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PRESS RELEASE from provider: Globe Newswire
This content is a press release from our partner Globe Newswire. The AP newsroom and editorial departments were not involved in its creation.

RPT Realty Reports Fourth Quarter and Full Year 2018 Results

February 22, 2019

NEW YORK, Feb. 20, 2019 (GLOBE NEWSWIRE) -- RPT Realty (NYSE:RPT) (the “Company”) today announced its financial and operating results for the quarter and year ended December 31, 2018.

FOURTH QUARTER AND FULL YEAR 2018 HIGHLIGHTS

-- Fourth quarter net loss attributable to common shareholders of $(5.8) million or $(0.07) per diluted share. -- Fourth quarter NAREIT-defined Funds from Operations (“FFO”) of $0.30 per diluted share and Operating Funds from Operations (“Operating FFO”) of $0.31 per diluted share. -- Same property NOI with redevelopment increased 4.3% in the fourth quarter and 2.9% for the full year as compared to the same periods in the prior year. -- As of December 31, 2018, the consolidated portfolio leased rate was 94.3%, up 10 basis points sequentially. -- As of December 31, 2018, spaces less than 10,000 square feet (“Small Shops”) were 88.8% leased, up 70 basis points sequentially. -- As of December 31, 2018, the Company had $4.8 million of signed not commenced Annualized Base Rent (“ABR”) that is scheduled to commence over the next twelve months. -- During the fourth quarter, the Company completed the sale of six non-core properties for an aggregate sale price of $123.0 million. Additionally, the Company is under contract to sell two non-core assets for $68.5 million. -- On February 5, 2019, the Company’s Board of Trustees declared a first quarter 2019 regular cash dividend of $0.22 per common share.

“2018 marked a turning point for RPT. With the new executive team setting the tone since June, the leasing and development teams now in place, and the completion of our disposition program almost a year ahead of schedule, we ended 2018 with great momentum as evidenced by our above plan operating performance,” said Brian Harper, President and Chief Executive Officer. “We are particularly pleased with the execution of our disposition program, which has significantly improved the quality of our cash flows and strength of our balance sheet. By shedding our lowest quality assets, we expect to produce higher and more consistent NOI and earnings growth in the years ahead and believe we have better insulated the portfolio from future retailer fallout. As we embark on 2019, our team is laser-focused on capitalizing on our organic growth initiatives including small shop leasing and proactive remerchandising, as well as driving further progress on our large-scale redevelopment opportunities. We believe these initiatives should drive another year of solid same property NOI growth, while setting the Company up for a return to earnings growth in 2020 and beyond.”

FINANCIAL RESULTS

Net (loss) income attributable to common shareholders for the fourth quarter 2018 of $(5.8) million, or $(0.07) per diluted share, compared to $19.2 million, or $0.24 per diluted share for the same period in 2017. Net income available to common shareholders for the full year 2018 of $10.9 million, or $0.13 per diluted share, compared to $62.4 million, or $0.78 per diluted share for the full year 2017.

FFO for the fourth quarter 2018 of $27.0 million, or $0.30 per diluted share, compared to $26.5 million, or $0.30 per diluted share for the same period in 2017. FFO for the full year 2018 of $109.4 million, or $1.23 per diluted share, compared to $118.6 million, or $1.34 per diluted share for the full year 2017.

Operating FFO for the fourth quarter 2018 of $27.3 million, or $0.31 per diluted share, compared to $27.7 million or $0.31 per diluted share for the same period in 2017. Operating FFO for the fourth quarter 2018 excludes certain net non-recurring costs that totaled $0.4 million, attributable to executive management reorganization, severance, and debt prepayment costs, partially offset by land sale gains associated with the sale of land at Harvest Junction. Operating FFO for the full year 2018 of $120.1 million, or $1.35 per diluted share, compared to $119.6 million, or $1.36 per diluted share in the full year 2017. Operating FFO for the full year 2018 excludes certain net non-recurring costs that totaled $10.7 million, primarily attributable to executive management reorganization and severance costs.

OPERATING RESULTS

Same property NOI with redevelopment during the fourth quarter 2018 increased 4.3% compared to the same period in 2017. For the full year 2018, same property NOI with redevelopment increased 2.9% compared to the same period in 2017. Same property NOI with redevelopment growth for the quarter and year was largely driven by higher minimum rent.

At December 31, 2018, the Company’s consolidated portfolio was 94.3% leased compared to 94.2% at September 30, 2018 and 93.3% at December 31, 2017. Occupancy at December 31, 2018 was 91.7% compared to 90.8% at September 30, 2018 and 91.1% at December 31, 2017. The consolidated anchor tenant portfolio (GLA of 10,000 square feet or more) was 96.6% leased and 94.6% occupied at December 31, 2018 compared to 96.7% leased and 93.4% occupied at September 30, 2018 and 96.1% leased and 93.7% occupied at December 31, 2017. Small Shops were 88.8% leased and 84.7% occupied at December 31, 2018 compared to 88.1% leased and 84.4% occupied at September 30, 2018 and 86.4% leased and 84.5% occupied at December 31, 2017.

During the fourth quarter 2018, the Company signed 58 leases totaling 202,342 square feet. Blended re-leasing spreads on comparable leases were 5.4% with an ABR of $22.41 per square foot. Re-leasing spreads on comparable new and renewal leases were 15.6% and 3.6%, respectively. For the twelve months ended December 31, 2018, the Company signed 288 leases totaling 1,607,252 square feet. Blended re-leasing spreads on comparable leases were 8.3% with an ABR of $17.22 per square foot. Re-leasing spreads on comparable new and renewal leases were 42.9% and 5.5%, respectively.

BALANCE SHEET

At December 31, 2018, the Company had approximately $964.1 million of consolidated debt, which resulted in a net debt to annualized proforma adjusted EBITDA ratio of 6.4x. Consolidated debt had a weighted average interest rate of 4.11% and a weighted average maturity, excluding scheduled amortization, of 5.8 years. The Company ended the fourth quarter 2018 with liquidity of $390.9 million, including $41.1 million in cash and cash equivalents and $349.8 million of availability on its unsecured revolving credit facility.

DISPOSITIONS

During the quarter, and as previously-announced, the Company completed the sale of six non-core properties for an aggregate sale price of $123.0 million, including two distressed non-core assets located in Jackson, Michigan, which has a Metropolitan Statistical Area (“MSA”) rank of 261. Additionally, the Company is under contract to sell two non-core assets for $68.5 million. These transactions are expected to close in the first quarter 2019, subject to satisfaction of customary closing conditions.

The weighted average ABR per square foot and the weighted average 3-mile household income and population for the properties sold and under contract were $12.86, $72,000, and 54,000 respectively.

DIVIDEND

On February 5, 2019, the Company’s Board of Trustees declared a first quarter 2019 regular cash dividend of $0.22 per common share. The Board of Trustees also approved a first quarter 2019 Series D convertible preferred share dividend of $0.90625 per share. The dividends, for the period January 1, 2019 through March 31, 2019 are payable on April 1, 2019 for shareholders of record on March 20, 2019.

2019 GUIDANCE

The Company is initiating 2019 earnings guidance. Selected items are outlined below.

Guidance item 2019 Guidance Range ------------------------------------------------------------- Net income available to common shareholders per diluted share $0.12 to $0.16 Same property NOI growth 2.00% to 3.00% General and administrative expenses (in millions) $23.75 to $25.00 Dispositions (in millions) 1 ~ $68.5 Operating FFO per diluted share $1.03 to $1.07 ------------------------------------------------------------- ------ -- ------ 1 Consists of the sale of two non-core assets which are under contract for sale in the first quarter 2019 subject to satisfaction of customary closing conditions. ------------------------------------------------------------------------------

RECONCILIATION OF 2018 OPERATING FFO PER SHARE TO INITIAL 2019 OPERATING FFO PER SHARE GUIDANCE

The following table reconciles the Company’s reported 2018 Operating FFO per diluted share to the Company’s initial 2019 Operating FFO per diluted share guidance range:

2019 Guidance Range 2018 Operating FFO per diluted share $1.35 to $1.35 Same property NOI growth 0.03 to 0.05 Interest expense 0.03 to 0.03 Impact of Jackson Crossing & Jackson West dispositions (0.07) to (0.07) Impact of 2018 open air shopping center dispositions (0.09) to (0.09) Impact of 2019 open air shopping center dispositions (0.05) to (0.05) NOI from other investments (0.07) to (0.07) Non-cash items (0.07) to (0.06) General and administrative expense (0.02) to (0.01) Change in share count (0.01) to (0.01) 2019 Operating FFO per diluted share $1.03 to $1.07 ------------------------------------------------------ ------ -- ------

NOI from other investments is expected to decrease $0.07 per diluted share as a result of the following: (i) $0.03 per diluted share related to the implementation of ASC 842 that requires companies to expense certain previously capitalized internal leasing costs, (ii) $0.03 per diluted share from certain property management related expenses that were classified in general and administrative expense in prior periods, and (iii) $0.01 per diluted share as a result of lower NOI from Webster Place due to the pending redevelopment of the asset.

Non-cash items are expected to decrease $0.06 per diluted share as a result of a non-recurring below market lease intangible that benefited 2018.

General and administrative expense, including the above-mentioned $0.03 reclassification to NOI from other investments, is expected to increase $0.04 per diluted share as a result of the following: (i) $0.01 per diluted share from non-cash amortization of stock-based compensation attributable to executive sign-on inducement awards, (ii) $0.01 per diluted share from the Company’s anticipated investment in its technology and data platforms, (iii) $0.01 per diluted share from the Company’s investment in human capital, including higher benefits cost, merit increases and promotions, and (iv) $0.01 per diluted share primarily as a result of a below target cash bonus payout in 2018 resulting in an unfavorable year-over-year comparison.

CONFERENCE CALL/WEBCAST:

The Company will host a live broadcast of its fourth quarter conference call on Thursday, February 21, 2019 at 10:00 a.m. (ET) to discuss its financial and operating results.

Date: Thursday, February 21, 2019 Time: 10:00 a.m. ET Dial in #: (877) 705-6003 International Dial in #: (201) 493-6725 Webcast: investors.rptrealty.com

A replay of the call will be available through March 7, 2019. The replay can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers and entering passcode 13684939. A replay will also be archived on the Company’s website for one year.

SUPPLEMENTAL MATERIALS

The Company’s quarterly financial and operating supplement is available on its corporate web site at rptrealty.com. If you wish to receive a copy via email, please send requests to invest@rptrealty.com.

RPT Realty owns and operates a national portfolio of open-air shopping destinations principally located in top U.S. markets. The Company’s locally-curated consumer experiences reflect the lifestyles of its diverse neighborhoods and match the modern expectations of its retail partners. The Company is a fully integrated and self-administered REIT publicly traded on the New York Stock Exchange under the ticker symbol RPT. As of December 31, 2018, the Company’s portfolio consisted of 51 shopping centers (including 1 shopping center owned through a joint venture) representing 12.4 million square feet. As of December 31, 2018, the Company’s aggregate portfolio was 94.3% leased. For additional information about the Company please visit rptrealty.com.

This press release may contain forward-looking statements that represent the Company’s expectations and projections for the future. Management of the Company believes the expectations reflected in any forward-looking statements made in this press release are based on reasonable assumptions. Certain factors could occur that might cause actual results to vary, including deterioration in national economic conditions, weakening of real estate markets, decreases in the availability of credit, increases in interest rates, adverse changes in the retail industry, our continuing ability to qualify as a REIT and other factors discussed in the Company’s reports filed with the Securities and Exchange Commission.

Company Contact:Vin Chao, Vice President - Finance19 W 44th St. 10th Floor, Ste 1002New York, New York 10036 vchao@rptrealty.com (212) 221-1752

RPT REALTYFFO AND OPERATING FFO ATTRIBUTABLE TO COMMON AND OP UNIT HOLDERS GUIDANCE

Per Share Guidance Range Full Year 2019 Low High ------ -- ------ Net income available to common shareholders $0.12 to $0.16 Depreciation and amortization 0.90 to 0.90 Convertible preferred dividend 0.07 to 0.07 Net income attributable to noncontrolling interests 0.01 to 0.01 (Gain)/Loss on sale of investment properties (0.04) to (0.04) Share count adjustment (1) (0.03) to (0.03) FFO and OFFO available to common shareholders and dilutive securities $1.03 to $1.07 ------ -- ------ (1)OP Units and Convertible Preferred shares are excluded from the diluted share count for Net Income, but included for FFO and OFFO

RPT REALTY CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) December 31, December 31, 2018 2017 ------------- ------------- ASSETS Income producing properties, at cost: Land $ 373,490 $ 397,935 Buildings and improvements 1,652,283 1,732,844 Less accumulated depreciation and amortization (358,195 ) (351,632 ) ----------- - ----------- - Income producing properties, net 1,667,578 1,779,147 Construction in progress and land available for development 53,222 58,243 Net real estate 1,720,800 1,837,390 Equity investments in unconsolidated joint ventures 1,572 3,493 Cash and cash equivalents 41,064 8,081 Restricted cash and escrows 3,658 4,810 Accounts receivable, net 23,802 26,145 Acquired lease intangibles, net 44,432 59,559 Other assets, net 93,112 90,916 TOTAL ASSETS $ 1,928,440 $ 2,030,394 - --------- - - --------- - LIABILITIES AND SHAREHOLDERS’ EQUITY Notes payable, net $ 963,149 $ 999,215 Capital lease obligation 975 1,022 Accounts payable and accrued expenses 56,355 56,750 Acquired lease intangibles, net 48,647 60,197 Other liabilities 8,043 8,375 Distributions payable 19,728 19,666 TOTAL LIABILITIES 1,096,897 1,145,225 ----------- - ----------- - Commitments and Contingencies RPT Realty (“RPT”) Shareholders’ Equity: Preferred shares, $0.01 par, 2,000 shares authorized: 7.25% Series D Cumulative Convertible Perpetual Preferred Shares, (stated at liquidation preference $50 per 92,427 92,427 share), 1,849 shares issued and outstanding as of December 31, 2018 and 2017, respectively Common shares of beneficial interest, $0.01 par, 120,000 shares authorized, 79,734 and 79,366 shares issued and outstanding as of December 31, 2018 and 2017, 797 794 respectively Additional paid-in capital 1,164,848 1,160,862 Accumulated distributions in excess of net income (450,130 ) (392,619 ) Accumulated other comprehensive income 4,020 2,858 ----------- - ----------- - TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO RPT 811,962 864,322 Noncontrolling interest 19,581 20,847 ----------- - ----------- - TOTAL SHAREHOLDERS’ EQUITY 831,543 885,169 ----------- - TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,928,440 $ 2,030,394 - --------- - - --------- -

RPT REALTY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Three Months Ended Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 ---------- ---------- ----------- ----------- REVENUE Minimum rent $ 47,528 $ 48,392 $ 194,810 $ 198,362 Percentage rent 40 134 585 704 Recovery income from tenants 15,141 14,603 61,136 61,258 Other property income 979 993 3,837 4,303 Management and other fee income 32 141 254 455 -------- - -------- - --------- - --------- - TOTAL REVENUE 63,720 64,263 260,622 265,082 -------- - -------- - --------- - --------- - EXPENSES Real estate tax expense 10,510 10,012 42,306 42,683 Recoverable operating expense 6,929 6,954 26,177 27,653 Non-recoverable operating expense 1,338 1,233 4,808 4,664 Depreciation and amortization 21,608 22,053 87,327 91,335 Acquisition costs — — 233 — General and administrative expense 6,465 7,383 33,861 25,944 Provision for impairment 13,434 982 13,650 9,404 -------- - -------- - --------- - --------- - TOTAL EXPENSES 60,284 48,617 208,362 201,683 -------- - -------- - --------- - --------- - OPERATING INCOME 3,436 15,646 52,260 63,399 OTHER INCOME AND EXPENSES Other expense, net (189 ) (96 ) (244 ) (708 ) Gain on sale of real estate 3,813 16,843 3,994 52,764 Earnings from unconsolidated joint ventures 19 50 589 273 Interest expense (11,085 ) (10,995 ) (43,439 ) (44,866 ) Other gain on unconsolidated joint ventures — — 5,208 — Loss on extinguishment of debt (134 ) — (134 ) — -------- - -------- - --------- - --------- - (LOSS) INCOME BEFORE TAX (4,140 ) 21,448 18,234 70,862 Income tax provision (51 ) (24 ) (198 ) (143 ) -------- - -------- - --------- - --------- - NET (LOSS) INCOME (4,191 ) 21,424 18,036 70,719 Net loss (income) attributable to noncontrolling partner 97 (501 ) (417 ) (1,659 ) interest -------- - -------- - --------- - --------- - NET (LOSS) INCOME ATTRIBUTABLE TO RPT (4,094 ) 20,923 17,619 69,060 Preferred share dividends (1,675 ) (1,675 ) (6,701 ) (6,701 ) NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS $ (5,769 ) $ 19,248 $ 10,918 $ 62,359 - ------ - - ------ - - ------- - - ------- - EARNINGS PER COMMON SHARE Basic $ (0.07 ) $ 0.24 $ 0.13 $ 0.78 - ------ - - ------ - - ------- - - ------- - Diluted $ (0.07 ) $ 0.24 $ 0.13 $ 0.78 - ------ - - ------ - - ------- - - ------- - WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic 79,725 79,366 79,592 79,344 -------- - -------- - --------- - --------- - Diluted 79,725 79,550 80,088 79,530 -------- - -------- - --------- - --------- -

RPT REALTY RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FUNDS FROM OPERATIONS (In thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2018 2017 2018 2017 ---------- ---------- ----------- ----------- Net (loss) income $ (4,191 ) $ 21,424 $ 18,036 $ 70,719 Net loss (income) attributable to noncontrolling partner 97 (501 ) (417 ) (1,659 ) interest Preferred share dividends (1,675 ) (1,675 ) (6,701 ) (6,701 ) Net (loss) income available to common shareholders (5,769 ) 19,248 10,918 62,359 Adjustments: Rental property depreciation and amortization expense 21,414 21,993 86,970 91,097 Pro-rata share of real estate depreciation from 14 73 191 302 unconsolidated joint ventures Gain on sale of depreciable real estate (3,699 ) (16,945 ) (3,699 ) (51,977 ) Gain on sale of joint venture depreciable real estate — — (307 ) — Provision for impairment on income-producing properties 13,434 — 13,434 8,422 Other gain on unconsolidated joint ventures — — (5,208 ) — -------- - -------- - --------- - --------- - FFO available to common shareholders 25,394 24,369 102,299 110,203 Noncontrolling interest in Operating Partnership (1) (97 ) 501 417 1,659 Preferred share dividends (assuming conversion)(2) 1,675 1,675 6,701 6,701 -------- - -------- - --------- - --------- - FFO available to common shareholders and dilutive securities $ 26,972 $ 26,545 $ 109,417 $ 118,563 Gain on sale of land (114 ) 102 (295 ) (787 ) Provision for impairment on land available for development — 982 216 982 Severance expense (3) 192 60 1,117 715 Executive management reorganization, net (3)(4)(5) 139 — 9,673 — Acquisition costs — — 233 — Cost associated with early extinguishment of debt 134 30 134 110 Other gain — — (398 ) — -------- - -------- - --------- - --------- - Operating FFO available to common shareholders and dilutive $ 27,323 $ 27,719 $ 120,097 $ 119,583 securities - ------ - - ------ - - ------- - - ------- - Weighted average common shares 79,725 79,366 79,592 79,344 Shares issuable upon conversion of Operating Partnership 1,909 1,916 1,912 1,917 Units (1) Dilutive effect of restricted stock 763 184 496 186 Shares issuable upon conversion of preferred shares (2) 6,858 6,740 6,858 6,740 -------- - -------- - --------- - --------- - Weighted average equivalent shares outstanding, diluted 89,255 88,206 88,858 88,187 -------- - -------- - --------- - --------- - FFO available to common shareholders and dilutive securities $ 0.30 $ 0.30 $ 1.23 $ 1.34 per share, diluted - ------ - - ------ - - ------- - - ------- - Operating FFO available to common shareholders and dilutive $ 0.31 $ 0.31 $ 1.35 $ 1.36 securities per share, diluted - ------ - - ------ - - ------- - - ------- - Dividend per common share $ 0.22 $ 0.22 $ 0.88 $ 0.88 Payout ratio - Operating FFO 71.0% 71.0% 65.2% 64.7% ------------------------------------------------------------ ---------- ---------- ----------- -----------

(1) The total noncontrolling interest reflects OP units convertible 1:1 into common shares. (2) Series D convertible preferred shares are paid annual dividends of $6.7 million and are currently convertible into approximately 6.9 million shares of common stock. They are dilutive only when earnings or FFO exceed approximately $0.24 per diluted share per quarter and $0.98 per diluted share per year. The conversion ratio is subject to adjustment based upon a number of factors, and such adjustment could affect the dilutive impact of the Series D convertible preferred shares on FFO and earning per share in future periods. (3) Amounts noted are included in General and Administrative expense. (4) Includes severance, accelerated vesting of restricted stock and performance award charges and the benefit from the forfeiture of unvested restricted stock and performance awards associated with our former executives, in addition to recruiting fees, relocation expenses and cash inducement bonuses related to the Company’s current executive team. (5) The $9.7 million reported for the twelve months ended December 31, 2018 includes $0.4 million for the three months ended March 31, 2018 not previously reported.

RPT REALTY RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (amounts in thousands) Reconciliation of net income available to common shareholders to Same Property NOI Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ 2018 2017 2018 2017 ---------- ---------- ----------- ----------- Net (loss) income available to common shareholders $ (5,769 ) $ 19,248 $ 10,918 $ 62,359 Preferred share dividends 1,675 1,675 6,701 6,701 Net (loss) income attributable to noncontrolling partner (97 ) 501 417 1,659 interest Income tax provision 51 24 198 143 Interest expense 11,085 10,995 43,439 44,866 Costs associated with early extinguishment of debt 134 — 134 — Earnings from unconsolidated joint ventures (19 ) (50 ) (589 ) (273 ) Gain on sale of real estate (3,813 ) (16,843 ) (3,994 ) (52,764 ) Other gain on unconsolidated joint ventures — — (5,208 ) — Other expense, net 189 96 244 708 Management and other fee income (32 ) (141 ) (254 ) (455 ) Depreciation and amortization 21,608 22,053 87,327 91,335 Acquisition costs — — 233 — General and administrative expenses 6,465 7,383 33,861 25,944 Provision for impairment 13,434 982 13,650 9,404 Lease termination fees (53 ) (23 ) (161 ) (83 ) Amortization of lease inducements 43 44 173 175 Amortization of acquired above and below market lease (1,147 ) (1,130 ) (9,880 ) (4,397 ) intangibles, net Straight-line ground rent expense 70 70 281 281 Amortization of acquired ground lease intangibles 6 6 25 25 Straight-line rental income (602 ) (872 ) (2,892 ) (2,669 ) -------- - -------- - --------- - --------- - NOI 43,228 44,018 174,623 182,959 NOI from Other Investments (2,939 ) (5,407 ) (25,586 ) (38,065 ) -------- - -------- - --------- - --------- - Same Property NOI with Redevelopment 40,289 38,611 149,037 144,894 NOI from Redevelopment (1) (3,828 ) (2,944 ) (14,185 ) (11,659 ) -------- - -------- - --------- - --------- - Same Property NOI without Redevelopment $ 36,461 $ 35,667 $ 134,852 $ 133,235 -------------------------------------------------------- ---------- ---------- ----------- ----------- (1) The NOI from Redevelopment adjustments represent 100% of the NOI related to Deerfield Towne Center and Woodbury Lakes, and a portion of the NOI related to specific GLA at Buttermilk Towne Center, Front Range Village, The Shoppes at Fox River, The Shops on Lane Avenue and Troy Marketplace for all periods presented. A portion of the NOI related to specific GLA at River City Marketplace, Spring Meadows and Town & Country Crossing is adjusted for only the twelve-month periods presented. Because of the redevelopment activity, the center or specific space is not considered comparable for the periods presented and is adjusted out of Same Property NOI with Redevelopment in arriving at Same Property NOI without Redevelopment.

RPT REALTY RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (amounts in thousands) Three Months Ended December 31, 2018 2017 ----------- ------------- Reconciliation of net (loss) income to annualized proforma adjusted EBITDA Net (loss) income $ (4,191 ) $ 21,424 Interest expense 11,085 10,995 Income tax provision 51 24 Depreciation and amortization 21,608 22,053 Gain on sale of depreciable real estate (3,699 ) (16,945 ) Provision for impairment on depreciable real estate 13,434 982 Pro-rata adjustments from unconsolidated entities 14 73 --------- - EBITDAre 38,302 38,606 Severance expense 192 60 Executive management organization, net 139 — Gain on sale of land (114 ) 102 Lease termination income (53 ) (23 ) Costs associated with early extinguishment of debt 134 — --------- - ----------- - Adjusted EBITDA 38,600 38,745 Proforma adjustments (1) (2,655 ) (1,324 ) --------- - ----------- - Proforma adjusted EBITDA $ 35,945 $ 37,421 Annualized proforma adjusted EBITDA $ 143,780 $ 149,684 - ------- - - --------- - Reconciliation of Notes Payable, net to Net Debt Notes payable, net $ 963,149 $ 999,215 Unamortized premium (2,948 ) (3,967 ) Deferred financing costs, net 3,058 3,821 --------- - ----------- - Consolidated notional debt 963,259 999,069 Pro-rata share of debt from unconsolidated joint venture — 12,699 Capital lease obligation 975 1,022 Cash and cash equivalents (41,064 ) (8,081 ) --------- - ----------- - Net debt $ 923,170 $ 1,004,709 - ------- - - --------- - Reconciliation of interest expense to total fixed charges Interest expense $ 11,085 $ 10,995 Preferred share dividends 1,675 1,675 Scheduled mortgage principal payments 658 758 --------- - ----------- - Total fixed charges $ 13,418 $ 13,428 - ------- - - --------- - Net debt to annualized proforma adjusted EBITDA 6.4 x 6.7 x Interest coverage ratio (proforma adjusted EBITDA / interest expense) 3.2 x 3.5 x Fixed charge coverage ratio (proforma adjusted EBITDA / fixed charges) 2.7 x 2.9 x -------------------------------------------------------------------------- ----------- ------------- (1) 4Q18 excludes $2.7 million from dispositions and 4Q17 excludes $1.3 million from acquisitions and dispositions including our Millennium Park joint venture. The proforma adjustments treat the activity as if they occurred at the start of each quarter.

RPT RealtyNon-GAAP Financial Definitions

Certain of our key performance indicators are considered non-GAAP financial measures. Management uses these measures along with our GAAP financial statements in order to evaluate our operations results. We believe these additional measures provide users of our financial information additional comparable indicators of our industry, as well as our performance.

Funds From Operations (FFO) Available to Common ShareholdersAs defined by the National Association of Real Estate Investment Trusts (NAREIT), Funds From Operations (FFO) represents net income computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of depreciable property and impairment provisions on depreciable real estate or on investments in non-consolidated investees that are driven by measurable decreases in the fair value of depreciable real estate held by the investee, plus depreciation and amortization, (excluding amortization of financing costs). Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. We have adopted the NAREIT definition in our computation of FFO available to common shareholders.

Operating FFO Available to Common ShareholdersIn addition to FFO available to common shareholders, we include Operating FFO available to common shareholders as an additional measure of our financial and operating performance. Operating FFO excludes acquisition costs and periodic items such as gains (or losses) from sales of land and impairment provisions on land available for development or sale, bargain purchase gains, severance expense, executive management reorganization costs, net, accelerated amortization of debt premiums and gains or losses on extinguishment of debt that are not adjusted under the current NAREIT definition of FFO. We provide a reconciliation of FFO to Operating FFO. FFO and Operating FFO should not be considered alternatives to GAAP net income available to common shareholders or as alternatives to cash flow as measures of liquidity.

While we consider FFO available to common shareholders and Operating FFO available to common shareholders useful measures for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs, our computations of FFO and Operating FFO may differ from the computations utilized by other real estate companies, and therefore, may not be comparable. We recognize the limitations of FFO and Operating FFO when compared to GAAP net income available to common shareholders. FFO and Operating FFO available to common shareholders do not represent amounts available for needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. In addition, FFO and Operating FFO do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the payment of dividends. FFO and Operating FFO are simply used as for reviewing our comparative operating and financial performance between periods or to compare our performance to different REITs, our computations of FFO and Operating FFO may differ from the computations utilized by other real estate companies, and therefore, may not be comparable.

EBITDAre/Adjusted EBITDA/Proforma Adjusted EBITDANAREIT defines EBITDAre as net income computed in accordance with GAAP, plus interest expense, income tax expense (benefit), depreciation and amortization and impairment of depreciable real estate and in substance real estate equity investments; plus or minus gains or losses from sales of operating real estate assets and interests in real estate equity investments; and adjustments to reflect our share of unconsolidated real estate joint ventures and partnerships for these items. The Company calculates EBITDAre in a manner consistent with the NAREIT definition. The Company also presents Adjusted EBITDA which is EBITDAre net of severance expense, lease termination income, and other non-recurring items. EBITDAre and Adjusted EBITDA should not be considered an alternative measure of operating results or cash flow from operations as determined in accordance with GAAP. Proforma Adjusted EBITDA further adjusts for the effect of the acquisition or disposition of properties during the period.

Same Property Operating IncomeSame Property Operating Income (“Same Property NOI with Redevelopment”) is a supplemental non-GAAP financial measure of real estate companies’ operating performance. Same Property NOI with Redevelopment is considered by management to be a relevant performance measure of our operations because it includes only the NOI of comparable properties for the reporting period. Same Property NOI with Redevelopment excludes acquisitions and dispositions. Same Property NOI with Redevelopment is calculated using consolidated operating income and adjusted to exclude management and other fee income, depreciation and amortization, general and administrative expense, provision for impairment and non-comparable income/expense adjustments such as straight-line rents, lease termination fees, above/below market rents, and other non-comparable operating income and expense adjustments.

In addition to Same Property NOI with Redevelopment, the Company also believes Same Property NOI without Redevelopment to be a relevant performance measure of our operations. Same Property NOI without Redevelopment follows the same methodology as Same Property NOI with Redevelopment, however it excludes redevelopment activity that significantly impacts the entire property, as well as lesser redevelopment activity where we are adding GLA or retenanting a specific space. A property is designated as redevelopment when projected costs exceed $1.0 million, and the construction impacts approximately 20% or more of the income producing property’s gross leasable area (“GLA”) or the location and nature of the construction significantly impacts or disrupts the daily operations of the property. Redevelopment may also include a portion of certain properties designated as same property for which we are adding additional GLA or retenanting space.

Same Property NOI should not be considered an alternative to net income in accordance with GAAP or as a measure of liquidity. Our method of calculating Same Property NOI may differ from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

RPT RealtyNon-GAAP Financial Definitions (continued)

OccupancyOccupancy is defined, for a property or group of properties, as the ratio, expressed as a percentage, of (a) the number of square feet of such property economically occupied by tenants under leases with an initial term of greater than one year, to (b) the aggregate number of square feet for such property.

Leased RateLease Rate is defined, for a property or group of properties, as the ratio, expressed as a percentage, of (a) the number of square feet of such property occupied by tenants at the time the lease was executed with an initial term of greater than one year, to (b) the aggregate number of square feet for such property.