CenterPoint Reports First Quarter Results; EPS of $0.81, FFO Per Share of $1.13.Business Editors OAK BROOK, Ill.--(BUSINESS WIRE)--April 20, 2004 CenterPoint Centerpoint is used in several senses:
See: New York Stock Exchange :CNT (Carbon NanoTube) See nanotube. ): Highlights: -- Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. Leasing Ahead of Plan -- 6 Million Square Feet in Build-to-Suit and Redevelopment Pipeline -- Breaking Ground at Three New Fully Entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: Business Parks -- Gross Absorption in Metro Chicago Metro is a concert hall at 3730 N. Clark Street in Chicago, Illinois that plays host to a variety of local, regional and national emerging bands and musicians. First opened in 1982, the Metro is the oldest continually owned independent music venue in the United States. Industrial Market 20% Higher Than First Quarter 2003 -- Robust Disposition Market; In Negotiations to Sell $400-$500 Million Portfolio -- Financial Flexibility - 5.3 to 1 Debt Service Coverage -- Two-for-One Share Split Proposed 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. ") decreased 25.0% for the first quarter 2004 to $0.81 from $1.08 for the same period in 2003. Year-over-year net income comparisons were affected by a first quarter 2003 "cumulative effect of a change in accounting principle," which retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin added $10.2 million ($0.42 per share) of net income to first quarter 2003 results. (The January January: see month. 2004 completion of the 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. ") 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 securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. prompted new accounting for the CIC TIF Notes receivable and a retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a increase to 2003 earnings (see January 22, 2004 release)). Excluding the $10.2 million retroactive addition to first quarter 2003 net income, EPS for first quarter 2004 would have increased 22.7%. 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 decreased 0.9% for the first quarter 2004 to $1.13 from $1.14 for the same period in 2003. Due to the new accounting for the CIC TIF Notes, $3.6 million of FFO ($0.12 per share) also was retroactively added to first quarter 2003. Absent this accounting change, first quarter 2004 FFO per share would have increased 11.9%. 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. "Our first quarter is usually our slowest. Nonetheless, leasing, build-to-suit and disposition activity was ahead of plan and is now accelerating. Many submarkets are firming up rapidly," 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. . "We continue to see significant demand for industrial property investments. As announced last week, we are in final negotiations to sell a $400-500 million portfolio of assets. Meanwhile, our expanding development and redevelopment pipeline is the largest we've we've Contraction of we have. we've have seen in more than three years." Expanding Investment Pipeline In the first quarter 2004, CenterPoint completed investments of $46.7 million. These investments are expected to produce an initial cash yield of 10.5% and a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). yield of 11.0%. First quarter 2004 investments included completion of two build-to-suit developments and acquisitions of approximately 553,460 square feet. Highlighting first quarter investment activity was the purchase of a five building, 361,000-square-foot portfolio. CenterPoint and its affiliates currently have five developments under construction totaling 1.5 million square feet or $55 million, of which 89% is pre-leased. These projects are expected to produce a weighted initial cash yield of 11.1% and GAAP yield of 11.6%. In the first quarter 2004, CenterPoint completed a 213,000-square-foot high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. distribution facility for 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). Cartage cart·age n. 1. The act or process of carting. 2. The cost of carting. cartage a fee charged for carting of goods. See also: Dues and Payment Noun 1. at CIC 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). . California Cartage will benefit from the park's recently approved foreign trade zone status. Sanyo SANYO Three Oceans (Japanese, refers to Pacific, Atlantic, and Indian Oceans) Logistics also recently 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 400,000 square feet at CIC and will occupy the same building as Partners Warehouse, which now occupies 200,000 square feet. Last week, 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 ("DSC"), a leading supply chain management company, executed their lease expansion provision for the remaining 282,000 square feet of the recently announced 1,023,000-square-foot build-to-suit at CIC. DSC signed a long-term lease for 741,000 square feet of the facility in November November: see month. and will now lease the entire building. This 100% leased build-to-suit is under construction and is expected to be delivered in the third quarter 2004. CenterPoint recently received all of the necessary entitlements for three new major business parks. They collectively total 738 acres upon which 10.3 million square feet is expected to be developed over the next five years. CenterPoint has letters of intent for developments at all three and expects to break ground on each in the second quarter 2004. -- CenterPoint Business Center - Gurnee: The 134-acre park could support approximately 1.5 million square feet. It fronts I-294 just south of Grand Avenue, across from the Six Flags For the national flags of Texas, see . Six Flags (NYSE: SIX) is the world's largest chain of amusement parks and theme parks and is headquartered in New York City. There are 20 such parks run by Six Flags. Great America America [for Amerigo Vespucci], the lands of the Western Hemisphere—North America, Central (or Middle) America, and South America. The world map published in 1507 by Martin Waldseemüller is the first known cartographic use of the name. Theme Park in Gurnee, IL. -- CenterPoint Business Center - McCook McCook may refer to:
could support approximately 3.7 million square feet. It is located at the 1st Avenue/ I-55 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. in McCook, IL. -- CenterPoint Intermodal Center - Rochelle Ro`chelle´ n. 1. A seaport town in France. Rochelle powders Same as Seidlitz powders. Rochelle salt (Chem.) the double tartrate of sodium and potassium, a white crystalline substance. : The 362-acre park could support approximately 5.2 million square feet. It is located near the I-88 and I-39 intersection and adjacent to the 1,200-acre UP Global III Intermodal Facility in Rochelle, IL. 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, "We currently have build-to-suits and redevelopments in excess of 6 million square feet in negotiation or under letter of intent. While not all of these deals will close, we are pleased with the opportunities to add value in this market. As a result, we continue to pursue attractive land acquisitions and now own or control a land bank of 3,300 acres that could support more than 50 million square feet." Robust Disposition Market Year-to-date, CenterPoint and its affiliates have completed $111 million of dispositions. CenterPoint completed $31 million of dispositions and its affiliates completed $80 million. Proceeds are redeployed into CenterPoint's expanding pipeline of investments and build-to-suit developments. First quarter 2004 dispositions were highlighted by the sale of 90% of the Company's interest in the 1.6-million-square-foot Ford 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. Manufacturing Campus to a pension fund. The remaining 10% is expected be sold later in the year. As announced on April 14, 2004, the Company is in talks to sell a $400-$500 million portfolio to a U.S. REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). subsidiary of a to-be-formed 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 fund. If concluded, approximately 60% of the buildings would be sold in June June: see month. 2004, with the balance to close in the first quarter of 2005. CenterPoint expects to redeploy re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. the majority of the proceeds into new build-to-suit developments, redevelopments and other value-added val·ue-add·ed 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 boost returns and growth, CenterPoint has consistently 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 and redeployed the capital into higher yielding opportunities where it can add value. Over time, this 'recycling' strategy increases earnings and limits shareholder dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. ," stated Paul Fisher Paul Fisher is the name of:
"Albeit large, the contemplated sale would serve the same objectives," added John S. Gates, Jr., Co-Chairman and CEO. "The sale would allow the Company to efficiently bundle the majority of its budgeted 2004 and 2005 sales to one buyer. In addition, it would fund - and fix the cost of - the preponderance pre·pon·der·ance also pre·pon·der·an·cy n. Superiority in weight, force, importance, or influence. Noun 1. preponderance of our capital needs for the next two years." Although there can be no assurance that all or any part of the transaction will close, the parties have reached an agreement in principle and are concluding final negotiations on definitive agreements. Leasing Ahead of Plan All leasing activity in the first quarter 2004 totaled 604,995 square feet, of which the Company renewed, replaced or sold 579,510 square feet. Rents for combined leasing activity decreased 1.6% on a GAAP basis and 5.1% on a cash basis. Renewals and replacements represented 538,710 square feet. Rents on renewals and replacements decreased at an average rate of 0.9% on a GAAP basis and 3.8% on a cash basis. At March 31, 92.0% 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 and occupied compared to 93.8% at December December: see month. 31, 2003. Excluding properties sold, the company retained 94.0% of its tenants. Since the end of the first quarter 2004, the Company has leased an additional 634,000 square feet bringing year-to-date leasing to more than 1.2 million square feet. This total includes 651,000 square feet that was expected to go vacant in the first quarter. 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
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), was formed in January 2000 to position, package and sell stabilized industrial property investment opportunities routinely passed over by the Company due to its more value-added investment focus. Given the success of this joint venture and the opportunities is has created for all parties, extension negotiations are well underway now. CenterPoint Venture and its affiliates contributed FFO of $0.02 in the first quarter 2004. As of March 31, 2004, assets in CenterPoint Venture totaled $132.1 million. In first quarter 2004, CenterPoint Venture purchased the three remaining Home Depot The Home Depot (NYSE: HD) is an American retailer of home improvement and construction products and services. Headquartered in Vinings, just outside Atlanta in unincorporated Cobb County, Georgia, Home Depot employs more than 355,000 people and operates 2,164 big-box buildings totaling 359,000 square feet from an affiliate of CalEast. Financial Flexibility At March 31, CenterPoint had a total of $820 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 29.0%. For the first quarter 2004, debt service coverage was 5.3 to 1 and fixed charge coverage was 4.8 to 1. Currently, CenterPoint's debt has a weighted average remaining term of 7.4 years and bears a weighted average interest rate of 4.2%. Paul Fisher, Chief Financial Officer, noted, "CenterPoint's financial flexibility continues to strengthen. The recently announced potential portfolio sale would only increase our flexibility and would fix the majority of our capital costs for the next two years. In addition to a strong disposition market, other attractive capital sources remain available, including additional TIF and lease securitizations as well as venture partners." Stock Split and Dividend On March 3, 2004, CenterPoint announced that its Board of Trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. has approved a two-for-one split of the Company's common shares, subject to shareholder approval of an increase in the number of authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: common shares under the Company's Declaration of Trust from 50 million to 120 million. The Company will hold its annual shareholder meeting on May 18, 2004. The increase in the number of authorized shares Authorized shares Number of shares authorized for issuance by a firm's corporate charter. will be voted on at this meeting. If the increase is approved, the Company will announce the record and distribution dates of the share split at that time. The Board also declared a dividend of $0.78 per share that was paid on April 14, 2004 to common shareholders of record on April 7, 2004. 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-pB) will be paid June 30, 2004 to shareholders of record June 16, 2004. For the first 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 69%. The Company's low payout ratio is a result of its desire to maximize internal capital formation. "The potential portfolio sale also positions the Company to consider a special dividend and a share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and as a means of returning some of the profits to shareholders. The Company could afford to return capital without diminishing di·min·ish v. di·min·ished, di·min·ish·ing, di·min·ish·es v.tr. 1. a. To make smaller or less or to cause to appear so. b. its ability to pursue attractive opportunities to add value," stated John Gates, Co-Chairman and CEO. Chicago Industrial Market Based on combined data from Colliers, Bennett & Kahnweiler ("CB&K") and The Polacheck Company, gross absorption in the 1.3-billion-square-foot Chicago Industrial Market was 12.7 million square feet for the first quarter 2004 compared to 10.6 million square feet absorbed in the first quarter 2003. Market-wide 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. for the first quarter 2004 was 9.0% compared to 8.9% at December 31, 2003. In the first quarter, submarkets showing significant leasing activity included the Southwest Suburbs (more than 2 million square feet of gross absorption), O'Hare (almost 1.4 million square feet of gross absorption) and Chicago South (approximately 1.3 million square feet of gross absorption). Construction completions for the first quarter 2004 totaled 3.6 million square feet (2.4 million of which occurred in the Southwest Suburbs). Of the 3.6 million, 2.0 million square feet were build-to-suits and 1.7 million square feet was speculative construction. 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. It currently owns and operates approximately 36 million square feet and owns or controls an additional 3,296 acres of land upon which 50 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 $2.8 billion as of March 31, 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. or 10-Q. An Investor conference call will be held Wednesday, April 21, 2004 beginning 3:30 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 , 4:30 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 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, April 21, 2004 at 7:00 p.m. CDT. The replay number is 888-266-2081, passcode 426525. 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 20, 2004. Financial Statements to Follow...
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2004 2003
------------ ------------
Assets:
Investment in real estate:
Land $ 200,174 $ 194,965
Buildings 845,710 824,248
Building improvements 150,187 148,519
Furniture, fixtures, and equipment 24,927 24,516
Construction in progress 151,911 150,126
------------ ------------
1,372,909 1,342,374
Less accumulated depreciation (176,756) (169,387)
Real estate held for sale, net of
depreciation 4,351 6,302
------------ ------------
Net investment in real estate 1,200,504 1,179,289
Cash and cash equivalents 1,071 231
Restricted cash 40,393 42,520
Tenant accounts receivable, net 39,118 36,891
Mortgage and notes receivable (1) 30,176 63,084
Investment in and advances to affiliate 17,710 47,139
Prepaid expenses and other assets 27,702 21,799
Deferred expenses, net 29,974 28,289
------------ ------------
$1,386,648 $1,419,242
============ ============
Liabilities and shareholders' equity
Mortgage notes payable and other
debt (2) $ 57,844 $ 26,955
Senior unsecured debt 400,000 500,000
Tax-exempt debt 94,210 94,210
Line of credit 267,700 213,700
Accounts payable 10,340 19,707
Accrued expenses 57,541 70,275
Rents received in advance and
security deposits 13,652 11,894
------------ ------------
901,287 936,741
------------ ------------
Shareholders' equity:
Preferred equity 45,203 47,118
Common equity 495,490 487,978
Retained earnings (deficit) (36,070) (37,253)
Other comprehensive loss (5,667) (5,924)
Unearned compensation -
restricted shares (13,595) (9,418)
------------ ------------
485,361 482,501
------------ ------------
$1,386,648 $1,419,242
============ ============
(1) December 31, 2003 balance includes TIF notes receivable of $24,335
(2) March 31, 2004 balance includes Nonrecouse TIF Debt of $31,209.
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended March 31
----------------------------
2004 2003
(Unaudited) (Unaudited)
------------- -------------
Revenue:
Minimum rents $ 31,164 $ 26,248
Straight-line rents 1,034 320
Expense reimbursements 9,888 8,252
Mortgage interest income 323 321
Real estate fee income 1,232 4,101
------------- -------------
Total revenue 43,641 39,242
------------- -------------
Expenses:
Real estate taxes 9,212 8,183
Property operating and leasing 7,153 6,141
General and administrative 1,922 1,722
Depreciation and amortization 10,300 8,253
------------- -------------
Total expenses 28,587 24,299
------------- -------------
Other income/(expense)
Interest income 454 779
Interest expense (7,698) (5,962)
Amortization of deferred financing
costs (865) (943)
------------- -------------
Total other income/(expenses) (8,109) (6,126)
------------- -------------
Income from continuing operations before
income taxes and equity in net income of
affiliate 6,945 8,817
Provision for income taxes
(expense) benefit 163 384
Equity in net income of affiliate (1) 621 4
------------- -------------
Income from continuing operations 7,729 9,205
Discontinued operations:
Gain on sale, net of tax 6,573 11,454
Income from operations, net of tax 202 1,178
------------- -------------
Income before gain on sale of real
estate and cumulative effect of change in
accounting principle 14,504 21,837
Gain on sale of real estate, net of
tax (2) 5,851 -
------------- -------------
Income before cumulative effect of
change in accounting principle 20,355 21,837
Cumulative effect of change in
accounting principle (3) - 6,528
------------- -------------
Net Income 20,355 28,365
Preferred dividends (887) (2,523)
------------- -------------
Net income available to common
shareholders $ 19,468 $ 25,842
============= =============
Basic EPS:
Income available to common shareholders
from continuing operations $ 0.55 $ 0.29
Discontinued operations 0.29 0.55
Cumulative effect of change in
accounting principle - 0.28
------------- -------------
Net income available to common
shareholders $ 0.84 $ 1.12
============= =============
Diluted EPS:
Income available to common
shareholders from
continuing operations $ 0.53 $ 0.31
Discontinued operations 0.28 0.51
Cumulative effect of change in
accounting principle - 0.26
------------- -------------
Net income available to common
shareholders $ 0.81 $ 1.08
============= =============
Distributions per share $ 0.780 $ 0.608
(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 March 31, 2004 and 2003, gains are
attributed to $110,963 and $29,742 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 March 31
----------------------------
2004 2003
(Unaudited) (Unaudited)
------------- -------------
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS
Funds from operations
---------------------
Net income available to common
shareholders $ 19,468 $ 25,842
Add back/(deduct):
Depreciation and amortization,
net of tax:
Continuing operations 10,092 7,971
Discontinued operations 130 583
Unconsolidated subsidiaries 304 82
Accumulated depreciation on sold
industrial assets, net of tax (2,616) (490)
Convertible preferred dividend - 933
Cumulative effect of change in
accounting principle for 2002 - (6,528)
------------- -------------
Funds from operations $ 27,378 $ 28,393
============= =============
Funds from operations per share $ 1.13 $ 1.14
============= =============
RECONCILIATION OF NET INCOME TO EBITDA
EBITDA
------
Net income available to common
shareholders $ 19,468 $ 25,842
Add back/(deduct):
Preferred dividends 887 2,523
Interest incurred, net 7,244 5,183
Depreciation and amortization 10,300 8,253
Amortization of deferred
financing costs 865 943
Provision for income taxes
expense (benefit) (163) (384)
Cumulative effect of change in
accounting principle - (6,528)
Discontinued operations:
Interest incurred, net - 907
Depreciation and amortization 130 583
Provision for income taxes
expense (benefit) from
operations (1) 53
------------- -------------
EBITDA $ 38,730 $ 37,375
============= =============
Debt service coverage 5.3 6.1
Fixed charge coverage 4.8 4.3
Annualized FFO return on common equity
--------------------------------------
FFO return on common equity 22.10% 23.44%
----------------------------------------------------------------------
Reconciliation of average shares outstanding
--------------------------------------------
Basic Shares - GAAP 23,212,283 23,109,149
Add: Stock options/grants - common share
equivalents 932,818 577,615
Add: Dilutive series B Preferred shares - 1,143,322
------------- -------------
Diluted shares - GAAP/FFO 24,145,101 24,830,086
============= =============
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
FIRST QUARTER 2004 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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