Crescent Real Estate Announces Fourth Quarter Results.Business Editors FORT WORTH, Texas--(BUSINESS WIRE)--Feb. 21, 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 three months and year ended December December: see month. 31, 2001. John C. Goff n. 1. A silly clown. 1. A game. See Golf. , Chief Executive Officer, commented, "This year's events have clearly made a mark on our country and our company. The national recession coupled with the tragic events of September September: see month. 11th has affected all of our operations, but as expected, the most notable impact was to our resort/hotel and residential development investments. This did not, however, stop us from accomplishing our key initiatives for 2001. 1)We refinanced $970 million of debt, which returned us to 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. borrower BORROWER, contracts. He to whom a thing is lent at his request. 2. The contract of loan confers rights, and imposes duties on the borrower' 1. In general, he has the right to use the thing borrowed, during the time and for the purpose intended between the status. 2)We generated $450 million in disposition Act of disposing; transferring to the care or possession of another. The parting with, alienation of, or giving up of property. The final settlement of a matter and, with reference to decisions announced by a court, a judge's ruling is commonly referred to as disposition, regardless of proceeds this year, bringing our total capital generation to $1.3 billion since 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 program in 1999. 3)We established key strategic relationships with joint-venture partners such as JPMorgan Fleming Flem·ing , Sir Alexander 1881-1955. British bacteriologist who discovered penicillin in 1928. He shared a 1945 Nobel Prize for this achievement. and GE Pension Trust. 4)We repurchased another 4.3 million of our common shares, bringing our total to 18.8 million shares, or 15% of our shares outstanding. This makes us one of the largest share repurchasers in the REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). industry. 5)We reconfigured our original plan to acquire 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. Operating's interests in our resort/hotel leases and residential developments which resulted in a recovery of substantially all of those assets on February February: see month. 14th. We believe we are now better positioned than ever before, financially and operationally, for potential growth opportunities that could arise in this economic environment." FINANCIAL REVIEW FFO FFO See: Funds from operations 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") for the three months ended December 31, 2001 was ($39.5) million, or ($.33) 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. ), compared to $94.7 million, or $.77 per share and equivalent unit (diluted), for the same period in 2000. Excluding the non-recurring charges and other adjustments related to the Crescent Operating, Inc. ("COPI COPI Chevron Overseas Petroleum Inc. COPI Construction Output Price Index (UK) COPI Court-Ordered Protected Individual ") transaction, the Company would have reported FFO of $58.8 million, or $.49 per share and equivalent unit (diluted). FFO for the twelve months ended December 31, 2001 was $177.1 million, or $1.45 per share and equivalent unit (diluted), compared to $326.9 million, or $2.54 per share and equivalent unit (diluted), for the same period in 2000. Excluding the non-recurring charges and other adjustments related to the COPI transaction, the Company would have reported FFO of $275.4 million, or $2.25 per share and equivalent unit (diluted). Net Income Net income (loss) available to common shareholders for the three months ended December 31, 2001 was ($76.7) million, or ($.72) per share (diluted), compared to $75.9 million, or $.69 per share (diluted), for the same period in 2000. Excluding the non-recurring charges and other adjustments related to the COPI transaction and other impairments and gains/losses on asset sales, the Company would have reported net income of $24.3 million, or $.23 per share (diluted). Net income (loss) available to common shareholders for the twelve months ended December 31, 2001 was ($18.2) million, or ($.17) per share (diluted), compared to $231.7 million, or $2.02 per share (diluted), for the same period in 2000. Excluding the non-recurring charges and other adjustments related to the COPI transaction and other impairments and gains/losses on asset sales, the Company would have reported net income of $101.0 million, or $.93 per share (diluted). BUSINESS SECTOR REVIEW Office Sector (67% of Asset Value as of December 31, 2001) 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 .3% for the three months ended December 31, 2001 over the same period in 2000 for the 25.4 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 December 31, 2001 was 91.7% compared to 92.4% for the same period in 2000. As of December 31, 2001, the overall office portfolio was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 92.5% 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 December 31, 2001 and 2000, Crescent received $1.4 million and $7.0 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 growth calculation. Office property same-store NOI increased 4.1% for the twelve months ended December 31, 2001 over the same period in 2000 for the 25.4 million square feet of office property space owned during both periods. Average occupancy for these properties for the twelve months ended December 31, 2001 was 92.3% compared to 91.8% for the same period in 2000. During the twelve months ended December 31, 2001 and 2000, Crescent received $9.1 million and $12.9 million, respectively, of lease termination fees. The Company leased 1.0 million net rentable square feet during the three months ended December 31, 2001, of which 419,000 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 15% 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 renewal or re-leased leases, all of which have commenced or will commence within the next twelve months. Tenant improvements related to these leases were $1.17 per square foot per year and leasing costs were $.53 per square foot per year. The Company leased 3.9 million net rentable square feet during the twelve months ended December 31, 2001, of which 1.9 million square feet was renewed or re-leased. The weighted average FFO net effective rental rate (rental rate less operating expenses) increased 31% over the expiring rates for the renewal or re-leased leases, all of which have commenced or will commence within the next twelve months. Tenant improvements related to these leases were $1.38 per square foot per year and leasing costs were $.77 per square foot per year. On January January: see month. 18, 2002, Crescent closed on the sale of Cedar Springs Cedar Springs is the name of three cities:
n. A geographic, economic, or specialized subdivision of a market. adj. Being below what is usual in a particular market: submarket wages; submarket interest rates. 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. . The sale generated net proceeds Net Proceeds 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). to Crescent of approximately $12 million. 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 are encouraged by how well our office sector is holding up in this economy. At a time when overall leasing velocity has slowed, we have signed or are in negotiations for over 60% of our 3.9 million square feet expiring in 2002. In addition, we are pleased to see reports that three of our four major markets are expected to experience positive job growth in 2002. That said, we are cautious in projecting 2002 growth for our office segment, and as such, we have built into our 2002 overall performance expectations a same-store growth range of 0% to 4% based on occupancy of 90% to 93%." Resort and Residential Development Sector (17% of Asset Value as of December 31, 2001) Destination Resort Properties Crescent reported no revenue related to the original lease structure with COPI for the three months ended December 31, 2001. Based on actual performance of Crescent's five resort properties, same-store net operating income declined 27% for the three months ended December 31, 2001 over the same period in 2000. The average daily rate increased 4% and revenue per available room decreased 13% for the three months ended December 31, 2001 compared to the same period in 2000. Weighted average occupancy was 61% for the three months ended December 31, 2001 compared to 73% for the three months ended December 31, 2000. Same-store 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 based on actual lease revenue declined 26% for the twelve months ended December 31, 2001 over the same period in 2000 for the five properties owned during both periods. Based on actual resort performance, same-store net operating income declined 20% for the twelve months ended December 31, 2001 over the same period in 2000. The average daily rate increased 6% and revenue per available room decreased 6% for the twelve months ended December 31, 2001 compared to the same period in 2000. Weighted average occupancy was 70% for the twelve months ended December 31, 2001 compared to 79% for the twelve months ended December 31, 2000. Upscale Residential Development Properties "Our residential development properties, with the exception of Desert Mountain, ended the year generally meeting 2001 expectations, which we are pleased about given the recessionary environment. Desert Mountain met revised expectations set forth in our October October: see month. 15th press release, generating over $8 million of FFO for the year. We are encouraged by the momentum we see building at Desert Mountain, and while we are not expecting a substantial increase in 2002 sales for that project, we are hopeful that the elevated consumer interest will lead us to earnings upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside in the next few years," stated Alberts. Investment Sector (16% of Asset Value as of December 31, 2001) Upscale Business-Class Hotel Properties Crescent reported no revenue related to the original lease structure with COPI for the three months ended December 31, 2001. Based on actual performance of Crescent's four hotel properties, same-store net operating income increased 3% for the three months ended December 31, 2001 over the same period in 2000. The average daily rate remained the same and revenue per available room decreased 6% for the three months ended December 31, 2001 compared to the same period in 2000. Weighted average occupancy was 66% for the three months ended December 31, 2001 compared to 70% for the three months ended December 31, 2000. Same-store rental income based on actual lease revenue declined 23% for the twelve months ended December 31, 2001 over the same period in 2000 for the four properties owned during both periods. Based on actual hotel performance, same-store net operating income declined 9% for the twelve months ended December 31, 2001 over the same period in 2000. The average daily rate increased 2% and revenue per available room decreased 3% for the twelve months ended December 31, 2001 compared to the same period in 2000. Weighted average occupancy was 71% for the twelve months ended December 31, 2001 compared to 75% for the twelve months ended December 31, 2000. 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. $12.7 million (of the $36.5 million contracted rent) for the fourth quarter, of which Crescent's share was $5.1 million. For the twelve months ended December 31, 2001, AmeriCold Logistics' rent deferral deferral - Waiting for quiet on the Ethernet. totaled $25.5 million (of the $146 million contracted rent), of which Crescent's share was $10.2 million. In December 2001, AmeriCold Corporation (the landlord) waived its rights to collect the cumulative deferred rent of $41.8 million, of which Crescent's share was $16.7 million. As Crescent had not previously recorded its share of the deferred rent, there is no financial impact to Crescent related to AmeriCold Corporation's decision to waive To intentionally or voluntarily relinquish a known right or engage in conduct warranting an inference that a right has been surrendered. For example, an individual is said to waive the right to bring a tort action when he or she renounces the remedy provided by law for such the collection of the deferral. RECOVERY OF COPI ASSETS As was announced on February 14, 2002, Crescent reached an agreement with COPI under which Crescent immediately received COPI's lease interests in eight of Crescent's resort/hotel properties and the voting interests Voting interest in business and accounting is a percentage of voting stock owned. This notion is different from economic interest that refers to a percentage of all the equity issued, including preferred stock, warrants, and so on. in substantially all of Crescent's residential development corporations and related entities. The remainder of the assets will be received in the near term. The agreement stipulates that Crescent will assist and provide funding to COPI for the implementation of a prepackaged bankruptcy Prepackaged Bankruptcy When acompany prepares a reorganization plan that is negotiated and voted on by creditors and shareholders before the company actually files for bankruptcy. of COPI. In addition, it provides for the distribution to COPI's stockholders of Crescent common shares in an amount that will be determined by reference to the claims, costs and expenses of COPI's bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most and related transactions. Crescent has agreed to provide approximately $14.0 million to COPI in the form of cash and the above referenced common shares of Crescent to fund the claims, costs and expenses in connection with the pending bankruptcy and related transactions. The agreement and the related transactions fall within the financial guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in Crescent's press release dated January 23, 2002. Related to the operating interest that COPI owns in AmeriCold Logistics, the tenant of the temperature-controlled logistics properties, REIT tax rules prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. Crescent from acquiring or owning the interest. Crescent, therefore, plans to acquire the interest from COPI through a separate entity, that will be owned by Crescent's shareholders, for approximately $15.5 million. Goff commented, "Our current expectation is that the COPI prepackaged bankruptcy will be confirmed at the end of the summer. At that time, the agreed-upon number of Crescent shares will be distributed to the COPI stockholders, and the new entity to be distributed to Crescent's shareholders will purchase COPI's operating interest in the AmeriCold tenant. The completion of this process, however, will require that a number of conditions be fulfilled ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. , including the vote of COPI's stockholders and creditors and approval by the bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. ." "We are very pleased to have reached a mutually acceptable resolution with COPI to bring this transaction to a close," Goff added. "Having the COPI assets will enable us to manage our resort/hotel and residential development investments more efficiently and should also lead to more predictable overall earnings in the future." BALANCE SHEET REVIEW As previously announced on October 15, 2001, the Company's Board of Trust Managers authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: an increase in the size of the Company's original common share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program, enacted in late 1999, from $500 million to $800 million. For the three months ended December 31, 2001, the Company had repurchased approximately 4.3 million shares. The average price per share was $17.97 for a total purchase price of $77 million. From inception of the original program through December 31, 2001, the Company had repurchased approximately 18.8 million shares, 15% of the Company's outstanding common shares as of December 31, 1999. The average price per share was $19.09 for a total purchase price of $358 million. Repurchases are made in the open market at prevailing prices or in privately negotiated transactions. "We remain bullish Bullish Word used to describe an investor's attitude. Bullish refers to an optimistic outlook, while bearish means a pessimistic outlook. bullish on our stock and continue to believe that the current price of our shares does not reflect the net asset value underlying our fundamental business segments. We consider our net asset value in the $24 to $26 range, taking into account the current economic environment," Goff concluded. 2002 OUTLOOK FFO Per Share Crescent reinstates its full year 2002 FFO range of $2.00 to $2.30 per share, of which $.42 to $.45 is expected for the first quarter. Office For office property same-store NOI growth, Crescent projects a range of 0% to 4% for 2002 over 2001, based on an average occupancy range of 90% to 93%. Resort and Hotel Same-store NOI for Crescent's resort and business-class hotel portfolio is expected to increase between 0% and 3%, based on an occupancy increase of 0% to 2%, for 2002 over 2001. In addition, average daily rate is expected to increase between 0% and 2% and revenue per available room is expected to increase between 0% and 3% both for 2002 over 2001. Residential Development Crescent expects residential lot sales at The Woodlands Woodlands refers to several places:
Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. including single family homes, townhomes and condominiums are also expected to occur at an average sales price per residential unit ranging between $750,000 and $850,000. SUPPLEMENTAL OPERATING AND FINANCIAL DATA Crescent is providing a supplemental and operating financial data report available to the general public for the first time this quarter and will continue to update the information quarterly. The report is located 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. , February 21, 2002, to discuss the fourth 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 February 27, 2002, by dialing 800/642-1687 domestically or 706/645-9291 internationally with a passcode of 2836937. 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: -- Crescent's inability to obtain the confirmation of a prepackaged bankruptcy plan of COPI binding all creditors and stockholders; -- The inability of Crescent successfully to integrate the lessee interests in the resort/hotel properties and the voting interests in its residential development corporations and related entities with its current business and operations; -- 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 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; -- 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); -- Financing risks, such as the ability to generate revenue sufficient to service and repay existing or additional debt, the Company's ability to fund the share repurchase program, increases in debt service associated with increased debt and with variable-rate debt, the ability to meet financial covenants and the Company's ability to consummate financings and refinancings on favorable terms and within any applicable time frames; -- Further 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 Company's tenant to pay all current rent due to the Company); -- 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 and, through its subsidiaries, owns and manages some of the country's most desirable properties. Its portfolio consists primarily of 74 office buildings totaling 28 million square feet located in six states and 26 sub-markets primarily 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. U.S., as well as world-renowned world-re·nowned adj. Widely known and acclaimed. luxury resorts and spas and upscale residential developments.
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
December 31, December 31,
2001 2000
(unaudited) (audited)
ASSETS:
Investments in real estate:
Land $ 265,594 $ 310,301
Land held for investment
or development 108,274 116,480
Building and improvements 2,980,116 3,201,332
Furniture, fixtures and
equipment 74,773 62,802
Less - accumulated
depreciation (648,834) (564,805)
----------------- -----------------
Net investment in real estate $ 2,779,923 $ 3,126,110
Cash and cash equivalents $ 36,285 $ 38,966
Restricted cash and cash
equivalents 115,531 94,568
Accounts receivable, net 28,654 42,200
Deferred rent receivable 66,362 82,775
Investments in real
estate mortgages and
equity of unconsolidated
companies 838,317 845,317
Notes receivable, net 132,065 141,407
Other assets, net 145,012 171,975
----------------- -----------------
Total assets $ 4,142,149 $ 4,543,318
================= =================
LIABILITIES:
Borrowings under UBS
Facility $ - $ 553,452
Borrowings under Fleet
Facility 283,000 -
Notes payable 1,931,094 1,718,443
Accounts payable, accrued
expenses and other
liabilities 220,068 202,591
-------------- --------------
Total liabilities $ 2,434,162 $ 2,474,486
----------------- -----------------
MINORITY INTERESTS:
Operating partnership,
6,594,521 and 6,995,823
units, respectively $ 69,910 $ 100,586
Investment joint ventures 232,137 236,919
----------------- -----------------
Total minority interests $ 302,047 $ 337,505
----------------- -----------------
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,
8,000,000 shares issued
and outstanding at
December 31, 2001 and
December 31, 2000 $ 200,000 $ 200,000
Common shares, $.01 par
value, authorized
250,000,000 shares,
123,396,017 and
121,818,653 shares
issued and outstanding
at December 31, 2001 and
December 31, 2000,
respectively 1,227 1,211
Additional paid-in capital 2,234,360 2,221,531
Retained deficit (638,435) (402,337)
Accumulated other
comprehensive income (31,484) (6,734)
----------------- -----------------
$ 1,765,668 $ 2,013,671
Less - shares held in
treasury, at cost,
18,770,418 and 14,468,623
common shares at December
31, 2001 and December 31,
2000, respectively (359,728) (282,344)
----------------- -----------------
Total shareholders' equity $ 1,405,940 $ 1,731,327
----------------- -----------------
Total liabilities and
shareholders' equity $ 4,142,149 $ 4,543,318
================= =================
TOTAL COMMON SHARES AND UNITS
OUTSTANDING 117,814,641 121,341,676
COMMON SHARE PRICE $18.11 $22.25
MARKET VALUE OF EQUITY $2,333,623 $2,899,852
TOTAL MARKET CAPITALIZATION
INCLUDING DEBT $4,547,717 $5,171,747
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
For the three months For the twelve months
ended December 31, ended December 31,
---------------------- ----------------------
2001 2000 2001 2000
---- ---- ---- ----
(unaudited) (unaudited) (audited)
REVENUES:
Office properties $ 145,942 $ 158,051 $ 610,116 $ 606,040
Resort/Hotel
properties 1,225 16,379 45,748 72,114
Interest and other
income 3,843 15,811 40,190 40,251
----------- ----------- ----------- -----------
Total revenues $ 151,010 $ 190,241 $ 696,054 $ 718,405
----------- ----------- ----------- -----------
EXPENSES:
Real estate taxes $ 18,184 $ 18,852 $ 84,488 $ 83,939
Repairs and
maintenance 7,873 8,422 39,247 39,024
Other rental
property operating 37,421 35,863 140,146 127,078
Corporate general
and administrative 5,875 9,441 24,249 24,073
Interest expense 43,221 48,653 182,410 203,197
Amortization of
deferred financing
costs 2,156 2,441 9,327 9,497
Depreciation and
amortization 33,339 30,231 126,157 123,839
Impairment and
other charges
related to real
estate assets 6,400 9,349 25,332 9,349
Impairment and
other charges
related to COPI 92,782 - 92,782 -
----------- ----------- ----------- -----------
Total expenses $ 247,251 $ 163,252 $ 724,138 $ 619,996
----------- ----------- ----------- -----------
Operating
(loss) income $ (96,241)$ 26,989 $ (28,084)$ 98,409
OTHER INCOME AND EXPENSE:
Equity in net income
of unconsolidated
companies:
Office properties $ 2,283 $ (71)$ 6,124 $ 3,164
Residential
development
properties 13,311 25,355 41,014 53,470
Temperature-
controlled
logistics
properties (1,149) 2,567 1,136 7,432
Other 61 4,016 2,957 11,645
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Total equity in net
income of
unconsolidated
companies $ 14,506 $ 31,867 $ 51,231 $ 75,711
----------- ----------- ----------- -----------
Gain on property
sales, net 3,698 36,500 4,425 128,932
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Total other income
and expense $ 18,204 $ 68,367 $ 55,656 $ 204,643
----------- ----------- ----------- -----------
(LOSS) INCOME BEFORE
MINORITY INTERESTS
AND EXTRAORDINARY
ITEM (78,037) 95,356 27,572 303,052
Minority interests 4,709 (17,593) (21,429) (51,002)
----------- ----------- ----------- -----------
(LOSS) INCOME BEFORE
EXTRAORDINARY ITEM $ (73,328)$ 77,763 $ 6,143 $ 252,050
Extraordinary item -
extinguishment of
debt - - (10,802) (3,928)
----------- ----------- ----------- -----------
NET (LOSS) INCOME $ (73,328)$ 77,763 $ (4,659)$ 248,122
6 3/4% Series A
Preferred Share
distributions (3,376) (3,375) (13,501) (13,500)
Share repurchase
agreement return - 1,535 - (2,906)
----------- ----------- ----------- -----------
NET (LOSS) INCOME
AVAILABLE TO COMMON
SHAREHOLDERS $ (76,704)$ 75,923 $ (18,160)$ 231,716
=========== =========== =========== ===========
BASIC EARNINGS PER
SHARE DATA:
Net (loss) income
before
extraordinary item $ (0.72)$ 0.70 $ (0.07)$ 2.08
Extraordinary item -
extinguishment of
debt - - (0.10) (0.03)
----------- ----------- ----------- -----------
Net (loss) income -
basic $ (0.72)$ 0.70 $ (0.17)$ 2.05
=========== =========== =========== ===========
DILUTED EARNINGS PER
SHARE DATA:
Net (loss) income
before
extraordinary item $ (0.72)$ 0.69 $ (0.07)$ 2.05
Extraordinary item -
extinguishment of
debt - - (0.10) (0.03)
----------- ----------- ----------- -----------
Net (loss) income -
diluted $ (0.72)$ 0.69 $ (0.17)$ 2.02
=========== =========== =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING -
BASIC 105,960,083 107,834,679 107,613,171 113,524,004
=========== =========== =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING -
DILUTED 106,319,439 109,427,332 109,139,987 114,720,818
=========== =========== =========== ===========
DEBT SERVICE COVERAGE
RATIO 2.2 3.1 2.5 2.6
=========== =========== =========== ===========
CRESCENT REAL ESTATE EQUITIES COMPANY
STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands, except per share data)
For the three months For the twelve months
ended December 31, ended December 31,
---------------------- ----------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
(unaudited) (unaudited)
------------- -------------
NET (LOSS) INCOME $ (73,328)$ 77,763 $ (4,659)$ 248,122
ADJUSTMENTS:
Depreciation and
amortization of
real estate assets 32,174 29,127 122,033 119,999
Gain on property
sales, net (2,265) (35,923) (2,835) (128,355)
Extraordinary item -
extinguishment of
debt - - 10,802 3,928
Impairment and other
charges related to
real estate assets 6,400 9,349 21,705 9,349
Adjustment for
investments in real
estate mortgages
and equity of
unconsolidated
companies:
Office properties 237 1,451 6,955 4,973
Residential
development
properties 3,813 579 13,037 25,130
Temperature-
controlled
logistics
properties 5,871 5,777 22,671 26,131
Other 144 - 144 -
Unitholder minority
interest (9,138) 9,968 765 31,120
6 3/4% Series A
Preferred Share
distributions (3,376) (3,375) (13,501) (13,500)
----------- ----------- ----------- -----------
FUNDS FROM
OPERATIONS (a) $ (39,468)$ 94,716 $ 177,117 $ 326,897
=========== =========== =========== ===========
INVESTMENT SEGMENTS:
Office properties $ 85,215 $ 95,233 $ 358,349 $ 361,574
Resort/hotel
properties 1,140 16,211 45,282 71,446
Residential
development
properties 17,124 25,935 54,051 78,600
Temperature-
controlled
logistics
properties 4,721 8,345 23,806 33,563
Corporate general &
administrative (5,875) (9,441) (24,249) (24,073)
Impairment and other
charges related to
COPI (92,782) - (92,782) -
Interest expense (43,221) (48,653) (182,410) (203,197)
6 3/4% Series A
Preferred Share
distributions (3,376) (3,375) (13,501) (13,500)
Other (b) (2,414) 10,461 8,571 22,484
----------- ----------- ----------- -----------
FUNDS FROM
OPERATIONS (a) $ (39,468)$ 94,716 $ 177,117 $ 326,897
=========== =========== =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING -
BASIC 105,960,083 107,834,679 107,613,171 113,524,004
WEIGHTED AVERAGE
SHARES/UNITS
OUTSTANDING - DILUTED 119,522,456 123,442,239 122,544,421 128,731,883
DIVIDEND PAID PER
SHARE DURING PERIOD $ 0.375 $ 0.55 $ 2.025 $ 2.20
SUPPLEMENTAL
INFORMATION:
Rental income from
straight-line rents $ (1,091)$ (2,815)$ (1,959)$ (14,225)
Residential
development capital
expenditures (118) (369) (461) (1,501)
Temperature-
controlled capital
expenditures (1,835) (1,728) (3,800) (3,762)
Non-incremental
revenue generating
exp.:
Resort/hotel
property capital
expenditures (3,821) (2,032) (10,477) (7,029)
Office property
capital
expenditures (7,932) (6,196) (15,672) (9,199)
Tenant improvement
and leasing costs (10,191) (9,678) (29,352) (34,674)
Depreciation and
amortization of
non-real estate
assets 511 683 2,934 2,646
Amortization of
deferred financing
costs 2,156 2,441 9,327 9,497
(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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