EXHIBIT 99.1
CENTERPOINT PROPERTIES TRUST
PRO FORMA FINANCIAL INFORMATION
(UNAUDITED)
Background
The accompanying unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2005 has been prepared to reflect the disposition of individually insignificant operating properties from January 1, 2005 through November 1, 2005 as if such transactions had occurred on January 1, 2005.
The accompanying unaudited pro forma condensed consolidated statement of operations for the years ended December 31, 2004, December 31, 2003 and December 31, 2002 have been prepared to reflect the disposition of individually insignificant operating properties from January 1, 2002 through November 1, 2005 as if such transactions had occurred as of the beginning of the periods presented.
These unaudited pro forma condensed consolidated statements should be read in connection with the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. Certain financial information has been condensed. In the opinion of management, the pro forma condensed consolidated financial information provides for all adjustments necessary to reflect the effects of the above transactions.
The pro forma information is unaudited and is not necessarily indicative of the consolidated results that would have occurred if the transactions and adjustments reflected therein had been consummated in the period or on the date presented, nor does it purport to represent the financial position, results of operations or cash flows for future periods.
CENTERPOINT PROPERTIES TRUST
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
| | Nine months ended September 30, 2005 | | Twelve months ended December 31, 2004 | | Twelve months ended December 31, 2003 | | Twelve months ended December 31, 2002 | |
| | | | Pro Forma | | | | | | Pro Forma | | | | | | Pro Forma | | | | | | Pro Forma | | | |
| | Company (a) | | Adjustments (b) | | Pro forma | | Company (a) | | Adjustments (b) | | Pro forma | | Company (a) | | Adjustments (b) | | Pro forma | | Company (a) | | Adjustments (b) | | Pro forma | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Revenues: | | | | | | | | | | | | | | | | | | | | | | | | | |
Rental revenues | | $ 73,439 | | | | $ 73,439 | | $ 113,696 | | $ (41,293 | ) | $ 72,403 | | $ 97,439 | | $ (28,689 | ) | $ 68,750 | | $ 92,981 | | $ (23,434 | ) | $ 69,547 | |
Expense reimburse-
ment revenue | | 23,784 | | | | 23,784 | | 34,345 | | (10,035 | ) | 24,310 | | 29,799 | | (8,095 | ) | 21,704 | | 27,535 | | (7,857 | ) | 19,678 | |
Mortgage interest income | | 976 | | | | 976 | | 946 | | | | 946 | | 1,317 | | | | 1,317 | | 896 | | | | 896 | |
Real estate fee income | | 5,770 | | | | 5,770 | | 10,785 | | | | 10,785 | | 11,988 | | | | 11,988 | | 12,230 | | | | 12,230 | |
Build-to-suit revenue | | 27,226 | | | | 27,226 | | — | | | | — | | — | | | | — | | — | | | | — | |
Total revenue | | 131,195 | | — | | 131,195 | | 159,772 | | (51,328 | ) | 108,444 | | 140,543 | | (36,784 | ) | 103,759 | | 133,642 | | (31,291 | ) | 102,351 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Real estate taxes | | 24,056 | | | | 24,056 | | 33,265 | | (10,700 | ) | 22,565 | | 28,207 | | (9,386 | ) | 18,821 | | 25,066 | | (8,465 | ) | 16,601 | |
Property operating and leasing | | 26,951 | | | | 26,951 | | 32,555 | | (3,392 | ) | 29,163 | | 28,476 | | (2,004 | ) | 26,472 | | 23,088 | | (1,388 | ) | 21,700 | |
General and administrative | | 10,608 | | | | 10,608 | | 11,994 | | | | 11,994 | | 8,681 | | | | 8,681 | | 7,023 | | | | 7,023 | |
Depreciation and amortizat-
ion | | 28,463 | | | | 28,463 | | 37,078 | | (9,987 | ) | 27,091 | | 29,942 | | (8,019 | ) | 21,923 | | 28,378 | | (6,582 | ) | 21,796 | |
Build-to-suit for sale construction costs | | 25,719 | | | | 25,719 | | — | | | | — | | — | | | | — | | — | | | | — | |
Impairment of asset | | 1,153 | | | | 1,153 | | 937 | | | | 937 | | — | | | | — | | 1,228 | | | | 1,228 | |
Total expenses | | 116,950 | | — | | 116,950 | | 115,829 | | (24,079 | ) | 91,750 | | 95,306 | | (19,409 | ) | 75,897 | | 84,783 | | (16,435 | ) | 68,348 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other income / (expense): | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest income | | 1,123 | | | | 1,123 | | 1,917 | | | | 1,917 | | 2,430 | | | | 2,430 | | 576 | | | | 576 | |
Interest expense | | (23,396 | ) | 11,665 | (c) | (11,731 | ) | (33,032 | ) | 14,524 | (c) | (18,508 | ) | (25,735 | ) | | | (25,735 | ) | (27,456 | ) | | | (27,456 | ) |
Amortization of deferred financing costs | | (2,815 | ) | | | (2,815 | ) | (3,567 | ) | | | (3,567 | ) | (3,354 | ) | | | (3,354 | ) | (2,918 | ) | | | (2,918 | ) |
Total other income / (expense) | | (25,088 | ) | 11,665 | | (13,423 | ) | (34,682 | ) | 14,524 | | (20,158 | ) | (26,659 | ) | — | | (26,659 | ) | (29,798 | ) | — | | (29,798 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations before income taxes and equity in net income of affiliate | | (10,843 | ) | 11,665 | | 822 | | 9,261 | | (12,725 | ) | (3,464 | ) | 18,578 | | (17,375 | ) | 1,203 | | 19,061 | | (14,856 | ) | 4,205 | |
(Provision for) benefit from income tax expense | | 2,481 | | | | 2,481 | | 1,017 | | (24 | ) | 993 | | (389 | ) | — | | (389 | ) | (1,575 | ) | — | | (1,575 | ) |
Equity in net income of affiliate | | 765 | | | | 765 | | 5,703 | | | | 5,703 | | 2,281 | | | | 2,281 | | 1,994 | | | | 1,994 | |
Gain from sale of equity interest | | — | | | | — | | 6,469 | | | | 6,469 | | — | | | | — | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ (7,597 | ) | $ 11,665 | | $ 4,068 | | $ 22,450 | | $ (12,749 | ) | $ 9,701 | | $ 20,470 | | $ (17,375 | ) | $ 3,095 | | $ 19,480 | | $ (14,856 | ) | $ 4,624 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Basic EPS: | | | | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ (0.16 | ) | | | $ 0.08 | | $ 0.47 | | | | $ 0.20 | | $ 0.44 | | | | $ 0.07 | | $ 0.43 | | | | $ 0.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Diluted EPS: | | | | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations | | $ (0.16 | )(d) | | | $ 0.08 | | $ 0.46 | | | | $ 0.20 | | $ 0.43 | | | | $ 0.07 | | $ 0.42 | | | | $ 0.10 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Weighted average share outstanding | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic | | 48,529,759 | | | | 48,529,759 | | 47,364,105 | | | | 47,364,105 | | 46,021,460 | | | | 46,021,460 | | 45,516,102 | | | | 45,516,102 | |
Diluted | | 48,529,759 | (d) | | | 50,029,166 | | 49,157,911 | | | | 49,157,911 | | 47,488,080 | | | | 47,488,080 | | 46,769,700 | | | | 46,769,700 | |
The accompanying notes are an integral part of these financial statements
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CENTERPOINT PROPERTIES TRUST
NOTES AND ADJUSTMENTS TO PRO FORMA CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(a) Reflects the historical condensed statements of operations of the Company as reported in its Quarterly Report on Form 10-Q for the nine months ended September 30, 2005 and its Annual Report on Form 10-K for the years ended December 31, 2004, 2003 and 2002.
The incremental rental revenues and certain operating expenses of the 48 individually insignificant operating properties that were disposed from January 1, 2005 through November 1, 2005 for an approximate gross sales price of $534.9 million and the 12 operating properties held-for-sale at September 30, 2005 have been removed from reported income from continuing operations in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2005. While several of the properties were sold after September 30, all of the properties sold through November 1, 2005 were held for sale as of September 30, 2005, therefore, their operations were excluded from continuing operations.
(b) These adjustments reflect the incremental rental revenues and certain operating expenses of the 48 individually insignificant operating properties that were disposed from January 1, 2005 through November 1, 2005 and the 12 operating properties held-for-sale at September 30, 2005 as if these properties were disposed on January 1, 2002.
(c) The adjustment to interest expense reflects the incremental impact of the disposition of all individually insignificant operating properties from January 1, 2004 through November 1, 2005 and the 12 operating properties held-for-sale at September 30, 2005 as if the Company utilized the proceeds to retire indebtedness under its line of credit as of January 1, 2004. The interest rate used for each year was the average rate for the Company’s line of credit in each of the relevant periods. A 0.125% increase or decrease in the interest rate used would decrease or increase, respectively, income from continuing operations by $0.4 million for the nine months ended September 30, 2005 and $0.8 million for the year ended December 31, 2004.
(d) Pursuant to Statement of Financial Accounting Standard No. 128, “Earnings Per Share,” the weighted average common shares outstanding for diluted EPS is the same as the weighted average common shares outstanding for basic EPS due to the loss from continuing operations.
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