- Continued Strength in Leasing Drove Record Total and Small Shop Leased Occupancy -
NEW YORK, Nov. 1, 2022 /PRNewswire/ -- Brixmor Property Group Inc. (NYSE: BRX) ("Brixmor" or the "Company") announced today its operating results for the three and nine months ended September 30, 2022. For the three months ended September 30, 2022 and 2021, net income was $0.26 per diluted share and $0.15 per diluted share, respectively.
Key highlights for the three months ended September 30, 2022 include:
Subsequent events:
"Our team and business plan continue to perform, as reflected in our strong leasing volumes and spreads, our record portfolio-wide occupancy, and our stabilization of highly accretive reinvestments that deliver significant value, even in a rising interest rate environment," commented James Taylor, CEO and President. "Importantly, our disciplined execution, coupled with our forward leasing and reinvestment pipelines, positions us to continue to deliver value to our stakeholders in the years to come."
FINANCIAL HIGHLIGHTS
Net Income
Nareit FFO
Same Property NOI Performance
Dividend
PORTFOLIO AND INVESTMENT ACTIVITY
Value Enhancing Reinvestment Opportunities
Acquisitions
Dispositions
CAPITAL STRUCTURE
GUIDANCE
(Unaudited, dollars in millions, except per share amounts) | 2022E | 2022E Per Diluted Share | ||
Net income | $305 - $314 | $1.01 - $1.04 | ||
Depreciation and amortization related to real estate | 335 | 1.11 | ||
Gain on sale of real estate assets | (61) | (0.20) | ||
Impairment of real estate assets | 5 | 0.02 | ||
Nareit FFO | $584 - $593 | $1.94 - $1.97 |
CONNECT WITH BRIXMOR
CONFERENCE CALL AND SUPPLEMENTAL INFORMATION
The Company will host a teleconference on Wednesday, November 2, 2022 at 10:00 AM ET. To participate, please dial 877.704.4453 (domestic) or 201.389.0920 (international) within 15 minutes of the scheduled start of the call. The teleconference can also be accessed via a live webcast at https://www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on November 16, 2022 by dialing 844.512.2921 (domestic) or 412.317.6671 (international) (Passcode: 13732415) or via the web through November 2, 2023 at https://www.brixmor.com in the Investors section.
The Company's Supplemental Disclosure will be posted at https://www.brixmor.com in the Investors section. These materials are also available to all interested parties upon request to the Company at investorrelations@brixmor.com or 800.468.7526.
NON-GAAP PERFORMANCE MEASURES
The Company presents the non-GAAP performance measures set forth below. These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity. Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP. The Company's computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance. A reconciliation of these non-GAAP performance measures to net income is presented in the attached tables.
Nareit FFO
Nareit FFO is a supplemental, non-GAAP performance measure utilized to evaluate the operating and financial performance of real estate companies. Nareit defines FFO as net income (loss), calculated in accordance with GAAP, excluding (i) depreciation and amortization related to real estate, (ii) gains and losses from the sale of certain real estate assets, (iii) gains and losses from change in control, (iv) impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and (v) after adjustments for unconsolidated joint ventures calculated to reflect FFO on the same basis. Considering the nature of its business as a real estate owner and operator, the Company believes that Nareit FFO is useful to investors in measuring its operating and financial performance because the definition excludes items included in net income that do not relate to or are not indicative of the Company's operating and financial performance, such as depreciation and amortization related to real estate, and items which can make periodic and peer analyses of operating and financial performance more difficult, such as gains and losses from the sale of certain real estate assets and impairment write-downs of certain real estate assets.
Same Property NOI
Same property NOI is a supplemental, non-GAAP performance measure utilized to evaluate the operating performance of real estate companies. Same property NOI is calculated (using properties owned for the entirety of both periods and excluding properties under development and completed new development properties that have been stabilized for less than one year) as total property revenues (base rent, expense reimbursements, adjustments for revenues deemed uncollectible, ancillary and other rental income, percentage rents, and other revenues) less direct property operating expenses (operating costs and real estate taxes). Same property NOI excludes (i) corporate level expenses (including general and administrative), (ii) lease termination fees, (iii) straight-line rental income, net, (iv) accretion of below-market leases, net of amortization of above-market leases and tenant inducements, (v) straight-line ground rent expense, net, and (vi) income or expense associated with the Company's captive insurance company. Considering the nature of its business as a real estate owner and operator, the Company believes that same property NOI is useful to investors in measuring the operating performance of its portfolio because the definition excludes various items included in net income that do not relate to, or are not indicative of, the operating performance of the Company's properties, such as depreciation and amortization and corporate level expenses (including general and administrative), lease termination fees, straight-line rental income, net, accretion of below-market leases, net of amortization of above-market leases and tenant inducements, and straight-line ground rent expense, net and because it eliminates disparities in NOI due to the acquisition or disposition of properties or the stabilization of completed new development properties during the period presented and therefore provides a more consistent metric for comparing the operating performance of the Company's real estate between periods.
ABOUT BRIXMOR PROPERTY GROUP
Brixmor (NYSE: BRX) is a real estate investment trust (REIT) that owns and operates a high-quality, national portfolio of open-air shopping centers. Its 378 retail centers comprise approximately 67 million square feet of prime retail space in established trade areas. The Company strives to own and operate shopping centers that reflect Brixmor's vision "to be the center of the communities we serve" and are home to a diverse mix of thriving national, regional and local retailers. Brixmor is a proud real estate partner to over 5,000 retailers including The TJX Companies, The Kroger Co., Publix Super Markets and Ross Stores.
Brixmor announces material information to its investors in SEC filings and press releases and on public conference calls, webcasts and the "Investors" page of its website at https://www.brixmor.com. The Company also uses social media to communicate with its investors and the public, and the information Brixmor posts on social media may be deemed material information. Therefore, Brixmor encourages investors and others interested in the Company to review the information that it posts on its website and on its social media channels.
SAFE HARBOR LANGUAGE
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to the Company's expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the sections entitled "Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2021, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company's filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.
CONSOLIDATED BALANCE SHEETS | |||||||
Unaudited, dollars in thousands, except share information | |||||||
As of | As of | ||||||
9/30/22 | 12/31/21 | ||||||
Assets | |||||||
Real estate | |||||||
Land | $ 1,830,251 | $ 1,773,448 | |||||
Buildings and tenant improvements | 8,369,931 | 8,009,320 | |||||
Construction in progress | 123,182 | 101,422 | |||||
Lease intangibles | 550,477 | 544,224 | |||||
10,873,841 | 10,428,414 | ||||||
Accumulated depreciation and amortization | (2,943,592) | (2,813,329) | |||||
Real estate, net | 7,930,249 | 7,615,085 | |||||
Cash and cash equivalents | 23,591 | 296,632 | |||||
Restricted cash | 7,661 | 1,111 | |||||
Marketable securities | 22,047 | 20,224 | |||||
Receivables, net | 249,039 | 234,873 | |||||
Deferred charges and prepaid expenses, net | 160,063 | 143,503 | |||||
Real estate assets held for sale | 30,001 | 16,131 | |||||
Other assets | 63,068 | 49,834 | |||||
Total assets | $ 8,485,719 | $ 8,377,393 | |||||
Liabilities | |||||||
Debt obligations, net | $ 5,109,454 | $ 5,164,518 | |||||
Accounts payable, accrued expenses and other liabilities | 548,084 | 494,529 | |||||
Total liabilities | 5,657,538 | 5,659,047 | |||||
Equity | |||||||
Common stock, $0.01 par value; authorized 3,000,000,000 shares; | |||||||
309,040,132 and 306,337,045 shares issued and 299,913,140 and 297,210,053 | |||||||
shares outstanding | 2,999 | 2,972 | |||||
Additional paid-in capital | 3,292,045 | 3,231,732 | |||||
Accumulated other comprehensive income (loss) | 8,028 | (12,674) | |||||
Distributions in excess of net income | (474,891) | (503,684) | |||||
Total equity | 2,828,181 | 2,718,346 | |||||
Total liabilities and equity | $ 8,485,719 | $ 8,377,393 | |||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
Unaudited, dollars in thousands, except per share amounts | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
9/30/22 | 9/30/21 | 9/30/22 | 9/30/21 | ||||||||
Revenues | |||||||||||
Rental income | $ 304,643 | $ 290,013 | $ 908,903 | $ 853,407 | |||||||
Other revenues | 102 | 173 | 602 | 3,549 | |||||||
Total revenues | 304,745 | 290,186 | 909,505 | 856,956 | |||||||
Operating expenses | |||||||||||
Operating costs | 33,299 | 32,774 | 102,592 | 92,914 | |||||||
Real estate taxes | 44,179 | 39,763 | 128,123 | 124,908 | |||||||
Depreciation and amortization | 84,773 | 81,724 | 254,132 | 246,356 | |||||||
Impairment of real estate assets | - | - | 4,597 | 1,898 | |||||||
General and administrative | 29,094 | 25,309 | 86,796 | 76,415 | |||||||
Total operating expenses | 191,345 | 179,570 | 576,240 | 542,491 | |||||||
Other income (expense) | |||||||||||
Dividends and interest | 88 | 51 | 198 | 242 | |||||||
Interest expense | (48,726) | (48,918) | (143,934) | (147,601) | |||||||
Gain on sale of real estate assets | 15,768 | 11,122 | 60,667 | 49,489 | |||||||
Loss on extinguishment of debt, net | - | (27,116) | (221) | (28,345) | |||||||
Other | (789) | 390 | (2,937) | 694 | |||||||
Total other expense | (33,659) | (64,471) | (86,227) | (125,521) | |||||||
Net income | $ 79,741 | $ 46,145 | $ 247,038 | $ 188,944 | |||||||
Net income per common share: | |||||||||||
Basic | $ 0.26 | $ 0.15 | $ 0.82 | $ 0.63 | |||||||
Diluted | $ 0.26 | $ 0.15 | $ 0.82 | $ 0.63 | |||||||
Weighted average shares: | |||||||||||
Basic | 300,213 | 297,188 | 299,626 | 297,165 | |||||||
Diluted | 301,341 | 298,269 | 300,784 | 298,209 | |||||||
FUNDS FROM OPERATIONS (FFO) | |||||||||||
Unaudited, dollars in thousands, except per share amounts | |||||||||||
Three Months Ended | Nine Months Ended | ||||||||||
9/30/22 | 9/30/21 | 9/30/22 | 9/30/21 | ||||||||
Net income | $ 79,741 | $ 46,145 | $ 247,038 | $ 188,944 | |||||||
Depreciation and amortization related to real estate | 83,712 | 80,778 | 250,991 | 243,601 | |||||||
Gain on sale of real estate assets | (15,768) | (11,122) | (60,667) | (49,489) | |||||||
Impairment of real estate assets | - | - | 4,597 | 1,898 | |||||||
NAREIT FFO | $ 147,685 | $ 115,801 | $ 441,959 | $ 384,954 | |||||||
NAREIT FFO per diluted share | $ 0.49 | $ 0.39 | $ 1.47 | $ 1.29 | |||||||
Weighted average diluted shares outstanding | 301,341 | 298,269 | 300,784 | 298,209 | |||||||
Items that impact FFO comparability | |||||||||||
Transaction expenses | $ (250) | $ (154) | $ (1,131) | $ (203) | |||||||
Litigation and other non-routine legal expenses | (157) | (145) | (492) | (2,474) | |||||||
Loss on extinguishment of debt, net | - | (27,116) | (221) | (28,345) | |||||||
Total items that impact FFO comparability | $ (407) | $ (27,415) | $ (1,844) | $ (31,022) | |||||||
Items that impact FFO comparability, net per share | $ (0.00) | $ (0.09) | $ (0.01) | $ (0.10) | |||||||
Additional Disclosures | |||||||||||
Straight-line rental income, net (1) | $ 6,393 | $ 4,951 | $ 17,883 | $ 10,627 | |||||||
Accretion of below-market leases, net of amortization of above-market leases and | 2,517 | 1,974 | 6,721 | 6,326 | |||||||
Straight-line ground rent expense, net (2) | (2) | (32) | (167) | (120) | |||||||
Dividends declared per share | $ 0.240 | $ 0.215 | $ 0.720 | $ 0.645 | |||||||
Dividends declared | $ 71,979 | $ 63,852 | $ 215,777 | $ 191,546 | |||||||
Dividend payout ratio (as % of NAREIT FFO) | 48.7 % | 55.1 % | 48.8 % | 49.8 % | |||||||
(1) Includes straight-line rental income reversals and re-establishments associated with the conversion of tenants between the cash and accrual bases of accounting of less than $0.1 million and $0.2 million during the three months ended September 30, 2022 and 2021, respectively. Includes straight-line rental income reversals and re-establishments associated with the conversion of tenants between the cash and accrual bases of accounting of ($0.1 million) and ($2.1 million) during the nine months ended September 30, 2022 and 2021, respectively. | |||||||||||
(2) Straight-line ground rent expense, net is included in Operating costs on the Consolidated Statements of Operations. | |||||||||||
SAME PROPERTY NOI ANALYSIS | ||||||||||||||
Unaudited, dollars in thousands | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||
9/30/22 | 9/30/21 | Change | 9/30/22 | 9/30/21 | Change | |||||||||
Same Property NOI Analysis | ||||||||||||||
Number of properties | 356 | 356 | - | 350 | 350 | - | ||||||||
Percent billed | 89.7 % | 88.2 % | 1.5 % | 89.6 % | 88.1 % | 1.5 % | ||||||||
Percent leased | 93.4 % | 91.7 % | 1.7 % | 93.4 % | 91.6 % | 1.8 % | ||||||||
Revenues | ||||||||||||||
Base rent | $ 206,714 | $ 197,138 | $ 602,071 | $ 577,530 | ||||||||||
Expense reimbursements | 63,463 | 59,331 | 183,590 | 174,591 | ||||||||||
Revenues deemed uncollectible | (862) | 4,083 | 6,523 | 1,342 | ||||||||||
Ancillary and other rental income / Other revenues | 6,133 | 4,938 | 17,374 | 13,789 | ||||||||||
Percentage rents | 1,242 | 854 | 6,869 | 4,277 | ||||||||||
276,690 | 266,344 | 3.9 % | 816,427 | 771,529 | 5.8 % | |||||||||
Operating expenses | ||||||||||||||
Operating costs | (31,067) | (30,849) | (94,297) | (85,816) | ||||||||||
Real estate taxes | (41,123) | (38,179) | (117,967) | (117,254) | ||||||||||
(72,190) | (69,028) | 4.6 % | (212,264) | (203,070) | 4.5 % | |||||||||
Same property NOI | $ 204,500 | $ 197,316 | 3.6 % | $ 604,163 | $ 568,459 | 6.3 % | ||||||||
NOI margin | 73.9 % | 74.1 % | 74.0 % | 73.7 % | ||||||||||
Expense recovery ratio | 87.9 % | 86.0 % | 86.5 % | 86.0 % | ||||||||||
Percent Contribution to Same Property NOI Performance: | ||||||||||||||
Change | Percent | Change | Percent | |||||||||||
Base rent - excluding COVID-19 rent deferrals (lease modifications) and rent abatements | $ 8,842 | 4.4 % | $ 20,790 | 3.7 % | ||||||||||
Base rent - COVID-19 rent deferrals (lease modifications) and rent abatements | 734 | 0.4 % | 3,751 | 0.6 % | ||||||||||
Revenues deemed uncollectible | (4,945) | (2.5 %) | 5,181 | 0.9 % | ||||||||||
Net expense reimbursements | 970 | 0.5 % | (195) | 0.0 % | ||||||||||
Ancillary and other rental income / Other revenues | 1,195 | 0.6 % | 3,585 | 0.6 % | ||||||||||
Percentage rents | 388 | 0.2 % | 2,592 | 0.5 % | ||||||||||
3.6 % | 6.3 % | |||||||||||||
Reconciliation of Net Income to Same Property NOI | ||||||||||||||
Same property NOI | $ 204,500 | $ 197,316 | $ 604,163 | $ 568,459 | ||||||||||
Adjustments: | ||||||||||||||
Non-same property NOI | 13,165 | 11,441 | 47,436 | 46,386 | ||||||||||
Lease termination fees | 694 | 1,999 | 2,754 | 7,456 | ||||||||||
Straight-line rental income, net | 6,393 | 4,951 | 17,883 | 10,627 | ||||||||||
Accretion of below-market leases, net of amortization of above-market leases and | 2,517 | 1,974 | 6,721 | 6,326 | ||||||||||
Straight-line ground rent expense, net | (2) | (32) | (167) | (120) | ||||||||||
Depreciation and amortization | (84,773) | (81,724) | (254,132) | (246,356) | ||||||||||
Impairment of real estate assets | - | - | (4,597) | (1,898) | ||||||||||
General and administrative | (29,094) | (25,309) | (86,796) | (76,415) | ||||||||||
Total other expense | (33,659) | (64,471) | (86,227) | (125,521) | ||||||||||
Net income | $ 79,741 | $ 46,145 | $ 247,038 | $ 188,944 | ||||||||||
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SOURCE Brixmor Property Group Inc.