Developers Diversified Realty reports smaller fourth-quarter loss

Posted by admin on February 18th, 2010

Developers Diversified Realty Corp. (NYSE: DDR) has reported a smaller fourth-quarter loss than it posted in the year-earlier period.The real estate investment trust that specializes in shopping centers also has removed the “interm” tag from the title of its chief financial officer.Developers Diversified said its net loss applicable to common shareholders in the latest fourth quarter totaled $90.1 million, or 46 cents a share, which is less than its loss of $194.6 million, or $1.61 a share, in the fourth quarter of 2008.Developers Diversified said funds from operations, a common measurement of REIT performance, totaled a loss applicable to common shareholders of $28 million, or 14 cents a share, compared to a loss of $119.3 million, or 98 cents a share, in the fourth quarter of 2008.The company said net charges in the latest fourth quarter totaled $90. 8 million, or less than half the net charges of $206.1 million that it absorbed in the fourth quarter of 2008.

Per-share losses in the latest fourth quarter have been diluted by a big increase in common shares outstanding over the last 12 months.

Last year, the company issued 32.9 million shares to German investor Alexander Otto and certain members of his family as it looked to bolster its finances. The REIT also issued warrants for the Otto family to buy up to 10 million common shares at an exercise price of $6 a share.

Developers Diversified also has been selling stock to the broader market as well.

The company said it sold about 5.1 million shares during the three-month period that ended Dec. 31, 2009, through its continuous equity program, generating proceeds of $50 million. In January of this year, the company sold approximately 5 million shares through the continuous equity program to generate proceeds of $46.1 million. Nearly all the money was used to repay debt.

Just this month, the company issued and sold 42.9 million shares in an underwritten offering. Net proceeds from the latest sale totaled $338.1 million, and the money was used to repay debt.

The company reported average shares outstanding during the latest fourth quarter of 196.4 million, up 62% from 121 million in the year-earlier period.

Separately, Developers Diversified announced that David J. Oakes has been named senior executive vice president and chief financial officer. Mr. Oakes most recently served as senior executive vice president of finance, chief investment officer and interim chief financial officer.

“After an extensive national search and meeting an extremely talented pool of candidates, it became patently obvious that the most qualified candidate was David,” Developers Diversified president and CEO Daniel B. Hurwitz said in a statement. “Over the past 18 months he has developed and executed the restructuring strategy for our balance sheet, raised over $2 billion of capital, has emerged as an internal leader and is widely respected by the investing and lending communities. I have valued my partnership with him as CIO and look forward to his continued prudent financial leadership as CFO.”

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