Exhibit 99.1
GREAT LAKES REIT REPORTS $0.21 EPS AND $0.42 FFO PER
COMMON SHARE FOR THIRD QUARTER 2003
Great Lakes REIT Third Quarter Highlights
• Net Income of $3.4 million, or $0.21 per common share
• Funds From Operations (FFO) of $6.7 million, or $0.42 per common share ($0.44 before one-time charges)
• Occupancy at October 1, 2003 was 78.3 %.
• Monthly cash dividend of $0.135 per common share paid in August, September and October 2003.
OAK BROOK, ILLINOIS, November 7, 2003 - Great Lakes REIT (NYSE: GL), a real estate investment trust which holds a portfolio of Midwestern office and medical office properties, today announced third quarter 2003 net income of $3.4 million, or $0.21 per common share, which included gains on sale of properties of $2.2 million, and funds from operations (FFO) of $6.7 million, or $0.42 per common share. This compares to net income of $9.5 million, or $0.57 per common share, which included gain on sale of properties of $6.2 million, and FFO of $8.2 million, or $0.50 per common share, for the third quarter of 2002. Results for the quarter ended September 30, 2003 were reduced by one-time costs associated with the previously disclosed initiatives undertaken to explore alternatives to improve shareholder value in the amount of $0.3 million, or $0.02 per common share. FFO represents a non-GAAP (generally accepted accounting principles) financial measure. A table reconciling FFO to the GAAP measure the Company believes to be most directly comparable, net income applicable to common shares, is included in this release. Although not a GAAP measure, the Company believes that the inclusion of information regarding funds from operations (FFO) provides important information to shareholders and potential investors. The GAAP measure, net income applicable to common shares, includes depreciation and amortization expenses, gains or losses on property sales and minority interests. In presenting FFO, the Company eliminates substantially all of these items in order to provide an indication of the results from the Company’s property operations. FFO is a widely recognized measure in the Company’s business and is presented by nearly all publicly traded REITs. The Company’s calculation of FFO follows the definition of FFO as promulgated by the National Association of Real Estate Investment Trusts, but may differ from the methodology for calculating FFO utilized by other real estate companies.
For the nine months ended September 30, 2003, the Company reported net income of $8.0 million, or $0.49 per common share, which included gains on sale of properties of $2.2 million, compared to $18.9 million, or $1.14 per common share, for the comparable period of 2002 (including $7.2 million of gain on sale of properties for the comparable period of 2002). Funds from operations totaled $21.7 million, or $1.34 per common share, for the nine months ended September 30, 2003, as compared to FFO of $26.3 million, or $1.59 per common share, for the comparable period of 2002. Results for the nine months ended September 30, 2003 were impacted by one-time costs associated with the termination of certain employee share loans in the amount of $0.5 million, or $0.03 per common share and one-time costs associated with the initiatives undertaken to explore alternatives to improve shareholder value in the amount of $0.3 million, or $0.02 per common share
“The level of leasing activity was subdued in the third quarter of 2003. Year to date we have averaged 32,500 square feet per month of new leases against a budget of 30,000 square feet per month. Our budget assumes that the leasing environment in our markets will continue at about 30,000 square feet per month of new leasing for the fourth quarter of 2003” commented Dick May, Great Lakes REIT’s Chairman and CEO. “Over the last three years, lease expirations have averaged 20% per year compared to lease expirations averaging 14% per year over the next three years. In addition, after 11 consecutive quarters of declining occupancies in our markets,
occupancies have improved slightly since the first quarter. However, it continues to be a battle to sign each and every lease.”
Based on current market conditions, the Company expects 2003 earnings per common share in the range of $0.55 to $0.70 and 2003 FFO per common share in the range of $1.74 to $1.76.
Portfolio Performance
Total revenues increased by 5% to $25.9 million in the third quarter of 2003 from $24.6 million in last year’s third quarter. Revenues increased primarily due to addition of revenues from the eight medical office properties acquired on October 1, 2002. Same store sales decreased 15% (cash basis) for the three months ended September 30, 2003, as compared to the third quarter of 2002, primarily as a result of the decline in occupancy quarter over quarter.
Total revenues increased by $5.2 million, or 7%, to $79.4 million for the nine months ended September 30, 2003, from $74.2 million for the comparable period of 2002. Revenues increased primarily due to addition of revenues from the eight medical office properties acquired on October 1, 2002. Same store sales decreased 14% (cash basis) for the nine months ended September 30, 2003, as compared to the nine months ended September 30, 2002, primarily as a result of the decline in occupancy.
EBITDA decreased $2.2 million, or 5%, to $38.7 million for the nine months ended September 30, 2003, as compared to $40.9 million for the comparable period in 2002. Cash provided by operating activities decreased to $19.3 million for the nine months ended September 30, 2003, from $30.0 million for the comparable period of 2002 due to the timing of real estate tax payments, and declines in occupancy in the office portfolio in 2003.
EBITDA, a non-GAAP financial measure, represents net income before allocation to minority interests plus interest expense, federal income tax expense (if any) and depreciation and amortization expense. A table reconciling EBITDA to cash provided by operating activities, the GAAP measure the Company believes to be directly comparable, is included in this release. EBITDA is presented solely as a supplemental disclosure because the Company believes it provides useful information regarding the Company’s ability to service or incur debt. Because not all companies calculate EBITDA the same way, the presentation of EBITDA may not be comparable to similarly titled measures of other companies.
Balance Sheet, Market Value and Liquidity
EBITDA coverage of interest expense was 2.9 times for the nine months ended September 30, 2003 as compared to 3.6 times for the same period of 2002 and EBITDA coverage of interest plus preferred dividends was 2.4 times for the nine months ended September 30, 2003, as compared to 2.9 times for the same period of 2002. Cash provided by operating activities (before interest expense) coverage of interest expense was 2.5 times for the nine months ended September 30, 2003, as compared to 3.6 times for the comparable period of 2002. Cash provided by operating activities (before interest expense) coverage of interest expense plus preferred dividends was 2.0 times for the nine months ended September 30, 2003, as compared to 2.9 times for the comparable period of 2002.
The Company has provided EBITDA and the related non-GAAP coverage ratios as supplemental disclosure because the Company believes such disclosure provides useful information regarding the Company’s ability to service or incur debt. Included with the reconciliation of EBITDA to cash provided by operating activities, the GAAP measure the Company believes to be directly comparable, are the coverage calculations for EBITDA coverage of interest expense, EBITDA coverage of interest plus preferred dividends, cash provided by operating activities (before interest expense) coverage of interest expense and cash provided by operating activities (before interest expense) coverage of interest expense plus preferred dividends.
The Company had $312.1 million of total debt outstanding at September 30, 2003. The interest rate on approximately 92% of this debt was fixed at a weighted average interest rate of 5.78%. At September 30, 2003,
2
Great Lakes REIT had $43 million available for future borrowings under two secured lines of credit that the Company utilizes for acquisitions, development activities, capital improvements, tenant improvements, leasing costs and working capital needs.
Dividends
In August, September and October 2003, the Company paid monthly cash dividends of $0.135 per common share.
Leasing
For the quarter ended September 30, 2003, the Company signed 54,000 square feet of new leases bringing the total for the year to 295,000 square feet. Net rental rates on new leases and leases renewed for the quarter were 12% lower than net rents on the expiring leases. In addition, the Company has experienced higher costs for tenant improvements and leasing commissions on leases signed in 2003 as compared to 2002.
As expected, the occupancy rate for the Company’s portfolio of properties declined to 78.3% at October 1, 2003 from 80.2% at July 1, 2003. The Company believes that the trend of vacancy increases is slowing, but the Company anticipates that the difficult leasing environment that currently exists in its markets will persist throughout 2004.
At October 1, 2003, Great Lakes REIT had 173,000 square feet of leases, or 3% of the portfolio, expiring during the balance of 2003. The Company currently expects to retain or renew 100,000 to 110,000 square feet of the remaining 173,000 square feet of leases rolling over during 2003. Although the Company has leased approximately 32,500 square feet of new space per month through September 30, it anticipates it will average approximately 30,000 square feet per month of new leasing activity for the balance of 2003, basically the same level as was experienced in the very difficult environment of 2002. Based on the tenant retention and new leasing activity expectations noted above, the Company expects that average portfolio occupancy during 2003 will be in the range of 79% to 80%. Occupancy at January 1, 2004 is expected to be in the range of 77% to 79% assuming no significant tenant defaults or material disposition activities occur during the remainder of the year.
Lease expirations for the years 2001, 2002 and 2003 averaged approximately 20% of total year end portfolio square footage each year, while lease expirations for 2004, 2005 and 2006 are expected to be 17%, 14% and 10% of total portfolio square footage, respectively. The Company believes the economic impact of new leasing activity will be less pronounced over the next several years.
Property Dispositions
On July 8, 2003, the Company sold its properties located at 165 and 175 Hansen Court, Wood Dale, Illinois, for a contract price of $3.9 million. The gain on sale of properties for this transaction of approximately $1.7 million was recognized in the third quarter of 2003. The net proceeds from sale were used for retirement of long-term debt ($2.3 million) with the balance for working capital ($1.3 million).
On September 10, 2003, the Company sold its property located at 191 Waukegan Road, Northfield, Illinois, for a contract price of $6.1 million. The gain on sale of properties for this transaction of approximately $0.5 million was recognized in the third quarter of 2003. The net proceeds from sale were used for retirement of long-term debt ($2.8 million) with the balance for working capital ($3.0 million).
Tenant Credit Issues
As of October 1, 2003, several tenants were in default under their leases for failure to make rent payments. Several other tenants that are not currently in default are experiencing financial difficulties which may lead to lease defaults. It is not anticipated that additional tenant defaults will materially affect the Company’s results of operations in the fourth quarter of 2003.
3
Legion Insurance Company, which leases 58,000 square feet of space at Milwaukee Center and represented 1.53% of the Company’s aggregate portfolio annualized base rent as of December 31, 2002, was placed in rehabilitation by the Pennsylvania Department of Insurance on April 1, 2002. After completing its review, the Pennsylvania Department of Insurance has recommended to the Commonwealth Court that Legion Insurance Company be liquidated. The Commonwealth Court approved the recommendation of the Pennsylvania Department of Insurance on July 28, 2003. Based on currently available information, the Company believes it is more likely than not that Legion will fulfill all terms of its lease in 2003 and 2004. Legion Insurance Company is current on its rental payments to date. The Legion lease specifies a termination date of February 28, 2006.
Alternatives to Improve Shareholder Value
The Company’s Board of Trustees has engaged a real estate advisor and an investment banker to assist it in analyzing alternatives to improve shareholder value. Included in general and administrative expenses for the three and nine months ended September 30, 2003, were $0.3 million of expenses related to these activities. These alternatives may include a sale of some or all of the Company’s properties, or a business combination or other similar transaction. Such activities are ongoing, and there can be no assurance that any such transaction will occur.
Earnings Web Cast/Conference Call
A live audio web cast and conference call presentation has been scheduled for November 7, 2003 at 11:00 AM Eastern time/10:00 AM Central time to review the results of the third quarter of 2003. To listen to the call over the Internet, go to Great Lakes REIT’s website at www.greatlakesreit.com under the Investor Information/audio-video section at least 15 minutes early to register, download and install any necessary audio software. To access the live call by telephone, please call (877) 407-9205 approximately five minutes prior to the scheduled start time. A recording of the call may also be accessed by telephone by dialing (877) 660-6853, entering Account number 1628 and then Conference ID 80314. The web cast and conference call contain time-sensitive information that is accurate only as of November 7, 2003, the date of the live broadcast. The call is the property of Great Lakes REIT. Any redistribution, retransmission or rebroadcast of the conference call in any form without the express written consent of Great Lakes REIT is strictly prohibited.
Great Lakes REIT is a fully integrated, self-administered and self-managed real estate investment trust with a current portfolio of 45 properties totaling 5.9 million square feet of office and medical office space in suburban areas of Chicago, Milwaukee, Detroit, Columbus, Minneapolis, Denver and Cincinnati.
A copy of the Company’s supplemental financial information for the quarter ended September 30, 2003, is available on the Company’s web site under the Investor section at www.greatlakesreit.com.
The Company is furnishing this earnings release to the Securities and Exchange Commission on Form 8-K in accordance with applicable SEC rules.
This press release contains forward-looking statements that involve numerous risks and uncertainties. Statements in this document regarding the Company’s expectations for FFO per share, earnings per share, tenant retention, new tenant leasing activity, vacancy trends, occupancy rates, acquisition and disposition volume and timing, the expectation regarding the performance of the economy and the office markets, the anticipated level and effect of tenant defaults and anticipated market and other economic conditions are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on what the Company believes to be reasonable assumptions and management’s current expectations; however, actual results may vary from those implied by such forward-looking statements. Key factors that may cause actual results to differ from projected results include: conditions in the financial markets generally and the market for real estate finance specifically; local and/or national economic conditions; the pace of office space development and sub-lease availability; tenant office space demand; the financial position of the Company’s tenants, including changes in such financial position that may
4
lead to increases in tenant defaults and the performance of Legion Insurance Company; actual tenant default rates compared to anticipated default rates; performance of the medical office market generally and the local markets for the Company’s medical office properties specifically; performance of the hospitals adjacent to the Company’s medical office properties; changes in interest rates; and other risks inherent in the real estate business. For more information, refer to Great Lakes REIT’s filings with the Securities and Exchange Commission.
Financial Tables to Follow
5
Great Lakes REIT
Consolidated Balance Sheets
(unaudited)
(In Thousands, except per share data)
|
| September |
| December |
| ||
Assets |
|
|
|
|
| ||
Properties: |
|
|
|
|
| ||
Land |
| $ | 64,567 |
| $ | 66,540 |
|
Buildings and improvements |
| 528,309 |
| 526,026 |
| ||
|
| 592,876 |
| 592,566 |
| ||
Less accumulated depreciation |
| 75,388 |
| 66,761 |
| ||
|
| 517,488 |
| 525,805 |
| ||
Cash and cash equivalents |
| 2,100 |
| 5,061 |
| ||
Real estate tax escrows |
| 92 |
| 69 |
| ||
Rents receivable |
| 7,164 |
| 6,261 |
| ||
Deferred financing and leasing costs, net of accumulated amortization |
| 8,971 |
| 9,110 |
| ||
Goodwill |
| 1,061 |
| 1,061 |
| ||
Other assets |
| 2,623 |
| 1,614 |
| ||
Total assets |
| $ | 539,499 |
| $ | 548,981 |
|
|
|
|
|
|
| ||
Liabilities and shareholders’ equity |
|
|
|
|
| ||
Bank loan payable |
| $ | 15,155 |
| $ | 36,000 |
|
Mortgage loans payable |
| 293,695 |
| 275,050 |
| ||
Bonds payable |
| 3,245 |
| 3,620 |
| ||
Accounts payable and accrued liabilities |
| 7,568 |
| 3,740 |
| ||
Accrued real estate taxes |
| 11,316 |
| 14,872 |
| ||
Dividends payable |
| 2,475 |
| 2,539 |
| ||
Prepaid rent |
| 3,594 |
| 4,044 |
| ||
Security deposits |
| 1,543 |
| 1,617 |
| ||
Total liabilities |
| 338,591 |
| 341,482 |
| ||
Minority interests |
| 650 |
| 677 |
| ||
Commitments and contingencies |
|
|
|
|
| ||
Shareholders’ equity: |
|
|
|
|
| ||
Preferred shares of beneficial interest ($0.01 par value, 10,000 shares authorized; 1,500 9 3/4% Series A Cumulative Redeemable shares, with a $25.00 per share Liquidation Preference, issued and outstanding) |
| 37,500 |
| 37,500 |
| ||
Common shares of beneficial interest ($0.01 par value, 60,000 shares authorized; 16,078 and 16,550 shares issued and outstanding in 2003 and 2002, respectively) |
| 161 |
| 165 |
| ||
Paid-in-capital |
| 201,371 |
| 208,319 |
| ||
Retained earnings (deficit) |
| (31,541 | ) | (19,765 | ) | ||
Employee share purchase loans |
| (4,655 | ) | (16,154 | ) | ||
Deferred compensation |
| (1,817 | ) | (2,035 | ) | ||
Accumulated other comprehensive income (loss) |
| (761 | ) | (1,208 | ) | ||
Total shareholders’ equity |
| 200,258 |
| 206,822 |
| ||
Total liabilities and shareholders’ equity |
| $ | 539,499 |
| $ | 548,981 |
|
6
Great Lakes REIT
Consolidated Statements of Income and Comprehensive Income
(unaudited)
(In Thousands, except per share data)
|
| Three months ended September 30, |
| ||||
|
| 2003 |
| 2002 |
| ||
Revenues: |
|
|
|
|
| ||
Rental |
| $ | 19,722 |
| $ | 18,647 |
|
Reimbursements |
| 5,478 |
| 5,068 |
| ||
Parking |
| 106 |
| 118 |
| ||
Telecommunications |
| 59 |
| 56 |
| ||
Tenant service |
| 120 |
| 127 |
| ||
Interest |
| 89 |
| 330 |
| ||
Other |
| 304 |
| 229 |
| ||
Total revenues |
| 25,879 |
| 24,575 |
| ||
Expenses: |
|
|
|
|
| ||
Real estate taxes |
| 4,424 |
| 3,972 |
| ||
Other property operating |
| 7,529 |
| 6,596 |
| ||
General and administrative |
| 1,699 |
| 1,317 |
| ||
Interest |
| 4,382 |
| 3,807 |
| ||
Depreciation and amortization |
| 5,637 |
| 4,921 |
| ||
Total expenses |
| 23,671 |
| 20,613 |
| ||
Income before allocation to minority interests |
| 2,208 |
| 3,962 |
| ||
Minority interests |
| 11 |
| 25 |
| ||
Income from continuing operations |
| 2,197 |
| 3,937 |
| ||
Discontinued operations, net (including gain on sale of properties of $2,191 and $6,245 in 2003 and 2002, respectively) |
| 2,128 |
| 6,428 |
| ||
Net income |
| 4,325 |
| 10,365 |
| ||
Income allocated to preferred shareholders |
| 914 |
| 914 |
| ||
Net income applicable to common shares |
| $ | 3,411 |
| $ | 9,451 |
|
Earnings per common share from continuing operations - basic. |
| $ | 0.08 |
| $ | 0.18 |
|
Earnings per common share-basic |
| $ | 0.21 |
| $ | 0.58 |
|
Weighted average common shares outstanding-basic |
| 15,912 |
| 16,372 |
| ||
Diluted earnings per common share from continuing operations |
| $ | 0.08 |
| $ | 0.18 |
|
Diluted earnings per common share |
| $ | 0.21 |
| $ | 0.57 |
|
Weighted average common shares outstanding–diluted |
| 16,046 |
| 16,552 |
| ||
Dividends declared per common share |
| $ | 0.405 |
| $ | 0.405 |
|
|
|
|
|
|
| ||
Comprehensive income: |
|
|
|
|
| ||
Net income |
| $ | 4,325 |
| $ | 10,365 |
|
Change in fair value of interest rate swap agreements |
| 267 |
| (1,023 | ) | ||
Total comprehensive income |
| $ | 4,592 |
| $ | 9,342 |
|
7
|
| Nine months ended |
| ||||
|
| 2003 |
| 2002 |
| ||
Revenues: |
|
|
|
|
| ||
Rental |
| $ | 60,294 |
| $ | 55,831 |
|
Reimbursements |
| 16,787 |
| 15,950 |
| ||
Parking |
| 345 |
| 373 |
| ||
Telecommunications |
| 190 |
| 119 |
| ||
Tenant service |
| 273 |
| 254 |
| ||
Interest |
| 493 |
| 1,000 |
| ||
Other |
| 1,017 |
| 695 |
| ||
Total revenues |
| 79,399 |
| 74,222 |
| ||
Expenses: |
|
|
|
|
| ||
Real estate taxes |
| 13,231 |
| 11,919 |
| ||
Other property operating |
| 23,379 |
| 19,547 |
| ||
General and administrative |
| 4,426 |
| 3,888 |
| ||
Employee share loan termination |
| 511 |
| — |
| ||
Interest |
| 13,312 |
| 11,334 |
| ||
Depreciation and amortization |
| 16,159 |
| 14,124 |
| ||
Total expenses |
| 71,018 |
| 60,812 |
| ||
Income before allocation to minority interests |
| 8,381 |
| 13,410 |
| ||
Minority interests |
| 27 |
| 53 |
| ||
Income from continuing operations |
| 8,354 |
| 13,357 |
| ||
Discontinued operations, net (including gain on sale of properties of $2,191 and $7,182 in 2003 and 2002, respectively) |
| 2,340 |
| 8,269 |
| ||
Net income |
| 10,694 |
| 21,626 |
| ||
Income allocated to preferred shareholders |
| 2,742 |
| 2,742 |
| ||
Net income applicable to common shares |
| $ | 7,952 |
| $ | 18,884 |
|
Earnings per common share from continuing operations- basic. |
| $ | 0.35 |
| $ | 0.65 |
|
Earnings per common share–basic |
| $ | 0.49 |
| $ | 1.15 |
|
Weighted average common shares outstanding-basic |
| 16,070 |
| 16,370 |
| ||
Diluted earnings per common share from continuing operations |
| $ | 0.35 |
| $ | 0.64 |
|
Diluted earnings per common share |
| $ | 0.49 |
| $ | 1.14 |
|
Weighted average common shares outstanding–diluted |
| 16,196 |
| 16,532 |
| ||
Dividends declared per common share |
| $ | 1.215 |
| $ | 1.205 |
|
|
|
|
|
|
| ||
Comprehensive income: |
|
|
|
|
| ||
Net income |
| $ | 10,694 |
| $ | 21,626 |
|
Change in fair value of interest rate swap agreements |
| 447 |
| (1,646 | ) | ||
Total comprehensive income |
| $ | 11,141 |
| $ | 19,980 |
|
8
Great Lakes REIT
Consolidated Statements of Cash Flows
(unaudited)
(Dollars in Thousands)
|
| Nine months ended |
| ||||
|
| 2003 |
| 2002 |
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
| ||
Net income |
| $ | 10,694 |
| $ | 21,626 |
|
Adjustments to reconcile net income to cash flows from operating activities |
|
|
|
|
| ||
Depreciation and amortization |
| 16,417 |
| 15,056 |
| ||
Gain on sale of properties |
| (2,191 | ) | (7,182 | ) | ||
Non-cash portion of employee share loan termination |
| 414 |
| — |
| ||
Other non-cash items |
| 245 |
| 267 |
| ||
Net changes in assets and liabilities: |
|
|
|
|
| ||
Rents receivable |
| (903 | ) | 183 |
| ||
Real estate tax escrows and other assets |
| (708 | ) | (1,364 | ) | ||
Accounts payable, accrued expenses and other liabilities |
| 765 |
| 2,319 |
| ||
Accrued real estate taxes |
| (3,556 | ) | 1,473 |
| ||
Payment of deferred leasing costs |
| (1,861 | ) | (2,393 | ) | ||
Net cash provided by operating activities |
| 19,316 |
| 29,985 |
| ||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
| ||
Purchase of properties |
| — |
| (18,647 | ) | ||
Additions to buildings and improvements |
| (13,130 | ) | (10,842 | ) | ||
Proceeds from property sales, net |
| 9,396 |
| 31,679 |
| ||
Other investing activities, net |
| (29 | ) | (635 | ) | ||
Net cash provided by (used in) investing activities |
| (3,763 | ) | 1,555 |
| ||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
| ||
Proceeds from exercise of share options |
| 11 |
| 113 |
| ||
Proceeds from repayment of employee share loans |
| 4,197 |
| 1,982 |
| ||
Proceeds from bank and mortgage loans payable |
| 57,154 |
| 19,200 |
| ||
Distributions / dividends paid |
| (19,995 | ) | (20,442 | ) | ||
Distributions to minority interests |
| (54 | ) | (59 | ) | ||
Payment of bank and mortgage loans and bonds |
| (59,730 | ) | (10,085 | ) | ||
Other |
| (97 | ) | (1,821 | ) | ||
Net cash provided by (used in) financing activities |
| (18,514 | ) | (11,112 | ) | ||
Net increase (decrease) in cash and cash equivalents |
| (2,961 | ) | 20,428 |
| ||
Cash and cash equivalents, beginning of year |
| 5,061 |
| 2,896 |
| ||
Cash and cash equivalents, end of year |
| $ | 2,100 |
| $ | 23,324 |
|
|
|
|
|
|
| ||
Supplemental disclosure of cash flow: |
|
|
|
|
| ||
Interest paid |
| $ | 13,157 |
| $ | 11,352 |
|
Non-cash financing transaction: |
|
|
|
|
| ||
Employee share loan termination |
| $ | 7,302 |
| — |
| |
9
Non-GAAP Financial Measures
Although not a GAAP measure, the Company believes that the inclusion of information regarding funds from operations (FFO) provides important information to shareholders and potential investors. The GAAP measure, net income applicable to common shares, includes depreciation and amortization expenses, gains or losses on property sales and minority interests. In presenting FFO, the Company eliminates substantially all of these items in order to provide an indication of the results from the Company’s property operations. FFO is a widely recognized measure in the Company’s business and is presented by nearly all publicly traded REITs. The Company’s calculation of FFO may differ from the methodology for calculating FFO utilized by other real estate companies. Funds from Operations should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it indicative of funds available to fund the Company’s cash needs, including its ability to make dividends.
|
| Three months ended |
| ||||
|
| 2003 |
| 2002 |
| ||
Net income applicable to common shares |
| $ | 3,411 |
| $ | 9,451 |
|
Adjustments to calculate funds from operations: |
|
|
|
|
| ||
Minority interests |
| 11 |
| 25 |
| ||
Gain on sale of properties |
| (2,191 | ) | (6,145 | ) | ||
Adjusted depreciation and amortization (a) |
| 5,506 |
| 4,904 |
| ||
Funds from operations |
| $ | 6,737 |
| $ | 8,235 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding- diluted |
| 16,046 |
| 16,552 |
| ||
(a) Adjusted depreciation and amortization is calculated as follows:
|
| Three months ended |
| ||||
|
| 2003 |
| 2002 |
| ||
Depreciation and amortization in consolidated statements of cash flows |
| $ | 5,692 |
| $ | 5,064 |
|
Less depreciation and amortization unrelated to properties |
| 186 |
| 160 |
| ||
Adjusted depreciation and amortization |
| $ | 5,506 |
| $ | 4,904 |
|
|
| Nine months ended |
| ||||
|
| 2003 |
| 2002 |
| ||
Net income applicable to common shares |
| $ | 7,952 |
| $ | 18,884 |
|
Adjustments to calculate funds from operations: |
|
|
|
|
| ||
Minority interests |
| 27 |
| 53 |
| ||
Gain on sale of properties |
| (2,191 | ) | (7,182 | ) | ||
Adjusted depreciation and amortization (a) |
| 15,886 |
| 14,578 |
| ||
Funds from operations |
| $ | 21,674 |
| $ | 26,333 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding - diluted |
| 16,196 |
| 16,532 |
| ||
(a) Adjusted depreciation and amortization is calculated as follows:
|
| Nine months ended |
| ||||
|
| 2003 |
| 2002 |
| ||
Depreciation and amortization in consolidated statements of cash flows |
| $ | 16,417 |
| $ | 15,057 |
|
Less depreciation and amortization unrelated to properties |
| 531 |
| 479 |
| ||
Adjusted depreciation and amortization |
| $ | 15,886 |
| $ | 14,578 |
|
EBITDA and Cash Provided by Operating Activities and Related Coverage Ratios
September 30, 2003 (dollars in thousands)
10
EBITDA, a non-GAAP financial measure, represents net income before allocation to minority interests plus interest expense, federal income tax expense (if any) and depreciation and amortization expense.
EBITDA is not intended to represent cash flow for the period, is not presented as a an alternative to operating income as an indicator of operating performance, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP and is not indicative of operating income or cash provided by operating activities as determined under GAAP.
EBITDA is presented solely as a supplemental disclosure because the Company believes it provides useful information regarding the Company’s ability to service or incur debt. Because all companies do not calculate EBITDA the same way, the presentation of EBITDA may not be comparable to similarly titled measures of other companies.
The Company believes that cash provided by operating activities is the financial measure calculated and presented in accordance with GAAP that is most directly comparable to EBITDA. The following is a reconciliation of EBITDA to cash provided by operating activities for each of the periods for which EBITDA is presented in this earnings release:
|
| For the nine months ended September |
| ||||
|
| 2003 |
| 2002 |
| ||
Calculation of EBITDA: |
|
|
|
|
| ||
Income before allocation to minority interests |
| $ | 8,381 |
| $ | 13,410 |
|
Depreciation and amortization from consolidated statements of cash flows |
| 16,417 |
| 15,056 |
| ||
Non-cash portion of employee share loan termination |
| 414 |
| — |
| ||
Interest expense |
| 13,312 |
| 11,334 |
| ||
Discontinued operations, net |
| 149 |
| 1,087 |
| ||
|
|
|
|
|
| ||
EBITDA |
| $ | 38,673 |
| $ | 40,887 |
|
|
|
|
|
|
| ||
Reconciliation of EBITDA to Cash Provided by Operating Activities: |
|
|
|
|
| ||
EBITDA |
| $ | 38,673 |
| $ | 40,887 |
|
Interest expense |
| (13,312 | ) | (11,334 | ) | ||
Other adjustments from Consolidated Statements of Cash Flows: |
|
|
|
|
| ||
Other non-cash items |
| 245 |
| 267 |
| ||
Minority interests |
| (27 | ) | (53 | ) | ||
Net changes in assets and liabilities: |
|
|
|
|
| ||
Rents receivable |
| (903 | ) | 183 |
| ||
Real estate tax escrows and other assets |
| (708 | ) | (1,364 | ) | ||
Accounts payable, accrued expenses and other liabilities |
| 765 |
| 2,319 |
| ||
Accrued real estate taxes |
| (3,556 | ) | 1,473 |
| ||
Payment of deferred leasing costs |
| (1,861 | ) | (2,393 | ) | ||
Cash provided by operating activities |
| $ | 19,316 |
| $ | 29,985 |
|
The Company has included the coverage calculations for EBITDA coverage of interest expense and EBITDA coverage of interest plus preferred dividends, which are non-GAAP financial measures, as well as the GAAP ratio that the Company believes to be most directly comparable, cash provided by operating activities (before interest expense) coverage of interest expense and cash provided by operating activities (before interest expense) coverage of interest expense plus preferred dividends. The Company has provided both calculations so that investors may evaluate both the non-GAAP and GAAP ratios together, and the Company is providing such ratios as supplemental disclosure with respect to liquidity because the Company believes such ratios provide useful information regarding the Company’s ability to service or incur debt.
11
Nine months ended | |||||||
|
| September 30, |
| September 30, |
| ||
Cash provided by operating activities |
| $ | 19,316 |
| $ | 29,985 |
|
Interest expense |
| 13,312 |
| 11,334 |
| ||
Cash provided from operating activities before interest expense |
| $ | 32,628 |
| $ | 41,319 |
|
|
|
|
|
|
| ||
Interest expense |
| $ | 13,312 |
| $ | 11,334 |
|
Total interest expense |
| $ | 13,312 |
| $ | 11,334 |
|
Preferred dividends |
| 2,742 |
| 2,742 |
| ||
Total interest expense and preferred dividends |
| $ | 16,054 |
| $ | 14,076 |
|
|
|
|
|
|
| ||
Ratio of cash provided by operating activities before interest expense to interest expense |
| 2.5 | X | 3.6 | X | ||
|
|
|
|
|
| ||
Ratio of cash provided by operating activities before interest expense to interest expense and preferred dividends |
| 2.0 | X | 2.9 | X | ||
|
|
|
|
|
| ||
EBITDA |
| $ | 38,673 |
| $ | 40,887 |
|
|
|
|
|
|
| ||
Ratio of EBITDA to interest expense |
| 2.9 | X | 3.6 | X | ||
|
|
|
|
|
| ||
Ratio of EBITDA to interest expense and preferred dividends |
| 2.4 | X | 2.9 | X | ||
12
SUPPLEMENTAL INFORMATION
For the Three and Nine Months Ended
September 30, 2003
13
Great Lakes REIT
Portfolio Occupancy Schedule
October 1, 2003
Market/Property |
| Location |
| Year Built/ |
| Approximate |
| Percent |
|
|
|
|
|
|
|
|
|
|
|
Chicago |
|
|
|
|
|
|
|
|
|
Centennial Center |
| Schaumburg |
| 1980/1993 |
| 266,910 |
| 77.0 | % |
Highpoint Business Center |
| Wood Dale |
| 1986 |
| 33,495 |
| 23.7 | % |
Arlington Ridge Service Center |
| Arlington Heights |
| 1987 |
| 95,938 |
| 60.2 | % |
Arlington Business Center |
| Arlington Heights |
| 1984 |
| 98,241 |
| 73.6 | % |
1011 Touhy Atrium |
| Des Plaines |
| 1978/1995 |
| 153,777 |
| 81.7 | % |
Kensington Corporate Center |
| Mount Prospect |
| 1989 |
| 85,487 |
| 100.0 | % |
One Hawthorn Place |
| Vernon Hills |
| 1987 |
| 84,592 |
| 84.3 | % |
2 Marriott Drive |
| Lincolnshire |
| 1985 |
| 41,500 |
| 100.0 | % |
823 Commerce Drive |
| Oak Brook |
| 1969/1996 |
| 44,814 |
| 32.2 | % |
One Century Centre |
| Schaumburg |
| 1985 |
| 212,212 |
| 25.9 | % |
Lisle Executive Center |
| Lisle |
| 1988 |
| 150,036 |
| 56.9 | % |
Woodfield Green Executive Ctr. |
| Schaumburg |
| 1986 |
| 109,392 |
| 69.8 | % |
1600 Corporate Center |
| Rolling Meadows |
| 1986 |
| 254,725 |
| 82.2 | % |
Bannockburn Corporate |
| Bannockburn |
| 1999 |
| 202,218 |
| 83.0 | % |
O’Hare Commerce Center |
| Des Plaines |
| 1975 |
| 148,444 |
| 91.0 | % |
387 Shuman Blvd |
| Naperville |
| 1981 |
| 112,309 |
| 87.9 | % |
Medical Office Buildings |
| Various |
| Various |
| 458,156 |
| 99.4 | % |
Subtotal/Weighted Average |
|
|
|
|
| 2,552,246 |
| 77.0 | % |
|
|
|
|
|
|
|
|
|
|
Milwaukee |
|
|
|
|
|
|
|
|
|
One Park Plaza |
| Milwaukee |
| 1984 |
| 198,722 |
| 60.5 | % |
Milwaukee Center |
| Milwaukee |
| 1988 |
| 373,500 |
| 86.5 | % |
Park Place VII |
| Milwaukee |
| 1989 |
| 36,037 |
| 79.3 | % |
Lincoln Center |
| West Allis |
| 1984-1987 |
| 120,931 |
| 59.6 | % |
Brookfield Lakes |
| Brookfield |
| 1987 |
| 116,799 |
| 69.1 | % |
Corporate Woods |
| Brookfield |
| 1987 |
| 53,807 |
| 83.1 | % |
One Riverwood Place |
| Pewaukee |
| 1999 |
| 97,778 |
| 94.9 | % |
Two Riverwood Place |
| Pewaukee |
| 2002 |
| 98,202 |
| 91.3 | % |
Subtotal/Weighted Average |
|
|
|
|
| 1,095,776 |
| 77.7 | % |
|
|
|
|
|
|
|
|
|
|
Minneapolis/St. Paul |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Court International |
| St. Paul |
| 1916/1985 |
| 319,848 |
| 80.7 | % |
University Office Plaza |
| Minneapolis |
| 1979/1997 |
| 97,610 |
| 74.2 | % |
Subtotal/Weighted Average |
|
|
|
|
| 417,458 |
| 79.2 | % |
|
|
|
|
|
|
|
|
|
|
Detroit |
|
|
|
|
|
|
|
|
|
Long Lake Crossings |
| Troy |
| 1988 |
| 170,457 |
| 81.0 | % |
Tri-Atria Office Building |
| Farmington Hills |
| 1986 |
| 236,592 |
| 94.7 | % |
777 Eisenhower Plaza |
| Ann Arbor |
| 1975 |
| 281,080 |
| 98.6 | % |
#40 OakHollow |
| Southfield |
| 1989 |
| 80,893 |
| 80.5 | % |
Oak Hollow Gateway |
| Southfield |
| 1987 |
| 79,052 |
| 88.1 | % |
Subtotal/Weighted Average |
|
|
|
|
| 848,074 |
| 91.3 | % |
|
|
|
|
|
|
|
|
|
|
Columbus |
|
|
|
|
|
|
|
|
|
Dublin Techmart |
| Dublin |
| 1986 |
| 124,929 |
| 80.0 | % |
MetroCenter IV |
| Dublin |
| 1982 |
| 101,592 |
| 56.8 | % |
MetroCenter V |
| Dublin |
| 1987 |
| 215,473 |
| 89.8 | % |
Firstar Tower |
| Columbus |
| 1981 |
| 197,870 |
| 80.8 | % |
Subtotal/Weighted Average |
|
|
|
|
| 639,864 |
| 79.9 | % |
|
|
|
|
|
|
|
|
|
|
Cincinnati |
|
|
|
|
|
|
|
|
|
Princeton Hill I |
| Springdale |
| 1988 |
| 95,910 |
| 86.9 | % |
|
|
|
|
|
|
|
|
|
|
Denver |
|
|
|
|
|
|
|
|
|
116 Inverness Drive East |
| Englewood |
| 1984 |
| 205,716 |
| 32.1 | % |
|
|
|
|
|
|
|
|
|
|
TOTAL/WEIGHTED AVERAGE |
|
|
|
|
| 5,855,044 |
| 78.3 | % |
14
Great Lakes REIT
Historic Occupancy
Since IPO
Reporting |
| Percent |
|
2Q’97 |
| 93.5 | % |
3Q’97 |
| 92.0 | % |
4Q’97 |
| 92.9 | % |
1Q’98 |
| 93.0 | % |
2Q’98 |
| 94.8 | % |
3Q’98 |
| 94.9 | % |
4Q’98 |
| 94.8 | % |
1Q’99 |
| 95.3 | % |
2Q’99 |
| 95.8 | % |
3Q’99 |
| 95.8 | % |
4Q’99 |
| 93.7 | % |
1Q’00 |
| 94.4 | % |
2Q’00 |
| 93.6 | % |
3Q’00 |
| 93.3 | % |
4Q’00 |
| 91.9 | % |
1Q’01 |
| 92.4 | % |
2Q’01 |
| 90.5 | % |
3Q’01 |
| 88.1 | % |
4Q’01 |
| 88.4 | % |
1Q’02 |
| 84.5 | % |
2Q’02 |
| 82.6 | % |
3Q’02 |
| 85.0 | % |
4Q’02 |
| 83.0 | % |
1Q’03 |
| 80.9 | % |
2Q’03 |
| 80.2 | % |
3Q’03 |
| 78.3 | % |
Average 26 quarters |
| 90.1 | % |
15
Great Lakes REIT
Operating Margins (unaudited)
(In thousands, except per share data)
Consolidated Income Statement
|
| Three Months Ended |
| ||||
|
| Sep 02 |
| Sep 03 |
| % Chg |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Minimum Rents |
| 19,429 |
| 19,935 |
| 3 | % |
Expense Reimbursements |
| 5,134 |
| 5,483 |
|
|
|
Total Operating Revenues |
| 24,563 |
| 25,418 |
| 3 | % |
Other tenant - and interest - income |
| 869 |
| 680 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Real estate taxes |
| 4,087 |
| 4,542 |
|
|
|
% of Oper. Revs |
| 16.6 | % | 17.9 | % |
|
|
% of NOI |
| 30.1 | % | 34.3 | % |
|
|
|
|
|
|
|
|
|
|
Other Operating Expenses |
| 6,912 |
| 7,638 |
|
|
|
% of Oper. Revs |
| 28.1 | % | 30.0 | % |
|
|
|
|
|
|
|
|
|
|
Total property-related exp. |
| 10,999 |
| 12,180 |
| 11 | % |
% of Oper. Revs |
| 44.8 | % | 47.9 | % |
|
|
|
|
|
|
|
|
|
|
NOI before General & Admin. |
| 13,564 |
| 13,238 |
| -2 | % |
as a % of Operating Revenue |
| 55.2 | % | 52.1 | % |
|
|
|
|
|
|
|
|
|
|
Depreciation & amort. |
| 5,064 |
| 5,692 |
|
|
|
General & Admin. |
| 1,317 |
| 1,699 |
| 29 | % |
% of Oper. Revs |
| 5.4 | % | 6.7 | % |
|
|
% of NOI |
| 9.7 | % | 12.8 | % |
|
|
|
|
|
|
|
|
|
|
Corp. Interest Expense |
| 3,807 |
| 4,382 |
|
|
|
Other |
| 0 |
| 0 |
|
|
|
Sub-Total Expenses |
| 21,187 |
| 23,953 |
| 13 | % |
|
|
|
|
|
|
|
|
Income before non-recurring items |
| 4,245 |
| 2,145 |
| -49 | % |
as a % of Total Revenues |
| 16.7 | % | 8.2 | % |
|
|
|
|
|
|
|
|
|
|
Extraordinary items / adjustments |
| 6,145 |
| 2,191 |
|
|
|
|
|
|
|
|
|
|
|
Net Income before minority interest |
| 10,390 |
| 4,336 |
|
|
|
Net Operating Income from Properties after G&A |
| 12,247 |
| 11,539 |
| -6 | % |
as a % of Operating Revenue |
| 49.9 | % | 45.4 | % |
|
|
Funds from Operations |
| 8,235 |
| 6,737 |
| -18 | % |
|
|
|
|
|
|
|
|
Per Share (fully-diluted) |
|
|
|
|
|
|
|
Net Income |
| 0.57 |
| 0.21 |
|
|
|
Funds From Operations (FFO) |
| 0.50 |
| 0.42 |
| -16 | % |
FFO less straight-lined rents |
| 0.49 |
| 0.39 |
|
|
|
|
|
|
|
|
|
|
|
Dividends per Share |
| 0.405 |
| 0.405 |
| 0 | % |
as a % of FFOperations (FDiluted) |
| 81.0 | % | 96.4 | % |
|
|
16
|
| Nine Months Ended |
| ||||
|
| Sep 02 |
| Sep 03 |
| % Chg |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Minimum Rents |
| 59,497 |
| 61,154 |
| 3 | % |
Expense Reimbursements |
| 16,248 |
| 16,854 |
|
|
|
Total Operating Revenues |
| 75,745 |
| 78,008 |
| 3 | % |
Other tenant - and interest - income |
| 2,472 |
| 2,325 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
Real estate taxes |
| 12,640 |
| 13,469 |
|
|
|
% of Oper. Revs |
| 16.7 | % | 17.3 | % |
|
|
% of NOI |
| 29.9 | % | 33.0 | % |
|
|
|
|
|
|
|
|
|
|
Other Operating Expenses |
| 20,801 |
| 23,667 |
|
|
|
% of Oper. Revs |
| 27.5 | % | 30.3 | % |
|
|
|
|
|
|
|
|
|
|
Total property-related exp. |
| 33,441 |
| 37,136 |
| 11 | % |
% of Oper. Revs |
| 44.1 | % | 47.6 | % |
|
|
|
|
|
|
|
|
|
|
NOI before General & Admin. |
| 42,304 |
| 40,872 |
| -3 | % |
as a % of Operating Revenue |
| 55.9 | % | 52.4 | % |
|
|
|
|
|
|
|
|
|
|
Depreciation & amort. |
| 15,057 |
| 16,418 |
|
|
|
General & Admin. |
| 3,888 |
| 4,937 |
| 27 | % |
% of Oper. Revs |
| 5.1 | % | 6.3 | % |
|
|
% of NOI |
| 9.2 | % | 12.1 | % |
|
|
|
|
|
|
|
|
|
|
Corp. Interest Expense |
| 11,334 |
| 13,312 |
|
|
|
Other |
| 0 |
| 0 |
|
|
|
Sub-Total Expenses |
| 63,720 |
| 71,803 |
| 13 | % |
|
|
|
|
|
|
|
|
Income before non-recurring items |
| 14,497 |
| 8,530 |
| -41 | % |
as a % of Total Revenues |
| 18.5 | % | 10.6 | % |
|
|
|
|
|
|
|
|
|
|
Extraordinary items / adjustments |
| 7,182 |
| 2,191 |
|
|
|
|
|
|
|
|
|
|
|
Net Income before minority interest |
| 21,679 |
| 10,721 |
|
|
|
Net Operating Income from Properties after G&A |
| 38,416 |
| 35,935 |
| -6 | % |
as a % of Operating Revenue |
| 50.7 | % | 46.1 | % |
|
|
Funds from Operations |
| 26,333 |
| 21,674 |
| -18 | % |
|
|
|
|
|
|
|
|
Per Share (fully-diluted) |
|
|
|
|
|
|
|
Net Income |
| 1.14 |
| 0.49 |
|
|
|
Funds From Operations (FFO) |
| 1.59 |
| 1.34 |
| -16 | % |
FFO less straight-lined rents |
| 1.57 |
| 1.27 |
|
|
|
|
|
|
|
|
|
|
|
Dividends per Share |
| 1.205 |
| 1.215 |
| 1 | % |
as a % of FFOperations (FDiluted) |
| 75.8 | % | 90.7 | % |
|
|
17
Great Lakes REIT
Same Store Sales Analysis (unaudited)
(Dollars in Thousands)
Non-GAAP Financial Measure
Net Operating Income
|
|
|
| Three months ended |
| ||||
Property |
| Location |
| 9/30/2003 |
| 9/30/2002 |
| ||
CHICAGO |
|
|
|
|
|
|
| ||
Centennial Center |
| Schaumburg |
| $ | 583 |
| $ | 947 |
|
One Century Centre |
| Schaumburg |
| 62 |
| 666 |
| ||
Highpoint Business Center |
| Wood Dale |
| (24 | ) | 76 |
| ||
Arlington Business Center |
| Arlington Heights |
| 217 |
| 186 |
| ||
Arlington Ridge Service Center |
| Arlington Heights |
| 205 |
| 54 |
| ||
1011 Touhy Avenue |
| Des Plaines |
| 269 |
| 299 |
| ||
Kensington Corporate Center |
| Mount Prospect |
| (7 | ) | 240 |
| ||
One Hawthorn Place |
| Vernon Hills |
| 272 |
| 253 |
| ||
Two Marriott Drive |
| Lincolnshire |
| 123 |
| 106 |
| ||
823 Commerce Drive |
| Oak Brook |
| (29 | ) | 105 |
| ||
Lisle Executive Center |
| Lisle |
| 179 |
| 235 |
| ||
Woodfield Green |
| Schaumburg |
| 186 |
| 110 |
| ||
1600 Corporate Center |
| Rolling Meadows |
| 539 |
| 352 |
| ||
Bannockburn Corporate Center |
| Bannockburn |
| 626 |
| 708 |
| ||
Subtotal |
|
|
| 3,202 |
| 4,336 |
| ||
14 Properties - Decrease |
|
|
| -26.14 | % |
|
| ||
|
|
|
|
|
|
|
| ||
MILWAUKEE |
|
|
|
|
|
|
| ||
One Park Plaza |
| Milwaukee |
| 206 |
| 138 |
| ||
Park Place VII |
| Milwaukee |
| 72 |
| 59 |
| ||
Milwaukee Center |
| Milwaukee |
| 1,557 |
| 1,511 |
| ||
Lincoln Center II & III |
| West Allis |
| 145 |
| 266 |
| ||
Brookfield Lakes Corporate Center |
| Brookfield |
| 154 |
| 132 |
| ||
Corporate Woods |
| Brookfield |
| 102 |
| 133 |
| ||
One Riverwood |
| Waukesha |
| 383 |
| 397 |
| ||
Subtotal |
|
|
| 2,618 |
| 2,636 |
| ||
7 Properties - Decrease |
|
|
| -0.67 | % |
|
| ||
|
|
|
|
|
|
|
| ||
MINNEAPOLIS / ST. PAUL |
|
|
|
|
|
|
| ||
Court International |
| St. Paul |
| 673 |
| 658 |
| ||
University Office Plaza |
| Minneapolis |
| 244 |
| 131 |
| ||
|
|
|
| 917 |
| 789 |
| ||
2 Properties - Increase |
|
|
| 16.18 | % |
|
| ||
|
|
|
|
|
|
|
| ||
DETROIT |
|
|
|
|
|
|
| ||
777 Eisenhower |
| Ann Arbor |
| 1,031 |
| 819 |
| ||
Tri-Atria |
| Farmington Hills |
| 821 |
| 678 |
| ||
Long Lake Crossings |
| Troy |
| 545 |
| 615 |
| ||
No. 40 OakHollow |
| Southfield |
| 119 |
| 282 |
| ||
OakHollow Gateway |
| Southfield |
| 300 |
| 227 |
| ||
Subtotal |
|
|
| 2,817 |
| 2,621 |
| ||
5 Properties - Increase |
|
|
| 7.49 | % |
|
| ||
|
|
|
|
|
|
|
| ||
COLUMBUS |
|
|
|
|
|
|
| ||
Firstar |
| Columbus |
| 498 |
| 524 |
| ||
Metro V |
| Dublin |
| 442 |
| 540 |
| ||
Metro IV |
| Dublin |
| 116 |
| 153 |
| ||
Dublin Techmart |
| Dublin |
| 167 |
| 235 |
| ||
Subtotal |
|
|
| 1,224 |
| 1,452 |
| ||
4 Properties - Decrease |
|
|
| -15.74 | % |
|
| ||
|
|
|
|
|
|
|
| ||
CINCINNATI |
|
|
|
|
|
|
| ||
Princeton Hill Corporate Center |
| Springdale |
| 291 |
| 346 |
| ||
1 Property - Decrease |
|
|
| -15.85 | % |
|
| ||
|
|
|
|
|
|
|
| ||
DENVER |
|
|
|
|
|
|
| ||
116 Inverness |
| Englewood |
| 44 |
| 830 |
| ||
1 Property - Decrease |
|
|
| -94.68 | % |
|
| ||
|
|
|
|
|
|
|
| ||
TOTAL |
|
|
| $ | 11,113 |
| $ | 13,010 |
|
34 Properties - Decrease |
|
|
| -14.58 | % |
|
| ||
18
|
|
|
| Three months ended |
| ||||
Property |
| Location |
| 9/30/2003 |
| 9/30/2002 |
| ||
CHICAGO |
|
|
|
|
|
|
| ||
Centennial Center |
| Schaumburg |
| $ | 2,030 |
| $ | 2,270 |
|
One Century Centre |
| Schaumburg |
| 614 |
| 1,952 |
| ||
Highpoint Business Center |
| Wood Dale |
| (13 | ) | 238 |
| ||
Arlington Business Center |
| Arlington Heights |
| 444 |
| 293 |
| ||
Arlington Ridge Service Center |
| Arlington Heights |
| 230 |
| 253 |
| ||
1011 Touhy Avenue |
| Des Plaines |
| 920 |
| 957 |
| ||
Kensington Corporate Center |
| Mount Prospect |
| (72 | ) | 731 |
| ||
One Hawthorn Place |
| Vernon Hills |
| 767 |
| 700 |
| ||
Two Marriott Drive |
| Lincolnshire |
| 322 |
| 325 |
| ||
823 Commerce Drive |
| Oak Brook |
| 80 |
| 311 |
| ||
Lisle Executive Center |
| Lisle |
| 414 |
| 897 |
| ||
Woodfield Green |
| Schaumburg |
| 531 |
| 479 |
| ||
1600 Corporate Center |
| Rolling Meadows |
| 1,401 |
| 1,884 |
| ||
Bannockburn Corporate Center |
| Bannockburn |
| 2,287 |
| 2,144 |
| ||
Subtotal |
|
|
| 9,955 |
| 13,435 |
| ||
14 Properties - Decrease |
|
|
| -25.90 | % |
|
| ||
|
|
|
|
|
|
|
| ||
MILWAUKEE |
|
|
|
|
|
|
| ||
One Park Plaza |
| Milwaukee |
| 563 |
| 444 |
| ||
Park Place VII |
| Milwaukee |
| 182 |
| 168 |
| ||
Milwaukee Center |
| Milwaukee |
| 4,867 |
| 4,503 |
| ||
Lincoln Center II & III |
| West Allis |
| 510 |
| 715 |
| ||
Brookfield Lakes Corporate Center |
| Brookfield |
| 390 |
| 377 |
| ||
Corporate Woods |
| Brookfield |
| 303 |
| 404 |
| ||
One Riverwood |
| Waukesha |
| 1,142 |
| 1,130 |
| ||
Subtotal |
|
|
| 7,956 |
| 7,741 |
| ||
7 Properties - Increase |
|
|
| 2.78 | % |
|
| ||
|
|
|
|
|
|
|
| ||
MINNEAPOLIS / ST. PAUL |
|
|
|
|
|
|
| ||
Court International |
| St. Paul |
| 2,347 |
| 2,915 |
| ||
University Office Plaza |
| Minneapolis |
| 582 |
| 427 |
| ||
|
|
|
| 2,929 |
| 3,342 |
| ||
2 Properties - Decrease |
|
|
| -12.36 | % |
|
| ||
|
|
|
|
|
|
|
| ||
DETROIT |
|
|
|
|
|
|
| ||
777 Eisenhower |
| Ann Arbor |
| 3,010 |
| 2,347 |
| ||
Tri-Atria |
| Farmington Hills |
| 2,554 |
| 2,206 |
| ||
Long Lake Crossings |
| Troy |
| 1,601 |
| 1,724 |
| ||
No. 40 OakHollow |
| Southfield |
| 504 |
| 873 |
| ||
OakHollow Gateway |
| Southfield |
| 820 |
| 760 |
| ||
Subtotal |
|
|
| 8,489 |
| 7,910 |
| ||
5 Properties - Increase |
|
|
| 7.32 | % |
|
| ||
|
|
|
|
|
|
|
| ||
COLUMBUS |
|
|
|
|
|
|
| ||
Firstar |
| Columbus |
| 1,554 |
| 1,732 |
| ||
Metro V |
| Dublin |
| 1,207 |
| 1,603 |
| ||
Metro IV |
| Dublin |
| 402 |
| 524 |
| ||
Dublin Techmart |
| Dublin |
| 444 |
| 703 |
| ||
Subtotal |
|
|
| 3,607 |
| 4,562 |
| ||
4 Properties - Decrease |
|
|
| -20.94 | % |
|
| ||
|
|
|
|
|
|
|
| ||
CINCINNATI |
|
|
|
|
|
|
| ||
Princeton Hill Corporate Center |
| Springdale |
| 982 |
| 1,024 |
| ||
1 Property - Decrease |
|
|
| -4.07 | % |
|
| ||
|
|
|
|
|
|
|
| ||
DENVER |
|
|
|
|
|
|
| ||
116 Inverness |
| Englewood |
| 726 |
| 2,368 |
| ||
1 Property - Decrease |
|
|
| -69.34 | % |
|
| ||
|
|
|
|
|
|
|
| ||
TOTAL |
|
|
| $ | 34,644 |
| $ | 40,381 |
|
34 Properties - Decrease |
|
|
| -14.21 | % |
|
| ||
19
Great Lakes REIT
Reconciliation of Same Store Net Operating Income to Income Before Allocation to Minority Interests (unaudited) (Dollars in thousands)
The Company provides same store net operating income which is the net operating income of properties owned in both the three and nine months ended September 30, 2003 and 2002. Same store net operating income is considered a non-GAAP financial measure because it does not include depreciation and amortization, interest expense and general and administrative expenses. The Company provides same store net operating income as it allows investors to compare the results of property operations for the three and nine months ended September 30,2003 and 2002. The Company also provides a reconciliation of these amounts to the most comparable GAAP measure, income before allocation to minority interests.
|
| Three months ended September 30, |
| Nine months ended September 30, |
| ||||||||
|
| 2003 |
| 2002 |
| 2003 |
| 2002 |
| ||||
Same store net operating income |
| $ | 11,113 |
| $ | 13,010 |
| $ | 34,644 |
| $ | 40,381 |
|
Net operating income from acquisitions: |
|
|
|
|
|
|
|
|
| ||||
Two Riverwood Place |
| 298 |
| 277 |
| 844 |
| 754 |
| ||||
O’Hare Commerce Center |
| 337 |
| 283 |
| 986 |
| 283 |
| ||||
Medical Portfolio |
| 1,327 |
| 0 |
| 3,961 |
| 0 |
| ||||
387 Shuman Blvd |
| 273 |
| 0 |
| 774 |
| 0 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Straight-line rent |
| 489 |
| 107 |
| 1,087 |
| 338 |
| ||||
Interest income |
| 89 |
| 330 |
| 493 |
| 1,000 |
| ||||
General and administrative expense |
| (1,699 | ) | (1,317 | ) | (4,937 | ) | (3,888 | ) | ||||
Interest expense |
| (4,382 | ) | (3,807 | ) | (13,312 | ) | (11,334 | ) | ||||
Depreciation and amortization |
| (5,637 | ) | (4,921 | ) | (16,159 | ) | (14,124 | ) | ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before allocation to minority interests |
| $ | 2,208 |
| $ | 3,962 |
| $ | 8,381 |
| $ | 13,410 |
|
20
GREAT LAKES REIT
Disposition Analysis
September 12, 2003
Property |
| Square |
| Sale |
| Holding |
| Net |
| Gross Book |
| Net |
| Unleveraged |
| Leveraged |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
10 Oak Hollow |
| 84,736 |
| 21-Oct-96 |
| 15 months |
| $ | 6,723,118 |
| $ | 6,883,350 |
| $ | 9,025,921 |
| 36.4 | % | 81.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
830 West End Court |
| 26,909 |
| 2-Dec-96 |
| 38 months |
| $ | 1,801,208 |
| $ | 1,968,423 |
| $ | 2,709,331 |
| 23.1 | % | 30.2 | %(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Roadway Industrial |
| 50,625 |
| 27-Feb-98 |
| 61 months |
| $ | 1,433,932 |
| $ | 1,458,285 |
| $ | 1,312,055 |
| 11.3 | % | 14.6 | %(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
1675 Holmes Rd, Elgin, IL and |
| 116,286 |
| 23-May-99 |
| 27 months |
| $ | 4,965,502 |
| $ | 5,204,189 |
| $ | 4,939,098 |
| 4.3 | % | -1.7 | %(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
2800 River Road |
| 99,732 |
| 30-Jun-99 |
| 53 months |
| $ | 4,051,532 |
| $ | 5,483,449 |
| $ | 7,525,579 |
| 22.3 | % | 33.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
1251 Plum Grove Road |
| 43,338 |
| 30-Jun-99 |
| 42 months |
| $ | 936,773 |
| $ | 1,745,349 |
| $ | 3,394,438 |
| 31.7 | % | 41.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
565 Lakeview Parkway |
| 84,808 |
| 25-Aug-99 |
| 45 months |
| $ | 4,417,775 |
| $ | 5,778,898 |
| $ | 8,483,584 |
| 22.2 | % | 31.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Woodcreek I & II |
| 126,911 |
| 6-Apr-00 |
| 42 months |
| $ | 9,147,437 |
| $ | 9,814,956 |
| $ | 12,032,765 |
| 17.9 | % | 25.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
183 Inverness Drive |
| 183,895 |
| 1-Dec-00 |
| 31 months |
| $ | 19,968,538 |
| $ | 20,376,245 |
| $ | 26,938,213 |
| 18.9 | % | 27.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
160 Hansen Court |
| 21,329 |
| 22-Apr-02 |
| 99 months |
| $ | 947,441 |
| $ | 1,311,563 |
| $ | 2,216,470 |
| 27.1 | % | 43.8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
3400 Dundee |
| 75,070 |
| 1-Jul-02 |
| 105 months |
| $ | 3,999,854 |
| $ | 5,028,267 |
| $ | 7,658,008 |
| 15.5 | % | 20.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Burlington Office Center |
| 182,167 |
| 30-Aug-02 |
| 40 months |
| $ | 19,536,381 |
| $ | 21,009,489 |
| $ | 21,939,442 |
| 11.2 | % | 14.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
180 Hansen Court |
| 18,241 |
| 22-Nov-02 |
| 106 months |
| $ | 810,271 |
| $ | 1,084,806 |
| $ | 1,640,456 |
| 10.8 | % | 12.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
165 & 175 Hansen Court |
| 40,876 |
| 8-Jul-03 |
| 113 months |
| $ | 1,815,724 |
| $ | 2,269,880 |
| $ | 3,633,254 |
| 20.1 | % | 31.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
191 Waukegan Drive |
| 62,081 |
| 12-Sep-03 |
| 60 months |
| $ | 4,234,148 |
| $ | 6,026,324 |
| $ | 5,463,897 |
| 7.0 | % | 7.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Totals/Weighted Average (6) |
| 1,217,004 |
|
|
| 46 months |
| $ | 84,789,634 |
| $ | 95,443,471 |
| $ | 118,912,511 |
| 18.2 | % | 27.8 | % |
21
(1) Unless otherwise noted below, Leveraged IRR’s assume an interest-only loan with an average Interest Rate of 6.5% and a Loan to Value of approximately 50% of Net Acquisition Price
(2) 830 West End Court mortgage terms were $1,025,000 principal, 15-year amortization at 7.875% interest
(3) Roadway Industrial mortgage terms were $940,000 principal, 15-year amortization at 8.5% interest
(4) 1675 Holmes Road and Court Office Center were the only two properties acquired from Great Lakes REIT’s predecessor, Equity Partners Ltd., as part of the merger of the two companies in 1996
(5) 1675 Holmes Road mortgage terms were $2,226,886 principal, 20-year amortization at 8.125% interest
(6) Weighted Average Holding Period and IRR’s based on Net Disposition Price
22
Great Lakes REIT
Portfolio Lease Expirations
As of October 1, 2003
YEAR |
|
|
| PERCENT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Medical |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
| Breakout By Market |
|
| |||||||||||||||||
| SQ FT |
|
| Chicago |
| Cincinnati |
| Columbus |
| Denver |
| Detroit |
| Milwaukee |
| Minneapolis |
| Total |
|
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Included in Chicago) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
| 172,703 |
| 2.95 | % | 72,703 |
| — |
| 9,380 |
| 4,523 |
| 7,642 |
| 74,573 |
| 3,882 |
| 172,703 |
| 19,439 |
|
|
|
|
|
|
| 42 | % | 0 | % | 5 | % | 3 | % | 4 | % | 44 | % | 2 | % | 100 | % | 11 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
| 988,204 |
| 16.88 | % | 337,345 |
| 83,365 |
| 116,955 |
| 13,948 |
| 216,544 |
| 186,682 |
| 33,365 |
| 988,204 |
| 74,777 |
|
|
|
|
|
|
| 35 | % | 8 | % | 12 | % | 1 | % | 22 | % | 19 | % | 3 | % | 100 | % | 8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 |
| 803,434 |
| 13.72 | % | 425,416 |
| — |
| 85,905 |
| — |
| 68,583 |
| 153,697 |
| 69,833 |
| 803,434 |
| 143,779 |
|
|
|
|
|
|
| 52 | % | 0 | % | 11 | % | 0 | % | 9 | % | 19 | % | 9 | % | 100 | % | 18 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
| 561,211 |
| 9.59 | % | 214,839 |
| — |
| 63,899 |
| — |
| 68,906 |
| 133,195 |
| 80,372 |
| 561,211 |
| 61,152 |
|
|
|
|
|
|
| 39 | % | 0 | % | 11 | % | 0 | % | 12 | % | 24 | % | 14 | % | 100 | % | 11 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2007 |
| 782,572 |
| 13.37 | % | 339,426 |
| — |
| 126,306 |
| 42,656 |
| 123,503 |
| 81,330 |
| 69,351 |
| 782,572 |
| 97,164 |
|
|
|
|
|
|
| 44 | % | 0 | % | 16 | % | 5 | % | 16 | % | 10 | % | 9 | % | 100 | % | 12 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 |
| 675,435 |
| 11.54 | % | 269,336 |
| — |
| 59,707 |
| 4,856 |
| 219,571 |
| 65,873 |
| 56,092 |
| 675,435 |
| 12,107 |
|
|
|
|
|
|
| 39 | % | 0 | % | 9 | % | 1 | % | 33 | % | 10 | % | 8 | % | 100 | % | 2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
| 225,755 |
| 3.86 | % | 91,411 |
| — |
| 31,462 |
| — |
| 39,246 |
| 53,397 |
| 10,239 |
| 225,755 |
| 4,976 |
|
|
|
|
|
|
| 40 | % | 0 | % | 14 | % | 0 | % | 17 | % | 24 | % | 5 | % | 100 | % | 2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
| 143,563 |
| 2.45 | % | 122,945 |
| — |
| 9,769 |
| — |
| — |
| 10,849 |
| — |
| 143,563 |
| 5,077 |
|
|
|
|
|
|
| 85 | % | 0 | % | 7 | % | 0 | % | 0 | % | 8 | % | 0 | % | 100 | % | 4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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2011 |
| 46,491 |
| 0.79 | % | 17,458 |
| — |
| — |
| — |
| 19,769 |
| 9,264 |
| — |
| 46,491 |
| 1,242 |
|
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|
| 38 | % | 0 | % | 0 | % | 0 | % | 42 | % | 20 | % | 0 | % | 100 | % | 3 | % |
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2012 |
| 85,922 |
| 1.47 | % | 32,251 |
| — |
| — |
| — |
| — |
| 53,671 |
| — |
| 85,922 |
| 32,251 |
|
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|
|
|
|
| 38 | % | 0 | % | 0 | % | 0 | % | 0 | % | 62 | % | 0 | % | 100 | % | 38 | % |
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2013 |
| 13,572 |
| 0.23 | % | 13,572 |
| — |
| — |
| — |
| — |
| — |
| — |
| 13,572 |
| 3,276 |
|
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|
| 100 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 100 | % | 24 | % |
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2017 |
| 20,116 |
| 0.34 | % | — |
| — |
| — |
| — |
| — |
| 20,116 |
| — |
| 20,116 |
| — |
|
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|
|
| 0 | % | 0 | % | 0 | % | 0 | % | 0 | % | 100 | % | 0 | % | 100 | % | 0 | % |
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Month-to-Month |
| 10,632 |
| 0.18 | % | 3,362 |
| — |
| 80 |
| — |
| 316 |
| 4,181 |
| 2,693 |
| 10,632 |
| 0 |
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Non Income Producing |
| 52,569 |
| 0.90 | % | 24,864 |
| — |
| 7,825 |
| — |
| 9,981 |
| 5,102 |
| 4,797 |
| 52,569 |
|
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23
Office Market Statistics
Third Quarter 2003
Suburban |
| Existing |
| Vacancy ** |
| Net Absorption (1,000’s) |
| Anticipated |
| Anticipated |
| ||||||||||
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| ||||||||||||||||
|
| 3Q,2002 |
| 2Q,2003 |
| 3Q,2003 |
| 2001 |
| 2002 |
| 3Q, 2003 |
| Y-T-D 2003 |
|
|
| ||||
Chicago |
| 98,924 |
| 16.8 | % | 19.4 | % | 19.4 | % | 32 |
| (1,510 | ) | (21 | ) | (680 | ) | 80 |
| — |
|
Detroit |
| 55,883 |
| 14.5 | % | 17.6 | % | 18.0 | % | (539 | ) | (1,854 | ) | (123 | ) | (900 | ) | — |
| 524 |
|
Denver |
| 79,240 |
| 17.9 | % | 18.7 | % | 18.3 | % | (279 | ) | (3,656 | ) | 373 |
| 394 |
| — |
| 495 |
|
Columbus |
| 17,226 |
| 19.3 | % | 20.4 | % | 21.6 | % | (279 | ) | (62 | ) | 27 |
| (88 | ) | — |
| 144 |
|
Cincinnati |
| 18,902 |
| 19.2 | % | 20.8 | % | 21.4 | % | 184 |
| (67 | ) | (35 | ) | (88 | ) | — |
| — |
|
Minneapolis |
| 34,338 |
| 15.9 | % | 16.0 | % | 15.1 | % | (364 | ) | (517 | ) | 144 |
| 441 |
| 100 |
| — |
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Subtotal/Average: |
| 304,513 |
| 16.8 | % | 18.6 | % | 18.6 | % | (1,246 | ) | (7,666 | ) | 365 |
| (920 | ) | 180 |
| 1,163 |
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Columbus CBD |
| 10,343 |
| 20.1 | % | 21.7 | % | 21.1 | % | 251 |
| (150 | ) | 120 |
| 140 |
| — |
| 140 |
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Totals Suburban/CBD: |
| 314,856 |
| 16.9 | % | 18.7 | % | 18.7 | % | (995 | ) | (7,816 | ) | 485 |
| (781 | ) | 180 |
| 1,303 |
|
Source: CB Richard Ellis, Paragon Corporate Realty Services (Detroit), and Great Lakes REIT
* The Milwaukee office market is not accurately surveyed in its entirety on a quarterly basis. In lieu of general statistics that encompass the entire market, the following analysis is based on a property set that directly competes with Great Lakes REIT’s holdings in the market. The source for suburban statistics, including new deliveries, is RFP Commercial and for the CBD, the source is The Polacheck Company. Vacancy as of the third quarter of 2003 for the Milwaukee suburbs was 13.3%. Vacancy as of the third quarter of 2003 for the CBD was 10.25%. In the suburbs, 142,100 square feet is currently under construction and is expected to be delivered in 2003-2004. The CBD has 208,000 square feet under construction that is all scheduled for delivery in 2003.
** Vacancy rates include direct, available space (exclude sublease space).
*** Anticipated Deliveries refers only to buildings that are currently under construction. Development that is initiated in the future would affect these annual totals.
24