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-- Flagler 2006 Full Year Outlook Increased Reflecting Improved Leasing Activity --
ST. AUGUSTINE, Fla., Nov. 2 /PRNewswire-FirstCall/ --
Railway Results
-- Third quarter 2006 Florida East Coast Railway (Railway) segment's
revenues increased 6% to $63.4 million. Railway revenue increases
were driven primarily by improved pricing including increased fuel
surcharges.
-- Railway segment's operating profit, which included $5.8 million of net
insurance recoveries, increased to $22.1 million, compared to
$16.5 million in the 2005 third quarter.
Realty Operations' Results
-- Third quarter 2006 realty rental revenues increased 17% to
$25.5 million compared to the 2005 third quarter, primarily as a
result of increased revenue contributions from new buildings delivered
in 2005 and "same store" properties.
-- Third quarter 2006 realty rental operating profit, which included
$2.4 million of net insurance recoveries, was $10.8 million compared
with $7.3 million in the 2005 comparable period. Realty rental
operating profit before depreciation and amortization expense*
increased to $18.2 million from $14.5 million in the third quarter
2005.
-- Third quarter 2006 realty services revenues were $15.8 million up from
$0.3 million in the 2005 third quarter as a result of the Codina Group
acquisition in April 2006. Realty services operating profit increased
to $1.4 million from $0.1 million in the third quarter 2005.
Realty Sales
-- Third quarter revenues from realty sales were $1.3 million compared to
$3.5 million in the prior year quarter. Realty sales under contract
or on the market at September 30, 2006 totaled $35.6 million.
* A reconciliation to the most comparable GAAP measures is provided in the
table at the end of this release.
Florida East Coast Industries, Inc. (FECI) (NYSE:FLA) today announced results for the three months ended September 30, 2006.
Adolfo Henriques, Chairman, President and Chief Executive Officer of Florida East Coast Industries, Inc., stated, "Both of our businesses continued to perform well, as evidenced by our third quarter results. Over the past several years the Railway's quarterly year over year volume growth has been above historical levels. During the third quarter, volume moderated, particularly in our aggregate business, as a result of the broader housing market slowdown. Our aggregate customers are shifting their focus from residential markets to infrastructure opportunities, and we expect long-term demand for aggregate, although lower than recent levels, to be positive. Our automobile volume declined in the quarter, due to a reduction in volume from the domestic automobile manufacturers. For the quarter, Railway revenues were up 6%, benefiting primarily from improved pricing. Operating profit increased at the Railway, primarily due to the receipt of insurance proceeds net of hurricane related expenses related to the 2005 hurricane season. To reflect year-to-date hurricane recoveries, net of costs, we have raised our operating profit outlook for the year, however, we expect growth to remain at more moderate levels for the remainder of the year and into 2007.
Mr. Henriques continued, "Our real estate business remains strong, with overall occupancy at 94% as a result of strong tenant retention and solid leasing results. The fundamentals in our real estate business are trending favorably as rental rates continue to improve in all our markets. Rental demand remains strong as we continue to lease up new buildings and start others to meet existing and expected demand. As a result, we are increasing Flagler's 2006 full-year outlook to reflect better than expected leasing activity and to adjust for net hurricane recoveries and gains from involuntary conversions resulting from hurricane damages recorded in 2006."
Consolidated Results
For the third quarter 2006, FECI reported consolidated revenues of $107.0 million, compared to $86.7 million for the third quarter 2005 due to higher revenues at the Railway and Flagler and the contribution from the recently- acquired Codina Group. Third quarter 2006 revenues included realty sales of $1.3 million, compared to $3.5 million in the third quarter 2005. FECI reported consolidated third quarter 2006 net income of $13.4 million, or $0.38 per diluted share, compared to $10.7 million, or $0.32 per diluted share, for the prior year quarter.
Railway Third Quarter Results
-- Railway segment's revenues in the third quarter 2006 increased 5.8% to
$63.4 million from $59.9 million in the prior year period, reflecting
improved pricing and fuel surcharges, offset by a decrease in volume.
Included in third quarter 2006 revenues was $6.3 million of fuel
surcharges, an increase of $2.8 million over the prior year's quarter.
-- Total carload revenues grew 3.3%, driven by year over year price
increases offset by a decrease in volume of 5.1%. Aggregate revenues
for the quarter increased 2.4%, however, volumes were down 3.7% due to
a slowdown in the Florida residential market. Vehicle revenues and
volumes decreased 3.7% and 16.7%, respectively, primarily due to
decreased shipments from the domestic automobile manufacturers.
-- Intermodal revenues (which includes drayage) increased 9.0% compared to
the prior year period, marking its thirteenth consecutive quarter of
revenue growth, reflecting primarily improved pricing, and increased
local business from the motor carrier and retail segments. Local
revenues were partially offset by a decline from the international
segments, which benefited from a temporary shift in business to Port
Everglades from the Port of New Orleans as a result of Hurricane
Katrina in the third quarter of 2005.
-- Railway segment's operating profit increased 33.7% to $22.1 million in
the third quarter 2006 versus $16.5 million in the third quarter of
2005. Improvement in the third quarter 2006 operating profit was
primarily due to net insurance recoveries of $5.8 million. As a
result, FECR's operating ratio improved to 65.2% from 72.4% a year ago.
Realty Second Quarter Results
Rental Portfolio Results
-- Realty rental revenues increased 16.7% to $25.5 million for the third
quarter 2006 versus $21.9 million in the third quarter of 2005. The
increased revenues resulted from buildings delivered in 2005 and 2006
($2.9 million) and "same store" properties ($0.7 million).
-- Realty rental operating profit for the third quarter 2006, which
included $2.4 million of net insurance recoveries, was $10.8 million,
compared to $7.3 million in the 2005 comparable period. Realty rental
operating profit before depreciation and amortization expense for the
quarter increased to $18.2 million, compared to $14.5 million in the
third quarter 2005 due to buildings delivered in 2005 and 2006
($2.0 million) and an increase in "same store" properties
($1.7 million). The increase in "same store" results were due
primarily to net insurance recoveries ($2.4 million) and higher
revenues ($0.7 million), which were offset by higher operating
expenses ($1.4 million) related to increased insurance and property
tax expense, compared to the third quarter 2005.
-- Flagler's overall occupancy rate, at the end of the third quarter,
decreased slightly to 94% compared to 95% at the end of the third
quarter 2005 and the second quarter 2006.
-- "Same store" occupancy decreased slightly to 95% at the end of the
third quarter, compared to 96% at the end of the third quarter 2005,
and is consistent with the second quarter 2006.
Realty Services Results
-- Third quarter 2006 realty services revenues were $15.8 million up from
$0.3 million in the 2005 third quarter, as a result of the Codina
Group acquisition in April 2006. Realty services operating profit
increased to $1.4 million from $0.1 million in the third quarter 2005.
Development, Leasing and Sales Activity
At quarter end, Flagler had 13 projects in the lease-up and construction stages totaling 1,734,600 square feet (677,900 square feet in the lease-up stage of which 74% has been leased and 1,056,700 square feet in the construction stage), and 12 projects totaling 1,711,215 square feet are in pre-development.
-- On August 31, 2006, we announced the lease of 78,000 square feet at
Flagler's Deerwood North Office Park to Fidelity Investments. With
this lease, Building 400 will be 100% occupied.
-- On October 17, 2006, we announced the commencement of construction of
Building 1200, an 118,296 square foot, four-story, Class-A office
building which is expected to be completed by June 2007. The
occupancy rate of existing buildings at Flagler Station, in Miami, is
99 percent.
-- On October 25, 2006, we also announced plans to begin construction on
Lakeside Three, which is expected to be completed in mid 2007.
Lakeside One and Two at Flagler Center in Jacksonville are currently
63% and 100% leased, respectively. Both Class-A office buildings are
112,000 square feet.
-- Property under sale contracts at September 30, 2006 totaled
$11.5 million and other property either listed for sale or the sale
contract is pending totaled $24.1 million. The Company expects full
year 2006 realty sale proceeds of $50 to $60 million.
Joint Venture Activity
-- On August 1, 2006, the Company announced that Flagler Development
Group entered into a joint venture with TIAA-CREF ("Teachers"), to
develop a 54-acre park in Boca Raton, Florida. Flagler will have a 20%
interest in the venture.
-- On August 31, 2006, Flagler announced the launch of Downtown Doral, a
120 acre mixed-use Master-Planned Community. Downtown Doral is a
joint venture with institutional investors advised by JP Morgan Asset
Management - Real Estate. The venture holds an exclusive option to
acquire and redevelop 77 acres within the 120-acre project.
-- On September 6, 2006, Flagler announced that construction had
commenced on Beacon Lakes Building 7 in Miami in August 2006. The
building is a 192,200 square foot warehouse/distribution building
situated on a 9.71 acre site. Beacon Lakes is a joint venture with AMB
Properties.
-- On November 1, 2006, Flagler announced the pre-sale of 6 industrial
condos currently under construction in Beacon Villages at Beacon
Lakes, and the start of a second 8-unit building. The Villages at
Beacon Lakes is a joint venture with AMB Property Corporation.
Capitalization
-- The Company's available cash balance on September 30, 2006 was
$17.2 million. Debt on September 30, 2006 was $335.4 million,
composed primarily of non-recourse, fixed-rate real estate mortgages.
-- During the third quarter 2006, the Company made capital investments of
approximately $36 million, including $12 million at the Railway, and
$24 million at Flagler.
2006 Outlook
The Company is adjusting its full-year 2006 outlook for the Railway to reflect net hurricane-related recoveries recorded in 2006. The 2006 full-year outlook for Flagler has been increased, reflecting better than expected leasing activity and net hurricane recoveries and gains recorded in 2006.
Railway Outlook
-- Revenue is expected to range between $265 - $275 million
-- Operating profit is now expected to range between $79 - $81 million,
reflecting year-to-date net hurricane-related proceeds, net of
expenses, of $5.3 million
-- Capital expenditures, before the purchase of any strategic land
parcels, is now expected to range between $42 - $47 million. Capital
expenditures were adjusted downward to reflect the Company's decision
to now lease 4 new locomotives. Included in capital expenditures is
approximately $7 million for the construction of 11 miles of siding
from Indian River to Frontenac.
Flagler Outlook
-- Realty rental revenues are now expected to range between $94 - $99
million; an increase of 8 - 13% over 2005
-- Realty rental operating profit before depreciation and amortization
expense is now expected to range between $61 - $64 million; an
increase of 9 - 15% over 2005
-- Realty rental operating profit is now expected to range between $30 -
$33 million
-- Capital investment (which includes investments in joint ventures),
before any land acquisitions, is expected to range between $100 -
$120 million. Land acquisitions during the first nine months totaled
$90.0 million, of which $65.5 million was purchased as part of the
Codina acquisition.
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.
About Florida East Coast Industries, Inc.
Florida East Coast Industries, Inc., headquartered in St. Augustine, 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 8.8 million square feet of Class-A office and industrial space, as well as an additional 1,056,700 square feet under construction. Flagler space consists of Class-A office and industrial properties, primarily in Jacksonville, Orlando, Ft. Lauderdale and Miami. In addition, Flagler provides construction, consulting, third party brokerage and property management (approximately 10.5 million square feet) services and owns 828 acres of entitled land in Florida, which is available for development of up to an additional 15.8 million square feet and Flagler owns approximately 3,158 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 third quarter 2006 results this morning, Thursday, November 2, 2006, at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). This call and accompanying slide presentation will be webcast live by Verizon Business 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) 889-1954 or (517) 623-4000, and entering passcode 110206. A replay of the call will be available approximately one hour after completion of the call through November 16, 2006 by dialing (866) 396-7636 or (203) 369-0521.
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," "will," "should," "could," "may", and other expressions that indicate future events and trends. Such forward-looking statements may include, without limitation, 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, ability to reinvest (tax deferred) sales proceeds into qualifying §1031 properties, future growth potential of the Company's lines of business, performance of the Company's product offerings, issuance of contingent consideration, timing 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 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 (particularly in the state of Florida, 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; a slow down in construction activities in Florida, including the residential market; ability to pass through fuel surcharges to customers; the Railway's ability to purchase low sulfur diesel fuel; ability to add capacity to support increase in volume or maintain fluidity to railway; ongoing challenges in the US domestic auto makers ability to be competitive; consolidation within industries of the Company's customers; 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; changes in insurance markets including availability of windstorm coverage, increases in insurance premiums and deductibles; timing and amount of issuance of contingent consideration; 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 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; 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 Nine Months
Ended September 30 Ended September 30
2006 2005 2006 2005
Operating revenues:
Railway operations 63,396 59,902 200,476 175,336
Realty rental and services 42,197 23,289 101,722 66,986
Flagler CAM recoveries
associated with
hurricane costs 101 - 312 -
Total realty rental
and services 42,298 23,289 102,034 66,986
Realty sales 1,332 3,482 47,410 10,261
Total revenues 107,026 86,673 349,920 252,583
Operating expenses:
Railway operations 47,102 43,079 144,732 127,578
Hurricane recoveries,
net of expenses (5,788) 304 (5,329) 304
Total railway
operations 41,314 43,383 139,403 127,882
Realty rental and
services 39,845 18,863 93,251 54,503
Hurricane recoveries,
net of expenses (2,563) 221 (1,641) 280
Total realty rental
and services 37,282 19,084 91,610 54,783
Realty sales 674 1,326 32,412 2,147
Corporate general &
administrative 3,609 3,451 11,489 19,105
Total expenses 82,879 67,244 274,914 203,917
Operating profit 24,147 19,429 75,006 48,666
Minority interest 34 - 38 -
Income from investment in
unconsolidated joint ventures 67 - 9 -
Interest income 153 374 1,264 1,117
Interest expense (5,134) (5,074) (15,317) (14,821)
Other income 2,363 2,383 8,275 11,632
(2,517) (2,317) (5,731) (2,072)
Income before income taxes 21,630 17,112 69,275 46,594
Provision for income taxes (8,138) (6,387) (25,909) (17,394)
Income from continuing
operations 13,492 10,725 43,366 29,200
Discontinued Operations
(Loss) Gain on disposition
of discontinued operations
(net of taxes) (111) - 5,713 -
Net income 13,381 10,725 49,079 29,200
Earnings Per Share
Income from continuing
operations - basic $0.39 $0.33 $1.27 $0.91
Income from continuing
operations - diluted $0.38 $0.32 $1.26 $0.89
(Loss) Gain on disposition
of discontinued
operations - basic ($0.01) - $0.17 -
Gain on disposition of
discontinued
operations - diluted - - $0.17 -
Net income - basic $0.38 $0.33 $1.44 $0.91
Net income - diluted $0.38 $0.32 $1.43 $0.89
Average shares
outstanding - basic 34,933,849 32,503,303 34,147,821 32,170,430
Average shares
outstanding - diluted 35,060,743 33,079,757 34,356,450 32,850,807
(Prior year's results have been reclassified to conform to current year's
presentation, including discontinued operations.)
INFORMATION BY INDUSTRY SEGMENT
(dollars in thousands)
(unaudited)
Three Months Nine Months
Ended September 30 Ended September 30
2006 2005 2006 2005
Operating Revenues
Railway operations:
Total Railway 63,396 59,902 200,476 175,336
Flagler:
Realty rental revenues 25,428 21,867 71,274 63,164
CAM recoveries associated with
hurricane costs 101 - 312 -
Total realty rental revenues 25,529 21,867 71,586 63,164
Realty services revenues 15,765 274 27,110 504
Land use revenues 129 202 490 663
Total Flagler realty rental and
services revenues 41,423 22,343 99,186 64,331
Flagler realty sales 1,193 1,307 42,618 2,780
Railway realty rental revenues 875 946 2,848 2,655
Railway realty sales 139 2,175 4,792 7,481
Total realty 43,630 26,771 149,444 77,247
Total Revenues 107,026 86,673 349,920 252,583
Operating Expenses
Railway operations:
Railway operations 47,102 43,079 144,732 127,578
Hurricane recoveries, net of
expenses (5,788) 304 (5,329) 304
Total Railway 41,314 43,383 139,403 127,882
Flagler:
Realty rental expenses 17,128 14,528 48,432 42,225
Hurricane recoveries, net of
expenses (2,360) 28 (1,623) 51
Total realty rental expenses 14,768 14,556 46,809 42,276
Realty services expenses 14,328 156 25,041 317
Land & overhead expenses 7,971 3,680 18,636 10,546
Total Flagler realty rental and
services expenses 37,067 18,392 90,486 53,139
Flagler realty sales 659 471 31,126 883
Railway realty rental expenses 418 499 1,142 1,415
Hurricane recoveries, net of
expenses (203) 193 (18) 229
Total Railway realty rental expenses 215 692 1,124 1,644
Railway realty sales 15 855 1,286 1,264
Total realty 37,956 20,410 124,022 56,930
Corporate general & administrative 3,609 3,451 11,489 19,105
Total Expenses 82,879 67,244 274,914 203,917
Operating Profit (Loss)
Railway operations 22,082 16,519 61,073 47,454
Realty 5,674 6,361 25,422 20,317
Corporate general & administrative (3,609) (3,451) (11,489) (19,105)
Segment & consolidated operating
profit 24,147 19,429 75,006 48,666
Minority interest 34 - 38 -
Income from investment in
unconsolidated joint ventures 67 - 9 -
Interest income 153 374 1,264 1,117
Interest expense (5,134) (5,074) (15,317) (14,821)
Other income 2,363 2,383 8,275 11,632
(2,517) (2,317) (5,731) (2,072)
Income before income taxes 21,630 17,112 69,275 46,594
(Prior year's results have been reclassified to conform to current year's
presentation.)
FLORIDA EAST COAST INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands)
September 30 December 31
2006 2005
(unaudited)
Assets
Cash and equivalents 17,185 75,990
Other current assets 83,707 61,834
Properties, less accumulated depreciation 1,153,468 955,395
Other assets and deferred charges 126,681 44,525
Total Assets 1,381,041 1,137,744
Liabilities and Shareholders' Equity
Short-term debt 5,437 5,198
Other current liabilities 103,748 62,934
Deferred income taxes 215,533 187,241
Long-term debt 329,932 332,760
Other liabilities 35,060 11,449
Minority interest in joint ventures 4,811 -
Shareholders' equity 686,520 538,162
Total liabilities and shareholders' equity 1,381,041 1,137,744
(Prior year's results have been reclassified to conform to current year's
presentation)
FLORIDA EAST COAST INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
Nine Months Ended
September 30
2006 2005
Cash Flows from Operating Activities
Net income 49,079 29,200
Adjustments to reconcile net income to cash
generated by operating activities 35,337 41,388
Changes in operating assets and liabilities 9,114 (6,093)
Net cash generated by operating activities 93,530 64,495
Cash Flows from Investing Activities
Purchase of properties and equipment (112,368) (152,256)
Acquisition of Codina Group, Inc. and
related interests, net of cash acquired (65,804) -
Investment in unconsolidated joint ventures (8,479) -
Decrease in restricted cash 1,445 -
Proceeds from hurricane related insurance
settlement 3,343 -
Proceeds from disposition of assets, including
those discontinued 58,701 10,261
Net cash used in investing activities (123,162) (141,995)
Cash Flows from Financing Activities
Borrowings from long term debt 272 -
Payments of mortgage debt (3,870) (3,645)
Payments of acquired debt (30,117) -
Payment of dividends (6,976) (5,540)
Tax benefit associated with equity based
compensation 3,116 3,924
Other 8,402 15,369
Net cash (used in)/provided by financing
activities (29,173) 10,108
Net Decrease in Cash and Cash Equivalents (58,805) (67,392)
Cash and Cash Equivalents at Beginning of Period 75,990 126,166
Cash and Cash Equivalents at End of Period 17,185 58,774
(Prior year's results have been reclassified to conform to current year's
presentation)
RAILWAY OPERATING RESULTS
(dollars in thousands)
(unaudited)
Three Months Nine Months
Ended September 30 Ended September 30
2006 2005 2006 2005
Operating revenues 63,396 59,902 200,476 175,336
Operating expenses 41,314 43,383 139,403 127,882
Operating profit 22,082 16,519 61,073 47,454
Operating ratio 65.2% 72.4% 69.5% 72.9%
Railway segment's operating profit
before depreciation 27,733 22,036 77,787 63,741
Total FECR legal entity EBITDA 31,163 26,318 91,886 83,517
TRAFFIC
Three Months Ended September 30
(dollars and units in thousands)
(unaudited)
2006 2005 Percent 2006 2005 Percent
Commodity Units Units Variance Revenues Revenues Variance
Rail Carloads
Crushed stone
(aggregate) 34.0 35.3 (3.7) 18,414 17,983 2.4
Construction materials 1.8 1.9 (5.3) 1,480 1,385 6.9
Vehicles 4.0 4.8 (16.7) 3,813 3,959 (3.7)
Foodstuffs & kindred 3.1 3.3 (6.1) 2,953 2,851 3.6
Chemicals & distillants 0.9 0.8 12.5 1,419 1,114 27.4
Paper & lumber 1.6 1.7 (5.9) 1,887 1,908 (1.1)
Other 2.9 3.1 (6.5) 2,567 2,287 12.2
Total carload 48.3 50.9 (5.1) 32,533 31,487 3.3
Intermodal 79.5 80.4 (1.1) 29,709 27,254 9.0
Total freight
units/revenues 127.8 131.3 (2.7) 62,242 58,741 6.0
Ancillary revenue - - - 1,154 1,161 (0.6)
Railway segment revenues - - - 63,396 59,902 5.8
REALTY SEGMENT REVENUES
(unaudited)
Three Months Three Months
Ended Sept. 30 Ended Sept. 30
(dollars in thousands) 2006 2005
Rental revenues - Flagler $20,907 $18,406
Rental income - straight-line rent adjustments 673 1,109
Operating expense recoveries 3,817 2,313
Operating expense recoveries - hurricane related 101 -
Rental revenues - undeveloped land 8 6
Other rental revenues 23 33
Total rental revenues - Flagler Properties $25,529 $21,867
Construction revenues $10,829 $-
Brokerage revenues 2,406 274
Property management 1,562 -
Development & other services 968 -
Total realty services revenues $15,765 $274
Land use revenues 129 202
Total rental and services
revenues - Flagler Properties $41,423 $22,343
Rental revenues - Railway 875 946
Total rental and services revenues $42,298 $23,289
Building and land sales - Flagler 1,193 1,307
Building and land sales - Railway 139 2,175
Total building and land sales revenues $1,332 $3,482
Total realty segment revenues $43,630 $26,771
(Prior year's results have been reclassified to conform to current year's
presentation.)
REALTY SEGMENT EXPENSES
(unaudited)
Three Months Three Months
Ended Sept. 30 Ended Sept. 30
(dollars in thousands) 2006 2005
Real estate taxes - developed $ 2,736 $2,224
Repairs & maintenance - recoverable 994 736
Recoverable Expenses - hurricane related (465) 28
Services, utilities, management costs 5,820 4,326
Total expenses subject to recovery -
Flagler properties $9,085 $7,314
Real estate taxes - Flagler undeveloped land $- $(54)
Repairs & maintenance - non-recoverable 74 131
Non-recoverable expenses - hurricane related 18 -
Depreciation & amortization 7,482 7,159
SG&A - non-recoverable - Flagler 22 6
Total - non-recoverable expenses - Flagler
properties $7,596 $7,242
Gain on involuntary conversion of assets,
hurricane related $(1,913) $-
Total rental expenses - Flagler properties $ 14,768 $14,556
Construction expenses $ 10,920 -
Brokerage expenses 1,893 $156
Property management 1,044 -
Development & other services 471 -
Total realty services expenses $ 14,328 $156
Land use expenses $7,971 $3,680
Total rental and services expenses - Flagler
properties $ 37,067 $8,392
Real estate taxes - Railway $163 $128
Depreciation & amortization - Railway 22 17
Non-recoverable expenses - hurricane related (203) 193
SG&A - non-recoverable - Railway 233 354
Total rental expenses - Railway $215 $692
Total rental & services expenses $37,282 $19,084
Realty sales expenses - Flagler properties 659 471
Realty sales expenses - Railway 15 855
Total realty sales expenses $674 $1,326
Total operating expenses $37,956 $20,410
(Prior year's results have been reclassified to conform to
current year's presentation.)
FLAGLER REAL ESTATE STATISTICS
Three Months
Ended Sept. 30
2006 2005
Property types(1)
Office (sq. ft. in 000's) 3,475 3,112
Industrial (sq. ft. in 000's) 4,383 4,037
Retail (sq. ft. in 000's) 43 43
100%-owned properties*
Rentable square feet (in 000's) 7,901 7,192
Occupied square feet (in 000's) 7,426 6,829
Number of buildings held in partnership 68 63
Ending occupancy rate 94% 95%
Buildings held in Partnership*
Rentable SF (in 000s) 206 -
Occupied SF (in 000s) 206 -
Number of Buildings Owned 1 -
Occupancy Rate 100% 0%
Same store statistics
Same store square footage (in 000's) 6,602 6,602
Same store occupancy (sq. ft. in 000's) 6,281 6,331
Same store buildings 60 60
Same store revenues (in 000's) $19,945 $19,204
Ending same store occupancy rate 95% 96%
Properties in pipeline**
Number of projects 25 15
Lease-up (sq. ft. in 000's) 678 563
In construction (sq. ft. in 000's) 1,057 430
Predevelopment (sq. ft. in 000's) 1,711 1,059
Total 3,446 2,052
Entitlements pipeline ***
Acres 828 749
Total square feet (in 000's) 15,756 10,942
Office (sq. ft. in 000's) 7,796 8,165
Industrial (sq. ft. in 000's) 7,294 2,186
Commercial (sq. ft. in 000's) 666 591
Multi-family (in units) 260 500
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 contract to be sold,
as well as property held in joint ventures.
(1) Includes reclass of FC OW2 and OW3 from office/showroom/warehouse to
office for both years shown.
RECONCILIATION OF NON-GAAP TO GAAP MEASURES
(dollars in thousands)
(unaudited)
Three Months Nine Months
Ended Sept. 30 Ended Sept. 30
2006 2005 2006 2005
Railway segment's operating
profit * 22,082 16,519 61,073 47,454
Railway segment's depreciation
expense 5,651 5,517 16,714 16,287
Railway segment's operating
profit before depreciation 27,733 22,036 77,787 63,741
Total FECR legal entity
net income 16,709 13,606 50,195 43,435
Depreciation expense
- legal entity 5,724 5,576 16,929 16,447
Interest income (1,980) (968) (5,227) (2,237)
Income tax expense 10,710 8,104 29,989 25,872
Total FECR legal entity EBITDA 31,163 26,318 91,886 83,517
*Includes $3.7 million in the three month and nine month 2006 periods
related to utility service interruption insurance settlement related to
Hurricane Wilma.
(in
millions)
Three Months Nine Months Outlook
Ended Sept. 30 Ended Sept. 30 Full Year
2006 2005 2006 2005 2006
Realty rental revenues 25,529 21,867 71,586 63,164
Realty rental expenses 14,768 14,556 46,809 42,276
Realty rental operating
profit 10,761 7,311 24,777 20,888 $30-33
Realty rental
depreciation and
amortization expense 7,482 7,159 22,165 20,397 $31
Realty rental operating
profit before depreciation
and amortization 18,243 14,470 46,942 41,285 $61-64
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., +1-904-819-2128
Web site: http://www.feci.com/