MELVILLE, N.Y.--(BUSINESS WIRE)--Nov. 5, 2001--
Reckson Associates Realty Corp. (NYSE: RA - news) today reported third
quarter diluted funds from operations (``FFO'') of $.66 per share, as
compared to FFO of $.65 per share for the third quarter of 2000,
representing a per share increase of 1.5%.
Reckson also reported that it is establishing a non-recurring
valuation reserve of $163 million against its outstanding loans to
FrontLine Capital Group and joint venture investments with RSVP. At
September 30, 2001, the Company had loans to FrontLine Capital Group
in the principal amount of $142.7 million plus accrued interest of
$19.6 million and investments in real estate joint ventures with RSVP
of $59.8 million. The Company has discontinued the accrual of interest
income on the FrontLine Capital Group loans inclusive of the third
quarter of 2001. Adjusting prior year FFO per share to exclude
interest income relating to the FrontLine Capital Group loans, FFO
attributable to core operations was $.59 per share, representing a per
share increase of 11.9%.
Reckson also reported diluted FFO for the nine months ended
September 30, 2001 of $2.04 per share, as compared to FFO of $1.92 per
share for the nine months ended September 30, 2000, representing a per
share increase of 6.3%. Adjusting prior year FFO per share to exclude
interest income relating to the FrontLine Capital Group loans, FFO
attributable to core operations was $1.75 per share, representing a
per share increase of 16.6%.
Commenting on the third quarter results, Scott Rechler, Reckson's
Co-Chief Executive Officer, stated, ``We are well positioned for the
current economic environment with a strong balance sheet, relatively
low lease expirations, portfolio rents well below market, high tenant
retention rates and minimal development exposure. Our objective is to
utilize this strong position to capitalize on attractive opportunities
throughout the New York Tri-State area as they arise.''
Portfolio performance remained strong during the third quarter of
2001 with occupancies of 96.7% for the office portfolio and 97.5% for
the industrial portfolio as of September 30, 2001. Operating margins
increased to 65.1% in the third quarter of 2001, as compared to 64.4%
in the third quarter of 2000.
Same property net operating income (``NOI'') for the third quarter
of 2001 increased 10.5% (cash) and 5.2% (GAAP) compared to the third
quarter of 2000. Occupancy on the same property portfolio decreased 70
basis points from 97.8% at September 30, 2000 to 97.1% at September
30, 2001.
Rents on same space leases executed during the third quarter of
2001 increased 21.7% (GAAP) and 15.4% (cash) in the Office properties
and 18.3% (GAAP) and 2.0% (cash) in the Industrial/R&D properties.
The Company also reported diluted income from operations (income
before gain on sales of real estate, extraordinary loss and valuation
reserves) of $.28 per Class A common share and diluted earnings per
share (``EPS'') of ($1.97) per Class A common share, for the third
quarter of 2001, as compared to $.29 and $.48, respectively per Class
A common share for the comparable 2000 period.
Other highlights include:
--
Sold convertible preferred securities in Keystone Property Trust
for $35.7 million.
--
Completed dispositions of three non-core office assets totaling
approximately $53 million, bringing the aggregate proceeds from
property dispositions in the capital recycling program to
approximately $85 million.
--
Expect to close on the sale of a 49% interest in 919 Third Avenue
to New York State Teachers' Retirement System (NYSTRS) within 30
days.
--
Converted Crescent's $85 million preferred equity investment in
Metropolitan into approximately 3.5 million shares of Reckson
Class A common stock, which were then successfully placed with
major institutional holders.
On Tuesday, November 6th, Reckson Associates' management will
discuss FFO guidance for the remainder of 2001 and for 2002 on the
Company's quarterly earnings conference call.
Reckson Associates Realty Corp. is a self-administered and
self-managed real estate investment trust (REIT) specializing in the
acquisition, leasing, financing, management and development of office
and industrial properties.
Reckson's core growth strategy is focused on the markets
surrounding and including New York City. The Company is one of the
largest publicly traded owners, managers and developers of Class A
office and industrial properties in the New York Tri-State area, with
182 properties comprised of approximately 20.6 million square feet
either owned and controlled, directly or indirectly, or under
contract. For additional information on Reckson Associates Realty
Corp., please visit the Company's web site at www.reckson.com.
CONFERENCE CALL AND WEBCAST
The Company's executive management team led by Co-Chief Executive
Officer Scott Rechler, will host a conference call outlining third
quarter results on Tuesday, November 6, 2001 at 3:00 p.m. EST. The
conference call can be accessed by dialing (800) 230-1059
(internationally (612) 332-0636). No passcode is required. The live
conference call will also be webcast in a listen-only mode on the
Company's web site at www.reckson.com, in the Investor Relations
section, with an accompanying slide show presentation outlining the
Company's third quarter results.
A replay of the conference call will be available telephonically
from November 6, 2001 at 7:00 p.m. EST through November 16, 2001 at
11:59 p.m. EST. The telephone number for the replay is (800) 475-6701,
passcode 606885. A replay of the webcast of the conference call will
also be available via the Company's web site.
FINANCIAL STATEMENTS ATTACHED
The supplemental materials on the Company's third quarter results
will be available on the Company's web site, sent by e-mail to those
on the Company's distribution list, and are also available by mail or
fax upon request. To be added to the Company's e-mail distribution
list or to receive a copy of the third quarter supplemental materials
by mail or fax please contact Susan McGuire, Investor Relations,
Reckson Associates Realty Corp., 225 Broadhollow Road, Melville, New
York 11747-4883, investorrelations@reckson.com or telephone number
(631) 622-6746.
Certain matters discussed herein are ``forward-looking statements''
within the meaning of the Private Securities Litigation Reform Act of
1995. Although the Company believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions,
forward-looking statements are not guarantees of results and no
assurance can be given that the expected results will be delivered.
Such forward-looking statements are subject to certain risks, trends
and uncertainties that could cause actual results to differ materially
from those expected. Among those risks, trends and uncertainties are
the general economic climate, including the conditions affecting
industries in which our principal tenants compete; changes in the
supply of and demand for office and industrial properties in the New
York Tri-State area; changes in interest rate levels; downturns in
rental rate levels in our markets and our ability to lease or re-lease
space in a timely manner at current or anticipated rental rate levels;
the availability of financing to us or our tenants; changes in
operating costs, including utility costs; repayment of debt owed to
the Company by third parties (including FrontLine Capital Group);
risks associated with joint ventures; and other risks associated with
the development and acquisition of properties, including risks that
development may not be completed on schedule, that the tenants will
not take occupancy or pay rent, or that development or operating costs
may be greater than anticipated. For further information on factors
that could impact Reckson, reference is made to Reckson's filings with
the Securities and Exchange Commission. Reckson is subject to the
reporting requirements of the Securities and Exchange Commission and
undertakes no responsibility to update or supplement information
contained in this press release that subsequently becomes untrue.
-0-
Reckson Associates Realty Corp. (NYSE:RA - news)
Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Property Operating Revenues:
Base rents $111,394 $100,854 $330,072 $291,353
Tenant escalations
and reimbursements 15,328 14,900 45,438 40,730
Total property
operating revenues 126,722 115,754 375,510 332,083
Property Operating Expenses:
Operating expenses 26,358 24,751 73,581 67,051
Real estate taxes 17,873 16,504 52,518 48,727
Total property
operating expenses 44,231 41,255 126,099 115,778
Net Operating Income 82,491 74,499 249,411 216,305
Gross Margin percentage 65.1% 64.4% 66.4% 65.1%
Other Income:
Gain on sales of real estate 972 15,206 972 21,868
Other 5,333 9,342 19,818 29,464
Total other income 6,305 24,548 20,790 51,332
Other Expenses:
Interest expense 23,510 24,651 70,703 72,667
Marketing, general
and administrative 7,679 6,930 23,587 20,151
Valuation reserves
on affiliate
loans and joint ventures 163,000 ---- 163,000 ----
Depreciation and
amortization 26,528 24,083 77,221 67,520
Total other expenses 220,717 55,664 334,511 160,338
Minority partners' interests
in consolidated partnerships 3,065 1,874 12,885 5,773
Income (loss) before limited
partners' minority interest
in the operating partnership,
distributions to preferred unit
holders and dividends to
preferred shareholders and
extraordinary loss (134,986) 41,509 (77,195) 101,526
Adjustments to arrive at
net income (loss):
Limited partners' minority
interest in the operating
partnership 14,657 (4,050) 9,326 (9,411)
Preferred unit distributions
and preferred dividends (5,996) (6,085) (18,009) (21,927)
Extraordinary loss on
extinguishment of debt,
net of limited partners'
minority interest (2,595) (1,396) (2,595) (1,396)
Net income (loss) available
to common shareholders $(128,920) $29,978 $(88,473) $68,792
Net Income (loss) available to:
Class A common $(97,944) $22,143 $(67,526) $50,244
Class B common $(30,976) $ 7,835 $(20,947) $18,548
Basic weighted average
common shares outstanding:
Class A common 49,715 45,178 47,489 42,312
Class B common 10,284 10,284 10,284 10,284
Basic net income (loss)
per weighted average common
share before extraordinary
loss:
Class A common $(1.93) $ .51 $(1.38) $ 1.21
Extraordinary loss per
Class A common share (.04) (.02) (.04) (.02)
Basic net income (loss) per
weighted average Class
A common share $(1.97) $ .49 $(1.42) $ 1.19
Class B common $(2.95) $ .80 $(1.98) $ 1.84
Extraordinary loss per Class
B common share (.06) (.04) (.06) (.04)
Basic net income (loss) per
weighted average Class B
common share $(3.01) $ .76 $(2.04) $1.80
Diluted weighted average
common shares outstanding:
Class A common 49,715 49,818 47,489 42,736
Class B common 10,284 10,284 10,284 10,284
Diluted net income (loss) per
weighted average common share:
Class A common $(1.97) $ .48 $ (1.42) $ 1.18
Class B common $(3.01) $ .53 $ (2.04) $ 1.28
Selected Balance Sheet Data (in thousands)
September 30,
2001 2000
Commercial real estate investments,
at cost, before depreciation $ 2,814,024 $ 2,434,633
Total assets $ 2,861,651 $ 2,944,120
Mortgage notes payable $ 762,526 $ 530,819
Unsecured credit facility $ 246,600 $ 362,600
Senior unsecured notes $ 449,443 $ 449,367
Total liabilities $ 1,566,012 $ 1,456,717
Stockholders' equity $ 1,040,689 $ 1,117,396
Total debt to total market
capitalization 42.4% 39.5%
Reckson Associates Realty Corp. (NYSE:RA - news)
Funds From Operations
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Net income (loss) available
to common shareholders $(128,920) $ 29,978 $ (88,473) $ 68,792
Adjustments for basic
funds from operations:
Add:
Limited partners'
minority interest in
the operating
partnership ---- 4,050 ---- 9,411
Real estate
depreciation and
amortization 26,340 23,632 76,055 66,184
Minority partners'
interests in
consolidated
partnerships 3,065 1,874 12,885 5,773
Valuation reserves on
investments in affiliate
loans and joint
ventures 163,000 ---- 163,000 ----
Extraordinary loss on
extinguishment of debt,
net of limited partners'
minority interest 2,595 1,396 2,595 1,396
Less:
Limited partners' minority
interest in the operating
partnership 14,657 ---- 9,326 ----
Gain on sales of real
estate 972 15,206 972 21,868
Amounts distributable to
minority partners in
consolidated
partnerships 4,206 2,247 15,010 6,764
Basic Funds From
Operations ("FFO") $ 46,245 $ 43,477 $140,754 $122,924
Add:
Dividends and
distributions on
dilutive shares and
units 5,996 7,679 20,633 26,708
Diluted FFO $ 52,241 $ 51,156 $161,387 $ 149,632
Basic FFO calculations:
Weighted average common
shares outstanding 59,999 55,462 57,773 52,595
Weighted average units of
limited partnership interest
outstanding 7,652 7,695 7,703 7,697
Basic weighted average
common shares and units
outstanding 67,651 63,157 65,476 60,292
Basic FFO per weighted
average common share
or unit $ .68 $ .69 $ 2.15 $ 2.04
Basic weighted average
dividends or distributions
per share or unit $ .46 $ .42 $ 1.34 $ 1.25
Basic FFO payout ratio 67.1% 61.2% 62.2% 61.2%
Diluted FFO calculations:
Basic weighted average
common shares and
units outstanding 67,651 63,157 65,476 60,292
Adjustments for dilutive
FFO weighted average
shares and units outstanding:
Add:
Weighted average
common stock
equivalents 441 588 429 424
Weighted average shares
of Series A Preferred
Stock 8,060 8,060 8,060 8,060
Weighted average
shares of Series B
Preferred Stock 1,919 1,919 1,919 4,315
Weighted average
shares of minority
partners' preferred
interest ---- 3,454 1,898 3,454
Weighted average units
of preferred limited
partnership interest 1,056 1,367 1,182 1,367
Dilutive FFO weighted average
shares and units
outstanding 79,127 78,545 78,964 77,912
Diluted FFO per weighted
average share or unit $ .66 $ .65 $ 2.04 $ 1.92
Diluted weighted average
dividends or distributions
per share or unit $ .45 $ .41 $ 1.32 $ 1.22
Diluted FFO payout ratio 68.7% 63.7% 64.6% 63.7%
Reckson Associates Realty Corp. (NYSE:RA - news)
Cash Available for Distribution
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Basic Funds From
Operations $ 46,245 $ 43,477 $ 140,754 $ 122,924
Adjustments for basic
cash available for
distribution:
Less:
Straight line
rents (Note a) 9,730 12,153 31,743 24,991
Non-incremental
capitalized
tenant
improvements
and leasing
commissions 3,105 4,239 9,849 8,982
Non-incremental
capitalized
improvements 1,996 1,075 4,260 3,773
Basic Cash Available
for Distribution
("CAD") 31,414 26,010 94,902 85,178
Add:
Dividends and
distributions on
dilutive shares
and units 260 ---- 4,254 5,597
Diluted CAD $ 31,674 $ 26,010 $ 99,156 $ 90,775
Basic CAD
calculations:
Weighted average
common shares
outstanding 59,999 55,462 57,773 52,595
Weighted average
units of limited
partnership
interest
outstanding 7,652 7,695 7,703 7,697
Basic weighted
average common
shares and units
outstanding 67,651 63,157 65,476 60,292
Basic CAD per
weighted average
common share
or unit $ 46 $ .41 $ 1.45 $ 1.41
Basic weighted
average dividends
or distributions
per share or unit $ .46 $ .42 $ 1.34 $ 1.25
Basic CAD payout
ratio 98.8% 102.4% 92.2% 88.3%
Diluted CAD
calculations:
Basic weighted
average common
shares and units
outstanding 67,651 63,157 65,476 60,292
Adjustments for
dilutive CAD
weighted average
shares and units
outstanding:
Add:
Weighted average
common stock
equivalents 441 588 429 424
Weighted average
shares of
Series A
Preferred Stock ---- ---- ---- ----
Weighted average
shares of
Series B
Preferred Stock ---- ---- ---- ----
Weighted average
shares of
minority
partners'
preferred
interest ---- ---- 1,898 3,454
Weighted average
units of
preferred
limited
partnership
interest 566 ---- 1,182 598
Dilutive CAD
weighted average
shares and units
outstanding 68,658 63,745 68,985 64,768
Diluted CAD per
weighted average
share or unit $ .46 $ .41 $ 1.44 $ 1.40
Diluted weighted
average dividends
or distributions
per share or unit $ .46 $ .42 $ 1.33 $ 1.24
Diluted CAD payout
ratio 99.3% 103.2% 92.6% 88.5%
Notes:
(a) Includes straight-line rental income attributable to the property
located at 919 Third Avenue, New York, N.Y. of $5,939, $8,175,
$20,323 and $13,560, respectively.
Contact:
Reckson Associates Realty Corp., Melville
Scott Rechler, Co-CEO / Michael Maturo, CFO
631/694-6900 (Phone)
631/622-6790 (Facsimile)
