JACKSON, Miss., Jan. 11 /PRNewswire-FirstCall/ -- EastGroup Properties today announced its initial outlook for 2007. FFO per share for 2007 is estimated to be in the range of $2.93 to $3.03. Earnings per share for 2007 is estimated to be in the range of $1.12 to $1.22. The table below reconciles projected net income to projected FFO.
Low Range High Range
Q1 2007 Y/E 2007 Q1 2007 Y/E 2007
Net income $6,710 29,262 7,186 31,638
Dividends on preferred
shares (656) (2,624) (656) (2,624)
Net income available to
common stockholders 6,054 26,638 6,530 29,014
Depreciation and
amortization 10,747 42,963 10,747 42,963
Funds from operations
available to common
stockholders $16,801 69,601 17,277 71,977
Diluted shares 23,754 23,758 23,754 23,758
Per share data (diluted):
Net income available to
common stockholders $0.25 1.12 0.27 1.22
Funds from operations
available to common
stockholders $0.71 2.93 0.73 3.03
The following assumptions were used:
-- Average occupancy of 94.0% to 96.5%.
-- Same property NOI increase of 1% to 4%.
-- Non-same property NOI:
* Development properties not transferred to the portfolio by January 1,
2006 contributing PNOI of $.37 per share.
* Dispositions of operating properties totaling $10 million on July 1,
2007.
* Operating property acquisitions of $19 million in December 2006 and $9
million in January 2007, which have closed.
* Additional operating property acquisitions of $50 million on July 1,
2007.
-- No lease termination fees.
-- No sales of nondepreciable real estate.
-- Floating rate bank debt at an average rate of 6%.
-- New fixed rate debt of $50 million on August 15, 2007 at 5.7%.
The Company's chief decision makers use two primary measures of operating results in making decisions: property net operating income (PNOI), defined as income from real estate operations less property operating expenses (before interest expense and depreciation and amortization), and funds from operations available to common stockholders (FFO). EastGroup defines FFO consistent with the National Association of Real Estate Investment Trusts' definition, as net income (loss) computed in accordance with accounting principles generally accepted in the United States of America (GAAP), excluding gains or losses from sales of depreciable real estate property, plus real estate related depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.
PNOI and FFO are supplemental industry reporting measurements used to evaluate the performance of the Company's investments in real estate assets and its operating results. The Company believes that the exclusion of depreciation and amortization in the industry's calculations of PNOI and FFO provides supplemental indicators of the properties' performance since real estate values have historically risen or fallen with market conditions. PNOI and FFO as calculated by the Company may not be comparable to similarly titled but differently calculated measures for other REITs. Investors should be aware that items excluded from or added back to FFO are significant components in understanding and assessing the Company's financial performance.
FORWARD-LOOKING STATEMENTS
The Company's assumptions and financial projections in this release are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently subject to known and unknown risks and uncertainties, many of which the Company cannot predict, including, without limitation:
-- changes in general economic conditions;
-- the extent of tenant defaults or of any early lease terminations;
-- the Company's ability to lease or re-lease space at current or
anticipated rents;
-- changes in the supply of and demand for industrial/warehouse
properties;
-- increases in interest rate levels;
-- increases in operating costs;
-- the availability of financing;
-- natural disasters and the Company's ability to obtain adequate
insurance;
-- changes in governmental regulation, tax rates and similar matters; and
-- other risks associated with the development and acquisition of
properties, including risks that development projects may not be
completed on schedule or that development or operating costs may be
greater than anticipated.
Although the Company believes that the expectations reflected in the forward-looking statements are based upon reasonable assumptions at the time made, the Company can give no assurance that such expectations will be achieved. The Company assumes no obligation whatsoever to publicly update or revise any forward-looking statements.
EastGroup Properties, Inc. is a self-administered equity real estate investment trust focused on the development, acquisition, and operation of industrial properties in major Sunbelt markets throughout the United States with a special emphasis in the states of Florida, Texas, California and Arizona. Its strategy for growth is based on its property portfolio orientation toward premier business distribution facilities clustered near major transportation features. EastGroup's portfolio currently includes 22.1 million square feet with an additional 1,458,000 square feet of properties under development.
EastGroup Properties, Inc. press releases are available at http://www.eastgroup.net/.
