New Plan Excel (NYSE:NXL)
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New Plan Excel Realty Trust Reports First Quarter 2004 Results
NEW YORK, May 6 /PRNewswire-FirstCall/ -- New Plan Excel Realty Trust, Inc.
today announced financial results for the three months ended March 31, 2004.
Total rental revenues for the first quarter of 2004 increased to $123.9 million
from $118.6 million in the first quarter of 2003. Net income available to
common stockholders was $32.4 million, or $0.32 per diluted share, in the first
quarter of 2004 compared with $30.7 million, or $0.31 per diluted share, in the
first quarter of 2003. Funds from operations (FFO) for the first quarter of
2004 was $52.3 million, or $0.51 on a diluted per share basis, compared with
$49.1 million, or $0.49 on a diluted per share basis, in the first quarter of
2003 (as restated downward by $0.04 per diluted share to reflect the revised
FFO methodology described below). A reconciliation of net income to FFO is
presented in the attached table.
On October 1, 2003, the National Association of Real Estate Investment Trusts
(NAREIT), based on discussions with the SEC, provided revised guidance
regarding the calculation of FFO. This revised guidance provides that
impairments should not be added back to net income in calculating FFO and that
original issuance costs associated with preferred stock that has been redeemed
should be factored into the calculation of FFO. Prior to this pronouncement,
the Company had added back impairments in calculating FFO, in accordance with
prior NAREIT guidance, and had not factored in original issuance costs of
preferred stock that had been redeemed in the calculation of FFO. The Company
has restated its historical calculations of FFO made prior to this
pronouncement in accordance with NAREIT's revised guidance and its application
to the Company's financial performance is as stated above.
Property Portfolio
At the end of the first quarter, the gross leasable area (GLA) for New Plan's
total stabilized community and neighborhood shopping centers, including its pro
rata share of joint venture projects, was approximately 92 percent leased. The
GLA for New Plan's total portfolio, including its pro rata share of joint
venture projects (Total Portfolio), was approximately 91 percent leased at
March 31, 2004. The average annual base rent (ABR) at March 31, 2004 for the
Total Portfolio was $8.02 per leased square foot. During the quarter, 164 new
leases, aggregating approximately 964,000 square feet, were signed at an
average ABR of $8.23 per square foot. Also during the quarter, 173 renewal
leases, aggregating approximately 575,000 square feet, were signed at an
average ABR of $10.73 per square foot, an increase of approximately 5.4 percent
over the expiring leases.
During the first quarter, the Company completed the redevelopment of four
shopping centers and added seven projects to its redevelopment pipeline,
increasing the pipeline to 35 projects (including joint venture redevelopment
projects) with an aggregate expected cost of $137.0 million (including costs
incurred in prior years on these projects).
Acquisitions and Dispositions
During the first quarter of 2004, the Company acquired, including through
co-investments with its joint venture partners, five shopping centers and the
remaining 50 percent interest in a shopping center in which the Company owned
the other 50 percent interest. The shopping centers totaled approximately 1.3
million square feet and were acquired for an aggregate of approximately $167.0
million. Acquisitions completed during the quarter are summarized below:
* On January 9, 2004, the Company acquired New Britain Village Square, a
143,716 square foot shopping center located in Chalfont, Pennsylvania
(Bucks County) and anchored by Genuardi's Family Market (a Safeway
Company), for approximately $23.4 million, consisting of the issuance
of $11.2 million in units in a partnership controlled by the Company
and the assumption of a $12.2 million mortgage loan previously made by
the Company to facilitate the seller's prior acquisition of the
property.
* On January 30, 2004, the Company purchased the remaining 50 percent
interest in Clearwater Mall, increasing New Plan's ownership interest
to 100 percent. The purchase price for the acquisition was
approximately $30.0 million. Clearwater Mall, located in Clearwater,
Florida, is a community shopping center encompassing a 72-acre site
with 292,402 square feet of leased space, as well as non-owned Costco,
Lowe's and SuperTarget anchors.
* Also on January 30, 2004, the Company acquired Elk Grove Town Center, a
131,849 square foot shopping center located in Elk Grove Village,
Illinois and anchored by Dominick's Foods (a Safeway Company), for
$21.0 million, including $14.5 million of assumed mortgage
indebtedness.
* On February 19, 2004, the Company acquired Villa Monaco, a 122,763
square foot shopping center located in Denver, Colorado and anchored by
King Soopers (a Kroger banner), for $12.0 million.
* On March 17, 2004, the Company acquired Florence Square, a 360,608
square foot shopping center located in Florence, Kentucky and anchored
by HomeGoods, Kroger, National Amusement, Staples and TJ Maxx, for
approximately $39.5 million, including $15.8 million of assumed
mortgage indebtedness.
* On March 22, 2004, NP/I&G Institutional Retail Company, LLC, the
Company's joint venture with JPMorgan Fleming Asset Management,
acquired Conyers Crossroads, a 246,666 square foot shopping center
located in Conyers, Georgia and anchored by Carmike Cinemas, Circuit
City and Old Navy, as well as an 86,584 square foot ground lease to
Kohl's, for approximately $41.1 million. In addition, NP/I&G
Institutional Retail Company, LLC is under contract to purchase Phase
II of Conyers Crossroads for approximately $13 million upon its
completion in Spring 2005. Phase II is expected to include over
126,000 square feet of GLA anchored by Belk's.
During the first quarter of 2004, the Company generated an aggregate of
approximately $13.2 million of proceeds through the sale of two properties and
one land parcel, as well as the sale of one property held through a joint
venture. Properties sold during the quarter include Edgebrook Plaza, a 100,170
square foot shopping center located in Houston, Texas; a 41,293 square foot
single tenant Brookshire's (lease assigned from Safeway) located in West
Monroe, Louisiana; 11.8 acres of land at Westgate in Dublin, Georgia; and
Fruitland Plaza, a 104,095 square foot shopping center located in Fruitland,
Maryland and owned by Benbrooke Ventures, a joint venture in which the Company
has a 50 percent interest.
Balance Sheet Position
The Company completed the first quarter with total book assets of approximately
$3.7 billion and a total debt / undepreciated book value ratio of 46.3 percent.
The Company's debt for the three months ended March 31, 2004 had an overall
weighted average current interest rate of 6.1 percent and a weighted average
maturity of 7.1 years. Approximately 79 percent of the Company's total debt is
fixed rate debt, including the impact of the Company's interest rate swap
agreements that effectively convert $150 million of outstanding notes from a
fixed rate to a blended floating rate.
On February 6, 2004, the Company issued $150 million aggregate principal amount
of unsecured, 7-year fixed rate notes with a coupon of 4.50 percent. The notes
are due on February 1, 2011. The notes were priced at 99.409 percent of par
value to yield 4.60 percent. Net proceeds from the offering were used to repay
a portion of the borrowings outstanding under the Company's $350 million
revolving credit facility. Concurrent with the pricing, the Company entered
into interest rate swaps that effectively converted the interest rate on $100
million of the notes from a fixed rate to a blended floating rate of 39 basis
points over the 6-month LIBOR rate.
Dividend
For the second quarter of 2004, the Company's Board of Directors declared a
cash dividend of $0.4125 per common share. On an annualized basis, this is the
equivalent of $1.65 per share. The dividend is payable on July 15, 2004 to
common stockholders of record on July 1, 2004. New Plan Excel Realty Trust,
Inc. shares go ex-dividend on June 29, 2004. The Board of Directors also
declared a dividend of $0.975 per depositary share on its 7.8 percent Series D
Cumulative Voting Step-Up Premium Rate Preferred Stock to stockholders of
record on July 1, 2004, payable on July 15, 2004. In addition, the Board of
Directors declared a dividend of $0.47656 per depositary share on its 7.625
percent Series E Cumulative Redeemable Preferred Stock to stockholders of
record on July 1, 2004, payable on July 15, 2004.
Management Comment
"Results this quarter demonstrate the value of our national platform. We
increased occupancy throughout our portfolio, initiated and advanced
redevelopment projects in numerous communities, acquired assets in five
different regions and enhanced our tenant relations. Our challenge is to stay
abreast of the ever changing retail environment and leverage our national
infrastructure to accommodate the many retailer opportunities that continue to
emerge," commented Glenn J. Rufrano, Chief Executive Officer.
Conference Call
The Company will be hosting a teleconference on Thursday, May 6, 2004 at 2:00
PM ET. The teleconference can be accessed by dialing 1-800-901-5231
(International: 1-617-786-2961) or via the web at http://www.newplan.com/ under
Investor Information; Audio Archives. Please refer to passcode #84322879. A
replay of the teleconference will be available through midnight ET May 13, 2004
by dialing 1-888-286-8010 (International: 1-617-801-6888) or via the web at
http://www.newplan.com/ under Investor Information; Audio Archives. Please
refer to passcode #63736567.
The Company's Supplemental Disclosure package will be furnished today on a
Current Report on Form 8-K and will also be available on the Company's website
at http://www.newplan.com/ under Investor Information; Financial Reports.
These materials are also available in e-mail or hard copy formats by contacting
New Plan Corporate Communications at or 1-800-468-7526.
New Plan Excel Realty Trust, Inc. is one of the nation's largest real estate
companies, focusing on the ownership and management of community and
neighborhood shopping centers. The Company operates as a self-administered and
self-managed REIT, with a national portfolio of 403 properties, including 21
properties held through joint ventures, and total assets of approximately $3.7
billion. Its properties are strategically located across 35 states and include
377 community and neighborhood shopping centers, primarily grocery or
name-brand discount chain anchored, with approximately 54.1 million square feet
of gross leasable area, and 26 related retail real estate assets, with
approximately 2.2 million square feet of gross leasable area. For additional
information, please visit http://www.newplan.com/.
Certain statements in this release that are not historical fact may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause the actual
results of the Company to differ materially from historical results or from any
results expressed or implied by such forward-looking statements, including
without limitation: national and local economic, business, real estate and
other market conditions; the competitive environment in which the Company
operates; financing risks; possible future downgrades in our credit ratings;
property management risks; the level and volatility of interest rates;
financial stability of tenants; the Company's ability to maintain its status as
a REIT for federal income tax purposes; acquisition, disposition, development
and joint venture risks, including risks that developments and redevelopments
are not completed on time or on budget and strategies, actions and performance
of affiliates that the Company may not control; potential environmental and
other liabilities; and other factors affecting the real estate industry
generally. The Company refers you to the documents filed by the Company from
time to time with the Securities and Exchange Commission, specifically the
section titled "Business-Risk Factors" in the Company's Annual Report on Form
10-K for the year ended December 31, 2003, which discuss these and other
factors that could adversely affect the Company's results.
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended
March 31, March 31,
2004 2003
Rental Revenues:
Rental income $ 95,473 $ 91,510
Percentage rents 2,645 1,640
Expense reimbursements 25,812 25,498
TOTAL RENTAL REVENUES 123,930 118,648
Rental Operating Expenses:
Operating costs 23,553 22,282
Real estate and other taxes 14,936 15,422
Provision for doubtful accounts 1,730 1,499
TOTAL RENTAL OPERATING EXPENSES 40,219 39,203
NET OPERATING INCOME 83,711 79,445
Other Income:
Interest, dividend and other income 2,535 3,351
Equity in income of unconsolidated ventures 230 473
TOTAL OTHER INCOME 2,765 3,824
Other Expenses:
Interest expense 26,401 25,770
Depreciation and amortization 21,010 18,540
General and administrative 4,991 4,230
TOTAL OTHER EXPENSES 52,402 48,540
Income before real estate sales, impairment
of real estate and minority interest 34,074 34,729
Gain on sale of real estate (1) 1,217 --
Minority interest in income of
consolidated partnership (260) (401)
INCOME FROM CONTINUING OPERATIONS 35,031 34,328
Discontinued Operations:
Results of discontinued operations 952 832
Gain on sale of discontinued operations 1,414 3,483
Impairment of real estate held for sale -- (3,454)
INCOME FROM DISCONTINUED OPERATIONS 2,366 861
NET INCOME $ 37,397 $ 35,189
Preferred dividends (5,275) (4,859)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
-- BASIC 32,122 30,330
Minority interest in income of
consolidated partnership 260 401
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
-- DILUTED $ 32,382 $ 30,731
Net income per common share -- basic $ 0.32 $ 0.31
Net income per common share -- diluted 0.32 0.31
Funds from operations: (2)
Net income available to common stockholders
-- diluted $ 32,382 $ 30,731
Deduct:
Minority interest in income of
consolidated partnership (260) (401)
Net income available to common stockholders
-- basic 32,122 30,330
Add:
Depreciation and amortization:
Continuing operations real estate assets 21,010 18,540
Discontinued operations real estate assets 254 578
Pro rata share of joint venture real estate
assets 373 254
Deduct:
Gain on sale of real estate (1) (3) (1,217) --
Gain on sale of discontinued operations (3) (946) (1,000)
Pro rata share of joint venture loss on sale
of real estate (3) 425 --
FUNDS FROM OPERATIONS -- Basic 52,021 48,702
Add:
Minority interest in income of
consolidated partnership 260 401
FUNDS FROM OPERATIONS -- DILUTED $ 52,281 $ 49,103
Funds from operations per share -- basic $ 0.52 $ 0.50
Funds from operations per share -- diluted 0.51 0.49
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended
March 31, March 31,
2004 2003
Funds from operations -- diluted $ 52,281 $ 49,103
Add:
Impairment of real estate -- --
Impairment of real estate held for sale -- 3,454
Premium on redemption of preferred stock -- --
FUNDS FROM OPERATIONS -- DILUTED
(prior calculation) $ 52,281 $ 52,557
Funds from operations per share -- diluted
(prior calculation) $ 0.51 $ 0.53
Weighted average common shares outstanding
-- basic 99,419 96,937
ERP partnership units 1,363 2,178
Options 1,226 487
Weighted average common shares outstanding
-- diluted 102,008 99,602
(1) For the three months ended March 31, 2004, balance includes $1.2 million of
previously deferred gain incurred in connection with the Company's sale of 70
percent of its interest in Arapahoe Crossings, LP in 2003.
(2) Funds from Operations ("FFO") is a widely used performance measure for real
estate companies and is provided here as a supplemental measure of operating
performance. The Company calculates FFO in accordance with the best practices
described in the April 2002 National Policy Bulletin of the National
Association of Real Estate Investment Trusts (the "White Paper"). The White
Paper defines FFO as net income (computed in accordance with generally accepted
accounting principles ("GAAP")), excluding gains (or losses) from sales of
property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures.
On October 1, 2003, NAREIT, based on discussions with the SEC, provided revised
guidance regarding the calculation of FFO. This revised guidance provides that
impairments should not be added back to net income in calculating FFO and that
original issuance costs associated with preferred stock that has been redeemed
should be factored into the calculation of FFO. Prior to this pronouncement,
the Company had added back impairments in calculating FFO, in accordance with
prior NAREIT guidance, and had not factored in original issuance costs of
preferred stock that had been redeemed in the calculation of FFO. The Company
has revised its calculations of FFO made prior to this pronouncement in
accordance with NAREIT's revised guidance. To assist investors in understanding
the impact of these changes, the Company also is presenting FFO in accordance
with the methodology historically used by the Company ("prior calculation").
Given the nature of the Company's business as a real estate owner and operator,
the Company believes that FFO is helpful to investors as a starting point in
measuring its operational performance because it excludes various items
included in net income that do not relate to or are not indicative of its
operating performance such as gains (or losses) from sales of property and
depreciation and amortization, which can make periodic and peer analyses of
operating performance more difficult to compare. The Company also believes
that the presentation of FFO consistent with the guidance that was in effect
until October 1, 2003 is further helpful to investors because it assists
investors in evaluating the Company's historical operational performance and
because it excludes other items included in the revised calculation of FFO such
as impairments which also do not relate to and are not indicative of the
Company's operating performance. FFO should not, however, be considered as an
alternative to net income (determined in accordance with GAAP) as an indicator
of the Company's financial performance, is not an alternative to cash flow from
operating activities (determined in accordance with GAAP) as a measure of the
Company's liquidity, and is not indicative of funds available to fund the
Company's cash needs, including its ability to make distributions. In
addition, the Company's computation of FFO may differ in certain respects from
the methodology utilized by other REITs to calculate FFO.
(3) Excludes gain / loss on sale of land.
The above does not purport to disclose all items required under GAAP.
The Company's Form 10-Q for the quarter ended March 31, 2004 should be read in
conjunction with the above information.
DATASOURCE: New Plan Excel Realty Trust, Inc.
CONTACT: Stacy Lipschitz, Senior Vice President - Corporate
Communications, of New Plan Excel Realty Trust, Inc., +1-212-869-3000 ext.
3359
Web site: http://www.newplanexcel.com/