Kite Realty Group Trust · NYSE:KRG

Kite Realty Group Trust — Investor Presentation (September 2016)

31 slides from Kite Realty Group Trust's investor presentation, Sep 12, 2016

  1. Slide 1: Investor Update Q2 2016

    INVESTOR UPDATE Q2 2016 Chapel Hill (Dallas, TX) Livingston Center (Livingston, NJ)

  2. Slide 2: Company Snapshot

    © 2016 Kite Realty Group kiterealty.com Investor Update | 2 COMPANY SNAPSHOT KITE REALTY GROUP TRUST Note: All data as of 06/30/16 unless otherwise noted. 1.) Source: SNL; Dividend yield calculated as most recent dividend, annualized and expressed as a percent of the security price. 2.) Demographic

  3. Slide 3: Kite's Strategy Focuses on the Core of the Business

    © 2016 Kite Realty Group kiterealty.com Investor Update | 3 KITE’S STRATEGY FOCUSES ON THE “CORE” OF THE BUSINESS C ULTURE & PASSION • MANAGEMENT CONSISTENCY • EFFICIENT OPERATING PLATFORM O PERATIONAL EXCELLENCE • HIGH-QUALITY PORTFOLIO • TOP-TIER FINANCIAL RESULTS R ESILIENT BALANCE SHEET • WELL-S

  4. Slide 4: Kite's 3-Year Core Roadmap to Unlock Value

    © 2016 Kite Realty Group kiterealty.com Investor Update | 4 KITE’S 3-YEAR CORE ROADMAP TO UNLOCK VALUE FFO, as Adjusted Per Share Free Cash Flow Net Debt / Adjusted EBITDA Floating Rate Debt Shops Leased Dividend Per Share 2017 2018YE Goal 2015YE 2016 $1.99 6.98x 12% 87.6% ~$50mm $1.09 6.0x – 6.25x

  5. Slide 5: Kite's Core Model Intertwined in All Aspects

    © 2016 Kite Realty Group kiterealty.com Investor Update | 5 KITE’S CORE MODEL INTERTWINED IN ALL ASPECTS CORPORATE IDENTITY & OPERATIONS HIGH-QUALITY PORTFOLIO PORTFOLIO TRANSFORMATION INVESTMENT GRADE BALANCE SHEET  Long-standing, experienced management team  Community involvement  Top-tier oper

  6. Slide 6: Earnings Growth Further Supports Investment

    © 2016 Kite Realty Group kiterealty.com Investor Update | 6 EARNINGS GROWTH FURTHER SUPPORTS INVESTMENT STATED GOAL: 12-16% FFO GROWTH (2015-2018E) (1) $1.99 2015 2018E Goal: +12-16% 20-25% 25-30% 30-35% 15-20% COMPONENTS OF FFO GROWTH Minimum Rent Other 3-R Shop Lease Up/SSNOI Under Construction De

  7. Slide 7: KRG Provides Attractive Investment Opportunity

    © 2016 Kite Realty Group kiterealty.com Investor Update | 7 KRG PROVIDES ATTRACTIVE INVESTMENT OPPORTUNITY 1.) Source: SNL Financial; Total Return (RMS Index) and implied dividend contribution (estimated as RMS less RMZ index) from December 2009 – September 2016. 2.) 2016E FFO per share refers to co

  8. Slide 8: Corporate Identity & Operations

    CORPORATE IDENTITY & OPERATIONS

  9. Slide 9: Company and Portfolio Transformation Since 2010

    © 2016 Kite Realty Group kiterealty.com Investor Update | 9 $1.70 $2.06 2010 2016E  Transformed 86% of portfolio into higher-quality assets since 2010 (1)  Obtained investment grade rating by Moody’s and S&P (Baa3 / BBB-)  Executed inaugural private placement bond deal in 2015  Increased free ca

  10. Slide 10: Kite Consistently Maintains Top-Tier SSNOI Growth

    © 2016 Kite Realty Group kiterealty.com Investor Update | 10 KITE CONSISTENTLY MAINTAINS TOP-TIER SSNOI GROWTH 4.9% 4.3% 4.0% 3.7% 3.5% 3.3% 3.3% 3.1% 2.9% 2.8% 2.8% 2.6% 1.9% ROIC AKR KRG EQY BRX REG WRI DDR RPT FRT RPAI KIM CDR QUARTERLY AVERAGE SSNOI GROWTH FROM Q2’14-Q2’16 (1) Peer average ~3.3%

  11. Slide 11: Continued Operational Efficiencies Within Portfolio

    © 2016 Kite Realty Group kiterealty.com Investor Update | 11 CONTINUED OPERATIONAL EFFICIENCIES WITHIN PORTFOLIO 83.4% 85.9% 89.5% 89.6% 89.0% 87.3% 90.1% 95.4% 95.3% 95.2% 94.8% 94.9% 95.4% 95.2% Q2'13 Q4'13 Q2'14 Q4'14 Q2'15 Q4'15 Q2'16 % Recovery - Retail Portfolio % Leased - Retail Portfolio 1.)

  12. Slide 12: Sustainability and Corporate Responsibility

    © 2016 Kite Realty Group kiterealty.com Investor Update | 12 SUSTAINABILITY AND CORPORATE RESPONSIBILITY COMMITTED TO THE COMMUNITY ENVIRONMENTALLY-CONSCIOUS EFFORTS TOTAL KITE ENVIRONMENTAL SAVINGS (1) • Facilitate opportunities to meet the needs, improve wellness, and enhance educational experienc

  13. Slide 13: High-Quality Portfolio

    HIGH-QUALITY PORTFOLIO

  14. Slide 14: High-Quality, Diverse Tenant Base and Geography

    © 2016 Kite Realty Group kiterealty.com Investor Update | 14 Midwest 17% Northeast 11% Mid- Central 17% West 12% Southeast 18% Florida 25% HIGH-QUALITY, DIVERSE TENANT BASE AND GEOGRAPHY Top Tenants By ABR # Stores % ABR 1 Publix 18 3.1% 2 TJ Maxx 22 2.5% 3 Petsmart 20 2.3% 4 Bed Bath & Beyond 19 2.

  15. Slide 15: Asset Quality Supported by Market Demographics

    © 2016 Kite Realty Group kiterealty.com Investor Update | 15 ASSET QUALITY SUPPORTED BY MARKET DEMOGRAPHICS ASSETS ACROSS THE TOP 5 MARKETS SUPERIORLY POSITIONED Median Household Income Source: STI: Popstats; information based on a 3-mile radius for the KRG portfolio. $54K $68K $66K $61K $66K $47K $

  16. Slide 16: Necessity Driven and Internet Resistant Retailer Base

    © 2016 Kite Realty Group kiterealty.com Investor Update| 16 INTERNET RESISTANT 54% SERVICES, ENTERTAINMENT 19% GROCERY, SPECIALTY STORES 19% RESTAURANTS 16% OMNI-CHANNEL 38% DISCOUNT RETAILERS 15% HOME IMPROVEMENT/GOODS 11% SOFT GOODS 8% SPORTING GOODS 4% NON-RESISTANT 8% ELECTRONICS / BOOKS 5% OFFI

  17. Slide 17: Portfolio of High-Quality, Diverse Assets

    © 2016 Kite Realty Group kiterealty.com Investor Update| 17 Dallas, TX Owned GLA 126,755 ABR per SF $24.09 % Leased 92.5% PORTFOLIO OF HIGH-QUALITY, DIVERSE ASSETS DELRAY MARKETPLACE CHAPEL HILL RIVERS EDGE CENTENNIAL CENTER Delray, FL Owned GLA 260,094 ABR per SF $25.16 % Leased 96.7% Indianapolis,

  18. Slide 18: Portfolio Transformation

    PORTFOLIO TRANSFORMATION

  19. Slide 19: Stabilized Ground-Up Developments

    © 2016 Kite Realty Group kiterealty.com Investor Update | 19 STABILIZED GROUND-UP DEVELOPMENTS  Power center consisting of premier national retailers  Accelerated development timing resulted in early store openings  Future growth expected via contractual rent terms and outparcel opportunities TAM

  20. Slide 20: In-Process Redevelopment & 3-R Platform

    © 2016 Kite Realty Group kiterealty.com Investor Update | 20  In-process projects of ~$43.5mm  Major Redevelopment:  City Center  Optimizing Existing Vacancies / Right-sizing:  Bolton Plaza Phase II  Northdale Promenade  Hitchcock Plaza  Shops at Moore  Tarpon Bay Plaza IN-PROCESS REDEVELOP

  21. Slide 21: Proven Ability to Create Ongoing Synergies

    © 2016 Kite Realty Group kiterealty.com Investor Update | 21 PROVEN ABILITY TO CREATE ONGOING SYNERGIES NO I MAR G IN 69.3% 77.8% PRE-TRANSACTION Q2'16 72.1% 76.8% PRE-TRANSACTION Q2'16 RECOVERY RATI O 70.1% 82.6% PRE-TRANSACTION Q2'16 80.5% 92.7% PRE-TRANSACTION Q2'16 9 Property Portfolio Acquisiti

  22. Slide 22: Investment Grade Balance Sheet

    INVESTMENT GRADE BALANCE SHEET

  23. Slide 23: Resilient Balance Sheet

    © 2016 Kite Realty Group kiterealty.com Investor Update | 23 RESILIENT BALANCE SHEET  Moody’s / S&P Ratings: Baa3 / BBB-  Fixed Charge Coverage: 3.7x (1)  Net Debt / Adjusted EBITDA: 6.9x  Secured Debt / Undepreciated Total Assets: 19.3%  Unencumbered Assets / Total Assets: 59.7% 1.) Fixed Char

  24. Slide 24: Further Enhanced Financial Flexibility

    © 2016 Kite Realty Group kiterealty.com Investor Update | 24 2010 Q2'16 ~2x higher FURTHER ENHANCED FINANCIAL FLEXIBILITY NET DEBT / ADJUSTED EBITDA 2010 Q2'16 FLOATING RATE EXPOSURE 21% 9% -1,200 bps FIXED CHARGE COVERAGE x 3.7x 2010 Q2'16 6.9x ~2x lower 9.1x  Maintain and continue to improve inve

  25. Slide 25: Well-Staggered Debt Maturity Profile

    © 2016 Kite Realty Group kiterealty.com Investor Update | 25 WELL-STAGGERED DEBT MATURITY PROFILE 1. Data is as of Q2’16 with pro forma adjustments. Chart excludes annual principal payments and net premiums on fixed rate debt. Pro forma adjustments include: Term Loan & Revolver Recast – completed in

  26. Slide 26: Forward-Looking Statements

    © 2016 Kite Realty Group kiterealty.com Investor Update | 26 FORWARD-LOOKING STATEMENTS This presentation, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Secti

  27. Slide 27: Non-GAAP Financial Measures: Funds from Operations

    © 2016 Kite Realty Group kiterealty.com Investor Update | 27 NON-GAAP FINANCIAL MEASURES Funds from Operations Funds from Operations (FFO) is a widely used performance measure for real estate companies and is provided here as a supplemental measure of operating performance. We calculate FFO in accor

  28. Slide 28: Non-GAAP Financial Measures: EBITDA

    © 2016 Kite Realty Group kiterealty.com Investor Update | 28 NON-GAAP FINANCIAL MEASURES Earnings Before Interest Expense, Income Tax Expense, Depreciation and Amortization (EBITDA) We define EBITDA, a non-GAAP financial measure, as net income before depreciation and amortization, interest expense a

  29. Slide 29: Appendix – Reconciliation of FFO to Net Income (Loss)

    © 2016 Kite Realty Group kiterealty.com Investor Update | 29 APPENDIX – RECONCILIATION OF FFO TO NET INCOME (LOSS) 1.) “Funds From Operations of the Kite Portfolio" measures 100% of the operating performance of the Operating Partnership’s real estate properties and construction and service subsidiar

  30. Slide 30: Appendix – Reconciliation of Same Property NOI to Net Income

    © 2016 Kite Realty Group kiterealty.com Investor Update | 30 APPENDIX – RECONCILIATION OF SAME PROPERTY NOI TO NET INCOME 1.) Same property analysis excludes operating properties in redevelopment as well as office properties (Thirty South Meridian and Eddy Street Commons). 2.) Excludes leases that a

  31. Slide 31: Appendix – Reconciliation of EBITDA / Adjusted EBITDA to Net Income (Loss)

    © 2016 Kite Realty Group kiterealty.com Investor Update | 31 APPENDIX – RECONCILIATION OF EBITDA / ADJUSTED EBITDA TO NET INCOME (LOSS) 1.) Represents Adjusted EBITDA for the three months ended June 30, 2016 (as shown in the table above) multiplied by four. Three Months Ended 2016 June 30, 2016 Cons

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