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Crescent Resources

Profile:

As part of Duke Energy for over 40 years, Crescent Resources manages land holdings and develops high-quality commercial, residential and multi-family real estate projects in nine states. Crescent Resources has received numerous awards for its environmentally sensitive property development strategies and partnerships with environmental and wildlife groups. The company is based in Charlotte.

Operating Data:

	2003		2002		2001		2000		1999
Crescent Resources
Residential lots sold	2,060		1,221		1,075		955		1,049
Commercial square footage sold, in millions	1.7		1.2		3.1		2.0		2.0
Multi-family units sold	950		—		—		—		—
Surplus (legacy) land sold, acres	5,088		10,982		11,402		8,562		29,648

Performance Highlights :

• Crescent is the master developer of Potomac Yard, a 300-acre mixed-use development adjacent to Reagan National Airport in Arlington and Alexandria, Va. The approved plans for Potomac Yard include high-quality mixed-use communities of townhouses, apartments, hotels, retail stores, offices, open space, pedestrian-friendly neighborhoods, parks, playfields and a transit system. In 2003, Crescent sold two parcels of land for apartment and condominium units and retail developments, and began work on two office buildings.
• Two major transactions underway in 2003 demonstrate Crescent's commitment to strike a balance between property developed in an environmentally sensitive manner and land sold for long-term preservation.
  • The N.C. Wildlife Resources Commission will manage the 4,400-acre Needmore area that hosts a diverse array of aquatic and forest wildlife along a 27-mile stretch of the Little Tennessee River in the N.C. mountains. Supported by individual donations and environmental groups, the N.C. chapter of The Nature Conservancy worked with the state and Crescent to facilitate the purchase, completed in January 2004.
  • In December 2003, Crescent accepted a letter of intent from The Katawba Valley Land Trust (KVLT) to buy the Heritage Tract, a 2,000-acre area of environmental, cultural and historical significance along the Catawba River in South Carolina. Crescent has sold more than 1,200 acres to KVLT for the expansion of Landsford Canal State Park, home of the world's largest known colony of the rare Rocky Shoals spider lilies. In recent years, Crescent has also conveyed several conservation easements along the stream banks feeding into the Catawba River to KVLT for permanent stewardship.
• More than one-third of the property in Palmetto Bluff, Crescent's 20,000-acre recreational and residential community in South Carolina 's lowcountry, will remain undeveloped, including a 6,500-acre managed forest. Crescent has sold close to $50 million in residential real estate at Palmetto Bluff since sales opened last year. A luxury inn and spa and an 18-hole Nicklaus Signature Golf Course are set to open in 2004.
• In 2003, Crescent maintained strong market share in its residential markets.
  • The company sold 57 percent of the total value of homesites with an average price of $50,000 or more in new communities in the greater Charlotte, N.C., area.
  • In the metro Atlanta area, Sugarloaf Country Club has been the top-selling luxury golf club community for million-dollar homes for the past six years.
  • In Palm Coast, Fla., Crescent's residential venture partner LandMar Group's Grand Haven exceeded 2003 sales projections by 55 percent.
  • Crescent welcomed the first families to its new country club community in the Atlanta area, the River Club, on the Chattahoochee River in Suwanee, Ga.
  • Crescent opened three new communities at Lake Keowee in South Carolina, and announced plans for a new family-oriented residential development near Lake Norman in North Carolina.
• Since establishing its retail division three years ago, Crescent's strategy has been to sell select neighborhood retail centers it develops and re-invest in the development of new retail centers. The company closed four sales in the month of December 2003 alone for more than $50 million, and has five retail centers under development.
• Crescent's multi-family division realized a gain of $11.6 million when it sold two apartment communities in 2003. Both Lighthouse Court in the Jacksonville, Fla., area and CrossWynde in the Tampa vicinity opened less than two years ago.

Strategy Going Forward:

• Generate earnings through:
  • Opportunity-driven development in carefully selected target markets
  • Land sales that maximize the return to shareholders.
• Continue to focus on existing business lines, executing a proven development strategy without significantly increasing risk.
• Continue to generate significant cash flows through asset sales, while maintaining current capital expenditure levels.