Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Cogdell Spencer Inc. | c24197exv99w2.htm |
| 8-K - FORM 8-K - Cogdell Spencer Inc. | c24197e8vk.htm |
Exhibit 99.1
Investor and Media Contact: Jaime Buell
Investor Relations Manager
704.940.2929
jbuell@cogdell.com
Investor Relations Manager
704.940.2929
jbuell@cogdell.com
FOR IMMEDIATE RELEASE
Thursday, November 3, 2011
Thursday, November 3, 2011
COGDELL SPENCER ANNOUNCES THIRD QUARTER 2011 RESULTS
Recent Highlights
| • | FFOM, excluding litigation gains and losses, of $0.09 per share |
| • | Increased portfolio occupancy to 92.3% |
| • | Completed and stabilized Bonney Lake Medical Office Building |
| • | Initiated a new development project |
Charlotte, N.C. (November 3, 2011) — Cogdell Spencer Inc. (the “Company” or “we”) (NYSE:CSA),
healthcare’s preferred real estate partner, is a real estate investment trust (“REIT”) focused on
planning, owning, developing, constructing, and managing medical facilities. Through strategically
managed, customized facilities, we help our clients deliver superior healthcare.
Recent highlights will be covered in detail on our Third Quarter 2011 Earnings Call and Webcast.
We encourage participants 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 “Third
Quarter 2011 Earnings Call” link on the Investor Relations homepage. In addition to webcast
access, you may attend the Third Quarter 2011 Earnings Call on Friday, November 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 December 2, 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
conference code: 10003743. The webcast can also be accessed for one year via the Internet at
www.cogdell.com through the “Third Quarter 2011 Earnings Call” link on the Investor
Relations page, under Press Releases and News and Audio Archives.
Third Quarter 2011 Financial Results
Results for the three and nine months ended September 30, 2011
Funds from Operations Modified (“FFOM”) and FFOM per share and operating partnership unit for the
three and nine months ended September 30, 2011, and a comparison to our prior year results, are as
follows (in thousands, except per share and operating partnership unit data):
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
FFOM |
$ | 5,858 | $ | 5,322 | $ | 11,603 | $ | 9,623 | ||||||||
Impact of: |
||||||||||||||||
Litigation loss (gain) provision |
(339 | ) | — | 1,461 | — | |||||||||||
Litigation gain settlement |
(500 | ) | — | (500 | ) | — | ||||||||||
Impairment charges |
— | — | — | 10,848 | ||||||||||||
CEO retirement expense |
— | — | — | 2,545 | ||||||||||||
FFOM, excluding impact of items listed above |
$ | 5,019 | $ | 5,322 | $ | 12,564 | $ | 23,016 | ||||||||
Per share and operating partnership unit data: |
||||||||||||||||
FFOM |
$ | 0.10 | $ | 0.09 | $ | 0.20 | $ | 0.18 | ||||||||
FFOM, excluding impact of items listed above |
0.09 | 0.09 | 0.21 | 0.43 | ||||||||||||
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 loss to FFOM and FFO for the three and nine months ended September 30, 2011 and 2010 is set
forth in the tables attached to this press release.
FFO and FFO per share and operating partnership unit for the three and nine months ended September
30, 2011, and a comparison to our prior year results, are as follows (in thousands, except per
share and operating partnership unit data):
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
FFO |
$ | 5,627 | $ | 4,948 | $ | 10,909 | $ | 8,502 | ||||||||
Impact of: |
||||||||||||||||
Litigation loss (gain) provision |
(339 | ) | — | 1,461 | — | |||||||||||
Litigation gain settlement |
(500 | ) | — | (500 | ) | — | ||||||||||
Impairment charges |
— | — | — | 10,848 | ||||||||||||
CEO retirement expense |
— | — | — | 2,545 | ||||||||||||
FFO, excluding impact of items listed above |
$ | 4,788 | $ | 4,948 | $ | 11,870 | $ | 21,895 | ||||||||
Per share and operating partnership unit data: |
||||||||||||||||
FFO |
$ | 0.10 | $ | 0.09 | $ | 0.19 | $ | 0.16 | ||||||||
FFO, excluding impact of items listed above |
0.09 | 0.09 | 0.20 | 0.41 | ||||||||||||
Net loss attributable to our common stockholders and net loss attributable to our common
stockholders per share for the three and nine months ended September 30, 2011, and a comparison to
our prior year results, are as follows (in thousands, except per share data):
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Net loss attributable to Cogdell Spencer Inc. common
shareholders |
$ | (1,834 | ) | $ | (1,838 | ) | $ | (9,950 | ) | $ | (10,574 | ) | ||||
Impact attributable to Cogdell Spencer Inc. common
shareholders of: |
||||||||||||||||
Litigation loss (gain) provision |
(296 | ) | — | 1,275 | — | |||||||||||
Litigation gain settlement |
(437 | ) | — | (437 | ) | — | ||||||||||
Impairment charges |
— | — | — | 9,280 | ||||||||||||
CEO retirement expense |
— | — | — | 2,171 | ||||||||||||
Net income (loss) attributable to Cogdell Spencer Inc.
common shareholders, excluding impact of
items above |
$ | (2,566 | ) | $ | (1,838 | ) | $ | (9,111 | ) | $ | 877 | |||||
Per share data: |
||||||||||||||||
Net loss attributable to Cogdell Spencer Inc. common
shareholders |
$ | (0.04 | ) | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.24 | ) | ||||
Net income (loss) attributable to Cogdell Spencer Inc.
common shareholders, excluding impact of
items listed above |
(0.05 | ) | (0.04 | ) | (0.18 | ) | 0.01 | |||||||||
As of September 30, 2011, we owned and/or managed 117 medical office buildings and healthcare
related facilities, totaling approximately 6.2 million net rentable square feet. Our portfolio
consists of:
| Net Rentable | ||||||||||||
| Number of | Square Feet | Percentage | ||||||||||
| Properties | (in millions) | Leased | ||||||||||
Stabilized properties: |
||||||||||||
Wholly-owned |
61 | 3.33 | ||||||||||
Consolidated joint ventures |
7 | 0.51 | ||||||||||
Total stabilized properties |
68 | 3.84 | 92.3 | % | ||||||||
Fill-up properties(1): |
2 | 0.11 | 66.5 | % | ||||||||
Total consolidated properties |
70 | 3.95 | ||||||||||
Unconsolidated joint venture properties |
3 | 0.21 | ||||||||||
Properties managed for third parties |
44 | 1.99 | ||||||||||
Total portfolio |
117 | 6.15 | ||||||||||
| (1) | Fill-up properties are newly available properties that have not achieved
underwritten stabilized occupancy. |
The following table outlines certain gains and losses incurred within the three and nine
months ended September 30, 2011 and 2010, respectively:
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Litigation gain (loss) provision |
$ | 339 | $ | — | $ | (1,461 | ) | $ | — | |||||||
Litigation gain settlement |
500 | — | 500 | — | ||||||||||||
Goodwill and intangible asset impairment charges,
net of income tax benefit |
— | — | — | (10,848 | ) | |||||||||||
CEO retirement compensation expense, net of income
tax expense |
— | — | — | (2,545 | ) | |||||||||||
Capital Activity
In the three and nine months ended September 30, 2011, we sold 49.5% of our 100% equity interest in
West Tennessee Investors MOB, LLC for approximately $3.1 million. The entity and its one property
are now accounted for as a consolidated real estate partnership.
Development Activity
In the three months ended September 30, 2011, we completed construction on Bonney Lake Medical
Office Building located in Bonney Lake, Washington for approximately $21.8 million. This 55,991
rentable square foot medical office building is 96.9% leased and is a joint venture between our
Company, MultiCare Good Samaritan Hospital, and a group of private physicians. We own 61.7% of
this consolidated real estate partnership.
We initiated a new development project to build a rehabilitation hospital located in Cleveland,
Ohio. The project is an approximate 54,500 rentable square foot, two story building and is 100%
owned by us. The off-campus, hospital affiliated, rehabilitation hospital has an estimated cost of
$18.3 million ($15.0 million inter-company design-build contract) and is 100% pre-leased by a joint
venture entity that includes University Hospital Health System and Centerre Healthcare.
Construction is expected to be completed in the fourth quarter of 2012.
Design-Build Contracts
During the quarter, we entered into three new design-build contracts with aggregate design-build
contract value of $7.5 million. Our contract pipeline increased from $129.5 million at the end of
the second quarter to $150.7 million at the end of the third quarter. Our contract pipeline is the
estimated dollar value of future design-build revenues from Project Design Agreements (“PDAs”) that
are currently either in project analysis or design development.
Litigation Activity
During the three and nine months ended September 30, 2011, an arbitrator awarded $2.5 million to
plaintiffs in a case in which we were named as the defendant. We had previously recorded a $2.8
million accrual for this litigation. During the third quarter we reversed $0.3 million of the
litigation accrual, resulting in a gain, and paid the remaining $2.5 million award.
In a separate case in which we were the plaintiff, we settled with the defendant for $0.5 million
in cash which we received during the three and nine months ended September 30, 2011. We recorded a
litigation gain of $0.5 million.
Dividends
On September 9, 2011, we announced that our Board of Directors had declared a quarterly dividend of
$0.10 per share and OP Unit that was paid in cash on October 19, 2011 to holders of record on
September 23, 2011. The $5.1 million dividend on our common stock covered our third quarter of
2011.
On November 3, 2011, we announced that our Board of Directors declared a quarterly dividend of
$0.53125 per share on our Series A preferred shares for the period September 1, 2011 to November
30, 2011. The $1.6 million dividend will be paid on December 1, 2011, to holders of record on
November 17, 2011.
Outlook
We maintain our annual FFOM to be in the range of $0.30 to $0.33 per share and operating
partnership unit, excluding the litigation gains and losses, for the year ending December 31, 2011.
Our guidance excludes any additional capital transactions 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 | ||||||||
| (In thousands, except per share and unit data) | Low | High | ||||||
Net income (loss) |
$ | (3,500 | ) | $ | (3,200 | ) | ||
Plus real estate related depreciation and amortization |
28,500 | 30,000 | ||||||
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) |
16,200 | 18,000 | ||||||
Plus amortization of intangibles related to purchase accounting, net of income tax benefit |
500 | 500 | ||||||
Funds from Operations Modified (FFOM) |
16,700 | 18,500 | ||||||
Litigation gains and losses, net |
1,000 | 1,000 | ||||||
FFOM, excluding litigation gains and losses |
$ | 17,700 | $ | 19,500 | ||||
FFO per share and unit — diluted |
$ | 0.28 | $ | 0.31 | ||||
FFOM per share and unit — diluted |
$ | 0.29 | $ | 0.32 | ||||
FFO per share and unit — diluted, excluding litigation gains and losses |
$ | 0.29 | $ | 0.32 | ||||
FFOM per share and unit — diluted, excluding litigation gains and losses |
$ | 0.30 | $ | 0.33 | ||||
Weighted average shares and units outstanding — basic and diluted |
58,500 | 58,500 | ||||||
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. To calculate FFOM, we adjust the NAREIT definition to add back
noncontrolling interests in consolidated real estate partnerships and limited liability companies
before real estate related depreciation and amortization, acquisition-related expenses, 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.
About Cogdell Spencer Inc.
Charlotte-based Cogdell Spencer Inc. (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. Learn more about Cogdell Spencer Inc. and its subsidiaries at www.cogdell.com.
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 ability to execute our business strategy; our ability to
comply with financial covenants in our debt instruments; our ability to raise capital on terms that
are favorable to us; our ability to obtain future financing arrangements; estimates relating to our
future distributions; increased competition for tenants and new properties; 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; 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; our
ability to convert design-build project opportunities into new engagements for us; 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, 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)
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)
| September 30, 2011 | December 31, 2010 | |||||||
Assets |
||||||||
Real estate properties: |
||||||||
Operating real estate properties |
$ | 709,091 | $ | 634,291 | ||||
Less: Accumulated depreciation |
(139,212 | ) | (119,141 | ) | ||||
Total operating real estate properties, net |
569,879 | 515,150 | ||||||
Construction in progress |
31,546 | 22,243 | ||||||
Total real estate properties, net |
601,425 | 537,393 | ||||||
Cash and cash equivalents |
16,033 | 12,203 | ||||||
Restricted cash |
2,952 | 6,794 | ||||||
Tenant and accounts receivable, net |
14,831 | 11,383 | ||||||
Goodwill |
22,882 | 22,882 | ||||||
Intangible assets, net |
20,943 | 18,601 | ||||||
Other assets |
30,718 | 23,684 | ||||||
Total assets |
$ | 709,784 | $ | 632,940 | ||||
Liabilities and Equity |
||||||||
Mortgage notes payable |
$ | 271,454 | $ | 317,303 | ||||
Term loan |
80,800 | — | ||||||
Revolving credit facility |
82,000 | 45,000 | ||||||
Accounts payable |
15,782 | 11,368 | ||||||
Billings in excess of costs and estimated earnings on uncompleted contracts |
1,284 | 1,930 | ||||||
Other liabilities |
60,886 | 39,819 | ||||||
Total liabilities |
512,206 | 415,420 | ||||||
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 per share), 2,940 and 2,600 shares issued and outstanding in
2011 and 2010, respectively |
73,500 | 65,000 | ||||||
Common stock, $0.01 par value, 200,000 shares authorized, 51,080 and 50,870 shares
issued and outstanding in 2011 and 2010, respectively |
511 | 509 | ||||||
Additional paid-in capital |
419,564 | 417,960 | ||||||
Accumulated other comprehensive loss |
(5,852 | ) | (3,339 | ) | ||||
Accumulated deficit |
(312,939 | ) | (287,798 | ) | ||||
Total Cogdell Spencer Inc. stockholders’ equity |
174,784 | 192,332 | ||||||
Noncontrolling interests: |
||||||||
Real estate partnerships |
8,057 | 6,452 | ||||||
Operating partnership |
14,737 | 18,736 | ||||||
Total noncontrolling interests |
22,794 | 25,188 | ||||||
Total equity |
197,578 | 217,520 | ||||||
Total liabilities and equity |
$ | 709,784 | $ | 632,940 | ||||
Cogdell Spencer Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Rental revenue |
$ | 24,762 | $ | 22,765 | $ | 70,952 | $ | 65,004 | ||||||||
Design-Build contract revenue and other sales |
21,619 | 15,734 | 54,500 | 66,406 | ||||||||||||
Property management and other fees |
789 | 809 | 2,325 | 2,388 | ||||||||||||
Development management and other income |
7 | 1 | 122 | 122 | ||||||||||||
Total revenues |
47,177 | 39,309 | 127,899 | 133,920 | ||||||||||||
Expenses: |
||||||||||||||||
Property operating and management |
10,069 | 9,067 | 29,180 | 25,652 | ||||||||||||
Design-Build contracts and development management |
18,567 | 13,806 | 47,557 | 49,832 | ||||||||||||
Selling, general, and administrative |
5,198 | 6,684 | 18,227 | 21,850 | ||||||||||||
Depreciation and amortization |
8,623 | 8,293 | 24,439 | 24,558 | ||||||||||||
Impairment charges |
— | — | — | 13,635 | ||||||||||||
Total expenses |
42,457 | 37,850 | 119,403 | 135,527 | ||||||||||||
Income (loss) from continuing operations before other income (expense) |
||||||||||||||||
and income tax benefit (expense) |
4,720 | 1,459 | 8,496 | (1,607 | ) | |||||||||||
Other income (expense): |
||||||||||||||||
Interest and other income |
641 | 151 | 978 | 446 | ||||||||||||
Interest expense |
(5,564 | ) | (5,851 | ) | (15,441 | ) | (16,332 | ) | ||||||||
Interest rate derivative expense |
— | (7 | ) | — | (32 | ) | ||||||||||
Equity in earnings (loss) of unconsolidated real estate partnerships |
(1 | ) | 3 | 11 | 5 | |||||||||||
Total other income (expense) |
(4,924 | ) | (5,704 | ) | (14,452 | ) | (15,913 | ) | ||||||||
Loss from continuing operations before income tax benefit (expense) |
(204 | ) | (4,245 | ) | (5,956 | ) | (17,520 | ) | ||||||||
Income tax benefit (expense) |
(32 | ) | 2,294 | (69 | ) | 5,741 | ||||||||||
Net loss from continuing operations |
(236 | ) | (1,951 | ) | (6,025 | ) | (11,779 | ) | ||||||||
Discontinued operations: |
||||||||||||||||
Income from discontinued operations |
— | — | — | 6 | ||||||||||||
Gain on sale of discontinued operations |
— | — | — | 264 | ||||||||||||
Net loss |
(236 | ) | (1,951 | ) | (6,025 | ) | (11,509 | ) | ||||||||
Net income
attributable to the noncontrolling interests in real estate partnerships |
(290 | ) | (172 | ) | (725 | ) | (660 | ) | ||||||||
Net loss attributable to the noncontrolling interests in operating partnership |
254 | 285 | 1,486 | 1,595 | ||||||||||||
Dividends on preferred stock |
(1,562 | ) | — | (4,686 | ) | — | ||||||||||
Net loss attributable to Cogdell Spencer Inc. common stockholders |
$ | (1,834 | ) | $ | (1,838 | ) | $ | (9,950 | ) | $ | (10,574 | ) | ||||
Per share data — basic and diluted |
||||||||||||||||
Loss from continuing operations attributable to Cogdell Spencer Inc.
common stockholders |
$ | (0.04 | ) | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.24 | ) | ||||
Income from discontinued operations attributable to Cogdell Spencer Inc.
common stockholders |
— | — | — | 0.01 | ||||||||||||
Net loss per share attributable to Cogdell Spencer Inc. common stockholders |
$ | (0.04 | ) | $ | (0.04 | ) | $ | (0.19 | ) | $ | (0.23 | ) | ||||
Weighted average common shares — basic and diluted |
51,080 | 50,083 | 51,049 | 46,348 | ||||||||||||
Net loss attributable to Cogdell Spencer Inc. common stockholders: |
||||||||||||||||
Continuing operations, net of tax |
$ | (1,834 | ) | $ | (1,838 | ) | $ | (9,950 | ) | $ | (10,805 | ) | ||||
Discontinued operations |
— | — | — | 231 | ||||||||||||
Net loss attributable to Cogdell Spencer Inc. common stockholders |
$ | (1,834 | ) | $ | (1,838 | ) | $ | (9,950 | ) | $ | (10,574 | ) | ||||
Cogdell Spencer Inc.
Business Segment Reporting
(In thousands)
(unaudited)
Business Segment Reporting
(In thousands)
(unaudited)
| Design-Build | ||||||||||||||||||||
| Property | and | Intersegment | Unallocated | |||||||||||||||||
| Three months ended September 30, 2011: | Operations | Development | Eliminations | and Other | Total | |||||||||||||||
Revenues: |
||||||||||||||||||||
Rental revenue |
$ | 24,762 | $ | — | $ | — | $ | — | $ | 24,762 | ||||||||||
Design-Build contract revenue and other sales |
— | 34,072 | (12,453 | ) | — | 21,619 | ||||||||||||||
Property management and other fees |
789 | — | — | — | 789 | |||||||||||||||
Development management and other income |
— | 288 | (281 | ) | — | 7 | ||||||||||||||
Total revenues |
25,551 | 34,360 | (12,734 | ) | — | 47,177 | ||||||||||||||
Certain operating expenses: |
||||||||||||||||||||
Property operating and management |
10,046 | — | — | — | 10,046 | |||||||||||||||
Design-Build contracts and development management |
— | 31,135 | (12,568 | ) | — | 18,567 | ||||||||||||||
Selling, general, and administrative |
— | 3,110 | — | — | 3,110 | |||||||||||||||
Total certain operating expenses |
10,046 | 34,245 | (12,568 | ) | — | 31,723 | ||||||||||||||
| 15,505 | 115 | (166 | ) | — | 15,454 | |||||||||||||||
Interest and other income |
136 | 500 | — | 5 | 641 | |||||||||||||||
Corporate general and administrative expenses |
— | — | — | (2,088 | ) | (2,088 | ) | |||||||||||||
Interest expense |
— | — | — | (5,564 | ) | (5,564 | ) | |||||||||||||
Income tax expense applicable to funds from operations modified |
— | — | — | (32 | ) | (32 | ) | |||||||||||||
Non-real estate related depreciation and amortization |
— | (270 | ) | — | (45 | ) | (315 | ) | ||||||||||||
Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization |
1 | — | — | — | 1 | |||||||||||||||
Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization |
(677 | ) | — | — | — | (677 | ) | |||||||||||||
Dividends on preferred stock |
— | — | — | (1,562 | ) | (1,562 | ) | |||||||||||||
Funds from operations modified (FFOM) |
14,965 | 345 | (166 | ) | (9,286 | ) | 5,858 | |||||||||||||
Amortization of intangibles related to purchase accounting |
(42 | ) | (189 | ) | — | — | (231 | ) | ||||||||||||
Funds from operations (FFO) |
14,923 | 156 | (166 | ) | (9,286 | ) | 5,627 | |||||||||||||
Real estate related depreciation and amortization |
(8,079 | ) | — | — | — | (8,079 | ) | |||||||||||||
Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization |
677 | — | — | — | 677 | |||||||||||||||
Acquisition-related expenses |
(23 | ) | (23 | ) | ||||||||||||||||
Dividends on preferred stock |
— | — | — | 1,562 | 1,562 | |||||||||||||||
Net income (loss) |
$ | 7,498 | $ | 156 | $ | (166 | ) | $ | (7,724 | ) | $ | (236 | ) | |||||||
Cogdell Spencer Inc.
Business Segment Reporting
(In thousands)
(unaudited)
Business Segment Reporting
(In thousands)
(unaudited)
| Design-Build | ||||||||||||||||||||
| Property | and | Intersegment | Unallocated | |||||||||||||||||
| Nine months ended September 30, 2011: | Operations | Development | Eliminations | and Other | Total | |||||||||||||||
Revenues: |
||||||||||||||||||||
Rental revenue |
$ | 70,952 | $ | — | $ | — | $ | — | $ | 70,952 | ||||||||||
Design-Build contract revenue and other sales |
— | 89,598 | (35,098 | ) | — | 54,500 | ||||||||||||||
Property management and other fees |
2,325 | — | — | — | 2,325 | |||||||||||||||
Development management and other income |
— | 1,738 | (1,616 | ) | — | 122 | ||||||||||||||
Total revenues |
73,277 | 91,336 | (36,714 | ) | — | 127,899 | ||||||||||||||
Certain operating expenses: |
||||||||||||||||||||
Property operating and management |
28,675 | — | — | — | 28,675 | |||||||||||||||
Design-Build contracts and development management |
— | 82,631 | (35,074 | ) | — | 47,557 | ||||||||||||||
Selling, general, and administrative |
— | 11,772 | — | — | 11,772 | |||||||||||||||
Total certain operating expenses |
28,675 | 94,403 | (35,074 | ) | — | 88,004 | ||||||||||||||
| 44,602 | (3,067 | ) | (1,640 | ) | — | 39,895 | ||||||||||||||
Interest and other income |
444 | 516 | — | 18 | 978 | |||||||||||||||
Corporate general and administrative expenses |
— | — | — | (6,455 | ) | (6,455 | ) | |||||||||||||
Interest expense |
— | — | — | (15,441 | ) | (15,441 | ) | |||||||||||||
Income tax expense applicable to funds from operations modified |
— | — | — | (69 | ) | (69 | ) | |||||||||||||
Non-real estate related depreciation and amortization |
— | (825 | ) | — | (132 | ) | (957 | ) | ||||||||||||
Earnings from unconsolidated real estate partnerships,
before real estate related depreciation and amortization |
19 | — | — | — | 19 | |||||||||||||||
Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization |
(1,681 | ) | — | — | — | (1,681 | ) | |||||||||||||
Dividends on preferred stock |
— | — | — | (4,686 | ) | (4,686 | ) | |||||||||||||
Funds from operations modified (FFOM) |
43,384 | (3,376 | ) | (1,640 | ) | (26,765 | ) | 11,603 | ||||||||||||
Amortization of intangibles related to purchase accounting |
(127 | ) | (567 | ) | — | — | (694 | ) | ||||||||||||
Funds from operations (FFO) |
43,257 | (3,943 | ) | (1,640 | ) | (26,765 | ) | 10,909 | ||||||||||||
Real estate related depreciation and amortization |
(22,796 | ) | — | — | — | (22,796 | ) | |||||||||||||
Noncontrolling interests in real estate partnerships, before
real estate related depreciation and amortization |
1,681 | — | — | — | 1,681 | |||||||||||||||
Acquisition-related expenses |
(505 | ) | — | — | — | (505 | ) | |||||||||||||
Dividends on preferred stock |
— | — | — | 4,686 | 4,686 | |||||||||||||||
Net income (loss) |
$ | 21,637 | $ | (3,943 | ) | $ | (1,640 | ) | $ | (22,079 | ) | $ | (6,025 | ) | ||||||
Cogdell Spencer Inc.
Reconciliation of Net Loss to Funds from Operations Modified (FFOM) (1)
(In thousands, except per share and unit amounts)
(unaudited)
Reconciliation of Net Loss to Funds from Operations Modified (FFOM) (1)
(In thousands, except per share and unit amounts)
(unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Net loss |
$ | (236 | ) | $ | (1,951 | ) | $ | (6,025 | ) | $ | (11,509 | ) | ||||
Add: |
||||||||||||||||
Real estate related depreciation and amortization: |
||||||||||||||||
Wholly-owned and consolidated properties |
8,077 | 7,372 | 22,788 | 21,837 | ||||||||||||
Unconsolidated real estate partnerships |
2 | 3 | 8 | 9 | ||||||||||||
Acquisiton-related expenses |
23 | — | 505 | — | ||||||||||||
Less: |
||||||||||||||||
Noncontrolling interests in real estate partnerships,
before real estate related depreciation and amortization |
(677 | ) | (476 | ) | (1,681 | ) | (1,571 | ) | ||||||||
Dividends on preferred stock |
(1,562 | ) | — | (4,686 | ) | — | ||||||||||
Gain on sale of real estate property |
— | — | — | (264 | ) | |||||||||||
Funds from Operations (FFO) (1) |
5,627 | 4,948 | 10,909 | 8,502 | ||||||||||||
Amortization of intangibles related to purchase
accounting, net of income tax benefit |
231 | 374 | 694 | 1,121 | ||||||||||||
Funds from Operations Modified (FFOM) (1) |
$ | 5,858 | $ | 5,322 | $ | 11,603 | $ | 9,623 | ||||||||
FFO per share and unit — basic and diluted |
$ | 0.10 | $ | 0.09 | $ | 0.19 | $ | 0.16 | ||||||||
FFOM per share and unit — basic and diluted |
$ | 0.10 | $ | 0.09 | $ | 0.20 | $ | 0.18 | ||||||||
Weighted average shares and units outstanding — basic and diluted |
58,503 | 57,849 | 58,469 | 54,134 | ||||||||||||
| (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, acquisition-related expenses, 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. |
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