Archstone Announces 86% Increase in First Quarter Earnings Per Share; Same-store Revenues Increase 7.2%; Net Operating Income Increases 8.7%
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DENVER, May 4 /PRNewswire/ -- Archstone Communities (NYSE: ASN - news) announced today that its net earnings per share (EPS) increased 86% to $0.52 per share for the quarter ended March 31, 2001, compared with $0.28 per share in 2000. EPS before net gains on depreciable assets in the first quarter was $0.26 per share, an increase of 4% compared with $0.25 per share last year.
Archstone's funds from operations (FFO) during the quarter was $0.53 per share. Excluding the impact of certain technology investments, Archstone's FFO per share was $0.58, an increase of 11.5% over 2000.
Archstone's same-store portfolio, which represents 76% of its total operating communities, continues to produce excellent results. The company's same-store revenues increased 7.2% over the first quarter of 2000, driven principally by the strong performance of Archstone's operating communities in San Francisco, Boston, Chicago, Washington, D.C. and Southern California -- markets with weighted average first quarter revenue growth in excess of 12%. Same-store net operating income growth during the quarter was also very strong, with an increase of 8.7% over 2000.
``We are very pleased with our strong internal growth during the first quarter -- particularly the revenue increases achieved by our same-store communities,'' said R. Scot Sellers, chairman and chief executive officer. ``Our consistent growth in same-store results underscores the benefits of our investments in well-located communities in markets protected from new competition.''
The company's first quarter results reflect a $1.7 million gain from its sale of shares of Manugistics Group, Inc., a leading global provider of pricing and revenue management products and services, which helped develop Archstone's revenue management software application currently in testing at communities in Atlanta, Denver and Austin, Texas. This gain was offset by a $7.4 million write-off of Archstone's investment in BroadbandNOW!, a provider of high-speed Internet services, and the recognition of a $500,000 operating loss from Archstone's investment in SafeRent, L.L.C., a leading applicant screening service provider.
Archstone Begins Reporting Earnings Per Share
Beginning with its first quarter results, Archstone will emphasize GAAP earnings per share as well as earnings per share before net gains on depreciable assets to be consistent with other major companies and industries. ``One of Archstone's most important objectives is to be viewed as a well-run operating company, not a separate asset class. We believe that EPS will help investors better understand our results -- and create a more level playing field to compare our performance with companies in other industries,'' said Mr. Sellers. ``By contrast, FFO has many flaws: it is not audited, it is not consistently applied among real estate companies and it adds all depreciation charges back to reported results, which is simply not an accurate way to evaluate our business.''
Joint Ventures, Successful Secondary Offering Validate Archstone's Strategy
During the quarter, Archstone formed a joint venture with a large institutional investor, contributing a total of 12 apartment communities with an estimated aggregate fair value of approximately $310 million. The venture also obtained $217 million in mortgage loans secured by the communities. ``We are very pleased to complete this transaction, and expect to close two additional joint venture transactions with this investor in the second quarter,'' said Charles E. Mueller, Jr., chief financial officer. The other joint ventures will include 15 apartment communities with an aggregate value of approximately $340 million. ``These transactions reduce our investment in non-core markets while enhancing our financial flexibility,'' said Mr. Mueller.
Including the joint venture, Archstone completed the disposition of $461 million of existing communities during the first quarter at an average cap rate of 8.6%. These dispositions included two assets in Indianapolis, which completes the company's exit from that market. The company increased its disposition targets for 2001 to $800 to $900 million of non-core assets.
Archstone also repurchased $50 million of its common shares during the quarter from Security Capital Group (NYSE: SCZ - news) concurrent with the closing of the company's highly successful underwritten secondary offering. Through the offering, Security Capital liquidated its entire investment in Archstone -- which totaled approximately $740 million in February 2001. ``The offering was more than two times oversubscribed, and through its success, we welcomed more than 50 institutional investors and thousands of households as new Archstone investors,'' said Mr. Mueller. ``This overwhelming investor support reflects confidence in our proven track record and business strategy.''
Archstone's senior management will host a conference call to discuss first
quarter 2001 results today, May 4, 2001, at 11 a.m. EDT.
For live listen-only access to the call:
-- Conference call dial-in: Toll-free (888) 423-3280.
-- Webcast: At archstonecommunities.com. Select "Investors" and follow
the instructions.
To hear a replay of the call:
-- Webcast replay: At archstonecommunities.com. Select "Investors."
The call will be archived for approximately one month.
-- Conference call replay: Call toll-free (800) 475-6701 (access code
584555). The call replay will be available beginning at 5 p.m. EDT on
May 4, 2001 through May 11, 2001 at 11:59 p.m. EDT.
Archstone Communities is a leading real estate operating company focused on the operation, development, redevelopment, acquisition and long-term ownership of apartment communities in protected markets throughout the United States. With a current total market capitalization of $5.8 billion, Archstone has a strategic national presence with 194 communities representing 59,650 units, including 3,807 units in its development pipeline, as of March 31, 2001, in markets that include 31 of the nation's 50 largest metropolitan markets.
Archstone's full 1Q01 financials and an archive of the company's press releases are available its web site at www.archstonecommunities.com or by calling (800) 982-9293 |
