CenterPoint Reports 57.9% EPS Growth and 16.1% FFO Per Share Growth.OAK BROOK A brook is a small stream. Brook may refer to the following places:
See: New York Stock Exchange :CNT (Carbon NanoTube) See nanotube. ):
Highlights:
-- Year-to-Date Investments of $269.9 Million; Dispositions of $236.3
Million
-- 3.7 Million Square Feet of Developments Delivered or Under
Construction
-- Investment Pipeline Increasing; Robust Disposition Market
-- Extended and Expanded CenterPoint Venture LLC
-- Strong Balance Sheet - 5.9 to 1 Debt Service Coverage, 5.6 to 1
Fixed Charge Coverage
-- 37 Million Square Feet YTD of Gross Absorption in Metro Chicago
Industrial Market
-- Executive Transition and Promotions Announced
CenterPoint Properties Trust (NYSE:CNT) reported today that 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 57.9% for the third quarter 2004 to $0.60 from $0.38 for the same period in 2003. Net income available to common shareholders increased 66.3% to $29.9 million from $18.0 million for the third quarter 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 FFO See: Funds from operations ") per share increased 16.1% for the third quarter 2004 to $0.65 from $0.56 for the same period in 2003. 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 gains 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 and reconciliation in Financial Statements for further explanation of FFO.) In September September: see month. 2004, CenterPoint increased full year 2004 earnings guidance to reflect better than expected 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 as well as investment, development and disposition volumes. As a result, the Company expects to report full year 2004 EPS in the range of $1.70 - $1.90 and FFO per share in the range of $2.33 - $2.37. Using the middle of the new guidance ranges, this represents an increase in full year 2004 EPS of 13.9% and FFO per share of 13.0% above 2003. The Company also expects to report fourth quarter 2004 EPS in the range of $0.39 - $0.59 and FFO per share in the range of $0.61 - $0.65. "The 1.3-billion-square-foot metropolitan 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] property market remains active - and so does CenterPoint. So far this year, we have executed 4.6 million square feet of leases. Additionally, we have completed $207.6 million of acquisitions and $62.3 million of developments. We also have $87.3 million of build-to-suit developments and redevelopments under construction and $204.2 million of acquisitions under contract or letter of intent. We expect the bulk of our investments will be funded by dispositions of existing assets, including the $236.3 million completed year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . CenterPoint's franchise is well positioned to exploit our expanding opportunities. Our balance sheet is strong and capital plentiful plen·ti·ful adj. 1. Existing in great quantity or ample supply. 2. Providing or producing an abundance: a plentiful harvest. . We expect leasing, acquisition, development and disposition markets to remain healthy as the economy continues to improve," stated John S. Gates, Jr., 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. . Investment Pipeline Increasing Year-to-date, CenterPoint has completed new investments of $269.9 million. These investments are expected to produce a weighted average initial cash yield of 10.0% and a weighted average straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. yield of 10.8%. Included in year-to-date investments is the $98.7 million acquisition of 24 buildings totaling 3.4 million square feet from Prime Group 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 (NYSE:PGE PGE Pacific Gas and Electric Company PGE Portland General Electric PGE Prostaglandin E PGE Platinum Group Elements PGE Pacific Great Eastern (Railroad) PGE Phenyl Glycidyl Ether PGE Perfect Girl Evolution ) announced on October October: see month. 12, 2004. The acquisition of an additional six buildings totaling 360,625 square feet is expected to close in early November November: see month. 2004 after the receipt of lender consents and the satisfaction of certain other customary closing conditions. The combined 30-building, 3.8 million square foot portfolio, together with 128 acres included in the transaction, represents substantially all of Prime's industrial holdings and is located in various industrial submarkets throughout metropolitan 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. . In addition to the Prime transaction, CenterPoint in the third quarter 2004 purchased six buildings totaling 1.2 million square feet and delivered two build-to-suit developments. CenterPoint completed the 1.0-million-square-foot 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 distribution center 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. ") and the 31,665-square-foot building for the FAA at O'Hare O'Hare may refer to:
CenterPoint currently has six developments under construction totaling 2.1 million square feet or $87.3 million. In September 2004, CenterPoint signed a lease and began construction on a 181,753-square-foot build-to-suit for Ta Chen International Corporation, a specialty metals distributor. This building is expected to be completed in July July: see month. 2005 and will be the third development at CenterPoint Business Center - Gurnee. Forty percent of total acreage at this park has been absorbed Absorbed 1. In a general business sense, when a cost is treated as an expense instead of being passed on to the customer in the form of higher prices. 2. In underwriting, when an issue has been completely sold to the public. 3. in the last six months. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. M. 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, "We are very pleased with our investment activity. Acquisition opportunities have rebounded and our business parks are all very active." "Due to this activity, we recently brought on board Brian Townsend Brian Townsend is an American professional poker player, currently residing in Santa Barbara, California. Townsend is largely known for his success playing no limit hold 'em and pot-limit omaha at Full Tilt Poker, playing under the nickname 'sbrugby. as Senior Vice President of Investments. He will be primarily responsible for acquisitions and dispositions, reporting to Jim Clewlow. Brian The name Brian (sometimes spelled Bryan) comes from an Irish backround. It is of Celtic origin and its meaning may be "hill" or "strong, noble, and high"[1]. has specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. in industrial real estate in Chicago for more than ten years and most recently served as Vice President of Leasing & Development for Duke Realty Corporation. We are excited that Brian has joined our team to help us capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the expanding opportunities in the Chicago industrial property market." Robust Disposition Market Year-to-date, CenterPoint and its affiliates have completed $236.3 million of dispositions. Proceeds have been redeployed into CenterPoint's expanding pipeline of investments and build-to-suit developments. In August 2004, CenterPoint sold a $108.4 million industrial portfolio to a private investor. The transaction encompassed ten buildings totaling 2.9 million square feet, located in various submarkets throughout the greater Chicago region. Also in the third quarter 2004, the Company sold five buildings totaling 115,860 square feet to another private investor for $5.6 million. The industrial real estate market remains very liquid with strong demand from users, investors and a variety of other buyer types. This consistent liquidity supports the Company's business strategy of selling 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. assets and redeploying the capital into assets where it can add value. Leasing on Plan Year-to-date leasing totals 4,636,127 square feet, of which 2,346,407 square feet was executed in the third quarter 2004. Rents on year-to-date leasing are expected to increase at an average rate of 6.5% on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis and increase 1.0% on a cash basis. Of total year-to-date leasing, 3,624,998 square feet was renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. , replaced or relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. . Rents on the renewals and replacements are expected to increase at an average rate of 3.4% on a GAAP basis and increase 0.6% on a cash basis. At September 30, 91.4% of the Company's in-service in-service In-service training adjective Referring to any form of on-the-job training noun In-service training of an employee industrial portfolio was leased and occupied. Excluding properties sold, the Company retained 91.7% of its tenants. 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. T. 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
adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: investments. To meet expanding demand, this year we acquired 920,520 square feet 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. in seven buildings, which we expect to retenant on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms. This strategy creates higher vacancy in the short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. , but significant share value upon lease-up." "We continue to see good activity in the Chicago industrial marketplace. In 2005, we have a relatively low level of lease expirations. This will allow us to focus on leasing up vacancy, while also continuing to find opportunities to provide relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. or expansion services to our existing tenants, both significant parts of our value-added strategy." CenterPoint Venture, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control CenterPoint Venture LLC, a joint venture between CenterPoint's taxable subsidiary and CalEast Industrial Investors, LLC (a real estate operating company operating company A business that engages in transactions with outsiders. owned by The State of California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). Public Employees' Retirement System and LaSalle Lasalle (ləsăl`) or Ville Lasalle (vēl), city (1991 pop. 73,804), S Que., Canada, SW of Montreal on the St. Lawrence River at the head of the Lachine Rapids. It is a suburb of Montreal. Investment Management, Inc.) was formed in January January: see month. 2000. In September 2004, all parties agreed to a five-year extension and expansion. The venture's equity commitments have increased to $200 million from CalEast and $67 million from CenterPoint. Concurrently con·cur·rent adj. 1. Happening at the same time as something else. See Synonyms at contemporary. 2. Operating or acting in conjunction with another. 3. Meeting or tending to meet at the same point; convergent. , the venture renewed its line of credit and expanded its capacity to $150 million. CenterPoint expects the reformulated venture to undertake up to double its historic activity. CenterPoint Venture will continue to invest in 'institutional quality' opportunities outside the Company's value-added investment focus. The venture improves, packages and then sells these assets to more fixed-income oriented o·ri·ent n. 1. Orient The countries of Asia, especially of eastern Asia. 2. a. The luster characteristic of a pearl of high quality. b. A pearl having exceptional luster. 3. investors. The renegotiated venture also expects to engage in more land acquisition and build-to-suit development than it has in the past. "With improved terms and expanded commitments, our partnership with CalEast continues to be an attractive and important source of capital for CenterPoint," stated James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. N. Clewlow, Senior Vice President of Investments. "Our venture with CalEast not only helps us fund expanding opportunities, but it is an excellent source of new opportunities as well. Over the last four years, about half the $600 million in activity between CenterPoint and CalEast have been transactions outside the venture." CenterPoint Venture contributed FFO of $0.03 year-to-date 2004. As of September 30, 2004, assets in CenterPoint Venture totaled $120.0 million. In August 2004, CenterPoint Venture sold a building as part of the industrial portfolio sale to a private investor. Financial Flexibility At September 30, CenterPoint had a total of $882.0 million of senior debt outstanding producing a debt to total market capitalization Total Market Capitalization The total market value of all of a firm's outstanding securities. of 29.3%. For the third quarter 2004, debt service coverage was 5.9 to 1 and fixed charge coverage was 5.6 to 1. Currently, CenterPoint's total debt bears a weighted average interest rate of 4.8%. A portion of the Prime industrial portfolio acquisition was immediately financed with $24.9 million of tax-exempt tax-ex·empt adj. 1. Not subject to taxation, as the capital or income of a philanthropic organization. 2. Producing interest that is exempt from income tax: tax-exempt bonds. n. debt. An additional $23.2 million of tax-exempt debt will be remarketed in January 2005 for a total of $48.1 million of such debt associated with the transaction. This would bring CenterPoint's total tax-exempt debt to $142.3 million. CenterPoint's tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. currently bear an interest rate of approximately 1.5%. "We will continue to fund much of our higher-growth opportunities with proceeds from profitable stabilized asset sales. Other supplemental capital remains attractive and plentiful, including funds from joint ventures, governments and tax-exempt debt," stated Paul S. Fisher, Chief Financial Officer. Chicago Industrial Market Based on combined data from Colliers, Bennett & Kahnweiler ("CB&K") and The Polacheck Company, CenterPoint estimates gross absorption in the 1.3-billion-square-foot Chicago Industrial Property Market was 37 million square feet for the first nine months 2004. The submarkets with the greatest gross absorption were O'Hare (5.6 million square feet), the Southwest Southwest or south west is the ordinal direction halfway between south and west, the opposite of northeast. Southwest or south west may also refer to:
Market-wide vacancy for the third quarter 2004 was estimated to be flat at 9.0% and construction completions through the third quarter 2004 were estimated at 11.9 million square feet. Dividends CenterPoint's Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. declared a fourth quarter dividend of $0.39 per common share, to be paid November 1, 2004 to shareholders of record October 21, 2004. On an 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. basis, this equates to $1.56 per share for the year 2004. The Board also declared a dividend of $0.9375 per share of its 7.50% Series B Convertible Cumulative Redeemable Redeemable Eligible for redemption under the terms of an indenture. 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. (NYSE:CNT B) to be paid December December: see month. 31, 2004 to shareholders of record December 15, 2004. For the third quarter 2004, the Company's FFO 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. was 60%. Executive Transition and Promotions In September 2004, CenterPoint announced that its Board of Directors approved a management transition and four executive promotions, which will go into effect January 1, 2005. Under this plan, John S. Gates, Jr., CenterPoint's Co-Chairman and Chief Executive Officer, will relinquish the CEO title and will transition to the role of an active Co-Chairman of the Board focusing on strategic, capital allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as and industry matters. Concurrently, Michael M. Mullen, President and Chief Operating Officer, will become Chief Executive Officer. Mr. Mullen joined one of CenterPoint's predecessor companies in 1984 and has served as President since December 2001. Paul S. Fisher, who joined the Company in 1991 as Chief Financial Officer, will take on the additional role of President. Paul T. Ahern, Chief Investment Officer, will assume the title of Executive Vice President and Chief Operating Officer. Mr. Ahern will be responsible for managing and adding value to the CenterPoint operating portfolio. James N. Clewlow, Senior Vice President of Investments, will be named Executive Vice President and Chief Investment Officer, responsible for the Company's acquisitions and dispositions. Mr. Clewlow joined CenterPoint in 1997 and has executed in excess of $1 billion in investments. He has also had day-to-day day-to-day adj. 1. Occurring on a routine or daily basis: the day-to-day movements of the stock market. 2. responsibility for CenterPoint Venture LLC since its inception and will continue in that role. Mr. Mullen remarked, "I look forward to building upon CenterPoint's success. While the 'batting order' has changed, our team, our focus and our strategies have not. No one - John included - is leaving. Rather, we are simply reallocating our duties. We will continue to focus on building our franchise and our ability to add value to industrial property in the metropolitan Chicago market. I am confident in the team we have assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. over the years and look forward to the opportunities that lie ahead." CenterPoint Properties Trust CenterPoint is a publicly traded real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) and the largest industrial property company in the 1.3-billion-square-foot Chicago regional market. It currently owns and operates approximately 37 million square feet and the Company and its affiliates own or control an additional 3,138 acres of land upon which approximately 48 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 $3.0 billion as of September 30, 2004. 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 and others 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. and 10-Qs. An Investor conference call will be held Wednesday Wednesday: see week. , October 27, 2004 beginning 1:00 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT , 2:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT . This call will be broadcast live on www.centerpoint-prop.com . To listen to the webcast, your computer must have either RealAudio A popular streaming audio technology for the Internet from RealNetworks. First introduced in 1995, a browser equipped with the RealPlayer media player or third-party RealAudio plug-in enables news, sports and other programs transmitted from RealAudio servers (RealServers) to be heard on 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, October 27, 2004 at 7:00 p.m. CDT. The replay number is 888-266-2081, passcode 575774. Supplemental financial and operating information will be available on the Company's website at www.centerpoint-prop.com after 8:00 p.m. CT on October 26, 2004. Financial Statements to Follow...
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
September 30, 2004 December 31, 2003
------------------ -----------------
Assets:
Investment in real estate:
Land $220,872 $194,965
Buildings 860,579 824,248
Building improvements 160,636 148,519
Furniture, fixtures, and
equipment 25,776 24,516
Construction in progress 158,543 150,126
------------------ -----------------
1,426,406 1,342,374
Less accumulated depreciation (186,607) (169,387)
Real estate held for sale, net
of depreciation 3,155 6,302
------------------ -----------------
Net investment in real
estate 1,242,954 1,179,289
Cash and cash equivalents 2,540 231
Restricted cash 103,209 42,520
Tenant accounts receivable, net 39,268 36,891
Mortgage and notes receivable (1) 17,845 63,084
Investment in and advances to
affiliate 18,443 47,139
Prepaid expenses and other assets 22,205 21,799
Deferred expenses, net 31,469 28,289
------------------ -----------------
$1,477,933 $1,419,242
================== =================
Liabilities and shareholders'
equity
Mortgage notes payable and
other debt (2) $45,605 $26,955
Senior unsecured debt 550,000 500,000
Tax-exempt debt 94,210 94,210
Line of credit 192,200 213,700
Accounts payable 21,921 19,707
Accrued expenses 66,890 70,275
Rents received in advance and
security deposits 11,678 11,894
------------------ -----------------
982,504 936,741
------------------ -----------------
Shareholders' equity:
Preferred equity 17,569 47,118
Common equity 523,986 487,978
Retained earnings (deficit) (29,741) (37,253)
Other comprehensive loss (6,851) (5,924)
Unearned compensation -
restricted shares (9,534) (9,418)
------------------ -----------------
495,429 482,501
------------------ -----------------
$1,477,933 $1,419,242
================== =================
(1) December 31, 2003 balance includes TIF notes receivable of $24,335
(2) September 30, 2004 balance includes non-recourse TIF debt of
$23,791.
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
----------------------- -----------------------
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Revenue:
Minimum rents $29,620 $25,503 $88,941 $75,229
Straight-line rents 1,497 1,485 2,959 2,094
Expense
reimbursements 8,978 7,526 26,978 22,736
Mortgage interest
income 174 343 688 1,032
Real estate fee
income 167 3,608 10,215 10,479
----------- ----------- ----------- -----------
Total revenue 40,436 38,465 129,781 111,570
----------- ----------- ----------- -----------
Expenses:
Real estate taxes 8,947 7,236 26,798 22,604
Property operating
and leasing 7,992 5,444 24,363 17,405
General and
administrative 2,797 1,785 7,186 5,287
Depreciation and
amortization 9,578 8,212 28,657 23,652
----------- ----------- ----------- -----------
Total expenses 29,314 22,677 87,004 68,948
----------- ----------- ----------- -----------
Other income/(expense)
Interest income 425 429 1,361 1,785
Interest expense (8,844) (6,847) (23,588) (18,400)
Amortization of
deferred financing
costs (932) (741) (2,606) (2,495)
----------- ----------- ----------- -----------
Total other
income/
(expenses) (9,351) (7,159) (24,833) (19,110)
----------- ----------- ----------- -----------
Income from continuing
operations before
income taxes and
equity in net
income of affiliate 1,771 8,629 17,944 23,512
(Provision for)
benefit from income
tax expense 303 (1,384) 740 (1,716)
Equity in net income
of affiliate (1) 683 780 1,466 1,489
Gain from sale of
equity interest - - 5,851 -
----------- ----------- ----------- -----------
Income from continuing
operations 2,757 8,025 26,001 23,285
Discontinued
operations:
Gain on sale, net of
tax (2) 26,570 6,248 35,687 23,742
Income from
operations, net of
tax 951 2,791 4,053 7,795
----------- ----------- ----------- -----------
Income before gain on
sale of real estate
and cumulative effect
of change in
accounting principle 30,278 17,064 65,741 54,822
Gain on sale of real
estate, net of
tax (2) - 2,084 177 4,999
----------- ----------- ----------- -----------
Income before
cumulative effect of
change in accounting
principle 30,278 19,148 65,918 59,821
Cumulative effect of
change in accounting
principle (3) - - - 6,528
----------- ----------- ----------- -----------
Net Income 30,278 19,148 65,918 66,349
Preferred dividends (368) (1,158) (2,092) (8,677)
----------- ----------- ----------- -----------
Net income available
to common
shareholders $29,910 $17,990 $63,826 $57,672
=========== =========== =========== ===========
Basic EPS (4):
Income available to
common shareholders
from continuing
operations $0.05 $0.19 $0.51 $0.43
Discontinued
operations 0.58 0.20 0.85 0.69
Cumulative effect of
change in accounting
principle - - - 0.14
----------- ----------- ----------- -----------
Net income available
to common
shareholders $0.63 $0.39 $1.36 $1.26
=========== =========== =========== ===========
Diluted EPS (4):
Income available to
common shareholders
from continuing
operations $0.05 $0.19 $0.49 $0.41
Discontinued
operations 0.55 0.19 0.82 0.67
Cumulative effect of
change in accounting
principle - - - 0.14
----------- ----------- ----------- -----------
Net income available
to common
shareholders $0.60 $0.38 $1.31 $1.22
=========== =========== =========== ===========
Distributions per
share (4) $0.390 $0.304 $1.170 $0.911
(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 September 30, 2004 and 2003, gains are
attributed to $99,023 and $34,999 of dispositions, respectively.
For the year ended September 30, 2004 and 2003, gains are
attributed to $182,308 and $91,529 of dispositions, respectively.
(3) See press release dated January 22, 2004.
(4) The per share amounts have been adjusted to reflect the
two-for-one stock split in June 2004.
FUNDS ANALYSIS
(in thousands, except share data)
Three Months Ended Nine Months Ended
September 30 September 30
----------------------- -----------------------
2004 2003 2004 2003
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Funds from operations
---------------------
Net income available to
common shareholders $29,910 $17,990 $63,826 $57,672
Add back/(deduct):
Depreciation and
amortization, net
of tax:
Continuing
operations 9,404 7,966 28,065 22,895
Discontinued
operations 442 1,090 1,675 3,327
Unconsolidated
subsidiaries 181 277 682 483
Accumulated
depreciation and
amortization of
intangibles on
sold industrial
assets, net of
tax (7,646) (679) (10,618) (2,015)
Cumulative effect
of change in
accounting
principle for
2002 - - - (6,528)
----------- ----------- ----------- -----------
Funds from operations $32,291 $26,644 $83,630 $75,834
=========== =========== =========== ===========
Funds from operations
per share $0.65 $0.56 $1.72 $1.60
=========== =========== =========== ===========
RECONCILIATION OF NET INCOME TO EBITDA
EBITDA
======
Net income available to
common shareholders $29,910 $17,990 $63,826 $57,672
Add back/(deduct):
Preferred
dividends 368 1,158 2,092 8,677
Interest incurred,
net 8,419 6,418 22,227 16,615
Depreciation and
amortization 9,578 8,212 28,657 23,652
Amortization of
deferred
financing costs 932 741 2,606 2,495
Provision for
income taxes
expense (benefit) (303) 1,384 (740) 1,716
Provision for
income taxes
expense (benefit)
from gain on sale - (331) 112 (38)
Cumulative effect
of change in
accounting
principle - - - (6,528)
Discontinued
operations:
Interest incurred,
net - 301 - 1,661
Depreciation and
amortization 442 1,090 1,675 3,327
Provision for
income taxes
expense (benefit)
from operations (1) 415 (35) 243
Provision for
income taxes
expense (benefit)
from gain on sale - - 234 (362)
----------- ----------- ----------- -----------
EBITDA $49,345 $37,378 $120,654 $109,130
=========== =========== =========== ===========
RECONCILIATION OF EBITDA TO DEBT SERVICE COVERAGE & FIXED CHARGE
COVERAGE RATIOS
EBITDA (A) 49,345 37,378 120,654 109,130
Interest incurred, net 8,419 6,418 22,227 16,615
Interest incurred, net
from discontinued
operations - 301 - 1,661
----------- ----------- ----------- -----------
Debt service (B) $8,419 $6,719 $22,227 $18,276
=========== =========== =========== ===========
EBITDA to debt service
coverage ratio (A/B) 5.9 5.6 5.4 6.0
Debt service 8,419 6,719 22,227 18,276
Preferred dividends 368 1,158 2,092 8,677
----------- ----------- ----------- -----------
Fixed charge (C) $8,787 $7,877 $24,319 $26,953
=========== =========== =========== ===========
EBITDA to fixed charge
coverage ratio (A/C) 5.6 4.7 5.0 4.0
Annualized FFO return
on common equity
=====================
FFO return on
common equity 24.7% 21.8% 21.3% 20.7%
Capitalized interest $1,297 $2,196 $4,755 $6,584
----------------------------------------------------------------------
Reconciliation of
average shares
outstanding
================
Basic Shares - GAAP 47,847,791 46,021,932 46,989,220 45,913,580
Add: Stock
options/grants -
common share
equivalents 1,757,454 1,492,062 1,719,276 1,357,336
----------- ----------- ----------- -----------
Diluted shares -
GAAP/FFO 49,605,245 47,513,994 48,708,496 47,270,916
=========== =========== =========== ===========
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
THIRD QUARTER 2004 EARNINGS RELEASE DEFINITIONS
Cash Yield is initial Net Operating Income, excluding straight line
rents, divided by total project cost, adjusted for tax increment
financing.
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.
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.
Straight Line Yield is average NOI, divided by total project cost,
adjusted for tax increment financing.
Weighted Average Straight Line Yield is calculated as the average NOI,
for the 12 months following stabilization, adjusted for TIF, 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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