inc. is a fully-integrated real estate investment trust which focuses
primarily on the ownership, operation, development and redevelopment of “bread and
butter”® supermarket-anchored shopping centers in coastal mid-Atlantic and New
England states. The Company presently owns (both wholly-owned and in joint venture) and manages
approximately 15.5 million square feet of GLA at 132 shopping center properties, of which more than
75% are anchored by supermarkets and/or drugstores with average remaining lease terms of
approximately 11 years. The Company’s properties have an occupancy rate of approximately 91%.
For additional financial and descriptive information on the Company, its operations and its
portfolio, please refer to the Company’s website at www.cedarshoppingcenters.com.
Forward-Looking Statements
Statements made or incorporated by reference in this press release include certain “forward-looking
statements”. Forward-looking statements include, without limitation, statements containing the
words “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import which
express the Company’s beliefs, expectations or intentions regarding future performance or future
events or trends. While forward-looking statements reflect good faith beliefs, expectations, or
intentions, they are not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors, which may cause actual results, performance or achievements to
differ materially from anticipated future results, performance or achievements expressed or implied
by such forward-looking statements as a result of factors outside of the Company’s control. Certain
factors that might cause such differences include, but are not limited to, the following: real
estate investment considerations, such as the effect of economic and other conditions in general
and in the Company’s market areas in particular; the financial viability of the Company’s tenants
(including an inability to pay rent, filing for bankruptcy protection, closing stores and/or vacating the premises);
the continuing availability of acquisition,
6
development
and redevelopment opportunities, on favorable terms; the availability of
equity and debt capital (including the availability of construction financing) in the public and
private markets; the availability of suitable joint venture partners and potential purchasers of
the Company’s properties if offered for sale; the ability of the Company’s joint venture partners
to fund their respective shares of property acquisitions, tenant improvements and capital
expenditures; changes in interest rates; the fact that returns from acquisition, development and
redevelopment activities may not be at expected levels or at expected times; risks inherent in
ongoing development and redevelopment projects including, but not limited to, cost overruns
resulting from weather delays, changes in the nature and scope of development and redevelopment
efforts, changes in governmental regulations relating thereto, and market factors involved in the
pricing of material and labor; the need to renew leases or re-let space upon the expiration or
termination of current leases and incur applicable required replacement costs; and the financial
flexibility of the Company and its joint venture partners to repay or refinance debt obligations
when due and to fund tenant improvements and capital expenditures.
Non-GAAP Financial Measures — FFO
Funds From Operations (“FFO”) is a widely-recognized non-GAAP financial measure for REITs that the
Company believes, when considered with financial statements determined in accordance with GAAP, is
useful to investors in understanding financial performance and providing a relevant basis for
comparison among REITs. In addition, FFO is useful to investors as it captures features particular
to real estate performance by recognizing that real estate generally appreciates over time or
maintains residual value to a much greater extent than do other depreciable assets. Investors
should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating
performance. The Company presents FFO because the Company considers it an important supplemental
measure of its operating performance and believes that it is frequently used by securities
analysts, investors and other interested parties in the evaluation of REITs. Among other things,
the Company uses FFO or an adjusted FFO-based measure (1) as one of several criteria to determine
performance-based bonuses for members of senior management, (2) in performance comparisons with
other shopping center REITs, and (3) to measure compliance with certain financial covenants under
the terms of the Company’s secured revolving credit facilities.
The Company computes FFO in accordance with the “White Paper” on FFO published by the National
Association of Real Estate Investment Trusts (“NAREIT”), which defines FFO as net income applicable
to common shareholders (determined in accordance with GAAP), excluding gains or losses from debt
restructurings and sales of properties, plus real estate-related depreciation and amortization, and
after adjustments for partnerships and joint ventures (which are computed to reflect FFO on the
same basis).
FFO does not represent cash generated from operating activities and should not be considered as an
alternative to net income applicable to common shareholders or to cash flow from operating
activities. FFO is not indicative of cash available to fund ongoing cash needs, including the
ability to make cash distributions. Although FFO is a measure used for comparability in assessing
the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the
computation of FFO may vary from one company to another.
The following table sets forth the Company’s calculations of FFO for the three and nine months
ended September 30, 2010 and 2009:
7
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Three months ended September 30, |
|
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Nine months ended September 30, |
|
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2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Net (loss) income attributable to common shareholders |
|
$ |
(6,780,000 |
) |
|
$ |
1,396,000 |
|
|
$ |
(14,521,000 |
) |
|
$ |
4,979,000 |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization |
|
|
11,831,000 |
|
|
|
12,724,000 |
|
|
|
35,486,000 |
|
|
|
37,815,000 |
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Limited partners’ interest |
|
|
(196,000 |
) |
|
|
64,000 |
|
|
|
(488,000 |
) |
|
|
224,000 |
|
Minority interests in consolidated joint ventures |
|
|
(194,000 |
) |
|
|
332,000 |
|
|
|
194,000 |
|
|
|
287,000 |
|
Minority interests’ share of FFO applicable to
consolidated joint ventures |
|
|
(1,340,000 |
) |
|
|
(1,661,000 |
) |
|
|
(4,717,000 |
) |
|
|
(4,131,000 |
) |
Equity in income of unconsolidated joint ventures |
|
|
288,000 |
|
|
|
(260,000 |
) |
|
|
(547,000 |
) |
|
|
(802,000 |
) |
FFO from unconsolidated joint ventures |
|
|
146,000 |
|
|
|
377,000 |
|
|
|
1,566,000 |
|
|
|
1,113,000 |
|
Gain on sale of discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
(170,000 |
) |
|
|
(277,000 |
) |
|
|
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|
|
|
|
|
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|
|
|
|
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|
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|
|
|
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Funds From Operations |
|
$ |
3,755,000 |
|
|
$ |
12,972,000 |
|
|
$ |
16,803,000 |
|
|
$ |
39,208,000 |
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
|
|
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|
|
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FFO per common share (assuming conversion of OP Units)
Basic and diluted |
|
$ |
0.06 |
|
|
$ |
0.28 |
|
|
$ |
0.26 |
|
|
$ |
0.83 |
|
|
|
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Weighted average number of common shares (basic): |
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|
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|
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|
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|
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Shares used in determination of basic earnings per share |
|
|
65,835,000 |
|
|
|
45,066,000 |
|
|
|
62,999,000 |
|
|
|
45,003,000 |
|
Additional shares assuming conversion of OP Units |
|
|
1,892,000 |
|
|
|
2,014,000 |
|
|
|
1,941,000 |
|
|
|
2,016,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of basic FFO per share |
|
|
67,727,000 |
|
|
|
47,080,000 |
|
|
|
64,940,000 |
|
|
|
47,019,000 |
|
|
|
|
|
|
|
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|
|
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|
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Weighted average number of common shares (dilutive): |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted earnings per share |
|
|
65,835,000 |
|
|
|
45,066,000 |
|
|
|
63,025,000 |
|
|
|
45,003,000 |
|
Additional shares assuming conversion of OP Units |
|
|
1,892,000 |
|
|
|
2,014,000 |
|
|
|
1,941,000 |
|
|
|
2,016,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in determination of diluted FFO per share |
|
|
67,727,000 |
|
|
|
47,080,000 |
|
|
|
64,966,000 |
|
|
|
47,019,000 |
|
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8
CEDAR SHOPPING CENTERS, INC.
Consolidated Balance Sheets
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September 30, |
|
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December 31, |
|
| |
|
2010 |
|
|
2009 |
|
| |
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Real estate: |
|
|
|
|
|
|
|
|
Land |
|
$ |
348,715,000 |
|
|
$ |
356,366,000 |
|
Buildings and improvements |
|
|
1,341,668,000 |
|
|
|
1,316,315,000 |
|
|
|
|
|
|
|
|
|
|
|
1,690,383,000 |
|
|
|
1,672,681,000 |
|
Less accumulated depreciation |
|
|
(195,944,000 |
) |
|
|
(163,879,000 |
) |
|
|
|
|
|
|
|
Real estate, net |
|
|
1,494,439,000 |
|
|
|
1,508,802,000 |
|
|
|
|
|
|
|
|
|
|
Real estate to be transferred to a joint venture |
|
|
— |
|
|
|
139,743,000 |
|
Real estate held for sale — discontinued operations |
|
|
8,325,000 |
|
|
|
21,380,000 |
|
Investment in unconsolidated joint ventures |
|
|
44,029,000 |
|
|
|
14,113,000 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
12,142,000 |
|
|
|
17,164,000 |
|
Restricted cash |
|
|
11,617,000 |
|
|
|
14,075,000 |
|
Receivables: |
|
|
|
|
|
|
|
|
Rents and other tenant receivables, net |
|
|
9,485,000 |
|
|
|
7,423,000 |
|
Straight-line rents |
|
|
15,999,000 |
|
|
|
14,545,000 |
|
Joint venture settlements |
|
|
9,533,000 |
|
|
|
2,322,000 |
|
Other assets |
|
|
11,818,000 |
|
|
|
9,315,000 |
|
Deferred charges, net |
|
|
29,717,000 |
|
|
|
36,236,000 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,647,104,000 |
|
|
$ |
1,785,118,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
|
Mortgage loans payable |
|
$ |
686,179,000 |
|
|
$ |
688,289,000 |
|
Mortgage loans payable — real estate to be transferred to a
joint venture |
|
|
— |
|
|
|
94,018,000 |
|
Mortgage
loans payable — real estate held for sale —
discontinued operations |
|
|
4,626,000 |
|
|
|
12,455,000 |
|
Secured revolving credit facilities |
|
|
126,446,000 |
|
|
|
257,685,000 |
|
Accounts payable and accrued liabilities |
|
|
30,335,000 |
|
|
|
46,902,000 |
|
Unamortized intangible lease liabilities |
|
|
49,304,000 |
|
|
|
53,733,000 |
|
Liabilities — real estate held for sale and, at December 31,
2009, real
estate to be transferred to a joint venture |
|
|
1,275,000 |
|
|
|
5,634,000 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
898,165,000 |
|
|
|
1,158,716,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Limited partners’ interest in Operating Partnership |
|
|
8,473,000 |
|
|
|
12,638,000 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
Cedar Shopping Centers, Inc. shareholders’ equity: |
|
|
|
|
|
|
|
|
Preferred stock ($.01 par value, $25.00 per share
liquidation value, 12,500,000 shares authorized, 6,400,000 and
3,550,000 shares, respectively, issued and outstanding) |
|
|
158,575,000 |
|
|
|
88,750,000 |
|
Common stock ($.06 par value, 150,000,000 shares authorized
66,035,000 and 52,139,000 shares, respectively, issued and
outstanding) |
|
|
3,962,000 |
|
|
|
3,128,000 |
|
Treasury stock (1,120,000 and 981,000 shares, respectively,
at cost) |
|
|
(10,419,000 |
) |
|
|
(9,688,000 |
) |
Additional paid-in capital |
|
|
708,310,000 |
|
|
|
621,299,000 |
|
Cumulative distributions in excess of net income |
|
|
(188,336,000 |
) |
|
|
(162,041,000 |
) |
Accumulated other comprehensive loss |
|
|
(3,924,000 |
) |
|
|
(2,992,000 |
) |
|
|
|
|
|
|
|
Total Cedar Shopping Centers, Inc. shareholders’ equity |
|
|
668,168,000 |
|
|
|
538,456,000 |
|
|
|
|
|
|
|
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
Minority interests in consolidated joint ventures |
|
|
65,237,000 |
|
|
|
67,229,000 |
|
Limited partners’ interest in Operating Partnership |
|
|
7,061,000 |
|
|
|
8,079,000 |
|
|
|
|
|
|
|
|
Total noncontrolling interests |
|
|
72,298,000 |
|
|
|
75,308,000 |
|
|
|
|
|
|
|
|
Total equity |
|
|
740,466,000 |
|
|
|
613,764,000 |
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
1,647,104,000 |
|
|
$ |
1,785,118,000 |
|
|
|
|
|
|
|
|
9
CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Operations
(unaudited)
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
| |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rents |
|
$ |
31,380,000 |
|
|
$ |
36,878,000 |
|
|
$ |
98,877,000 |
|
|
$ |
107,462,000 |
|
Expense recoveries |
|
|
7,370,000 |
|
|
|
7,688,000 |
|
|
|
24,692,000 |
|
|
|
25,831,000 |
|
Other |
|
|
1,628,000 |
|
|
|
146,000 |
|
|
|
2,056,000 |
|
|
|
443,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
|
|
40,378,000 |
|
|
|
44,712,000 |
|
|
|
125,625,000 |
|
|
|
133,736,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating, maintenance and management |
|
|
7,788,000 |
|
|
|
8,231,000 |
|
|
|
26,033,000 |
|
|
|
24,878,000 |
|
Real estate and other property-related taxes |
|
|
5,347,000 |
|
|
|
5,171,000 |
|
|
|
16,103,000 |
|
|
|
15,535,000 |
|
General and administrative |
|
|
2,421,000 |
|
|
|
2,521,000 |
|
|
|
6,738,000 |
|
|
|
6,813,000 |
|
Impairments |
|
|
155,000 |
|
|
|
— |
|
|
|
2,272,000 |
|
|
|
— |
|
Acquisition transaction costs and terminated projects, net |
|
|
2,043,000 |
|
|
|
— |
|
|
|
3,365,000 |
|
|
|
3,948,000 |
|
Depreciation and amortization |
|
|
11,854,000 |
|
|
|
12,473,000 |
|
|
|
35,485,000 |
|
|
|
36,925,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses |
|
|
29,608,000 |
|
|
|
28,396,000 |
|
|
|
89,996,000 |
|
|
|
88,099,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
10,770,000 |
|
|
|
16,316,000 |
|
|
|
35,629,000 |
|
|
|
45,637,000 |
|
Non-operating income and expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, including amortization of
deferred financing costs |
|
|
(12,495,000 |
) |
|
|
(12,436,000 |
) |
|
|
(39,052,000 |
) |
|
|
(35,503,000 |
) |
Write-off of deferred financing costs |
|
|
(2,552,000 |
) |
|
|
— |
|
|
|
(2,552,000 |
) |
|
|
— |
|
Interest income |
|
|
6,000 |
|
|
|
10,000 |
|
|
|
25,000 |
|
|
|
27,000 |
|
Equity in (loss) income of unconsolidated joint ventures |
|
|
(288,000 |
) |
|
|
260,000 |
|
|
|
547,000 |
|
|
|
802,000 |
|
Gain on sale of land parcel |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
236,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-operating income and expense |
|
|
(15,329,000 |
) |
|
|
(12,166,000 |
) |
|
|
(41,032,000 |
) |
|
|
(34,438,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before discontinued operations |
|
|
(4,559,000 |
) |
|
|
4,150,000 |
|
|
|
(5,403,000 |
) |
|
|
11,199,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from discontinued operations |
|
|
68,000 |
|
|
|
(389,000 |
) |
|
|
(2,965,000 |
) |
|
|
(79,000 |
) |
Gain on sale of discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
170,000 |
|
|
|
277,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations |
|
|
68,000 |
|
|
|
(389,000 |
) |
|
|
(2,795,000 |
) |
|
|
198,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
|
(4,491,000 |
) |
|
|
3,761,000 |
|
|
|
(8,198,000 |
) |
|
|
11,397,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less, net loss (income) attributable to noncontrolling
interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests in consolidated joint ventures |
|
|
194,000 |
|
|
|
(332,000 |
) |
|
|
(194,000 |
) |
|
|
(287,000 |
) |
Limited partners’ interest in Operating Partnership |
|
|
196,000 |
|
|
|
(64,000 |
) |
|
|
488,000 |
|
|
|
(224,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net loss (income) attributable to noncontrolling interests |
|
|
390,000 |
|
|
|
(396,000 |
) |
|
|
294,000 |
|
|
|
(511,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Cedar Shopping Centers, Inc. |
|
|
(4,101,000 |
) |
|
|
3,365,000 |
|
|
|
(7,904,000 |
) |
|
|
10,886,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred distribution requirements |
|
|
(2,679,000 |
) |
|
|
(1,969,000 |
) |
|
|
(6,617,000 |
) |
|
|
(5,907,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to common shareholders |
|
$ |
(6,780,000 |
) |
|
$ |
1,396,000 |
|
|
$ |
(14,521,000 |
) |
|
$ |
4,979,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share attributable to common sharehoders (basic
and diluted): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.10 |
) |
|
$ |
0.04 |
|
|
$ |
(0.19 |
) |
|
$ |
0.11 |
|
Discontinued operations |
|
|
— |
|
|
|
(0.01 |
) |
|
|
(0.04 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(0.10 |
) |
|
$ |
0.03 |
|
|
$ |
(0.23 |
) |
|
$ |
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Cedar Shopping Centers, Inc.
common shareholders, net of limited partners’ interest: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations |
|
$ |
(6,846,000 |
) |
|
$ |
1,768,000 |
|
|
$ |
(11,810,000 |
) |
|
$ |
4,790,000 |
|
(Loss) income from discontinued operations |
|
|
66,000 |
|
|
|
(372,000 |
) |
|
|
(2,876,000 |
) |
|
|
(76,000 |
) |
Gain on sale of discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
165,000 |
|
|
|
265,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(6,780,000 |
) |
|
$ |
1,396,000 |
|
|
$ |
(14,521,000 |
) |
|
$ |
4,979,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share |
|
$ |
0.0900 |
|
|
$ |
— |
|
|
$ |
0.1800 |
|
|
$ |
0.1125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
65,835,000 |
|
|
|
45,066,000 |
|
|
|
62,999,000 |
|
|
|
45,003,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
CEDAR SHOPPING CENTERS, INC.
Consolidated Statements of Cash Flows
(unaudited)
| |
|
|
|
|
|
|
|
|
| |
|
Nine months ended September 30, |
|
| |
|
2010 |
|
|
2009 |
|
Cash flow from operating activities: |
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(8,198,000 |
) |
|
$ |
11,397,000 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Non-cash provisions: |
|
|
|
|
|
|
|
|
Equity in income of unconsolidated joint ventures |
|
|
(547,000 |
) |
|
|
(802,000 |
) |
Distributions from unconsolidated joint ventures |
|
|
759,000 |
|
|
|
716,000 |
|
Impairments |
|
|
2,272,000 |
|
|
|
— |
|
Terminated projects |
|
|
1,324,000 |
|
|
|
3,139,000 |
|
Impairment — discontinued operations |
|
|
3,274,000 |
|
|
|
— |
|
Gain on sales of real estate |
|
|
(170,000 |
) |
|
|
(513,000 |
) |
Straight-line rents |
|
|
(1,622,000 |
) |
|
|
(2,048,000 |
) |
Provision for doubtful accounts |
|
|
2,484,000 |
|
|
|
2,770,000 |
|
Depreciation and amortization |
|
|
35,644,000 |
|
|
|
37,965,000 |
|
Amortization of intangible lease liabilities |
|
|
(7,478,000 |
) |
|
|
(10,620,000 |
) |
Amortization/market price adjustments relating to stock-based compensation |
|
|
2,068,000 |
|
|
|
1,713,000 |
|
Amortization and accelerated write-off of deferred financing costs |
|
|
6,620,000 |
|
|
|
2,410,000 |
|
Increases/decreases in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Rents and other receivables, net |
|
|
(4,518,000 |
) |
|
|
(5,108,000 |
) |
Joint venture settlements |
|
|
(3,383,000 |
) |
|
|
— |
|
Prepaid expenses and other |
|
|
(6,935,000 |
) |
|
|
(4,718,000 |
) |
Accounts payable and accrued expenses |
|
|
(1,349,000 |
) |
|
|
(2,098,000 |
) |
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
20,245,000 |
|
|
|
34,203,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities: |
|
|
|
|
|
|
|
|
Expenditures for real estate and improvements |
|
|
(20,874,000 |
) |
|
|
(86,049,000 |
) |
Net proceeds from sales of real estate |
|
|
2,056,000 |
|
|
|
3,472,000 |
|
Net proceeds from transfers to unconsolidated joint venture, less
cash at dates of transfer |
|
|
31,395,000 |
|
|
|
— |
|
Investments
in and advances to unconsolidated joint ventures |
|
|
(30,396,000 |
) |
|
|
(350,000 |
) |
Distributions of capital from unconsolidated joint venture |
|
|
7,725,000 |
|
|
|
— |
|
Construction escrows and other |
|
|
4,632,000 |
|
|
|
(901,000 |
) |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(5,462,000 |
) |
|
|
(83,828,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities: |
|
|
|
|
|
|
|
|
Net (repayments)/advances (to)/from revolving credit facilities |
|
|
(131,239,000 |
) |
|
|
18,989,000 |
|
Proceeds from mortgage financings |
|
|
16,272,000 |
|
|
|
51,588,000 |
|
Mortgage repayments |
|
|
(18,594,000 |
) |
|
|
(15,753,000 |
) |
Payments of debt financing costs |
|
|
(1,141,000 |
) |
|
|
(2,821,000 |
) |
Termination payments related to interest rate swaps |
|
|
(5,476,000 |
) |
|
|
— |
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
Contributions from consolidated joint venture minority interests, net |
|
|
— |
|
|
|
12,212,000 |
|
Distributions to consolidated joint venture minority interests |
|
|
(2,186,000 |
) |
|
|
(2,113,000 |
) |
Redemption of Operating Partnership Units |
|
|
(2,834,000 |
) |
|
|
— |
|
Distributions to limited partners |
|
|
(526,000 |
) |
|
|
(229,000 |
) |
Net proceeds from the sales of preferred and common stock |
|
|
138,296,000 |
|
|
|
— |
|
Exercise of warrant |
|
|
10,000,000 |
|
|
|
— |
|
Preferred stock distributions |
|
|
(5,907,000 |
) |
|
|
(5,907,000 |
) |
Distributions to common shareholders |
|
|
(16,470,000 |
) |
|
|
(5,046,000 |
) |
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities |
|
|
(19,805,000 |
) |
|
|
50,920,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(5,022,000 |
) |
|
|
1,295,000 |
|
Cash and cash equivalents at beginning of period |
|
|
17,164,000 |
|
|
|
8,231,000 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
12,142,000 |
|
|
$ |
9,526,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11