Douglas Emmett, Inc. Announces Second Quarter 2007 Results
Reports FFO of $0.29 per Diluted Share
SANTA MONICA, Calif., Aug. 7 /PRNewswire-FirstCall/ -- Douglas Emmett,
Inc. (NYSE: DEI), a real estate investment trust (REIT) focused on owning
and acquiring top-tier office properties and multifamily communities within
targeted submarkets, today announced its second quarter financial results
for the quarter ended June 30, 2007.
Financial Results
Funds From Operations (FFO) for the quarter ended, June 30, 2007
totaled $48.7 million, or $0.29 per diluted share. For the six months ended
June 30, 2007, FFO totaled $95.1 million, or $0.57 per diluted share. The
Company reported a net loss of $1.3 million, or approximately $0.01 per
diluted share, for the quarter ended June 30, 2007 and a net loss of $4.5
million, or $0.04 per diluted share, for the six months ended June 30,
2007.
Company Operations
As of June 30, 2007, the Company's office portfolio was 95.7% leased
compared to 95.2% as of March 31, 2007. The Company's office portfolio was
93.0% occupied as of June 30, 2007 compared to 93.8% occupied as of March
31, 2007. The occupied percentage represents the leased portion of the
Company's office portfolio less those leases where the rent commencement
date has yet to occur. During the second quarter, the Company signed 156
new and renewal leases, totaling approximately 570,405 square feet,
resulting in overall positive net absorption of 51,945 square feet. The
Company's multifamily portfolio was 99.5% leased at June 30, 2007.
Acquisitions
On May 11, 2007, the Company acquired a Class A office building located
at 1801 Century Park West in Century City, California for a contract price
of $32 million. The Company obtained the ground leasehold in the property
and the option to acquire fee title to the land for a fixed price of
$800,000. The building is approximately 50,000 rental square feet and is
currently 100% leased through December 2019.
Financing Activity
During the second quarter, the Company increased its borrowings with
Fannie Mae by $150 million. The annual interest rate on these incremental
borrowings taking into account the applicable floating-to-fixed interest
rate hedges is approximately 5.87%. The maturity dates of certain of the
Company's Fannie Mae loan facilities were also extended. As a result, the
maturity dates of the Company's Fannie Mae loan facilities now range from
June 1, 2012 to June 1, 2017.
Dividends
During the quarter, the Company's Board of Directors approved a $0.175
per share quarterly cash dividend, which was payable on July 16, 2007 to
shareholders of record as of June 29, 2007. On an annualized basis, the
dividend represents a distribution of $0.70 per common share.
Conference Call and Web Cast Information
A conference call to discuss the Company's 2007 second quarter results
is scheduled for Wednesday, August 8, 2007 at 2:00 p.m. Eastern Time, or
11:00 a.m. Pacific Time. Interested parties can access the live call via
the Internet call by going to the Investor Relations section of the
Company's Web site at http://www.douglasemmett.com or by dialing into the
call at 800.240.5318 (domestic) or 303.262.2142 (international). A
rebroadcast of the live call will be available via the web site for 90
days. A digital replay will be available through Wednesday, August 15, 2007
at 800.405.2236 (domestic) or 303.590.3000 (international) and using the
passcode 11092783.
Supplemental Information
Supplemental financial information for the Company's first quarter
financial results can be accessed on the Company's Web site under the
investors section at http://www.douglasemmett.com.
About Douglas Emmett, Inc.
Douglas Emmett, Inc. (NYSE: DEI) is a fully integrated,
self-administered and self-managed real estate investment trust (REIT), and
one of the largest owners and operators of high-quality office and
multifamily properties located in targeted submarkets in California and
Hawaii. The Company's property portfolio currently consists of 47 office
properties with approximately 11.6 million rentable square feet, nine
multifamily properties with a total of 2,868 units, and interests in three
land parcels. For more information on Douglas Emmett, please visit the
Company's Web site at http://www.douglasemmett.com.
Safe Harbor Statement
Except for the historical facts, the statements in this press release
regarding Douglas Emmett's business activities are forward-looking
statements based on the beliefs of, assumptions made by, and information
currently available to us about known and unknown risks, trends,
uncertainties and factors that are beyond our control or ability to
predict. Although we believe that our assumptions are reasonable, they are
not guarantees of future performance and some will inevitably prove to be
incorrect. As a result, our actual future results can be expected to differ
from our expectations, and those differences may be material. Accordingly,
investors should use caution in relying on past forward-looking statements
to anticipate future results or trends. For a discussion of some of the
risks and uncertainties which could cause actual results to differ from
those contained in the forward-looking statements, see "Risk Factors" in
our Annual Report on Form 10-K filed with the Securities and Exchange
Commission.
Mary Jensen, Vice President - Investor Relations
310.255.7751 or mjensen@douglasemmett.com
--tables follow--
Douglas Emmett, Inc.
Consolidated Balance Sheets
(in thousands, except for share data)
June 30, December 31,
2007 2006
(unaudited)
Assets
Investments in real estate:
Land $817,249 $813,599
Buildings and improvements 4,893,677 4,863,955
Tenant improvements and leasing costs 432,998 411,063
6,143,924 6,088,617
Less: accumulated depreciation (134,135) (32,521)
Net investment in real estate 6,009,789 6,056,096
Cash and cash equivalents 65,961 4,536
Tenant receivables, net 857 4,160
Deferred rent receivables 12,594 3,587
Interest rate contracts 142,639 76,915
Acquired lease intangible assets, net 29,042 34,137
Other assets 21,386 20,687
Total Assets $6,282,268 $6,200,118
Liabilities
Secured notes payable $2,900,000 $2,760,000
Unamortized non-cash debt premium 27,497 29,702
Interest rate contracts 47,702 6,278
Accrued interest payable 12,735 12,701
Acquired lease intangible liabilities, net 238,617 263,649
Accounts payable and accrued expenses 38,330 39,035
Security deposits 29,839 28,670
Dividends payable 19,982 13,801
Total Liabilities 3,314,702 3,153,836
Minority interests 894,982 934,509
Stockholders' equity
Common stock 1,142 1,150
Additional paid-in capital 2,144,556 2,144,600
Accumulated other comprehensive income 31,200 415
Accumulated deficit (104,314) (34,392)
Total stockholders' equity 2,072,584 2,111,773
Total liabilities and stockholders'
equity $6,282,268 $6,200,118
Douglas Emmett, Inc.
Consolidated Statements of Income
(unaudited and in thousands, except per share data)
Three Months Ended
June 30, 2007
Revenues
Office rental:
Rental revenues $92,884
Tenant recoveries 5,362
Parking and other income 11,098
Total office revenues 109,344
Multifamily rental:
Rental revenues 16,879
Parking and other income 526
Total multifamily revenues 17,405
Total revenues 126,749
Operating Expenses
Office expenses 31,124
Multifamily expenses 3,872
General and administrative expenses 5,120
Depreciation and amortization 50,494
Total operating expenses 90,610
Operating income 36,139
Interest and other income 372
Interest expense (38,313)
Loss before minority interests (1,802)
Minority interests 542
Net loss $(1,260)
Net loss per common share - diluted $(0.01)
Weighted average shares of common stock
outstanding - diluted 114,862
FFO Reconciliation
Three Months Ended
June 30, 2007
Funds From Operations (FFO)(1):
Net loss $(1,260)
Depreciation and amortization of real estate
assets 50,494
Minority interests (542)
FFO $48,692
Weighted average common shares and units outstanding
(in thousands) - diluted 165,709
FFO per share - diluted $0.29
(1) We calculate funds from operations before minority interest (FFO) in
accordance with the standards established by the National Association
of Real Estate Investment Trusts (NAREIT). FFO represents net income
(loss), computed in accordance with accounting principles generally
accepted in the United States of America (GAAP), excluding gains (or
losses) from sales of depreciable operating property, real estate
depreciation and amortization (excluding amortization of deferred
financing costs) and after adjustments for unconsolidated partnerships
and joint ventures. The Company uses FFO as a supplemental performance
measure because, in excluding real estate depreciation and
amortization and gains and losses from property dispositions, it
provides a performance measure that, when compared year over year,
captures trends in occupancy rates, rental rates and operating costs.
We also believe that, as a widely recognized measure of the
performance of REITs, FFO will be used by investors as a basis to
compare our operating performance with that of other REITs. However,
because FFO excludes depreciation and amortization and captures
neither the changes in the value of our properties that results from
use or market conditions nor the level of capital expenditures and
leasing commissions necessary to maintain the operating performance of
our properties, all of which have real economic effect and could
materially impact our results from operations, the utility of FFO as a
measure of our performance is limited. Other equity REITs may not
calculate FFO in accordance with the NAREIT definition and,
accordingly, our FFO may not be comparable to such other REITs' FFO.
Accordingly, FFO should be considered only as a supplement to net
income as a measure of our performance. FFO should not be used as a
measure of our liquidity, nor is it indicative of funds available to
fund our cash needs, including our ability to pay dividends. FFO
should not be used as a supplement to or substitute for cash flow from
operating activities computed in accordance with GAAP. FFO per
share - diluted is calculated by dividing FFO by the average number of
fully diluted shares outstanding during the quarter ended June 30,
2007.
SOURCE Douglas Emmett, Inc.
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