New Plan Excel (NYSE:NXL)
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New Plan Excel Realty Trust Reports Third Quarter 2004 Results
NEW YORK, Oct. 28 /PRNewswire-FirstCall/ -- New Plan Excel Realty Trust, Inc.
(NYSE:NXL) today announced financial results for the three and nine months
ended September 30, 2004.
Total rental revenues for the third quarter of 2004 increased to $123.0 million
from $116.9 million in the third quarter of 2003. Net income available to
common stockholders was $24.2 million, or $0.23 per diluted share, in the third
quarter of 2004 compared with $26.8 million, or $0.27 per diluted share, in the
third quarter of 2003. Funds from operations (FFO) for the third quarter of
2004 was $51.4 million, or $0.50 on a diluted per share basis, compared with
$47.3 million, or $0.47 on a diluted per share basis, in the third quarter of
2003. A reconciliation of net income to FFO is presented in the attached
table.
Total rental revenues for the nine months ended September 30, 2004 were $370.1
million as compared with $354.8 million in the first nine months of 2003. Net
income available to common stockholders was $84.5 million, or $0.82 per diluted
share, in the first nine months of 2004 compared with $84.1 million, or $0.84
per diluted share, in the first nine months of 2003. FFO for the first nine
months of 2004 was $158.7 million, or $1.55 on a diluted per share basis,
compared with $139.9 million, or $1.40 on a diluted per share basis, in the
first nine months of 2003 (which included $0.09 per diluted share related to
impairment of real estate and real estate held for sale and original issuance
costs associated with preferred stock that has been redeemed).
Property Portfolio
At the end of the third quarter, the gross leasable area (GLA) for the
Company's total stabilized community and neighborhood shopping centers,
including its pro rata share of joint venture projects, was approximately 93.5
percent leased. The GLA for the Company's total portfolio, including its pro
rata share of joint venture projects (Total Portfolio), was approximately 92.0
percent leased at September 30, 2004. The average annual base rent (ABR) at
September 30, 2004 for the total portfolio was $8.10 per leased square foot.
During the quarter, 158 new leases, aggregating approximately 999,000 square
feet, were signed at an average ABR of $8.70 per square foot. Also during the
quarter, 186 renewal leases, aggregating approximately 782,000 square feet,
were signed at an average ABR of $9.47 per square foot, an increase of
approximately 7.2 percent over the expiring leases. In total, 481 new leases,
aggregating approximately 2.9 million square feet, were signed during the first
nine months of 2004 at an average ABR of $9.13 per square foot and 567 renewal
leases, aggregating approximately 2.3 million square feet, were signed at an
average ABR of $10.08 per square foot, an increase of approximately 6.6 percent
over the expiring leases.
During the third quarter, the Company completed the redevelopment of five
shopping centers and added 11 projects to its redevelopment pipeline,
increasing the pipeline to 42 projects (including joint venture redevelopment
projects), with an aggregate expected cost of $160.2 million (including costs
incurred in prior years on these projects).
Acquisitions and Dispositions
During the third quarter of 2004, the Company acquired, including through
co-investments with its joint venture partners, six 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 1.2
million square feet and were acquired for an aggregate of approximately $117.2
million. During the first nine months of 2004, the Company acquired, including
through co-investments with its joint venture partners, an aggregate of 14
shopping centers, the remaining 50 percent interest in two shopping centers
both in which the Company owned the other 50 percent interest and two land
parcels for an aggregate of approximately $344.8 million. The shopping centers
totaled approximately 3.0 million square feet and the land parcels totaled
approximately 24 acres. Acquisitions completed during the third quarter are
summarized below:
* On July 2, 2004, CA New Plan Venture Fund, the Company's joint venture
with a major U.S. pension fund, acquired Stone Mountain Festival, a
347,217 square foot shopping center located in Stone Mountain, Georgia
(a suburb of Atlanta), for $19.5 million, of which approximately
$14.4 million was funded through a draw under the joint venture's line
of credit. The property is currently under redevelopment with the
expansion of its Wal-Mart anchor to a Wal-Mart Supercenter.
* On July 22, 2004, the Company acquired Starlite Plaza, a 222,450 square
foot shopping center located in Sylvania, Ohio (a suburb of Toledo) and
anchored by Farmer Jack, for $16.8 million.
* On July 22, 2004, NP/I&G Institutional Retail Company, LLC, the
Company's joint venture with JPMorgan Fleming Asset Management,
acquired Village Shoppes of Flowery Branch, a 92,985 square foot
shopping center located in Flowery Branch, Georgia (a suburb of
Atlanta) and anchored by Publix, for approximately $13.8 million,
including approximately $10.4 million of assumed mortgage indebtedness.
* On August 19, 2004, the Company acquired Hillside Village Center, a
97,536 square foot shopping center located in Smithtown, New York (on
Long Island), for approximately $16.8 million, including approximately
$4.4 million of assumed mortgage indebtedness. The property is
currently under redevelopment.
* On August 26, 2004, the Company acquired Annex of Arlington, a 197,328
square foot shopping center located in Arlington Heights, Illinois (a
suburb of Chicago) and anchored by Barnes & Noble, PetsMart, Sports
Authority and Trader Joe's, for $27.2 million, including approximately
$17.9 million of assumed mortgage indebtedness.
* On September 1, 2004, the Company acquired Marketplace, a 186,851
square foot shopping center located in Tulsa, Oklahoma and anchored by
CompUSA, Drysdale's, Oshman's and PetsMart, for $18.0 million,
consisting of the issuance of $8.8 million of limited partner units in
a partnership controlled by the Company and approximately $9.2 million
of assumed mortgage indebtedness.
* On September 1, 2004, the Company purchased the remaining 50 percent
interest in The Market at Preston Ridge, increasing the Company's
ownership interest to 100 percent. The purchase price for the
acquisition was approximately $5.2 million. The Market at Preston
Ridge, a 50,326 square foot shopping center anchored by CompUSA, is
located in Frisco, Texas adjacent to The Centre at Preston Ridge, a
community shopping center owned by a joint venture in which the Company
has a 25 percent interest.
During the third quarter of 2004, the Company generated an aggregate of
approximately $18.1 million of proceeds through the sale of four properties and
one outparcel. Properties sold during the quarter include a 10,069 square foot
single tenant Rite Aid located in East Albany, Georgia; a 34,019 square foot
single tenant Kroger located in East Albany, Georgia; New Port Richey Center, a
43,441 square foot single tenant building located in New Port Richey, Florida;
Factory Merchants Barstow, a 329,110 square foot factory outlet center located
in Barstow, California; and a one-acre outparcel at Kimball Crossing located in
Kimball, Tennessee. In the first nine months of 2004, the Company generated an
aggregate of approximately $52.5 million of proceeds through the culling of
non-core and non-strategic properties, the disposition of certain properties
held through joint ventures and the transfer of one property to a joint
venture.
Balance Sheet Position
The Company completed the third quarter with total book assets of approximately
$3.8 billion and a total debt / undepreciated book value ratio of 45.9 percent.
The Company's debt for the three months ended September 30, 2004 had an
overall weighted average current interest rate of 6.0 percent and a weighted
average maturity of 6.8 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 $115 million of outstanding notes from
a fixed rate to a blended floating rate.
Earnings Guidance
Given the current economic outlook and management's expectations with respect
to its portfolio performance and capital recycling program, the Company
anticipates 2005 net income available to common stockholders per share (EPS)
and FFO per share, both on a diluted basis, to be in the range of $1.20 to
$1.25 and $2.08 to $2.13, respectively. The Company's guidance for 2005 EPS
and FFO is reconciled below:
2005
EPS - Diluted $1.20 - $1.25
Add: Depreciation and amortization 0.88
FFO per Share - Diluted $2.08 - $2.13
Due to the uncertain nature of property dispositions and impairments, the
Company has assumed no gains or losses on the sales of real estate or
impairments of real estate for 2005 in its guidance. Any gains or losses on
the sales of real estate will have an impact on net income, which may be
material, but will not have an impact on FFO, since those amounts are not added
back in the calculation of FFO. Any impairments of real estate will negatively
impact both net income and FFO, which may be material. Since November 2000,
the Company has been strategically disposing of non-strategic shopping centers
and non-core properties and has recognized impairments associated with such
sales. Based on prior years' experience, the Company could record
approximately $0.07 per share of impairment during 2005, which would impact the
Company's 2005 guidance.
Management Change
The Company also announced that during the second quarter of 2005 Scott
MacDonald anticipates relocating to the West Coast and, as a result, will be
relinquishing his role as President and COO of New Plan at that time. The
Company is currently discussing opportunities with Mr. MacDonald to continue
his relationship with New Plan in an alternate capacity. New Plan is also in
the process of determining how best to replace Mr. MacDonald's current role and
responsibilities and expects to provide further details during the first half
of 2005.
Dividend
For the fourth quarter of 2004, the Company's Board of Directors declared a
cash dividend of $0.4125 per common share (CUSIP #648053106). On an annualized
basis, this is the equivalent of $1.65 per share. The dividend is payable on
January 18, 2005 to common stockholders of record on January 3, 2005. New Plan
Excel Realty Trust, Inc. shares go ex-dividend on December 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 (CUSIP
#648053700) to stockholders of record on January 3, 2005, payable on January
18, 2005. 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 (CUSIP #6480538090) to stockholders of record on January 3,
2005, payable on January 18, 2005.
Management Comment
"We are pleased with our operating performance in the third quarter and
continue to execute on the fundamentals of our core shopping center business,
utilizing our national infrastructure to lease 1.8 million square feet,
complete $117 million of opportunistic acquisitions via multiple capital
sources and grow our redevelopment pipeline during the quarter. Over the past
three years, Scott MacDonald has been an integral member of our senior
management team and has played an instrumental role in establishing our
operating platform. We appreciate his efforts and look forward to leveraging
his talents over the long-term," commented Glenn J. Rufrano, Chief Executive
Officer.
Conference Call
The Company will be hosting a teleconference on Thursday, October 28, 2004 at
2:00 PM ET. The teleconference can be accessed by dialing 1-800-299-9630
(International: 1-617-786-2904) or via the web at http://www.newplan.com/ under
Investor Information; Audio Archives. Please refer to passcode #34727932. A
replay of the teleconference will be available through midnight ET November 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 #98936613.
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 24
properties held through joint ventures, and total assets of approximately $3.8
billion. Its properties are strategically located across 35 states and include
381 community and neighborhood shopping centers, primarily grocery or
name-brand discount chain anchored, with approximately 55.6 million square feet
of gross leasable area, and 22 related retail real estate assets, with
approximately 1.8 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 ownership / 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 Nine Months Ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
Rental Revenues:
Rental income $98,309 $92,559 $290,648 $275,537
Percentage rents 1,359 1,260 5,420 4,817
Expense reimbursements 23,320 23,125 74,058 74,432
TOTAL RENTAL
REVENUES 122,988 116,944 370,126 354,786
Rental Operating Expenses:
Operating costs 19,618 21,071 62,883 66,237
Real estate and
other taxes 16,238 14,399 46,235 44,309
Provision for
doubtful accounts 2,816 1,561 7,146 5,089
TOTAL RENTAL
OPERATING EXPENSES 38,672 37,031 116,264 115,635
NET OPERATING INCOME 84,316 79,913 253,862 239,151
Other Income:
Interest, dividend
and other income 2,175 2,112 6,563 7,402
Equity in income of
unconsolidated ventures 314 772 1,103 2,432
TOTAL OTHER INCOME 2,489 2,884 7,666 9,834
Other Expenses:
Interest expense 26,150 25,764 79,087 76,614
Depreciation and
amortization 23,455 19,759 66,148 56,876
General and
administrative 4,484 6,293 14,650 14,727
TOTAL OTHER EXPENSES 54,089 51,816 159,885 148,217
Income before real
estate sales, impairment
of real estate and
minority interest 32,716 30,981 101,643 100,768
Gain on sale of
real estate (1) - - 1,217 -
Impairment of real estate - - (43) (1,124)
Minority interest in
income of consolidated
partnership and
joint ventures (203) (394) (938) (1,169)
INCOME FROM CONTINUING
OPERATIONS 32,513 30,587 101,879 98,475
Discontinued Operations:
Results of discontinued
operations 109 1,335 614 4,503
(Loss) gain on sale of
discontinued
operations (2) (3,093) (163) (2,649) 3,404
Impairment of real
estate held for sale (88) (48) (88) (6,953)
INCOME FROM DISCONTINUED
OPERATIONS (3,072) 1,124 (2,123) 954
NET INCOME $29,441 $31,711 $99,756 $99,429
Preferred dividends (5,458) (5,279) (16,008) (15,891)
Premium on redemption
of preferred stock - - - (630)
NET INCOME AVAILABLE TO
COMMON STOCKHOLDERS -
BASIC 23,983 26,432 83,748 82,908
Minority interest in
income of consolidated
partnership 206 394 752 1,170
NET INCOME AVAILABLE TO
COMMON STOCKHOLDERS -
DILUTED $24,189 $26,826 $84,500 $84,078
Net income per common
share - basic $0.24 $0.27 $0.84 $0.85
Net income per common
share - diluted 0.23 0.27 0.82 0.84
Funds from operations: (3)
Net income available to
common stockholders -
diluted $24,189 $26,826 $84,500 $84,078
Deduct:
Minority interest in
income of consolidated
partnership (206) (394) (752) (1,170)
Net income available to
common stockholders -
basic 23,983 26,432 83,748 82,908
Add:
Depreciation and amortization:
Continuing operations
real estate assets 23,455 19,759 66,117 56,876
Discontinued operations
real estate assets 105 332 568 1,274
Pro rata share of
joint venture real
estate assets 495 253 1,136 717
NEW PLAN EXCEL REALTY TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2004 2003 2004 2003
Deduct:
Gain on sale of
real estate (1) (4) - - (1,217) -
Loss (gain) on sale of
discontinued
operations (4) 3,169 163 7,132 (2,419)
Pro rata share of
joint venture loss
(gain) on sale of
real estate (4) 12 (39) 433 (643)
FUNDS FROM OPERATIONS -
Basic 51,219 46,900 157,917 138,713
Add:
Minority interest in
income of consolidated
partnership 206 394 752 1,170
FUNDS FROM OPERATIONS -
DILUTED $51,425 $47,294 $158,669 $139,883
Funds from operations
per share - basic $0.51 $0.48 $1.57 $1.43
Funds from operations
per share - diluted 0.50 0.47 1.55 1.40
Funds from operations -
diluted $51,425 $47,294 $158,669 $139,883
Add:
Impairment of
real estate - - 43 1,124
Impairment of real
estate held for sale 88 48 88 6,953
Premium on redemption
of preferred stock - - - 630
FUNDS FROM OPERATIONS -
DILUTED
(prior calculation) $51,513 $47,342 $158,800 $148,590
Funds from operations
per share - diluted
(prior calculation) $0.50 $0.47 $1.55 $1.49
Weighted average common
shares outstanding -
basic 101,255 97,455 100,281 97,170
ERP partnership units 1,405 2,178 1,311 2,178
Options 998 872 1,034 663
Weighted average common
shares outstanding -
diluted 103,658 100,505 102,626 100,011
(1) For the nine months ended September 30, 2004, balance includes
$1.217 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) For the nine months ended September 30, 2004, balance includes
approximately $3.876 million of previously deferred gain incurred in
connection with the Company's sale of 21.5 acres of land at The Mall
at 163rd Street in 2003.
(3) 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, the National Association of Real Estate Investment
Trusts ("NAREIT"), based on discussions with the Securities and
Exchange Commission ("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 presents FFO 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 and, therefore, may not be comparable to such
other REITs.
(4) 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 September 30, 2004
should be read in conjunction with the above information.
DATASOURCE: New Plan Excel Realty Trust, Inc.
CONTACT: Stacy Lipschitz-Slater, Senior Vice President - Corporate
Communications, New Plan Excel Realty Trust, Inc., +1-212-869-3000 EXT. 3359,
Web site: http://www.newplanexcel.com/