EXHIBIT 99
For information contact:
Liz Kohlmyer
Director of Communications
(407) 540-2221
NYSE: TSY
TRUSTREET PROPERTIES, INC. ANNOUNCES SECOND QUARTER RESULTS
ORLANDO, FL - August 8, 2006 - Trustreet Properties, Inc. (NYSE: TSY), the largest real estate investment trust (“REIT”) focused primarily on the restaurant industry, announces operating results for the second quarter and six months ended June 30, 2006.
Highlights
| · | The Company reported revenues of $54.7 million for the quarter ended June 30, 2006, a 9.0% increase over $50.2 million reported in the quarter ended June 30, 2005. |
| · | In the second quarter of 2006 and 2005, the Company reported funds from operations (“FFO”) available to common shareholders, after adding back the principal component of capital leases, of $21.3 million, or $0.32 cents per diluted share compared to $20.0 million, or $0.35 cents per diluted share. |
| · | For the six months ended June 30, 2006 and 2005, the Company reported FFO available to common shareholders, after adding back the principal component of capital leases, of $40.8 million, or $0.61 cents per diluted share compared to $26.5 million, or $0.52 cents per diluted share. |
| · | For the quarter ended June 30, 2006, adjusted funds from operations (“AFFO”) was $23.5 million, compared to $21.7 million for the quarter ended June 30, 2005. |
| · | The Company acquired 104 properties in the second quarter representing a total investment of $90.7 million. Through June 30, 2006, the Company has acquired $165.0 million in new acquisitions. |
| · | In the second quarter, the taxable REIT subsidiary (“TRS”) sold 43 properties generating $74.2 million in sales proceeds producing a pre-tax gain of $8.8 million. Through June 30, 2006, the TRS has sold $114.9 million producing a pre-tax gain of $13.3 million. |
| · | The Company owned 2,015 properties in the core REIT portfolio of which 97.8 percent were leased based on carrying value as of June 30, 2006. Since June 2005, the Company has added $319 million to its core REIT portfolio. |
| · | The Company declared monthly common dividends per share of $0.11 cents throughout the second quarter. |
Second Quarter Results and Portfolio Highlights
For the quarter ended June 30, 2006, the Company reported funds from operations of $19.7 million, or $0.29 cents per share computed in accordance with the definition of the National Association of Real Estate Investment Trusts (“NAREIT”). FFO generated by the core REIT portfolio represented approximately 88 percent of gross FFO. NAREIT FFO does not include cash received from tenants that is treated as the principal component of a capital lease. Unlike many REITs that are in the Company’s peer group, the Company has a meaningful number of capital leases. FFO and the principal component of capital leases total $21.3 million, or $0.32 cents per share for the quarter.
For the quarter ended June 30, 2006, adjusted funds from operations (“AFFO”) was $23.5 million. The Company believes that AFFO is useful as a measure of its cash available for distribution. Given the variation in the definition of AFFO in the REIT industry, investors should take these differences into account when comparing AFFO against other REITs. Typically, this metric will exceed the Company’s FFO because of the level of deferred financing cost amortization, the principal component of capital leases, non-real estate depreciation, non-cash real estate impairment charges and loan provisions.
The Company acquired 104 properties for $90.7 million during the second quarter. The Company designated 43 of the second quarter acquisitions as long-term investments resulting in improved tenant and geographic diversity and a stronger outlook for net income from continuing operations within the core REIT portfolio. The remaining 61 properties were designated as held-for-sale inventory to be sold through Trustreet’s investment property sales platform. For the six months ended June 30, 2006, we purchased $165 million in net lease properties. In addition to the $17.2 million in transactions closed through the end of July 2006, the Company currently has signed commitments to acquire a further $110 million, the substantial majority of which is expected to close over the next six months.
In the second quarter, the Company sold 43 properties generating $74.2 million in sales proceeds from its investment property sales platform producing a pre-tax gain of $8.8 million. For the six months ended June 30, 2006, the Company sold $114.9 million through its investment property sales platform. At June 30, 2006, we held 142 properties for sale to investors through our IPS program with an investment of $174.6 million. These results are required to be recorded as discontinued operations under GAAP. In addition, the Company held for sale an additional 44 properties in their development pipeline comprising an investment of $46.9 million.
As of June 30, 2006, the Company owned 2,015 properties held in the core REIT portfolio of which 97.8 percent were leased based on carrying value. The weighted average remaining lease term of the Company’s real estate investment portfolio was approximately 10.2 years, with more than 81 percent of the Company’s lease expirations occurring after 2011. The Company has recycled capital or paid down debt through sales of $37.6 million in the core REIT generating a pre-tax gain of $8.1 million.
The Company’s portfolio is broadly diversified with more than 175 concepts and more than 500 tenants in 49 states. No single tenant represented more than 6.8 percent of contractual rents. Of the 65 vacant properties with a carrying value of approximately $40.9 million, 12 are either under contract for sale or have a lease or sales contract out for signature, and another five are currently being redeveloped after having been pre-leased.
On August 4, 2006, the Company’s Board approved the move from a monthly dividend to a quarterly dividend payout policy beginning in the fourth quarter of 2006. The change will result in cost savings and enable the Company to more effectively evaluate the future quarterly dividend level. The fourth quarter dividend will be declared in mid-November with a payout occurring before the end of the year.
“I am pleased with the performance of our core real estate portfolio exhibited by the historic low vacancy rate, the improving credit metrics of our tenants and the great progress that has been made in renewing expiring leases. On the TRS side of our business, sales velocity in our investment property sales platform increased nicely in the second quarter, reflecting the additional resources we have devoted to this business. However, we continue to face some cap rate compression, which impacted our gain percentages,” states Curtis B. McWilliams, President and Chief Executive Officer of Trustreet Properties, Inc. “Looking ahead, I firmly believe we will continue to see increased monetization of all or significant portions of real estate held by restaurant companies. We continue to explore ways to ensure that we have sufficient capital to take advantage of these opportunities,” added Mr. McWilliams.
About Trustreet
Trustreet Properties, Inc. (pronounced “trust - street”) is the largest self-advised restaurant real estate investment trust (REIT) in the United States. Trustreet, traded on the NYSE under the ticker symbol TSY, provides a complete range of financial, real estate and advisory services to operators of national and regional restaurant chains. For more information, visit www.trustreet.com.
Conference Call
Management will hold a conference call on Tuesday, August 8, 2006 at 10:00 a.m. EDT to review the Company’s quarterly results. The call can be accessed on the Company’s website at www.trustreet.com and by direct dial-in at 888-413-5357. Reference conference identification number 934600. For those unable to listen to the live broadcast, a replay will also be available on the Company’s web site for 30 days.
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Statements in this press release that are not strictly historical are “forward-looking” statements. Forward-looking statements involve known and unknown risks, which may cause the Company’s actual future results to differ materially from expected results. These risks include, among others, general economic conditions, local real estate conditions, changes in interest rates, increases in operating costs, the availability of capital, and the profitability of the Company’s taxable subsidiary. Additional information concerning these and other factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the Company’s SEC filings. Copies of each filing may be obtained from the Company or the SEC. Consequently, such forward-looking statements should be regarded solely as reflections of the Company’s current operating plans and estimates. Actual operating results may differ materially from what is expressed or forecast in this press release. The Company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date these statements were made.
‘‘Funds From Operations’’ (FFO) is a measure of performance that Trustreet computes in accordance with the ‘‘White Paper’’ definition of FFO adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (‘‘NAREIT’’). According to this definition, and as used herein by Trustreet, FFO means net income (loss) allocable to common stockholders (computed in accordance with GAAP), plus real estate related depreciation and amortization excluding gains (or losses) from sales of property held for investment and after adjustments allocable to minority interests or joint ventures. NAREIT created FFO as a supplemental performance measure to exclude historical cost depreciation, among other items, from GAAP net income (loss) allocable to common stockholders. Trustreet uses FFO as a supplemental measure to conduct and evaluate its business because there are certain limitations associated with using GAAP net income by itself as the primary measure of operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, Trustreet believes that the presentation of operating results for real estate companies that use historical cost accounting is insufficient by itself. In addition, Trustreet believes that the use of FFO has made comparisons of those results more meaningful and has enabled the evaluation of its operating performance compared to other REITs that use the NAREIT definition in order to make more informed business decisions based on industry trends or conditions. FFO should not be considered as an alternative to net income (loss) allocable to common stockholders as the primary indicator of Trustreet’s operating performance or as an alternative to cash flow as a measure of liquidity. While Trustreet adheres to the NAREIT definition of FFO in making its calculations, this method of calculating FFO may not be comparable to the methods used by other REITs and, accordingly, may be different from similarly titled measures reported by other companies.
The Company believes that Adjusted Funds from Operations is helpful to investors as a measure of its ability to pay dividends. While the measure is used commonly in the REIT industry, definitions of AFFO vary and investors should take definitional differences into account when comparing AFFO reported by other REITs. The Company calculates AFFO by subtracting from or adding to FFO (i) amortization of the principal portion of capital leases, (ii) straight-lining of rents, (iii) non-real estate depreciation and amortization, (iv) amortization of deferred loan costs and (v) non-cash real estate impairment charges or loan reserves.
TRUSTREET PROPERTIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In thousands except for per share data)
| Quarter ended June 30, | Six months ended June 30, | ||||||||||||
| 2006 | 2005 | 2006 | 2005 | ||||||||||
| Revenues: | |||||||||||||
Rental income from operating leases | $ | 46,656 | $ | 38,296 | $ | 93,768 | $ | 60,728 | |||||
Earned income from capital leases | 3,048 | 3,170 | 6,107 | 5,830 | |||||||||
Interest income from mortgage, equipment and other notes receivables | 1,961 | 6,554 | 3,945 | 12,835 | |||||||||
Investment and interest income | 339 | 448 | 610 | 993 | |||||||||
Other income | 2,735 | 1,686 | 6,319 | 2,882 | |||||||||
| 54,739 | 50,154 | 110,749 | 83,268 | ||||||||||
| Expenses: | |||||||||||||
General operating and administrative | 7,259 | 10,041 | 15,068 | 20,987 | |||||||||
Interest expense | 25,412 | 24,868 | 50,416 | 41,759 | |||||||||
| Property expenses, state and other taxes | 2,278 | 1,947 | 5,680 | 3,098 | |||||||||
Depreciation and amortization | 9,757 | 8,487 | 20,171 | 13,436 | |||||||||
Impairment provisions on assets | 950 | 125 | 1,637 | 140 | |||||||||
| 45,656 | 45,468 | 92,972 | 79,420 | ||||||||||
| Income from continuing operations before minority interest and equity in earnings of unconsolidated joint ventures | 9,083 | 4,686 | 17,777 | 3,848 | |||||||||
| Minority interest | (140 | ) | (734 | ) | (372 | ) | (1,549 | ) | |||||
| Equity in earnings/(loss) of unconsolidated joint ventures | (25 | ) | 32 | 11 | 62 | ||||||||
| Income from continuing operations | 8,918 | 3,984 | 17,416 | 2,361 | |||||||||
| Income from discontinued operations, after income taxes | 12,930 | 14,142 | 21,729 | 19,215 | |||||||||
| Gain/(loss) on sale of assets | (136 | ) | 23 | 523 | 23 | ||||||||
| Net income | 21,712 | 18,149 | 39,668 | 21,599 | |||||||||
Dividends to preferred stockholders | (7,176 | ) | (7,176 | ) | (14,352 | ) | (10,099 | ) | |||||
| Net income allocable to common stockholders | $ | 14,536 | $ | 10,973 | $ | 25,316 | $ | 11,500 | |||||
| Basic and diluted net income per share: | |||||||||||||
Income/(loss) from continuing operations allocable to common stockholders | $ | 0.03 | $ | (0.05 | ) | $ | 0.06 | $ | (0.15 | ) | |||
Income from discontinued operations | 0.19 | 0.24 | 0.32 | 0.38 | |||||||||
| Basic and diluted net income per share | $ | 0.22 | $ | 0.19 | $ | 0.38 | $ | 0.23 | |||||
Weighted average number of shares of common stock outstanding | |||||||||||||
Basic | 67,278 | 57,908 | 67,260 | 50,922 | |||||||||
Diluted | 67,280 | 57,908 | 67,278 | 50,922 | |||||||||
TRUSTREET PROPERTIES, INC.
DISCONTINUED OPERATIONS BY SEGMENT
(UNAUDITED)
Quarter ended June 30, (in millions) | |||||||||||||
| 2006 | 2005 | ||||||||||||
Real Estate Segment | Specialty Finance Segment | Real Estate Segment | Specialty Finance Segment | ||||||||||
| Sale of real estate | $ | 31.6 | $ | 74.2 | $ | 13.2 | $ | 70.8 | |||||
| Cost of real estate sold | 26.5 | 65.4 | 12.4 | 59.4 | |||||||||
| Gain on sale of real estate | 5.1 | 8.8 | 0.8 | 11.4 | |||||||||
| Rental income | 0.5 | 3.2 | 2.1 | 1.5 | |||||||||
| Interest expense | — | (2.2 | ) | — | (1.3 | ) | |||||||
Other property expense and impairment provisions | (0.3 | ) | (0.2 | ) | (0.4 | ) | (0.4 | ) | |||||
Net earnings from retail discontinued operations before tax | — | — | — | 0.3 | |||||||||
| Net other income | 0.2 | 0.8 | 1.7 | 0.1 | |||||||||
Earnings from discontinued operations before tax | 5.3 | 9.6 | 2.5 | 11.5 | |||||||||
| Income tax benefit/(provision) | — | (2.0 | ) | — | 0.2 | ||||||||
Income from discontinued operations, after income taxes | $ | 5.3 | $ | 7.6 | $ | 2.5 | $ | 11.7 | |||||
TRUSTREET PROPERTIES, INC.
DISCONTINUED OPERATIONS BY SEGMENT (cont.)
(UNAUDITED)
Six months ended June 30, (in millions) | |||||||||||||
| 2006 | 2005 | ||||||||||||
Real Estate Segment | Specialty Finance Segment | Real Estate Segment | Specialty Finance Segment | ||||||||||
| Sale of real estate | $ | 45.7 | $ | 114.9 | $ | 13.5 | $ | 127.8 | |||||
| Cost of real estate sold | 37.6 | 101.6 | 12.6 | 106.7 | |||||||||
Gain on sale of real estate | 8.1 | 13.3 | 0.9 | 21.1 | |||||||||
| Rental income | 1.6 | 6.3 | 3.4 | 3.4 | |||||||||
| Interest expense | — | (4.2 | ) | — | (2.1 | ) | |||||||
Other property expense and impairment provisions | (0.8 | ) | — | (1.1 | ) | (0.8 | ) | ||||||
Net earnings from retail discontinued operations before tax | — | — | — | 0.9 | |||||||||
| Net other income | 0.8 | 2.1 | 2.3 | 1.4 | |||||||||
Earnings from discontinued operations before tax | 8.9 | 15.4 | 3.2 | 22.5 | |||||||||
| Income tax provision | — | (2.6 | ) | — | (6.4 | ) | |||||||
Income from discontinued operations, after income taxes | $ | 8.9 | $ | 12.8 | $ | 3.2 | $ | 16.1 | |||||
TRUSTREET PROPERTIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
| June 30, 2006 | December 31, 2005 | |||||||||
| ASSETS | ||||||||||
| Real estate investment properties | $ | 1,757,151 | $ | 1,726,493 | ||||||
| Net investment in capital leases | 144,825 | 147,995 | ||||||||
| Real estate held for sale | 221,366 | 242,777 | ||||||||
Mortgage, equipment and other notes receivable, net of allowance of $3,286 and $5,706, respectively | 84,115 | 88,239 | ||||||||
| Cash and cash equivalents | 15,987 | 20,459 | ||||||||
| Restricted cash | 37,524 | 32,465 | ||||||||
Receivables, less allowance for doubtful accounts of $2,764 and $2,394, respectively | 9,523 | 7,665 | ||||||||
| Accrued rental income | 40,148 | 34,295 | ||||||||
Intangible lease costs, net of accumulated amortization of $15,082 and $9,628, respectively | 75,538 | 77,716 | ||||||||
| Goodwill | 235,895 | 235,895 | ||||||||
| Other assets | 70,475 | 69,481 | ||||||||
| Total assets | $ | 2,692,547 | $ | 2,683,480 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
| Revolver | $ | 101,500 | $ | 55,000 | ||||||
| Notes payable | 576,887 | 579,002 | ||||||||
| Mortgage warehouse facilities | 145,163 | 122,722 | ||||||||
| Bonds payable | 705,735 | 742,201 | ||||||||
Below market lease liability, net of accumulated amortization of $5,914 and $3,772, respectively | 29,754 | 31,649 | ||||||||
| Due to related parties | 354 | 232 | ||||||||
| Other payables | 49,584 | 56,097 | ||||||||
| Minority interests | 4,230 | 4,077 | ||||||||
| Stockholders’ equity | 1,079,340 | 1,092,500 | ||||||||
Total liabilities and stockholders’ equity | $ | 2,692,547 | $ | 2,683,480 | ||||||
TRUSTREET PROPERTIES, INC.
RECONCILIATION OF NAREIT FFO AND AFFO
(UNAUDITED)
(In thousands except for per share data)
| Quarter ended June 30, | Six months ended June 30, | ||||||||||||
| 2006 | 2005 | 2006 | 2005 | ||||||||||
Funds From Operations (NAREIT defined): | |||||||||||||
| Net income | $ | 21,712 | $ | 18,149 | $ | 39,668 | $ | 21,599 | |||||
| Less: Dividends on preferred stock | (7,176 | ) | (7,176 | ) | (14,352 | ) | (10,099 | ) | |||||
Net income allocable to common stockholders | 14,536 | 10,973 | 25,316 | 11,500 | |||||||||
FFO adjustments: Real estate depreciation and amortization | 8,913 | 8,454 | 18,967 | 13,539 | |||||||||
| Gain on sale of real estate | (3,786 | ) | (828 | ) | (6,740 | ) | (828 | ) | |||||
NAREIT FFO | $ | 19,663 | $ | 18,599 | $ | 37,543 | $ | 24,211 | |||||
| NAREIT FFO per share | $ | 0.29 | $ | 0.32 | $ | 0.56 | $ | 0.48 | |||||
| Principal component of capital leases | $ | 1,646 | $ | 1,442 | $ | 3,226 | $ | 2,337 | |||||
FFO and the principal component of capital leases | $ | 21,309 | $ | 20,041 | $ | 40,769 | $ | 26,548 | |||||
FFO and the principal component of capital leases per share | $ | 0.32 | $ | 0.35 | $ | 0.61 | $ | 0.52 | |||||
Straight-line rent | $ | (2,563 | ) | $ | (2,231 | ) | $ | (5,838 | ) | $ | (3,416 | ) | |
Non-real estate depreciation and amortization Deferred loan cost amortization Asset impairment/provisions | 1,326 2,472 973 | 803 2,748 308 | 1,932 4,843 1,759 | 1,187 4,716 500 | |||||||||
ADJUSTED FFO | $ | 23,517 | $ | 21,669 | $ | 43,465 | $ | 29,535 | |||||
LEASE EXPIRATIONS
Lease Expirations
(based on annualized base rent as of June 30, 2006)
# of Properties | % of Total | # of Properties | % of Total | |||
| 2006 | 28 | 1.3% | 2012 | 82 | 4.5% | |
| 2007 | 79 | 2.9% | 2013 | 75 | 4.2% | |
| 2008 | 80 | 2.6% | 2014 | 145 | 8.3% | |
| 2009 | 94 | 3.8% | 2015 | 93 | 5.6% | |
| 2010 | 103 | 4.7% | 2016 | 191 | 9.3% | |
| 2011 | 74 | 3.5% | Thereafter (or Vacant) | 971 | 49.3% |
DIVERSIFICATION
Top 10 Tenants Top 10 Concepts
(based on annualized base rent as of June 30, 2006) ; (based on annualized base rent as of June 30, 2006)
Tenant | % of Rent | Concept | % of Rent | |||
| 1 | Jack in the Box, Inc. | 6.8% | 1 | Wendy’s* | 8.5% | |
| 2 | Golden Corral Corporation | 6.1% | 2 | Burger King | 7.1% | |
| 3 | IHOP Properties, Inc. | 4.0% | 3 | Golden Corral | 7.0% | |
| 4 | Captain D's, LLC | 3.7% | 4 | Jack in the Box | 6.7% | |
| 5 | Sybra Inc. | 3.4% | 5 | Arby’s | 6.2% | |
| 6 | S&A Properties Corp. | 3.0% | 6 | International House of Pancakes | 4.2% | |
| 7 | Texas Taco Cabana, LP | 2.1% | 7 | Captain D’s | 3.9% | |
| 8 | El Chico Restaurants, Inc. | 1.9% | 8 | Pizza Hut | 2.9% | |
| 9 | The Restaurant Company | 1.8% | 9 | Bennigan’s | 2.9% | |
| 10 | Vicorp Restaurants, Inc. | 1.6% | 10 | Denny’s | 2.6% |
* Includes contingent rent for units with leases where rent is based solely on actual store sales, generally without a minimum threshold.
DIVERSIFICATION (cont.)
Top 10 States
(based on annualized base rent as of June 30, 2006)
State | % of Rent | State | % of Rent | |||
| 1 | Texas | 19.5% | 6 | California | 3.7% | |
| 2 | Florida | 10.4% | 7 | North Carolina | 3.5% | |
| 3 | Georgia | 5.8% | 8 | Ohio | 3.3% | |
| 4 | Tennessee | 4.0% | 9 | Missouri | 2.8% | |
| 5 | Illinois | 3.8% | 10 | South Carolina | 2.5% |
OTHER PORTFOLIO STATISTICS
6/30/06 | 3/31/06 | 12/31/05 | |
| Rent to Sales | |||
| Quick Service | 8.0% | 8.5% | 8.2% |
| Casual Dining | 7.5% | 7.7% | 7.8% |
| Fixed Charge Coverage | 1.67x | 1.69x | 1.66x |
Notes:
1. The Company looks for rent-to-sales ratios to be under 10% for quick service restaurants and under 14% for casual dining restaurants. Of the portfolio’s 1,053 quick service restaurants reporting sales, the aggregate rent as a percentage of aggregate sales was 8.0% based on the most recent tenant sales information provided. Of the portfolio’s 412 casual and family dining restaurants reporting sales, the aggregate rent as a percentage of aggregate sales was 7.5%.
2. The Company’s initial underwriting criteria requires that tenants have a fixed charge coverage ratio (“FCCR”) of at least 1.25x, generally based on historical financial information adjusted to include the proposed sale/leaseback financing. Based on the most recent tenant financial information obtained, approximately 77% of the units (as measured by rent) that report have a tenant-level FCCR of at least 1.25x, with a weighted average tenant-level FCCR of 1.87x. The weighted average tenant-level FCCR for all reporting units is 1.67x, with 74% (as measured by rent) of the total REIT reporting financial statements. In those cases where the tenant-level FCCR is below 1.25x, we may find store-level FCCRs that exceed 1.25x. A strong store level FCCR often mitigates any negative impact of a weaker tenant-level FCCR.
Supplemental Information
EBITDA
(UNAUDITED)
(in thousands)
Quarter ended June 30, | Six months ended June 30, | ||||||||||||
2006 | 2005 | 2006 | 2005 | ||||||||||
Net income | $ | 21,712 | $ | 18,149 | $ | 39,668 | $ | 21,599 | |||||
Interest expense | 27,600 | 26,021 | 54,631 | 43,835 | |||||||||
Income tax expense | 1,964 | (186 | ) | 2,571 | 6,408 | ||||||||
Depreciation and amortization | 9,886 | 9,270 | 20,485 | 14,743 | |||||||||
EBITDA | 61,162 | 53,254 | 117,355 | 86,585 | |||||||||
Impairment provisions on assets | 973 | 234 | 1,759 | 425 | |||||||||
Principal component of capital leases | 1,646 | 1,442 | 3,225 | 2,337 | |||||||||
Straight line rent | (2,550 | ) | (2,231 | ) | (5,815 | ) | (3,417 | ) | |||||
Amortization of above/below market leases | 344 | (27 | ) | 414 | (40 | ) | |||||||
Adjusted EBITDA | $ | 61,575 | $ | 52,672 | $ | 116,938 | $ | 85,890 | |||||
Dividends to preferred stockholders | $ | 7,176 | $ | 7,176 | $ | 14,352 | $ | 10,099 | |||||
EBITDA/interest expense + preferred dividends | 1.76x | 1.60x | 1.70x | 1.61x | |||||||||
Adjusted EBITDA/interest expense + preferred dividends | 1.77x | 1.59x | 1.70x | 1.59x | |||||||||
Note:
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is a non-GAAP measure that, as calculated by the Company, represents net income plus (i) interest expense, (ii) income tax expense and (iii) depreciation and amortization. Adjusted EBITDA represents EBITDA plus (i) impairment provisions on assets, (ii) principal component of capital leases, (iii) amortization of above/below market leases, (iv) loss on termination of cash flow hedges less (v) straight line rent. EBITDA and Adjusted EBITDA are presented, because we believe that they provide useful information to investors regarding our ability to service debt and the preferred dividend obligation. EBITDA and Adjusted EBITDA should not be considered alternative measures of operating results or cash flow from operations as determined in accordance with GAAP.
Supplemental Information
SEGMENT FFO RECONCILIATION
(UNAUDITED) | Quarter ended June 30, 2006 | Quarter ended June 30, 2005 | |||||||||||||||||||||||
| (in thousands except for per share data) | Real | Specialty | Real | Specialty | |||||||||||||||||||||
| Estate | Finance | Estate | Finance | ||||||||||||||||||||||
| Segment | Segment | Other | Consolidated | Segment | Segment | Other | Consolidated | ||||||||||||||||||
| Net income/(Loss) | $ | 18,873 | $ | 2,863 | $ | (24 | ) | $ | 21,712 | $ | 13,829 | $ | 4,427 | $ | (107 | ) | $ | 18,149 | |||||||
| Less: Dividends on preferred stock* | (6,459 | ) | (717 | ) | — | (7,176 | ) | (6,459 | ) | (717 | ) | — | (7,176 | ) | |||||||||||
| Net income allocable to common stockholders | 12,414 | 2,146 | (24 | ) | 14,536 | 7,370 | 3,710 | (107 | ) | 10,973 | |||||||||||||||
| FFO adjustments: | |||||||||||||||||||||||||
| Real Estate related depreciation & amortization | 8,757 | 156 | — | 8,913 | 8,514 | (60 | ) | — | 8,454 | ||||||||||||||||
| Gain on sale of property | (3,786 | ) | — | — | (3,786 | ) | (828 | ) | — | — | (828 | ) | |||||||||||||
NAREIT FFO | $ | 17,385 | $ | 2,302 | $ | (24 | ) | $ | 19,663 | $ | 15,056 | $ | 3,650 | $ | (107 | ) | $ | 18,599 | |||||||
| NAREIT FFO per share | $ | 0.26 | $ | 0.03 | — | $ | 0.29 | $ | 0.26 | $ | 0.06 | — | $ | 0.32 | |||||||||||
| Principal component of capital leases | $ | 1,586 | $ | 60 | — | $ | 1,646 | $ | 1,442 | — | — | 1,442 | |||||||||||||
FFO and the principal component of capital leases | $ | 18,971 | $ | 2,362 | $ | (24 | ) | $ | 21,309 | $ | 16,498 | $ | 3,650 | $ | (107 | ) | $ | 20,041 | |||||||
| FFO and the principal component of capital leases per share | $ | 0.28 | $ | 0.04 | — | $ | 0.32 | $ | 0.29 | $ | 0.06 | — | $ | 0.35 | |||||||||||
| Straight-line rent | $ | (2,364 | ) | $ | (199 | ) | — | $ | (2,563 | ) | $ | (2,209 | ) | $ | (22 | ) | — | $ | (2,231 | ) | |||||
| Non-real estate related depreciation and amortization | 401 | 925 | — | 1,326 | 242 | 561 | — | 803 | |||||||||||||||||
| Deferred loan cost amortization | 2,195 | 277 | — | 2,472 | 2,431 | 317 | — | 2,748 | |||||||||||||||||
| Asset impairments / provisions | 973 | — | — | 973 | 234 | 74 | — | 308 | |||||||||||||||||
Adjusted FFO | $ | 20,176 | $ | 3,365 | $ | (24 | ) | $ | 23,517 | $ | 17,196 | $ | 4,580 | $ | (107 | ) | $ | 21,669 | |||||||
* Represents internal allocation of 90% to the real estate segment and 10% to the specialty finance segment.