Funds from operations per diluted share dropped 5.1% from 39 cents in the third quarter of 2002 to 37 cents this third quarter. This reflected a $1.5 million gain on the extinguishment of debt that raised last year's funds from operations per diluted share by 4 cents. Not counting the gain last year, funds from operations per diluted share in this year's third quarter would have grown 5.1%.
Third-quarter net income was $17.2 million, or 27 cents per diluted share, compared with $10.9 million, or 32 cents per diluted share, last year's quarter. This third quarter included 2 cents per diluted share of income from discontinued operations, and the 2002 quarter included 5 cents per diluted share of income from discontinued operations. In the third quarter, total rental revenue was up 103% to $50.8 million from $25 million in the 2002 quarter.
Funds from operations grew 79.3% from $35.5 million for the nine months ended Sept. 30, 2002, to $63.6 million for the same period this year. This figure per diluted share was $1.08 for the first nine months of both years. Net income was $45.9 million for the nine-month period this year, or 79 cents per diluted share, compared with $32.6 million, or $1 per diluted share, for the same period last year. For the nine months, total rental revenue rose 88.3% from $73 million in 2002 to $137.6 million this year.
Equity One and IRT Property Co. merged on Feb. 12, and Equity One's results from that date include IRT's activity. "We continued our positive momentum in the third quarter of 2003," Chaim Katzman, chairman and CEO of Equity One, says in a statement. "Our performance was very strong with significant gains in leasing, rental rates and operating margins. … We are stronger than ever financially, having raised over $130 million in new equity in 2003, excluding shares issued in the IRT merger, thereby reducing our leverage to 38% of total market capitalization and improving our interest expense coverage ratio."
"In our view, supermarket-anchored shopping centers remain the investment of choice, benefiting from a unique combination of upside opportunity and downside protection in an uncertain economy," he adds.
Publicly traded Equity One owns, develops and operates community and neighborhood shopping centers mainly in high-growth markets in the southern US. At the end of the third quarter, 172 shopping centers made up the REIT's core portfolio. They were 90.1% leased. This compares to 168 shopping centers 88.7% leased at the end of the second quarter. Overall, Equity One owns 182 properties.
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