Acadia Realty Trust Reports Third Quarter 2006 Operating Results.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Acadia Realty 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). "), today reported operating results for the quarter ended September 30, 2006. All per share amounts discussed below are on a fully diluted basis. Third Quarter 2006 Highlights FFO FFO See: Funds from operations 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") per share of $0.30 for the third quarter 2006 compared to $0.30 for the third quarter 2005 * Earnings per share 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 2006 of $0.12 compared to $0.20 for 2005 Solid portfolio performance * Same-store 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 retail portfolio up 1.9% for the quarter over same period in 2005 * Portfolio occupancy at 93.0% Strong balance sheet * Maintained conservative dividend payout ratio Dividend Payout Ratio The percentage of earnings paid to shareholders in dividends. Calculated as: for third quarter 2006 of 62% of FFO * 31% debt to total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. * 2.9 to 1 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: for the quarter External growth initiatives continue * New York Urban/Infill Redevelopment progress continues * RCP (networking, tool) rcp - (Remote copy) The Unix utility for copying files over Ethernet. Rcp is similar to FTP but uses the hosts.equiv user authentication method. Unix manual page: rcp(1). Venture - additional investments made * Completed core portfolio acquisition in the Bronx, New York for $18.5 million in connection with asset recycling program Third Quarter Operating Results FFO, a widely accepted measure of REIT performance, for the quarter ended September 30, 2006 was $10.0 million, or $0.30 per share, compared to $9.9 million, or $0.30 per share for third quarter 2005. Third quarter 2005 FFO included operating income received through Acadia's Funds I and II from the Mervyns investment and from the settlement of a bankruptcy claim against Penn Traffic The Penn Traffic Company operates 109 supermarkets in Pennsylvania, upstate New York, Vermont and New Hampshire. The Penn Traffic Company of today was built through the merger of three strong regional supermarket companies in the late 1980s, The Penn Traffic Company, P&C Foods and aggregating $0.02. For the nine months ended September 30, 2006, FFO was $29.9 million or $0.88 per share compared to $27.3 million, or $0.82 per share for the nine months ended September 30, 2005. Earnings per share from continuing operations was $0.12 for the third quarter 2006 compared to $0.20 for third quarter 2005 and $0.37 for the nine months ended September 30, 2006 compared to $0.47 for the nine months ended September 30, 2005. In addition to the items discussed above, third quarter 2005 also included $0.06 associated with Acadia's share of a gain related to the sale of certain Mervyns locations. Portfolio Activity - Portfolio Occupancy at 93.0% Including its pro-rata share of joint venture operating properties, portfolio occupancy was 93.0% for the quarter ended September 30, 2006, compared to occupancy of 93.5% at June 30, 2006 and occupancy of 94.2% at September 30, 2005. The decrease in portfolio occupancy is primarily due to re-tenanting activities at the Bloomfield Town Square and other properties within the portfolio. Same store net operating income ("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 ") for the retail portfolio increased 1.9% for the quarter and for the nine months ended September 30, 2006 compared with the same periods for 2005. Excluding the adverse impact of re-tenanting activities at the Bloomfield Town Square, same store NOI for the quarter and nine months ended September 30, 2006 increased by 3.2% and 3.3%, respectively. During the third quarter 2006, Acadia executed new leases at an average increase of 63%, which was favorably impacted by an anchor lease at the Haygood Shopping Center 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 well as several shop space leases within the portfolio. Renewal leases increased 34% over the previous rents. This increase was primarily driven by the renewal of the New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. lease at the 161st Street property. Balance Sheet - Low Interest Rate Exposure During the third quarter, the Company completed a $23.5 million, 10 year fixed-rate financing at a 6.1% interest rate. As of September 30, 2006, 96% of the Company's total mortgage debt, as adjusted for its pro-rata share of consolidated joint venture debt, is fixed-rate. For 2006, the strength of Acadia's balance sheet was evidenced by continued solid financial ratios as follows: * Debt to total market capitalization of 31% * Fixed-charge coverage ratio (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) of 2.9 to 1 for the third quarter * Dividend payout ratio of 62% of FFO for the third quarter * As of September 30, 2006, approximately $179 million was available under existing credit facilities and cash on hand to fund capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. External Growth Continues with Focus on New York Urban/Infill Redevelopments, RCP Venture and Other Activities New York Urban/Infill Redevelopment Program In the third quarter 2006, Acadia continued to make steady progress in its New York Urban/Infill Redevelopment Program. The Program currently includes a total of seven properties in its redevelopment pipeline, for which acquisition and development costs are anticipated to total approximately $370.0 million. Construction has commenced on three of the seven properties. The anticipated completion schedules and costs for these projects are set forth in the Company's Quarterly Supplement which will be filed on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. with the SEC. RCP Venture - Additional Investments During the third quarter, Acadia and its Fund II investors made four additional investments of approximately $3.6 million in its Retailer Controlled Property Venture ("RCP Venture") for the following acquisitions: * ShopKo, a regional multi-department retailer with 358 stores located throughout the Midwest, Mountain and Pacific Northwest * Marsh Supermarkets, a regional supermarket chain operating 271 stores in central Indiana, Illinois and Western Ohio * Two add-on investments related to the Albertsons acquisition including Newkirk, a portfolio of 50 properties currently leased to Albertsons, and Camellia camellia (kəmēl`yə) [for G. J. Kamel, a Moravian Jesuit missionary], any plant of the genus Camellia in the tea family, evergreen shrubs or small trees native to Asia but now cultivated extensively in warm climates and in Center, an Albertsons-anchored center located in Sacramento, California. Capital Recycling During the third quarter, the Company continued its asset recycling initiative with the purchase of 2914 Third Avenue in the Hub section of the Bronx for $18.5 million. The property is 100% leased and is located in a densely populated, high barrier-to-entry, infill area. This is a continuation of Acadia's initiative of replacing non-core assets with high-quality cash flow from infill/supply constrained properties. This core portfolio purchase is in addition to the Company's purchases of properties in Philadelphia, Pennsylvania, Staten Island, New York, northern New Jersey and Lincoln Park, Chicago Lincoln Park, also designated as Community Area 7, is one of the North side community areas of Chicago, Illinois in the United States. Named after Lincoln Park, a vast stretch of park belonging to the Chicago Park District, the community area is anchored by the Lincoln Park over the previous 12 months. The Company is currently under contract to sell 5 properties, including 4 properties located in Northeast Pennsylvania. Outlook - Maintains Earnings Guidance for 2006 The Company currently reaffirms its previously announced 2006 annual FFO and earnings per share forecast to be at the middle of the range from $1.14 to $1.19 per share and earnings per share from $0.59 to $0.64. Management Comments Commenting on the results for the third 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 continue to be pleased with the success of our business plan as evidenced by our third quarter results. We are constantly upgrading our core portfolio through aggressive re-tenanting and asset recycling. Furthermore, we continue to maintain some of the strongest balance sheet ratios in our sector. Combining this stability with our important external growth initiatives enables us to continue to plant the seeds for future growth. Both our Urban/Infill platform and our RCP Venture are creating significant long-term value which, when combined with a solid core portfolio and strong balance sheet, will continue to drive our success." Investor Conference Call Management will conduct a conference call on October 26, 2006 at 2:00 PM EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to review the Company's earnings and operating results. The live conference call can be accessed by dialing 888-481-7939 (internationally 617-847-8707). The pass-code is "Acadia". The call will also be webcast and can be accessed in a listen-only mode at Acadia's web site at 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 pass-code will be 40445057. The phone replay will be available through Tuesday, November 2, 2006. Acadia Realty Trust, headquartered in White Plains, NY, is a fully integrated, self-managed and self-administered 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. focused primarily on the ownership, acquisition, redevelopment and management of retail properties, including neighborhood/community shopping centers and mixed-use properties with retail components. Certain matters in this press release may constitute forward-looking statements 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. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings "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" and "Risk Factors" in the Company's most recent 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. filed with the SEC on March 16, 2006 (the "Form 10-K") and other periodic reports filed with the SEC, including risks related to: (i) the Company's reliance on revenues derived from major tenants; (ii) the Company's limited control over joint venture investments; (iii) the Company's partnership structure; (iv) real estate and the geographic concentration of our properties; (v) market interest rates; (vi) leverage; (vii) liability for environmental matters;(viii) the Company's growth strategy; (ix) the Company's status as a REIT (x) uninsured losses and (xi) the loss of key executives. Copies of the Form 10-K and the other periodic reports Acadia files with the SEC are available on the Company's website at www.acadiarealty.com. Any forward-looking statements in this press release speak only as of the date hereof. 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 or change in events, conditions or circumstances on which any such statement is based. See the notes to the attached financial tables for a further discussion of the Company's use of FFO and NOI. For more information visit Acadia Realty Trust's Web site at www.acadiarealty.com, which is not to be deemed a part of this press release (Financial Tables Follow)
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Nine Months ended September 30, 2006 and 2005
(dollars in thousands, except per share data)
[TABLE OMITTED]
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Nine Months ended September 30, 2006 and 2005
(dollars in thousands, except per share data)
[TABLE OMITTED]
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
For the Quarters and Nine Months ended September 30, 2006 and 2005
(dollars in thousands, except per share data)
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS (3)
[TABLE OMITTED]
ACADIA REALTY TRUST AND SUBSIDIARIES
Financial Highlights
As of September 30, 2006 and December 31, 2005
(dollars in thousands, except per share data)
[TABLE OMITTED]
Notes: (1) Effective January 1, 2006, the Company accounts for its Funds I, II and Mervyn's investments on a fully consolidated basis pursuant to Emerging Issues Task Force ("EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation ") 04-5, "Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights". Historic results for the quarter and nine months ended September 30, 2005 have also been presented on a fully consolidated basis for purposes of comparability with 2006. In addition, the Company's investment in the Brandywine Portfolio was fully consolidated as part of Fund I for the quarter and nine months ended September 30, 2005. As a result of the recapitalization and conversion of the Brandywine Portfolio interests from Fund I to GDC GDC Game Developers Conference GDC General Dental Council GDC Gouvernement du Canada GDC Georgia Department of Corrections GDC Global Data Center GDC Guglielmi Detachable Coil GDC Global Development Center GDC Institute for Genetic Disease Control in Animals Properties Incorporated during January 2006, this investment is accounted for under the equity method of accounting for the quarter and nine months ended September 30, 2006. (2) Reflects the potential dilution potential dilution The decrease in the proportional equity position of a share of stock that will occur eventually if additional authorized shares are actually issued. that could occur if securities or other contracts to issue Common Shares were exercised or converted into Common Shares. The effect of the conversion of Common OP Units is not reflected in the above table as they are exchangeable for Common Shares on a one-for-one basis. The income allocable to such units is allocated on this same basis and reflected as minority interest in the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge . As such, the assumed conversion of these units would have no net impact on the determination of diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . (3) 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 ") and net operating income ("NOI") to be appropriate supplemental disclosures of operating performance for an equity REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO and NOI are presented to assist investors in analyzing the performance of the Company. They are helpful as they exclude various items included in net income that are not indicative of the operating performance, such as gains (losses) from sales of depreciated Depreciated may refer to:
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 with GAAP), excluding gains (losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Reference is made to the Company's Quarterly Supplemental Disclosure filed on Form 8-K with the SEC for a reconciliation of theses non-GAAP financial measures to the most comparable GAAP financial measures. (4) In addition to the weighted average Common Shares outstanding, basic and diluted FFO also assumes full conversion of a weighted average 642 and 649 OP Units into Common Shares for the quarters ended September 30, 2006 and 2005, respectively, and 649 and 602 OP Units into Common Shares for the nine months ended September 30, 2006 and 2005, respectively. Diluted FFO also includes the assumed conversion of Preferred OP Units into 337 Common Shares for the quarter and nine months ended September 30, 2006 and the assumed conversion of Preferred OP Units into 430 and 492 Common Shares for the quarter and nine months ended September 30, 2005. |
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