CenterPoint Reports First Quarter 2005 Results; EPS of $0.59, FFO Per Share of $0.62.OAK BROOK, Ill. -- CenterPoint Centerpoint is used in several senses:
See: New York Stock Exchange :CNT (Carbon NanoTube) See nanotube. ): Highlights: --$393 Million Portfolio Sale Contracted; Attractive Continuing Source of Capital --Strong Acquisition Pipeline, Expanding Build-to-Suit Opportunities --2.5 Million Square Feet, or 46% of 2005 Lease Expirations Accounted For Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. --Halo Recovery of $4.8 Million in Q1 --Financial Flexibility - 6.3 to 1 Debt Service Coverage; 5.3 to 1 Fixed Charge Coverage --Metro 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] Market Active, Occupancy Improving --Donald A. King, Jr. Added to Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. 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 47.5% for the first quarter 2005 to $0.59 from $0.40 for the same period in 2004. Net income for the first quarter 2005 was $29.8 million, an increase of 52.8% over first quarter 2004 net income of $19.5 million. 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 8.8% for the first quarter 2005 to $0.62 from $0.57 for the same period in 2004. FFO for the first quarter 2005 was $31.2 million, 13.9% higher than first quarter 2004 FFO of $27.4 million. First quarter 2005 earnings and FFO results include a $4.8 million recovery associated with the bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most of Halo Industries, Inc. The recovery, together with the sale of the building in 2002, partially offset the charge CenterPoint recorded in 2001. 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 Reconciliation and Reporting Definitions for further explanation of FFO. The Company revised its 2005 EPS guidance upward to reflect greater than anticipated book gains resulting from the $392.7 million portfolio sale, which includes more heavily depreciated Depreciated may refer to:
"CenterPoint is ahead of plan and fundamentals continue to improve. About 2.5 million square feet, or 46% of the Company's total 2005 expirations, have been favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. addressed through new or renewal leases and dispositions. The 1.4-billion-square-foot Chicago industrial property market is active and rents are stabilizing stabilizing, v to hold a limb motionless in order to ground its energy; a standard isometric resistance technique, it releases tension and lengthens muscle fibers. . While we are pleased with our progress, nominal 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. has increased as a result of above average rollover A graphic element in an application or on a Web page that changes its color or shape when the pointer is moved (rolled) over it. See JavaScript rollover. See also n-key rollover. last year and our strategic decision to invest in vacant real estate to exploit the recovering market. However, we do expect improving conditions to increase occupancy in the second half of 2005," stated 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. , Chief Executive Officer. "On Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , we announced the administrative leave of 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 and Monday confirmed that the basis for the leave relates solely to Paul and has nothing to do with the operation of our business or reporting. We believe the leave will not affect our tenant or other relationships nor impact our prospects. We have confidence in Sean Maher This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , who will fill in for Paul, and the rest of our operations team. Business is continuing as usual at CenterPoint because we have a very deep and talented bench. We will provide more details on Paul when we're able." "Two weeks ago we announced the formation of a strategic relationship with James Fielding James Field (c.1714 – 11 February 1751) was a sailor and boxer in England in the 18th century who was hanged for robbery. He was born in Dublin, and spent most of his early life involved in petty crime. Funds Management Limited, an affiliate of the Mirvac Group Mirvac Group (ASX: MGR) is a diversified property investment and management group in Australia with more than $24 billion of assets under control across the investment, development, and hotel and funds management spectrum. , a leading listed Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. property group. We believe our phased sale of the $392.7 million industrial portfolio into a venture with James Fielding, and ongoing opportunity for similar transactions, provide earnings visibility as well as solidifies attractive funding for new value-added investment. The benefits of this deal make it one of the most important the Company has executed." "Finally, we are pleased to have recovered some of the loss we suffered following the bankruptcy of Halo in 2001. We expected a recovery and planned 2005 accordingly." Expanding Investment Pipeline In the first quarter 2005, CenterPoint and affiliates completed investments of $132.2 million. Of these, CenterPoint completed $118.7 million, which are expected to produce an initial cash yield of 9.5% and a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). yield of 9.9%. First quarter 2005 investments included completion of one build-to-suit delivery, acquisition of approximately 3.1 million square feet and a 50-acre land acquisition. Highlighting first quarter investment activity was the purchase of a 3.0 million-square-foot, 8-building industrial portfolio from HSA HSA Health Savings Account (US) HSA Human Serum Albumin HSA Human Services Agency (Nevada) HSA Health Services Agency HSA Health and Safety Authority (Ireland) Commercial Real Estate for $96 million, including the assumption of approximately $25 million in mortgage debt. James Clewlow, Chief Investment Officer, commented, "With our next four quarters of dispositions under contract, our investment team can now focus solely on redeploying the proceeds into 'value-added' acquisition and development opportunities offering better yields. We have a significant number of deals in negotiation or under letter of intent and a healthy pipeline of other potential investments. Our activity in the first quarter is a significant head start." CenterPoint and its affiliates currently have eight developments under construction totaling 2.2 million square feet or $112.2 million. Excluding four build-to-suits for sale, these projects are expected to produce a weighted initial cash yield of 10.6% and GAAP yield of 11.2%. Robust Disposition Market In the first quarter 2005, CenterPoint and its affiliates completed $132.2 million of dispositions. CenterPoint completed $95.4 million of these dispositions. First quarter 2005 dispositions were highlighted by the sale of an 856,768-square-foot building leased to Cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to Brands and located in West Chester West Chester, borough (1990 pop. 18,041), seat of Chester co., SE Pa., W of Philadelphia; inc. 1799. Primarily residential, West Chester was long the trade and processing center for an agricultural region that is now mainly suburbs. , OH. This building was sold to a private investor. As announced on April 7, 2005, CenterPoint signed a contract to sell a $392.7 million portfolio of industrial assets to a new venture to be created between the Company and JF US Industrial Trust, a property trust to be listed on the Australian Stock Exchange Australian Stock Exchange (ASX) Australia's major securities market, formed when the six state stock exchanges (Adelaide, Brisbane, Hobart, Melbourne, Perth, and Sydney stock exchanges) were merged in 1987. and managed by James Fielding. CenterPoint will retain a 5% promoted interest in the venture and will manage the portfolio for fees. The portfolio contains 41 industrial buildings totaling approximately 10.1 million square feet located in various markets throughout metropolitan Chicago. The sale is scheduled to close in phases over four quarters, in approximately equal amounts each quarter. The first sale is planned to close in the second quarter 2005 with the last sale closing in the first quarter 2006. The venture will run for an initial period ending three years following the last closing. James Fielding, acting through the venture, will have a right of first offer on additional CenterPoint sales during the term, conditioned on the venture meeting specified acquisition targets. James Fielding can only acquire Chicago properties from CenterPoint, provided the Company offers it a minimum amount of property annually. CenterPoint agreed to master lease existing vacancy at the time of close and any vacancy incident to rollover during the first year following acquisition, each for a period of one year. The master lease obligation is an offset to profit initially recognized, but any rent received from third parties will become additional gain. James Clewlow remarked, "Given the liquidity in the Chicago industrial property market, we widely marketed this portfolio of assets. James Fielding offered the most attractive price and terms for the portfolio, which included a mix of new and older properties. As important, the venture structure establishes James Fielding as a continuing attractive source of capital going forward, contributing additional certainty to our 'recycling' model." Leasing Ahead of Plan All leasing activity in the first quarter 2005 totaled 917,691 square feet. Rents on total leasing activity increased 15.2% on a straight-line basis and 8.6% on a cash basis. Renewals and replacements represented 679,164 square feet. Rents on renewals and replacements increased at an average rate of 6.7% on a straight-line basis and 4.7% on a cash basis. CenterPoint sold two buildings totaling 172,356 square feet in the first quarter which had 2005 lease expiries. We also began demolition Demolition is the opposite of construction: the tearing-down of buildings and other structures. It contrasts with deconstruction, which is the taking down of a building while carefully preserving valuable elements for re-use. of a 583,260-square-foot building at CNT Business Center I-80, which had a 2005 lease expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created . Additionally, the Australian portfolio included 609,083 square feet of vacancy and 1.1 million square feet of space scheduled to expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. this year. The Company also sold two other vacant properties totaling 103,435 square feet. Overall, the Company has addressed 3.2 million square feet or 36.4% of beginning year inventory, the total of scheduled 2005 lease expirations and beginning year vacancy. The Company's activity relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 2005 expiries accounted for 2.5 million square feet or 46% of the 5.5 million square feet scheduled to roll at year end. Excluding properties sold, the Company retained 94.6% of its tenants. At March 31, 88.0% 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 compared to 90.4% at the end of 2004. Last year and in the first quarter 2005, CenterPoint purchased several vacant buildings and sold 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 consistent with its value-added 'recycling' strategy. While this has resulted in higher 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. vacancy, the Company expects it to add significant 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. value. CenterPoint expects occupancy to improve in the second half of 2005 as it leases up existing vacancy. CenterPoint Affiliates CenterPoint Venture LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control CenterPoint Venture LLC, a joint venture between CenterPoint Properties and CalEast (a joint venture between CalPERS and LaSalle Investment Management) acquires or develops, packages and sells stabilized industrial property investment opportunities outside the Company's more "value-added" investment focus. CenterPoint Venture contributed EPS of $0.01 and FFO per share of $0.01 in the first quarter 2005. As of March 31, 2005, assets in CenterPoint Venture totaled $130.1 million. In first quarter 2005, CenterPoint Venture sold four buildings totaling 506,022 square feet. These buildings were located in Crystal Lake, IL. The assets were sold to a partnership between a local private investor capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. by an institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . Rochelle Development Joint Venture Rochelle Development Joint Venture, a joint venture between CenterPoint Properties and UBS UBS Union Bank of Switzerland UBS United Bible Societies UBS United Blood Services UBS United Buying Service UBS Used Bookstore UBS University Business Services UBS Universal Building Society (UK) UBS Ulaanbaatar Broadcasting System Real Estate, was formed in December 2004 to develop and sell completed leased buildings or to develop facilities to be owned by users at CIC-Rochelle, a 362-acre industrial park located less than one mile from the Union Pacific's 1,230-acre intermodal in·ter·mod·al adj. Relating to transportation by more than one means of conveyance, as by truck and rail: intermodal transport. facility (developed by CenterPoint). In the first quarter 2005, UBS purchased the 400,000-square-foot RC2 build-to-suit completed in January 2005 pursuant to the joint venture agreement. Strong Balance Sheet At March 31, CenterPoint had a total of $835 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 28.2%. For the first quarter 2005, debt service coverage was 6.3 to 1 and fixed charge coverage was 5.3 to 1. Currently, CenterPoint's total debt has a weighted average remaining term of 8.0 years and bears a weighted average interest rate of 5.4%. Paul Fisher Paul Fisher is the name of:
adj. Not high in price; cheap. in  ex·pen sive·ly adv. fixed the cost of considerable
capital through our largest ever disposition. We expect future, similar
sales through the relationship with James Fielding to continue to tap
the attractive Australian capital Noun 1. Australian capital - the capital of Australia; located in southeastern AustraliaCanberra, capital of Australia Australia, Commonwealth of Australia - a nation occupying the whole of the Australian continent; Aboriginal tribes are thought to have market. Knowing our capital cost allows us to invest more and with greater certainty, improving the efficiency of our recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. model. Accelerated turnover with reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of proceeds into higher yielding assets improves our valuation. Additionally, this sale adds significant liquidity and enhances the flexibility and strength of CenterPoint's balance sheet." Donald A. King, Jr. Joins Board of Trustees As announced in April, CenterPoint's Board of Trustees elected Donald A. King, Jr. as an independent trustee, to fill a vacancy created by the Board. Including Mr. King, there are now 11 members on CenterPoint's Board of Trustees. Mr. King is currently the Vice Chairman of Deutsche Asset Management, a Member of the Deutsche Bank Deutsche Bank AG (IPA: /'dɔɪ.tʃə/[1]) (ISIN: DE0005140008, NYSE: DB) (English: German Bank Group. He is a member of the Urban Land Institute, the National Association of Real Estate Investment Managers and the Pension Real Estate Association. Since its founding in 1984, CenterPoint has maintained a Board composed of a majority of independent trustees recruited for excellence in their distinct skill sets. The Board has determined that Mr. King is an independent trustee under the categorical That which is unqualified or unconditional. A categorical imperative is a rule, command, or moral obligation that is absolutely and universally binding. Categorical is also used to describe programs limited to or designed for certain classes of people. standards adopted by the Board. CenterPoint's Board of Trustees now includes seven independent trustees. Dividends CenterPoint's Board of Trustees declared a second quarter dividend of $0.4275 per common share, to be paid April 25, 2005 to shareholders of record April 14, 2005. 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 $1.71 per share for the year 2005. 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:CNTPRB) to be paid June 30, 2005 to shareholders of record June 16, 2005. For the first quarter 2005, 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 69%. Chicago Industrial Market Based on combined data from Colliers, Bennett & Kahnweiler ("CB&K") and The Polacheck Company, gross absorption in the 1.4-billion-square-foot Chicago Industrial Market was 14.6 million square feet for the first quarter 2005 compared to 12.7 million square feet absorbed in the first quarter 2004. Market-wide vacancy for the first quarter 2005 was 8.9% compared to 9.0% at December 31, 2004. In the first quarter, submarkets showing significant gross absorption included the Southwest Suburbs, O'Hare, Fox Valley and Chicago South. Construction completions for the first quarter 2005 totaled 3.4 million square feet. 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 1.4-billion-square-foot Chicago regional market. As of March 31, 2005, the Company owned and operated approximately 40.1 million square feet and the Company and its affiliates owned or controlled an additional 3,329 acres of land upon which approximately 52 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 March 31, 2005. 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. or 10-Q. An Investor conference call will be held Wednesday, April 20, 2005 beginning 1:00 p.m. CT (2:00 p.m. ET). This call will be broadcast live on www.centerpoint-prop.com. To access the webcast, go to this website and click on Investor Relations Investor relations The process by which the corporation communicates with its investors. . Click on the webcast title located on the upper left side of the page. To listen to the webcast, your computer must have either RealAudio or Media Player installed. If you do not have either player, there 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. CT on Wednesday, April 20, 2005. The replay number is 888-266-2081, passcode 631834. Supplemental financial and operating information will be available on the Company's web site at www.centerpoint-prop.com after 7:00 p.m. CT on April 19, 2005. Financial Statements to Follow...
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2005 December 31, 2004
---------------- ------------------
Assets:
Investment in real estate:
Land $255,018 $233,326
Buildings 907,847 881,328
Building improvements 159,774 167,982
Furniture, fixtures, and
equipment 26,293 26,130
Construction in progress 150,686 152,795
---------------- ------------------
1,499,618 1,461,561
Less accumulated depreciation (185,271) (183,770)
Real estate held for sale, net
of depreciation 83,525 62,360
---------------- ------------------
Net investment in real estate 1,397,872 1,340,151
Cash and cash equivalents 2,538 1,496
Restricted cash 43,011 79,297
Tenant accounts receivable, net 30,953 36,949
Mortgage and notes receivable 14,497 75,089
Investment in and advances to
affiliate 8,902 14,202
Prepaid expenses and other assets 17,693 16,694
Deferred expenses, net 42,286 34,613
---------------- ------------------
$1,557,752 $1,598,491
================ ==================
Liabilities and shareholders'
equity
Mortgage notes payable and
other debt (1) $99,101 $73,109
Senior unsecured debt 550,000 550,000
Tax-exempt debt 142,150 118,900
Line of credit 44,200 131,500
Preferred dividend payable 1,598 254
Accounts payable 16,538 18,778
Accrued expenses 73,772 86,762
Rents received in advance and
security deposits 12,665 12,224
---------------- ------------------
940,024 991,527
---------------- ------------------
Shareholders' equity:
Preferred equity 110,687 110,687
Common equity 541,056 534,038
Retained earnings (deficit) (13,223) (22,031)
Other comprehensive loss (6,213) (6,532)
Unearned compensation -
restricted shares (14,579) (9,198)
---------------- ------------------
617,728 606,964
---------------- ------------------
$1,557,752 $1,598,491
================ ==================
(1) March 31, 2005 and December 31, 2004 balances includes
non-recourse TIF debt of $21,958.
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended March 31
-----------------------------------
2005 2004
(Unaudited) (Unaudited)
---------------- ------------------
Revenue:
Minimum rents $31,600 $24,718
Straight-line rents 716 741
Expense reimbursements 10,977 8,019
Mortgage interest income 425 378
Real estate fee income 5,130 1,232
---------------- ------------------
Total revenue 48,848 35,088
---------------- ------------------
Expenses:
Real estate taxes 10,350 7,562
Property operating and leasing 9,980 6,435
General and administrative 2,837 1,922
Depreciation and amortization 11,455 8,432
Impairment of assets held for
sale 694 -
---------------- ------------------
Total expenses 35,316 24,351
---------------- ------------------
Other income/(expense)
Interest income 239 486
Interest expense (8,432) (7,785)
Amortization of deferred
financing costs (1,002) (865)
---------------- ------------------
Total other income/(expenses) (9,195) (8,164)
---------------- ------------------
Income from continuing operations
before income taxes and equity in
net income of affiliate 4,337 2,573
(Provision for) benefit from
income tax expense 831 129
Equity in net income of affiliate (1) 366 621
Gain from sale of equity interest - 5,851
---------------- ------------------
Income from continuing operations 5,534 9,174
Discontinued operations:
Gain on sale, net of tax (2) 25,048 6,573
Income from operations, net of
tax 805 4,608
---------------- ------------------
Net Income 31,387 20,355
Preferred dividends (1,604) (887)
---------------- ------------------
Net income available to common
shareholders $29,783 $19,468
================ ==================
Basic EPS (3):
Income available to common
shareholders from continuing
operations $0.08 $0.18
Discontinued operations 0.53 0.24
---------------- ------------------
Net income available to common
shareholders $0.61 $0.42
================ ==================
Diluted EPS (3):
Income available to common
shareholders from continuing
operations $0.08 $0.17
Discontinued operations 0.51 0.23
---------------- ------------------
Net income available to common
shareholders $0.59 $0.40
================ ==================
Distributions per share (3) $0.428 $0.390
(1) Results of investments accounted on the equity basis include
CenterPoint Venture, LLC, Chicago Manufacturing Campus II, LLC and
Rochelle Development Joint Venture.
(2) For the quarter ended March 31, 2005 and 2004, gains are
attributed to $95,353 and $31,274 of dispositions, respectively.
(3) The per share amounts have been adjusted to reflect the
two-for-one stock split in June 2004.
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
FUNDS ANALYSIS
(in thousands, except share data)
Three Months Ended March 31
-----------------------------------
2005 2004
(Unaudited) (Unaudited)
---------------- ------------------
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Funds from operations
---------------------
Net income available to common
shareholders $29,783 $19,468
Add back/(deduct):
Depreciation and amortization,
net of tax:
Continuing operations 10,934 8,225
Discontinued operations 621 1,997
Unconsolidated subsidiaries 95 305
Accumulated depreciation and
amortization of intangibles on
sold industrial assets, net of tax (10,204) (2,616)
---------------- ------------------
Funds from operations $31,229 $27,379
================ ==================
Funds from operations per share $0.62 $0.57
================ ==================
RECONCILIATION OF NET INCOME TO EBITDA
EBITDA
------
Net income available to common
shareholders $29,783 $19,468
Add back/(deduct):
Preferred dividends 1,604 887
Interest incurred, net 8,193 7,299
Depreciation and amortization 11,455 8,432
Amortization of deferred
financing costs 1,002 865
Provision for income taxes
expense (benefit) (831) (129)
Discontinued operations:
Depreciation and amortization 621 1,997
Provision for income taxes
expense (benefit) from
operations (5) (35)
Provision for income taxes
expense (benefit) from gain on
sale 154 -
---------------- ------------------
EBITDA $51,976 $38,784
================ ==================
RECONCILIATION OF EBITDA TO DEBT SERVICE COVERAGE & FIXED CHARGE
COVERAGE RATIOS
EBITDA (A) 51,976 38,784
Interest incurred, net 8,193 7,299
Interest incurred, net from
discontinued operations - -
---------------- ------------------
Debt service (B) $8,193 $7,299
================ ==================
EBITDA to debt service coverage
ratio (A/B) 6.3 5.3
Debt service 8,193 7,299
Preferred dividends 1,604 887
---------------- ------------------
Fixed charge (C) $9,797 $8,186
================ ==================
EBITDA to fixed charge coverage
ratio (A/C) 5.3 4.7
Annualized FFO return on common
equity
-------------------------------
FFO return on common equity 23.1% 22.1%
Capitalized interest $2,123 $1,918
----------------------------------------------------------------------
Reconciliation of average shares
outstanding
--------------------------------
Basic Shares - GAAP 48,683,418 46,424,566
Add: Stock options/grants - common
share equivalents 1,717,085 1,865,636
---------------- ------------------
Diluted shares - GAAP/FFO 50,400,503 48,290,202
================ ==================
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES FIRST QUARTER 2005 EARNINGS RELEASE DEFINITIONS Cash Yield is initial Net Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , excluding straight line rents, divided by total project cost, adjusted for 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. . Debt Service Coverage is 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 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 preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) Funds From Operations (FFO) The National Associations of Real Estate Investment Trust ("NAREIT NAREIT National Association of Real Estate Investment Trusts ") 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 re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. funds because the disposition of stabilized properties, and the recycling of capital and profits into new "value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. " 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 ex·pend tr.v. ex·pend·ed, ex·pend·ing, ex·pends 1. To lay out; spend: expending tax revenues on government operations. See Synonyms at spend. 2. to materially increase the revenue potential of a property. Second Generation Costs, deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. in calculating FAD FAD - ["FAD, A Simple and Powerful Database Language", F. Bancilon et al, Proc 13th Intl Conf on VLDB, Brighton, England, Sep 1987]. , can include leasing commissions and related costs, tenant specific improvements, or improvements to land or buildings. Straight Line Yield is average NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics , 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 Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders , adjusted for 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 , 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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