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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 0-28226
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POST APARTMENT HOMES, L.P.
(Exact name of registrant as specified in its charter)
GEORGIA 58-2053632
- --------------------------------- ------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3350 CUMBERLAND CIRCLE, SUITE 2200, ATLANTA, GEORGIA 30339
(Address of principal executive offices -- zip code)
(770) 850-4400
(Registrant's telephone number, including area code)
----------------------------------------------------
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
NAME OF EACH
TITLE OF EACH CLASS EXCHANGE ON WHICH REGISTERED
------------------- ----------------------------
Units of the Limited Partnership ("Units") N/A
----------------------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
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POST APARTMENT HOMES, L.P.
TABLE OF CONTENTS
ITEM FINANCIAL INFORMATION PAGE
NO. NO.
--- ---
PART I
1. Business ........................................................................... 1
2. Properties ......................................................................... 7
3. Legal Proceedings .................................................................. 10
4. Submission of Matters to a Vote of Security holders ................................ 10
10
PART II
5. Market Price of the Registrant's Common Stock and Related Stockholder Matters....... 13
6. Selected Financial Data ............................................................ 14
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations ........................................................ 17
8. Financial Statements and Supplementary Data ........................................ 30
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ......................................................... 30
PART III
10. Directors and Executive Officers of the Registrant ................................. 30
11. Executive Compensation ............................................................. 30
12. Security Ownership of Certain Beneficial Owners and Management ..................... 30
13. Certain Relationships and Related Transactions ..................................... 30
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K .................. 31
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PART I
ITEM 1.BUSINESS
THE COMPANY
The Company is one of the largest developers and operators of upscale
multifamily apartment communities in the Southeastern United States. The Company
currently owns 49 stabilized communities (the "Communities") containing 17,930
apartment units located primarily in metropolitan Atlanta, Georgia and Tampa,
Florida. In addition, the Company currently has under construction or in initial
lease-up nine new communities and additions to two existing communities in the
Atlanta, Tampa, Nashville and Charlotte metropolitan areas that will contain an
aggregate of 3,271 apartment units when completed. For the year ended December
31, 1996, the average economic occupancy rate of the 40 Communities and the
first phase of an additional Community stabilized for the entire period was
95.4%. The average monthly rental rate per apartment unit at these Communities
for the same period was $767. The Company also manages through affiliates one
community with 260 apartment units under the Post(R) brand name for a third
party and approximately 7,800 additional apartment units owned by third parties.
The Company is a fully-integrated organization with multifamily development,
acquisition, operation and asset management expertise and has approximately
1,100 employees, none of whom is a party to a collective bargaining agreement.
Since founded in 1971, the Company and its predecessor, collectively referred to
as the "Company" has pursued three distinctive core business strategies that,
for over 25 years, have remained substantially unchanged:
Investment Building
Investment building means taking a long-term view of the assets the Company
creates. The Company develops communities with the intention of operating them
for periods that are relatively long by the standards of the apartment industry.
Key elements of the Company's investment building strategy include instilling a
disciplined team approach to development decisions; selecting sites in niche and
infill locations in strong primary markets; consistently constructing new
apartment communities with a uniformly high quality; and conducting ongoing
property improvements.
Promotion of the Post(R) Brand Name
The Post(R) brand name strategy has been integral to the success of the Company
and, to the knowledge of the Company, has not been successfully duplicated
within the multifamily real estate industry in any major U.S. market. For such a
strategy to work, a company must develop and implement systems to achieve
uniformly high quality and value throughout its operations. As a result of the
Company's efforts in developing and maintaining its communities, the Company
believes that the Post(R) brand name is synonymous with quality upscale
apartment communities that are situated in desirable locations and provide
superior resident service. Key elements in implementing the Company's brand name
strategy include extensively utilizing the trademarked brand name; adhering to
quality in all aspects of the Company's operations; developing and implementing
leading edge training programs; and coordinating the Company's advertising
programs to increase brand name recognition.
Service Orientation
The Company's mission statement is: "To provide the superior apartment living
experience for our residents." By striving to provide a superior product and
superior service, the Company believes that it will be able to achieve its
long-term goals. The Company believes that it provides its residents with
superior product and superior service through its uniformly high quality
construction, award winning landscaping and numerous amenities, including on
site business centers, on site courtesy officers, urban vegetable gardens and
state of the art fitness centers.
The Company believes that with the implementation of these strategies,
multifamily properties in its primary markets have the potential over the long
term to provide investment returns that exceed national averages. According to
recent market surveys, employment growth, population growth and household
formation growth in the Company's primary markets have exceeded and are
forecasted to continue to exceed national averages.
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ORGANIZATION STRUCTURE
The Company's general partner, Post Properties, Inc. ("PPI") is a
self-administered and self-managed equity real estate investment trust (a
"REIT"). On July 22, 1993, PPI completed an initial public offering of
10,580,000 shares of Common Stock (the "Initial Offering") and a business
combination involving entities under varying common ownership (the "Formation
Transactions"). On February 7, 1994, PPI completed a second public offering of
3,000,000 shares of Common Stock (the "Second Offering"). On October 20, 1995,
PPI completed a third public offering of 3,710,500 additional shares of Common
Stock (the "Third Offering"). Proceeds from the Initial Offering were (i) used
by PPI to acquire a controlling interest in the Company which was formed to
succeed to substantially all of the ownership interest in a portfolio of 40
Post(R) multifamily apartment communities, all of which were developed by the
Company and owned by affiliates of the Company, and to the development, leasing,
landscaping and management business of the Company and certain other affiliates
and (ii) contributed by PPI to the Company to pay down existing indebtedness on
certain communities. Proceeds of the Second and Third Offerings were contributed
by PPI to the Company and used by the Company to pay down existing indebtedness.
On October 1, 1996, PPI sold one million non-convertible 8.5% Series A
Cumulative Redeemable Preferred Shares (the "Perpetual Preferred Shares") with a
liquidation preference equivalent to $50 per share. Proceeds from the sale of
the Perpetual Preferred Shares were contributed by PPI to the Company in
exchange for one million Series A Preferred Partnership Units (the "Perpetual
Preferred Units"). The Company used the proceeds to repay outstanding
indebtedness. PPI is the sole general partner of, and controls a majority of the
limited partnership interests in, the Company. PPI conducts all of its business
through the Company and its subsidiaries.
The Company's executive offices are located at 3350 Cumberland Circle, Atlanta,
Georgia 30339 and its telephone number is (770) 850-4400. PPI, a Georgia
corporation, was incorporated on January 25, 1984, and is the successor by
merger to the original Post Properties, Inc., a Georgia corporation, which was
formed in 1971. The Company is a Georgia limited partnership that was formed in
July 1993 for the purpose of consolidating the operating and development
businesses of the original Post Properties, Inc. and the Post(R) apartment
portfolio described herein.
The Company, through the operating divisions and subsidiaries described below,
is the entity through which all of the PPI's operations are conducted. At
December 31, 1996, PPI controlled the Company as the sole general partner and as
the holder of 80.8% of the common units in the Company ("Units") and 100% of the
Perpetual Preferred Units. The other limited partners of the Company are those
persons (including certain officers and directors of PPI) who, at the time of
the Initial Offering, elected to hold all or a portion of their interest in PPI
in the form of Units rather than receiving shares of PPI Common Stock. Each Unit
may be redeemed by the holder thereof for either one share of PPI Common Stock
or cash equal to the fair market value thereof at the time of such redemption,
at the option of PPI. PPI has issued Common Stock in connection with all
redemptions to date. With each redemption of outstanding Units for PPI's Common
Stock, PPI's percentage ownership interest in the Company will increase.
In addition, whenever PPI issues shares of Common Stock, PPI will contribute any
net proceeds therefrom to the Company and the Company will issue an equivalent
number of Units to PPI.
As sole general partner, PPI has the exclusive power under the agreement of
limited partnership of the Company to manage and conduct the business of the
Company, subject to the consent of the holders of the Units in connection with
the sale of all or substantially all of the assets of the Company or in
connection with a dissolution of the Company. The board of directors of PPI
manages the affairs of PPI, which directs the affairs of the Company. The
Company cannot be terminated, except in connection with a sale of all or
substantially all of the assets of the Company, for a period of 50 years without
a vote of limited partners of the Company. PPI's limited and general partner
interests in the Company entitle it to share in cash distributions from, and in
the profits and losses of, the Company in proportion to PPI's percentage
interest therein and entitle PPI to vote on all matters requiring a vote of the
limited partners.
As part of the formation of the Company, a new holding company, Post Services,
Inc. ("Post Services") was organized as a separate corporate subsidiary of the
Company. Post Services, in turn, owns all the outstanding stock of three
operating subsidiaries, RAM Partners, Inc. ("RAM"), Post Asset Management, Inc.
("Post Asset Management") and Post Landscape Services, Inc. ("Post Landscape").
Certain officers and directors of PPI received 99%, collectively, of the voting
common stock of Post Services, and the Company received 1% of the voting common
stock and 100% of the nonvoting common stock of Post Services. The voting and
nonvoting common stock of Post Services held by the Company represents 99% of
the equity interests therein. The voting common stock held by officers and
directors in Post
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Services is subject to an agreement that is designed to ensure that the stock
will be held by one or more officers of Post Services. The by-laws of Post
Services provide that a majority of the board of directors of Post Services must
be persons who are not employees, members of management or affiliates of PPI or
its subsidiaries. This by-law provision cannot be amended without the vote of
100% of the outstanding voting common stock of Post Services. Post Services
currently has the same board of directors as PPI.
OPERATING DIVISIONS
The major operating divisions of the Company include:
Post Management Services
Post Management Services is responsible for the day-to-day operations of all the
Post(R) communities and is itself comprised of two divisions: one responsible
for community leasing, property management and personnel recruiting, training
and development, and the other for maintenance and security. Post Management
Services also conducts short-term leasing activities and is the largest division
in the Company.
Post Apartment Development
Post Apartment Development conducts the development and construction activities
of the Company. Development activities include site selection, zoning and
regulatory approvals, project design, and the full range of construction
management services.
Post Landscape Operations
This division works closely with Post Apartment Development in the initial
design of each Post(R) community and then has primary responsibility for
maintaining each community's landscape. The division maintains each community's
grounds on a cost effective basis for seasonal impact and has earned national
recognition for the Company. Post Landscape Operations employs professionals
specializing in landscape architecture, horticulture, floriculture, and general
landscape maintenance.
Post Corporate Services
Post Corporate Services provides executive direction and control to the
Company's other divisions and subsidiaries and has responsibility for the
creation and implementation of all Company financing and capital strategies. All
accounting, management reporting, information systems and insurance services
required by the Company and all of its affiliates are centralized in Post
Corporate Services.
OPERATING SUBSIDIARIES
The operating subsidiaries of the Company, each of which is wholly owned by Post
Services, include:
RAM
RAM provides third party asset management and leasing services for multifamily
properties that do not operate under the Post(R) name. RAM's clients include
pension funds, independent private investors, financial institutions and
insurance companies. RAM's asset management contracts generally are subject to
annual renewal or are terminable upon specified notice. As of December 31, 1996,
RAM managed 35 properties (located in Georgia, California, Florida, North
Carolina, Virginia and Pennsylvania) with approximately 7,800 units under
management.
Post Asset Management
Post Asset Management currently provides management services to a Post(R)
community (260 apartment units) owned by a third party, which was originally
developed by the Company but sold prior to the Initial Offering. Use of the
Post(R) name and other of the Company's federally registered service marks in
connection with each such community is limited to the period during which the
Company continues to manage the community.
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Post Landscape
As a result of the reputation the Company developed in connection with the
landscaping of Post(R) communities, in 1990 the Company began providing third
party landscape services for clients other than Post(R) communities. Projects
with third parties include the maintenance and design of the landscape for
office parks, commercial buildings and other commercial enterprises, and private
residences. Post Landscape provides such third party landscape services.
HISTORY OF POST PROPERTIES, INC.
The Company and its affiliates have developed a total of 71 Post(R) upscale
garden and mid-rise apartment communities containing approximately 23,432
apartment units and have acquired one community containing 80 units. Of these
communities, 49 communities comprising 17,930 apartment units are owned by the
Company in fee simple or pursuant to a long-term ground lease, and are operated
by the Company. The Company and its affiliates sold 24 communities between 1972
and 1996 to parties not affiliated with the Company, one of which was reacquired
during 1996 and one of which the Company continues to manage under the Post(R)
name. As of March 7, 1997, nine additional Post(R) communities and additions to
two existing communities are under construction and are owned and operated by
the Company.
During the five-year period from January 1, 1992 through December 31, 1996, the
Company and its predecessors and affiliates have developed and completed 4,256
apartment units in 14 apartment communities, acquired 890 units in two apartment
communities and sold four apartment communities containing an aggregate of 748
apartment units. Historically, the Company has developed its apartment
communities to the Company's specifications as opposed to buying and
refurbishing existing properties built by others. During 1996, the Company
reacquired a community it had previously developed and sold. Also during 1996,
the Company also purchased two communities located in Nashville, Tennessee, in a
single transaction, containing 181 apartment units. The first, a 101 unit
community, is currently being completely renovated and 100 units are being
constructed on adjacent land. The second is an 80 unit community that the
Company is currently operating, while evaluating whether to hold , renovate or
sell. The Company and its affiliates have sold apartment communities after
holding them for investment periods that typically have been seven to twelve
years after development. The following table shows the results of the Company's
developments during this period:
1996 1995 1994 1993 1992
-------- -------- -------- -------- -------
Units completed ...................................... 2,258 685 575 182 556
Units acquired ....................................... 890 -- -- -- --
Units sold ........................................... (180) (568) -- -- --
Total units owned by Company affiliates
at end of year ..................................... 17,930 14,962 14,845 14,270 14,088
Total apartment rental income (in
thousands) ......................................... $157,735 $133,817 $115,309 $104,482 $94,754
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CURRENT DEVELOPMENT ACTIVITY
The Company currently has, under construction or in initial lease-up, nine new
communities and additions to two existing communities that will contain an
aggregate of 3,271 units. The Company's communities under development or in
initial lease up are summarized in the following chart:
ACTUAL OR ACTUAL OR
ESTIMATED ESTIMATED
QUARTER OF QUARTER QUARTER OF
# OF CONSTRUCTION FIRST UNITS STABILIZED
METROPOLITAN AREA UNITS COMMENCEMENT AVAILABLE OCCUPANCY
- ----------------- ----- ------------ --------- ---------
ATLANTA, GA
Post Collier Hills(TM) ................................... 396 4Q'95 4Q'96 4Q'97
Post Glen(R) ............................................. 314 1Q'96 1Q'97 1Q'98
Post Lindbergh(TM) ....................................... 396 3Q'96 3Q'97 1Q'99
Post Gardens(R) .......................................... 397 3Q'96 4Q'97 1Q'99
Riverside by Post(TM) .................................... 537 3Q'96 1Q'98 4Q'99
Post Ridge(TM) ........................................... 232 1Q'97 4Q'97 3Q'98
Post River(R)II .......................................... 88 1Q'97 4Q'97 2Q'98
-----
2,360
-----
TAMPA, FL
Post Walk at Hyde Park(TM) ............................... 134 1Q'96 1Q'97 3Q'97
Post Rocky Point(R)II .................................... 174 4Q'96 3Q'97 1Q'98
-----
308
-----
CHARLOTTE, NC
Post Park at Phillips Place(TM) .......................... 402 4Q'95 4Q'96 1Q'98
-----
NASHVILLE, TN
Post Hillsboro Village(TM) ............................... 201 1Q'97 3Q'97 1Q'98
-----
3,271
=====
The Company has acquired a parcel of land in Atlanta on which it plans to build
a new community. Adjacent to the parcel, Home Depot, Inc. is constructing its
corporate headquarters campus and extensive infrastructure improvements are
being made by the county. The Company will review its development plan for this
parcel closer to completion of these improvements. In addition, the Company
holds land for a third phase of Post Rocky Point in Tampa, Florida. The Company
is also currently conducting feasibility and other pre-development studies for
possible new Post(R) communities in its primary market areas.
COMPETITION
All of the Communities are located in developed areas that include other upscale
apartments. The number of competitive upscale apartment properties in a
particular area could have a material effect on the Company's ability to lease
apartment units at the Communities or at any newly developed or acquired
communities and on the rents charged. The Company may be competing with others
that have greater resources than the Company. In addition, other forms of
residential properties, including single family housing, provide housing
alternatives to potential residents of upscale apartment communities.
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AMERICANS WITH DISABILITIES ACT
The Communities and any newly acquired apartment communities must comply with
Title III of the Americans with Disabilities Act (the "ADA") to the extent that
such properties are "public accommodations" and/or "commercial facilities" as
defined by the ADA. Compliance with the ADA requirements could require removal
of structural barriers to handicapped access in certain public areas of the
Company's Communities where such removal is readily achievable. The ADA does
not, however, consider residential properties, such as apartment communities, to
be public accommodations or commercial facilities, except to the extent portions
of such facilities, such as the leasing office, are open to the public. The
Company believes that its properties comply with all present requirements under
the ADA and applicable state laws. Noncompliance could result in imposition of
fines or an award of damages to private litigants. If required to make material
additional changes, the Company's results of operations could be adversely
affected.
ENVIRONMENTAL REGULATIONS
The Company is subject to Federal, state and local environmental regulations
that apply to the development of real property, including construction
activities, the ownership of real property, and the operation of multifamily
apartment communities.
In developing properties and constructing apartments, the Company utilizes
environmental consultants to determine whether there are any flood plains,
wetlands or environmentally sensitive areas that are part of the property to be
developed. If flood plains are identified, development and construction is
planned so that flood plain areas are preserved or alternative flood plain
capacity is created in conformance with Federal and local flood plain management
requirements.
Storm water discharge from a construction facility is evaluated in connection
with the requirements for storm water permits under the Clean Water Act. This is
an evolving program in most states. The Company currently anticipates it will be
able to obtain storm water permits for existing or new development.
The Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. sec. 9601 et seq. ("CERCLA"), and applicable state superfund laws subject
the owner of real property to claims or liability for the costs of removal or
remediation of hazardous substances that are disposed of on real property in
amounts that require removal or remediation. Liability under CERCLA and
applicable state superfund laws can be imposed on the owner of real property or
the operator of a facility without regard to fault or even knowledge of the
disposal of hazardous substances on the property or at the facility. The
presence of hazardous substances in amounts requiring response action or the
failure to undertake remediation where it is necessary may adversely affect the
owner's ability to sell real estate or borrow money using such real estate as
collateral. In addition to claims for cleanup costs, the presence of hazardous
substances on a property could result in a claim by a private party for personal
injury or a claim by an adjacent property owner for property damage.
The Company has instituted a policy that requires an environmental investigation
of each property that it considers for purchase or that it owns and plans to
develop. The environmental investigation is conducted by a qualified
environmental consultant. If there is any indication of contamination, sampling
of the property is performed by the environmental consultant. The environmental
investigation report is reviewed by the Company and counsel prior to purchase of
any property. If necessary, remediation of contamination, including underground
storage tanks, is undertaken prior to development.
The Company has not been notified by any governmental authority of any
noncompliance, claim, or liability in connection with any of the Communities.
The Company has not been notified of a claim for personal injury or property
damage by a private party in connection with any of the Communities in
connection with environmental conditions. The Company is not aware of any other
environmental condition with respect to any of the Communities that could be
considered to be material.
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ITEM 2.PROPERTIES
The Communities consist of 48 stabilized Post(R) multifamily apartment
communities and one acquired community located in the following metropolitan
areas:
METROPOLITAN AREA COMMUNITIES # OF UNITS % OF TOTAL
----------------- ----------- ---------- ----------
Atlanta, GA .................................... 35 13,058 72.8%
Tampa, FL ...................................... 7 2,262 12.6%
Orlando, FL .................................... 2 1,248 7.0%
Fairfax, VA .................................... 2 700 3.9%
Pompano Beach, FL .............................. 1 416 2.3%
Nashville, TN .................................. 2 246 1.4%
------ ------ -----
49 17,930 100.0%
====== ====== =====
The Company developed all of the Post(R) Communities and currently manages all
of the Communities. Thirty-three of the Communities have in excess of 300
apartment units, with the largest Community having a total of 810 apartment
units. The oldest of the Communities was first occupied in 1977 and 42 of the 49
Communities, comprising approximately 86% of such Communities' apartment units,
were completed after January 1, 1986. The average economic occupancy rate for
communities stabilized for each of the entire years ended December 31, 1996 and
1995 was 95.4% and 96.0% respectively. The average monthly rental rate per unit
(stabilized communities) during 1996 and 1995 was $767 and $710, respectively.
See "Selected Financial Information".
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COMMUNITY INFORMATION
DECEMBER
1996 1996
AVERAGE AVERAGE AVERAGE
YEAR UNIT SIZE NUMBER OF RENTAL RATES ECONOMIC
POST COMMUNITIES LOCATION(1) COMPLETED (SQUARE FEET) UNITS PER UNIT OCCUPANCY(2)
- ---------------- ----------- --------- ------------- ----- -------- ------------
GEORGIA
Post Ashford(R) .......................... Atlanta 1987 872 222 $ 761 96.9%
Post Bridge(R) ........................... Atlanta 1986 847 354 660 95.7%
Post Brook(R) ............................ Atlanta 1984 916 130 779 97.4%
Post Brookhaven(R) ....................... Atlanta 1990-92(3) 991 735 960 94.7%
Post Canyon(R) ........................... Atlanta 1986 899 494 691 94.7%
Post Chase(R) ............................ Atlanta 1987 938 410 697 94.6%
Post Chastain(R) ......................... Atlanta 1990 965 558 979 95.3%
Post Corners(R) .......................... Atlanta 1986 860 460 672 95.4%
Post Court(R) ............................ Atlanta 1988 838 446 668 95.5%
Post Creek(TM) ........................... Atlanta 1983(4) 1,180 810 857 89.0%(5)
Post Crest(R) ............................ Atlanta 1996 1,073 410 919 N/A (6)
Post Crossing(R) ......................... Atlanta 1995 1,067 354 1,028 95.3%
Post Dunwoody(R) ......................... Atlanta 1989-96(3) 941 530 901 93.4%(8)
Post Lane(R) ............................. Atlanta 1988 840 166 706 97.6%
Post Lenox Park(TM) ...................... Atlanta 1995 1,030 206 1,049 97.2%
Post Mill(R) ............................. Atlanta 1985 952 398 711 96.8%
Post Oak(TM) ............................. Atlanta 1993 1,003 182 956 97.8%
Post Oglethorpe(R) ....................... Atlanta 1994 1,205 250 1,236 95.5%
Post Park(R) ............................. Atlanta 1988-90(3) 904 770 787 94.6%
Post Parkwood(TM) ........................ Atlanta 1995 1,071 125 930 97.4%
Post Peachtree Hills(R) .................. Atlanta 1992-94(3) 982 300 979 98.3%
Post Pointe(R) ........................... Atlanta 1988 835 360 655 94.7%
Post Renaissance(R)(7) ................... Atlanta 1992-94(3) 890 342 893 97.1%
Post River(R) ............................ Atlanta 1991 983 125 1,141 94.7%
Post Summit(R) ........................... Atlanta 1990 957 148 833 97.4%
Post Terrace(R) .......................... Atlanta 1996 1,144 296 1,022 N/A (6)
Post Valley(R) ........................... Atlanta 1988 854 496 655 96.8%
Post Village(R) .......................... Atlanta 906 718 94.3%
The Arbors .............................. 1983 1,063 301
The Fountains ........................... 1987 850 352
The Gardens ............................. 1986 891 494
The Hills ............................... 1984 953 241
The Meadows ............................. 1988 817 350
Post Vinings(R) .......................... Atlanta 1989-91(3) 964 403 791 94.4%
Post Walk(R) ............................. Atlanta 1987 932 346 812 96.7%
Post Woods(R) ............................ Atlanta 1977-83(3) 1,057 494 827 96.0%
----- ------ ---- ----
Subtotal-- Atlanta ....................... 958 13,058 820 95.2%
----- ------ ---- ----
FLORIDA
Post Bay(R) .............................. Tampa 1988 782 312 650 96.5%
Post Court(R) ............................ Tampa 1991 1,018 228 748 94.5%
Post Crossing(R) ......................... Pompano 1989 847 416 777 94.8%
Post Fountains(TM) ....................... Orlando 1988 835 508 585 94.8%
Post Hyde Park(R) ........................ Tampa 1996 1,009 270 907 N/A (6)
Post Lake(R) ............................. Orlando 1988 850 740 610 97.5%
Post Rocky Point(R) ...................... Tampa 1996 1,018 452 826 N/A (6)
Post Village(R) .......................... Tampa 941 700 93.2%
The Arbors .............................. 1991 967 304
The Lakes ............................... 1989 895 360
The Oaks ................................ 1991 968 336
----- ------ ---- ----
Subtotal-- Florida ...................... 921 3,926 704 95.0%
----- ------ ---- ----
VIRGINIA
Post Corners(R) at Trinity Centre ........ Fairfax 1996 1,030 336 935 N/A (6)
Post Forest(R) ........................... Fairfax 1990 889 364 883 93.6%
Subtotal-- Virginia ...................... 960 700 908 93.6%
----- ------ ---- ----
TENNESSEE
Post Green Hills(R) ...................... Nashville 1996 1,056 166 1,087 N/A (6)
----- ------ ---- ----
ACQUIRED COMMUNITY
- ------------------
TENNESSEE
The Lee Apartments ....................... Nashville 1924(9) 808 80 600 91.8%(10)
----- ------ ---- ----
TOTAL ............................... 941 17,930 $ 838 95.1%
===== ====== ===== ====
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- ----------
(1) Refers to greater metropolitan areas of cities ind icated.
(2) Average economic occupancy is defined as gross potential rent less
vacancy losses, model expenses and bad debt divided by gross potential
rent for the period, expressed as a percentage.
(3) These dates represent the respective completion dates for multiple
phases of a Community.
(4) This community was completed by the Company in 1983, sold during 1986,
managed by the Company through 1993 and reacquired by the Company in
1996.
(5) Represents average economic occupancy since acquisition on May 7, 1996.
(6) During 1996, this Community was in the lease-up phase and, therefore,
is not included.
(7) The Company has a leasehold interest in the land underlying Post
Renaissance pursuant to a ground lease that expires on January 1, 2040.
(8) Represents amounts only for the first phase of the Community since the
second phase of this Community was in the lease-up phase during the
year ended December 31, 1996.
(9) This community was acquired by the Company during 1996.
(10) Represents average economic occupancy since acquisition on August 26,
1996.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET PRICE OF THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
There is no established public trading market for the Units. As of February 21,
1997, the Company had 122 holders of record of Units of the Company.
9
12
ITEM 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
POST APARTMENT HOMES, L.P.
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT AND APARTMENT UNIT DATA)
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
OPERATING DATA:
Revenue:
Rental ................................................ $ 157,735 $ 133,817 $ 115,309 $ 104,482 $ 94,754
Property management (1) ............................... 2,828 2,764 2,508 3,057 2,793
Landscape services (1) ................................ 4,834 4,647 3,799 3,829 2,240
Other ................................................. 5,311 3,477 3,123 2,879 2,750
--------- --------- --------- --------- ---------
Total revenue ......................................... 170,708 144,705 124,739 114,247 102,537
Property operating and maintenance
expense (exclusive of depreciation
and amortization) ..................................... 57,335 49,912 43,376 41,209 39,080
Depreciation (real estate assets) ...................... 22,676 20,127 19,967 19,427 19,085
Depreciation (non-real estate assets) .................. 927 692 241 303 195
Property management expenses (1) ....................... 2,055 2,166 2,229 2,453 2,057
Landscape services expenses (1) ........................ 3,917 3,950 3,098 3,151 1,998
Interest expense ....................................... 22,131 22,698 19,231 34,309 41,548
Amortization of deferred loan costs .................... 1,352 1,967 1,999 969 2,105
General and administrative ............................. 7,716 6,071 6,269 4,384 5,015
REIT formation expense ................................. -- -- -- 2,783 --
Minority interest in consolidated
property partnership .................................. -- 451 680 692 655
--------- --------- --------- --------- ---------
Income (loss) before net gain on sale of assets,
net of related income taxes, and
extraordinary item .................................... 52,599 36,671 27,649 4,567 (9,201)
Net gain on sale of assets, net of related .............
income taxes .......................................... 854 1,746 1,494 --
--------- --------- --------- --------- ---------
Income (loss) before extraordinary item ................ 53,453 38,417 29,143 4,567 (9,201)
Extraordinary item ..................................... -- (1,120) (4,413)(2) (13,628)(2) --
--------- --------- --------- --------- ---------
Net Income (loss) ...................................... 53,453 37,297 24,730 (9,061) (9,201)
Distribution to preferred unitholders .................. (1,063) -- -- -- --
--------- --------- --------- --------- ---------
Net income (loss) available to
common unitholders .................................... $ 52,390 $ 37,297 $ 24,730 $ (9,061) $ (9,201)
========= ========= ========= ========= =========
(Selected financial data continued on following page)
10
13
YEAR ENDED DECEMBER 31,
---------------------------------------------
1996 1995 1994 1993 1992
----- ----- ----- ------ ----
PER COMMON UNIT DATA:
Income before extraordinary item
(net of preferred distribution) ............... $1.95 $1.63 $1.32 $ 0.34 N/A
Net income (loss) available to common
unitholders.................................... $1.95 $1.58 $1.12 $(0.67) N/A
Distributions declared .......................... $2.16 $1.96 $1.80 $ 0.77 (3) N/A
DECEMBER 31,
-------------------------------------------------------------------
1996 1995 1994 1993 1992
---------- -------- -------- -------- ---------
BALANCE SHEET DATA:
Real estate, before accumulated depreciation .......... $1,109,342 $937,924 $828,585 $722,266 $ 616,289
Real estate, net of accumulated depreciation .......... 931,670 781,100 686,009 599,898 513,651
Total assets .......................................... 958,675 812,984 710,973 627,322 536,961
Total debt ............................................ 434,319 349,719 362,045 357,809 540,900
Partners' equity (deficit) ............................ 482,434 425,489 313,367 246,342 (25,812)
DECEMBER 31,
--------------------------------------------------------------------------------
1996 1995 1,994 1993 1992
------------ ------------ ------------ ------------ --------
OTHER DATA:
Cash flow provided from (used in):
Operating activities ................... $ 78,966 $ 57,362 $ 43,807 $ 2,412 $ 11,400
Investing activities ................... $ (166,762) $ (114,531) $ (99,364) $ (51,152) $(28,696)
Financing activities ................... $ 79,021 $ 60,885 $ 46,508 $ 49,647 $ 19,902
Funds from operations (4) .................. $ 74,212 $ 56,798 $ 47,616 $ 26,777 $ 9,884
Weighted average Units outstanding ......... 26,917,723 23,541,639 22,125,890 13,574,767 N/A
Total stabilized communities
(at end of period) ......................... 49 42 42 41 40
Total stabilized apartment units
(at end of period) ......................... 17,930 14,962 14,845 14,270 14,088
Average economic occupancy
(stabilized communities) (5) ............... 95.3% 96.0% 96.4% 94.7% 93.0%
- --------------
(1) Consists of revenues and expenses from property management and
landscape services provided to properties owned by third parties
(including services provided to third-party owners of properties
previously developed and sold by the Company that operate under the
Post(R) name).
(2) The extraordinary item resulted from costs associated with the early
extinguishment of indebtedness.
(3) The distribution paid by the Company for the portion of the quarter
ended September 30, 1993 after the Initial Offering was $.320 per Unit,
which is an amount equivalent to a quarterly distribution of $.415 per
Unit (which, if annualized, would equal $1.66 per Unit).
(4) The Company uses the National Association of Real Estate Investment
Trust ("NAREIT") definition of FFO, which was adopted for periods
beginning after January 1, 1996. FFO for any period means the
Consolidated Net Income of the Company and its subsidiaries for such
period excluding gains or losses from debt restructuring and sales of
property, plus depreciation of real estate assets, and after adjustment
for unconsolidated partnerships and joint ventures, all determined on a
consistent basis in accordance with generally accepted accounting
principles ("GAAP"). FFO presented herein is not necessarily comparable
to FFO presented by other real estate companies due to the fact that
not all real estate companies use the same definition. However, the
Company's FFO is comparable to the FFO of real estate companies that
use the current NAREIT definition. FFO should not be considered as an
alternative to net income (determined in accordance with GAAP) as an
indicator of the Company's financial performance or to cash flow from
operating activities (determined in accordance with GAAP) as a measure
of the Company's liquidity, nor is it necessarily indicative of
sufficient cash flow to fund all of the Company's needs or ability to
service indebtedness or make distributions.
(5) Amount represents average economic occupancy for communities stabilized
for both the current and prior respective periods. Average economic
occupancy is defined as gross potential rent less vacancy losses, model
expenses and bad debt divided by gross potential rent for the period,
expressed as a percentage. The calculation of average economic
occupancy does not include a deduction for concessions and employee
discounts (average economic occupancy, taking account of these amounts,
would have been 94.7% and 95.5% for the year ended December 31, 1996
and 1995, respectively). Concessions were $428 and $296 and employee
discounts were $261 and $213 for the years ended December 31, 1996 and
1995, respectively. A community is considered by the Company to have
achieved stabilized occupancy on the earlier to occur of (i) attainment
of 95% physical occupancy on the first day of any month, or (ii) one
year after completion of construction.
11
14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
OVERVIEW
The following discussion should be read in conjunction with all of the financial
statements appearing elsewhere in this report. The following discussion is based
primarily on the Consolidated Financial Statements of the Company.
As of December 31, 1996, there were 27,145,386 Units outstanding, of which
21,922,393, or 80.8%, were owned by PPI and 5,222,993, or 19.2% were owned by
other limited partners ( including certain officers and directors of PPI). As of
December 31, 1996, there were 1,000,000 Perpetual Preferred Units outstanding,
all of which were owned by PPI.
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
The Company recorded net income available for common unitholders of $52,390,
$37,297 and $24,730 for the year ended December 31, 1996, 1995 and 1994,
respectively. The increases in net income in 1996 and 1995 were primarily due to
increased rental rates for fully stabilized communities and an increase in units
placed in service.
COMMUNITY OPERATIONS
The Company's net income is generated primarily from the operation of its
apartment communities. For purposes of evaluating comparative operating
performance, the Company categorizes its operating communities based on the
period each community reaches stabilized occupancy. A community is generally
considered by the Company to have achieved stabilized occupancy on the earlier
to occur of (i) attainment of 95% physical occupancy on the first day of any
month or (ii) one year after completion of construction.
At December 31, 1996, the Company's portfolio of apartment communities consisted
of the following: (i) 36 communities and the first phase of 2 additional
communities which were completed and stabilized for all of the current and prior
year, (ii) 3 communities and the second phase of an existing community which
achieved full stabilization during the prior year, (iii) 6 communities and the
second phase of an existing community which reached stabilization during 1996,
(iv) 2 communities which were acquired during 1996 and (v) 9 communities and the
second phase of two existing communities in the development or lease-up stage.
For communities with respect to which construction is completed and the
community has become fully operational, all property operating and maintenance
expenses are expensed as incurred and those recurring and non-recurring
expenditures relating to acquiring new assets, materially enhancing the value of
an existing asset, or substantially extending the useful life of an existing
asset are capitalized. (See "Capitalization of Fixed Assets and Community
Improvements").
The Company has adopted an accounting policy related to communities in the
development and lease-up stage whereby substantially all operating expenses
(including pre-opening marketing expenses) are expensed as incurred. The Company
treats each unit in an apartment community separately for cost accumulation,
capitalization and expense recognition purposes. Prior to the commencement of
leasing activities, interest and other construction costs are capitalized and
reflected on the balance sheet as construction in progress. Once a unit is
placed in service, all operating expenses allocated to that unit, including
interest, are expensed as incurred. During the lease-up phase, the sum of
interest expense on completed units and other operating expenses (including
pre-opening marketing expenses) will initially exceed rental revenues, resulting
in a "lease-up deficit," which continues until such time as rental revenues
exceed such expenses.
12
15
Therefore, in order to evaluate the operating performance of its communities,
the Company has presented financial information which summarizes the revenue in
excess of specified expense on a comparative basis for all of its operating
communities combined and for communities which have reached stabilization prior
to January 1, 1995. The Company has also presented quarterly financial
information reflecting the dilutive impact of lease-up deficits incurred for
communities in the development and lease-up stage and not yet operating at
break-even. In this presentation, only those Communities which were dilutive
during each period are included and, accordingly, different communities may be
included in each period.
ALL OPERATING COMMUNITIES
The operating performance for all of the Company's apartment communities
combined for the years ended December 31, 1996, 1995 and 1994 is summarized as
follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------- -------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
-------- -------- ------- -------- -------- -------
Rental and other revenue:
Fully stabilized communities (1) ...................... $123,887 $118,744 4.3% $118,744 $110,047 7.9%
Communities stabilized during 1995 .................... 9,354 6,702 39.6% 6,702 148 N/A
Acquired communities (2) .............................. 5,127 -- N/A -- -- N/A
Development and lease-up communities (3) .............. 20,154 4,150 N/A 4,150 2 N/A
Sold communities (4) .................................. 1,001 4,647 N/A 4,647 5,736 N/A
Other revenue (5) ...................................... 3,197 2,458 30.1% 2,458 2,057 19.5%
-------- -------- -------- --------
162,720 136,701 19.0% 136,701 117,990 15.9%
-------- -------- -------- --------
Property operating and maintenance expense
(exclusive of depreciation and
amortization):
Fully stabilized communities .......................... 41,186 39,787 3.5% 39,787 37,495 6.1%
Communities stabilized during 1995 .................... 2,606 1,886 38.2% 1,886 313 N/A
Acquired communities .................................. 1,956 -- N/A -- -- N/A
Development and lease-up communities .................. 6,766 2,513 N/A 2,513 38 N/A
Sold communities ...................................... 345 1,890 N/A 1,890 2,344 N/A
Other expenses (6) ..................................... 4,476 3,836 16.7% 3,836 3,186 20.4%
-------- -------- -------- --------
57,335 49,912 14.9% 49,912 43,376 15.1%
-------- -------- -------- --------
Revenue in excess of specified expense ................. $105,385 $ 86,789 21.4% $ 86,789 $ 74,614 16.3%
======== ======== ======== ========
Recurring capital expenditures: (7)
Carpet ................................................ $ 1,087 $ 897 21.2% $ 897 $ 729 23.0%
Other ................................................. 1,874 803 133.4% 803 1,087 (26.1%)
-------- -------- -------- --------
Total ............................................. $ 2,961 $ 1,700 74.2% $ 1,700 $ 1,816 (6.4%)
======== ======== ======== ========
Average apartment units in service ..................... 17,089 15,519 10.1% 15,519 14,619 6.2%
======== ======== ======== ========
- ---------------
13
16
(1) Communities which reached stabilization prior to January 1, 1995.
(2) On May 7, 1996, the Company reacquired three contiguous Atlanta
apartment communities containing a total of 810 units which the Company
now operates as a single community. On August 26, 1996, the Company
acquired an apartment community containing 80 units in Nashville,
Tennessee. See "Current Development Activity".
(3) Communities in the "construction", "development" or "lease-up" stage
during 1996 and, therefore, not considered fully stabilized for all of
the periods presented.
(4) Includes three communities, containing 568 units, which were sold on
September 13, 1995 and one community, containing 180 units, which was
sold on July 19, 1996. The revenues and expenses for these communities
had previously been included in the fully stabilized group.
(5) Other revenue includes revenue on furnished apartment rentals above the
unfurnished rental rates and any revenue not directly related to
property operations. Other revenue also includes, for the year ended
December 31, 1996, approximately $527 which resulted from the Company's
Olympic-related housing initiatives.
(6) Other expenses includes certain indirect central office operating
expenses related to management, grounds maintenance, and costs
associated with furnished apartment rentals.
(7) In addition to those expenses which relate to property operations, the
Company incurs recurring and non-recurring expenditures relating to
acquiring new assets, materially enhancing the value of an existing
asset, or substantially extending the useful life of an existing asset,
all of which are capitalized.
For the year ended December 31, 1996, rental and other revenue increased
$26,019, or 19.0% compared to the same period in the prior year, primarily as a
result of increased rental rates for fully stabilized communities, an increase
in units placed in service, the acquisition of communities and the Company's
Olympic-related housing initiatives, partially offset by a decrease in rental
and other revenue due to the sale of three communities during the third quarter
of 1995 and the sale of one community during the third quarter of 1996.
For the year ended December 31, 1996, recurring capital expenditures increased
$1,261, or 74.2%, compared to the same period in the prior year, primarily due
to additional units placed in service and the timing of scheduled capital
improvements.
Property operating and maintenance expenses (exclusive of depreciation and
amortization) increased from 1995 to 1996 and 1994 to 1995 primarily due to the
increase in the units placed in service through the development and acquisition
of communities.
FULLY STABILIZED COMMUNITIES
The Company defines fully stabilized communities as those which have reached
stabilization prior to the beginning of the previous calendar year.
The operating performance of the 36 communities and the first phase of two
additional communities containing an aggregate of 13,980 units which were
stabilized as of January 1, 1995, are summarized as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------------- ----------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
-------- -------- ------- -------- -------- -------
Rental and other revenue .............................. $123,887 $118,744 4.3% $118,744 $110,047 7.9%
Property operating and maintenance expense
(exclusive of depreciation and 6.1%
amortization)(1) ..................................... 41,186 39,787 3.5% 39,787 37,495
-------- -------- -------- --------
Revenue in excess of specified expense ................ $ 82,701 $ 78,957 4.7% $ 78,957 $ 72,552 8.8%
======== ======== ======== ========
Average economic occupancy (2) ........................ 95.3% 96.2% 96.2% 95.3%
======== ======== ======== ========
Average monthly rental rate per apartment 7.0%
unit(3) .............................................. $ 754 $ 721 4.6% $ 721 $ 674
======== ======== ======== ========
Apartment units in service ............................ 13,980 13,980 13,980 13,980
======== ======== ======== ========
- ---------------
(1) In addition to those expenses which relate to property operations, the
Company incurs recurring and non-recurring expenditures relating to
acquiring new assets, materially enhancing the value of an existing
asset, or substantially extending the useful life of an existing asset,
all of which are capitalized. For the year ended December 31, 1996 and
1995, recurring expenditures were $2,782 and $1,607, or $199 and $115
on a per unit basis, respectively.
14
17
(2) Average economic occupancy is defined as gross potential rent less
vacancy losses, model expenses and bad debt divided by gross potential
rent for the period, expressed as a percentage. The calculation of
average economic occupancy does not include a deduction for concessions
and employee discounts. (Average economic occupancy, taking account of
these amounts would have been 94.7% and 95.8% for the years ended
December 31, 1996 and 1995, respectively.) Concessions were $428 and
$297 and employee discounts were $261 and $239 for the years ended
December 31, 1996 and 1995, respectively.
(3) Average monthly rental rate is defined as the average of the gross
actual rental rates for leased units and the average of the anticipated
rental rates for unoccupied units.
Rental and other revenue increased from 1995 to 1996 due to higher rental rates
with occupancy slightly declining. The modest increase in property and
maintenance expense (exclusive of depreciation and amortization) from 1995 to
1996 was primarily due to increases in ad valorem real estate taxes and
personnel costs.
Rental and other revenue increased from 1994 to 1995 due to higher rental rates.
Property operating and maintenance expenses (exclusive of depreciation and
amortization) increased $2,292, or 6.1%. Ad valorem real estate taxes increased
from $9,439 in 1994 to $10,973 in 1995, an increase of 16.3%. This increase
alone accounted for 67% of the overall operating expense increase. The remaining
increase was primarily due to modest increases in utilities, advertising and
promotion and building repairs and maintenance offset by a modest decrease in
landscaping and grounds and maintenance expense.
LEASE-UP DEFICITS
As noted in the overview of Community Operations, the Company has adopted an
accounting policy related to communities in the development and lease-up stage
whereby substantially all operating expenses (including pre-opening marketing
expenses) are expensed as incurred. The Company treats each unit in an apartment
community separately for cost accumulation, capitalization and expense
recognition purposes. Prior to the commencement of leasing activities, interest
as well as other construction costs are capitalized and reflected on the balance
sheet as construction in progress. Once a unit is placed in service, all
expenses allocated to that unit, including interest, are expensed as incurred.
During the lease-up phase, the sum of interest expense on completed units and
other operating expenses (including pre-opening marketing expenses) will
typically exceed rental revenues, resulting in a "lease-up deficit," which
continues until rental revenues exceed such expenses.
In this presentation, only those communities which were dilutive during each
period are included in that period and, accordingly, different communities may
be included in different periods.
For each quarter of the year ended December 31, 1996, the "lease-up deficit"
charged to and included in results of operations are summarized as follows:
YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
------- ------- -----
Rental and other revenue .................................... $ 974 $ 3,327 $ 331
Property operating and maintenance expense (exclusive of
depreciation and amortization) ............................ 1,056 2,422 800
------- ------- -----
Revenue in excess of specified expense ...................... (82) 905 (469)
Interest expense ............................................ 673 2,072 214
------- ------- -----
Lease-up deficit ............................................ $ (755) $(1,167) $(683)
======= ======= =====
THIRD PARTY MANAGEMENT SERVICES
The Company provides asset management, leasing and other consulting services to
non-related owners of apartment communities through two of its subsidiaries, RAM
and Post Asset Management.
15
18
The operating performance of RAM and Post Asset Management for the years ended
December 31, 1996, 1995 and 1994 are summarized as follows:
RAM PARTNERS, INC.
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------------- ------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
------ ------ ------- ------ ------ -------
Property management and other revenue ............ $2,562 $2,331 9.9% $2,331 $2,184 6.7%
Property management expense ...................... 1,244 1,213 2.6% 1,213 1,278 (5.1)%
General and administrative expense ............... 502 467 7.5% 467 433 7.9%
------ ------ ------ ------
Revenue in excess of specified expense ........... $ 816 $ 651 25.3% $ 651 $ 473 37.6%
====== ====== ====== ======
Average apartment units in service ............... 8,852 8,798 0.6% 8,798 8,488 3.7%
====== ====== ====== ======
The change in property management revenues and expenses from 1995 to 1996 and
from 1994 to 1995 is primarily attributable to the change in the average number
and the average gross revenues of units managed.
POST ASSET MANAGEMENT
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- --------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
----- ------ ------- ------ ------ --------
Property management and other revenue .......... $ 282 $ 550 (48.7)% $ 550 $ 578 (4.8)%
Property management expense .................... 255 392 (35.0)% 392 408 (3.9)%
General and administrative expense ............. 54 94 (42.6)% 94 110 (14.5)%
----- ------ ------ ------
Revenue in excess of specified expense ......... $ (27) $ 64 (142.2)% $ 64 $ 60 6.7 %
===== ====== ====== ======
Average apartment units in service ............. 563 1,061 (46.9)% 1,061 1,498 (29.2)%
===== ====== ====== ======
The decreases in property management revenues and the related expenses from 1995
to 1996 and 1994 to 1995 were primarily due to the reduction in the average
number of apartment units managed during the periods. These reductions were
primarily due to the termination of one management contract during 1994 for
communities developed by the Company and sold to third-party owners prior to the
Initial Offering. Four additional contracts were terminated effective during
1996. As of December 31, 1996, Post Asset Management provided management
services to one Post(R) community, containing 260 apartment units. The Company
anticipates that the remaining contract will be terminated during 1997.
THIRD PARTY LANDSCAPE SERVICES
The Company provides landscape maintenance, design and installation services to
non-related parties through a subsidiary, Post Landscape.
The operating performance of Post Landscape for the years ended December 31,
1996, 1995 and 1994 are summarized as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- ---------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
------ ------ ------- ------ ------ -------
Landscape services and other revenue ............... $4,882 $4,662 4.7% $4,662 $3,808 22.4%
Landscape services expense ......................... 3,459 3,255 6.3% 3,255 2,685 21.2%
General and administrative expense ................. 458 695 (34.1)% 695 413 68.3%
------ ------ ------ ------
Revenue in excess of specified expense ............. $ 965 $ 712 35.5% $ 712 $ 710 0.3%
====== ====== ====== ======
16
19
The change in landscape services revenue, landscape services expense and general
and administrative expense from 1995 to 1996 and 1994 to 1995 is primarily due
to an increase in landscape contracts.
OTHER INCOME AND EXPENSES
Depreciation expense increased from 1995 to 1996 and 1994 to 1995 primarily due
to the completion of new communities and the acquisition of communities.
Interest expense decreased from 1995 to 1996 primarily due to the repayment of
debt with proceeds from the Third Offering and the Perpetual Preferred Shares.
Interest expense increased from 1994 to 1995 due to additional outstanding
borrowings until the time of the Third Offering.
Amortization of deferred loan costs decreased from 1995 to 1996 as a result of
repayment of indebtedness with proceeds of the Third Offering.
General and administrative expense increased from 1995 to 1996 primarily as a
result of increased travel-related expenses and personnel costs. General and
administrative expense remained relatively consistent from 1994 to 1995.
The net gain on sale of assets resulted from the sale of a community and other
assets during 1996, the sale of three communities during 1995 and a parcel of
land during 1994.
The extraordinary item of $1,120 and $4,413 for the years ended December 31,
1995 and 1994, respectively, resulted from the costs associated with the early
retirement of debt.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company's net cash provided by operating activities increased from $43,807
in 1994 to $57,362 in 1995 and to $78,966 in 1996, principally due to increased
property operating income. Net cash used in investing activities increased from
$99,364 in 1994 to $114,531 in 1995, principally due to a $27,740 increase in
spending on new community development and acquisition activity offset by an
increase in net proceeds of $15,152 from the sale of real estate assets. Net
cash used in investing activities increased from $114,531 in 1995 to $166,762 in
1996 primarily due to a $41,616 increase in spending on construction and
acquisition of real estate assets and a $10,360 decrease in proceeds from the
sale of assets. The Company's net cash provided by financing activities
increased from $46,508 in 1994 to $60,885 in 1995, primarily due to the effects
of contributions from PPI of proceeds from the Third Offering and dividend
reinvestment plan ("DRIP"), and the Company's additional borrowings and
distributions. Net cash provided by financing activities increased from $60,885
in 1995 to $79,021 in 1996 primarily as a result of a decrease in net borrowings
and an increase in contributions from PPI of offering proceeds from the Notes
and the Perpetual Preferred Shares.
PPI has elected to be taxed as a Real Estate Investment Trust ("REIT") under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended,
commencing with its taxable year ended December 31, 1993. REITs are subject to a
number of organizational and operational requirements, including a requirement
that they currently distribute 95% of their ordinary taxable income. The Company
makes distributions to enable PPI to satisfy this requirement. As a REIT, the
Company generally will not be subject to Federal income tax on net income.
At December 31, 1996, the Company had total indebtedness of $434,319 and cash
and cash equivalents of $233. The Company's indebtedness includes approximately
$36,281 in conventional mortgages payable and $149,038 in tax-exempt bond
indebtedness secured by communities, senior unsecured notes of $225,000, and
borrowings under unsecured lines of credit totaling approximately $24,000.
The Company expects to meet its short-term liquidity requirements generally
through its net cash provided by operations and borrowings under credit
arrangements and expects to meet certain of its long-term liquidity
17
20
requirements, such as scheduled debt maturities, repayment of financing of
construction and development activities and possible property acquisitions,
through long-term secured and unsecured borrowings, possible sale of properties
and the issuance of debt securities or additional equity securities of PPI, or,
possibly in connection with acquisitions of land or improved properties, Units
of the Company. The Company believes that its net cash provided by operations
will be adequate and anticipates that it will continue to be adequate to meet
both operating requirements and payment of distributions by the Company in
accordance with REIT requirements, of which PPI is subject to, in both the short
and the long term. The budgeted expenditures for improvements and renovations to
certain of the communities are expected to be funded from property operations.
Lines Of Credit
The Company has a syndicated line of credit (the "Revolver") in the amount of
$180,000 to provide funding for future construction, acquisitions and general
business obligations. The Revolver matures on May 1, 1999 and as of December 31,
1996, borrowings bore interest at LIBOR plus .80% or prime minus .25%. The
Revolver provides for the rate to be adjusted up or down based on changes in the
credit ratings on the Company's senior unsecured debt. The credit agreement for
the Revolver contains customary representations, covenants and events of
default, including covenants which restrict the ability of the Company to make
distributions, in excess of stated amounts, which in turn restricts the
discretion of PPI to declare and pay dividends. In general, during any fiscal
year the Company may only distribute up to 100% of the Company's consolidated
income available for distribution (as defined in the credit agreement) exclusive
of distributions of up to $30,000 of capital gains for such year. The credit
agreement contains exceptions to these limitations to allow the Company to make
distributions necessary to allow PPI to maintain its status as a REIT. The
Company does not anticipate that this covenant will adversely affect its ability
to make required distributions.
On July 26, 1996, the Company closed a $20,000 unsecured line of credit with
Wachovia Bank of Georgia, N.A. (The "Cash Management Line"), which was fully
funded and used to pay down the outstanding balance on the Revolver. The Cash
Management Line bears interest at LIBOR plus .75% or prime minus .25% and has a
maturity date of July 25, 1997. The Revolver requires three days advance notice
to repay borrowings whereas the Cash Management Line provides the Company with
an automatic daily sweep which applies all available cash to reduce the
outstanding balance. At December 31, 1996, the Company had $176,000 available
under the Revolver to fund future development and general corporate obligations.
In addition, the Company has a $3,000 facility to provide letters of credit for
general business purposes.
Tax Exempt Bonds
On June 29, 1995, the Company replaced the bank letters of credit providing
credit enhancement for twelve of its outstanding tax-exempt bonds and three of
its economically defeased tax-exempt bonds. Under an agreement with the Federal
National Mortgage Association ("FNMA"), FNMA now provides, directly or
indirectly through other bank letters of credit, credit enhancement with respect
to such bonds. Under the terms of such agreement, FNMA has provided replacement
credit enhancement through 2025 for seven bond issues, aggregating $84,280,
which were concurrently reissued, and has agreed, subject to certain conditions,
to provide credit enhancement through November 14, 2025 for up to an additional
$70,248 ($5,490 of which is currently defeased) with respect to eight other bond
issues which mature and may be refunded during 1997 and 1998. Under this
agreement, on January 1, 1997, the Post Bridge and Post Gardens bonds were
refunded in the amount of $12,450 ($2,490 of which had previously been defeased)
and $14,500, respectively, with an issue enhanced by FNMA and maturing on June
1, 2025. The agreement with FNMA contains representations, covenants, and events
of default customary to such secured loans.
Refundable Tax Exempt Bonds
The Company has previously issued tax-exempt bonds, secured by certain
communities, totaling $235,880, of which $86,842 has been economically defeased
at December 31, 1996, leaving $149,038 of principal amount of tax-exempt bonds
outstanding at December 31, 1996 of which $84,280 of the bonds outstanding have
been reissued with a maturity of June 1, 2025. The remaining outstanding bonds,
together with the economically defeased bonds, mature and may be reissued,
during the years 1997 and 1998. On January 1, 1997, the Post Bridge and Post
Gardens bonds were refunded in the amount of $12,450 ($2,490 of which had
previously been defeased) and $14,500, respectively, with an issue enhanced by
FNMA and maturing on June 1, 2025. The Company has chosen economic defeasance of
the bond obligations rather than a legal defeasance in order to preserve the
legal right to refund such
18
21
obligations on a tax-exempt basis at the stated maturity if the Company then
determines that such refunding is beneficial to the Company.
The following table shows the amount of bonds (both defeased and outstanding) at
December 31, 1996, which the Company may reissue during the years 1997 through
2025:
DEFEASED OUTSTANDING TOTAL REISSUE
PORTION PORTION CAPACITY
-------- ----------- -------------
1997 (1)............. $ 5,490 $ 51,460 $ 56,950
1998................. 81,352 13,298 94,650
Thereafter........... -- 84,280 84,280
------- -------- --------
$86,842 $149,038 $235,880
======= ======== ========
- ---------------
(1) 1997 amounts include Post Bridge and Post Gardens bonds which matured
on January 1, 1997.
Senior Unsecured Debt Offering
On September 30, 1996, the Company completed a $125,000 senior unsecured debt
offering comprised of two tranches. The first tranche, $100,000 of 7.25% Notes
due on October 1, 2003 (the "2003 Notes"), was priced at 99.642% to yield
7.316%, or 71 basis points over the rate on U.S. Treasury securities with a
comparable maturity. The second tranche, $25,000 or 7.50% Notes due on October
1, 2006 (the "2006 Notes", and together with the 2003 Notes, the "Notes"), was
priced at 99.694% to yield 7.544%, or 83 basis points over the rate on U.S.
Treasury securities with a comparable maturity. Proceeds from the Notes were
used to pay down the Revolver.
Perpetual Preferred Stock Offering
On October 1, 1996, PPI sold one million non-convertible 8.5% Series A
Cumulative Redeemable Shares (the "Perpetual Preferred Shares"), raising $50
million. Net proceeds of $48,700 from the sale of the Perpetual Preferred Shares
were contributed to the Company in exchange for one million Series A Preferred
Partnership Units (the "Perpetual Preferred Units"). The Company used the
proceeds to repay outstanding indebtedness.
Dividend Reinvestment Plan
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of PPI.
Under the DRIP, shareholders may elect for their dividends to be used to acquire
additional shares of PPI's Common Stock directly from PPI, for 95% of the market
price on the date of purchase.
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Schedule of Indebtedness
The following table reflects the Company's indebtedness at December 31, 1996.
MATURITY PRINCIPAL
COMMUNITY LOCATION INTEREST RATE DATE (1) BALANCE
- --------- ------------ ---------------------------- ----------------- ---------
TAX EXEMPT FIXED RATE (SECURED)
Post Bridge ....................... Atlanta, GA 7.5% + .575% (3)(4) 01/01/97 (5)(2) $ 9,960
Post Village (Atlanta) Gardens .... Atlanta, GA 7.5% + .575% (3)(4) 01/01/97 (5)(2) 14,500
Post Chase ........................ Atlanta, GA 7.5% + .575% (3)(4) 07/01/97 (5) 12,000
Post Walk ......................... Atlanta, GA 7.5% + .575% (3)(4) 07/01/97 (5) 15,000
Post Court ........................ Atlanta, GA 7.5% + .575% (3)(4) 06/01/98 (5) 13,298
--------
64,758
--------
CONVENTIONAL FIXED RATE (SECURED)
Post Village (Atlanta) Arbors ..... Atlanta, GA 8.16% 02/10/97 (6) 7,640
Post Summit ....................... Atlanta, GA 7.72% 02/01/98 5,315
Post River ........................ Atlanta, GA 7.72% 03/01/98 5,875
Post Hillsboro Village ............ Nashville, TN 9.20% 10/01/2001 3,051
--------
21,881
--------
TAX EXEMPT FLOATING RATE (SECURED)
Post Ashford Series 1995 .......... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 9,895
Post Valley Series 1995 ........... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 18,600
Post Brook Series 1995 ............ Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 4,300
Post Village (Atlanta) Hills
Series 1995 ..................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 7,000
Post Mill ......................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 12,880
Post Canyon ....................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 16,845
Post Corners ...................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 14,760
--------
84,280
--------
CONVENTIONAL FLOATING RATE (SECURED)
Post Renaissance (Phase I and II) Atlanta, GA LIBOR + .55% 07/01/99 14,400
--------
14,400
--------
SENIOR NOTES (UNSECURED)
Wachovia Bank of Georgia .......... N/A 7.15% 09/29/99 25,000
Northwestern Mutual Life .......... N/A 8.21% 06/07/2000 30,000
Wachovia Bank of Georgia .......... N/A 7.15% 09/29/2001 25,000
Northwestern Mutual Life .......... N/A 8.37% 06/07/2002 20,000
Senior Notes ...................... N/A 7.25% 10/01/2003 100,000
Senior Notes ...................... N/A 7.50% 10/01/2006 25,000
--------
225,000
--------
LINE OF CREDIT (UNSECURED)
Revolver .......................... N/A LIBOR + .80 % or prime minus .25% 05/01/99 4,000
Cash Management Line .............. N/A LIBOR + .75 % or prime minus .25% 11/14/97 20,000
--------
24,000
--------
TOTAL ............................. $434,319
========
- -----------------------------
(1) All of the debt can be prepaid at any time, subject to certain
prepayment penalties. All dates listed are final maturity dates
assuming the exercise of any available extension option by the Company.
(2) On January 1, 1997, this bond was refunded with an issue having a
maturity date of June 1, 2025 and an interest rate of SunTrust Bank,
Atlanta Non-AMT "AAA" tax free rate plus a credit enhancement fee of
.575%.
(3) Bond Financed (interest rate on bonds + credit enhancement fees).
(4) These bonds are cross collateralized and are also secured by Post
Fountains at Lee Vista, Post Lake (Orlando) and the Fountains and
Meadows of Post Village for which the Company has economically defeased
their respective bond indebtedness.
(5) Subject to certain conditions at re-issuance, the credit enhancement
runs to June 1, 2025.
(6) On February 10, 1997, this mortgage was paid off with proceeds drawn on
the Revolver.
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23
Current Development Activity
The Company's communities under development or in initial lease-up are
summarized in the following table:
ACTUAL OR UNITS
ACTUAL OR ESTIMATED LEASED
QUARTER OF ESTIMATED QUARTER OF AS OF
# OF CONSTRUCTION QUARTER FIRST STABILIZED FEBRUARY 22,
METROPOLITAN AREA UNITS COMMENCEMENT UNITS AVAILABLE OCCUPANCY 1997
----------------- ----- ------------ --------------- --------- ----
ATLANTA, GA
-----------
Post Collier Hills(TM) .................. 396 4Q'95 4Q'96 4Q'97 158
Post Glen(R) ............................ 314 1Q'96 1Q'97 1Q'98 38
Post Lindbergh(TM) ...................... 396 3Q'96 3Q'97 1Q'99 N/A
Post Gardens(R) ......................... 397 3Q'96 4Q'97 1Q'99 N/A
Riverside by Post(TM) ................... 537 3Q'96 1Q'98 4Q'99 N/A
Post Ridge(TM) .......................... 232 1Q'97 4Q'97 3Q'98 N/A
Post River(R)II ......................... 88 1Q'97 4Q'97 2Q'98 N/A
----- ---
2,360 196
----- ---
TAMPA, FL
---------
Post Walk at Hyde ....................... 134 1Q'96 1Q'97 3Q'97 62
Post Rocky .............................. 174 4Q'96 3Q'97 1Q'98 N/A
----- ---
308 62
----- ---
CHARLOTTE, NC
Post Park at Phillips ................... 402 4Q'95 4Q'96 1Q'98 139
----- ---
NASHVILLE, TN
Post Hillsboro .......................... 201 1Q'97 3Q'97 1Q'98 N/A
----- ---
3,271 397
===== ===
Land
The Company has acquired a parcel of land in Atlanta on which it plans to build
a new community. The Home Depot, Inc. is constructing its corporate headquarters
campus and extensive infrastructure improvements are being made by the county
adjacent to the parcel. The Company will review its development plan for this
parcel closer to completion of these improvements. In addition, the Company
holds land for a third phase of Post Rocky Point in Tampa, Florida. The Company
is also currently conducting feasibility and other pre-development studies for
possible new Post(R) communities in its primary market areas.
Other Activities
On May 7, 1996, the Company reacquired three contiguous Atlanta apartment
communities, containing 810 units, which the Company developed in the early
1980's and managed under the Post(R) brand name through mid-1993. The Company's
capital investment, after capital improvements, will be approximately $48
million, or $59,000 per apartment unit. The Company is operating this as one
community under the name Post Creek(TM) .
On July 19, 1996, the Company sold a community located in Florida, containing
180 units. The sale of the community is consistent with the Company's strategy
of selling communities when the market demographics for a community are no
longer consistent with the Company's existing ownership strategy.
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Capitalization of Fixed Assets and Community Improvements
The Company has established a policy of capitalizing those expenditures relating
to acquiring new assets, materially enhancing the value of an existing asset, or
substantially extending the useful life of an existing asset. All expenditures
necessary to maintain a community in ordinary operating condition are expensed
as incurred. During the first five years of a community (which corresponds to
the estimated depreciable life), carpet replacements are expensed as incurred.
Thereafter, carpet replacements are capitalized.
Acquisition of assets and community improvement expenditures for the year ended
December 31, 1996 and 1995 are summarized as follows:
YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
-------- --------
New community development and acquisition activity ..... $173,328 $132,922
Nonrecurring capital expenditures
Vehicle access control gates ......................... 66 428
Other community additions and improvements ........... 1,872 859
Recurring capital expenditures
Carpet replacements .................................. 1,087 897
Other community additions and improvements ........... 1,874 803
Corporate additions and improvements ................... 820 1,267
-------- --------
$179,047 $137,176
======== ========
INFLATION
Substantially all of the leases at the Communities allow, at the time of
renewal, for adjustments in the rent payable thereunder, and thus may enable the
Company to seek increases in rents. The substantial majority of these leases are
for one year or less and the remaining leases are for up to two years. At the
expiration of a lease term, the Company's lease agreements provide that the term
will be extended unless either the Company or the lessee gives at least sixty
(60) days written notice of termination; in addition, the Company's policy
permits the earlier termination of a lease by a lessee upon thirty (30) days
written notice to the Company and the payment of one month's additional rent as
compensation for early termination. The short-term nature of these leases
generally serves to reduce the risk to the Company of the adverse effect of
inflation.
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
Historical Funds from Operations
The Company considers funds from operations ("FFO") an appropriate measure of
performance of an equity REIT. FFO is defined to mean net income (loss)
determined in accordance with GAAP, excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation of real estate assets,
and after adjustment for unconsolidated partnerships and joint ventures. FFO
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indicator of the Company's financial performance or
to cash flow from operating activities (determined in accordance with GAAP) as a
measure of the Company's liquidity, nor is it necessarily indicative of
sufficient cash flow to fund all of the Company's needs. Cash available for
distribution ("CAD") is defined as FFO less capital expenditures funded by
operations and loan amortization payments. The Company believes that in order to
facilitate a clear understanding of the consolidated historical operating
results of the Company, FFO and CAD should be examined in conjunction with net
income as presented in the consolidated financial statements and data included
elsewhere in this report.
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25
FFO and CAD for the year ended December 31, 1996, 1995 and 1994 presented on a
historical basis are summarized in the following table:
Calculations of Funds from Operations and Cash Available for Distribution
YEAR ENDED DECEMBER 31,
1996 1994 1995
------------ ------------ ------------
Net income available to common unitholders ............. $ 52,390 $ 37,297 $ 24,730
Extraordinary item .................................... -- 1,120 4,413
Net gain on sale of assets, net of related income taxes (854) (1,494) (1,746)
------------ ------------ ------------
Adjusted net income .................................... 51,536 36,671 27,649
Depreciation of real estate assets ..................... 22,676 20,127 19,967
------------ ------------ ------------
Funds from Operations (1) .............................. 74,212 56,798 47,616
Recurring capital expenditures (2) .................... (2,961) (1,700) (1,816)
Non-recurring capital expenditures (3) ................ (1,938) (1,287) (1,302)
Loan amortization payments ............................ (228) (199) (184)
------------ ------------ ------------
Cash Available for Distribution ........................ $ 69,085 $ 53,612 $ 44,314
============ ============ ============
Cash Flow Provided From (Used In):
Operating activities .................................. $ 78,966 $ 57,362 $ 43,807
Investing activities .................................. $ (166,762) $ (114,531) $ (99,364)
Financing activities ................................... $ 79,021 $ 60,885 $ 46,508
Weighted average Units outstanding ..................... 26,917,723 23,541,639 22,125,890
============ ============ ============
- ---------------
(1) The Company uses the National Association of Real Estate Investment
Trusts ("NAREIT") definition of FFO which was adopted for periods
beginning after January 1, 1996. FFO for any period means the
Consolidated Net Income of the Company and its subsidiaries for such
period excluding gains or losses from debt restructuring and sales of
property plus depreciation of real estate assets, and after adjustment
for unconsolidated partnerships and joint ventures, all determined on a
consistent basis in accordance with generally accepted accounting
principles. FFO presented herein is not necessarily comparable to FFO
presented by other real estate companies due to the fact that not all
real estate companies use the same definition. However, the Company's
FFO is comparable to the FFO of real estate companies that use the
current NAREIT definition.
(2) Recurring capital expenditures consisted primarily of $1,087, $897 and
$729 of carpet replacement and $1,874, $803 and $1,087 of other
community additions and improvements to existing communities for the
years ended December 31, 1996, 1995 and 1994, respectively. Since the
Company does not add back the depreciation of non-real estate assets in
its calculation of FFO, capital expenditures of $820, $1,267 and $783
are excluded from the calculation of CAD for the years ended December
31, 1996, 1995 and 1994, respectively.
(3) Non-recurring capital expenditures consisted of the additions of
vehicle access control gates to communities of $66, $428 and $1,302 and
other community additions and improvements of $1,872, $859 and $0 for
the years ended December 31, 1996, 1995 and 1994, respectively.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The Company considers portions of this information to be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of The Securities Exchange Act of 1934. Although the Company
believes that the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, it can give no assurance that its
expectations will be achieved.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements are listed under Item 14(a) and are filed as part of
this report on the pages indicated. The supplementary data are included in Note
13 of the Notes to Consolidated Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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26
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company, a Georgia limited partnership, has no directors.
The persons who are executive officers of the Company and its affiliates and
their positions are as follows:
NAME POSITIONS AND OFFICES HELD
- -----------------------------------------------------------------------
John A. Williams.......................... Chairman of the Board, Chief Executive Officer and Director
John T. Glover............................ President, Chief Operating Officer, Treasurer and Director
W. Daniel Faulk, Jr....................... President -- Post Apartment Development
Jeffrey A. Harris......................... President -- Post Management Services
Martha J. Logan........................... President -- Post Management Division
Terry L. Chapman.......................... Executive Vice President -- Post Management Services
Richard A. Denny, III..................... Executive Vice President -- Post Apartment Development
John D. Hooks............................. Executive Vice President -- Post Management Services
William F. Leseman........................ Executive Vice President -- RAM Partners, Inc.
William C. Lincicome...................... Executive Vice President -- Post Landscape Services
Timothy A. Peterson....................... Executive Vice President -- Post Corporate Services
Sherry W. Cohen........................... Senior Vice President -- Post Corporate Services and Secretary
Judy M. Denman............................ Senior Vice President -- Post Corporate Services
R. Gregory Fox............................ Senior Vice President -- Post Corporate Services
Katharine W. Kelley....................... Senior Vice President -- Post Apartment Development
John B. Mears............................. Senior Vice President -- Post Apartment Development
Janie S. Maddox........................... Vice President -- Post Corporate Services
Donald J. Rutzen.......................... Vice President -- Post Apartment Development
The following is a biographical summary of the experience of the executive
officers of the company:
John A. Williams. Mr. Williams is the Chairman of the Board and Chief Executive
Officer of the Company. Mr. Williams founded the business of the Company in 1971
and since that time has acted as Chairman and Chief Executive Officer. Mr.
Williams is currently serving on the board of directors of Barnett Banks, Inc.,
Crawford & Co. and the Atlanta Regional Commission. Mr. Williams is 54 years
old.
John T. Glover. Mr. Glover is the President, Chief Operating Officer and
Treasurer of the Company and a director. Mr. Glover joined the Company in 1984
and since that time has acted as its President. Mr. Glover is a Director of
SunTrust Banks of Georgia Inc., SunTrust Bank, Atlanta, N.A. and Haverty's
Furniture Companies, Inc. In addition, he is a member of the Board of Governors
of the National Association of Real Estate Investment Trusts, and a member of
the board of directors of the National Realty Committee, and the National
Multi-Housing Council. Mr. Glover is 50 years old.
W. Daniel Faulk, Jr. Mr. Faulk has been with the Company for nine years. Since
April 1993, he has been President of Post Apartment Development, which is
responsible for the development and construction of all Post apartment
communities. Prior thereto, Mr. Faulk was President of Post Atlanta since
February 1987. Mr. Faulk is currently on the board of directors of Mountain
National Bank. Mr. Faulk is 54 years old.
Jeffrey A. Harris. Mr. Harris has been with the Company for twelve years. Since
October 1995, he has been President of Post Management Services and President of
Post Landscape. Prior thereto, Mr. Harris was President of Post Management
Division from March 1995, Executive Vice President of Post Management Division
from April 1993 and Senior Vice President from 1989. Mr. Harris is on the Board
of Directors and is President of the Atlanta Apartment Association. Mr. Harris
is 39 years old.
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27
Martha J. Logan. Ms. Logan has been with the Company for five years. Since
October 1995, she has been President of Post Management Division. Prior thereto,
Ms. Logan was President of RAM since July 1994, Executive Vice President of RAM
from January 1994 and was Vice President of RAM since 1991. Ms. Logan is 42
years old.
Terry L. Chapman. Mr. Chapman has been with the Company for twenty-three years
and is currently, and has been for more than five years, an Executive Vice
President of Post Management Services responsible for maintenance, quality
assurance, security, and preventive maintenance for all Post(R) communities. Mr.
Chapman is 50 years old.
Richard A. Denny, III. Mr. Denny has been with the Company for sixteen years.
Since July 1993, he has been an Executive Vice President of Post Apartment
Development responsible for construction of all Post(R) apartment communities.
Prior thereto, he was a Senior Vice President of Post Atlanta since June 1987.
Mr. Denny is 39 years old.
John D. Hooks. Mr. Hooks has been with the Company for eighteen years. Since
July 1993, he has been an Executive Vice President of Post Landscape responsible
for landscape design, installation and maintenance on all Post(R) communities.
Prior thereto, he was the Senior Vice President of Landscape since January 1987.
Mr. Hooks is 42 years old.
William F. Leseman. Mr. Leseman has been with the Company for seven years. Since
October 1995, he has been Executive Vice President of RAM responsible for
day-to-day operations of such division. Prior thereto, Mr. Leseman was Senior
Vice President of Post Management Services since January 1994 and an Area Vice
President of Post Management Services since 1989. Mr. Leseman is 37 years old.
William C. Lincicome. Mr. Lincicome has been with the Company for six years.
Since September 1996, he has been Executive Vice President of Post Landscape
Services responsible for the day to day operations of Post Landscape Services.
Prior thereto, he was an independent architectural consultant since April 1996
and was Vice President and Director of Land Planning of Post Landscape Services
since 1989. Mr. Lincicome is 44 years old.
Timothy A. Peterson. Mr. Peterson has been with the Company for seven years and
currently serves as Executive Vice President of Post Corporate Services
responsible for accounting and capital markets. Prior thereto, he was Senior
Vice President of Post Corporate Service since April 1993 and responsible for
capital markets since November 1995. Mr. Peterson was Vice President of Post
Corporate Services since January 1993, and he was responsible for planning and
reporting services since 1989. Mr. Peterson is Co-Chairman of the Accounting
Committee for the National Association of Real Estate Investment Trust. Mr.
Peterson is a Certified Public Accountant. Mr. Peterson is 31 years old.
Sherry W. Cohen. Ms. Cohen has been with the Company for twelve years. Since
July 1993, she has been a Senior Vice President of Post Corporate Services
responsible for supervising and coordinating legal affairs and insurance. Prior
thereto, Ms. Cohen was a Vice President of Post Properties, Inc. since April
1990, as well as Corporate Secretary. Ms. Cohen is 42 years old.
Judy M. Denman. Ms. Denman has been with the Company for twenty-one years. Since
July 1993, she has been a Senior Vice President of Post Corporate Services
responsible for day-to-day accounting functions and cash management reporting.
Prior thereto, she was a Vice President of Post Properties, Inc. since June
1984. Ms. Denman is 50 years old.
R. Gregory Fox. Mr. Fox has been with the Company since February 1996 and he
serves as Senior Vice President of Post Corporate Services and the Company's
Chief Accounting Officer responsible for financial reporting and management
information systems. Prior to joining the Company, he was a senior manager in
the audit division of Price Waterhouse LLP where he was employed for ten years.
Mr. Fox is a Certified Public Accountant. Mr. Fox is 37 years old.
Katharine W. Kelley. Ms. Kelley has been with the Company since 1994 and serves
as a Senior Vice President of Post Apartment Development responsible for
acquiring new development sites in metropolitan Atlanta, Georgia. For five year
prior to joining the Company, she was a Vice President at The Landmarks Group, a
commercial real estate development firm. Ms. Kelley is 33 years old.
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28
John B. Mears. Mr. Mears has been with the Company since November 1993. Since
July 1994, he has been a Senior Vice President of Post Apartment Development
responsible for acquiring new development sites in the Company's primary market
outside of Atlanta, GA. Prior to joining the Company, Mr. Mears was an associate
in the Real Estate Investment Banking Group at Merrill Lynch and Company since
June 1992. Mr. Mears is 33 years old.
Janie S. Maddox. Ms. Maddox has been with the Company for twenty-one years.
Since November 1995, she has been a Vice President of the Company in charge of
community relations. Prior thereto, she was a Senior Vice President of Post
Management Services primarily responsible for human resources since 1990. Ms.
Maddox is 49 years old.
Donald J. Rutzen. Mr. Rutzen has been with the Company for eighteen years and
currently serves as Vice President of Post Apartment Development responsible for
the coordination of site planning for new apartment development. Prior thereto,
he was Executive Vice President of Post Landscape Services, Inc. responsible for
the day-to-day landscape design, installation and maintenance for third party
accounts since 1993. He was Senior Vice President of Post Landscape Services,
Inc. since April 1992 and Vice President of Post Apartment Development since
January 1985. Mr. Rutzen is 49 years old.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the compensation
paid to the Company's Chief Executive Officer and the executive officers whose
salary and bonus compensation for the year ended December 31, 1996 exceeded
$100,000.
SUMMARY COMPENSATION TABLE
Annual Compensation
------------------------------------------------
Name and Other Annual
Principal Position Year Salary Bonus($) Compensation(1)
- ------------------ ---- ------ -------- ---------------
John A. Williams .......................... 1996 250,000 103,082 141,861
Chairman of the Board of Directors of 1995 225,000 143,640 75,510
Chief Executive Officer 1994 225,000 157,500 951
John T. Glover ............................ 1996 250,000 103,082 84,524
President, Chief Operating Officer 1995 225,000 143,640 40,374
and Treasurer 1994 225,000 157,500 951
W. Daniel Faulk, Jr ....................... 1996 168,000 69,271 2,813
President--Post 1995 160,000 87,144 905
Apartment Development 1994 140,000 98,000 951
Jeffrey A. Harris ......................... 1996 168,000 51,088 261,024
President--Post 1995 130,000 66,694 5,704
Management Services 1994 104,800 84,000 5,464
Timothy A. Peterson ....................... 1996 125,000 51,541 2,296
Executive Vice President 1995 90,000 57,456 884
Post Corporate Services 1994 85,000 56,525 539
(1) Amounts shown for Messrs. Williams and Glover for 1996 include (i) the
cost of tax and financial planning by third parties in the amount of
$73,627 and $40,213, respectively and (ii) personal use of the
corporate aircraft in the amounts of $65,421 and $41,497,
respectively. Amounts shown for Messrs,. Williams and Glover for
1995 include (i) the cost of tax and financial planning advice by
third parties in the amounts of $49,000 and $29,600, respectively and
(ii) personal use of the corporate aircraft in the amounts of $25,606
and $9,870, respectively.
26
29
PROFIT SHARING PLAN
PPI has adopted a qualified profit sharing plan for the benefit of employees of
PPI, its subsidiaries and affiliates. An employee is eligible to share in
contributions made under the plan after he has been employed on the first day of
a calendar year. Thereafter an employee will share in the contributions, if any,
made for each calendar year if he is an employee on the last day of such
calendar year. Each participating employee's share of any contribution is
(subject to certain limitations for highly compensated employees) based on the
ratio that his compensation for such year bears to the compensation of all
participating employees for such year. Contributions made on behalf of
participating employees are credited to an account under the plan in his name,
and his interest in such account begins to vest upon the completion of three
years of service as an employee. Upon the completion of three years of service
he has a 20% vested interest in his account, and his account then continues to
vest at the rate of 20% for each year of service he completed thereafter.
Contributions are made based on a discretionary amount determined by management
of PPI. The contributions, if any, are made to trust which is tax exempt. The
assets of the trust are invested by the trustee. The plan was amended in 1993 to
provide for participation by Messrs, Williams, Glover, Hooks and Faulk. PPI's
contributions to the plan during 1994, 1995, and 1996 were $147,000, $145,000
and $104,000, respectively.
NONCOMPETITION AND EMPLOYMENT CONTRACT
Each of Messrs. Williams and Glover has entered into noncompetition agreements
with PPI and the Company. These agreements prohibit each individual, subject to
certain limited exceptions, from engaging in managerial responsibilities
directly or indirectly in the development, operation, management, leasing or
landscaping of any multifamily community for the period of his employment by PPI
and the Company or its affiliates, including Post Services, Inc. ("Post
Services") and for two years thereafter. Each of Messrs. Williams and Glover has
entered into an employment contract with each of PPI, the Company and Post
Services, for a term of five years although each has the right to resign after
three years. The contracts provide for annual base compensation of an aggregate
of $225,000, subject to any increases in base compensation approved by the
Compensation Committee of the Board of Directors of PPI, of which each of
Messrs. Williams and Glover will receive $125,000 from the Company, $50,000 from
Post Services and $50,000 from PPI.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no compensation committee and no Board of Directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Unit Ownership by Management and Principal Unitholders
The following table sets forth the beneficial ownership of Units as of March 1,
1997 for (i) the Chief Executive Officer and each of the five other most highly
compensated executive officers of the Company (collectively the "Named Executive
Officers"), (ii) the executive officers of the Company as a group and (iv) each
person who is a Unitholder of the Company holding more than a 5% interest in the
Company. Unless otherwise indicated in the footnotes, all of such interests are
owned directly, and the indicated person or entity has sole voting and
disposition power. None of the Named Executive Officers own Perpetual Preferred
Units.
Name and Address Number of Units
of Beneficial Owner Beneficially Owned Percent of Class(1)
- ------------------- ------------------ -------------------
John A. Williams(2) ............................ 2,003,570 38.4%
John T. Glover(3) .............................. 695,344 13.3%
W. Daniel Faulk, Jr. (4) ....................... 150,460 *
Jeffrey A. Harris .............................. 1,396 *
Timothy A. Peterson ............................ 0 *
All executive officers as a group
(23 persons)(12) .............................. 2,936,785 56.3%
27
30
*Less than 1%.
(1) Based on an aggregate of 5,216,474 Units issued and outstanding as of
March 1, 1997. Units are redeemable for Common Stock of PPI or cash, at
the option of PPI.
(2) Includes (i) 1,793,731 of Units deemed beneficially owned by Mr.
Williams through control of certain limited partnerships and (ii)
209,839 Units (of which Mr. Williams has shared voting and disposition
power) deemed beneficially owned by Mr. Williams through his control of
a corporation (which Units are also shown as being beneficially owned
by Mr. John T. Glover).
(3) Includes (i) 485,505 Units deemed beneficially owned by Mr. Glover
through his control of certain limited partnerships, (iv) 11,189 Units
deemed beneficially owned by Mr. Glover as trustee of a trust for the
benefit of Mr. Williams' family, and (v) 209,839 Units (of which Mr.
Glover has shared voting and disposition power) deemed beneficially
owned by Mr. Glover through his control of a corporation (which shares
are also shown as being beneficially owned by Mr. John A. Williams).
(4) Includes 1,590 shares of Common Stock issuable upon redemption of Units
owned by Mr. Faulk's children.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LANDSCAPING SERVICES
Certain executive officers and directors of PPI employ the Company to provide
landscaping services through the Company's landscaping affiliate, Post Landscape
Services, Inc. During 1996, the Company received landscaping fees of $353,000
from Mr. Williams, $47,000 from Mr. Glover and $358,000 from Mr. Blank. In the
aggregate, the fees included $242,000 of reimbursed expenses which the Company
does not include in landscaping services revenue. As a result of these
transactions, $516,000 of landscape services revenue was recognized in the
Company's 1996 financial statements. All landscaping services were provided to
the directors at the market price for such services and to the executive
officers at the cost to the Company of providing such services.
CORPORATE SERVICES
Pursuant to the terms of their employment agreements, the Company has received
reimbursement fees from entities in which Mr. Williams is the controlling
partner. The fees represent a reimbursement for the accounting and
administrative duties and oversight provided to the entities by the Company. The
calculation of these monthly fees is based on an estimate of time and resources
incurred by Post Corporate Services personnel. Set forth below are the fees
received from these entities during 1996:
1996
----
Northwest Associates, Ltd. .................. $ 3,600
Powder Springs Investors, Ltd. .............. 3,600
Post Partners, Ltd. ......................... 12,000
Post Gwinnett Investors, Ltd. ............... 6,000
28
31
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(a)1. and 2. FINANCIAL STATEMENTS AND SCHEDULES
The financial statements and schedules listed below are filed as part of this
annual report on the pages indicated.
INDEX TO FINANCIAL STATEMENTS
PAGE
POST APARTMENT HOMES, L.P.
Consolidated Financial Statements:
Report of Independent Accountants ................................................... 32
Consolidated Balance Sheets as of December 31, 1996 and 1995 ........................ 33
Consolidated Statements of Operations for the Years Ended December 31, 1996,
1995 and 1994 ...................................................................... 34
Consolidated Statements of Partners' Equity for the
Years Ended December 31, 1996, 1995 and 1994 ....................................... 35
Consolidated Statements of Cash Flows for the Years Ended December 31, 1996,
1995 and 1994 ...................................................................... 36
Notes to the Consolidated Financial Statements ...................................... 37
Schedule III:
Consolidated Real Estate and Accumulated Depreciation ............................... 48
All other schedules are omitted because they are not applicable or not required.
29
32
3. EXHIBITS
Certain of the exhibits required by Item 601 of Regulation S-K have been filed
with previous reports by the registrant and are herein incorporated by reference
thereto.
The Registrant agrees to furnish a copy of all agreements relating to long-term
debt upon request of the Commission.
EXHIBIT
NO. DESCRIPTION
10.1** -- Agreement of Limited Partnership of the Company
10.4** -- Noncompetition Agreement between PPI, the Company and John A. Williams
10.5** -- Noncompetition Agreement between PPI, the Company and John T. Glover
10.6** -- Employment Agreement between PPI and John A. Williams
10.7** -- Employment Agreement between PPI and John T. Glover
10.8** -- Employment Agreement between the Company and John A. Williams
10.9** -- Employment Agreement between the Company and John T. Glover
10.10** -- Employment Agreement between Post Services, Inc. and John A. Williams
10.11** -- Employment Agreement between Post Services, Inc. and John T. Glover
10.12** -- Option and Transfer Agreement among the Company, Post Services, John A. Williams and John T.
Glover
10.13** -- Promissory Note made by Post Services, Inc. in favor of RAM Partners, Inc.
10.14* -- Form of officers and directors Indemnification Agreement
10.15* -- Form of Option Agreement to be entered into between the Company and the owners of four parcels of
undeveloped land
10.16* -- Profit Sharing Plan of the Company
10.17** -- Form of General Partner 1% Exchange Agreement
10.20- -- Credit Agreement dated as of February 1, 1995 among Post
Apartment Homes, L.P., Wachovia Bank of Georgia, N.A., as
administrative agent, First Union National Bank of Georgia,
as Co-Agent, and the banks listed on the signature pages
thereto (the "Credit Agreement")
10.21+ -- First Amendment to Credit Agreement and Release of Subsidiary Guarantors dated July 26, 1995
10.22+ -- Second Amendment to Credit Agreement dated October 27, 1995
10.23+ -- Third Amendment to Credit Agreement dated February 29, 1996
10.24 -- Indenture between the Company and Sun Trust Bank, Atlanta, as Trustee (filed as an Exhibit to Form S-3
(SEC File No. 333-3555)
21.1+ -- List of Subsidiaries
23.1 -- Consent of Price Waterhouse LLP for Registration Statement on Form S-3 (No. 333-3555)
27.1 -- Financial Data Schedule (for SEC use only)
- ---------------
* Filed as an exhibit to the Registration Statement on Form S-11 (SEC
File No. 33-61936), as amended, of the Registrant.
** Filed as an exhibit to the Registration Statement on Form S-11 (SEC
File No. 33-71650), as amended, of the Registrant.
+ Filed as an exhibit to the Annual Report on Form 10-K for the year
ended December 31, 1995. The registrant's proxy statement is to be
filed with the Commission on or about March 31, 1997.
- - Filed as an exhibit to the Annual Report on Form 10-K for the
year ended December 31, 1994.
(b) Reports on Form 8-K
Report on Form 8-K filed on October 1, 1996.
30
33
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
POST APARTMENT HOMES, L.P.
By: Post Properties, Inc., as General
Partner
March 28, 1997 /s/ JOHN T. GLOVER
--------------------------------------------
John T. Glover, President
Chief Operating Officer, Treasurer
and a Director
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
SIGNATURE TITLE DATE
John A. Williams Chief Executive Officer March 28, 1997
- ------------------------------------
John A. Williams
John T. Glover President, Chief Operating Officer, March 28, 1997
- ------------------------------------ Treasurer and Principal Financial
John T. Glover Officer
R. Gregory Fox Senior Vice President, Chief March 28, 1997
- ------------------------------------ Accounting Officer
R. Gregory Fox
31
34
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Post Apartment Homes, L.P.
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a) 1. and 2. on page 29 present fairly, in all material
respects, the financial position of Post Apartment Homes, L.P. at December 31,
1996 and 1995, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the management of Post Apartment Homes, L.P.; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Atlanta, Georgia
February 11, 1997
32
35
POST APARTMENT HOMES, L.P.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
DECEMBER 31,
-----------------------
1996 1995
---------- ---------
ASSETS
Real estate assets
Land ...................................................... $ 150,072 $ 118,988
Building and improvements ................................. 730,518 589,869
Furniture, fixtures and equipment ......................... 74,120 67,354
Construction in progress .................................. 140,437 149,514
Land held for future development .......................... 14,195 12,199
---------- ---------
1,109,342 937,924
Less: accumulated depreciation ............................ (177,672) (156,824)
---------- ---------
Operating real estate assets ............................ 931,670 781,100
Cash and cash equivalents .................................. 233 9,008
Restricted cash ............................................ 1,148 1,146
Deferred charges, net ...................................... 9,459 7,241
Other assets ............................................... 16,165 14,489
---------- ---------
Total assets ............................................ $ 958,675 $ 812,984
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable .............................................. $ 434,319 $ 349,719
Accrued interest payable ................................... 4,264 3,965
Distribution payable ....................................... 14,659 13,091
Accounts payable and accrued expenses ...................... 17,915 16,354
Security deposits and prepaid rents ........................ 5,084 4,366
---------- ---------
Total liabilities ....................................... 476,241 387,495
---------- ---------
Commitments and contingencies ..............................
Partners' equity ........................................... 482,434 425,489
---------- ---------
Total liabilities and partners' equity ..................... $ 958,675 $ 812,984
========== =========
The accompanying notes are an integral part of these
consolidated financial statements.
33
36
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
YEAR ENDED DECEMBER 31,
1996 1995 1994
------------ ------------ ------------
REVENUES
Rental ................................................................... $ 157,735 $ 133,817 $ 115,309
Property management - third party ........................................ 2,828 2,764 2,508
Landscape services - third party ......................................... 4,834 4,647 3,799
Interest ................................................................. 326 593 442
Other .................................................................... 4,985 2,884 2,681
------------ ------------ ------------
Total revenue ........................................................... 170,708 144,705 124,739
------------ ------------ ------------
EXPENSES
Property operating and maintenance (exclusive of items
shown separately below) ................................................. 57,335 49,912 43,376
Depreciation (real estate assets) ........................................ 22,676 20,127 19,967
Depreciation (non-real estate assets) .................................... 927 692 241
Property management ...................................................... 2,055 2,166 2,229
Landscape services ....................................................... 3,917 3,950 3,098
Interest ................................................................. 22,131 22,698 19,231
Amortization of deferred loan costs ...................................... 1,352 1,967 1,999
General and administrative ............................................... 7,716 6,071 6,269
Minority interest in consolidated property partnership ................... -- 451 680
------------ ------------ ------------
Total expenses ........................................................ 118,109 108,034 97,090
------------ ------------ ------------
Income before net gain on sale of assets, net of related income
taxes,and extraordinary item ........................................... 52,599 36,671 27,649
Net gain on sale of assets, net of related income taxes .................. 854 1,746 1,494
------------ ------------ ------------
Income before extraordinary item ......................................... 53,453 38,417 29,143
Extraordinary item ....................................................... -- (1,120) (4,413)
------------ ------------ ------------
Net income ............................................................... 53,453 37,297 24,730
Distribution to preferred unitholders .................................... (1,063) -- --
------------ ------------ ------------
Net income available to common unitholders ............................... $ 52,390 $ 37,297 $ 24,730
============ ============ ============
PER COMMON UNIT DATA:
Weighted average common Units outstanding ................................ 26,917,723 23,541,639 22,125,890
============ ============ ============
Income before extraordinary item (net of preferred distributions) ........ $ 1.95 $ 1.63 $ 1.32
============ ============ ============
Net income available to common unitholders ............................... $ 1.95 $ 1.58 $ 1.12
============ ============ ============
Distributions declared ................................................... $ 2.16 $ 1.96 $ 1.80
============ ============ ============
The accompanying notes are an integral part of these
consolidated financial statements.
34
37
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(DOLLARS IN THOUSANDS)
GENERAL LIMITED
PARTNER PARTNERS TOTAL
------- --------- ---------
PARTNERS' EQUITY, DECEMBER 31, 1993 ....................... $ 2,857 $ 243,485 $ 246,342
Contribution from PPI related to Second Offering .......... 827 81,854 82,681
Distribution paid ......................................... (303) (29,989) (30,292)
Distributions declared to common unitholders .............. (101) (9,993) (10,094)
Net income ................................................ 247 24,483 24,730
------- --------- ---------
PARTNERS' EQUITY, DECEMBER 31, 1994 ....................... 3,527 309,840 313,367
Contribution from PPI related to Third Offering ........... 1,053 104,225 105,278
Contribution from PPI related to Dividend Reinvestment Plan 161 16,010 16,171
Distributions paid ........................................ (335) (33,198) (33,533)
Distributions declared to common unitholders .............. (131) (12,960) (13,091)
Net income ................................................ 373 36,924 37,297
------- --------- ---------
PARTNERS' EQUITY, DECEMBER 31, 1995 ....................... 4,648 420,841 425,489
Contributions from PPI related to Preferred Shares ........ 486 48,127 48,613
Acquisition of real estate through issuance of Units ...... 51 5,040 5,091
Contributions from PPI related to Dividend Reinvestment
and Employee Stock Purchase Plans ........................ 90 8,944 9,034
Distributions to preferred unitholders .................... (11) (1,052) (1,063)
Distributions to common unitholders ....................... (435) (43,089) (43,524)
Distributions declared to common unitholders .............. (147) (14,512) (14,659)
Net income ................................................ 534 52,919 53,453
------- --------- ---------
PARTNERS' EQUITY, DECEMBER 31, 1996 ....................... $ 5,216 $ 477,218 $ 482,434
======= ========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
35
38
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
YEAR ENDED DECEMBER 31,
-------------------------------------------
1996 1995 1994
--------- --------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ..................................................................... $ 53,453 $ 37,297 $ 24,730
Adjustments to reconcile net income to net cash provided
by operating activities:
Net gain on sale of assets, net of related income tax ........................... (854) (1,746) (1,488)
Depreciation ................................................................... 23,603 20,819 20,208
Write-off of deferred swap income .............................................. -- -- (1,485)
Write-off of deferred financing costs .......................................... -- 1,120 1,139
Amortization of deferred loan costs ............................................ 1,352 1,967 1,999
Changes in assets, (increase) decrease in:
Restricted cash .............................................................. (2) 7,211 (7,211)
Organization costs and other deferred charges ................................ 1,589 (90) 134
Other assets ................................................................. (3,281) (9,122) (1,655)
Changes in liabilities, increase (decrease) in:
Accrued interest payable ..................................................... 299 (1,171) 3,058
Accounts payable and accrued expenses ........................................ 2,089 868 4,143
Security deposits and prepaid rents .......................................... 718 213 247
--------- --------- ---------
Net cash provided by operating activities ...................................... 78,966 57,366 43,819
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets,
net of payables ............................................................... (168,885) (117,120) (99,529)
Proceeds from sale of assets ................................................... 12,285 22,645 7,493
Capitalized interest ........................................................... (4,443) (5,653) (3,427)
Recurring capital expenditures ................................................. (3,781) (2,967) (2,599)
Non-recurring capital expenditures ............................................. (1,938) (1,287) (1,302)
Purchase of minority interests in property partnerships ........................ -- (10,149) --
--------- --------- ---------
Net cash used in investing activities .......................................... (166,762) (114,531) (99,364)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs ..................................................... (3,986) (4,614) (1,385)
Debt proceeds .................................................................. 236,833 362,196 140,122
Debt payments .................................................................. (277,233) (374,523) (135,886)
Offering proceeds, net of underwriters discount and offering costs ............. 123,438 105,278 82,681
Proceeds from contributions from PPI related to Preferred Shares ............... 48,613 -- --
Proceeds from contributions from PPI related to Dividend
Reinvestment Plan ............................................................ 9,034 16,171 --
Capital distributions to preferred unitholders ................................. (1,063) -- --
Capital distributions to common unitholders .................................... (56,615) (43,627) (39,036)
--------- --------- ---------
Net cash provided by financing activities ...................................... 79,021 60,881 46,496
--------- --------- ---------
Net increase (decrease) in cash and cash equivalents ........................... (8,775) 3,716 (9,049)
Cash and cash equivalents, beginning of period ................................. 9,008 5,292 14,341
--------- --------- ---------
Cash and cash equivalents, end of period ....................................... $ 233 $ 9,008 $ 5,292
========= ========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
36
39
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
1. ORGANIZATION AND FORMATION OF THE COMPANY
ORGANIZATION AND FORMATION OF THE COMPANY
Post Apartment Homes, L.P. (the "Company"), a Georgia limited partnership, was
formed on January 22, 1993, to conduct the business of developing, leasing and
managing upscale multi-family apartment communities for its general partner,
Post Properties, Inc. ("PPI"). The Company, through its operating divisions and
subsidiaries, is the entity through which all of PPI's operations are conducted.
PPI elected to be taxed as a real estate investment trust ("REIT") for Federal
income tax purposes beginning with the year ended December 31, 1993. A REIT is a
legal entity which holds real estate interest and, through payments of dividends
to shareholders, in practical effect is not subject to Federal income taxes at
the corporate level.
The Company currently owns and manages or is in the process of developing
apartment communities located in the Atlanta, Tampa, Northern Virginia,
Nashville and Charlotte metropolitan areas. Approximately 72.8% and 12.6% (on a
unit basis) of the Company's communities are located in the Atlanta and Tampa
metropolitan areas, respectively.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the consolidated
accounts of PPI and the Company. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Certain items in the Consolidated Financial Statements were reclassified for
comparative purposes.
ACCOUNTING CHANGES
In 1996, the Company adopted SFAS No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long- Lived Assets to be Disposed of." This statement
requires that long-lived assets and certain identified intangibles to be held
and used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The statement requires the use of undiscounted estimated cash flows
expected from the asset's operations and eventual disposition. If the sum of the
expected future cash flows are less than the carrying value of the asset, an
impairment loss is recognized based on the fair value of the asset. Adoption of
this pronouncement had no material effect on the consolidated statement of
operations for the year ended December 31, 1996.
During 1996, the Company adopted SFAS 123, "Accounting for Stock-Based
Compensation." This statement provides entities a choice between fair value
based or intrinsic value based methods of accounting, for stock based
compensation plans. The Company has elected to continue using the intrinsic
value method. Under this approach, the Company will provide pro forma
disclosures of net income and earnings per share as if the fair value method had
been applied.
REAL ESTATE ASSETS AND DEPRECIATION
Real estate assets are stated at the lower of depreciated cost or fair value, if
deemed impaired. Ordinary repairs and maintenance are expensed as incurred;
major replacements and betterments are capitalized and depreciated over their
estimated useful lives. Depreciation is computed on a straight-line basis over
the useful lives of the properties (buildings and components and related land
improvements -- 20-40 years; furniture, fixtures and equipment -- 5 years).
37
40
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
REVENUE RECOGNITION
Rental -- Residential properties are leased under operating leases with terms of
generally one year or less. Rental income is recognized when earned, which is
not materially different from revenue recognition on a straight line basis.
Property management and landscaping services -- Income is recognized when earned
for property management and landscaping services provided to third parties.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, all investments purchased with an
original maturity of three months or less are considered to be cash equivalents.
RESTRICTED CASH
Restricted cash generally is comprised of resident security deposits for
communities located in Florida and Tennessee and required maintenance reserves
for communities located in DeKalb County, Georgia.
DEFERRED FINANCING COSTS
Deferred financing costs are amortized using the interest method over the terms
of the related debt.
INTEREST AND REAL ESTATE TAXES
Interest and real estate taxes incurred during the construction period are
capitalized and depreciated over the lives of the constructed assets. Interest
paid (including capitalized amounts of $4,443, $5,653 and $3,427 during 1996,
1995 and 1994, respectively, and interest rate protection receipts of $830,
$1,539 and $384 during 1996, 1995 and 1994, respecitvely) aggregated $27,120,
$28,343, $21,234 for the years ended December 31, 1996, 1995 and 1994,
respectively.
INTEREST RATE PROTECTION AGREEMENTS
Premiums paid to purchase interest rate protection agreements are capitalized
and amortized over the terms of those agreements using the interest method.
Unamortized premiums are included in other assets in the consolidated balance
sheet. Amounts receivable under the interest rate protection agreements are
accrued as a reduction of interest expense.
PER UNIT DATA
Earnings per common Unit with respect to the Company for the years ended
December 31, 1996, 1995 and 1994 is computed based upon the weighted average
number of Units outstanding during the period.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
38
41
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
2.DEFERRED CHARGES
Deferred charges consist of the following:
DECEMBER 31,
-----------------------
1996 1995
-------- --------
Deferred financing costs .............. $ 18,915 $ 15,411
Other ................................. 1,156 1,340
-------- --------
20,071 16,751
Less: accumulated amortization ........ (10,612) (9,510)
-------- --------
$ 9,459 $ 7,241
======== ========
3. NOTES PAYABLE
The Company's indebtedness consists of the following:
DECEMBER 31,
1996 1995
-------- --------
Tax-exempt fixed rate bond indebtedness
(secured) ......................................... $ 64,758 $105,379
Conventional fixed rate (secured) ................... 21,881 44,145
Tax-exempt floating rate bond indebtedness
(secured) ......................................... 84,280 39,795
Conventional floating rate (secured) ................ 14,400 14,400
Senior notes (unsecured) ............................ 225,000 100,000
Lines of credit (unsecured) ......................... 24,000 46,000
-------- --------
Total ............................................... $434,319 $349,719
======== ========
CONVENTIONAL MORTGAGES PAYABLE
Conventional mortgages payable were comprised of five loans at December 31, 1996
and 1995 each of which is collateralized by an apartment community included in
real estate assets. The mortgages payable are generally due in monthly
installments of interest only and mature at various dates through 1999. The
interest rates on the fixed rate mortgages payable ranged from 7.72% to 9.20% at
December 31, 1996. At December 31, 1996, the interest rate on the variable rate
mortgage payable was at .55% above the London Interbank Offered Rate ("LIBOR").
At December 31, 1996, LIBOR ranged from 5.50% to 5.79% for one, three, six, and
twelve month indices.
39
42
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
TAX-EXEMPT BOND INDEBTEDNESS
Certain of the apartment communities are encumbered to secure tax-exempt housing
bonds. Such bonds are generally payable in monthly or semi-annual installments
of interest only and mature at various dates through 2025. The interest rate on
each of the fixed rate bonds payable was 8.075% at December 31, 1996. Floating
rate indebtedness reissued in 1995 and 1996, bears interest at the "AAA" non-AMT
tax exempt rate, set weekly, which was 4.05% at December 31, 1996 (average of
3.44% for 1996). The Company pays certain credit enhancement fees with respect
to such bonds, ranging from .575% to 1.075% of the amount of such bonds or the
amount of such letters of credit, as the case may be.
On June 29, 1995, the Company replaced the bank letters of credit providing
credit enhancement for twelve of its outstanding tax-exempt bonds and three of
its economically defeased tax-exempt bonds. Under an agreement with the Federal
National Mortgage Association ("FNMA"), FNMA now provides, directly or
indirectly through other bank letters of credit, credit enhancement for such
bonds. Under the terms of such agreement, FNMA has provided replacement credit
enhancement through 2025 for seven bond issues, aggregating $84,280, which were
concurrently reissued, and has agreed, subject to certain conditions, to provide
credit enhancement through June 1, 2025 for up to an additional $70,248 ($5,490
of which is currently defeased) with respect to eight other bond issues which
mature and may be refunded during 1997 and 1998. Under this agreement, on
January 1, 1997, the Post Bridge and Post Gardens bonds were refunded in the
amount of $12,450 ($2,490 of which had previously been defeased) and $14,500,
respectively, with an issue enhanced by FNMA and maturing on June 1, 2025. The
agreement also contains a provision whereby the Company may request FNMA to
evaluate the enhancement of an additional $81,352 of bonds which are currently
defeased and not part of the agreement. The agreement with FNMA contains
representations, covenants, and events of default customary to such secured
loans.
DEBT DEFEASED
The Company applied a portion of the net proceeds of the Initial Offering and
Second Offering, contributed from PPI, to pay in full thirteen fixed rate
obligations totaling $132,470 and economically defease in full six tax exempt
bond financings totaling $52,700. In addition, the Company paid $43,108 to
partially prepay eleven variable rate obligations and $51,956 to economically
defease portions of eight tax exempt bond financings. The above amounts do not
include aggregate prepayment penalties and defeasance escrow requirements in
excess of principal defeased of $18,077. The balance of debt fully or partially
economically defeased aggregated $86,842 at December 31, 1996.
LINES OF CREDIT
The Company has a syndicated line of credit (the "Revolver") in the amount of
$180,000 to provide the funding for future construction, acquisition and general
business obligations. The Revolver matures on May 1, 1999 and borrowings
currently bear interest at LIBOR plus .80% or prime minus .25%. The Revolver
provides for the rate to be adjusted up or down based on changes in the credit
ratings on the Company's senior unsecured debt. The credit agreement for the
Revolver contains customary representations, covenants and events of default,
including covenants which restrict the ability of the Company to make
distributions, in excess of stated amounts, which in turn restricts the
discretion of PPI to declare and pay dividends. In general, during any fiscal
year the Company may only distribute up to 100% of the Company's consolidated
income available for distribution (as defined in the credit agreement) exclusive
of distributions of up to $30,000 of capital gains for such year. The credit
agreement contains exceptions to these limitations to allow the Company to make
distributions necessary to allow PPI to maintain its status as a REIT. The
Company does not anticipate that this covenant will adversely affect its ability
to make required distributions.
On July 26, 1996, the Company closed a $20,000 unsecured line of credit with
Wachovia Bank of Georgia, N.A. (The "Cash Management Line"), which was fully
funded and used to pay down the outstanding balance on the Revolver. The Cash
Management Line bears interest at LIBOR plus .75% or prime minus .25% and has a
maturity date of November 14, 1997. The Revolver requires three days advance
notice to repay borrowings whereas this facility provides the Company with an
automatic daily sweep which applies all available cash to reduce the outstanding
balance.
40
43
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
At December 31, 1996, the outstanding balances on the Revolver and the Cash
Management Line were $4,000 and $20,000, respectively.
In addition, the Company has a $3,000 facility to provide letters of credit for
general business purposes.
SENIOR UNSECURED NOTES
On June 7, 1995, the Company issued $50,000 of unsecured senior notes with The
Northwestern Mutual Life Insurance Company. The notes were in two tranches: the
first, totaling $30,000, carries an interest rate of 8.21% per annum (1.25% over
the corresponding treasury rate on the date such rate was set) and matures on
June 7, 2000; and the second, totaling $20,000 carries an interest rate of 8.37%
per annum (1.35% over the corresponding treasury rate on the date such rate was
set) and matures on June 7, 2002. Proceeds from the notes were used to reduce
other secured indebtedness and to pay down the Revolver. The note agreements
pursuant to which the notes were purchased contain customary representations,
covenants and events of default similar to those contained in the note agreement
for the Revolver.
On September 29, 1995, the Company issued $50,000 of unsecured senior notes with
Wachovia Bank of Georgia, N.A. (the "Wachovia Notes"). The Wachovia Notes were
in two tranches: the first tranche, aggregating $25,000, will mature on
September 29, 1999; the second tranche, aggregating $25,000 will mature on
September 29, 2001. Both tranches bear interest at 7.15% per annum (1.10% over
the corresponding treasury rate on the date such rate was set). Proceeds from
the issuance of the Wachovia Notes were used to reduce indebtedness outstanding
on the Revolver. The credit agreement for the notes contain representations,
covenants and events of default similar to those contained in the note agreement
for the Revolver.
On September 30, 1996, the Company completed a $125,000 senior unsecured debt
offering comprised of two tranches. The first tranche, $100,000 of 7.25% Notes
due on October 1, 2003 (the "2003 Notes"), was priced at 99.642% to yield
7.316%, or 71 basis points over the rate on U.S. Treasury securities with a
comparable maturity. The second tranche, $25,000 of 7.50% Notes due on October
1, 2006 (the "2006 Notes", and together with the 2003 Notes, the "Notes"), was
priced at 99.694% to yield 7.544%, or 83 basis points over the rate on U.S.
Treasury securities with a comparable maturity. Proceeds from the Notes were
used to pay down existing indebtedness outstanding on the Revolver.
The aggregate maturities of the above conventional mortgages payable, tax-exempt
bond indebtedness, lines of credit and senior unsecured notes (after giving
effect to the refunding of the Post Bridge and Post Gardens bonds and the
extension of the Revolver) are as follows:
1997 ..................................... $ 54,640
1998 ..................................... 24,488
1999 ..................................... 43,400
2000 ..................................... 30,000
2001 ..................................... 28,051
Thereafter ............................... 253,740
--------
$434,319
========
PLEDGED ASSETS
The aggregate net book value at December 31, 1996 of property pledged as
collateral for indebtedness amounted to approximately $169,171.
41
44
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
EXTRAORDINARY ITEM
The extraordinary item for the year ended December 31, 1995 resulted from the
write-off of deferred financing costs on the mortgage debt satisfied.
The extraordinary item for the year ended December 31, 1994 resulted from
mortgage prepayment penalties and defeasance escrow requirements ($4,274), the
administrative costs for bond indebtedness defeased ($485), the write-off of
deferred financing costs on the mortgage debt satisfied ($1,139) and the
recognition of the gain previously deferred ($1,485) from the termination of the
interest rate swap agreements for which the related debt has been repaid or
defeased.
4. INCOME TAXES
The Company is a partnership and, as a result, all income or losses of the
Company are allocated to the partners of the Company for inclusion in their
respective income tax returns. Accordingly, no provision or benefit for income
taxes has been made in the accompanying financial statements.
PPI has elected to be taxed as a REIT under the Internal Revenue Code of 1986,
as amended (the "Code") commencing with the taxable year ended December 31,
1993. In order for PPI to qualify as a REIT, it must distribute annually at
least 95% of its REIT taxable income, as defined in the Code, to its
shareholders and satisfy certain other requirements. As a result, the Company
generally will not be subject to Federal income taxation at the corporate level
on the income PPI distributes to the shareholders. Although PPI has elected to
be taxed as a REIT, Post Services, Inc. ("Post Services") was formed as a
subsidiary of the Company to provide through its subsidiaries asset management,
leasing and landscaping services to third parties. The consolidated taxable
income of Post Services, if any, will be subject to tax at regular corporate
rates.
As of December 31, 1996, the net basis for Federal income tax purposes, taking
into account the special allocation of gain to the partners contributing
property to the Company exceeded the net assets as reported in the Company's
consolidated financial statements by approximately $100,439.
5. RELATED PARTY TRANSACTIONS
The Company provides landscaping services for executive officers, employees,
directors and other related parties. For the years ended December 31, 1996, 1995
and 1994, the Company received landscaping fees of $1,391, $1,758 and $1,968 for
such services. These amounts include reimbursements of direct expenses in the
amount of $729, $1,111 and $1,507 which are not included in landscape services
revenue; accordingly, these transactions resulted in the Company recording
landscape services net fees in excess of direct expenses of $662, $647 and $461
in the accompanying financial statements for the years ended December 31, 1996,
1995 and 1994, respectively.
The Company provides accounting and administrative services to entities
controlled by certain executive officers of the Company. Fees under this
arrangement aggregated $25, $32 and $60 for the years ended December 31, 1996,
1995 and 1994, respectively.
During the years ended December 31, 1996, 1995 and 1994, the Company was
contracted to assist in the development of apartment complexes constructed by a
former executive and current shareholder. Fees under this arrangement were $363
in 1996, $317 in 1995 and $140 in 1994.
On May 22, 1995, the Company purchased for a nominal amount the outstanding
capital stock of A.T. Aviation, Inc. ("A.T. Aviation"), an entity formed and
owned by John A. Williams, Chairman of the Board of Directors of the Company,
and John T. Glover, President and a Director of the Company. In connection with
the acquisition, the Company assumed certain obligations of A.T. Aviation. At
the time of the acquisition, A.T. Aviation had entered into a
42
45
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
purchase agreement for a used aircraft, leased certain property improvements
related thereto, and obtained a line of credit in the amount of $7,500 to fund
such acquisitions. In connection with the acquisition, the Company assumed and
repaid such line of credit, which had been guaranteed by such officers, and such
line and guarantees were terminated.
On October 15, 1996, the Company exercised its option to purchase land from
certain unitholders. In exchange for the land, the Company issued 138,150 units
to the unitholders.
6. EMPLOYEE BENEFIT PLANS
Through a plan adopted by PPI, the employees of the Company are participants in
a profit sharing plan pursuant to Section 401 of the Internal Revenue Code.
Contributions are made based on a discretionary amount determined by the
Company's management. Contributions, if any, are allocated to each participant
based on the relative compensation of the participant to the compensation of all
participants. Contributions of $100, $145 and $147 were made in 1996, 1995 and
1994, respectively.
During 1995, PPI adopted the Employee Stock Purchase Plan ("ESPP") to encourage
stock ownership by eligible directors and employees. To participate in the ESPP,
(i) directors must not be employed by the Company or PPI and must have been a
member of the Board of Directors of PPI for at least one month and (ii) an
employee must have been employed full-time by the Company or PPI for at least
one month. The purchase price of shares of common stock of PPI under the ESPP is
equal to 85% of the lesser of the closing price per share of common stock of PPI
on the first or last day of the trading period, as defined.
7. DIVIDEND REINVESTMENT PLAN
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of PPI.
Under the DRIP, shareholders may elect for their dividends to be used to acquire
additional shares of PPI's Common Stock directly from PPI, for 95% of the market
price on the date of purchase.
43
46
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
8. STOCK-BASED COMPENSATION PLANS
STOCK COMPENSATION PLANS
At December 31, 1996, PPI had two stock-based compensation plans in which the
Company's employees may participate, the Employee Stock Plan (the "Stock Plan"),
the Employee Stock Purchase Plan (the "ESPP") and, under the Stock Plan, a stock
grant program (the "Grant Plan") as described below. The Company applies APB
Opinion 25 and related Interpretations in accounting for these plans.
Accordingly, no compensation cost has been recognized for the Stock Plan and the
ESPP. The compensation cost that has been charged against income for the Grant
Plan was, $129 and $73 for 1996 and 1995, respectively. Had compensation cost
for PPI's Stock Plan and ESPP been determined based on the fair value at the
grant dates for awards under the Plans consistent with the method of FASB
Statement 123, the Company's net income and earnings per share would have been
reduced to the pro forma amounts indicated below:
1996 1995
------- -------
Net income available to common
unitholders As reported ......... $52,390 $37,297
Pro Forma ........... $50,472 $36,950
Net income per common unit As reported ......... $ 1.95 $ 1.58
Pro Forma ........... $ 1.86 $ 1.57
For purposes of the pro forma presentation, the fair value of each option grant
is estimated as of the date of grant using the Black-Scholes option-pricing
model. The weighted-average of all assumptions used in the calculation for
various grants under all of the Company's plans during 1996 and 1995, are as
follows: dividend yield of 5.4 for 1996 and 6.2 percent for 1995; expected
volatility of 14.5 percent for both years; risk-free interest rates ranging from
5.4 to 5.7 percent for 1996 and 5.5 to 7.3 percent for 1995; and expected lives
ranging from 5 to 7 years for both years.
FIXED STOCK OPTION PLANS
Under the Stock Plan, PPI may grant options to its employees and directors for
up to 1,200,000 shares of its common stock. Of this amount, 550,000 shares are
available for grants of restricted stock. Options granted to any key employee or
officer cannot exceed 50,000 shares a year. The exercise price of each option
equals the market price on the date of grant and all options have a maximum term
of ten years from the grant date.
44
47
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
A summary of the status of PPI's Stock Plan as of December 31, 1995 and 1996,
changes during the years then ended, and the weighted-average fair value of
options granted during the years is presented below:
1995 1996
----------------------------- ----------------------------
WEIGHTED- WEIGHTED-
AVERAGE AVERAGE
SHARES EXERCISE PRICE SHARES EXERCISE PRICE
------ -------------- ------ --------------
FIXED OPTIONS
Outstanding at beginning of year............ 353,344 $31 601,366 $31
Granted..................................... 251,383 30 310,067 32
Exercised................................... (361) 28 (18,993) 31
Forfeited................................... (3,000) 30 (28,335) 31
------- -------
Outstanding at end of year.................. 601,366 31 864,105 31
======= =======
Options exercisable at year-end............. 238,188 797,830
======= =======
Weighted-Average fair value of options
granted during the year..................... $ 3.59 $ 3.47
======= =======
The following table summarizes information about the options outstanding under
PPI's Stock Plan at December 31, 1996:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------- -------------------
WEIGHTED-AVERAGE
RANGE OF NUMBER OUTSTANDING REMAINING WEIGHTED-AVERAGE NUMBER EXERCISABLE WEIGHTED-AVERAGE
EXERCISE PRICES AT 12/31/96 CONTRACTUAL LIFE EXERCISE PRICE AT 12/31/96 EXERCISE PRICE
--------------- ----------- ---------------- -------------- ----------- --------------
$28 to 40 864,105 8.0 years $31 797,830 $31
45
48
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
9.COMMITMENTS AND CONTINGENCIES
LAND, OFFICE AND EQUIPMENT LEASES
The Company is party to two ground leases relating to an operating community
with terms expiring in years 2040 and 2043 and to office, equipment and other
operating leases with terms expiring in years 1997 through 2004. Future minimum
lease payments for noncancellable land, office, equipment and other leases at
December 31, 1996 are as follows:
1997 ............................................ $ 2,249
1998 ............................................ 2,226
1999 ............................................ 2,115
2000 ............................................ 1,026
2001 ............................................ 698
2002 and thereafter ............................. 6,741
---------
$ 15,055
=========
The Company incurred $2,172 , $2,034 and $1,911 of rent expense for the years
ended December 31, 1996, 1995 and 1994, respectively.
CONTINGENCIES
The Company is party to various legal actions which are incidental to its
business. Management believes that these actions will not have a material
adverse affect on the consolidated balance sheets and statements of operations.
10.FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosures of estimated fair value were determined by management
using available market information and appropriate valuation methodologies.
Considerable judgment is necessary to interpret market data and develop
estimated fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Company could realize on disposition
of the financial instruments. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.
Cash equivalents, rents and landscape service receivables, interest rate
protection agreement, accounts payable, accrued expenses, notes payable and
other liabilities are carried at amounts which reasonably approximate their fair
values.
Disclosure about fair value of financial instruments are based on pertinent
information available to management as of December 31, 1996. Although management
is not aware of any factors that would significantly affect the reasonable fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since that date and current estimates of fair
value may differ significantly from the amounts presented herein.
11.EARNINGS PER UNIT
Primary earnings per common Unit for income before extraordinary item, net of
preferred distributions, and net income available to common unitholders has been
computed by dividing income before extraordinary item, net of preferred
distributions, and net income available to common unitholders by the weighted
average number of units outstanding. The weighted average number of common Units
outstanding utilized in the calculations are 26,917,723, 23,541,639 and
22,125,890 for the years ended December 31, 1996, 1995 and 1994, respectively.
46
49
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
12.SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash investing and financing activities for the years ended December 31,
1996, 1995 and 1994 are as follows:
(a)During 1996, PPI exercised its option to purchase land from the Company in
exchange for 138,150 Units of the Company.
(b)The Company committed to distribute $14,659, $13,091 and $10,094 for the
quarters ended December 31, 1996, 1995 and 1994, respectively.
13.QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for the years ended 1996 and 1995 are as
follows:
YEARS ENDED DECEMBER 31, 1996*
------------------------------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
(IN THOUSANDS, EXCEPT PER UNIT DATA)
Revenues ............................................... $39,205 $42,578 $44,699 $ 44,226
Income before net gain on sale of assets, net of related
income tax............................................ 12,432 12,443 13,423 14,301
Net gain on sale of assets, net of related income taxes -- -- 854 --
Net income ............................................. 12,432 12,443 14,277 14,301
Distributions to preferred unitholders ................. -- -- -- (1,063)
Net income available to common unitholders ............. 12,432 12,443 14,277 13,238
Earnings per common Unit:
Income before extraordinary item, net of preferred
distribution ....................................... 0.46 0.46 0.53 0.49
Net income available to common unitholders ........... 0.46 0.46 0.53 0.49
YEARS ENDED DECEMBER 31, 1995*
------------------------------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
(IN THOUSANDS, EXCEPT PER UNIT DATA)
Revenues ............................................... $33,163 $35,650 $37,480 $ 38,412
Income before net gain on sale of assets, net of related
income tax, and extraordinary item ................... 7,965 8,526 8,999 11,181
Net gain on sale of assets, net of related taxes ....... -- -- 1,746 --
Extraordinary item ..................................... (155) (648) (244) (73)
Net income ............................................. 7,810 7,878 10,501 11,108
Earnings per Unit:
Income before extraordinary item ..................... 0.35 0.37 0.47 0.43
Net income ........................................... 0.35 0.34 0.46 0.43
- ---------------
* The total of the four quarterly amounts for earnings per Unit may not
equal the total for the year. These differences result from the use of a
weighted average to compute average number of Units outstanding.
47
50
SCHEDULE III
POST APARTMENT HOMES, L.P.
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
GROSS AMOUNT AT WHICH
INITIAL COSTS COSTS CARRIED AT CLOSE OF PERIOD
----------------------- CAPITALIZED -----------------------------------
RELATED BUILDING AND SUBSEQUENT BUILDING AND
ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL (1)
ATLANTA, GEORGIA
Post Ashford $ 9,895 (2) $ 1,906 $ - $ 7,434 $ 1,906 $ 7,434 9,340
Post Bridge 9,960 (2) 868 - 10,810 868 10,810 11,678
Post Brook 4,300 (2) 584 - 3,600 584 3,600 4,184
Post Brookhaven - 7,921 - 30,019 7,921 30,019 37,940
Post Canyon 16,845 (2) 931 - 15,486 931 15,486 16,417
Post Chase 12,000 (2) 1,438 - 13,893 1,438 13,893 15,331
Post Chastain - 6,352 - 37,778 6,779 37,351 44,130
Post Collier Hills - 6,487 - 16,116 7,206 15,397 22,603
Post Corners 14,760 (2) 1,473 - 13,489 1,473 13,489 14,962
Post Court 13,298 (2) 1,769 - 15,654 1,769 15,654 17,423
Post Creek - 10,406 36,756 1,581 10,441 38,302 48,743
Post Crest - 4,733 - 24,508 4,733 24,508 29,241
Post Crossing - 3,951 - 19,261 3,951 19,261 23,212
Post Dunwoody - 4,917 - 27,956 4,961 27,912 32,873
Post Gardens - 5,859 - 2,183 5,859 2,183 8,042
Post Glen - 5,591 - 11,220 6,029 10,782 16,811
Post Lane - 1,512 - 7,978 2,067 7,423 9,490
Post Lenox Park - 3,132 - 10,591 3,132 10,591 13,723
Post Lindbergh - 6,268 - 1,811 6,670 1,409 8,079
Post Mill 12,880 (2) 915 - 11,151 915 11,151 12,066
Post Oak - 2,028 - 8,055 2,027 8,056 10,083
Post Oglethorpe - 3,662 - 16,765 3,662 16,765 20,427
Post Park - 6,253 - 38,769 8,830 36,192 45,022
Post Parkwood - 1,331 - 7,264 1,331 7,264 8,595
Post Peachtree Hills - 4,215 - 13,454 4,857 12,812 17,669
Post Pointe - 2,417 - 15,258 3,027 14,648 17,675
Post Renaissance 14,400 - - 19,267 - 19,267 19,267
Post River 5,875 1,011 - 9,351 1,011 9,351 10,362
Post Summit 5,315 1,575 - 6,039 1,575 6,039 7,614
Post Terrace - 4,131 - 18,743 4,148 18,726 22,874
Post Valley 18,600 (2) 1,117 - 17,130 1,117 17,130 18,247
Post Vinings - 4,322 - 21,019 5,668 19,673 25,341
Post Village
The Arbors 7,640 384 - 15,531 774 15,141 15,915
The Fountains and The Meadows - (2) 611 - 33,082 907 32,786 33,693
The Gardens 14,500 (2) 187 - 24,555 348 24,394 24,742
The Hills 7,000 (2) 91 - 11,851 165 11,777 11,942
Post Walk 15,000 (2) 2,370 - 12,617 2,370 12,617 14,987
Post Woods - 1,378 - 22,441 3,043 20,776 23,819
Riverside by Post - 11,130 - 5,192 11,139 5,183 16,322
CHARLOTTE, NORTH CAROLINA
Post Park at Phillips Place - 4,685 - 14,536 4,158 15,063 19,221
DEPRECIABLE
ACCUMULATED DATE OF DATE LIVES
DEPRECIATION CONSTRUCTION ACQUIRED YEARS
------------ ------------ -------- -----
ATLANTA, GEORGIA
Post Ashford $2,508 4/86 - 6/87 6/87 5 - 40 Years
Post Bridge 3,873 9/84 - 12/86 9/84 5 - 40 Years
Post Brook 1,589 8/83 - 7/84 8/83 5 - 40 Years
Post Brookhaven 7,421 7/89 - 12/92 3/89 5 - 40 Years
Post Canyon 5,883 4/84 - 4/86 10/81 5 - 40 Years
Post Chase 4,795 6/85 - 4/87 6/85 5 - 40 Years
Post Chastain 9,094 6/88 - 10/90 6/88 5 - 40 Years
Post Collier Hills - 10/95 (4) 6/95 -
Post Corners 5,030 8/84 - 4/86 8/84 5 - 40 Years
Post Court 4,997 6/86 - 4/88 12/85 5 - 40 Years
Post Creek 912 9/81 - 8/83 5/96 5 - 40 Years
Post Crest 4 9/95 10/94 5 - 40 Years
Post Crossing 891 4/94 - 8/95 11/93 5 - 40 Years
Post Dunwoody 2,893 11/88 12/84&8/(6) 5 - 40 Years
Post Gardens - 7/96 (4) 5 - 40 Years
Post Glen - 7/96 (4) 5 - 40 Years
Post Lane 2,176 4/87 - 5/88 1/87 5 - 40 Years
Post Lenox Park 622 3/94 - 5/95 3/94 5 - 40 Years
Post Lindbergh - 11/96 (4) 5 - 40 Years
Post Mill 4,448 5/83 - 5/85 5/81 5 - 40 Years
Post Oak 1,202 9/92 - 12/93 9/92 5 - 40 Years
Post Oglethorpe 1,186 3/93 - 10/94 3/93 5 - 40 Years
Post Park 9,445 6/87 - 9/90 6/87 5 - 40 Years
Post Parkwood 350 7/94 - 8/95 6/94 5 - 40 Years
Post Peachtree Hills 1,536 2/92 - 9/94 2&11/92 (6) 5 - 40 Years
Post Pointe 4,511 4/87 - 12/88 12/86 5 - 40 Years
Post Renaissance 2,850 7/91 - 12/94 6/91&1/9(6) 5 - 40 Years
Post River 2,127 9/90 - 1/92 7/90 5 - 40 Years
Post Summit 1,661 1/90 - 12/90 1/90 5 - 40 Years
Post Terrace 56 10/94 (4) 3/94 5 - 40 Years
Post Valley 5,384 3/86 - 4/88 12/85 5 - 40 Years
Post Vinings 5,094 5/88 - 9/91 5/88 5 - 40 Years
Post Village
The Arbors 4,543 4/82 - 10/83 3/82 5 - 40 Years
The Fountains and The Meadows 8,811 8/85 - 5/88 8/85 5 - 40 Years
The Gardens 6,254 6/88 - 7/89 5/84 5 - 40 Years
The Hills 3,430 5/84 - 4/86 4/83 5 - 40 Years
Post Walk 4,165 3/86 - 8/87 6/85 5 - 40 Years
Post Woods 7,208 3/76 - 9/83 6/76 5 - 40 Years
Riverside by Post - 7/96 (4) 5 - 40 Years
CHARLOTTE, NORTH CAROLINA
Post Park at Phillips Place - 1/96 (4) 11/95 -
51
SCHEDULE III
POST APARTMENT HOMES, L.P.
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
GROSS AMOUNT AT WHICH
INITIAL COSTS COSTS CARRIED AT CLOSE OF PERIOD
--------------------- CAPITALIZED ------------------------------
RELATED BUILDING AND SUBSEQUENT BUILDING AND
ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION LAND IMPROVEMENTS TOTAL(1)
------------ ---- ------------ -------------- ---- ------------ --------
FLORIDA
Post Bay - 2,203 - 13,334 2,573 12,964 15,537
Post Court - 2,083 - 9,552 2,083 9,552 11,635
Post Crossing - 5,480 - 19,511 5,764 19,227 24,991
Post Fountains - (2) 3,856 - 20,285 3,856 20,285 24,141
Post Hyde Park - 3,498 - 15,972 3,853 15,617 19,470
Post Lake - (2) 6,113 - 29,752 6,724 29,141 35,865
Post Rocky Point - 4,634 - 22,688 4,709 22,613 27,322
Post Village
The Arbors - 2,063 - 13,966 2,446 13,583 16,029
The Lakes - 2,813 - 15,329 3,387 14,755 18,142
The Oaks - 3,229 - 15,026 3,855 14,400 18,255
Post Walk at Hyde Park - 1,943 - 7,133 1,946 7,130 9,076
NASHVILLE, TENNESSEE
Post Green Hills - 2,464 - 13,620 2,505 13,579 16,084
Post Hillsboro Village 1,709 2,255 2,555 585 2,369 3,026 5,395
The Lee Apartments 1,342 720 2,125 4 720 2,129 2,849
NORTHERN VIRGINIA
Post Corners at Trinity Centre - 4,404 - 23,116 4,493 23,027 27,520
Post Forest - 8,590 - 23,352 9,106 22,836 (3) 31,942
MISCELLANEOUS INVESTMENTS - 15,066 - 9,918 15,095 9,889 24,984
--------- -------- ------- -------- -------- -------- ----------
TOTAL $185,319 $201,325 $41,436 $866,581 $215,274 $894,068 $1,109,342
========= ======== ======= ======== ======== ======== ==========
DEPRECIABLE
ACCUMULATED DATE OF DATE LIVES
DEPRECIATION CONSTRUCTION ACQUIRED YEARS
------------ ------------ -------- -----
FLORIDA
Post Bay 3,898 5/87 - 12/88 5/87 5 - 40 Years
Post Court 2,529 4/90 - 5/91 10/87 5 - 40 Years
Post Crossing 5,373 6/87 - 9/89 6/87 5 - 40 Years
Post Fountains 6,163 12/85 - 3/88 12/85 5 - 40 Years
Post Hyde Park 415 9/94 (4) 7/94 -
Post Lake 8,946 11/85 - 3/88 10/85 5 - 40 Years
Post Rocky Point 583 4/94 (4) 2/94&9/96(6) 5 - 40 Years
Post Village
The Arbors 2,640 6/90 - 12/91 11/90 5 - 40 Years
The Lakes 4,578 7/88 - 12/89 5/88 5 - 40 Years
The Oaks 3,428 11/89 - 7/91 12/89 5 - 40 Years
Post Walk at Hyde Park 5 - 40 Years
NASHVILLE, TENNESSEE
Post Green Hills 363 9/94 (4) 7/94 -
Post Hillsboro Village - 12/96 (4) 8/96
The Lee Apartments 13 n/a (5) 8/96
NORTHERN VIRGINIA
Post Corners at Trinity Centre 573 6/94 (4) 6/94 5 - 40 Years
Post Forest 6,740 1/89 - 12/90 3/88 5 - 40 Years
MISCELLANEOUS INVESTMENTS 4,481
--------
TOTAL $177,672
========
(1) The aggregate cost for Federal Income Tax purposes to PPI was
approximately $1,198,542 at December 31, 1996, taking into account the
special allocation of gain to the partners contributing property to the
Company.
(2) These properties serve as collateral for the Federal National Mortgage
Association credit enhancement.
(3) Balance includes an allowance for possible loss of $3,700 which was taken
in prior years.
(4) Construction still in process as of December 31, 1996.
(5) The Company acquired this community during 1996. The Company is
operating the community while evaluating whether whether to hold,
renovate or sell the community.
(6) Additional land was acquired for construction of a second phase.
A summary of activity for real estate investments and accumulated depreciation
is as follows:
Year Ended December, 31
-----------------------
1996 1995 1994
---- ---- ----
Real estate investments:
Balance at beginning of year $ 937,924 $828,585 $722,266
Purchase of minority interests in certain property partnerships - 10,149 -
Improvements 183,910 127,150 106,319
Disposition of property (12,492) (27,960) -
---------- -------- --------
Balance at end of year $1,109,342 $937,924 $828,585
========== ======== ========
Accumulated depreciation:
Balance at beginning of year $ 156,824 $142,576 $122,368
Depreciation 23,372 [a] 20,681 [a] 20,208
Depreciation on disposed property (2,524) (6,433) -
---------- -------- --------
Balance at end of year $ 177,672 $156,824 $142,576
========== ======== ========
[a] Depreciation expense in the Consolidated Statements for the year ended
December 31, 1996 and 1995, include $231 and $138, respectively, of
depreciation expense on other assets.
52
EXHIBIT INDEX
EXHIBIT PAGE
NO. DESCRIPTION NO.
--- ----------- ---
10.1** -- Agreement of Limited Partnership of the Company
10.4** -- Noncompetition Agreement between PPI, the Company and John A. Williams
10.5** -- Noncompetition Agreement between PPI, the Company and John T. Glover
10.6** -- Employment Agreement between PPI and John A. Williams
10.7** -- Employment Agreement between PPI and John T. Glover
10.8** -- Employment Agreement between the Company and John A. Williams
10.9** -- Employment Agreement between the Company and John T. Glover
10.10** -- Employment Agreement between Post Services, Inc. and John A. Williams
10.11** -- Employment Agreement between Post Services, Inc. and John T. Glover
10.12** -- Option and Transfer Agreement among the Company, Post Services, John A. Williams and
John T. Glover
10.13** -- Promissory Note made by Post Services, Inc. in favor of RAM Partners, Inc.
10.14* -- Form of officers and directors Indemnification Agreement
10.15* -- Form of Option Agreement to be entered into between the Company and the owners of four
parcels of undeveloped land
10.16* -- Profit Sharing Plan of the Company
10.17** -- Form of General Partner 1% Exchange Agreement
10.20- -- Credit Agreement dated as of February 1, 1995 among Post
Apartment Homes, L.P., Wachovia Bank of Georgia, N.A., as
administrative agent, First Union National Bank of Georgia, as
Co-Agent, and the banks listed on the signature pages thereto
(the"Credit Agreement")
10.21+ -- First Amendment to Credit Agreement and Release of Subsidiary Guarantors dated July 26,
1995
10.22+ -- Second Amendment to Credit Agreement dated October 27, 1995
10.23+ -- Third Amendment to Credit Agreement dated February 29, 1996
10.24 -- Indenture between the Company and Sun Trust Bank, Atlanta, as Trustee (filed as an
Exhibit to Form S-3 (Sec File No. 333-3555)
21.1+ -- List of Subsidiaries
23.1 -- Consent of Price Waterhouse LLP for Registration Statement on Form S-3 (No. 333-3555)
27.1 -- Financial Data Schedule (for SEC use only)
- ---------------
* Filed as an exhibit to the Registration Statement on Form S-11 (SEC File
No. 33-61936), as amended, of the Registrant.
** Filed as an exhibit to the Registration Statement on Form S-11 (SEC File
No. 33-71650), as amended, of the Registrant.
+ Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1995. The registrant's proxy statement is to be filed with
the Commission on or about March 31, 1997.
- - Filed as an exhibit to the Annual Report on Form 10-K for the year ended
December 31, 1994.
(b) REPORTS ON FORM 8-K
Report on Form 8-K filed on October 1, 1996.
50