Exhibit 99.1
Cornerstone Realty Reports Fourth Quarter and Year 2003 Results
RICHMOND, Va.--(BUSINESS WIRE)--Feb. 17, 2004--Cornerstone Realty
Income Trust, Inc. (NYSE: TCR) today reported operating results for
the fourth quarter and year ended December 31, 2003.
Funds From Operations ("FFO") in the fourth quarter ended December
31, 2003 were $11.3 million, or $0.20 per common share, compared with
$10.0 million, or $0.20 per common share, in the fourth quarter of
2002. FFO for the year 2003 was $43.5 million, or $0.80 per common
share, compared with $46.2 million, or $0.92 per common share, last
year. Net loss available to common shareholders in the fourth quarter
of 2003 was $3.1 million, or $0.06 per common share basic and diluted,
compared with a net loss available to common shareholders of $1.7
million, or $0.04 per common share basic and diluted, in the fourth
quarter of 2002. For the year 2003, net loss available to common
shareholders was $8.2 million, or $0.16 per common share basic and
diluted, compared with net loss available to common shareholders of
$0.1 million, or $0.00 per common share basic and diluted, in the year
2002.
FFO is the generally accepted measure of operating performance for
a real estate investment trust (REIT). A reconciliation of net income
to FFO is included in the Operating Results table at the end of this
news release.
In the fourth quarter of 2003, total revenues were $44.7 million
compared with $39.4 million in the fourth quarter of 2002. Average
physical occupancy in the fourth quarter of 2003 was 93% compared with
92% a year ago, and the average rent per unit in the fourth quarter of
2003 was $671 compared with $681 in the fourth quarter of 2002. For
the year 2003, total revenues were $171.7 million compared with $159.9
million a year ago. Average physical occupancy in both 2003 and 2002
was 92%, and the average rent per unit in 2003 was $674 compared with
$688 in the prior year.
Commenting on the fourth quarter and annual results, Glade M.
Knight, chairman and chief executive officer, said: "The fourth
quarter was a continuation of softness in occupancy rates in our major
markets, particularly in the Dallas/Ft. Worth area where lack of
significant job growth, overbuilding of apartment communities, and low
mortgage rates have continued to adversely affect our operations. In
some of our other major markets, we are beginning to experience slight
improvement in occupancy and rental rates, and we are hopeful that
employment growth and fewer new apartment completions in those markets
will allow us to generate moderate improvement in operations
throughout 2004," Knight said.
"Although the occupancy rates in some of our markets remain soft,
we believe we are positioned well for meaningful improvement in
revenues and earnings toward the end of this year and into 2005. We
have greatly enhanced the depth and quality of our portfolio in the
past year, particularly with the Merry Land merger last spring. The
merger also provided us with a small but quality development pipeline
in Savannah and Charleston as well as a third-party property
management business, which we believe can generate a significant
contribution to revenues and earnings over time as we work to grow
that portion of our business.
"In the second half of last year, we also completed a major
$150-million refinancing that lowered our effective average interest
rates and provided us with greater overall financial flexibility. In
addition, we have spent considerable effort to greatly enhance our
training and continuing education programs for our field management
and staff, and we believe the results of that effort have positioned
our apartment communities as the favored places to reside among
current and prospective residents in each of our markets," Knight
said.
"In addition, we have added some outstanding individuals to our
executive management team and our board of directors in the past year,
and we look forward to capitalizing on the talents and experience of
those executives and board members to enhance our overall operations
and continue to improve our already strong corporate governance
programs."
Comparable Property Operations
Comparable property operations is a measure Cornerstone uses to
evaluate performance and is not deemed to be an alternative to net
income as determined in accordance with generally accepted accounting
principles. In addition, this measure as calculated by Cornerstone may
not be comparable to similarly entitled measures of other companies.
In the fourth quarter of 2003, Cornerstone's "same-community"
portfolio consists of 74 stabilized apartment communities containing
20,127 apartment homes that the company has owned since January 1,
2002, representing approximately 87% of Cornerstone's 23,189 units.
For the fourth quarter of 2003, same-community property operating
income (rental income less property operating expenses) decreased 4%
from the fourth quarter of 2002. Fourth quarter 2003 rental income
decreased 3% while property operating expenses decreased 1% compared
with the fourth quarter of 2002. For the year 2003, same-community
property operating income decreased 7% from the prior year. Rental
income in 2003 decreased 3% while property operating expenses
increased 4% compared with the prior year.
Dividends
A quarterly dividend of $0.20 per share was paid on January 20,
2004 to common shareholders of record on December 30, 2003. The
company also paid a quarterly dividend of $0.5938 per share on January
20, 2004 to record holders of its Series A Convertible Preferred
Shares on December 30, 2003.
Conference Call and Webcast
Cornerstone will hold a live conference call and webcast tomorrow,
February 18, 2004 at 10:00 a.m. EST to review fourth quarter and
yearly results. Individual investors can access the live webcast by
visiting the Investor Relations page of the company's Web site at
www.cornerstonereit.com. Investment professionals and media should
call the company's Investor Relations department at (804) 643-1761 for
further information on participating in the conference call. A replay
of the conference call and webcast will be available on the company's
Web site shortly after completion of the live event.
Supplemental Information
Additional operational and financial information for the fourth
quarter and year ended December 31, 2003 is available in the Investor
Relations section of Cornerstone's Web site at
www.cornerstonereit.com.
Forward Looking Statements
Certain statements contained herein constitute "forward-looking
statements" within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance or achievements of the
company to be materially different from results expressed or implied
by such forward-looking statements. Such factors include, among other
things, risks associated with unanticipated adverse business
developments affecting the company, adverse changes in the real estate
markets, and local as well as general economic and competitive
factors. In addition, the timing and amounts of distributions to
common shareholders are within the discretion of Cornerstone's board
of directors. There is no assurance that planned events or results
will be achieved.
Corporate Profile
Cornerstone Realty Income Trust, Inc. (NYSE:TCR) is a fully
integrated, self-managed and self-advised real estate company that has
operated as a REIT since 1993. The company focuses on the ownership
and management of multifamily communities in select markets in
Virginia, North Carolina, South Carolina, Georgia and Texas. Currently
Cornerstone owns 89 apartment communities with 23,189 units, a
third-party property management business, undeveloped apartment land,
and ownership interests in two joint ventures. Cornerstone is
headquartered in Richmond, Virginia and its common stock trades on the
New York Stock Exchange under the symbol "TCR." For more information
about Cornerstone, visit the company's web site at
www.cornerstonereit.com.
CORNERSTONE REALTY INCOME TRUST, INC.
OPERATING RESULTS
In Thousands Except Per Share Amounts
Three Months Twelve Months
Ended Ended
Dec. 31 Dec. 31
2003 2002 2003 2002
- ----------------------------------------------------------------------
Revenues
Rental Income $42,362 $38,101 $163,059 $153,295
Other Property Income 2,302 1,300 8,593 6,571
---------------- ------------------
Total Revenues 44,664 39,401 171,652 159,866
Expenses
Property and Maintenance 13,401 11,158 50,930 44,907
Real Estate Taxes and Insurance 6,292 5,789 23,550 20,727
Property Management 985 1,029 4,102 3,798
General and Administrative 1,095 1,181 3,824 3,904
Other Depreciation 6 6 23 24
Depreciation and Amortization of
Real Estate Assets 14,407 11,531 52,794 45,157
Other 30 46 239 251
---------------- ------------------
Total Expenses 36,216 30,740 135,462 118,768
Income Before Interest Income
(Expense) 8,448 8,661 36,190 41,098
Interest Income 104 4 274 31
Interest Expense (11,632)(10,640) (45,896) (41,684)
---------------- ------------------
Loss from Continuing Operations
before
Minority Interest of Unit Holders
in Operating Partnership (3,080) (1,975) (9,432) (555)
Minority Interest of Unit Holders
in Operating Partnership 92 71 262 36
---------------- ------------------
Loss from Continuing Operations (2,988) (1,904) (9,170) (519)
Discontinued Operations
Income (Loss) from Discontinued
Operations (5) 252 (15) 739
Gain (Loss) on Sales of
Investments (75) - 1,316 -
---------------- ------------------
Net (Loss) Income $(3,068)$(1,652) $(7,869) $220
Distributions to Preferred
Shareholders (76) (75) (303) (303)
---------------- ------------------
Net Loss Available to Common
Shareholders $(3,144)$(1,727) $(8,172) $(83)
================ ==================
Funds From Operations
Net Loss Available to Common
Shareholders $(3,144)$(1,727) $(8,172) $(83)
Adjustments:
Distributions to Preferred
Shareholders 76 75 303 303
Minority Interest of Unit Holders
in Operating Partnership (92) (71) (262) (36)
Gain on Sales of Investments 75 - (1,316) -
Depreciation from Discontinued
Operations - 173 162 864
Depreciation and Amortization of
Real Estate Assets 14,407 11,531 52,794 45,157
---------------- ------------------
Funds From Operations $11,322 $9,981 $43,509 $46,205
================ ==================
Per Share
Weighted Average Shares -- Fully
Converted 57,488 50,885 54,694 50,202
Funds From Operations Per Share $0.20 $0.20 $0.80 $0.92
Common Share Distributions $0.20 $0.28 $0.88 $1.12
Net Loss from Continuing
Operations --
Basic and Diluted $(0.06) $(0.04) $(0.18) $(0.02)
Net Income from Discontinued
Operations --
Basic and Diluted $- $- $0.02 $0.02
Net (Loss) Income Available to
Common Shareholders --
Basic and Diluted $(0.06) $(0.04) $(0.16) $-
Weighted Average Common Shares --
Basic and Diluted 55,479 48,308 52,643 48,068
CORNERSTONE REALTY INCOME TRUST, INC.
BALANCE SHEET DATA Dec. 31, Dec. 31,
In Thousands Except Per Share Amounts 2003 2002
- ----------------------------------------------------------------------
Assets
- ----------------------------------------------
Investment in Rental Property
Land $160,108 $149,133
Building and Improvements 1,102,483 960,735
Furniture and Fixtures and Other 38,735 34,139
Real Estate Under Development 5,450 1,635
Assets Available for Sale, Net - 13,185
----------- -----------
1,306,776 1,158,827
Less Accumulated Depreciation (224,462) (172,978)
----------- -----------
1,082,314 985,849
----------- -----------
Cash and Cash Equivalents 1,393 1,380
Prepaid Expenses 5,334 4,636
Deferred Financing Costs, Net 5,924 4,519
Investment in Real Estate Joint Ventures 2,649 -
Other Assets 26,257 18,463
----------- -----------
Total Assets $1,123,871 $1,014,847
=========== ===========
- ----------------------------------------------
Liabilities and Shareholders' Equity
- ----------------------------------------------
Liabilities
Notes Payable-Secured $801,754 $604,446
Notes Payable-Unsecured - 77,913
Distributions Payable 76 76
Accounts Payable and Accrued Expenses 14,950 12,953
Rents Received in Advance 884 606
Tenant Security Deposits 1,889 1,574
----------- -----------
Total Liabilities 819,553 697,568
Minority Interest of Unitholders in Operating
Partnership 18,884 30,205
Shareholders' Equity
Preferred Stock, No Par Value, Authorized
25,000 Shares; $25 Liquidation Preference,
Series A Cumulative Convertible Redeemable;
Issued and Outstanding 127 Shares 2,680 2,680
Common Stock, No Par Value, Authorized
100,000 Shares; Issued and Outstanding
55,534 Shares and 48,361 Shares,
Respectively 538,969 487,303
Deferred Compensation (456) (638)
Distributions Greater Than Net Income (255,759) (202,271)
----------- -----------
Total Shareholders' Equity 285,434 287,074
----------- -----------
Total Liabilities and Shareholders' Equity $1,123,871 $1,014,847
=========== ===========
CONTACT: Cornerstone Realty Income Trust, Inc.
Mark M. Murphy, 804-643-1761 ext. 231