Chelsea Property Group, Inc. (ticker: CPG, exchange: New York Stock Exchange) News Release - 13-Nov-2001
Chelsea Property Group Reports 13% Increase In Third Quarter Funds From Operations
ROSELAND, N.J., Nov 13, 2001 /PRNewswire via COMTEX/ --FFO Per Share Up 9% to $1.35 Chelsea Property Group,
Inc. (NYSE: CPG) today reported its operating results for the third quarter
ended September 30, 2001.
Third quarter funds from operations (FFO) before minority interest rose 13% to
$27.4 million from $24.2 million in the third quarter of 2000, and diluted FFO
per share rose 9% to $1.35 from $1.24, respectively. Rental revenues from
wholly-owned properties rose 12% to $34.6 million from $30.9 million, and total
revenues from wholly-owned properties rose 10% to $49.1 million from $44.6
million, respectively. FFO from unconsolidated investments rose to $5.6 million
from $3.1 million, primarily due to the openings of Orlando and Rinku Premium
Outlets, and the acquisition of a 49% interest in four existing U.S. outlet
properties; this increase was partially offset by a $1.5 million loss related to
the Company's investment in Chelsea Interactive. Third quarter earnings before
interest, depreciation and amortization (EBITDA) rose 20% to $40.6 million from
$33.8 million, respectively.
Favorable third quarter revenue, earnings and FFO comparisons were driven by
internal rent growth; the completion since June 30, 2000 of expansions totaling
approximately 260,000 square feet at three operating properties; the openings of
three new centers with a total gross leasable area (GLA) of more than 800,000
square feet (Orlando, Allen and Rinku Premium Outlets); and the December 2000
acquisition through a joint venture of four outlet centers (Gilroy, California;
Michigan City, Indiana; Waterloo, New York; and Kittery, Maine) with a total GLA
of 1.6 million square feet.
For the year to date, FFO rose to $74.5 million from $64.5 million, up 16%;
diluted FFO per share rose to $3.73 from $3.31, up 13%; rental revenues from
wholly-owned properties rose to $97.8 million from $89.5 million, up 9%; total
revenues from wholly-owned properties rose to $140.2 million from $126.2
million, up 11%; FFO from unconsolidated investments rose to $15.2 million from
$3.5 million; and EBITDA rose to $112.8 million from $91.5 million, up 23%.
GLA in service, including joint venture projects in The United States and Japan,
totaled 12.5 million square feet at September 30, 2001, more than double the 6.0
million square feet of a year earlier. The Premium Outlet center portfolio
(including Japan) was 99% leased at September 30, 2001.
On September 25, 2001, the Company completed the $180 million acquisition of 31
retail properties -- containing 4.3 million square feet of GLA -- from Konover
Property Trust (NYSE: KPT); the acquisition had no material effect on third
quarter operating results. Separately, in July and October, the Company issued a
total of 2.5 million new shares of common stock, generating net proceeds of $110
million and increasing the number of outstanding shares and operating
partnership units to 21.9 million. Proceeds were used to repay all outstandings
under the Company's $160 million line of credit and to more than pre-fund the
December 2001 repayment of $66 million of acquisition-related mortgage debt.
Largely due to the impact of the events of September 11 on sales in the last
three weeks of the quarter, same-space sales (weighted average sales per square
foot reported in space open for the full duration of both comparison periods) at
domestic Premium Outlet centers were down 4% for the 2001 third quarter and 2%
for the year to date compared to the corresponding periods in 2000.
David Bloom, Chairman and Chief Executive Officer, said, "We are pleased with
our third quarter results. Funds from operations met plan in spite of weaker
traffic at many of our properties following September 11, and results for the
quarter also reflected strong growth driven by last year's record development
and acquisition activity. We are prepared for the retail environment to remain
difficult and unpredictable, particularly in some locations sensitive to
international tourism. We have significantly strengthened our balance sheet and
liquidity in recent months, and enjoy great flexibility as we consider growth
opportunities in this time of economic and financial market uncertainty."
Chelsea Property Group, Inc. is a fully integrated, self-administered and
self-managed real estate investment trust (REIT) that wholly or partially owns
58 Premium 0utlet(TM) and other retail shopping centers -- containing 12.5
million square feet of GLA -- in 28 states and Japan. The company's leading
properties include Woodbury Common Premium Outlets, near New York City; Wrentham
Village Premium Outlets, near Boston; Desert Hills Premium Outlets, near Palm
Springs, California; Orlando Premium Outlets, in Orlando, Florida; arid Gotemba
Premium Outlets, near Tokyo, Japan. Please see http://www.cpgi.com for more
information.
Chelsea's third-quarter conference call with investors and analysts will be held
on Wednesday, November 14, 2001, at 2:00 p.m. eastern time. The call may be
accessed by dialing 800-633-8516 (U.S. callers) or 212-346-6431 (international
callers) and referencing reservation No. 19919732. A replay of the call will be
available through November 23, 2001 by dialing 800-633-8284 (U.S. callers) or
858-812-6440 (international callers) and using the same reservation number.
Statements in this news release that are not strictly historical are
"forward-looking" statements under the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Although Chelsea Property Group
believes that the expectations reflected in such statements are based on
reasonable assumptions, it can give no assurance that its expectations will be
attained. Forward-looking statements involve known and unknown risks that may
cause actual results to differ materially from expected results. Risk factors
include, without limitation, the receipt of regulatory entitlements for and
completion of development projects, in the United States or abroad, the
availability and cost of capital and foreign currency; credit risk; the
Company's ability to lease its properties; retail, real estate and economic
conditions; risks inherent to being a partner in joint ventures; risks related
to the acquisition of certain assets from Konover Property Trust, both known and
unknown; competition; and other risks detailed from time to time in Chelsea
Property Group's reports to the Securities and Exchange Commission. The Company
accepts no responsibility for updating forward-looking statements
CHELSEA PROPERTY GROUP, INC.
STATEMENT OF OPERATIONS - Unaudited
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Revenues:
Base rent (a) $30,528 $26,867 $87,930 $79,726
Percentage rent 4,051 4,063 9,851 9,812
Expense reimbursements 11,581 10,582 34,002 29,587
Other Income 2,905 3,054 8,403 7,086
Total revenues 49,065 44,566 140,186 126,211
Expenses:
Operating and
maintenance 12,779 11,793 37,505 33,132
Depreciation and
amortization 12,174 10,616 35,479 31,823
General and
administrative 634 857 2,842 2,597
Other 461 1,159 1,924 2,324
Total expenses 26,048 24,425 77,750 69,876
Income before
unconsolidated investments,
interest expense and
minority interest 23,017 20,141 62,436 56,335
Income from unconsolidated
investments 3,953 2,199 10,509 2,644
Loss from Chelsea
Interactive (1,477) (530) (3,447) (805)
Interest expense (8,891) (6,113) (26,326) (17,481)
Income before Minority
interest 16,602 15,697 43,172 40,693
Less minority interest (3,717) (3,756) (10,213) (10,157)
Net income 12,885 11,941 32,959 30,536
Preferred dividends (1,047) (1,047) (3,141) (3,141)
Net income - common
shareholders $11,838 $10,894 $29,818 $27,395
Net income per common
share (diluted) (b) $0.69 $0.67 $1.78 $1.70
Funds from operations
() (c) $27,415 $24,246 $74,498 $64,494
FFO per common share
(diluted) $1.35 $1.24 $3.73 $3.31
Dividends per common
share $0.78 $0.75 $2.34 $2.25
(a) Base rent includes straight-line rent of $534 and $349 in the third
quarter of 2001 and 2000, respectively, and $1.181 and $1.048 for the
nine months ended September 30, 2001 and 2000 respectively.
(b) Basic earnings per share were $0.71 and $0.68 in the third quarters
of 2001 and 2000, respectively and $1.83 and $1.72 for the nine
months ended September 30, 2001 and 2000, respectively.
(c) FFO per common snare is defined as income before minority interests,
depreciation and amortization, reduced by amortization of deferred
financing costs, depreciation of non-real estate assets and preferred
dividends.
CALCULATION OF FFO
(Amounts in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Net income - common
shareholders $11,838 $10,894 $29,818 $27,395
Add:
Depreciation and
amortization -
wholly-owned 12,174 10,616 35,479 31,823
Depreciation and
amortization - joint
ventures 1,628 865 4,700 865
Amortization of
deferred financing
costs and depreciation
of non-real estate
assets (480) (423) (1,326) (1,360)
Preferred unit
distributions (1,462) (1,462) (4,386) (4,386)
Minority interest 3,717 3,756 10,213 10,157
FFO $27,415 $24,246 $74,498 $64,494
Ownership interests:
REIT common shares 17,160 16,214 16,767 16,130
Partnership units held
by minority interest 3,155 3,357 3,189 3,357
Weighted average shares
/units outstanding 20,315 19,571 19,956 19,487
CHELSEA PROPERTY GROUP, INC.
SELECTED BALANCE SHEET DATA - Unaudited
September December
30, 31,
(In thousands, except center data) 2001 2000
Real estate assets, before depreciation $1,104,729 $908,344
Cash and cash equivalents 16,290 18,036
Total assets 1,091,323 901,314
Total liabilities 706,958 528,752
Minority interest 96,695 101,203
Stockholders' equity 287,670 271,359
Shares and units outstanding at period-end 19,891 19,305
DEBT DATA:
Unsecured bank debt 22,035 35,035
Mortgage debt 233,499 90,776
7.75% Notes due 2001 -- 99,987
8.375% Notes due 2005 49,888 49,877
7.25% Notes due 2007 124,801 124,776
8.625% Notes due 2009 49,917 49,902
8.25% Notes due 2011 148,633 --
Interest coverage ratio - trailing 12 months 4.5x 5.1x
OPERATING DATA: (sq ft in thousands)
Gross leasable area at period-end 12,493 8,159
Weighted average GLA during period 8,278 5,703
Lease-up at period-end -- Domestic Premium Outlets 99% 98%
Number of centers (including two international) 58 27
Number of states and foreign countries 29 16
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SOURCE Chelsea Property Group, Inc.
CONTACT:
Leslie T. Chao, President, or
Michael J. Clarke, CFO, both of
Chelsea Property Group +1-973-228-6111
URL:
http://www.chelseagca.com
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Copyright (C) 2001 PR Newswire. All rights reserved.
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