Florida East Coast Industries Inc
Florida East Coast Industries — Q3 2006 Earnings Presentation
36 slides from Florida East Coast Industries's earnings presentation, Nov 2, 2006
Slide 1: Third Quarter 2006 Earnings Review
October 31, 2006 Florida East Coast Industries, Inc. Third Quarter 2006 Earnings Review Exhibit 99.1 November 2, 2006
Slide 2: Company Snapshot
RAILROAD REAL ESTATE Company Snapshot Florida East Coast Industries A Florida Railroad and Real Estate Company > Regional freight railroad that operates 351 miles of main line track with the most direct route from Jacksonville to Miami and provides intermodal drayage services in the Southeast U.S. >
Slide 3: Forward-Looking Statements
Florida East Coast Industries, Inc. Forward-Looking Statements This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, asamended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements includ
Slide 4: Adolfo Henriques, Chairman, President & CEO
FLORIDA EAST COAST INDUSTRIES, INC. Adolfo Henriques Chairman, President & CEO
Slide 5: Third Quarter Overview – Railway
Third Quarter Overview Railway • Revenues increased 6% to $63.4 million • Operating profit increased $5.6 million to $22.1 million • Lower volumes • Operating Profit includes $5.8 million of net insurance recoveries related to Hurricane Wilma
Slide 6: Third Quarter Overview – Real Estate
Third Quarter Overview Real Estate • Realty rental revenues increased 17% to $25.5 million • Realty rental operating profit before depreciation & amortization increased $3.7 million, or 26%, to $18.2 million • Results include $2.4 million net insurance recoveries related to Hurricane Wilma • Overall
Slide 7: Railway – Aggregate Volumes and Revenues
Railway – Aggregate Volumes and Revenues • Aggregate volume down 4% and revenue up 2% • Volume decline mainly due to residential slowdown • Customers are shifting demand from residential to infrastructure and commercial sectors • Recent ruling affecting rock mining in South Florida could impact aggr
Slide 8: Railway – Continued Intermodal Revenue Growth
Railway – Continued Intermodal Revenue Growth • Intermodal volume down 1% and revenue up 9% • Volume decline due to hurricane benefit last year and general economic softness this year • Florida’s shape and growth supports the value proposition of rail transportation • Rail provides a direct, more co
Slide 9: Railway Outlook
Railway Outlook • Florida continues to be one of the fastest growing states in the US • Softening residential market partially offset by higher commercial and infrastructure growth • FECR is a well-run railroad generating consistent cash flow • Advantage is location, which cannot be duplicated today
Slide 10: Development Group
Flagler Development Group Doral Concourse, Doral, FL
Slide 11: Development Pipeline
Flagler Development Pipeline • Overall Occupancy: 94% • 678,000 square feet in lease-up • 74% leased • 1.1 million square feet under construction • 1.7 million square feet in pre-development
Slide 12: Development Activity – North Florida
Flagler Development Activity – North Florida • Lakeside Two – 100% Leased • Lakeside One – 112,306 sq. ft. to be completed December • Lakeside One - 63% Leased • Construction on Lakeside Three to commence with completion expected in September 2007 Lakeside One, Flagler Center, Jacksonville, Florida
Slide 13: Development Activity – North Florida
Flagler Development Activity – North Florida • Terminated 59,690 sq. ft. lease with Option One • Fidelity Real Estate Company, LLC, a subsidiary of Fidelity Investments, leased 77,919 sq. ft. in August • Deerwood North 400 now 100% leased Deerwood North 400, Jacksonville, Florida
Slide 14: Development Activity – South Florida
Flagler Development Activity – South Florida • ??? • 118,723 sq. ft. completed August 2006 • 80% leased as of September 30, 2006 • Commenced construction of Building 1200 with completion expected in June 2007 Office Building 1100 at Flagler Station, Miami, Florida
Slide 15: Development Activity – South Florida
Flagler Development Activity – South Florida Beacon Lakes, Miami, Florida • 605,620 sq. ft. of warehouse space 93% leased • Building 7 commenced August • First industrial condo building in Village (E-1) – 75% under contract
Slide 16: Development Activity – South Florida
Flagler Development Activity – South Florida • Mixed use project to include: • 2,840 residential units • 180,000 sq ft retail space • 400,000 sq ft new class “A” office space • Built in phases as the market demands. The project's initial phase includes a 66,000 square foot class “A” office condomini
Slide 17: Florida's Dynamics are Driving Growth for Flagler
Florida ’ s Dynamics are Driving Growth for Flagler • Overall Florida economy is the fastest-growing among the 10 largest states • Leading the US in job creation – added over 250,000 jobs in 2005 • Population growth is driving demand • Office/retail development follow new residents – population grow
Slide 18: Daniel H. Popky, Chief Financial Officer
FLORIDA EAST COAST INDUSTRIES, INC . Daniel H. Popky Chief Financial Officer
Slide 19: Florida East Coast Railway
FLORIDA EAST COAST RAILWAY
Slide 20: Railway Revenue Growth
Railway Revenue Growth $59.9 $1.0 $63.4 $2.5 Q3 Carload Intermodal Q3 Third Quarter - in Millions +3.3% +9.0% +5.8%
Slide 21: Railway Revenue Growth Detail
Railway Revenue Growth Detail $59.9 $63.4 ($1.6) $2.3 $2.8 Q3 Volume Rate & Mix Fuel Recovery Q3 Third Quarter - in Millions (2.7%) +3.8% +4.7% +5.8%
Slide 22: Railway Operating Profit Growth
Railway Operating Profit Growth Q3 Hurricane Recoveries, Net of Costs (1) Derailment Cost, Net of Insurance All Other Q3 Third Quarter - in Millions $16.5 $6.1 ($0.3) ($0.2) $22.1 (1) Third quarter 2006 includes $5.8 million of hurricane recoveries, net of expenses, and third quarter 2005 includes $
Slide 23: Updated 2006 Railway Outlook
Updated 2006 Railway Outlook Revenues Operating Profit (1) Includes insurance recoveries, net of expenses, related to Hurricane Wilma of $5.3 million Full Year – In Millions 11-16% 24-27% $237.9 $265-$275 $63.7 $79-$81 (1)
Slide 24: Railway Capital Expenditures
Railway Capital Expenditures 2006 Outlook $30 $27 $30 $39 (1) $42-$47 (2) Maintenance capital Productivity & growth capital * (in millions) *Before the purchase of any strategic land parcels to be used for industrial development (1)Productivity and growth capital includes $5.1 million of land purcha
Slide 25: Flagler Development Group
FLAGLER DEVELOPMENT GROUP Office Building 1100 At Flagler Station Miami, FL
Slide 26: Rental & Services Revenue Growth
Flagler Rental & Services Revenue Growth Q3 Operating Properties Q3 Third Quarter - in Millions $41.4 +85.7% $3.6 $22.3 Realty Services (1) $15.5 (1) Includes construction, brokerage, property management and development revenues from Codina Group.
Slide 27: Realty Rental Revenue Growth
Flagler Realty Rental Revenue Growth Q3 New in ’05/’06 Q3 Third Quarter - in Millions $25.5 +16.7% $2.9 $21.9 Same Store $0.7
Slide 28: Realty Rental Operating Profit Before D&A Growth
Flagler Realty Rental Operating Profit Before Depreciation & Amortization* Growth Q3 Same Store New in ’05/’06 Q3 Third Quarter - in Millions $18.2 +25.5% $2.0 $1.7 (1) $14.5 * See page 36 for reconciliation of non-GAAP measures. (1) Includes $2.4 million net gain on insurance recoveries related to
Slide 29: Realty Segment Operating Profit
Realty Segment Operating Profit $6.4 $5.7 Realty Operating Profit (3.5) (7.9) (2) Land and Overhead 0.3 0.7 Other Realty Rental 2.2 0.7 Realty Sales 0.1 1.4 Realty Services $7.3 $10.8 (1) Realty Rental Operating Profit: Third Quarter Third Quarter - in Millions (1) Includes $2.5 million net gain fro
Slide 30: Occupancy and Leasing Activity
Flagler Occupancy and Leasing Activity (1) 2003 and 2004 leasing activity represents quarterly averages. 92.5% 94.2% 95.0% 95.1% 95.2% 94.9% 94.0% 87.2% 94.7% -10 2003(1) 2004(1) 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 84.0% 86.0% 88.0% 90.0% 92.0% 94.0% 96.0% Square Feet Leased Overall Occupancy
Slide 31: Lease Expirations
Flagler Lease Expirations 3,214 1,842 7.3% 11.9% 23.6% 41.1% 3.8% 12.4% Remainder 2011and Beyond 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% Total Square Feet Expiring % of Total Portfolio
Slide 32: Revised 2006 Flagler Outlook
Revised 2006 Flagler Outlook Full Year – In Millions Realty Rental Revenues Realty Rental Operating Profit before Depreciation & Amortization* (1) Includes insurance recoveries, net of expenses, related to Hurricane Wilma of $1.9 million. * See page 36 for reconciliation of non-GAAP measures 8 - 13%
Slide 33: Capital Investments
Flagler Capital Investments Outlook* Existing Operating Properties Infrastructure Investments in Joint Ventures Acquisition New Building Construction $27.0 $75.0 $80.0 $132.7 $100-$120 (in millions) * Excludes land acquisitions
Slide 34: Condensed Consolidated Statements of Cash Flows
Condensed Consolidated Statements of Cash Flows 19.1 10.2 Proceeds from exercise of options - 4.8 Other - 0.6 Investment by minority interest - (8.5) Investments in joint ventures - (65.8) Acquisition of Codina Group $58.8 $ 17.2 Cash and cash equivalents at end of period 126.2 76.0 Cash and cash eq
Slide 35: Looking Forward
Looking Forward . • Florida economy remains strong • Strategic position provides strong competitive advantage • Railway management team focused on a safe, profitable railway • Real estate team focused on capturing demand and maximizing property values through entitlement process
Slide 36: Reconciliation of Non-GAAP to GAAP Measures
Reconciliation of Non-GAAP to GAAP Measures $14.5 7.2 7.3 $22.0 5.5 $16.5 Q305 $18.2 7.4 10.8 $27.7 5.6 $22.1 Q306 $85.5 $67.5 $62.6 $59.9 Railway Segment ’ s operating profit before depreciation $61-$64 $55.8 $44.8 $40.1 $38.8 Realty rental properties ’ operating profit before D&A expense 28.2 $23.
Florida East Coast Industries — Q3 2006 Earnings Presentation on 6ix