UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 20, 2014
ARMADA HOFFLER PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
| Maryland | 001-35908 | 46-1214914 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 222 Central Park Avenue, Suite 2100 Virginia Beach, Virginia |
23462 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (757) 366-4000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02. | Results of Operations and Financial Condition. |
On February 20, 2014, Armada Hoffler Properties, Inc. (the “Company”) issued a press release announcing its financial position as of December 31, 2013, results of operations for the three and twelve months ended December 31, 2013 and other related information. Also on February 20, 2014, the Company made available on its website at www.armadahoffler.com certain supplemental information concerning the Company’s financial results and operations for the three and twelve months ended December 31, 2013. Copies of such press release and supplemental information are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
| Item 7.01. | Regulation FD Disclosure. |
The disclosure contained in Item 2.02 is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description | |
| 99.1 | Press Release, dated February 20, 2014, issued by Armada Hoffler Properties, Inc., providing its financial position as of December 31, 2013 and results of operations for the three and twelve months ended December 31, 2013. | |
| 99.2 | Armada Hoffler Properties, Inc. Supplemental Information for the three and twelve months ended December 31, 2013. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ARMADA HOFFLER PROPERTIES, INC. | ||||||
| Dated: February 20, 2014 | By: | /s/ Michael P. O’Hara | ||||
| Michael P. O’Hara | ||||||
| Chief Financial Officer and Treasurer | ||||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release, dated February 20, 2014, issued by Armada Hoffler Properties, Inc., providing its financial position as of December 31, 2013 and results of operations for the three and twelve months ended December 31, 2013. | |
| 99.2 | Armada Hoffler Properties, Inc. Supplemental Information for the three and twelve months ended December 31, 2013. | |
Exhibit 99.1
ARMADA HOFFLER PROPERTIES REPORTS FOURTH QUARTER 2013 RESULTS
Core FFO of $7.1 Million, $0.22 Per Diluted Share
Operating Property Portfolio at 94.4% Average Occupancy
VIRGINIA BEACH, VA, February 20, 2014 — Armada Hoffler Properties, Inc. (NYSE: AHH), a full service real estate company, which develops and owns high-quality office, retail and multifamily properties in key Mid-Atlantic markets, today announced its results for the quarter ended December 31, 2013.
Highlights include:
| • | Core Funds From Operations (“Core FFO”) of $7.1 million, or $0.22 per diluted share. |
| • | New and renewal leases executed during the quarter totaling approximately 105,000 square feet in the office and retail property portfolios. |
| • | Average occupancy increased to 94.4%, compared to 93.3% in the third quarter of 2013, across the operating property portfolio. |
| • | Seven properties under development including 513,000 square feet of office and retail space and 489 multifamily units. The 4525 Main Street development project in the Town Center of Virginia Beach is 46% pre-leased. |
| • | The Company was selected to develop Oceaneering International’s new 155,000 square foot build-to-suit development project in Chesapeake, Virginia. Construction began in the fourth quarter of 2013 with expected completion in the first quarter of 2015. This build-to-suit project is 100% pre-leased. The Company facilitated this public / private project among the City of Chesapeake, the Commonwealth of Virginia and Oceaneering International. |
| • | On January 17, 2014, the Company closed on the previously announced acquisition of Liberty Apartments in Newport News, Virginia, for $30.7 million. Liberty Apartments is part of a $70 million public / private, mixed-use development project with the Newport News Shipbuilding division of Huntington Ingalls Industries, the Commonwealth of Virginia and the Industrial Development Authority of the City of Newport News, Virginia. |
February 20, 2014
Page 2 of 8
| • | $28.5 million of new construction loans, since September 30, 2013, to fund the development pipeline. |
| • | $6.8 million of new construction contract work executed during the quarter; approximately $46.4 million of total backlog at the end of the quarter. |
| • | The Board of Directors declared a cash dividend of $0.16 per share on the Company’s shares of common stock for the first quarter of 2014. The dividend will be payable in cash on April 10, 2014 to stockholders of record on April 1, 2014. |
“We are pleased with our strong finish to the year. The fourth quarter is traditionally our strongest quarter and this year is no exception,” commented Louis Haddad, Chief Executive Officer. “We view 2013 as a year in which we laid the foundation, through our development pipeline, for sustained future net operating income and asset value growth. We accomplished what we set out to do this year, including executing on development opportunities, identifying attractive opportunities for the next generation pipeline, and positioning our income portfolio for further growth. Execution will remain our focus in 2014 and 2015.”
Financial Results
Net income was $2.9 million, or $0.09 per diluted share, for the three months ended December 31, 2013. Core FFO was $7.1 million, or $0.22 per diluted share, for the three months ended December 31, 2013. A reconciliation of GAAP net income to Core FFO is presented on page eight of this release.
Operating Performance
The Company executed four new office leases and five office lease renewals totaling 64,000 square feet, and two new retail leases and seven retail lease renewals totaling 41,000 square feet. At the end of the fourth quarter, the Company’s office, retail and multifamily operating property portfolios were 95.2%, 93.4% and 94.2% occupied, respectively.
General Contracting Activity
During the quarter, the Company executed $6.8 million of new construction contracts and generated $1.4 million of gross profit from its third party construction contracts. The Company had total backlog of approximately $46.4 million at December 31, 2013.
Balance Sheet and Financing Activity
At the end of the fourth quarter, the Company had total outstanding debt of approximately $277.7 million, including $70.0 million outstanding on its revolving credit facility.
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February 20, 2014
Page 3 of 8
In October, the Company closed on an $18.5 million loan to fund construction of the Whetstone Apartments in Durham, North Carolina, increased the aggregate capacity under the revolving credit facility to $155.0 million, and repaid the $10.8 million loan secured by Bermuda Crossroads. In October, the Company also refinanced the six loans secured by Broad Creek Shopping Center, Commerce Street Retail, Hanbury Village, and Tyre Neck Harris Teeter to reduce the interest rates, make the loans nonrecourse, and extend the maturity dates to 2018.
In December, the Company refinanced the loan secured by Smith’s Landing to extend the maturity date to 2017 and closed on a $10.0 million loan to fund construction of Sandbridge Commons in Virginia Beach, Virginia.
Supplemental Financial Information
Further details regarding operating results, properties and leasing statistics can be found in the Company’s supplemental financial package available at www.ArmadaHoffler.com under the Investor Relations section.
Webcast and Conference Call
The Company will host a webcast and conference call on Thursday, February 20, 2014 at 8:30 a.m. Eastern Time to review fourth quarter ended December 31, 2013 results and discuss recent events. The live webcast will be available through the Investor Relations page of the Company’s website, www.ArmadaHoffler.com, or through www.viavid.com. To participate in the call, please dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of the conference call will be available through Thursday, March 20, 2014, by dialing 877-870-5176 (domestic) or 858-384-5517 (international) and entering the pass code 13574420.
About Armada Hoffler Properties, Inc.
Armada Hoffler Properties, Inc. is a full service real estate company with extensive experience developing, building, owning and managing high-quality, institutional-grade office, retail and multifamily properties in attractive markets throughout the Mid-Atlantic United States. The Company has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.
Forward-Looking Statements
Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve
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February 20, 2014
Page 4 of 8
known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These forward-looking statements may include comments relating to the current and future performance of the Company’s operating property portfolio, the Company’s identified and next generation development pipelines, the Company’s construction and development business including backlog, and financing activities as well as comments on the Company’s outlook. For a description of factors that may cause the Company’s actual results or performance to differ from its forward-looking statements, please review the information under the heading “Risk Factors” included in the Company’s final prospectus related to its IPO, which was filed with the Securities and Exchange Commission on May 9, 2013, and other documents filed by the Company with the Securities and Exchange Commission.
Non-GAAP Financial Measures
The Company calculates FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income (loss) (calculated in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. The Company uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring the Company’s operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the Company’s operating performance with that of other REITs.
However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the Company’s properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the Company’s properties, all of which have real economic effects and could materially impact the Company’s results from operations, the utility of FFO as a measure of the Company’s performance is limited. In addition, other equity REITs may not calculate FFO in
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February 20, 2014
Page 5 of 8
accordance with the NAREIT definition as the Company does, and, accordingly, the Company’s FFO may not be comparable to such other REITs’ FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company’s performance.
Management also believes that the computation of FFO in accordance with NAREIT’s definition includes certain items that are not indicative of the results provided by the Company’s operating property portfolio and affect the comparability of the Company’s period-over-period performance. Accordingly, the Company further adjusts FFO to arrive at Core FFO, which eliminates certain of these items, including, but not limited to, gains and losses on the extinguishment of debt and non-cash stock compensation expense.
For reference, as an aid in understanding the Company’s computation of FFO and Core FFO, a reconciliation of net income calculated in accordance with GAAP to FFO and Core FFO has been included on page eight of this release.
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February 20, 2014
Page 6 of 8
ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in thousands)
| December 31, | ||||||||
| 2013 | 2012 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Real estate investments: |
||||||||
| Income producing property |
$ | 406,239 | $ | 350,814 | ||||
| Held for development |
— | 3,926 | ||||||
| Construction in progress |
56,737 | — | ||||||
| Accumulated depreciation |
(105,228 | ) | (92,454 | ) | ||||
|
|
|
|
|
|||||
| Net real estate investments |
357,748 | 262,286 | ||||||
| Cash and cash equivalents |
18,882 | 9,400 | ||||||
| Restricted cash |
2,160 | 3,725 | ||||||
| Accounts receivable, net |
18,272 | 17,423 | ||||||
| Construction receivables, including retentions |
12,633 | 10,490 | ||||||
| Construction costs and estimated earnings in excess of billings |
1,178 | 1,206 | ||||||
| Other assets |
24,409 | 27,283 | ||||||
|
|
|
|
|
|||||
| Total Assets |
$ | 435,282 | $ | 331,813 | ||||
|
|
|
|
|
|||||
| Liabilities and Equity | ||||||||
| Indebtedness: |
||||||||
| Secured debt |
277,745 | 334,438 | ||||||
| Participating note |
— | 643 | ||||||
| Accounts payable and accrued liabilities |
6,463 | 2,478 | ||||||
| Construction payables, including retentions |
28,139 | 17,369 | ||||||
| Billings in excess of construction costs and estimated earnings |
1,541 | 4,236 | ||||||
| Other liabilities |
15,873 | 13,990 | ||||||
|
|
|
|
|
|||||
| Total Liabilities |
$ | 329,761 | $ | 373,154 | ||||
|
|
|
|
|
|||||
| Total Equity |
105,521 | (41,341 | ) | |||||
|
|
|
|
|
|||||
| Total Liabilities and Equity |
$ | 435,282 | $ | 331,813 | ||||
|
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February 20, 2014
Page 7 of 8
ARMADA HOFFLER PROPERTIES, INC.
CONDENSED CONSOLIDATED INCOME STATEMENT
(dollars in thousands, except per share)
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenues |
||||||||||||||||
| Rental revenues |
$ | 14,992 | $ | 14,122 | $ | 57,520 | $ | 54,436 | ||||||||
| General contracting and real estate services |
19,373 | 13,391 | 82,516 | 54,046 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
34,365 | 27,513 | 140,036 | 108,482 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
| Expenses |
||||||||||||||||
| Rental expenses |
3,557 | 3,237 | 14,025 | 12,682 | ||||||||||||
| Real estate taxes |
1,347 | 1,273 | 5,124 | 4,865 | ||||||||||||
| General contracting and real estate services |
17,945 | 11,903 | 78,813 | 50,103 | ||||||||||||
| Depreciation and amortization |
3,786 | 3,612 | 14,898 | 12,909 | ||||||||||||
| General and administrative |
1,725 | 540 | 6,937 | 3,232 | ||||||||||||
| Impairment charges |
47 | — | 580 | — | ||||||||||||
|
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|
|
|
|
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|
|||||||||
| Total expenses |
28,407 | 20,565 | 120,377 | 83,791 | ||||||||||||
|
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|
|
|
|
|||||||||
| Operating income |
5,958 | 6,948 | 19,659 | 24,691 | ||||||||||||
| Interest expense |
(2,501 | ) | (4,043 | ) | (12,303 | ) | (16,561 | ) | ||||||||
| Loss on extinguishment of debt |
(135 | ) | — | (2,387 | ) | — | ||||||||||
| Gain on acquisitions |
— | — | 9,460 | — | ||||||||||||
| Other income (expense) |
(46 | ) | 244 | 297 | 777 | |||||||||||
|
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|
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|
|
|||||||||
| Income before taxes |
3,276 | 3,149 | 14,726 | 8,907 | ||||||||||||
| Income tax provision |
(410 | ) | — | (273 | ) | — | ||||||||||
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|||||||||
| Continuing operations |
2,866 | 3,149 | 14,453 | 8,907 | ||||||||||||
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| Discontinued operations |
— | — | — | (10 | ) | |||||||||||
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| Net income |
$ | 2,866 | $ | 3,149 | $ | 14,453 | $ | 8,897 | ||||||||
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| Per Share: |
||||||||||||||||
| Basic and Diluted |
$ | 0.09 | $ | 0.39 | ||||||||||||
| Weighted Average Common Shares and Units: |
||||||||||||||||
| Basic and Diluted |
32,223 | 32,105 | ||||||||||||||
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February 20, 2014
Page 8 of 8
ARMADA HOFFLER PROPERTIES, INC.
RECONCILIATION OF NET INCOME TO CORE FUNDS FROM OPERATIONS
(dollars in thousands, except per share)
| Three Months Ended December 31, 2013 |
||||
| (Unaudited) | ||||
| Net income |
$ | 2,866 | ||
| Depreciation and amortization |
3,786 | |||
|
|
|
|||
| Funds From Operations |
$ | 6,652 | ||
| Loss on extinguishment of debt |
135 | |||
| Non-cash stock compensation |
237 | |||
| Impairment charges |
47 | |||
| Loan modification costs |
27 | |||
|
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|
|||
| Core Funds From Operations |
$ | 7,098 | ||
|
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|
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| Core Funds From Operations per diluted share |
$ | 0.22 | ||
|
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|
|||
| Common Shares and Units Outstanding |
32,223 | |||
Contact:
Julie Loftus Trudell
Armada Hoffler Properties, Inc.
Vice President of Investor Relations
Email: JTrudell@ArmadaHoffler.com
Phone: (757) 366-6692
###
| Exhibit 99.2
|
Armada Hoffler Properties, Inc.
Fourth Quarter 2013 Supplemental Information
|
|
Table of Contents
Forward Looking Statement 3
Fourth Quarter Results and Financial Summary 5
Fourth Quarter 2013 Highlights 6
Summary Information 7
Summary Balance Sheet 8
Summary Income Statement 9
Core FFO & Core AFFO 10
Summary of Outstanding Debt 11
Debt to EBITDA 12
Debt Maturity 13
Portfolio Summary & Business Segment Overview 14
Stabilized Portfolio Summary 15
Stabilized Portfolio Summary Footnotes 16
Identified Development Pipeline 17
Construction Business Summary 18
Operating Results & Property-Type Segment Analysis 19
Same Store NOI by Segment 20
Top 10 Tenants by Annual Base Rent 21
Office Lease Summary 22
Retail Lease Summary 24
Portfolio Occupancy 26
Appendix - Understanding AHH 28
Corporate Overview 29
Differentiation Provides Value Creation 30
Business Segmentation Overview 31
Components of NAV 32
Stabilized Portfolio 33
Identified & Next Generation Pipeline 34
3rd Party Construction 35
Net Asset Value Component Data 36
Appendix - Definitions & Reconciliations 37
Definitions 38
Reconciliations 42
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Forward Looking Statement
This Supplemental Information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2013 (the “10-K”), the consolidated unaudited financial statements appearing in our press release dated February 20, 2014, which has been furnished as Exhibit 99.1 to our Form 8-K filed on February 20, 2014. The Company makes statements in this Supplemental Information that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). In particular, statements pertaining to our capital resources, portfolio performance and results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our funds from operations, core funds from operations, adjusted funds from operations, funds available for distribution and net operating income are forward-looking statements. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,”
“may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.
Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise and the Company may not be able to realize them. The Company does not guarantee that the transactions and events described will happen as described (or that they will happen at all). For further discussion of risk factors and other events that could impact our future results, please refer to our Registration
Statement on Form S-11, initially filed with the Securities and Exchange Commission (the “SEC”) on March 26,
2013, as subsequently amended, and the documents subsequently filed by us from time to time with the SEC.
|
|
Corporate Profile
Corporate Information
Armada Hoffler Properties, Inc. (NYSE: AHH) is a full-service real estate investment trust (REIT) and property company that develops, builds, owns and manages institutional grade office, retail and multifamily properties in the Mid-Atlantic U.S. The Company also provides general construction and development services to third-party clients throughout the Mid-Atlantic and Southeastern regions of the U.S. Armada Hoffler Properties was founded in 1979 and is headquartered in Virginia Beach, VA.
Management & Board
Board of Directors Corporate Officers
Daniel A. Hoffler Executive Chairman of the Board Louis S. Haddad President and Chief Executive Officer
A. Russell Kirk Vice Chairman of the Board Anthony P. Nero President of Development
Louis S. Haddad Director Shelly R. Hampton President of Asset Management
John W. Snow Lead Independent Director Eric E. Apperson President of Construction
George F. Allen Independent Director Michael P. O’Hara Chief Financial Officer
James A. Carroll Independent Director Eric L. Smith Vice President of Operations and Secretary
James C. Cherry Independent Director
Admiral Joseph W. Prueher Independent Director
Analyst Coverage
Janney, Montgomery, & Scott LLC Raymond James & Associates Robert W. Baird & Co. Stifel, Nicolaus & Company, Inc. Wunderlich Securities
Michael Gorman Richard Mulligan David Rodgers John Guinee Craig Kucera
(215) 665-6224 (727) 567-2619 (216) 737-7341 (443) 224-1307 (540) 277-3366
mgorman@janney.com rj.milligan@raymondjames.com drodgers@rwbaird.com jwguinee@stifel .com ckucera@wundernet.com
Investor Relations Contact
Julie Loftus Trudell
Vice President of Investor Relations (757) 366-6692 Jtrudell@armadahoffler.com
|
|
Fourth Quarter Results and Financial Summary
|
|
Highlights
Core Funds From Operations (“Core FFO”) of $7.1 million, or $0.22 per diluted share.
New and renewal leases executed during the quarter totaling approximately 105,000 square feet in the office and retail property portfolios.
Average occupancy increased to 94.4%, compared to 93.3% in the third quarter of 2013, across the operating property portfolio.
Development pipeline of seven properties, consisting of approximately 513,000 square feet of office and retail space and 489 multifamily units.
- 4525 Main Street development project in the Virginia Beach Town Center is 46% pre-leased.
- On November 15, 2013, the Company announced that it was selected as the developer for Oceaneering International’s new 155,000 square foot build-to-suit development project that is 100% pre-leased.
On January 21, 2014, the Company closed on the previously announced acquisition of Liberty Apartments, in Newport News, Virginia, for approximately $30.7 million.
Liberty Apartments is part of the “Apprentice School Project”, a $70 million public / private, mixed-use development project with the Newport News Shipbuilding division of Huntington Ingalls Industries, the Commonwealth of Virginia and the Industrial Development Authority of the City of Newport News, Virginia.
|
|
Summary Information
$ in thousands, except per share
Market Capitalization Key Financials
Three months ended
12/31/2013 12/31/2013
% of Total Total Market
Equity Capitalization Financial Information:
Market Data Rental revenues $14,992
Total Common Shares Outstanding 59% 19,163,413 General contracting and real estate services revenues 19,373
Operating Partnership (“OP”) Units Outstanding 41% 13,059,365 Rental properties Net Operating Income (NOI) 10,088
Common shares and OP units outstanding 100% 32,222,778 General contracting and real estate services Gross Profit 1,428
Market price per common share $9.36 Net income 2,866
Equity market capitalization $301,605 Funds From Operations (FFO) 6,652
Total debt 277,745 Core FFO 7,098
Total market capitalization $579,350 Core FFO per diluted share $0.22
Less: cash (21,042)
Total enterprise value $558,308
Operating Metrics Debt Metrics
Three months ended
12/31/2013 12/31/2013
Rentable square feet or number of units: Key Metrics
Office 952,603 Core debt/enterprise value 46.5%
Retail 1,093,301
Multifamily 626 Fixed charge coverage ratio
Core EBITDA with Seasonality $9,764
Occupancy: Interest 2,501
Office (1) 95.2% Principal 780
Retail (1) 93.4% Total Fixed Charges 3,281
Multifamily(2) 94.2% Fixed charge coverage ratio 2.98x
Weighted Average (3) 94.4%
Core Debt/Annualized Core EBITDA 6.6x
(1) Office and retail occupancy based on leased square feet as a % of respective total
(2) Multifamily occupancy based on occupied units as a % of respective total
(3) Total occupancy weighted by annualized base rent
|
|
Summary Balance Sheet
$ in thousands
As of
12/31/2013 12/31/2012
Assets (Unaudited)
Real estate investments:
Income producing property $406,239 $ 350,814
Held for development - 3,926
Construction in progress 56,737 -
462,976 354,740
Accumulated depreciation (105,228) (92,454)
Net real estate investments 357,748 262,286
Cash and cash equivalents 18,882 9,400
Restricted cash 2,160 3,725
Accounts receivable, net 18,272 17,423
Construction receivables, including retentions 12,633 10,490
Costs and estimated earnings in excess of billings 1,178 1,206
Other assets 24,409 27,283
Total Assets $435,282 $331,813
Liabilities and Equity
Indebtedness:
Secured debt $277,745 $ 334,438
Participating note - 643
Accounts payable and accrued liabilities 6,463 2,478
Construction payables, including retentions 28,139 17,369
Billings in excess of costs and estimated earnings 1,541 4,236
Other liabilities 15,873 13,990
Total Liabilities 329,761 373,154
Equity 105,521 (41,341)
Total Liabilities and Equity $435,282 $ 331,813
|
|
Summary Income Statement
$ in thousands
Three months ended Year ended
12/31/2013 12/31/2012 12/31/2013 12/31/2012
Revenues (Unaudited) (Unaudited)
Rental revenues $14,992 $14,122 $57,520 $54,436
General contracting and real estate services 19,373 13,391 82,516 54,046
Total Revenues 34,365 27,513 140,036 108,482
Expenses
Rental expenses 3,557 3,237 14,025 12,682
Real estate taxes 1,347 1,273 5,124 4,865
General contracting and real estate services 17,945 11,903 78,813 50,103
Depreciation and amortization 3,786 3,612 14,898 12,909
General and administrative 1,725 540 6,937 3,232
Impairment charges 47 - 580 -
Total Expenses 28,407 20,565 120,377 83,791
Operating Income 5,958 6,948 19,659 24,691
Interest expense (2,501) (4,043) (12,303) (16,561)
Loss on extinguishment of debt (135) - (2,387) -
Gain on acquisitions - - 9,460 -
Other income (expense) (46) 244 297 777
Income before taxes 3,276 3,149 14,726 8,907
Income tax (provision) benefit (410) - (273) -
Income from continuing operations 2,866 3,149 14,453 8,907
Loss from discontinued operations - - - (10)
Net income $2,866 $3,149 $14,453 $8,897
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Core FFO & Core AFFO
$ in thousands, except per share
Three months ended
12/31/2013
(Unaudited)
Net income $2,866
Depreciation and amortization 3,786
FFO 6,652
Core FFO
Adjustments
Loss on extinguishment of debt 135
Non-cash stock compensation 237
Impairment charges 47
Loan modifications 27
Non-Stabilized development pipeline adjustments -
Core FFO 7,098
Core FFO per share $0.22
Core AFFO
Adjustments
Tenant improvements, leasing commissions (1) (886)
Leasing incentives (26)
Property related Capital expenditures (2) (337)
Non Cash interest expense 154
GAAP Adjustments
Net effect of straight-line rents (201)
Amortization of lease incentives and above (below) market rents 146
Derivative (income) losses 52
Core AFFO $6,000
Core AFFO per share $0.19
(1) Excludes tenant improvements and leasing commissions on first generation rental space and funded by previous owners.
(2) Excludes one time, non-recurring capital expenditures.
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Summary of Outstanding Debt
$ in thousands Amount Effective Rate as of Balance at
Debt Outstanding Interest Rate (1) December 31, 2013 Maturity Date Maturity
Virginia Beach Town Center
249 Central Park Retail $15,834 5.99% September 8, 2016 $15,084
South Retail 6,985 5.99% September 8, 2016 6,655
Studio 56 Retail 2,690 3.75% May 7, 2015 2,592
Commerce Street Retail 5,613 LIBOR +2.25% 2.42% October 31, 2018 5,315
Fountain Plaza Retail 7,917 5.99% September 8, 2016 7,542
Dick’s at Town Center 8,318 LIBOR+2.75% 2.92% October 31, 2017 7,889
The Cosmopolitan 47,723 3.75% July 1, 2051 -
Diversified Portfolio
Oyster Point 6,466 5.41% December 1, 2015 6,089
Broad Creek Shopping Center
Note 1 4,503 LIBOR +2.25% 2.42% October 31, 2018 4,223
Note 2 8,267 LIBOR +2.25% 2.42% October 31, 2018 7,752
Note 3 3,461 LIBOR +2.25% 2.42% October 31, 2018 3,246
Hanbury Village
Note 1 21,449 6.67% October 11, 2017 20,499
Note 2 4,160 LIBOR +2.25% 2.42% October 31, 2018 3,867
Harrisonburg Regal 3,842 6.06% June 8, 2017 3,165
North Point Center
Note 1 10,319 6.45% February 5, 2019 9,333
Note 2 2,831 7.25% September 15, 2025 1,344
Note 4 1,030 5.59% December 1, 2014 1,007
Note 5 705 LIBOR+2.00% 3.57% (2) February 1, 2017 641
Tyre Neck Harris Teeter 2,482 LIBOR +2.25% 2.42% October 31, 2018 2,235
Smith’s Landing 24,795 (4) LIBOR+2.15% 2.32% January 31, 2017 23,793
189,388 132,271
Credit Facility 70,000 LIBOR + 1.60% - 2.20% 1.93% (5) May 13, 2016 70,000
Total including Credit Facility $259,388 $202,271
Development Pipeline
4525 Main Street 11,313 LIBOR+1.95% 2.13% (3) January 30, 2017 $11,313
Encore Apartments 3,585 LIBOR+1.95% 2.13% (3) January 30, 2017 3,585
Whetstone Apartments 284 LIBOR+1.90% 2.07% (6) October 8, 2016 284
Sandbridge Commons 3,172 LIBOR+1.85% 2.02% January 17, 2018 3,172
Total Notes Payable - Development Pipeline 18,354 18,354
Unamortized fair value adjustments 3
Total Notes Payable $277,745 $220,625
Weighted Average Fixed Interest Rate 4.3%
(1) LIBOR rate is determined by individual lenders. Weighted Average Variable Interest Rate 2.3%
(2) Subject to an interest rate swap lock. Total Weighted Average Interest Rate 3.6%
(3) Subject to LIBOR interest rate cap of 3.50%. Variable Interest Rate as a % of Total (net of interest rate caps) 34.1%
(4) Principal balance excluding any fair value adjustment recognized upon acquisition. Weighted Average Maturity (years) 9.2
(5) Subject to a $40 million LIBOR interest rate cap of 1.50%.
(6) Subject to LIBOR interest rate cap of 1.50%. 4Q 2013 Full Year 2013
Capitalized Interest $309 $563
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Debt to EBITDA
$ in thousands
Three months
ended 12/31/13 12/31/2013
(Unaudited) (Unaudited)
Net Income $2,866 Total Debt $ 277,745
Excluding: Excluding:
Interest Expense 2,501 Development Pipeline Construction Loans (18,354)
Income Tax 410
Depreciation and amortization 3,786 Core Debt $ 259,391
EBITDA 9,563
Additional Adjustments:
Non-recurring or extraordinary (gains) losses 27
Early extinguishment of debt 135 Core Debt/Annualized Core EBITDA 6.6x
Derivative (income) losses 52
Non-cash stock compensation 237
Development Pipeline -
Total Other Adjustments 451
Core EBITDA 10,014
Seasonality (250)
Core EBITDA with Seasonality Adjustment $9,764
Annualized Core EBITDA with Seasonality Adjustment $39,056
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Debt Maturity
$ in thousands
Debt Maturity as of 12/31/13
120,000
100,000
80,000
thousands) 60,000 in $ (
40,000 20,000 -
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Portfolio Summary & Business Segmentation Overview
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Stabilized Portfolio Summary
As of 12/31/2013 Average Net
Effective
Annualized Annual Base
Net Rentable Annualized Base Rent per Rent per
Property Location Year Built Square Feet(1) % Leased(2) Base Rent(3) Leased Sq. Ft.(3) Leased Sq. Ft.(4)
Office Properties
Armada Hoffler Tower(5) Virginia Beach, VA 2002 326,581 98.9% $8,649,639 $ 26.79 $ 26.38
One Columbus Virginia Beach, VA 1984 129,424 94.4% 2,829,349 23.17 23.21
Two Columbus Virginia Beach, VA 2009 109,215 90.7% 2,474,646 24.98 25.23
Virginia Natural Gas (6) Virginia Beach, VA 2010 31,000 100.0% 568,230 18.33 20.17
Richmond Tower Richmond, VA 2010 206,969 98.0% 7,274,896 35.87 41.88
Oyster Point Newport News, VA 1989 100,214 79.8% 1,740,247 21.76 21.23
Sentara Williamsburg(6) Williamsburg, VA 2008 49,200 100.0% 1,006,140 20.45 20.50
Subtotal / Weighted Average Office Portfolio(7) 952,603 95.2% $24,543,148 $ 27.06 $ 28.31
Retail Properties Not Subject to Ground Lease
Bermuda Crossroads Chester, VA 2001 111,566 94.0% 1,409,089 13.44 13.93
Broad Creek Shopping Center Norfolk, VA 1997-2001 227,731 96.8% 2,922,782 13.26 12.90
Courthouse 7-11 Virginia Beach, VA 2011 3,177 100.0% 125,000 39.35 43.81
Gainsborough Square Chesapeake, VA 1999 88,862 93.0% 1,295,935 15.69 15.36
Hanbury Village Chesapeake, VA 2006-2009 61,049 86.4% 1,321,633 25.07 24.66
North Point Center Durham, NC 1998-2009 215,690 93.1% 2,365,193 11.77 11.71
Parkway Marketplace Virginia Beach, VA 1998 37,804 100.0% 735,668 19.46 19.68
Harrisonburg Regal Harrisonburg, VA 1999 49,000 100.0% 683,550 13.95 13.95
Dick’s at Town Center Virginia Beach, VA 2002 100,804 83.3% 798,000 9.50 7.79
249 Central Park Retail Virginia Beach, VA(8) 2004 91,171 96.2% 2,536,604 28.93 27.30
Studio 56 Retail Virginia Beach, VA 2007 11,600 84.8% 371,200 37.75 36.92
Commerce Street Retail(9) Virginia Beach, VA 2008 20,123 100.0% 792,313 39.37 39.24
Fountain Plaza Retail Virginia Beach, VA 2004 35,961 100.0% 996,181 27.70 25.71
South Retail(24) Virginia Beach, VA 2002 38,763 83.6% 621,240 19.17 18.66
Subtotal / Weighted Avg Retail Portfolio not Subject to Ground Leases(10) 1,093,301 93.4% $16,974,385 $ 16.62 $ 16.18
Retail Properties Subject to Ground Lease
Bermuda Crossroads (11) Chester, VA 2001 (13) 100.0% 163,350
Broad Creek Shopping Center(12) Norfolk, VA 1997-2001 (14) 100.0% 579,188
Hanbury Village(11) Chesapeake, VA 2006-2009 (15) 100.0% 1,067,598
North Point Center(11) Durham, NC 1996-2009 (16) 100.0% 1,055,125
Tyre Neck Harris Teeter(12) Chesapeake, VA 2011 (17) 100.0% 508,134
Subtotal / Weighted Avg Retail Portfolio Subject to Ground Leases 100.0% $3,373,396
Total / Weighted Avg Retail Portfolio 1,093,301 (18) 93.4% $20,347,780 $ 16.62 $ 16.18
Total / Weighted Average Retail and Office Portfolio 2,045,904 94.3% $44,890,928 $ 21.53 $ 21.88
Average
Monthly Base
Annualized Rent per
Property Location Year Built Units(19) % Leased(2) Base Rent(20) Leased Unit(21)
Multifamily
Smith’s Landing(22) Blacksburg, VA 2009 284 99.3% $3,382,380 $999.52
The Cosmopolitan Virginia Beach, VA 2006 342 90.1% 6,639,606 1,547.93
Total / Weighted Avg Multifamily Portfolio 626 94.2% $10,021,986 $1,285.81
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Stabilized Portfolio Summary Footnotes
1)The net rentable square footage for each of our office properties is the sum of (a) the square footages of existing leases, plus (b) for available space, management’s estimate of net rentable square footage based, in part, on past leases. The net rentable square footage included in office leases is generally determined consistently with the Building Owners and Managers Association, or BOMA, 1996 measurement guidelines. The net rentable square footage for each of our retail properties is the sum of (a) the square footages of existing leases, plus (b) for available space, the field verified square footage.
2)Percentage leased for each of our office and retail properties is calculated as (a) square footage under executed leases as of December 31, 2013, divided by (b) net rentable square feet, expressed as a percentage. Percentage leased for our multifamily properties is calculated as (a) total units occupied as of December 31, 2013, divided by (b) total units available, expressed as a percentage.
3)For the properties in our office and retail portfolios, annualized base rent is calculated by multiplying (a) base rental payments for executed leases as of December 31, 2013 (defined as cash base rents (before abatements) excluding tenant reimbursements for expenses paid by the landlord), by (b) 12. Annualized base rent per leased square foot is calculated by dividing (a) annualized base rent, by (b) square footage under commenced leases as of December 31, 2013. In the case of triple net or modified gross leases, annualized base rent does not include tenant reimbursements for real estate taxes, insurance, common area or other operating expenses.
4)Average net effective annual base rent per leased square foot represents (a) the contractual base rent for leases in place as of December 31, 2013, calculated on a straight-line basis to amortize free rent periods and abatements, but without regard to tenant improvement allowances and leasing commissions, divided by (b) square footage under commenced leases as of December 31, 2013.
5)As of December 31, 2013, the Company occupied 16,151 square feet at this property at an annualized base rent of $449,007, or $27.80 per leased square foot, which amounts are reflected in the % leased, annualized base rent and annualized base rent per square foot columns in the table above. The rent paid by us is eliminated from our revenues in consolidation. In addition, effective March 1, 2013, the Company sublease approximately 5,000 square feet of space from a tenant at this property.
6)This property is subject to a triple net lease pursuant to which the tenant pays operating expenses, insurance and real estate taxes. 7)Includes square footage and annualized base rent pursuant to leases for space occupied by us.
8)As of December 31, 2013, the Company occupied 8,995 square feet at this property at an annualized base rent of $278,965, or $31.01 per leased square foot, which amounts are reflected in the % leased, annualized base rent and annualized base rent per square foot columns in the table above. The rent paid by us is eliminated from our revenues in consolidation.
9)Includes $31,200 of annualized base rent pursuant to a rooftop lease.
10)Reflects square footage and annualized base rent pursuant to leases for space occupied by us.
11)For this ground lease, the Company own the land and the tenant owns the improvements thereto. The Company will succeed to the ownership of the improvements to the land upon the termination of the ground lease.
12)The Company lease the land underlying this property from the owner of the land pursuant to a ground lease. The Company re-lease the land to our tenant under a separate ground lease pursuant to which our tenant owns the improvements on the land.
13)Tenants collectively lease approximately 139,356 square feet of land from us pursuant to ground leases. 14)Tenants collectively lease approximately 299,170 square feet of land from us pursuant to ground leases. 15)Tenants collectively lease approximately 105,988 square feet of land from us pursuant to ground leases. 16)Tenants collectively lease approximately 1,443,985 square feet of land from us pursuant to ground leases. 17)Tenant leases approximately 200,073 square feet of land from us pursuant to a ground lease.
18)The total square footage of our retail portfolio excludes the square footage of land subject to ground leases. 19)Units represent the total number of apartment units available for rent at December 31, 2013.
20)For the properties in our multifamily portfolio, annualized base rent is calculated by multiplying (a) base rental payments for the month ended December 31, 2013 by (b) 12. 21)Average monthly base rent per leased unit represents the average monthly rent for all leased units for the month ended December 31, 2013.
22)The Company lease the land underlying this property from the owner of the land pursuant to a ground lease.
23)The annualized base rent for The Cosmopolitan includes $918,462 of annualized rent from 15 retail leases at the property.
24)As of December 31, 2013, The Company occupied 2,908 square feet at this property at an annualized base rent of $12,000, or $4.13 per leased square foot, which amounts are reflected in the % leased, annualized base rent and annualized base rent per square foot columns in the table above. The rent paid by us and is eliminated from our revenues in consolidation.
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Development Pipeline
$ in thousands
Identified Development Pipeline Schedule
Estimated Cost Incurred
Square Estimated through Anchor Tenant Stabilized AHH Principal
Office/Retail Location Footage(1) Cost(1) 12/31/13 Start Occupancy Operation Ownership % (1) Property Type Tenants %leased
4525 Main Street(2) Virginia Beach, VA 234,000 (3) $50,000 $25,700 1Q13 3Q14 1Q16 100% Office Clark Nexsen, Development 46%
Authority of Virginia Beach(3)
Sandbridge Commons Virginia Beach, VA 70,000 13,000 6,000 4Q13 1Q15 2Q16 85% Retail Harris Teeter 66%
Brooks Crossing (7) Newport News, VA 36,000 8,000 1,000 3Q14 3Q15 3Q15 65% Office Huntington Ingalls(4) 0%(4)
Greentree Shopping Center(5) Chesapeake, VA 18,000 6,000 2,200 4Q13 4Q14 3Q16 100% Retail Wawa 40%
358,000 77,000 34,900
Schedule
Estimated Cost Incurred
Apartment Estimated through Initial Stabilized AHH
Multifamily Location Units(1) Cost(1) 12/31/13 Start Occupancy Complete(1) Operation Ownership %
Encore Apartments(2) Virginia Beach, VA 286 $34,000 $11,500 1Q13 3Q14 4Q15 1Q16 100%
Whetstone Apartments Durham, NC 203 28,000 7,700 2Q13 3Q14 3Q15 1Q16 100%
Liberty Apartments(6) Newport News, VA 197 30,700 - - - 1Q14 3Q15 100%
686 $92,700 $19,200
Next Generation Pipeline Schedule
Estimated Cost Incurred
Square Estimated through Anchor Tenant Stabilized AHH Principal
Office/Retail Location Footage(1) Cost(1) 12/31/13 Start Occupancy Operation Ownership % (1) Property Type Tenants %leased
Oceaneering Chesapeake, VA 155,000 26,000 3,500 4Q13 1Q15 1Q15 100% Office Oceaneering 100%
Total $195,700 $57,600
(1) Represents estimates that may change as the development process proceeds (2) This property will be located within the Virginia Beach Town Center
(3) Approximately 83,000 square feet is leased to Clark Nexsen, an architectural firm and approximately 23,000 square feet is leased to the Development Authority of Virginia Beach (4) The principal tenant lease has not been signed as of the date of this supplemental information (5) AHH has a contract to sell Wal-Mart a pad-ready site adjacent to Greentree Shopping Center (6) Reflects actual purchase price of the acquisition, which occurred in 1Q14 (7) Development program has been updated since 3Q13
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Construction Business Summary
$ in thousands
Work in Place Estimated
Location Total Contract Value as of 12/31/13 Backlog Date of Completion
Projects Greater than $5.0M
Hyatt Place Baltimore / Inner Harbor Hotel Baltimore, MD $25,346 $2,142 $ 23,204 3Q 2014
City of Suffolk Municipal Center Suffolk, VA 24,574 12,656 11,918 2Q 2015
Main Street Parking Garage(1) Virginia Beach, VA 17,766 13,177 4,589 3Q 2014
Total Projects Greater then $5.0M 67,686 27,975 39,711
Projects Less than $5.0M 79,870 73,196 6,674
Total $147,556 $101,171 $ 46,385
Gross Profit Summary
Q4 2013 Full Year 2013
(Unaudited)
Revenue $19,373 $82,516
Expense (17,945) (78,813)
Gross Profit $1,428 $3,703
(1) Related party contracts
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Operating Results & Property- Type Segment Analysis
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Same Store NOI by Segment
(Reconciliation to GAAP located in appendix pg. 42) $ in thousands
Three months ended 12/31 Year ended 12/31
2013 2012 $ Change % Change 2013 2012 $ Change % Change
Office(1) (Unaudited) (Unaudited)
Revenue $ 6,524 $ 6,662 ($138) -2% $ 25,794 $ 25,815 ($21) 0%
Expenses 1,925 1,747 178 10% 7,892 7,668 224 3%
Net Operating Income 4,599 4,915 (316) -6% 17,902 18,147 (245) -1%
Retail(2)
Revenue 5,175 5,580 (405) -7% 19,898 20,786 (888) -4%
Expenses 1,625 2,005 (380) -19% 6,254 6,458 (204) -3%
Net Operating Income 3,550 3,575 (25) -1% 13,644 14,328 (684) -5%
Multi Family(3)
Revenue 1,810 1,880 (70) -4% 7,494 7,457 37 0%
Expenses 883 723 160 22% 3,441 3,176 265 8%
Net Operating Income 927 1,157 (230) -20% 4,053 4,281 (228) -5%
Same Store Net Operating Income (NOI), GAAP basis $ 9,076 $ 9,647 ($571) -6% $ 35,599 $ 36,756 ($1,157) -3%
Net effect of straight-line rents (198) (783) 585 -75% (621) (1,873) 1,252 -67%
Amortization of lease incentives and above (below) market rents 173 205 (32) -16% 755 754 1 0%
Same store portfolio NOI, cash basis $ 9,051 $ 9,069 ($18) 0% $ 35,733 $ 35,637 $96 0%
Cash Basis:
Office 4,270 4,409 (139) -3% 16,818 16,467 351 2%
Retail 3,850 3,497 353 10% 14,842 14,873 (31) 0%
Multifamily 931 1,163 (232) -20% 4,073 4,297 (224) -5%
$ 9,051 $ 9,069 ($18) 0% $ 35,733 $ 35,637 $96 0%
GAAP Basis:
Office 4,599 4,915 (316) -6% 17,902 18,147 (245) -1%
Retail 3,550 3,575 (25) -1% 13,644 14,328 (684) -5%
Multifamily 927 1,157 (230) -20% 4,053 4,281 (228) -5%
$ 9,076 $ 9,647 ($571) -6% $ 35,599 $ 36,756 ($1,157) -3%
(1) No assets excluded
(2) Bermuda Crossroads and Tyre Neck Harris Teeter excluded
(3) Smith’s Landing excluded
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Top 10 Tenants by Annual Base Rent
As of December 31, 2013
Office Portfolio
% of Office % of Total
Number Portfolio Portfolio
Number of Lease Annualized Annualized Annualized
Tenant of Leases Properties Property(ies) Expiration Base Rent Base Rent Base Rent
Williams Mullen 3 2 Armada Hoffler Tower, Richmond Tower 3/19/2026 $7,779,349 31.7% 14.2%
Troutman Sanders LLP 1 1 Armada Hoffler Tower 1/31/2015 1,026,938 4.2% 1.9%
Sentara Medical Group 1 1 Sentara Williamsburg 3/31/2023 1,006,140 4.1% 1.8%
Cherry Bekaert & Holland 3 3 Armada Hoffler Tower, Richmond Tower, Oyster Point 9/21/2022 932,547 3.8% 1.7%
GSA 1 1 Oyster Point 4/26/2017 870,047 3.5% 1.6%
Pender & Coward 2 1 Armada Hoffler Tower 1/31/2015 818,985 3.3% 1.5%
The Art Institute 1 1 Two Columbus 12/31/2019 771,898 3.1% 1.4%
Kimley- Horne 1 1 Two Columbus 12/31/2018 669,333 2.7% 1.2%
Hampton University 2 1 Armada Hoffler Tower 5/3/2023 629,935 2.6% 1.1%
Hankins & Anderson 1 1 Armada Hoffler Tower 4/30/2022 572,368 2.3% 1.0%
Top 10 Total $15,077,541 61.4% 27.5%
Retail Portfolio
% of Retail % of Total
Number Portfolio Portfolio
Number of Lease Annualized Annualized Annualized
Tenant of Leases Properties Property(ies) Expiration Base Rent Base Rent Base Rent
Home Depot 2 2 Broad Creek Shopping Center, North Point Center 12/27/2019 $2,032,600 10.0% 3.7%
Harris Teeter 2 2 Tyre Neck Harris Teeter, Hanbury Village 10/16/2028 1,430,001 7.0% 2.6%
Food Lion 3 3 Broad Creek Shopping Center, Bermuda Crossroads, 3/19/2020 1,282,568 6.3% 2.3%
Gainsborough Square
Dick’s Sporting Goods 1 1 Dick’s at Town Center 1/31/2020 798,000 3.9% 1.5%
Regal Cinemas 1 1 Harrisonburg Regal 4/23/2019 683,550 3.4% 1.2%
PetsMart 2 2 Broad Creek Shopping Center, North Point Center 2/7/2016 618,704 3.0% 1.1%
Kroger 1 1 North Point Center 8/31/2018 552,864 2.7% 1.0%
Yard House 1 1 Commerce Street Retail 11/30/2023 538,000 2.6% 1.0%
Rite Aid 2 2 Gainsborough Square, Parkway Marketplace 5/29/2019 484,193 2.4% 0.9%
Walgreens 1 1 Hanbury Village 12/31/2083 447,564 2.2% 0.8%
Top 10 Total $8,868,044 43.6% 16.1%
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Office Lease Summary
In thousands, except per share
Renewal Lease Summary(1) GAAP Cash
Number of Annual Weighted TI, LC, &
Leases Net rentable Leases Net rentable Contractual Prior Rent Change in Contractual Prior Rent Annual Change Average Lease TI, LC, & Incentives
Quarter Signed SF Signed Expiring SF Expiring Rent per SF per SF Rent per SF Rent per SF per SF in Rent per SF Term Incentives per SF
4th Quarter 2013 (2) 5 (3) 45,677 4 5,112 $26.74 $25.27 $1.47 $23.58 $27.97 ($4.39) 11.34 $1,927,309 $ 42.19
3rd Quarter 2013 5 16,289 4 30,038 29.18 26.76 2.42 28.26 27.92 0.33 6.79 60,809 3.73
2nd Quarter 2013 6 29,725 4 16,635 22.86 23.14 (0.28) 21.81 24.20 (2.39) 5.68 481,389 16.19
Total 16 91,691 $3.61 ($6.44) $2,469,507
New Lease Summary(1)
Number of Weighted TI, LC, &
Leases Net rentable Contractual Average TI, LC, & Incentives
Quarter Signed SF Signed Rent per SF Lease Term Incentives per SF
4th Quarter 2013 4 18,381 $23.56 10.34 $577,382 $31.41
3rd Quarter 2013 1 1,142 29.50 5.00 3,577 3.13
2nd Quarter 2013 2 4,046 26.77 5.00 165,628 40.94
Total 7 23,569 $746,587
(1) Excludes leases for space occupied by AHH.
(2) Two of the renewed leases executed during 4Q13 included expansions, which are shown as new leases below.
(3) Of the five renewals during Q4 2013, three were early renewals of leases expiring later than Q4 2013.
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Office Lease Expirations
Square
Number of Footage of % Portfolio % of Portfolio Annualized Base Rent
Leases Leases Net Rentable Annualized Annualized per Leased Square
Year of Lease Expiration Expiring Expiring Square Feet Base Rent Base Rent Foot
Available - 45,554 4.8% $0 - $0.00
2014 15 49,384 5.2% 1,375,424 5.6% 27.85
2015 8 98,200 10.3% 2,483,520 10.1% 25.29
2016 10 33,481 3.5% 784,963 3.2% 23.45
2017 5 65,186 6.8% 1,566,263 6.4% 24.03
2018 15 133,189 14.0% 3,517,059 14.3% 26.41
2019 6 71,512 7.5% 1,619,344 6.6% 22.64
2020 3 25,283 2.7% 772,781 3.1% 30.57
2021 4 41,363 4.3% 946,930 3.9% 22.89
2022 3 48,117 5.1% 1,268,882 5.2% 26.37
2023 5 105,160 11.0% 2,310,230 9.4% 21.97
Thereafter 6 236,174 24.8% 7,897,751 32.2% 33.44
Total / Weighted Average 80 952,603 100.0% $24,543,148 100.0% $27.06
35.0% 32.2%
30.0%
25.0%
20.0%
14.3%
15.0%
10.1% 9.4%
10.0% 6.4% 6.6%
5.6% 5.2%
5.0% 3.2% 3.1% 3.9%
0.0%
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Retail Lease Summary
In thousands, except per share
Renewal Lease Summary(1) GAAP Cash
Number of Net Weighted TI, LC, &
Leases Net rentable Leases rentable SF Contractual Prior Rent Annual Change Contractual Prior Rent Annual Change Average Lease TI, LC, & Incentives
Quarter Signed SF Signed Expiring Expiring Rent per SF per SF in Rent per SF Rent per SF per SF in Rent per SF Term Incentives per SF
4th Quarter 2013 7 37,733 6 7,928 $13.82 $13.49 $0.33 $13.79 $14.12 ($0.33) 4.70 $40,540 $1.07
3rd Quarter 2013 6 24,506 3 3,648 24.26 25.11 (0.85) 23.55 28.34 (4.79) 5.67 227,766 9.29
2nd Quarter 2013 6 26,345 3 7,728 17.02 17.40 (0.37) 16.50 18.03 (1.53) 4.12 $0 -
Total 19 88,584 ($0.89) ($6.65) $268,306
New Lease Summary(1)
Number of Weighted TI, LC, &
Leases Net rentable Contractual Average TI, LC, & Incentives
Quarter Signed SF Signed Rent per SF Lease Term Incentives per SF
4th Quarter 2013 2 3,270 $18.67 5.06 $75,884 $23.21
3rd Quarter 2013 - - - - - -
2nd Quarter 2013 6 20,037 11.59 5.34 433,101 21.62
Total 8 23,307 $508,985
(1) Excludes leases from space occupied by AHH
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Retail Lease Expiration
Square
Number of Footage of % Portfolio % of Portfolio Annualized Base Rent
Leases Leases Net Rentable Annualized Annualized per Leased Square
Year of Lease Expiration Expiring Expiring Square Feet Base Rent Base Rent Foot
Available - 71,863 6.6% $0 - $0.00
2014 21 46,307 4.2% 783,659 4.6% 16.92
2015 18 63,030 5.8% 1,314,420 7.7% 20.85
2016 22 68,620 6.3% 1,667,203 9.8% 24.30
2017 19 133,945 12.3% 1,877,223 11.1% 14.01
2018 19 120,295 11.0% 1,736,312 10.2% 14.43
2019 14 285,235 26.1% 4,023,649 23.7% 14.11
2020 6 132,094 12.1% 1,647,180 9.7% 12.47
2021 4 18,053 1.7% 503,648 3.0% 27.90
2022 6 83,588 7.6% 1,215,718 7.2% 14.54
2023 5 27,625 2.5% 869,930 5.1% 31.49
Thereafter 6 42,646 3.9% 1,335,442 7.9% 31.31
Total / Weighted Average 140 1,093,301 100.0% $16,974,385 100.0% $16.62
25.0% 23.7%
20.0%
15.0%
11.1%
9.8% 10.2% 9.7%
10.0% 7.7% 7.2% 7.9%
4.6% 5.1%
5.0% 3.0%
0.0%
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Historical Occupancy
Occupancy - All Properties as of
Sector 12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
Office (1) 95.2% 93.4% 93.4% 93.9% 94.1%
Retail (1) 93.4% 93.6% 94.6% 93.9% 93.9%
Multifamily(2) 94.2% 92.7% 91.2% 93.3% 94.9%
Weighted Average(3) 94.4% 93.3% 93.5% 93.8% 94.2%
(1) Office and retail occupancy based on leased square feet as a % of respective total
(2) Multifamily occupancy based on occupied units as a % of respective total
(3) Total occupancy weighted by annualized base rent
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Multifamily Occupancy
Occupancy Summary - Smiths Landing (284 available units)
Number of Units Percentage Annualized Base Average Monthly Rent
Quarter Ended Occupied Occupied(1) Rent(2) per Occupied Unit
12/31/2013 282 99.3% $3,382,380 $1,000
9/30/2013 284 100.0% 3,427,980 1,006
6/30/2013 264 93.0% 3,163,164 998
3/31/2013 284 100.0% 3,395,184 996
12/31/2012 280 98.6% 3,353,280 998
Occupancy Summary - The Cosmopolitan (342 available units)
Number of Units Percentage Annualized Base Average Monthly Rent
Quarter Ended Occupied Occupied(1) Rent(2)(4) per Occupied Unit(3)
12/31/2013 308 90.1% $5,721,144 $1,548
9/30/2013 296 86.5% 5,506,764 1,550
6/30/2013 307 89.9% 5,818,908 1,580
3/31/2013 300 87.7% 5,490,864 1,525
12/31/2012 314 91.8% 5,889,528 1,563
(1) Total units occupied as of each respective date
(2) Annualized base rent is calculated by multiplying (a) contractual rent due from our tenants for the last month of the respective quarter by (b) 12
(3) Average Monthly Rent per Occupied Unit is calculated as (a) annualized base rent divided by (b) the number of occupied units as of the end of the respective date.
(4) Excludes annualized base rent from retail leases
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Appendix - Understanding AHH
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Understanding AHH – Corporate Overview
Armada Hoffler Properties, Inc. is a full-service real estate investment trust (REIT) and property company that
develops, builds, owns and manages institutional grade office, retail and multifamily properties in the Mid -
Atlantic U.S. The Company also provides general construction and development services to third-party clients
throughout the Mid-Atlantic and Southeastern regions of the U.S. Armada Hoffler Properties was founded in
1979 and is headquartered in Virginia Beach, VA.
Diversified portfolio consisting of Office, Retail
and Multifamily properties
Institutional grade portfolio focused on the Mid-
Atlantic region
35 year corporate track record with senior
leadership team averaging more than 20 years
with the company
Market Cap of ~$300 million as of 12/31/13
Management and previous partners own in Current Portfolio & Development Pipeline
excess of 40% of the company through limited Previous Construction or Development Projects
partnership units in the operating partnership
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Understanding AHH –
Differentiation Provides Value Creation
1. Advantages of Core Stabilized Portfolio:
- Consistent cash flow
- High occupancy Development Engine
- Stable same store metrics
2. Advantages of Wholesale Development Pipeline Engine:
- Equity creation
Stable Construction
- Asset base growth Portfolio Business
3. Advantages of Construction Company:
- Stable earnings and value creation
- Reduces risk in selecting/executing development opportunities
- Brand recognition in new markets
Sum of the Parts Leads to Valuation
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Business Segmentation Overview
Definition Characteristics Valuation
• Includes stabilized
office, retail, and • Consistent cash flow • Traditional real estate
Stabilized multifamily real estate • High occupancy valuation, NAV/Cap
(defined as the earlier of
Portfolio 80% occupancy or the • Stable same store Rates
13th full quarter after metrics
CO)
Development • Real estate assets in • Value creation
development or ramping • Equity Creation
Pipeline towards stabilization • Asset base growth
• Stable earnings and
value creation
• Reduces risk in
Construction • 3rd party construction selecting/executing
Business business development • Multiples analysis
opportunities
• Brand recognition in
new markets
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Components of NAV
See Pages 33-36 for Further Information Regarding the Components of NAV
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1) Understanding AHH –
Stabilized Portfolio
(Reconciliation to GAAP located in appendix pg. 42)
$ in thousands Cash NOI
Three months
ended 12/31/13 Annualized
Diversified Portfolio
Office $2,123 $8,494
Retail 3,040 12,160
Multifamily 628 2,510
Total Diversified Portfolio NOI $5,791 $23,164
Virginia Beach Town Center
Office(1) $2,290 $9,158
Retail (1) 1,236 4,944
Multifamily 930 3,720
Total Virginia Beach Town Center NOI $4,456 $17,822
Total Stabilized Portfolio NOI $10,247 $40,986
Seasonality ($250) ($1,000)
Net Stabilized Portfolio with Seasonality Adjustment $9,997 $39,986
(1) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP purposes totaling ~$220K per quarter
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2) Understanding AHH –
Identified & Next Generation Pipeline
$ in thousands
Note: The data below reflects the Company’s current estimates and projections, which may change as a result of various factors. The Company can make no assurances that the estimates and projections below will actually be realized.
The Company’s Est.
Estimated The Company’s Equity Creation
Estimated Return on Projected Estimated Equity Excluding JV
Estimated Cost Stabilized NOI Cost Value Spread Creation Ownership
Identified Pipeline $ 139,000 $ 11,400 8.20% 125bp $ 24,995 $ 23,903
Next Generation Pipeline 150,000 12,400 8.27% 150bp 33,251 33,251
Liberty Apartments 30,700 (1) 2,060
Estimated Stabilized Value/Weighted Average $ 319,700 $ 25,860 8.24% $ 58,246 $ 57,154
Greater than $57M in Equity Creation – 3 to 4 Years
(1) Actual purchase price
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3) Understanding AHH – 3rd Party Construction
$ in thousands
Gross Profit - metric to use when evaluating the profitability and valuation of the general contracting & real estate services segment
Gross Profit Summary
Q4 2013 Full Year 2013
(Unaudited)
Revenue $19,373 $82,516
Expense (17,945) (78,813)
Gross Profit $1,428 $3,703
Construction Company - Ongoing Profitable Business with Intrinsic Value
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4) NAV Component Data
$ in thousands
Stabilized Portfolio NOI (Cash) Development Pipeline
Annualized three
months ended
12/31/2013 Development Investment as of 12/31/13 $56,737
Diversified Portfolio The Company’s Estimated Equity Creation - 3-4 years (pg. 34) 58,246
Office $8,494 $114,983
Retail 12,160
Multifamily 2,510
Total Diversified Portfolio NOI (pg. 33) $23,164
Operating Companies
Virginia Beach Town Center Annualized
Office(1) $9,158 12/31/2013
Retail (1) 4,944
Multifamily 3,720 General Contracting and Real Estate Services (pg. 35) $3,703
Total Virginia Beach Town Center NOI (pg. 33) $17,822
Stabilized Portfolio NOI (Cash) $40,986
Seasonality (1,000) Liabilities & Share Count
As of 12/31/2013
Net Stabilized Portfolio with Seasonality Adjustment $39,986 Liabilities
Mortgages and notes payable $277,745
Other Assets Accounts payable and accrued liabilities 6,463
As of 12/31/2013 Other Liabilities 15,873
Other Assets Total Liabilities $300,081
Cash and Cash Equivalents $18,882
Restricted Cash 2,160 Share Count
Accounts Receivable 18,272 Total Common Shares Outstanding 19,163
Other Assets 24,409 Operating Partnership (“OP”) Units Outstanding 13,059
Total Other Assets $63,723 Common Shares and OP Units Outstanding 32,222
(1) Includes leases for space occupied by Armada Hoffler which are eliminated for GAAP purposes totaling ~$220K per quarter
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Appendix –
Definitions & Reconciliations
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Definitions
Net Operating Income:
We calculate Net Operating Income (“NOI”) as property revenues (base rent, expense reimbursements and other revenue) less property expenses (rental expenses and real estate taxes). For our office, retail and multifamily segments, NOI excludes general contracting and real estate services expenses, depreciation and amortization, general and administrative expenses, and impairment charges. Other REITs may use different methodologies for calculating
NOI, and accordingly, our NOI may not be comparable to such other REITs’ NOI. NOI is not a measure of operating income or cash flows from operating activities as measured by GAAP and is not indicative of cash available to fund cash needs. As a result, net operating income should not be considered an alternative to cash flows as a measure of liquidity. We consider NOI to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of our real estate business. (Reconciliation to GAAP located in appendix pg. 45)
Funds From Operations:
We calculate Funds From Operations (“FFO”) in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income (loss) (calculated in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of depreciable operating property, real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. Management uses FFO as a supplemental performance measure because it believes that FFO is beneficial to investors as a starting point in measuring our operational performance. Specifically, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, which do not relate to or are not indicative of operating performance, FFO provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. Other equity REITs may not calculate FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO.
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Definitions
Core Funds From Operations:
We calculate Core Funds From Operations (“Core FFO”) as FFO calculated in accordance with the standards established by NAREIT, adjusted for losses on debt extinguishments, non-cash stock compensation and impairment charges. Such items are non-recurring or non-cash in nature. Our calculation of Core FFO also excludes acquisition costs and the impact of development pipeline projects that are still in lease-up. We generally consider a property to be in lease-up until the earlier of (i) the quarter after which the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy.
Management believes that the computation of FFO in accordance to NAREIT’s definition includes certain items that are not indicative of the results provided by the Company’s operating portfolio and affect the comparability of the Company’s period-over-period performance. Our calculation of Core FFO differs from NAREIT’s definition of FFO. Other equity REITs may not calculate Core FFO in the same manner as us, and, accordingly, our Core FFO may not be comparable to other REITs’ Core FFO.
Core Adjusted Funds From Operations:
We calculate Core Adjusted Funds From Operations (“Core AFFO”) as Core FFO, (i) excluding the impact of tenant improvement and leasing commission costs, capital expenditures, the amortization of deferred financing fees, derivative (income) loss, the net effect of straight-line rents and the amortization of lease incentives and net above (below) market rents and (ii) adding back the impact of development pipeline projects that are still in lease-up and government development grants that are not included in FFO.
Management believes that Core AFFO provides useful supplemental information to investors regarding our operating performance as it provides a consistent comparison of our operating performance across time periods and allows investors to more easily compare our operating results with other REITs. However, other REITs may use different methodologies for calculating Core AFFO or similarly entitled FFO measures and, accordingly, our Core AFFO may not always be comparable to Core AFFO or other similarly entitled FFO measures of other REITs.
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Definitions
EBITDA:
We calculate EBITDA as net income (loss) (calculated in accordance with GAAP), excluding interest expense, income taxes and depreciation and amortization. Management believes EBITDA is useful to investors in evaluating and facilitating comparisons of our operating performance between periods and between REITs by removing the impact of our capital structure (primarily interest expense) and asset base (primarily depreciation and amortization) from our operating results.
Core EBITDA:
We calculate Core EBITDA as EBITDA, excluding certain items, including, but not limited to, non-recurring or extraordinary gains (losses), early extinguishment of debt, derivative (income) losses, acquisition costs and the impact of development pipeline projects that are still in lease-up. We generally consider a property to be in lease-up until the earlier of (i) the quarter after which the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. Management believes that Core EBITDA provides useful supplemental information to investors regarding our ongoing operating performance as it provides a consistent comparison of our operating performance across time periods and allows investors to more easily compare our operating results with other REITs. However, other REITs may use different methodologies for calculating Core EBITDA or similarly entitled measures and, accordingly, our Core EBITDA may not always be comparable to Core EBITDA or other similarly entitled measures of other REITs.
Core Debt:
We calculate Core Debt as our total debt, excluding any construction loans associated with our development pipeline.
Same Store Portfolio:
We define same store properties as including those properties that were owned and operated for the entirety of the period being presented and excluding properties that were in lease-up during the period present. We generally consider a property to be in lease-up until the earlier of (i) the quarter after which the property reaches 80% occupancy or (ii) the thirteenth quarter after the property receives its certificate of occupancy. The following table shows the properties included in the same store and non-same store portfolio for the comparative periods presented.
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Same Store vs. Non-Same Store Properties
Comparison of Three Months Ended Comparison of Year Ended
December 31, 2013 to 2012 December 31, 2013 to 2012
Same Store Non-Same Store Same Store Non-Same Store
Office Properties
Armada Hoffler Tower X X
One Columbus X X
Two Columbus X X
Virginia Natural Gas X X
Richmond Tower X X
Oyster Point X X
Sentara Williamsburg X X
Retail Properties
Bermuda Crossroads X X
Broad Creek Shopping Center X X
Courthouse 7-Eleven X X
Gainsborough Square X X
Hanbury Village X X
North Point Center X X
Parkway Marketplace X X
Harrisonburg Regal X X
Dick’s at Town Center X X
249 Central Park Retail X X
Studio 56 Retail X X
Commerce Street Retail X X
Fountain Plaza Retail X X
South Retail X X
Tyre Neck Harris Teeter X X
Multifamily
Smith’s Landing X X
The Cosmopolitan X X
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Reconciliation to GAAP - Segment Portfolio NOI
$ in thousands
Three months ended 12/31 Year ended 12/31
2013 2012 2013 2012
Office Same Store
Rental revenues (1) $6,524 $ 6,662 $25,794 $25,815
Property expenses 1,925 1,747 7,892 7,668
NOI 4,599 4,915 17,902 18,147
Non-Same Store NOI - - - -
Segment NOI $4,599 $ 4,915 $17,902 $18,147
Retail Same Store(2)
Rental revenues $5,175 $ 5,580 $19,898 $20,786
Property expenses 1,625 2,005 6,254 6,458
NOI 3,550 3,575 13,644 14,328
Non-Same Store NOI 409 - 1,332 207
Segment NOI $3,959 $ 3,575 $14,976 $14,535
Multifamily Same Store(3)
Rental revenues $1,810 $ 1,880 $7,494 $7,457
Property expenses 883 723 3,441 3,176
NOI 927 1,157 4,053 4,281
Non-Same Store NOI 603 - 1,440 -
Segment NOI $1,530 $ 1,157 $5,493 $4,281
Total Segment Portfolio NOI $10,088 $ 9,647 $38,371 $36,963
(1) No assets excluded
(2) Bermuda Crossroads and Tyre Neck Harris Teeter excluded
(3) Smith’s Landing excluded
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Reconciliation to GAAP - Segment Portfolio NOI
$ in thousands
Three months ended 12/31/13
Diversified Portfolio Office Retail Multifamily Total
Cash NOI $2,123 $3,040 $628 $5,791
Net effect of straight-line rents 266 (101) (12) 153
Amortization of lease incentives and (above) below market rents (14) 40 (13) 13
GAAP NOI $2,375 $2,979 $603 $5,957
Town Center of Virginia Beach Office(1) Retail (2) Multifamily Total
Cash NOI $2,290 $1,236 $930 $4,456
Net effect of straight-line rents 109 (54) (3) 52
Amortization of lease incentives and (above) below market rents (29) (130) - (159)
Elimination of AHH rent (146) (72) - (218)
GAAP NOI $2,224 $980 $927 $4,131
GAAP NOI Office Retail Multifamily Total
Diversified Portfolio $2,375 $2,979 $603 $5,957
Town Center of Virginia Beach 2,224 980 927 4,131
Total Segment Portfolio GAAP NOI $4,599 $3,959 $1,530 $10,088
(1) Includes AH rent of ~$147,000
(2) Includes AH rent of ~$73,000
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Reconciliation to GAAP - Segment Portfolio NOI
$ in thousands
Three months ended 12/31/13
Total Rental General Contracting &
Office Retail Multifamily Properties Real Estate Services Total
Segment revenues $ 6,524 $ 5,684 $ 2,784 $ 14,992 $ 19,373 $ 34,365
Segment expenses 1,925 1,725 1,254 4,904 17,945 22,849
Net operating income $ 4,599 $ 3,959 $ 1,530 $ 10,088 $ 1,428 $ 11,516
Depreciation and amortization (3,786)
General and administrative expenses (1,725)
Impairment charges (47)
Interest expense (2,501)
Loss on extinguishment of debt (135)
Gain on acquisitions -
Other income (expense) (46)
Income tax provision (410)
Net income $ 2,866
Year ended 12/31/13
Total Rental General Contracting &
Office Retail Multifamily Properties Real Estate Services Total
Segment revenues $ 25,794 $ 21,755 $ 9,971 $ 57,520 $ 82,516 $ 140,036
Segment expenses 7,892 6,779 4,478 19,149 78,813 97,962
Net operating income $ 17,902 $ 14,976 $ 5,493 $ 38,371 $ 3,703 $ 42,074
Depreciation and amortization (14,898)
General and administrative expenses (6,937)
Impairment charges (580)
Interest expense (12,303)
Loss on extinguishment of debt (2,387)
Gain on acquisitions 9,460
Other income (expense) 297
Income tax provision (273)
Net income $ 14,453