Crescent Announces First Quarter 2006 Results.FORT WORTH, Texas Fort Worth is the fifth-largest city in the state of Texas, 18th-largest city in the United States[1], and voted one of "America’s Most Livable Communities. -- Crescent Real Estate Equities Company Crescent Real Estate Equities Co. (NYSE: CEI) is a Fort Worth, Texas-based real estate investor with holdings mainly in office and hotel properties, including several landmark buildings in the southern United States. (NYSE NYSE See: New York Stock Exchange :CEI CEI Competitive Enterprise Institute CEI Conferenza Episcopale Italiana (Italian bishop conference) CEI Central European Initiative CEI Comitato Elettrotecnico Italiano (Italian Electrotechnical Committee) ) today announced results for the first quarter of 2006. Net loss available to common shareholders for the three months ended March 31, 2006, was ($13.1) million, or ($0.13) per share (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. ). These compare to net loss available to common shareholders of ($9.3) million, or ($0.09) per share (diluted), for the three months ended March 31, 2005. 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. available to common shareholders - diluted, as adjusted to exclude impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges and debt extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. charges related to the sale of real estate assets ("FFO FFO See: Funds from operations , as adjusted"), was $24.8 million, or $0.20 per share and equivalent unit, for the three months ended March 31, 2006, compared to $28.9 million, or $0.25 per share and equivalent unit, for the three months ended March 31, 2005. Crescent crescent, emblematic representation of the quarter moon. The crescent and star, ancient Byzantine symbols that became the emblems of Constantinople, were also assumed as the standard of the Ottoman Turks. provides this calculation of FFO, as adjusted, because management utilizes it in making operating decisions and assessing performance, and to assist investors in assessing Crescent's operating performance. Funds from operations available to common shareholders - diluted, calculated 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 the NAREIT NAREIT National Association of Real Estate Investment Trusts definition ("FFO"), was $24.8 million, or $0.20 per share and equivalent unit, for the three months ended March 31, 2006, compared to $27.8 million, or $0.24 per share and equivalent unit, for the three months ended March 31, 2005. Both uses of FFO are non-GAAP financial measures, and as such, are reconciled to net income in the documents accompanying this press release. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. John C. Goff n. 1. A silly clown. 1. A game. See Golf. , vice chairman and chief executive officer, "Our FFO per share of $0.20 was in line with our guidance of $0.19 to $0.22 per share. As we approach the midpoint mid·point n. 1. Mathematics The point of a line segment or curvilinear arc that divides it into two parts of the same length. 2. A position midway between two extremes. for 2006, we are seeing continued recovery in our office markets. Our major markets enjoyed healthy employment expansion again this quarter, with Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. leading the nation in job growth and Dallas/Fort Worth ranking 10th in job growth and 2nd in job creation. Overall for 2006, we anticipate modest growth in occupancy and rental rates in our portfolio as demand further improves in our markets, and we remain comfortable with our previous 2006 full year guidance of $1.25 to $1.40 in FFO, as adjusted, per share." On April 13, 2006, Crescent announced that its Board of Trust Managers had declared cash dividends of $0.375 per share for its Common Shares, $0.421875 per share for 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. , and $0.59375 per share for its Series B Redeemable Redeemable Eligible for redemption under the terms of an indenture. Preferred Shares. The dividends are payable May 15, 2006, to shareholders of record on April 28, 2006. BUSINESS SECTOR REVIEW Office Segment (60% of Gross Book Value of Real Estate Assets as of March 31, 2006) Crescent reports operating statistics in this press release assuming 100% ownership without adjusting for joint-venture interests. Crescent owned and managed, through its subsidiaries and joint ventures, 30.5 million square feet at March 31, 2006, including 14.7 million square feet of office properties in joint ventures. - Same-store NOI NOI Net Operating Income NOI Notice of Intent NOI Nation of Islam NOI Notice of Inquiry NOI Neuro Orthopaedic Institute NOI New Organizing Institute NOI Notice of Interest NOI No Offense Intended NOI National Olympiad in Informatics - Office property 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. ("NOI") declined 4.9% for the three months ended March 31, 2006, from the same period in 2005 for the 27.7 million square feet of office property space owned during both periods, primarily due to timing of expenses incurred, as well as anticipated increases in general 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. . Average economic occupancy for these same-store properties was 88.3% for both periods. Management continues to expect full year 2006 same-store NOI growth of 1% to 3%. -Total Portfolio Occupancy - As of March 31, 2006, leased occupancy was 90.6%, and economic occupancy was 88.2%. - Leasing Activity - Crescent leased 0.7 million net rentable square feet during the three months ended March 31, 2006, of which 0.4 million square feet were renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. or re-leased. The weighted average full service rental rate (which includes expense reimbursements) decreased 2% from the expiring ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. rates for the leases of the renewed or re-leased space. All of these leases have commenced or will commence within the next twelve months. Tenant improvements related to these leases were $2.80 per square foot per year, and leasing costs were $1.39 per square foot per year. - Lease Termination Fees termination fee The one-time charge for terminating or transferring an individual retirement account. If a financial institution charges a termination fee, the fee must be spelled out in the original agreement that is signed when the account is opened. - Crescent earned $7.8 million of lease termination fees during the three months ended March 31, 2006. This compares to $0.4 million of lease termination fees earned during the three months ended March 31, 2005, respectively. Crescent's policy is to exclude lease termination fees from its same-store NOI calculation. Denny Denny may refer to:
The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , commented, "We expect our office portfolio to make positive strides this year after a strong year in 2005. Due to impressive leasing efforts, particularly in our healthy markets, we ended the quarter at 90.6% leased occupancy. Overall, we expect to end 2006 at 91% to 92% leased for our 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. office portfolio. "Last year, leasing exceeded 5.2 million square feet. For 2006, we have gross expirations of only 3.4 million square feet; therefore, we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that we will re-lease re-lease tr.v. re-leased, re-leas·ing, re-leas·es To lease again: re-leased the car. this space and grow occupancy. To date, we have addressed 82% of 2006 gross expirations - 65% by signed leases and 17% by leases in negotiation." Resort Residential Development Segment (19% of Gross Book Value of Real Estate Assets as of March 31, 2006) Crescent's overall resort residential investments generated $1.0 million in FFO for the three months ended March 31, 2006. This compares to $4.9 million in FFO generated for the three months ended March 31, 2005. Luxury Resorts and Upscale Business-Class Hotels (10% of Gross Book Value of Real Estate Assets as of March 31, 2006) Crescent reports operating statistics in this press release for its three luxury resorts and three upscale business-class hotels and assuming 100% ownership without adjusting for joint-venture interests. - Same-store NOI - For the three months ended March 31, 2006, Crescent's three luxury resorts and three upscale business-class hotels generated same-store NOI of $11.0 million, which is a 27% increase from $8.7 million generated for the same period in 2005. - Operating Statistics - The average daily rate increased 8%, and revenue per available room increased 16% for the three months ended March 31, 2006, compared to the same period in 2005. Weighted average occupancy was 74% for the three months ended March 31, 2006, compared to 69% for the three months ended March 31, 2005. Temperature-Controlled Logistics Segment (11% of Gross Book Value of Real Estate Assets as of March 31, 2006) Crescent's investment in temperature-controlled logistics properties generated $3.2 million in FFO for the three months ended March 31, 2006. This compares to $3.5 million of FFO generated for the three months ended March 31, 2005. Improved operations, primarily as a result of increased occupancy levels, were offset this quarter by certain non-recurring charges. BALANCE SHEET REVIEW Investment Activity Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 2006 through the date of this release, Crescent had invested $35.0 million in Mezzanine mez·za·nine n. 1. A partial story between two main stories of a building. 2. The lowest balcony in a theater or the first few rows of that balcony. investments at an average current yield of 10.81%. Year-to-date 2006 through the date of this release, Crescent had received $56.4 million, including $6.2 million prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. fees, for the full repayment of two mezzanine investments. On March 31, 2006, Crescent committed to co-develop with Champion Partners a 144,000 square-foot, two-building office complex in Austin Austin. 1 City (1990 pop. 21,907), seat of Mower co., SE Minn., on the Cedar River, near the Iowa line; inc. 1868. The commercial and industrial center of a rich farm region, it is noted as home to the Hormel meatpacking company, whose Spam Town museum , Texas. The venture is structured such that Crescent owns a 90% interest. Crescent's initial commitment to the joint venture was $8.2 million, of which $3.7 million was funded on March 31, 2006. Consolidated Debt On March 24, 2006, a Crescent subsidiary entered into a master repurchase agreement Repurchase agreement An agreement with a commitment by the seller (dealer) to buy a security back from the purchaser (customer) at a specified price at a designated future date. with Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. Bank to finance up to 70% of
the value of certain mezzanine investments, not to exceed an aggregate
amount of $100.0 million. The loan bears interest based on the loan to
value of each mezzanine investment, and Crescent can borrow against the
loan through March 2008. The agreement has a one-year adj. 1. completing its life cycle within a year.Adj. 1. one-year - completing its life cycle within a year; "a border of annual flowering plants" annual phytology, botany - the branch of biology that studies plants extension option. Crescent has currently drawn approximately $21.0 million. On March 13, 2006, Crescent paid off the remaining balance on the LaSalle Lasalle (ləsăl`) or Ville Lasalle (vēl), city (1991 pop. 73,804), S Que., Canada, SW of Montreal on the St. Lawrence River at the head of the Lachine Rapids. It is a suburb of Montreal. Note II of approximately $155.0 million. The loan was secured by defeasance defeasance n. an antiquated word for a document which terminates the effect of an existing writing such as a deed, bond, or contract if some event occurs. DEFEASANCE, contracts, conveyancing. investments, which matured in March and provided the proceeds to pay off the loan. On January January: see month. 20, 2006, Crescent entered into a $55.0 million loan with 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. , N.A., secured by the Fairmont Fairmont, city (1990 pop. 20,210), seat of Marion co., N central W.Va., where the West Fork and Tygart rivers form the Monongahela; settled 1793 around Prickett's Fort (1774), inc. as Fairmont 1843. Sonoma Sonoma may refer to
EARNINGS OUTLOOK Crescent addresses earnings guidance in its earnings conference calls and provides documentation of its quarterly supplemental operating and financial data reports. Refer to the following paragraphs for details about accessing today's conference call, presentation, and supplemental operating and financial data report. FUNDS FROM OPERATIONS Funds from operations is a supplemental non-GAAP financial measurement used in the real estate industry to measure and compare the operating performance of real estate companies, although those companies may calculate funds from operations in different ways. The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations as Net Income (Loss) determined in accordance 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 ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), excluding gains (or losses) from sales of depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. operating property, excluding extraordinary items (determined by GAAP), excluding depreciation and amortization of real estate assets, and including the impact of adjustments for unconsolidated partnerships and joint ventures. Crescent's FFO, as adjusted, follows the NAREIT definition, but is adjusted to exclude the impact of impairment charges and debt extinguishment charges related to the sale of real estate assets. Crescent provides this additional calculation of FFO, as adjusted, to exclude these charges, because management utilizes it in making operating decisions and assessing performance, and to assist investors in assessing the operating performance of Crescent. A reconciliation of Crescent's FFO before and after such adjustments to GAAP net income is included in the financial statements accompanying this press release and in the "First Quarter 2006 Supplemental Operating and Financial Data" located on Crescent's website. FFO should not be considered an alternative to net income. SUPPLEMENTAL OPERATING AND FINANCIAL DATA Crescent's first quarter supplemental operating and financial data report is available on Crescent's website (www.crescent.com) in the investor relations Investor relations The process by which the corporation communicates with its investors. section. To request a hard copy, please call Crescent at (817) 321-2100. CONFERENCE CALL, WEBCAST AND PRESENTATION Crescent will also host a conference call and audio webcast, both open to the general public, at 10:00 A.M. Central Time on Wednesday Wednesday: see week. , May 3, 2006, to discuss the first quarter results and provide a company update. To participate in the conference call, please dial (877) 392-0083 domestically or (706) 679-3110 internationally, or you may access the audio webcast on Crescent's website (www.crescent.com) in the investor relations section. A replay of the conference call will be available through May 10, 2006, by dialing (800) 642-1687 domestically or (706) 645-9291 internationally with a passcode of 7450026. 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. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are generally characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by terms such as "believe", "expect", "anticipate" and "may". Although Crescent believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, Crescent's actual results could differ materially from those described in the forward-looking statements. The following factors might cause such a difference: --Crescent's ability, at its office properties to timely lease unoccupied square footage and timely re-lease occupied square footage upon expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created on favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms, which continue to be adversely affected by existing real estate conditions (including the 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. levels in particular markets, decreased rental rates and competition from other properties) and may also be adversely affected by general economic downturns; --Adverse changes in the financial condition of existing office customers and the ability of these office customers to pay rent; --Lack of control and limited flexibility in dealing with Crescent's jointly owned investments; --The ability of Crescent to reinvest re·in·vest tr.v. re·in·vest·ed, re·in·vest·ing, re·in·vests To invest (capital or earnings) again, especially to invest (income from securities or funds) in additional shares. available funds at anticipated returns and consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. anticipated office acquisitions on favorable terms and within anticipated time frames; --The ability of El Paso El Paso (ĕl pă`sō), city (1990 pop. 515,342), seat of El Paso co., extreme W Tex., on the Rio Grande opposite Juárez, Mex.; inc. 1873. Energy to satisfy its obligations to pay rent and termination fees in accordance with the terms of its agreement with Crescent; --The concentration of a significant percentage of Crescent's office assets in Texas; --The ability to develop, sell and deliver resort residential units and lots within anticipated time frames and within anticipated profit margins; --Deterioration in the market or in the economy generally and increases in construction cost associated with development of residential land or luxury residences, including single-family sin·gle-fam·i·ly adj. Relating to or being a dwelling designed for one family only: a single-family home; single-family occupancy. homes, town homes and condominiums; --Financing risks, such as Crescent's ability to generate revenue sufficient to service and repay existing or additional debt, increases in debt service associated with increased debt and with variable-rate Variable-rate A varible-rate agreement, as distinguished from a fixed-rate agreement, calls for an interest rate that may fluctuate over the life of the loan. The rate is often tied to an index that reflects changes in market rates of interest. debt, Crescent's ability to meet financial and other covenants, liquidity risks related to the use of warehouse facilities governed gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. by repurchase agreements to fund certain of our mezzanine investments, and Crescent's ability to consummate financings and refinancings on favorable terms and within any applicable time frames; --Deterioration in Crescent's resort / business-class hotel markets or in the economy generally and increase in construction cost associated with the development of resort/hotel properties; --The inherent risk of mezzanine investments, which are structurally or contractually subordinated to senior debt, may become unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. as a result of foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. by a senior lender on its collateral, and are riskier than conventional mortgage loans; --The existence of complex regulations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Crescent's status as a REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). , the effect of future changes in REIT requirements as a result of new legislation and the adverse consequences of the failure to qualify as a REIT; and --Other risks detailed from time to time in Crescent's filings with the SEC. Given these uncertainties, readers are cautioned not to place undue reliance on such statements. Crescent is not obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to update these forward-looking statements to reflect any future events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . ABOUT CRESCENT Crescent Real Estate Equities Company (NYSE: CEI) is a real estate investment trust headquartered in Fort Worth, Texas. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 75 premier office buildings totaling 31 million square feet located in select markets across 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. , with major concentrations in Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; , Austin, Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. , Miami and Las Vegas. Crescent also makes strategic investments in resort residential development, as well as destination resorts, including Canyon Ranch Canyon Ranch is a brand associated with several properties, communities, resorts, and spas. Properties & communities
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
March 31, December 31,
2006 2005
---- ----
(unaudited) (unaudited)
ASSETS:
Investments in real estate:
Land $ 186,770 $ 183,228
Land improvements, net of accumulated
depreciation of $31,379 and $29,784 at
March 31, 2006 and December 31, 2005,
respectively 68,955 70,494
Buildings and improvements, net of
accumulated depreciation of $476,016
and $456,628 at March 31, 2006 and
December 31, 2005, respectively 1,828,315 1,760,920
Furniture, fixtures and equipment, net
of accumulated depreciation of $35,848
and $34,129 at March 31, 2006 and
December 31, 2005, respectively 39,617 37,236
Land held for investment or development 595,380 574,527
Properties held for disposition, net 4,138 28,918
------------- -------------
Net investment in real
estate $ 2,723,175 $ 2,655,323
Cash and cash equivalents $ 90,540 $ 86,228
Restricted cash and cash equivalents 60,498 84,699
Defeasance investments 116,999 274,134
Accounts receivable, net 53,478 56,356
Deferred rent receivable 72,843 70,074
Investments in unconsolidated companies 395,398 393,535
Notes receivable, net 188,235 219,016
Income tax asset - current - 8,291
Other assets, net 295,154 294,206
------------- -------------
Total assets $ 3,996,320 $ 4,141,862
============= =============
LIABILITIES:
Borrowings under Credit Facility $ 214,000 $ 234,000
Notes payable 1,908,784 1,948,152
Junior subordinated notes 77,321 77,321
Accounts payable, accrued expenses and
other liabilities 435,618 471,920
Current and deferred tax liability 2,791 1,093
------------- -------------
Total liabilities $ 2,638,514 $ 2,732,486
------------- -------------
COMMITMENTS AND CONTINGENCIES:
MINORITY INTERESTS:
Operating partnership, 11,428,673 and
11,416,173 units, at March 31, 2006
and December 31, 2005 respectively $ 110,210 $ 113,819
Consolidated real estate partnerships 52,431 53,562
------------- -------------
Total minority interests $ 162,641 $ 167,381
------------- -------------
SHAREHOLDERS' EQUITY:
Preferred shares, $0.01 par value,
authorized 100,000,000 shares:
Series A Convertible Cumulative
Preferred Shares, liquidation
preference of $25.00 per share,
14,200,000 shares issued and
outstanding at March 31, 2006
and December 31, 2005 $ 319,166 $ 319,166
Series B Cumulative Preferred Shares,
liquidation preference of $25.00 per
share, 3,400,000 shares issued and
outstanding at March 31, 2006 and
December 31, 2005 81,923 81,923
Common shares, $0.01 par value,
authorized 250,000,000 shares,
126,845,500 and 126,562,980 shares
issued and outstanding at March 31, 2006
and December 31, 2005 respectively 1,268 1,266
Additional paid-in capital 2,275,809 2,271,888
Deferred compensation on restricted
shares - (1,182)
Accumulated deficit (1,023,523) (972,319)
Accumulated other comprehensive income 654 1,385
------------- -------------
$ 1,655,297 $ 1,702,127
Less - shares held in treasury, at
cost, 25,120,917 common shares at
March 31, 2006 and December 31, 2005 (460,132) (460,132)
------------- -------------
Total shareholders' equity $ 1,195,165 $ 1,241,995
------------- -------------
Total liabilities and
shareholders' equity $ 3,996,320 $ 4,141,862
============= =============
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except share data)
For the three months
ended March 31,
--------------------------
2006 2005
------------ -----------
(unaudited)
REVENUE:
Office Property $ 99,666 $ 88,917
Resort Residential Development Property 99,140 54,476
Resort/Hotel Property 39,798 39,834
------------- ------------
Total Property Revenue $ 238,604 $ 183,227
------------- ------------
EXPENSE:
Office Property real estate taxes $ 9,566 $ 10,069
Office Property operating expenses 41,554 36,325
Resort Residential Development Property
expense 91,697 48,837
Resort/Hotel Property expense 29,457 31,735
------------- ------------
Total Property Expense $ 172,274 $ 126,966
------------- ------------
Income from Property Operations $ 66,330 $ 56,261
------------- ------------
OTHER INCOME (EXPENSE):
Income from investment land sales $ - $ 3,461
Gain on joint venture of properties,
net - 532
Interest and other income 15,888 5,304
Corporate general and administrative (14,826) (10,328)
Interest expense (33,410) (33,279)
Amortization of deferred financing
costs (1,770) (1,929)
Extinguishment of debt - (1,427)
Depreciation and amortization (36,445) (34,055)
Other expenses (1,932) (668)
Equity in net income (loss) of unconsolidated
companies:
Office Properties 2,176 3,331
Resort Residential Development
Properties 473 121
Resort/Hotel Properties (870) 1,406
Temperature-Controlled Logistics
Properties (322) (1,132)
Other 115 6,190
------------- ------------
Total Other Income (Expense) $ (70,923) $ (62,473)
------------- ------------
LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY
INTERESTS AND INCOME TAXES $ (4,593) $ (6,212)
Minority interests 498 519
Income tax (expense) benefit (1,104) 1,216
------------- ------------
LOSS BEFORE DISCONTINUED OPERATIONS $ (5,199) $ (4,477)
Income from discontinued operations, net
of minority interests 22 1,687
Gain on sale of real estate from
discontinued operations, net of minority
interests 96 1,503
------------- ------------
NET LOSS $ (5,081) $ (1,287)
Series A Preferred Share distributions (5,990) (5,990)
Series B Preferred Share distributions (2,019) (2,019)
------------- ------------
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $ (13,090) $ (9,296)
============= ============
BASIC EARNINGS PER SHARE DATA:
Loss available to common shareholders
before discontinued operations $ (0.13) $ (0.13)
Income from discontinued operations, net
of minority interests - 0.02
Gain on sale of real estate from
discontinued operations, net of minority
interests - 0.02
------------- ------------
Net loss available to common
shareholders - basic $ (0.13) $ (0.09)
============= ============
DILUTED EARNINGS PER SHARE DATA:
Loss available to common shareholders
before discontinued operations $ (0.13) $ (0.13)
Income from discontinued operations, net
of minority interests - 0.02
Gain on sale of real estate from
discontinued operations, net of minority
interests - 0.02
------------- ------------
Net loss available to common
shareholders - diluted $ (0.13) $ (0.09)
============= ============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 101,475,910 99,510,211
============= ============
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 101,475,910 99,510,211
============= ============
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands, except share data)
For the three months
ended March 31,
----------------------------------------------
(unaudited)
2006 2006 2005 2005
$ Per share $ Per share
------------ --------- ------------ ----------
NET LOSS (5,081) (0.04) (1,287) (0.01)
ADJUSTMENTS:
Depreciation and
amortization of real
estate assets 32,039 0.26 30,755 0.26
Gain on property
sales, net (113) - (2,589) (0.02)
Extinguishment of debt
expense directly related
to real estate asset
sales(a) - - 1,055 0.01
Adjustment for investments
in unconsolidated companies:
Office Properties 5,384 0.04 5,123 0.04
Resort Residential
Development
Properties (3,092) (0.02) (1,396) (0.01)
Resort/Hotel
Properties 1,121 0.01 811 0.01
Temperature-
Controlled
Logistics
Properties 3,510 0.03 4,645 0.04
Unitholder minority
interest (942) (0.01) (226) -
Series A Preferred
Share distributions (5,990) (0.05) (5,990) (0.05)
Series B Preferred
Share distributions (2,019) (0.02) (2,019) (0.02)
------------ -------- ------------ ---------
FUNDS FROM OPERATIONS
AVAILABLE TO COMMON
SHAREHOLDERS - DILUTED,
AS ADJUSTED (b) 24,817 0.20 28,882 0.25
============ ======== ============ =========
Extinguishment of debt
expense directly related
to real estate asset
sales (a) - - (1,055) (0.01)
------------ -------- ------------ ---------
FUNDS FROM OPERATIONS
AVAILABLE TO COMMON
SHAREHOLDERS - DILUTED
(b) - NAREIT DEFINITION 24,817 0.20 27,827 0.24
============ ======== ============ =========
INVESTMENT SEGMENTS:
Office Properties 54,695 0.45 52,426 0.45
Resort Residential
Development
Properties 1,034 0.01 4,907 0.04
Resort/Hotel
Properties 10,630 0.09 11,445 0.10
Temperature-Controlled
Logistics Properties 3,188 0.02 3,514 0.03
OTHER:
Corporate general and
administrative (14,826) (0.12) (10,328) (0.09)
Interest expense (33,410) (0.27) (33,279) (0.28)
Series A Preferred
Share distributions (5,990) (0.05) (5,990) (0.05)
Series B Preferred
Share distributions (2,019) (0.02) (2,019) (0.02)
Income from mezzanine
loans and other loans 10,968 0.09 939 0.01
Other (c) 547 - 7,267 0.06
------------ -------- ------------ ---------
FUNDS FROM OPERATIONS
AVAILABLE TO COMMON
SHAREHOLDERS - DILUTED,
AS ADJUSTED (b) 24,817 0.20 28,882 0.25
============ ======== ============ =========
Extinguishment of debt
expense directly related
to real estate asset
sales (a) - - (1,055) (0.01)
------------ -------- ------------ ---------
FUNDS FROM OPERATIONS
AVAILABLE TO COMMON
SHAREHOLDERS - DILUTED
(b) - NAREIT
DEFINITION 24,817 0.20 27,827 0.24
============ ======== ============ =========
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 101,475,910 99,510,211
WEIGHTED AVERAGE
SHARES/UNITS
OUTSTANDING - DILUTED 122,007,365 117,226,331
DIVIDEND PAID PER SHARE
DURING PERIOD 0.375 0.375
(a) Extinguishment of debt directly related to the sale of real estate
assets. An additional $0.4 million for the first quarter 2005 of
extinguishment of debt that is not related to the sale of real
estate assets is included in funds from operations available to
common shareholders.
(b) Funds from operations is a supplemental non-GAAP financial
measurement used in the real estate industry to measure and
compare the operating performance of real estate companies,
although those companies may calculate funds from operations in
different ways. The National Association of Real Estate Investment
Trusts ("NAREIT") defines funds from operations as Net Income
(Loss) determined in accordance with generally accepted accounting
principles ("GAAP"), excluding gains (or losses) from sales of
depreciable operating property, excluding extraordinary items
(determined by GAAP), excluding depreciation and amortization of
real estate assets, and including the impact of adjustments for
unconsolidated partnerships and joint ventures.
Crescent's FFO, as adjusted, follows the NAREIT definition, but is
adjusted to exclude the impact of impairment charges and debt
extinguishment charges related to the sale of real estate assets.
Crescent provides this additional calculation of FFO, as adjusted,
to exclude these charges because management utilizes it in making
operating decisions and assessing performance, and to assist
investors in assessing the operating performance of Crescent. FFO
should not be considered an alternative to net income.
(c) Includes income from investment land sales, net, interest and
other income, extinguishment of debt, income/loss from other
unconsolidated companies, other expenses, depreciation and
amortization of non-real estate assets, and amortization of
deferred financing costs.
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