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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DECEMBER 31, 2003
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(Date of Earliest Event Reported)
CRESCENT REAL ESTATE EQUITIES COMPANY
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(Exact Name of Registrant as Specified in its Charter)
TEXAS 1-13038 52-1862813
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(State of Incorporation) (Commission File (I.R.S. Employer
Number) Identification Number)
777 MAIN STREET, SUITE 2100, FORT WORTH, TX 76102
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(Address of Principal Executive Offices) (Zip Code)
(817) 321-2100
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As used in this Form 8-K, the term "Company" means, unless the context
otherwise requires, Crescent Real Estate Equities Company, a Texas real estate
investment trust, and its direct and indirect subsidiaries, including Crescent
Real Estate Equities Limited Partnership, a Delaware limited partnership (the
"Operating Partnership"), and subsidiaries of the Operating Partnership.
Crescent Real Estate Equities Company is filing this Form 8-K to report
the disposition of the Company's interests in the Woodlands, Texas. The
Woodlands is a 27,000-acre, mixed-use, master-planned community north of
Houston, Texas, consisting of office properties, commercial acreage, a hotel and
conference center and residential development property.
On December 31, 2003, the Company sold all of its interests in The
Woodlands, Texas to TWC Operating LP, a Delaware limited partnership and a
subsidiary of The Rouse Company, L.P., a Delaware limited partnership. The
interests sold by the Company consist of the following:
o A 52.5% economic interest, including a 10% earned promotional
interest, in The Woodlands Land Development Company, L.P.,
through which the Company owned its interest in The Woodlands
Land Company, Inc., the owner of The Woodlands Residential
Development Property;
o A promissory note due in 2007 in the original principal amount
of $10,625,000 from The Woodlands Land Development Company,
L.P.;
o A 75% interest in Woodlands Office Equities - '95 Limited
Partnership, through which the Company owned its interests in
four Office Properties located in The Woodlands;
o A 52.5% economic interest, including a 10% earned promotional
interest, in The Woodlands Commercial Properties Company,
L.P.; and
o A 52.5% economic interest, including a 10% earned promotional
interest, in The Woodlands Operating Company, L.P.
Total consideration to the Company for the sale of its interests in The
Woodlands was $387 million, approximately $202 million in cash and approximately
$185 million in assumption of debt. The Company received approximately $18
million of the $202 million cash component prior to closing in the form of
partnership distributions net of working capital adjustments. The debt
represents 52.5% of the debt of the partnerships through which Crescent held its
interests in the Woodlands.
The Company has agreed to use approximately $126 million of the net
proceeds from the sale of its interests in The Woodlands, together with the
assumption of approximately $97 million of mortgage debt, to acquire from the
Rouse Company, L.P. its interests in the eight Class A office properties and
nine leased restaurant parcels in Hughes Center in Las Vegas, Nevada.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(b) Pro Forma Financial Information.
Pro Forma Consolidated Balance Sheet as of September 30, 2003 and notes thereto....................
Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 2003 and
notes thereto..................................................................................
Pro Forma Consolidated Statement of Operations for the year ended December 31, 2002 and notes
thereto........................................................................................
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CRESCENT REAL ESTATE EQUITIES COMPANY
Dated: January 7, 2004 By: /s/ JERRY R. CRENSHAW, JR.
-----------------------------------
Name: Jerry R. Crenshaw, Jr.
Title: Executive Vice President
and Chief Financial Officer
INDEX TO FINANCIAL STATEMENTS
PRO FORMA FINANCIAL STATEMENTS FOR CRESCENT REAL ESTATE EQUITIES COMPANY (UNAUDITED)
Pro Forma Consolidated Balance Sheet as of September 30, 2003 and notes thereto.................... F-3
Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 2003 and
notes thereto.................................................................................. F-5
Pro Forma Consolidated Statement of Operations for the year ended December 31, 2002 and notes
thereto........................................................................................ F-7
F-1
Pro Forma Financial Information
The following unaudited pro forma consolidated financial statements are based
upon Crescent Real Estate Equities Company's historical financial statements and
give effect to the following transactions.
o The sale of the Company's interest in the Woodlands, Texas,
which consisted of
o A 52.5% economic interest, including a 10% earned
promotional interest, in The Woodlands Land
Development Company, L.P., through which the Company
owned its interest in The Woodlands Land Company,
Inc., the owner of The Woodlands Residential
Development Property;
o A promissory note due in 2007 in the original
principal amount of $10,625,000 from The Woodlands
Land Development Company, L.P.;
o A 75% interest in Woodlands Office Equities - '95
Limited Partnership, through which the Company owned
its interests in four Office Properties located in
The Woodlands;
o A 52.5% economic interest, including a 10% earned
promotional interest, in The Woodlands Commercial
Properties Company, L.P.; and
o A 52.5% economic interest, including a 10% earned
promotional interest, in The Woodlands Operating
Company, L.P.
o The assumed application of the $152.2 million in net cash
proceeds, after estimated transaction costs and taxes, from
the sale.
The unaudited pro forma consolidated balance sheet as of September 30, 2003 is
presented as if these transactions had been completed on September 30, 2003. The
unaudited pro forma consolidated statements of operations for the nine months
ended September 30, 2003 and the year ended December 31, 2002 are presented as
if these transactions had occurred as of January 1, 2002.
In management's opinion, all adjustments necessary to reflect the above
discussed transactions have been made. The unaudited pro forma consolidated
balance sheet and statements of operations are not necessarily indicative of
what actual results of operations of the Company would have been for the periods
presented, nor does it purport to predict the Company's results of operations
for future periods.
F-2
Crescent Real Estate Equities Company
Unaudited Pro Forma Consolidated Balance Sheet
As of September 30, 2003
(dollars in thousands)
Crescent
Real Estate The Woodlands
Equitities Company (A) Land Company (B)
----------------- -------------
ASSETS:
Investments in real estate:
Land $ 315,479 $ (7,456)
Building and improvements, net of accumulated depreciation of $734,370 2,201,657 --
Furniture, fixtures and equipment, net of accumulated depreciation of $69,487 62,682 --
Land held for investment or development 470,813 --
Properties held for disposition, net 87,701 --
------------ ------------
Net investment in real estate 3,138,332 (7,456)
Cash and cash equivalents 63,483 --
Restricted cash and cash equivalents 106,675 --
Accounts receivable, net 39,966 --
Deferred rent receivable 62,474 --
Investments in unconsolidated companies 543,259 (38,309)
Notes receivable, net 108,971 (12,039)
Income tax asset-current and deferred, net 54,496 6,725
Other assets, net 180,273 --
------------ ------------
Total assets $ 4,297,929 $ (51,079)
============ ============
LIABILITIES:
Borrowings under Credit Facility $ 314,500 $ --
Notes payable 2,261,969 --
Accounts payable, accrued expenses and other liabilities 351,264 --
------------ ------------
Total liabilities 2,927,733 --
------------ ------------
MINORITY INTERESTS:
Operating partnership, 8,873,347 units 109,181 --
Consolidated real estate partnerships 37,694 --
------------ ------------
Total minority interests 146,875 --
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred shares, $0.01 par value, authorized 100,000,000 shares:
Series A Convertible Cumulative Preferred Shares,
liquidation preference of $25.00 per share,
10,800,000 shares issued and outstanding 248,160 --
Series B Cumulative Preferred Shares,
liquidation preference of $25.00 per share,
3,400,000 shares issued and outstanding 81,923 --
Common shares, $0.01 par value, authorized 250,000,000 shares,
124,298,763 shares issued and outstanding 1,236 --
Additional paid-in capital 2,243,384 --
Deferred compensation on restricted shares (5,253) --
Accumulated deficit (868,397) (51,079)
Accumulated other comprehensive income (loss) (17,492) --
------------ ------------
1,683,561 (51,079)
Less - shares held in treasury, at cost, 25,127,388 common shares (460,240) --
------------ ------------
Total shareholders' equity 1,223,321 (51,079)
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Total liabilities and shareholders' equity $ 4,297,929 $ (51,079)
============ ============
Other Woodlands
Entities (C) Sales Proceeds (D)
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ASSETS:
Investments in real estate:
Land $ -- $ --
Building and improvements, net of accumulated depreciation of $734,370 -- --
Furniture, fixtures and equipment, net of accumulated depreciation of $69,487 -- --
Land held for investment or development -- --
Properties held for disposition, net (16,571) --
------------ ------------
Net investment in real estate (16,571) --
Cash and cash equivalents (25) --
Restricted cash and cash equivalents -- --
Accounts receivable, net (1) --
Deferred rent receivable (187) --
Investments in unconsolidated companies (32,111) --
Notes receivable, net -- --
Income tax asset-current and deferred, net (1,232) --
Other assets, net (320) --
------------ ------------
Total assets $ (50,447) $ --
============ ============
LIABILITIES:
Borrowings under Credit Facility $ -- $ (152,200)
Notes payable (1,743) --
Accounts payable, accrued expenses and other liabilities 1,033 --
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Total liabilities (710) (152,200)
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MINORITY INTERESTS:
Operating partnership, 8,873,347 units -- --
Consolidated real estate partnerships 283 --
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Total minority interests 283 --
------------ ------------
SHAREHOLDERS' EQUITY:
Preferred shares, $0.01 par value, authorized 100,000,000 shares:
Series A Convertible Cumulative Preferred Shares,
liquidation preference of $25.00 per share,
10,800,000 shares issued and outstanding -- --
Series B Cumulative Preferred Shares,
liquidation preference of $25.00 per share,
3,400,000 shares issued and outstanding -- --
Common shares, $0.01 par value, authorized 250,000,000 shares,
124,298,763 shares issued and outstanding -- --
Additional paid-in capital -- --
Deferred compensation on restricted shares -- --
Accumulated deficit (50,020) 152,200
Accumulated other comprehensive income (loss) -- --
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(50,020) 152,200
Less - shares held in treasury, at cost, 25,127,388 common shares -- --
------------ ------------
Total shareholders' equity (50,020) 152,200
------------ ------------
Total liabilities and shareholders' equity $ (50,447) $ --
============ ============
Consolidated
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ASSETS:
Investments in real estate:
Land $ 308,023
Building and improvements, net of accumulated depreciation of $734,370 2,201,657
Furniture, fixtures and equipment, net of accumulated depreciation of $69,487 62,682
Land held for investment or development 470,813
Properties held for disposition, net 71,130
------------
Net investment in real estate 3,114,305
Cash and cash equivalents 63,458
Restricted cash and cash equivalents 106,675
Accounts receivable, net 39,965
Deferred rent receivable 62,287
Investments in unconsolidated companies 472,839
Notes receivable, net 96,932
Income tax asset-current and deferred, net 59,989
Other assets, net 179,953
------------
Total assets $ 4,196,403
============
LIABILITIES:
Borrowings under Credit Facility $ 162,300
Notes payable 2,260,226
Accounts payable, accrued expenses and other liabilities 352,297
------------
Total liabilities 2,774,823
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MINORITY INTERESTS:
Operating partnership, 8,873,347 units 109,181
Consolidated real estate partnerships 37,977
------------
Total minority interests 147,158
------------
SHAREHOLDERS' EQUITY:
Preferred shares, $0.01 par value, authorized 100,000,000 shares:
Series A Convertible Cumulative Preferred Shares,
liquidation preference of $25.00 per share,
10,800,000 shares issued and outstanding 248,160
Series B Cumulative Preferred Shares,
liquidation preference of $25.00 per share,
3,400,000 shares issued and outstanding 81,923
Common shares, $0.01 par value, authorized 250,000,000 shares,
124,298,763 shares issued and outstanding 1,236
Additional paid-in capital 2,243,384
Deferred compensation on restricted shares (5,253)
Accumulated deficit (817,296)
Accumulated other comprehensive income (loss) (17,492)
------------
1,734,662
Less - shares held in treasury, at cost, 25,127,388 common shares (460,240)
------------
Total shareholders' equity 1,274,422
------------
Total liabilities and shareholders' equity $ 4,196,403
============
See accompanying notes to Pro Forma Consolidated Balance Sheet
F-3
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(dollars in thousands)
The following describes the pro forma adjustments to the Unaudited Pro Forma
Consolidated Balance Sheet as of September 30, 2003 as if the transactions
described in the first paragraph of "Pro Forma Financial Information" were
completed on September 30, 2003.
(A) Reflects Crescent Real Estate Equities Company's unaudited consolidated
historical Balance Sheet as of September 30, 2003.
(B) Reflects an adjustment to remove the historical balance sheet of The
Woodlands Land Development Company, L.P.
(C) Reflects an adjustment to remove the historical balance sheets of
Woodlands Office Equities - '95 Limited Partnership, The Woodlands
Commercial Property Company, L.P., and The Woodlands Operating Company,
L.P.
(D) Assumes that the $152.2 million net cash proceeds, after estimated
transaction costs and taxes, were used to pay down the Company's Credit
Facility. However, the Company has agreed to use approximately $126
million of the net cash proceeds, together with the assumption of $97
million of mortgage debt, to purchase the eight Class A office
properties and nine leased restaurant parcels in Hughes Center in Las
Vegas, Nevada.
Cash proceeds $ 183,700
Estimated transaction costs 6,500
Estimated cash taxes 25,000
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Assumed pay down on Credit Facility $ 152,200
===========
F-4
Crescent Real Estate Equities Company
Unaudited Pro Forma Consolidated Statement of Operations
For the nine months ended September 30, 2003
(dollars in thousands, except share data)
Crescent Real
Estate Equitities The Woodlands Other Woodlands
Company (A) Land Company (B) Entities (C)
----------------- ------------- --------------
REVENUE:
Office Property $ 375,996 $ -- $ --
Resort/Hotel Property 170,122 -- --
Residential Development Property 119,380 (1,257) --
------------- ------------- -------------
Total Property revenue 665,498 (1,257) --
------------- ------------- -------------
EXPENSE:
Office Property real estate taxes 50,663 -- --
Office Property operating expenses 129,116 -- --
Resort/Hotel Property expense 137,325 -- --
Residential Development Property expense 110,483 (961) --
------------- ------------- -------------
Total Property expense 427,587 (961) --
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Income from Property Operations 237,911 (296) --
------------- ------------- -------------
OTHER INCOME (EXPENSE):
Income from investment land sales, net 12,961 -- --
Gain on joint venture of properties, net 100 -- --
Interest and other income 4,172 -- --
Corporate general and administrative (20,526) -- --
Interest expense (129,298) -- --
Amortization of deferred financing costs (7,751) -- --
Depreciation and amortization (110,947) -- --
Impairment charges related to real estate assets (1,200) -- --
Other expenses (1,042) -- 417
Equity in net income (loss) of unconsolidated companies:
Office Properties 8,797 -- (6,300)
Resort/Hotel Properties 2,036 -- --
Residential Development Properties 4,235 (4,350) --
Temperature-Controlled Logistics Properties 152 -- --
Other (1,679) -- 2,453
------------- ------------- -------------
Total Other Income (Expense) (239,990) (4,350) (3,430)
------------- ------------- -------------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY
INTERESTS AND INCOME TAXES (2,079) (4,646) (3,430)
Minority interests (1,897) -- --
Income tax benefit (provision) 10,545 1,812 (957)
------------- ------------- -------------
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE $ 6,569 $ (2,834) $ (4,387)
============= ============= =============
BASIC EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.07
=============
DILUTED EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.07
=============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 99,186,469
=============
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 99,191,192
=============
Sales
Proceeds (D) Consolidated
------------- -------------
REVENUE:
Office Property $ -- $ 375,996
Resort/Hotel Property -- 170,122
Residential Development Property -- 118,123
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Total Property revenue -- 664,241
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EXPENSE:
Office Property real estate taxes -- 50,663
Office Property operating expenses -- 129,116
Resort/Hotel Property expense -- 137,325
Residential Development Property expense -- 109,522
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Total Property expense -- 426,626
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Income from Property Operations -- 237,615
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OTHER INCOME (EXPENSE):
Income from investment land sales, net -- 12,961
Gain on joint venture of properties, net -- 100
Interest and other income -- 4,172
Corporate general and administrative -- (20,526)
Interest expense 3,592 (125,706)
Amortization of deferred financing costs -- (7,751)
Depreciation and amortization -- (110,947)
Impairment charges related to real estate assets -- (1,200)
Other expenses -- (625)
Equity in net income (loss) of unconsolidated companies:
Office Properties -- 2,497
Resort/Hotel Properties -- 2,036
Residential Development Properties -- (115)
Temperature-Controlled Logistics Properties -- 152
Other -- 774
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Total Other Income (Expense) 3,592 (244,178)
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INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY
INTERESTS AND INCOME TAXES 3,592 (6,563)
Minority interests -- (1,897)
Income tax benefit (provision) -- 11,400
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INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE $ 3,592 $ 2,940 (E)
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BASIC EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.03
=============
DILUTED EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.03
=============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 99,186,469
=============
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 99,191,192
=============
See accompanying notes to Pro Forma Consolidated Statements of Operations
F-5
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
The following describes the pro forma adjustments to the Unaudited Pro Forma
Consolidated Statement of Operations for the nine months ended September 30,
2003 as if the transactions described in the first paragraph of "Pro Forma
Financial Information" were completed on January 1, 2002.
(A) Reflects Crescent Real Estate Equities Company's unaudited
consolidated historical Statement of Operations for the nine months
ended September 30, 2003.
(B) Reflects an adjustment to remove the historical incremental income and
expense for The Woodlands Land Development Company, L.P. for the
nine months ended September 30, 2003.
(C) Reflects an adjustment to remove the historical incremental income and
expense for the nine months ended September 30, 2003 for:
The Woodlands Commercial Property Company, L.P. $ 5,883
The Woodlands Operating Company, L.P. (1,496)
--------------
$ 4,387
==============
Woodlands Office Equities - '95 Limited Partnership results of $802
thousand were presented in Net (loss)/income from discontinued
operations, net of minority interests in the September 30, 2003
Consolidated Statements of Operations.
(D) Net decrease in interest costs assuming that the $152.2 million net
cash proceeds, after estimated transaction costs and taxes, were used
to pay down the Company's Credit Facility at January 1, 2002.
Cash proceeds $ 152,200
Weighted average interest rate (3.14% for nine months) 2.36%
------------
Reduction in interest expense $ 3,592
============
(E) Does not reflect the gain on the sale of the Company's interest in The
Woodlands, Texas. The estimated gain, net of estimated transaction
costs and taxes, would have been approximately $ 44.3 million had the
transaction taken place on September 30, 2003.
Purchase price $ 183,700
Net book value 101,000
Estimated transaction costs 6,500
Estimated tax provision 30,900
---------
Estimated gain $ 44,300
=========
F-6
Crescent Real Estate Equities Company
Unaudited Pro Forma Consolidated Statement of Operations
For the year ended December 31, 2002
(dollars in thousands, except share data)
Crescent Real
Estate Equitites The Woodlands Other Woodlands
Company (A) Land Company (B) Entities (C)
---------------- --------------- ---------------
REVENUE:
Office Property $ 540,108 $ -- $ --
Resort/Hotel Property 203,128 -- --
Residential Development Property 231,726 (1,440) --
--------------- --------------- ---------------
Total Property revenue 974,962 (1,440) --
--------------- --------------- ---------------
EXPENSE:
Office Property real estate taxes 72,710 -- --
Office Property operating expenses 165,870 -- --
Resort/Hotel Property expense 157,987 -- --
Residential Development Property expense 211,760 (1,193) --
--------------- --------------- ---------------
Total Property expense 608,327 (1,193) --
--------------- --------------- ---------------
Income from Property Operations 366,635 (247) --
--------------- --------------- ---------------
OTHER INCOME (EXPENSE):
Income from investment land sales, net 21,591 -- --
Gain on joint venture of properties, net 17,363 -- --
Interest and other income 13,036 -- --
Corporate general and administrative (27,762) -- --
Interest expense (179,059) -- --
Amortization of deferred financing costs (10,178) -- --
Depreciation and amortization (138,523) -- --
Impairment charges related to real estate assets (12,216) -- --
Other expenses (11,389) -- --
Equity in net income (loss) of unconsolidated companies:
Office Properties 23,431 -- (20,491)
Resort/Hotel Properties (115) -- --
Residential Development Properties 39,778 (33,847) --
Temperature-Controlled Logistics Properties (2,933) -- --
Other (6,609) -- 1,509
--------------- --------------- ---------------
Total Other Income (Expense) (273,585) (33,847) (18,982)
--------------- --------------- ---------------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY
INTERESTS AND INCOME TAXES 93,050 (34,094) (18,982)
Minority interests (21,230) -- --
Income tax benefit (provision) 4,922 7,941 (1,657)
--------------- --------------- ---------------
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE $ 76,742 $ (26,153) $ (20,639)
=============== =============== ===============
BASIC EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.74
===============
DILUTED EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.74
===============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 103,527,833
===============
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 103,730,569
===============
Sales
Proceeds (D) Consolidated
--------------- ---------------
REVENUE:
Office Property $ -- $ 540,108
Resort/Hotel Property -- 203,128
Residential Development Property -- 230,286
--------------- ---------------
Total Property revenue -- 973,522
--------------- ---------------
EXPENSE:
Office Property real estate taxes -- 72,710
Office Property operating expenses -- 165,870
Resort/Hotel Property expense -- 157,987
Residential Development Property expense -- 210,567
--------------- ---------------
Total Property expense -- 607,134
--------------- ---------------
Income from Property Operations -- 366,388
--------------- ---------------
OTHER INCOME (EXPENSE):
Income from investment land sales, net -- 21,591
Gain on joint venture of properties, net -- 17,363
Interest and other income -- 13,036
Corporate general and administrative -- (27,762)
Interest expense 5,616 (173,443)
Amortization of deferred financing costs -- (10,178)
Depreciation and amortization -- (138,523)
Impairment charges related to real estate assets -- (12,216)
Other expenses -- (11,389)
Equity in net income (loss) of unconsolidated companies:
Office Properties -- 2,940
Resort/Hotel Properties -- (115)
Residential Development Properties -- 5,931
Temperature-Controlled Logistics Properties -- (2,933)
Other -- (5,100)
--------------- ---------------
Total Other Income (Expense) 5,616 (320,798)
--------------- ---------------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY
INTERESTS AND INCOME TAXES 5,616 45,590
Minority interests -- (21,230)
Income tax benefit (provision) -- 11,206
--------------- ---------------
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE $ 5,616 $ 35,566
=============== ===============
BASIC EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.34
===============
DILUTED EARNINGS PER SHARE DATA:
Net income (loss) before discontinued operations and
cumulative effect of a change in accounting principle $ 0.34
===============
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 103,527,833
===============
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 103,730,569
===============
See accompanying notes to Pro Forma consolidated Statements of Operations
F-7
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands)
The following describes the pro forma adjustments to the Unaudited Pro Forma
Consolidated Statement of Operations for the year ended December 31, 2002 as if
the transactions described in the first paragraph of "Pro Forma Financial
Information" were completed on January 1, 2002.
(A) Reflects Crescent Real Estate Equities Company's audited
consolidated historical Statement of Operations for the year
ended December 31, 2002.
(B) Reflects an adjustment to remove the historical incremental income and
expense for the The Woodlands Land Development Company, L.P. for the
year ended December 31, 2002.
(C) Reflects an adjustment to remove the historical incremental income and
expense for the year ended December 31, 2002 for:
The Woodlands Commercial Property Company, L.P. $ 20,491
The Woodlands Operating Company, L.P 148
------------
$ 20,639
============
Woodlands Office Equities - '95 Limited Partnership results of $6,794
were presented in Net income (loss) from discontinued operations, net
of minority interests and Gain (loss) on real estate from discontinued
operations, net of minority interests in the December 31, 2002
Consolidated Statements of Operations.
(D) Net decrease in interest costs assuming that the $152.2 million net
cash proceeds, after estimated transaction costs and taxes, were used
to pay down the Company's Credit Facility at January 1, 2002.
Cash proceeds $ 152,200
Weighted average interest rate 3.69%
------------
Reduction in interest expense $ 5,616
============
F-8