CenterPoint Announces Fourth Quarter and Full Year 2003 Results; 2003 EPS Increases 13.3% to $3.16.Business Editors OAK BROOK, Ill.--(BUSINESS WIRE)--Feb. 17, 2004 CenterPoint Centerpoint is used in several senses:
See: New York Stock Exchange :CNT (Carbon NanoTube) See nanotube. ): -- 2003 FFO FFO See: Funds from operations Per Share Increases 3.7% to $4.16 -- 28% Increase in Annual Dividend to $3.12 per share for 2004, 10th Consecutive Annual Increase -- Operating Portfolio 93.8% Occupied -- $385 Million of Investments and $265 Million of Dispositions Completed in 2003 -- Expanding Investment and Disposition Pipeline -- Balance Sheet Remains Strong - 5.2 to 1 Debt Service Coverage -- Most Chicago Industrial In the early 1980s the Chicago-based record label Wax Trax! helped to forge the industrial music genre. At the forefront of this explosion of musical exploration were bands such as Chicago's Ministry, My Life With The Thrill Kill Kult, Die Warzau and Eight and One Half[1] Submarkets Active and Improving CenterPoint Properties Trust (NYSE:CNT) (the "Company") reported today that 2003 earnings per share ("EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ") increased 13.3% to $3.16 from $2.79 in 2002. Fourth quarter 2003 EPS remained flat at $0.72 from fourth quarter 2002. 2003 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 increased 3.7% to $4.16 from $4.01 in 2002 and fourth quarter 2003 FFO per share decreased 7.8% to $0.95 from $1.03 in fourth quarter 2002. CenterPoint defines FFO as: net income available to common shareholders plus real estate depreciation and non-financing amortization, inclusive of inclusive of prep. Taking into consideration or account; including. fee income and gain or losses on industrial property sales (net of accumulated depreciation accumulated depreciation The total amount of depreciation that has been recorded for an asset since its date of acquisition. For example, a computer with a 5-year estimated life that was purchased for $2,000 would have accumulated depreciation of $800 [( ) of the Company and its unconsolidated affiliates. See attached Reporting Definitions for further explanation of FFO. The Company also reconfirmed its 2004 earnings guidance and expects to report 2004 EPS in the range of $3.25 to $3.65 and first quarter 2004 EPS of $0.75 to $0.83. The Company expects to report FFO per share for full year 2004 of $4.55 to $4.75 and for first quarter 2004 of $1.08 to $1.12 per share. "2003 marked our tenth year as a public Company. Since our IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. in 1993, FFO per share has tripled and we have achieved a 22% average annual total return to shareholders. In 2003, CenterPoint delivered double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. earnings growth and a 36% total return to shareholders. Additionally, we completed $385 million of investments and $265 million of dispositions. This is significant given the economic and geopolitical ge·o·pol·i·tics n. (used with a sing. verb) 1. The study of the relationship among politics and geography, demography, and economics, especially with respect to the foreign policy of a nation. 2. a. environment of the past year. These results prove that our business model and franchise can produce well above average results throughout the economic cycle," stated John Gates
John Gates, born Solomon Regenstriet in New York City in 1913, was a prominent American Communist from 1939 to 1958. , Co-Chairman 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. . "CenterPoint continues to see an abundance Abundance See also Fertility. Amalthea’s horn horn of Zeus’s nurse-goat which became a cornucopia. [Gk. Myth.: Walsh Classical, 19] cornucopia conical receptacle which symbolizes abundance. [Rom. Myth. of real estate problems to solve in the metropolitan Chicago industrial property markets. Meanwhile, demand has increased for existing space, build-to-suits, redevelopments and infrastructure developments. We now control more than 3,267 acres of developable land in key submarkets, most of which was positioned very inexpensively in·ex·pen·sive adj. Not high in price; cheap. in  ex·pen sive·ly adv. . This land bank should
prove advantageous as the economy rebounds and customers look to expand
their operations. This should enhance our already very visible future
earnings growth."Operating Portfolio 93.8% Occupied As of December December: see month. 31, 2003, the Company's operating portfolio was 93.8% occupied. In 2003, the Company renewed, replaced or sold 2,757,631 square feet or 65.5% of all 2003 scheduled lease expirations. Renewals and replacements represented 2,560,561 square feet. Renewal and replacement rents increased at an average rate of 2.9% on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis and decreased 4.2% on a cash basis. In total, including lease up of 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. , the Company leased 5,340,035 square feet during 2003 at an average rental rate increase of 2.4% on a GAAP basis and a decrease of 4.0% on a cash basis. Excluding properties sold, the Company retained 97.2% of its tenants. Fourth quarter 2003 leasing activity totaled 1,107,575 square feet. Rents for all fourth quarter 2003 leasing activity increased 0.3% on a GAAP basis and decreased 4.6% on a cash basis. Renewals and replacements represented 506,819 square feet. Rents on renewals and replacements increased 4.9% on a GAAP basis and were flat on a cash basis. Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Ahern Ahern, also Aherne (Irish: Ó hEachtighearna/Ó hEachthairn) is an Irish surname and may refer to: Members of the political Ahern family in Ireland
v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. in 2004. However, the majority of these are at below-market rents and we continue to see improving activity in most submarkets." Investment Activity - $385 Million Completed in 2003 During 2003, the Company and its affiliates completed total investments of $385 million. Excluding land, these investments are expected to produce an initial cash yield of 10.2% and a GAAP yield of 11.0%. Build-to-suit developments completed in 2003 totaled $108 million and these developments are expected to produce an initial cash yield of 10.5% and a GAAP yield of 11.7%. The Company also completed $277 million of property acquisitions. Excluding land, these will produce an initial cash yield of 10.1% and a GAAP yield of 10.7%. During the fourth quarter 2003, the Company completed $109 million of total investments producing an initial cash yield of 11.8% and GAAP yield of 12.4%. Highlighting fourth quarter investment activity was a sale lease-back transaction to Caterpillar caterpillar (kăt`əpĭl'ər, kăt`ər–), common name for the larva of a moth or butterfly. Caterpillars have distinct heads and are segmented and wormlike. Corporation in Joliet, Illinois The city of Joliet is located 40 miles southwest of Chicago. It holds the county seat of Will County and is also incorporated in Kendall County. As of the 2000 census, the city had a total population of 106,221. . CenterPoint acquired Caterpillar's 280-acre hydraulics hydraulics, branch of engineering concerned mainly with moving liquids. The term is applied commonly to the study of the mechanical properties of water, other liquids, and even gases when the effects of compressibility are small. systems manufacturing campus, which consists of four buildings totaling 2.9 million square feet. Caterpillar signed a 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. lease for a significant portion of the property, which sits just east of the intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. of Interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. 55 and Interstate 80. CenterPoint currently has seven build-to-suits under construction totaling approximately $71 million that are 74% pre-leased. These projects are expected to produce a weighted average initial cash yield of 10.1% and long-term yield of 10.7%. In November November: see month. 2003, the Company announced its plans to develop a new distribution center for DSC (1) (Digital Signal Controller) A microcontroller and DSP combined on the same chip. It adds the interrupt-driven capabilities normally associated with a microcontroller to a DSP, which typically functions as a continuous process. See microcontroller and DSP. Logistics at CenterPoint Intermodal in·ter·mod·al adj. Relating to transportation by more than one means of conveyance, as by truck and rail: intermodal transport. Center ("CIC CIC circulating immune complexes. CIC Circulating immune complexes. See Immune complexes. ") in Elwood, Illinois Elwood is a village in Will County, Illinois, United States. The population was 1,620 at the 2000 census. Geography Elwood is located at (41.413615, -88.110438). . DSC Logistics, a leading supply chain management company headquartered in Des Plaines Des Plaines, city, United States Des Plaines (dĕs plānz), city (1990 pop. 53,223), Cook co., NE Ill., a suburb of Chicago on the Des Plaines River; inc. 1925. Among its manufactures are chemicals and electronic equipment. , IL, has signed a long-term lease for 741,000 square feet. Construction of this facility is expected to be completed in July July: see month. 2004. Also in the fourth quarter 2003, CenterPoint broke ground on a 157,000-square-foot airfreight air·freight n. 1. A system of transporting freight by air. 2. The amount charged for transporting freight by air. air facility at O'Hare O'Hare may refer to:
Additionally, CenterPoint is developing a 40,000-square-foot build-to-suit for Allied Building Products, a national distributor of building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . , in Oak Forest, IL. The wholesale distribution facility is under construction and is expected to be completed by May 2004. Mike Mullen Mul´len n. 1. (Bot.) See Mullein. , President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. commented, "Fortunately, we are seeing expanding opportunities for investments, redevelopments and build-to-suits at attractive yields. As customer inventories re-build, we expect this trend to continue." Disposition Activity - $265 Million Completed in 2003 CenterPoint and its affiliates completed dispositions totaling $265 million in 2003 and $64 million in the fourth quarter 2003. Proceeds from these sales are redeployed into CenterPoint's expanding pipeline of investments and build-to-suit developments. Dispositions in the fourth quarter were highlighted by the sale of a 444,000-square-foot multi-tenant In the Software as a Service (SaaS) software architecture, multi-tenant refers to the ability of the hosting site to support multiple organizations ("tenants") at the same time. Multi-tenancy is a key feature of a true SaaS architecture. property, a 24-acre land parcel in McCook, Illinois McCook is a suburb of Chicago in Cook County, in the U.S. state of Illinois. As of the 2000 census, the village population was 254, which is the lowest population of all municipalities in the county. . These dispositions nearly complete the sale of CenterPoint Business Center - McCook McCook may refer to:
Also included in fourth quarter disposition activity was the last closing of the $91 million phased sale of the 600-acre rail facility at CIC leased to The Burlington Northern and Santa Fe Santa Fe, city, Argentina Santa Fe, city (1991 pop. 341,000), capital of Santa Fe prov., NE Argentina, a river port near the Paraná, with which it is connected by canal. Railway. CenterPoint Affiliates CenterPoint Venture LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , a joint venture between CenterPoint Properties and CalEast (a joint venture between CalPERS and LaSalle Investment Management), was formed in January 2000 to position, package and sell stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. industrial property investment opportunities routinely passed over by the Company due to its more "value-added" investment focus. In 2003, CenterPoint Venture and its affiliates contributed net income to the Company of $2.1 million or EPS of $.09, and FFO of $7.4 million or $0.31 per share. In the fourth quarter 2003, this venture contributed net income to the Company of $473,144 or EPS of $.02, and FFO of $609,507 or $0.03 per share. Assets of the venture and its affiliates totaled $131.6 million at year end. At December 31, 2003, Chicago Manufacturing Campus, LLC (a development joint venture between CenterPoint and Ford Motor Land Development Corporation) had assets totaling $80.5 million. The 1.6 million-square-foot supplier park consisting of four buildings is 100% leased to various Ford suppliers. The final 384,000-square-foot building was delivered in November 2003. Both ventures' financial statements are included in the Company's supplemental investor package. Balance Sheet Remains Strong In 2003, $265 million of sales funded a majority of the $385 million of new investments. Overall, internally generated funds (i.e. sale proceeds and retained cash flow) satisfied 71% of all capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . The balance was funded by debt. At December 31, 2003, CenterPoint had a total of $835 million of senior debt outstanding with a weighted average interest rate of 4.6%. Debt to total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. was 31.5%. 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 to debt service coverage was 5.2 to 1 and EBITDA to fixed charge coverage was 4.6 to 1. In January 2004, CenterPoint announced a $48 million Tax Increment Financing Tax Increment Financing, or TIF, is a tool which has been used for redevelopment and community improvement projects throughout the United States for more than half a century. ("TIF TIF Tagged Image File (file name extension) TIF Tax Increment Financing TIF Temporary Internet Files TIF Transport Innovation Fund (UK) TIF Telecommunications Infrastructure Fund ") sale. To date, approximately $88 million of 10% tax-exempt CIC TIF Notes have been issued to CenterPoint. The Company retains approximately $64 million of these TIF Notes and expects to receive up to an additional $47 million of TIF Notes as the CIC park progresses. The Company announced a change in accounting principles relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc TIF assets at the time of the TIF sale. Please refer to the January 22, 2004 release for further detail on the sale and the change in accounting principles. Paul Fisher Paul Fisher is the name of:
tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. $75 million of 8.48% Series A 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. . Additionally the debt associated with the phased BNSF BNSF Burlington Northern Santa Fe Corporation (railroad) sale was retired by the end of the year. These transactions allowed us to reduce our weighted average interest rate from 6.2% to 4.6% over the past year and improve our coverage ratios." "In addition to assets sales, we continue to look for ways to efficiently create inexpensive capital for our expanding investment opportunities. The recent TIF transaction was a perfect example of this strategy." 28% Increase in Common Dividend As a result of its confidence in the Company's cash flow growth, in the fourth quarter 2003 the Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. voted to increase the dividend payable to common shareholders by 28% to $3.12 per share. This is the tenth consecutive annual increase in the common dividend. The Company's payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. should remain relatively low and is the minimum payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. management believes will be required by the REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). rules. The Company's low payout ratio is a result of its desire to maximize internal capital formation. The Company paid a first quarter dividend of $0.78 per common share on February 2, 2004, to shareholders of record as of January 22, 2004. Greater Chicago Industrial Property Market Improving According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. combined market data from Colliers Bennett & Kahnweiler and The Polacheck Company, vacancy in the greater Chicago industrial property market was flat at 8.9% in fourth quarter 2003 compared with third quarter 2003. Gross absorption in the 1.3 billion square foot greater Chicago market for the full year 2003 was 49.4 million square feet, 6.7% higher than the 46.3 million square feet absorbed in 2002. Submarkets showing strong gross absorption in 2003 were the Southwest Suburbs with 9.5 million square feet (4.8 million of which was completed in the fourth quarter), O'Hare with 5.7 million square feet and the Chicago South Suburbs with 5.4 million square feet. New industrial construction in the greater Chicago market was 15.3 million in 2003 compared to 14.1 million square feet in 2002. CenterPoint Properties Trust CenterPoint is a publicly traded real estate investment trust (REIT) and the largest industrial property Company in the 1.3 billion-square-foot Chicago regional market. The Company and its affiliates currently own and operate approximately 36 million square feet and own or control an additional 3,267 acres of land upon which 50.1 million square feet could be developed. The Company is focused on providing unsurpassed tenant satisfaction and adding value to its shareholders through customer driven management, investment, development and redevelopment of warehouse, distribution, light manufacturing buildings and logistics infrastructure. The first major REIT to focus on the industrial property sector, CenterPoint had a total market capitalization of approximately $2.7 billion as of December 31, 2003. Statements in this release, which are not historical, may be deemed 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. under federal securities laws. There can be no assurance that future results will be achieved and actual results could differ materially from forecasts and estimates. Factors that could cause actual results to differ materially are general business and economic conditions, completion of pending acquisitions, competitive market conditions, weather, pricing of debt and equity capital markets and other risks inherent in the real estate business. Such factors are listed in 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. or 10-Q. An Investor conference call will be held Wednesday, February 18, 2004 beginning 1:00 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. , 2:00 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. . This call will be broadcast live on www.centerpoint-prop.com. To listen to the webcast, your computer must have either RealAudio or Media Player installed. If you do not have either player, the CenterPoint website will have instructions for installing one at the Pre-event System Test link. An online replay will also be available approximately one hour after the call. A replay of the call will be available after 5:00 p.m. on Wednesday, February 18, 2004. The replay number is 888-266-2081, passcode 372807. Supplemental financial and operating information will be available on the Company's web site at www.centerpoint-prop.com after 8:00 p.m. CT on Tuesday, February 17, 2004.
Financial Statements to Follow...
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2003 2002
----------------------------
Assets:
Investment in real estate:
Land $194,965 $179,466
Buildings 824,248 772,722
Building improvements 148,519 132,274
Furniture, fixtures, and
equipment 24,516 22,764
Construction in progress 150,126 111,883
----------------------------
1,342,374 1,219,109
Less accumulated depreciation (169,387) (143,587)
Real estate held for sale, net of
depreciation 6,302 48,632
----------------------------
Net investment in real
estate 1,179,289 1,124,154
Cash and cash equivalents 231 1,234
Restricted cash 42,520 60,441
Tenant accounts receivable, net 36,891 31,487
Mortgage and notes receivable (1) 63,084 30,287
Investment in and advances to
affiliate 47,139 30,997
Prepaid expenses and other assets 21,800 15,679
Deferred expenses, net 28,289 16,463
----------------------------
$1,419,243 $1,310,742
============================
Liabilities and shareholders' equity
Mortgage notes payable and other
debt $26,955 $84,681
Senior unsecured debt 500,000 500,000
Tax-exempt debt 94,210 94,420
Line of credit 213,700 18,000
Preferred dividends payable - 1,060
Accounts payable 19,707 11,942
Accrued expenses 70,276 61,952
Rents received in advance and
security deposits 11,894 11,728
----------------------------
936,742 783,783
----------------------------
Shareholders' equity:
Preferred equity 47,118 119,611
Common equity 487,978 477,069
Retained earnings (deficit) (37,253) (54,474)
Other comprehensive loss (5,924) (5,898)
Unearned compensation -
restricted shares (9,418) (9,349)
----------------------------
482,501 526,959
----------------------------
$1,419,243 $1,310,742
============================
(1) - Includes TIF notes receivable of $24,238.
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31 December 31
--------------------------------------------------
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------------------------------------------------
Revenue:
Minimum rents $29,839 $27,091 $111,571 $104,348
Straight-line rents 768 494 3,520 2,038
Expense
reimbursements 8,628 6,817 33,320 29,887
Mortgage interest
income 285 297 1,318 896
Real estate fee
income 1,509 2,240 11,988 12,230
--------------------------------------------------
Total revenue 41,029 36,939 161,717 149,399
--------------------------------------------------
Expenses:
Real estate taxes 6,868 6,258 30,666 27,724
Property operating
and leasing 11,579 6,904 29,945 23,904
General and
administrative 3,394 2,574 8,681 7,023
Depreciation and
amortization 9,039 8,108 34,763 31,935
Interest expense: -
Interest
incurred, net 6,690 7,351 23,305 26,880
Amortization of
deferred
financing costs 859 950 3,354 2,918
Impairment of assets
held for sale - 1,228 1,228
--------------------------------------------------
Total expenses 38,429 33,373 130,714 121,612
--------------------------------------------------
Income from continuing
operations before
income taxes
and equity in net
income of affiliate 2,600 3,566 31,003 27,787
Provision for
income taxes
(expense) benefit 521 176 (1,111) (1,373)
Equity in net
income of
affiliate (1) 792 1,374 2,281 1,994
--------------------------------------------------
Income from
continuing operations 3,913 5,116 32,173 28,408
Discontinued operations:
Gain on sale, net
of tax 12,996 12,241 36,785 29,899
Income from
operations, net
of tax 573 1,040 3,402 4,123
--------------------------------------------------
Income before gain
on sale of real
estate and
cumulative effect
of change in
accounting
principle 17,482 18,397 72,360 62,430
Gain on sale of
real estate, net
of tax (2) 753 1,118 5,696 12,962
--------------------------------------------------
Income before cumulative
effect of change in
accounting principle 18,235 19,515 78,056 75,392
Cumulative effect of
change in accounting
principle (3) - - 6,528 -
--------------------------------------------------
Net Income 18,235 19,515 84,584 75,392
Preferred dividends (922) (2,523) (9,599) (10,090)
--------------------------------------------------
Net income available
to common shareholders $17,313 $16,992 $74,985 $65,302
==================================================
Per share income
available to common
shareholders from
continuing
operations
Basic $0.16 $0.16 $1.23 $1.37
Diluted $0.16 $0.16 $1.19 $1.34
Per share income from
discontinued operations
Basic $0.59 $0.58 $1.75 $1.50
Diluted $0.56 $0.56 $1.70 $1.45
Per share net income
from cumulative
effect of change in
accounting principle
Basic $- $- $0.28 $-
Diluted $- $- $0.27 $-
Per share net income
available to common
shareholders
Basic $0.75 $0.74 $3.26 $2.87
Diluted $0.72 $0.72 $3.16 $2.79
Distributions per share $0.608 $0.578 $2.430 $2.310
(1) Results of investments accounted on the equity basis include
CenterPoint Venture, LLC, and Chicago Manufacturing Campus, LLC.
See summary financial statements in the supplemental schedules.
(2) For the quarter ended December 31, 2003 and 2002, gains are
attributed to $64,882 and $48,133 of dispositions, respectively.
For the year ended December 31, 2003 and 2002, gains are
attributed to $156,411 and $188,001 of dispositions, respectively.
(3) See press release dated January 22, 2004
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
FUNDS ANALYSIS
(in thousands, except share data)
Three Months Ended Twelve Months Ended
December 31 December 31
--------------------------------------------------
2003 2002 2003 2002
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------------------------------------------------
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Funds from operations
---------------------
Net income available
to common shareholders $17,313 $16,992 $74,985 $65,302
Add back/(deduct):
Depreciation and
amortization, net
of tax:
Continuing
operations 8,755 7,790 33,721 30,975
Discontinued
operations 293 490 1,548 2,860
Unconsolidated
subsidiaries 375 82 858 301
Accumulated
depreciation on
sold industrial
assets, net of tax (3,855) (1,272) (5,869) (5,647)
Cumulative effect
of change in
accounting
principle - - (6,528) -
--------------------------------------------------
Funds from operations $22,881 $24,082 $98,715 $93,791
==================================================
Funds from
operations per share $0.95 $1.03 $4.16 $4.01
==================================================
RECONCILIATION OF NET INCOME TO EBITDA
EBITDA
------
Net income available
to common shareholders $17,313 $16,992 $74,985 $65,302
Add back/(deduct):
Preferred dividends 922 2,523 9,599 10,090
Interest
incurred, net 6,690 7,351 23,305 26,880
Depreciation and
amortization 9,039 8,108 34,763 31,935
Amortization
of deferred
financing costs 859 950 3,354 2,918
Provision for
income taxes
expense (benefit) (521) (176) 1,111 1,373
Provision for
income taxes
expense (benefit)
from gain on sale 89 - 50 1,302
Cumulative effect
of change in
accounting
principle - - (6,528) -
Discontinued operations
Interest
incurred, net 200 1,401 1,861 2,995
Depreciation
and amortization 293 490 1,548 2,860
Provision for
income taxes
expense (benefit)
from operations 92 115 411 282
Provision for
income taxes
expense (benefit)
from gain on sale 806 2 452 291
--------------------------------------------------
EBITDA $35,782 $37,756 $144,911 $146,228
==================================================
Debt service coverage 5.2 4.3 5.8 4.9
Fixed charge coverage 4.6 3.3 4.2 3.7
Annualized FFO return
on common equity
---------------------
FFO return on
common equity 18.76% 20.19% 20.23% 19.66%
----------------------------------------------------------------------
Reconciliation of
average shares outstanding
---------------------------
Basic Shares - GAAP 23,137,220 22,860,520 23,010,730 22,758,051
Add: Stock
options/grants -
common share
equivalents 876,613 598,052 733,310 626,799
--------------------------------------------------
Diluted shares -
GAAP/FFO 24,013,833 23,458,572 23,744,040 23,384,850
==================================================
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
FOURTH QUARTER 2003 EARNINGS RELEASE DEFINITIONS
Cash Yield is initial Net Operating Income ("NOI"), excluding straight
line rents, divided by total project cost.
Debt Service Coverage is EBITDA divided by interest incurred, net.
Debt to Total Market Cap is total debt from the balance sheet divided
by the sum of total debt from the balance sheet plus the market value
of shares outstanding at the end of the period.
EBITDA stands for earnings before interest, income taxes, depreciation
and amortization. Management believes that EBITDA is helpful to
investors as an indication of property operations, because it excludes
costs of financing and non-cash depreciation and amortization amounts.
EBITDA does not represent cash flows from operations as defined by
GAAP, should not be considered by the reader as an alternative to net
income as an indicator of the Company's operating performance, and is
not indicative of cash available to fund all cash flow needs.
Investors are cautioned that EBITDA, as calculated by the Company, may
not be comparable to similarly titled but differently calculated
measurers for other REITs.
FFO Payout Ratio is dividends paid during the period divided into
Funds from Operations for that same period.
FFO Return on Common Equity is calculated as FFO divided by common
equity.
Fixed Charge Coverage is EBITDA divided by the total of interest
incurred, net and preferred dividends
Funds From Operations (FFO) The National Associations of Real Estate
Investment Trust ("NAREIT") defines funds from operations ("FFO")
(April, 2002 White Paper) as net income excluding gains (or losses)
from sales of property, plus depreciation and amortization. NAREIT
adds, "management of each of its member companies has the
responsibility and authority to publish financial information that it
regards as useful to the financial community." Accordingly,
CenterPoint calculates FFO, inclusive of fee income and industrial
property sales (net of accumulated depreciation) of the Company and
its unconsolidated affiliates. The Company believes that FFO inclusive
of cash gains better reflects recurring funds because the disposition
of stabilized properties, and the recycling of capital and profits
into new "value added" investments, is fundamental to the company's
business strategy.
GAAP Yield is initial NOI, including straight line rents, divided by
total project cost.
Second Generation Costs include all capitalized costs incident to
leasing, operating or improving the company's portfolio excluding
costs budgeted at acquisition or initial development or costs expended
to materially increase the revenue potential of a property. Second
Generation Costs, deducted in calculating FAD, can include leasing
commissions and related costs, tenant specific improvements, or
improvements to land or buildings.
Weighted Average GAAP Yield is calculated as the total NOI, including
straight-line rents, for the 12 months following stabilization,
divided by Total Costs.
Weighted Average Initial Cash Yield is calculated as the total NOI,
excluding straight-line rents, for the 12 months following
stabilization, divided by Total Costs.
Weighted Average Interest Rate is the annual interest expense for the
current outstanding debt (most current interest rate X current debt
outstanding) divided into the current debt outstanding.
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