Crescent Real Estate Announces Third Quarter Results.FT. WORTH, Texas--(BUSINESS WIRE)--Nov. 10, 1999-- 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) ) -- Financial Statement Charges Related to the Company's Behavioral behavioral pertaining to behavior. behavioral disorders see vice. behavioral seizure see psychomotor seizure. Healthcare Segment Reduce FFO FFO See: Funds from operations 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. ) to $0.43 -- All Other Segments Performed At or Above Management Expectations Crescent Real Estate Equities Company (NYSE:CEI) announced today 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") per share and equivalent unit (diluted) of $0.43 for the three months ended September September: see month. 30, 1999, which is below consensus analyst estimates of $0.66 per share as reported through First Call on November November: see month. 9, 1999. The shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. is the result of financial statement charges made with respect to the behavioral healthcare segment and Crescent's master lease agreement with Charter Behavioral Health Behavioral health was first used in the 1980's to name the combination of the fields mental health and substance abuse. As an example, an organization serving both mental health and substance abuse clients might refer to its practice as behavioral health or Systems, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("Charter"). John C. Goff n. 1. A silly clown. 1. A game. See Golf. , Vice-Chairman vice-chairman n → vicepresidente m vice-chairman vice irreg n → vice-président(e) vice-chairman vice- n , CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President stated, "As I discussed on our second quarter conference call, our immediate focus was to resolve our behavioral healthcare investment. I further explained that, based on our findings, we would take the necessary steps in the third quarter to clean up our financial statement items related to Charter. We have done this by recognizing financial statement charges this quarter, which had a negative impact on our financial results. Despite these challenges, I am pleased with the progress we have made in developing and implementing a plan to restructure our investment in the behavioral healthcare segment. Our other business segments continue to perform well and we are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about their prospects. During the third quarter, we have been active in addressing a number of corporate issues. We have formulated for·mu·late tr.v. for·mu·lat·ed, for·mu·lat·ing, for·mu·lates 1. a. To state as or reduce to a formula. b. To express in systematic terms or concepts. c. and issued a statement of our mission and values (available on our web site), re-organized our management team, opened communication channels with all of our constituents, and strengthened the balance sheet. With respect to our balance sheet, we have already refinanced, with fixed-rate debt, or hedged hedge n. 1. A row of closely planted shrubs or low-growing trees forming a fence or boundary. 2. A line of people or objects forming a barrier: a hedge of spectators along the sidewalk. approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $400 million of our 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 during the third quarter alone and are confident that we will reduce our total variable-rate debt by an additional $300 - $400 million by the first quarter of 2000. Finally, we have developed a strategic plan that I will summarize sum·ma·rize intr. & tr.v. sum·ma·rized, sum·ma·riz·ing, sum·ma·riz·es To make a summary or make a summary of. sum later today during our conference call. We are well on our way to taking the offensive once again. We have a clear direction, and we are eager to share that direction with all our constituents." HIGHLIGHTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 -- FFO FFO per share and equivalent unit (diluted) and total FFO for the three months ended September 30, 1999 decreased 30.6% and 37.6%, respectively, compared to the same period in 1998. Excluding the behavioral healthcare segment, FFO per share and equivalent unit (diluted) and total FFO would have increased 3.8% and decreased 4.7%, respectively, during the three months ended September 30, 1999, compared with the same period in 1998. FFO per share and equivalent unit (diluted) and total FFO for the nine months ended September 30, 1999 decreased 2.1% and 3.1%, respectively, compared to the same period of 1998. Excluding the behavioral healthcare segment, FFO per share and equivalent unit (diluted) and total FFO would have increased 11.4% and 10.3%, respectively, during the nine months ended September 30, 1999, compared to the same period in 1998. -- 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 "), 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 and leasing During the nine months ended September 30, 1999, office property same-store NOI increased 6.4% and the weighted average occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) increased 1.5 percentage points, over the same period in 1998, for properties owned as of January January: see month. 1, 1998. During the nine months ended September 30, 1999, leases were 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. renewing 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-leasing 2,094,000 net rentable square feet with an increase in the weighted average full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. 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 of 18% and an increase in the FFO annual net effective rental rate of 31%. -- Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). Office, Inc. 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. , along with seven other real estate companies, joined with the venture capital firm Kleiner Perkins Per·kins , Frances 1882-1965. American social reformer and public official. As U.S. secretary of labor (1933-1945) she was the first woman to hold a cabinet position. Caufield and Byers Byers may refer to any of the following places:
Broadband is a national telecommunications company See telecom company. dedicated to providing state of the art broadband telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. to commercial office properties across the country. -- Hotel property 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 Hotel property rental income for properties owned as of January 1, 1998 increased 16% for the nine months ended September 30, 1999 over the same period in 1998. -- Variable-rate debt During the three months ended September 30, 1999, approximately $400 million, or 28% of the variable-rate debt outstanding at June June: see month. 30, 1999, was refinanced, with fixed-rate debt, or hedged. -- Management re-organization effective September 28, 1999 On September 28, 1999, Crescent announced the re-organization of its senior management team to better align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. management talents with areas of responsibility. This re-organization will enable Crescent to more efficiently execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution its operating strategy and effectively position the Company to take advantage of investment opportunities. FINANCIAL REVIEW FFO and Net Income (Loss) (in thousands except per share information): The following table shows FFO and net income (loss) available to common shareholders, in total and on a per share basis (diluted), for the three and nine months ended September 30, 1999, including the behavioral healthcare segment charges that impacted the reported periods. -0-
Three Months Ended Nine Months Ended
September 30, 1999 September 30, 1999
------------------- ------------------
Total Per Share Total Per Share
-------- --------- -------- ---------
FUNDS FROM OPERATIONS
FUNDS FROM OPERATIONS $ 57,197 $ 0.43 $254,540 $ 1.83
BEHAVIORAL HEALTHCARE SEGMENT
CHARGES:
Removal of third quarter
straight-line rent associated
with the behavioral
healthcare segment 2,324 0.02 2,324 0.02
Write-off of August rent
receivable from Charter 2,866 0.02 2,866 0.02
Reversal of deferred rent
receivable from Charter 25,603 0.19 25,603 0.18
-------- -------- -------- --------
FFO BEFORE BEHAVIORAL
HEALTHCARE SEGMENT CHARGES $ 87,990 $ 0.66(1) $285,333 $ 2.05
======== ========== ======== ========
(1) Analyst consensus FFO per share estimate as reported through
First Call on November 9, 1999.
NET INCOME (LOSS)
NET LOSS AVAILABLE TO COMMON
SHAREHOLDERS ($105,657) ($0.88) ($25,549) ($0.21)
BEHAVIORAL HEALTHCARE SEGMENT
CHARGES:
Removal of third quarter
straight-line rent associated
with the behavioral healthcare
segment 2,324 0.02 2,324 0.02
Write-off of August rent
receivable from Charter 2,866 0.02 2,866 0.02
Write-off of deferred rent
receivable from Charter 25,603 0.21 25,603 0.20
Impairment adjustment to
behavioral healthcare segment
assets 136,435 1.12 136,435 1.08
Minority interest adjustment (15,981) (0.13) (15,981) (0.13)
-------- -------- -------- --------
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS BEFORE BEHAVIORAL
HEALTHCARE SEGMENT CHARGES $ 45,590 $ 0.36 $125,698 $ 0.98
======== ======== ======== ========
FFO for the three months ended September 30, 1999 was $57.2 million, or $.43 per share and equivalent unit (diluted), compared to $91.7 million, or $.62 per share and equivalent unit (diluted), for the third quarter of 1998. FFO for the nine months ended September 30, 1999 was $254.5 million, or $1.83 per share and equivalent unit (diluted), as compared to $262.6 million, or $1.87 per share and equivalent unit (diluted) for the nine months ended September 30, 1998. Both the three and nine month decreases are primarily a result of the charges related to the behavioral healthcare segment. Excluding the charges related to Charter recognized during the third quarter of 1999, FFO for the three and nine months ended September 30, 1999 would have been $88.0 million and $285.3 million, respectively, or $0.66 and $2.05 per share and equivalent unit (diluted), respectively. Net income (loss) available to common shareholders for the three months ended September 30, 1999, was ($105.7) million, or ($0.88) per share (diluted), on total revenues of $185.5 million, compared with net income (loss) available to common shareholders of $27.8 million, or $.21 per share (diluted), on total revenues of $179.8 million, for the same period of 1998. For the nine months ended September 30, 1999, net income (loss) available to common shareholders was ($25.5) million, or ($0.21) per share (diluted), on total revenues of $563.7 million, compared with net income (loss) available to common shareholders of $108.7 million, or $.85 per share (diluted), on total revenues of $510.0 million, for the nine months ended September 30, 1998. BEHAVIORAL HEALTHCARE UPDATE -- Charter has been adversely affected by many factors, including conditions affecting its industry, and is no longer performing 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 its operating budgets Noun 1. operating budget - a budget for current expenses as distinct from financial transactions or permanent improvements budget items, operating cost, operating expense, overhead - the expense of maintaining property (e.g. . -- For the three and nine months ended September 30, 1999, Crescent received cash rental payments of $8.6 million and $30.5 million, respectively, from Charter. In September, the Company completed the transactions with Magellan A disk management utility for PCs from Lotus that had its heyday in the late 1980s. Believed by many to be one of the top 10 utility programs of all time, Magellan searched for file names and indexed the text content of the PC's hard drive at lightning speed. Health Services health services Managed care The benefits covered under a health contract , Inc. (NYSE: MGL MGL Massachusetts General Laws MGL Moenchengladbach, Germany MGL Mongolian Airlines (ICAO code) MGL Mascon Global Limited (New Delhi, India) MGL Multiple Greek Letter MGL Milpitas Golfland ) ("Magellan"), Charter and Crescent Operating, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : COPI COPI Chevron Overseas Petroleum Inc. COPI Construction Output Price Index (UK) COPI Court-Ordered Protected Individual ) ("COPI") whereby Magellan transferred its remaining hospital-based assets to Charter, Magellan and Charter terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: the franchise agreement, and Magellan transferred all but 10% of its common interest and all of its preferred interest in Charter to COPI and an affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. of COPI. These transactions resulted in an infusion INFUSION, med. jur. A pharmaceutical operation, which consists in pouring a hot or cold fluid upon a substance, whose medical properties it is desired to extract. Infusion is also used for the product of this operation. Although infusion differs from decoction, (q.v. of cash and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. to Charter, eliminated the franchise fee and simplified sim·pli·fy tr.v. sim·pli·fied, sim·pli·fy·ing, sim·pli·fies To make simple or simpler, as: a. To reduce in complexity or extent. b. To reduce to fundamental parts. c. the capital structure. These transactions were considered phase one of the Company's plan to strengthen Charter and re-establish re-establish Verb to create or set up (an organization, link, etc.) again re-establishment n Charter as a financially stronger tenant capable of paying market rent with acceptable coverage ratios. Simultaneous with the closing of the phase one transactions described above, Crescent initiated phase two and commissioned PriceWaterhouseCoopers to assist in the assessment of options related to the Charter investment. This assessment included an appraisal of the behavioral healthcare real estate assets. Mr. Goff commented, "First, consistent with our original underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. in 1997, we have independent confirmation that the real estate has substantial value and alternative uses. Second, we have determined that a core group of 34 Crescent-owned facilities plus 9 Charter joint venture facilities could generate, on a 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. basis, earnings before, interest, taxes, depreciation, amortization and rent ("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) ") of approximately $45 million. This would leave us with the potential to sell up to 53 facilities. The core group of 34 facilities has a value of approximately $125 million. Assuming cash rent of $25 million, this would provide a rent coverage level of 1.8. The new business model would allow Charter's management to focus on fewer facilities that have a track record of performance. Additionally, the new model assumes that management would transition the business to provide the full continuum Continuum (pl. -tinua or -tinuums) can refer to:
n. 1. A patient who is outside a hospital, but receives medical aid from it. 2. A medical patient who receives treatment at a hospital, especially in an emergency room, but is not admitted to stay overnight. as well as in-patient in·pa·tient or in-pa·tient n. A patient who is admitted to a hospital or clinic for treatment that requires at least one overnight stay. ) in the markets in which it operates. Crescent would benefit from this new structure by reducing its exposure to this segment going forward, significantly improving its rent coverage, and by monetizing a portion of its initial investment. We believe that it is important to note that the foregoing analysis has been made using a conservative outlook for the industry in general and is based on Charter's historical margins and operating results." Mr. Goff cautioned, "However, we also anticipate that the transition to this core group of facilities would require deferral deferral - Waiting for quiet on the Ethernet. of all cash rent payments for up to 14 months (November 1999 - December December: see month. 2000) as well as additional equity and debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay in excess of $50 million over that same period to cover the costs of facility closings and working capital. While we believe that there is a viable, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. business at the heart of this situation, we are unwilling to make this investment. However, Charter has received expressions of interest from various parties interested in participating in the business in one form or another. In order to provide Charter with an opportunity to find a serious investor, we have agreed 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. Charter's cash rent payments for November and December and, in addition, we may agree to provide Charter with working capital during this period. Charter has agreed to enter into an amendment to the master lease which will allow Crescent to market the 53 facilities for sale." -- Crescent made the following financial statement adjustments related to its investment in the behavioral healthcare segment in the third quarter of 1999: -- Wrote off the August rent receivable from Charter of $2.8 million, which was the difference between the deferred $3.8 million cash rent payment for August and the approximately $950,000 that was received in September. -- Recognized the July July: see month. and September Charter rent payments on a cash basis at $7.7 million, compared to rent of $9.2 million on a straight-line straight-line adj. 1. Lying in a straight line. 2. Relating to a device whose linkage produces or copies motion in straight lines. 3. basis. -- Wrote off the $25.6 million deferred rent receivable due under the Charter master lease and recognized for financial reporting purposes beginning with the commencement of the lease in June of 1997 through June 30, 1999. This deferred rent represents the difference between rent recorded on a straight-line basis and cash received in accordance with the master lease during this period. -- Wrote down the book value of the behavioral healthcare real estate assets from $348.8 to approximately $245.0 million at September 30, 1999 based on the lower of cost or market lower of cost or market A method for determining an asset's value such that either the original cost or the current replacement cost, whichever is lowest, is used for financial reporting purposes. method, on a facility by facility basis, as prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). by 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 . However, the value of the behavioral healthcare real estate assets is approximately $280 million. -0-
INVESTMENT SECTOR HIGHLIGHTS
Office Properties
Same-store net operating income growth (in millions):
The following tables show the same-store net operating income
growth for the 27.1 million square feet of office property space owned
as of January 1, 1998.
Three Months Three Months Percentage/
Ended Ended Point
Sept. 30, 1999 Sept. 30, 1998 Increase
-------------- -------------- -----------
Same-store Revenues $ 129.1 $ 123.1 4.9%
Same-store Expenses (54.9) (52.9) 3.6%
-------------- --------------
Net Operating Income $ 74.2 $ 70.2 5.7%
============== ==============
Weighted Average Occupancy 90.4% 90.3% 0.1 pt
Nine Months Nine Months Percentage/
Ended Ended Point
Sept. 30, 1999 Sept. 30, 1998 Increase
-------------- -------------- -----------
Same-store Revenues $ 385.1 $ 359.2 7.2%
Same-store Expenses (166.6) (153.8) 8.3%
-------------- --------------
Net Operating Income $ 218.5 $ 205.4 6.4%
============= ==========
Weighted Average Occupancy 91.1% 89.6% 1.5 pts
Leasing and rental rates:
Three Months Ended September 30, 1999
---------------------------------------------
Percentage
Signed Leases Expiring Leases Increase
----------------- ---------------- ----------
Renewed or re-leased (1) 528,000 sq. ft. N/A N/A
Weighted average full-
service rental rate (2) $22.08 per sq. ft. $19.01 per sq. ft. 16%
FFO annual net effective
rental rate (3) $14.10 per sq. ft. $11.21 per sq. ft. 26%
Nine Months Ended September 30, 1999
--------------------------------------------
Percentage
Signed Leases Expiring Leases Increase
----------------- ---------------- ----------
Renewed or re-leased (1) 2,094,000 sq. ft. N/A N/A
Weighted average full-
service rental rate (2) $21.66 per sq. ft. $18.36 per sq. ft. 18%
FFO annual net effective
rental rate (3) $13.70 per sq. ft. $10.46 per sq. ft. 31%
(1) All of which have commenced or will commence during the next
twelve months.
(2) Including free rent, scheduled rent increases taken into account
under generally accepted accounting principles, and expense
recoveries.
(3) Calculated as weighted average full-service rental rate minus
operating expenses.
-- For the nine months ended September 30, 1999, executed leases required tenant improvements of $1.36 per square foot per year and leasing costs of $0.70 per square foot per year. -- Based on executed leases, the overall office portfolio was approximately 92.4% leased, or approximately 90.4% leased based on commenced leases at September 30, 1999. -0-
Significant third quarter leasing transactions:
(Commencing within the next three months)
FFO
Annual Per-
Net centage
Net Effec- change
New, Rentable tive over
Business Renewal Lease Square Rental Expiring
Property Location Type or Relet Term Feet Rate Rate
-------- ----------- --------- -------- ----- ------- ---------- ----
Three Houston, TX Oil and Relet 3-year 87,105 $14.86 psf 105%
Westlake Gas
44 Cook Denver, CO Financial New 5.2-year 48,906 $11.48 psf N/A
Services
Corp.
Greenway Houston, TX Internet New 6.4-year 45,512 $12.93 psf N/A
Plaza Research
Provider
Greenway Houston, TX Internet New/ 3.1-year 12,124 $ 9.82 psf N/A
Plaza Jewelry Relet 3.7-year 20,000 $ 9.61 psf 34%
Retailer
The Austin, TX Software Relet 4.8-year 26,690 $16.58 psf 50%
Avallon Company
Post Oak Houston, TX HMO Relet/ 10-year 25,073 $15.69 psf 77%
Central Renewal
General market overview: Bill Miller, Senior Vice-President vice president or vice-pres·i·dent n. Abbr. VP 1. An officer ranking next below a president, usually empowered to assume the president's duties under conditions such as absence, illness, or death. 2. , Asset Management noted, "We continue to see strong demand in virtually all of our office markets, especially our core markets of 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; , 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. and 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 . Rental rates are flat to slightly up, with the CBD (Component Based Development) Building applications with components (objects). See component software. CBD - component based development markets in Houston, Austin and Denver continuing strong. New space continued to enter most markets, but that space is leasing up as we anticipated. The construction pipeline should shrink shrink Vox populi noun A psychiatrist considerably by December 31, 1999, and its product should also lease up quickly. Looking ahead to 2000, we anticipate few new starts without committed anchor tenants as the financial markets discipline new activity. Leasing activity for Crescent properties remained strong in the third quarter with major renewals and expansions by such tenants as Janus Janus, in astronomy Janus (jā`nəs), in astronomy, one of the named moons, or natural satellites, of Saturn. Also known as Saturn X (or S10), Janus is an irregularly shaped (nonspherical) body measuring about 122 mi (196 km) by 119 mi Capital Corporation, a financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. corporation, and Swidler, Berlin, Shereff, Friedman Fried·man , Milton Born 1912. American economist. He won a 1976 Nobel Prize for his theories of monetary control and governmental nonintervention in the economy. Noun 1. , LLP LLP - Lower Layer Protocol , a nationally recognized law firm." -0-
Dallas market overview:
Three Months Ended Nine Months Ended
Dallas Class A Data September 30, 1999 September 30, 1999
------------------- ------------------ ------------------
Absorption 1.1 million sq. ft. 2.5 million sq. ft.
Average occupancy rate 84.2% 84.2%
Newly delivered multi-
tenant space 2.5 million sq. ft. 5.3 million sq. ft.
Average quoted market
rental rates $24.23 per sq. ft. $24.23 per sq. ft.
Twelve Months Ended
Dallas Class A Data December 31, 1998
------------------- -------------------
Absorption 2.0 million sq. ft.
Average occupancy rate 87.5%
Newly delivered multi-
tenant space 3.4 million sq. ft.
Average quoted market
rental rates $24.38 per sq. ft.
Source: CoStar/Jamison
1999 Projections for the Dallas Market- CoStar/Jamison, a market research company, estimates that approximately 2.9 million square feet of multi-tenant In the Software as a Service (SaaS) software architecture, multi-tenant refers to the ability of the hosting site to support multiple organizations ("tenants") at the same time. Multi-tenancy is a key feature of a true SaaS architecture. Class A space is under construction, of which 1.7 million square feet is scheduled for delivery during the remainder of 1999. Approximately 48% of the total Class A space under construction is pre-leased. With new construction coming on line, total Class A space delivered in 1999 is projected at approximately 7.0 million square feet, representing approximately 9.8% of Dallas Class A inventory. Given these deliveries and based on projected demand, CoStar/Jamison expects the Class A occupancy rate to be 83% by December 31, 1999, compared with 84% at September 30, 1999. John Zogg, Vice-President, Leasing and Marketing Southwest Southwest or south west is the ordinal direction halfway between south and west, the opposite of northeast. Southwest or south west may also refer to:
Chase Bank and the anticipated decisions by two major financial service companies to relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. significant operations to Dallas will bring additional activity to the market. Over one million square feet of Class A space was absorbed Absorbed 1. In a general business sense, when a cost is treated as an expense instead of being passed on to the customer in the form of higher prices. 2. In underwriting, when an issue has been completely sold to the public. 3. in the third quarter, and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. absorption absorption [Lat.,=sucking from], taking of molecules of one substance directly into another substance. It is contrasted with adsorption, in which the molecules adhere only to the surface of the second substance. of 2.5 million square feet already exceeds absorption for all of 1998 by over a half million square feet. In addition, space under construction has dropped significantly with most of the construction pipeline's remaining Class A space scheduled for delivery by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . Of course, the office market is feeling the effects of the new space being delivered, but Crescent retains an advantage over its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. due to the high quality and excellent locations of our properties. The average occupancy (based on executed leases) for Crescent's Dallas Class A buildings was 92% at September 30, 1999, holding steady with the prior quarter, and the average current in-place full-service rental rate was $21.87, 15% below Crescent's quoted rental rate of $25.66 per square foot." -0-
Houston market overview:
Three Months Ended Nine Months Ended
Houston Class A September 30, 1999 September 30, 1999
--------------- ------------------ ------------------
Absorption 427,000 sq. ft. 415,000 sq. ft.
Average occupancy rate 92.3% 92.3%
Newly delivered multi-
tenant space 1.2 million sq. ft. 2.9 million sq. ft.
Average quoted market
rental rates $21.75 per sq. ft. $21.75 per sq. ft.
Twelve Months Ended
Houston Class A December 31, 1998
--------------- -----------------
Absorption 1.4 million sq. ft.
Average occupancy rate 95.4%
Newly delivered multi-
tenant space 151,000 sq. ft.
Average quoted market
rental rates $21.55 per sq. ft.
Source: The Baca Group
1999 Projections for the Houston Market - 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. the Baca Group, a market research company, new Class A multi-tenant space under construction in Houston currently totals approximately 1.6 million square feet. Approximately 36% of this amount is pre-leased. Approximately 85% of the Class A multi-tenant space under construction is expected to come on line in 1999, which will result in total deliveries for the year of 4.3 million square feet. This represents a 7.6% increase in the Houston market's total multi-tenant Class A inventory over year-end 1998. Jane Page, Vice-President, Houston Region Asset Management commented, "Houston continues to absorb absorb To offset sell orders or a new security offering with buy orders. new space with only a slight dip dip, in agriculture, method of treating animals (chiefly livestock) infested with skin parasites such as mites, ticks, and warbles. The animal is dipped into or forced to swim through a tank filled with an insecticide solution. in the Class A occupancy rate during the third quarter. The central business district has absorbed almost 175,000 square feet of Class A space in 1999, outpaced only by the Westchase/Westheimer submarket sub·mar·ket 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. . The central business district Class A occupancy rate remains very strong at 97%, and the average Class A quoted rental rate for the submarket is approaching $22.50 per square foot. The other Crescent submarkets are also holding steady on both occupancy and rental rates, with the Katy Katy may refer to: People with the given name Katy:
n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective from last quarter's drop following the termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. of a major tenant's lease. The average occupancy rate (based on executed leases) for Crescent's Class A Houston buildings was 93% at September 30, 1999, up from the prior quarter's rate of 91% primarily because of leasing efforts at the Three Westlake Park Westlake Park can mean:
current in-place full-service rental rate for Crescent's Class A properties rose to $17.53 per square foot, 22% below Crescent's quoted rental rate of $22.42 per square foot." Investment in Broadband Office, Inc.: Crescent, along with seven other real estate companies, joined with the venture capital firm Kleiner Perkins Caufield and Byers as a founding shareholder in Broadband Office, Inc. Broadband is a national telecommunications company dedicated to providing state of the art broadband telecommunications services to commercial office properties across the country. In addition to significantly improving Crescent's office tenant amenity a·men·i·ty n. pl. a·men·i·ties 1. The quality of being pleasant or attractive; agreeableness. 2. Something that contributes to physical or material comfort. 3. package to take advantage of evolving technologies, Crescent also received an initial equity interest and representation on the board of directors of Broadband in exchange for granting Broadband marketing access to the tenants within Crescent's office property portfolio. Broadband has committed to fund all capital improvements (estimated to be in excess of $20 million) necessary to provide these advanced services to Crescent's office properties. Given the increasing demand for such telecommunications services, Crescent believes that this investment will prove rewarding for both its tenants and shareholders. -0-
Hotel & Resort Properties
-- The following table shows the percentage changes in occupancy,
average daily rate and revenue per available room for all hotel
and resort properties for the third quarter of 1999 and
year-to-date 1999 as compared with the same periods of 1998.
Three Months Three Months Percentage/
Ended Ended Point
Sept. 30, 1999 Sept. 30, 1998 Change
-------------- -------------- ----------
Weighted average occupancy 76% 76% 0 pt
Average daily rate $247 $233 6%
Revenue per available room $186 $176 6%
Nine Months Nine Months Percentage/
Ended Ended Point
Sept. 30, 1999 Sept. 30, 1998 Change
-------------- -------------- ----------
Weighted average occupancy 75% 76% -1 pt
Average daily rate $220 $208 6%
Revenue per available room $165 $157 5%
-- Year-to-date 1999 hotel property rental income growth, including
weighted average base rent(1) and percentage rent, was
approximately 16%(2) compared with the same period of 1998, for
the eight hotel and resort properties owned as of January 1,
1998.
(1) Including scheduled rent increases that would be taken into
account under generally accepted accounting principles.
(2) This growth primarily represents the return on approximately $22
million of capital invested during 1998 and 1999 (i.e. the
construction of The Allegra Spa at the Hyatt Beaver Creek hotel,
the spa facility at Ventana Country Inn and the renovation of the
Four Seasons - Houston hotel).
Investment in Residential Development Properties
The Woodlands Land Development, L.P. and The Woodlands Commercial
Properties Company, L.P. (collectively "The Woodlands"), The
Woodlands, Texas:
Three Months Ended Three Months Ended
September 30, 1999 September 30, 1998
------------------ -----------------
Residential lot sales 534 415
Average sales price per lot $44,000 $53,000
Commercial land sales - 19 acres
Average sales price per acre - $346,000
Nine Months Ended Nine Months Ended
September 30, 1999 September 30, 1998
------------------ ------------------
Residential lot sales 1,452 1,234
Average sales price per lot $47,000 $53,000
Commercial land sales 27 acres 124 acres
Average sales price per acre $316,000 $205,000
-- Future buildout of The Woodlands is estimated at approximately
16,700 residential lots and approximately 2,021 acres of
commercial land, of which 1,174 residential lots and 1,040 acres
are currently in inventory.
-- The Woodlands estimates that sales of 588 residential lots and 58
acres of commercial land will close during the fourth quarter of
1999, which would put 1999 results in excess of initial sales
estimates of 2,000 residential lots and in line with initial
sales estimates of 85 commercial acres.
Desert Mountain Properties Limited Partnership ("Desert
Mountain"), Scottsdale, Arizona:
Three Months Ended Three Months Ended
September 30, 1999 September 30, 1998
------------------ ------------------
Residential lot sales 37 25
Average sales price per lot(1) $488,000 $374,000
Nine Months Ended Nine Months Ended
September 30, 1999 September 30, 1998
------------------ ------------------
Residential lot sales 161 148
Average sales price per lot(1) $534,000 $381,000
(1) Including equity golf membership.
-- Since the March 1999 opening of the initial Saguaro Forest
villages, Desert Mountain has sold 49 lots with an average sales
price of $643,000 per lot. Continued marketing efforts relating
to the remaining lots, which range in price from $500,000 to $2.5
million per lot, are anticipated to result in 15 to 25 additional
closings during the fourth quarter of 1999.
-- In October 1999, Desert Mountain opened two new villages in
Saguaro Forest consisting of 55 additional lots. Approximately
50% of the lots are anticipated to close during the fourth
quarter of 1999 with an estimated average closing price in excess
of $650,000 per lot.
-- In addition to the Saguaro Forest lot inventory, Desert Mountain
is also marketing approximately 200 lots in other villages of
Desert Mountain, with prices ranging from $400,000 to $2.6
million per lot, and estimates approximately 20% of these lots
will close during the fourth quarter of 1999.
Crescent Development Management Corporation ("CDMC"), Beaver
Creek, Colorado:
Three Months Ended Three Months Ended
September 30, 1999 September 30, 1998
------------------ ------------------
Active projects 5 2
Residential lot sales 36 17
Townhome sales 6 7
Single-family home sales 4 -
Condominium sales 7 -
Total CMDC Revenues
(in thousands) $41,911 $ 6,591
Nine Months Ended Nine Months Ended
September 30, 1999 September 30, 1998
------------------ ------------------
Active projects 8 2
Residential lot sales 42 29
Townhome sales 27 7
Single-family home sales 8 -
Equivalent timeshare unit sales 5 -
Condominium sales 7 -
Total CDMC Revenues
(in thousands) $89,131 $19,513
-- For the fourth quarter of 1999, CDMC estimates the following
sales from eight active projects and three projects expected to
be introduced during the fourth quarter of 1999: 370 residential
lots, four townhomes, one single-family home, one equivalent
timeshare unit and 18 condominiums.
-- 99% of the sales anticipated during the fourth quarter of 1999
have been pre-sold as of September 30, 1999.
Refrigerated re·frig·er·ate tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates 1. To cool or chill (a substance). 2. To preserve (food) by chilling. Storage Properties -- Management believes that earnings before interest, taxes, depreciation and amortization ("EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ") is a useful performance measure for assessing the financial condition of AmeriCold Logistics' operating partnership ("AmeriCold 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. "), which is the sole lessee One who rents real property or Personal Property from another. A lessee of land is a tenant. Cross-references Landlord and Tenant. lessee n. the person renting property under a written lease from the owner (lessor). of the refrigerated storage properties. The lessor One who rents real property or Personal Property to another. A lessor of land is a landlord. Cross-references Landlord and Tenant. lessor n. the owner of real property who rents it to a lessee pursuant to a written lease. is a partnership in which Crescent has a 40% interest and Vornado Realty Trust Vornado Realty Trust (NYSE: VNO) is a New York based real estate investment trust. It is the inheritor of real estate formerly controlled by companies including Two Guys and Alexander's. has a 60% interest. Consistent with expectations of AmeriCold Logistics' management, same-store EBITDA growth for the nine months ended September 30, 1999 was approximately 3% over the same period of 1998. -- In the third quarter of 1999, AmeriCold Logisitics completed and opened $46 million of expansion and new product, representing approximately 15.1 million cubic feet (.5 million square feet). AmeriCold Logistics currently has approximately $30.6 million of expansion and new refrigerated storage properties under construction, which management of AmeriCold Logistics expects will be completed in the fourth quarter of 1999 or early in the first quarter of 2000, and which are expected to contain approximately 16.6 million cubic feet (.8 million square feet). In addition, AmeriCold Logistics has approximately $100 million of expansion and new product refrigerated storage properties under review for completion or acquisition during 2000. DEBT MATURITY REVIEW During the third quarter of 1999 Crescent completed the refinancing Refinancing An extension and/or increase in amount of existing debt. of the Houston Center complex and obtained additional financing on two pools of assets that were previously underleveraged underleveraged Of, relating to, or being a firm that has insufficient debt in its capital structure. Because bond interest is deductible for tax purposes and is generally fixed in amount for a long period of time, some use of debt can often result in greater . -- The $184 million variable-rate note variable-rate note See floating-rate note. secured by the Houston Center complex was refinanced with a $200 million, 7-year, 8.3% fixed-rate mortgage. The 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). were used to reduce amounts outstanding under the Company's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. The refinancing did not include the Four Seasons Hotel, which had served as partial collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although for the original loan. -- Crescent obtained a $200 million, 4-year loan secured by partnership interests in two pools of underleveraged assets. This loan has a floating interest rate of 30-day LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). plus 325 basis points. The proceeds were used to pay off a $150 million short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. note and reduce amounts outstanding under the Company's revolving credit facility. Crescent entered into an interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. agreement in a separate transaction related to the $200 million financing, reducing its exposure to increases in short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. . -- Crescent has approximately $47 million of debt due to mature in the fourth quarter of 1999. Crescent anticipates modifying and extending the existing loan at $40.3 million for 6 years at a fixed-rate of 8.49% by December 1, 1999. 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. Crescent's Board of Trust Managers has 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: the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of a portion of its outstanding common shares, from time to time in the open market or through privately negotiated transactions, in an amount not to exceed $500 million. The proposed repurchases will be subject to prevailing market conditions and other considerations. Crescent expects the share repurchase program to be funded through a combination of asset sales and financing arrangements, which, in some cases, may be secured by the repurchased shares. The amount of shares that Crescent actually will purchase will be determined from time to time, in its reasonable judgement, based on market conditions and the availability of funds, among other factors. There can be no assurance that any number of shares actually will be purchased within any particular time period. ASSET DISPOSITIONS Crescent has identified for 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 the following assets, which are either non-strategic or non-core assets within the Company's business segments. The proceeds generated from these assets sales will be used to reduce Crescent's variable-rate debt, make investments, fund a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program or any combination of these purposes. -- Dallas Mavericks  The introduction of this article is too short.To comply with Wikipedia's lead section guidelines, it should be expanded. interest On October October: see month. 27, 1999, Crescent and certain of its subsidiaries completed the sale of their equity and debt interests in the Dallas Mavericks, interest in the new Dallas sports arena development and surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. mixed-use development Mixed-use development refers to the practice of allowing more than one type of use in a building or set of buildings. In planning zone terms, this can mean some combination of residential, commercial, industrial, office, institutional, or other land uses. projects, and certain promissory promissory (prom´isôrē), n a promise; stipulation for a future act or course of conduct. notes relating primarily to the Dallas Mavericks, for approximately $89 million in cash to Hillwood, a majority owner of the Dallas Mavericks NBA NBA abbr. 1. National Basketball Association 2. National Boxing Association NBA (US) n abbr (= National Basketball Association) → Basketball-Dachverband (= basketball basketball, game played generally indoors by two opposing teams of five players each. Basketball was conceived in 1891 by Dr. James Naismith, a physical education instructor at the YMCA college in Springfield, Mass. franchise. The sale is projected to have no gain or loss impact to Crescent. -- The Woodlands Woodlands refers to several places:
The Woodlands Commercial Properties Company, owned by Crescent and Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. Real Estate Fund II, LP, has been actively marketing for
sale certain commercial property portfolios(multi-family, office/venture tech and retail) in The Woodlands. As of September 30, 1999, the multi-family portfolio has been sold, the sale of the retail portfolio is expected to close during the fourth quarter of 1999 and the sale of the office/venture technology portfolio is expected to close during the first quarter of 2000. -- Office Properties Crescent is actively marketing for sale its wholly-owned interests in 12 office properties. Bids have been received on these properties, either individually or in various combinations. Management is currently in the process of evaluating the bids to determine their economic viability as well as the credit-worthiness of the potential purchasers and their ability to close the transactions. During this evaluation process, management will decide whether or not it is in Crescent's best interest economically ec·o·nom·i·cal adj. 1. Prudent and thrifty in management; not wasteful or extravagant. See Synonyms at sparing. 2. Intended to save money, as by efficient operation or elimination of unnecessary features; economic: to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose all or a portion of these properties based on the bids received. The disposition of these properties remains subject to the negotiation of acceptable terms and other customary conditions once one or more purchasers have been selected. Crescent anticipates completing any economically justified sales of these properties to one or more buyers in the fourth quarter of 1999 or the first quarter of 2000. If all of the pending asset sales discussed above are completed at the current offering prices, Crescent will realize net proceeds, including the sale of Crescent's interest in the Dallas Mavericks, in excess of $380 million after paying off secured debt encumbering certain of the properties of $75 million. CONFERENCE CALL Crescent will conduct a conference call to discuss its third quarter earnings on Wednesday Wednesday: see week. , November 10, 1999 at 10:00 a.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. . To access the conference call within 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. , please dial 800/642-1384 (no pass code needed). Outside of the United States, please dial 706/634-5544. A replay of the call will be available on our redesigned web site (www.cei-crescent.com) approximately two hours after the end of the conference call. 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. Certain matters discussed within this press release are forward-looking statements within the meaning of the federal securities laws, and the transactions contemplated herein are subject to certain closing conditions. 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 set forth in the forward-looking statements. Factors that could cause actual results to differ materially from Crescent's expectations include: -- The failure of Charter to locate an investment partner and procure To cause something to happen; to find and obtain something or someone. Procure refers to commencing a proceeding; bringing about a result; persuading, inducing, or causing a person to do a particular act; obtaining possession or control over an item; or making a person sufficient debt and equity capital to complete a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). prior to December 15, 1999 and pay deferred rent payments on that date; -- The failure of Charter, following any restructuring, to fulfill 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. all of its lease obligations over the long term; -- Crescent's ability to generate revenues sufficient to meet debt service payments, satisfy existing financial covenants and pay other 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. ; -- Crescent's ability to close anticipated sales of assets, including sales of non-core behavioral healthcare facilities; -- Financing risks, such as increases in debt service associated with variable-rate debt and Crescent's ability to 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. planned financings and refinancings on the terms and within the time frames anticipated; -- Crescent's ability to timely lease unoccupied square footage and timely re-lease re-lease tr.v. re-leased, re-leas·ing, re-leas·es To lease again: re-leased the car. occupied oc·cu·py tr.v. oc·cu·pied, oc·cu·py·ing, oc·cu·pies 1. To fill up (time or space): a lecture that occupied three hours. 2. To dwell or reside in. 3. 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 ; -- Changes in real estate conditions (including rental rates and competition from other properties); -- The concentration of a significant percentage of Crescent's assets in Texas; -- 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; -- Adverse changes in the financial condition of existing tenants; 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. ABOUT THE COMPANY Crescent, one of the country's largest real estate investment trusts, owns and manages a diversified diversified (di·verˑ·s portfolio consisting of Class A office and retail properties, hotels and destination fitness resorts, residential land developments, refrigerated storage properties and behavioral healthcare facilities. Our mission is to maximize In a graphical environment, to enlarge a window to the full size of the screen. See Win Maximize windows. value to our shareholders by: i) distinguishing ourselves as the undisputed leader in each of our businesses through customer service and asset quality; and ii) executing a disciplined real estate investment and operating strategy that focuses on market leadership, innovative growth opportunities, and outstanding employee and partner alliances. FOR MORE INFORMATION For further information, please contact Jerry Jer·ry n. pl. Jer·ries Chiefly British Slang A German, especially a German soldier. [Alteration of German. R. Crenshaw cren·shaw also cran·shaw n. A variety of winter melon (Cucumis melo var. inodorus) having a greenish-yellow rind and sweet, usually salmon-pink flesh. [Origin unknown.] , Senior Vice-President and Chief Financial Officer, at 817/321-1492 or refer to Crescent's web site at www.cei-crescent.com. -0-
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
September 30, December 31,
1999 1998
------------- -----------
(unaudited) (audited)
ASSETS:
Investments in real estate:
Land $ 398,703 $ 400,690
Land held for development or sale 95,282 95,282
Building and improvements 3,517,383 3,569,774
Furniture, fixtures and equipment 70,160 63,626
Less - accumulated depreciation (476,438) (387,457)
----------- -----------
Net investment in real estate 3,605,090 3,741,915
Cash and cash equivalents 67,557 110,292
Restricted cash and cash
equivalents 76,219 46,841
Accounts receivable, net 34,322 32,730
Deferred rent receivable 68,537 73,635
Investments in real estate
mortgages and equity of
unconsolidated companies 920,321 743,516
Notes receivable, net 184,573 183,974
Other assets, net 103,039 110,544
----------- -----------
Total assets $ 5,059,658 $ 5,043,447
=========== ===========
LIABILITIES:
Borrowings under Credit Facility $ 585,000 $ 660,000
Notes payable 2,097,127 1,658,156
Accounts payable, accrued
expenses and other liabilities 160,089 149,444
----------- -----------
Total liabilities 2,842,216 2,467,600
----------- -----------
MINORITY INTERESTS:
Operating partnership, 6,404,524
and 6,545,528 units, respectively 103,012 126,575
Investment joint ventures 25,003 26,727
----------- -----------
Total minority interests 128,015 153,302
----------- -----------
SHAREHOLDERS' EQUITY:
Preferred shares, $.01 par value,
authorized 100,000,000 shares:
6 3/4% Series A Convertible
Cumulative Preferred Shares,
8,000,000 shares issued and
outstanding at September 30, 1999
and December 31, 1998 200,000 200,000
Common shares, $.01 par value,
authorized 250,000,000 shares,
119,898,368 and 124,555,447
shares issued and outstanding
at September 30, 1999 and
December 31, 1998, respectively 1,196 1,245
Additional paid-in capital 2,214,990 2,336,621
Deferred compensation on
restricted shares (41) (88)
Retained deficit (339,276) (110,196)
Accumulated other comprehensive
income 12,558 (5,037)
----------- -----------
Total shareholders' equity 2,089,427 2,422,545
----------- -----------
Total liabilities and
shareholders' equity $ 5,059,658 $ 5,043,447
=========== ===========
TOTAL COMMON SHARES AND UNITS
OUTSTANDING 132,707,416(a) 137,646,503(a)
COMMON SHARE PRICE $ 18.00 $ 23.00
MARKET VALUE OF EQUITY $ 2,588,733 $ 3,365,870
TOTAL MARKET CAPITALIZATION
INCLUDING DEBT $ 5,270,860 $ 5,684,026
DEBT AS A % OF TOTAL MARKET
CAPITALIZATION 51% 41%
(a) Units are exchangeable on a one-for-two basis for Common Shares.
CRESCENT REAL ESTATE EQUITIES COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
For the three months
ended September 30,
(unaudited)
1999 1998
------------- -------------
REVENUES:
Office and retail properties $ 153,012 $ 146,037
Hotel properties 16,999 12,798
Behavioral healthcare
properties 8,634 13,824
Interest and other income 6,880 7,134
------------- -------------
Total revenues 185,525 179,793
------------- -------------
EXPENSES:
Real estate taxes 21,169 18,531
Repairs and maintenance 10,421 10,379
Other rental property
operating 32,504 33,338
Corporate general and
administrative 4,083 4,335
Interest expense 51,084 37,940
Amortization of deferred
financing costs 2,033 1,944
Depreciation and amortization 30,344 29,770
------------- -------------
Total expenses 151,638 136,237
------------- -------------
Operating income 33,887 43,556
OTHER INCOME AND EXPENSES:
Equity in net income of
unconsolidated companies:
Office and retail
properties 3,778 (318)
Refrigerated storage
properties 1,746 484
Residential development
properties 7,944 8,265
Other 1,367 822
Settlement of merger
dispute -- --
Impairment adjustment
related to the
behavioral healthcare
segment assets (162,038) --
Write-off of costs
associated with
unsuccessful acquisitions -- (18,435)
------------- -------------
Total other income and
expenses (147,203) (9,182)
------------- -------------
INCOME (LOSS) BEFORE MINORITY
INTERESTS (113,316) 34,374
Minority interests 11,034 (3,217)
------------- -------------
NET INCOME (LOSS) (102,282) 31,157
PREFERRED SHARE DIVIDENDS (3,375) (3,375)
FORWARD SHARE PURCHASE
AGREEMENT RETURN -- --
------------- -------------
NET INCOME (LOSS) AVAILABLE TO
COMMON SHAREHOLDERS $ (105,657) $ 27,782
============= =============
PER COMMON SHARE DATA:
Net Income (Loss) - Basic $ (0.88) $ 0.23
============= =============
Net Income (Loss) - Diluted $ (0.88) $ 0.21
============= =============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 119,891,807 120,819,630
============= =============
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 121,278,681 134,172,062
============= =============
DEBT SERVICE COVERAGE RATIO 2.6 3.2
============= =============
For the nine months
ended September 30,
------------------------------
(unaudited)
1999 1998
------------- -------------
REVENUES:
Office and retail properties $ 458,747 $ 409,937
Hotel properties 48,510 38,350
Behavioral healthcare
properties 36,282 41,471
Interest and other income 20,130 20,288
------------- -------------
Total revenues 563,669 510,046
------------- -------------
EXPENSES:
Real estate taxes 64,369 51,937
Repairs and maintenance 32,113 28,181
Other rental property
operating 97,614 93,003
Corporate general and
administrative 12,013 11,036
Interest expense 138,482 110,067
Amortization of deferred
financing costs 7,857 4,194
Depreciation and amortization 97,001 84,602
------------- -------------
Total expenses 449,449 383,020
------------- -------------
Operating income 114,220 127,026
OTHER INCOME AND EXPENSES:
Equity in net income of
unconsolidated companies:
Office and retail
properties 5,734 511
Refrigerated storage
properties 11,476 (1,032)
Residential development
properties 30,988 20,914
Other 2,277 822
Settlement of merger
dispute (15,000) --
Impairment adjustment
related to the
behavioral healthcare
segment assets (162,038) --
Write-off of costs
associated with
unsuccessful acquisitions -- (18,435)
------------- -------------
Total other income and
expenses (126,563) 2,780
------------- -------------
INCOME (LOSS) BEFORE MINORITY
INTERESTS (12,343) 129,806
Minority interests 1,236 (12,797)
------------- -------------
NET INCOME (LOSS) (11,107) 117,009
PREFERRED SHARE DIVIDENDS (10,125) (8,325)
FORWARD SHARE PURCHASE
AGREEMENT RETURN (4,317) --
------------- -------------
NET INCOME (LOSS) AVAILABLE TO
COMMON SHAREHOLDERS $ (25,549) $ 108,684
============= =============
PER COMMON SHARE DATA:
Net Income (Loss) - Basic $ (0.21) $ 0.91
============= =============
Net Income (Loss) - Diluted $ (0.21) $ 0.85
============= =============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 123,631,761 119,660,343
============= =============
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 125,899,439 127,165,200
============= =============
DEBT SERVICE COVERAGE RATIO 2.9 3.2
============= =============
CRESCENT REAL ESTATE EQUITIES COMPANY
STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands, except per share data)
Three Months Ended
September 30,
----------------------------
1999 1998
------------ ------------
(unaudited)
INCOME (LOSS) AFTER MINORITY
INTERESTS $ (102,282) $ 31,157
ADJUSTMENTS:
Depreciation and amortization
of real estate assets 29,516 29,204
Settlement of merger dispute -- --
Impairment adjustment related
to the behavioral healthcare
segment assets 136,435 --
Write-off of costs associated
with unsuccessful
acquisitions -- 18,435
Adjustment for investments in
real estate mortgages and
equity of unconsolidated
companies:
Office and retail
properties (751) 1,808
Refrigerated storage
properties 5,045 7,245
Residential development
properties 3,457 4,184
Other 439 --
Unitholder minority interest (11,287) 3,017
Preferred stock dividends (3,375) (3,375)
------------ ------------
FUNDS FROM OPERATIONS (a) $ 57,197 $ 91,675
============ ============
INVESTMENT SEGMENTS:
Office and retail properties $ 91,916 $ 85,121
Hotel properties 16,564 12,567
Behavioral healthcare
properties (16,969) 13,824
Refrigerated storage
properties 6,791 7,729
Residential development
properties 11,401 12,449
Corporate general &
administrative (4,083) (4,335)
Interest expense (51,084) (37,940)
Preferred stock dividends (3,375) (3,375)
Other (b) 6,036 5,635
------------ ------------
FUNDS FROM OPERATIONS $ 57,197 $ 91,675
============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 119,891,807 120,819,630
WEIGHTED AVERAGE SHARES/UNITS
OUTSTANDING - DILUTED 134,094,033 147,316,296
DIVIDEND PAID PER SHARE DURING
PERIOD $ 0.550 $ 0.380
SUPPLEMENTAL INFORMATION:
Rental income from straight-
line rents $ (4,903) $ (7,735)
Rental income from straight-
line rents - behavioral
healthcare segment
adjustment 25,603 --
Residential development
capital expenditures (169) (338)
Refrigerated storage capital
expenditures -- --
Non-incremental revenue
generating expenditures:
Hotel property capital
expenditures (983) (2,328)
Office and retail property
capital expenditures (345) (1,965)
Tenant improvement and
leasing costs (6,178) (4,513)
Depreciation and amortization
of non-real estate assets 618 369
Amortization of deferred
financing costs 2,033 1,944
Nine Months Ended
September 30,
------------------------------
1999 1998
------------- -----------
(unaudited)
INCOME (LOSS) AFTER MINORITY
INTERESTS $ (11,107) $ 117,009
ADJUSTMENTS:
Depreciation and amortization
of real estate assets 94,542 82,919
Settlement of merger dispute 15,000 --
Impairment adjustment related
to the behavioral healthcare
segment assets 136,435 --
Write-off of costs associated
with unsuccessful
acquisitions -- 18,435
Adjustment for investments in
real estate mortgages and
equity of unconsolidated
companies:
Office and retail
properties 3,603 4,813
Refrigerated storage
properties 12,803 20,299
Residential development
properties 14,751 15,623
Other 611 --
Unitholder minority interest (1,973) 11,791
Preferred stock dividends (10,125) (8,325)
------------- -----------
FUNDS FROM OPERATIONS (a) $ 254,540 $ 262,564
============ ============
INVESTMENT SEGMENTS:
Office and retail properties $ 273,395 $ 241,237
Hotel properties 47,658 37,677
Behavioral healthcare
properties 10,679 41,471
Refrigerated storage
properties 24,279 19,267
Residential development
properties 45,739 36,537
Corporate general &
administrative (12,013) (11,036)
Interest expense (138,482) (110,067)
Preferred stock dividends (10,125) (8,325)
Other (b) 13,410 15,803
------------ ------------
FUNDS FROM OPERATIONS $ 254,540 $ 262,564
============ ============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 123,631,761 119,660,343
WEIGHTED AVERAGE SHARES/UNITS
OUTSTANDING - DILUTED 138,829,819 140,115,533
DIVIDEND PAID PER SHARE DURING
PERIOD $ 1.650 $ 1.140
SUPPLEMENTAL INFORMATION:
Rental income from straight-
line rents $ (19,956) $ (23,795)
Rental income from straight-
line rents - behavioral
healthcare segment
adjustment 25,603 --
Residential development
capital expenditures (1,717) (1,137)
Refrigerated storage capital
expenditures (2,600) --
Non-incremental revenue
generating expenditures:
Hotel property capital
expenditures (4,216) (4,180)
Office and retail property
capital expenditures (2,897) (3,668)
Tenant improvement and
leasing costs (24,420) (17,572)
Depreciation and amortization
of non-real estate assets 1,752 1,108
Amortization of deferred
financing costs 7,857 4,194
(a) To calculate Basic Fund from Operations per share, deduct
Unitholder minority interest.
(b) Includes Interest and Other Income less depreciation and
amortization of non-real estate assets and amortization of
deferred financing costs.
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