Crescent Real Estate Equities, Inc. announces third quarter operating results.NEW YORK--(BUSINESS WIRE)--Oct. 29, 1996--Crescent Real Estate Equities, Inc. (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 its operating results for the quarter and nine months ended Sept. 30, 1996. Funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. ("FFO FFO See: Funds from operations ") for the third quarter of 1996 was $19.0 million, or $.65 per share and equivalent unit, as compared to $17.5 million, or $.61 per share and equivalent unit, for the third quarter of 1995. FFO for the nine months ended Sept. 30, 1996 was $55.7 million, or $1.92 per share and equivalent unit, as compared to $47.4 million, or $1.79 per share and equivalent unit, for the nine months ended Sept. 30, 1995. FFO for both periods is calculated based on the revised definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts. Gerald Gerald - ["Gerald: An Exceptional Lazy Functional Programming Language", A.C. Reeves et al, in Functional Programming, Glasgow 1989, K. Davis et al eds, Springer 1990]. Haddock haddock: see cod. haddock Valuable North American food fish (Melanogrammus aeglefinus, family Gadidae). A bottom-dweller that feeds on invertebrates and fishes, it resembles the cod, with its chin barbel (fleshy feeler) and two anal and three dorsal , president and chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , commented, "Following the recent completion of our $484 million equity offering, we are well positioned for near term acquisition opportunities. We expect to have the excess proceeds from the offering fully invested prior to year end, with a substantial amount of buying power Buying Power The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available. Also referred to as "Excess Equity. remaining for 1997. We intend to continue executing our disciplined investment strategy by focusing on our existing markets as well as new markets which we believe have similar growth prospects." Haddock further stated, "Although we have seen an increase in investment capital in many of our office markets, we believe our demonstrated competitive advantages, particularly in structuring complex acquisition transactions involving both owners and lenders, will provide us significant acquisition opportunities over the next several years as life insurance companies and pension funds continue to reduce their exposure to direct real estate investments. Additionally, we expect a significant source of transactions to result from tax deferred exchanges with private owners seeking to increase the liquidity of their investments for estate planning Estate Planning The overall planning of a person's wealth, including the preparation of a will and the planning of taxes after the individual's death. Notes: Contrary to popular belief, estate planning involves much more than preparing a will, and it is not only for the purposes. Finally, we intend to increase our effort in identifying opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. real estate transactions involving operating companies operating company A business that engages in transactions with outsiders. which will capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the corporate and capital market skills of our executive management team." The following is a summary of 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. operating highlights: Office and Retail Properties During the quarter, 97,023 square feet of renewal/relet leases were signed at a weighted average annual base rate and FFO annual net effective rate (calculated as weighted average annual base rate plus expense recoveries minus 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. ) of $24.54 and $17.57 per square foot, respectively, compared to 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. leases with a weighted average annual base rate (including expense recoveries) and FFO annual net effective rate of $19.75 and $12.80 per square foot, respectively, a 24 percent and 37 percent increase, respectively. For the nine months ended Sept. 30, 1996, 469,253 square feet of renewal/relet leases were signed at a weighted average annual base rate and FFO annual net effective rate of $20.69 and $114.27 per square foot, respectively, compared to expiring leases with a weighted average annual base rate (including expense recoveries) and FFO annual net effective rate of $16.53 and $10.31 per square foot, respectively, a 25 percent and 38 percent increase, respectively. The leases signed for the nine months ended, all of which have commenced or will commence during the next twelve months, required tenant improvement and leasing costs of $10.07 and $5.16 per square foot, respectively, or $1.69 and $.83 per square foot per year, respectively. The overall portfolio was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 91 percent leased at Sept. 30, 1996. Hotel Properties For the third quarter of 1996, weighted-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 , average daily rate and revenue per available room for the full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. hotel properties were 82 percent, $112 and $91, respectively, compared to 80 percent, $103 and $84, respectively, for the same period of 1995. For the nine months ended Sept. 30, 1996 weighted-average occupancy, average daily rate and revenue per available room for the full-service hotel properties were 79 percent, $124 and $98, respectively, compared to 78 percent, $115 and $90, respectively, for the same period of 1995. Certain matters discussed within this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws. Although 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. believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from Crescent's expectations include real estate conditions (including 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. rates and competing properties), timely leasing of unoccupied square footage, timely releasing of 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 , finding acquisition opportunities which meet our investment strategy and other risks detailed from time to time in the company's SEC reports, including quarterly reports on Form 10-Q Form 10-Q See 10-Q. , reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and annual reports on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . Crescent is a real estate investment trust which, through its subsidiaries, owns a portfolio of real estate assets, including 47 office properties and two retail properties totaling 15.1 million square feet, three full-service hotel properties totaling 1,303 rooms, one destination health and fitness resort, and economic interests in six single-family sin·gle-fam·i·ly adj. Relating to or being a dwelling designed for one family only: a single-family home; single-family occupancy. residential land developments. The office rental properties are located primarily in 18 metropolitan submarkets in Texas, Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. and Arizona Arizona (âr'əzō`nə), state in the southwestern United States. It is bordered by Utah (N), New Mexico (E), Mexico (S), and, across the Colorado R., Nevada and California (W). . Crescent is a fully integrated real estate company that provides management and leasing services with respect to its rental properties. -0-
CRESCENT REAL ESTATE EQUITIES, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
September 30, December 31,
1996 1995
---- ----
(unaudited) (audited)
ASSETS:
Land $ 82,530 $ 57,566
Building, improvements and
equipment 1,155,887 949,140
Less - Accumulated depreciation (198,517) (172,267)
------------ ------------
1,039,900 834,439
Cash and cash equivalents 14,367 16,931
Restricted cash and cash
equivalents 19,054 22,187
Accounts receivable, net 10,731 7,005
Deferred rent receivable 12,939 10,007
Investments in real estate
mortgages and common stock
of residential development
corporations 35,477 20,090
Notes receivable 29,497 17,972
Other assets, net 51,247 35,540
------------ ------------
Total assets $ 1,213,212 $ 964,171
============ ============
LIABILITIES:
Borrowings under Credit
Facility $ 172,500 $ 20,000
Notes payable 491,983 424,528
Accounts payable, accrued
expenses and other
liabilities 30,312 31,706
------------ ------------
Total liabilities 694,795 476,234
------------ ------------
MINORITY INTERESTS:
Operating partnership,
6,033,966 and 5,296,734
units, respectively 95,604 71,925
Investment Joint Ventures 34,521 9,481
------------ ------------
Total minority interests 130,125 81,406
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value,
authorized 250,000,000 shares,
23,596,586 and 23,523,547 shares
issued and outstanding at
September 30, 1996 and
December 31, 1995, respectively 236 236
Additional paid-in capital 424,496 423,530
Deferred compensation on
restricted shares (364) (455)
Retained deficit (36,076) (16,780)
------------ -----------
Total stockholders' equity 388,292 406,531
------------ -----------
Total liabilities and
stockholders' equity $ 1,213,212 $ 964,171
============ ===========
TOTAL SHARES AND UNITS
OUTSTANDING 29,630,552 28,820,281
STOCK PRICE $ 41.125 $ 34.125
MARKET VALUE OF EQUITY $ 1,218,556 $ 983,492
TOTAL MARKET CAPITALIZATION
INCLUDING DEBT $ 1,883,039 $ 1,428,020
DEBT AS A % OF TOTAL MARKET
CAPITALIZATION 35% 31%
CRESCENT REAL ESTATE EQUITIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
(unaudited) (unaudited)
1996 1995 1996 1995
----------- ----------- ----------- -----------
REVENUES:
Rental
property $ 48,306 $ 33,086 $ 133,855 $ 84,371
Interest and
other income 1,062 1,194 3,572 5,092
----------- ----------- ----------- -----------
Total
revenues 49,368 34,280 137,427 89,463
----------- ----------- ----------- -----------
EXPENSES:
Real estate
taxes 5,077 3,378 13,454 8,678
Repairs and
maintenance 2,369 1,950 7,248 4,843
Other rental
property
operating 9,452 6,312 27,294 17,535
Corporate
general and
administrative 1,199 1,102 3,498 2,847
Interest expense 11,843 5,151 30,861 11,424
Amortization of
deferred
financing
costs 745 643 2,065 1,735
Depreciation and
amortization 11,058 7,386 29,339 19,650
----------- ----------- ----------- -----------
Total
expenses 41,743 25,922 113,759 66,712
----------- ----------- ----------- -----------
Operating
income 7,625 8,358 23,668 22,751
OTHER INCOME:
Equity in net
income of
residential
development
corporations 892 3,069 3,067 5,008
----------- ----------- ----------- -----------
INCOME BEFORE
MINORITY
INTERESTS AND
EXTRAORDINARY
ITEM 8,517 11,427 26,735 27,759
Minority
interests (2,239) (2,369) (5,858) (6,744)
----------- ----------- ----------- -----------
INCOME BEFORE
EXTRAORDINARY
ITEM 6,278 9,058 20,877 21,015
Extraordinary
item -- -- (1,306) --
----------- ----------- ----------- -----------
NET INCOME $ 6,278 $ 9,058 $ 19,571 $ 21,015
=========== =========== =========== ===========
PER SHARE DATA:
Income before
extraordinary
item $ 0.27 $ 0.39 $ 0.89 $ 1.05
Extraordinary
item -- -- (0.06) --
----------- ----------- ----------- -----------
Net income $ 0.27 $ 0.39 $ 0.83 $ 1.05
=========== =========== =========== ===========
WEIGHTED
AVERAGE
SHARES
OUTSTANDING 23,595,282 23,143,547 23,563,632 20,062,345
=========== =========== =========== ===========
DEBT SERVICE
COVERAGE RATIO 2.6x 4.5x 2.8x 4.9x
=========== =========== =========== ===========
CRESCENT REAL ESTATE EQUITIES, INC.
STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
INCOME BEFORE
MINORITY INTERESTS AND
EXTRAORDINARY ITEM $ 8,517 $ 11,427 $ 26,735 $ 27,759
ADJUSTMENTS:
Depreciation and
amortization of
real estate assets 10,670 7,110 28,488 19,094
Adjustment for
unconsolidated
investments in
real estate
mortgages and
common stock of
residential
development
corporations 461 (866) 1,473 3,002
Joint Ventures
minority interest (635) (148) (955) (148)
Other (a) -- -- -- (2,300)
---------- ---------- ---------- ----------
FUNDS FROM OPERATIONS $ 19,013 $ 17,523 $ 55,741 $ 47,407
========== ========== ========== ==========
WEIGHTED-AVERAGE
SHARES/UNITS
OUTSTANDING 29,419,472 28,821,279 29,058,062 26,508,255
DIVIDEND PAID PER
SHARE DURING PERIOD $ 0.55 $ 0.50 $ 1.65 $ 1.50
SUPPLEMENTAL INFORMATION:
Rental income
from straight-line
rents $ (1,287) $ (263) $ (2,892) $ (489)
Residential
development capital
expenditures (318) (873) (1,585) (1,647)
Non-incremental
revenue
generating exp.:
Rental property
capital
expenditures (791) (333) (1,550) (915)
Tenant leasing
costs (2,610) (1,027) (5,976) (2,710)
Depreciation and
amortization of
non-real estate
assets 233 153 578 433
Amortization of
deferred
financing costs 745 643 2,065 1,735
(a) Represents non-recurring gain on sale of investment.
CONTACT: Crescent Real Estate Equities, Inc., 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. E. Lucas Lucas (l  `kəs), variant of Luke. , 212/836-4216
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