Berkshire Income Realty Announces Quarter End FFO of $1,393,097.Business Editors BOSTON--(BUSINESS WIRE)--May 18, 2004 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 quarter ended March 31, 2004. Financial highlights for the quarter ended March 31, 2004 include: -- The Company's 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. for the quarter ended March 31, 2004 were $1,393,097. -- For the quarter ended March 31, 2004, Berkshire reported a net loss of $1,059,590. For the comparable period in 2003, the Berkshire Income Realty Predecessor Group reported net income of $375,415. Because the Company did not have any operations until the quarter ended June June: see month. 30, 2003, the discussion in this press release of operations or activities prior to April 1, 2003 refers to the operations and activities of the Berkshire Income Realty Predecessor Group, the Company's predecessor entities for accounting purposes. As described in the Company's Form 10K for the year ended December December: see month. 31, 2003 filed on March 30, 2004, the Berkshire Income Realty Predecessor Group contributed to the Company the initial properties that comprise a portion of the Company's current operations. -- During the quarter, the Company announced several acquisitions that broaden the Company's presence in certain markets. The Company's purchase of The Berkshires at Marina Marina “a piece of virtue.” [Br. Lit.: Pericles] See : Virtuousness Mile, located in Fort Lauderdale, Florida Fort Lauderdale, known as the "Venice of America" due to its expansive and intricate canal system, is a city in Broward County, Florida, United States. The city's population is described as metropolitan, where diverse culture is commonplace. According to 2006 U.S. , was the first acquisition of the quarter. This acquisition added 306 units to the Company's total portfolio. We believe the 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 market is one of the more desirable multifamily markets in the country. The Company intends to form a joint venture, with an unrelated third party, on the property whereby each of the party's to the venture will participate, on a pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. basis, in the economic benefits of The Berkshires at Marina Mile apartment community, located in Pompano pompano (pŏm`pənō), common name for fishes of the genus Trachinotus, and for Palometus simillimus, members of a large and important family of mackerellike fishes, abundant in warm seas around the world. , Florida. President and CFO See Chief Financial Officer. , David Quade comments, "We are very excited about this joint venture relationship. The economics of the venture are positive for the Company, it establishes a new relationship that we hope to grow in the future and it allows us to stretch our capital resources." -- The Company also announced the acquisitions of Laurel Laurel, cities, United States Laurel. 1 Town (1990 pop. 19,438), Prince Georges co., central Md., about halfway between Washington, D.C., and Baltimore; patented in the late 1600s, inc. 1870. Woods and Bear Creek Bear Creek may refer to: Communities
Mr. Quade, previously commented, "Bear Creek Apartments and Laurel Woods Apartments were purchased from lenders. We believe that the purchase prices of both properties represent excellent values in their respective markets and that prior undermanagement, reflected in occupancy statistics, gives us significant 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 . Both properties are located in what we consider to be attractive sub-markets." -- On April 30, 2004, the Company announced it that would pay its regular quarterly cash dividend of $.5625 on each share (aggregate quarterly dividend of $1,675,000) of its 9% Series A Cumulative Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. ("Preferred Shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. ") on May 15, 2004 to shareholders of record on May 10, 2004. The regular cash dividend payable on the Series A Preferred Stock is payable on February February: see month. 15, May 15, August 15 and November 15 of each year. Funds From Operations The Company has adopted the revised definition of 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 Funds from Operations ("FFO FFO See: Funds from operations ") 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 and real estate related depreciation and amortization. Management believes that in order to facilitate a clear understanding of the historical operating results of the Company, FFO should be considered in conjunction with net income (loss) as presented in the financial statements included elsewhere herein. 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 REITs or similar real estate companies that have not adopted the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. FFO should not be considered as an alternative to net income (loss) (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 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 financial statements. The following table presents a reconciliation of Net Income (loss) to Funds from Operations for the three months ended March 31, 2004 and 2003:
March 31, March 31,
------------ ----------
2004 2003
------------ ----------
Net Income (loss) ($1,059,590) 375,415
Add:
Depreciation of real property 1,998,050 1,107,320
Amortization of acquired in-place leases 454,637 -
------------ ----------
Funds from Operations $1,393,097 1,482,735
============ ==========
Net income in 2004 includes certain items of a variable nature. The Company's equity in income of the Mortgage Funds includes certain components that may vary from period to period. During the quarter ended March 31, 2004, equity in income of Mortgage Funds included approximately $103,207 related to the amortization of discounts associated with the acquisition of the interests in the Mortgage Funds. The pace at which future amortization is recognized is generally tied to the payoff of the various underlying mortgage assets and as such may be slower in future periods. Thus, past FFO may not be indicative of future FFO results. 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 expectations. 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 real estate investment trusts ("REITs"), availability of capital, interest rates and interest rate spreads, changes in generally accepted 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. 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.
BERKSHIRE INCOME REALTY, INC.
(FORMERLY BERKSHIRE INCOME REALTY PREDECESSOR GROUP)
CONSOLIDATED BALANCE SHEETS
(unaudited)
March 31, 2004 December 31, 2003
---------------- -----------------
ASSETS
Multi-family apartment communities,
net of accumulated depreciation of
$105,235,489 and $102,609,721,
respectively $177,458,332 $ 145,222,916
Cash and cash equivalents 24,217,089 42,145,947
Available for sale securities, at
fair value 18,613,628 18,488,414
Cash restricted for tenant security
deposits 857,093 856,498
Replacement reserve escrow 245,432 318,708
Prepaid expenses and other assets 4,278,695 5,113,200
Investment in Mortgage Funds 23,413,986 24,046,908
Acquired in place leases and tenant
relationships, net of accumulated
amortization of $666,837 and
$212,200, respectively 1,531,538 1,061,004
Deferred expenses, net of
accumulated amortization of
$400,680 and $323,067 respectively. 1,906,685 1,621,498
---------------- -----------------
Total assets $252,522,477 $238,875,093
================ =================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $201,250,695 $184,471,204
Due to affiliates 1,740,902 1,318,755
Dividends and distributions
payable 837,607 1,087,593
Accrued expenses and other
liabilities 2,488,540 3,268,859
Tenant security deposits 1,152,107 971,363
---------------- -----------------
Total liabilities 207,469,851 191,117,774
Commitments and Contingencies - -
Minority Interest - -
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 March 31, 2004
and December 31, 2003,
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 March 31, 2004
and 2003, respectively - -
Class B common stock, $.01 par
value, 5,000,000 shares
authorized; 1,283,313 shares
issued and outstanding at March
31, 2004 and December 31, 2003,
respectively 12,383 12,383
Excess stock, $.01 par value,
15,000,000 shares authorized, 0
shares issued and outstanding
at March 31, 2004 and December
31, 2003, respectively - -
Accumulated deficit (25,186,468) (22,451,665)
Accumulated other comprehensive
gain (loss) 15,881 (14,229)
---------------- -----------------
Total stockholders' equity 45,052,626 47,757,319
Total liabilities and
stockholders' equity $252,522,477 $238,875,093
================ =================
BERKSHIRE INCOME REALTY, INC.
(FORMERLY BERKSHIRE INCOME REALTY PREDECESSOR GROUP)
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended March 31,
-----------------------------
2004 2003
-------------- --------------
Revenue:
Rental $8,832,565 $6,606,860
Interest 251,818 32,380
Utility reimbursement 135,734 108,611
Other 342,997 244,548
-------------- --------------
Total revenue 9,563,114 6,992,399
-------------- --------------
Expenses:
Operating 2,457,112 1,614,342
Maintenance 594,686 477,286
Real estate taxes 1,073,682 564,226
General and administrative 349,134 147,604
Management fees 621,494 432,368
Depreciation and amortization 2,703,381 1,453,032
Interest 2,699,803 1,928,126
Amortization of acquired in-place
leases and tenant relationships 454,637 -
-------------- --------------
Total expenses 10,953,929 6,616,984
-------------- --------------
Income (loss) before minority interest
in properties, equity in income of
Mortgage Funds and minority common
interest in Operating Partnership (1,390,815) 375,415
Minority interest in properties (45,942) -
Equity in income of Mortgage Funds 377,167 -
Minority interest in Operating
Partnership - -
-------------- --------------
Net income (loss) (1,059,590) $375,415
-------------- ==============
Preferred dividend (1,675,213)
--------------
Net loss available to common
shareholders $(2,734,711)
==============
Loss per common share, basic and diluted $(2.13)
==============
Weighted average number of common shares
outstanding, basic and diluted 1,283,313
==============
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