BIRMINGHAM, Ala., Oct. 19 /PRNewswire-FirstCall/ -- Colonial Properties
Trust (NYSE: CLP), a real estate investment trust (REIT) that owns a
diversified portfolio of multifamily, office and retail properties, today
reported financial results for the quarter ended September 30, 2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030709/CLPLOGO-c )
Net income available to common shareholders was $5.0 million, or $0.18 per
fully diluted share (EPS); for the same period in 2003, net income available
to common shareholders was $6.8 million, or $0.26 per fully diluted share.
Funds from operations (FFO), a widely accepted measure of REIT
performance, increased 6.8 percent to $32.6 million, or $0.86 per fully
diluted share/unit (FFOPS), from $30.5 million, or $0.83 per share/unit in the
2003 third quarter. A reconciliation from 'net income available to common
shareholders' to 'funds from operations' is provided in the attached tables.
Other highlights for the third quarter:
- NOI on a same-property basis increased by 2.7 percent, 4.2 percent and
1.1 percent, respectively, for the multifamily, office and retail
divisions.
- Colonial Properties expanded its multifamily portfolio with
acquisitions in Nashville, Tennessee, and Austin, Texas.
- The Company acquired a majority interest in Colonnade Properties LLC, a
real estate investment company with an office-asset focus.
- Colonial Properties acquired four retail properties in South Florida.
- Subsequent to the end of the third quarter, Colonial Properties entered
into a definitive agreement to sell Orlando Fashion Square.
- The Company announced its intent to sell six regional malls from its
retail portfolio by the end of second quarter 2005.
- In August, Colonial Properties paid a dividend of $0.67 per common
share.
Third-Quarter Highlights by Division
- Multifamily: On a same-property basis, this division posted an NOI
increase of 2.7 percent over the comparable period last year.
Occupancies at the end of the period for stabilized properties were 96
percent, up 120 basis points from second quarter of 2004. Development
continues of three multifamily communities totaling 950 units in
Charlotte, North Carolina, Orlando, Florida and Austin, Texas.
- Office: On a same-property basis, the office division realized an NOI
increase of 4.2 percent from last year's third quarter. Occupancies at
the end of the period for stabilized properties were 92 percent, up 140
basis points from second quarter of 2004.
- Retail: On a same-property basis, this division saw an NOI increase of
1.1 percent from the 2003 third quarter. Occupancies at the end of the
period for stabilized properties were 90 percent. Also during quarter,
the Company announced it would develop a 285,000-square-foot lifestyle
center in Gulf Shores, Ala.
Commenting on the third-quarter performance, Thomas H. Lowder, Colonial
Properties' chairman and chief executive officer, stated, "Our operations
continued to show improvement, which drove a solid quarter. Same-property
growth was positive across all divisions and occupancy rates for all three
segments were at least 90 percent. We reported FFO in line with our
expectations."
Year-to Date Results
Year-to-date net income available to common shareholders was $24.8
million, or $0.91 per share compared with $22.7 million, or $0.92 per share,
for the same period in 2003. FFO increased 12.2 percent to $97.7 million, or
$2.59 per fully diluted share/unit, from $87.0 million, or $2.47 per
share/unit in the 2003 period.
Acquisitions
During the third quarter, Colonial Properties:
- Acquired a 232-unit multifamily asset, Colonial Village at Sierra
Vista, in the Round Rock submarket of Austin, Texas. The property is
94 percent occupied.
- Entered the Nashville market by acquiring a 25 percent partnership
interest and the management of 618 units in two multifamily
communities. Colonial Grand at Brentwood, a 254-unit community, is 92
percent occupied and Colonial Village at Hendersonville, a 364-unit c
community, is 97 percent occupied.
- Acquired four retail centers in South Florida totaling 742,000 square
feet and averaging 95.8 percent occupancy.
- Announced a $9 million investment acquiring a majority interest in
Colonnade Properties LLC, a real estate investment company focused on
the acquisition and management of office assets. Colonnade is a direct
owner of a five-building complex in Coral Gables, Fla.
Dispositions
- Last week, Colonial Properties and its joint venture partner signed a
binding agreement with Pennsylvania Real Estate Investment Trust
(NYSE: PEI) to sell Orlando Fashion Square in Orlando, Florida. The
sale of this mall is expected to close in the fourth quarter.
- In line with its retail strategy to focus on open-air centers, the
Company identified six regional mall assets for sale and has retained
Granite Partners to market these properties. The Company's goal is to
complete these asset sales by the second quarter of 2005.
"As a diversified REIT investing in multifamily, office and retail
properties, Colonial Properties Trust is able to efficiently allocate capital
between the sectors according to market conditions," Lowder noted. "In the
current economic environment, multifamily properties, as well as open air
centers and community shopping centers, offer the most opportunity to create
shareholder value, and the Company is targeting these sectors for near-term
investment," he added.
For additional details of disposition and investment activities, see the
Company's detailed Supplemental Financial Highlights available on Colonial
Properties' website.
Financing Activities
During the third quarter, the Company repaid $100 million of unsecured
medium-term notes with an average coupon of 7.27 percent and $42.3 million of
secured debt with an average interest rate of 7.5 percent, which were
satisfied through borrowings under its unsecured line of credit.
Portfolio Overview
- Multifamily: The Company owns and/or manages more than 23,000 units.
This is comprised of 42 wholly owned properties that total over 14,000
units and have 96 percent occupancy; a partial interest in 17
properties with over 5,200 units; and management of approximately
another 4,100 units.
- Office: Colonial Properties owns or manages 6.6 million square feet of
office space. The Company's office portfolio includes 25 wholly owned
properties and one partially owned property that together total 5.7
million square feet. The Company manages an additional eight
properties totaling 0.9 million square feet.
- Retail: The Company owns and/or manages assets approximating 16.7
million square feet of retail centers, which is comprised of 45 wholly
owned properties, four partially owned properties and management of
another four centers.
Lowder stated, "At the beginning of the year, we announced our intention
to rebalance our portfolio, which was weighted toward retail, and reinvest
proceeds into the multifamily sector. As part of our diversified portfolio
strategy, we are committed to the retail sector, however, when the sale of our
six malls are completed, this will effectively end our presence in the major
mall sector. We will focus our retail investment on open-air centers."
EPS and FFO Per Share Guidance
The Company's guidance for the fourth-quarter and full-year 2004 for fully
diluted EPS and FFOPS is set forth and reconciled below.
Fourth-Quarter 2004 Range Full-Year 2004 Range
Low - High Low - High
Fully Diluted EPS $0.43 - $0.44 $1.36 - $1.38
Plus: Real Estate
Depreciation &
Amortization 0.70 0.70 2.68 2.68
Less: Gain on
Sale of Assets (0.10) (0.10) (0.42) (0.42)
Fully Diluted FFOPS $1.03 - $1.04 $3.62 - $3.64
Conference Call and Supplemental Materials
Colonial Properties will hold its quarterly conference call Wednesday,
October 20th at 1:00 p.m. Central time. The call will include a review of the
Company's third-quarter performance and discussion of its strategy and current
expectations for the future.
To participate, dial 1-877-500-9123. As with previous calls, a replay will
be available for one week by dialing 800-642-1687; the Conference ID will be
1133692. Access to the live call and a replay will be available through the
Company's website at http://www.colonialprop.com under "Investor Relations:
Shareholder Information."
Colonial Properties produces a supplemental information package that
provides detailed information regarding operating performance, investing
activities and the Company's overall financial position. Additionally, 2004
earnings guidance is available in the supplemental. For a copy of Colonial
Properties' detailed Supplemental Financial Highlights, please visit the
Company's website at http://www.colonialprop.com under the "Investor
Relations: Financial Reporting" tab or contact Investor Relations at
800-645-3917.
Company Summary
Colonial Properties Trust is a diversified REIT that, through its
subsidiaries, owns a portfolio of multifamily, office and retail properties
where you live, work and shop in Alabama, Florida, Georgia, Mississippi, North
Carolina, South Carolina, Tennessee, Texas and Virginia. Colonial Properties
Trust performs development, acquisition, management, leasing and brokerage
services for its portfolio and properties owned by third parties. Colonial
Properties Trust is a diversified REIT, which has a total market
capitalization of $3.5 billion. The cornerstone of Colonial Properties'
success is its live, work and shop diversified investment strategy. The
Company manages or leases 23,786 apartment units, 6.6 million square feet of
office space and 16.7 million square feet of retail shopping space.
Additional information on Colonial Properties Trust is available on the
Internet at http://www.colonialprop.com . The Company, headquartered in
Birmingham, Ala., is listed on the New York Stock Exchange under the symbol
"CLP" and is included in the S&P SmallCap 600 Index.
Forward Looking Statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: Except for the historical information contained herein, this news
release contains forward-looking statements regarding Company and property
performance, and is based on the Company's current expectations and judgment.
Actual results could vary materially depending on risks and uncertainties
inherent to general and local real estate conditions, competitive factors
specific to markets in which Colonial Properties operates, legislative or
other regulatory decisions, future interest rate levels or capital markets
conditions. The Company assumes no liability to update this information. For
more details, please refer to the Company's SEC filings, including its most
recent Annual Report on Form 10-K and quarterly reports on Form 10-Q.
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2004
BALANCE SHEET
($ in 000s)
As of As of
9/30/2004 12/31/2003
ASSETS
Real Estate Investments
Operating Properties $2,637,402 $2,378,835
Undeveloped Land & Construction in
Progress 141,179 114,262
Total Real Estate, before Depreciation 2,778,581 2,493,097
Less: Accumulated Depreciation (420,425) (419,827)
Real estate assets held for sale, net 146,294 11,691
Net Real Estate Assets 2,504,450 2,084,961
Cash and Equivalents 7,450 8,070
Restricted Cash 2,261 1,879
Accounts Receivable, net 16,639 10,262
Notes Receivable 645 2,504
Prepaid Expenses 6,654 6,587
Deferred Debt and Lease Costs 33,174 25,832
Investment in Unconsolidated
Subsidiaries 63,085 37,496
Other Assets 42,799 17,336
Total Assets $2,677,157 $2,194,927
LIABILITIES
Long-Term Liabilities
Unsecured Credit Facility $228,021 $205,935
Notes and Mortgages Payable 1,499,531 1,050,145
Mortgages Payable related to real
estate held for sale 3,400 11,785
Total Long-Term Liabilities 1,730,952 1,267,865
Other Liabilities 87,805 55,275
Total Liabilities 1,818,757 1,323,140
MINORITY INTEREST & EQUITY
Minority Interest 1,184 -
Preferred Shares and Units, at
Liquidation Value
Series B 7 1/4%, Preferred Units 100,000 100,000
Series C 9 1/4%, Preferred Shares 50,000 50,000
Series D 8 1/8%, Preferred Shares 125,000 125,000
Total Preferred Shares and Units,
at Liquidation Value 275,000 275,000
Common Equity, including Minority Interest 582,216 596,787
Total Equity, including Minority Interest 858,400 871,787
Total Liabilities and Equity $2,677,157 $2,194,927
SHARES & UNITS OUTSTANDING, END OF PERIOD
(shares and units in 000s)
As of As of
9/30/2004 12/31/2003
Basic
Shares 27,319 26,395
Operating Partnership Units (OP Units) 10,345 10,361
Total Shares & OP Units 37,664 36,756
Dilutive Common Share Equivalents 345 266
Diluted
Shares 27,664 26,661
Total Shares & OP Units 38,009 37,022
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2004
CONSOLIDATED STATEMENTS OF INCOME
($ in 000s, except per share data)
Three Months Ended
9/30/2004 9/30/2003
Revenue
Minimum Rent $70,811 $58,901 20.2%
Percentage Rent 534 420 27.1%
Tenant Recoveries 7,752 6,693 15.8%
Other Property Related Revenue 5,447 3,922 38.9%
Other Non-Property Related Revenue 1,957 1,242 57.6%
Total Revenue 86,501 71,178 21.5%
Operating Expenses
Property Operating Expenses:
General Operating Expenses 6,775 5,753 17.8%
Salaries and Benefits 4,496 3,625 24.0%
Repairs and Maintenance 7,991 6,962 14.8%
Taxes, Licenses, and Insurance 8,601 6,535 31.6%
Total Property Operating Expenses 27,863 22,875 21.8%
General and Administrative 6,992 4,936 41.7%
Depreciation 22,085 18,362 20.3%
Amortization 3,418 1,895 80.4%
Total Operating Expenses 60,358 48,068 25.6%
Income from Operations 26,143 23,110 13.1%
Other Income (Expense)
Interest Expense (21,437) (16,724) 28.2%
Income from Investments 114 (114) -200.0%
Gain (Loss) on Hedging Activities 62 (9) -788.9%
Gain on Sale of Property 902 3,915 -77.0%
Other (168) (505) -66.7%
Total Other Expense (20,527) (13,437) 52.8%
Income before Minority Interest
& Discontinued Operations 5,616 9,673 -41.9%
Minority Interest
Minority Interest of limited partners (25) -
Minority Interest in CRLP - Preferred (1,813) (2,218) -18.3%
Minority Interest in CRLP - Common (23) (1,067) -97.8%
Total Minority Interest (1,861) (3,285) -43.3%
Income from Continuing Operations 3,755 6,388 -41.2%
Discontinued Operations
Income from Discontinued Operations 5,195 5,231 -0.7%
Gain (Loss) on Disposal of
Discontinued Operations 1,566 577 171.4%
Minority Interest in Discontinued
Operations (1,861) (1,662) 12.0%
Income from Discontinued Operations 4,900 4,146 18.2%
Net Income 8,655 10,534 -17.8%
Dividends to Preferred Shareholders (3,695) (3,724) -0.8%
Preferred Share Issuance Costs - -
Net Income Available to Common
Shareholders $4,960 $6,810 -27.2%
Earnings per Share - Basic
Continuing Operations $- $0.10 -100.0%
Discontinued Operations 0.18 0.16 12.5%
EPS - Basic $0.18 $0.26 -30.8%
Earnings per Share - Diluted
Continuing Operations $- $0.10 -100.0%
Discontinued Operations 0.18 0.16 12.5%
EPS - Diluted $0.18 $0.26 -30.8%
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2004
CONSOLIDATED STATEMENTS OF INCOME
($ in 000s, except per share data)
Nine Months Ended
9/30/2004 9/30/2003
Revenue
Minimum Rent $198,398 $174,775 13.5%
Percentage Rent 1,375 1,115 23.3%
Tenant Recoveries 21,489 21,395 0.4%
Other Property Related Revenue 14,334 14,015 2.3%
Other Non-Property Related Revenue 4,634 3,875 19.6%
Total Revenue 240,230 215,175 11.6%
Operating Expenses
Property Operating Expenses:
General Operating Expenses 18,230 16,319 11.7%
Salaries and Benefits 12,284 10,452 17.5%
Repairs and Maintenance 22,210 20,294 9.4%
Taxes, Licenses, and Insurance 23,237 20,308 14.4%
Total Property Operating Expenses 75,961 67,373 12.7%
General and Administrative 18,209 15,001 21.4%
Depreciation 60,441 53,668 12.6%
Amortization 8,562 5,681 50.7%
Total Operating Expenses 163,173 141,723 15.1%
Income from Operations 77,057 73,452 4.9%
Other Income (Expense)
Interest Expense (56,063) (49,959) 12.2%
Income from Investments 288 (330) -187.3%
Gain (Loss) on Hedging Activities 142 (326) -143.6%
Gain on Sale of Property 3,020 6,055 -50.1%
Other (276) (156) 76.9%
Total Other Expense (52,889) (44,716) 18.3%
Income before Minority Interest
& Discontinued Operations 24,168 28,736 -15.9%
Minority Interest
Minority Interest of limited partners (36) -
Minority Interest in CRLP - Preferred (5,680) (6,655) -14.7%
Minority Interest in CRLP - Common (2,071) (1,302) 59.1%
Total Minority Interest (7,787) (7,957) -2.1%
Income from Continuing Operations 16,381 20,779 -21.2%
Discontinued Operations
Income from Discontinued Operations 15,525 16,188 -4.1%
Gain (Loss) on Disposal of
Discontinued Operations 11,448 10,371 10.4%
Minority Interest in Discontinued
Operations (7,477) (8,573) -12.8%
Income from Discontinued Operations 19,496 17,986 8.4%
Net Income 35,877 38,765 -7.5%
Dividends to Preferred Shareholders (11,086) (11,588) -4.3%
Preferred Share Issuance Costs - (4,451) -100.0%
Net Income Available to Common
Shareholders $24,791 $22,726 9.1%
Earnings per Share - Basic
Continuing Operations $0.20 $0.19 5.3%
Discontinued Operations 0.72 0.73 -1.4%
EPS - Basic $0.92 $0.92 0.0%
Earnings per Share - Diluted
Continuing Operations $0.19 $0.19 0.0%
Discontinued Operations 0.71 0.73 -2.7%
EPS - Diluted $0.91 $0.92 -1.1%
THIRD QUARTER FUNDS FROM OPERATIONS (FFO) RECONCILIATION
($ in 000s, except per share data)
Three Months Ended Nine Months Ended
9/30/2004 9/30/2003 9/30/2004 9/30/2003
Net Income Available
to Common
Shareholders $4,960 $6,810 -27.2% $24,791 $22,726 9.1%
Minority Interest in
CRLP (Operating Ptr
Unitholders) 1,884 2,729 -31.0% 9,548 9,875 -3.3%
Total 6,844 9,539 -28.3% 34,339 32,601 5.3%
Adjustments -
Consolidated
Properties
Depreciation -
Real Estate 23,911 19,597 22.0% 66,193 58,784 12.6%
Amortization -
Real Estate 2,467 1,035 138.4% 5,664 3,178 78.2%
Remove:
Gain/(Loss) on
Sale of Property (2,468) (4,492) -45.1% (14,324) (16,426) -12.8%
Include: Gain/
(Loss) on Sale of
Undepreciated
Property 813 3,836 -78.8% 2,933 5,991 -51.0%
Total
Adjustments -
Consolidated 24,723 19,976 23.8% 60,466 51,527 17.3%
Adjustments -
Unconsolidated
Properties
Depreciation -
Real Estate 955 963 -0.8% 2,914 2,845 2.4%
Amortization -
Real Estate 46 14 228.6% 82 69 18.8%
Remove:
Gain/(Loss) on
Sale of Property 1 - (144) (3) 4700.0%
Include:
Gain/(Loss) on
Sale of
Undepreciated
Property - - - -
Total
Adjustments -
Unconsolidated 1,002 977 2.6% 2,852 2,911 -2.0%
Funds from
Operations $32,569 $30,492 6.8% $97,657 $87,039 12.2%
FFO per Share
Basic $0.87 $0.84 3.5% $2.61 $2.49 5.1%
Diluted $0.86 $0.83 3.3% $2.59 $2.47 4.8%
Pursuant to the definition of Funds from Operations ("FFO") adopted by
the Board of Governors of the National Association of Real Estate
Investment Trusts ("NAREIT"), FFO is calculated by adjusting net income
(loss) (computed in accordance with GAAP), excluding gains (or losses)
from sales of depreciated property, plus depreciation and amortization,
and after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect FFO on the same basis.
The Company believes that FFO is useful to investors because it provides
an additional indicator of the Company's financial and operating
performance. This is because, by excluding the effect of real estate
depreciation and gains (or losses) from sales of properties (all of which
are based on historical costs which may be of limited relevance in
evaluating current performance), FFO can facilitate comparison of
operating performance among equity REITs. FFO is a widely recognized
measure in the Company's industry. FFO does not represent cash generated
from operating activities determined in accordance with GAAP, and should
not be considered as an alternative to net cash flows from operating
activities (determined in accordance with GAAP), as a measure of our
liquidity, or as an indicator of our ability to make cash distributions.
THIRD QUARTER SHARES AND UNITS OUTSTANDING, WEIGHTED
(shares and units in 000s)
Three Months Ended Nine Months Ended
9/30/2004 9/30/2003 9/30/2004 9/30/2003
Basic
Shares 27,252 26,002 4.8% 27,005 24,527 10.1%
Operating Partnership
Units (OP Units) 10,345 10,420 -0.7% 10,354 10,471 -1.1%
Total Shares & OP Units 37,597 36,422 3.2% 37,359 34,998 6.7%
Dilutive Common Share
Equivalents 363 273 33.0% 345 222 55.4%
Diluted
Shares 27,615 26,275 5.1% 27,350 24,749 10.5%
Total Shares & OP Units 37,960 36,695 3.4% 37,704 35,220 7.1%
THIRD QUARTER SEGMENT DATA & RECONCILIATION
Three Months Ended Nine Months Ended
9/30/2004 9/30/2003 9/30/2004 9/30/2003
Net Operating Income
(NOI)
Divisional Same-
Property NOI
Multifamily 15,281 14,880 2.7% 45,601 44,299 2.9%
Office 16,291 15,633 4.2% 47,438 49,432 -4.0%
Retail 24,556 24,296 1.1% 74,724 73,782 1.3%
Total Same-Property 56,128 54,809 2.4% 167,763 167,513 0.1%
Less: Unconsolidated
Assets (1,890) (1,726) (5,531) (5,306)
Same-Property NOI,
Consolidated 54,238 53,083 162,232 162,207
Divisional Non Same-
Property NOI
Multifamily 3,728 448 7,305 4,907
Office 1,580 127 4,702 22,861
Retail 4,845 1,384 8,621 3,177
Total Non-Same
Property 10,153 1,959 20,628 30,945
Less: Unconsolidated
Assets (701) (472) (1,591) (3,388)
Non Same-Property
NOI, Consolidated 9,452 1,487 19,037 27,557
Divisional Total NOI
Multifamily 19,009 15,328 24.0% 52,906 45,815 15.5%
Office 17,871 15,760 13.4% 52,140 49,794 4.7%
Retail 29,401 25,680 14.5% 83,345 78,466 6.2%
Total Divisional NOI 66,281 56,768 16.8% 188,391 174,075 8.2%
Less: NOI,
Unconsolidated (2,591) (2,198) (7,122) (6,678)
Less: Discontinued
Operations (6,991) (7,474) (21,672) (23,296)
Unallocated Corporate
Rev 1,956 1,242 4,632 3,767
Other Expense (17) (35) 40 (66)
General &
Administrative
Expenses (6,992) (4,936) (18,209) (15,001)
Depreciation (22,085) (18,362) (60,441) (53,668)
Amortization (3,418) (1,895) (8,562) (5,681)
Income from
Operations, restated
for additional
discontinued
operations 26,143 23,110 77,057 73,452
Total Other Income
(Expense) (20,527) (13,437) (52,889) (44,716)
Income from Continuing
Operations before
Extraordinary
Items, Minority
Interest and
Discontinued
Operations,
as restated for
additional
discontinued
operations 5,616 9,673 24,168 28,736
Add: Discontinued
Operations Income,
post 3Q 2003 - 5,194 - 16,102
Income from Continuing
Operations before
Extraordinary Items,
Minority Interest
and Discontinued
Operations, per
corresponding 10-K
or 10-Q 5,616 14,867 24,168 44,838
Divisional NOI is defined as total property revenues, including
unconsolidated partnerships and joint ventures, less real estate expenses
(such items as repairs and maintenance, payroll, utilities, property
taxes, insurance, advertising, management fees).
The Company believes Total Divisional NOI (and other NOI measures
aggregating segment data) is useful to investors as a meaningful
indicator of property level operating performance and current market
conditions affecting the Company . Additionally, the Company also
believes Total Divisional NOI (and such other NOI measures) is useful to
investors because NOI is commonly used industry-wide to evaluate and
compare property level operating results of real estate companies,
allowing investors to view the Company in comparison to these other
real estate companies. The Company cautions investors that other real
estate companies may calculate Total Divisional NOI on a basis different
than the Company. In addition, Total Divisional NOI (and such other NOI
measures) should not be viewed as a substitute measure of performance for
GAAP income from continuing operations or other applicable GAAP
performance measures.
SOURCE Colonial Properties Trust
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Related links:
http://www.colonialprop.com
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CONTACT:
Weston M. Andress, CFO-CIO, +1-704-376-3391,
or Barbara M. Pooley, SVP Investor Relations, +1-704-376-1774,
both of Colonial Properties Trust
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