NEW YORK, Oct. 24, 2016 /PRNewswire/ -- Brixmor Property Group Inc. (NYSE: BRX) ("Brixmor" or the "Company") announced today its operating results for the three months ended September 30, 2016. Net income attributable to common stockholders was $0.19 per diluted share compared with $0.18 per diluted share in the comparable 2015 period.  Key highlights for the quarter include:

• Executed 2.0 million square feet of new and renewal leases or 3.5 million square feet including options exercised
• Achieved comparable new and renewal rent spreads of 14.7%
• Realized leased occupancy of 92.6%, consistent with the same period in the prior year, despite the impact of retailer bankruptcies
• Increased small shop leased occupancy by 100 basis points year-over-year to 85.0%
• Completed nine anchor space repositioning projects and four outparcel developments and significantly expanded the redevelopment pipeline
• Generated same property NOI growth of 2.0%
• Grew FFO per diluted share 5% year-over-year, excluding non-cash GAAP rental adjustments and items that impact comparability
• Increased dividend 6%
• Issued $500 million of 3.25% Senior Notes due 2023 and amended and restated $2.75 billion credit facility
• Revised NAREIT FFO per share – diluted guidance for 2016 to $2.04 - $2.06 from previous guidance of $2.03 - $2.06

"I'm very pleased with our progress this quarter on all fronts.   We increased small shop occupancy, which rose 100 basis points over last year to 85%, while also driving healthy rent spreads and new leasing activity with leading tenants such as Kroger, Total Wine, and Ulta.  We drove further value creation by delivering $20 million of anchor space repositioning projects at double digit yields and by expanding our pipeline of reinvestments in our properties to $175 million at an expected yield of 10 - 12%," commented James Taylor, President and Chief Executive Officer. 

Mr. Taylor added, "We also continued to strengthen our balance sheet, with the issuance of $500 million of seven-year Senior Notes and the amendment and restatement of our $2.75 billion credit facility, while Blackstone Real Estate Partners fully monetized their position in Brixmor, enhancing liquidity for our shareholder base. We are very well positioned to accelerate value creation at the asset level and execute our plan of sustainable growth."

FINANCIAL HIGHLIGHTS

Net Income

• For the three months ended September 30, 2016 and 2015, net income attributable to common stockholders was $57.5 million, or $0.19 per diluted share, and $53.8 million, or $0.18 per diluted share, respectively.
• For the nine months ended September 30, 2016 and 2015, net income attributable to common stockholders was $182.4 million, or $0.61 per diluted share, and $138.3 million, or $0.46 per diluted share, respectively.

NAREIT FFO

• For the three months ended September 30, 2016 and 2015, NAREIT FFO was $154.9 million, or $0.51 per diluted share and $156.2 million, or $0.51 per diluted share, respectively. Results for the three months ended September 30, 2016 include a loss on extinguishment of debt, net and other items that impact FFO comparability of ($2.1) million, or ($0.01) per diluted share. Results for the three months ended September 30, 2015 include an adjustment of tax reserves for pre-IPO transactions and other items that impact FFO comparability of $4.1 million, or $0.01 per diluted share.
• For the nine months ended September 30, 2016 and 2015, NAREIT FFO was $468.9 million, or $1.54 per diluted share and $444.4 million, or $1.46 per diluted share, respectively. Results for the nine months ended September 30, 2016 include expenses related to the previously disclosed Audit Committee review, executive severance expenses and other items that impact FFO comparability of ($9.0) million, or ($0.03) per diluted share. Results for the nine months ended September 30, 2015 include a non-recurring charge related to pre-IPO compensation programs and transaction expenses, offset by an adjustment of tax reserves for pre-IPO transactions, and other items that impact FFO comparability of ($7.1) million, or ($0.02) per diluted share.

Same Property NOI

• Same property NOI for the three and nine months ended September 30, 2016 increased 2.0% and 2.7%, respectively, from the comparable 2015 period.

Dividend

• The Company's Board of Directors declared a quarterly cash dividend of $0.26 per common share (equivalent to $1.04 per annum) for the fourth quarter of 2016, which represents a 6% increase.
• The dividend is payable on January 17, 2017 to stockholders of record on January 5, 2017, representing an ex-dividend date of January 3, 2017.

PORTFOLIO AND INVESTMENT ACTIVITY

Value Creation Opportunities

• During the three months ended September 30, 2016, the Company completed nine anchor space repositioning projects and added two new projects to its pipeline. At September 30, 2016, the anchor space repositioning pipeline was comprised of 15 projects, the aggregate cost of which is expected to be approximately $33 million.
• During the three months ended September 30, 2016, the Company completed four outparcel developments and at September 30, 2016, the outparcel development pipeline was comprised of 11 projects, the aggregate cost of which is expected to be approximately $19 million. In addition, the new development pipeline was comprised of one project, the cost of which is expected to be approximately $19 million.
• The Company also added two new redevelopment projects and moved five anchor space repositioning projects to its redevelopment pipeline. At September 30, 2016, the redevelopment pipeline was comprised of eight projects, the aggregate cost of which is expected to be approximately $104 million.

Acquisitions

• On September 22, 2016, the Company acquired a 28,500 square foot vacant anchor space for approximately $7 million at Rose Pavilion in Pleasanton, California, a shopping center owned by the Company. The acquired space was subsequently leased to Total Wine & More, as part of a redevelopment of the shopping center.

Dispositions

• During the three months ended September 30, 2016, the Company generated approximately $11 million of gross proceeds through the sale of two properties.

CAPITAL STRUCTURE

Unsecured Notes

• On August 15, 2016, the Company's Operating Partnership, Brixmor Operating Partnership LP (the "Operating Partnership"), issued $500 million aggregate principal amount of 3.25% Senior Notes due 2023 at 99.736% of par value. Proceeds from the offering were utilized to repay outstanding indebtedness under the Company's $1.25 billion unsecured revolving credit facility (the "Revolver") and for general corporate purposes.

Credit Facility

• As previously announced, on July 25, 2016, the Operating Partnership executed an amendment and restatement to its $2.75 billion credit facility (the "Facility"), extending its weighted average maturity and lowering the aggregate pricing. The amended Facility provides for (i) a three-year extension on the Revolver to July 31, 2020 at an effective interest rate of LIBOR plus 145 basis points and (ii) a reallocation of the existing unsecured term loan that was to mature on July 31, 2018 into two tranches (the "Term Loans"), comprised of a $1.0 billion tranche A term loan maturing July 31, 2018 and a $500.0 million tranche B term loan maturing July 31, 2021, both at an effective interest rate of LIBOR plus 135 basis points.

Secured Mortgages

• During the three months ended September 30, 2016, the Company repaid $687 million of mortgage indebtedness, including amortization, at an average interest rate of 5.43%, increasing its unencumbered asset base to 72% of properties at September 30, 2016.

GUIDANCE

• The Company has revised its NAREIT FFO per share – diluted expectations for 2016 and the key underlying assumptions as follows:

The following table provides a reconciliation of the range of estimated 2016 NAREIT FFO to net income attributable to common stockholders.

CONNECT WITH BRIXMOR

• For additional information, please visit www.brixmor.com;
• Follow Brixmor on Twitter at www.twitter.com/Brixmor;
• Find Brixmor on LinkedIn at www.linkedin.com/company/brixmor.

CONFERENCE CALL AND SUPPLEMENTAL INFORMATION

The Company will host a teleconference on Tuesday, October 25, 2016 at 10:00 AM ET.   To participate, please dial 888.317.6003 (domestic) or 412.317.6061 (international) at least ten minutes prior to the scheduled start of the call (Passcode: 2633815).  The teleconference can also be accessed via a live webcast at www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on November 9, 2016 by dialing 877.344.7529 (domestic) or 412.317.0088 (international) (Passcode: 10091678) or via the web through October 25, 2017 at www.brixmor.com in the Investors section.

The Company's Supplemental Disclosure will be posted at 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 DISCLOSURES

NAREIT FFO

NAREIT FFO is a supplemental non-GAAP performance measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income (loss) in accordance with GAAP excluding (i) gain (loss) on disposition of operating properties, and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties, (iv) impairment of operating properties and real estate equity investments, and (v) after adjustments for joint ventures calculated to reflect funds from operations on the same basis. 

The Company presents NAREIT FFO as it considers it an important supplemental measure of its operating performance and the Company believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. The Company believes NAREIT FFO assists investors  in analyzing Brixmor's comparative operating and financial performance because, by excluding gains and losses related to dispositions of previously depreciated operating properties, real estate-related depreciation and amortization of continuing operations and unconsolidated joint ventures and impairment of operating properties (which can vary among owners of properties in similar condition based on historical cost accounting and useful life estimates), investors can compare the operating performance of a company's real estate between periods or as compared to different companies. 

NAREIT FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of financial performance and is not an alternative to cash flow from operating activities (determined 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 to financial results presented in accordance with GAAP. Computation of NAREIT FFO 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 NAREIT FFO are significant components in understanding and addressing financial performance.  A reconciliation of NAREIT FFO to Net income is presented in the attached table.

Same Property NOI

Same property NOI is calculated (using properties owned for the entirety of both periods excluding properties under development or pending stabilization), as rental income (base rent, percentage rents, expense reimbursements and other property income) less rental operating expenses (operating costs, real estate taxes and provision for doubtful accounts. Same Property NOI includes unconsolidated joint venture, Montecito Marketplace, at pro rata share.  Same property NOI excludes corporate level income (including management, transaction and other fees), lease termination fees, straight-line rental income, amortization of above- and below-market rent and tenant inducements, straight-line ground rent expense and income / expense associated with the captive insurance entity.

Same property NOI is a supplemental, non-GAAP performance measure utilized to evaluate the operating performance of real estate companies and the Company believes it is frequently used by securities analysts, investors and other interested parties in understanding business and operating results regarding the underlying economics of Brixmor's business operations.

It includes only the net operating income of properties owned and stabilized for the full period presented, which eliminates disparities in net income due to the acquisition, disposition or stabilization of development properties during the period presented, and therefore, provides a more consistent metric for comparing the performance of properties. Management uses same property NOI to review operating results for comparative purposes with respect to previous periods or forecasts, and also to evaluate future prospects. Same property NOI is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, net income (determined in accordance with GAAP) or other GAAP financial measures. Non-GAAP financial 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 to financial results presented in accordance with GAAP.  Computation of same property NOI may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs. 

ABOUT BRIXMOR PROPERTY GROUP

Brixmor Property Group, a real estate investment trust (REIT), is a leading owner and operator of high-quality, open-air shopping centers. The Company's more than 500 retail centers comprise 86 million square feet in market-dominant locations across the nation and are supported by a diverse mix of highly productive non-discretionary and value-oriented retailers, as well as service and entertainment users. Brixmor is committed to maximizing the value of its portfolio by prioritizing investments, cultivating relationships and capitalizing on embedded growth opportunities through driving rents, increasing occupancy and pursuing repositioning and redevelopment projects. Headquartered in New York City, Brixmor is a partner to more than 5,500 best-in-class national, regional and local tenants and is the largest landlord to The TJX Companies and The Kroger Company. 

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," "approximately," "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 section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, 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.

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SOURCE Brixmor Property Group Inc.