BEACHWOOD, Ohio, Jan. 10, 2012 /PRNewswire/ --DDR Corp. (NYSE: DDR) today announced a review of 2011 accomplishments as well as its guidance for 2012.
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The Company continued to aggressively pursue its long-term strategic objectives during 2011 and made significant progress in upgrading the quality of its shopping center portfolio through its capital recycling efforts, while improving its balance sheet by reducing leverage and extending debt duration. DDR's plans for 2012 are focused on continued growth in net asset value with further balance sheet, portfolio and FFO per share improvement.
Daniel B. Hurwitz, president and chief executive officer, commented, "We are very pleased to report another year of significant progress achieving the objectives of our long-term strategic plan, and we are encouraged by the prospects for 2012 and beyond. We remain focused on enhancing our relationships with the industry's most successful retailers, and providing industry-leading transparency and candor to the investment community."
Consistent with the Company's 2011 achievements and future prospects, DDR's Board of Directors recently approved a 50% increase in the quarterly common share dividend to $0.12 per share.
In 2011, the Company completed approximately $2.8 billion of capital transactions and financing activities including the following:
- Completed the initial public offering of Sonae Sierra Brasil (SSB) which generated gross proceeds of approximately $280 million. The IPO raised the capital necessary to fund SSB's identified development and expansion pipeline.
- Sold 9.5 million of its common shares in a public offering generating net proceeds of approximately $130 million. The net proceeds, plus $60 million from the cash exercise of warrants to purchase the Company's common shares by Mr. Alexander Otto and certain members of his family, were used to redeem $180 million of the Company's 8% Class G Preferred Shares.
- Issued $300 million of 4.75%, seven-year unsecured notes.
- Refinanced a $550 million senior secured term loan that was scheduled to mature in February 2012 with a new $500 million senior secured term loan. The new term loan has a final maturity of September 2015, and pricing is set at LIBOR plus 170 basis points.
- Amended its two senior unsecured revolving credit facilities, including the extension of the term of each to February 2016. The pricing on both revolving credit facilities was reduced to LIBOR plus 165 basis points, a decrease of 110 basis points from the previous rate.
- Completed $270 million of acquisitions of prime shopping centers and $461 million of asset dispositions. DDR's share of 2011 acquisitions was $230 million. DDR's share of 2011 dispositions was $371 million, including the sale of $57 million of non-income producing assets.
- Reduced consolidated debt from $4.3 billion to $4.1 billion, and extended the weighted average maturity of consolidated debt from 3.9 years to 4.3 years.
- Paid cash dividends of $0.22 per common share, an increase of 175% from 2010.
The Company also achieved the following operational accomplishments in 2011:
- Leased approximately 11.7 million square feet of gross leasable area.
- Increased core portfolio leased rate to 93.6%, up 100 basis points from 92.6% at year-end 2010.
- Increased total portfolio average annualized base rent per occupied square foot by approximately 3.4%.
- Increased the percentage of net operating income (NOI) generated from the prime portfolio to approximately 89%.
- Increased total portfolio ancillary income by approximately 24% in 2011 to approximately $54 million.
- Generated annual same store NOI growth in excess of 3%.
2012 Guidance
The Company expects to generate operating FFO per diluted share of $0.98 - $1.04 in 2012. Significant activity assumed in this guidance is as follows:
- As announced today, the acquisition and associated funding of the $1.43 billion portfolio of 46 shopping centers currently owned by EPN Group (the "EDT Retail Portfolio") in a joint venture with a real estate fund managed by Blackstone. The Company expects to own a 5% common equity interest in the venture, invest $150 million of preferred equity, and continue to provide management and leasing services to the partnership.
- Refinance maturing unsecured bonds with new long-term unsecured debt, including a new unsecured term loan of at least $200 million expected to close in the first quarter.
- Refinance maturing mortgage debt with new long-term secured debt, including a new seven-year mortgage loan of at least $100 million expected to close in the first quarter, which will pre-fund future maturities on assets which will be unencumbered.
- Dispose of $100 million of non-prime assets with net proceeds invested in the acquisition of prime shopping centers.
- Opportunistic capital raising activity to improve liquidity, further extend debt duration and improve credit metrics.
- Same store NOI growth of 2.0% - 3.0% with growth disproportionately weighted toward the second half of the year due to the timing of 2011 move-outs and 2012 rent commencements.
- Year-end core portfolio leased rate increasing by 100 basis points, resulting in a leased rate above 94.5%.
- Approximately $77 million in aggregate general and administrative expenses.
- Annual common share dividend of $0.48 per share.
About DDR
DDR is an owner and manager of 538 value-oriented shopping centers representing 134 million square feet in 41 states, Puerto Rico and Brazil. The company's assets areconcentrated in high barrier-to-entry markets with stable populations and high growth potential and its portfolio is actively managed to create long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under theticker symbol DDR. Additional information about the company is available atwww.ddr.com.
Safe Harbor
DDR considers portions of the information in this press release to be forward-looking statements within the meaning of Section27A of the Securities Act of 1933 and Section21E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, the ability of the joint venture between affiliates of the Company and Blackstone to successfully complete the acquisition of the EDT Retail Portfolio; local conditions such as oversupply of space or a reduction in demand for real estate in the area; competition from other available space; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant; constructing properties or expansions that produce a desired yield on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements and the success of our capital recycling strategy. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company's Form 10-K for the year ended December31, 2010. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
SOURCE DDR Corp.
