Cornerstone Realty Reports Fourth Quarter and Year 2003 Results.Business Editors/Real Estate Writers RICHMOND Richmond, cities, United States Richmond. 1 City (1990 pop. 87,425), Contra Costa co., W Calif., on San Pablo Bay, an inlet of San Francisco Bay; inc. 1905. , Va.--(BUSINESS WIRE)--Feb. 17, 2004 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 Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Income Trust, Inc. (NYSE NYSE See: New York Stock Exchange : TCR TCR T cell receptor. ) today reported operating results for the fourth quarter and year ended December December: see month. 31, 2003. 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 ") in the fourth quarter ended December 31, 2003 were $11.3 million, or $0.20 per common share, compared with $10.0 million, or $0.20 per common share, in the fourth quarter of 2002. FFO for the year 2003 was $43.5 million, or $0.80 per common share, compared with $46.2 million, or $0.92 per common share, last year. Net loss available to common shareholders in the fourth quarter of 2003 was $3.1 million, or $0.06 per common share basic and 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. , compared with a net loss available to common shareholders of $1.7 million, or $0.04 per common share basic and diluted, in the fourth quarter of 2002. For the year 2003, net loss available to common shareholders was $8.2 million, or $0.16 per common share basic and diluted, compared with net loss available to common shareholders of $0.1 million, or $0.00 per common share basic and diluted, in the year 2002. FFO is the generally accepted measure of operating performance for a real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ). A reconciliation of net income to FFO is included in the Operating Results table at the end of this news release. In the fourth quarter of 2003, total revenues were $44.7 million compared with $39.4 million in the fourth quarter of 2002. Average physical occupancy in the fourth quarter of 2003 was 93% compared with 92% a year ago, and the average rent per unit in the fourth quarter of 2003 was $671 compared with $681 in the fourth quarter of 2002. For the year 2003, total revenues were $171.7 million compared with $159.9 million a year ago. Average physical occupancy in both 2003 and 2002 was 92%, and the average rent per unit in 2003 was $674 compared with $688 in the prior year. Commenting on the fourth quarter and annual results, Glade M. Knight, chairman and chief executive officer, said: "The fourth quarter was a continuation of softness in occupancy rates 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) in our major markets, particularly in the Dallas/Ft. Worth area where lack of significant job growth, overbuilding of apartment communities, and low mortgage rates have continued to adversely affect our operations. In some of our other major markets, we are beginning to experience slight improvement in occupancy and rental rates, and we are hopeful that employment growth and fewer new apartment completions in those markets will allow us to generate moderate improvement in operations throughout 2004," Knight said. "Although the occupancy rates in some of our markets remain soft, we believe we are positioned well for meaningful improvement in revenues and earnings toward the end of this year and into 2005. We have greatly enhanced the depth and quality of our portfolio in the past year, particularly with the Merry Land merger last spring. The merger also provided us with a small but quality development pipeline in Savannah Savannah, city, United States Savannah, city (1990 pop. 137,560), seat of Chatham co., SE Ga., a port of entry on the Savannah River near its mouth; inc. 1789. and Charleston Charleston, cities, United States Charleston. 1 City (1990 pop. 20,398), seat of Coles co., E Ill.; inc. 1835. Charleston is an industrial, rail, and trade center located in an agricultural area; shoes are also made. Eastern Illinois Univ. as well as a third-party property management business, which we believe can generate a significant contribution to revenues and earnings over time as we work to grow that portion of our business. "In the second half of last year, we also completed a major $150-million refinancing Refinancing An extension and/or increase in amount of existing debt. that lowered our effective average interest rates and provided us with greater overall financial flexibility. In addition, we have spent considerable effort to greatly enhance our training and continuing education continuing education: see adult education. continuing education or adult education Any form of learning provided for adults. In the U.S. the University of Wisconsin was the first academic institution to offer such programs (1904). programs for our field management and staff, and we believe the results of that effort have positioned our apartment communities as the favored places to reside among current and prospective residents in each of our markets," Knight said. "In addition, we have added some outstanding individuals to our executive management team and our board of directors in the past year, and we look forward to capitalizing on the talents and experience of those executives and board members to enhance our overall operations and continue to improve our already strong corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. programs." Comparable Property Operations Comparable property operations is a measure Cornerstone uses to evaluate performance and is not deemed to be an alternative to net income as determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . In addition, this measure as calculated by Cornerstone may not be comparable to similarly 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: measures of other companies. In the fourth quarter of 2003, Cornerstone's "same-community" portfolio consists of 74 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. apartment communities containing 20,127 apartment homes that the company has owned since January January: see month. 1, 2002, representing approximately 87% of Cornerstone's 23,189 units. For the fourth quarter of 2003, same-community property 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. (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 less property 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. ) decreased 4% from the fourth quarter of 2002. Fourth quarter 2003 rental income decreased 3% while property operating expenses decreased 1% compared with the fourth quarter of 2002. For the year 2003, same-community property operating income decreased 7% from the prior year. Rental income in 2003 decreased 3% while property operating expenses increased 4% compared with the prior year. Dividends A quarterly dividend of $0.20 per share was paid on January 20, 2004 to common shareholders of record on December 30, 2003. The company also paid a quarterly dividend of $0.5938 per share on January 20, 2004 to record holders of its Series A Convertible 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. on December 30, 2003. Conference Call and Webcast Cornerstone will hold a live conference call and webcast tomorrow, February February: see month. 18, 2004 at 10:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy to review fourth quarter and yearly results. Individual investors can access the live webcast by visiting the Investor Relations Investor relations The process by which the corporation communicates with its investors. page of the company's Web site at www.cornerstonereit.com. Investment professionals and media should call the company's Investor Relations department at (804) 643-1761 for further information on participating in the conference call. A replay of the conference call and webcast will be available on the company's Web site shortly after completion of the live event. Supplemental Information Additional operational and financial information for the fourth quarter and year ended December 31, 2003 is available in the Investor Relations section of Cornerstone's Web site at www.cornerstonereit.com. Forward Looking Statements Certain statements contained herein constitute "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 Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from results expressed or implied by such forward-looking statements. Such factors include, among other things, risks associated with unanticipated adverse business developments affecting the company, adverse changes in the real estate markets, and local as well as general economic and competitive factors. In addition, the timing and amounts of distributions to common shareholders are within the discretion of Cornerstone's board of directors. There is no assurance that planned events or results will be achieved. Corporate Profile Cornerstone Realty Income Trust, Inc. (NYSE:TCR) is a fully integrated, self-managed and self-advised real estate company that has operated as a REIT since 1993. The company focuses on the ownership and management of multifamily communities in select markets in Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. and Texas. Currently Cornerstone owns 89 apartment communities with 23,189 units, a third-party property management business, undeveloped apartment land, and ownership interests in two joint ventures. Cornerstone is headquartered in Richmond, Virginia Richmond IPA: [ɹɯʒmɐnɖ] is the capital of the Commonwealth of Virginia, in the United States. and its common stock trades 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 symbol "TCR." For more information about Cornerstone, visit the company's web site at www.cornerstonereit.com.
CORNERSTONE REALTY INCOME TRUST, INC.
OPERATING RESULTS
In Thousands Except Per Share Amounts
Three Months Twelve Months
Ended Ended
Dec. 31 Dec. 31
2003 2002 2003 2002
----------------------------------------------------------------------
Revenues
Rental Income $42,362 $38,101 $163,059 $153,295
Other Property Income 2,302 1,300 8,593 6,571
---------------- ------------------
Total Revenues 44,664 39,401 171,652 159,866
Expenses
Property and Maintenance 13,401 11,158 50,930 44,907
Real Estate Taxes and Insurance 6,292 5,789 23,550 20,727
Property Management 985 1,029 4,102 3,798
General and Administrative 1,095 1,181 3,824 3,904
Other Depreciation 6 6 23 24
Depreciation and Amortization of
Real Estate Assets 14,407 11,531 52,794 45,157
Other 30 46 239 251
---------------- ------------------
Total Expenses 36,216 30,740 135,462 118,768
Income Before Interest Income
(Expense) 8,448 8,661 36,190 41,098
Interest Income 104 4 274 31
Interest Expense (11,632)(10,640) (45,896) (41,684)
---------------- ------------------
Loss from Continuing Operations
before
Minority Interest of Unit Holders
in Operating Partnership (3,080) (1,975) (9,432) (555)
Minority Interest of Unit Holders
in Operating Partnership 92 71 262 36
---------------- ------------------
Loss from Continuing Operations (2,988) (1,904) (9,170) (519)
Discontinued Operations
Income (Loss) from Discontinued
Operations (5) 252 (15) 739
Gain (Loss) on Sales of
Investments (75) - 1,316 -
---------------- ------------------
Net (Loss) Income $(3,068)$(1,652) $(7,869) $220
Distributions to Preferred
Shareholders (76) (75) (303) (303)
---------------- ------------------
Net Loss Available to Common
Shareholders $(3,144)$(1,727) $(8,172) $(83)
================ ==================
Funds From Operations
Net Loss Available to Common
Shareholders $(3,144)$(1,727) $(8,172) $(83)
Adjustments:
Distributions to Preferred
Shareholders 76 75 303 303
Minority Interest of Unit Holders
in Operating Partnership (92) (71) (262) (36)
Gain on Sales of Investments 75 - (1,316) -
Depreciation from Discontinued
Operations - 173 162 864
Depreciation and Amortization of
Real Estate Assets 14,407 11,531 52,794 45,157
---------------- ------------------
Funds From Operations $11,322 $9,981 $43,509 $46,205
================ ==================
Per Share
Weighted Average Shares -- Fully
Converted 57,488 50,885 54,694 50,202
Funds From Operations Per Share $0.20 $0.20 $0.80 $0.92
Common Share Distributions $0.20 $0.28 $0.88 $1.12
Net Loss from Continuing
Operations --
Basic and Diluted $(0.06) $(0.04) $(0.18) $(0.02)
Net Income from Discontinued
Operations --
Basic and Diluted $- $- $0.02 $0.02
Net (Loss) Income Available to
Common Shareholders --
Basic and Diluted $(0.06) $(0.04) $(0.16) $-
Weighted Average Common Shares --
Basic and Diluted 55,479 48,308 52,643 48,068
CORNERSTONE REALTY INCOME TRUST, INC.
BALANCE SHEET DATA Dec. 31, Dec. 31,
In Thousands Except Per Share Amounts 2003 2002
----------------------------------------------------------------------
Assets
----------------------------------------------
Investment in Rental Property
Land $160,108 $149,133
Building and Improvements 1,102,483 960,735
Furniture and Fixtures and Other 38,735 34,139
Real Estate Under Development 5,450 1,635
Assets Available for Sale, Net - 13,185
----------- -----------
1,306,776 1,158,827
Less Accumulated Depreciation (224,462) (172,978)
----------- -----------
1,082,314 985,849
----------- -----------
Cash and Cash Equivalents 1,393 1,380
Prepaid Expenses 5,334 4,636
Deferred Financing Costs, Net 5,924 4,519
Investment in Real Estate Joint Ventures 2,649 -
Other Assets 26,257 18,463
----------- -----------
Total Assets $1,123,871 $1,014,847
=========== ===========
----------------------------------------------
Liabilities and Shareholders' Equity
----------------------------------------------
Liabilities
Notes Payable-Secured $801,754 $604,446
Notes Payable-Unsecured - 77,913
Distributions Payable 76 76
Accounts Payable and Accrued Expenses 14,950 12,953
Rents Received in Advance 884 606
Tenant Security Deposits 1,889 1,574
----------- -----------
Total Liabilities 819,553 697,568
Minority Interest of Unitholders in Operating
Partnership 18,884 30,205
Shareholders' Equity
Preferred Stock, No Par Value, Authorized
25,000 Shares; $25 Liquidation Preference,
Series A Cumulative Convertible Redeemable;
Issued and Outstanding 127 Shares 2,680 2,680
Common Stock, No Par Value, Authorized
100,000 Shares; Issued and Outstanding
55,534 Shares and 48,361 Shares,
Respectively 538,969 487,303
Deferred Compensation (456) (638)
Distributions Greater Than Net Income (255,759) (202,271)
----------- -----------
Total Shareholders' Equity 285,434 287,074
----------- -----------
Total Liabilities and Shareholders' Equity $1,123,871 $1,014,847
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