Cornerstone Properties Inc. Announces Third Quarter 1998 Results.NEW YORK--(BUSINESS WIRE)--Nov. 3, 1998-- Third Quarter 1998 Highlights -- Announced approval by the investors of William Wilson Many real people and fictitious characters share the name William Wilson, or variations such as Bill or Willlie Wilson, including:
Associates of a merger valued at over $1.81 billion. -- 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 over 24% as compared to the same period in 1997. -- 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) remained a solid 98%. -- Completed the refinancing Refinancing An extension and/or increase in amount of existing debt. of One Norwest Center in Denver and 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. . Cornerstone Properties Inc. (NYSE NYSE See: New York Stock Exchange : CCP (Certified Computer Professional) The award for successful completion of a comprehensive examination on computers offered by the ICCP. See ICCP and certification. . 1. (language) CCP - Concurrent Constraint Programming. 2. ), a real estate investment trust, announced today results for its third quarter ended September 30, 1998. Funds from operations (FFO FFO See: Funds from operations ) allocated to shareholders amounted to $39,396,000, or $0.36 per share calculated on 109,931,000 average 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. total shares outstanding, compared to $15,371,000, or $0.29 per share on 53,145,000 average diluted total shares outstanding for the three months ended September 30, 1997. The increase in FFO per share 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 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. before depreciation from Cornerstone Properties' real estate assets increased 163% to $165,624,000 for the nine months ended September 30, 1998, from $62,991,000 for the comparable period in 1997. Net income for the third quarter of 1998 grew to $18,958,000 compared to $8,076,000 in the third quarter of 1997. Year-to-date net income increased to $60,964,000 compared to $21,666,000 for 1997. John S. Moody, 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. said, "Cornerstone Properties' third quarter results continue to reflect the advantages that flow from our very high quality portfolio - namely high occupancy, high retention and same store revenue growth reflecting good market fundamentals in our portfolio." Quarterly Dividend Declared The Company declared a quarterly dividend of $0.30 per share payable on November 30, 1998 to shareholders of record as of October 30, 1998. "Same Store" Revenue Growth Continues The Company achieved year to date "same store" net operating income growth of 3.51% over 1997 at the seven properties owned over the same period; this is a substantial increase in same store growth and the highest quarterly increase since Cornerstone became a public company in early 1997. This increase is due to a 2.48% increase in revenues while expenses increased only 0.81% and reflects the strengthening of fundamentals in the Company's core markets. Leasing Update: Tenant Retention Rate 77% and Overall Occupancy Rate 98% Tenant retention for 1998 decreased to 77%, mainly due to the downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing of an existing tenant's lease, however, since the space which was vacated was immediately leased to a new tenant, there was no loss of revenue from the downsizing. The portfolio's overall occupancy rate remained at 98%. Occupancy across the DIHC portfolio has increased from 96% to 98%, in the eleven months since it was acquired. Two significant leasing transactions were completed at Sixty State Street in Boston. Cornerstone repurchased 44,000 square feet of space that was leased to ITT ITT Initial Teacher Training (UK) ITT I Think That ITT Invitation To Tender ITT Individual Time Trial (professional cycling) ITT Intention-To-Treat ITT In This Thread (forums) Sheraton at substantially below market rents. The Company expects to re-lease this space at market rates. In addition, the law firm, Hale and Dorr exercised an option to take an additional 23,000 square feet in the building. Cornerstone Properties also signed a lease for 60,000 square feet with Towers Perrin Towers Perrin is a global professional services firm. It was established 1 March 1934 as Towers, Perrin, Forster & Crosby. The umbrella name of Towers Perrin was adopted in 1987. , renewing and expanding their tenancy A situation that arises when one individual conveys real property to another individual by way of a lease. The relation of an individual to the land he or she holds that designates the extent of that person's estate in real property. at 500 Boylston Street Boylston Street is the name of a major east-west thoroughfare in the city of Boston, Massachusetts and its western suburbs. It begins at its eastern end in central Boston as the continuation of Essex Street at the intersection of Tremont, and forms the southern boundary of Boston which will significantly reduce 1999 expirations. Refinancing of One Norwest Center in Denver and Corporate 500 Centre in Deerfield During the third quarter and early fourth quarter the Company refinanced the first $110 million mortgage on One Norwest Center in Denver with CIGNA CIGNA CG (Connecticut General Life Insurance Company) INA (Insurance Company of North America) and Mass Mutual. The Company increased its proceeds by approximately $2 million to $98.5 million. The term of the loan was extended from three years to ten years and the interest rate was reduced from 7.50% to 6.90%. In the early part of the fourth quarter the company also refinanced the first mortgage on Corporate 500 Centre in Deerfield, Illinois with Teachers Insurance and Annuity Association. The outstanding balance was increased from $80 million to $90 million. The term of the loan was extended from 4.5 years to 10 years and the interest rate increased by three basis points to 6.66%. Approval of Merger with William Wilson and Associates On September 14, 1998 the Company announced that the investors of William Wilson and Associates had approved the merger with Cornerstone Properties. Since then Cornerstone's proxy has been filed and is being reviewed by the Securities and Exchange Commission. Cornerstone Properties expects the transaction to close in December. 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 metropolitan areas and central business districts. The Company, through its subsidiaries, currently owns 21 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 11.5 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 cpp - C preprocessor. . 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 and Wilson to differ materially from those reflected in such forward-looking statements. The acquisition described herein may not be consummated for a variety of reasons and anticipated benefits may not materialize, also for a variety of reasons. Information contained in this press release regarding current and future market conditions is based on Cornerstone's and Wilson'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. [Tables to follow] For more information on Cornerstone Properties visit Cornerstone Properties' Web site at http://www.cstoneprop.com -0-
CORNERSTONE PROPERTIES INC.
Funds From Operations
September 30, 1998
(in 000's, except per share data)
Three months Ended Nine months Ended
September 30 September 30
1998 1997 1998 1997
------------------------------------------
Rental Income(1) 90,897 34,546 259,992 103,237
Building Operating
Expenses(1) 33,364 13,593 94,368 40,246
------------------------------------------
Building Net Operating
Income 57,533 20,953 165,624 62,991
------------------------------------------
Corporate General and
Administrative (3,169) (1,869) (8,713) (5,134)
Interest and Other Income 1,955 3,868 7,167 8,432
-------------------------------------------
EBITDA 56,319 22,952 164,078 66,289
------------------------------------------
Interest Expense (16,057) (7,405) (47,724) (22,395)
Minority Adjustments (1,453) (721) (4,671) (2,452)
Rent Notes 387 346 1,133 903
------------------------------------------
Funds From Operations 39,196 15,172 112,816 42,345
Interest on Convertible
Debt 200 199 604 592
------------------------------------------
Funds From Operations 39,396 15,371 113,420 42,937
(Adjusted for convertible
debt)
------------------------------------------
Weighted Average Diluted
Shares 109,931 53,145 104,940 46,404
FFO Per Share (Diluted) 0.36 0.29 1.08 0.93
Less: Capital Expenditures
Per Share 0.02 0.02 0.05 0.06
------------------------------------------
AFFO Per Share 0.34 0.27 1.03 0.87
------------------------------------------
Funds From Operations 39,196 15,172 112,816 42,345
Less: Preferred Dividends (875) (875) (2,625) (9,285)
Less: Recurring Lease Costs
and
Capital Expenditures(2) (2,062) (1,038) (5,690) (2,999)
Less: Straight Line Rents
Adjusted For Minority
Interest (3,483) 38 (10,392) (746)
------------------------------------------
Funds Available for
Distribution 32,776 13,297 94,109 29,315
------------------------------------------
Weighted Average Common
Shares and Units
Outstanding 105,720 45,804 100,729 33,494
Funds Available for
Distribution Per Share 0.31 0.29 0.93 0.88
Distribution Per Share 0.30 0.30 0.90 0.90
(1) For the nine months ended September 30, 1998 rental income has
been increased by $20,225,000 and building operating expenses have
been increased by $6,521,000 in order to show the effects of Market
Square had the property been consolidated. For the three months ended
September 30, 1998, rental income has been increased by $7,670,000 and
building operating expenses have been increased by $2,434,000.
(2) Based on a five year 1994-1998 average of recurring (non-revenue
generating) tenant leasing costs of $8.46 per square foot leased times
the five year (1998-2003) average quarterly lease expiration (adjusted
for minority interest) of 211,009 square feet ($1,785,136) plus a
capital expenditure reserve (adjusted for minority interest) of $0.10
per square foot ($276,717).
Year to date the Company has incurred $12,288,520 in recurring
tenant costs in leasing 1,319,315 square feet or a cost of $9.31 per
square foot.
Year to date the Company has incurred $1,179,978 in recurring
capital costs or $0.15 per square foot on an annualized basis.
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