-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OcZhh/6UIMeenBTT/uQQPUkYE+40vy4qeOYeYd+oImRLyh8mV2uLj4uK50m3JCtH up6aj5JQC5CPpS4gZYQXpQ== 0001275287-06-001422.txt : 20060316 0001275287-06-001422.hdr.sgml : 20060316 20060316093427 ACCESSION NUMBER: 0001275287-06-001422 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060315 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060316 DATE AS OF CHANGE: 20060316 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMREIT CENTRAL INDEX KEY: 0000913957 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 760410050 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31397 FILM NUMBER: 06690141 BUSINESS ADDRESS: STREET 1: 8 GREENWAY PLAZA STREET 2: STE 824 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7138501400 MAIL ADDRESS: STREET 1: 8 GREENWAY PLAZA STREET 2: STE 824 CITY: HOUSTON STATE: TX ZIP: 77046 FORMER COMPANY: FORMER CONFORMED NAME: AMREIT INC DATE OF NAME CHANGE: 19981123 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN ASSET ADVISERS TRUST INC DATE OF NAME CHANGE: 19931022 8-K 1 am5157.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ---------- Date of Report (Date of earliest event reported) March 15, 2006 Commission File Number 0-28378 AmREIT ------------------------------------------------------ (Exact name of registrant as specified in its charter) TEXAS 76-0410050 - ------------------------------- ------------------- (State or other jurisdiction of (IRS Employer Incorporation or organization) Identification No.) 8 Greenway Plaza, Suite 1000, Houston, Texas 77046 713-850-1400 ---------------------------------------- ------------------------------- (Address of principal executive offices) (Registrant's telephone number) [N/A] ------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ TABLE OF CONTENTS Item 2.02. Results of Operations and Financial Condition On March 15, 2006 the Company issued a press release announcing its financial results for the year end and fourth quarter ended December, 31 2005. A copy of the press release issued by the Company is attached hereto as Exhibit 99.1. Attached as Exhibit 99.2 to this report is the Supplemental Financial Information which accompanies this press release. The Company's press release announcing its financial results for its year end and fourth quarter ended December, 31 2005, contains non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles, or GAAP. Pursuant to the requirements of Regulation G, the Company has provided quantitative reconciliations within the press release of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The press release attached to this Form 8-K as Exhibit 99.1 shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that section. Item 9.01. Financial Statement and Exhibits Exhibits. The following exhibits are furnished as part of this current report on Form 8-K: 99.1 Press release dated March 15, 2006 99.2 Supplemental Financial Information 2 SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AmREIT By: /s/ Chad C. Braun ----------------------- Chad C. Braun, Chief Financial Officer Dated: March 15, 2006 3 EX-99.1 2 am5157ex991.txt EXHIBIT 99.1 Exhibit 99.1 FOR IMMEDIATE RELEASE FOR INFORMATION CONTACT: Debbie Lucas (dlucas@amreit.com) AmREIT, (713) 850-1400 AmREIT REPORTS STRONG 2005 YEAR END AND FOURTH QUARTER RESULTS; FFO PER SHARE GREW 9% FOR THE YEAR HOUSTON, March 15, 2006 - AmREIT (AMEX: AMY), a Houston-based real estate investment trust, announced today financial results for the fourth quarter and year end 2005. Following are the financial highlights: o Funds from Operations (FFO) available to our Class A shareholders for the year ended December 31, 2005 were $3.6 million or $0.70 per share. This is a 9% increase over year end 2004 reported FFO of $2.1 million or $0.64 per share (as adjusted for non-cash charges to earnings); o Funds from Operations (FFO) available to our Class A shareholders for the fourth quarter 2005 were $1.7 million, or $0.27 per share. This compares to fourth quarter 2004 reported FFO loss of $965 thousand or a loss of $0.28 per share; o Total FFO available to all common shareholders for the year ended December 31, 2005 was $12.9 million and we paid dividends to all classes of common shareholders of $11.8 million. This compares to 2004 where we reported FFO available to all common shareholders of $6.6 million (as adjusted for non-cash charges to earnings) and dividends to all classes of common shareholders of $6.0 million; o Revenues for the fourth quarter 2005 increased to $12.6 million as compared to $4.9 million for the same period in 2004. For the year, revenues were $34.7 million as compared with revenues of $15.3 million for 2004, a 127% year over year increase; o Net income available to our class A common shareholders for the year ended December 31, 2005 was $881,000, or $0.17 per share. This compares to a loss of $3.9 million for 2004 or a loss of $1.19 per share; o Net income available to our class A common shareholders for the fourth quarter 2005 was $2.1 million, or $0.33 per share. This compares to fourth quarter 2004 reported net loss of $1.6 million or ($0.48) per share; o During 2005, we sold 10 non-core assets from our portfolio, generating a gain on sale of $3.4 million. Additionally, we sold six properties merchant development properties that were held for re-sale, generating $3.2 million in gains on sale; o The Board of Trust Managers declared dividends of $0.50 per class A common share during 2005, which were paid out on a monthly basis, as compared to dividends declared of $0.48 during 2004. This represents an annual increase in dividends of 4.2%. o Total assets increased from a book value of $203 million to a book value of $315 million for the year, a 55% increase. AmREIT's business model and therefore its financial results are broken down into three distinct businesses. First, as a real estate development and operating company we create value by providing construction, development, acquisition, disposition, brokerage, leasing and property management services to our own portfolio, to third parties, and to our affiliated asset advisory group. Second, we have a portfolio of Irreplaceable CornersTM, which provides a solid foundation for our revenue growth through its steady stream of rental income. Finally, we have an asset advisory group that has historically raised private capital for our merchant development partnership funds. These three segments collectively contribute to our overall financial growth and earnings. "We have and will continue to focus on creating value for our shareholders by growing our Net Asset Value (NAV) on a per share basis, while at the same time growing our FFO on a per share basis," said Chad C. Braun, AmREIT's chief financial officer. "Our business model allows us to be active in up and down cap rate markets. In a market where cap rates continue to be compressed and interest rates are on the rise, we will shift focus and grow our asset advisory group and real estate development group. These businesses allow us to develop and sell properties and generate transactional income for services provided to grow earnings and value." Real Estate Development and Operations Our real estate development group generated $7.8 million (including discontinued operations and net of construction expense) in revenue during 2005, up 152% as compared to the $3.1 million generated in 2004. We anticipate this business to generate total 2006 revenues of $10.6 million (net of construction expense), a 36% expected annual increase. Expenses associated with this line of business were approximately $5.0 million. Revenues are further reduced by the allocation of dividends on our non-traded shares on a pro-rata basis based on net income contribution of the segment ($2.3 million allocated to this group), resulting in net income to our class A shares of $450,000. FFO contributions from this segment totaled approximately $450,000, or $0.08 per share for the year, representing approximately 27% of total FFO per share for 2005. Anticipated FFO per share for 2006 from this segment is budgeted at $0.13 to $0.15 a share, or approximately 17% of total 2006 budgeted FFO. This business is transactional and the timing of these contributions from quarter to quarter is hard to predict. Fee income generated during 2005 by this group related to services provided to third parties and our affiliated asset advisory group totaled $5.8 million (net of construction expense). For 2006 we have budgeted fee income from this segment to be $8.5 million, a 47% increase. Our pipeline of development opportunities for third parties and for our asset advisory group includes approximately 700,000 square feet under various stages of development and an additional 600,000 square feet in various stages of pre-development. Together, this represents over $111 million in active development projects. Of this, 690,000 square feet is scheduled for completion in 2006. Our merchant development program, which buys and builds properties with the intent to sell, generated profits of $3.2 million during 2005. In 2006 we anticipate merchant development profits to be $2.1 million for the year. Asset Advisory Group For 20 years we have been raising private capital for our real estate merchant development partnership funds and building relationships in the financial planning community, earning fees and sharing in profits from those activities. To date, we have sponsored six actively managed income and growth funds, with the first two having substantially liquidated and generating back end profit participation to the general partners. These remaining funds are anticipated to enter their liquidation phases in 2008, 2010, 2011 and 2012, respectively. As these funds enter into liquidation, we expect to receive economic benefit from our profit participation, after certain preferred returns have been paid to the partnerships' limited partners. As of December 31, 2005, we had $61 million in equity capital under management in four funds. For the year, this group generated total revenues of $1.7 million, with $1.2 million related to securities commissions earned on sales of units in our merchant development funds and $495,000 related to recurring asset management fees. We anticipate asset management fees to increase 88% in 2006 to $930,000. Expenses associated with this line of business were approximately $2.1 million, comprised of $864,000 in securities commission expense and $1.2 million of general and administrative expense. This results in a net loss to our class A shares of $427,000. The asset advisory group reduced FFO by approximately $327,000, or $0.06 per share for the year. Anticipated FFO per share for 2006 from this segment is budgeted at $0.02 to $0.03 a share, or approximately 2% of total 2006 FFO. The asset advisory group is anticipated to increase its contribution to FFO as we grow equity under management from the current $61 million to an anticipated critical mass of $250 million within the next twenty-four months. As our existing funds enter into liquidation, they can produce general partner back end interest, which can provide additional contributions to FFO. Portfolio of Irreplaceable Corners Our portfolio acts as the primary source of recurring income to our business model, contributing approximately 66% in total revenues, and consists of premier retail properties typically located on "Main and Main" intersections in high-traffic, highly populated affluent areas. As of December 31, 2005, we owned 49 properties, located in 15 states. Approximately 81% of our rental income is derived from multi-tenant, grocery anchored and lifestyle shopping centers. The remaining 22% comes primarily from single tenant, parent company guaranteed leased properties. The portfolio generated $23.0 million in operating revenue during 2005, up 123% as compared to the $10.3 million generated in 2004. Additionally, based on selling non-core assets, the portfolio generated income from discontinued operations of $4.6 million during 2005. We anticipate this business to generate total 2006 operating revenues of $33.1 million, a 44% annual increase. Expenses associated with our portfolio were approximately $20.3 million, comprised of $4.8 million in property expenses, $6.0 million in depreciation and amortization, $5.8 million in interest expense and $3.1 million in general and administrative expense. Revenues are further reduced by the allocation of dividends on our non-traded shares on a pro-rata basis based on net income contribution of the segment ($6.9 million allocated to this group), resulting in net income to our class A shares of $930,000. FFO contributions from the portfolio totaled approximately $3.6 million or $0.68 per share for the year, representing approximately 81% of total FFO per share for 2005. Anticipated FFO per share for 2006 from this segment is budgeted at $0.56 to $0.59 a share, or approximately 81% of total 2006 FFO. This is a recurring and dependable income stream that supports the monthly dividends. Our overall occupancy as of December 31, 2005 was approximately 96.4%. During the year we acquired three shopping center properties, representing approximately 255,000 square feet, for an investment of over $110 million. One property was acquired in Houston, Texas during the second quarter, one in San Antonio, Texas during the third quarter and one in Dallas, Texas during the fourth quarter. Consistent with our continued strategy of selling non-core assets, we sold eight single tenant properties during the fourth quarter of 2005, representing approximately 91,000 square feet. Three of the properties were located in Texas, one in Minnesota, one in Missouri, one in Louisiana, one in Mississippi and one in Colorado. The sale generated a gain of approximately $2.8 million. "Our balance sheet is conservatively leveraged, with a debt to asset ratio of 40% based on book value of our assets," said Chad C. Braun, AmREIT's chief financial officer. "The combination of great real estate assets and conservative leverage gives us great opportunity and flexibility during 2006." AmREIT updates earnings guidance on a quarterly basis. CONFERENCE CALL AmREIT will hold its quarterly conference call to discuss fourth quarter and year end results Thursday, March 16, at 10:00 am Central Time (11:00 am Eastern Time). Interested parties are encouraged to access the live webcast by visiting the investor relations page of AmREIT's website at www.amreit.com. The dial-in number for the call is 1-877-407-8031. The call will also be available for replay for 60 days by dialing 1-877-660-6853, account number 286, ID number 191232. The company has published additional forward-looking statements in its fourth quarter and year end 2005 supplemental information package that may help investors estimate earnings for 2006. A copy of the company's fourth quarter and year end 2005 supplemental information will be available on the company's web site at www.amreit.com or by written request to Debbie Lucas, Investor Relations, AmREIT, 8 Greenway Plaza, Suite 1000, Houston, Texas 77046. The information provided in the supplemental package is unaudited and there can be no assurance that the information will not vary from the final information for the quarter ended December 31, 2005. AmREIT may, but assumes no obligation to, update information in the supplemental package from time to time. ABOUT AmREIT AmREIT (AMEX: AMY) is a growing real estate company that has delivered results to our investors for 21 years. Our mission is to establish a real estate business that can realize growth in income in any market cycle - a company with strong earnings power from multiple sources. This mission has led us into three distinct businesses. First, as a real estate development and operating company, we construct, develop, acquire, dispose of, broker, lease and manage properties for our shareholders as well as for our asset advisory group and third parties. Second, we have an asset advisory group which raises private capital for and generates fees from our merchant development partnership funds. And third, we own a portfolio of "Irreplaceable Corners(TM)" - premier retail properties in high-traffic, highly populated areas - which are held for long-term value and provide a steady stream of rental income. As of December 31, 2005, AmREIT has over 1.3 million square feet of retail centers in various stages of development or in the pipeline for both our advisory group and for third parties. Since listing on the AMEX in July 2002, our total assets have grown from a book value of $32 million to $315 million, and equity within our asset advisory group has grown from $15 million to $61 million. In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which AmREIT operates, management's beliefs and assumptions made by management. Past performance is not indicative of future returns. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. This press release does not constitute an offer to sell, or the solicitation of an offer to buy any public or private securities from the company. The purchase of any securities may only be made pursuant to a prospectus. For more information, call Debbie Lucas, Vice President Investor Relations & Corporate Communications of AmREIT, at (713) 850-1400, or Chad Braun, Chief Financial Officer of AmREIT, 713-850-1400. AmREIT is online at TUwww.amreit.comUT. (Tables to Follow) Operating Results (in thousands, except share and per share data)
Three Months Ended Twelve Months Ended December 31, December 31, ------------------------ ------------------------ 2005 2004 2005 2004 ---------- ---------- ---------- ---------- Revenues: Rental income from operating leases $ 6,816 $ 3,104 $ 20,484 $ 8,200 Earned income from direct financing leases 508 507 2,030 2,029 Real estate fee income 133 353 485 409 Real estate fee income - related party 1,219 135 4,588 1,443 Construction revenue 1,636 - 2,302 - Construction revenue - related party 1,361 - 2,434 - Securities commission income 644 688 1,163 2,742 Asset management fee income 128 116 495 361 Interest and other income 191 35 705 82 ---------- ---------- ---------- ---------- Total revenues 12,636 4,938 34,686 15,266 Expenses: General and administrative 2,553 1,193 6,356 4,600 Property expense 2,101 630 4,860 1,418 Construction expense 2,784 - 4,283 - Legal and professional 431 686 1,859 1,646 Securities commissions 476 530 864 2,081 Depreciation and amortization 1,879 763 6,046 1,817 Deferred merger costs - - - 1,682 ---------- ---------- ---------- ---------- Total expenses 10,224 3,802 24,268 13,244 Operating income 2,412 1,136 10,418 2,022 Income from merchant development funds and other affiliates (27) 881 161 1,121 Federal income tax (expense)/benefit 111 (225) (379) (77) Interest expense (1,691) (1,164) (6,412) (3,290) Minority interest in income of consolidated joint ventures (20) (54) (241) (186) ---------- ---------- ---------- ---------- Income (loss) before discontinued operations 785 574 3,547 (410) Income (loss) from discontinued operations 1,863 (906) 3,356 (829) Gain on sale of real estate acquired for resale 2,351 68 3,223 1,827 ---------- ---------- ---------- ---------- Net income (loss) 4,999 (264) 10,126 588 Distributions paid to class B, C and D shareholders (2,897) (1,366) (9,245) (4,454) ---------- ---------- ---------- ---------- Net income (loss) available to class A shareholders $ 2,102 $ (1,630) $ 881 $ (3,866) ========== ========== ========== ==========
(in thousands, except share and per share data)
Three Months Ended Twelve Months Ended December 31, December 31, -------------------------- -------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- RECONCILIATION OF INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS TO FUNDS FROM OPERATIONS ("FFO"): Income (loss) before discontinued operations $ 785 $ 574 $ 3,547 $ (410) Income (loss) from discontinued operations 4,214 (838) 6,579 998 Depreciation - from operations 2,210 648 5,952 1,674 Depreciation - from discontinued operations 177 60 111 297 Adjustments for non-consolidated affiliates 35 9 100 29 Gain on sale of real estate held for investment (2,805) (52) (3,400) (137) Class B, C and D distributions (2,897) (1,366) (9,245) (4,454) ----------- ----------- ----------- ----------- FFO available to class A shares $ 1,719 $ (965) $ 3,644 $ (2,003) BASIC AND DILUTED PER CLASS A SHARE DATA: Loss before discontinued operations $ (0.33) $ (0.23) $ (1.09) $ (1.50) Income (loss) from discontinued operations 0.65 (0.24) 1.26 0.31 ----------- ----------- ----------- ----------- Net income (loss) $ 0.32 $ (0.47) $ 0.17 $ (1.19) FFO $ 0.27 $ (0.28) $ 0.70 $ (0.62) SHARE DATA: Weighted average class A common shares used to compute net income per share, basic and diluted 6,446,377 3,431,394 5,204,914 3,251,285
MARKET CAPITALIZATION TABLE:
Common Shares Outstanding (12/31/05) Number of Shares Price Market Equity - ------------------------------------ ---------------- ------- ------------- Class A, net of treasury shares 6,401,537 $ 6.90 $ 44.17M Class B 2,148,649 $ 6.90 $ 14.83M Class C (priced at par value) 4,119,923 $ 10.00 $ 41.19M Class D (priced at par value) 11,035,482 $ 10.00 $ 110.35M ---------------- ------------- Total 23,705,591 $ 210.54M
Balance Sheet Highlights (in thousands) (Unaudited) December 31, December 31, 2005 2004 ------------ ------------ Real estate held for investment, net $ 241,301 $ 157,031 Net investment in direct financing leases 19,212 19,219 Intangible lease cost, net 17,761 10,628 Real estate held for resale, net 3,569 6,326 Investment in merchant development funds and other affiliates 2,311 1,979 Total assets 314,971 203,151 Notes payable 114,687 105,964 Total liabilities 126,510 113,666 Minority interest 1,176 1,115 Total shareholders' equity 187,285 88,370 Non-GAAP Financial Disclosure This press release contains certain non-GAAP financial measures that management believes are useful in evaluating an equity REIT's performance. AmREIT's definitions and calculations of non-GAAP financial measures may differ from those used by other equity REIT's, and therefore may not be comparable. The non-GAAP financial measures should not be considered as an alternative to net income as an indication of our operating results, or to net cash provided by operating activities as a measure of our liquidity. AmREIT considers FFO to be an appropriate measure of the operating performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") defines FFO as net income computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains or losses from sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. AmREIT calculates its FFO in accordance with this definition. The Company considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company's real estate between periods, or as compared to different companies. FFO is not defined by GAAP and should not be considered as an alternative to net income as an indication of our operating performance or to net cash provided by operating activities as a measure of our liquidity. FFO as disclosed by other REITs may not be comparable to AmREIT's calculation. Projected FFO is calculated in a method consistent with historical FFO, and AmREIT considers projected FFO to be an appropriate supplemental measure when compared with projected EPS. A reconciliation of the projected FFO to projected EPS per share is provided below:
Projected 2006 Range ------------------------ Historical High Low 12/31/05 ---------- ---------- ---------- Net (loss)/income available to class A shareholders $ (0.41) $ (0.45) $ 0.17 Depreciation and amortization 1.18 1.16 1.18 Less gain on sale of real estate - - (0.65) ---------- ---------- ---------- FFO available to class A shareholders $ 0.77 $ 0.71 $ 0.70 ========== ========== ==========
### EX-99.2 3 am5157ex992.txt EXHIBIT 99.2 Exhibit 99.2 [LOGO OF AMREIT] - -------------------------------------------------------------------------------- SUPPLEMENTAL FINANCIAL INFORMATION DECEMBER 31, 2005 (Unaudited) TABLE OF CONTENTS ----------------- Page # -------- Corporate Profile 1 Consolidated Balance Sheets 2 Consolidated Statements of Operations 3 - 4 Consolidated Statements of Operations - Segments 5 - 6 SUMMARY OF OPERATING RESULTS Funds From Operations 7 Dividends - All Classes of Common Shares 7 Rental Income 8 Real Estate Revenue Allocation 8 Discontinued Operations 9 Interest Expense 9 SUMMARY BALANCE SHEET INFORMATION Common Share Data 10 Capitalization 10 DEBT INFORMATION Outstanding Balances and Terms 11 - 12 Fixed vs. Variable Rate Debt 12 PROPERTY & Tenant Information Property Table 13 - 14 Tenant Diversification 15 Leasing Activity Report 15 Lease Expiration Schedule 16 This Supplemental Financial Information package contains historical information of the Company and is intended to supplement the Company's Annual Report on Form 10-K for the year ended December 31, 2005. All financial information in this Supplemental Financial Information package is shown in thousands, except for per share data and share information. Certain information contained in this Supplemental Financial Information package includes certain forward-looking statements reflecting AmREIT's expectations in the near term that involve a number of risks and uncertainties; however, many factors may materially affect the actual results, including demand for our properties, changes in rental and occupancy rates, changes in property operating costs, interest rate fluctuations, and changes in local and general economic conditions. Accordingly, there is no assurance that AmREIT's expectations will be realized. CORPORATE PROFILE: AmREIT (AMEX: AMY) is an established real estate company that, at its core, is a value creator which has delivered results to our investors for 21 years. Our mission is to build a real estate business that can realize consistent growth year over year regardless of market cycles. We have developed three distinct businesses that provide earnings power from multiple sources: a real estate development and operating business, an asset advisory business and our premium portfolio of Irreplaceable Corners(TM). As a real estate development and operating company, we provide value through offering an array of services to our tenants and properties, to our asset advisory group's portfolios and to third parties. As of December 31, 2005, the Company has over 1.5 million square feet of retail centers in various stages of development or in the pipeline for both our advisory group and for third parties. Our asset advisory group broadens the Company's avenues to capital and raises private equity for a series of merchant development funds. Through these funds, we combine the skills of our asset advisory team with those of our real estate development team to actively manage a blend of value-added acquisition, redevelopment and development projects, which generate both transactional fees and recurring management fees. AmREIT's institutional-grade portfolio of Irreplaceable Corners, our most recognized business, provides a foundation to our FFO growth through a steady stream of rental income. We focus on the acquisition and development of premier retail properties in high-traffic, densely populated high-income areas to hold for long-term value. These properties are primarily high-end grocery anchored and lifestyle shopping centers leased to well-known national and regional tenants. Since AmREIT listed its class A shares on the AMEX in July 2002, our total assets have grown from a book value of $32 million to $315 million and equity within our asset advisory group has grown from $15 million to $61 million. CORPORATE OFFICE: 8 Greenway Plaza, Suite 1000 Houston, Texas 77046 (800) 888-4400 (713) 850-0498 (fax) www.amreit.com STOCK EXCHANGE: American Stock Exchange - AMY 1 CONSOLIDATED BALANCE SHEETS:
DECEMBER 31, DECEMBER 31, 2005 2004 ------------ ------------ ASSETS Real estate investments at cost Land $ 112,784 $ 68,138 Building 127,094 88,211 Tenant improvements 7,366 4,243 ------------ ------------ 247,244 160,592 Less accumulated depreciation and amortization (5,493) (3,561) ------------ ------------ 241,301 157,031 Real estate held for sale, net 3,569 6,326 Net investment in direct financing leases held for investment 19,212 19,219 Intangible lease cost, net 17,761 10,628 Investment in retail partnerships and other affiliates 2,311 1,979 ------------ ------------ Net real estate investments 284,154 195,183 Cash and cash equivalents 5,915 2,960 Tenant receivables, net 3,132 1,338 Accounts receivable, net 1,807 37 Accounts receivable - related party 4,158 910 Notes receivable - related party 11,232 - Deferred costs 1,487 1,040 Other assets 3,086 1,683 ------------ ------------ TOTAL ASSETS $ 314,971 $ 203,151 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Notes payable $ 114,687 $ 105,964 Accounts payable and other liabilities 8,232 4,830 Below market leases, net 2,940 2,504 Security deposits 651 368 ------------ ------------ TOTAL LIABILITIES 126,510 113,666 ------------ ------------ Minority Interest 1,176 1,115 Shareholders' Equity Preferred Shares, $.01 par value, 10,000,000 shares authorized, note issued - - Class A Common shares, $.01 par value, 50,000,000 shares authorized, 6,479,278 and 3,462,767 shares issued, respectively 65 35 Class B Common shares, $.01 par value, 3,000,000 shares authorized, 2,148,649 and 2,246,283 shares issued, respectively 22 22 Class C Common shares, $.01 par value, 4,400,000 shares authorized, 4,119,923 and 4,079,174 shares issued, respectively 41 41 Class D Common shares, $.01 par value, 17,000,000 shares authorized, 11,035,482 and 2,090,765 shares issued, respectively 110 21 Capital in excess of par value 205,859 104,114 Accumulated distributions in excess of earnings (16,736) (15,038) Deferred compensation (1,528) (770) Cost of treasury shares, 77,741 and 9,116 Class A shares, respectively (548) (55) ------------ ------------ TOTAL SHAREHOLDERS' EQUITY 187,285 88,370 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 314,971 $ 203,151 ============ ============
2 CONSOLIDATED STATEMENTS OF OPERATIONS:
THREE MONTHS THREE MONTHS ENDED ENDED DECEMBER 31, DECEMBER 31, 2005 2004 ------------ ------------ Revenue: Rental income from operating leases $ 6,816 $ 3,104 Earned income from direct financing leases 508 507 Real estate fee income 133 353 Real estate fee income - related party 1,219 135 Construction revenues 1,636 - Construction revenues - related party 1,361 - Securities commission income - related party 644 688 Asset management fee income - related party 128 116 Interest and other income 191 35 ------------ ------------ Total revenues 12,636 4,938 ------------ ------------ Expenses: General and administrative 2,553 1,193 Property expense 2,101 630 Construction costs 2,784 - Legal and professional 431 686 Securities commissions 476 530 Depreciation and amortization 1,879 763 ------------ ------------ Total expenses 10,224 3,802 ------------ ------------ Operating income 2,412 1,136 Other income (expense): Income from merchant development funds and affiliates (27) 881 Federal income tax benefit (expense) for TRS 111 (225) Interest expense (1,691) (1,164) Minority interest in income of consolidated joint ventures (20) (54) ------------ ------------ Income before discontinued operations 785 574 Income (loss) from discontinued operations 1,863 (906) Gain on sales of real estate acquired for resale 2,351 68 ------------ ------------ Income (loss) from discontinued operations 4,214 (838) ------------ ------------ Net income (loss) 4,999 (264) Distributions paid to class B,C, and D shareholders (2,897) (1,366) ------------ ------------ Net income (loss) available to class A shareholders $ 2,102 $ (1,630) ============ ============ Net (loss) income per class A common share - basic and diluted Loss before discontinued operations $ (0.33) $ (0.23) Income (loss) from discontinued operations 0.65 (0.24) ------------ ------------ Net income (loss) $ 0.32 $ (0.47) ============ ============ Weighted average class A common shares used to compute net income (loss) per share, basic and diluted 6,446 3,431 ============ ============
3 CONSOLIDATED STATEMENTS OF OPERATIONS, CONT.:
TWELVE TWELVE TWELVE MONTHS MONTHS MONTHS ENDED ENDED ENDED DECEMBER DECEMBER DECEMBER 31, 2005 31, 2004 31, 2004 ------------ ------------ ------------ Revenue: Rental income from operating leases $ 20,484 $ 8,200 $ 2,609 Earned income from direct financing leases 2,030 2,029 2,016 Real estate fee income 485 409 576 Real estate fee income - related party 4,588 1,443 455 Construction revenues 2,302 - - Construction revenues - related party 2,434 - - Securities commission income - related party 1,163 2,742 1,497 Asset management fee income - related party 495 361 240 Interest and other income 705 82 9 ------------ ------------ ------------ Total revenues 34,686 15,266 7,402 ------------ ------------ ------------ Expenses: General and administrative 6,356 4,661 3,117 Property expense 4,860 1,418 388 Construction costs 4,283 - - Legal and professional 1,859 1,646 871 Securities commissions 864 2,081 1,130 Depreciation and amortization 6,046 1,817 522 Deferred merger costs - 1,682 915 ------------ ------------ ------------ Total expenses 24,268 13,305 6,943 ------------ ------------ ------------ Operating income 10,418 1,961 459 Other income (expense): Income from merchant development funds and other affiliates 161 1,121 312 Federal income tax (expense) benefit for TRS (379) (16) 254 Interest expense (6,412) (3,290) (2,080) Minority interest in income of consolidated joint ventures (241) (186) (158) ------------ ------------ ------------ Income (loss) before discontinued operations 3,547 (410) (1,213) Income (loss) from discontinued operations 3,356 (829) 2,425 Gain on sales of real estate acquired for resale 3,223 1,827 787 ------------ ------------ ------------ Income from discontinued operations 6,579 998 3,212 ------------ ------------ ------------ Net income 10,126 588 1,999 Distributions paid to class B,C, and D shareholders (9,245) (4,454) (1,943) ------------ ------------ ------------ Net income (loss) available to class A shareholders $ 881 $ (3,866) $ 56 ============ ============ ============ Net income (loss) per class A common share - basic and diluted Loss before discontinued operations $ (1.09) $ (1.50) $ (1.13) Income from discontinued operations 1.26 0.31 1.15 ------------ ------------ ------------ Net loss $ 0.17 $ (1.19) $ 0.02 ============ ============ ============ Weighted average class A common shares used to compute net income (loss) per share, basic and diluted 5,205 3,251 2,792 ============ ============ ============
4 SEGMENTED STATEMENTS OF OPERATIONS:
ASSET ADVISORY ---------------------------- THREE MONTHS ENDED REAL ESTATE RETAIL DECEMBER 31, 2005 PORTFOLIO OPERATIONS SECURITIES PARTNERSHIPS TOTAL - ----------------------------------- ------------ ------------ ------------ ------------ ------------ Rental income $ 7,324 $ - $ - $ - $ 7,324 Securities commissions - - 644 - 644 Construction revenues - 2,997 - - 2,997 Real estate fee income - 1,352 - 1,352 Other income 159 32 - 128 319 ------------ ------------ ------------ ------------ ------------ Total revenue 7,483 4,381 644 128 12,636 Securities commission expense - - 476 - 476 Professional fees 290 46 27 - 363 Depreciation and amortization 1,879 - - - 1,879 Property expense 2,051 50 - - 2,101 Construction expense - 2,784 - - 2,784 Real estate commissions - 68 - - 68 General and administrative 1,137 901 494 21 2,553 ------------ ------------ ------------ ------------ ------------ Total expenses 5,357 3,849 997 21 10,224 Interest expense (1,514) (172) (5) - (1,691) Other (expense) income (54) 174 (77) 21 64 Income from discontinued operations 2,738 1,476 - - 4,214 ------------ ------------ ------------ ------------ ------------ Net income $ 3,295 $ 2,011 $ (435) $ 128 $ 4,999
ASSET ADVISORY ---------------------------- THREE MONTHS ENDED REAL ESTATE RETAIL DECEMBER 31, 2004 PORTFOLIO OPERATIONS SECURITIES PARTNERSHIPS TOTAL - ----------------------------------- ------------ ------------ ------------ ------------ ------------ Rental income $ 3,611 $ - $ - $ - $ 3,611 Securities commissions - - 688 - 688 Real estate fee income - 488 - - 488 Other income - 35 - 116 151 ------------ ------------ ------------ ------------ ------------ Total revenue 3,611 523 688 116 4,938 Securities commission expense - - 530 - 530 Professional fees 302 76 - - 378 Depreciation and amortization 763 - - - 763 Property expense 627 3 - - 630 Real estate commissions - 308 - - 308 General and administrative 158 636 364 35 1,193 ------------ ------------ ------------ ------------ ------------ Total expenses 1,850 1,023 894 35 3,802 Interest expense (1,108) (56) - - (1,164) Other (expense) income (51) 133 (54) 574 602 Income from discontinued operations (968) 130 - - (838) ------------ ------------ ------------ ------------ ------------ Net (loss) income $ (366) $ (293) $ (260) $ 655 $ (264)
5
ASSET ADVISORY ---------------------------- TWELVE MONTHS ENDED REAL ESTATE RETAIL DECEMBER 31, 2005 PORTFOLIO OPERATIONS SECURITIES PARTNERSHIPS TOTAL - ----------------------------------- ------------ ------------ ------------ ------------ ------------ Rental income $ 22,514 $ - $ - $ - $ 22,514 Securities commissions - - 1,163 - 1,163 Real estate fee income - 5,073 - - 5,073 Construction revenues - 4,736 - - 4,736 Other income 465 240 - 495 1,200 ------------ ------------ ------------ ------------ ------------ Total revenue 22,979 10,049 1,163 495 34,686 Securities commission expense - - 864 - 864 Depreciation and amortization 6,046 - - - 6,046 Property expense 4,803 57 - - 4,860 Construction costs - 4,283 - - 4,283 Professional fees 1,214 266 112 1 1,593 Real estate commissions - 266 - - 266 General and administrative 1,657 3,595 844 260 6,356 ------------ ------------ ------------ ------------ ------------ Total expenses 13,720 8,467 1,820 261 24,268 Interest expense (5,816) (572) (24) - (6,412) Other (expense) income (196) (259) (60) 56 (459) Income from discontinued operations 4,584 1,995 - - 6,579 ------------ ------------ ------------ ------------ ------------ Net income (loss) $ 7,831 $ 2,746 $ (741) $ 290 $ 10,126
ASSET ADVISORY ---------------------------- TWELVE MONTHS ENDED REAL ESTATE RETAIL DECEMBER 31, 2004 PORTFOLIO OPERATIONS SECURITIES PARTNERSHIPS TOTAL - ----------------------------------- ------------ ------------ ------------ ------------ ------------ Rental income $ 10,229 $ - $ - $ - $ 10,229 Securities commissions - - 2,742 - 2,742 Real estate fee income - 1,852 - - 1,852 Other income 46 36 - 361 443 ------------ ------------ ------------ ------------ ------------ Total revenue 10,275 1,888 2,742 361 15,266 Deferred merger expense 1,682 - - - 1,682 Securities commission expense - - 2,081 - 2,081 Depreciation and amortization 1,817 - - - 1,817 Property expense 1,413 5 - - 1,418 Professional expense 917 105 80 - 1,102 Real estate commissions - 544 - - 544 General and administrative 929 1,951 1,680 101 4,661 ------------ ------------ ------------ ------------ ------------ Total Expenses 6,758 2,605 3,841 101 13,305 Interest expense (3,233) (57) - - (3,290) Other (expense) income (187) 594 (79) 591 919 Income from discontinued operations (203) 1,201 - - 998 ------------ ------------ ------------ ------------ ------------ Net income (loss) $ (106) $ 1,021 $ (1,178) $ 851 $ 588
6 AMREIT SUMMARY OF OPERATING RESULTS
Three Months Ended Twelve Months Ended December 31, December 31, ----------------------- ----------------------- 2005 2004 2005 2004 ---------- ---------- ---------- ---------- FUNDS FROM OPERATIONS: Income (loss) before discontinued operations $ 785 $ 574 $ 3,547 $ (410) Income from discontinued operations 4,214 (838) 6,579 998 Depreciation of real estate assets - operations 2,210 648 5,952 1,674 Depreciation of real estate assets - discontinued operations 177 60 111 297 Adjustments for non consolidated affiliates 35 9 100 29 Gain on sale of real estate acquired for investment (2,805) (52) (3,400) (137) Class B, C, and D common share distributions (2,897) (1,366) (9,245) (4,454) ---------- ---------- ---------- ---------- Total Funds from Operations available to Class A Shareholders $ 1,791 $ (965) $ 3,644 $ (2,003) ========== ========== ========== ========== Weighted average class A shares outstanding 6,446 3,431 5,205 3,251 Funds from operations per class A share $ 0.27 $ (0.28) $ 0.70 $ (0.62) DIVIDENDS: Class A Common share dividends per share $ 0.12 $ 0.12 $ 0.50 $ 0.48 Class B Common share dividends per share (1) $ 0.19 $ 0.19 $ 0.74 $ 0.74 Class C Common share dividends per share (2) $ 0.18 $ 0.18 $ 0.70 $ 0.70 Class D Common share dividends per share (3) $ 0.16 $ 0.16 $ 0.65 $ 0.65
(1) The class B common shares receive a cumulative preferred dividend, fixed at 8%, payable quarterly. The shares are currently convertible on a one for one basis into our class A common shares, and are callable by the Company beginning in July 2005 on a one for one basis, or $10.18 in cash at the holders option. (2) The class C common shares receive a preferred dividend, fixed at 7%, payable monthly. The shares are convertible into our class A common shares based on 110% of invested capital (i.e. $1,000 in class C common shares will convert into $1,100 in class A common shares) after the seventh anniversary of issuance (beginning in 2010). The class C common shares are callable by the Company beginning in 2006, based on the same conversion formula (110% of invested capital). (3) The class D common shares receive a fixed 6.5% annual dividend, payable monthly. The shares are convertible into our class A common shares based on 107.7% of invested capital (i.e. $1,000 in class C common shares will convert into $1,077 in class A common shares) after the seventh anniversary of issuance (beginning in 2011). The class D common shares are callable by the Company beginning in 2005, based on the same conversion formula, prorated for the time the shares were outstanding (107.7% of invested capital). 7
THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- RENTAL AND EARNED INCOME: 2005 2004 2005 2004 - ------------------------------------------------------------ ---------- ---------- ---------- ---------- Base minimum rent $ 4,425 $ 2,348 $ 14,825 $ 6,638 Earned Income from direct financing leases 508 507 2,030 2,029 Straight line rent 93 43 319 139 Over/Under market rent 31 24 218 44 Percentage rent 71 - 154 65 Tenant reimbursements 2,196 689 4,968 1,314 ---------- ---------- ---------- ---------- Total Rental and Earned Income $ 7,324 $ 3,611 $ 22,514 $ 10,229 ========== ========== ========== ==========
THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- REAL ESTATE OPERATING REVENUE: 2005 2004 2005 2004 - ------------------------------------------------------------ ---------- ---------- ---------- ---------- Development and construction management fees Merchant development funds and affiliates $ 183 $ 38 $ 1,243 $ 998 Unrelated third parties 40 - 70 8 Leasing and brokerage commissions Merchant development funds and affiliates 919 171 3,145 378 Unrelated third parties 93 353 415 401 Property management fees Merchant development funds and affiliates 117 (74) 200 67 Unrelated third parties - - - - ---------- ---------- ---------- ---------- Total Real Estate Operating Revenue $ 1,352 $ 488 $ 5,073 $ 1,852 ========== ========== ========== ========== Percent attributable to retail partnerships and affiliates 90% 28% 90% 78% Percent attributable to unrelated third parties 10% 72% 10% 22%
8
THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- DISCONTINUED OPERATIONS: 2005 2004 2005 2004 - ------------------------------------------------------------ ---------- ---------- ---------- ---------- Rental revenue and earned income from DFL $ 398 $ 474 $ 1,805 $ 2,095 Gain on sale of real estate held for investment 2,805 52 3,400 137 Interest and other income - - 146 936 Gain on sale of real estate held for resale - - 3,223 1,827 ---------- ---------- ---------- ---------- Total revenues 3,203 526 8,574 4,995 Property expense (192) (109) (382) (355) General and administrative (266) (4) (272) (76) Federal income tax expense (237) 113 (340) (521) Legal and professional (4) - (2) (2) Depreciation and amortization (177) (60) (111) (297) Minority interest (328) (16) (597) (182) Interest expense (27) (56) (182) (161) Debt prepayment penalty (109) (109) - Impairment charge - (1,300) - (2,403) ---------- ---------- ---------- ---------- Total expenses (1,340) (1,432) (1,995) (3,997) Income (loss) from discontinued operations $ 1,863 $ (906) $ 6,579 $ 998 ========== ========== ========== ========== Basic and diluted income (loss) from discontinued operations per class A common share $ 0.29 $ (0.26) $ 1.26 $ 0.31 ========== ========== ========== ==========
THREE MONTHS ENDED TWELVE MONTHS ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- INTEREST EXPENSE: 2005 2004 2005 2004 - ------------------------------------------------------------ ---------- ---------- ---------- ---------- Interest paid - floating rate $ 8 $ 237 $ 626 $ 716 Interest paid - fixed rate 1,692 906 5,792 2,457 Loan cost amortization 50 45 221 165 Out-of-market debt amortization (59) (24) (227) (48) ---------- ---------- ---------- ---------- Total Interest Expense $ 1,691 $ 1,164 $ 6,412 $ 3,290 ---------- ---------- ---------- ----------
9 AMREIT SUMMARY BALANCE SHEET INFORMATION DECEMBER 31, DECEMBER 31, 2005 2004 ------------ ------------ CLASS A COMMON SHARE DATA: Closing market price $ 6.90 $ 8.05 Dividend yield 7.24% 5.96% 90-Day average trading volume 25,095 2,659 TOTAL CAPITALIZATION: Debt $ 114,687 $ 105,964 Class A common shares at market 44,171 27,802 Class B common shares as converted 14,826 18,083 Class C common shares as converted 45,319 44,871 Class D common shares as converted 118,852 22,518 ------------ ------------ Total Capitalization $ 337,855 $ 219,238 ============ ============ Debt to Total Capitalization 33.9% 48.3% 10 AMREIT DEBT INFORMATION
AMOUNT AMOUNT OUTSTANDING OUTSTANDING INTEREST ANNUAL DEBT MATURITY DESCRIPTION 12-31-2005 12-31-2004 RATE SERVICE DATE - ------------------------------ ------------ ------------ ------------ ------------ ------------ Credit Facility (1) $ - $ 38,014 5.61% $ - 11/4/2005 ------------ ------------ 2005 Maturities $ - $ 38,014 MacArthur Park $ 13,410 $ 13,410 6.17% $ 827 12/1/2008 ------------ ------------ 2008 Maturities $ 13,410 $ 13,410 Merger Notes (2) $ 760 $ 760 5.47% $ 43 7/23/2010 ------------ ------------ 2010 Maturities $ 760 $ 760 Sugarland IHOP $ 1,196 $ 1,233 8.25% $ 138 3/1/2011 Sugar Land Plaza 2,313 2,336 7.60% 203 11/1/2011 ------------ ------------ 2011 Maturities $ 3,509 $ 3,569 Albuquerque IHOP $ 692 $ 712 7.82% $ 75 4/24/2012 Baton Rouge IHOP 1,143 1,176 7.82% 124 4/24/2012 Beaverton IHOP 811 834 7.82% 88 4/16/2012 Charlottesville IHOP 576 593 7.82% 62 4/24/2012 El Paso #1934 IHOP 695 715 7.82% 75 4/16/2012 Rochester IHOP 870 894 7.82% 94 4/16/2012 Shawnee IHOP 686 706 7.82% 74 4/18/2012 5115 Buffalo Spdwy 2,761 2,789 7.58% 241 5/11/2012 Salem IHOP 567 585 7.82% 61 5/17/2012 Springfield IHOP 944 971 7.82% 102 6/21/2012 Roanoke IHOP 654 673 7.89% 71 7/26/2012 Centerville IHOP 1,145 1,176 7.89% 124 7/26/2012 Memphis #4462 IHOP 1,237 1,271 7.89% 134 7/19/2012 Alexandria IHOP 660 679 7.89% 71 7/19/2012 El Paso #1938 IHOP 826 849 7.89% 89 8/23/2012 La Verne IHOP 688 707 7.89% 74 8/23/2012 Memphis #4482 IHOP 717 737 7.89% 77 8/23/2012 Parker IHOP 772 793 7.89% 83 8/23/2012 ------------ ------------ 2012 Maturities $ 16,444 $ 16,861
11
AMOUNT AMOUNT OUTSTANDING OUTSTANDING INTEREST ANNUAL DEBT MATURITY DESCRIPTION 12-31-2005 12-31-2004 RATE SERVICE DATE - ------------------------------ ------------ ------------ ------------ ------------ ------------ Cinco Ranch $ 8,430 $ 8,555 5.60% $ 601 7/10/2013 Plaza in the Park 17,817 18,081 5.60% 1,270 7/10/2013 ------------ ------------ 2013 Maturities $ 26,247 $ 26,635 Uptown Park $ 49,000 $ - 5.37% $ 2,631 6/1/2015 ------------ ------------ 2015 Maturities $ 49,000 $ - Bakery Square $ 4,211 $ 4,435 8.00% $ 571 2/10/2017 ------------ ------------ 2017 Maturities $ 4,211 $ 4,435 ------------ ------------ Total Maturities (3) $ 113,581 $ 104,631 ============ ============
- ---------- (1) Our revolving credit facility is a variable-rate debt instrument, and its outstanding balance fluctuates throughout the year based on our liquidity needs. Annual Debt Service on this debt instrument assumes that the amount outstanding ($0 as of December 31, 2005) remains constant through maturity. (2) The Merger Notes were paid off subsequent to December 31, 2005. (3) Total maturities above are $1.1 million and $1.2 million less than total debt as reported in our consolidated financial statements as of December 31, 2005 and 2004, respectively, due to the premium recorded on above-market debt assumed in conjunction with certain of our property acquisitions. FIXED VS. VARIABLE DECEMBER 31, % OF DECEMBER 31, % OF RATE DEBT: 2005 TOTAL 2004 TOTAL ------------ -------- ------------ -------- Variable rate $ - -% $ 38,014 35.9% Fixed rate 114,687 100.0% 67,950 64.1% ------------ ------------ $ 114,687 $ 105,964 ------------ ------------ 12 AMREIT PROPERTY & Tenant Information
ANNUALIZED BASE RENT AS MULTI-TENANT DATE OF DECEMBER % SHOPPING CENTERS MAJOR TENANTS CITY STATE ACQUIRED GLA 31, 2005 LEASED - --------------------- ----------------------- ------------- ----- ------------- -------- ------------ ------ Uptown Park Ann Taylor, McCormick & Houston TX 06/01/05 169,110 $ 4,067,373 85% Schmick's Southbank - Riverwalk Hard Rock Cafe San Antonio TX 09/30/05 46,673 $ 1,351,495 96% MacArthur Park Kroger Dallas TX 12/04 & 12/05 237,381 3,982,955 98% Plaza in the Park Kroger Houston TX 07/01/04 139,971 2,529,012 97% Cinco Ranch Kroger Houston TX 07/01/04 97,297 1,245,833 100% Bakery Square Walgreens & Houston TX 07/21/04 34,614 849,460 100% Bank of America Uptown Plaza CVS/pharmacy Houston TX 12/10/03 28,000 1,236,646 100% Woodlands Plaza FedEx/Kinkos & The Woodlands TX 06/03/98 20,018 373,317 100% Rug Gallery Sugarland Plaza Mattress Giant Sugarland TX 07/01/98 16,750 349,545 100% Terrace Shops Starbucks Houston TX 12/15/03 16,395 385,342 100% Baptist Memorial Baptist Memorial & Auto Memphis TN 07/23/02 15,000 222,643 100% Medical Plaza Zone Courtyard at Post Oak Verizon Wireless Houston TX 06/15/04 13,597 477,361 100% San Felipe and Winrock (1) (2) (1) (2) Houston TX 11/17/03 8,400 (1) (1) -------- ------------ ------ Multi-Tenant Shopping Centers Total 843,211 17,070,982 97%
ANNUALIZED BASE RENT AS DATE OF DECEMBER % SINGLE TENANT (GROUND LEASES) CITY STATE ACQUIRED GLA 31, 2005 LEASED - ----------------------------- -------------- ----- ------------- -------- ------------ ------ CVS Corporation Houston TX 01/10/03 13,824 $ 327,167 100% Darden Restaurants Peachtree City GA 12/18/98 6,867 79,366 100% Carlson Restaurants Hanover MD 09/16/03 6,802 150,421 100% Citibank (1) San Antonio TX 12/17/04 4,439 (6) 100% Comerica Bank (1) Houston TX 04/30/04 4,277 (6) 100% Washington Mutual Houston TX 12/11/96 3,685 98,160 100% Washington Mutual The Woodlands TX 09/23/96 3,685 61,060 100% -------- ------------ ------ Single Tenant (Ground Leases) Total 43,579 716,174 100%
13
ANNUALIZED BASE RENT AS DATE OF DECEMBER % SINGLE TENANT (FEE SIMPLE) CITY STATE ACQUIRED GLA 31, 2005 LEASED - ----------------------------- -------------- ------- ------------- -------- ------------ ------ Energy Wellness Sugarland TX 07/23/02 15,000 187,857 100% Golden Corral Houston TX 07/23/02 12,000 182,994 100% Golden Corral Humble TX 07/23/02 12,000 181,688 100% Carlson Restaurants Houston TX 07/23/02 8,500 200,000 100% IHOP Corporation Sugarland TX 09/22/99 4,020 188,664 100% IHOP Corporation(5) Centerville UT 07/25/02 4,020 161,707 100% IHOP Corporation (5) Memphis TN 08/23/02 4,020 177,780 100% IHOP Corporation Topeka KS 09/30/99 4,020 157,892 100% AFC, Inc. Atlanta GA 07/23/02 2,583 119,279 100% Advance Auto (1)(2)(3)(4) Various Various Various 21,000 107,414 (1) -------- ------------ ------ Single Tenant (Fee Simple) Total 87,163 1,665,275 100%
ANNUALIZED BASE RENT AS DATE OF DECEMBER % SINGLE TENANT (LEASEHOLD) CITY STATE ACQUIRED GLA 31, 2005 LEASED - ----------------------------- -------------- ------- ------------- --------- ------------ ------ IHOP Corporation (5) Various Various Various 60,300 $ 1,562,922 100% --------- ------------ ------ Company Total GLA/% Leased 1,034,253 $ 21,015,353 96%
- ---------- (1) Under Development (GLA represents proposed leaseable square footage). (2) Held for Sale (3) Held in joint venture of which we are the managing 50% owner (4) Advance Auto properties are located in MO and IL. Each of the properties has a proposed GLA of 7,000 square feet. (5) IHOP properties are located in NM, LA, OR, VA, TX, CA, TN, CO, VA, NY, OR, KS, UT and MO. Each of the properties has a GLA of 4,020 square feet. These properties are held by a consolidated subsidiary, 79.0% of which is owned by AmREIT, 19.6% of which is owned by AmREIT Income & Growth Corporation, one of our affiliated retail partnerships, and 1.4% of which is owned by unaffiliated third parties. (6) These properties are 100% leased; however, rent does not commence until first quarter of 2006. 14 Top 10 Tenants by revenue concentration for the twelve months ended December 31, 2005: % OF TOTAL RENTAL OPERATING TENANT INCOME REVENUE - ----------------------------- ------------ ------------ Kroger $ 2,899 8.36% IHOP 2,249 6.48% CVS/pharmacy 1,060 3.06% Linens 'N Things 716 2.06% Barnes & Noble 466 1.34% Landry's 445 1.28% Golden Corral Corporation 432 1.25% Hallmark 428 1.23% Carlson Restaurants Worldwide 350 1.01% Champps Americana 333 0.96% ------------ ------------ Total $ 9,378 27.04% LEASING ACTIVITY FOR THE QUARTER ENDED DECEMBER 31, 2005:
RENT PER SQ. FT. # OF TOTAL ----------------------- LEASES SQ. FT. NEW RENT OLD RENT % CHANGE ---------- ---------- ---------- ---------- ---------- New leases 2 4,126 28.97 N/A N/A Expired/ cancelled leases: Lease renewals 1 1,720 18.50 18.00 2.78% Non-renewals 1 4,512 N/A 22.00 N/A Cancelled leases 2 4,418 N/A 27.72 N/A
15 LEASE EXPIRATIONS BY YEAR: NUMBER OF LEASES SQUARE PERCENT EXPIRATION YEAR EXPIRING FOOTAGE OF TOTAL - -------------------- ------------ ------------ ------------ 2006 ............... 13 30,747 3.26% 2007 ............... 18 49,769 5.27% 2008 ............... 23 67,199 7.12% 2009 ............... 33 94,467 10.01% 2010 ............... 34 129,419 13.71% 2011 ............... 38 166,337 17.62% 2012 ............... 6 21,851 2.31% 2013 ............... 6 25,373 2.69% 2014 ............... 8 28,504 3.02% 2015 ............... - - - 2016 ............... 1 5,969 0.63% 2017 ............... - - - 2018 ............... - - - 2019 ............... 1 4,020 0.43% 2020 ............... 4 75,991 8.05% 2021 ............... 3 79,806 8.45% 2022 ............... 1 4,020 0.43% 2023 ............... 1 63,373 6.71% 2024 ............... 3 21,864 2.32% 2025 ............... 6 32,100 3.40% 2026 ............... 4 16,080 1.70% 2027 ............... 3 12,060 1.28% 2056 ............... 1 15,120 1.60% ------------ ------------ ------------ Totals 207 944,069 100.00% 16 -----END PRIVACY-ENHANCED MESSAGE-----