Forest City Enterprises Inc. (NYSE:FCEA) and (NYSE:FCEB), lost $15.6 million in the first quarter - but shed no tears for the Cleveland, OH-based commercial and residential real estate developer and investor.
As of April 30, 2010, the company had $239.2 million ($194.0 million at full consolidation) in cash on its balance sheet.
The developer also has $373.5 million of available capacity on its newly amended revolving line of credit, according to its recently filed financials with the Securities and Exchange Commission.
Charles Ratner
"Overall comparable property NOI was up for the quarter, and all portfolio segments achieved increased occupancies.
"We're especially pleased with results from our Residential Segment, which posted healthy gains in comparable property NOI, occupancy and net rental income."
"Although retail still faces challenges, the rate of decline in our retail comparable property NOI has slowed, and we are beginning to see improved fundamentals.
"Sales at our regional malls are up 1.5 percent for the four months January through April, compared with the same period in 2009.
"Our office portfolio continues to perform well, although, as anticipated, the rate of increase in comparable property NOI has moderated compared with rates for the prior year.
"While write-offs of abandoned development projects are a normal and expected cost of doing business in real estate development, it is worth noting that we had none in the first quarter.
"This is due in part to our efforts to curtail development activity in response to market and economic conditions.'
In his prepared statement showing the company's first-quarter performance, Ratner says, "A highlight of the first quarter occurred in early March with retirement of $178.7 million of Senior Notes due 2011, 2015 and 2017 in exchange for $170.0 million of new 7.0 percent convertible preferred stock, through privately negotiated agreements with certain note holders.
"This transaction further improved our balance sheet and near-term recourse debt exposure.
"Our Chief Financial Officer, Bob O'Brien, and his team, as well as our outside advisors, deserve credit for yet another creative and efficient capital markets transaction.
"Another major highlight for the Company occurred early in the second quarter when we achieved vacant possession of the land at our Atlantic Yards project in Brooklyn on May 7."
Ratner says the Atlantic Yards event was "the culmination of a six-year journey for Forest City.
"It allowed us not only to continue to move forward on the overall project, including ongoing construction of the Barclays Center arena, but also to complete the transaction, on May 12, with (Russian investor and entrepreneur) Mikhail Prokhorov for his investment in the Nets and the arena.
"With Mr. Prokhorov's $200 million investment completed, he now owns 80 percent of the Nets and 45 percent of the arena project.
"Once again, our New York team, led by Bruce Ratner and Joanne Minieri, deserves credit for their hard work, creativity and perseverance in achieving these important milestones.
Joanne Minieri
"Both have been well-received in their respective markets, are well-leased to high-quality tenants and are expected to be accretive to our results in 2010."
First-quarter EBDT (earnings before depreciation, amortization and deferred taxes) was $70.5 million, an increase of $28.9 million compared with 2009 first-quarter EBDT of $41.6 million.
On a fully diluted, per share basis, first-quarter 2010 EBDT was $0.37, a 5.1 percent decrease compared with 2009 first quarter EBDT of $0.39.
Bruce Ratner
The first-quarter net loss attributable to Forest City Enterprises, Inc. was $15.6 million, or $0.10 per share, compared with a net loss of $30.7 million, or $0.30 per share, in the first quarter of 2009.
First-quarter 2010 consolidated revenues were $281.7 million compared with $311.5 million last year.
The year-over-year revenue variance was impacted primarily by joint ventures entered into during the first quarter and by lower sales of commercial out lots.
For the first quarter, the company's combined commercial and residential segments provided a pre-tax EBDT increase of $9.2 million compared with the same period in 2009.
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