Crescent Announces Second Quarter 2002 Results.Business Editors FORT WORTH, Texas--(BUSINESS WIRE)--Aug. 8, 2002 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 second quarter 2002. 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 ") for the three months ended June June: see month. 30, 2002 was $53.2 million, or $.45 per share and equivalent unit (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. ), which met the Company's guidance and analyst consensus. FFO for the six months ended June 30, 2002 was $117.3 million or $.99 per share and equivalent unit (diluted). These compare to $81.4 million, or $.66 per share and equivalent unit (diluted), for the three months ended June 30, 2001 and $153.6 million or $1.25 per share and equivalent unit (diluted), for the six months ended June 30, 2001. 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. , Chief Executive Officer, "We are pleased to have met our earnings expectation for the second quarter. While we look forward to a recovery in the national economy, we feel the company is well positioned in the current environment and will quickly benefit when the recovery occurs. We recently completed a $500 million capital raising initiative which strengthened our balance sheet, addressed our significant debt maturities through 2004, and created substantial liquidity, which will allow us to take advantage of investment opportunities as they arise." Net income available to common shareholders for the three months ended June 30, 2002 was $6.7 million, or $.07 per share (diluted). Net income available to common shareholders for the six months ended June 30, 2002 was $17.3 million, or $.17 per share (diluted). These compare to $11.6 million, or $.10 per share (diluted), for the three months ended June 30, 2001 and $39.5 million, or $.36 per share (diluted), for the six months ended June 30, 2001. 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 SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 144, gains of $.01 per share and $.04 per share related to office property sales were recorded as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. for the three months and six months ended June 30, 2002, respectively. BUSINESS SECTOR REVIEW Office Sector (67% of Gross Book Value of Real Estate Assets as of June 30, 2002) 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 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 ") declined 1.5% for the three months ended June 30, 2002 over the same period in 2001 for the 25.7 million square feet of office property space owned during both periods. Average occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy for these properties for the three months ended June 30, 2002 was 89.6% leased compared to 92.6% leased for the same period in 2001. As of June 30, 2002, the overall office portfolio was 90.4% leased based on executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. leases. During the three months ended June 30, 2002 and 2001, 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. received $0.6 million and $2.3 million, respectively, of 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's policy is to exclude lease termination fees from its same-store NOI calculation. Office property same-store NOI declined 1.0% for the six months ended June 30, 2002 over the same period in 2001 for the 25.7 million square feet of office property space owned during both periods. Average occupancy for these properties for the six months ended June 30, 2002 was 89.8% leased compared to 92.6% leased for the same period in 2001. During the six months ended June 30, 2002 and 2001, Crescent received $1.8 million and $4.0 million, respectively, of lease termination fees. The Company leased 807,000 net rentable square feet during the three months ended June 30, 2002, of which 473,000 square feet was 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 FFO net effective rental RENTAL. A roll or list of the rents of an estate containing the description of the lands let, the names of the tenants, and other particulars connected with such estate. This is the same as rent roll, from which it is said to be corrupted. rate (rental rate less 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. ) increased 4% over 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 renewed or re-leased leases, all of which have commenced or will commence within the next twelve months. Tenant improvements related to these leases were $1.73 per square foot per year and leasing costs were $.92 per square foot per year. The Company leased 1.9 million net rentable square feet during the six months ended June 30, 2002, of which 1.1 million square feet was renewed or re-leased. The weighted average FFO net effective rental rate (rental rate less operating expenses) increased 9% over the expiring rates for the renewed or re-leased leases, all of which have commenced or will commence within the next twelve months. Tenant improvements related to these leases were $1.06 per square foot per year and leasing costs were $.67 per square foot per year. 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, "Although the national office market is challenging, we are encouraged by the leasing velocity that we are seeing in 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; . We have already signed or are in negotiations for 70% of our leases expiring in Houston this year. Also, we have recently signed two very important new customers - one is a Houston company moving to Greenway Plaza Greenway Plaza is a master-planned mixed-use development off of U.S. Highway 59 in Houston, Texas, five miles (8 kilometers) west of Downtown Houston and three miles (5 kilometers) east of Uptown Houston. for 215,000 square feet and the other is a company relocating its headquarters to 5 Houston Center for 30,000 square feet. Further, we are in serious negotiations with various existing customers for over 1 million square feet in Houston that, if consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , would have a positive impact to 2003 operating performance. In 2002, we believe our office segment will produce between $320 million and $329 million in FFO." On May 29, 2002, Crescent closed on the sale of two buildings within The Woodlands Woodlands refers to several places:
The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). and gain to Crescent of $3.2 million and $1.9 million, respectively. On August 1, 2002, Crescent closed on the sale of 6225 N. 24th Street, a 86,000 square foot office building located in the Camelback cam·el·back adj. Shaped like a hump or an arching curve. n. New Orleans A narrow house with one story in front and two in the rear. See Regional Note at beignet. Corridor of Phoenix. The sale generated net proceeds and gain to Crescent of $9.0 million and $1.3 million, respectively. Resort and Residential Development Sector (22% of Gross Book Value of Real Estate Assets as of June 30, 2002) Destination Resort Properties Based on actual performance of Crescent's five resort properties, same-store NOI declined 2% for the three months ended June 30, 2002 over the same period in 2001. The average daily rate decreased 5% and revenue per available room decreased 8% for the three months ended June 30, 2002 compared to the same period in 2001. Weighted average occupancy was 63% for the three months ended June 30, 2002 compared to 65% for the three months ended June 30, 2001. Based on actual performance of Crescent's five resort properties, same-store NOI declined 7% for the six months ended June 30, 2002 over the same period in 2001. The average daily rate decreased 1% and revenue per available room decreased 6% for the six months ended June 30, 2002 compared to the same period in 2001. Weighted average occupancy was 69% for the six months ended June 30, 2002 compared to 72% for the six months ended June 30, 2001. Upscale Residential Development Properties According to Alberts, "Our overall residential investment generated $12.5 million in FFO for the second quarter, which was in line with our expectation. After extensive operating reviews with our residential partners, we believe that our overall residential business will deliver between $61 million and $65 million in FFO this year. Last year the overall residential business delivered $54 million in FFO." Investment Sector (11% of Gross Book Value of Real Estate Assets as of June 30, 2002) Business-Class Hotel Properties Based on actual performance of Crescent's four business-class hotel properties, same-store NOI increased 7% for the three months ended June 30, 2002 over the same period in 2001. The average daily rate decreased 3%, while revenue per available room increased 1% for the three months ended June 30, 2002 compared to the same period in 2001. Weighted average occupancy was 75% for the three months ended June 30, 2002 compared to 72% for the three months ended June 30, 2001. Based on actual performance of Crescent's four business-class hotel properties, same-store NOI declined 5% for the six months ended June 30, 2002 over the same period in 2001. The average daily rate decreased 4%, while revenue per available room decreased 7% for the six months ended June 30, 2002 compared to the same period in 2001. Weighted average occupancy was 70% for the six months ended June 30, 2002 compared to 72% for the six months ended June 30, 2001. Temperature-Controlled Logistics logistics In military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. Investment AmeriCold Logistics' same-store EBITDAR Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring Costs - EBITDAR An indicator of a company's financial performance calculated as: = Revenue - Expenses (excluding tax, interest, depreciation, amortization, and restructuring costs) (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
v. e·lect·ed, e·lect·ing, e·lects v.tr. 1. To select by vote for an office or for membership. 2. To pick out; select: elect an art course. to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. $6.2 million (of the $33.9 million contracted rent) for the second quarter, of which Crescent's share was $2.5 million. AmeriCold Logistics' same-store EBITDAR (earnings before interest, taxes, depreciation and amortization, and rent) remained flat for the six months ended June 30, 2002, compared to the same period in 2001. AmeriCold Logistics elected to defer $9.3 million (of the $69.0 million contracted rent) for the first six months of 2002, of which Crescent's share was $3.7 million. Crescent recognizes 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 when earned and collected and has not recognized the $3.7 million deferral deferral - Waiting for quiet on the Ethernet. in its equity in net income. BALANCE SHEET REVIEW On April 15, 2002, Crescent's operating partnership completed a private offering of $375 million in 9.25% senior, 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. notes due 2009. Proceeds were used to repay existing indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. and redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. preferred units of one of its subsidiaries. On April 26, 2002, Crescent completed a preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. issuance of 2.8 million shares of its 6.75% Series A convertible cumulative preferred stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. to an institutional investor Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . Proceeds of $50 million were used to redeem preferred units of one of its operating partnership subsidiaries. On May 10, 2002, Crescent completed a 9.5% Series B cumulative redeemable Redeemable Eligible for redemption under the terms of an indenture. preferred stock issuance, which, including the underwriters' exercise of an over-allotment option, totaled 3.4 million shares. Proceeds of $85 million were used to redeem preferred units of one of its operating partnership subsidiaries. In June 2002, the Company repurchased 1.5 million of its common shares at an average price of $19.00 per share, for a total purchase price of $28.5 million. From inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. of the original program in late 1999 to date, the Company has repurchased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 20.3 million shares, or 16.6% of the Company's outstanding common shares at December December: see month. 31, 1999. The average price per share was $19.04, for a total purchase price of $387 million. Repurchases are made in the open market at prevailing prices or in privately negotiated transactions. 2002 OUTLOOK Crescent's management expects 2002 FFO in the lower end of its original guidance range of $2.00 to $2.30 per share. Included in the Company's second quarter supplemental and operating financial data report is 2002 guidance by business segment, and based on this information, we expect 2002 FFO to be in the range of $2.00 to $2.10 per share. For the third quarter 2002 we expect FFO to be in the range of $.40 to $.45 per share. SUPPLEMENTAL OPERATING AND FINANCIAL DATA Crescent's supplemental and operating financial data report for the second quarter is available on the Company's website (www.cei-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 the Company's investor relations department at (817) 321-2180. CONFERENCE CALL, WEBCAST AND PRESENTATION The Company will also host a conference call and audio webcast, both open to the general public, at 10:00 A.M. Central Time on Thursday Thursday: see week. , August 8, 2002, to discuss the second quarter results and provide a Company update. To participate in the conference call, please dial (800) 818-4442 domestically or (706) 679-3110 internationally, or you may access the audio webcast on the Company's website (www.cei-crescent.com) in the investor relations section. During the call, reference will be made to a presentation that will also be posted on the Company's website. A replay of the conference call will be available through August 15, 2002, by dialing (800) 642-1687 domestically or (706) 645-9291 internationally with a passcode of 4717703. The webcast and presentation will be available on Crescent's website for 30 days. 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" and "may". Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company's actual results could differ materially from those described in the forward-looking statements. The following factors might cause such a difference: -- The Company's ability, at its office properties, to timely lease unoccupied square footage and timely re-lease occupied square footage upon expiration on favorable terms, which may be adversely affected by changes in real estate conditions (including rental rates and competition from other properties and new development of competing properties or a general downturn in the economy); -- Further deterioration in the resort/business-class hotel markets or in the market for residential land or luxury residences, including single-family homes, townhomes and condominiums, or in the economy generally; -- Financing risks, such as the 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 debt, the ability to meet financial covenants, the Company's ability to fund the share repurchase program and the Company's ability to consummate financings and refinancings on favorable terms and within any applicable time frames; -- Crescent's inability to obtain the confirmation of a prepackaged bankruptcy plan of COPI binding all creditors and stockholders; -- The inability of Crescent to complete the distribution to its shareholders of the shares of a new entity to purchase the AmeriCold tenant interest from COPI; -- Further or continued adverse conditions in the temperature-controlled logistics business (including both industry-specific conditions and a general downturn in the economy which may further jeopardize the ability of the tenant to pay all current and deferred rent due); -- Adverse changes in the financial condition of existing tenants; -- The concentration of a significant percentage of the Company's assets in Texas; -- The Company's ability to find acquisition and development opportunities which meet the Company's investment strategy; -- The existence of complex regulations relating to the Company's status as a 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 the Company's filings with the SEC. Given these uncertainties, readers are cautioned not to place undue reliance on such statements. The Company 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 THE COMPANY Crescent Real Estate Equities Company (NYSE:CEI) is one of the largest publicly held real estate investment trusts in the nation. Through its subsidiaries and partners, Crescent owned and managed, as of June 30, 2002, a portfolio of 74 premier office buildings totaling over 28 million square feet and centered in the Southwestern south·west n. 1. Abbr. SW The direction or point on the mariner's compass halfway between due south and due west, or 135° west of due north. 2. An area or region lying in the southwest. 3. 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, 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 and 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. . In addition, the company invests in world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. resorts and spas and upscale residential developments. With award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" customer service and industry-leading amenities, Crescent offers an exceptional experience at every property, every day.
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
June 30, December 31,
2002 2001
------- --------
(unaudited) (audited)
ASSETS:
Investments
in real estate:
Land $ 312,337 $ 249,266
Land held for
investment or
development 473,138 92,951
Building and
improvements 3,051,494 2,938,669
Furniture, fixtures
and equipment 108,580 72,247
Properties held
for disposition,
net 47,470 64,694
Less - accumulated
depreciation (720,350) (637,904)
-------------- ---------------
Net investment
in real estate $ 3,272,669 $ 2,779,923
Cash and cash
equivalents $ 67,584 $ 36,285
Restricted cash
and cash
equivalents 96,576 115,531
Accounts receivable,
net 40,601 28,654
Deferred rent
receivable 66,482 66,362
Investments in real
estate mortgages
and equity
of unconsolidated
companies 532,976 838,317
Notes receivable, net 109,090 132,065
Income tax asset-current
and deferred, net 37,671 -
Other assets, net 199,131 145,012
-------------- ---------------
Total assets $ 4,422,780 $ 4,142,149
============== ===============
LIABILITIES:
Borrowings under
Credit Facility 136,500 283,000
Notes payable 2,335,931 1,931,094
Accounts payable,
accrued expenses
and other
liabilities 339,655 220,068
------------ -------------
Total
liabilities $ 2,812,086 $ 2,434,162
-------------- ---------------
MINORITY INTERESTS:
Operating partnership,
6,591,234 and
6,594,521 units,
respectively $ 63,352 $ 69,910
Consolidated real
estate partnerships 95,894 232,137
-------------- ---------------
Total
minority
interests $ 159,246 $ 302,047
-------------- ---------------
SHAREHOLDERS' EQUITY:
Preferred shares,
$.01 par value, authorized
100,000,000 shares:
6 3/4% Series A
Convertible Cumulative
Preferred Shares,
liquidation preference
of $25.00 per share,
10,800,000 and 8,000,000
shares issued and
outstanding
at June 30, 2002 and
December 31, 2001,
respectively $ 248,160 $ 200,000
9 1/2% Series B
Cumulative Preferred Shares,
liquidation preference
of $25.00 per share,
3,400,000 shares issued
and outstanding at
June 30, 2002 81,923 -
Common shares, $.01 par value,
authorized 250,000,000 shares,
123,975,115 and 123,396,017
shares issued and outstanding
at June 30, 2002 and
December 31, 2001, respectively 1,233 1,227
Additional paid-in capital 2,240,125 2,234,360
Deferred compensation on
restricted shares (5,253) -
Accumulated deficit (699,915) (638,435)
Accumulated other
comprehensive income (26,587) (31,484)
-------------- ---------------
$ 1,839,686 $ 1,765,668
Less - shares held in treasury,
at cost, 20,270,953 and
18,770,418
common shares at June 30, 2002
and December 31, 2001,
respectively (388,238) (359,728)
-------------- ---------------
Total shareholders'
equity $ 1,451,448 $ 1,405,940
-------------- ---------------
Total liabilities
and shareholders'
equity $ 4,422,780 $ 4,142,149
============== ===============
TOTAL COMMON SHARES
AND UNITS OUTSTANDING 116,886,630 117,814,641
COMMON SHARE PRICE $18.70 $18.11
MARKET VALUE OF EQUITY $2,521,180 $2,333,623
TOTAL MARKET
CAPITALIZATION
INCLUDING DEBT $4,993,611 $4,547,717
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
For the three months For the six months
ended June 30, ended June 30,
--------------------- -------------------
--------------------- -------------------
2002 2001 2002 2001
------ ------ ------ ------
REVENUE:
Office
property $ 141,540 $ 155,426 $ 285,011 $ 308,229
Resort/
Hotel
property 53,523 16,125 92,047 32,074
Residential
Development
property 84,985 - 133,050 -
Interest and
other
income 1,843 17,634 4,069 26,637
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
Total
revenue $ 281,891 $ 189,185 $ 514,177 $ 366,940
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
EXPENSE:
Office
property
real estate
taxes $ 20,651 $ 22,059 $ 41,923 $ 44,747
Office
property
operating
expenses 42,130 44,690 86,685 88,249
Resort/Hotel
property
expense 42,212 - 66,102 -
Residential
Development
property
expense 76,994 - 119,209 -
Corporate
general and
administrative 5,333 6,889 11,725 12,153
Interest expense 46,450 46,833 88,722 94,281
Amortization of
deferred
financing costs 2,701 2,307 5,021 4,732
Depreciation and
amortization 35,329 30,446 69,151 60,459
Impairment and
other charges
related
to real estate
assets - 13,174 - 15,324
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
Total
expense $ 271,800 $ 166,398 $ 488,538 $ 319,945
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
Operating
income $ 10,091 $ 22,787 $ 25,639 $ 46,995
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
OTHER INCOME AND
EXPENSE:
Equity in net income
(loss) of
unconsolidated
companies:
Office
properties $ 1,471 $ 1,228 $ 2,781 $ 2,321
Residential
development
properties 6,179 9,732 18,662 20,440
Temperature-
controlled
logistics
properties (417) 1,632 (727) 4,351
Other (465) (636) (4,526) 1,210
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
Total equity in
net income of
unconsolidated
companies $ 6,768 $ 11,956 $ 16,190 $ 28,322
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
Loss on property
sales, net - (702) - (372)
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
Total other
income and
expense $ 6,768 $ 11,254 $ 16,190 $ 27,950
---------- ------------------------- -------------
---------- ------------------------- -------------
INCOME BEFORE INCOME
TAXES, MINORITY
INTERESTS,
DISCONTINUED
OPERATIONS,
EXTRAORDINARY ITEM
AND CUMULATIVE
EFFECT OF A CHANGE
IN ACCOUNTING
PRINCIPLE $ 16,859 $ 34,041 $ 41,829 $ 74,945
Minority
interests (5,059) (8,337) (13,102) (18,089)
Income tax
(expense)
benefit (418) - 3,865 -
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
INCOME BEFORE
DISCONTINUED
OPERATIONS,
EXTRAORDINARY
ITEM AND CUMULATIVE
EFFECT OF A CHANGE
IN ACCOUNTING
PRINCIPLE $ 11,382 $ 25,704 $ 32,592 $ 56,856
Discontinued
operations -
income and
gain on assets
sold and held
for sale 569 60 3,785 156
Extraordinary
item -
extinguishment
of debt - (10,802) - (10,802)
Cumulative
effect of a
change in
accounting
principle - - (10,465) -
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
NET INCOME $ 11,951 $ 14,962 $ 25,912 $ 46,210
6 3/4% Series A
Preferred Share
distributions (4,215) (3,375) (7,590) (6,750)
9 1/2% Series B
Preferred Share
distributions (1,009) - (1,009) -
---------- ------------ ----------- -----------
---------- ------------ ----------- -----------
NET INCOME AVAILABLE
TO COMMON
SHAREHOLDERS $ 6,727 $ 11,587 $ 17,313 $ 39,460
========== ============ =========== ===========
========== ============ =========== ===========
BASIC EARNINGS
(LOSS) PER SHARE
DATA:
Net income before
discontinued
operations,
extraordinary
item and
Cumulative
effect of a
change in
accounting
principle $ 0.06 $ 0.21 $ 0.23 $ 0.47
Discontinued
operations -
income and gain
on assets sold
and held for
sale 0.01 - 0.04 -
Extraordinary
item -
extinguishment
of debt - (0.10) - (0.10)
Cumulative effect
of a change in
accounting
principle - - (0.10) -
---------- ------------ ---------- -----------
---------- ------------ ---------- -----------
Net income -
basic $ 0.07 $ 0.11 $ 0.17 $ 0.37
========== ============ ========== ===========
========== ============ ========== ===========
DILUTED EARNINGS
(LOSS) PER SHARE
DATA:
Net income before
discontinued
operations,
extraordinary
item and
Cumulative
effect of a
change in
accounting
principle $ 0.06 $ 0.20 $ 0.23 $ 0.46
Discontinued
operations -
income and gain
on assets sold
and held
for sale 0.01 - 0.04 -
Extraordinary
item -
extinguishment
of debt - (0.10) - (0.10)
Cumulative effect
of a change in
accounting
principle - - (0.10) -
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income -
diluted $ 0.07 $ 0.10 $ 0.17 $ 0.36
=========== =========== =========== ===========
=========== =========== =========== ===========
WEIGHTED AVERAGE
SHARES
OUTSTANDING -
BASIC 104,887,898 108,370,320 104,912,915 107,876,496
========= =========== =========== ==========
========= =========== =========== ==========
WEIGHTED AVERAGE
SHARES
OUTSTANDING -
DILUTED 106,113,049 110,482,434 105,750,825 109,742,202
========= =========== =========== ==========
========= =========== =========== ==========
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands except per share data)
For the three months For the six months
ended June 30, ended June 30,
--------------- --------------
2002 2001 2002 2001
----- ------ ------ ------
(unaudited) (unaudited)
NET INCOME $ 11,951 $ 14,962 $ 25,912 $ 46,210
ADJUSTMENTS:
Depreciation
and
amortization
of real
estate
assets 33,530 29,524 65,669 59,019
(Gain) loss
on property
sales, net (1,425) 792 (5,189) 462
Cumulative
effect of
change in
accounting
principle - - 10,465 -
Extraordinary
item -
extinguishment
of debt - 10,802 - 10,802
Impairment and
other charges
related to
real estate
assets - 14,174 600 15,324
Adjustment for
investments
in real estate
mortgages and
equity of
unconsolidated
companies:
Office
properties 1,889 2,015 4,051 4,055
Residential
development
properties 2,051 3,851 2,954 6,209
Temperature-
controlled
logistics
properties 5,790 5,507 11,501 11,113
Other 3,130 - 5,776 -
Unitholder
minority
interest 1,513 3,122 4,192 7,191
6 3/4% Series A
Preferred Share
distributions (4,215) (3,375) (7,590) (6,750)
9 1/2% Series B
Preferred Share
distributions (1,009) - (1,009) -
--------- --------- ---------- --------
--------- --------- ---------- --------
FUNDS FROM
OPERATIONS (a) $ 53,205 $ 81,374 $ 117,332 $ 153,635
========= ========= ========== ==========
========= ========= ========== ==========
INVESTMENT
SEGMENTS:
Office
properties $ 80,502 $ 91,744 $ 161,074 $ 181,897
Resort/hotel
properties 12,637 16,016 33,547 31,768
Residential
development
properties 12,474 13,582 28,035 26,648
Temperature-
controlled
logistics
properties 5,374 7,139 10,775 15,464
OTHER:
Corporate
general &
administrative (5,333) (6,889) (11,725) (12,153)
Interest expense (46,450) (46,833) (88,722) (94,281)
6 3/4% Series A
Preferred Share
distributions (4,215) (3,375) (7,590) (6,750)
9 1/2% Series B
Preferred Share
distributions (1,009) - (1,009) -
Other (b) (775) 9,990 (7,053) 11,042
--------- ---------- ---------- ----------
--------- ---------- ---------- ----------
FUNDS FROM
OPERATIONS (a) $ 53,205 $ 81,374 $ 117,332 $ 153,635
======== ========== ========== ==========
======== ========== ========== ==========
WEIGHTED AVERAGE
SHARES
OUTSTANDING -
BASIC 104,887,898 108,370,320 104,912,915 107,876,496
WEIGHTED AVERAGE
SHARES/UNITS
OUTSTANDING -
DILUTED 119,291,717 123,722,972 118,934,650 123,350,589
DIVIDEND PAID PER
SHARE DURING
PERIOD $ 0.375 $ 0.550 $ 0.750 $ 1.100
SUPPLEMENTAL
INFORMATION:
Rental income
from straight-
line rents $ (577) $ (850) $ (1,058) $ (1,775)
Residential
development
capital
expenditures (398) (66) (531) (198)
Temperature-
controlled
capital
expenditures 459 283 (492) (667)
Non-incremental
revenue
generating
capital
expenditures:
Resort/hotel
property
capital
expenditures (2,166) (2,937) (6,053) (4,257)
Office
property
capital
expenditures (3,988) (2,664) (5,898) (4,453)
Tenant
improvement
and leasing
costs (8,336) (6,537) (13,092) (12,995)
Depreciation and
amortization of
non-real
estate assets 1,507 810 2,956 1,565
Amortization of
deferred
financing
costs 2,701 2,307 5,021 4,732
(a) To calculate Basic Fund from Operations ("FFO") per share,
deduct Unitholder minority interest from FFO and divide by basic
weighted average shares outstanding.
(b) Includes interest and other income, behavioral healthcare
income, preferred return paid to GMAC, other unconsolidated companies,
less depreciation and amortization of non-real estate assets and
amortization of deferred financing costs.
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