American Financial Realty Trust Announces 2005 Fourth Quarter/Year-End Results.JENKINTOWN, Pa. -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Financial 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 (AFR AFR African AFR Australian Financial Review AFR Afrikaans (South African language) AFR Air France (ICAO code) AFR Alternate Frame Rendering AFR Applicable Federal Rate ) (NYSE NYSE See: New York Stock Exchange :AFR), reported fourth quarter revenues 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 of $141.4 million. Total revenues were $151.1 million ($2.4 million increase over the previous quarter) prior to the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of revenues relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. as required under 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 . Such reclassified revenues include those properties included within the anticipated strategic asset sale to Resnick Resnick is a surname, and may refer to:
Revenues for the twelve months ended December December: see month. 31, 2005 from continuing operations were $520.3 million, an increase of $200.5 million, or 62.7% over the prior year. This increase was largely attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to $39.8 million in revenues resulting from acquisitions completed in 2005 and the normalization In relational database management, a process that breaks down data into record groups for efficient processing. There are six stages. By the third stage (third normal form), data are identified only by the key field in their record. of partial year revenues from 2004 acquisitions of $146.4 million. The Company reported fourth quarter adjusted 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. ("AFFO AFFO Adjusted Funds From Operation ") of $40.8 million (inclusive of inclusive of prep. Taking into consideration or account; including. gains on sales of non-core assets and a net charge of $660,000 for hurricane hurricane, tropical cyclone in which winds attain speeds greater than 74 mi (119 km) per hr. Wind speeds reach over 190 mi (289 km) per hr in some hurricanes. related damages), representing an increase of $7.5 million or 22.6% over the prior quarter. Full year AFFO, inclusive of gains on sales of non-core properties was $134.4 million, with weighted average 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. common shares and Operating Partnership units outstanding at 125.7 million. 2005 Fourth Quarter Dividend AFR declared a quarterly dividend for shareholders of beneficial interest of $0.27 per share totaling $35.7 million. The dividend was paid on January January: see month. 18, 2006 to shareholders of record on December 31, 2005 and includes the distribution of $0.27 per unit to Operating Partnership unit holders. In 2005, the Company paid out $132.1 million in dividends. Highlights --NOI(1): Excluding the operating results of the strategic assets to be sold as such activities are included within discontinued operations, GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). 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 was reported at $262.0 million for the year ended December 31, 2005, demonstrating the continuation of an upward trend. At year end as referred to in the Company's Supplemental Report Appendix, 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. cash NOI came in above expectations at approximately $326.3 million. Annualized cash NOI would have been approximately $304.7 million after reflecting the impact of the strategic asset sale. --Occupancy(2): Total portfolio occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy for the period was 86.3%. Stable Occupancy for the fourth quarter of 2005 was 88.1%. Same Store Occupancy for the period was 91.3%. --Recapture space: During the fourth quarter of 2005, the Company recaptured 591,000 square feet under contract terms. Excluding those properties the Company expects to sell, annualized, average rent and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. reimbursable re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. expenses for this 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. space is $3.43 per square foot based on original agreement with the financial institution. The Company estimates that the embedded value Embedded Value A common valuation measure used outside North America particularly in the insurance industry. It is calculated by adding the adjusted net asset value and the present value of future profits of a firm. of the space to be leased is approximately $9.30 per square foot, and the amount of square footage to be leased (net of the space anticipated to be sold) is 430,000 square feet, providing a substantial opportunity to enhance operating performance. --Acquisitions: During the quarter, the Company acquired 109 properties, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. bank branches under the Company's Formulated for·mu·late tr.v. for·mu·lat·ed, for·mu·lat·ing, for·mu·lates 1. a. To state as or reduce to a formula. b. To express in systematic terms or concepts. c. Price Contracts, which totaled approximately 732,000 rentable square feet for a net purchase price of approximately $178.8 million. --Leasing: New leasing exceeded Company expectations totaling approximately 314,000 square feet at an average rent per square foot of $29.89, creating annualized additional rent of approximately $9.4 million. --Dispositions: The Company disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of 58 non-core properties generating $57.9 million 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). , for capital recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. activities during the quarter. These transactions generated $15.7 million in gains for the quarter, before minority interest. --Capital Recycling: On February 24, 2006, the Company announced the sale of five 100% leased properties to Resnick Development Corp. for $301 million, before transaction and closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, . Among other adjustments, at closing the purchaser will reimburse re·im·burse tr.v. re·im·bursed, re·im·burs·ing, re·im·burs·es 1. To repay (money spent); refund. 2. To pay back or compensate (another party) for money spent or losses incurred. the Company for approximately $16.0 million in loan defeasance defeasance n. an antiquated word for a document which terminates the effect of an existing writing such as a deed, bond, or contract if some event occurs. DEFEASANCE, contracts, conveyancing. and prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. costs. This transaction will result in a net gain to the Company of approximately $42.5 million, net of estimated closing costs. Commenting on the quarter, Nicholas S Nicholas, Russian grand duke Nicholas (Nikolai Nikolayevich) (nyĭkəlī` nyĭkəlī`əvĭch), 1856–1929, Russian grand duke and army officer; first cousin of Czar Alexander III and grandson of Czar . Schorsch, president and chief executive officer of American Financial Realty Trust stated, "Continued success in our capital recycling program, including the most recent Resnick transaction, demonstrates our commitment to achieving the lowest cost of capital to fund the growth of our operating platform." 2005 Fourth Quarter Results The Company reported adjusted funds from operations ("AFFO")(3) of $40.8 million in the fourth quarter of 2005. For the three months ended December 31, 2005 the Company's weighted average diluted common shares and Operating Partnership units outstanding totaled 131.4 million. The Company reported a net loss of $21.0 million, or $(0.17) per share for the fourth quarter of 2005, compared to a net loss of $25.4 million or $(0.20) per share in the third quarter of 2005 and a net loss of $6.3 million or $(0.06) per share reported in the fourth quarter of 2004. The Company's net losses are largely attributable to non-cash depreciation and amortization charges from continuing operations, which totaled $44.9 million in the fourth quarter of 2005. For the twelve months ended December 31, 2005 the net loss is $93.6 million or $(0.78) per share. Funds from operations ("FFO FFO See: Funds from operations ")(4), including gains on sales of assets, was $23.0 million, or $0.18 per share, an increase of $4.1 million over the third quarter of 2005, when FFO was $18.9 million or $0.14 per share and a decrease of $7.9 million or 25.7% from $30.9 million reported in the fourth quarter of 2004. Excluding gains, FFO, 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 the definition of the National Association of Real Estate Investment Trusts ("NAREIT NAREIT National Association of Real Estate Investment Trusts FFO")(5), was $7.2 million. 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 grew by 1.3% over the third quarter of 2005 and by more than 44% over the same period in 2004. The improvement over third quarter of $0.9 million was due primarily to higher 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. of $1.6 million, offset by higher MG&A expenses. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (EBITDA divided by total revenues) for the period was 46.7%. On an unadjusted cash basis, the operating margin was 49.7% for the fourth quarter of 2005. MG&A expenses increased $1.1 million compared to the third quarter 2005, and were down $1.0 million over fourth quarter 2004 on a dollar basis. (1)GAAP NOI is the amount resulting from the addition of all tenant revenues, including straight-line rent adjustments, less all property related costs, inclusive of any negative straight-line adjustments. Cash NOI is the amount resulting from GAAP NOI less any straight-line revenue or rent adjustments. (2)Total occupancy encompasses the entire portfolio at any specific point in time. Stable occupancy is the total occupancy less any space acquired during the quarter and all activity in the quarter associated with those assets, and recapture space. See AFR 4Q 05 Supplemental page 22. (3)The Company calculates AFFO by subtracting from or adding to FFO (i) non-real estate related depreciation and amortization, (ii) amortized portion of capital expenditures that were amortized during the period (e.g., leasing commissions and tenant improvement allowances), (iii) straightlining of rents and fee income, and (iv) amortization of various deferred costs. The SEC classifies AFFO as a non-per share reportable statistic and as such the Company does not report AFFO on a per share basis. Please see the section that follows on "Non-GAAP Financial Measures" for a further description of the Company's use of NAREIT FFO, FFO and AFFO. (4)The Company calculates FFO pursuant to an alternative definition that includes both gains and losses resulting from, and impairments taken in anticipation of, the sale of real estate property. The Company includes gains and losses from property sales in its definition of FFO because it believes that strategic disposition of properties is a significant component of its business model and that gains (and losses) from property sales, as well as impairments taken in anticipation of such sales, demonstrate (in part) the Company's execution of its business model. The Company also believes that an inclusive presentation of gains, losses and impairments in FFO more accurately reflects the Company's overall performance. The Company's definition of FFO differs from NAREIT FFO only with respect to its treatment of gains and losses from property sales. (5)NAREIT FFO is defined as net income (loss) before minority interest, in our operating partnership (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from debt restructuring and gains (or losses) from sales of property, less any impairments of asset values at cost (unrealized loss), plus real estate related depreciation and amortization (excluding amortization of deferred costs) and after adjustments for unconsolidated partnerships and joint ventures. Update on Sarbanes-Oxley Section 404 Compliance During the final review of year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results, the Company determined that it had a material weakness in its internal controls over financial reporting relating to the Company's accounting for income taxes. Specifically, this material weakness relates to the Company's processing and oversight
Oversight may refer to:
See: Real Estate Investment Trust REIT See real estate investment trust (REIT). and its taxable REIT subsidiary levels during the fourth quarter of 2005. This material weakness resulted in the overstatement o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o of income tax expense and understatement of net income by approximately $1.75 million during this period. The Company corrected this error prior to the end of the fourth quarter, and since the error was confined con·fine v. con·fined, con·fin·ing, con·fines v.tr. 1. To keep within bounds; restrict: Please confine your remarks to the issues at hand. See Synonyms at limit. to this period, it had no effect on previously reported year-end or quarterly financial results. The Company will disclose this material weakness in internal controls in its 2005 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 will indicate that the Company has strengthened the internal controls related to income tax accounting and reporting. Occupancy Total Occupancy for the portfolio decreased by 1.0%, to 86.3% at December 31, 2005, primarily due to the recapture space and purchase of vacant bank branches through the Company's Formulated Price Contracts. Leasing Activity The Company executed leases for 46 bank branches and 72 offices during the fourth quarter ended December 31, 2005. Associated tenant improvement costs, calculated on a weighted average lease term of 15.5 years, were $0.25 per square foot per year, broken out as follows: --Branch leases were executed for approximately 172,000 square feet at a weighted average lease term of 18.2 years. There were no tenant improvement costs associated with these transactions. --Office leases were executed for approximately 142,000 square feet at a weighted average lease term of 5.9 years. The tenant improvement dollars based on the weighted average lease term were $1.43 per square foot. Total new leasing for 2005 was approximately 1.3 million square feet. Average price per square foot for the year was $17.39. Recapture Space During the fourth quarter 2005, three anchor tenants returned to the Company 591,000 square feet that they had the right to return per their existing sale agreements of pooled transactions, which were completed late in 2004 and mid- mid- pref. Middle: midbrain. 2005. Excluding the properties that will be offered for sale, the recapture space is expected to return a net increase to the Company of $9.30 per square foot, based on market rates in the recapture locations. In 2006, the Company could recapture an additional 1.3 million square feet, of which approximately 604,000 square feet is in properties the Company intends to sell, and the remaining approximately 744,000 square feet have opportunity for upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar when they are leased to third party tenants. These two blocks of recapture space represent all the existing space that could possibly be returned pursuant to existing contracts, and are expected to provide upside potential for the Company's revenue stream. Acquisition Activity During the twelve months ended December 31, 2005, the Company acquired 286 buildings and land parcels totaling approximately 6.8 million rentable square feet, for a total net purchase price of approximately $917.8 million. Overall, these acquisitions will generate a 2006 levered cash yield of 11.23%, excluding bank branches. Total branch square footage increased quarter over quarter by 6.25%. Disposition Activity During the twelve months ended December 31, 2005, the Company disposed of a total of 143 properties, including 138 buildings, and five land parcels aggregating approximately 2.5 million square feet, 1.7 million of which was vacant or soon to become vacant space. Dispositions generated net proceeds of approximately $124.6 million, and $22.4 million in gains, before minority interest. These dispositions contributed property net operating income losses of $1.2 million during the year ended December 31, 2005. Portfolio and Tenant Overview The following table provides portfolio statistics on the AFR portfolio as of December 31, 2005, with comparisons to the portfolio as of September September: see month. 30, 2005. The portfolio statistics include 100% of the two properties (State Street Financial Center and 123 South Broad Street) owned by the Company in joint ventures. Similarly, these joint ventures are reported on a consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: basis for GAAP accounting purposes.
As of As of
December 31, September 30,
2005 2005
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Number of Properties 1,107 1,083
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-- Branches 645 598
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-- Office Buildings 462 485
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Number of States 39 & DC 39 & DC
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Total Square Feet 37,120,083 37,307,778
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-- Branches 4,759,864 4,485,774
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-- Office Buildings 32,540,219 32,822,004
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Occupancy
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-- Total Occupancy 86.3% 87.3%
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-- Stable Occupancy 88.1% 88.3%
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-- Same Store Occupancy 91.3% 91.5%
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% Rent from Financial Institutions 86.7% 87.1%
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% Rent from "A" Rated Tenants 84.2% 85.0%
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% Rent from Net Leases 85.1% 85.2%
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Lease Expirations (within 1 year) 1.6% 1.9%
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Average Remaining Lease Term (years) 13.4 13.6
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Average Remaining Debt Term (years) 11.4 12.0
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% Fixed Rate Debt to Total Debt 90.5% 95.9%
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Balance Sheet As of December 31, 2005, the Company had a ratio of total debt to enterprise value (debt and equity market capitalization Equity Market Capitalization A measure of the total market value of an equity market. The measure is calculated by taking the market capitalization of all companies in the equity market and adding them together to arrive at the capitalization for the market as a whole. ) of approximately 67.7%, and a ratio of debt to total real estate investments and real estate intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. (at cost) of approximately 71.9%. As of December 31, 2005, the Company had total indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. of approximately $3.3 billion, with a weighted average remaining term of 11.4 years and a weighted average interest rate (including amortized hedging costs) of 5.67%. "Completion of the refinancing Refinancing An extension and/or increase in amount of existing debt. of the Dana Dāna almsgiving to poor, giftgiving to priests. [Hindu Rel.: Parrinder, 72] See : Generosity portfolio is consistent with our announced refinancing strategy, which is focused on extending the term of existing debt, while selectively reducing or eliminating amortization requirements, and increasing internally generated cash flow," commented Dave Nettina, chief financial officer at American Financial. Subsequent Events New Leasing at Harborside har·bor·side n. The area adjacent to a harbor. , New Jersey -- Following the end of 2005, the Company completed a 15-year sublease sublease n. the lease of all or a portion of premises by a tenant who has leased the premises from the owner. A sublease may be prohibited by the original lease, or require written permission from the owner. of approximately 70,000 square feet lease with Citco Fund Services. Sale of Edmund Ball Edmund Ball (1855 - 1925) was U.S. can & jar businessman; co-introducer & co-eponym of Ball jar 1886. He was the brother of Frank Ball and member of the Ball Brothers. External links
Jacksonville is the largest city in the state of Florida and the county seat of Duval County. for approximately $23.0 million. The property was previously on the company's top ten vacancy VACANCY. A place which is empty. The term is principally applied to cases where an office is not filled. 2. By the constitution of the United States, the president has the power to fill up vacancies that may happen during the recess of the senate. list. Sale of properties to Resnick Development Corp -- In the first quarter of 2006, the Company entered into an agreement to sell five 100% occupied properties to Resnick Development Corp. for approximately $301.0 million. Among other adjustments, at closing the purchaser will reimburse the Company for approximately $16.0 million in loan defeasance and prepayment costs. Business Outlook American Financial has a policy that its earnings guidance is held to be effective at the date given and will not be updated until the Company publicly announces updated guidance. Conference Call Management will conduct a conference call and audio webcast at 11:00 a.m. ET on February 27, 2006 to review the Company's quarterly results. The conference call dial-in number is 303-262-2140. The audio webcast will be available to the public, on a listen-only basis, via the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's website at www.afrt.com. Please allow extra time, prior to the call, to visit the site and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. the necessary software to listen to the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the broadcast. A replay of the conference call will be available through March 6, 2006 by dialing 303-590-3000, passcode 11053095. An online archive of the webcast will be available for 30 days on the Company's website at www.afrt.com. Supplemental Quarterly Financial and Operating Data American Financial publishes supplemental quarterly financial and operating data, which can be found under the Investor Relations section of the company's website at www.afrt.com. These materials are also available via e-mail by calling 312-640-6770. Non-GAAP Financial Measures The Company believes that FFO is helpful to investors as a measure of the Company's performance as 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. because it provides investors with an understanding of the Company's operating performance and profitability. The Company includes gains and losses from property sales in its definition of FFO because it believes that the strategic disposition of properties is a significant component of the Company's business model, and that gains and losses from dispositions demonstrate (in part) the Company's execution of its business model. FFO is a non-GAAP financial measure commonly used in the REIT industry, and therefore this measure may be useful in comparing the Company's performance with that of other REITs. However, the Company's definition of FFO differs from NAREIT FFO (which is also disclosed by the Company) and investors should take definitional differences into account when comparing FFO reported by other REITs (including particularly those REITs that exclude gains and losses from property sales in their definition of FFO). Additionally, FFO and FFO per share should be evaluated along with GAAP net income and net income per share (the most directly comparable GAAP measures) in evaluating the performance of equity REITs. The Company believes that AFFO is helpful to investors as a measure of its liquidity position, because, along with cash flows from operating activities, this measure provides investors with an understanding of its ability to pay dividends. In addition, because this measure is commonly used in the REIT industry, the Company's use of AFFO may assist investors in comparing the Company's liquidity position with that of other REITs. The Company's definition of AFFO differs from that of other equity REITs and investors should take definitional differences into account when comparing AFFO reported by other REITs (including particularly those REITs that exclude gains and losses from property sales in their definition of AFFO). About American Financial Realty Trust American Financial Realty Trust is a self-administered, self-managed real estate investment trust that acquires properties from, and leases properties to, regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. financial institutions. The Company owns and manages its assets primarily under 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. triple net and bond net leases with banks. The Company is led by chief executive officer Nicholas S. Schorsch and non-executive non-executive adj non-executive director → direttore m senza potere esecutivo chairman Lewis S. Ranieri. The Company is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors AFR. For more information on American Financial Realty Trust, visit the Company's website at www.afrt.com. 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. Certain statements in this press release constitute forward-looking statements within the meaning of the federal securities laws. You can identify these statements by our use of the words "expects," "anticipates," "estimates," "intends," "believes" and similar expressions that do not relate to historical information. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks and uncertainties which are, in some cases, beyond the Company's control and could materially affect actual results, performance or achievements. These risks and uncertainties include the risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, and include, without limitation, changes in general economic conditions and the extent of any tenant bankruptcies and insolvencies; the Company's ability to maintain and increase occupancy; the Company's ability to timely lease or re-lease re-lease tr.v. re-leased, re-leas·ing, re-leas·es To lease again: re-leased the car. space at anticipated net effective rents; the cost and availability of debt and equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. ; and the Company's ability to acquire and dispose of dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. certain of its assets from time to time on acceptable terms. The Company assumes no obligation to update or supplement forward-looking statements that become untrue un·true adj. un·tru·er, un·tru·est 1. Contrary to fact; false. 2. Deviating from a standard; not straight, even, level, or exact. 3. Disloyal; unfaithful. because of subsequent events. Financial Statements The attached financial statements and data are presented to supplement the Company's audited and unaudited regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. filings and should be read in conjunction with those filings. The unaudited financial data presented herein is provided from the perspective of timeliness to assist readers of quarterly and annual financial filings. This financial data was prepared prior to the Company's auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together completing their audit. As such, data otherwise contained in future regulatory filings covering this same time period may differ from the data presented herein. The Company does not accept responsibility for highlighting these changes in its subsequent filings.
AMERICAN FINANCIAL REALTY TRUST
CONSOLIDATED BALANCE SHEETS
December 31, 2005 and 2004
(Unaudited in thousands, except share and per share data)
December 31,
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2005 2004
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Assets:
Real estate investments, at cost:
Land $ 475,457 $ 415,852
Land held for development 24,563 --
Buildings and improvements 2,651,223 2,280,971
Equipment and fixtures 401,661 352,737
Leasehold interests 3,974 4,972
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Total real estate investments, at cost 3,556,878 3,054,532
Less accumulated depreciation (260,852) (147,478)
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Total real estate investments, net 3,296,026 2,907,054
Cash and cash equivalents 110,245 110,607
Restricted cash 73,535 59,905
Marketable investments and accrued interest 3,353 24,272
Tenant and other receivables, net 51,435 34,667
Prepaid expenses and other assets 37,789 65,551
Assets held for sale 341,338 101,827
Intangible assets, net of accumulated
amortization of $64,369 and $25,749 642,467 590,341
Deferred costs, net of accumulated
amortization of $13,179 and $7,637 67,388 57,623
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Total assets $4,623,576 $3,951,847
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Liabilities and Shareholders' Equity:
Mortgage notes payable $2,467,596 $2,008,554
Credit facilities 171,265 270,000
Convertible notes, net 446,134 445,926
Accounts payable 4,350 4,947
Accrued interest expense 19,484 24,510
Accrued expenses and other liabilities 55,938 60,098
Dividends and distributions payable 35,693 29,805
Below-market lease liabilities, net of
accumulated amortization of $8,912 and
$3,396 67,613 59,232
Deferred revenue 150,771 105,745
Liabilities related to assets held for sale 243,665 7,972
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Total liabilities 3,662,509 3,016,789
------------ ------------
Minority interest 53,224 65,099
Shareholders' equity:
Preferred shares, 100,000,000 shares
authorized at $0.001 per share, no shares
issued and outstanding at December 31, 2005
and 2004, respectively -- --
Common shares, 500,000,000 shares authorized
at $0.001 per share, 128,712,181 and
111,001,935 issued and outstanding at
December 31, 2005 and 2004, respectively 129 111
Capital contributed in excess of par 1,384,500 1,130,034
Deferred compensation (12,852) (16,518)
Accumulated deficit (457,313) (229,380)
Accumulated other comprehensive loss (6,621) (14,288)
------------ ------------
Total shareholders' equity 907,843 869,959
------------ ------------
Total liabilities and shareholders' equity $4,623,576 $3,951,847
------------ ------------
AMERICAN FINANCIAL REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter and Year Ended December 31, 2005 and 2004
(Unaudited and in thousands, except per share data)
Quarter Ended Year Ended
December 31, December 31,
-------------------- --------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues:
Rental income $ 91,397 $ 71,844 $329,865 $223,160
Operating expense
reimbursements 49,095 42,969 185,244 93,520
Interest and other income,
net 872 356 5,240 3,195
---------- ---------- ---------- ----------
Total revenues 141,364 115,169 520,349 319,875
---------- ---------- ---------- ----------
Property operating expenses 65,923 59,144 258,414 139,905
Property write-down -
hurricane 949 -- 949 --
Property damage recoverable
- hurricane (949) -- (949) --
---------- ---------- ---------- ----------
Total property operating
expenses 65,923 59,144 258,414 139,905
---------- ---------- ---------- ----------
Property net operating
income 75,441 56,025 261,935 179,970
---------- ---------- ---------- ----------
Expenses:
Marketing, general and
administrative 7,013 8,009 24,144 23,888
Broken deal costs 53 -- 1,220 227
Amortization of deferred
equity compensation 2,332 2,236 10,411 9,078
Outperformance plan -
contingent restricted
share component -- -- -- (5,238)
Severance and related
accelerated amortization
of deferred compensation -- -- 4,503 1,857
---------- ---------- ---------- ----------
EBITDA 66,043 45,780 221,657 150,158
---------- ---------- ---------- ----------
Interest expense on
mortgages and other debt 48,870 34,599 157,608 89,417
Depreciation and
amortization 44,895 35,473 163,923 103,808
---------- ---------- ---------- ----------
Loss before net gain on
sale of properties in
continuing operations, net
loss on investments,
minority interest and
discontinued operations (27,722) (24,292) (99,874) (43,067)
Gain on sale of properties
in continuing operations 1,474 17,773 1,596 17,773
Net loss on investments -- -- (530) (409)
---------- ---------- ---------- ----------
Loss from continuing
operations before minority
interest (26,248) (6,519) (98,808) (25,703)
Minority interest 1,035 283 4,518 1,192
---------- ---------- ---------- ----------
Loss from continuing
operations (25,213) (6,236) (94,290) (24,511)
---------- ---------- ---------- ----------
Discontinued operations:
Loss from operations, net
of minority interest of
$244, $104, $528 and $197
for the quarters and years
ended December 31, 2005
and 2004, respectively (9,232) (3,188) (18,952) (6,084)
Yield maintenance fees, net
of minority interest of
$11, $0, $16 and $103 for
the quarters and years
ended December 31, 2005
and 2004, respectively (396) -- (567) (3,060)
Net gains on disposals, net
of minority interest of
$368, $101, $562 and $374
for the quarters and years
ended December 31, 2005
and 2004, respectively,
net of income taxes 13,877 3,079 20,194 11,410
---------- ---------- ---------- ----------
Income (loss) from
discontinued operations 4,249 (109) 675 2,266
---------- ---------- ---------- ----------
Net loss $(20,964) $ (6,345) $(93,615) $(22,245)
---------- ---------- ---------- ----------
Basic and diluted income
(loss) per share:
From continuing operations $ (0.20) $ (0.06) $ (0.79) $ (0.24)
From discontinued
operations 0.03 -- 0.01 0.02
---------- ---------- ---------- ----------
Total basic and diluted
loss per share $ (0.17) $ (0.06) $ (0.78) $ (0.22)
---------- ---------- ---------- ----------
Set forth below is a reconciliation of our calculations of FFO and
AFFO to net loss (unaudited, in thousands except per share data):
Quarter Ended Year Ended
December 31, December 31,
--------------------- ---------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Funds from operations
(NAREIT defined):
Net loss $(20,964) $ (6,345) $(93,615) $(22,245)
Add:
Minority interest
- Operating
Partnership (548) (242) (2,588) (899)
Depreciation and
amortization 44,973 37,356 167,987 109,985
Amortization of
fair market rental
adjustment, net 60 466 -- 1,031
Less:
Non-real estate
depreciation and
amortization (559) (329) (1,599) (519)
Amortization of
fair market rental
adjustment, net -- -- (1,047) --
Net gains from
disposals, net of
income taxes (15,719) (20,953) (22,352) (29,551)
---------- ---------- ---------- ----------
Funds from operations
(NAREIT defined) $ 7,243 $ 9,953 $ 46,786 $ 57,802
---------- ---------- ---------- ----------
Funds from operations
- diluted per share $ 0.055 $ 0.087 $ 0.372 $ 0.503
---------- ---------- ---------- ----------
----------------------------------------------------------------------
Funds from operations (AFR
defined):
Funds from operations
(NAREIT defined) $ 7,243 $ 9,953 $ 46,786 $ 57,802
Add:
Net gains from
disposals, net of
income taxes 15,719 20,953 22,352 29,551
---------- ---------- ---------- ----------
Funds from operations
(AFR defined) $ 22,962 $ 30,906 $ 69,138 $ 87,353
---------- ---------- ---------- ----------
Funds from operations
- diluted per share $ 0.175 $ 0.271 $ 0.550 $ 0.761
---------- ---------- ---------- ----------
----------------------------------------------------------------------
Adjusted funds from
operations:
Funds from operations
(AFR defined) $ 22,962 $ 30,906 $ 69,138 $ 87,353
Add:
Non-real estate
depreciation and
amortization 559 329 1,599 519
Reverse straightline
rental income 8,756 10,649 43,990 33,125
Amortization of
deferred equity
compensation 2,332 2,236 10,411 9,078
Amortization of
deferred costs and
interest rate cap
adjustment 8,147 1,927 14,042 4,785
Straightline fee
income 1,888 2,350 4,840 10,818
Accelerated
amortization of
deferred
compensation -
severance -- -- 3,026 1,857
Less:
Straightline rental
income (2,583) (1,462) (9,783) (6,789)
Tenant improvements
and leasing
commissions -- (284) -- (1,123)
Amortization of
tenant improvements
and leasing
commissions (1,225) -- (2,882) --
OPP accrual -
contingent
restricted share
component -- -- -- (5,238)
---------- ---------- ---------- ----------
Adjusted funds from
operations $ 40,836 $ 46,651 $134,381 $134,385
---------- ---------- ---------- ----------
----------------------------------------------------------------------
AFFO coverage ratio:
Quarterly dividend $ 35,693 $ 29,805 $137,955 $117,777
AFFO / quarterly
dividend 1.14x 1.57x 0.97x 1.14x
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