Cornerstone Properties Inc. Announces 1999 Second Quarter and First Half Results.NEW YORK--(BUSINESS WIRE)--Aug. 2, 1999-- Second Quarter/First Half 1999 Highlights - FFO FFO See: Funds from operations per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the 1999 second quarter increased more than 7.9% over the 1998 period. - First half property 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. rose 88% over the same period in 1998. - Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. same store net operating income up 4.32% over the same period in 1998. - Occupancy increases 40 basis points to 96.8%. 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 Properties Inc. (NYSE NYSE See: New York Stock Exchange : CPP cpp - C preprocessor. ), a real estate investment trust, announced today results for its second quarter and first six months ended June 30, 1999. In the second quarter, 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) allocated to shareholders (adjusted for convertible debt) amounted to $60,382,000, or $0.40 per diluted share calculated on 152,699,000 average diluted total shares outstanding, compared to $39,308,000, or $0.37 per diluted share on 107,228,000 average diluted total shares outstanding for the three months ended June 30, 1998. The increase in FFO per diluted share was due to internal growth and the accretive impact of the Company's acquisitions over the past twelve months. As defined by NAREIT NAREIT National Association of Real Estate Investment Trusts , funds from operations is net income excluding expenses from debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: , gains (or losses) on sale of property, plus depreciation and amortization. For the six month period ending June 30, 1999, funds from operations (adjusted for convertible debt) allocated to shareholders amounted to $119,745,000, or $0.78 per diluted share calculated on 152,660,000 average diluted total shares outstanding, compared to $74,024,000, or $0.72 per diluted share on 102,458,000 average diluted total shares outstanding for the six months ended June 30, 1998. The increase in FFO per diluted share for the first half was due to internal growth and the accretive impact of the Company's acquisitions over the past twelve months. Net operating income before depreciation from Cornerstone Properties' real estate assets increased 88.4% to $203,606,000 for the six months ended June 30, 1999, from $108,091,000 in the comparable period in 1998. This increase is mainly due to the acquisition of the Wilson portfolio in December 1998. Basic and diluted income per share grew to $0.19 for the three month period ended June 30, 1999 from $0.18 (basic and diluted) for the same period in 1998. Basic and diluted income for the six months ended June 30, 1999 was $0.41 per share as compared to $0.42 in the same period in 1998. John S. Moody mood·y adj. 1. Given to frequent changes of mood; temperamental. 2. Subject to periods of depression; sulky. 3. Expressive of a mood, especially a sullen or gloomy mood. , President 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. of Cornerstone, commented, "We continue to produce strong earnings that exceed expectations. These results are attributable to the continued strength of our core markets, strong leasing and integration that is ahead of schedule. We believe our FFO growth of close to 8% is especially compelling considering our current dividend yield is at the high end within our peer group. We believe that over time, due to the quality of our assets and our conservative lease 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. schedule, our investors will enjoy 'total returns' among the highest in the industry on a risk adjusted basis." "Same Store" Revenue Growth Continues The Company achieved year-to-date "same store" net operating income growth of 4.32% at the 18 properties owned over the same period. This increase is due to a 3.83% increase in revenues while expenses increased only 2.94% -- a reflection of increased rents in the Company's supply-constrained core markets and lower costs as property management is internalized. Cash basis year-to-date same store net operating income (not including the effects of straight-line rents) has increased 5.48%. Property Management Internalization Internalization A decision by a brokerage to fill an order with the firm's own inventory of stock. Notes: When a brokerage receives an order they have numerous choices as to how it should be filled. Continues The Company continues its plans to internalize internalize To send a customer order from a brokerage firm to the firm's own specialist or market maker. Internalizing an order allows a broker to share in the profit (spread between the bid and ask) of executing the order. property management. In June, the Company assumed management control at One Lincoln Centre in Suburban Chicago. As of August 1, the Company internalized management for its two New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. assets, Tower 56 and 527 Madison, as well as Corporate 500 Centre in Deerfield, Illinois Deerfield is a village in Lake County, Illinois, United States. A portion of the village is in Cook County, Illinois, United States. The population was 18,420 at the 2000 census. It is one of the predominant suburbs that make up Chicago's North Shore region. . Stephen J. Pilch, Cornerstone Senior Vice President, Director of Management and Leasing, commented, "In the first six months since merging with William Wilson Many real people and fictitious characters share the name William Wilson, or variations such as Bill or Willlie Wilson, including:
n. 1. Forward movement or the rate of forward movement, especially of a ship. 2. Progress toward a goal. 3. The clear vertical space beneath a ceiling or archway; clearance. 4. in assuming greater management control of our core assets in Chicago, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Boston. To date we've internalized approximately 3 million square feet of Class A property - a figure that exceeds our mid-year targets. We are on-track to complete the process in several other markets by mid-2000 and look forward to receiving the benefits derived from developing a closer relationship with our clients." Occupancy trends up to 96.8% During the second quarter of 1999, the Company leased approximately one million square feet, increasing occupancy from 96.4% to 96.8% (96.3% to 96.7% when adjusted for minority interest). Major transactions include approximately 240,000 square feet in Suburban Chicago, over 75,000 square feet at 201 California in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden and over 66,000 square feet at Seaport Centre Seaport Centre is a high-tech business park located in Redwood City, California, USA, and as of 2007 is one of the largest biotechnology research complexes in the San Francisco Bay Area. in Redwood City, California Redwood City is a suburb located on the San Francisco Peninsula in the San Francisco Bay Area of California. Redwood City is the county seat of San Mateo County. As of the 2005 census, the city had a total population of 76,000. , which brings this property up to 100% occupancy. Prudential/Northwestern Mutual Financing On June 23, 1999, the Company closed a $180,000,000 multi-asset 10 year mortgage financing with Prudential Prudential is the name of two different companies and buildings named after them: Companies:
Quarterly Dividend Declared The Board of Directors declared a regular quarterly dividend of $0.30 per common share payable on August 31, 1999 for common stockholders of record as of July 30, 1999. Supplemental Earnings Release is now available at www.cstoneprop.com The Second Quarter 1999 Supplemental Earnings Release is available in PDF-format at www.cstoneprop.com (on the Home Page and under Investor Relations Investor relations The process by which the corporation communicates with its investors. ). Cornerstone Properties Inc. is a self-administered equity real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) investing in Class A office properties in prime locations in major suburban markets and prime central business districts. The Company, through its subsidiaries, currently owns interests in 96 Class A office properties throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. totaling approximately 21 million square feet. Headquartered in New York City, Cornerstone's stock is traded on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors CPP. This press release contains 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. within the meaning of the Federal securities laws. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, that could cause the actual results, performance or achievements of Cornerstone to differ materially from those reflected in such forward-looking statements. Information contained in this press release regarding current and future market conditions is based on Cornerstone's assessment of real estate markets as of this date and is subject to the uncertainties inherent in such an assessment. In particular, but not exclusively, national and regional economic conditions, the rate of new construction, and demand and supply in a given market will affect leasing activity, projected rents and the cost of lease renewals. For more information on Cornerstone Properties visit Cornerstone Properties' Web site at http://www.cstoneprop.com -0-
Cornerstone Properties Inc.
Funds From Operations
June 30, 1999
--------------------------------------------
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
--------------------------------------------
(in thousands, except per share amounts)
Rental Income (1) $155,329 $ 88,744 $307,449 $169,095
Building Operating
Expenses (1) 52,120 31,178 103,843 61,004
--------------------------------------------
Building Net Operating
Income 103,209 57,566 203,606 108,091
--------------------------------------------
Corporate General and
Administrative (1)(2) (8,343) (2,958) (15,735) (5,544)
Interest and Other
Income (1) 3,176 1,584 6,895 5,212
--------------------------------------------
EBITDA 98,042 56,192 194,766 107,759
--------------------------------------------
Interest Expense (1) (35,316) (15,752) (70,279) (31,667)
Minority Adjustments (1) (2,520) (1,709) (5,118) (3,218)
Rent Notes - 378 - 746
--------------------------------------------
Funds From Operations 60,206 39,109 119,369 73,620
Interest on Convertible
Debt 176 199 376 404
Funds From Operations
(Adjusted for --------------------------------------------
convertible debt) $ 60,382 $ 39,308 $119,745 $ 74,024
--------------------------------------------
Weighted Average
Diluted Shares/Units 152,699 107,228 152,660 102,458
FFO Per Share/Unit
(Diluted) $ 0.40 $ 0.37 $ 0.78 $ 0.72
Less: Capital
Expenditures Per
Share/Unit 0.04 0.02 0.07 $ 0.04
--------------------------------------------
AFFO Per Share/Unit $ 0.36 $ 0.35 $ 0.71 $ 0.69
--------------------------------------------
Funds From Operations $ 60,206 $ 39,109 $119,369 $ 73,620
Less: Preferred
Dividends (875) (875) (1,750) (1,750)
Less: Recurring Lease
Costs and Capital
Expenditures (3) (5,748) (1,743) (11,210) (3,628)
Less: Straight Line
Rents Adjusted For
Minority Interest (6,602) (3,763) (13,472) (6,909)
--------------------------------------------
Funds Available for
Distribution $ 46,981 $ 32,728 $ 92,937 $ 61,333
--------------------------------------------
Weighted Average
Common Shares and
Units Outstanding 148,594 102,963 148,594 98,192
Funds Available for
Distribution Per
Share/Unit $ 0.32 $ 0.32 $ 0.63 $ 0.62
Distribution Per
Share/Unit $ 0.30 $ 0.30 $ 0.60 $ 0.60
(1) For the three months ended June 30, 1999 rental income has been
increased by $3,155,000, building operating expenses have been
increased by $1,444,000, corporate general and administrative
expense has been increased by $1,908,000, interest and other
income has been increased by $1,798,000, interest expense has
been increased by $602,000 and minority adjustments have been
increased $548,000 in order to show Cornerstone's equity
investments had they been consolidated. For the three months
ended June 30, 1998 rental income has been increased by
$7,386,000, building operating expenses have been increased by
$2,526,000 and interest and other income has been reduced by
$5,312,000 in order to show Cornerstone's equity investments had
they been consolidated.
For the six months ended June 30, 1999 rental income has been
increased by $5,799,000, building operating expenses have been
increased by $2,566,000, corporate general and administrative
expense has been increased by $3,411,000, interest and other
income has been increased by $3,533,000, interest expense has
been increased by $1,206,000 and minority adjustments have been
increased $1,019,000 in order to show Cornerstone's equity
investments had they been consolidated. For the six months ended
June 30, 1998 rental income has been increased by $12,555,000,
building operating expenses have been increased by $4,087,000 and
interest and other income has been reduced by $8,982,000 in order
to show Cornerstone's equity investments had they been
consolidated.
(2) Non-recurring merger severance costs of $247,000 have been
deducted from general and administrative expenses.
(3) Based on a five year 1995-1999 average of recurring (non revenue
generating) tenant leasing costs of $8.97 per square foot leased
times the five year (1999-2003) average quarterly lease
expiration (adjusted for minority interest) of 561,896 square
feet or $5,040,207, plus a capital expenditure reserve (adjusted
for minority interest) of $0.14 per square foot ($707,818).
Year to date the Company has incurred $12,244,557 in recurring
tenant costs (adjusted for minority interest) in leasing
1,246,040 square feet or a cost of $9.83 per square foot. Year to
date the Company has incurred $1,916,659 in recurring capital
costs (adjusted for minority interest) or $0.19 per square foot
on an annualized basis.
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