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 DDR Reports A 6.0% Increase In Operating FFO Per Diluted Share To $1.23 For The Year Ended December 31, 2015
   Thursday, February 11, 2016 5:00:00 PM ET

DDR Corp. (DDR ) today announced operating results for the fourth quarter and year ended December 31, 2015.

(Logo: http://photos.prnewswire.com/prnh/20131217/DDRLOGO )

Financial Highlights

-- Fourth quarter operating funds from operations attributable to common shareholders ("Operating FFO") increased $1.9 million to $114.1 million, or $0.31 per diluted share, compared to $112.2 million, or $0.31 per diluted share, for the prior-year comparable period.

-- Fourth quarter net income attributable to common shareholders was $87.9 million, or $0.24 per diluted share, compared to net loss of $16.3 million, or $0.05 per diluted share, for the prior-year comparable period.

Significant Quarterly Activity

-- Generated same-store net operating income growth of 3.4% on a pro rata basis

-- Executed 290 new leases and renewals for 2.5 million square feet

-- Generated new leasing spreads of 24.5% and renewal leasing spreads of 7.0%, both on a pro rata basis

-- Increased the portfolio leased rate by 20 basis points to 96.0% at December 31, 2015, from 95.8% at September 30, 2015, on a pro rata basis

-- Closed on a new joint venture with Blackstone that acquired six shopping centers with a total investment of $96 million at DDR’s share

-- Acquired one prime power center in Orlando for $67 million

-- Sold nine operating assets and three non-operating assets totaling $211 million at DDR’s share

-- Issued $400 million aggregate principal amount of 4.25% senior unsecured notes due 2026 and redeemed $350 million of senior convertible notes

2015 Year-End Highlights

-- Generated Operating FFO of $1.23 per diluted share for the full year 2015, an increase of 6.0% compared to 2014

-- Acquired 10 shopping centers and three outparcels for $326 million at DDR’s share

-- Sold 66 operating assets and eight non-operating assets for $569 million at DDR’s share

-- Executed 1,330 new leases and renewals for 10.9 million square feet in 2015

-- The portfolio leased rate was 96.0% at December 31, 2015 and 2014, on a pro rata basis

-- Increased the annualized base rent per occupied square foot by 4.1% on a pro rata basis to $14.76 at December 31, 2015, from $14.15 at December 31, 2014

-- Generated new leasing spreads for the full year 2015 of 22.0% and renewal leasing spreads of 7.0%, both on a pro rata basis

"I am pleased to report another year of positive results and portfolio improvement. I am extremely proud of the efforts of our team in 2015. Our portfolio evolution is evident in our operating statistics, as same-store net operating income grew 3.1% in 2015, above the high end of our original guidance range. The operating figures translated into strong earnings and dividend growth in excess of 6% and 10%, respectively, which highlights our team’s focus on best positioning DDR for long-term growth," commented David J. Oakes, president and chief executive officer of DDR.

2016 Guidance There has been no change in guidance since the initial release on January 4, 2016. The Company continues to estimate Operating and NAREIT defined FFO for 2016 between $1.19 and $1.25 per diluted share.

Non-GAAP Disclosures FFO is a supplemental non-GAAP financial measurement used as a standard in the real estate industry and a widely accepted measure of real estate investment trust ("REIT") performance. Management believes that FFO and Operating FFO provide additional indicators of the financial performance of a REIT. The Company also believes that FFO and Operating FFO more appropriately measure the core operations of the Company and provide benchmarks to its peer group. Neither FFO nor Operating FFO represents cash generated from operating activities in accordance with generally accepted accounting principles ("GAAP"), is necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income computed in accordance with GAAP as an indicator of the Company’s operating performance or as an alternative to cash flow as a measure of liquidity.

FFO is defined and calculated by the Company as net income, adjusted to exclude: (i) preferred share dividends, (ii) gains and losses from disposition of depreciable real estate property, which are presented net of taxes, (iii) impairment charges on depreciable real estate property and related investments and (iv) certain non-cash items. These non-cash items principally include real property depreciation and amortization of intangibles, equity income from joint ventures and equity income from non-controlling interests and adding the Company’s proportionate share of FFO from its unconsolidated joint ventures and non-controlling interests, determined on a consistent basis. The Company calculates Operating FFO by excluding the non-operating charges and gains described below. The Company computes FFO in accordance with the NAREIT definition. Other real estate companies may calculate FFO and Operating FFO in a different manner. Operating FFO is useful to investors as the Company removes these charges and gains to analyze the results of its operations and assess performance of the core operating real estate portfolio. A reconciliation of net income (loss) to FFO and Operating FFO is presented herein.

Safe Harbor DDR Corp. considers portions of the information in this press release to be 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, both as amended, with respect to the Company’s expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as supply of space or a reduction in demand for real estate in the area; competition from other available space; dependence on rental income from real property; the loss of, significant downsizing of or bankruptcy of a major tenant; constructing properties or expansions that produce a desired yield on investment; our ability to buy or sell assets on commercially reasonable terms; our ability to complete acquisitions or dispositions of assets under contract; our ability to secure equity or debt financing on commercially acceptable terms or at all; our ability to enter into definitive agreements with regard to our financing and joint venture arrangements or our failure to satisfy conditions to the completion of these arrangements; the success of our capital recycling strategy; and the finalization of the financial statements for the three months and year ended December 31, 2015. For additional factors that could cause the results of the Company to differ materially from those indicated in the forward-looking statements, please refer to the Company’s Form 10-K for the year ended December 31, 2014, as amended. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

About DDR Corp. DDR is an owner and manager of 367 value-oriented shopping centers representing 115 million square feet in 38 states and Puerto Rico. The Company’s portfolio is comprised primarily of large-format power centers located in top markets across the United States, and is actively managed to create long-term shareholder value. DDR is a self-administered and self-managed REIT operating as a fully integrated real estate company, and is publicly traded on the New York Stock Exchange under the ticker symbol DDR. Additional information about the Company is available at www.ddr.com.

Conference Call and Supplemental Information A copy of the Company’s Supplemental package is available upon request to Brooke Vanek at the Company’s corporate office, 3300 Enterprise Parkway, Beachwood, Ohio 44122 or at www.ddr.com.

The Company will hold its quarterly conference call tomorrow, February 12, 2016, at 10:00 a.m. Eastern Time. To participate, please dial 877-249-1119 (domestic) or 412-542-4143 (international) at least ten minutes prior to the scheduled start of the call. The conference call webcast will be recorded and available for replay through the Investors portion of DDR’s website, http://ir.ddr.com/events.cfm .

DDR Corp.
Income Statement:  Consolidated Interests
$ in thousands, except per share
                                                         4Q15              4Q14       12M15        12M14
Revenues:
Minimum rents (1)                                        $179,154          $181,081   $719,737     $688,556
Percentage rent                                          2,675             2,459      6,267        5,231
Recoveries                                               58,703            59,040     246,719      230,987
Ancillary income                                         5,525             5,824      19,038       24,288
Other revenues (2)                                       473               153        3,339        4,706
                                                         246,530           248,557    995,100      953,768
Expenses (3):
Operating and maintenance                                33,893            35,355     144,611      142,336
Real estate taxes                                        36,271            34,729     149,082      138,771
                                                         70,164            70,084     293,693      281,107
Net operating income                                     176,366           178,473    701,407      672,661
Other income (expense):
Fee income                                               8,258             8,211      32,971       31,907
Interest income                                          7,510             6,989      29,213       15,927
Interest expense (4)                                     (59,203)          (61,014)   (241,727)    (237,120)
Depreciation and amortization                            (102,575)         (106,732)  (402,045)    (402,825)
General and administrative (5)                           (17,920)          (25,606)   (73,382)     (84,484)
Other income (expense), net (6)                          (439)             (1,221)    (1,739)      (12,262)
Impairment charges (7)                                   0                 (11,055)   (279,021)    (29,175)
Income (loss) before earnings from equity method         11,997            (11,955)   (234,323)    (45,371)
investments and other items
Equity in net (loss) income of joint ventures            (5,486)           748        (3,135)      10,989
Impairment of joint venture investments                  (1,909)           (21,552)   (1,909)      (30,652)
Gain on sale and change in control of interests, net     0                 183        7,772        87,996
Income from discontinued operations (8)                  0                 21,471     0            89,398
Tax expense                                              (285)             (742)      (6,286)      (1,855)
Gain on disposition of real estate, net of tax           89,417            415        167,571      3,060
Net income (loss)                                        93,734            (11,432)   (70,310)     113,565
Non-controlling interests (9)                            (268)             732        (1,858)      3,717
Net income (loss) attributable to DDR                    93,466            (10,700)   (72,168)     117,282
Write-off of preferred share original issuance costs     0                 0          0            (1,943)
Preferred dividends                                      (5,594)           (5,594)    (22,375)     (24,054)
Net income (loss) attributable to Common Shareholders    87,872            (16,294)   (94,543)     91,285
FFO:
Net income (loss) attributable to common shareholders    87,872            (16,294)   (94,543)     91,285
Depreciation and amortization of real estate investments 100,582           105,887    393,847      410,172
Equity in net loss (income) of joint ventures            5,486             (748)      3,135        (10,989)
Impairment of depreciable joint venture investments      1,909             0          1,909        0
Joint ventures’ FFO                                      6,465             5,836      27,579       30,344
Non-controlling interests (OP units)                     69                223        635          732
Impairment of depreciable real estate                    0                 7,555      179,748      19,412
Gain on disposition of depreciable real estate, net      (85,728)          (21,565)   (164,010)    (181,319)
FFO attributable to Common Shareholders                  116,655           80,894     348,300      359,637
Non-operating items, net (10)                            (2,533)           31,311     97,890       60,756
Operating FFO                                            $114,122          $112,205   $446,190     $420,393
FFO per share - Diluted (11)                             $0.32             $0.22      $0.96        $1.00
Operating FFO per share - Diluted (11)                   $0.31             $0.31      $1.23        $1.16
DDR Corp.
Balance Sheet:  Consolidated Interests
$ in thousands
                                                                                      At Year End
                                                                                      4Q15         4Q14
Assets:
Land                                                                                  $2,184,145   $2,208,468
Buildings                                                                             6,965,632    7,087,040
Fixtures and tenant improvements                                                      743,037      645,035
                                                                                      9,892,814    9,940,543
Less: Accumulated depreciation                                                        (2,062,899)  (1,909,585)
                                                                                      7,829,915    8,030,958
Construction in progress and land                                                     235,385      395,242
Real estate, net                                                                      8,065,300    8,426,200
Investments in and advances to joint ventures                                         72,576       109,538
Preferred equity interest                                                             395,156      305,310
Cash                                                                                  22,416       20,937
Restricted cash                                                                       10,104       11,375
Notes receivable, net                                                                 42,534       56,245
Receivables, including straight-line rent, net                                        129,089      132,661
Other assets, net (12), (13)                                                          359,913      457,146
Total Assets                                                                          9,097,088    9,519,412
Liabilities and Equity:
Revolving credit facilities                                                           210,000      29,009
Unsecured debt (13)                                                                   3,149,188    2,752,394
Unsecured term loan (13)                                                              397,934      347,883
Mortgage and other secured debt (13)                                                  1,382,415    2,082,938
                                                                                      5,139,537    5,212,224
Dividends payable                                                                     68,604       61,468
Other liabilities (14)                                                                425,478      448,192
Total Liabilities                                                                     5,633,619    5,721,884
Preferred shares                                                                      350,000      350,000
Common shares                                                                         36,529       36,071
Paid-in capital                                                                       5,466,511    5,438,778
Accumulated distributions in excess of net income                                     (2,391,793)  (2,047,212)
Deferred compensation obligation                                                      15,537       16,609
Accumulated other comprehensive income                                                (6,283)      (7,352)
Less: Common shares in treasury at cost                                               (15,316)     (16,646)
Non-controlling interests                                                             8,284        27,280
Total Equity                                                                          3,463,469    3,797,528
Total Liabilities and Equity                                                          $9,097,088   $9,519,412
DDR Corp.
Income Statement:  Unconsolidated Interests at 100%
$ in thousands
                                                         4Q15              4Q14       12M15        12M14
Revenues:
Minimum rents                                            $95,265           $99,018    $392,657     $359,140
Percentage rent                                          1,106             858        2,431        1,909
Recoveries                                               29,087            27,256     119,321      91,917
Other revenues                                           1,875             1,700      10,288       32,798
                                                         127,333           128,832    524,697      485,764
Expenses:
Operating and maintenance                                31,376            28,810     125,589      112,800
Real estate taxes                                        17,509            17,040     70,368       54,891
                                                         48,885            45,850     195,957      167,691
Net operating income                                     78,448            82,982     328,740      318,073
Other income (expense):
Interest expense                                         (33,003)          (42,306)   (140,701)    (171,803)
Depreciation and amortization                            (49,648)          (44,485)   (207,816)    (151,651)
Impairment charges                                       (52,252)          (20,983)   (52,700)     (21,583)
Tax expense                                              0                 0          0            (6,565)
Other income (expense), net                              (6,020)           (15,285)   (7,193)      (18,249)
                                                         (140,923)         (123,059)  (408,410)    (369,851)
Loss from continuing operations                          (62,475)          (40,077)   (79,670)     (51,778)
Gain (loss) from discontinued operations                 0                 3,151      0            (13,955)
Gain on disposition of discontinued operations, net      0                 26,797     0            55,020
Gain on disposition of real estate, net                  21,385            6,283      17,188       10,116
Non-controlling interests                                0                 0          0            (2,022)
Net loss attributable to unconsolidated joint ventures   (41,090)          (3,846)    (62,482)     (2,619)
Depreciation and amortization of real estate investments 49,648            46,647     207,816      164,668
Impairment of depreciable real estate                    52,252            20,983     52,700       32,675
Gain on disposition of depreciable real estate, net      (21,385)          (33,080)   (17,188)     (65,045)
FFO                                                      39,425            30,704     180,846      129,679
FFO at DDR’s ownership interests                         6,465             5,836      27,579       30,344
Operating FFO at DDR’s ownership interests               6,667             6,771      27,829       31,414
Net (loss) income at DDR’s ownership interests           (6,694)           (264)      (5,289)      9,218
Basis differences                                        1,208             1,012      2,154        1,771
Equity in net (loss) income of joint ventures            ($5,486)          $748       ($3,135)     $10,989
DDR Corp.
Balance Sheet:  Unconsolidated Interests at 100%
$ in thousands
                                                                                                                                                           At Year End
                                                                                                                                                           4Q15                            4Q14
Assets:
Land                                                                                                                                                       $1,343,889                      $ 1,439,849
Buildings                                                                                                                                                  3,551,227                       3,854,585
Fixtures and tenant improvements                                                                                                                           191,581                         200,696
                                                                                                                                                           5,086,697                       5,495,130
Less: Accumulated depreciation                                                                                                                             (817,235)                       (773,256)
                                                                                                                                                           4,269,462                       4,721,874
Land held for development and construction in progress                                                                                                     52,390                          55,698
Real estate, net                                                                                                                                           4,321,852                       4,777,572
Cash and restricted cash                                                                                                                                   58,916                          100,812
Receivables, including straight-line rent, net                                                                                                             52,768                          80,508
Other assets, net                                                                                                                                          318,546                         376,540
Total Assets                                                                                                                                               4,752,082                       5,335,432
Liabilities and Equity:
Mortgage debt                                                                                                                                              3,177,603                       3,534,553
Notes and accrued interest payable to DDR                                                                                                                  1,556                           144,831
Other liabilities                                                                                                                                          219,799                         276,998
Total Liabilities                                                                                                                                          3,398,958                       3,956,382
Redeemable preferred equity                                                                                                                                395,156                         305,310
Accumulated equity                                                                                                                                         957,968                         1,073,740
Total Liabilities and Equity                                                                                                                               $4,752,082                      $5,335,432
DDR Corp.
Financial Statements:  Footnotes
$ in millions, except per share
Includes discontinued operations                                                           4Q15                            4Q14                            12M15                           12M14
(1)                          Minimum rents:
                             Straight-line rent, net                                       $1.5                            $1.9                            $5.3                            $5.9
                             Below-market rent, net                                        0.7                             0.4                             2.9                             1.3
                             Ground lease revenue                                          9.5                             9.2                             37.4                            33.7
(2)                          Other revenues:
                             Lease termination fees                                        0.5                             0.0                             2.8                             4.1
                             Other miscellaneous                                           0.0                             0.1                             0.5                             0.6
(3)                          Operating expenses:
                             Recoverable expenses (2014 excludes sold assets)              (64.2)                          (64.1)                          (268.3)                         (251.7)
                             Non-recoverable expenses (2014 excludes sold assets)          (6.0)                           (6.0)                           (25.4)                          (29.4)
                             Straight-line ground rent expense                             (0.1)                           (0.3)                           (0.5)                           (1.1)
                             Expensed costs of suspended developments                      (0.1)                           (0.5)                           (0.5)                           (1.3)
(4)                          Non-cash interest expense:
                             Convertible debt accretion                                    (1.0)                           (2.9)                           (9.9)                           (11.4)
                             Debt fair value amortization                                  1.6                             5.4                             14.4                            17.9
                             Loan cost amortization                                        (2.3)                           (2.5)                           (9.6)                           (12.0)
                             Interest expense (capitalized)                                1.5                             2.0                             6.7                             8.7
(5)                          General and administrative expenses:
                             Executive separation charges                                  (0.3)                           (5.4)                           (2.6)                           (5.6)
                             Stock compensation expenses                                   (1.4)                           (1.9)                           (6.6)                           (7.7)
                             Internal leasing expenses                                     (2.0)                           (1.6)                           (7.5)                           (7.1)
                             Construction administrative costs (capitalized)               2.1                             2.5                             9.1                             9.9
(6)                          Other income (expense):
                             Transactions and other, net                                   (0.3)                           (0.8)                           (0.7)                           (9.7)
                             Litigation expenses                                           (0.0)                           (1.0)                           (0.0)                           (3.2)
                             Debt extinguishment, net                                      (0.1)                           0.6                             (1.0)                           0.6
(7)                          Impairment charges:
                             Assets marketed for sale                                      (0.0)                           (7.6)                           (179.7)                         (19.5)
                             Land previously held for development                          (0.0)                           (3.5)                           (99.3)                          (18.6)
DDR Corp.
Financial Statements:  Footnotes
$ in millions, except per share
Includes discontinued operations                                                           4Q15                            4Q14                            12M15                           12M14
(8)                          Discontinued operations:
                             Revenues                                                      n/a                             $3.2                            n/a                             $39.5
                             Expenses                                                      n/a                             (2.0)                           n/a                             (21.0)
                             Impairments                                                   n/a                             (0.0)                           n/a                             (8.9)
                             Depreciation                                                  n/a                             (1.4)                           n/a                             (16.2)
                             Gain on disposition of real estate, net                       n/a                             21.7                            n/a                             96.0
                             Net income                                                    n/a                             21.5                            n/a                             89.4
                             Note:  Presented only for 2014 as DDR adopted new accounting guidance on January 1, 2015, which changed the definition for reporting.
(9)                          Non-controlling interests:
                             FFO attributable to non-controlling interests                 (0.2)                           0.9                             (1.4)                           2.8
                             Operating FFO attributable to non-controlling interests       (0.2)                           (0.1)                           (1.0)                           (0.8)
(10)                         Non-operating items excluded from Operating FFO:
                             Non-cash impairment charges - non-depreciable assets          0.0                             25.0                            99.3                            49.3
                             Executive separation charges                                  0.3                             5.4                             2.6                             5.6
                             Transaction, debt extinguishment, litigation, other, net      0.7                             1.8                             2.3                             13.7
                             Joint ventures - transaction, currency, other                 0.2                             0.9                             0.2                             1.1
                             Non-cash gain on sale and change in control of interests, net 0.0                             (0.3)                           (7.8)                           (4.3)
                             Tax expense (primarily Puerto Rico restructuring)             0.0                             0.0                             4.4                             0.0
                             Gain on sale of non-depreciable real estate, net              (3.7)                           (1.5)                           (3.1)                           (6.5)
                             Non-cash write-off of preferred share original issuance costs 0.0                             0.0                             0.0                             1.9
                                                                                           (2.5)                           31.3                            97.9                            60.8
(11)                         Outstanding per share information:
                             Common shares (at quarter end)                                365.3                           360.7                           365.3                           360.7
                             OP units (at quarter end)                                     0.4                             1.4                             0.4                             1.4
                             Total shares and units (at quarter end)                       365.7                           362.1                           365.7                           362.1
                             Weighted average shares and units - Basic - EPS               362.7                           359.0                           360.9                           358.1
                             Assumed conversion of dilutive securities                     2.5                             0.0                             0.0                             0.0
                             Weighted average shares and units - Diluted - EPS             365.2                           359.0                           360.9                           358.1
                             Weighted average shares and units - Basic - FFO & OFFO        364.0                           361.9                           362.9                           360.6
                             Assumed conversion of dilutive securities                     0.4                             0.5                             0.4                             0.5
                             Weighted average shares and units - Diluted - FFO & OFFO      364.4                           362.4                           363.3                           361.1
                             Earnings per common share - Basic & Diluted                   $0.24                           $(0.05)                         $(0.27)                         $0.25
                             FFO per share - Basic & Diluted                               $0.32                           $0.22                           $0.96                           $1.00
                             Operating FFO per share - Diluted                             $0.31                           $0.31                           $1.23                           $1.16
                             Common stock dividends declared, per share                    $0.1725                         $0.155                          $0.69                           $0.62
DDR Corp.
Financial Statements:  Footnotes
$ in millions, except per share
Includes discontinued operations                                                           4Q15                            4Q14                            12M15                           12M14
(12)                         Intangible assets, net (at year end)                                                                                          $311.0                          $389.2
(13)                         Loan costs, net (at year end)                                                                                                 23.8                            22.5
                             Note:  DDR adopted new accounting guidance, which changed the presentation requirements retroactively.  Loan costs for term debt are now required to be presented as a direct deduction from the related debt liability rather than as an asset.
(14)                         Below-market leases, net (at year end)                                                                                        155.3                           139.3
Additional financial information:
                             Capital expenditures (DDR share):
                             Retenanting                                                   $12.9                           $8.5                            $49.0                           $39.0
                             Maintenance - total                                           2.9                             5.2                             16.2                            14.4
 Maintenance PSF of owned GLA - non reimbursable                         0.13  0.14
 Miscellaneous (DDR share):
 Est. value of land owned adjacent to existing centers (at 12/31/15)     26.0
 Cost basis of headquarters (non-income producing at 12/31/15)           40.0

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ddr-reports-a-60-increase-in-operating-ffo-per-diluted-share-to-123-for-the-year-ended-december-31-2015-300219227.html

SOURCE DDR Corp.

http://rt.prnewswire.com/rt.gif?NewsItemId=CL21016&Transmission_Id=201602111700PR_NEWS_USPR_____CL21016&DateId=20160211



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