DDR Posts $90M FFO Loss for Q3

The loss of FFO is not however as detrimental as previous quarters. CEO and chairman Scott Wolstein told investors this morning on the Q3 earnings call, "We are pleased to report solid earnings results this quarter. We had another high volume quarter in terms of leasing activity, and we are happy to see the improvement in leased rate as a result."

He went on say, "We also executed upon several important financial transactions this quarter, and have made good progress on our de-leveraging and liquidity enhancing initiatives. We are proud of the considerable strides that we have made thus far, but our focus remains keenly on the additional balance sheet progress that we expect to complete in the coming quarters."

According to the earnings report, the net charges include:

• Non-cash loss on equity derivative instruments related to Otto investment
• Non-cash impairment charges - consolidated and equity method investments
• Consolidated impairment charges and loss on sales including discontinued operations
• Less portion of impairment charges and losses allocated to non-controlling interests (Mervyns)
• Non-cash change in control compensation charge
• (Gain) on sale of MDT units, net loan loss reserve and other expenses
• Impairment charges, derivative (gains)/losses and losses on asset sales - equity method investments
• Gain on repurchases of unsecured notes

FFO applicable to shareholders for the first nine months of the year totals a $116.6 million loss. This is a loss of $0.80 per diluted share. Net loss to shareholders for the first three quarters totaled $308.7 million or $2.11 per diluted share. This is a significant decline in comparison to the net income of $80.4 million or $0.66 per diluted share for the same period in 2008.

DDR completed a number of deals during the third quarter. Throughout the company, 146 new leases and 287 renewals were completed for a total of 2.6 million square feet. Rental rates on these leases decreased 3.5%. The total portfolio now averages an annualized base rent per occupied square foot of $12.50.

Net leased space rose slightly to 90.9% from Q2's 90.7%. The total is a decrease from 2008's Q3 figures, which saw a core portfolio leased rate of 94.5%