Company – Scrape Financial
Risk Factors Summary

Risk Factors Update Summary

  • Gross interest expense increased by $42 million, primarily due to increased borrowings.
  • Adjusted EBITDA to fixed charges ratio improved from 1.9x to 3.0x.
  • Added "development pipelines" in place of "developments" in the risk factors, emphasizing future growth strategies.
  • The company suspended its quarterly dividend in September 2023 to address liquidity, impacting shareholders.
  • The covenant levels for total liabilities to total asset value decreased from 47% to 45.1%.
  • The Company settled the Quixote note for $150.0 million, resulting in a gain of $10.0 million.
  • Cash and cash equivalents increased significantly from $255,761 to $285,731.
  • Increased future development pipeline square footage from 583,000 to 233,000, indicating a strategic shift.
  • The Company sold properties for $102.8 million, $46.0 million, $96.32 million, $40.0 million, $43.5 million, and $700 million.
  • Property acquisitions decreased by $21,448 million from $118,907 million to $96,459 million.
  • Dividends per share for common stock decreased from $1.00 in 2022 to $0.375 in 2023. Series A preferred units' dividends decreased from $1.5625 to $1.1875.
  • Non-cash interest expense increased by $16.7 million, driven by mark-to-market adjustments.
  • Impairment charges increased significantly from $28,548 to $60,158 million in 2023.
  • The Company did not utilize the ATM program during the years ended December 31, 2023 and 2022. During the year ended December 31, 2021, the Company utilized the ATM program and sold 1,526,163 shares for $37.1 million.
  • Modified leverage ratio covenants to 65% from 60% until 12/31/2024, impacting financial flexibility.
  • Decreased total under construction and future development from 589 to 252, reflecting a change in expansion plans.
  • Capitalized interest increased by $14 million, primarily due to development activities at Washington 1000.
  • Net loss increased from $16,517 to $170,700 million in 2023.
  • Contributions to non-real estate investments increased by $4,512 million from $12,397 million to $17,109 million.
  • Downgrades in credit ratings could significantly affect business, financial condition, and securities trading.
  • Unsecured indebtedness to unencumbered asset value decreased from 51.3% to 41.8%.
  • Interest expense increased from $149,901 to $214,415 for the year ended December 31, 2023.
  • The Company declared dividends on a quarterly basis and paid dividends during the quarters in which they were declared. The common stock dividend was temporarily suspended in September 2023.
  • The Company repurchased 2.1 million shares of its common stock at a weighted average price of $17 per share for $37.1 million before transaction costs during the year ended December 31, 2023. This is a decrease from repurchasing 1.9 million shares at a weighted average price of $23 per share for $46.1 million in 2022.
  • Restricted cash increased from $29,970 to $100.
  • Tenant improvement costs per square foot decreased from $11.66 to $8.77 in 2023.
  • Reduced NOI from $612,406 to $560,988, impacting financial performance and potential investor returns.
  • Decrease in the percentage of the 15 largest tenants from 44% to 42% in 2023.
  • Distributions from non-real estate investments increased by $739 million from $53 million to $1,238 million.
  • Depreciation and amortization rose from $343,614 to $373,219 million in 2023.
  • Depreciation and amortization expense increased by $24.6 million, related to property acquisitions.
  • Share repurchases totaled $214.7 million through December 31, 2023, compared to $213.4 million through December 31, 2022.
  • The Company recognized $4.2 million in cost reimbursements from unconsolidated real estate entities in 2023, an increase from $1.1 million in 2022.
  • Secured indebtedness to total asset value ratio decreased from 21.4% to 19.9%.
  • The Company modified a loan agreement to replace the LIBOR-based rate with a term SOFR-based rate.
  • Accounts receivable increased from $16.9 million to $25.0 million with a $0.3 million allowance.
  • Lowered rental revenues from $794,164 to $722,059, indicating a shift in income sources.
  • Decrease in the percentage of the three largest tenants from 22% to 20% in 2023.
  • The Company contributed $38.2 million to fund investments as of December 31, 2023, with $12.9 million remaining to be contributed, compared to contributing $33 million with $14.8 million remaining as of December 31, 2022.
  • Loss on extinguishment of debt increased by $34 million due to the partial sale of acquired debt.
  • Additions to non-real estate property, plant, and equipment decreased by $14,469 million from $20,209 million to $5,740 million.
  • Straight-line rent receivables decreased from $279 million to $220 million.
  • Proceeds from sale of non-real estate investment increased by $539 million from $503 million to $1,042 million.
  • Deferred tax assets decreased from $5,317 to $2,412.
  • Increase in the percentage of square footage expiring from 19% to 24% in 2023.
  • Increased operating expenses from $289,507 to $335,847, affecting cost management strategies.
  • Gain on sale of real estate increased by $103.2 million, driven by property sales.
  • Prepaid expenses and other assets increased from $47,329 to $48,581.
  • Decrease in the percentage of square footage expiring in 2023 from 13% to 12%.
  • Decreased NOI from $491,243 to $121,163, signaling a significant impact on operational efficiency.
  • Other income increased by $11.5 million, primarily due to the full impairment of the Zio trade name.
  • Non-real estate investments decreased from $119,000 to $94,145.
  • Suspended quarterly dividend to address liquidity concerns due to industry trends and strikes.

Full Text Changes in Most Recent 10-K

Intended use: review the highlighted statements. These are additions to the risk factors disclosure in the most recent 10-K filing compared to the previous 10-K filing. Deleted and moved text is less important and is shown for context.

To view the full company filings, click on the following link to be taken to the SEC EDGAR database landing page for the company: https://www.sec.gov/edgar/browse/?CIK=1482512&owner=exclude

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