PS Business Parks, Inc. Reports Results for the Fourth Quarter and Year Ended December 31, 2003.Business Editors GLENDALE Glendale. 1 City (1990 pop. 148,134), Maricopa co., S central Ariz., adjacent to Phoenix; inc. 1910. It is located in a rich agricultural region irrigated by the Salt River project. Glendale has become one of the fastest-growing U.S. , Calif.--(BUSINESS WIRE)--Feb. 26, 2004 PS Business Parks, Inc. (AMEX AMEX See: American Stock Exchange :PSB PSB Pet Shop Boys (band) PSB Public Service Broadcasting (radio and television) PSB Public Service Board (Vermont) PSB Public Security Bureau (China) ), reported operating results for the fourth quarter ending December December: see month. 31, 2003. Net income allocable al·lo·ca·ble adj. Capable of being allocated. Adj. 1. allocable - capable of being distributed allocatable, apportionable distributive - serving to distribute or allot or disperse to common shareholders for the fourth quarter of 2003 was $6.7 million or $0.31 per 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. share on revenues of $49.9 million compared to $9.5 million or $0.44 per diluted share on revenues of $47.7 million for the same period in 2002. Net income allocable to common shareholders for the year ended December 31, 2003 was $33.3 million or $1.54 per diluted share on revenues of $198.0 million compared to net income allocable to common shareholders of $42.0 million or $1.93 per diluted share on revenues of $192.4 million for the same period in 2002. Net income allocable to common shareholders for the three months ended December 31, 2003 decreased $2.8 million or $0.13 per diluted share from the comparable period in 2002 due primarily to a reduction in gains on dispositions of $1.6 million or $0.05 per diluted share, an increase in loss on dispositions of $0.6 million or $0.02 per diluted share and a reduction in equity in income of a discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: joint venture of $1.6 million or $0.05 per diluted share. Net income allocable to common shareholders for the year ended December 31, 2003 decreased $8.7 million or $0.39 per diluted share compared to the year ended December 31, 2002 due primarily to a reduction in gains on dispositions of real estate and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $4.1 million or $0.14 per diluted share, an increase in impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. losses of $5.0 million or $0.17 per diluted share in addition to a reduction in "Same Park" results of $1.6 million or $0.06 per diluted share. Supplemental Measures 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 ") allocable to common shareholders and unit holders for the fourth quarter of 2003 were $25.5 million or $0.88 per diluted share compared to $25.8 million or $0.89 per diluted share for the same period in 2002. This represents a decrease of 1.1% in FFO per share based on 29.1 million and 29.0 million weighted average shares outstanding during the fourth quarter of 2003 and 2002, respectively. FFO allocable to common shareholders and unit holders for the year ended December 31, 2003 was $97.4 million or $3.38 per diluted share compared to $104.5 million or $3.60 per diluted share for the year ended December 31, 2002. This represents a decrease of 6.1% in FFO per diluted share based on 28.9 million and 29.0 million weighted average shares outstanding during the year ended December 31, 2003 and 2002, respectively. FFO allocable to common shareholders and unit holders and FFO per share exclude depreciation and amortization, the gain on disposition of real estate and marketable securities, and equity income from sale of joint venture properties, all of which are included in the calculation of net income. Funds available for Distribution (FAD FAD - ["FAD, A Simple and Powerful Database Language", F. Bancilon et al, Proc 13th Intl Conf on VLDB, Brighton, England, Sep 1987]. ) increased 0.2% to $17.6 million during the fourth quarter of 2003 from $17.5 million during the fourth quarter of 2002. FAD decreased 3.4% to $79.2 million during the year ended December 31, 2003 from $82.0 million for the year ended December 31, 2002. The decrease was primarily the result of higher tenant improvement costs and higher leasing transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). . The Company announced in April that it will report funds from operations in conformity with the definition provided by the National Association of Real Estate Investment Trusts and, therefore, will no longer exclude the effects of straight-lining rents from its calculation of funds from operations. The Company made this decision after review of Regulation G, governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. public disclosures of non-GAAP financial measures, which was recently adopted by the Securities and Exchange Commission. The impact was to increase funds from operations by $819,000 for the three months ended December 31, 2003 and $120,000 for the same period in 2002. The impact for years ended December 31, 2003 and 2002 was to increase funds from operations by $2.2 million and $2.4 million, respectively. The Company has also adopted recent guidance from the SEC regarding the inclusion of impairment adjustments in the calculation of funds from operations. Accordingly, the Company will no longer add back the effects of impairment losses in determining funds from operations. There was no effect on funds from operations for the three months ended December 31, 2003 and 2002. The impact for the years ended December 31, 2003 and 2002 was to decrease funds from operations by $5.9 million and $900,000, respectively. The following table summarizes the effect of the adoption of the SEC's guidance regarding straight-lining rents and impairment adjustments on the Company's FFO per share:
For the Three Months For the Year Ended
Ended December 31, December 31,
-------------------- --------------------
2003 2002 2003 2002
---------- --------- ---------- ---------
FFO before adjustments $ 0.85 $ 0.88 $ 3.51 $ 3.55
Straight-line rent adjustment 0.03 0.01 0.07 0.08
Impairment adjustment - - (0.20) (0.03)
---------- --------- ---------- ---------
Reported FFO $ 0.88 $ 0.89 $ 3.38 $ 3.60
========== ========= ========== =========
The Company continues to disclose the 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. rent and impairment adjustments and exclude them from its FAD calculation. See the Company's reconciliation of net income allocable to common shareholders to FFO and FAD later in this news release. Property Operations In order to evaluate the performance of the Company's overall portfolio, management analyzes the operating performance of a consistent group of properties (13.7 million net rentable square feet). These properties (herein referred to as the "Same Park" facilities) have been owned and operated by the Company for the comparable periods. The Same Park facilities represent approximately 96% of the weighted average square footage of the Company's portfolio at December 31, 2003. As of December 31, 2003 Same Park facilities represented approximately 75% of the Company's total square footage of 18.3 million. The following tables 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 the pre-depreciation historical operating results of the Same Park facilities and the entire portfolio.
Same Park Facilities (13.7 million square feet)
Three Months Ended
December 31,
-------------------------
2003 2002 Change
------------ ------------ ------
Rental income before straight line
rent adjustment $46,332,000 $45,958,000 0.8%
Straight line rent adjustment 683,000 55,000 N/A
------------ ------------ ------
Total rental income 47,015,000 46,013,000 2.2%
------------ ------------ ------
Cost of operations 13,309,000 12,835,000 3.7%
------------ ------------ ------
Net operating income 33,706,000 33,178,000 1.6%
Less: straight line rent
adjustment (683,000) (55,000) N/A
------------ ------------ ------
Net operating income before
straight line rent adjustment(1) $33,023,000 $33,123,000 (0.3%)
============ ============ ======
Gross margin(2) 71.3% 72.1% (1.1%)
Weighted average for period:
----------------------------
Occupancy 92.5% 93.8% (1.4%)
Annualized realized rent per
occupied sq. ft.(3) $ 14.61 $ 14.29 2.2%
Year Ended
December 31,
---------------------------
2003 2002 Change
------------- ------------- ------
Rental income before straight
line rent adjustment $185,759,000 $186,055,000 (0.2%)
Straight line rent adjustment 1,793,000 2,207,000 N/A
------------- ------------- ------
Total rental income 187,552,000 188,262,000 (0.4%)
------------- ------------- ------
Cost of operations 51,429,000 50,544,000 1.8%
------------- ------------- ------
Net operating income 136,123,000 137,718,000 (1.2%)
Less: straight line rent
adjustment (1,793,000) (2,207,000) N/A
------------- ------------- ------
Net operating income before
straight line rent adjustment(1) $134,330,000 $135,511,000 (0.9%)
============= ============= ======
Gross margin(2) 72.3% 72.8% (0.7%)
Weighted average for period:
----------------------------
Occupancy 92.7% 94.3% (1.7%)
Annualized realized rent per
occupied sq. ft.(3) $ 14.60 $ 14.38 1.5%
(1) 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 ") is an important measurement in the commercial real estate industry for determining the value of the real estate generating the NOI. The key components of NOI are 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 less cost of operations excluding the effects of the straight-line rent adjustment and depreciation. The Company breaks out Same Park operations to provide information regarding trends for properties the Company has held for the periods being compared. (2) Gross margin is computed by dividing property net operating income before straight line rent adjustment by rental income before straight line rent adjustment. (3) Realized rent per square foot represents the revenues earned before straight line rent adjustment per occupied square foot.
Total Portfolio Statistics (18.3 million square feet) (1)
Three Months Ended
December 31,
-------------------------
2003 2002 Change
------------ ------------ ------
Rental income before straight line
rent adjustment $48,713,000 $47,170,000 3.3%
Straight line rent adjustment 819,000 120,000 N/A
------------ ------------ ------
Total rental income 49,532,000 47,290,000 4.7%
------------ ------------ ------
Cost of operations 14,387,000 13,268,000 8.4%
------------ ------------ ------
Net operating income 35,145,000 34,022,000 3.3%
Less: straight line rent
adjustment (819,000) (120,000) N/A
------------ ------------ ------
Net operating income before
straight line rent adjustment(2) $34,326,000 $33,902,000 1.3%
============ ============ ======
Gross margin(3) 70.5% 71.9% (1.9%)
Weighted average for period:
----------------------------
Square footage 14,508,000 13,893,000 4.4%
Occupancy 91.8% 93.3% (1.6%)
Annualized realized rent per
occupied sq. ft.(4) $ 14.63 $ 14.56 0.5%
Year Ended
December 31,
---------------------------
2003 2002 Change
------------- ------------- ------
Rental income before straight
line rent adjustment $191,954,000 $188,202,000 2.0%
Straight line rent adjustment 2,171,000 2,398,000 N/A
------------- ------------- ------
Total rental income 194,125,000 190,600,000 1.8%
------------- ------------- ------
Cost of operations 53,917,000 50,996,000 5.7%
------------- ------------- ------
Net operating income 140,208,000 139,604,000 0.4%
Less: straight line rent
adjustment (2,171,000) (2,398,000) N/A
------------- ------------- ------
Net operating income before
straight line rent adjustment(2) $138,037,000 $137,206,000 0.6%
============= ============= ======
Gross margin(3) 71.9% 72.9% (1.4%)
Weighted average for period:
----------------------------
Square footage 14,229,000 13,893,000 2.4%
Occupancy 92.3% 93.9% (1.7%)
Annualized realized rent per
occupied sq. ft.(4) $ 14.62 $ 14.43 1.3%
(1) Does not include discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . (2) Net operating income ("NOI") is an important measurement in the commercial real estate industry for determining the value of the real estate generating the NOI. The key components of NOI are rental income less cost of operations excluding the effects of the straight-line rent adjustment and depreciation. (3) Gross margin is computed by dividing property net operating income before straight line rent adjustment by rental income before straight line rent adjustment. (4) Realized rent per square foot represents the revenues earned before straight line rent adjustment per occupied square foot. Financial Condition The Company continued to maintain financial strength and flexibility. The following are the Company's key financial ratios with respect to its leverage at and for the three months ended December 31, 2003. Ratio of FFO to fixed charges(1) 34.0x Ratio of FFO to fixed charges and preferred 3.5x distributions(2) Debt and preferred equity to total market capitalization (based on the common stock price of $41.26 at December 31, 2003) 35% Available under line of credit at December 31, 2003(3) $5 million (1) Fixed charges include interest expense of $1,001,000. (2) Preferred distributions include amounts paid to preferred shareholders of $3,879,000 and preferred unit holders in the operating partnership of $4,810,000. (3) As of January January: see month. 30, 2004 the availability under the line of credit was $100 million. Issuance of Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. On January 15, 2004, the Company priced a public offering, of 6,000,000 depositary DEPOSITARY, contracts. He with whom a deposit is confided or made. 2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. shares, each representing 1/1,000 of a share of the Company's 7.00% Cumulative Preferred Stock Cumulative preferred stock Preferred stock whose dividends accrue, should the issuer not make timely dividend payments. Related: Non-cumulative preferred stock. , Series H, at $25.00 per share. The Company also granted the underwriters an option to purchase an additional 900,000 depository The place where a deposit is placed and kept, e.g., a bank, savings and loan institution, credit union, or trust company. A place where something is deposited or stored as for safekeeping or convenience, e.g., a safety deposit box. shares, which the underwriters exercised. Accordingly, the Company issued 6,900,000 depository shares to purchasers on January 30, 2004 for an aggregate offering of $172.5 million. The Company received 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). of approximately $167 million, which was used to repay outstanding short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. , consisting of borrowings under the Company's line of credit with Wells Fargo Wells Fargo armored carriers of bullion. [Am. Hist.: Brewer Dictionary, 1147] See : Protectiveness Wells Fargo company that handled express service to western states; often robbed. [Am. Hist. Bank and a portion of a 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. loan from Public Storage, Inc. Redemption of Preferred Stock On May 22, 2003 and September September: see month. 30, 2003, the Company repurchased 7,300 and 78,300 depository units of Series A preferred stock at $26.00 and $25.65 per unit, for $190,000 and $2.0 million, respectively. The stated value Stated Value A value that, instead of being par value, is assigned to a corporation's stock for accounting purposes. Stated value has no relation to market price. Notes: of the stock was $25 per depository share. The premium and original issuance costs were recorded as an additional distribution to preferred shareholders. The aggregate effect was a reduction of $127,000 of net income and funds from operations allocable to common shareholders and unit holders. Repayment of Term Loan In February February: see month. 2004, the Company repaid in full the $50 million outstanding on its term loan with Fleet Bank with proceeds from its line of credit as a result of the 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 of the early termination fee 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. on the term loan. Interest on the line of credit is paid at Libor plus 70 basis points while the term loan was at Libor plus 145 basis points. The Company had previously 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. contract for the $50 million term loan that fixed the Libor rate at 3.01%. Therefore, the effective rate on the $50 million draw on the line of credit is 3.71%. The interest rate swap contract expires July July: see month. , 2004. Property Acquisitions On December 19, 2003, the Company acquired four flex 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. buildings in the Metro/Black Canyon 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. of Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. , totaling approximately 110,000 square feet for $9.5 million. The buildings are 83% occupied. This acquisition increases the Company's presence in the Phoenix market to 669,000 square feet. This business park is adjacent to Corporate Park, a 200,000 square foot business park which the Company has owned and operated since 1999 and was 98.2% occupied as of December 31, 2003. On December 24, 2003, PSB purchased two multi-tenant office buildings in the Central Orange County submarket of Orange, California The City of Orange is located in Orange County, California, United States. It is approximately 3 miles (6 kilometers) north of the county seat, Santa Ana, and approximately 32 miles (52 kilometers) southeast of Los Angeles. , totaling approximately 107,000 square feet for $15.5 million. The buildings are 84% occupied. The acquisition increased the Company's presence in Orange County to 1.6 million square feet and in the Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, market to 3.7 million square feet. On December 30, 2003, PSB entered a new core market by purchasing Miami International Commerce Center (MICC MICC Malaysia International Conference on Communications MICC Maltese Italian Chamber of Commerce MICC Main Instrumentation and Controls Contractor MICC Major Incident Control Centre (UK) MICC Mineral Insulated Copper Covered ), a well-established 53 building portfolio totaling approximately 3,350,000 square feet adjacent to the Miami International Airport Miami International Airport (IATA: MIA, ICAO: KMIA, FAA LID: MIA) is a public airport located eight miles (13 km) northwest of the central business district of Miami, in unincorporated Miami-Dade County, Florida, United States. . The portfolio consists of approximately 3.3 million square feet of multi-tenant industrial and flex space Flex space is a term used for lightly zoned buildings. It is mainly used when referring to industrial or office space. History Flex space evolved from light industrial warehouses being converted to office space. and approximately 60,000 square feet of retail space. The facility was acquired at a cost of approximately $217 million including transaction costs and an estimate to bring the park to the Company's operating standards. The Company will undertake several improvements to the park over the next several quarters. The total combined cost of the acquisitions was approximately $242 million. The Company financed the transactions using $47 million of existing cash, $95 million from its line of credit, and $100 million of short-term borrowings from Public Storage, Inc. Proceeds from the Series H preferred stock offering were used to repay the line of credit and a substantial portion of the Public Storage, Inc. short-term borrowings. Cash from operations will be used to repay the remaining balance of the short-term borrowing from Public Storage, Inc. The Company currently owes $5 million plus accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. to Public Storage, Inc. As a result of the 2003 transactions, the Company operates in nine specific regions, with no specific region accounting for more than 20% of the Company's total square footage. Southern California represents the Company's largest region with 20.0% of the total square footage, with Miami representing the second largest region with 18.3% of the total square footage. Property Dispositions Three properties, including a 57,000 square foot office building in Lakewood, California Lakewood is a city in Los Angeles County, California, United States. The population was 79,345 at the 2000 census. It is bordered by Long Beach on the west and south, Bellflower on the north, Cerritos on the northeast, Cypress on the east, and Hawaiian Gardens on the southeast. and two flex facilities in Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. totaling 138,000 square feet were sold during the second quarter of 2003 with net proceeds of approximately $11.4 million. The Company recognized gains Recognized Gain The amount of gain reported for income tax purposes. Notes: You can defer recognizing some gains until the following year(s). See also: Capital Gain, Capital Loss, Deferred Income Tax, Drought Sale, Exempt Income, Exemption, Gain, Recognized Loss on the sale of the Lakewood Lakewood. 1 City (1990 pop. 73,557), Los Angeles co., S Calif., a residential and industrial suburb of Long Beach; inc. 1954. Nearby are extensive aerospace, high-technology, and electronic industries. 2 City (1990 pop. and Nashville Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. properties in the second quarter of 2003 totaling $3.5 million. A one acre parcel of land in Beaverton, Oregon Beaverton is a city in Washington County, Oregon, United States, seven miles west of Portland in the Tualatin River Valley. As of May 2006, its population is estimated to be 84,270,[1] 9.1% more than the 2000 census figure of 76,129. was sold during the third quarter for $775,000, resulting in a gain of approximately $14,000. A flex facility in Beaverton, Oregon consisting of approximately 31,000 square feet was sold during the fourth quarter of 2003 with net proceeds of approximately $2.4 million. The Company recognized a loss on the sale of this facility in the fourth quarter of 2003 of $0.6 million. In addition, the Company previously announced it was under contract to sell a group of five office and flex buildings with a 3.5 acre parcel of land in Beaverton, Oregon for net proceeds of $34.5 million. This contract was subsequently 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: and the Company continues to evaluate its alternatives as they relate to these assets. An impairment loss of $5.9 million based on the estimated proceeds from the disposition of the Beaverton, Oregon properties was recognized in the first quarter of 2003. The properties sold and those identified as assets held for sale have been reported as discontinued operations. Distributions Declared The Board of Directors declared a quarterly dividend of $0.29 per common share on February 26, 2004. Distributions were also declared on the various series' of depositary shares, each representing 1/1,000 of a share of preferred stock listed below. Distributions are payable March 31, 2004 to shareholders of record on March 15, 2004. Series Dividend Rate Dividend Declared ------------------------------------------------ Series A 9.25% $0.578125 Series D 9.50% $0.593750 Series F 8.75% $0.546875 Series H 7.00% $0.301389 Company Information PSB is a self-advised and self-managed equity real estate investment trust that acquires, develops, owns and operates commercial properties, primarily flex, multi-tenant office and industrial space. The Company defines "flex" space as buildings that are configured con·fig·ure tr.v. con·fig·ured, con·fig·ur·ing, con·fig·ures To design, arrange, set up, or shape with a view to specific applications or uses: with a combination of office and warehouse space and can be designed to fit a number of uses (including office, assembly, showroom, laboratory, light manufacturing and warehouse space). As of December 31, 2003, PSB wholly-owned approximately 18.3 million net rentable square feet of commercial space with approximately 3,700 customers located in eight states, concentrated primarily in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). (5,160,000 sq. ft.), Texas (2,895,000 sq. ft.), Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and (3,352,000 sq. ft.), Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. (1,941,000 sq. ft.), Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). (2,625,000 sq. ft.) and Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). (1,646,000 sq. ft.). 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. When used within this press release, the words "expects," "believes," "anticipates," "should," "estimates," and similar expressions are intended to identify "forward-looking statements." Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements. Such factors include the impact of competition from new and existing commercial facilities which could impact rents and 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 levels at the Company's facilities, the Company's ability to evaluate, finance, and integrate acquired and developed properties into the Company's existing operations; the Company's ability to effectively compete in the markets that it does business in; the impact of the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. environment as well as national, state, and local laws and regulations including, without limitation, those governing Real Estate Investment Trusts; the impact of general economic conditions upon rental rates and occupancy levels at the Company's facilities; the availability of permanent capital at attractive rates, the outlook and actions of Rating Agencies and 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. . Additional information about PS Business Parks, Inc. including more financial analysis of the fourth quarter's operating results is available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . The Company's web site is www.psbusinessparks.com. A conference call is scheduled for Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , February 27, 2004 at 10:00 A.M. (PST PST Paroxysmal supraventricular tachycardia, see there ) to discuss the fourth quarter results. The toll free number is 1-800-399-4409; the conference ID is 5017784. A replay of the conference call will be available through March 5, 2004 at 1-800-642-1687. A replay of the conference call will also be available on the Company's website.
PS BUSINESS PARKS, INC.
Selected Financial Data
(Unaudited)
At December 31, At December 31,
2003 2002
--------------- ---------------
Balance Sheet Data:
-------------------
Cash and cash equivalents $ 5,809,000 $ 44,812,000
Marketable equity securities $ - $ 5,278,000
Properties held for disposition,
net $ 34,649,000 $ -
Real estate facilities, before
accumulated depreciation $1,516,199,000 $1,254,774,000
Total assets $1,358,861,000 $1,156,802,000
Total debt $ 264,694,000 $ 70,279,000
Minority interest - common units $ 169,888,000 $ 167,469,000
Minority interest - preferred
units $ 217,750,000 $ 217,750,000
Perpetual preferred stock $ 168,673,000 $ 170,813,000
Common shareholders' equity $ 502,155,000 $ 493,589,000
Total common shares outstanding at
period end 21,566,000 21,531,000
=============== ===============
Total common shares outstanding at
period end, assuming conversion
of all Operating Partnership
units into common stock 28,871,000 28,836,000
=============== ===============
PS BUSINESS PARKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months For the Year Ended
Ended December 31, December 31,
------------------------- --------------------------
2003 2002 2003 2002
------------ ------------ ------------- ------------
Revenues:
Rental income $49,532,000 $47,290,000 $194,125,000 $190,600,000
Facility
management
fees primarily
from
affiliates 180,000 186,000 742,000 763,000
Gain on sale of
marketable
securities - - 2,043,000 41,000
Interest and
other income 154,000 219,000 1,125,000 959,000
------------ ------------ ------------- ------------
49,866,000 47,695,000 198,035,000 192,363,000
------------ ------------ ------------- ------------
Expenses:
Cost of
operations 14,387,000 13,268,000 53,917,000 50,996,000
Cost of
facility
management 35,000 42,000 146,000 176,000
Depreciation
and
amortization 15,838,000 14,416,000 58,927,000 55,183,000
General and
administrative 1,175,000 1,351,000 4,683,000 5,125,000
Interest
expense 1,001,000 1,226,000 4,015,000 5,324,000
------------ ------------ ------------- ------------
32,436,000 30,303,000 121,688,000 116,804,000
------------ ------------ ------------- ------------
Income before
discontinued
operations and
Minority
interest 17,430,000 17,392,000 76,347,000 75,559,000
------------ ------------ ------------- ------------
Discontinued
operations:
Income from
discontinued
operations 867,000 727,000 4,048,000 3,940,000
Impairment
charge on
properties
held for sale - - (5,907,000) (900,000)
Gain (loss) on
disposition of
real estate (601,000) 1,616,000 2,897,000 9,023,000
Equity in
income of
discontinued
joint venture - 1,591,000 2,296,000 1,978,000
------------ ------------ ------------- ------------
Net income from
discontinued
operations 266,000 3,934,000 3,334,000 14,041,000
------------ ------------ ------------- ------------
Income before
minority
interest 17,696,000 21,326,000 79,681,000 89,600,000
Minority
interest in
income -
preferred
units (4,810,000) (4,690,000) (19,240,000) (17,927,000)
Minority
interest in
income -
common units (2,281,000) (3,224,000) (11,345,000) (14,243,000)
------------ ------------ ------------- ------------
Net income $10,605,000 $13,412,000 $ 49,096,000 $ 57,430,000
============ ============ ============= ============
Net income
allocation:
Allocable to
preferred
shareholders $ 3,879,000 $ 3,929,000 $ 15,784,000 $ 15,412,000
Allocable to
common
shareholders 6,726,000 9,483,000 33,312,000 42,018,000
------------ ------------ ------------- ------------
$10,605,000 $13,412,000 $ 49,096,000 $ 57,430,000
============ ============ ============= ============
Net income
per common share -
basic:
Continuing
operations $ 0.30 $ 0.30 $ 1.44 $ 1.46
Discontinued
operations $ 0.01 $ 0.14 $ 0.12 $ 0.49
------------ ------------ ------------- ------------
$ 0.31 $ 0.44 $ 1.56 $ 1.95
Net income
per common share -
diluted:
Continuing
operations $ 0.30 $ 0.30 $ 1.42 $ 1.45
Discontinued
operations $ 0.01 $ 0.14 $ 0.12 $ 0.48
------------ ------------ ------------- ------------
$ 0.31 $ 0.44 $ 1.54 $ 1.93
Weighted
average common
shares
outstanding:
Basic 21,545,000 21,565,000 21,412,000 21,552,000
============ ============ ============= ============
Diluted 21,759,000 21,733,000 21,565,000 21,743,000
============ ============ ============= ============
PS BUSINESS PARKS, INC.
Computation of Funds from Operations ("FFO") and Funds Available
for Distribution ("FAD")
For the Three Months For the Year Ended
Ended December 31, December 31,
------------------------ --------------------------
2003 2002 2003 2002
------------ ----------- ------------ -------------
Net income allocable
to common
shareholders $ 6,726,000 $ 9,483,000 $ 33,312,000 $ 42,018,000
Less: Gain on
sale of
marketable
securities - - (2,043,000) (41,000)
Less: (Gain)/loss
on disposition of
real estate 601,000 (1,616,000) (2,897,000) (9,023,000)
Less: Equity
income from sale
of joint venture
properties - (596,000) (1,376,000) (861,000)
Depreciation and
amortization 15,870,000 15,259,000 59,107,000 58,144,000
Depreciation from
unconsolidated
joint venture - 6,000 - 63,000
Minority interest
in income -
common units 2,281,000 3,224,000 11,345,000 14,243,000
------------ ----------- ------------ -------------
Consolidated FFO
allocable to common
shareholders $25,478,000 $25,760,000 $ 97,448,000 $104,543,000
=========== =========== ============ =============
Computation of
Diluted FFO per
Common Share (1):
------------------
Consolidated FFO
allocable to common
shareholders $25,478,000 $25,760,000 $ 97,448,000 $104,543,000
Weighted average
common shares
outstanding 21,545,000 21,565,000 21,412,000 21,552,000
Weighted average
common OP units
outstanding 7,305,000 7,305,000 7,305,000 7,305,000
Dilutive effect
of stock options 214,000 168,000 153,000 191,000
------------ ----------- ------------ -------------
Weighted average
common shares and
OP units for
purposes of
computing fully-
diluted FFO per
common share 29,064,000 29,038,000 28,870,000 29,048,000
=========== =========== ============ =============
Fully diluted FFO
per common share $ 0.88 $ 0.89 $ 3.38 $ 3.60
=========== =========== ============ =============
Computation of Funds
Available for
Distribution
("FAD") (2)
--------------------
Consolidated FFO
allocable to common
shareholders $25,478,000 $25,760,000 $ 97,448,000 $104,543,000
Less: Capitalized
Expenditures:
Maintenance
capital
expenditures $(1,239,000)$(2,549,000)$ (4,037,000)$ (6,057,000)
Tenant
improvements (4,794,000) (3,409,000) (14,030,000) (10,722,000)
Capitalized lease
commissions (1,310,000) (2,461,000) (4,887,000) (5,322,000)
------------ ----------- ------------ -------------
Total Capitalized
Expenditures (7,343,000) (8,419,000) (22,954,000) (22,101,000)
------------ ----------- ------------ -------------
Less: Straight
line rent
adjustment (819,000) (120,000) (2,171,000) (2,398,000)
Add: Impairment
charge on
properties held
for sale - - 5,907,000 900,000
Add: Stock
based
compensation
expense 268,000 322,000 991,000 1,036,000
------------ ----------- ------------ -------------
FAD $17,584,000 $17,543,000 $ 79,221,000 $ 81,980,000
=========== =========== ============ =============
(1) Funds from operations ("FFO") is a term defined by the National Association of Real Estate Investment Trusts, Inc. ("NAREIT NAREIT National Association of Real Estate Investment Trusts ") by which real estate investment trusts ("REITs") may be compared. It is generally defined as net income, computed 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 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 , before depreciation, amortization, minority interest in income and extraordinary items. The Company considers FFO to be a useful measure of the operating performance of a REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). , which provides investors with a basis to evaluate the operations and the cash flows of a REIT. FFO does not represent net income or cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses as defined by GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . FFO computations do not factor out the REIT's requirement to make either capital expenditures or principal payments on debt. The Company excludes gains/losses on disposition of real estate and gains/losses on sale of marketable securities to more accurately reflect cash flow from real estate operations. Other REITs may not make these adjustments in computing computing - computer FFO. (2) Funds available for distribution ("FAD") is computed by deducting from consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: FFO recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. capital expenditures, tenant improvements, capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. leasing commissions, and the straight line rent adjustment from FFO and adding impairment charges and stock based compensation expense. Like FFO, the Company considers FAD to be a useful measure for investors to evaluate the operations and cash flows of a REIT. FAD does not represent net income or cash flow from operations as defined by GAAP. |
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