SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RECKSON ASSOCIATES REALTY CORP.
By: /s/ Michael Maturo
---------------------------------------------
Michael Maturo
President, Chief Financial Officer and
Treasurer
RECKSON OPERATING PARTNERSHIP, L.P.
By: Reckson Associates Realty Corp.,
its General Partner
By: /s/ Michael Maturo
---------------------------------------------
Michael Maturo
President, Chief Financial Officer and
Treasurer
Date: May 4, 2006
3
PRESS RELEASE
- -------------
Reckson Associates Realty Corp.
225 Broadhollow Road
Melville, NY 11747
(631) 694-6900 (Phone)
(631) 622-6790 (Facsimile)
Contact: Scott Rechler, CEO
Michael Maturo, President and CFO
- ------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
- ---------------------
Reckson Announces First Quarter 2006 Results
--------------------------------------------
(MELVILLE, NEW YORK, May 3, 2006) - Reckson Associates Realty Corp. (NYSE: RA)
today reported diluted funds from operations (FFO) of $47.6 million, or $0.56
per share for the first quarter of 2006 including a $3.6 million, or $0.04 per
share charge recognized in connection with Reckson's long-term incentive
compensation plan. When adjusted for this charge the Company reported diluted
FFO of $51.2 million, or $0.60 per share for the first quarter of 2006. This
compares to diluted FFO of $46.4 million, or $0.55 per share for the first
quarter of 2005.
Reckson reported net income of $57.7 million, or diluted earnings per share
(EPS) of $0.69 for the first quarter of 2006 including $43.6 million related
to gains on sales of real estate and a $3.5 million charge for the
aforementioned compensation plan, as compared to $17.4 million, or diluted EPS
of $0.21 for the first quarter of 2005.
Commenting on the Company's performance, Scott Rechler, Reckson's Chief
Executive Officer, stated, "During this quarter, we further positioned
ourselves to capitalize on our strengthening market conditions. We have
approximately 1.0 million square feet of premium CBD space scheduled to expire
at average rents that are approximately 30% below market; almost 1.0 million
square feet of irreplaceable redevelopment and repositioning opportunities;
and approximately 650,000 square feet of premier, in-fill development
projects. We are well positioned to deliver on these opportunities through the
end of 2007."
Michael Maturo, Reckson's President and Chief Financial Officer, added, "Our
markets have experienced significant cap rate compression and increased
property valuations even as interest rates have continued to rise. We have
maintained our investment discipline and capitalized on this environment by
accelerating our disposition program. During the past two quarters we have
sold or contracted to sell over $1.0 billion of properties or interest in
properties including approximately $170.0 million during the first quarter.
While these activities are dilutive to earnings in the short term, we believe
that they are accretive in the long-term as we strengthen our balance sheet
and invest in higher quality
properties with more attractive growth prospects and into our robust value
creation pipeline."
A reconciliation of net income to FFO is in the financial statements
accompanying this press release. Net income is the GAAP measure the Company
believes to be the most directly comparable to FFO.
Summary Portfolio Performance
- -----------------------------
Occupancy Statistics:
Same Property Overall
----------------------------------------- ----------------------------------
Quarter End Economic (1) Quarter End
------------------ -------------------- ----------------------------------
3/31/06 12/31/05 1Q'06 4Q'05 3/31/06 12/31/05 3/31/05
------- -------- --------- --------- ------- -------- -------
Total Occupancy:
Office 92.4% 92.4% 91.0% 91.3% 92.3% (2) 92.3% (2) 94.5%
Portfolio 91.7% 91.7% 90.2% 90.4% 91.5% (2) 91.5% (2) 93.5%
Based on Pro Rata Ownership:
Office 91.2% 91.2% 88.6% 89.9% 91.0% (2) 91.0% (2) 94.2%
Portfolio 90.7% 90.7% 88.0% 89.2% 90.5% (2) 90.1% (2) 93.1%
(1) Economic occupancy calculated based on weighted average space generating rental revenue on a straight line basis.
(2) Includes Eastridge portfolio acquired on December 29, 2005.
Office same property net operating income (property operating revenues less
property operating expenses) (NOI), on a pro rata ownership basis, before
termination fees, for the first quarter of 2006 increased 1.3% (on a
straight-line rent basis) and 1.6% (on a cash basis) compared to the first
quarter of 2005. Excluding the effect of the 1185 Avenue of the Americas
ground rent expense office same property NOI, on a pro rata ownership basis,
before termination fees, for the first quarter of 2006 increased 5.2% (on a
cash basis) compared to the first quarter of 2005. Portfolio same property
NOI, on a pro rata ownership basis, before termination fees, for the first
quarter of 2006 increased 2.0% (on a straight-line rent basis) and 2.2% (on a
cash basis) compared to the first quarter of 2005.
Office same property NOI, on an overall basis, before termination fees, for
the first quarter of 2006 increased 2.3% (on a straight-line rent basis) and
2.1% (on a cash basis) compared to the first quarter of 2005. Portfolio same
property NOI, on an overall basis, before termination fees, for the first
quarter of 2006 increased 2.9% (on a straight-line rent basis) and 2.6% (on a
cash basis) compared to the first quarter of 2005.
Other Highlights
- ----------------
Leasing Activity
- ----------------
- Executed 57 lease transactions encompassing 370,876 square feet
during the first quarter of 2006
- Office leasing transactions executed during the first quarter of
2006 resulted in a 57% renewal rate
- Rent performance on renewal and replacement space, on a
consolidated basis, during the first quarter of 2006 increased
8.8% (on a straight-line rent basis) and 1.2% (on a cash basis) in
the office portfolio. Rent performance on renewal and replacement
space, on a consolidated basis, for the 12 months ended March 31,
2006 increased 13.2% (on a straight-line rent basis) and 2.0% (on
a cash basis) in the office portfolio.
Disposition Activity
- --------------------
- Sold One Orlando Center, a 355,000 square foot office building,
located at 800 North Magnolia Avenue, Orlando, Florida, for $70.0
million, or approximately $197 per square foot, representing a
cash NOI yield of approximately 5.3%. This non-strategic operating
asset is located outside of Reckson's core New York Tri-State
area markets. Reckson reported a GAAP gain of approximately $9.3
million on the sale. Net proceeds from the sale were used to
establish an escrow account with a qualified intermediary for a
future Section 1031 Exchange.
- Sold Three Gannett Drive, a 161,000 square foot office building,
located in Westchester, for $35.3 million, or approximately $219
per square foot, representing a cash NOI yield of approximately
5.7%. This non-core real estate holding was acquired in December
2005 as part of Reckson's acquisition of a 14 building office
portfolio concentrated within five business parks in Westchester.
- Closed tranche II of the Australian listed property trust
transaction with Reckson New York Property Trust (the Trust) (ASX:
RNY), a Reckson-sponsored Australian listed property trust. In the
tranche II closing, Reckson sold three suburban core plus
properties containing approximately 760,000 square feet for
approximately $84.6 million, including the assignment of
approximately $20.1 million of mortgage debt. In connection with
the closing of tranche II, approximately $25.1 million of the net
proceeds were used to establish an escrow account with a qualified
intermediary for a future Section 1031 Exchange.
- Sold Reckson's option to acquire the existing minority partner's
40% interest in the Omni property, a 96% leased office property
located in Mitchel Field, Uniondale, Long Island, for net proceeds
of approximately $9.0 million to a group of institutional
investors led by JPMorgan Investment Management, Reckson's joint
venture partner in One Court Square, Long Island City and 919
Third Avenue, New York City. In connection with this transaction,
the original minority partner repaid to Reckson approximately
$22.1 million, including accrued interest, under a 12.0% per
annum, $17.0 million note receivable investment which was secured
by their interest in the Omni.
Development Activity
- --------------------
- Lighthouse Development Group, LLC, a joint venture between Reckson
and the owner of the New York Islanders (NHL) and NY Dragons
(AFL), was selected by the Nassau County Executive for the
redevelopment of the Nassau County Coliseum complex.
Capital Market Activity
- -----------------------
- Completed an offering of $275 million of ten-year 6.00% senior
unsecured notes due March 31, 2016. Interest on the notes is
payable semi-annually on May 15 and November 15, commencing May
15, 2006. The notes were priced at 99.857% of par value to yield
6.02%.
Management Appointments
- -----------------------
- Announced management appointments and several promotions from
within the Company's talented management team.
o Michael Maturo has been appointed President of the Company,
in addition to his current role as Chief Financial Officer
and Treasurer and has joined the Company's board of
directors; Jason Barnett has been appointed Senior Executive
Vice President Corporate Initiatives in addition to his role
as General Counsel and Secretary; Richard Conniff will now
serve as Chairman of the Investment Committee in addition to
his current role of Corporate Senior Vice President
Investments. In addition to continuing their current roles,
Todd Rechler, Corporate Senior Vice President and Managing
Director, New Jersey, and Matthew Frank, Senior Vice
President Development and Design, will now also serve as
Co-Chairman of the Development Committee, better positioning
Reckson for its anticipated increase in development
activity.
o Frank Adipietro has joined the Company as Senior Vice
President Joint Ventures and Alternative Investments. Mr.
Adipietro will be responsible for sourcing, underwriting and
closing joint venture and alternative investments including
structured finance and preferred equity investments,
ground-up developments, core plus investments with joint
venture capitalization and special projects; underwriting
and closing disposition transactions; maintaining
relationships with the Reckson's joint venture partners; and
the internal integration of joint venture and alternative
investments. Mr. Adipietro brings nearly 20 years of real
estate related experience to his new Reckson position.
o David Sims has joined Reckson as Senior Vice President and
Managing Director of the Westchester/Connecticut division.
Mr. Sims joins Reckson with over 35 years of real estate
industry experience with the majority of his
career spent at several real estate companies including
Olympia and York, Mendik Realty Company, Vornado and most
recently CB Richard Ellis.
- Reckson will be launching a fully redesigned web site on May
15, 2006 at which time you can visit the new site at
www.reckson.com.
Earnings Guidance
- -----------------
During the Company's quarterly earnings conference call on May 4, 2006
management will discuss earnings guidance for 2006 diluted FFO in the range of
$2.36 to $2.40 per share and 2007 diluted FFO in the range of $2.60 to $2.80
per share.
2006 guidance reflects(1):
- Accelerated disposition program and slower re-investment
activities
- Delay in investing or repaying debt with 1031 proceeds currently
held by a qualified intermediary
- Deferral of forecast to repatriate approximately $50 million of
funds from RSVP until the end of 2006
- Higher general and administrative costs associated with expansion
of management personnel, increase in salaries and increase in
equity compensation cost
- $275 million bond transaction which was upsized and completed
earlier than anticipated
- Forecasts for additional downtime as the Company is experiencing
longer build out periods on executed leases and slower lease-up of
an abnormally high inventory of small suburban units
2007 results will benefit from the execution of the Company's leasing strategy
and active value creation pipeline.(1)
(1) This guidance does not include contingent and undetermined impact of the
special outperformance long-term incentive plan which vests on March 13, 2007
subject to achieving certain performance criteria.
Reconciliation of Earnings Guidance
- -----------------------------------
The Company's guidance for diluted FFO is reconciled from GAAP net income
below:
Full Year 2006 Full Year 2007
-------------- --------------
Low End High End Low End High End
------- -------- ------- --------
Net income $1.69 $1.73 $0.98 $1.18
Add: Real estate depreciation and amortization 1.62 1.62 1.62 1.62
Less: Gains on sales of depreciable real estate 0.95 0.95 0.00 0.00
------- -------- ------- --------
Diluted FFO Per Share $2.36 $2.40 $2.60 $2.80
======= ======== ======= ========
This guidance is based upon management's current estimates. Actual results may
differ materially. This information involves forward-looking statements which
are subject to uncertainties noted below in the section titled Forward-Looking
Statements.
Non-GAAP Financial Measures
- ---------------------------
Funds from Operations (FFO)
- ---------------------------
The Company believes that FFO is a widely recognized and appropriate measure
of performance of an equity REIT. The Company presents FFO because it
considers it an important supplemental measure of the Company's operating
performance and believes it is frequently used by securities analysts,
investors and other interested parties in the evaluation of REITs, many of
which present FFO when reporting their results. FFO is intended to exclude
GAAP historical cost depreciation and amortization of real estate and related
assets, which assumes that the value of real estate diminishes ratably over
time. Historically, however, real estate values have risen or fallen with
market conditions. As a result, FFO provides a performance measure that, when
compared year over year, reflects the impact to operations from trends in
occupancy rates, rental rates, operating costs, development activities,
interest costs and other matters without the inclusion of depreciation and
amortization, providing perspective that may not necessarily be apparent from
net income. The Company computes FFO in accordance with standards established
by the National Association of Real Estate Investment Trusts (NAREIT). FFO is
defined by NAREIT as net income or loss, excluding gains or losses from sales
of depreciable properties plus real estate depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures. FFO does
not represent cash generated from operating activities in accordance with GAAP
and is not indicative of cash available to fund cash needs. FFO should not be
considered as an alternative to net income as an indicator of the Company's
operating performance or as an alternative to cash flow as a measure of
liquidity. Since all companies and analysts do not calculate FFO in a similar
fashion, the Company's calculation of FFO presented herein may not be
comparable to similarly titled measures as reported by other companies.
Reckson Associates Realty Corp. is a self-administered and self-managed real
estate investment trust (REIT) specializing in the acquisition, leasing,
financing, management and development of Class A office properties.
Reckson's core growth strategy is focused on properties located in New York
City and the surrounding Tri-State area markets. The Company is one of the
largest publicly traded owners, managers and developers of Class A office
properties in the New York Tri-State area, and wholly owns, has substantial
interests in, or has under contract, a total of 102 properties comprised of
approximately 20.2 million square feet. For additional information on Reckson
Associates Realty Corp., please visit the Company's web site at
www.reckson.com.
Conference Call and Webcast
- ---------------------------
The Company's executive management team, led by Chief Executive Officer Scott
Rechler, will host a conference call outlining first quarter results on May 4,
2006 at 12:00 p.m. ET. The conference call may be accessed by dialing (800)
230-1766 (internationally (612) 288-0318). No passcode is required. The live
conference call will also be webcast in a listen-only mode on the Company's
web site at www.reckson.com, in the Investor Relations section, with an
accompanying slide show presentation outlining the Company's first quarter
results.
A replay of the conference call will be available telephonically from May 4,
2006 at 5:30 p.m. ET through May 12, 2006 at 11:59 p.m. ET. The telephone
number for the replay is (800) 475-6701, passcode 824253. A replay of the
webcast of the conference call will also be available via the Company's web
site.
Financial Statements Attached
- -----------------------------
The Supplemental Package and Slide Show Presentation outlining the Company's
first quarter 2006 results will be available prior to the Company's quarterly
conference call on the Company's web site at www.reckson.com in the Investor
Relations section, by e-mail to those on the Company's distribution list, as
well as by mail or fax, upon request. To be added to the Company's e-mail
distribution list or to receive a copy of the quarterly materials by mail or
fax, please contact Susan McGuire, Senior Vice President Investor Relations,
Reckson Associates Realty Corp., 225 Broadhollow Road, Melville, New York
11747-4883, investorrelations@reckson.com or (631) 622-6746.
Forward-Looking Statements
- --------------------------
Certain matters discussed herein, including guidance concerning the Company's
future performance, are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.
Although the Company believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions,
forward-looking statements are not guarantees of results and no assurance can
be given that the expected results will be delivered. Such forward-looking
statements are subject to certain risks, trends and uncertainties that could
cause actual results to differ materially from those expected.
Among those risks, trends and uncertainties are the general economic climate,
including the conditions affecting industries in which our principal tenants
compete; financial condition of our tenants; changes in the supply of and
demand for office properties in the New York Tri-State area; changes in
interest rate levels; changes in the Company's credit ratings; changes in the
Company's cost of and access to capital; downturns in rental rate levels in
our markets and our ability to lease or re-lease space in a timely manner at
current or anticipated rental rate levels; the availability of financing to us
or our tenants; changes in operating costs, including utility, real estate
taxes, security and insurance costs; repayment of debt owed to the Company by
third parties; risks associated with joint ventures; liability for uninsured
losses or environmental matters; and other risks associated with the
development and acquisition of properties, including risks that development
may not be completed on schedule, that the tenants will not take occupancy or
pay rent, or that development or operating costs may be greater than
anticipated. For further information on factors that could impact Reckson,
reference is made to Reckson's filings with the Securities and Exchange
Commission. Reckson undertakes no responsibility to update or supplement
information contained in this press release.
Reckson Associates Realty Corp.(NYSE: RA)
Consolidated Balance Sheets
(in thousands, except share amounts)
March 31, December 31,
2006 2005
------------ ------------
Assets:
Commercial real estate properties, at cost:
Land $ 428,354 $ 430,064
Buildings and improvements 2,885,208 2,823,020
Developments in progress:
Land 126,016 123,761
Development costs 116,088 99,570
Furniture, fixtures, and equipment 12,942 12,738
------------ ------------
3,568,608 3,489,153
Less: accumulated depreciation (559,727) (532,152)
------------ ------------
Investments in real estate, net of accumulated depreciation 3,008,881 2,957,001
Properties and related assets held for sale, net of accumulated depreciation 67,251 194,297
Investments in real estate joint ventures 46,724 61,526
Investments in mortgage notes and notes receivable 169,025 174,612
Investments in affiliate loans and joint ventures 60,181 59,324
Cash and cash equivalents 42,635 17,468
Tenant receivables 16,281 20,196
Deferred rents receivable 144,419 138,990
Prepaid expenses and other assets 179,787 109,197
Contract and land deposits and pre-acquisition costs 313 184
Deferred leasing and loan costs (net of accumulated amortization) 83,063 78,411
------------ ------------
Total Assets $ 3,818,560 $ 3,811,206
============ ============
Liabilities:
Mortgage notes payable $ 466,682 $ 541,382
Unsecured credit facility 180,000 419,000
Senior unsecured notes 1,254,808 980,085
Mortgage notes payable and other liabilities associated with
properties held for sale 63,955 84,572
Accrued expenses and other liabilities 114,916 120,994
Deferred revenues and tenant security deposits 73,301 75,903
Dividends and distributions payable 36,476 36,398
------------ ------------
Total Liabilities 2,190,138 2,258,334
------------ ------------
Minority partners' interests in consolidated partnerships 263,663 217,705
Preferred unit interest in the operating partnership 1,200 1,200
Limited partners' minority interest in the operating partnership 35,663 33,498
------------ ------------
300,526 252,403
------------ ------------
Commitments and contingencies - -
Stockholders' Equity:
Preferred Stock, $.01 par value, 25,000,000 shares authorized - -
Common Stock, $.01 par value, 200,000,000 shares authorized
83,196,326 and 82,995,931 shares issued and outstanding, respectively 832 830
Accumulated other comprehensive income 2,269 1,819
Treasury Stock, 3,318,600 shares (68,492) (68,492)
Retained earnings 79,241 56,868
Additional paid in capital 1,314,046 1,309,444
------------ ------------
Total Stockholders' Equity 1,327,896 1,300,469
------------ ------------
Total Liabilities and Stockholders' Equity $ 3,818,560 $ 3,811,206
============ ============
Total debt to market capitalization (a): 34.0% 40.1%
============ ============
- -----------------------
(a) Total debt includes the Company's pro rata share of consolidated and unconsolidated joint venture debt.
Reckson Associates Realty Corp. (NYSE: RA)
Consolidated Statements of Income
(in thousands, except share amounts)
Three Months Ended
March 31,
-----------------------
2006 2005
-----------------------
Property Operating Revenues:
Base rents $ 116,085 $ 112,410
Tenant escalations and reimbursements 19,068 17,778
-----------------------
Total property operating revenues 135,153 130,188
-----------------------
Property Operating Expenses:
Operating expenses 35,984 31,406
Real estate taxes 24,251 21,334
-----------------------
Total property operating expenses 60,235 52,740
-----------------------
Net Operating Income 74,918 77,448
-----------------------
Gross Margin percentage 55.4% 59.5%
-----------------------
Other Income:
Gains on sale of real estate 35,393 -
Interest income on mortgage notes and notes receivable 5,499 2,447
Interest, investment income and other 12,077 682
Equity in earnings of real estate joint ventures 396 151
-----------------------
Total other income 53,365 3,280
-----------------------
Other Expenses:
Interest:
Expense 27,989 23,566
Amortization of deferred financing costs 1,122 991
Depreciation and amortization 32,836 28,419
Marketing, general and administrative 9,482 7,995
Long-term incentive compensation expense 3,623 -
-----------------------
Total other expenses 75,052 60,971
-----------------------
Income from continuing operations before minority interests and
discontinued operations 53,231 19,757
Minority partners' interests in consolidated partnerships (4,096) (3,779)
Limited partners' minority interest in the operating partnership (1,549) (692)
-----------------------
Income before discontinued operations 47,586 15,286
Discontinued operations, net of minority interests:
Gains on sales of real estate 9,286 -
Income from discontinued operations 870 2,070
-----------------------
Net income $ 57,742 $ 17,356
=======================
Basic net income per weighted average common share:
Common stock - income from continuing operations $ 0.17 $ 0.18
Gains on sales of real estate 0.41 -
Discontinued operations 0.12 0.03
-----------------------
Basic net income per common shares $ 0.70 $ 0.21
=======================
Basic weighted average common shares outstanding 83,068,000 81,100,000
=======================
Diluted net income per weighted average common share $ 0.69 $ 0.21
=======================
Diluted weighted average common shares outstanding 83,584,000 81,521,000
=======================
Reckson Associates Realty Corp. (NYSE: RA)
Funds From Operations
(in thousands, except per share amounts)
Three Months Ended
March 31,
--------------------------
2006 2005
--------------------------
Net income $ 57,742 $ 17,356
Add: Real estate depreciation and amortization 32,151 27,313
Minority partners' interests in consolidated partnerships 7,234 6,712
Limited partners' minority interest in the operating
partnership 1,440 697
Less: Amounts distributable to minority partners in
consolidated partnerships 6,345 5,724
Gains on sales of depreciable real estate 44,669 -
--------------------------
Basic and Diluted Funds From Operations ("FFO") $ 47,553 $ 46,354
==========================
Diluted FFO calculations:
Weighted average common shares outstanding 83,068 81,100
Weighted average units of limited partnership interest
outstanding 2,026 3,213
--------------------------
Basic weighted average common shares and units outstanding 85,094 84,313
Adjustments for dilutive FFO weighted average shares and
units outstanding:
Common stock equivalents 516 421
Limited partners' preferred interest 41 41
--------------------------
Total diluted weighted average shares and units outstanding 85,651 84,775
==========================
Diluted FFO per weighted average share or unit $ 0.56 $ 0.55
Diluted weighted average dividends per share $ 0.42 $ 0.42
Diluted FFO payout ratio 76.5% 77.7%
FFO Data excluding non recurring charges:
Diluted FFO per weighted average share or unit $ 0.60 $ 0.55
Diluted weighted average dividends per share $ 0.42 $ 0.42
Diluted FFO payout ratio 71.1% 77.7%
- ----------------------------------------------------------------------------------------------
Reckson Associates Realty Corp. (NYSE: RA)
Cash Available for Distribution
(in thousands, except per share amounts)
Three Months Ended
March 31,
--------------------------
2006 2005
--------------------------
Basic Funds From Operations $ 47,553 $ 46,354
Less: Straight line rents and other FAS 141 non-cash rent
adjustments 8,079 7,926
Committed non-incremental capitalized tenant
improvements and leasing costs 7,150 10,769
Actual non-incremental capitalized improvements 2,185 3,015
Add: Amortization of equity grants (a) 5,615 1,486
--------------------------
Basic and Diluted Cash Available for Distribution ("CAD") $ 35,754 $ 26,130
==========================
Diluted CAD calculations:
Weighted average common shares outstanding 83,068 81,100
Weighted average units of limited partnership interest
outstanding 2,026 3,213
--------------------------
Basic weighted average common shares and units outstanding 85,094 84,313
Adjustments for dilutive CAD weighted average shares and
units outstanding:
Common stock equivalents 516 421
Limited partners' preferred interest 41 41
--------------------------
Total diluted weighted average shares and units outstanding 85,651 84,775
==========================
Diluted CAD per weighted average share or unit $ 0.42 $ 0.31
Diluted weighted average dividends per share $ 0.42 $ 0.42
Diluted CAD payout ratio 101.8% 137.8%
- -----------------------------------------------------------------------------------------------
(a)- Includes estimated charge of $3.6 million related to a long-term incentive compensation plan for the quarterly period
ended March 31, 2006.
