Maguire Properties, Inc. (NYSE:MPG), a
Southern California-focused real estate investment trust, today provided
an update to address a select number of assets located primarily in
Orange County, California and reported results for the quarter ended
June 30, 2009.
The Company announced its Board of Directors has approved management’s
plan to seek to dispose of four former EOP/Blackstone assets and two
other assets in cooperation with lenders as well as Park Place I and
certain parking areas and development rights. During the quarter ended
June 30, 2009, the Company recorded a non-cash impairment charge of
approximately $345 million associated with these assets.
Nelson Rising, President and Chief Executive Officer, stated, “We remain
sharply focused on our liquidity issues. We believe a successfully
executed Board-approved plan will eliminate the adverse effect these
assets have had on the Company’s cash position.”
Asset Initiative
The Company’s Board of Directors has approved the disposal of Park Place
I and certain parking areas and development rights as well as the
following assets as part of its asset disposition plan:
-
Stadium Towers in Central Orange County;
-
Park Place II in Irvine;
-
2600 Michelson in Irvine;
-
Pacific Arts Plaza in Costa Mesa;
-
550 South Hope in Downtown Los Angeles; and
-
500 Orange Tower in Central Orange County.
The Company has contacted the master servicers of the mortgage loans
encumbering the properties named above and has apprised them that it
will no longer continue to fund the cash shortfall associated with the
respective mortgages. The Company intends to work cooperatively with the
master and special servicers and has expressed a willingness to continue
to manage the properties until such time the CMBS special servicer
appoints a receiver. The Company has a practice of working
collaboratively with lenders and over the last year has completed a
number of transactions that achieved favorable results for all parties.
Significant Second Quarter Events
-
On June 2, 2009, we disposed of City Parkway located in Orange,
California. We have no further obligations with respect to the
property-level debt and eliminated a master lease obligation on the
property.
-
On June 12, 2009, we reached an agreement with our counterparty to
terminate a forward-starting interest rate swap on the Lantana
construction loan for $11.3 million.
-
On June 13, 2009, we extended the maturity date of our
Lantana Media Campus construction loan to September 30, 2009. We have
the option to extend the maturity date of this loan to June 13, 2010,
subject to certain conditions.
-
On June 15, 2009, we disposed of 3161 Michelson, which is located
within the Park Place campus in Irvine, California. The Company has no
further obligations with respect to the property-level debt and
eliminated significant master lease obligations. Additionally, our
Operating Partnership has no further obligation to guarantee the
repayment of the construction loan.
-
During the quarter, we completed new leases and renewals for
approximately 452,000 square feet (including our pro rata share of our
joint venture properties), including a new lease for approximately
82,500 square feet with U.S. Bank at 3121 Michelson located in Irvine,
California.
Significant Subsequent Events
-
Subsequent to quarter end, we entered into loan modifications to amend
the financial covenants of our Plaza Las Fuentes mortgage and Lantana
Media Campus construction loan effective as of June 30, 2009. We made
certain principal paydowns and agreed to other changes to the loan
agreements, as described in our Quarterly Report on Form 10-Q for the
quarter ended June 30, 2009. These loan modifications provide us with
greater operating flexibility, particularly with respect to the
disposition of non-core assets.
-
On August 6, 2009, the Company entered into a deed in lieu of
foreclosure with the lender to dispose of Park Place I. Additionally,
we have entered into an agreement to sell certain parking areas
together with related development rights under which we have received
a non-refundable deposit.
Second Quarter 2009 Financial Results
-
Net loss available to common stockholders for the quarter ended
June 30, 2009 was $(380.5) million, or $(7.95) per share, compared to
a net loss available to common stockholders of $(110.6) million, or
$(2.32) per share, for the quarter ended June 30, 2008. Our earnings
in the second quarter of 2009 were negatively impacted by non-cash
impairment charges totaling $384.7 million recorded in connection with
the properties included in the Company’s Asset Disposition Program,
City Parkway, which was disposed of during the quarter and the
writeoff of assets related to our investment in DH Von Karman Maguire,
LLC. Additionally, our earnings were negatively impacted by $8.3
million due to a non-cash impairment charge recorded in our Maguire
Macquarie joint venture in connection with the Quintana Campus in
Irvine. Our earnings in the second quarter of 2008 were negatively
impacted by a $51.9 million impairment charge recorded in connection
with the disposition of Main Plaza and $17.5 million of costs
associated with our review of strategic alternatives and management
changes.
-
Our share of Funds from Operations (FFO) available to common
stockholders for the quarter ended June 30, 2009 was $(339.7) million,
or $(7.10) per diluted share, compared to $(56.4) million, or $(1.18)
per diluted share, for the quarter ended June 30, 2008. Our share of
FFO before specified items was $3.7 million, or $0.08 per diluted
share, for the quarter ended June 30, 2009 as compared to
$4.5 million, or $0.09 per diluted share, for the quarter ended
June 30, 2008.
The weighted average number of common and common equivalent shares used
to calculate basic and diluted earnings per share for the quarter ended
June 30, 2009 was 47,836,591 due to our net loss position. Our diluted
number of common and common equivalent shares outstanding used to
calculate FFO for the quarter ended June 30, 2009 was 47,837,083.
As of June 30, 2009, our portfolio was comprised of whole or partial
interests in approximately 32 million square feet, consisting of 33
office and retail properties totaling approximately 19 million net
rentable square feet, one 350-room hotel with 266,000 square feet, and
on- and off-site structured parking plus surface parking totaling
approximately 12 million square feet, which accommodates almost 41,000
vehicles. We have one project under development that totals
approximately 189,000 square feet of office space. We also own
undeveloped land that we believe can support up to approximately
8 million square feet of office, hotel, retail, and residential
development and approximately 8 million square feet of structured
parking.
We will host a conference call and audio webcast, both open to the
general public, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) on
Monday, August 10, 2009, to discuss the financial results of the second
quarter and provide a company update. The conference call can be
accessed by dialing (866) 394-8461 (Domestic) or (706) 758-3042
(International), ID number 24118207. The live conference call can be
accessed via audio webcast at the Investor Relations section of our
website, located at www.maguireproperties.com,
or through CCBN at www.fulldisclosure.com.
A replay of the conference call will be available approximately two
hours following the call through August 13, 2009. To access this replay,
dial (800) 642-1687 (Domestic) or (706) 645-9291 (International). The
required passcode for the replay is ID number 24118207. The replay can
also be accessed via audio webcast at the Investor Relations section of
our website, located at www.maguireproperties.com,
or through CCBN at www.fulldisclosure.com.
About Maguire Properties, Inc.
Maguire Properties, Inc. is the largest owner and operator of Class A
office properties in the Los Angeles central business district and is
primarily focused on owning and operating high-quality office properties
in the Southern California market. Maguire Properties, Inc. is a
full-service real estate company with substantial in-house expertise and
resources in property management, marketing, leasing, acquisitions,
development and financing. For more information on Maguire Properties,
visit our website at www.maguireproperties.com.
Business Risks
This press release contains forward-looking statements based on current
expectations, forecasts and assumptions that involve risks and
uncertainties that could cause actual outcomes and results to differ
materially. These risks and uncertainties include: risks associated with
our announced asset disposition program; risks associated with our
contingent guarantees by our operating partnership; risks associated
with our liquidity situation; risks associated with the negative impact
of the current credit crisis and economic slowdown; general risks
affecting the real estate industry (including, without limitation, the
inability to enter into or renew leases at favorable rates, dependence
on tenants’ financial condition, and competition from other developers,
owners and operators of real estate); risks associated with the
availability and terms of financing and the use of debt to fund
acquisitions and developments; risks associated with our ability to
dispose of properties, if and when we decide to do so, at prices or
terms set by or acceptable to us; risks and uncertainties affecting
property development and construction; risks associated with increases
in interest rates, volatility in the securities markets and contraction
in the credit markets affecting our ability to refinance existing loans
as they come due; risks associated with joint ventures; potential
liability for uninsured losses and environmental contamination; risks
associated with our potential failure to qualify as a REIT under the
Internal Revenue Code of 1986, as amended, and possible adverse changes
in tax and environmental laws; and risks associated with our dependence
on key personnel whose continued service is not guaranteed.
For a further list and description of such risks and uncertainties, see
our Annual Report on Form 10-K/A filed on April 30, 2009 and our
Quarterly Report on Form 10-Q filed on August 10, 2009 with the
Securities and Exchange Commission. The Company does not update
forward-looking statements and disclaims any intention or obligation to
update or revise them, whether as a result of new information, future
events or otherwise.
|
MAGUIRE PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
|
|
|
|
|
|
|
|
|
|
June 30, 2009
|
|
December 31, 2008
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
Investments in real estate
|
|
$
|
4,559,872
|
|
|
$
|
5,026,688
|
|
|
Less: accumulated depreciation
|
|
|
(666,092
|
)
|
|
|
(604,302
|
)
|
|
Net investments in real estate
|
|
|
3,893,780
|
|
|
|
4,422,386
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
63,736
|
|
|
|
80,502
|
|
|
Restricted cash
|
|
|
159,487
|
|
|
|
199,664
|
|
|
Rents and other receivables, net
|
|
|
10,938
|
|
|
|
15,044
|
|
|
Deferred rents
|
|
|
70,284
|
|
|
|
62,229
|
|
|
Due from affiliates
|
|
|
2,984
|
|
|
|
1,665
|
|
|
Deferred leasing costs and value of in-place leases, net
|
|
|
139,132
|
|
|
|
153,660
|
|
|
Deferred loan costs, net
|
|
|
26,564
|
|
|
|
30,496
|
|
|
Acquired above-market leases, net
|
|
|
11,514
|
|
|
|
19,503
|
|
|
Other assets
|
|
|
13,882
|
|
|
|
19,663
|
|
|
Investment in unconsolidated joint ventures
|
|
|
–
|
|
|
|
11,606
|
|
|
Assets associated with real estate held for sale
|
|
|
–
|
|
|
|
182,597
|
|
|
Total assets
|
|
$
|
4,392,301
|
|
|
$
|
5,199,015
|
|
|
|
|
|
|
|
|
LIABILITIES AND DEFICIT
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Mortgage and other secured loans
|
|
$
|
4,600,771
|
|
|
$
|
4,714,090
|
|
|
Accounts payable and other liabilities
|
|
|
171,173
|
|
|
|
216,920
|
|
|
Capital leases payable
|
|
|
3,294
|
|
|
|
4,146
|
|
|
Acquired below-market leases, net
|
|
|
91,015
|
|
|
|
112,173
|
|
|
Obligations associated with real estate held for sale
|
|
|
–
|
|
|
|
171,348
|
|
|
Total liabilities
|
|
|
4,866,253
|
|
|
|
5,218,677
|
|
|
|
|
|
|
|
|
Deficit:
|
|
|
|
|
|
Stockholders’ Deficit:
|
|
|
|
|
|
Preferred stock, $0.01 par value, 50,000,000 shares authorized;
7.625% Series A Cumulative Redeemable Preferred Stock, $25.00
liquidation preference, 10,000,000 shares issued and outstanding
|
|
|
100
|
|
|
|
100
|
|
|
Common stock, $0.01 par value, 100,000,000 shares authorized;
47,967,645 and 47,974,955 shares issued and outstanding at June
30, 2009 and December 31, 2008, respectively
|
|
|
480
|
|
|
|
480
|
|
|
Additional paid-in capital
|
|
|
699,351
|
|
|
|
696,260
|
|
|
Accumulated deficit and dividends
|
|
|
(1,082,577
|
)
|
|
|
(656,606
|
)
|
|
Accumulated other comprehensive loss, net
|
|
|
(35,451
|
)
|
|
|
(59,896
|
)
|
|
Total stockholders’ deficit
|
|
|
(418,097
|
)
|
|
|
(19,662
|
)
|
|
Noncontrolling Interests:
|
|
|
|
|
|
Common units of our Operating Partnership
|
|
|
(55,855
|
)
|
|
|
–
|
|
|
Total deficit
|
|
|
(473,952
|
)
|
|
|
(19,662
|
)
|
|
Total liabilities and deficit
|
|
$
|
4,392,301
|
|
|
$
|
5,199,015
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGUIRE PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
|
|
June 30, 2009
|
|
June 30, 2008
|
|
June 30, 2009
|
|
June 30, 2008
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Rental
|
|
$
|
86,240
|
|
|
$
|
83,238
|
|
|
$
|
169,222
|
|
|
$
|
166,873
|
|
|
Tenant reimbursements
|
|
|
26,537
|
|
|
|
26,000
|
|
|
|
54,364
|
|
|
|
54,185
|
|
|
Hotel operations
|
|
|
5,148
|
|
|
|
6,986
|
|
|
|
10,142
|
|
|
|
13,867
|
|
|
Parking
|
|
|
12,711
|
|
|
|
13,239
|
|
|
|
25,794
|
|
|
|
26,911
|
|
|
Management, leasing and development services
|
|
|
1,747
|
|
|
|
1,857
|
|
|
|
3,777
|
|
|
|
3,814
|
|
|
Interest and other
|
|
|
2,393
|
|
|
|
3,208
|
|
|
|
3,546
|
|
|
|
6,700
|
|
|
Total revenue
|
|
|
134,776
|
|
|
|
134,528
|
|
|
|
266,845
|
|
|
|
272,350
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Rental property operating and maintenance
|
|
|
31,739
|
|
|
|
30,081
|
|
|
|
61,969
|
|
|
|
61,552
|
|
|
Hotel operating and maintenance
|
|
|
3,481
|
|
|
|
4,567
|
|
|
|
6,930
|
|
|
|
8,982
|
|
|
Real estate taxes
|
|
|
12,885
|
|
|
|
13,039
|
|
|
|
25,566
|
|
|
|
25,580
|
|
|
Parking
|
|
|
3,807
|
|
|
|
3,589
|
|
|
|
7,875
|
|
|
|
7,353
|
|
|
General and administrative
|
|
|
7,914
|
|
|
|
27,071
|
|
|
|
16,178
|
|
|
|
43,745
|
|
|
Other expense
|
|
|
1,639
|
|
|
|
1,405
|
|
|
|
3,143
|
|
|
|
2,933
|
|
|
Depreciation and amortization
|
|
|
45,664
|
|
|
|
44,834
|
|
|
|
90,057
|
|
|
|
91,309
|
|
|
Impairment of long-lived assets
|
|
|
344,540
|
|
|
|
–
|
|
|
|
344,540
|
|
|
|
–
|
|
|
Interest
|
|
|
61,018
|
|
|
|
61,145
|
|
|
|
140,264
|
|
|
|
123,670
|
|
|
Total expenses
|
|
|
512,687
|
|
|
|
185,731
|
|
|
|
696,522
|
|
|
|
365,124
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before equity in net loss of
unconsolidated joint venture and gain on sale of real estate
|
|
|
(377,911
|
)
|
|
|
(51,203
|
)
|
|
|
(429,677
|
)
|
|
|
(92,774
|
)
|
|
Equity in net loss of unconsolidated joint venture
|
|
|
(9,120
|
)
|
|
|
(388
|
)
|
|
|
(10,859
|
)
|
|
|
(664
|
)
|
|
Gain on sale of real estate
|
|
|
–
|
|
|
|
–
|
|
|
|
20,350
|
|
|
|
–
|
|
|
Loss from continuing operations
|
|
|
(387,031
|
)
|
|
|
(51,591
|
)
|
|
|
(420,186
|
)
|
|
|
(93,438
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued Operations:
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations before gain on sale of real
estate
|
|
|
(41,577
|
)
|
|
|
(61,135
|
)
|
|
|
(67,212
|
)
|
|
|
(70,603
|
)
|
|
Gain on sale of real estate
|
|
|
–
|
|
|
|
–
|
|
|
|
2,170
|
|
|
|
–
|
|
|
Loss from discontinued operations
|
|
|
(41,577
|
)
|
|
|
(61,135
|
)
|
|
|
(65,042
|
)
|
|
|
(70,603
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(428,608
|
)
|
|
|
(112,726
|
)
|
|
|
(485,228
|
)
|
|
|
(164,041
|
)
|
|
Net loss attributable to common units of our Operating Partnership
|
|
|
52,924
|
|
|
|
6,864
|
|
|
|
60,420
|
|
|
|
14,354
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to Maguire Properties, Inc.
|
|
|
(375,684
|
)
|
|
|
(105,862
|
)
|
|
|
(424,808
|
)
|
|
|
(149,687
|
)
|
|
Preferred stock dividends
|
|
|
(4,766
|
)
|
|
|
(4,766
|
)
|
|
|
(9,532
|
)
|
|
|
(9,532
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to common stockholders
|
|
$
|
(380,450
|
)
|
|
$
|
(110,628
|
)
|
|
$
|
(434,340
|
)
|
|
$
|
(159,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted loss per common share:
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
$
|
(7.19
|
)
|
|
$
|
(1.11
|
)
|
|
$
|
(7.89
|
)
|
|
$
|
(1.98
|
)
|
|
Loss from discontinued operations
|
|
|
(0.76
|
)
|
|
|
(1.21
|
)
|
|
|
(1.19
|
)
|
|
|
(1.39
|
)
|
|
Net loss available to common stockholders per share
|
|
$
|
(7.95
|
)
|
|
$
|
(2.32
|
)
|
|
$
|
(9.08
|
)
|
|
|
(3.37
|
)
|
|
Weighted average number of common shares outstanding
|
|
|
47,836,591
|
|
|
|
47,615,421
|
|
|
|
47,812,444
|
|
|
|
47,298,976
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Maguire Properties, Inc.:
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations
|
|
$
|
(339,184
|
)
|
|
$
|
(48,299
|
)
|
|
$
|
(367,709
|
)
|
|
$
|
(83,921
|
)
|
|
Loss from discontinued operations
|
|
|
(36,500
|
)
|
|
|
(57,563
|
)
|
|
|
(57,099
|
)
|
|
|
(65,766
|
)
|
|
|
|
$
|
(375,684
|
)
|
|
$
|
(105,862
|
)
|
|
$
|
(424,808
|
)
|
|
$
|
(149,687
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAGUIRE PROPERTIES, INC.
FUNDS FROM OPERATIONS
(Unaudited and in thousands, except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|
|
|
|
|
June 30, 2009
|
|
June 30, 2008
|
|
June 30, 2009
|
|
June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of net loss to funds from operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to common stockholders
|
|
$
|
(380,450
|
)
|
|
$
|
(110,628
|
)
|
|
$
|
(434,340
|
)
|
|
$
|
(159,219
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
Depreciation and amortization of real estate assets
|
|
|
46,183
|
|
|
|
50,888
|
|
|
|
91,709
|
|
|
|
103,883
|
|
|
|
|
Depreciation and amortization of real estate assets -
unconsolidated joint venture (a)
|
|
|
2,008
|
|
|
|
2,377
|
|
|
|
5,320
|
|
|
|
4,680
|
|
|
|
|
Net loss attributable to common units of our Operating Partnership
|
|
|
(52,924
|
)
|
|
|
(6,864
|
)
|
|
|
(60,420
|
)
|
|
|
(14,354
|
)
|
|
|
|
Unallocated losses - unconsolidated joint venture (a)
|
|
|
(1,785
|
)
|
|
|
–
|
|
|
|
(1,785
|
)
|
|
|
–
|
|
|
Deduct:
|
|
Gains on sale of real estate
|
|
|
–
|
|
|
|
–
|
|
|
|
22,520
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from operations available to common stockholders and unit
holders (FFO) (b)
|
|
$
|
(386,968
|
)
|
|
$
|
(64,227
|
)
|
|
$
|
(422,036
|
)
|
|
$
|
(65,010
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company share of FFO (c) (d)
|
|
$
|
(339,712
|
)
|
|
$
|
(56,383
|
)
|
|
$
|
(370,498
|
)
|
|
$
|
(57,061
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share - basic
|
|
$
|
(7.10
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
(7.75
|
)
|
|
$
|
(1.21
|
)
|
|
FFO per share - diluted
|
|
$
|
(7.10
|
)
|
|
$
|
(1.18
|
)
|
|
$
|
(7.75
|
)
|
|
$
|
(1.21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic
|
|
|
47,836,591
|
|
|
|
47,615,421
|
|
|
|
47,812,444
|
|
|
|
47,298,976
|
|
|
Weighted average number of common and common equivalent shares
outstanding - diluted
|
|
|
47,837,083
|
|
|
|
47,875,984
|
|
|
|
47,813,342
|
|
|
|
47,587,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of FFO to FFO before specified items: (e)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO available to common stockholders and unit holders (FFO)
|
|
$
|
(386,968
|
)
|
|
$
|
(64,227
|
)
|
|
$
|
(422,036
|
)
|
|
$
|
(65,010
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add:
|
|
Loss from early extinguishment of debt included in discontinued
operations
|
|
|
377
|
|
|
|
–
|
|
|
|
588
|
|
|
|
–
|
|
|
|
|
Unrealized loss on forward-starting interest rate swap
|
|
|
(15,255
|
)
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
|
Realized loss on forward-starting interest rate swap
|
|
|
11,340
|
|
|
|
–
|
|
|
|
11,340
|
|
|
|
–
|
|
|
|
|
Impairment of long-lived assets included in continuing operations
|
|
|
344,540
|
|
|
|
–
|
|
|
|
344,540
|
|
|
|
–
|
|
|
|
|
Impairment of long-lived assets included in discontinued operations
|
|
|
40,133
|
|
|
|
51,898
|
|
|
|
63,633
|
|
|
|
51,898
|
|
|
|
|
Impairment of long-lived assets included in unconsolidated
operations joint venture (a)
|
|
|
10,050
|
|
|
|
–
|
|
|
|
10,050
|
|
|
|
–
|
|
|
|
|
Costs associated with strategic alternatives and management changes
(f)
|
|
|
–
|
|
|
|
17,490
|
|
|
|
–
|
|
|
|
23,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO before specified items
|
|
$
|
4,217
|
|
|
$
|
5,161
|
|
|
$
|
8,115
|
|
|
$
|
10,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company share of FFO before specified items (c) (d)
|
|
$
|
3,702
|
|
|
$
|
4,531
|
|
|
$
|
7,124
|
|
|
$
|
9,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share before specified items - basic
|
|
$
|
0.08
|
|
|
$
|
0.10
|
|
|
$
|
0.15
|
|
|
$
|
0.20
|
|
|
FFO per share before specified items - diluted
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
$
|
0.15
|
|
|
$
|
0.20
|
|
__________
|
(a)
|
Amount represents our 20% ownership interest in our joint venture
with Macquarie Office Trust.
|
|
|
|
|
(b)
|
Funds from Operations, or FFO, is a widely recognized measure of
REIT performance. We calculate FFO as defined by the National
Association of Real Estate Investment Trusts, or NAREIT. FFO
represents net income (loss) (as computed in accordance with
accounting principles generally accepted in the United States of
America, or GAAP), excluding gains from disposition of property (but
including impairments and provisions for losses on property held for
sale), plus real estate-related depreciation and amortization
(including capitalized leasing costs and tenant allowances or
improvements). Adjustments for our unconsolidated joint venture are
calculated to reflect FFO on the same basis.
|
|
|
|
|
|
Management uses FFO as a supplemental performance measure because,
in excluding real estate-related depreciation and amortization and
gains from property dispositions, it provides a performance measure
that, when compared year over year, captures trends in occupancy
rates, rental rates and operating costs. We also believe that, as a
widely recognized measure of the performance of REITs, FFO will be
used by investors as a basis to compare our operating performance
with that of other REITs.
|
|
|
|
|
|
However, because FFO excludes depreciation and amortization and
captures neither the changes in the value of our properties that
result from use or market conditions nor the level of capital
expenditures and leasing commissions necessary to maintain the
operating performance of our properties, all of which have real
economic effect and could materially impact our results from
operations, the utility of FFO as a measure of our performance is
limited. Other Equity REITs may not calculate FFO in accordance with
the NAREIT definition and, accordingly, our FFO may not be
comparable to such other Equity REITs’ FFO. As a result, FFO should
be considered only as a supplement to net income as a measure of our
performance. FFO should not be used as a measure of our liquidity,
nor is it indicative of funds available to fund our cash needs,
including our ability to pay dividends or make distributions. FFO
also should not be used as a supplement to or substitute for cash
flow from operating activities (as computed in accordance with GAAP).
|
|
|
|
|
(c)
|
Based on a weighted average interest in our Operating Partnership of
approximately 87.8% for both the three months ended June 30, 2009
and 2008, respectively.
|
|
|
|
|
(d)
|
Based on a weighted average interest in our Operating Partnership of
approximately 87.8% and 87.2% for the six months ended June 30, 2009
and 2008, respectively.
|
|
|
|
|
(e)
|
Management also uses FFO before specified items as a supplemental
performance measure because losses from early extinguishment of debt
and the impairment of long-lived assets create significant earnings
volatility which in turn results in less comparability between
reporting periods and less predictability regarding future earnings
potential.
|
|
|
|
|
|
Losses from early extinguishment of debt represent costs to
extinguish debt prior to the stated maturity and the write off of
unamortized loan costs on the date of extinguishment. The decision
to extinguish debt prior to its maturity generally results from (i)
the assumption of debt in connection with property acquisitions that
is priced or structured at less than desirable terms (for example, a
variable interest rate instead of a fixed interest rate), (ii)
short-term bridge financing obtained in connection with the
acquisition of a property or portfolio of properties until such time
as the company completes its long-term financing strategy, (iii) the
early repayment of debt associated with properties disposed of, or
(iv) the restructuring or replacement of property or corporate-level
financing to accommodate property acquisitions. Consequently,
management views these losses as costs to complete the respective
acquisition or disposition of properties.
|
|
|
|
|
|
Impairment of long-lived assets represents non-cash charges taken to
write down depreciable real estate assets to fair value estimated
when events or changes in circumstances indicate that the carrying
amount may not be recoverable. Per the NAREIT definition of FFO,
gains from property dispositions are excluded from the calculation
of FFO; however, impairment losses are required to be included.
Management excludes both gains on disposal and impairment losses
from the calculation of FFO before specified items because they both
relate to the financial statement impact of decisions made to
dispose of property, whether in the period of disposition or in
advance of disposition. These types of gains or losses create
volatility in our earnings and make it difficult for investors to
determine the funds generated by our ongoing business operations.
|
|
|
|
|
(f)
|
Additionally, during the first and second quarters of 2008, we have
excluded from the calculation of FFO costs associated with our
review of strategic alternatives and management changes, primarily
contractual separation obligations for our former senior executives,
and exit costs and tenant improvement writeoffs related to the 1733
Ocean lease. These costs are associated with the Special Committee’s
review of strategic alternatives, including the potential sale of
our company, and the resulting management changes made after the
Special Committee concluded its review. Management views these costs
as non-recurring and believes that including these costs in the
calculation of FFO would make it difficult for investors to
determine funds generated by our ongoing business operations.
|
Maguire Properties, Inc.
Peggy Moretti, 213-613-4558
Senior
Vice President, Investor and Public Relations
