AmREIT Announces Second Quarter Operating Results

AmREIT (AMEX: AMY), a Texas-based real estate investment trust announced that its net income available to its class A shareholders (EPS") for the second quarter 2003 was $0.075 per class A share, compared to $0.110 per share for the same period in 2002.

HOUSTON, TX (PRWEB) August 7, 2003 -- AmREIT (AMEX: AMY), a Texas-based real estate investment trust announced that its net income available to its class A shareholders (EPS") for the second quarter 2003 was $0.075 per class A share, compared to $0.110 per share for the same period in 2002. AmREITs EPS for the six months ended June 30, 2003 was $0.077 compared to $0.188 for the same period in 2002.    Funds from operations (FFO") for the second quarter of 2003 totaled $0.153 per class A share, compared with $0.164 for the same period in 2002. AmREITs FFO for the six months ended June 30, 2003 was $0.236 compared to $0.295 for the same period in 2002. A reconciliation of net income to FFO is included in the financial tables accompanying this press release.

AmREIT closed on approximately $7.2 million in property acquisitions during the second quarter and owns a portfolio of 50 single-tenant and multi-tenant commercial retail properties, located in 20 states, with an economic occupancy of 98.4% during the second quarter. AmREIT broke ground on its Eckerd development in the Houston galleria/uptown area, has contracted to purchase a TGI Fridays restaurant in Hanover, Maryland and has contracted to purchase a 16,395 square foot multi-tenant shopping center in Houston, Texas. The first significant contribution to earnings from these acquisitions/developments will take place in the first quarter 2004.

Management expects EPS for the third quarter of 2003 of between $0.08 and $0.09 and for the calendar year 2003 of between $0.23 and $0.25 per share, and adjusted FFO for the third quarter of 2003 of between $0.16 and $0.17 and for the calendar year of 2003 of between $0.54 and $0.56. This represents an increase in adjusted FFO of over 20% when compared to adjusted FFO of $0.42 per share for 2002. AmREIT updates earnings guidance on a quarterly basis.

AmREIT is an American Stock Exchange listed real estate investment trust operating in two distinct lines of business. The Investment Sponsorship division is a sponsor of high quality real estate investment opportunities to the independent financial planning community. The Company researches, identifies and participates in quality real estate opportunities and works hand in hand with the broker-dealer financial services community to sponsor real estate investment products and services. AmREITs real estate team focuses on the development, management, brokerage and ownership of freestanding credit-tenant leased and multi-tenant shopping centers located contiguous to major thoroughfares and traffic generators. AmREIT projects have been leased to parent companies such as Goodyear Tire, Washington Mutual, IHOP, McDonalds, Memorial Herman Hospital, RadioShack, Sprint, Coldwell Banker, Jack in the Box, Guaranty Federal, Bennigans, Chilis, Texas Childrens Hospital, and Discount Tire.

In addition to historical statements included in this press release, certain statements are included that state the Companys or managements intentions, hopes, beliefs, expectations or predictions of the future and are considered forward looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995, which by their nature, involve known and unknown risks and uncertainties. The Companys actual results, performance, or achievements could differ materially from those expressed as implied by such statements. Reference is made to the Companys regulatory filings with the Securities and Exchange Commission for information or factors, which may impact the Companys performance.

For further information, contact AmREITs Investor Relations Department at 800-888-4400 or 713-850-1400, or access our web site at www.amreit.com.

Operating Results
(Unaudited)

   Three Months Ended   Six Months Ended
   June 30,   June 30,
Revenues:   2003   2002   2003   2002
     Rental income from operating             leases   
$ 1,265,235   
$    677,614   
$ 2,497,975   
$ 1,384,354
     Earned income from direct financing leases   
     670,608   
     437,169   
    1,269,328   
     628,351
     Service fee income        848,863           52,378       1,059,860        531,396
     Management fees
     Income from non-consolidated
         Affiliates            52,616
        
         45,033           94,276

         1,467        110,247

         85,338        185,406

        283,509
     Interest and other income               1,991        208,303            3,830           210,331
Total Revenues       2,884,346    1,471,207       5,026,578       3,223,347
            
Expenses:            
     General operating and administrative   
     785,090   
     439,962   
1,542,219   
1,203,523
     Legal and professional        545,942        161,998        732,676        371,925
     Interest        593,905        410,032    1,145,346        663,680
     Depreciation and amortization        209,404        126,822        431,707        253,670
Total Expenses       2,134,341    1,138,814    3,851,948    2,492,798
            
Income before federal income taxes and minority interest in income of consolidated joint ventures    

     750,005   

    332,393   

1,174,630   

     730,549
Federal income tax (expense) benefit for taxable REIT subsidiary   
    
     (57,700)   
            
     69,000   
    
     15,300   
            
     (15,000)
Minority interest in income of consolidated joint venture   
     (43,161)   
(140,100)   
     (82,949)   
(271,945)
            
Net income        649,144        261,293    1,106,981       443,604
            
Distributions paid to class B    shareholders   
     (439,124)   
                -   
    (891,667)   
                -
            
Net income available to class A shareholders   
$     210,020   
$ 261,293   
$ 215,314   
$ 443,604

Funds From Operations (FFO"):            
     Net income   $     649,144   $ 261,293   $1,106,981    $ 443,604
     Depreciation        228,053        126,822        462,689        253,670
     Class B distributions        (439,124)                   -       (891,667)                    -
FFO available to class A Shares   $     438,073   $ 388,115   $ 678,003   $ 697,274

Basic Per Share Data:            
    Net income available to class A shareholders   
$ 0.075   
$ 0.110   
$ 0.077   
$ 0.188
    FFO -- Basic        0.157        0.164        0.244        0.295
    Distributions per Class A share        0.111        0.071        0.222        0.140
    Distributions per Class B share        0.209   -        0.392    -
            
Weighted average number of class A common shares outstanding   

2,790,492   

2,364,807   

2,779,434   

2,358,283
            
Weighted average number of class B common shares outstanding   

2,100,638
             -   

2,273,849   

             -
            

Balance Sheet Highlights
(Unaudited)

   As of June 30,
   2003   2002
Total property, net    $ 50,033,640    $ 28,836,524
Net investment in direct financing leases       27,155,700        16,895,057
Total assets       80,440,990        48,365,670
Notes payable       40,996,381        26,429,521
Total liabilities       42,152,009        27,060,210
Minority interest            800,570           5,657,132
Total shareholders equity       37,488,411        15,651,328

Non-GAAP Financial Disclosure
(Unaudited)

This press release contains certain non-GAAP financial measures that management believes are useful in evaluating an equity REITs performance. AmREITs definitions and calculations of non-GAAP financial measures may differ from those used by other equity REITs, 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 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 further adjusts FFO by adding back non-cash charges to earnings related to the issuance of stock in conjunction with the payment of deferred merger costs, resulting in its adjusted FFO. 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 companys 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 and adjusted FFO as disclosed by other REITs may not be comparable to AmREITs 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:

   3Q2003 Range      2003 Range
   Low   High      Low   High
Projected net income available to class A shareholders   
$ 0.080   
$ 0.090      
$ 0.230   
$ 0.250
Projected depreciation and amortization    0.077    0.077       0.310    0.310
Projected FFO   $ 0.157   $ 0.167      $ 0.540   $ 0.560