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SEC Filings

8-K
WASHINGTON PRIME GROUP INC. filed this Form 8-K on 07/26/2018
Entire Document
 
Exhibit


Exhibit 99.1


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Washington Prime Group Reports Second Quarter 2018 Results

- Company reaffirms fiscal 2018 guidance
- Core portfolio year-to-date total leasing volume at 2.4 million square feet through July 25


COLUMBUS, OH - July 25, 2018 - Washington Prime Group Inc. (NYSE: WPG) today reported financial and operating results for the second quarter ended June 30, 2018 that reflect continued progress of the execution of the Company’s financial, operating and strategic objectives. A description of each non-GAAP financial measure and the related reconciliation to the comparable GAAP financial measure are included in this release.

 
 
Three Months Ended June 30,
 
 
Six Months Ended June 30,
 
(per share amounts)
 
2018
 
2017
 
2018
 
2017
 
Net income per diluted share
 
$
0.05

 
$
0.72

 
$
0.13

 
$
0.77

 
FFO per diluted share
 
$
0.37

 
$
0.50

 
$
0.76

 
$
0.92

 
FFO per diluted share, as adjusted (AFFO)¹
 
$
0.37

 
$
0.40

 
$
0.76

 
$
0.83

 

(1)
A reconciliation of funds from operations (FFO) to FFO, as adjusted (AFFO), for the periods presented is included in the reconciliation of net income attributable to common shareholders to FFO, which is included in this release.

Business Highlights
The year-over-year difference in net income is primarily due to the sale of a 49% interest in six properties during the second quarter of 2017 as noted below.
Comparable net operating income (NOI) for the Company’s 41 Tier One enclosed retail properties increased 0.6% during the second quarter of 2018, demonstrating continued stable performance. Tier One occupancy increased 10 basis points to 92.8% as of June 30, 2018.
Comparable NOI growth for the Company’s 51 Open Air properties increased 2.6% during the second quarter of 2018. Open Air occupancy increased 10 basis points to 95.1% as of June 30, 2018.
Combined Tier One and Open Air comparable NOI growth increased 1.1% during the second quarter of 2018. As of June 30, 2018, Tier One and Open Air assets represent approximately 90% of core portfolio NOI.
Occupancy cost for the core portfolio decreased 30 basis points to 12.3% as of June 30, 2018. As of June 30, 2018, occupancy cost for Tier One and Tier Two enclosed retail properties was 12.0% and 13.7%, respectively.
Year-to-date, leasing continues to be robust with total leasing volume for the core portfolio totaling nearly 2.4 million square feet through July 25, 2018.
Lifestyle tenancy, which includes food, beverage, entertainment, fitness and services accounted for 44% of total new leasing activity during the first half of 2018.
Tenant driven redevelopment remains one of the Company’s most intriguing value propositions. Redevelopment efforts include 43 projects currently underway ranging between $1.0 million and $60.0 million, with an average estimated project yield of approximately 10%.
During the second quarter of 2018, the Company proactively gained control of six Sears department store spaces located at Tier One properties for future redevelopment efforts.

Lou Conforti, CEO and Director stated: “We reported adjusted FFO of $0.37 for the second quarter of 2018 and reaffirmed full year adjusted FFO guidance. From the onset, it was imperative we demonstrated cash flow stability as we rolled up our sleeves and cleaned up our operational and financial acts. As a result, future prospects for Washington



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