Trizec (NYSE:TRZ)
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Trizec Properties, Inc. (NYSE:TRZ) ("the Company") today
reported financial and operating results for the fourth quarter ended
December 31, 2005.
The Company reported funds from operations available to common
stockholders ("FFO") of $64.6 million, or $0.41 per diluted share, for
the fourth quarter of 2005, compared to $64.6 million, or $0.42 per
diluted share, for the same period a year earlier. Fourth quarter 2004
FFO included a derivative gain of $3.8 million, or $0.02 per diluted
share.
For the fourth quarter of 2005, net income available to common
stockholders, the generally accepted accounting principles ("GAAP")
measurement most directly comparable to FFO, totaled $98.3 million, or
$0.62 per diluted share, and included a net gain on disposition of
real estate totaling $93.6 million, or $0.59 per diluted share. This
compares to net income available to common stockholders of $103.2
million, or $0.67 per diluted share, for the fourth quarter of 2004,
which included the impact on FFO noted above as well as an $82.4
million, or $0.54 per diluted share, net gain on disposition of real
estate. The attached financial information contains the reconciliation
between net income available to common stockholders and FFO.
The weighted average number of diluted shares of common stock
outstanding used to compute net income available to common
stockholders and FFO per share for the quarter ended December 31, 2005
totaled 159,191,349 compared to 153,470,355 for the fourth quarter of
2004. The increase in diluted shares outstanding was primarily
attributable to the exercise of 4.2 million warrants and options
during 2005, as well as the impact of a 31 percent higher average
share price during the fourth quarter of 2005 versus the fourth
quarter of 2004.
Tim Callahan, Trizec's president and chief executive officer
commented, "2005 was another successful year for Trizec, highlighted
by numerous significant achievements, including the continuation of
our capital recycling program that resulted in $445 million of
non-core office dispositions and $625 million of acquisitions. These
transactions place Trizec as a net acquirer for the first time since
1999." Mr. Callahan added, "With our largest acquisition ever, a
pending $1.6 billion office portfolio in Southern California, and
improving office market fundamentals nationally, we have strong
momentum going into 2006."
The financial statements for the three and twelve months ended
December 31, 2004 included in this release and the attached financial
information below have been restated to reflect the properties that
the Company has reclassified as discontinued operations since January
1, 2005, in accordance with GAAP. Such reclassification, however, does
not impact the net income available to common stockholders for the
three and twelve months ended December 31, 2004 as previously
reported.
Fourth quarter 2005 total revenues from continuing operations were
$189.0 million, compared to $169.6 million during the three months
ended December 31, 2004. This increase was primarily due to the
revenues from three office properties that the Company acquired
subsequent to October 1, 2004 for $621.8 million.
Lease termination fees from continuing operations and the
Company's pro rata share of such fees from unconsolidated joint
ventures totaled $1.2 million for the quarter ended December 31, 2005,
compared to $2.4 million reported in the fourth quarter of 2004.
Termination fees from discontinued operations during the quarter
totaled $3.9 million, primarily attributable to a tenant's early
termination at Williams Center. This termination fee was offset by a
related $3.5 million provision for loss on discontinued real estate
recognized during the fourth quarter of 2005.
During the fourth quarter of 2005, the Company leased 1.8 million
square feet of space in its office portfolio with an average lease
term of 7.6 years. The average gross rental rate on leases executed in
the quarter was $26.72 per square foot compared to $26.86 per square
foot on leases that expired during the quarter. At December 31, 2005,
occupancy was 88.2 percent for the Company's owned area, which
includes its wholly-owned properties and its pro rata share of joint
ventures. Occupancy based on total area, which includes 100 percent of
the Company's consolidated properties and 100 percent of its
unconsolidated joint venture properties, was also 88.2 percent at
December 31, 2005, with consolidated properties at 88.2 percent and
unconsolidated joint venture properties at 88.3 percent.
Property revenues less property expenses (including straight-line
rent and excluding termination fees) decreased by 0.9 percent on a
same-property basis compared to the fourth quarter of 2004.
FFO for the year ended December 31, 2005 totaled $266.7 million,
or $1.69 per diluted share, compared to $141.8 million, or $0.93 per
diluted share, for the year ended December 31, 2004. FFO for the year
2004 included a $148.3 million, or $0.97 per diluted share, impact
from a net provision for loss on real estate and investment and loss
on early debt retirement.
For the year ended December 31, 2005, the Company reported net
income available to common stockholders of $200.1 million, or $1.27
per diluted share, which includes a net gain on disposition of real
estate of $133.2 million, or $0.84 per diluted share. This compares to
net income available to common stockholders of $96.5 million, or $0.63
per diluted share, for the year ended December 31, 2004. In addition
to the impact on FFO described above, net income for the year 2004
included a $133.6 million, or $0.87 per diluted share, net gain on
disposition of real estate.
The weighted average number of diluted shares of common stock
outstanding used to compute net income available to common
stockholders and FFO per share for the year ended December 31, 2005
totaled 157,877,915 compared to 153,109,854 for the same period in
2004. The increase in diluted shares outstanding was primarily
attributable to the exercise of 4.2 million warrants and options
during 2005 as well as the impact of a 27 percent higher average share
price during 2005 versus 2004, on the calculation of dilutive shares.
Total revenues from continuing operations for the twelve months
ended December 31, 2005 were $722.0 million, compared to $647.4
million during the same period last year. This increase was primarily
due to the revenues from four office properties that the Company
acquired subsequent to January 1, 2004 for approximately $1.1 billion.
Total lease termination fees from continuing operations and the
Company's pro rata share of such fees from unconsolidated joint
ventures, totaled $7.2 million for the year ended December 31, 2005,
compared to $7.5 million for the same period in 2004. Termination fees
from discontinued operations during 2005 totaled $4.3 million,
primarily due to the previously mentioned fee from a tenant at
Williams Center during the fourth quarter.
The Company leased 5.9 million square feet of space in its office
portfolio during the year ended December 31, 2005, with an average
lease term of 7.7 years. The average gross rental rate on leases
executed during 2005 was $25.04 per square foot compared to $25.50 per
square foot on leases expiring during the same time period.
Property revenues less property expenses (including straight-line
rent and excluding termination fees) declined 1.0 percent as compared
to the same period in 2004, on a same-property basis.
Highlights for the fourth quarter 2005:
-- On December 22, Trizec announced an agreement to acquire a
high-quality Southern California office portfolio, currently
owned by Arden Realty, Inc., comprised of 13 properties,
totaling 4.1 million square feet, and several development land
parcels for $1.63 billion. With this transaction, Trizec will
nearly double its Southern California office portfolio from
4.5 million square feet to more than 8.6 million square feet.
Accordingly, Southern California will become Trizec's largest
market and will represent approximately 30 percent of the
Company's total net operating income, based on Trizec's
current portfolio. Trizec's portfolio acquisition is
contingent upon the completion of GE Real Estate's acquisition
of Arden and is expected to close in late first quarter or
early second quarter of 2006, subject to approval by Arden's
common shareholders and certain other customary closing
conditions. Assuming the acquisition of the Arden portfolio,
Trizec's total acquisition volume since the third quarter of
2004 will total $2.8 billion.
-- On November 7, announced that the Company was awarded the 2005
Gold "Leader in the Light" award from the National Association
of Real Estate Investment Trusts (NAREIT) in collaboration
with the United States Environmental Protection Agency (EPA).
This award recognizes company-wide operations that generate
substantially improved energy efficiency and expense
management.
-- On November 1, a 50/50 joint-venture partnership between
Trizec and Principal Real Estate Investors acquired the Victor
Building, a 343,000-square-foot property located in
Washington, D.C., for $157.5 million. Including the Victor
Building, Trizec has acquired interests in three premier
office properties in Washington, D.C. totaling 961,000 square
feet during the past 18 months. Trizec's full-year 2005
acquisition volume totaled over $625 million.
-- On October 31, announced the modification and extension of the
Company's $750 million unsecured credit facility. The
restructured facility has a three-year term with a one-year
extension option, carries a current borrowing rate below that
of the prior credit facility, and is fully revolving.
-- During the fourth quarter, sold three non-core office
properties for $191.5 million and recognized a gain on
disposition totaling $93.6 million. Full year 2005 disposition
volume totaled $444.7 million.
-0-
*T
-- On October 18, sold Beaumeade Corporate Park, a
six-building 460,000-square-foot office park in Ashburn,
Virginia for $53 million.
-- On October 18, sold Twinbrook Metro Plaza, a
165,000-square-foot property in Rockville, Maryland for
$52 million.
-- On October 7, sold the Watergate Office Building, a
261,000-square-foot property in Washington, D.C. for $86.5
million.
*T
Subsequent to the end of the fourth quarter 2005:
-- On January 10, announced the sale of Williams Center I & II, a
770,000-square-foot property in Tulsa, Okla. for $42.5
million. With this transaction, Trizec has exited the Tulsa
market.
-- On January 10, announced the appointment of John R. Barganski
as vice president, leasing of the Company's Southern
California Region.
-- On January 3, announced lease renewal and expansion
transactions with CDW Corporation and Arnstein & Lehr totaling
346,000 square feet, representing 50 percent of the rentable
space at 120 South Riverside Plaza in downtown Chicago.
-- On January 3, announced the renewal of Bank of America's lease
for more than 29 floors, totaling approximately 640,000 square
feet of Class A office space, at Bank of America Plaza in
downtown Charlotte.
Trizec reiterated its FFO guidance for 2006 to be in the range of
$1.60 to $1.70 per share on a fully-diluted basis. This guidance is
based on the Company's expectation that its average occupancy levels
will remain stable; however, rental rates on new and renewal leases
are expected to be lower than rental rates on expiring leases and
operating expenses are expected to increase relative to 2005.
Additionally, this FFO guidance includes the impact of anticipated
property dispositions that may occur during the first half of 2006,
but excludes any impact from the Company's pending $1.63 billion
Southern California portfolio acquisition.
Trizec also reiterated its guidance for 2006 net income available
to common stockholders, which is calculated in accordance with GAAP,
to be in the range of $0.28 to $0.36 per diluted share and reflects
certain projected impacts on 2006 FFO projections, described above.
The reconciliation of the projected FFO available to common
stockholders per diluted share to projected net income available to
common stockholders per diluted share is set forth in the attached
financial information.
Trizec Properties will conduct a conference call today, February
9, from 11:00 a.m. to 12:30 p.m. Central Time, to discuss fourth
quarter 2005 results and other current issues. To participate in the
call, please dial (877) 626-0598 from Canada and the U.S., or (706)
679-1441 from outside North America, approximately 15 minutes before
the call begins. A live webcast will be available at the Trizec
Properties web site, www.trz.com, via hyperlink. To listen to the live
webcast, please visit the web site at least 15 minutes beforehand in
order to download and install any necessary audio software.
A replay of the call will be available for 15 business days by
dialing (800) 642-1687 or (706) 645-9291 and entering the pass code
4439835. A replay of this call will be available online at the
Company's web site and at various financial web portals.
Consolidated financial information is attached. In addition, the
Company has updated its quarterly supplemental financial and operating
package, which can be found at Trizec's web site, www.trz.com. The
Company has furnished this news release and the updated supplemental
package to the SEC under a Form 8-K.
Trizec Properties, Inc., a real estate investment trust ("REIT")
headquartered in Chicago, is one of the largest owners and operators
of commercial office properties in the United States. The Company has
ownership interests in and manages a high-quality portfolio of 49
office properties totaling approximately 36 million square feet
concentrated in the metropolitan areas of seven major U.S. cities. The
Company trades on the New York Stock Exchange under the symbol TRZ.
For more information, visit Trizec's web site at www.trz.com or call
toll free at (800) 891-7017.
This release contains forward-looking statements, within the
meaning of the federal securities laws, relating to our business and
financial outlook which are based on our current expectations,
beliefs, projections, forecasts, future plans and strategies, and
anticipated events or trends. In some cases, you can identify
forward-looking statements by terms such as "may," "will," "should,"
"expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or the negative of these terms or other
comparable terminology. We intend these forward-looking statements,
which are not guarantees of future performance and financial
condition, to be covered by the safe harbor provisions for
forward-looking statements contained in the federal securities laws.
Forward-looking statements are not historical facts. Instead, such
statements reflect estimates and assumptions and are subject to
certain risks and uncertainties that are difficult to predict or
anticipate. Therefore, actual outcomes and results may differ
materially from those projected or anticipated in these
forward-looking statements. You should not place undue reliance on
these forward-looking statements. A number of important factors could
cause actual results to differ materially from those indicated by the
forward-looking statements, including, without limitation, the risks
described under "Item 1. Business - Risk Factors" in our 2004 Form
10-K, filed with the Securities and Exchange Commission on March 11,
2005. These factors include, without limitation, the following:
changes in national and local economic conditions, including those
economic conditions in our seven core markets; the extent, duration
and strength of any economic recovery; our ability to maintain
occupancy and to timely lease or re-lease office space; the extent of
any tenant bankruptcies and insolvencies; our ability to sell our
non-core office properties in a timely manner; our ability to acquire
office properties selectively in our core markets; our ability to
integrate and realize the full benefits from our acquisitions,
including the Arden office portfolio; our ability to maintain REIT
qualification and changes to U.S. tax laws that affect REITs; material
increases in the amount of special dividends payable to affiliates of
Trizec Canada on shares of our special voting stock as a result of
increases in the applicable cross-border withholding tax rates;
Canadian tax laws that affect treatment of investment in U.S. real
estate companies; the competitive environment in which we operate; the
cost and availability of debt and equity financing; the effect of any
impairment charges associated with changes in market conditions; the
sale or other disposition of shares of our common stock owned by
Trizec Canada Inc.; our ability to obtain, at a reasonable cost,
adequate insurance coverage for catastrophic events, such as
earthquakes and terrorist acts; and other risks and uncertainties
detailed from time to time in our filings with the Securities and
Exchange Commission.
-0-
*T
Consolidated Balance Sheets
(unaudited)
----------------------------------------------------------------------
$ in thousands, except share and per share December 31 December 31
amounts 2005 2004
----------------------------------------------------------------------
Assets
Real estate $4,565,123 $4,335,159
Less: accumulated depreciation (672,451) (619,010)
------------ ------------
Real estate, net 3,892,672 3,716,149
Cash and cash equivalents 36,498 194,265
Escrows and restricted cash 70,004 83,789
Investment in unconsolidated real estate
joint ventures 206,970 119,641
Office tenant receivables (net of allowance
for doubtful accounts of $3,718 and $6,677
at December 31, 2005 and December 31, 2004,
respectively) 13,087 9,306
Deferred rent receivables (net of allowance
for doubtful accounts of $1,438 and $831 at
December 31, 2005 and December 31, 2004,
respectively) 139,135 137,561
Other receivables (net of allowance for
doubtful accounts of $3,080 and $2,473 at
December 31, 2005 and December 31, 2004,
respectively) 7,384 9,914
Deferred charges (net of accumulated
amortization of $82,365 and $68,802 at
December 31, 2005 and December 31, 2004,
respectively) 124,061 115,669
Prepaid expenses and other assets, net 216,098 139,118
------------ ------------
Total Assets $4,705,909 $4,525,412
============ ============
Liabilities and Stockholders' Equity
Liabilities
Mortgage debt and other loans $1,863,273 $2,069,282
Unsecured credit facility 347,000 150,000
Trade, construction and tenant improvements
payables 19,127 25,386
Accrued interest expense 5,697 8,116
Accrued operating expenses and property
taxes 108,099 86,713
Other accrued liabilities 172,583 135,201
Dividends payable 32,329 32,407
Taxes payable 27,508 51,406
------------ ------------
Total Liabilities 2,575,616 2,558,511
------------ ------------
Commitments and Contingencies - -
Minority Interest 8,137 7,348
------------ ------------
Special Voting and Class F Convertible Stock 200 200
------------ ------------
Stockholders' Equity
Preferred stock, 50,000,000 shares
authorized, $0.01 par value, none issued
and outstanding - -
Common stock, 500,000,000 shares authorized,
$0.01 par value, 156,478,409 and
152,164,471 issued at December 31, 2005 and
December 31, 2004, respectively, and
156,419,864 and 152,132,857 outstanding at
December 31, 2005 and December 31, 2004,
respectively 1,565 1,521
Additional paid in capital 2,283,591 2,211,545
Accumulated deficit (158,178) (232,965)
Treasury stock, at cost, 58,545 and 31,614
shares at December 31, 2005 and December
31, 2004, respectively (750) (415)
Unearned compensation (446) (798)
Accumulated other comprehensive loss (3,826) (19,535)
------------ ------------
Total Stockholders' Equity 2,121,956 1,959,353
------------ ------------
Total Liabilities and Stockholders' Equity $4,705,909 $4,525,412
============ ============
Consolidated Statements of Operations
(unaudited)
----------------------------------------------------------------------
For the three months For the twelve months
ended ended
December 31 December 31
------------------------- -------------------------
$ in thousands,
except share and
per share amounts 2005 2004 2005 2004
----------------------------------------------------------------------
Revenues
Rentals $129,857 $118,786 $499,918 $454,241
Recoveries from
tenants 30,329 26,223 111,099 94,097
Parking and
other 27,118 22,821 104,090 88,005
Fee income 1,740 1,754 6,887 11,048
------------ ------------ ------------ ------------
Total Revenues 189,044 169,584 721,994 647,391
------------ ------------ ------------ ------------
Expenses
Operating 69,966 59,622 249,245 216,935
Property taxes 22,345 18,754 88,112 72,579
General and
administrative 10,519 12,463 38,653 39,759
Depreciation and
amortization 48,047 37,593 170,753 132,644
Provision for
loss on real
estate - - - 12,749
Provision for
loss on
investment - - - 14,558
------------ ------------ ------------ ------------
Total Expenses 150,877 128,432 546,763 489,224
------------ ------------ ------------ ------------
Operating income 38,167 41,152 175,231 158,167
------------ ------------ ------------ ------------
Other income
(Expense)
Interest and
other income 1,330 1,757 6,597 5,280
Foreign currency
exchange gain - - - 3,340
Loss on early
debt retirement (922) (2,656) (6,842) (7,032)
Recovery on
insurance
claims - 24 74 739
Interest expense (34,762) (35,730) (138,564) (137,398)
Derivative gain - 3,753 - 1,073
Lawsuit and
other
settlements 1,653 3,582 3,288 3,676
------------ ------------ ------------ ------------
Total Other
Expense (32,701) (29,270) (135,447) (130,322)
------------ ------------ ------------ ------------
Income before
Income Taxes,
Minority
Interest, (Loss)
Income from
Unconsolidated
Real Estate Joint
Ventures,
Discontinued
Operations and
(Loss) Gain on
Disposition of
Real Estate, Net 5,466 11,882 39,784 27,845
Benefit
(Provision) for
income and other
corporate taxes,
net 508 (1,778) 3,754 (4,379)
Minority interest 10 (880) (1,048) (1,834)
(Loss) Income from
unconsolidated
real estate joint
ventures (2,679) 3,995 9,195 15,243
------------ ------------ ------------ ------------
Income from
Continuing
Operations 3,305 13,219 51,685 36,875
Discontinued
Operations
Income (Loss)
from
discontinued
operations 2,154 8,457 19,614 (68,428)
Gain on
disposition of
discontinued
real estate,
net 93,590 77,667 133,075 125,508
------------ ------------ ------------ ------------
Income Before
(Loss) Gain on
Disposition of
Real Estate, Net 99,049 99,343 204,374 93,955
(Loss) Gain on
disposition of
real estate, net (21) 4,764 145 7,358
------------ ------------ ------------ ------------
Net Income 99,028 104,107 204,519 101,313
------------ ------------ ------------ ------------
Special voting and
Class F
convertible
stockholders'
dividends (742) (909) (4,438) (4,824)
------------ ------------ ------------ ------------
Net Income
Available to
Common
Stockholders $98,286 $103,198 $200,081 $96,489
============ ============ ============ ============
Consolidated Statements of Operations
(continued)
(unaudited)
----------------------------------------------------------------------
For the three months For the twelve months
ended ended
December 31 December 31
------------------------- -------------------------
$ in thousands,
except share and
per share amounts 2005 2004 2005 2004
----------------------------------------------------------------------
Earnings per
common share
Income from
Continuing
Operations
Available to
Common
Stockholders
per Weighted
Average
Common Share
Outstanding:
Basic $0.02 $0.11 $0.31 $0.26
Diluted $0.02 $0.11 $0.30 $0.26
Net Income
Available to
Common
Stockholders
per Weighted
Average
Common Share
Outstanding:
Basic $0.63 $0.68 $1.29 $0.64
Diluted $0.62 $0.67 $1.27 $0.63
Weighted average
shares
outstanding
Basic 156,203,111 151,884,824 154,847,663 151,596,514
Diluted 159,191,349 153,470,355 157,877,915 153,109,854
Earnings Per Share Calculation
(unaudited)
----------------------------------------------------------------------
For the three months For the twelve months
ended ended
December 31 December 31
------------------------- -------------------------
$ in thousands,
except share and
per share amounts 2005 2004 2005 2004
----------------------------------------------------------------------
Numerator:
Income from
continuing
operations $3,305 $13,219 $51,685 $36,875
(Loss) Gain on
disposition of
real estate, net (21) 4,764 145 7,358
Less: Special
voting and Class
F convertible
stockholders'
dividends (742) (909) (4,438) (4,824)
------------ ------------ ------------ ------------
Income from
Continuing
Operations
Available to
Common
Stockholders 2,542 17,074 47,392 39,409
Discontinued
operations 95,744 86,124 152,689 57,080
------------ ------------ ------------ ------------
Net Income
Available to
Common
Stockholders $98,286 $103,198 $200,081 $96,489
============ ============ ============ ============
Denominator:
Weighted average
shares
outstanding
Basic 156,203,111 151,884,824 154,847,663 151,596,514
Dilutive effect of
securities 2,988,238 1,585,531 3,030,252 1,513,340
------------ ------------ ------------ ------------
Diluted 159,191,349 153,470,355 157,877,915 153,109,854
============ ============ ============ ============
Basic Earnings per
Common Share
Income from
continuing
operations
available to
common
stockholders $0.02 $0.11 $0.31 $0.26
Discontinued
operations 0.61 0.57 0.99 0.38
------------ ------------ ------------ ------------
Net Income
Available to
Common
Stockholders per
Weighted Average
Common Share
Outstanding -
Basic (1) $0.63 $0.68 $1.29 $0.64
============ ============ ============ ============
Diluted Earnings
per Common Share
Income from
continuing
operations
available to
common
stockholders $0.02 $0.11 $0.30 $0.26
Discontinued
operations 0.60 0.56 0.97 0.37
------------ ------------ ------------ ------------
Net Income
Available to
Common
Stockholders per
Weighted Average
Common Share
Outstanding -
Diluted (1) $0.62 $0.67 $1.27 $0.63
============ ============ ============ ============
(1) May not total the sum of the per share components due to rounding.
*T
Reconciliation of Funds from Operations
Funds from operations is a non-GAAP financial measure. Funds from
operations is defined by the Board of Governors of the National
Association of Real Estate Investment Trusts, or NAREIT, as net
income, computed in accordance with accounting principles generally
accepted in the United States, or GAAP, excluding gains or losses from
sales of properties and cumulative effect of a change in accounting
principle, plus real estate related depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are
calculated to reflect funds from operations on the same basis.
The Company believes that funds from operations is helpful to
investors as one of several measures of the performance of an equity
REIT. The Company further believes that by excluding the effect of
depreciation, amortization and gains or losses from sales of real
estate, all of which are based on historical costs and which may be of
limited relevance in evaluating current performance, funds from
operations can facilitate comparisons of operating performance between
periods and between other equity REITs. Investors should review funds
from operations, along with GAAP net income and cash flows from
operating activities, investing activities and financing activities,
when trying to understand an equity REIT's operating performance. As
discussed above, the Company computes funds from operations in
accordance with current standards established by NAREIT, which may not
be comparable to funds from operations reported by other REITs that do
not define the term in accordance with the current NAREIT definition
or that interpret the current NAREIT definition differently than the
Company does. While funds from operations is a relevant and widely
used measure of operating performance of equity REITs, it does not
represent cash generated from operating activities in accordance with
GAAP, nor does it represent cash available to pay distributions and
should not be considered as an alternative to net income, determined
in accordance with GAAP, as an indication of the Company's financial
performance, or to cash flows from operating activities, determined in
accordance with GAAP, as a measure of the Company's liquidity, nor is
it indicative of funds available to fund the Company's cash needs,
including its ability to make cash distributions.
The following tables set forth the reconciliation of the Company's
funds from operations from its net income available to common
stockholders, both on an aggregate and per share basis, for the three
and twelve months ended December 31, 2005 and 2004:
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*T
Reconciliation of Funds from Operations
(unaudited)
----------------------------------------------------------------------
For the three months For the twelve months
ended ended
December 31 December 31
------------------------- -------------------------
$ in thousands,
except share and
per share amounts 2005 2004 2005 2004
----------------------------------------------------------------------
Net income
available to
common
stockholders $98,286 $103,198 $200,081 $96,489
Add/(deduct):
Loss (Gain) on
disposition of
real estate,
net 21 (4,764) (145) (7,358)
Gain on
disposition of
discontinued
real estate,
net (93,590) (77,667) (133,075) (125,508)
Gain on
disposition of
real estate
from
unconsolidated
real estate
joint ventures - - - (704)
Depreciation and
amortization
(real estate
related)
including share
of
unconsolidated
real estate
joint ventures
and
discontinued
operations 59,929 43,863 199,826 178,847
------------ ------------ ------------ ------------
Funds from
operations
available to
common
stockholders $64,646 $64,630 $266,687 $141,766
============ ============ ============ ============
Reconciliation of Funds from Operations per Share, Basic
(unaudited)
----------------------------------------------------------------------
For the three months For the twelve months
ended ended
December 31 December 31
------------------------- -------------------------
$ in thousands,
except share and
per share amounts 2005 2004 2005 2004
----------------------------------------------------------------------
Net income
available to
common
stockholders $0.63 $0.68 $1.29 $0.64
Add/(deduct):
Loss (Gain) on
disposition of
real estate,
net - (0.03) - (0.05)
Gain on
disposition of
discontinued
real estate,
net (0.60) (0.51) (0.86) (0.83)
Gain on
disposition of
real estate
from
unconsolidated
real estate
joint ventures - - - -
Depreciation and
amortization
(real estate
related)
including share
of
unconsolidated
real estate
joint ventures
and
discontinued
operations 0.38 0.29 1.29 1.18
------------ ------------ ------------ ------------
Funds from
operations
available to
common
stockholders per
weighted average
common share
outstanding -
basic (a) $0.41 $0.43 $1.72 $0.94
============ ============ ============ ============
Weighted average
shares
outstanding -
basic. 156,203,111 151,884,824 154,847,663 151,596,514
============ ============ ============ ============
(a) Funds from operations available to common stockholders per
weighted average common share outstanding-basic may not total the
sum of the per share components in the reconciliation due to
rounding.
Reconciliation of Funds from Operations per Share, Diluted
(unaudited)
----------------------------------------------------------------------
For the three months For the twelve months
ended ended
December 31 December 31
------------------------- -------------------------
$ in thousands,
except share and
per share amounts 2005 2004 2005 2004
----------------------------------------------------------------------
Net income
available to
common
stockholders $0.62 $0.67 $1.27 $0.63
Add/(deduct):
Loss (Gain) on
disposition of
real estate,
net - (0.03) - (0.05)
Gain on
disposition of
discontinued
real estate,
net (0.59) (0.51) (0.84) (0.82)
Gain on
disposition of
real estate
from
unconsolidated
real estate
joint ventures - - - -
Depreciation and
amortization
(real estate
related)
including share
of
unconsolidated
real estate
joint ventures
and
discontinued
operations 0.38 0.29 1.27 1.17
------------ ------------ ------------ ------------
Funds from
operations
available to
common
stockholders per
weighted average
common share
outstanding -
diluted (a) $0.41 $0.42 $1.69 $0.93
============ ============ ============ ============
Weighted average
shares
outstanding -
diluted 159,191,349 153,470,355 157,877,915 153,109,854
============ ============ ============ ============
(a) Funds from operations available to common stockholders per
weighted average common share outstanding-diluted may not total
the sum of the per share components in the reconciliation due to
rounding.
Earnings and FFO per Share Guidance
(unaudited)
----------------------------------------------------------------------
The following table sets forth the reconciliation of the Company's
guidance on FFO per diluted share with net income available to common
stockholders per diluted share for 2006.
Full Year 2006
-----------------------
Low - High
---------- ----------
Projected net income available to common
stockholders (diluted) (1) $0.28 - $0.36
Add:
Projected depreciation and amortization (real
estate related) including share of
unconsolidated real estate joint ventures 1.32 - 1.34
---------- ----------
Projected FFO available to common stockholders
(diluted) (1) $1.60 - $1.70
========== ==========
(1) The guidance for 2006 net income available to common stockholders
and FFO includes the impact of anticipated property dispositions
on operating income, but does not include any gains or losses from
such dispositions. In addition, the guidance does not reflect any
estimates for future gains or losses on the possible disposition
of real estate. The guidance also does not include any possible
future provision for loss or recovery of provision for loss on
real estate. The Company is not able to assess at this time
whether or not gains or losses, or provision for loss or recovery
of provision for loss, will be recognized during 2006.
Additionally, the guidance does not include the operating results
from the pending acquisition of a portfolio comprised of thirteen
office properties currently owned by Arden Realty, Inc.
*T