August 5, 2014 - EX99.1 - 8-K: Current report | Brixmor Property Group Inc. (BRX)

Exhibit 99.1

420 Lexington Avenue New York, NY 10170 800.468.7526

FOR IMMEDIATE RELEASE

CONTACT:

Stacy Slater

Senior Vice President, Investor Relations

800.468.7526

stacy.slater@brixmor.com

BRIXMOR PROPERTY GROUP REPORTS SECOND QUARTER 2014 RESULTS

- Achieves Same Property NOI Growth of 3.8% -

- Increases FFO per Share by 12% -

NEW YORK, AUGUST 5, 2014 - Brixmor Property Group Inc. (NYSE: BRX) announced today its results of operations for the second quarter ended June 30, 2014.

Second Quarter 2014 Operating Results - IPO Portfolio



	Three Months Ended
	6/30/2014	6/30/2013	Change
Percent leased	92.5%	91.6%	+90 basis points
Percent leased: anchors (≥ 10K SF)	97.0%	96.4%	+60 basis points
Percent leased: small shop (< 10K SF)	82.1%	80.6%	+150 basis points
Total new signed leases (SF)	1,094,245	949,309	+15.3%
Total rent spread (cash)	11.2%	8.4%	+280 basis points
New lease rent spread (cash)	27.3%	22.7%	+460 basis points

Brixmor delivered another quarter of strong results driven by continued growth in revenues and momentum in operating fundamentals. Same property NOI increased 3.8% in the second quarter, marking the eighth consecutive quarter of growth over 3.5%. Funds from operations (“FFO”) per diluted share growth accelerated during the quarter, increasing 12.2% over 2013. Additionally, the Company’s operating partnership, Brixmor Operating Partnership, L.P., received an investment grade rating from Moody’s Investors Service during the quarter.

The positive trajectory of the Company’s operating metrics was driven by record leasing activity, with new lease volume of 1.1 million square feet during the quarter, the highest in three years and driven by strong anchor and small shop leasing. In addition, as part of its continued efforts to maximize the potential of its shopping centers, the Company commenced eight new anchor space repositioning projects with high quality retailers including Walmart, WinCo Foods, Fresh Thyme Farmers Market (Meijer), CVS and REI.

“Our performance metrics continue to demonstrate the value creation opportunity embedded within our portfolio as we realize the substantial mark-to-market in our leases, achieving blended leasing spreads of 11% or higher for the fourth consecutive quarter. With a focus on operations across our organization, we continue to drive rents and occupancy, while simultaneously enhancing the quality and credit of our merchandise mix. These efforts continue to produce results higher than the industry as demonstrated by our same property NOI growth in the quarter,” stated

420 Lexington Avenue New York, NY 10170 800.468.7526

Michael Carroll, Chief Executive Officer. “In addition, we were pleased to have our balance sheet progress recognized by an investment grade rating assigned by Moody’s.”

Dividend

The Company’s Board of Directors declared a quarterly cash dividend of $0.20 per common share (equivalent to $0.80 per annum) for the third quarter of 2014. The dividend is payable on October 15, 2014 to stockholders of record on October 3, 2014, representing an ex-dividend date of October 1, 2014.

Financial Highlights

For the second quarter of 2014, Brixmor reported FFO attributable to stockholders and non-controlling interests convertible into common stock of $140.1 million, or $0.46 per diluted share, up 12.2% on a diluted per share basis from $125.9 million, or $0.41 per diluted share, on a pro forma basis in the second quarter of 2013. FFO attributable to stockholders and non-controlling interests convertible into common stock for the second quarter of 2013 includes approximately $1.7 million, or ($0.01) per diluted share, of costs related to the early prepayment of debt. Net income attributable to common stockholders for the three-month period ended June 30, 2014 was $23.5 million, or $0.10 per diluted share, compared with $4.9 million, or $0.02 per diluted share, on a pro forma basis in the second quarter of 2013. See “IPO Portfolio” below for more information on pro forma results of operations.

For the six months ended June 30, 2014, Brixmor reported FFO attributable to stockholders and non-controlling interests convertible into common stock on a pro forma basis of $272.7 million, or $0.90 per diluted share, up 9.8% on a diluted per share basis from $249.3 million, or $0.82 per diluted share, on a pro forma basis in the six months ended June 30, 2013. FFO attributable to stockholders and non-controlling interests convertible into common stock for the six months ended June 30, 2014 includes approximately $3.0 million, or ($0.01) per diluted share, of costs related to the early prepayment of debt. Net income attributable to common stockholders for the six month period ended June 30, 2014 was $38.9 million on a pro forma basis, or $0.17 per diluted share, compared with $5.5 million, or $0.02 per diluted share, on a pro forma basis in the six month period ended June 30, 2013.

For the first six months of 2014, Brixmor reported net income attributable to common stockholders (actual results) of $38.9 million, or $0.17 per diluted share.

Same Property NOI for the second quarter increased 3.8% from the comparable 2013 period primarily due to growth in rental income driven by improved leasing spreads as the Company continues to harvest the below-market leases inherent in its portfolio. For the first six months of 2014, same property NOI increased 3.8% from the comparable 2013 period. In addition, annualized base rent per square foot for the portfolio increased to $12.04 at June 30, 2014 from $11.83 in the year ago period.

Capital Structure

In May, Moody’s Investors Service assigned an investment grade issuer rating of Baa3 with a stable outlook to the Company’s operating partnership, Brixmor Operating Partnership, L.P. Also in May, the Company was added to the MSCI US REIT Index as part of its semi-annual index review.

420 Lexington Avenue New York, NY 10170 800.468.7526

In June, the Company completed a $775 million secondary offering of 34,442,500 shares of its common stock by certain selling stockholders affiliated with The Blackstone Group L.P. at a price to the public of $22.50 per share. The Company did not offer any shares of common stock in the offering and did not receive any proceeds from the sale of shares in this offering.

Michael Carroll, Chief Executive Officer, added, “The completion of our first secondary offering and the addition of BRX to the MSCI US REIT Index are important catalysts in providing us additional visibility to US equity REIT investors, while also positively impacting the depth of our shareholder base.”

Guidance

The Company’s previously provided expectations for 2014 earnings and portfolio metrics are on page 50 of its Supplemental Disclosure and the Company is affirming such guidance. See “Conference Call and Supplemental Information” below for more information on the Company’s Supplemental Disclosure.

IPO Portfolio

In connection with the Company’s initial public offering (the “IPO”), the Company acquired interests in 43 properties (the “Acquired Properties”) from certain investment funds affiliated with The Blackstone Group L.P. (“Blackstone”). Also in connection with the IPO, the Company issued to certain funds affiliated with Blackstone and Centerbridge Partners L.P. (the "pre-IPO owners") an interest in its Operating Partnership allocating to these pre-IPO owners all of the economic consequences of ownership of 47 excluded properties (the “Excluded Properties”).

The Company’s IPO Portfolio includes all properties owned as of the completion of the IPO, including the Acquired Properties and excluding the Excluded Properties, and constitutes the go forward properties owned by the Company. The IPO Portfolio performance is captured in the pro forma results. These results reflect the impact of the transactions associated with the IPO, including (i) the contribution of the Acquired Properties, (ii) the distribution of the Excluded Properties, (iii) the acquisition of the interest not already held in Arapahoe Crossings L.P., (iv) borrowings under the unsecured credit facility, including the use thereof, and (v) the net proceeds from the IPO, including the use thereof. The pro forma adjustments associated with these transactions assume that each transaction was completed as of December 31, 2013 for the purpose of the unaudited pro forma consolidated balance sheet and as of January 1, 2014 and January 1, 2013, respectively, for the purpose of the unaudited pro forma consolidated statements of operations. A reconciliation of pro forma balance sheet and results of operations is presented in the attached table.

Conference Call and Supplemental Information

The Company will host a teleconference on Wednesday, August 6, 2014 at 1:00 PM ET. To participate, please dial 888.317.6003 (domestic) or 412.317.6061 (international) at least ten minutes prior to the scheduled start of the call (Passcode: 8430357). The teleconference can also be accessed via a live webcast at www.brixmor.com in the Investors section. A replay of the teleconference will be available through midnight ET on August 20, 2014 by dialing 877.344.7529 (domestic) or 412.317.0088 (international) (Passcode: 10047196) or via the web through August 6, 2015 at www.brixmor.com in the Investors section.

iii

420 Lexington Avenue New York, NY 10170 800.468.7526

The Company’s Supplemental Disclosure will be posted at www.brixmor.com in the Investors section. These materials are also available to all interested parties upon request to the Company at investorrelations@brixmor.com or 800.468.7526.

Non-GAAP Disclosures

FFO

FFO is a supplemental non-GAAP financial measure utilized to evaluate the operating performance of real estate companies. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) in accordance with GAAP excluding (i) gain (loss) on disposition of operating properties, and (ii) extraordinary items, plus (iii) depreciation and amortization of operating properties, (iv) impairment of operating properties and real estate equity investments, and (v) after adjustments for joint ventures calculated to reflect funds from operations on the same basis. FFO attributable to stockholders and non-controlling interests convertible into common stock is FFO as further adjusted to exclude net income (loss) attributable to non-controlling interests not convertible into common stock. The Company believes FFO attributable to stockholders and non-controlling interests convertible into common stock is a meaningful supplemental measure that is more reflective of its operating performance by excluding FFO attributable to non-controlling interests not convertible into common stock.

The Company presents FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock as it considers them important supplemental measures of its operating performance and the Company believes they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of financial performance and are not alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of liquidity. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations and, accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from FFO and FFO attributable to stockholders and non-controlling interests convertible into common stock are significant components in understanding and addressing financial performance.

A reconciliation of FFO and FFO attributable to non-controlling interests not convertible into common stock to Net income (loss) is presented in the attached table.

Same Property NOI

Same property net operating income (“same property NOI”) is calculated (using properties owned as of the end of both reporting periods and for the entirety of both periods excluding properties classified as discontinued operations), as rental income (minimum rent, percentage rents, tenant recoveries and other property income) less rental operating expenses (property operating expenses, real estate taxes and bad debt expense) of the properties owned by Brixmor. Same property NOI excludes corporate level income (including transaction and other fees), lease termination income, straight-line rent and amortization of above-/below-market leases of the same property pool from the prior year reporting period to the current year reporting period.

420 Lexington Avenue New York, NY 10170 800.468.7526

Same property NOI is a supplemental, non-GAAP financial measure utilized to evaluate the operating performance of real estate companies and is frequently used by securities analysts, investors and other interested parties in understanding business and operating results regarding the underlying economics of Brixmor's business operations. It includes only the net operating income of properties owned for the full period presented, which eliminates disparities in net income due to the acquisition or disposition of properties during the period presented, and therefore, provides a more consistent metric for comparing the performance of properties. Management uses same property NOI to review operating results for comparative purposes with respect to previous periods or forecasts, and also to evaluate future prospects. Same property NOI is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, net income (determined in accordance with GAAP) or other GAAP financial measures. Non-GAAP financial measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental to financial results presented in accordance with GAAP. Computation of same property NOI may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to such other REITs.

About Brixmor Property Group

Brixmor owns and operates the nation's largest wholly owned portfolio of grocery-anchored community and neighborhood shopping centers, with 522 properties aggregating approximately 87 million square feet of gross leasable area located primarily across the top 50 U.S. metro markets. Brixmor leverages its national footprint, local market knowledge and operational expertise to support the growth of its retail tenants. The Company is focused on maximizing the value of its portfolio through its extensive leasing capabilities and anchor space repositioning / redevelopment platform. Headquartered in New York City, the Company is the largest landlord to The TJX Companies and The Kroger Company. For additional information, please visit www.brixmor.com.

Safe Harbor Language

This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to the Company’s expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including those described under the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company’s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

###



CONSOLIDATED BALANCE SHEETS
Unaudited, dollars in thousands, except share information

				Actual Results						Pro Forma
				6/30/14			12/31/13			12/31/13
	Assets
		Real estate
			Land	$	1,998,895		$	2,055,802		$	1,989,160
			Buildings and improvements	8,713,114			8,781,926			8,654,899
				10,712,009			10,837,728			10,644,059
			Accumulated depreciation and amortization	(1,360,647		)	(1,190,170		)	(1,160,478		)
		Real estate, net		9,351,362			9,647,558			9,483,581
		Investments in and advances to unconsolidated joint ventures		5,104			9,205			5,171
		Cash and cash equivalents		61,830			113,915			95,332
		Restricted cash		64,927			75,457			74,847
		Marketable securities		21,647			22,104			22,104
		Receivables, net		171,131			178,505			175,584
		Deferred charges and prepaid expenses, net		111,064			105,522			103,237
		Other assets		13,138			19,650			14,043
	Total assets			$	9,800,203		$	10,171,916		$	9,973,899

	Liabilities
		Debt obligations, net		$	5,947,168		$	5,981,289		$	5,965,307
		Financing liabilities, net		121,470			175,111			175,111
		Accounts payable, accrued expenses and other liabilities		667,679			709,529			701,495
	Total liabilities			6,736,317			6,865,929			6,841,913

	Redeemable non-controlling interests			21,467			21,467			21,467
	Commitments and contingencies			—			—			—

	Equity
		Common stock, $0.01 par value; authorized 3,000,000,000 shares;
			245,095,327 and 229,689,960 shares outstanding	2,451			2,297			2,297
		Additional paid in capital		2,709,311			2,543,690			2,543,690
		Accumulated other comprehensive loss		(8,365		)	(6,812		)	(6,812		)
		Distributions and accumulated losses		(252,967		)	(196,707		)	(196,707		)
	Total stockholders' equity			2,450,430			2,342,468			2,342,468
		Non-controlling interests		591,989			942,052			768,051
	Total equity			3,042,419			3,284,520			3,110,519
	Total liabilities and equity			$	9,800,203		$	10,171,916		$	9,973,899



	vi



CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited, dollars in thousands, except per share amounts

				Pro Forma												Actual Results
				Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
				6/30/14			6/30/13			6/30/14			6/30/13			6/30/14			6/30/13			6/30/14			6/30/13

	Revenues
		Rental income		$	240,076		$	232,662		$	477,336		$	463,724		$	240,076		$	216,296		$	477,336		$	430,854
		Expense reimbursements		65,694			63,295			134,317			126,969			65,694			59,311			134,317			118,915
		Other revenues		2,307			2,648			4,120			5,833			2,307			2,613			4,120			5,760
	Total revenues			308,077			298,605			615,773			596,526			308,077			278,220			615,773			555,529

	Operating expenses
		Operating costs		31,902			29,895			66,790			62,099			31,902			27,659			66,790			57,506
		Real estate taxes		43,835			43,369			88,281			87,433			43,835			40,995			88,281			82,696
		Depreciation and amortization		109,666			119,901			222,934			242,956			109,666			108,622			222,934			220,399
		Provision for doubtful accounts		2,988			2,682			5,865			5,160			2,988			2,573			5,865			4,885
		Impairment of real estate assets		—			1,531			—			1,531			—			1,531			—			1,531
		General and administrative		19,939			18,935			39,597			42,330			19,939			18,724			39,597			41,781
	Total operating expenses			208,330			216,313			423,467			441,509			208,330			200,104			423,467			408,798

	Other income (expense)
		Dividends and interest		159			243			267			426			159			239			267			420
		Interest expense		(65,953		)	(72,029		)	(133,919		)	(144,938		)	(65,953		)	(94,373		)	(133,919		)	(186,244		)
		Gain (loss) on sale of real estate assets		—			722			378			561			—			722			378			722
		Gain (loss) on extinguishment of debt, net		(757		)	(1,668		)	(3,033		)	482			(757		)	(1,668		)	(3,033		)	482
		Other		(1,969		)	(3,047		)	(4,130		)	(4,008		)	(1,969		)	(3,710		)	(4,130		)	(4,671		)
	Total other income (expense)			(68,520		)	(75,779		)	(140,437		)	(147,477		)	(68,520		)	(98,790		)	(140,437		)	(189,291		)

	Income (loss) before equity in income of unconsolidated joint ventures			31,227			6,513			51,869			7,540			31,227			(20,674		)	51,869			(42,560		)
	Equity in income of unconsolidated joint ventures			71			295			204			404			71			507			136			754
	Gain on disposal of investments in unconsolidated joint ventures			—			—			—			—			—			—			1,820			—
	Income (loss) from continuing operations			31,298			6,808			52,073			7,944			31,298			(20,167		)	53,825			(41,806		)

	Discontinued operations
		Income (loss) from discontinued operations		—			—			—			—			—			(302		)	4,787			(1,077		)
		Gain on disposition of operating properties		—			—			—			—			—			2,631			14,426			2,631
		Impairment of real estate held for sale		—			—			—			—			—			(39,007		)	—			(42,039		)
	Income (loss) from discontinued operations			—			—			—			—			—			(36,678		)	19,213			(40,485		)
	Net income (loss)			31,298			6,808			52,073			7,944			31,298			(56,845		)	73,038			(82,291		)
	Non-controlling interests
	Net (income) loss attributable to non-controlling interests			(7,825		)	(1,926		)	(13,172		)	(2,453		)	(7,825		)	13,583			(34,164		)	19,531
	Net income (loss) attributable to common stockholders			$	23,473		$	4,882		$	38,901		$	5,491		$	23,473		$	(43,262	)	$	38,874		$	(62,760	)

	Per common share:
		Income (loss) from continuing operations:
			Basic	$	0.10		$	0.02		$	0.17		$	0.02		$	0.10		$	(0.09	)	$	0.17		$	(0.18	)
			Diluted	$	0.10		$	0.02		$	0.17		$	0.02		$	0.10		$	(0.09	)	$	0.17		$	(0.18	)
		Net income (loss) attributable to common stockholders:
			Basic	$	0.10		$	0.02		$	0.17		$	0.02		$	0.10		$	(0.24	)	$	0.17		$	(0.35	)
			Diluted	$	0.10		$	0.02		$	0.17		$	0.02		$	0.10		$	(0.24	)	$	0.17		$	(0.35	)
		Weighted average number of vested common shares:
			Basic	228,978			228,113			228,547			228,113			228,978			180,675			228,547			180,675
			Diluted	230,469			230,194			229,907			230,194			230,469			180,675			229,907			180,675



	vii



RECONCILIATION OF NET INCOME (LOSS) TO FFO
Unaudited, dollars in thousands, except per share amounts

			Pro Forma												Actual Results
			Three Months Ended						Six Months Ended						Three Months Ended						Six Months Ended
			6/30/14			6/30/13			6/30/14			6/30/13			6/30/14			6/30/13			6/30/14			6/30/13

	Net income (loss)		$	31,298		$	6,808		$	52,073		$	7,944		$	31,298		$	(56,845	)	$	73,038		$	(82,291	)
		Gain on disposition of operating properties	—			—			(378		)	—			—			(2,631		)	(14,804		)	(2,631		)
		Gain on disposition of unconsolidated joint ventures	—			—			—			—			—			—			(1,820		)	—
		Depreciation and amortization- real estate related- continuing operations	109,073			119,401			221,658			241,948			109,073			108,122			221,658			219,391
		Depreciation and amortization- real estate related- discontinued operations	—			—			—			—			—			3,135			431			6,984
		Depreciation and amortization- real estate related- unconsolidated joint ventures	21			24			41			52			21			80			123			160
		Impairment of operating properties	—			—			—			—			—			37,467			—			40,500
	FFO		140,392			126,233			273,394			249,944			140,392			89,328			278,626			182,113
		Adjustments attributable to non-controlling interests not convertible into common stock	(322		)	(342		)	(646		)	(671		)	(322		)	(342		)	(5,878		)	(671		)
	FFO attributable to stockholders and non-controlling interests convertible into common stock		$	140,070		$	125,891		$	272,748		$	249,273		$	140,070		$	88,986		$	272,748		$	181,442

	FFO per share/OP Unit - diluted		$	0.46		$	0.41		$	0.90		$	0.82		$	0.46		$	0.37		$	0.90		$	0.75
	Weighted average shares/OP Units outstanding - basic and diluted (1)		304,390			304,231			304,253			304,231			304,390			240,905			304,253			240,905

	Items that impact FFO comparability
		Gain (loss) on extinguishment of debt, net	$	(757	)	$	(1,668	)	$	(3,033	)	$	482		$	(757	)	$	(1,668	)	$	3,041		$	482
		Gain (loss) on extinguishment of debt per share	$	—		$	(0.01	)	$	(0.01	)	$	—		$	—		$	(0.01	)	$	0.01		$	—

	Dividends declared per share/OP Unit		$	0.20					$	0.40					$	0.20					$	0.40
	Shares/OP Unit dividends declared		$	60,846					$	121,692					$	60,846					$	121,692
	Share/OP Unit dividend payout ratio (as % of FFO)		43.4		%				44.6		%				43.4		%				44.6		%


(1) Basic and diluted shares/OP Units outstanding reflects an assumed conversion of certain BPG Sub shares and OP Units to common stock of the Company and the vesting of certain restricted stock
awards.



	viii



RECONCILIATION OF GAAP BALANCE SHEET TO PRO FORMA BALANCE SHEET
Unaudited, dollars in thousands

				Actual Results						Pro Forma
				12/31/13			Adjustments (1)			12/31/13
	Assets
		Real estate
			Land	$	2,055,802		$	(66,642	)	$	1,989,160
			Buildings and improvements	8,781,926			(127,027		)	8,654,899
				10,837,728			(193,669		)	10,644,059
			Accumulated depreciation and amortization	(1,190,170		)	29,692			(1,160,478		)
		Real estate, net		9,647,558			(163,977		)	9,483,581
		Investments in and advances to unconsolidated joint ventures		9,205			(4,034		)	5,171
		Cash and cash equivalents		113,915			(18,583		)	95,332
		Restricted cash		75,457			(610		)	74,847
		Marketable securities		22,104			—			22,104
		Receivables, net		178,505			(2,921		)	175,584
		Deferred charges and prepaid expenses, net		105,522			(2,285		)	103,237
		Other assets		19,650			(5,607		)	14,043
	Total assets			$	10,171,916		$	(198,017	)	$	9,973,899

	Liabilities
		Debt obligations, net		$	5,981,289		$	(15,982	)	$	5,965,307
		Financing liabilities, net		175,111			—			175,111
		Accounts payable, accrued expenses and other liabilities		709,529			(8,034		)	701,495
	Total liabilities			6,865,929			(24,016		)	6,841,913

	Redeemable non-controlling interests			21,467			—			21,467
	Commitments and contingencies			—			—			—

	Equity
		Common stock, $0.01 par value; authorized 3,000,000,000 shares;
			229,689,960 shares outstanding	2,297			—			2,297
		Additional paid in capital		2,543,690			—			2,543,690
		Accumulated other comprehensive loss		(6,812		)	—			(6,812		)
		Distributions and accumulated losses		(196,707		)	—			(196,707		)
	Total stockholders' equity			2,342,468			—			2,342,468
		Non-controlling interests		942,052			(174,001		)	768,051
	Total equity			3,284,520			(174,001		)	3,110,519
	Total liabilities and equity			$	10,171,916		$	(198,017	)	$	9,973,899


(1) Reflects the impact of distributing the Excluded Properties as if the distribution was completed on December 31, 2013.



	ix



RECONCILIATION OF GAAP STATEMENTS OF OPERATIONS TO PRO FORMA
STATEMENTS OF OPERATIONS
Unaudited, dollars in thousands, except per share amounts

				Three Months Ended 6/30/13									Six Months Ended 6/30/14									Six Months Ended 6/30/13
				Actual Results			Adjustments (1)			Pro Forma			Actual Results			Adjustments (1)			Pro Forma			Actual Results			Adjustments (1)			Pro Forma
	Revenues
		Rental income		$	216,296		$	16,366		$	232,662		$	477,336		$	—		$	477,336		$	430,854		$	32,870		$	463,724
		Expense reimbursements		59,311			3,984			63,295			134,317			—			134,317			118,915			8,054			126,969
		Other revenues		2,613			35			2,648			4,120			—			4,120			5,760			73			5,833
	Total revenues			278,220			20,385			298,605			615,773			—			615,773			555,529			40,997			596,526

	Operating expenses
		Operating costs		27,659			2,236			29,895			66,790			—			66,790			57,506			4,593			62,099
		Real estate taxes		40,995			2,374			43,369			88,281			—			88,281			82,696			4,737			87,433
		Depreciation and amortization		108,622			11,279			119,901			222,934			—			222,934			220,399			22,557			242,956
		Provision for doubtful accounts		2,573			109			2,682			5,865			—			5,865			4,885			275			5,160
		Impairment of real estate assets		1,531			—			1,531			—			—			—			1,531			—			1,531
		General and administrative		18,724			211			18,935			39,597			—			39,597			41,781			549			42,330
	Total operating expenses			200,104			16,209			216,313			423,467			—			423,467			408,798			32,711			441,509

	Other income (expense)
		Dividends and interest		239			4			243			267			—			267			420			6			426
		Interest expense		(94,373		)	22,344			(72,029		)	(133,919		)	—			(133,919		)	(186,244		)	41,306			(144,938		)
		Gain (loss) on sale of real estate assets		722			—			722			378			—			378			722			(161		)	561
		Gain (loss) on extinguishment of debt, net		(1,668		)	—			(1,668		)	(3,033		)	—			(3,033		)	482			—			482
		Other		(3,710		)	663			(3,047		)	(4,130		)	—			(4,130		)	(4,671		)	663			(4,008		)
	Total other income (expense)			(98,790		)	23,011			(75,779		)	(140,437		)	—			(140,437		)	(189,291		)	41,814			(147,477		)

	Income (loss) before equity in income of unconsolidated joint ventures			(20,674		)	27,187			6,513			51,869			—			51,869			(42,560		)	50,100			7,540
	Equity in income of unconsolidated joint ventures			507			(212		)	295			136			68			204			754			(350		)	404
	Gain on disposal of investments in unconsolidated joint ventures			—			—			—			1,820			(1,820		)	—			—			—			—
	Income (loss) from continuing operations			(20,167		)	26,975			6,808			53,825			(1,752		)	52,073			(41,806		)	49,750			7,944

	Discontinued operations
		Income from discontinued operations		(302		)	302			—			4,787			(4,787		)	—			(1,077		)	1,077			—
		Gain on disposition of operating properties		2,631			(2,631		)	—			14,426			(14,426		)	—			2,631			(2,631		)	—
		Impairment of real estate held for sale		(39,007		)	39,007			—			—			—			—			(42,039		)	42,039			—
	Income (loss) from discontinued operations			(36,678		)	36,678			—			19,213			(19,213		)	—			(40,485		)	40,485			—

	Net income (loss)			(56,845		)	63,653			6,808			73,038			(20,965		)	52,073			(82,291		)	90,235			7,944
	Non-controlling interests
		Net (income) loss attributable to non-controlling interests		13,583			(15,509		)	(1,926		)	(34,164		)	20,992			(13,172		)	19,531			(21,984		)	(2,453		)
	Net income (loss) attributable to common stockholders			$	(43,262	)	$	48,144		$	4,882		$	38,874		$	27		$	38,901		$	(62,760	)	$	68,251		$	5,491

	Per common share:
		Income (loss) from continuing operations:
			Basic	$	(0.09	)	$	0.11		$	0.02		$	0.17		$	—		$	0.17		$	(0.18	)	$	0.20		$	0.02
			Diluted	$	(0.09	)	$	0.11		$	0.02		$	0.17		$	—		$	0.17		$	(0.18	)	$	0.20		$	0.02
		Net income (loss) attributable to common stockholders:
			Basic	$	(0.24	)	$	0.26		$	0.02		$	0.17		$	—		$	0.17		$	(0.35	)	$	0.37		$	0.02
			Diluted	$	(0.24	)	$	0.26		$	0.02		$	0.17		$	—		$	0.17		$	(0.35	)	$	0.37		$	0.02
		Weighted average number of vested common shares:
			Basic	180,675			47,438			228,113			228,547			—			228,547			180,675			47,438			228,113
			Diluted	180,675			49,519			230,194			229,907			—			229,907			180,675			49,519			230,194

(1) Reflects the impact of the following transactions associated with the IPO including (i) the contribution of the Acquired Properties (ii) the distribution of the Excluded Properties (iii) the acquisition of
the interest not already held in Arapahoe Crossings L.P. (iv) borrowings under the unsecured credit facility, including the use thereof and (v) the net proceeds from the IPO, including the use thereof.
The pro forma adjustments for the three and six months ended June 30, 2013 associated with these transactions assume that each transaction was completed as of January 1, 2013. The pro forma
adjustments for the six months ended June 30, 2014 associated with these transactions assume that each transaction was completed as of January 1, 2014.



	x

Form: 8-K

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