Berkshire Income Realty Announces FFO of $6,630,740 for the Nine Months Ended September 30, 2005.BOSTON Boston, town, England Boston, town (1991 pop. 26,495), E central England, on the Witham River. Boston's fame as a port dates from the 13th cent., when it was a Hanseatic port trading wool and wine. Having recovered from a decline in the 18th and 19th cent. -- Berkshire Berkshire (bärk`shĭr, –shər, bûrk`–) or Berks (bärks, bûrks), former county, S central England. Income 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. , Inc. (AMEX AMEX See: American Stock Exchange :BIR BIR British Institute of Radiology BIR Bureau of Internal Revenue BIR Bureau of International Recycling BIR Baculovirus IAP Repeat BIR Biomedical Imaging Resource BIR Bureau of Intelligence and Research (US State Department) _pa), (AMEX:BIRPRA), (AMEX:BIR-A), (AMEX:BIR.PR.A) ("Berkshire" or the "Company") today released its results for the periods ended September September: see month. 30, 2005. Financial highlights for the three and the nine-month periods include:
-- The Company's Funds From Operations ("FFO") for the three and
nine months ended September 30, 2005 were $2,582,936 and
$6,630,740, respectively, as compared to $2,787,473 and
$6,286,169, respectively, for the three and nine months ended
September 30, 2004.
-- For the three and nine months ended September 30, 2005, net
income, prior to charges for depreciation, was $3,859,130 and
$32,228,531, respectively, and included a gain on the sale of real
estate assets of $25,215,105 in the nine month period ended
September 30, 2005. Net income, prior to charges for depreciation
and the gain on the sale of real estate assets, for the three and
nine months ended September 30, 2005 was $3,901,862 and 7,013,426,
respectively. For the comparable periods of 2004, net income,
prior to charges for depreciation, was $2,781,204 and $6,296,653,
respectively.
-- The results for the nine-month period ended September 30, 2005
include a gain of $25,215,105 from the sale of Windward Lakes
Apartments in Pompano, Florida. The sale was structured to comply
with the requirements of a Section 1031 tax deferred exchange
under the Internal Revenue Code of 1986, as amended, and the
proceeds from the sale were reinvested in the acquisition of Lake
Ridge Apartments, a qualifying property in Hampton, Virginia.
Additionally, approximately $1,100,000 of costs associated with
the pre-payment of the outstanding mortgage on the Windward Lakes
property and write-off of deferred costs were recognized in the
second quarter of 2005 at the time of the sale.
-- The Company added to its portfolio during the third quarter of
2005:
-- On July 1, 2005, the Company completed the acquisition of
Lake Ridge Apartments in Hampton, Virginia, from a third
party for $34,344,000. The multifamily apartment community
has 282 units. The Company will operate the property under
the name Lakeridge Apartments.
President and CFO See Chief Financial Officer. , David Quade comments, "The Company experienced positive operating results for the three and nine month periods ended September 30, 2005. 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. , when adjusted for expenses related to the sale of Windward wind·ward adj. 1. Of or moving toward the quarter from which the wind blows. 2. Of or on the side exposed to the wind or to prevailing winds. adv. In a direction from which the wind blows; against the wind. Lakes, continue to show solid growth over comparative prior year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. periods. The Company's strategy of acquiring assets that benefit from renovation and rehabilitation rehabilitation: see physical therapy. as well as assets that are candidates for repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. remains successful. Extensive rehabilitation projects are currently ongoing at five of the Company's properties resulting in positive returns on the capital being invested. Additionally, the Company owns three properties in Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; and one in south Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and , areas recently affected by hurricanes Katrina KATRINA Keeping All the Resources in New Orleans Alive KATRINA Krewe Aiding Trash Removal In the New Orleans Area , Rita and Wilma. We are pleased to report that there was no significant damage to the properties and normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of continue." Funds From Operations The Company has adopted the revised definition of FFO FFO See: Funds from operations adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT NAREIT National Association of Real Estate Investment Trusts "). Management considers FFO to be an appropriate measure of performance of 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. . We calculate FFO by adjusting net income (loss) (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 GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , including non-recurring items), for gains (or losses) from sales of properties, real estate related depreciation and amortization, and adjustment for unconsolidated partnerships and ventures. Management believes that in order to facilitate a clear understanding of the historical operating results of the Company, FFO should be considered in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with net income (loss) as presented 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 included elsewhere herein and in the reconciliation set forth below. Management considers FFO to be a useful measure for reviewing the comparative operating and financial performance of the Company because, by excluding gains and losses related to sales of previously depreciated Depreciated may refer to:
The Company's calculation of FFO may not be directly comparable to FFO reported by other REIT's or similar real estate companies that have not adopted the term in accordance with the current NAREIT definition or that interpret To run a program one line at a time. Each line of source language is translated into machine language and then executed. the current NAREIT definition differently. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance. FFO does not represent cash generated from operating activities determined in accordance with GAAP and is not a measure of liquidity or an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income (loss) and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements. The following table presents a reconciliation of GAAP net income (loss) to FFO for the three and nine months ended September 30, 2005 and 2004:
Three months ended Nine months ended
September 30, September 30,
------------------------ --------------------------
2005 2004 2005 2004
------------ ----------- ------------- ------------
Net income (loss) $(1,823,776) $ 29,350 $ 17,069,691 $(1,898,170)
Add:
Depreciation of
real property 3,537,408 2,160,186 11,640,294 6,543,521
Depreciation
included in
results of
discontinued
operations - - 389,520 -
Minority
interest in
Operating
Partnership 244,025 244,025 488,050 732,075
Minority
interest in
properties - 2,418 - 111,228
Amortization of
acquired in-
place leases
and tenant
relationships 755,326 361,251 2,834,713 1,134,188
Equity in loss
of Multifamily
Venture 23,943 58,105 67,316 160,778
Funds from
operations of
Multifamily
Venture 47,187 43,908 228,578 10,562
Less:
Minority
interest in
properties (14,964) - (77,900) -
Minority
interest in
properties
share of
funds from
operations (228,945) (111,770) (794,417) (275,309)
Gain on transfer
of property to
Multifamily
Venture - - - (232,704)
Gain on
disposition of
real estate
assets 42,732 - (25,215,105) -
------------ ----------- ------------- ------------
Funds from
Operations $ 2,582,936 $2,787,473 $ 6,630,740 $ 6,286,169
============ =========== ============= ============
Other Non-GAAP Measures The Company believes that the use of certain other non-GAAP measures for comparative presentation between reporting periods allows for more meaningful comparisons of the periods presented. Net income, prior to charges for depreciation allow for comparison of operating results absent the significant 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. included in GAAP net income. Additionally, net income, prior to charges for depreciation and the gain on the sale of real estate assets eliminates the unusual activity related to the gain from the sale of the real estate assets, which presents a more meaningful comparison to the previous year results, which did not include a similar event. The following table represents the reconciliation of GAAP net income (loss) to the other Non-GAAP measures presented for the three and nine months ended September 30, 2005 and 2004:
Three months ended Nine months ended
September 30, September 30,
-------------------------- --------------------------
2005 2004 2005 2004
------------ ----------- ------------- ------------
Net income
(loss) $(1,823,776) $ 29,350 $ 17,069,691 $(1,898,170)
Add:
Depreciation 5,682,906 2,573,097 14,698,315 7,658,724
Depreciation
included
discontinued
Operations - 178,757 460,525 536,099
------------ ----------- ------------- ------------
Net income,
prior to
charges for
depreciation 3,859,130 2,781,204 32,228,531 6,296,653
Less:
Gain on
disposition
of real
estate assets
(1) 42,732 (1) - (25,215,105) -
------------ ----------- ------------- ------------
Net income,
prior to
charges for
depreciation
and the gain on
the sale of
real estate
assets $ 3,901,862 $2,781,204 $ 7,013,426 $ 6,296,653
============ =========== ============= ============
(1) - Represents miscellaneous adjustments to gain reported in the
quarter ended June 30, 2005.
The Company The Company is a REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). whose objective is to acquire, operate, and rehabilitate re·ha·bil·i·tate v. 1. To restore to good health or useful life, as through therapy and education. 2. To restore to good condition, operation, or capacity. multifamily apartment communities. The Company owns interests in twenty-three such multifamily apartment communities, of which eight are located in the Baltimore/Washington, D.C. metropolitan area, five are located in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). , three are located in Houston, two are located in each of Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. and the Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. area and one is located in each of Austin Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas, Charlotte, North Carolina “Charlotte” redirects here. For other uses, see Charlotte (disambiguation). Charlotte is the largest city in the state of North Carolina and the 20th largest city in the United States. and the Ft. Lauderdale Lauderdale is the name of various places:
Forward Looking Statements With the exception of the historical information contained in the release, the matters described herein may contain 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. that are made pursuant to the Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions 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. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the Company's control, which may cause material differences in actual results, performance or other expectation. These factors include, but are not limited to, changes in economic conditions generally and the real estate and bond markets specifically, legislative/regulatory changes (including changes to laws governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. the taxation of REITs, availability of capital, interest rates and interest rate spreads, changes in 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 and policies and guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. applicable to REITs, those set forth in Part I, "Risk Factors" of the Company's 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. for the year ended December December: see month. 31, 2004 and other risks and uncertainties as may be detailed from time to time in the Company's public announcements and SEC filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . The Company assumes no obligation to update such information. - Statements Follow -
BERKSHIRE INCOME REALTY, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
September 30, December 31,
2005 2004
------------- -------------
ASSETS
Multifamily apartment communities, net of
accumulated depreciation of $120,501,433
and $113,953,842, respectively $355,654,603 $260,554,434
Cash and cash equivalents 23,088,348 31,913,045
Cash restricted for tenant security
deposits 1,425,572 1,217,517
Replacement reserve escrow 1,375,010 2,157,952
Prepaid expenses and other assets 9,020,115 8,190,739
Investment in Mortgage Funds 8,583,985 10,167,693
Investment in Multifamily Venture 1,969,059 2,274,500
Acquired in place leases and tenant
relationships, net of accumulated
amortization of $4,557,141 and
$1,722,428, respectively 1,061,737 2,152,840
Deferred expenses, net of accumulated
amortization of $539,755 and $325,338,
respectively 2,920,657 2,476,779
------------- -------------
Total assets $405,099,086 $321,105,499
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $339,170,319 $268,716,955
Due to affiliates 2,523,005 1,862,822
Dividend and distributions payable 837,607 1,087,607
Accrued expenses and other liabilities 7,802,478 7,312,054
Tenant security deposits 1,890,238 1,468,397
------------- -------------
Total liabilities 352,223,647 280,447,835
------------- -------------
Commitments and contingencies - -
Minority interest in properties 7,428,609 7,422,481
Minority interest in Operating Partnership - -
Stockholders' equity:
Series A 9% Cumulative Redeemable
Preferred Stock, no par value, $25
stated value, 5,000,000 shares
authorized, 2,978,110 shares issued
and outstanding at September 30,
2005 and December 31, 2004,
respectively 70,210,830 70,210,830
Class A common stock, $.01 par
value, 5,000,000 shares authorized;
0 shares issued and outstanding at
September 30, 2005 and December 31,
2004, respectively - -
Class B common stock, $.01 par
value, 5,000,000 shares authorized,
1,406,196 and 1,283,313 issued and
outstanding at September 30, 2005
and December 31, 2004, respectively 14,062 12,833
Excess stock, $.01 par value,
15,000,000 shares authorized, 0
shares issued and outstanding at
September 30, 2005 and December 31,
2004, respectively - -
Accumulated Deficit (24,778,062) (36,988,480)
------------- -------------
Total stockholders' equity 45,446,830 33,235,183
------------- -------------
Total liabilities and stockholders' equity $405,099,086 $321,105,499
============= =============
BERKSHIRE INCOME REALTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenue:
Rental $16,092,704 $ 8,522,654 $43,805,061 $25,056,663
Interest 149,696 153,877 322,312 639,129
Utility
reimbursement 198,567 120,821 610,164 366,194
Other 588,845 406,074 1,611,473 1,012,760
------------ ------------ ------------ ------------
Total revenue 17,029,812 9,203,426 46,349,010 27,074,746
------------ ------------ ------------ ------------
Expenses:
Operating 4,152,522 2,343,965 11,430,616 6,747,466
Maintenance 1,342,494 702,220 3,460,326 1,917,889
Real estate
taxes 1,883,867 984,426 5,101,785 2,960,411
General and
administrative 995,412 340,500 2,987,930 1,020,292
Management fees 1,090,617 618,402 3,038,744 1,836,651
Depreciation 5,682,906 2,573,097 14,698,315 7,658,724
Interest 4,548,982 2,458,933 12,399,147 7,554,562
Loss on sale of
securities - - - 163,630
Loss on
extinguishment
of debt 80,017 - 80,017 -
Amortization of
acquired
in-place
leases and
tenant
relationships 755,326 361,251 2,834,713 1,134,188
------------ ------------ ------------ ------------
Total expenses 20,532,143 10,382,794 56,031,593 30,993,813
------------ ------------ ------------ ------------
Loss before
minority interest
in properties,
equity in loss of
Multifamily
Venture, equity
in income of
Mortgage Funds,
minority common
interest in
Operating
Partnership,
income from
discontinued
operations and
gain on transfer
of assets to
Multifamily
Venture (3,502,331) (1,179,368) (9,682,583) (3,919,067)
Minority interest
in properties 14,964 (2,418) 77,900 (111,228)
Equity in loss of
Multifamily
Venture (23,943) (58,105) (67,316) (160,778)
Equity in income
of Mortgage Funds 1,973,191 1,559,844 3,127,348 2,824,714
Minority common
interest in
Operating
Partnership (244,025) (244,025) (488,050) (732,075)
------------ ------------ ------------ ------------
Net income (loss)
from continuing
operations (1,782,144) 75,928 (7,032,701) (2,098,434)
Discontinued
operations:
Income (loss)
from
discontinued
operations 1,100 (46,578) (1,112,713) (32,440)
Gain (loss) on
disposition of
real estate
asset (42,732) - 25,215,105 -
------------ ------------ ------------ ------------
Income (loss) from
discontinued
operations (41,632) (46,578) 24,102,392 (32,440)
------------ ------------ ------------ ------------
Income (loss)
before gain on
transfer of
assets to
Multifamily Joint
Venture (1,823,776) 29,350 17,069,691 (2,130,874)
Gain on transfer
of assets to
Multifamily Joint
Venture - - - 232,704
------------ ------------ ------------ ------------
Net income (loss) $(1,823,776) $ 29,350 $17,069,691 $(1,898,170)
============ ============ ============ ============
Preferred dividend (1,675,199) (1,675,200) (5,025,598) (5,025,638)
------------ ------------ ------------ ------------
Net income (loss)
available to
common
shareholders $(3,498,975) $(1,645,850) $12,044,093 $(6,923,808)
============ ============ ============ ============
Net income (loss)
from continuing
operations per
common share,
basic and diluted $ (1.27) $ 0.06 $ (5.29) $ (1.63)
============ ============ ============ ============
Net income (loss)
from discontinued
operations per
common share,
basic and diluted $ (.03) $ (0.04) $ 18.13 $ (0.03)
============ ============ ============ ============
Net income (loss)
per common share,
basic and diluted $ (2.49) $ (1.28) $ 9.06 $ (5.40)
============ ============ ============ ============
Weighted average
number of common
shares
outstanding,
basic and diluted 1,406,196 1,283,313 1,329,675 1,283,313
============ ============ ============ ============
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