Acadia Realty Trust Announces Fourth Quarter and Year-End 2003 Operating Results; 2003 Earnings Driven by Strong External Growth and Solid Portfolio Performance.Business Editors/Real Estate Writers NEW YORK--(BUSINESS WIRE)--Feb. 17, 2004 Acadia Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Trust (NYSE NYSE See: New York Stock Exchange : AKR AKR Auroral Kilometric Radiation AKR Vehicle Cargo Ship AKR Address Key Register AKR Anime Kingdom Rebirth - "Acadia" or the "Company"), a real estate investment trust ("REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ") and owner and operator of shopping centers shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into anchored by grocery and value-oriented retail, today reported operating results for the quarter and year ended December 31, 2003. All per share amounts are on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. 2003 Highlights Quarter and year-end earnings on track -- Funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. ("FFO FFO See: Funds from operations ") per share for the quarter of $0.19 included charges totaling $0.04 for a non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. associated with the redevelopment of the Town Line Plaza and share option-based compensation. FFO before these charges was consistent with guidance and represented a 20% increase over 2002 FFO from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the -- FFO per share for the year were $0.92, which, before the above charges exceeded 2003 guidance by $0.01 -- Earnings per share for the quarter and year were $(0.04) and $0.27, respectively Portfolio occupancy up 1.3% with 10.1% rent spreads -- Executed new and renewal leases totaling 568,000 square feet, or 8% of the portfolio -- Town Line Plaza added to redevelopment pipeline -- Two former Ames Ames, city (1990 pop. 47,198), Story co., central Iowa, on the Skunk River; inc. 1870. Its chief manufactures are electronic, water-analysis, and water-treatment equipment; motor vehicles; construction materials; and machinery. Iowa State Univ. centers re-anchored at average 62% base rent increase Balance sheet ratios remain strong - Dividend increased -- 39% debt to total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. -- 3.0 to 1 fixed-charge coverage fixed-charge coverage The number of times that a firm's operating income exceeds its fixed payments. Fixed-charge coverage is a measure of a firm's ability to meet contractually fixed payments, with high coverage indicating significant flexibility for making -- 85% of debt is fixed-rate -- Dividend increased by 10% for fourth quarter 2003 -- Maintained conservative dividend payout ratio Dividend Payout Ratio The percentage of earnings paid to shareholders in dividends. Calculated as: for 2003 of 63% of FFO 2003 earnings fueled by $0.095 FFO accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the from two portfolio acquisitions - Future growth opportunities enhanced with new venture -- Brandywine Portfolio; one-million square foot value-based retail portfolio -- Kroger/Safeway Portfolio; one-million square foot supermarket portfolio of 25 Kroger and Safeway supermarkets -- Formation of new venture in 2004 with Klaff Realty, L.P. and Lubert-Adler Management, Inc. for investments in surplus and underutilized properties Fourth Quarter and Year-End Operating Results - In-Line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. with Guidance Fourth quarter FFO was $5.7 million, or $0.19 per share. These results include a charge of $1.0 million for option-based compensation as well as a non-cash charge of approximately $200,000 as a result of the straight-line rent write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. related to the buyout Buyout The purchase of a company or a controlling interest of a corporation's shares. Notes: A leveraged buyout is accomplished with borrowed money or by issuing more stock. and termination of the former anchor lease at the Company's Town Line Plaza redevelopment project. A new lease has been executed for a Super Stop & Shop supermarket at a 33% increase in total rent over the former anchor with no interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. in rent payments. Before these charges, fourth quarter FFO was $6.9 million, or $0.23 per share, which was in-line with Acadia's 2003 earnings guidance and represented a 20 % increase over 2002 FFO from continuing operations of $0.19 per share. FFO for the year was $26.9 million, or $0.92 per share. Before the above charges, FFO was $28.1 million, or $0.96 per share, which was $0.01 per share above the upper range of Acadia's 2003 earnings guidance. For comparative purposes, 2003 FFO also included $1.2 million, or $0.04 per share of additional rents received during the first quarter related to the assignment of an anchor lease, while 2002 FFO from continuing operations of $27.4 million, or $0.94 per share, included $3.8 million, or $0.13 of lease termination income received from a single former tenant. Net loss for the fourth quarter 2003 was $1.2 million, or $0.04 per share on a fully diluted basis. This included the above charges as well as an additional non-cash write-off of $2.7 million of unamortized tenant improvement costs related to the buyout and termination of the former anchor at the Town Line Plaza redevelopment project. This compares with fourth quarter 2002 net income of $7.2 million, or $0.28 per share, which included income of $5.8 million, or $0.22 per share from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Net income for the year ended December 31, 2003 was $7.1 million, or $0.27 per share compared to 2002 net income of $19.4 million or $0.76 per share. Included in 2002 net income was $7.9 million in income from discontinued operations, totaling $0.31 per share. Redevelopment Activity - New Project Added to Redevelopment Pipeline - New Anchors Now Open in Former Ames Locations As previously announced, Acadia added an additional project to its redevelopment pipeline during the quarter. The Company's three existing projects progressed on time and on budget during 2003: Super Stop & Shop to Replace GU Markets at the Town Line Plaza Acadia is re-anchoring the center with a new Super Stop & Shop supermarket, replacing a former GU Markets at the Town Line Plaza, located in Rocky Hill, Connecticut Rocky Hill is a town in Hartford County, Connecticut, United States with a population of 17,966 as of the 2000 census. Rocky Hill was part of Wethersfield, the neighboring town to the north, until it was indepedently incorporated in 1849. . The existing building is being demolished de·mol·ish tr.v. de·mol·ished, de·mol·ish·ing, de·mol·ish·es 1. To tear down completely; raze. 2. To do away with completely; put an end to. 3. and will be replaced with a 66,000 square foot Super Stop & Shop. The new supermarket anchor is paying total rent at a 33% increase over that of the former tenant with no interruption in rent payments. It is anticipated this project will be completed during the first quarter of 2005. Home Depot The Home Depot (NYSE: HD) is an American retailer of home improvement and construction products and services. Headquartered in Vinings, just outside Atlanta in unincorporated Cobb County, Georgia, Home Depot employs more than 355,000 people and operates 2,164 big-box Replaces Ames at the Plaza 422 Home Depot held its grand opening during the quarter at the Plaza 422 redevelopment project located in Lebanon, Pennsylvania Lebanon, Pennsylvania, formerly known as Steitztown, is the county seat of Lebanon County, PennsylvaniaGR6, United States. The population was 24,461 at the 2000 census. . The expansion of the former 83,000 square foot Ames space to a 104,000 square feet Home Depot included the recapture recapture n. in income tax, the requirement that the taxpayer pay the amount of tax savings from past years due to accelerated depreciation or deferred capital gains upon sale of property. (See: income tax) RECAPTURE, war. and demolition Demolition is the opposite of construction: the tearing-down of buildings and other structures. It contrasts with deconstruction, which is the taking down of a building while carefully preserving valuable elements for re-use. of the formerly enclosed en·close also in·close tr.v. en·closed, en·clos·ing, en·clos·es 1. To surround on all sides; close in. 2. To fence in so as to prevent common use: enclosed the pasture. portion of the center. Acadia is now collecting double the base rent of that which was paid by Ames. In connection with the redevelopment project, Acadia also recaptured another 48,000 square feet of space, for which re-leasing is underway. Bon Ton Department Store Replaces Ames at the New Loudon Center The Bon Ton Department Store also opened for business during the quarter as part of the redevelopment of the New Loudon Center located in Latham, New York Latham is a hamlet in Upstate New York. It is located along US 9 in the Town of Colonie, a dense suburb north and west of Albany. The latitude of Latham's center is 42.746N. The longitude is 73.759W. . Occupying 66,000 square feet formerly occupied by an Ames department store, Bon Ton is paying base rent at a 15% increase over that of Ames. In addition, Acadia has now leased the balance of the former Ames space to Marshall's, an existing tenant at the center, which will be expanding its current 26,000 square foot store to 37,000 square feet. The Company will also install a new 49,000 square foot Raymour and Flanigan Furniture store at this center. Following the completion of this project in mid- mid- pref. Middle: midbrain. 2004, this community shopping center will be 100% occupied. Gateway Shopping Center During 2003, Acadia completed the de-malling and re-anchoring of the Gateway Shopping Center located in South Burlington South Burlington, city (1990 pop. 12,809), Chittenden co., NW Vt., on Lake Champlain; inc. 1971. Electronic equipment, skiing equipment, and medical instruments are manufactured. Burlington International Airport is there. , VT. The project, formerly a partially enclosed mini-mall with an undersized undersized see dwarfism, runt. Grand Union, was converted into a new open-air community shopping center with a 72,000 square foot Shaw's supermarket which opened during the year. Portfolio Activity - Portfolio Occupancy up 1.3% On a year-over-year basis, Acadia increased its portfolio occupancy by 1.3%. Year-end 2003 occupancy was 87.6% compared to 86.3% at year-end 2002. The 2003 occupancy gains resulted primarily from the re-tenanting of two former Ames locations; Home Depot at the Plaza 422 and Bon Ton Department Store at the New Loudon Center. Current occupancy still reflects the temporary effect of two other former Ames locations for which leasing is still underway. These locations represent 166,000 square feet, or 3.2% of the total retail portfolio GLA. On a sequential basis, year-end 2003 occupancy decreased 20 basis points from that of third quarter 2003. This was primarily a result of the Company recapturing 48,000 square feet at the New Loudon Center redevelopment project which has already been re-leased to a Raymour and Flanigan Furniture store which is expected to open mid-2004. During 2003, Acadia executed new and renewal leases totaling 568,000 square feet, or 8% of the portfolio (including joint venture properties), at an average increase of 10.1% over the previous base rents on a cash basis. Average in-place rents were $10.22 per square foot at year-end which represents a 6.7% increase over 2002 in-place rents on a same property basis. Same property net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. ("NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics ") increased 2.0% for fourth quarter 2003 over 2002. Excluding the temporary $1.6 million effect from the four former Ames locations (two of which have now been re-anchored at an average 62% increase over the former Ames base rent), NOI was up 1.6% year over year. Including the impact from these closings, NOI declined $1.0 million, or 2.4%. Balance Sheet - Solid Platform for Growth For 2003, the strength of Acadia's balance sheet was evidenced by positive trends in its financial ratios as well as sufficient working capital to fund all of its foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. internal and external capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . All financial ratios include the Company's pro-rata Pro-rata Used to describe a proportionate allocation. Notes: For example, a pro-rata dividend means that every shareholder gets an equal proportion for each share they own. See also: Dividend share of unconsolidated joint venture debt and interest expense: -- Debt to total market capitalization at year-end was 39% compared with 49% for 2002 -- For 2003, 85% of the Company's total mortgage debt, inclusive of the effect of interest rate swaps Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. , was fixed-rate. This contrasts with 74% as of the end of 2002. This was accomplished while maintaining a blended cost of debt of 6.1% -- Fixed-charge ratio was 3.0 times (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become / interest expense plus preferred distributions) -- Dividend payout ratio for 2003 was 63% of FFO -- $50 million currently available under existing credit facilities to fund anticipated capital requirements Dividend Increase - 10% Increase for Fourth Quarter 2003 - Follows 11.5% Increase in First Quarter 2003 and 8% Increase in 2002 During the fourth quarter, Acadia's Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. approved an increase in Acadia's quarterly dividend to $0.16 per share, which represents a 10% increase over the $0.145 quarterly dividend paid by Acadia for the first three quarters of 2003. This increase was effective for the dividend paid January 15, 2004 to shareholders of record as of December 31, 2003. On an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, the dividend will increase $0.06 resulting in an annual dividend of $0.64. Acadia has now increased its dividend by more than 30% over the last two years. Even after the recent dividend increase, Acadia expects to maintain a conservative payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. of approximately 65% in 2004. External Growth Initiatives - Formation of New Venture Follows 2003 Acquisitions totaling $135 million Existing Joint Venture - Two Portfolio Acquisitions in 2003 contribute $0.095 FFO with Initial 15% Yields Acadia, through Acadia Strategic Opportunity Fund ("ASOF ASOF Arctic-Subarctic Ocean Flux (International Study of Environmental Arctic Change subprogram) ASOF ASEAN Senior Officials on Forestry ASOF Asparagus Officinalis (garden asparagus) ASOF Attack Ships on Fire "), acquired two portfolios totaling approximately 2.0 million square feet for $135 million during 2003. The first, the Kroger/Safeway Portfolio, is a one million square foot supermarket portfolio consisting of twenty-five anchor-only leases with either Kroger or Safeway supermarkets. The second is the Brandywine Portfolio, which totals one million square feet, consisting of two open-air, value-based shopping centers. Tenants at these properties include Target, Lowe's, TJ Maxx, Bed Bath & Beyond, Dick's Sporting Goods Dick's Sporting Goods (NYSE: DKS) is the largest full-line sporting goods retailer in the world. It is headquartered in Pittsburgh, Pennsylvania, USA and has locations in thirty-four states with 314 stores. and Trader Joe's Trader Joe's is a privately held chain of specialty grocery stores headquartered in Monrovia, California. As of September 2007, Trader Joe's has a total of 284 stores.[1] gourmet grocery. Both portfolios, which contributed a total of $0.095 incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. FFO in 2003, are performing ahead of their initial underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. with leveraged yields in excess of 15%. New Retail Venture - Additional Pipeline for External Growth As announced in January 2004, Acadia has formed a venture (the "Venture") with Klaff Realty, L.P. ("Klaff") and its long-time capital partner Lubert-Adler Management, Inc. ("Lubert-Adler") for the purpose of making investments in surplus or underutilized properties owned or controlled by retailers. The goal of the Venture will be to invest approximately $300 million in equity over the next three years. Acadia and its current acquisition fund, ASOF, as well as possible subsequent Acadia funds, anticipate investing $60 million, or 20%, of the equity of the Venture. This investment will be in addition to Acadia's current external growth initiatives. As an additional component to the transaction with Klaff, Acadia has also acquired Klaff's rights to provide asset management, leasing, disposition, development and construction services for an existing portfolio of retail properties and/or leasehold An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use land for a period of time. leasehold n. interests comprised of approximately 10 million square feet of retail space located throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (the "Klaff Portfolio"). The acquisition involves only Klaff's rights associated with operating the Klaff Portfolio and does not include equity interests in assets owned by Klaff or Lubert-Adler. The Klaff Portfolio consists of 144 properties, including 90 former Service Merchandise Service Merchandise was a chain of large stores carrying fine jewelry, toys, sporting goods, and electronics that existed from 1934 to 2002. The company's former chairman, Raymond Zimmerman, resurrected Service Merchandise as an Internet-only retailer in 2004 after buying the name stores acquired out of bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most , 35 Levitz Home Furnishing stores acquired through a sale-leaseback transaction and approximately 2 million square feet of other retail assets acquired by Klaff over the past 10 years. For the first two years, Acadia will jointly operate the Klaff Portfolio with Klaff's existing organization, ensuring the best possible management structure and a continuity of operations The degree or state of being continuous in the conduct of functions, tasks, or duties necessary to accomplish a military action or mission in carrying out the national military strategy. for current ownership. Thereafter, Acadia will assume responsibility for the operations of the majority of the Klaff Portfolio. Outlook - Earnings Guidance for 2004 On a fully diluted basis, the Company currently forecasts its 2004 FFO will range from $0.95 to $1.00 per share. 2004 earnings per diluted share is expected to range from $0.40 to $0.45 per share. Acadia's 2004 earnings guidance is based on the following assumptions: -- Same Property Occupancy and NOI The Company's same property portfolio (including joint venture properties on a pro-rata basis) is expected to experience stable growth of approximately 1% to 2% for 2004 with expected portfolio occupancy increasing approximately 1% over 2003. Revenue growth will be driven by redevelopment projects that came on-line in late 2003 as well as anticipated commencements during 2004. This may be partially offset by the potential impact of general tenant credit issues. Expense growth is anticipated to increase moderately from 2003 to 2004, primarily as a result of inflation. -- Acquisitions Acadia is currently forecasting an incremental external earnings contribution of $0.02 to $0.04 per share through its acquisition joint venture primarily in the second half of 2004. -- Interest Expense The Company's interest expense forecast assumes a 2% increase in LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). during 2004. -- General and Administrative 2004 general and administrative expense is expected to be consistent with 2003, as inflationary in·fla·tion·ar·y adj. Of, associated with, or tending to cause inflation: inflationary prices; inflationary policies. Adj. 1. increases for 2004 are anticipated to be offset by cost saving measures. -- Merchant Development and Lease Termination Income There is no projected income in 2004 from these activities. The following is a reconciliation of the calculation of FFO per diluted share and earnings per diluted share:
Guidance Range for 2004 Low High
----------------------- ---- ----
Earnings per diluted share $0.40 $0.45
Depreciation of real estate and amortization of leasing
costs:
Wholly owned and consolidated partnerships 0.48 0.48
Unconsolidated partnerships 0.07 0.07
----- -----
Funds from operations $0.95 $1.00
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Management Comments Commenting on the results for the quarter, Kenneth Bernstein, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , stated, "In 2003, our team was successful in driving the three key components of our business plan. First, we continued to enhance the value of our core portfolio with the launching of three profitable redevelopments which are expected to provide $0.02 to $0.03 of additional FFO in 2004. Second, we maintained and enhanced the strength and flexibility of our balance sheet. At year end our debt to total market cap was 39% and our fixed-charge coverage ratio Fixed-Charge Coverage Ratio A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated as the following: was 3.0 times. Our dividend payout ratio for the year was one of the most conservative in our sector at 63% even after raising our dividend 30% over two years. Third, we continued our highly opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. but disciplined acquisition program adding two important portfolio acquisitions that were consistent with our value-added focus. Looking ahead, the fundamentals of our business plan remain sound and compelling. The potential for internal growth through redevelopments and occupancy gains, coupled with an exciting external growth platform -- further enhanced by our recently announced venture with the Klaff Organization -- should enable us to continue to create strong shareholder value going forward." Investor Conference Call Kenneth Bernstein, President and CEO, and Michael Nelsen, Sr. Vice President and CFO See Chief Financial Officer. , will conduct a conference call February 18, 2004 at 12 Noon EST EST electroshock therapy. EST abbr. electroshock therapy to review the Company's earnings and operating results. The live conference call can be accessed by dialing 888-339-2688 (internationally 617-847-3007). No passcode is required. The call will also be webcast and can be accessed in a listen-only mode at Acadia's Web site at www.acadiarealty.com. If you are unable to participate during the live webcast, the call will be archived and available on Acadia's website. Alternatively, to access the replay by phone, dial 888-286-8010 (internationally 617-801-6888). The passcode will be 57909940. The phone replay will be available through Wednesday, February 25, 2004. Acadia Realty Trust, headquartered in White Plains, NY, is a fully integrated and self-managed real estate investment trust which specializes in the acquisition, redevelopment and operation of shopping centers which are anchored by grocery and value-oriented retail. Acadia currently owns (or has interests in) and operates 62 properties totaling approximately nine million square feet, located primarily in the Eastern United States. Certain matters in this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of federal securities law and as such may involve known and unknown risk, uncertainties and other factors which may cause the actual results, performances or achievements of Acadia to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such forward-looking statements speak only as of the date of this document. Acadia expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Acadia's expectations with regard thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. or change in events, conditions or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or on which any such statement is based. The Company also refers you to the documents filed by the Company, from time to time, with the Securities and Exchange Commission, including without limitation the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and the "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" incorporated by reference therein, for a discussion of such risks and uncertainties. The Company considers funds from operations ("FFO") as defined by the National Association of Real Estate Investment Trusts ("NAREIT NAREIT National Association of Real Estate Investment Trusts ") to be an appropriate supplemental disclosure of operating performance for an equity REIT Equity REIT A Real Estate Investment Trust that assumes ownership status in the property it invests in enabling investors of the REIT to earn dividends on rental income from the property and appreciation in property resale. Antithesis of a Mortgage REIT. due to its widespread acceptance and use within the REIT and analyst communities. FFO is presented to assist investors in analyzing the performance of the Company. It is helpful as it excludes various items included in net income that are not indicative of the operating performance, such as gains (or losses) from sales of property and depreciation and amortization. However, the Company's method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ") and is not indicative of cash available to fund all cash needs, including distributions. It should not be considered as an alternative to net income for the purpose of evaluating the Company's performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP), excluding gains (or losses) from sales of depreciated Depreciated may refer to:
For more information visit Acadia Realty Trust's Web site at www.acadiarealty.com.
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Years ended December 31, 2003 and 2002
(dollars in thousands, except per share data)
STATEMENTS OF INCOME
For the quarters For the years
ended December 31, ended December 31,
Revenues 2003 2002 2003 2002
------- ------- -------- --------
Minimum rents $12,818 $12,592 $ 50,168 $ 48,488
Percentage rents 467 477 1,012 1,079
Expense reimbursements 3,914 3,358 13,539 11,419
Lease termination income -- -- -- 3,945
Other property income 268 83 749 536
Other 684 1,080 3,977 3,880
------- ------- -------- --------
Total revenues 18,151 17,590 69,445 69,347
------- ------- -------- --------
Operating expenses
Property operating 4,470 4,061 15,170 12,274
Real estate taxes 2,502 2,166 8,799 8,447
General and administrative 3,553 2,886 11,484 10,173
Depreciation and amortization 6,632 3,845 17,909 14,804
Abandoned project costs -- -- -- 274
------- ------- -------- --------
Total operating expenses 17,157 12,958 53,362 45,972
------- ------- -------- --------
Operating income 994 4,632 16,083 23,375
Equity in earnings of
unconsolidated partnerships 634 303 2,411 628
Interest expense (2,818) (2,810) (11,231) (11,017)
Gain on sale -- -- 1,187 1,530
Minority interest (7) (653) (1,317) (2,999)
------- ------- -------- --------
Income (loss) from continuing
operations (1,197) 1,472 7,133 11,517
------- ------- -------- --------
Additional financial and portfolio information is available at Acadia Realty Trust's web site at www.acadiarealty.com. Refer to the Year-End 2003 Financial and Operating Reporting Supplement on the Financial Reports page under the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of Acadia's web site.
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Years ended December 31, 2003 and 2002
(dollars in thousands, except per share data)
STATEMENTS OF INCOME (continued)
For the quarters For the years
ended December 31, ended December 31,
2003 2002 2003 2002
------- ------- ------- -------
Discontinued operations:
Operating income from
discontinued operations $ -- $ 151 $ -- $ 1,165
Impairment of real estate -- -- -- (197)
Gain on sale of properties -- 6,349 -- 8,132
Minority interest -- (742) -- (1,218)
------- ------- ------- -------
Income from discontinued
operations -- 5,758 -- 7,882
------- ------- ------- -------
Net income (loss) $(1,197)$ 7,230 $ 7,133 $19,399
======= ======= ======= =======
Net income (loss) per Common
Share - Basic
Net income (loss) per Common
Share - Continuing operations $ (.04)$ .06 $ .27 $ .46
Net income (loss) per Common
Share - Discontinued
operations -- .23 -- .31
------- ------- ------- -------
Net income (loss) per Common
Share $ (.04)$ .29 $ .27 $ .77
======= ======= ======= =======
Weighted average Common Shares 27,335 25,174 26,589 25,321
======= ======= ======= =======
Net income (loss) per Common
Share - Diluted (a)
Net income (loss) per Common
Share - Continuing operations n/a $ .06 $ .27 $ .45
Net income (loss) per Common
Share - Discontinued
operations n/a .22 -- .31
------- ------- ------- -------
Net income (loss) per Common
Share n/a $ .28 $ .27 $ .76
------- ------- ------- -------
Weighted average Common Shares n/a 25,684 27,496 25,806
======= ======= ======= =======
Additional financial and portfolio information is available at Acadia Realty Trust's web site at www.acadiarealty.com. Refer to the Year-End 2003 Financial and Operating Reporting Supplement on the Financial Reports page under the Investor Relations section of Acadia's web site.
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Years ended December 31, 2003 and 2002
(dollars in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS (b)
For the quarters For the years
ended December 31, ended December 31,
2003 2002 2003 2002
------- ------- ------- -------
Net income (loss) $(1,197)$ 7,230 $ 7,133 $19,399
Depreciation of real estate and
amortization of leasing costs:
Wholly owned and
consolidated partnerships 6,416 3,625 16,957 15,305
Unconsolidated partnerships 550 183 2,107 662
Income attributable to minority
interest in Operating
Partnership (41) 948 717 2,928
Gain on sale of properties (b) -- (6,349) -- (8,132)
------- ------- ------- -------
Funds from operations 5,728 5,637 26,914 30,162
Funds from operations -
Discontinued operations -- (168) -- (2,743)
------- ------- ------- -------
Funds from operations -
Continuing operations $ 5,728 $ 5,469 $26,914 $27,419
======= ======= ======= =======
Funds from operations per share
- Basic
Weighted average Common Shares
and OP Units (c) 28,475 28,420 28,457 28,998
======= ======= ======= =======
Funds from operations per share
- Continuing operations $ .20 $ .19 $ .95 $ .95
Funds from operations per share
- Discontinued operations -- .01 -- .09
------- ------- ------- -------
Funds from operations per share $ .20 $ .20 $ .95 $ 1.04
======= ======= ======= =======
Funds from operations per share
- Diluted
Weighted average Common Shares
and OP Units (c) 29,692 28,931 29,364 29,483
======= ======= ======= =======
Funds from operations per share
- Continuing operations $ .19 $ .19 $ .92 $ .94
Funds from operations per share
- Discontinued operations -- .01 -- .09
======= ======= ======= =======
Funds from operations per share $ .19 $ .20 $ .92 $ 1.03
======= ======= ======= =======
Additional financial and portfolio information is available at Acadia Realty Trust's web site at www.acadiarealty.com. Refer to the Year-End 2003 Financial and Operating Reporting Supplement on the Financial Reports page under the Investor Relations section of Acadia's web site.
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
As of December 31, 2003 and 2002
(dollars in thousands, except per share data)
SELECTED BALANCE SHEET INFORMATION
December December
31, 2003 31, 2002
-------- --------
Cash and cash equivalents $ 14,663 $ 45,168
Rental property, at cost 427,628 413,878
Total assets 388,184 410,935
Mortgage notes payable 190,444 202,361
Total liabilities 208,916 224,487
Fixed rate debt: (d) 156,433 145,236
% of outstanding debt 82% 72%
Weighted average interest rate 6.6% 6.8%
Variable rate debt $ 34,011 $ 57,125
% of outstanding debt 18% 28%
Weighted average interest rate 2.9% 3.3%
Total weighted average interest rate 5.9% 5.8%
Notes: (a) Reflects the potential impact if certain Preferred OP Units and Common Share options were converted to Common Shares at the beginning of the period. Assuming such conversion, net income would be increased by $36 and $50 for the quarters ended December 31, 2003 and 2002, respectively, and $185 and $199 for the years then ended. (b) The Company considers funds from operations ("FFO") as defined by the National Association of Real Estate Investment Trusts ("NAREIT") to be an appropriate supplemental disclosure of operating performance for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO is presented to assist investors in analyzing the performance of the Company. It is helpful as it excludes various items included in net income that are not indicative of the operating performance, such as gains (or losses) from sales of property and depreciation and amortization. However, the Company's method of calculating FFO may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent cash generated from operations as defined by generally accepted accounting principles ("GAAP") and is not indicative of cash available to fund all cash needs, including distributions. It should not be considered as an alternative to net income for the purpose of evaluating the Company's performance or to cash flows as a measure of liquidity. Consistent with the NAREIT definition, the Company defines FFO as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The Company historically has added back impairments in real estate in calculating FFO, in accordance with prior NAREIT guidance. However, NAREIT, based on discussions with the SEC, has provided revised guidance that provides that impairments should not be added back to net income in calculating FFO. As such, historical FFO has been restated consistent with this revised guidance. Included in FFO for the years ended December 31, 2003 and 2002 are gains from the sale of land of $659 and $957, respectively (amounts are net of minority interests). (c) In addition to the weighted average Common Shares outstanding for the period, diluted FFO also assumes full conversion of a weighted average 1,140 and 3,246 OP Units into Common Shares for the quarters ended December 31, 2003 and 2002, and 1,868 and 3,677 OP Units into Common Shares for the years then ended. (d) Fixed-rate debt includes $86,669 of notional no·tion·al adj. 1. Of, containing, or being a notion; mental or imaginary. 2. Speculative or theoretical. 3. principal fixed through swap transactions. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , variable-rate Variable-rate A varible-rate agreement, as distinguished from a fixed-rate agreement, calls for an interest rate that may fluctuate over the life of the loan. The rate is often tied to an index that reflects changes in market rates of interest. debt excludes this amount. Additional financial and portfolio information is available at Acadia Realty Trust's web site at www.acadiarealty.com. Refer to the Year-End 2003 Financial and Operating Reporting Supplement on the Financial Reports page under the Investor Relations section of Acadia's web site. |
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