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Cogdell Spencer also announced that its Board has approved a business planfor 2009 that focuses on cost reductions and the preservation of capital forproductive deployment while allowing the Company to pursue its integrateddelivery strategy despite client-related project delays resulting from thecurrent financial crisis.
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As part of this plan, Cogdell Spencer will
-- Implement a cost saving plan which, when combined with a reduction inforce, will generate approximately $17 million in annual savings. The planincludes elimination of all executive incentive compensation for the 2009fiscal year, unless budgeted benchmarks are substantially exceeded. TheErdman subsidiary will implement a reduction in force in order to right-sizethe organization for contracted 2009 revenues. The staff reduction will bemade effective January 6-9, 2009. Approximately 115 jobs will be eliminated.
-- Reduce its dividend from an annual equivalent of $1.40 per share andunit ($0.35 per share and unit per quarter) to an annual equivalent of $0.90per share and unit ($0.225 per share and unit per quarter).
Commenting on these steps, CEO Frank Spencer said, "We believe theseactions will meaningfully enhance our operating and financial flexibility,better position us to serve our clients and provide us with added capital tomeet our on-going financial obligations. It is never easy to eliminate jobs,but we have enough visibility on our design/build pipeline to adjust inadvance."
As a part of the plan, Cogdell Spencer has placed a mortgage on otherwiseunencumbered East Jefferson Medical Plaza, generating approximately $11.4million in cash. The cash will be used to meet ongoing working capital needsand to fund committed investments. "We continue to find attractivedevelopment opportunities, even in this environment," Frank Spencer said. "Weare being very selective, demanding significant pre-leasing and committedconstruction loans before investing our equity." The company will hold aconference call to discuss the business plan for 2009 on December 30, 2008 at9:00 AM EST. Interested parties may dial in at (800) 860-2442 (domestic) or(412) 858-4600 (international), no passcode required. In addition, theconference call can be accessed via the Internet at www.cogdellspencer.comthrough the "2009 Management Plan" link on the Investor Relations page.
A playback is available at (877) 344-7529 (domestic) or (412) 317-0088(international) and entering the conference ID number: 426609. The replay canalso be accessed via the Internet at www.cogdellspencer.com through the "2009Management Plan" link on the Investor Relations page.
About Cogdell Spencer Inc.
Charlotte-based Cogdell Spencer Inc. (NYSE: CSA) is a fully-integrated,self-administered, and self-managed real estate investment trust ("REIT") thatinvests in specialty office buildings for the medical profession, includingmedical offices and ambulatory surgery and diagnostic centers. The Companyfocuses on the ownership, development, redevelopment, acquisition, andmanagement of strategically located medical office buildings and otherhealthcare related facilities in the United States of America. Erdman, ACogdell Spencer Company, provides service offerings including advancedplanning, architecture, engineering and construction, and development. TheCompany has been built around understanding and addressing the full range ofspecialized real estate needs of the healthcare industry.
At present, the Company's portfolio consists of 62 consolidated wholly-owned properties and joint venture properties, three unconsolidated jointventure properties, and 52 managed medical office buildings. For moreinformation on Cogdell Spencer Inc., please visit the Company's Web site atwww.cogdellspencer.com.
Forward-Looking Statements
This document contains forward-looking statements within the meaning ofthe Private Securities Litigation Reform Act of 1995. The forward-lookingstatements reflect the Company's views about future events and are subject torisks, uncertainties, assumptions and changes in circumstances that may causeactual results to differ materially. Factors that may contribute to thesedifferences include, but are not limited to the following: our businessstrategy; our ability to integrate Erdman; our ability to obtain futurefinancing arrangements; estimates relating to our future distributions; ourunderstanding of our competition; our ability to renew our ground leases;changes in the reimbursement available to our tenants by government or privatepayors; our tenants' ability to make rent payments; defaults by tenants;market trends; and projected capital expenditures. For a further list anddescription of such risks and uncertainties, see the reports filed by theCompany with the Securities and Exchange Commission, including the Company'sForm 10-K for the year ended December 31, 2007. Although the Company believesthe expectations reflected in such forward-looking statements are based onreasonable assumptions, it can give no assurance that its expectations will berealized. The Company disclaims any intention or obligation to update orrevise any forward-looking statements, whether as a result of new information,future events or otherwise.
SOURCE Cogdell Spencer Inc.
