Cogdell Spencer Announces Fourth Quarter 2010 Results and Completion of Strategic Plan
CHARLOTTE, N.C., March 3, 2011 /PRNewswire/ --
Recent Highlights
- Strategic plan completed and approved
- Corporate governance changes announced
- Term loan repaid
- Revolving line of credit renewed
- Additional reporting metrics released
- Fourth quarter 2010 financial results announced
Cogdell Spencer Inc. (the "Company" or "we") (NYSE: CSA), healthcare's preferred real estate partner, is a REIT focused on planning, owning, developing, constructing, and managing medical facilities. Through strategically managed, customized facilities, we help our clients deliver superior healthcare.
Strategic Plan Completed and Approved
Through a defined and disciplined process, we completed our strategic plan.
Corporate Governance Changes Announced
We announced the 2011 slate of Directors nominees are John R. Georgius, Richard B. Jennings, Christopher E. Lee, David J. Lubar, Richard C. Neugent, Randolph D. Smoak, Jr. M.D., and Raymond W. Braun. We also adopted a minimum stock ownership plan for management and Directors.
Term Loan Repaid
In December 2010, we completely repaid the $50.0 million Term Loan.
Revolving Line of Credit Renewed
On March 1, 2011, we amended and restated our Revolving Line of Credit and it now matures in March 2014 with a one-year extension option.
Additional Reporting Metrics Released
We released metrics for same store net operating income and our design-build pipeline. These metrics are in our Supplemental Operating and Financial Data located in the Investor Relations section of our Web site.
Recent highlights will be covered in detail on our Fourth Quarter 2010 Earnings Call and Webcast. We encourage people to access the webcast for our slide show presentation.
Conference Call and Webcast
The webcast is accessible live via the Internet at www.cogdell.com through the "Fourth Quarter 2010 Earnings Call" link on the Investor Relations homepage. In addition to webcast access, you may attend the Fourth Quarter 2010 Earnings Call on Friday, March 4, 2011 at 10:00 a.m. Eastern Time (ET) via teleconference. The number to call is (877) 317-6789 (domestic) or +1 (412) 317-6789 (international). A conference identification number is not required.
An audio playback will be available until March 28, 2011 at 9:00 a.m. ET. To access the playback, please dial (877) 344-7529 (domestic) or +1 (412) 317-0088 (international) and enter the passcode: 447535. The replay can also be accessed for one year via the Internet at www.cogdell.com through the "Fourth Quarter 2010 Earnings Call" link on the Investor Relations page, under Press Releases and News and Audio Archives.
Fourth Quarter 2010 Financial Results
Results for the three months and year ended December 31, 2010
Funds from Operations Modified ("FFOM") and FFOM per share and operating partnership unit for the three months and year ended December 31, 2010, are as follows (in thousands, except per share and operating partnership unit data):
For the Three Months Ended |
For the Year Ended |
||||||||
December 31, 2010 |
December 31, 2009 |
December 31, 2010 |
December 31, 2009 |
||||||
FFOM |
$ (98,878) |
$ 8,812 |
$ (89,243) |
$ (71,132) |
|||||
Non-recurring events and impairment charges (summarized below) |
105,872 |
(905) |
119,265 |
102,361 |
|||||
FFOM, excluding non-recurring events and impairment charges |
$ 6,994 |
$ 7,907 |
$ 30,022 |
$ 31,229 |
|||||
Per share and operating partnership unit data: |
|||||||||
FFOM |
$ (1.69) |
$ 0.17 |
$ (1.62) |
$ (1.75) |
|||||
Non-recurring events and impairment charges (summarized below) |
1.81 |
(0.01) |
2.16 |
2.52 |
|||||
FFOM, excluding non-recurring events and impairment charges |
0.12 |
0.16 |
0.54 |
0.77 |
|||||
FFOM adds back to traditionally defined Funds from Operations (FFO) non-cash amortization of non-real estate related intangible assets associated with purchase accounting. A reconciliation of net income (loss) to FFOM and FFO for the three months and year ended December 31, 2010 and 2009 is set forth as an attachment to this press release.
FFO and FFO per share and operating partnership unit for the three months and year ended December 31, 2010, are as follows (in thousands, except per share and operating partnership unit data):
For the Three Months Ended |
For the Year Ended |
||||||||
December 31, 2010 |
December 31, 2009 |
December 31, 2010 |
December 31, 2009 |
||||||
FFO |
$ (99,252) |
$ 8,782 |
$ (90,738) |
$ (73,897) |
|||||
Non-recurring events and impairment charges (summarized below) |
105,872 |
(905) |
119,265 |
102,361 |
|||||
FFO, excluding non-recurring events and impairment charges |
$ 6,620 |
$ 7,877 |
$ 28,527 |
$ 28,464 |
|||||
Per share and operating partnership unit data: |
|||||||||
FFO |
$ (1.70) |
$ 0.17 |
$ (1.64) |
$ (1.82) |
|||||
Non-recurring events and impairment charges (summarized below) |
1.81 |
(0.01) |
2.16 |
2.52 |
|||||
FFO, excluding non-recurring events and impairment charges |
0.11 |
0.16 |
0.52 |
0.70 |
|||||
Net income (loss) attributable to our common shareholders and net income (loss) attributable to our common shareholders per share for the three months and year ended December 31, 2010, are as follows (in thousands, except per share data):
For the Three Months Ended |
For the Year Ended |
||||||||
December 31, 2010 |
December 31, 2009 |
December 31, 2010 |
December 31, 2009 |
||||||
Net income (loss) attributable to Cogdell Spencer Inc. common shareholders |
$ (92,469) |
$ 1,556 |
$ (103,043) |
$ (69,728) |
|||||
Non-recurring events and impairment charges (summarized below) attributable to Cogdell Spencer Inc. common shareholders |
92,003 |
(766) |
103,454 |
82,298 |
|||||
Net income (loss) attributable to Cogdell Spencer Inc. common shareholders, excluding non-recurring events and impairment charges |
$ (466) |
$ 790 |
$ 411 |
$ 12,570 |
|||||
Per share data: |
|||||||||
Net income (loss) attributable to Cogdell Spencer Inc. common shareholders |
$ (1.82) |
$ 0.04 |
$ (2.17) |
$ (2.14) |
|||||
Non-recurring events and impairment charges (summarized below) attributable to Cogdell Spencer Inc. common shareholders |
1.81 |
(0.02) |
2.18 |
2.52 |
|||||
Net income (loss) attributable to Cogdell Spencer Inc. common shareholders, excluding non-recurring events and impairment charges |
(0.01) |
0.02 |
0.01 |
0.38 |
|||||
As of December 31, 2010, we owned and/or managed 113 medical office buildings and healthcare related facilities, totaling 5.9 million net rentable square feet. Our portfolio consists of:
- 65 consolidated wholly-owned and joint venture properties, comprising a total of approximately 3.6 million net rentable square feet, 90.6% leased;
- One wholly-owned property in the lease-up phase, comprising approximately 0.1 million net rentable square feet, 75% leased and income producing with the remaining 25% leased and under construction for a third quarter 2011 scheduled date of occupancy;
- Three unconsolidated joint venture properties comprising a total of approximately 0.2 million net rentable square feet; and
- 44 properties managed for third party clients comprising a total of approximately 2.0 million net rentable square feet.
Non-Recurring Events and Impairment Charges
The following table summarizes our non-recurring events and impairment charges for the three months and year ended December 31, 2010 (in thousands):
For the Three Months Ended |
For the Year Ended |
||||||||
December 31, |
December 31, |
December 31, |
December 31, |
||||||
Goodwill and intangible asset impairment charges, net of income tax benefit |
$ 93,826 |
$ - |
$ 104,674 |
$ 101,746 |
|||||
Deferred tax asset valuation allowance |
10,553 |
- |
10,553 |
- |
|||||
Mr. Cogdell's retirement compensation expense |
1,493 |
- |
1,493 |
- |
|||||
Mr. Spencer's retirement compensation expense, net of income tax benefit |
- |
- |
2,545 |
- |
|||||
Strategic planning professional fees |
- |
2,641 |
- |
2,641 |
|||||
Debt extinguishment and interest rate derivative expense, net of tax benefit |
- |
- |
- |
1,520 |
|||||
Impairment of real estate property held for sale |
- |
1,359 |
- |
1,359 |
|||||
Gain on settlement from MEA Holdings, Inc. transaction |
- |
(4,905) |
- |
(4,905) |
|||||
For the three months ended December 31, 2010, we recorded goodwill and intangible asset impairment charges, a deferred tax asset valuation allowance, and retirement compensation expense related to Mr. Cogdell. The impairment and the deferred tax asset valuation allowance primarily related to the Design-Build and Development business segment.
For the year ended December 31, 2010, in addition to the charges discussed above, we also recorded a second quarter goodwill and intangible asset impairment charges and retirement compensation expense related to the retirement of the Company's former Chief Executive Officer, Frank Spencer. The impairment related to the Design-Build and Development business segment.
Preferred Stock Issuance
In December 2010, we issued approximately 2.6 million shares of Series A 8.500% cumulative redeemable perpetual preferred stock, resulting in net proceeds of approximately $62.6 million. The net proceeds were used to repay the senior secured term facility (the "Term Loan"), to reduce borrowings under the Credit Facility, to fund build to suit development projects, and for working capital and other general corporate purposes.
Mortgage Note Payable
In November 2010, we entered into a mortgage note payable on the St. Francis Outpatient Surgery Center property. The $13.0 million note matures in November 2011, has an interest rate of LIBOR plus 3.25%, and requires monthly principal and interest payments based on a 30-year amortization.
Dividend
On December 17, 2010, we announced our Board of Directors declared a quarterly dividend of $0.10 per share and operating partnership unit that was paid in cash on January 19, 2011 to holders of record on December 27, 2010. The dividend covered the fourth quarter of 2010.
On February 1, 2011, we announced that our Board of Directors declared a quarterly dividend of $0.419 per share on our Series A cumulative redeemable perpetual preferred shares for the period from December 20, 2010, the date of original issue, to February 28, 2011. The dividend was paid on March 1, 2011, to holders of record on February 15, 2011.
Outlook
Our management team expects that FFOM per share and operating partnership unit for the year ending December 31, 2011 will be in a range of $0.33 to $0.40. Our guidance assumes the following: (i) acquisitions of $5.0 million to $25.0 million; (ii) no dispositions; (iii) developments of $40.0 million to $60.0 million; (iv) third party design-build revenue of $90.0 million to $120.0 million; (v) design-build gross margins of 13.0% to 17.0%; and (vi) corporate general and administrative expenses of $9.5 million to $10.5 million. Our guidance excludes any additional capital transaction or impairments.
A reconciliation of the range of projected net income (loss) to projected FFO and FFOM for the year ending December 31, 2011 is set forth below:
Guidance Range for the |
|||||
Year Ending December 31, 2011 |
|||||
Low |
High |
||||
(In thousands, except per share and operating partnership unit data) |
|||||
Net income (loss) |
$ (500) |
- - |
$ 1,500 |
||
Plus real estate related depreciation and amortization |
28,500 |
- - |
30,500 |
||
Less noncontrolling interests in real estate partnerships, before real estate |
|||||
related depreciation and amortization |
(2,500) |
- - |
(2,500) |
||
Less dividends on preferred stock |
(6,300) |
(6,300) |
|||
Funds from Operations (FFO) |
19,200 |
- - |
23,200 |
||
Plus amortization of intangibles related to purchase accounting, net of income tax benefit |
500 |
- - |
500 |
||
Funds from Operations Modified (FFOM) |
$ 19,700 |
- - |
$ 23,700 |
||
FFO per share and unit - diluted |
$ 0.32 |
- - |
$ 0.39 |
||
FFOM per share and unit - diluted |
$ 0.33 |
- - |
$ 0.40 |
||
Weighted average shares and units outstanding - basic and diluted |
59,500 |
- - |
59,500 |
||
Supplemental operating and financial data are available in the Investor Relations section of our Web site at www.cogdell.com.
FFO is a supplemental non-GAAP financial measure used by the real estate industry to measure the operating performance of real estate companies. FFOM adds back to traditionally defined FFO non-cash amortization of non-real estate related intangible assets associated with purchase accounting. We present FFO and FFOM because we consider them important supplemental measures of operational performance. We believe FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. We believe that FFOM allows securities analysts, investors and other interested parties to evaluate current period results to results prior to the acquisition of MEA Holdings, Inc. FFO and FFOM are intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and FFOM excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, they provide performance measures that, when compared year over year, reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing a perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO and FFOM utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. We adjust the NAREIT definition to add back noncontrolling interests in consolidated real estate partnerships before real estate related depreciation and amortization and deduct dividends on preferred stock. Further, FFO and FFOM do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO and FFOM should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our performance, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. A reconciliation from GAAP net loss to FFO and FFOM is included as an attachment to this press release.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements reflect our views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ materially. Factors that may contribute to these differences include, but are not limited to the following: our business strategy; our ability to comply with financial covenants in our debt instruments; our access to capital; our ability to obtain future financing arrangements; estimates relating to our future distributions; our understanding of our competition; our ability to renew our ground leases; legislative and regulatory changes (including changes to laws governing the taxation of REITs and individuals); increases in costs of borrowing as a result of changes in interest rates and other factors; our ability to maintain our qualification as a REIT due to economic, market, legal, tax or other considerations; changes in the reimbursement available to our tenants by government or private payors; our tenants' ability to make rent payments; defaults by tenants and customers; customers' access to financing; delays in project starts and cancellations by customers; market trends; and projected capital expenditures. For a further list and description of such risks and uncertainties, see our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2009 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. Although we believe the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be realized. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Cogdell Spencer Inc. |
|||||
Condensed Consolidated Balance Sheets |
|||||
(In thousands) |
|||||
(unaudited) |
|||||
December 31, 2010 |
December 31, 2009 |
||||
Assets |
|||||
Real estate properties: |
|||||
Operating real estate properties |
$ 635,663 |
$ 561,124 |
|||
Less: Accumulated depreciation |
(119,141) |
(93,247) |
|||
Total operating real estate properties, net |
516,522 |
467,877 |
|||
Construction in progress |
22,075 |
43,338 |
|||
Total real estate properties, net |
538,597 |
511,215 |
|||
Cash and cash equivalents |
12,203 |
25,914 |
|||
Restricted cash |
6,794 |
3,060 |
|||
Tenant and accounts receivable, net |
11,383 |
12,993 |
|||
Goodwill |
22,882 |
108,683 |
|||
Trade names and trademarks |
- |
41,240 |
|||
Intangible assets, net |
18,601 |
21,742 |
|||
Other assets |
23,684 |
25,599 |
|||
Other assets - held for sale |
- |
2,217 |
|||
Total assets |
$ 634,144 |
$ 752,663 |
|||
Liabilities and Equity |
|||||
Mortgage notes payable |
$ 317,303 |
$ 280,892 |
|||
Revolving credit facility |
45,000 |
80,000 |
|||
Term loan |
- |
50,000 |
|||
Accounts payable |
11,368 |
15,293 |
|||
Billings in excess of costs and estimated earnings on uncompleted contracts |
1,930 |
13,189 |
|||
Deferred income taxes |
- |
15,993 |
|||
Other liabilities |
39,819 |
47,312 |
|||
Other liabilities - held for sale |
- |
2,204 |
|||
Total liabilities |
415,420 |
504,883 |
|||
Commitments and contingencies |
|||||
Equity: |
|||||
Cogdell Spencer Inc. stockholders' equity: |
|||||
Preferred stock, $0.01 par value; 50,000 shares authorized: |
|||||
8.5000% Series A Cumulative Redeemable Perpetual Preferred Shares (liquidation preference $25.00 |
65,000 |
- |
|||
Common stock, $0.01 par value, 200,000 shares authorized, 50,870 and 42,729 shares issued and |
509 |
427 |
|||
Additional paid-in capital |
417,960 |
370,593 |
|||
Accumulated other comprehensive loss |
(3,339) |
(1,861) |
|||
Accumulated deficit |
(286,752) |
(164,321) |
|||
Total Cogdell Spencer Inc. stockholders' equity |
193,378 |
204,838 |
|||
Noncontrolling interests: |
|||||
Real estate partnerships |
6,452 |
5,220 |
|||
Operating partnership |
18,894 |
37,722 |
|||
Total noncontrolling interests |
25,346 |
42,942 |
|||
Total equity |
218,724 |
247,780 |
|||
Total liabilities and equity |
$ 634,144 |
$ 752,663 |
|||
Cogdell Spencer Inc. |
|||||||||
Condensed Consolidated Statements of Operations |
|||||||||
(In thousands, except per share amounts) |
|||||||||
(unaudited) |
|||||||||
For the Three Months Ended |
For the Year Ended |
||||||||
December 31, |
December 31, |
December 31, |
December 31, |
||||||
Revenues: |
|||||||||
Rental revenue |
$ 22,799 |
$ 20,375 |
$ 87,803 |
$ 79,486 |
|||||
Design-Build contract revenue and other sales |
24,850 |
30,016 |
91,256 |
143,416 |
|||||
Property management and other fees |
824 |
807 |
3,212 |
3,336 |
|||||
Development management and other income |
25 |
98 |
146 |
3,363 |
|||||
Total revenues |
48,498 |
51,296 |
182,417 |
229,601 |
|||||
Expenses: |
|||||||||
Property operating and management |
8,012 |
8,021 |
33,664 |
31,810 |
|||||
Design-Build contracts and development management |
22,169 |
21,388 |
72,001 |
113,961 |
|||||
Selling, general, and administrative |
8,561 |
11,067 |
30,411 |
32,285 |
|||||
Depreciation and amortization |
8,283 |
7,470 |
32,841 |
34,502 |
|||||
Impairment charges |
113,406 |
- |
127,041 |
120,920 |
|||||
Total expenses |
160,431 |
47,946 |
295,958 |
333,478 |
|||||
Income (loss) from continuing operations before other income (expense) and income tax benefit |
(111,933) |
3,350 |
(113,541) |
(103,877) |
|||||
Other income (expense): |
|||||||||
Interest and other income |
210 |
164 |
655 |
620 |
|||||
Gain on settlement from MEA Holdings, Inc. transaction |
- |
4,905 |
- |
4,905 |
|||||
Interest expense |
(5,662) |
(5,123) |
(21,994) |
(21,711) |
|||||
Debt extinguishment and interest rate derivative expense |
(339) |
(10) |
(371) |
(2,511) |
|||||
Equity in earnings of unconsolidated real estate partnerships |
7 |
10 |
13 |
15 |
|||||
Total other income (expense) |
(5,784) |
(54) |
(21,697) |
(18,682) |
|||||
Loss from continuing operations before income tax benefit |
(117,717) |
3,296 |
(135,238) |
(122,559) |
|||||
Income tax benefit |
11,815 |
60 |
17,556 |
22,124 |
|||||
Loss from continuing operations |
(105,902) |
3,356 |
(117,682) |
(100,435) |
|||||
Discontinued operations: |
|||||||||
Income (loss) from discontinued operations |
- |
(41) |
6 |
(168) |
|||||
Impairment of real estate property |
- |
(1,359) |
- |
(1,359) |
|||||
Gain on sale of discontinued operations |
- |
- |
264 |
- |
|||||
Total discontinued operations |
- |
(1,400) |
270 |
(1,527) |
|||||
Net loss |
(105,902) |
1,956 |
(117,412) |
(101,962) |
|||||
Net income attributable to the noncontrolling interests in real estate partnerships |
(171) |
(131) |
(831) |
(288) |
|||||
Net loss attributable to the noncontrolling interests in operating partnership |
13,812 |
(269) |
15,408 |
32,522 |
|||||
Dividends on preferred stock |
(208) |
- |
(208) |
- |
|||||
Net loss attributable to Cogdell Spencer Inc. common shareholders |
$ (92,469) |
$ 1,556 |
$ (103,043) |
$ (69,728) |
|||||
Per share data - basic and diluted |
|||||||||
Loss from continuing operations attributable to Cogdell Spencer Inc. |
$ (1.82) |
$ 0.06 |
$ (2.18) |
$ (2.10) |
|||||
Income (loss) from discontinued operations attributable to Cogdell Spencer Inc. common shareholders |
- |
(0.02) |
0.01 |
(0.04) |
|||||
Net loss per common share available to Cogdell Spencer Inc. common shareholders |
$ (1.82) |
$ 0.04 |
$ (2.17) |
$ (2.14) |
|||||
Weighted average common shares - basic and diluted |
50,745 |
42,615 |
47,456 |
32,655 |
|||||
Net loss attributable to Cogdell Spencer Inc. common shareholders: |
|||||||||
Continuing operations, net of tax |
$ (92,469) |
$ 2,956 |
$ (103,275) |
$ (68,500) |
|||||
Discontinued operations |
- |
(1,400) |
232 |
(1,228) |
|||||
Net loss attributable to Cogdell Spencer Inc. common shareholders |
$ (92,469) |
$ 1,556 |
$ (103,043) |
$ (69,728) |
|||||
Cogdell Spencer Inc. |
|||||||||||
Business Segment Reporting |
|||||||||||
(In thousands) |
|||||||||||
(unaudited) |
|||||||||||
Three months ended December 31, 2010: |
Property |
Design-Build |
Intersegment Eliminations |
Unallocated |
Total |
||||||
Revenues: |
|||||||||||
Rental revenue |
$ 22,821 |
$ - |
$ (22) |
$ - |
$ 22,799 |
||||||
Design-Build contract revenue and other sales |
- |
31,640 |
(6,790) |
- |
24,850 |
||||||
Property management and other fees |
824 |
- |
- |
- |
824 |
||||||
Development management and other income |
- |
419 |
(394) |
- |
25 |
||||||
Total revenues |
23,645 |
32,059 |
(7,206) |
- |
48,498 |
||||||
Certain operating expenses: |
|||||||||||
Property operating and management |
8,012 |
- |
- |
- |
8,012 |
||||||
Design-Build contracts and development |
- |
29,007 |
(6,838) |
- |
22,169 |
||||||
Selling, general, and administrative |
- |
4,651 |
(22) |
- |
4,629 |
||||||
Impairment charges |
- |
113,406 |
- |
- |
113,406 |
||||||
Total certain operating expenses |
8,012 |
147,064 |
(6,860) |
- |
148,216 |
||||||
15,633 |
(115,005) |
(346) |
- |
(99,718) |
|||||||
Interest and other income |
178 |
- |
- |
32 |
210 |
||||||
Corporate general and administrative expenses |
- |
- |
- |
(3,932) |
(3,932) |
||||||
Interest expense |
- |
- |
- |
(5,662) |
(5,662) |
||||||
Interest rate derivative expense |
- |
- |
- |
(339) |
(339) |
||||||
Benefit from income taxes applicable to funds from operations modified |
- |
- |
- |
11,576 |
11,576 |
||||||
Non-real estate related depreciation and amortization |
- |
(292) |
- |
(51) |
(343) |
||||||
Earnings from unconsolidated real estate partnerships, before real estate related depreciation and amortization |
10 |
- |
- |
- |
10 |
||||||
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization |
(472) |
- |
- |
- |
(472) |
||||||
Dividends on preferred stock |
- |
- |
- |
(208) |
(208) |
||||||
Funds from operations modified (FFOM) |
15,349 |
(115,297) |
(346) |
1,416 |
(98,878) |
||||||
Amortization of intangibles related to purchase accounting, net of income tax benefit |
(42) |
(571) |
- |
239 |
(374) |
||||||
Funds from operations (FFO) |
15,307 |
(115,868) |
(346) |
1,655 |
(99,252) |
||||||
Real estate related depreciation and amortization |
(7,330) |
- |
- |
- |
(7,330) |
||||||
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization |
472 |
- |
- |
- |
472 |
||||||
Dividends on preferred stock |
- |
- |
- |
208 |
208 |
||||||
Net income (loss) |
$ 8,449 |
$ (115,868) |
$ (346) |
$ 1,863 |
$ (105,902) |
||||||
Cogdell Spencer Inc. |
|||||||||||
Business Segment Reporting |
|||||||||||
(In thousands) |
|||||||||||
(unaudited) |
|||||||||||
Year ended December 31, 2010: |
Property |
Design-Build |
Intersegment Eliminations |
Unallocated |
Total |
||||||
Revenues: |
|||||||||||
Rental revenue |
$ 87,895 |
$ - |
$ (92) |
$ - |
$ 87,803 |
||||||
Design-Build contract revenue and other sales |
- |
113,997 |
(22,741) |
- |
91,256 |
||||||
Property management and other fees |
3,212 |
- |
- |
- |
3,212 |
||||||
Development management and other income |
- |
5,861 |
(5,715) |
- |
146 |
||||||
Total revenues |
91,107 |
119,858 |
(28,548) |
- |
182,417 |
||||||
Certain operating expenses: |
|||||||||||
Property operating and management |
33,664 |
- |
- |
- |
33,664 |
||||||
Design-Build contracts and development |
- |
97,561 |
(25,560) |
- |
72,001 |
||||||
Selling, general, and administrative |
- |
17,373 |
(92) |
- |
17,281 |
||||||
Impairment charges |
- |
127,041 |
- |
- |
127,041 |
||||||
Total certain operating expenses |
33,664 |
241,975 |
(25,652) |
- |
249,987 |
||||||
57,443 |
(122,117) |
(2,896) |
- |
(67,570) |
|||||||
Interest and other income |
607 |
3 |
- |
45 |
655 |
||||||
Corporate general and administrative expenses |
- |
- |
- |
(13,130) |
(13,130) |
||||||
Interest expense |
- |
- |
- |
(21,994) |
(21,994) |
||||||
Interest rate derivative expense |
- |
- |
- |
(371) |
(371) |
||||||
Benefit from income taxes applicable to funds from operations modified |
- |
- |
- |
16,600 |
16,600 |
||||||
Non-real estate related depreciation and amortization |
- |
(997) |
- |
(229) |
(1,226) |
||||||
Earnings from unconsolidated real estate partnerships, before real estate related depreciation and amortization |
26 |
- |
- |
- |
26 |
||||||
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization |
(2,031) |
- |
- |
- |
(2,031) |
||||||
Discontinued operations |
9 |
- |
- |
(3) |
6 |
||||||
Dividends on preferred stock |
- |
- |
- |
(208) |
(208) |
||||||
Funds from operations modified (FFOM) |
56,054 |
(123,111) |
(2,896) |
(19,290) |
(89,243) |
||||||
Amortization of intangibles related to purchase accounting, net of income tax benefit |
(169) |
(2,282) |
- |
956 |
(1,495) |
||||||
Funds from operations (FFO) |
55,885 |
(125,393) |
(2,896) |
(18,334) |
(90,738) |
||||||
Real estate related depreciation and amortization |
(29,177) |
- |
- |
- |
(29,177) |
||||||
Gain on sale of real estate property |
264 |
- |
- |
- |
264 |
||||||
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization |
2,031 |
- |
- |
- |
2,031 |
||||||
Dividends on preferred stock |
- |
- |
- |
208 |
208 |
||||||
Net income (loss) |
$ 29,003 |
$ (125,393) |
$ (2,896) |
$ (18,126) |
$ (117,412) |
||||||
Cogdell Spencer Inc. |
|||||||||
Reconciliation of Net Income (Loss) to Funds from Operations Modified (FFOM) (1) |
|||||||||
(In thousands, except per share and unit amounts) |
|||||||||
(unaudited) |
|||||||||
For the Three Months Ended |
For the Year Ended |
||||||||
December 31, |
December 31, |
December 31, |
December 31, |
||||||
Net income (loss) |
$ (105,902) |
$ 1,956 |
$ (117,412) |
$ (101,962) |
|||||
Add: |
|||||||||
Real estate related depreciation and |
|||||||||
Wholly-owned and consolidated properties, |
7,327 |
7,197 |
29,164 |
29,102 |
|||||
Unconsolidated real estate partnerships |
3 |
3 |
13 |
12 |
|||||
Less: |
|||||||||
Gain on sale of real estate property |
- |
- |
(264) |
- |
|||||
Dividends on preferred stock |
(208) |
- |
(208) |
- |
|||||
Noncontrolling interests in real estate |
(472) |
(374) |
(2,031) |
(1,049) |
|||||
Funds from Operations (FFO) (1) |
(99,252) |
8,782 |
(90,738) |
(73,897) |
|||||
Amortization of intangibles related to |
374 |
30 |
1,495 |
2,765 |
|||||
Funds from Operations Modified (FFOM) (1) |
$ (98,878) |
$ 8,812 |
$ (89,243) |
$ (71,132) |
|||||
FFO per share and unit - basic and diluted |
$ (1.70) |
$ 0.17 |
$ (1.64) |
$ (1.82) |
|||||
FFOM per share and unit - basic and diluted |
$ (1.69) |
$ 0.17 |
$ (1.62) |
$ (1.75) |
|||||
Weighted average shares and units outstanding - basic and diluted |
58,389 |
50,386 |
55,206 |
40,616 |
|||||
(1) FFO is a supplemental non-GAAP financial measure used by the real estate industry to measure the operating performance of real estate companies. FFOM adds back to traditionally defined FFO non-cash amortization of non-real estate related intangible assets associated with purchase accounting. We present FFO and FFOM because we consider them important supplemental measures of operational performance. We believe FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. We believe that FFOM allows securities analysts, investors and other interested parties to evaluate current period results to results prior to the acquisition of MEA Holdings, Inc. FFO and FFOM are intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and FFOM excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, they provide performance measures that, when compared year over year, reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing a perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO and FFOM utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. We adjust the NAREIT definition to add back noncontrolling interests in consolidated real estate partnerships before real estate related depreciation and amortization and deduct dividends on preferred stock. Further, FFO and FFOM do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO and FFOM should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our performance, nor are they indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. |
|||||||||
SOURCE Cogdell Spencer Inc.
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