New Plan Excel (NYSE:NXL)
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New Plan Excel Realty Trust Reports Fourth Quarter and Year-End 2003 Results
- FFO Per Diluted Share In-Line With Expectations Before New Accounting
Adjustments -
NEW YORK, Feb. 26 /PRNewswire-FirstCall/ -- New Plan Excel Realty Trust, Inc.
today announced financial results for the three and twelve months ended December
31, 2003. Funds from operations (FFO) for the twelve months ended December 31,
2003, excluding the adjustments required by the new FFO methodology discussed
below, was $1.96 per diluted share, at the high-end of the Company's previously
announced range of FFO guidance of $1.90 to $1.96 per diluted share.
Total rental revenues for the fourth quarter of 2003 increased to $120.0 million
from $104.0 million in the fourth quarter of 2002. Net income available to
common stockholders was $24.7 million, or $0.24 per diluted share, in the fourth
quarter of 2003 compared with $34.9 million, or $0.35 per diluted share, in the
fourth quarter of 2002. FFO for the fourth quarter of 2003was $44.6 million,
or $0.44 on a diluted per share basis (which included a downward adjustment of
$0.03 per diluted share to reflect the newly required FFO methodology, as
described below), compared with $(44.7) million, or $(0.45) on a diluted per
share basis, in the fourth quarter of 2002 (as restated downward by $0.92 per
diluted share to reflect the newly required FFO methodology). A reconciliation
of net income to FFO is presented in the attached table.
Total rental revenues for the year endedDecember 31, 2003 were $479.9 million
as compared with $388.1 million for the year ended December 31, 2002. Net income
available to common stockholders was $108.8 million, or $1.08 per diluted share,
in 2003 (which included a reduction to net income available to common
stockholders of approximately $630,000, or $0.01 per diluted share, attributable
to the premium on the Company's redemption of its Series B Preferred Stock)
compared with $108.7 million, or $1.13 per diluted share, in 2002 (which
included an addition to net income available to common stockholders of
approximately $7.0 million, or $0.07 per diluted share, attributable to the
discount on the Company's redemption of its Series A Preferred Stock). FFO for
2003 was $185.7 million, or $1.85 on a diluted per share basis (which included a
downward adjustment of $0.11 per diluted share to reflect the newly required FFO
methodology), compared with $82.8 million, or $0.85 on a diluted per share
basis, for 2002 (as restated downward by $1.03 per diluted share to reflect the
newly required FFO methodology).
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. The Company historically has added back
impairments in calculating FFO, in accordance with prior NAREIT guidance, and
has not factored in original issuance costs of preferred stock that has been
redeemed in the calculation of FFO. The Company has restated its historical
calculation of FFO 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 fourth quarter, the gross leasable area (GLA) for the
Company's stabilized community and neighborhood shopping centers, including
stabilized joint venture projects, was approximately 92 percent leased. The GLA
for the Company's total stabilized portfolio, excluding joint venture projects,
was approximately 91 percent leased at December 31, 2003, and when including
properties under redevelopment, the GLA for the Company's total portfolio,
excluding joint venture projects (Company Total Portfolio), was approximately 90
percent leased at December 31, 2003. The average annual base rent (ABR) at
December 31, 2003 for the Company's Total Portfolio was $7.87 per leased square
foot. During the quarter, 154 new leases, aggregating approximately 967,000
square feet, were signed at an average ABR of $8.01 per square foot. Also
during the quarter, 181 renewal leases, aggregating approximately 838,000 square
feet, were signed at an average ABR of $9.93 per square foot, an increase of
approximately 8.2 percent over the expiring leases. In total, 613 new leases,
aggregating approximately 3.3 million square feet, were signed during 2003 at an
average ABR of $8.20 per square foot and 844 renewal leases, aggregating
approximately 3.5 million square feet, were signed at an average ABR of $9.29
per square foot, an increaseof approximately 7.0 percent over the expiring
leases.
Acquisitions and Dispositions
On October 10, 2003, CA New Plan Venture Fund, the Company's joint venture with
a major U.S. pension fund, acquired Shoppes of Victoria Square. The 95,253
square foot grocery-anchored neighborhood shopping center, located in Port St.
Lucie, Florida, was purchased for $8.3 million, with 75 percent financing. On
October 31, 2003, CA New Plan Venture Fund also acquired Clinton Crossing, a
26,200 square foot neighborhood shopping center (net of space subsequently
demolished), for $6.0 million. The property, located in Clinton, Mississippi,
is currently under redevelopment with the construction of space for a new anchor
tenant and will total 101,073 square feet when complete.
On November 24, 2003, the Company formed a strategic joint venture with JPMorgan
Fleming Asset Management to acquire high-quality institutional grade community
and neighborhood shopping centers on a nationwide basis. The joint venture,
which is called NP/I&G Institutional Retail Company, LLC, has an equity
commitment of $150 million based on a 20 percent / 80 percent contribution split
between the Company and a fund advised by JPMorgan Fleming Asset Management,
respectively. As the managing member, the Company will be responsible for
initiating acquisitions, as well as providing management and leasing services.
On November 25, 2003, the joint venture acquired Lake Grove Plaza, a 251,236
square foot grocery-anchored community shopping center located in Lake Grove,
New York, for $44.0 million.
During 2003, the Company acquired, including through co-investments with its
joint venture partners, 15 shopping centers, totaling approximately 2.0 million
square feet, for an aggregate of approximately $185.1 million (includes one
shopping center, Paradise Pavilion, for which the purchase amount was included
in the Equity Investment Group portfolio acquisition on December 12, 2002).
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 million. Clearwater
Mall, located in Clearwater, Florida, is a community shopping center
encompassing a 72-acre site with 284,184 square feet of leased space, as well as
non-owned Costco, Lowe's and SuperTarget anchors.
During the fourth quarter of 2003, the Company sold six properties, one land
parcel and one outparcel for an aggregate of approximately $15.2 million.
Properties sold during the quarter include Village Mart, a 89,528 square foot
shopping center located in Aurora, Illinois; Lamar Plaza, a 154,855 square foot
shopping center located in Rosenberg, Texas; Meadowbrook, a 40,308 square foot
shopping center located in Ft. Worth, Texas; a 5,671 square foot single tenant
Northern Automotive located in Grand Island, Nebraska; a 29,300 square foot
single tenant building located in Hobart, Indiana; a 43,848 square foot single
tenant Winn-Dixie located in Chattanooga, Tennessee; 2.2 acres of land at
Highland Commons in Glasgow, Kentucky; and a 1.2 acre outparcel at Vail Ranch
Center in Temecula, California.
In 2003, the Company generated an aggregate of approximately $121.7 million of
proceeds through the culling of non-core and non-strategic properties, the sale
of 70 percent of its interest in Arapahoe Crossings, and the disposition of
certain properties held through joint ventures.
Balance Sheet Position
The Company completed the 2003 fiscal year with total book assets of
approximately $3.6 billion and a total debt / undepreciated book value ratio of
45.4 percent. The Company's debt for the three months ended December 31, 2003
had an overall average current interest rate of6.2 percent and a weighted
average maturity of 6.1 years. Approximately 83 percent of the Company's total
debt is fixed rate debt.
On November 20, 2003, the Company issued $50 million aggregate principal amount
of unsecured, 10-year fixed rate notes with a coupon of 5.50 percent. The notes
are due on November 20, 2013. The notes were priced at 99.499 percent of par
value to yield 5.566 percent. Net proceeds from the offering were used to repay
$49 million of 7.33 percent notes scheduled to matureon November 20, 2003. On
May 8, 2003, the Company entered into a 10-year forward starting interest rate
swap in anticipation of this offering, locking the LIBOR swap rate at 4.1135
percent. This swap settled upon the completion of this transaction. As a
result, the effective interest rate on the $50 million of unsecured, fixed rate
notes is approximately 5.0 percent.
On February 6, 2004, the Company issued $150 million aggregate principal amount
of unsecured, 7-year fixed rate notes with a couponof 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 of the offering, 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 basispoints over the 6-month LIBOR rate.
Dividend
For the first 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 April 15, 2004 to
common stockholders of record on April 1, 2004. New Plan Excel Realty Trust,
Inc. shares go ex-dividend on March 30, 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 April 1, 2004, payable on April 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 April 1, 2004, payable on April 15, 2004.
Management Comment
"Following two years of extensive repositioning, we are pleased to conclude 2003
by meeting or exceeding our financial and operating goals and expectations. FFO
was at the high-end of our range of guidance, leasing exceeded our targets and
capital markets activity reduced balance sheet costs, while increasing our
return on investment. We look forward to 2004," commented Glenn J. Rufrano,
Chief Executive Officer.
Conference Call
The Company will be hosting a teleconference on Thursday, February 26, 2004 at
2:00 PM ET. The teleconference can be accessed by dialing 1-800-884-5695
(International: 1-617-786-2960) or via the web at http://www.newplan.com/ under
Investor Information; Audio Archives. Please refer to passcode #13203315. A
replay of the teleconference will be available through midnight ET March 4, 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 #22819551.
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 ExcelRealty 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 401 properties, including 22
properties held through joint ventures, and total assets of approximately $3.6
billion. Its properties are strategically located across 35 states and include
374 community and neighborhood shopping centers, primarilygrocery or name-brand
discount chain anchored, with approximately 53.5 million square feet of gross
leasable area, and 27 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 statementsinvolve 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; 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 oron 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 Twelve Months Ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
Rental Revenues:
Rental income $ 92,232 $ 79,178 $ 371,320 $ 299,223
Percentage rents 2,262 1,626 7,340 6,688
Expense reimbursements
25,478 23,201 101,222 82,141
TOTAL RENTAL REVENUES 119,972 104,005 479,882 388,052
Rental Operating Expenses:
Operating costs 23,981 19,868 91,644 67,464
Real estate and
other taxes 15,234 12,990 60,132 46,463
Provision for doubtful
accounts 2,648 2,146 8,309 8,955
TOTAL RENTAL OPERATING
EXPENSES 41,863 35,004 160,085 122,882
NET OPERATING INCOME 78,109 69,001 319,797 265,170
Other Income:
Interest, dividend
and other income 2,016 2,074 9,419 11,014
Equity in income
of unconsolidated
ventures 1,006 1,511 3,439 5,244
Foreign currency loss - - - (13)
TOTAL OTHER INCOME 3,022 3,585 12,858 16,245
Other Expenses:
Interest expense 25,015 24,889 101,632 93,260
Depreciation
and amortization 19,874 17,164 77,372 64,948
General and
administrative 5,088 4,567 19,815 17,879
TOTAL OTHER EXPENSES 49,977 46,620 198,819 176,087
Income before real estate sales,
impairment of real estate
and minority interest 31,154 25,966 133,836 105,328
Gain on sale
of real estate - - - 202
Impairment of real estate - (90,253) (4,376) (94,046)
Minority interest in income of
consolidated partnership (385) (224) (1,555) (642)
INCOME FROM CONTINUING
OPERATIONS 30,769 (64,511) 127,905 10,842
Discontinued Operations:
Results of discontinued
operations 620 5,450 3,210 23,899
Gain on sale of discontinued
operations 615 99,330 4,018 100,837
Impairment of real
estate held for sale (2,411) (747) (6,112) (13,516)
INCOME FROM DISCONTINUED
OPERATIONS (1,176) 104,033 1,116 111,220
NET INCOME $ 29,593 $ 39,522 $ 129,021 $122,062
Preferred dividends (5,279) (4,859) (21,170) (21,023)
(Premium) discount on
redemption of preferred
stock - - (630) 6,997
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS - BASIC 24,314 34,663 107,221 108,036
Minority interest
in income of
consolidated partnership 385 224 1,555 642
NET INCOME AVAILABLE
TO COMMON STOCKHOLDERS
- DILUTED $ 24,699 $34,887 $ 108,776 $ 108,678
Net income per
common share -
basic $ 0.25 $ 0.36 $ 1.10 $ 1.14
Net income per common share -
diluted 0.24 0.35 1.08 1.13
Funds from operations: (1)
Net income available
to common stockholders
- diluted $ 24,699 $ 34,887 $ 108,776 $ 108,678
Deduct:
Minority interest
in income of
consolidated
partnership (385) (224) (1,555) (642)
Net income available
to common stockholders
- basic 24,314 34,663 107,221 108,036
Add:
Depreciation and amortization:
Continuing operations
real estate assets 19,874 17,164 77,372 64,948
Discontinued operations real
estate assets 89 324 740 5,275
Pro rata share of
joint venture
real estateassets 300 428 1,016 1,405
Deduct:
Gain on sale
of real estate (2) - - - (202)
Gain on sale of discontinued
operations (2) (405) (97,538) (1,534) (98,876)
Pro rata share
of joint venture
gain on sale
of real estate (2) - - (643) -
FUNDS FROM OPERATIONS
- Basic 44,172 (44,959) 184,172 80,586
Add:
Preferred A dividends (3) - - - 1,587
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2003 2002 2003 2002
Minority interest
in income of
consolidated
partnership 385 224 1,555 642
FUNDS FROM
OPERATIONS
- DILUTED $ 44,557 $(44,735) $185,727 $82,815
Funds from
operations per
share - basic$ 0.45 $ (0.46) $ 1.89 $ 0.85
Funds from operations
per share - diluted 0.44 (0.45) 1.85 0.85
Funds from
operations
- diluted $ 44,557 $ (44,735) $ 185,727 $ 82,815
Add:
Impairment
of real estate - 90,253 4,376 94,046
Impairment of real
estate held
for sale 2,411 747 6,112 13,516
Premium (discount)
on redemption
of preferred stock - - 630 (6,997)
FUNDS FROM OPERATIONS
- DILUTED
(prior
calculation) $ 46,968 $ 46,265 $ 196,845 $ 183,380
Funds from
operations per
share - diluted
(prior calculation) $ 0.47 $ 0.47 $ 1.96 $ 1.88
Weighted average
common shares
outstanding
- basic 97,758 96,900 97,318 95,119
ERP partnership
units 2,178 1,081 2,178 897
Options 1,044 442 773 536
Weighted average
common shares
outstanding -
diluted (Net
income
calculation) 100,980 98,423 100,269 96,552
Dilutive effect
of convertible
Preferred A (3) - - - 937
Weighted average
common shares
outstanding
- diluted
(FFO calculation) 100,980 98,423 100,269 97,489
(1) Funds fromOperations ("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. The Company historically has
added back impairments in calculating FFO, in accordance with prior
NAREIT guidance, and has not factored in original issuance costs of
preferred stock that has been redeemed in the calculation of FFO. The
Company has revised its calculation of FFO in accordance with NAREIT's
revised guidance. To assist investors in understanding the impact of
thesechanges, 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.
(2) Excludes gain / loss on sale of land.
(3) On July 15, 2002, the Company redeemed all Preferred A shares
outstanding, resulting in the issuance of approximately 1.9 million
shares of common stock at an equivalent price of $20.10 per share.
The above does not purport to disclose all items required under GAAP.
The Company's Form 10-K for the year ended December 31, 2003 should be
read in conjunction with the above information.
DATASOURCE: New Plan Excel Realty Trust, Inc.
CONTACT: Stacy Lipschitz, Vice President - Corporate Communications, New
Plan Excel Realty Trust, Inc., +1-212-869-3000, ext. 3359
Web site: http://www.newplan.com/