Agree Realty Reports Operating Results for the Fourth Quarter 2009
FARMINGTON HILLS, Mich., Feb. 25 /PRNewswire-FirstCall/ --
FOURTH Quarter 2009 Highlights:
- 4th quarter FFO increases 9.7% year-over-year
- Year-to-date FFO increases 9.4% year-over-year
- $0.51 per share quarterly dividend paid January 5, 2010
Agree Realty Corporation (NYSE: ADC) today announced results for the quarter ended December 31, 2009. Fourth quarter funds from operations ("FFO") increased 9.7% to $6,013,000 compared with FFO in the fourth quarter of 2008 of $5,480,000. FFO per diluted share was $0.71 compared with $0.66 for the fourth quarter of 2008. A reconciliation of net income to FFO is included in the financial tables accompanying this press release. Net income was $4,563,000, or $0.54 per diluted share, compared with net income for the fourth quarter of 2008 of $4,120,000 or $0.49 per share. Total revenues increased 5.2% to $9,537,000, compared with total revenues of $9,067,000 in the fourth quarter of 2008.
For the year ended December 31, 2009, FFO increased 9.4% to $23,634,000 compared with FFO for the year ended December 31, 2008 of $21,598,000. FFO per diluted share was $2.81 compared with $2.58 for the year ended December 31, 2008. Net income was $17,994,000, or $2.14 per diluted share, compared with net income for the comparable period last year of $16,282,000, or $1.95 per diluted share. Total revenues increased 4.5% to $37,260,000 compared with total revenues of $35,654,000 for the comparable period last year.
"We are extremely pleased with the operating results for the quarter, as well as the year and expect continued growth as our projects in Oakland, California, Ann Arbor, Michigan, St Augustine Shores, Florida and Atlantic Beach, Florida are completed," said Richard Agree, Chief Executive Officer. "Our balance sheet remains strong and we continue to search for opportunistic uses of our available capital."
Dividend
The Company paid a cash dividend of $0.51 per share on January 5, 2010 to shareholders of record on December 21, 2009. The dividend is equivalent to an annualized dividend of $2.04 per share and represents a payout ratio of 72.5% of FFO for the quarter.
Portfolio
At December 31, 2009, the Company's total assets were $261,789,000 and its portfolio consisted of 73 properties located in 16 states totaling 3,492,199 square feet. The portfolio was 98.1% leased at the end of the quarter.
The Company's construction in progress balance totaled approximately $4,792,000 at December 31, 2009, and we capitalized $49,703 of construction period interest during the fourth quarter of 2009.
Lease Expirations
The following table, as of December 31, 2009, sets forth lease expirations for the next 10 years for the Company's freestanding properties and community shopping centers, assuming that none of the tenants exercise renewal options or terminate their leases prior to the contractual expiration date.
Expiring Leases
---------------
Number of
Expiration Leases Square Percent of Annualized Percent of
Year Expiring Footage Total Base Rent Total
---------- --------- ------- ---------- ---------- ----------
2010 9 182,100 5.3% $1,017,912 3.0%
2011 23 136,636 4.0% 1,110,428 3.2%
2012 28 267,986 7.8% 1,375,067 4.0%
2013 20 314,713 9.2% 1,662,241 4.8%
2014 9 190,458 5.6% 985,856 2.9%
2015 18 768,841 22.4% 5,443,351 15.8%
2016 7 124,841 3.6% 1,922,928 5.6%
2017 4 30,844 0.9% 351,995 1.0%
2018 13 249,732 7.3% 4,396,756 12.8%
2019 6 70,170 2.0% 1,741,879 5.1%
Thereafter 41 1,090,336 31.9% 14,341,431 41.8%
Total 178 3,426,657 $34,349,844
--- --------- -----------
Annualized Base Rent of Properties
The following is a breakdown of base rents in effect at December 31, 2009 for each type of retail tenant:
Credit Analysis
---------------
Retail Annualized Percent of Square Percent of
Tenant Base Rent Total Feet Total
------ ---------- ---------- ------ ----------
National $30,614,320 89.2% 2,943,242 86.0%
Regional 2,659,992 7.7% 376,806 11.0%
Local 1,075,532 3.1% 106,609 3.0%
--------- -------
Total $34,349,844 3,426,657
----------- ---------
Major Tenants
The following is a breakdown of base rents in effect at December 31, 2009 for each of the Company's major tenants:
Tenant Analysis
---------------
Retail Annualized Percent of Square Percent of
Tenant Base Rent Total Feet Total
------ ---------- ---------- ------ ----------
Walgreen $10,246,099 29.8% 402,430 11.7%
Borders 9,938,796 28.9% 975,219 28.5%
Kmart 3,847,911 11.2% 999,766 29.2%
--------- ---- ------- ----
Subtotal $24,032,806 69.9% 2,377,415 69.4%
----------- ---- --------- ----
Outstanding Shares and Operating Partnership Units
For the three months and year ended December 31, 2009, the Company's fully diluted weighted average shares outstanding were 8,088,424 and 7,965,958, respectively. The basic weighted average shares outstanding for the three months and year ended December 31, 2009 were 8,053,377 and 7,945,860, respectively.
The Company's assets are held by, and all of its operations are conducted through, Agree Limited Partnership, of which the Company is the sole general partner. As of December 31, 2009, there were 347,619 operating partnership units outstanding and the Company held a 95.93% interest. For the three months and year ended December 31, 2009, the weighted average number of operating partnership units outstanding, were 347,619 and 450,737, respectively.
Agree Realty Corporation owns, manages and develops properties which are primarily single tenant properties leased to major retail tenants and neighborhood community shopping centers. The Company currently owns and operates a portfolio of 73 properties, which are located in 16 states and contain approximately 3.5 million square feet of gross leasable space.
The Company is developing for a national retailer, retail space located at the southwest corner of 14th Street and Broadway in Oakland, California. The retail space was formally occupied by Gap. The Company is managing and coordinating the development process and overseeing the construction for a fee. The development process commenced during the third quarter of 2009 and the project is expected to be completed during the first quarter of 2010.
The Company considers portions of the information contained in this release to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. These forward-looking statements represent the Company's expectations, plans and beliefs concerning future events. Although these forward-looking statements are based on good faith beliefs, reasonable assumptions and the Company's best judgment reflecting current information, certain factors could cause actual results to differ materially from such forward–looking statements. Such factors are detailed from time to time in reports filed or furnished by the Company with the Securities and Exchange Commission, including the Company's Form 10-K for the year ended December 31, 2008. Except as required by law, the Company assumes no obligation to update these forward–looking statements, even if new information becomes available in the future.
For additional information, visit the Company's home page on the Internet at http://www.agreerealty.com
Agree Realty Corporation
Operating Results (in thousands, except per share amounts)
(Unaudited)
Three Months Year Ended
Ended December 31, December 31,
------------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Minimum rents $8,619 $8,399 $34,157 $32,851
Percentage rent 7 11 15 15
Operating cost
reimbursements 648 656 2,647 2,784
Development fee income 252 - 410 -
Other income 11 1 31 4
--- --- --- ---
Total Revenues 9,537 9,067 37,260 35,654
----- ----- ------ ------
Expenses:
Real estate taxes 498 484 1,938 1,867
Property operating
expenses 365 465 1,566 1,812
Land lease payments 215 222 859 767
General and administration 1,226 1,097 4,559 4,361
Depreciation and
amortization 1,467 1,376 5,709 5,385
----- ----- ----- -----
Operating Expenses 3,771 3,644 14,631 14,192
----- ----- ------ ------
Income From Operations 5,766 5,423 22,629 21,462
Other Income (Expense)
Interest expense, net (1,203) (1,303) (4,635) (5,180)
------ ------ ------ ------
Net Income $4,563 $4,120 $17,994 $16,282
====== ====== ======= =======
Net Income Per Share –
Dilutive $0.54 $0.49 $2.14 $1.95
===== ===== ===== =====
Reconciliation of Funds
from Operations to Net
Income: (1)
Net income $4,563 $4,120 $17,994 $16,282
Depreciation of real
estate assets 1,433 1,346 5,574 5,257
Amortization of leasing
costs 17 14 66 59
--- --- --- ---
Funds from Operations $6,013 $5,480 $23,634 $21,598
====== ====== ======= =======
Funds from Operations Per
Share – Dilutive $0.71 $0.66 $2.81 $2.58
===== ===== ===== =====
Weighted average number of
shares and OP units
outstanding – dilutive 8,436 8,373 8,417 8,376
----- ----- ----- -----
(1) FFO is defined by the National Association of Real Estate Investment
Trusts, Inc. (NAREIT) to mean net income computed in accordance with
generally accepted accounting principles (GAAP), excluding gains (or
losses) from sales of property, plus real estate related depreciation and
amortization and after adjustments for unconsolidated partnerships and
joint ventures. Management uses FFO as a supplemental measure to conduct
and evaluate the Company's business because there are certain limitations
associated with using GAAP net income by itself as the primary measure of
the Company's operating performance. Historical cost accounting for real
estate assets in accordance with GAAP implicitly assumes that the value of
real estate assets diminishes predictably over time. Since real estate
values instead have historically risen or fallen with market conditions,
management believes that the presentation of operating results for real
estate companies that use historical cost accounting is insufficient by
itself.
FFO should not be considered as an alternative to net income as the
primary indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity. Further, while the
Company adheres to the NAREIT definition of FFO, its presentation of FFO
is not necessarily comparable to similarly titled measures of other REITs
due to the fact that not all REITs use the same definition.
Agree Realty Corporation
Consolidated Balance Sheets (in thousands)
(Unaudited)
December 31, December 31
------------ -----------
2009 2008
---- ----
Assets
Land $95,047 $87,309
Buildings 220,605 210,650
Accumulated depreciation (64,076) (58,502)
Property under development 4,792 13,383
Cash and cash equivalents 689 669
Rents receivable 1,987 965
Deferred costs, net of
amortization 1,897 1,437
Other assets 848 986
--- ---
Total Assets $261,789 $256,897
======== ========
Liabilities
Mortgages payable $75,553 $67,624
Notes payable 29,000 32,945
Deferred revenue 10,035 10,725
Dividends and distributions
payable 4,354 4,233
Other liabilities 3,020 3,388
----- -----
Total Liabilities 121,962 118,915
------- -------
Stockholders' Equity
Common stock (8,191,574 and
7,863,930 shares) 1 1
Additional paid-in capital 147,466 143,892
Deficit (10,633) (11,258)
Accumulated other comprehensive
income (loss) (71) -
Non-controlling interest 3,064 5,347
----- -----
Total Stockholders' Equity 139,827 137,982
------- -------
$261,789 $256,897
======== ========
SOURCE Agree Realty Corporation
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