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- Flagler Development Group Delivers Strong First Quarter Results -
JACKSONVILLE, Fla., May 9 /PRNewswire-FirstCall/ -- Florida East Coast Industries, Inc. (FECI) (NYSE:FLA) today announced results for the three months ended March 31, 2007.
Adolfo Henriques, Chairman, President and Chief Executive Officer of Florida East Coast Industries, Inc., stated, "Our first quarter results reflect the continued strong performance by Flagler in our office and industrial real estate markets while the Railway continues to be impacted by the weakness in the housing and domestic automobile markets. We have responded to these challenges at the Railway by taking actions on the cost side of the business which will benefit the Railway's financial results for the balance of the year. In addition, the first quarter of 2006 benefited from increased volume related to hurricane activity in the latter half of 2005, which makes for a difficult year-over-year comparison. On a positive note, we are seeing successes by our aggregate customers in shifting their focus from residential to commercial and infrastructure construction. In the long run, we expect Florida's positive macroeconomic and demographic trends to continue to drive demand for goods, especially those that the Railway transports. We continue to look for improved year-over-year comparisons in the Railway business in the second half of this year as we begin to benefit from the initiatives undertaken to enhance our profitability."
Mr. Henriques continued, "Contrary to residential markets, we continue to be pleased with Flagler's performance which reflects exceptional positioning and execution in the commercial and industrial real estate markets in Florida stemming from investments made in those sectors. Continuing healthy demand has allowed us to lease up new buildings coming on-line and, together with strong tenant retention, has kept overall occupancy rates at a very strong 97% while capturing higher rental rates. We remain optimistic about the future of our new projects and those in the pipeline and, accordingly, we anticipate another solid year from Flagler."
Consolidated Results
For the 2007 first quarter, FECI reported consolidated revenues of $107.7 million, compared to $136.1 million for the first quarter 2006; revenues declined primarily due to a decrease in land sales of $43.9 million and a decline in Railway revenue of $7.3 million, which were partially offset by a $23.1 million increase in revenues from Flagler's realty rental and services due to the acquisition of Codina's service businesses. FECI reported consolidated first quarter 2007 net income of $9.0 million, or $0.26 per diluted share, compared to $18.7 million, or $0.57 per diluted share (which included $8.6 million of after-tax profit from land sales) for the prior year quarter.
Railway First Quarter Results
- Railway segment's revenues in the first quarter 2007 decreased $7.3
million to $59.8 million from $67.1 million in the prior year period.
Included in first quarter 2007 revenues were $5.0 million of fuel
surcharges, a decrease of $0.3 million from the $5.3 million included
in the prior year's quarter.
- Total carload revenues decreased $6.0 million in the first quarter 2007
over the same period last year. The decrease in revenue was a result of
a 21.1% decrease in volume which represented $7.9 million, partially
offset by an increase in rate/mix of $1.9 million. Carload shipments
declined primarily as a result of softness in the residential
construction market in Florida and reduced vehicle traffic. Aggregate
revenues for the quarter decreased 22.3%, or $4.5 million, in the first
quarter 2007 compared to the first quarter 2006 levels.
- Intermodal revenues (which include drayage) decreased $0.3 million to
$27.8 million in the first quarter 2007, compared to $28.1 million in
the prior year period, reflecting a decline in overall volume of 1.8%,
or $0.5 million due to general economic conditions, although retail
volume increased as a result of new customers added in the fourth
quarter of 2006 and the first quarter of 2007. This decline was
partially offset by an improvement in the rate/mix of $0.2 million.
- Railway segment's operating profit decreased $4.4 million to $14.4
million compared to $18.8 million in the first quarter of 2006.
Operating profit in the first quarter 2007 decreased primarily due to
lower revenues, which were partially offset by a decrease in
compensation and benefits and fuel expense. FECR's operating ratio for
the 2007 first quarter was 76.0% compared to 71.9% in the same period
last year.
Realty First Quarter Results
Rental Portfolio Results
- Realty rental revenues increased 17.6% to $26.9 million for the first
quarter 2007 versus $22.9 million in the first quarter of 2006. The
increased revenues resulted from new properties brought on-line in 2005
($1.6 million), 2006 ($0.6 million), and 2007 ($0.2 million) and an
increase in revenues from "same store" properties ($1.6 million).
- Realty rental operating profit for the first quarter of 2007 increased
18.1% to $8.5 million compared to $7.2 million in the first quarter of
2006. Realty rental operating profit before depreciation and
amortization expense for the quarter increased to $16.5 million or
14.2%, compared to $14.4 million in the first quarter 2006. Operating
profit before depreciation and amortization increased as a result of
properties that were delivered in 2005, 2006 and 2007 ($1.6 million)
and an increase in "same store" properties ($0.5 million).
- Flagler's overall occupancy rate at the end of the first quarter 2007
was 97% compared to 95% at the end of the first quarter 2006 and 96% at
the end of the fourth quarter 2006.
- Flagler held 68 wholly-owned stabilized buildings with 7.9 million
square feet at March 31, 2007 compared to 64 wholly-owned stabilized
buildings with 7.4 million square feet at March 31, 2006.
Realty Services Results
- First quarter 2007 realty services revenues, which includes
construction, brokerage, property management and development
activities, increased $19.1 million due to the contribution from
Codina Group's realty services revenue for the first quarter 2007.
Codina Group was acquired on April 27, 2006.
- Realty services operating profit for the first quarter of 2007 was
$4.7 million which includes $3.1 million of development profit
associated with a fee paid by the Company's partner for the
successful completion of pre-development activities in the 2701
LeJeune Road project.
Land and Overhead Expenses
- Flagler's land and overhead expense increased $3.1 million to $8.2
million in the first quarter of 2007 due primarily to the addition of
Codina land and corporate overhead and acquisition related expenses.
Development, Leasing and Sales Activity
- At quarter end, Flagler had 14 projects in the lease-up and
construction stages totaling 2,391,000 square feet (475,000 square feet
in the lease-up stage, which is 61% pre-leased, and 1,916,000 square
feet in the construction stage), and 15 projects totaling 2,172,000
square feet are in pre-development.
- Property under sale contracts at March 31, 2007 totaled $75.6 million
of which $67.7 million is held in joint ventures.
- On April 27, 2007, Flagler announced construction would begin on a 5
story Class A office building, Lakeside Five, in Flagler Center and
that Kemper Auto and Home had pre-leased 80% of the building.
Completion is expected in the second quarter of 2008.
Joint Venture Activity
- Downtown Doral (a venture with an affiliate of JP Morgan) - During the
quarter, the venture began the redevelopment of an office building at
Downtown Doral. The venture is converting this building to office
condominiums for sale.
- 2701 LeJeune Road (a venture with an affiliate of JP Morgan) - During
the quarter, the venture acquired land and began construction of the
15-story, 246,800 square foot building for a major corporate
headquarters.
Capitalization
- The Company's available cash balance on March 31, 2007 was
$4.0 million. Debt on March 31, 2007 was $356.4 million, composed
primarily of non-recourse, fixed-rate real estate mortgages and
$20.2 million drawn under the Company's five year revolving credit
facility.
- During the first quarter 2007, the Company made capital investments of
approximately $45 million, including $11 million at the Railway, and
$34 million at Flagler.
- On February 22, 2007, the Company declared a quarterly cash dividend of
$0.07 per share.
2007 Outlook
Railway Outlook
The Company's expectations for the Railway's full-year 2007 operating results assume continued weakness in residential housing construction and domestic vehicle shipments during the first half of 2007, with modest recovery in the second half of the year.
- Revenue is expected to range from $265 - $280 million; flat to an
increase of 6% over 2006.
- Operating profit is expected to range between $72 - $76 million; a
decrease of 2% to an increase of 4% over 2006 excluding hurricane
recoveries, net of expenses, of $5.3 million in 2006.
- Capital expenditures, before the purchase of any strategic land
parcels, are expected to range between $42 and $47 million.
Lake Belt Ruling
As previously announced, in March 2006 a federal judge for the Southern District of Florida ruled that several mining permits for aggregate quarries were not adequately evaluated by the United States Army Corps of Engineers. The court has been conducting a hearing to consider whether to issue any interim orders pending additional evaluation by the Corps of Engineers. The outlook provided above does not include the impact, if any, of an interruption
or suspension of aggregate mining that may be mandated if such an order were issued.
Flagler Outlook
The Company's expectations for Flagler's full-year 2007 operating results assume continued strength in the national and Florida commercial and industrial real estate rental markets.
- Realty rental revenues are expected to range between $105 and
$115 million; an increase of 8 - 18% over 2006.
- Realty rental operating profit before depreciation and amortization
expense is expected to range between $65 and $69 million; an increase
of 7 - 14% over 2006 excluding hurricane recoveries, net of expenses of
$1.8 million in 2006.
- Realty rental operating profit is expected to range between $32 and
$35 million.
- Capital investment (which includes investments in joint ventures),
before any land acquisitions, is expected to range between $90 and
$115 million.
Reported results are preliminary and not final until the filing of our Form 10-Q with the SEC, and therefore remain subject to adjustment.
About Florida East Coast Industries, Inc.
Florida East Coast Industries, Inc., headquartered in Jacksonville, FL, conducts operations through two distinct businesses, Flagler Development Group (Flagler), its commercial real estate operation, and Florida East Coast Railway, L.L.C. (FECR). Flagler owns, develops, leases and holds in joint ventures, approximately 8.6 million square feet of Class-A office and industrial space, as well as an additional 1,916,000 square feet under construction. Flagler space consists of Class-A office and industrial properties, primarily in Jacksonville, Orlando, and South Florida counties of Palm Beach, Broward and Miami-Dade. In addition, Flagler provides construction, consulting, third party brokerage and property management (includes Flagler's wholly-owned portfolio, as well as approximately 10.5 million square feet for third parties) services and owns 846 acres of entitled land in Florida, which is available for development of up to an additional 15.9 million square feet and Flagler owns approximately 3,089 acres of other Florida properties. FECR is a regional freight railroad that operates 351 miles of mainline track from Jacksonville to Miami and provides intermodal drayage services at terminals located in Atlanta, Jacksonville, Ft. Pierce, Ft. Lauderdale and Miami. For more information, visit the Company's Web site at http://www.feci.com/.
Florida East Coast Industries, Inc. will hold a conference call to discuss first quarter 2007 results this morning, May 9, 2007, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). This call and accompanying slide presentation will be webcast and can be accessed at the Company's website, http://www.feci.com/, with an archived version of the webcast available approximately two hours after completion of the call. The dial-in numbers for the call are (888) 560- 8501 or (210) 234-0010, and entering passcode 050907. A replay of the call will be available approximately one hour after completion of the call through May 23, 2007 by dialing (888) 568-0902 or (203) 369-3211.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include the Company's present expectations or beliefs concerning future events. These statements may be identified by the use of words like "plan," "expect," "aim," "believe," "project," "anticipate," "intend," "estimate," "may," "will," "should," "could," and other expressions that indicate future events and trends. Such forward-looking statements may include, without limitation, statements that the Company does not expect that lawsuits, environmental costs, commitments, including future contractual obligations, contingent liabilities, financing availability, labor negotiations or other matters will have a material adverse effect on its consolidated financial condition. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (2) the outcome of any legal proceedings that may be instituted against FECI and others following announcement of the merger agreement; (3) the inability to complete the merger due to the failure to obtain shareholder approval or the failure to satisfy other conditions to completion of the merger, including the receipt of shareholder approval and regulatory approvals; (4) the failure to obtain the necessary debt financing arrangements set forth in commitment letters received in connection with the merger; (5) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger; (6) the ability to recognize the benefits of the merger; (7) the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financings that will be obtained for the merger; and (8) the impact of the substantial indebtedness incurred to finance the consummation of the merger; and other risks that are set forth in FECI's SEC filings. Also, forward-looking statements may include statements concerning future capital needs and sources of such capital funding, statements concerning future intentions with respect to the payment of dividends, execution of a share repurchase program, and other potential capital distributions, number of shares to be repurchased, availability of cash to fund the stock repurchase, ability to reinvest (tax- deferred) sales proceeds into qualifying §1031 properties, future level of traffic volumes, future growth potential of the Company's lines of business, performance of the Company's product offerings, intention to entitle and develop real estate, ability to complete planned acquisitions, ability of each party to an announced transaction to satisfy the closing conditions in the agreement, expected completion dates, issuance of contingent consideration, completion of existing and future projects, statements regarding accessibility, visibility, expansion opportunities, ability to complete transactions within specified time frame; failure or inability of third parties to fulfill their commitments or to perform their obligations under agreements; costs and availability of land and construction materials; the intentions to close the construction and demolition debris (C&D) facility at Beacon Countyline at the current estimated cost, the resolution of litigation involving mining in South Florida and other similar expressions concerning matters that are not historical facts, and projections relating to the Company's financial results. The Company cautions that such forward-looking statements are necessarily based on certain assumptions, which are subject to risks and uncertainties that could cause actual results to materially differ from those contained in these forward-looking statements. Important factors that could cause such differences include, but are not limited to, the changing general economic conditions and the residential real estate market in the state of Florida as well as the southeast US and the Caribbean as they relate to economically sensitive products in freight service and building rental activities; ability to manage through economic recessions or downturns in customers' business cycles; ability to pass through fuel surcharges to customers; a slow down in construction activities in Florida, including the residential market; the impact of interim or final orders related to mining activities in South Florida issued by courts or regulatory agencies including the United States District Court and the US Army Corps of Engineers on the Company's rail volumes; industry competition; consolidation within industries of the Company's customers; ongoing challenges in the US domestic auto makers ability to be competitive; possible future changes in the Company's structure, lines of business, business and investment strategies, and related implementation; legislative or regulatory changes; technological changes; volatility of fuel prices (including volatility caused by military actions); the Railway's ability to purchase low sulfur diesel fuel; changes in levels of preventive and capital maintenance, asset replacement and depreciation rates resulting from assumptions in the Railway right-of-way and equipment life studies; changes in the ability of the Company to complete its financing plans, changes in interest rates, the settlement of future contractual obligations as estimated in time and amount (customary to the Company's historical cost structure) including labor negotiations and recoveries from damage claims in a satisfactory way; changes in insurance markets, including availability of windstorm coverage, increases in insurance premiums and deductibles; the availability and costs of attracting and retaining qualified independent third party contractors; timing and amount of issuance of contingent consideration; liability for environmental remediation and changes in environmental laws and regulations; the ultimate outcome of environmental investigations or proceedings and other types of claims and litigation, natural events such as weather conditions, hurricanes, floods, earthquakes and forest fires; discretionary government decisions affecting the use of land and delays resulting from weather conditions and other natural occurrences, like hurricanes, that may affect construction or cause damage to assets; the ability of buyers to terminate contracts to purchase real estate from the Company prior to the expiration of inspection periods; failure or inability of third parties to fulfill their commitments or to perform their obligations under agreements; failure of one or all parties to meet requirements, terms and conditions for closing; ability to complete transactions within a specified time frame; costs and availability of land and construction materials; buyers' inability or unwillingness to close transactions, particularly where buyers only forfeit deposits upon failure to close; the ability of the Company to close the Beacon Countyline C&D facility at the current estimated costs; the ability to accomplish certain zoning changes or other land use changes by the Company or others; the Company's future taxable income and other factors that may affect the availability and timing of utilization of the Company's deferred tax assets; uncertainties, changes or litigation related to tax laws, regulations; and other risks inherent in the real estate and other businesses of the Company. Further information on these and other risk factors is included in the Company's filings with the Securities and Exchange Commission, including the Company's most recently filed Forms 10-K and 10-Q. The Company assumes no obligation to update the information contained in this news release, which speaks only as of its date.
FLORIDA EAST COAST INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
(unaudited)
Three Months
Ended March 31
2007 2006
Operating revenues:
Railway operations $59,824 $67,068
Realty rental and services 47,575 24,423
Flagler CAM recoveries associated with
hurricane costs - 137
Total realty rental and services 47,575 24,560
Realty sales 460 44,422
Total revenues (segment) 107,859 136,050
Intersegment revenues (134) -
Total revenues (consolidated) 107,725 136,050
Operating expenses:
Railway operations 45,456 47,872
Hurricane costs (net of recoveries) - 355
Total railway operations 45,456 48,227
Realty rental and services 41,907 21,231
Hurricane costs (net of recoveries) - 373
Total realty rental and services 41,907 21,604
Realty sales 85 30,628
Corporate general & administrative 4,579 3,408
Total expenses (segment) 92,027 103,867
Intersegment expenses (134) -
Total expenses 91,893 103,867
Operating profit 15,832 32,183
Interest income 47 615
Interest expense (4,915) (5,126)
Other income 3,290 2,193
Income from investment in unconsolidated joint
ventures 189 -
Minority interest in loss of consolidated joint
venture 57 -
(1,332) (2,318)
Income before income taxes 14,500 29,865
Provision for income taxes (5,463) (11,140)
Net income $9,037 $18,725
EARNINGS PER SHARE
Net income - basic $0.26 $0.57
Net income - diluted $0.26 $0.57
Average shares outstanding - basic 35,127,651 32,796,096
Average shares outstanding - diluted 35,256,576 32,998,557
INFORMATION BY INDUSTRY SEGMENT
(dollars in thousands)
(unaudited)
Three Months
Ended March 31
2007 2006
Operating Revenues
Railway operations:
Total Railway 59,824 67,068
Flagler:
Realty rental 26,956 22,782
CAM recoveries associated with hurricane
costs - 137
Total realty rental revenues 26,956 22,919
Realty services revenues 19,489 420
Land use revenues 179 173
Total Flagler realty rental and services
revenues 46,624 23,512
Flagler realty sales - 41,038
Railway realty rental revenues 951 1,048
Railway realty sales 460 3,384
Total realty 48,035 68,982
Total revenues (segment) 107,859 136,050
Intersegment revenues (134) -
Total revenues (consolidated) 107,725 136,050
Operating Expenses
Railway operations:
Railway operations 45,456 47,872
Hurricane costs (net of recoveries) - 355
Total Railway 45,456 48,227
Flagler:
Realty rental expenses 18,496 15,565
Hurricane costs (net of recoveries) - 188
Total realty rental expenses 18,496 15,753
Realty services expenses 14,756 249
Land & overhead expenses 8,232 5,068
Total Flagler realty rental and services
expenses 41,484 21,070
Flagler realty sales - 30,412
Railway realty rental expenses 423 349
Hurricane costs (net of recoveries) - 185
Total railway realty rental expenses 423 534
Railway realty sales 85 216
Total realty 41,992 52,232
Corporate general & administrative 4,579 3,408
Total expenses (segment) 92,027 103,867
Intersegment expenses (134) -
Total expenses (consolidated) 91,893 103,867
Operating Profit (Loss)
Railway operations 14,368 18,841
Realty 6,043 16,750
Corporate general & administrative (4,579) (3,408)
Segment & consolidated operating profit 15,832 32,183
Interest income 47 615
Interest expense (4,915) (5,126)
Other income 3,290 2,193
Income from investment in unconsolidated joint
ventures 189 -
Minority interest in loss of consolidated
joint venture 57 -
(1,332) (2,318)
Income before income taxes 14,500 29,865
(Prior year's results have been reclassified to conform to current year's
presentation.)
FLORIDA EAST COAST INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
March 31 December 31
2007 2006
(unaudited)
Assets
Cash and equivalents 4,002 5,096
Restricted Cash 284 424
Other current assets 71,976 73,520
Properties, less accumulated depreciation 1,199,205 1,179,641
Other assets and deferred charges 137,556 136,145
Total assets 1,413,023 1,394,826
Liabilities and Shareholders' Equity
Short-term debt 5,603 5,519
Other current liabilities 83,958 100,632
Deferred income taxes 206,667 205,365
Long-term debt 350,751 328,638
Other liabilities 35,973 35,865
Minority interest in joint ventures 6,000 5,571
Shareholders' equity 724,071 713,236
Total liabilities and shareholders'
equity 1,413,023 1,394,826
FLORIDA EAST COAST INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Three Months
Ended March 31
2007 2006
Cash Flows from Operating Activities
Net income 9,037 18,725
Adjustments to reconcile net income to cash
generated by operating activities 21,606 1,519
Changes in operating assets and liabilities (5,749) 5,102
Net cash generated by operating activities 24,894 25,346
Cash Flows from Investing Activities
Purchase of properties and equipment (45,116) (41,907)
Investment in unconsolidated joint ventures,
net of distributions (1,677) -
Decrease in restricted cash 140 -
Proceeds from disposition of assets 481 45,110
Net cash (used in) provided by investing
activities (46,172) 3,203
Cash Flows from Financing Activities
Borrowings from long term debt 23,545 -
Payment of mortgage debt (1,348) (1,271)
Payment of dividends (2,516) (1,994)
Other 503 6,619
Net cash provided by financing activities 20,184 3,354
Net Decrease/Increase in Cash and Cash
Equivalents (1,094) 31,903
Cash and Cash Equivalents at Beginning of
Period 5,096 75,990
Cash and Cash Equivalents at End of Period 4,002 107,893
(Prior year's results have been reclassified to conform to current
year's presentation.)
RAILWAY OPERATING RESULTS
(dollars in thousands)
(unaudited)
Three Months
Ended March 31
2007 2006
Operating revenues 59,824 67,068
Operating expenses 45,456 48,227
Operating profit 14,368 18,841
Operating ratio 76.0 % 71.9 %
Railway segment's operating profit before
depreciation 20,051 24,325
Total FECR legal entity EBITDA 24,570 30,517
TRAFFIC
Three Months Ended March 31
(dollars and units in thousands)
(unaudited)
2007 2006 Percent 2007 2006 Percent
Commodity Units Units Variance Revenues Revenues Variance
Rail Carloads
Crushed stone
(aggregate) 29.9 39.1 (23.5) 15,598 20,086 (22.3)
Construction
materials 1.5 1.9 (21.1) 1,206 1,505 (19.9)
Vehicles 5.8 7.1 (18.3) 5,172 5,959 (13.2)
Foodstuffs &
kindred 3.1 3.4 (8.8) 3,193 3,066 4.1
Chemicals &
distillants 0.9 0.8 12.5 1,357 1,150 18.0
Paper & lumber 1.4 1.9 (26.3) 1,652 2,269 (27.2)
Other 3.7 4.5 (17.8) 2,912 3,103 (6.2)
Total carload 46.3 58.7 (21.1) 31,090 37,138 (16.3)
Intermodal 77.5 78.9 (1.8) 27,757 28,099 (1.2)
Total freight
units/revenues 123.8 137.6 (10.0) 58,847 65,237 (9.8)
Ancillary revenue - - - 977 1,831 (46.6)
Railway segment
revenue - - - 59,824 67,068 (10.8)
REALTY SEGMENT REVENUES
(unaudited)
(dollars in thousands)
Three Months
Ended March 31
2007 2006
Rental revenues - Flagler $21,388 $19,190
Rental income - straight-line rent
adjustments 1,004 1,009
Operating expense recoveries 4,530 2,528
Operating expense recoveries -
hurricane related - 137
Rental revenues - undeveloped land 6 7
Other rental revenues 28 48
Total rental revenues - Flagler
properties 26,956 22,919
Construction revenues 10,574 -
Brokerage revenues 2,326 420
Property management 1,471 -
Development & other services 5,118 -
Total realty services revenues 19,489 420
Land use revenues 179 173
Total rental and services revenues -
Flagler properties 46,624 23,512
Rental revenues - Railway 951 1,048
Total rental and services revenues 47,575 24,560
Building and land sales - Flagler - 41,038
Building and land sales - Railway 460 3,384
Total building and land sales
revenues 460 44,422
Total realty segment revenues $48,035 $68,982
(Prior year's results have been reclassified to conform to current
year's presentation.)
REALTY SEGMENT EXPENSES
(unaudited)
(dollars in thousands)
Three Months
Ended March 31
(dollars in thousands) 2007 2006
Real estate taxes - developed $3,177 $2,852
Repairs & maintenance - recoverable 1,053 794
Recoverable Expenses - hurricane related - 305
Services, utilities, management costs 6,147 4,516
Total expenses subject to recovery -
Flagler properties 10,377 8,467
Repairs & maintenance - non-recoverable 57 45
Non-recoverable expenses - hurricane
related - (117)
Depreciation & amortization 8,018 7,260
SG&A - non-recoverable - Flagler 44 98
Total - non-recoverable expenses -
Flagler properties 8,119 7,286
Total rental expenses - Flagler
properties 18,496 15,753
Construction expenses 10,401 -
Brokerage expenses 2,099 249
Property management 947 -
Development & other services 1,309 -
Total realty services expenses 14,756 249
Land use expenses 8,232 5,068
Total rental and services expenses -
Flagler properties 41,484 21,070
Real estate taxes - Railway 137 33
Depreciation & amortization - Railway 22 22
Non-recoverable expenses - hurricane
related - 185
SG&A - non-recoverable - Railway 264 294
Total rental expenses - Railway 423 534
Total rental & services expenses 41,907 21,604
Realty sales expenses - Flagler
properties - 30,412
Realty sales expenses - Railway 85 216
Total realty sales expenses 85 30,628
Total operating expenses $41,992 $52,232
(Prior year's results have been reclassified to conform to current
year's presentation.)
FLAGLER REAL ESTATE STATISTICS
Three Months
Ended March 31
2007 2006
Property types
Office (sq. ft. in 000's) 3,476 3,113
Industrial (sq. ft. in 000's) 4,388 4,232
Retail (sq. ft. in 000's) 43 43
100%-owned properties*
Rentable square feet (in 000's) 7,907 7,388
Occupied square feet (in 000's) 7,632 7,033
Number of buildings owned 68 64
Ending occupancy rate 97% 95%
Buildings held in Partnership*
Rentable SF (in 000's) 413 -
Occupied SF (in 000's) 413 -
Number of Buildings Owned 2 -
Occupancy Rate 100% -%
Same store statistics
Same store square footage (in 000's) 7,393 7,393
Same store occupancy (sq. ft. in 000's) 7,118 7,033
Same store buildings 64 64
Same store revenues (in 000's) $23,721 $22,069
Ending same store occupancy rate 96% 95%
Properties in pipeline **
Number of projects 29 16
Lease-up (sq. ft. in 000's) 475 674
In construction (sq. ft. in 000's) 1,916 575
Predevelopment (sq. ft. in 000's) 2,172 808
Total 4,563 2,057
Entitlements pipeline ***
Acres 846 586
Total square feet (in 000's) 15,938 9,438
Office (sq. ft. in 000's) 7,852 7,004
Industrial (sq. ft. in 000's) 7,270 1,842
Commercial (sq. ft. in 000's) 816 592
Multi-family (in units) 900 260
Hotel Rooms 253 380
* Excludes properties in the lease-up and construction phases.
** Includes buildings held in joint ventures.
*** Includes land currently on the market or under construction to be
sold, as well as property held in joint ventures.
RECONCILIATION OF NON-GAAP TO GAAP MEASURES
(dollars in thousands)
(unaudited)
Three Months
Ended March 31
2007 2006
Railway segment's operating profit $14,368 $18,841
Railway segment's depreciation
expense 5,683 5,484
Railway segment's operating profit
before depreciation 20,051 24,325
Total FECR legal entity net income 13,185 16,790
Depreciation expense - legal entity 5,755 5,556
Interest income (1,973) (1,496)
Income tax expense 7,603 9,667
Total FECR legal entity EBITDA 24,570 $30,517
(in millions)
Three Months Outlook
Ended March 31 Full Year
2007 2006 2007
Realty rental revenues $26,956 $22,919 $ 105-115
Realty rental expenses 18,496 15,753
Realty rental operating profit 8,460 7,166 $32-35
Realty rental depreciation and
amortization expense 8,018 7,260 $33-34
Realty rental operating profit
before depreciation
and amortization $16,478 $14,426 $65-69
The Company reports certain non-GAAP measures for the Company's railway
business and a portion of its real estate business. The Company believes
these measures to be performance measures that investors commonly use to
value the relevant businesses and to evaluate their ongoing performance.
The Company operates in two distinctly different lines of business,
railway and realty, which many investors value and evaluate separately,
using metrics similar to the non-GAAP financial measures provided by the
Company. The Company also uses some of these measures internally as part
of its incentive compensation plans for management employees.
(Prior year's results have reclassified to conform to current
year's presentation.)
DATASOURCE: Florida East Coast Industries, Inc.
CONTACT: Bradley D. Lehan, Vice President-Treasurer of Florida East
Coast Industries, Inc., +1-904-996-2817
Web site: http://www.feci.com/