The Company's surface of directors has approved the pay of DDR's senior spot dividend in a mixture of moolah and shares of the Company's tired stock. The Company intends to channel the aggregate lot of spondulicks due to shareholders in the dividend to 10% of the add up to dividend paid. This novel payout lead is a part of the Company's scheme to further enhance liquidity and maximize available cash flow and maintain its REIT status. Financings: The Company's shared imperil in Brazil obtained 8.5% fixed-rate, twelve-year financing of R$112 million for the incident in Manaus, Brazil.
In addition, during the fourth quarter, the Company refinanced a $19 million condition accommodation for a consolidated dive plunge with a callow credit of approximately $30 million at an interest fee of LIBOR plus 300 bps, which matures in January 2010. In the fourth ninety days of 2008, the Company purchased approximately $66.9 million outside number of its eminent senior notes at a lessen to par resulting in a rally of approximately $11.4 million.
Additionally, during January 2009, the Company purchased an additional $10 million of elder notes. In January 2009, the Company repaid in consumed approximately $227 million of its major notes upon completion particularly with borrowings under its revolving tribute facility. Equity Issuances: The Company sold approximately 8.6 million of its base shares in December 2008, generating reticulum proceeds of approximately $43 million in the aggregate through its persistent tolerance program.
Substantially, all get proceeds have been utilized to refund debt. Developers Diversified Realty Corporation currently owns and manages over 710 retail operating and occurrence properties in 45 states, benefit Puerto Rico, Brazil and Canada, totaling approximately 157 million above-board feet. Developers Diversified Realty Corporation is a self-administered and self-managed REIT operating as a fully integrated legitimate demesne society which acquires, develops, leases and manages shopping centers. A copy of the Company's Supplemental Financial/Operational case is accessible to all partial parties upon application at our corporate duty to Francine Glandt, Vice President of Capital Markets and Treasurer, Developers Diversified Realty Corporation, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or on our Web situation which is located at.
Developers Diversified Realty Corporation considers portions of this knowledge to be forward-looking statements within the message of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with admire to the Company's guess for days periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon wise assumptions, it can give no word that its expectations will be achieved. For this purpose, any statements contained herein that are not factual occurrence may be deemed to be forward-looking statements.
There are a horde of eminent factors that could cause the results of the Company to diverge at bottom from those indicated by such forward-looking statements, including, amid other factors, townsperson conditions such as oversupply of spell or a reduction in need for trusted domain in the area; meet from other at one's disposal space; dependence on rental revenue from bona fide property; the drubbing of, significant downsizing of or bankruptcy of a paramount tenant; constructing properties or expansions that bring out a desired the sponge on investment; our wit to hawk assets on commercially inexpensive terms; our cleverness to steady equity or indebtedness financing on commercially acceptable terms or at all; our gift to enter into definitive agreements with see to our financing and joint speculation arrangements or our failure to satisfy conditions to the realization of these arrangements and the finalization of the pecuniary statements for three-month period and year ended December 31, 2008. For additional factors that could cause the results of the Company to distinct substantially from these indicated in the forward-looking statements, content send to the Company's Form 10-K as of December 31, 2007. The Company undertakes no debt to publicly improve these forward-looking statements to exemplify events or circumstances that get to one's feet after the epoch hereof. DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (in thousands - omit per allot data) Three-Month Period Year Ended Ended December 31, December 31, Revenues: 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Minimum rents (A) $ 156,158 $ 157,870 $ 628,664 $ 635,415 Percentage and overage rents (A) 4,267 5,066 9,414 10,540 Recoveries from tenants 47,269 51,009 198,919 203,126 Ancillary and other paraphernalia proceeds 6,460 5,505 22,294 19,518 Management, evolvement and other recompense gain 15,588 15,934 62,890 50,840 Other (B) 1,457 161 9,291 13,697 ----------- ----------- ----------- ----------- 231,199 235,545 931,472 933,136 ----------- ----------- ----------- ----------- Expenses: Operating and subvention (C) 40,340 37,790 146,346 131,409 Real holdings taxes 27,610 25,617 110,773 107,428 Impairment charges (D) 79,864 - 79,864 - Termination of disinterestedness endow with drawing (E) 15,837 - 15,837 - General and administrative (E) 20,275 20,940 81,882 81,244 Depreciation and amortization 65,085 53,358 242,032 214,445 ----------- ----------- ----------- ----------- 249,011 137,705 676,734 534,526 ----------- ----------- ----------- ----------- Other profit (expense): Interest return 2,682 1,045 5,473 8,772 Interest loss (61,790) (63,789) (244,212) (258,149) Gain on repurchase of older notes 11,351 - 11,552 - Abandoned projects and business costs (D) (11,519) - (12,433) - Other expenses (F) (9,273) (2,344) (15,819) (3,019) ----------- ----------- ----------- ----------- (68,549) (65,088) (255,439) (252,396) ----------- ----------- ----------- ----------- (Loss) takings before objectivity in earnings (loss) receipts of seam ventures, minority interests, income pressure profit (expense) of taxable REIT subsidiaries and franchise taxes, discontinued operations and get on temper of verifiable estate, after taxes of put a strain on (86,361) 32,752 (701) 146,214 Equity in openwork (loss) income of collaborative ventures (G) (4,205) 9,343 17,719 43,229 Impairment of collective proffer investments (D) (106,957) - (106,957) - Minority interests (H) 17,053 (2,013) 11,188 (18,218) Income saddle advance (expense) of taxable REIT subsidiaries And Franchise Taxes (I) 2,351 (633) 17,434 14,669 ----------- ----------- ----------- ----------- (Loss) income from continuing operations (178,119) 39,449 (61,317) 185,894 (Loss) income from discontinued operations (J) (2,117) (1,795) (3,421) 21,302 ----------- ----------- ----------- ----------- (Loss) income before yield on settlement of honest assets (180,236) 37,654 (64,738) 207,196 Gain on attitude of corporeal estate, grate of burden 594 5,137 6,962 68,851 ----------- ----------- ----------- ----------- Net (loss) income $ (179,642) $ 42,791 $ (57,776) $ 276,047 =========== =========== =========== =========== Net (loss) income apt to familiar shareholders $ (190,209) $ 32,224 $ (100,045) $ 225,113 =========== =========== =========== =========== Funds From Operations ("FFO"): Net (loss) income germane to communal shareholders $ (190,209) $ 32,224 $ (100,045) $ 225,113 Depreciation and amortization of valid mansion investments 63,603 53,577 236,344 214,396 Equity in concluding impairment (income) of mutual ventures (I) 4,205 (9,343) (17,719) (43,229) Joint ventures' FFO (I) 7,433 21,949 68,355 84,423 Minority interests (OP Units) (J) - 569 1,145 2,275 Loss (gain) on power of depreciable material state 77 1,057 (4,244) (17,956) ----------- ----------- ----------- ----------- FFO pertinent to workaday shareholders (114,891) 100,033 183,836 465,022 Preferred dividends 10,567 10,567 42,269 50,934 ----------- ----------- ----------- ----------- FFO $ (104,324) $ 110,600 $ 226,105 $ 515,956 =========== =========== =========== =========== Per allotment data: (Loss) proceeds per stale partition Basic $ (1.57) $ 0.27 $ (0.83) $ 1.86 =========== =========== =========== =========== Diluted $ (1.57) $ 0.27 $ (0.83) $ 1.85 =========== =========== =========== =========== Dividends Declared $ - $ 0.66 $ 2.07 $ 2.64 =========== =========== =========== =========== Funds From Operations - Basic (K) $ (0.95) $ 0.82 $ 1.52 $ 3.80 =========== =========== =========== =========== Funds From Operations - Diluted (K) $ (0.95) $ 0.82 $ 1.52 $ 3.79 =========== =========== =========== =========== Basic - commonplace shares distinguished 121,019 120,786 119,843 120,879 =========== =========== =========== =========== Diluted - customary shares remarkable 121,019 121,103 119,987 121,497 =========== =========== =========== =========== (A) Base and portion rental revenues for the year ended December 31, 2008, as compared to the erstwhile year, decreased $7.9 million, on the whole due to the personality of properties in 2008 and 2007 to union offer interests and third parties aggregating $29.0 million.
Partially offsetting this slacken were the following increases in shabby and proportion rental revenues: an multiply of $3.3 million relating to the gist portfolio properties (an prolong of 0.6% over the comparable while in 2007), $17.8 million from the possession of assets and the coalescence with IRRETI, $3.8 million joint to developments and redevelopments and $0.4 million from an advance in occupancy at the Company's function centers.
Included in rental revenues for the years ended December 31, 2008 and 2007, is approximately $8.0 million and $12.1 million, respectively, of profits resulting from the identification of straight-line rents. (B) Other income for the three-month periods and years ended December 31, 2008 and 2007 was comprised of the following (in millions): Three-Month Period Year Ended December 31, December 31, 2008 2007 2008 2007 ------------ ------------ ------------ ------------ Acquisition fees $ - $ 0.1 $ - $ 6.4 Lease desinence fees 0.8 0.1 6.3 5.0 Financing fees 0.1 - 2.0 1.5 Other multiform 0.6 - 1.0 0.8 ------------ ------------ ------------ ------------ $ 1.5 $ 0.2 $ 9.3 $ 13.7 ============ ============ ============ ============ (C) Included in operating and living detriment is unhappy responsibility sacrifice aggregating $8.5 million and $2.4 million relating to the three-month periods ended December 31, 2008 and 2007, respectively.
Fourth part 2008 crotchety due ruin includes the list off of $4.1 million of straight-line rents relating to Mervyns, of which 50% is allocable to minority interest. For the years ended December 31, 2008 and 2007, wrong obligation cost was $18.7 million and $9.0 million or 2% and 1% of unmitigated revenues, respectively. (D) Due to the continued deterioration of the U.S. super markets and the be deficient in of liquidity and the kindred colliding on the unaffected rank demand and retail industry, during the fourth lodge of 2008, the Company recorded flaw charges on several consolidated palpable caste investments, including both operating shopping centers and acquire under development, to the range the engage footing of the benefit was in leftovers of the estimated polite retail value.
As discussed below, some of these charges are allocable to minority importance thereby providing a imperfect offset. In addition, the Company intent that several of its unconsolidated intersection gamble investments suffered an "Other than Temporary Impairment." The Company recorded approximately $107.0 million of worsening charges associated with on the cards of its combined hazard investments in accordance with Accounting Principles Board Opinion No. 18, "The Equity Method of Accounting for Investment in Common Stock.
" The provisions of this sentiment demand that a detriment in value of an investment under the fair play technique of accounting which is an other than "temporary" descend must be recognized. The Company also wrote off costs tied up to dropped increase projects as well as costs incurred for transactions that are not expected to close. (E) General and administrative expenses allow for internal leasing salaries, legitimate salaries and affiliate expenses associated with the releasing of space, which are charged to operations as incurred.
For the years ended December 31, 2008 and 2007, unspecialized and administrative expenses were approximately 5.2% and 4.5%, respectively, of thoroughgoing revenues, including juncture wager revenues.
For the year ended December 31, 2008, the Company recorded a non-cash precept of approximately $15.8 million allied to the cessation of a supplemental fair-mindedness accord plan. Excluding this charge, mongrel and administrative expenses were 4.3% of whole revenues for the year ended December 31, 2008.
For the year ended December 31, 2007, the Company recorded a pervade of approximately $4.1 million to non-specialized and administrative impairment in appropriateness with the Company's late president's abdication as an supervisory officer. Excluding this charge, extensive and administrative expenses were 4.3% of totality revenues for the year ended December 31, 2007. (F) Other destruction generally relates to a aloofness associated with a mezzanine notes receivable as well as suit costs common to a implied exposure associated with a judiciary verdict.
The accrual for the permissible verdict was established in the third leniency of 2008. (G) The following is a distillate of the combined operating results of the Company's honky-tonk ventures: Three-Month Period Year Ended Ended December 31, December 31, 2008 2007 2008 2007 --------- --------- --------- --------- Revenues from operations (a) $ 231,716 $ 237,654 $ 946,340 $ 812,630 --------- --------- --------- --------- Operating expense 82,682 84,547 328,875 272,277 Impairment charges (b) 3,887 - 3,887 - Depreciation and amortization of sincere landed estate investments 65,929 57,825 241,652 193,032 Interest expense 82,572 79,543 307,580 269,405 --------- --------- --------- --------- 235,070 221,915 881,994 734,714 --------- --------- --------- --------- Income (loss) from operations before dues further (expense) and discontinued operations (3,354) 15,739 64,346 77,916 Income toll (expense) improve (3,485) 2,664 (15,479) (4,839) (Loss) enhancement on choice of loyal fortune (18) 1,399 (67) 94,386 (Loss) income from discontinued operations, conclusive of impost (10) 75 105 (784) Income (loss) on regulation of discontinued operations, lattice-work of charge 7,364 (12) 7,364 2,516 Other expense, plexus (c) (47,791) - (31,318) - --------- --------- --------- --------- Net (loss) income $ (47,294) $ 19,865 $ 24,951 $ 169,195 ========= ========= ========= ========= DDR ownership interests (d) $ (5,482) $ 10,017 $ 17,335 $ 44,537 ========= ========= ========= ========= FFO from junction ventures are summarized as follows: Net income $ (47,294) $ 19,865 $ 24,951 $ 169,195 Loss (gain) on transference of verified estate, including discontinued operations (7,364) 228 (7,350) (91,111) Depreciation and amortization of legal standing investments 65,928 57,919 241,651 193,437 --------- ---------- --------- --------- $ 11,270 $ 78,012 $ 259,252 $ 271,521 ========= ========== ========= ========= DDR ownership interests (d) $ 7,433 $ 21,949 $ 68,355 $ 84,423 ========= ========== ========= ========= DDR dump bet distributions received, earn (e) $ 24,467 $ 17,323 $ 65,957 $ 97,104 ========= ========== ========= ========= (a) Revenues for the three-month periods ended December 31, 2008 and 2007 included approximately $0.7 million and $2.7 million, respectively, resulting from the detection of straight-line rents, of which the Company's proportionate helping was not research and $0.4 million, respectively.
Revenues for the years ended December 31, 2008 and 2007 included approximately $6.3 million and $9.3 million, respectively, resulting from the cognizance of straight-line rents, of which the Company's proportionate divide up was $0.8 million and $1.4 million, respectively. (b) Impairment charges aggregating $3.9 million were recorded at two common ventures cognate to assets under knit expected to be sold in the start with half of 2009 of which the Company's division was $0.5 million. (c) Includes non-cash lessening charges and collapse on traffic of assets of which the Company's dole out aggregated $2.4 million.
Also includes the stuff of infallible borrowed instruments that are pronounced to buy and sell through emolument from the Company's high-mindedness investment in Macquarie DDR Trust aggregating approximately $45.9 million and $29.4 million of harm for the three-month aeon and year ended December 31, 2008, respectively, of which the Company's serving was approximately $5.6 million and $1.7 million of loss, respectively. (d) The Company's percentage of cooperative put forward catch income was increased by $1.2 million and decreased by $0.6 million for the three-month periods ended December 31, 2008 and 2007, respectively.
The Company's pay out of connection dare return income was increased by $0.4 million and decreased by $1.2 million for the years ended December 31, 2008 and 2007, respectively. These adjustments give an account of to bottom differences impacting amortization and depreciation and secure on dispositions. During the year ended December 31, 2007, the Company received $13.6 million of promoted income relating to the jumble sale of assets from the DDR Markaz Joint Venture which is included in the Company's proportionate slice of take in income and FFO.
At December 31, 2008 and 2007, the Company owned communal endanger interests, excluding consolidated joint ventures, in 329 and 317 shopping center properties, respectively. (e) Distributions may incorporate funds received from talent sales and refinancings in annexe to developing operating distributions. (H) Minority interests are comprised of the following: Three-Month Period Year Ended Ended December 31, Decmeber 31, 2008 2007 2008 2007 ---------- --------- --------- --------- Minority equitableness interests $ 17,053 $ (1,444) $ 12,333 $ (6,253) Operating partnership units - (569) (1,145) (2,275) Preferred operating partnership units - - - (9,690) ---------- --------- --------- --------- $ 17,053 $ (2,013) $ 11,188 $ (18,218) ========== ========= ========= ========= The $17.1 million and $12.3 million of income from minority interests for the three-month patch and year ended December 31, 2008, respectively, is fundamentally connected to advantage damage charges and the a postcard off of straight-line slash relating to the DDR MDT MV LLC (Mervyns), a consolidated joint venture, of which the Company has a 50% interest.
The preferred operating partnership units were redeemed in June 2007. In June 2008, 0.5 million operating partnership units were converted into an match gang of prosaic shares of the Company. (I) During the third neighbourhood of 2008 and the commencement quadrature of 2007, the Company released to income approximately $16.0 million and $15.0 million, respectively, of in days gone by established valuation allowances against irrefutable deferred octroi assets as guidance had determined, due to several factors, that it is more plausible than not that the deferred assess resource will be realized.
The issue of this contract for in 2008 was pre-eminently due to the Company's increased use of its taxable REIT subsidiaries relating to the attention of fees, at bottom from joint ventures, and other motley non-real possessions linked income. (J) The operating results relating to assets classified as discontinued operations are summarized as follows: Three-Month Period Year Ended Ended December 31, December 31, 2008 2007 2008 2007 -------- -------- -------- -------- Revenues $ 1,334 $ 3,765 $ 12,182 $ 40,554 -------- -------- -------- -------- Expenses: Operating - 780 3,990 11,708 Interest, trap 241 918 2,331 10,308 Depreciation 210 2,718 4,342 9,929 Minority fee - 80 110 (434) -------- -------- -------- -------- Total expenses 451 4,496 10,773 31,511 -------- -------- -------- -------- Income (loss) before (loss) rise on dispensation of authentic belongings 883 (731) 1,409 9,043 (Loss) attainment on discretion of official estate, make (3,000) (1,064) (4,830) 12,259 -------- -------- -------- -------- Net (loss) income $ (2,117) $ (1,795) $ (3,421) $ 21,302 ======== ======== ======== ======== (K) For purposes of computing FFO per parcel (basic), the weighted so so shares receivable were adjusted to send the presumed conversion of approximately 0.4 million and 0.9 million Operating Partnership Units ("OP Units") important at December 31, 2008 and 2007, respectively, 0.9 million stereotypical shares of the Company for the three-month era ended December 31, 2007 (antidilutive at December 31, 2008) and 0.6 million and 0.9 million plain shares for the years ended December 31, 2008 and 2007, respectively, on a weighted normal basis.
The weighted ordinary diluted shares and OP Units outstanding, for purposes of computing FFO, were approximately 121.5 million and 122.5 million for the three-month periods ended December 31, 2008 and 2007, respectively, and 121.0 million and 122.7 million for the years ended December 31, 2008 and 2007, respectively.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (in thousands) Selected Balance Sheet Data: December 31, December 31, 2008 (A) 2007 (A) ------------ ------------ Assets: Real wealth and rental property: Land $ 2,073,947 $ 2,142,942 Buildings 5,890,332 5,933,890 Fixtures and lessee improvements 262,809 237,117 ------------ ------------ 8,227,088 8,313,949 Less: Accumulated depreciation (1,208,903) (1,024,048) ------------ ------------ 7,018,185 7,289,901 Construction in develop 879,547 664,926 Assets held for garage sale - 5,796 ------------ ------------ Real estate, gain 7,897,732 7,960,623 Investments in and advances to joint ventures 583,767 638,111 Cash 29,494 49,547 Restricted coin of the realm (B) 111,792 58,958 Notes receivable 75,781 18,557 Receivables, including straight-line rent, bottom-line 164,356 199,354 Other assets, pocket 155,403 164,666 ------------ ------------ $ 9,018,325 $ 9,089,816 ============ ============ Liabilities: Indebtedness: Revolving believe facilities $ 1,027,183 $ 709,459 Unsecured accountability 2,452,741 2,622,219 Mortgage and other secured liability 2,437,440 2,259,336 ------------ ------------ 5,917,364 5,591,014 Dividends mature 6,967 85,851 Other liabilities 281,179 285,245 ------------ ------------ 6,205,510 5,962,110 Minority interests 128,130 128,881 Shareholders’ impartiality 2,684,685 2,998,825 ------------ ------------ $ 9,018,325 $ 9,089,816 ============ ============ (A) Amounts count the consolidation of a 50% owned joint venture, DDR MDT MV LLC ("MV LLC"), that owns 37 sites long ago occupied by Mervyns, which includes $348.5 and $405.8 million of genuine manor assets at December 31, 2008 and 2007, respectively, $258.5 million of mortgage encumbrance at December 31, 2008 and 2007, and $70.2 million and $74.6 million of minority fairness vigorish at December 31, 2008 and 2007, respectively.
The run out of gas in proper land assets at MV LLC in 2008 is principally due to the employment of $25.0 million in ready proceeds received under a grasp honorarium refund missive of dependability from the sales agent of the Mervyns portfolio due to the retailer's bankruptcy filing during the third zone and approximately $35.3 million of non-cash reduction charges recorded on these assets in the fourth quarter. (B) Restricted scratch includes $64.8 million at MV LLC at December 31, 2008.
The MV LLC restricted gelt is comprised of $23.9 million received from the counter-jumper of the Mervyns portfolio relating to Mervyns bankruptcy filing in the third quarter, a $33.0 million profit splendid contribution by the members of MV LLC, and $7.9 million mutual to a safe keeping precipitate line of credit, all of which are required to be held in escrow by the lender. Also included in restricted legal tender is $47.0 million and $59.0 million at December 31, 2008 and 2007, respectively, relating to the terms of a control consummation for one of the Company's projects in Mississippi.
DEVELOPERS DIVERSIFIED REALTY CORPORATION Financial Highlights (in thousands) Selected Balance Sheet Data (Continued): Combined condensed scale sheets relating to the Company's joint ventures are as follows: December 31, December 31, 2008 2007 ------------ ------------ Land $ 2,378,033 $ 2,384,069 Buildings 6,353,985 6,253,167 Fixtures and inhabitant improvements 131,622 101,115 ------------ ------------ 8,863,640 8,738,351 Less: Accumulated depreciation (606,530) (412,806) ------------ ------------ 8,257,110 8,325,545 Construction in improve 412,357 207,387 ------------ ------------ Real estate, mesh-work 8,669,467 8,532,932 Receivables, including straight-line rent, sifter 136,410 124,540 Leasehold interests 12,615 13,927 Other assets 315,591 365,925 ------------ ------------ $ 9,134,083 $ 9,037,324 ============ ============ Mortgage debt (a) $ 5,776,897 $ 5,551,839 Notes and accrued tempt owing to DDR 64,967 8,492 Other liabilities 237,363 201,083 ------------ ------------ 6,079,227 5,761,414 Accumulated neutrality 3,054,856 3,275,910 ------------ ------------ $ 9,134,083 $ 9,037,324 ============ ============ (a) The Company's proportionate allocate of joint risk debt aggregated approximately $1,216.1 million and $1,034.1 million at December 31, 2008 and 2007, respectively.
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