BIRMINGHAM, Ala., Oct. 24 /PRNewswire-FirstCall/ -- Colonial Properties
Trust (NYSE: CLP) (the "Company") today reported earnings of $6.8 million or
$0.26 per fully diluted share (EPS) for the third quarter 2003; for the same
period in 2002, EPS was $0.53. Year-to-date, fully diluted earnings per share
were $0.92 in 2003 as compared to $2.10 for the same period in 2002. As
discussed in previous reporting periods, a significant portion of the decrease
in earnings per share was attributable to the gains recognized on asset sales
in 2002. Asset sales are a recurring part of the company's strategy; the
timing and amount of these asset sales fluctuate from quarter to quarter and
year to year.
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Funds from operations (FFO) for the third quarter were $30.5 million, or
$0.83 per fully diluted share/unit, compared to $31.4 million, or $0.93 per
fully diluted share/unit for the same period a year ago. On a year-to-date
basis, FFO per share/unit was $2.47 in 2003 as compared to $2.73 for the same
period in 2002. A reconciliation from net income available to common
shareholders to funds from operations is provided in the attached tables.
Total divisional net operating income was down 2.1 percent for the quarter
and up 3.1 percent year-to-date compared to the same periods in 2002. On a
same-property basis, the multifamily, office and retail divisions posted net
operating income results of a 5.9 percent decrease, 14.1 percent decrease and
0.1 percent increase, respectively, for the quarter. Occupancies at the end
of the period for the Company's stabilized properties were 95 percent,
91 percent and 87 percent for the multifamily, office and retail divisions,
respectively. A reconciliation of total divisional net operating income to
income from continuing operations before discontinued operations is provided
in the attached tables.
"Our multifamily and retail divisions have experienced flat results over
sequential quarters," stated Thomas H. Lowder, chairman and chief executive
officer. "We expect that our office business will remain in a difficult
leasing environment until the economy experiences some sustained job growth."
Management has responded to recent comments from the Securities and
Exchange Commission (SEC) involving the periodic reports of Colonial Realty
Limited Partnership, the Company's operating partnership, and the Company and
its operating partnership made 10-K/A filings on October 10, 2003. The
Company expects no further adjustments to the financial statements will be
made. The SEC comments arose in connection with a review of a Registration
Statement of the Company's operating partnership, Colonial Realty Limited
Partnership, filed with the SEC. The staff of the SEC had commented on certain
matters applicable to the operating partnership's 10-K for the year ended
December 31, 2002, as noted in the Company's July 28, 2003 news release. The
comments included a request for information concerning the allocation of the
purchase price of operating properties to tangible and intangible assets under
Statement of Financial Accounting Standards No. 141, Business Combinations.
Please refer to the Company's 10-K/A filing as of October 10, 2003 for
additional information.
Investment and Disposition Activities
During the third quarter, the Company sold 2100 International Park in
Birmingham, outparcels adjacent to Colonial University Village/Auburn and land
from the recent office park acquisition in Orlando, Florida; proceeds were
approximately $9.4 million.
The Company's current development pipeline is primarily the expansion or
redevelopment of existing projects, weighted towards the redevelopment of
several of the Company's retail properties. For additional details of the
Company's disposition and investment activities, see the Company's detailed
Supplemental Financial Highlights available on the Company's website.
Financing Activities
Year-to-date, the Company has closed on a number of financing activities
including a debt issue, preferred stock refinancing and an equity issue.
- The Company's operating partnership, Colonial Realty Limited
Partnership, closed on a 6.15% 10-year $125 million senior unsecured
notes offering.
- The Company redeemed its $125 million 8.75% Series A Cumulative
Redeemable Preferred Shares with a new issue of $125 million 8.125%
Series D Cumulative Redeemable Preferred Shares.
- The Company closed on a $72.5 million secondary offering of the
Company's common shares, issuing 2.11 million shares.
Guidance
Our guidance for the year has been reduced primarily due to an equity
issue earlier in the year, and the current annual FFO guidance remains
unchanged as follows:
Range
Fully Diluted Earnings per Share $1.32 1.46
Plus: Real Estate Depreciation & Amortization 2.54 2.54
Less: Gain on Sale of Assets (0.42) (0.42)
Fully Diluted Funds from Operations per Share $3.44 $3.58
Conference Call and Supplemental Materials
The Company will hold its quarterly conference call Monday, October 27th
at 1:00 pm central time. The call will include a review of the Company's
third quarter performance and discussion of the Company's 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
3082963. 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".
The Company produces a supplemental information package that provides
detailed information regarding operating performance, investing activities and
the Company's overall financial position. For a copy of the Company's
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 $2.8 billion. The cornerstone of Colonial Properties'
success is its live, work and shop diversified investment strategy. The
Company manages or leases 19,500 apartment units, 6.5 million square feet of
office space and 15.6 million square feet of retail shopping space. In 2003,
the National Association of Industrial and Office Properties (NAIOP) named
Colonial Properties Trust "National Developer of the Year". Additional
information on Colonial Properties Trust is available on the Internet at
http://www.colonialprop.com . The Company, headquartered in Birmingham, Ala., is
listed on the New York Stock Exchange under the symbol "CLP" and is included
in the S&P SmallCap 600 Index.
Forward Looking Statements
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: Except for the historical information contained herein, this news
release contains forward-looking statements regarding Company and property
performance, and is based on the Company's current expectations and judgment.
Actual results could vary materially depending on risks and uncertainties
inherent to general and local real estate conditions, competitive factors
specific to markets in which Colonial Properties operates, legislative or
other regulatory decisions, future interest rate levels or capital markets
conditions. The Company assumes no liability to update this information. For
more details, please refer to the Company's SEC filings, including its most
recent Annual Report on Form 10-K and quarterly reports on Form 10-Q.
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2003
BALANCE SHEET
($ in 000s)
As of As of
09/30/2003 12/31/2002
ASSETS
Real Estate Investments
Operating Properties $2,290,919 $2,298,242
Undeveloped Land & Construction
in Progress 116,331 82,520
Total Real Estate, before
Depreciation 2,407,250 2,380,762
Less: Accumulated Depreciation (404,964) (351,164)
Net Real Estate Development 2,002,286 2,029,598
Cash and Equivalents 3,591 6,236
Restricted Cash 1,873 1,481
Accounts Receivable, net 8,581 10,395
Notes Receivable 1,789 1,307
Prepaid Expenses 4,203 7,581
Deferred Debt and Lease Costs 24,406 23,157
Investment in Unconsolidated
Subsidiaries 33,842 36,265
Other Assets 13,162 13,836
Total Assets $2,093,733 $2,129,856
LIABILITIES
Long-Term Liabilities
Payable to Banks $42,261 $208,270
Notes and Mortgages Payable 1,113,214 1,053,923
Total Long-Term Liabilities 1,155,475 1,262,193
Other Liabilities 66,319 55,566
Total Liabilities 1,221,794 1,317,759
MINORITY INTEREST & EQUITY
Preferred Shares and Units, at
Liquidation Value
Series A 8 3/4%, Preferred Shares - 125,000
Series B 8 7/8%, 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 -
Total Preferred Shares and
Units, at Liquidation Value 275,000 275,000
Common Equity, including Minority
Interest 596,939 537,097
Total Equity, including Minority
Interest 871,939 812,097
Total Liabilities and Equity $2,093,733 $2,129,856
SHARES & UNITS OUTSTANDING, END OF PERIOD
(shares and units in 000s)
As of As of
09/30/2003 12/31/2002
Basic
Shares 26,116 22,850
Operating Partnership Units (OP
Units) 10,420 10,788
Total Shares & OP Units 36,535 33,638
Dilutive Common Share Equivalents 273 254
Diluted
Shares 26,389 23,104
Total Shares & OP Units 36,808 33,892
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2003
CONSOLIDATED STATEMENTS OF INCOME
($ in 000s, except per share data)
Three Months Ended
09/30/2003 09/30/2002
Revenue
Minimum Rent $66,349 $63,912 3.8%
Percentage Rent 743 589 26.1%
Tenant Recoveries 9,587 10,266 -6.6%
Other Property Related Revenue 4,547 4,754 -4.4%
Other Non-Property Related Revenue 1,282 1,600 -19.9%
Total Revenue 82,508 81,121 1.7%
Operating Expenses
Property Operating Expenses:
General Operating Expenses 6,312 5,891 7.1%
Salaries and Benefits 3,949 3,818 3.4%
Repairs and Maintenance 8,953 8,346 7.3%
Taxes, Licenses, and Insurance 7,567 6,234 21.4%
Total Property Operating
Expenses 26,781 24,289 10.3%
General and Administrative 4,936 3,405 45.0%
Depreciation 20,480 18,231 12.3%
Amortization 1,958 2,173 -9.9%
Total Operating Expenses 54,155 48,098 12.6%
Income from Operations 28,353 33,023 -14.1%
Other Income (Expense)
Interest Expense (16,925) (16,820) 0.6%
Income from Investments 36 585 -93.8%
Loss on Hedging Activities (9) (4) 125.0%
Gain on Sale of Property 3,917 615 536.9%
Other (505) -
Total Other Expense (13,486) (15,624) -13.7%
Income before Minority Interest
& Discontinued Operations 14,867 17,399 -14.6%
Minority Interest
Minority Interest in CRLP -
Preferred (2,218) (2,218) 0.0%
Minority Interest in CRLP - Common (2,553) (3,644) -29.9%
Total Minority Interest (4,771) (5,862) -18.6%
Income from Continuing Operations 10,096 11,537 -12.5%
Discontinued Operations
Income from Discontinued
Operations 39 514 -92.4%
Gain on Disposal of Discontinued
Operations 575 6,069 -90.5%
Minority Interest in Discontinued
Operations (176) (2,125) -91.7%
Income from Discontinued Operations 438 4,458 -90.2%
Net Income 10,534 15,995 -34.1%
Dividends to Preferred Shareholders (3,724) (3,891) -4.3%
Preferred Share Issuance Costs - -
Net Income Available to Common
Shareholders $6,810 $12,104 -43.7%
Earnings per Share - Basic
Continuing Operations $0.24 $0.34 -29.4%
Discontinued Operations 0.02 0.20 -90.0%
EPS - Basic $0.26 $0.54 -51.9%
Earnings per Share - Diluted
Continuing Operations $0.24 $0.34 -29.4%
Discontinued Operations 0.02 0.20 -90.0%
EPS - Diluted $0.26 $0.53 -50.9%
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2003
CONSOLIDATED STATEMENTS OF INCOME
($ in 000s, except per share data)
Nine Months Ended
09/30/2003 09/30/2002
Revenue
Minimum Rent $197,083 $186,987 5.4%
Percentage Rent 1,923 1,728 11.3%
Tenant Recoveries 30,152 30,499 -1.1%
Other Property Related Revenue 16,295 13,513 20.6%
Other Non-Property Related Revenue 3,989 5,253 -24.1%
Total Revenue 249,442 237,980 4.8%
Operating Expenses
Property Operating Expenses:
General Operating Expenses 17,995 16,545 8.8%
Salaries and Benefits 11,453 11,433 0.2%
Repairs and Maintenance 26,038 23,268 11.9%
Taxes, Licenses, and Insurance 23,393 21,052 11.1%
Total Property Operating
Expenses 78,879 72,298 9.1%
General and Administrative 15,001 11,682 28.4%
Depreciation 60,059 52,880 13.6%
Amortization 5,897 6,272 -6.0%
Total Operating Expenses 159,836 143,132 11.7%
Income from Operations 89,606 94,848 -5.5%
Other Income (Expense)
Interest Expense (50,685) (47,805) 6.0%
Income from Investments 127 986 -87.1%
Loss on Hedging Activities (326) (12) 2616.7%
Gain on Sale of Property 6,272 32,727 -80.8%
Other (156) -
Total Other Expense (44,768) (14,104) 217.4%
Income before Minority Interest
& Discontinued Operations 44,838 80,744 -44.5%
Minority Interest
Minority Interest in CRLP -
Preferred (6,655) (6,655) 0.0%
Minority Interest in CRLP - Common (6,742) (20,883) -67.7%
Total Minority Interest (13,397) (27,538) -51.4%
Income from Continuing Operations 31,441 53,206 -40.9%
Discontinued Operations
Income from Discontinued Operations 303 1,809 -83.3%
Gain on Disposal of Discontinued
Operations 10,154 6,069 67.3%
Minority Interest in Discontinued
Operations (3,133) (2,629) 19.2%
Income from Discontinued Operations 7,324 5,249 39.5%
Net Income 38,765 58,455 -33.7%
Dividends to Preferred Shareholders (11,588) (11,674) -0.7%
Preferred Share Issuance Costs (4,451) -
Net Income Available to Common
Shareholders $22,726 $46,781 -51.4%
Earnings per Share - Basic
Continuing Operations $0.63 $1.89 -66.7%
Discontinued Operations 0.30 0.24 25.0%
EPS - Basic $0.93 $2.13 -56.3%
Earnings per Share - Diluted
Continuing Operations $0.62 $1.87 -66.8%
Discontinued Operations 0.30 0.24 25.0%
EPS - Diluted $0.92 $2.10 -56.2%
THIRD QUARTER FUNDS FROM OPERATIONS (FFO) RECONCILIATION
($ in 000s, except per share data)
Three Months Ended
09/30/2003 09/30/2002
Net Income Available to Common
Shareholders $6,810 $12,104 -43.7%
Minority Interest in CRLP (Operating
Ptr Unitholders) 2,729 5,769 -52.7%
Total 9,539 17,873 -46.6%
Adjustments - Consolidated Properties
Depreciation - Real Estate 19,597 18,214 7.6%
Amortization - Real Estate 1,035 1,192 -13.2%
Remove: Gain/(Loss) on Sale of
Property (4,492) (6,684) -32.8%
Include: Gain/(Loss) on Sale of
Undepreciated Property 3,836 741 417.7%
Straight-Line Rents (Prior to
2003) - (588) -100.0%
Marketing Fees (Prior to 2003) - -
Total Adjustments -
Consolidated 19,976 12,875 55.2%
Adjustments - Unconsolidated
Properties
Depreciation - Real Estate 963 622 54.8%
Amortization - Real Estate 14 6 133.3%
Remove: Gain/(Loss) on Sale of
Property - -
Include: Gain/(Loss) on Sale of
Undepreciated Property - -
Straight-Line Rents (Prior to
2003) - (1) -100.0%
Total Adjustments -
Unconsolidated 977 627 55.8%
Funds from Operations $30,492 $31,375 -2.8%
FFO per Share
Basic $0.84 $0.94 -10.8%
Diluted $0.83 $0.93 -10.7%
Pursuant to the definition of Funds from Operations ("FFO") adopted by
the Board of Governors of the National Association of Real Estate
Investment Trusts ("NAREIT"), FFO is calculated by adjusting net income
(loss) (computed in accordance with GAAP), excluding gains (or losses)
from sales of depreciated property, plus depreciation and amortization,
and after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect FFO on the same basis.
The Company believes that FFO is useful to investors because it provides
an additional indicator of the Company's financial and operating
performance. This is because, by excluding the effect of real estate
depreciation and gains (or losses) from sales of properties (all of which
are based on historical costs which may be of limited relevance in
evaluating current performance), FFO can facilitate comparison of
operating performance among equity REITs. FFO is a widely recognized
measure in the Company's industry. FFO does not represent cash generated
from operating activities determined in accordance with GAAP,and should
not be considered as an alternative to net cash flows from operating
activities (determined in accordance with GAAP), as a measure of our
liquidity, or as an indicator of our ability to make cash distributions.
THIRD QUARTER FUNDS FROM OPERATIONS (FFO) RECONCILIATION
($ in 000s, except per share data)
Nine Months Ended
09/30/2003 09/30/2002
Net Income Available to Common
Shareholders $22,726 $46,781 -51.4%
Minority Interest in CRLP (Operating
Ptr Unitholders) 9,875 23,512 -58.0%
Total 32,601 70,293 -53.6%
Adjustments - Consolidated Properties
Depreciation - Real Estate 58,784 53,046 10.8%
Amortization - Real Estate 3,178 3,441 -7.6%
Remove: Gain/(Loss) on Sale of
Property (16,426) (38,796) -57.7%
Include: Gain/(Loss) on Sale of
Undepreciated Property 5,991 969 518.3%
Straight-Line Rents (Prior to
2003) - (1,369) -100.0%
Marketing Fees (Prior to 2003) - 1,658 -100.0%
Total Adjustments -
Consolidated 51,527 18,949 171.9%
Adjustments - Unconsolidated
Properties
Depreciation - Real Estate 2,845 1,818 56.5%
Amortization - Real Estate 69 17 305.9%
Remove: Gain/(Loss) on Sale of
Property (3) -
Include: Gain/(Loss) on Sale of
Undepreciated Property - -
Straight-Line Rents (Prior to
2003) - (23) -100.0%
Total Adjustments -
Unconsolidated 2,911 1,812 60.7%
Funds from Operations $87,039 $91,054 -4.4%
FFO per Share
Basic $2.49 $2.76 -9.7%
Diluted $2.47 $2.73 -9.6%
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
9/30/2003 9/30/2002 9/30/2003 9/30/2002
Basic
Shares 26,002 22,517 15.5% 24,527 21,984 11.6%
Operating
Partnership Units
(OP Units) 10,420 10,909 -4.5% 10,471 11,059 -5.3%
Total Shares & OP
Units 36,421 33,426 9.0% 34,998 33,043 5.9%
Dilutive Common
Share Equivalents 273 283 -3.4% 222 269 -17.5%
Diluted
Shares 26,275 22,800 15.2% 24,749 22,253 11.2%
Total Shares & OP
Units 36,695 33,709 8.9% 35,220 33,312 5.7%
THIRD QUARTER SEGMENT DATA & RECONCILIATION
Three Months Ended Nine Months Ended
9/30/2003 9/30/2002 9/30/2003 9/30/2002
Net Operating Income
(NOI)
Divisional Same-
Property NOI
Multifamily 13,663 14,513 -5.9% 40,908 43,642 -6.3%
Office 8,783 10,214 -14.0% 26,932 29,492 -8.7%
Retail 24,789 24,770 0.1% 75,289 75,833 -0.7%
Total Same-
Property 47,235 49,497 -4.6% 143,129 148,967 -3.9%
Less:
Unconsolidated
Assets (1,071) (1,528) (3,290) (3,791)
Same-Property
NOI,
Consolidated 46,164 47,969 139,839 145,176
Divisional Non Same-
Property NOI
Multifamily 1,665 1,843 4,907 8,643
Office 6,976 5,617 22,861 8,781
Retail 891 1,002 3,177 2,416
Total Non-Same
Property 9,532 8,462 30,945 19,840
Less:
Unconsolidated
Assets (1,127) (612) (3,388) (1,773)
Non Same-Property
NOI,
Consolidated 8,405 7,850 27,557 18,067
Divisional Total NOI
Multifamily 15,328 16,356 -6.3% 45,815 52,285 -12.4%
Office 15,759 15,831 -0.5% 49,793 38,273 30.1%
Retail 25,680 25,772 -0.4% 78,466 78,249 0.3%
Total Divisional
NOI 56,767 57,959 -2.1% 174,074 168,807 3.1%
Less: NOI,
Unconsolidated (2,198) (2,141) (6,678) (5,565)
2002 Discontinued
Operations - (111) - (781)
2003 Discontinued
Operations (67) (700) (568) (2,071)
Unallocated
Corporate Rev 1,282 1,879 3,882 5,400
Other Expense (57) (54) (147) (108)
General &
Administrative
Expenses (4,936) (3,405) (15,001) (11,682)
Depreciation (20,480) (18,231) (60,059) (52,880)
Amortization (1,958) (2,173) (5,897) (6,272)
Income from
Operations,
restated for
additional
discontinued
operations 28,353 33,023 89,606 94,848
Total Other Income
(Expense) (13,486) (15,624) (44,768) (14,104)
Income from
Continuing
Operations before
Extraordinary
Items, Minority
Interest and
Discontinued
Operations,
as restated for
additional
discontinued
operations 14,867 17,399 44,838 80,744
Add: 2003
Discontinued
Operations NOI - 700 - 2,071
2003 Discontinued
Operations
Deprec/Amortization - (241) - (713)
Income from
Continuing
Operations before
Extraordinary
Items, Minority
Interest and
Discontinued
Operations, per
corresponding
10-K or 10-Q 14,867 17,858 44,838 82,102
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
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20030709/CLPLOGO-c
CONTACT:
Sandra Lee Robertson, Senior Vice President -
Finance, +1-205-250-8788, or Linda S. Geiss, Vice President -
Media Relations, +1-205-250-8768, both of Colonial Properties
Trust
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