Acadia Realty Trust Announces Third Quarter 2002 Operating Results; 8% Increase in Year-to-Date FFO Per Share.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 4, 2002 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 ) today reported operating results for the third quarter ended September 30, 2002. Third Quarter Highlights
- Funds from operations ("FFO") for the nine months ended September 30, 2002 were $0.81 per share representing an 8% increase over 2001 FFO of $0.63 per share.
- Same property net operating income increased 2.3% year-over-year.
- Kmart exposure further reduced through the $16.8 million sale of two shopping centers.
- Acquired portfolio of three grocery-anchored shopping centers.
- Maintained strong dividend payout ratio at approximately 60% of FFO.
Third Quarter Operating Results - Increase in FFO FFO See: Funds from operations FFO for the third quarter 2002 was $6.1 million, or $0.21 per share (basic and fully 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. ) compared to $7.3 million or $0.21 for the same quarter 2001. For the nine months ended September 30, 2002, FFO was $23.8 million, or $0.81 per share compared to $21.7 million or $0.63 in 2001. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2002 FFO includes $3.9 million, or $0.13 per share, of lease termination income received during the period which has been excluded in determining the 8% increase over 2001. Income 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 for the third quarter 2002 was $2.0 million, or $0.08 per share, compared to $1.4 million, or $0.05 per share, for 2001. For the nine months ended September 30, 2002, income from continuing operations was $9.1 million, or $0.36 per share, compared to $3.2 million, or $0.11 per share, in 2001. Acquisitions - Three Supermarket-Anchored 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 As previously announced, Acadia's acquisition joint venture acquired three supermarket-anchored shopping centers located in Ohio. The total purchase price for the three properties, which aggregate 324,000 square feet, was $26.7 million: - Represents an 11.6% cap rate on the current net operating income before structural reserves and imputed Attributed vicariously. In the legal sense, the term imputed is used to describe an action, fact, or quality, the knowledge of which is charged to an individual based upon the actions of another for whom the individual is responsible rather than on the individual's management fees. - Acadia's initial cash flow return for 2003 on its equity investment is estimated to be approximately 15% (before debt amortization as well as management fees and any residual profit). Two of the centers, located in Cleveland, are anchored by Giant Eagle, the dominant supermarket in the region. The third center, located in Columbus, is anchored by Big Bear Supermarket, the number two grocer in that market. This acquisition is the first for the joint venture, which will seek to acquire up to $300 million of real estate assets. The Company is the general partner with a 22% interest in the joint venture and, additionally, is entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to profit participation in excess of its invested capital based on certain investment return thresholds. The Company will also earn various market-rate property level fees. Dispositions - Further Reduction in Kmart Exposure Acadia further reduced its exposure to Kmart through the sale of two shopping centers for $16.8 million. The first property, the Manahawkin Village Shopping Center, located in Manahawkin, New Jersey Manahawkin is a census-designated place and unincorporated area contained within Stafford Township, in Ocean County, New Jersey, United States. As of the United States 2000 Census, the CDP population was 2,004. , is anchored by an 112,000 square foot Kmart which paid the highest rent among all of the Kmart locations within Acadia's portfolio. To date, none of the remaining Kmart stores in Acadia's portfolio have been closed nor have any of the leases been rejected. The second property sold was Valmont Plaza, a 200,000 square foot shopping center located in West Hazelton, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York . Acadia recently finalized See finalization. a 41,000 square foot lease with Big Lots as a new anchor for the center. Assuming redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). , the transaction is not anticipated to have a material impact on 2003 earnings. Year to date, Acadia has sold 20 non-core properties totaling 3.0 million square feet for $74.3 million. These sales included four Kmart locations. Portfolio Activity - Increase in Occupancy and Same Property 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 Within the Company's portfolio of operating properties, third quarter 2002 occupancy was 90.9% compared to 89.4% for the second quarter 2002. On a same property basis, occupancy for the second quarter 2002 was 91.5%, and 90.5% for the same quarter a year ago, third quarter 2001. During the quarter, Acadia leased 157,280 square feet of new and renewal leases at an average increase of 4% over the previous base rents on a cash 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. for the portfolio increased 2.3% year-to-date 2002 over the same period in 2001. This was primarily attributable to increases in rents from new and renewal leases, scheduled increases in contractual tenant rents and a reduction in property operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Redevelopment Activity - Pathmark Grand Opening at Elmwood Park Elmwood Park, village (1990 pop. 23,206), Cook co., NE Ill., a suburb of Chicago; inc. 1914. It is chiefly residential. This Week Acadia's two redevelopment projects progressed on time and on budget during the third quarter 2002: - At the Elmwood Park Shopping Center, located in Elmwood Park, NJ, the 49,000 square foot Pathmark Supermarket has scheduled its grand opening for later this week. - Construction continues on a 72,000 square feet Shaw's Supermarket at the Gateway Shopping Center located in South Burlington, Vermont Burlington is the largest city in the U.S. state of Vermont and is the shire town of Chittenden County, Vermont. With a population of 38,889, the city is the core of one of the nation's smaller metropolitan areas, and is also the smallest U.S. . This redevelopment is already 83% pre-leased and is anticipated to be completed in the second half of 2003. Balance Sheet - Further Locking in of Favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. Interest Rates At September 30, 2002, the strength of Acadia's balance sheet was evidenced by positive trends in its financial ratios: - Debt to total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. was 49% with a blended cost of debt of 5.9%. - 74% of the total mortgage debt was fixed-rate (this includes 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. and 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 joint venture debt). This contrasts with 55% fixed as of the end of 2001. - Fixed-charge ratio was 3.0 times (EBIDTA EBIDTA Earnings Before Interest Depreciation Taxes and Amortization / interest expense plus preferred distributions). - Dividend payout ratio Dividend Payout Ratio The percentage of earnings paid to shareholders in dividends. Calculated as: was approximately 60% of FFO. Outlook and Comments Acadia has reaffirmed its FFO guidance for the year ended December 31, 2002 of $0.85 to $0.90 per share which excludes $0.13 of lease termination income. More specifically, the Company now expects it to approximate the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. of this range. The Company also introduced preliminary guidance for 2003 annual FFO of $0.85 to $0.90 per share. Details for the 2003 forecast will be discussed in the conference call to be conducted later today. 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, "We remain quite pleased with the solid and stable performance of our portfolio. Both our year to date earnings growth and NOI growth are strong evidence of the solid performance from our core portfolio. Our balance sheet and financial coverage ratios are now at their strongest point in our company's history. While we remain cautious about the economy and its impact on various retailers in the short run, we believe the quality of our locations will provide us with strong long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth. More importantly, the external growth in our acquisition pipeline is beginning to hit the bottom line. This will continue to help us successfully weather the short-term uncertainties and provide long-term value creation for our shareholders." Investor Conference Call The Company will provide a live online Web simulcast of the quarterly conference call on November 4, 2002 beginning at 2:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. at Acadia's website at www.acadiarealty.com or at CCBN's individual investor center at www.companyboardroom.com or institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. website at www.streetevents.com. An online rebroadcast of the call will be available at these sites after the call. Investors may also participate by telephone. The dial-in number for the call is (888) 482-0024 (international 617-801-9702). A replay of the call will also be available through November 11, 2002 at (888) 286-8010 (international 617-801-6888) - Passcode 62243. Acadia Realty Trust, headquartered on Long Island, 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 36 properties totaling approximately 7 million square feet, located primarily in the Eastern 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. . 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 the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 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 considers 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") 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 REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). and analyst communities. FFO is presented to assist investors in analyzing the performance of the Company. 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. 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 Nine Months ended September 30, 2002 and 2001
(dollars in thousands, except per share data)
STATEMENTS OF INCOME
For the For the
quarters ended nine months ended
September 30, September 30,
Revenues 2002 2001 2002 2001
---- ---- ---- ----
Minimums rents $ 12,175 $ 11,682 $ 35,896 $ 35,166
Percentage rents 161 154 602 667
Expense reimbursements 2,795 2,562 8,061 8,139
Lease termination income -- -- 3,945 --
Other property income 144 137 453 465
Other 933 385 2,800 990
-------- -------- -------- --------
Total revenues 16,208 14,920 51,757 45,427
-------- -------- -------- --------
Operating expenses
Property operating 2,830 2,741 8,213 8,828
Real estate taxes 2,191 2,154 6,281 6,326
General and administrative 2,160 1,960 7,287 6,485
Depreciation and amortization 3,701 3,398 10,959 10,151
Abandoned project costs 274 -- 274 --
-------- -------- -------- --------
Total operating expenses 11,156 10,253 33,014 31,790
-------- -------- -------- --------
Operating income 5,052 4,667 18,743 13,637
Equity in earnings of
unconsolidated partnerships 101 125 325 414
Interest expense (2,781) (2,932) (8,207) (9,660)
Minority interest (383) (472) (1,773) (1,174)
-------- -------- -------- --------
Income from continuing
operations 1,989 1,388 9,088 3,217
-------- -------- -------- --------
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Nine Months ended September 30, 2002 and 2001
(dollars in thousands, except per share data)
STATEMENTS OF INCOME (continued)
For the For the
quarters ended nine months ended
September 30, September 30,
2002 2001 2002 2001
----- ---- ---- ----
Discontinued operations:
Operating income from
discontinued operations 123 746 1,014 3,038
Impairment of real estate (197) (14,756) (197) (14,756)
(Loss) gain on sale of
properties (49) 1,245 3,313 8,280
Minority interest 15 2,108 (1,049) 624
-------- -------- -------- --------
(Loss) income from discontinued
operations (108) (10,657) 3,081 (2,814)
-------- -------- -------- --------
Income (loss) before
extraordinary item and
cumulative effect of change in
accounting principle 1,881 (9,269) 12,169 403
Extraordinary item - loss on
early extinguishments of debt -- -- -- (140)
Cumulative effect of change in
accounting principle -- -- -- (149)
-------- -------- -------- --------
Net income (loss) $ 1,881 $ (9,269) $ 12,169 $ 114
======== ======== ======== ========
Net income (loss) per Common
Share - basic and $ .08 $ ( .33) $ .48 $ .00
diluted (a)
======== ======== ======== ========
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Nine Months ended September 30, 2002 and 2001
(dollars in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS (b)
For the For the
quarters ended nine months ended
September 30, September 30,
2002 2001 2002 2001
---- ---- ---- ----
Net income (loss) $ 1,881 $ (9,269) $ 12,169 $ 114
Depreciation of real estate and
amortization of leasing costs:
Wholly owned and consolidated
partnerships 3,540 4,579 11,680 13,976
Unconsolidated partnerships 163 157 479 470
Income attributable to minority
interest in Operating
Partnership 276 (1,707) 1,980 347
Loss (gain) on sale of
properties (c) 49 (1,245) (2,740) (8,280)
Impairment of real estate 197 14,756 197 14,756
Extraordinary item -- -- -- 140
Cumulative effect of change in
accounting principal -- -- -- 149
-------- -------- -------- --------
Funds from operations $ 6,106 $ 7,271 $ 23,765 $ 21,672
======== ======== ======== ========
Funds from operations per
share (d) $ .21 $ .21 $ .81 $ .63
======== ======== ======== ========
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
As of September 30, 2002 and December 31, 2001
(dollars in thousands, except per share data)
SELECTED BALANCE SHEET INFORMATION
September 30, December 31,
2002 2001
---- ----
Cash and cash equivalents $ 27,820 $ 33,173
Rental property, at cost 408,562 420,826
Total assets 413,677 493,939
Mortgages notes payable 203,244 218,968
Total liabilities 231,722 276,025
Fixed rate debt: (e) 145,665 112,945
% of outstanding debt 72% 52%
Weighted average interest rate 6.8% 7.5%
Variable rate debt $ 57,579 $ 106,023
% of outstanding debt 28% 48%
Weighted average interest rate 3.7% 3.9%
Total weighted average interest rate 5.9% 5.8%
Notes:
(a) Net income per share (basic and diluted) is computed based on the
weighted average number of Common Shares outstanding for the
quarters ended September 30, 2002 and 2001 of 24,974,176 and
28,488,712, respectively, and the weighted average number of
Common Shares outstanding for the nine months ended September 30,
2002 and 2001 of 25,370,088 and 28,224,716, respectively.
(b) Consistent with the NAREIT definition, the Company defines FFO as
net income (computed in accordance with GAAP), excluding gains (or
losses) from sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated
partnerships and joint ventures.
(c) Net of minority interest of $573 on the sale of land during 2002.
(d) Assumes full conversion of a weighted average 3,449,232 and
5,628,091 OP Units into Common Shares for the quarters ended
September 30, 2002 and 2001, and 3,822,225 and 6,227,938 OP Units
into Common Shares for the nine months ended September 30, 2002
and 2001.
(e) Fixed-rate debt includes $87,335 of notional principal fixed
through swap transactions. Conversely, variable-rate debt excludes
this amount.
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