WP GLIMCHER Inc. (NYSE:WPG.PRI) Q4 2016 Earnings Conference Call - Final Transcript

Feb 23, 2017 • 01:00 pm ET

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WP GLIMCHER Inc. (NYSE:WPG.PRI) Q4 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentleman, and welcome to the Washington Prime Group's Fourth Quarter 2016 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to hand the floor over to Lisa Indest, Senior Vice President of Finance and Chief Accounting Officer. Please go ahead.

Executive
Lisa Indest

Good afternoon, and welcome to WPG's fourth quarter 2016 earnings call.

During today's call, we will make certain forward-looking statements as defined by the federal securities laws. These statements relate to expectations, beliefs, projections, plans and other matters that are not historical and are subject to the risks and uncertainties that might affect future events or results. For a detailed description of these risks, please refer to our earnings release and various SEC filings.

Management may also discuss certain non-GAAP financial measures. Reconciliations of each non-GAAP financial measure to the comparable GAAP measure are included in our press release, supplemental information packet and SEC filings, which are available on the Investor Relations section of our website.

Members of management with us today are Lou Conforti, CEO; Butch Knerr, COO; and Mark Yale, CFO.

Now, I'd like to turn the call over to Lou.

Executive
Louis Conforti

Good afternoon. Thanks for joining us and let's get down to business. Over the previous six months, we've worked our tails off to foundationally strengthen the Company and while improvements are always ongoing, we've accomplished this objective. I'll cut to the quick. As a result of such measures, we're forecasting moderate transactional dilution for 2017. It's important to emphasize the transactional versus operational, as these actions were proactively implemented by my team and me.

As the son of a former boxer, my father always told me you need to strengthen your core before you work on your biceps. The previous six months has been characterized by lots and lots of sit-ups, while pretty much foregoing the curl bar. It is simple. If we get punched in the stomach, we want to be able to shrug off these body blows and continue our grinding it out. If the quid pro quo of this one-time dilution has been to reinforce our investment-grade balance sheet with net debt-to-EBITDA ratio of 6.3 times and $900 million of cash and credit availability, it's a trade-off I'll make every single time.

I'll be providing operational, financial and strategic highlights with Butch and Mark providing the details. We're also going to discuss redevelopment in depth, as we believe it is our most intriguing value proposition. Last, I'll spend a few seconds about innovation and how we're utilizing it to lease space, generate sponsorship revenue and in general, transform our assets into town centers where shoppers are actually excited about spending time and money. First a few highlights. Comparable NOI growth for 2016 was 2.1% across our core assets. It's worth mentioning the performance of our various classifications. Tier 1 enclosed increased a healthy 3.2% and Tier 2, while decreasing a negative 2.6%, there are 21 assets in the Tier 2 basket and it