Equity One, Inc. FOR ADDITIONAL INFORMATION
1696 Miami Gardens Drive (EQUITY ONE LOGO) AT THE COMPANY:
North Miami Beach, FL 33179 Howard Sipzner,
Chief Financial Officer
Michele Guard,
Investor Relations
305-947-1664
Media Contact:
Abbe Solomon 305-446-2700
FOR IMMEDIATE RELEASE
- ---------------------
October 22, 2002
EQUITY ONE REPORTS STRONG THIRD QUARTER 2002 RESULTS
----------------------------------------------------
NORTH MIAMI BEACH, FL, October 22, 2002 - Equity One, Inc. (NYSE: EQY), an
owner, developer and operator of primarily supermarket-anchored shopping centers
located predominantly in high growth markets of Florida and Texas, announced
today its financial results for the three and nine months ended September 30,
2002.
FINANCIAL HIGHLIGHTS
For the three months ended September 30, 2002, Funds from Operations (FFO)
- - a standard measure of operating performance for Real Estate Investment Trusts
(REITs) - increased 83.8% to $13.6 million from $7.4 million for the comparable
period in 2001. FFO per diluted share increased 14.7% to $0.39 in 2002 from
$0.34 for the comparable period in 2001. Net income was $10.9 million, or $0.32
per diluted share, compared with $5.8 million, or $0.27 per diluted share, in
the third quarter of 2001. Total revenues for the third quarter increased 32.1%
to $25.8 million from $19.6 million in the third quarter of 2001.
For the nine months ended September 30, 2002, FFO increased 71.1% to $35.5
million from $20.7 million for the comparable period in 2001. FFO per diluted
share increased 9.1% to $1.08 in 2002 from $0.99 for the comparable period in
2001. Net income was $32.6 million or $1.00 per diluted share in 2002, compared
with $13.6 million, or $0.66 per diluted share, for the comparable period in
2001. Total revenues increased 33.7% to $75.4 million in 2002 from $56.4 million
in the comparable period in 2001.
The increases include a gain on early debt extinguishment of $1.5 million
or $0.04 per diluted share, as well as the acquisition of the minority interest
in CEFUS in September 2001, the acquisition of UIRT in September 2001, the
lease-up of vacant space acquired in the CEFUS and UIRT acquisitions, and
various individual property acquisitions made since September 30, 2001. The
increases in net income are also attributable to gains from various asset sales
during the three and nine-month periods ended September 30, 2002.
"We are extremely pleased with our third quarter and year to date results,"
stated Chaim Katzman, Chairman and Chief Executive Officer of Equity One. "Our
business model, emphasizing supermarket-anchored shopping centers, continues to
show its durability and attractiveness to tenants, shoppers and investors. Our
results further reflect the strength of our geographic markets and the depth of
our management team, and demonstrate the ongoing upgrading of the quality of our
portfolio through our leasing, acquisition, disposition and development
activities."
1
PORTFOLIO HIGHLIGHTS
At September 30, 2002, our portfolio was 87.1% leased and consisted of 88
properties located primarily in metropolitan areas of Florida and Texas. Our
portfolio includes 56 supermarket-anchored shopping centers, 8 drug
store-anchored shopping centers, 18 other retail-anchored shopping centers, 3
commercial properties and 3 retail developments. During the third quarter, we
increased our average base rent per occupied square foot to $10.27 from $10.12
at June 30, 2002, renewed 69 leases increasing the average rate 4.4% to $14.12
per square foot, and signed 56 new leases at an average rate of $11.84 per
square foot. Our same property NOI increased 0.7% in the third quarter of 2002
compared to the third quarter of 2001, and increased 3.1% versus the comparable
nine-month period in 2001.
DEBT EXTINGUISHMENT
During the third quarter of 2002, we settled a mortgage obligation at a
discount and recognized a gain on the early extinguishment of debt in the amount
of approximately $1.5 million. This added approximately $0.04 per diluted share
to our reported results.
We have adopted SFAS No. 145, which modified the reporting treatment of
gains or losses from extinguishment of debts and results in the classification
of this extinguishment of debt as part of ordinary income.
ACQUISITIONS AND DISPOSITIONS
During the third quarter of 2002, we acquired one supermarket-anchored
center for $9.3 million. During the first nine months of 2002, we acquired ten
properties for an aggregate investment of approximately $59 million.
During the third quarter, we sold three properties for aggregate
consideration of approximately $11 million and recognized total gain on the
sales of $1.1 million. Our third quarter income from discontinued operations,
including the gain on the sales, was $1.2 million. In total, we sold seven
properties during the first nine months of 2002 for aggregate consideration of
approximately $24 million and associated gain on the sales of $8.2 million. Our
income from discontinued operations for the nine months ended September 30,
2002, including the gain on the sales, was $9.4 million.
DEVELOPMENTS AND REDEVELOPMENTS
We are underway on the development of Plaza Alegre, an 84,000 square foot,
Publix supermarket-anchored shopping center in southwest Miami-Dade County,
Florida, with a target completion in February 2003.
We are in the planning and permitting stage for several other developments
and redevelopments including: (1) the development of a new 25,000 square foot
CVS drug store-anchored center across the street from Plaza Alegre; (2) the
complete redevelopment of University Mall in Pembroke Pines, Florida
incorporating a new Lowe's home improvement store; (3) a partial reconfiguration
of the Oakbrook Square shopping center in Palm Beach Gardens, Florida to
accommodate a new Stein Mart store; (4) the redevelopment of Salerno Village in
Stuart, Florida to accommodate a new and expanded Winn Dixie supermarket; and
(5) a 114,000 square foot addition to the Shops at Skylake in North Miami Beach,
Florida to accommodate a new L.A. Fitness Sports Club and other local tenants.
These five developments are scheduled for completion between the end of 2003 and
early 2004.
2
EARNINGS GUIDANCE
Based on current plans and assumptions and subject to the risks and
uncertainties more fully described in Equity One's reports filed with the
Securities and Exchange Commission, we expect to report $0.35 of FFO per diluted
share in the fourth quarter of 2002 resulting in $1.42 of FFO per diluted share
for full year 2002, incorporating $0.04 related to the early extinguishment of
debt. For full year 2003, we have targeted FFO per diluted share to be between
$1.43 and $1.47. We currently anticipate that the growth in our FFO in 2003 will
come from a combination of internal growth related to increases in rent and the
continued lease-up of vacant space, as well as incremental income from property
acquisitions and developments. This guidance is provided for information
purposes and is subject to change.
ACCOUNTING AND OTHER DISCLOSURES
All prior reporting periods which fall between August 18, 2000 and
September 19, 2001 have been restated or adjusted to account for the acquisition
on August 18, 2000 of 68.07% of the stock of First Capital Realty (TSE:FCR), the
parent of Centrefund Realty (U.S.) Corporation, or CEFUS, by Gazit-Globe (1982)
Ltd. (TLV:GLOB), Equity One's majority shareholder. The restatement consolidates
the operations of Equity One and CEFUS between August 18, 2000 and September 19,
2001, subject to a 31.93% minority interest in CEFUS. On September 20, 2001,
Equity One acquired 100% of CEFUS from First Capital Realty, thereby acquiring
the remaining 31.93% minority interest.
We define FFO consistent with the most recent NAREIT definition as net
income before gains (losses) on the sale of real estate, extraordinary items and
minority interest, plus real estate depreciation and amortization of capitalized
leasing costs, adjusted to add back/subtract any deferred income tax
expense/credit attributable to the CEFUS accounting treatment. We believe that
FFO should be considered along with, but not as an alternative to net income as
defined by U.S. generally accepted accounting principles, or GAAP, as a measure
of our operating performance. FFO does not represent cash generated from
operating activities in accordance with GAAP and is not necessarily indicative
of funds available to fund our cash needs. Our calculation of FFO may not be
comparable to similarly titled measures reported by other companies.
CONFERENCE CALL INFORMATION AND VIDEO WEB-CAST
We will host a conference call on Wednesday, October 23, 2002 at 1:00 p.m.
EST to discuss our performance for the three and nine months ended September 30,
2002. You may access the video web-cast at www.equityone.net using the icons on
the bottom of the home page. Investors may also join the call by dialing
877-446-8439. A replay of the call can be accessed by dialing 800-642-1687 and
entering pass code 6078090.
FOR ADDITIONAL INFOMRATION
For a copy of our third quarter supplemental information package, please
access the "Financial Reports" section in our web site at www.equityone.net. To
be included in our e-mail distributions for future press releases and other
notices, please send your e-mail address to Michele Guard at
mguard@equityone.net.
FORWARD LOOKING STATEMENTS
Certain matters discussed in this press release constitute forward-looking
statements within the meaning of the federal securities laws. Although we
believe that the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, we can give no assurance that these
expectations will be achieved. Factors that could cause actual results to differ
materially from current expectations include changes in macro-economic
conditions and the demand for retail space in Florida and Texas; the continuing
financial success of our current and prospective tenants; continuing supply
constraints in our geographic markets; the availability of properties for
acquisition; the success of our efforts to lease up vacant properties; the
effects of natural and other disasters; and other risks, which are described in
our filings with the Securities and Exchange Commission.
3
EQUITY ONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the three For the three
months ended months ended %
September 30, 2002 September 30, 2001 Increase
--------------------------- --------------------------- -------------
(Unaudited) (Unaudited)
Total Revenue $ 25,833 $ 19,563 32.1%
Net Income $ 10,926 $ 5,826 87.5%
per share (basic) $ 0.32 $ 0.27 18.5%
per share (diluted) $ 0.32 $ 0.27 18.5%
Funds from Operations $ 13,608 $ 7,403 83.8%
per share (diluted) $ 0.39 $ 0.34 14.7%
Weighted average common shares
basic 33,926 21,304
diluted 34,785 21,948
For the nine For the nine
months ended months ended %
September 30, 2002 September 30, 2001 Increase
--------------------------- -------------------------- ----------------
(Unaudited) (Unaudited)
Total Revenue $ 75,423 $ 56,425 33.7%
Net Income $ 32,631 $ 13,625 139.5%
per share (basic) $ 1.01 $ 0.67 50.7%
per share (diluted) $ 1.00 $ 0.66 51.5%
Funds from Operations $ 35,477 $ 20,737 71.1%
per share (diluted) $ 1.08 $ 0.99 9.1%
Weighted average common shares
basic 32,195 20,343
diluted 32,956 20,941
4
EQUITY ONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, 2002 December 31, 2001
------------------------ ------------------------
------------------------ ------------------------
(Unaudited) (Unaudited)
Investments in Real Estate
(before accumulated depreciation) $ 709,322 $ 656,005
Total Assets $ 718,568 $ 668,536
Mortgage Notes Payable $ 307,713 $ 345,047
Credit Facilities $ 36,507 $ 27,409
Total Liabilities $ 368,918 $ 390,269
Shareholders' Equity $ 349,650 $ 278,267
Total Liabilities and Shareholders' Equity $ 718,568 $ 668,536
5