Exhibit 99.2
Equity One, Inc. For additional information at the Company:
1696 NE Miami Gardens Drive Howard Sipzner, CFO
North Miami Beach, FL 33179 Michele Guard, Investor Relations
305-947-1664 Media Contact:
Abbe Solomon 305-446-2700
FOR IMMEDIATE RELEASE:
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February 18, 2003
EQUITY ONE REPORTS FOURTH QUARTER AND FULL YEAR 2002 RESULTS
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NORTH MIAMI BEACH, FL, February 18, 2003 - Equity One, Inc. (NYSE: EQY), an
owner, developer and operator of primarily supermarket-anchored shopping centers
located predominantly in high growth markets in the southern United States,
announced today its financial results for the three and twelve months ended
December 31, 2002.
FINANCIAL HIGHLIGHTS
For the three months ended December 31, 2002, Funds From Operations (FFO) - a
standard measure of operating performance for Real Estate Investment Trusts
(REITs) - increased 15.8% to $10.0 million from $8.7 for the comparable period
in 2001. FFO per diluted share decreased 3.3% to $0.29 in 2002 from $0.30 for
the comparable period in 2001. The fourth quarter results for 2002 include a
lawsuit settlement (including legal fees) of $2.1 million or $0.06 per diluted
share. Net income was $7.3 million, or $0.21 per diluted share, compared with
$5.1 million, or $0.18 per diluted share, in the fourth quarter of 2001. Total
revenues for the fourth quarter increased 14.6% to $27.2 million from $23.7
million in the fourth quarter of 2001.
For the year ended December 31, 2002, FFO increased 54.8% to $45.5 million from
$29.4 million for the comparable period in 2001. FFO per diluted share increased
6.3% to $1.36 in 2002 from $1.28 for the comparable period in 2001. Net income
was $39.9 million or $1.20 per diluted share in 2002, compared with $18.7
million, or $0.83 per diluted share, for the comparable period in 2001. Total
revenues increased 29% to $103 million in 2002 from $79.9 million in the
comparable period in 2001.
Excluding the lawsuit settlement in the fourth quarter of 2002 and a loss from
the early extinguishment of debt in the corresponding quarter in 2001, FFO
adjusted for nonrecurring items for the three months ended December 31, 2002,
was $12.1 million or $0.35 per diluted share compared to $10.2 million or $0.35
per diluted share for the comparable period in 2001, increases of 18.5% and 0%,
respectively. Excluding the lawsuit settlement and gains or losses from the
early extinguishment of debt, FFO adjusted for nonrecurring items for the year
ended December 31, 2002 was $46 million or $1.38 per diluted share compared to
$30.9 million or $1.34 per diluted share for 2001, increases of 48.8% and 3.0%,
respectively.
"Our fourth quarter and full year results reflect the continued performance of
our portfolio and our ability to add value for our shareholders," stated Chaim
Katzman, Chairman and Chief Executive Officer of Equity One. "Since our
acquisition of CEFUS and UIRT in September 2001, we have improved our overall
occupancy by 310 basis points, increased our annual rents by $7.7 million, and
furthered our concentration on supermarket-anchored shopping centers through
strategic acquisitions, developments and dispositions. With the recent closing
of our merger with IRT Property Company and strengthened management team, we now
have the market breadth, geographic and tenant diversification and capital
market capabilities to become one of the dominant owners of neighborhood
shopping centers in the southern United States."
PORTFOLIO HIGHLIGHTS
At December 31, 2002, our portfolio was 88.9% leased and consisted of 88
properties located primarily in metropolitan areas of Florida and Texas. Our
portfolio includes 55 supermarket-anchored shopping centers, 9 drug
store-anchored shopping centers, 19 other retail-anchored shopping centers, one
self-storage facility and 4 retail developments, as well as non-controlling
interests in four unconsolidated joint ventures.
During the fourth quarter of 2002, we increased our average base rent per leased
square foot to $10.34 from $10.27 at September 30, 2002, renewed 45 leases
increasing the average rate 3.6% to $12.98 per square foot, and signed 46 new
leases at an average rate of $12.88 per square foot. Our same property NOI
(excluding termination fees) increased 4.9% in the fourth quarter of 2002
compared to the fourth quarter of 2001.
During 2002, we increased our average base rent per leased square foot to $10.34
from $9.84, renewed 251 leases increasing the average rate 4.3% to $12.33 per
square foot, and signed 195 new leases at an average rate of $12.35 per square
foot. For all of 2002, our same property NOI (excluding termination fees)
increased 4.4% compared to the comparable twelve-month period in 2001.
LITIGATION SETTLEMENT
During the fourth quarter of 2002, we settled a lawsuit in the amount of $1.9
million plus legal fees of $167,000. This resulted in approximately a $0.06 per
diluted share reduction in our reported results.
IRT PROPERTY COMPANY MERGER
On February 7, 2003, we entered into a $340 million unsecured revolving credit
facility with Wells Fargo and 14 other lenders in advance of the expected
completion of our merger with IRT. We have borrowed $175 million under the
facility in part to fund the merger and to prepay certain indebtedness.
On February 12, 2003, we completed the acquisition of IRT in a merger
transaction. We now own 180 properties encompassing approximately 18.4 million
square feet in twelve states, making us one of the largest owners of
neighborhood shopping centers in the southern United States.
OTHER ACQUISITIONS AND DISPOSITIONS
During the fourth quarter of 2002, we acquired one supermarket-anchored center
for $10.4 million. During 2002, we acquired 11 properties for an aggregate
investment of approximately $69 million.
During the fourth quarter, we sold two properties for aggregate consideration of
approximately $8 million and recognized total gain on the sales of $1.1 million.
Our fourth quarter income from discontinued operations, including the gain on
the sales, was $1.4 million. In total, we sold nine properties during 2002 for
aggregate consideration of approximately $32.1 million and associated gain on
the sales of $9.3 million. Our income from discontinued operations for the year
ended December 31, 2002, including the gain on the sales, was $10.7 million.
DEVELOPMENTS AND REDEVELOPMENTS
We are underway on the development of: (1) Plaza Alegre, an 84,000 square foot,
Publix supermarket-anchored shopping center in southwest Miami-Dade County,
Florida, with the opening scheduled for March 2003; (2) a complete redevelopment
of University Mall in Pembroke Pines, Florida incorporating a new Lowe's home
improvement store, with completion targeted in the fourth quarter of 2003; and
(3) a partial reconfiguration of the Oakbrook Square shopping center in Palm
Beach Gardens, Florida to accommodate a new Stein Mart store, with completion
targeted for the third quarter of 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
redevelopment of Salerno Village in Stuart, Florida to accommodate a new and
expanded Winn Dixie supermarket; and (3) 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 three developments are scheduled for
completion between the end of 2003 and early 2004.
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 the post merger full year 2003,
targeted FFO per diluted share to be between $1.46 and $1.49. We currently
anticipate that the growth in our FFO in 2003 will come from a combination of
accretion from the IRT merger, 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 reinstatement 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 attribution 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/VIDEO WEB CAST INFORMATION
We will host a conference call on Tuesday, February 18, 2003 at 10:30 a.m. EST
to discuss our performance for the three months and year ended December 31,
2002. You may access the live 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) 531-9985 for domestic callers or (706) 679-3073 for international
callers. A
replay of the call can be accessed for 30 days by dialing (800) 642-1687 for
domestic callers or (706) 645-9291 for international callers and entering code
7547162.
Equity One will be visiting the NYSE on February 18, 2003. In honor of the
occasion, Chaim Katzman, Equity One's Chairman and CEO, will be ringing The
Opening BellSM. You can view the event at:
http://www.nyse.com/listed/listed.html?/events/NT0063CBAB.html.
FOR ADDITIONAL INFORMATION
For a copy of our fourth quarter supplemental information package, please access
the "Investor Relations" 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 by Equity One in this press release constitute
forward-looking statements within the meaning of the federal securities laws.
Although Equity One believes that the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it 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, Georgia,
Texas and the other states in which Equity One owns properties; the continuing
financial success of Equity One's current and prospective tenants; continuing
supply constraints in its geographic markets; the availability of properties for
acquisition; the success of its efforts to lease up vacant properties; the
effects of natural and other disasters; the ability of Equity One successfully
to integrate the operations and systems of acquired companies and properties;
and other risks, which are described in Equity One's filings with the Securities
and Exchange Commission.
EQUITY ONE, INC.
UNAUDITED SELECTED CONSOLIDATED STATEMENTS OF OPERATIONS DATA
(In thousands, except per share data)
For the three For the three For the year For the year
months ended months ended ended ended
December 31, 2002 December 31, 2001 December 31, 2002 December 31,2001
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Total Revenue $ 27,188 $ 23,715 $103,009 $ 79,877
Net Income $ 7,303 $ 5,096 $ 39,934 $ 18,721
per share (basic) $ 0.21 $ 0.18 $ 1.22 $ 0.83
per share (diluted) $ 0.21 $ 0.18 $ 1.20 $ 0.83
Funds From Operations $ 10,010 $ 8,648 $ 45,487 $ 29,385
per share (diluted) $ 0.29 $ 0.30 $ 1.36 $ 1.28
Funds From Operations,
excluding
nonrecurring items $ 12,077 $ 10,194 $ 46,034 $ 30,931
per share (diluted) $ 0.35 $ 0.35 $ 1.38 $ 1.34
Weighted average common shares
basic 34,046 28,560 32,662 22,414
diluted 34,894 29,248 33,443 23,037
EQUITY ONE, INC.
UNAUDITED SELECTED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
December 31, 2002 December 31, 2001
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Investments in real estate
(before accumulated depreciation) $ 718,864 $ 652,169
Total assets $ 730,069 $ 668,536
Mortgage notes payable $ 332,143 $ 345,047
Revolving credit facilities $ 23,000 $ 27,409
Total liabilities before minority interests $ 375,969 $ 386,400
Shareholders' equity $ 350,231 $ 278,267
Total liabilities and shareholders' equity $ 730,069 $ 668,536