Cornerstone Properties Inc. Announces Fourth Quarter 1998 Results.NEW YORK--(BUSINESS WIRE)--Feb. 25, 1999-- Fourth Quarter 1998 Highlights - Closed merger with William Wilson Many real people and fictitious characters share the name William Wilson, or variations such as Bill or Willlie Wilson, including:
$1.8 billion. - Fourth 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. per share increased 8.8% as compared to the same period in 1997. - Total 1998 Funds From Operations per share increased 13.3% as compared to 1997. - Same store 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. up 3.0% for the year ending December 31, 1998. - Increased line of credit to $550 million with a one year extension. Cornerstone Properties Inc. (NYSE NYSE See: New York Stock Exchange : CPP cpp - C preprocessor. ), a real estate investment trust, announced today results for its fourth quarter ended December 31, 1998. Funds from operations (FFO FFO See: Funds from operations ) allocated to share/unit holders amounted to $43,285,000, or $0.37 per share/unit calculated on 117,272,000 average diluted total shares/units outstanding, compared to $26,163,000, or $0.34 per share/unit on 77,676,000 average diluted total shares/units outstanding for the three months ended December 31, 1997. The increase in FFO per share/unit was due to the accretive impact of the Company's acquisitions over the past twelve months and internal growth. 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. Year-to-date net operating income before depreciation from Cornerstone Properties' real estate assets increased 136% to $231,553,000 for the 12 months ended December 31, 1998, from $98,306,000 for the comparable period in 1997. Net income for the fourth quarter of 1998 grew to $22,501,000 compared to $15,881,000 in the fourth quarter of 1997. Year-to-date net income increased to $83,465,000 compared to $37,547,000 for 1997. Quarterly Dividend Declared The Company declared a quarterly dividend of $0.30 per share based on two record dates. A distribution of $0.15 was declared for all shareholders of record as of December 15, 1998 to be paid on February 26, 1999. A second distribution of $0.15 was declared for all shareholders of record as of January 29, 1999 and will also be paid on February 26, 1999. The two separate payments are being made pursuant to the merger between Cornerstone Properties Inc. and William Wilson & Associates. "Same Store" Revenue Growth Continues The Company achieved year-to-date "same store" net operating income growth of 3.0% over 1997 at the seven properties owned over the same period; this compares favorably to the 0.93% achieved during the same period in 1997. This increase is due to a 2.19% increase in revenues while expenses increased only 0.88% and reflects the strengthening of fundamentals in the Company's core markets. Leasing Update: Tenant Retention Rate 76% and Overall Occupancy Rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) 95% Tenant retention for 1998 was a very strong 76%. The portfolio's overall occupancy rate currently stands at 95%. Closure of $1.8 Billion Merger with William Wilson and Associates On December 16, 1998 the Company announced the closure of the merger of William Wilson and Associates with Cornerstone Properties. As part of the transaction, the Board of Directors has been increased from 11 to 14 directors. William Wilson III, formerly President and Founder of William Wilson & Associates, was appointed Chairman of Cornerstone Properties. John S. Moody, former Chairman and Chief Executive Officer, was elected President and Chief Executive Officer. In addition to serving as Chairman of the Board of Directors, Mr. Wilson will serve as President of Wilson Cornerstone Properties, the western operating division of Cornerstone. Following the closing, Cornerstone owns a national portfolio of Class A real estate totaling approximately 21 million square feet and ranks among the top four office REITs in 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. . Awarded development rights to the historic Ferry Building The Ferry Building is a terminal for ferries that travel across the San Francisco Bay and a shopping center located on The Embarcadero in San Francisco, California. On top of the building is a large clock tower, which can be seen from Market Street, a main thoroughfare of the city. Cornerstone announced on November 19, 1998 that the Cornerstone development team was chosen by the Port Commission of 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 for the historic Ferry Building rehabilitation rehabilitation: see physical therapy. project. Cornerstone will rehabilitate re·ha·bil·i·tate v. 1. To restore to good health or useful life, as through therapy and education. 2. To restore to good condition, operation, or capacity. the Ferry Building's exterior and create significant public space within the building. The ground floor of the building will be developed as a high quality market hall featuring the best of San Francisco's restaurants, food producers and purveyors. The upper floors will comprise the Port Commission offices and premium-quality general office space. Corporate Line of Credit Increased to $550 million On November 3, 1998, Cornerstone's corporate line of credit was increased from $350 million to $550 million and the term was extended through November 3, 2001. The line of credit is with a syndicate of banks led by Bankers Trust The Bankers Trust is a historic American banking organisation that was acquired by Deutsche Bank in 1998. It was originally set up when banks could not perform trust company services. , The Chase Manhattan Bank The Chase Manhattan Bank, now part of JPMorgan Chase, was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955. The bank is headquartered in New York City. , and Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. . The interest rate on the line is a variable rate over LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). with a spread of between 110 and 140 basis points depending on the current leverage level of the Company. 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 92 Class A office properties throughout the United States totaling approximately 21 million square feet. Headquartered in 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. , 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 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
Cornerstone Properties Inc.
Funds From Operations
December 31, 1998
3 Months 3 Months 12 Months 12 Months
Ended Ended Ended Ended
12/31/98 12/31/97 12/31/98 12/31/97
Rental Income(1) $ 101,393 $ 56,591 $ 361,385 $ 159,828
Building Operating
Expenses(1) 35,464 21,276 129,832 61,522
Building Net
Operating Income 65,929 35,315 231,553 98,306
Corporate General and
Administrative(1)(2) (4,011) (2,430) (12,724) (7,564)
Interest and
Other Income 2,712 5,651 9,879 14,083
EBITDA 64,630 38,536 228,708 104,825
Interest Expense(1) (19,861) (11,582) (67,585) (33,977)
Minority Adjustments (2,068) (1,467) (6,739) (3,919)
Rent Notes 398 476 1,531 1,379
Funds From Operations 43,099 25,963 155,915 68,308
Interest on
Convertible Debt 186 200 790 792
Funds From Operations
(Adjusted for
convertible debt) $ 43,285 $ 26,163 $ 156,705 $ 69,100
Weighted Average
Diluted Shares/Units 117,272 77,676 108,052 54,192
FFO Per Share/Unit
(Diluted) $ 0.37 $ 0.34 $ 1.45 $ 1.28
Less: Capital Expenditures
Per Share/Unit 0.02 0.02 0.08 0.09
AFFO Per Share/Unit $ 0.35 $ 0.32 $ 1.37 $ 1.19
Funds From
Operations $ 43,099 $ 25,963 $ 155,915 $ 68,308
Less: Preferred
Dividends (875) (875) (3,500) (10,160)
Less: Recurring Lease
Costs and Capital
Expenditures(3) (2,811) (1,740) (8,501) (4,739)
Less: Straight Line
Rents Adjusted For
Minority Interest (4,151) (1,951) (14,543) (2,697)
Funds Available
for Distribution $ 35,262 $ 21,397 $ 129,371 $ 50,712
Weighted Average
Common Shares and
Units Outstanding 113,236 73,478 103,882 43,572
Funds Available for
Distribution Per
Share/Unit $ 0.31 $ 0.29 $ 1.25 $ 1.16
Distribution Per
Share/Unit $ 0.30 $ 0.30 $ 1.20 $ 1.20
-0- (1) For the twelve months ended December 31, 1998 rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time has been increased by $22,870,000, building operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. have been increased by $7,409,000, corporate general and administrative expense has been increased by $263,000, interest and other income has been increased by $328,000 and interest expense has been increased by $52,000 in order to show Cornerstone's equity investments had they been consolidated. For the three months ended December 31, 1998 rental income has been increased by $2,645,000, building expenses have been increased by $888,000, interest and other income have been increased $64,000, corporate general and administrative expenses have been increased by $263,000 and interest expense has been increased by $52,000 in order to show Cornerstone's equity investments had they been consolidated. (2) Non-recurring merger severance costs of $478,000 have been deducted from general and administrative. (3) Based on a five year 1994-1998 average of recurring (non revenue generating) tenant leasing costs of $8.32 per square foot leased times the five year (1999-2003) average quarterly lease expiration (adjusted for minority interest and the 15 day hold period for the Wilson assets) of 304,500 square feet ($2,533,440) leased times the five year (1999-2003) average quarterly lease expiration (adjusted for minority interest and the 15 day hold period for the Wilson assets), plus a capital expenditure reserve (adjusted for minority interest) of $.10 per square foot ($277,145). Year to date the Company has incurred $15,876,813 in recurring tenant costs in leasing 1,768,939 square feet or a cost of $8.98 per square foot. Year to date the Company has incurred $1,671,684 in recurring capital costs or $0.15 per square foot 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. |
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