Attached files
file | filename |
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8-K - FORM 8-K - POST PROPERTIES INC | d8k.htm |
EX-99.1 - EARNINGS RELEASE - POST PROPERTIES INC | dex991.htm |
Exhibit 99.2
First Quarter 2010
Supplemental Financial Data
Table of Contents
Page | ||
Consolidated Statements of Operations |
3 | |
Calculation of Funds from Operations and Adjusted Funds From Operations |
6 | |
Same Store Results |
7 | |
Consolidated Balance Sheets |
10 | |
Debt Summary |
11 | |
Summary of Apartment Communities in Lease-Up and Land Held for Future Investment and Sale |
14 | |
Summary of Condominium Projects |
15 | |
Community Acquisition and Disposition Summary |
16 | |
Capitalized Costs Summary |
17 | |
Investments in Unconsolidated Real Estate Entities |
18 | |
Net Asset Value Supplemental Information |
19 | |
Non-GAAP Financial Measures and Other Defined Terms |
21 |
The projections and estimates given in this document and other written or oral statements made by or on behalf of the Company may constitute forward-looking statements within the meaning of the federal securities laws. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. The following are some of the factors that could cause the Companys actual results and its expectations to differ materially from those described in the Companys forward-looking statements: the success of the Companys business strategies discussed in its Annual Report on Form 10-K for the year ended December 31, 2009 and in subsequent filings with the SEC; future local and national economic conditions, including changes in job growth, interest rates, the availability of mortgage and other financing and related factors; uncertainties associated with the global capital markets, including the continued availability of traditional sources of capital and liquidity and related factors; conditions affecting ownership of residential real estate and general conditions in the multi-family residential real estate market; the effects on the financial markets of the emergency stabilization actions of the U.S government, U.S. Treasury, Federal Reserve and other governmental and regulatory bodies; uncertainties associated with the Companys real estate development and construction; uncertainties associated with the timing and amount of apartment community sales; the Companys ability to generate sufficient cash flows to make required payments associated with its debt financing; the effects of the Companys leverage on its risk of default and debt service requirements; the impact of a downgrade in the credit rating of the Companys securities; the impact of the lack of sales of condominium units at the Atlanta Condominium Project; the effects of a default by the Company or its subsidiaries on an obligation to repay outstanding indebtedness, including cross-defaults and cross-acceleration under other indebtedness or the responsibility for limited recourse guarantees; the effects of covenants of the Companys or its subsidiaries mortgage indebtedness on operational flexibility and default risks; the Companys ability to maintain its current dividend level; uncertainties associated with the Companys condominium conversion and for-sale housing business, including the timing and volume of condominium sales and including the ability to sell units above sales prices; the impact of any additional charges the Company may be required to record in the future related to any impairment in the carrying value of its assets; the impact of competition on the Companys business, including competition for residents in the Companys apartment communities and buyers of the Companys for-sale condominium homes and development locations; the effectiveness of interest rate hedging contracts; the Companys ability to succeed in new markets; the costs associated with compliance with laws requiring access to the Companys properties by persons with disabilities; the impact of the Companys ongoing litigation with the Equal Rights Center regarding the Americans with Disabilities Act and the Fair Housing Act as well as the impact of other litigation; the effects of losses from natural catastrophes in excess of insurance coverage; uncertainties associated with environmental and other regulatory matters; the costs associated with moisture infiltration and resulting mold remediation; the costs of remediating damage to the Companys communities that have stucco or exterior insulation finishing systems for potential water penetration and other related issues; the Companys ability to control joint ventures, properties in which it has joint ownership and corporations and limited partnership in which it has partial interests; the Companys ability to renew leases or relet units as leases expire; the Companys ability to continue to qualify as a REIT under the Internal Revenue Code; and the effects of changes in accounting policies and other regulatory matters detailed in the Companys filings with the Securities and Exchange Commission. Other important risk factors regarding the Company are included under the caption Risk Factors in the Companys Annual Report on Form 10-K for the year ended December 31, 2009 and may be discussed in subsequent filings with the SEC. The risk factors discussed in Form 10-K under the caption Risk Factors are specifically incorporated by reference into this document.
2
POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share or unit data)
(Unaudited)
Three months ended March 31, | ||||||
2010 | 2009 | |||||
Revenues |
||||||
Rental |
$ | 65,134 | $ | 65,384 | ||
Other property revenues |
3,726 | 3,568 | ||||
Other |
283 | 226 | ||||
Total revenues |
69,143 | 69,178 | ||||
Expenses |
||||||
Total property operating and maintenance (exclusive of items shown separately below) |
33,491 | 32,698 | ||||
Depreciation |
18,471 | 17,592 | ||||
General and administrative (1) |
4,676 | 4,409 | ||||
Investment and development (2) |
602 | 997 | ||||
Other investment costs (2) |
669 | 653 | ||||
Total expenses |
57,909 | 56,349 | ||||
Operating income |
11,234 | 12,829 | ||||
Interest income |
169 | 115 | ||||
Interest expense |
(12,613) | (14,178) | ||||
Amortization of deferred financing costs |
(833) | (934) | ||||
Net gains (losses) on condominium sales activities (3) |
948 | (260) | ||||
Equity in income of unconsolidated real estate entities |
123 | 110 | ||||
Other income (expense) (4) |
(155) | 1,059 | ||||
Net gain on early extinguishment of indebtedness (5) |
- | 898 | ||||
Loss from continuing operations |
(1,127) | (361) | ||||
Discontinued operations (6) |
||||||
Income from discontinued property operations |
- | 2,609 | ||||
Income from discontinued operations |
- | 2,609 | ||||
Net income (loss) |
(1,127) | 2,248 | ||||
Noncontrolling interests - consolidated real estate entities |
(61) | 76 | ||||
Noncontrolling interests - Operating Partnership |
11 | (2) | ||||
Net income (loss) attributable to the Company |
(1,177) | 2,322 | ||||
Dividends to preferred shareholders |
(1,890) | (1,909) | ||||
Preferred stock redemption costs |
(8) | - | ||||
Net income (loss) available to common shareholders |
$ | (3,075) | $ | 413 | ||
Per common share data - Basic (7) |
||||||
Loss from continuing operations (net of preferred dividends and redemption costs) |
$ | (0.06) | $ | (0.05) | ||
Income from discontinued operations |
- | 0.06 | ||||
Net income (loss) available to common shareholders |
$ | (0.06) | $ | 0.01 | ||
Weighted average common shares outstanding - basic |
48,370 | 44,114 | ||||
Per common share data - Diluted (7) |
||||||
Loss from continuing operations (net of preferred dividends and redemption costs) |
$ | (0.06) | $ | (0.05) | ||
Income from discontinued operations |
- | 0.06 | ||||
Net income (loss) available to common shareholders |
$ | (0.06) | $ | 0.01 | ||
Weighted average common shares outstanding - diluted |
48,370 | 44,114 | ||||
3
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share or unit data)
(1) | For the three months ended March 31, 2010, as compared to 2009, general and administrative costs increased as a result of additional legal expenses of $627 in 2010 related primarily to property litigation associated with the Companys ground lease and related land acquisition rights at one of its Washington, D.C. communities, partially offset by reduced personnel costs of approximately $403 resulting from workforce reductions and a management reorganization in the fourth quarter of 2009. |
(2) | Investment and development expenses for the three months ended March 31, 2010 and 2009 included investment group expenses, development personnel and associated costs not allocable to current development projects. Other investment costs for the three months ended March 31, 2010 and 2009 includes land carry costs, primarily property taxes and assessments. |
(3) | For the three months ended March 31, 2010 and 2009, loss from continuing operations included net gains (losses) from condominium sales activities at newly developed and condominium conversion projects representing portions of existing communities. In addition, condominium gains are net of certain expensed sales, marketing and administrative costs associated with condominium communities under development and in pre-sale totaling $437 and $124 for the three months ended March 31, 2010 and 2009, respectively. A summary of revenues and costs and expenses of condominium activities for the three months ended March 31, 2010 and 2009 is as follows: |
Three months ended March 31, | ||||||||
2010 | 2009 | |||||||
Condominium revenues |
$ | 1,840 | $ | 2,046 | ||||
Condominium costs and expenses |
(892) | (2,306) | ||||||
Net gains (losses) on sales of condominiums |
$ | 948 | $ | (260) | ||||
(4) | For the three months ended March 31, 2010 and 2009, other income (expense) included estimated state franchise and other income taxes. For the three months ended March 31, 2009, other income (expense) also included non-cash income of $874 related to the mark-to-market of an interest rate swap agreement that became ineffective under generally accepted accounting principles in that period and non-cash income of approximately $376 related to a reduction in estimated costs associated with hurricane damage sustained in prior years, offset by inspection expenses related to the Companys exterior remediation project. |
(5) | Net gain on early extinguishment of indebtedness for the three months ended March 31, 2009 included a net gain of $3,524 from the early extinguishment of debt related to the Companys tender offer for its 2010 and 2011 senior unsecured bonds offset by a net loss of $2,626 on the prepayment of the Companys weekly-remarketed, variable rate taxable mortgage bonds and an associated interest rate swap agreement. |
(6) | In accordance with ASC Topic 360, Property, Plant and Equipment (previously referred to as SFAS No. 144), the operating results of real estate assets designated as held for sale or sold are included in discontinued operations for all periods presented. Additionally, all subsequent gains or additional losses on the sale of these assets are included in discontinued operations. There were no communities classified as held for sale at March 31, 2010. |
4
For the three months ended March 31, 2009, income from discontinued operations included the operating results of three apartment communities, containing 1,328 units. The operating revenues and expenses of these communities for the three months ended March 31, 2009 were as follows: |
Three months ended March 31, 2009 | ||||
Revenues |
||||
Rental |
$ 4,235 | |||
Other property revenues |
258 | |||
Total revenues |
4,493 | |||
Expenses |
||||
Total property operating and maintenance (exclusive of items shown separately below) |
1,472 | |||
Interest |
412 | |||
Total expenses |
1,884 | |||
Income from discontinued property operations |
$ 2,609 | |||
(7) | Post Properties, Inc. is structured as an UPREIT, or Umbrella Partnership Real Estate Investment Trust. Post GP Holdings, Inc., a wholly-owned subsidiary of the Company, is the sole general partner and, together with Post LP Holdings, Inc., also a wholly-owned subsidiary of the Company, owns the controlling interest in Post Apartment Homes, L.P., the Operating Partnership through which the Company conducts its operations. As of March 31, 2010, there were 48,772 units of the Operating Partnership outstanding, of which 48,598, or 99.6%, were owned by the Company. |
5
POST PROPERTIES, INC.
CALCULATION OF FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
AVAILABLE TO COMMON SHAREHOLDERS AND UNITHOLDERS
(In thousands, except per share or unit data)
(Unaudited)
A reconciliation of net income (loss) available to common shareholders to funds from operations available to common shareholders and unitholders and adjusted funds from operations available to common shareholders and unitholders is provided below.
Three months ended March 31, | ||||
2010 | 2009 | |||
Net income (loss) available to common shareholders |
$ (3,075) | $ 413 | ||
Noncontrolling interests - Operating Partnership |
(11) | 2 | ||
Depreciation on consolidated real estate assets, net (1) |
18,002 | 17,077 | ||
Depreciation on real estate assets held in unconsolidated entities |
354 | 350 | ||
Losses (gains) on sales of condominiums |
(948) | 260 | ||
Incremental gains (losses) on condominium sales (2) |
722 | (1,113) | ||
Funds from operations available to common shareholders and unitholders (A) |
$ 15,044 | $ 16,989 | ||
Funds from operations available to common shareholders and unitholders (A) |
$ 15,044 | $ 16,989 | ||
Annually recurring capital expenditures |
(2,578) | (2,633) | ||
Periodically recurring capital expenditures (3) |
(551) | (3,724) | ||
Non-cash income related to mark-to-market of interest rate swap agreement |
- | (874) | ||
Non-cash straight-line adjustment for ground lease expenses |
281 | 289 | ||
Net gain on early extinguishment of indebtedness |
- | (898) | ||
Preferred stock redemption costs |
8 | - | ||
Adjusted funds from operations available to common shareholders and unitholders (4) (B) |
$ 12,204 | $ 9,149 | ||
Per Common Share Data - Basic |
||||
Funds (deficit) from operations per share or unit, as defined (A÷C) |
$ 0.31 | $ 0.38 | ||
Adjusted funds from operations per share or unit (4) (B÷C) |
$ 0.25 | $ 0.21 | ||
Dividends declared |
$ 0.20 | $ 0.20 | ||
Weighted average shares outstanding |
48,557 | 44,299 | ||
Weighted average shares and units outstanding (C) |
48,731 | 44,517 | ||
Per Common Share Data - Diluted |
||||
Funds (deficit) from operations per share or unit, as defined (A÷D) |
$ 0.31 | $ 0.38 | ||
Adjusted funds from operations per share or unit (4) (B÷D) |
$ 0.25 | $ 0.21 | ||
Dividends declared |
$ 0.20 | $ 0.20 | ||
Weighted average shares outstanding (5) |
48,665 | 44,299 | ||
Weighted average shares and units outstanding (5) (D) |
48,838 | 44,517 |
(1) | Depreciation on consolidated real estate assets is net of the minority interest portion of depreciation on consolidated entities. |
(2) | For conversion projects, the Company recognizes accounting gains under GAAP to the extent that net sales proceeds from the sale of condominium units exceed the Companys net GAAP basis and related expenses. For FFO purposes, the Company recognizes incremental gains on condominium sales in FFO, net of provision for income taxes, to the extent that net sales proceeds, less costs of sales, from the sale of condominium units exceed the transfer price. The transfer price for purposes of computing incremental gains on condominium sales included in FFO at conversion projects reflects the greater of (1) the estimated fair value on the date the project was acquired by the Companys taxable REIT subsidiary (as supported by independently-prepared, third-party appraisals) or (2) its net book value at that time. For development projects, gains on condominium sales in FFO are equivalent to gains reported under GAAP. |
(3) | Excludes approximately $4,895 and $5,372 for the three months ended March 31, 2010 and 2009, respectively, of periodically recurring capital expenditures related to the Companys exterior remediation project. Includes approximately $1,918 of periodically recurring capital expenditures associated with communities under rehabilitation for the three months ended March 31, 2009. |
(4) | Since the Company does not add back the depreciation of non-real estate assets in its calculation of funds from operations, non-real estate related capital expenditures of $351 and $59 for the three months ended March 31, 2010 and 2009, respectively, are excluded from the calculation of adjusted funds from operations available to common shareholders and unitholders. |
(5) | Diluted weighted average shares and units include the impact of dilutive securities totaling 108 for the three months ended March 31, 2010. These dilutive securities were antidilutive to the computation of income (loss) per share, as the Company reported a loss from continuing operations for this period under generally accepted accounting principles. Additionally, basic and diluted weighted average shares and units included the impact of non-vested shares and units totaling 187 and 185 for the three months ended March 31, 2010 and 2009, respectively, for the computation of funds from operations per share. Such non-vested shares and units are considered in the income (loss) per share computations under generally accepted accounting principles using the two-class method. |
6
POST PROPERTIES, INC.
SAME STORE RESULTS
(In thousands, except per share or unit data)
(Unaudited)
Same Store Results
The Company defines fully stabilized or same store communities as those which have reached stabilization prior to the beginning of the previous calendar year, adjusted by communities sold and classified as held for sale and communities under rehabilitation. Same store net operating income is a supplemental non-GAAP financial measure. See Table 1 on page 23 for a reconciliation of same store net operating income to GAAP net income and Table 3 on page 25 for a quarterly margin analysis. The operating performance and capital expenditures of the 43 communities containing 15,713 apartment units which were fully stabilized as of January 1, 2009, is summarized as follows:
Three months ended March 31, | ||||||
2010 | 2009 | % Change | ||||
Revenues: |
||||||
Rental and other revenue |
$ 55,839 | $ 58,707 | (4.9)% | |||
Utility reimbursements |
1,753 | 1,641 | 6.8 % | |||
Total rental and other revenues |
$ 57,592 | $ 60,348 | (4.6)% | |||
Property operating and maintenance expenses: |
||||||
Personnel expenses |
5,755 | 5,536 | 4.0 % | |||
Utility expense |
3,494 | 3,381 | 3.3 % | |||
Real estate taxes and fees |
8,251 | 8,657 | (4.7)% | |||
Insurance expenses |
1,026 | 996 | 3.0 % | |||
Building and grounds repairs and maintenance |
3,597 | 3,262 | 10.3 % | |||
Ground lease expense |
668 | 668 | 0.0 % | |||
Other expenses |
1,603 | 1,788 | (10.3)% | |||
Total property operating and maintenance expenses |
24,394 | 24,288 | 0.4 % | |||
Same store net operating income |
$33,198 | $36,060 | (7.9)% | |||
Capital expenditures (1) |
||||||
Annually recurring: |
||||||
Carpet |
$595 | $592 | 0.5 % | |||
Other |
1,881 | 1,785 | 5.4 % | |||
Total annually recurring |
2,476 | 2,377 | 4.2 % | |||
Periodically recurring (2) |
5,063 | 6,418 | (21.1)% | |||
Total capital expenditures (A) |
$ 7,539 | $ 8,795 | (14.3)% | |||
Total capital expenditures per unit |
||||||
(A ÷ 15,713 units) |
$480 | $560 | (14.3)% | |||
Average monthly rental rate per unit (3) |
$ 1,213 | $ 1,303 | (6.9)% | |||
Gross turnover (4) |
41.7% | 42.6% | (0.9)% | |||
Net turnover (5) |
36.8% | 35.4% | 1.4 % | |||
(1) | See Table 4 on page 26 for a reconciliation of these segment components of property capital expenditures to total annually recurring capital expenditures and total periodically recurring capital expenditures as presented on the consolidated cash flow statements prepared under GAAP. |
(2) | Periodically recurring capital expenditures included $4,895 and $5,372 for the three months ended March 31, 2010 and 2009, respectively, related to the Companys exterior remediation project. Periodically recurring capital expenditures included $76 and $325 for the three months ended March 31, 2010 and 2009, respectively, related to the Companys resident design center program. |
(3) | Average monthly rental rate is defined as the average of the gross actual rates for occupied units and the anticipated rental rates for unoccupied units divided by total units. See Table 2 on page 24 for further information. |
(4) | Gross turnover represents the percentage of leases expiring during the period that are not renewed by the existing resident(s). |
(5) | Net turnover is gross turnover decreased by the percentage of expiring leases where the resident(s) transfer to a new apartment unit in the same community or in another Post® community. |
7
Same Store Operating Results by Market
Comparison of First Quarter of 2010 to First Quarter of 2009
(Increase (decrease) from same period in prior year)
Three months ended | ||||||||||||||
March 31, 2010 | ||||||||||||||
Market |
Revenues | (1) | Expenses | (1) | NOI | (1) | Average Economic Occupancy | |||||||
Atlanta |
(4.2)% | 0.2 % | (7.4)% | 3.2 % | ||||||||||
Washington, D.C. |
(0.4)% | 6.9 % | (4.4)% | (0.2)% | ||||||||||
Dallas |
(7.4)% | 2.4 % | (14.1)% | (0.4)% | ||||||||||
Tampa |
(2.5)% | (5.4)% | (0.6)% | 2.2 % | ||||||||||
Charlotte |
(9.2)% | 5.8 % | (17.1)% | 2.4 % | ||||||||||
New York |
(10.7)% | 4.5 % | (20.3)% | 1.3 % | ||||||||||
Houston |
(6.8)% | (15.5)% | 1.1 % | (0.1)% | ||||||||||
Orlando |
1.5 % | 2.3 % | 0.9 % | 2.2 % | ||||||||||
Austin |
(1.7)% | (7.3)% | 3.1 % | 4.3 % | ||||||||||
Total |
(4.6)% | 0.4 % | (7.9)% | 1.4 | ||||||||||
(1) | See Table 2 on page 24 for a reconciliation of these components of same store net operating income and Table 1 on page 23 for a reconciliation of same store net operating income to GAAP net income. |
Same Store Occupancy by Market
Market |
Apartment Units |
% of
NOI Three months ended March 31, 2010 |
Average Economic Occupancy (1) |
Physical Occupancy at March 31, 2010 (2) |
Average Rental Rate Per Unit Three Months Ended March 31, 2010 (3) | ||||||||
Three months ended March 31, |
|||||||||||||
2010 | 2009 | ||||||||||||
Atlanta |
4,800 | 26.2% | 96.2% | 93.0% | 95.6% | $ | 1,036 | ||||||
Washington, D.C. |
1,905 | 18.8% | 94.1% | 94.3% | 93.8% | 1,773 | |||||||
Dallas |
3,429 | 17.2% | 94.0% | 94.4% | 93.9% | 1,008 | |||||||
Tampa |
2,111 | 14.1% | 97.5% | 95.3% | 97.1% | 1,173 | |||||||
Charlotte |
1,388 | 7.5% | 93.4% | 91.0% | 93.7% | 1,016 | |||||||
New York |
337 | 5.4% | 93.6% | 92.3% | 94.4% | 3,586 | |||||||
Houston |
837 | 4.9% | 92.0% | 92.1% | 91.3% | 1,190 | |||||||
Orlando |
598 | 3.9% | 96.9% | 94.7% | 95.5% | 1,280 | |||||||
Austin |
308 | 2.0% | 97.0% | 92.7% | 94.8% | 1,274 | |||||||
Total |
15,713 | 100.0% | 95.0% | 93.6% | 94.8% | $ | 1,213 | ||||||
(1) | The calculation of average economic occupancy does not include a deduction for net concessions and employee discounts. Average economic occupancy, including these amounts, would have been 93.8% and 91.8% for the three months ended March 31, 2010 and 2009, respectively. For the three months ended March 31, 2010 and 2009, net concessions were $506 and $888, respectively, and employee discounts were $174 and $198, respectively. |
(2) | Physical occupancy is defined as the number of units occupied divided by total apartment units, expressed as a percentage. |
(3) | Average monthly rental rate is defined as the average of the gross actual rates for occupied units and the anticipated rental rates for unoccupied units divided by total units. See Table 2 on page 24 for further information. |
8
Same Store Sequential Comparison
Three months ended | ||||||
March 31, 2010 | December 31, 2009 |
% Change | ||||
Rental and other revenue |
$ 55,839 | $ 56,013 | (0.3)% | |||
Utility reimbursements |
1,753 | 1,684 | 4.1 % | |||
Total rental and other revenues |
$ 57,592 | $ 57,697 | (0.2)% | |||
Personnel expenses |
5,755 | 5,438 | 5.8 % | |||
Utility expense |
3,494 | 3,184 | 9.7 % | |||
Real estate taxes and fees |
8,251 | 7,715 | 6.9 % | |||
Insurance expenses |
1,026 | 958 | 7.1 % | |||
Building and grounds repairs and maintenance |
3,597 | 4,142 | (13.2)% | |||
Ground lease expense |
668 | 668 | 0.0 % | |||
Other expenses |
1,603 | 1,779 | (9.9)% | |||
Total property operating and maintenance expenses |
24,394 | 23,884 | 2.1 % | |||
Same store net operating income (1) |
$ 33,198 | $ 33,813 | (1.8)% | |||
Average economic occupancy |
95.0% | 94.4% | 0.6 % | |||
Average monthly rental rate per unit |
$ 1,213 | $ 1,225 | (1.0)% | |||
(1) | See Table 2 on page 24 for a reconciliation of these components of same store net operating income and Table 1 on page 23 for a reconciliation of same store net operating income to GAAP net income. |
Sequential Same Store Operating Results by Market
Comparison of First Quarter of 2010 to Fourth Quarter 2009
(Increase (decrease) between periods)
Market |
Revenues | (1) | Expenses | (1) | NOI | (1) | Average Economic Occupancy | |||||||
Atlanta |
(0.4)% | (1.1)% | 0.2 % | 0.2 % | ||||||||||
Washington, D.C. |
0.1 % | 5.6 % | (2.9)% | (0.2)% | ||||||||||
Dallas |
(0.2)% | (1.2)% | 0.7 % | 0.8 % | ||||||||||
Tampa |
0.9 % | 4.8 % | (1.4)% | 1.2 % | ||||||||||
Charlotte |
(0.6)% | 1.5 % | (1.9)% | 1.6 % | ||||||||||
New York |
(1.6)% | (0.2)% | (2.8)% | 0.5 % | ||||||||||
Houston |
(2.9)% | 6.5 % | (9.0)% | 0.6 % | ||||||||||
Orlando |
0.9 % | 20.7 % | (10.8)% | 1.5 % | ||||||||||
Austin |
2.6 % | 4.8 % | 0.9 % | 3.9 % | ||||||||||
Total |
(0.2)% | 2.1 % | (1.8)% | 0.6 % | ||||||||||
(1) | See Table 2 on page 24 for a reconciliation of these components of same store net operating income and Table 1 on page 23 for a reconciliation of same store net operating income to GAAP net income. |
9
POST PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share or unit data)
March 31,
2010 |
December 31, 2009 | |||||
(Unaudited) | ||||||
Assets |
||||||
Real estate assets |
||||||
Land |
$ | 284,673 | $ | 283,217 | ||
Building and improvements |
2,003,185 | 1,983,839 | ||||
Furniture, fixtures and equipment |
233,880 | 230,271 | ||||
Construction in progress |
13,567 | 28,274 | ||||
Land held for future investment |
93,800 | 93,899 | ||||
2,629,105 | 2,619,500 | |||||
Less: accumulated depreciation |
(643,642) | (625,391) | ||||
Condominiums, for-sale and under construction |
121,519 | 107,366 | ||||
Assets held for sale |
5,045 | 5,045 | ||||
Total real estate assets |
2,112,027 | 2,106,520 | ||||
Investments in and advances to unconsolidated real estate entities |
8,194 | 8,322 | ||||
Cash and cash equivalents |
11,299 | 13,347 | ||||
Restricted cash |
12,503 | 11,177 | ||||
Deferred charges, net |
8,520 | 8,365 | ||||
Other assets |
28,313 | 29,698 | ||||
Total assets |
$ | 2,180,856 | $ | 2,177,429 | ||
Liabilities and equity |
||||||
Indebtedness |
$ | 1,008,551 | $ | 992,760 | ||
Accounts payable and accrued expenses |
73,826 | 79,815 | ||||
Investments in unconsolidated real estate entities |
54,551 | 54,706 | ||||
Dividend and distribution payable |
9,754 | 9,724 | ||||
Accrued interest payable |
10,276 | 4,890 | ||||
Security deposits and prepaid rents |
16,528 | 16,079 | ||||
Total liabilities |
1,173,486 | 1,157,974 | ||||
Redeemable common units |
3,822 | 3,402 | ||||
Commitments and contingencies |
||||||
Equity |
||||||
Company shareholders' equity |
||||||
Preferred stock, $.01 par value, 20,000 authorized: |
||||||
8 1/2% Series A Cumulative Redeemable Shares, liquidation preference $50 per share, 884 and 900 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively |
9 | 9 | ||||
7 5/8% Series B Cumulative Redeemable Shares, liquidation preference |
||||||
$25 per share, 1,994 and 2,000 shares issued and outstanding at March 31, 2010 and December 31, 2009, respectively |
20 | 20 | ||||
Common stock, $.01 par value, 100,000 authorized: |
||||||
48,598 and 48,453 shares issued and 48,598 and 48,445 shares outstanding at March 31, 2010 and December 31, 2009, respectively |
485 | 484 | ||||
Additional paid-in-capital |
961,350 | 960,593 | ||||
Accumulated earnings |
44,007 | 57,253 | ||||
1,005,871 | 1,018,359 | |||||
Less common stock in treasury, at cost, 92 and 97 shares at March 31, 2010 and December 31, 2009, respectively |
(3,141) | (3,240) | ||||
Total Company shareholders' equity |
1,002,730 | 1,015,119 | ||||
Noncontrolling interests - consolidated real estate entities |
818 | 934 | ||||
Total equity |
1,003,548 | 1,016,053 | ||||
Total liabilities and equity |
$ 2,180,856 | $ 2,177,429 | ||||
10
POST PROPERTIES, INC.
DEBT SUMMARY
(Dollars in thousands, except per share or unit data)
(Unaudited)
Summary of Outstanding Debt at March 31, 2010 - Consolidated
Weighted Average Rate (1) | |||||||||
Percentage | March 31, | ||||||||
Type of Indebtedness |
Balance | of Total | 2010 | 2009 | |||||
Unsecured fixed rate senior notes |
$ | 335,917 | 33.3% | 6.4% | 6.4% | ||||
Secured fixed rate notes |
648,481 | 64.3% | 5.7% | 5.8% | |||||
Unsecured lines of credit |
16,000 | 1.6% | 1.0% | 1.0% | |||||
Secured variable rate construction note |
8,153 | 0.8% | 1.6% | - | |||||
$ | 1,008,551 | 100.0% | 5.9% | 5.6% | |||||
Percentage | Weighted Average Maturity | ||||||||
Balance | of Total Debt | of Total Debt (2) (3) | |||||||
Total fixed rate debt |
$ | 984,398 | 97.6% | 4.9 | |||||
Total variable rate debt |
24,153 | 2.4% | 1.1 | ||||||
Total debt |
$ | 1,008,551 | 100.0% | 4.8 | |||||
Debt Maturities Consolidated and Unconsolidated
Consolidated | Unconsolidated Entities | ||||||||||||||
Aggregate debt maturities by year |
Amount | Weighted Average Rate on Debt Maturities (1) |
Amount | Company Share | Weighted Average Rate on Debt Maturities (1) | ||||||||||
Remainder of 2010 |
$ | 101,149 | 7.7% | $ | - | $ | - | 0.0% | |||||||
2011 |
37,276 | (3) | 2.7% | 63,919 | (4) | 63,919 | 1.7% | ||||||||
2012 |
100,104 | 5.5% | - | - | 0.0% | ||||||||||
2013 |
186,606 | 6.1% | 79,772 | 27,920 | 5.8% | ||||||||||
2014 |
188,644 | 6.1% | - | - | 0.0% | ||||||||||
Thereafter |
394,772 | 5.6% | 126,723 | 31,681 | 5.7% | ||||||||||
$ | 1,008,551 | 5.9% | $ | 270,414 | $ | 123,520 | 4.1% | ||||||||
Debt Statistics
Three months ended March 31, | ||||
2010 | 2009 | |||
Interest coverage ratio (5)(6) |
2.4x | 2.3x | ||
Fixed charge coverage ratio (5)(7) |
2.1x | 2.0x | ||
Total debt as a % of undepreciated real estate assets (adjusted for joint venture partners share of debt) (8) |
39.5% | 40.9% | ||
Total debt and preferred equity as a % of undepreciated real estate assets (adjusted for joint venture partners share of debt) (8) |
42.8% | 44.2% |
(1) | Weighted average rate includes credit enhancements and other fees, where applicable. The weighted average rates at March 31, 2009 are based on the debt outstanding at that date. |
(2) | Weighted average maturity of total debt represents number of years to maturity based on the debt maturities schedule above. |
(3) | Includes outstanding indebtedness on lines of credit of $16,000 maturing in 2011. |
(4) | Amount represents the outstanding balance of the condominium portion of the total construction loan outstanding on the Companys mixed-use development. See page 18 for further discussion. |
(5) | Calculated for the three months ended March 31, 2010 and 2009. |
(6) | Interest coverage ratio is defined as net income available for debt service divided by interest expense. For purposes of this calculation, net income available for debt service represents income from continuing operations, before preferred or common noncontrolling interest, gains on sales of real estate, impairment charges, interest expense, depreciation, amortization and income taxes. Net income available for debt service was also adjusted for the Companys share of depreciation and interest expense from unconsolidated entities, and interest expense used in the calculation was adjusted to include the Companys share of interest expense from unconsolidated entities. The calculation of the interest coverage ratio is a non-GAAP financial measure. A reconciliation of net income available for debt service to income from continuing operations and interest expense to consolidated interest expense is included in Table 5 on page 26. |
(7) | Fixed charge coverage ratio is defined as net income available for debt service divided by interest expense plus dividends to preferred shareholders and distributions to preferred unitholders. For purposes of this calculation, net income available for debt service represents earnings from continuing operations, before preferred or common noncontrolling interest, gains on sales of real estate, impairment charges, interest expense, depreciation, amortization and income taxes. Net income available for debt service was also adjusted for the Companys share of depreciation and interest expense from unconsolidated entities, and interest expense used in the calculation was adjusted to include the Companys share of interest expense from unconsolidated entities. The calculation of the fixed charge coverage ratio is a non-GAAP financial measure. A reconciliation of net income available for debt service to income from continuing operations and fixed charges to consolidated interest expense plus preferred dividends to shareholders and preferred distributions to unitholders is included in Table 5 on page 26. |
(8) | A computation of the debt ratios is included in Table 6 on page 27. |
11
POST PROPERTIES, INC.
DEBT SUMMARY (CONT.)
(Dollars in thousands, except per share or unit data)
(Unaudited)
Financial Debt Covenants - Senior Unsecured Public Notes
Covenant requirement (1) |
As of March 31, 2010 | |
Consolidated Debt to Total Assets cannot exceed 60% |
36% | |
Secured Debt to Total Assets cannot exceed 40% |
23% | |
Total Unencumbered Assets to Unsecured Debt must beat least 1.5/1 |
5.6x | |
Consolidated Income Available for Debt Service Charge must be at least 1.5/1 |
2.4x |
(1) | A summary of the public debt covenant calculations and reconciliations of the financial components used in the public debt covenant calculations to the most comparable GAAP financial measures are detailed below. |
Ratio of Consolidated Debt to Total Assets | |||
As
of March 31, 2010 | |||
Consolidated debt, per balance sheet (A) |
$ | 1,008,551 | |
Total assets, as defined (B) (Table A) |
$ | 2,815,978 | |
Computed ratio (A÷B) |
36% | ||
Required ratio (cannot exceed) |
60% | ||
Ratio of Secured Debt to Total Assets | |||
Total secured debt (C) |
$ | 656,634 | |
Computed ratio (C÷B) |
23% | ||
Required ratio (cannot exceed) |
40% | ||
Ratio of Total Unencumbered Assets to Unsecured Debt | |||
Consolidated debt, per balance sheet (A) |
$ | 1,008,551 | |
Total secured debt (C) |
(656,634) | ||
Total unsecured debt (D) |
$ | 351,917 | |
Total unencumbered assets, as defined (E) (Table A) |
$ | 1,954,816 | |
Computed ratio (E÷D) |
5.6x | ||
Required minimum ratio |
1.5x | ||
Ratio of Consolidated Income Available for Debt Service to Annual Debt Service Charge (Annualized) (2) | |||
Consolidated Income Available for Debt Service, as defined (F) (Table B) |
$ | 129,528 | |
Annual Debt Service Charge, as defined (G) (Table B) |
$ | 53,868 | |
Computed ratio (F÷G) |
2.4x | ||
Required minimum ratio |
1.5x | ||
(2) | The actual calculation of these ratios requires the use of annual trailing financial data. These computations reflect annualized 2010 results for comparison and presentation purposes. The computations using annual financial data also reflect compliance with the debt covenants. |
12
POST PROPERTIES, INC.
DEBT SUMMARY (CONT.)
(Dollars in thousands, except per share or unit data)
(Unaudited)
Table A
Calculation of Total Assets and Total Unencumbered Assets for Public Debt Covenant Computations | |||
As of March 31, 2010 | |||
Total real estate assets |
$ | 2,112,027 | |
Add: |
|||
Investments in and advances to unconsolidated real estate entities |
8,194 | ||
Accumulated depreciation |
643,642 | ||
Other tangible assets |
52,115 | ||
Total assets for public debt covenant computations |
2,815,978 | ||
Less: |
|||
Encumbered real estate assets |
(861,162) | ||
Total unencumbered assets for public debt covenant computations |
$ | 1,954,816 | |
Table B
Calculation of Consolidated Income Available for Debt Service and Annual Debt Service Charge (Annualized) (1) | |||
Consolidated income available for debt service |
Three months ended March 31, 2010 | ||
Net loss |
$ | (1,127) | |
Add: |
|||
Depreciation |
18,471 | ||
Depreciation (company share) of assets held in unconsolidated entities |
354 | ||
Amortization of deferred financing costs |
833 | ||
Interest expense |
12,613 | ||
Interest expense (company share) of assets held in unconsolidated entities |
854 | ||
Income tax expense |
280 | ||
Other non-cash expenses |
1,052 | ||
Less: |
|||
Gains on sales of real estate assets |
(948) | ||
Consolidated income available for debt service |
$ | 32,382 | |
Consolidated income available for debt service (annualized) |
$ | 129,528 | |
Annual debt service charge |
|||
Consolidated interest expense |
$ | 12,613 | |
Interest expense (company share) of assets held in unconsolidated entities |
854 | ||
Debt service charge |
$ | 13,467 | |
Debt service charge (annualized) |
$ | 53,868 | |
(1) | The actual calculation of these ratios requires the use of annual trailing financial data. These computations reflect annualized 2010 results for comparison and presentation purposes. The computations using annual financial data also reflect compliance with the debt covenants. |
13
POST PROPERTIES, INC.
SUMMARY OF APARTMENT COMMUNITIES IN LEASE-UP
AND LAND HELD FOR FUTURE INVESTMENT AND SALE
($ in millions)
Communities in Lease-Up
Community |
Location |
Number of Units |
Retail |
Estimated Total Cost |
Costs Incurred as of 03/31/10 |
Quarter |
Estimated Quarter of Stabilized Occupancy (1) |
Units |
Percent Leased (2) |
||||||||||||
Post Sierra at Frisco Bridges |
Dallas, TX | 268 | 29,000 | $ | 42.1 | $ | 40.4 | 2Q 2009 | 3Q 2010 | 228 | 85 | % | |||||||||
Post Park® |
Wash. DC | 396 | 1,700 | 84.7 | 81.6 | 2Q 2009 | 4Q 2010 | 215 | 54 | % | |||||||||||
Post West Austin |
Austin, TX | 329 | - | 53.2 | 51.2 | 2Q 2009 | 3Q 2010 | 231 | 70 | % | |||||||||||
Total |
993 | 30,700 | $ | 180.0 | $ | 173.2 | 674 | 68 | % | ||||||||||||
(1) | The Company defines stabilized occupancy as the earlier to occur of (i) the attainment of 95% physical occupancy on the first day of any month or (ii) one year after completion of construction. |
(2) | As of April 26, 2010. |
Land Held for Future Investment and Sale
The following are land positions (including pre-development costs incurred to date) that the Company currently holds. There can be no assurance that projects held for future investment will be developed in the future or at all or that land held for sale will be sold.
Land Held for Future Investment: |
||||||||
Project |
Metro Area | Carrying Value At Mar. 31, 2010 (in thousands) |
Estimated Usable Acreage | |||||
Alexander |
Atlanta, GA |
$ 6,652 | 2.5 | |||||
Allen Plaza |
Atlanta, GA |
18,858 | 5.6 | |||||
Millennium |
Atlanta, GA |
2,774 | 1.0 | |||||
Spring Hill |
Atlanta, GA |
2,023 | 9.1 | |||||
South Lamar |
Austin, TX |
4,942 | 4.0 | |||||
Frisco Bridges II |
Dallas, TX |
5,480 | 5.4 | |||||
Midtown Square III |
Houston, TX |
3,502 | 1.6 | |||||
Richmond |
Houston, TX |
4,420 | 2.1 | |||||
Baldwin Park |
Orlando, FL |
9,841 | 13.5 | |||||
Wade |
Raleigh, NC |
14,544 | 39.6 | |||||
Citrus Park |
Tampa, FL |
3,450 | 17.7 | |||||
Soho Square |
Tampa, FL |
5,168 | 4.1 | |||||
Carlyle Square II |
Washington, D.C. |
12,146 | 2.4 | |||||
Total Land Held for Future Investment |
$ 93,800 | 108.6 | ||||||
Land Held for Sale: |
||||||||
Project |
Metro Area | Carrying Value At Mar. 31, 2010 (in thousands) |
Estimated Usable Acreage | |||||
Wade |
Raleigh, NC | $ 5,045 | 40.9 | |||||
Total Land Held for Sale |
$ 5,045 | 40.9 | ||||||
14
POST PROPERTIES, INC.
SUMMARY OF CONDOMINIUM PROJECTS
(Dollars in Thousands)
The Ritz-Carlton Residences, Atlanta, Buckhead |
Four Seasons Residences | |||||
Non-financial Data |
||||||
Location |
Atlanta, GA | Austin, TX | ||||
Ownership interest |
(1) | 100% | ||||
Residential square footage |
245,539 | 291,452 | ||||
Average unit square footage (2) |
1,903 | 1,969 | ||||
Quarter of first units available |
2Q10 | 2Q10 | ||||
Units (3) |
||||||
Under contract |
- | 76 | ||||
Closed |
- | - | ||||
Available for sale |
129 | 72 | ||||
Total |
129 | 148 | ||||
Financial Data |
||||||
Balance Sheet/Cost Data as of 3/31/10 |
||||||
Condominium book value |
$ | 27,241 | $ | 121,401 | ||
Condominium estimated cost to complete |
$ | 14,600 | $ | 15,099 | ||
Projected total cost (before impairment losses) |
$ | 116,574 | $ | 136,500 | ||
Units Closed as of 3/31/10 |
||||||
Quarter |
- | - | ||||
Year to date |
- | - | ||||
Gross Revenue as of 3/31/10 |
||||||
Quarter |
$ | - | $ | 17 | ||
Year to date |
$ | - | $ | 17 |
(1) | The mixed-use project (the Mixed-Use LP) consists of 129 luxury for-sale condominiums to be marketed as The Ritz-Carlton Residences, Atlanta, Buckhead (sponsored through a joint venture between the Company and a private condominium developer; the Condominium LLC) and approximately 425,000 square feet of Class A office space (sponsored through a joint venture between an office REIT and a private office developer). The Condominium LLC owns an approximate 49% pro-rata interest in the Mixed-Use LP accounted for on the equity method, representing the condominium portion of the project. Due to its majority ownership of the Condominium LLC, the Company consolidates that entity on its consolidated balance sheet. See page 18 for further information regarding this project. |
(2) | Average square footage information is based on approximate amounts and individual unit sizes may vary. |
(3) | Unit status is as of April 26, 2010. There can be no assurance that condominium units under contract will close. In addition, the Company is in discussions with its construction lenders for The Ritz-Carlton Residences, Atlanta, Buckhead. These discussions are ongoing, and until such time that they are concluded, the Company is not able to execute sales contracts at prices below the minimum sales prices stated in the loan agreement without the lenders prior written consent. As current market prices for condominium units at this project are substantially below the minimum sales prices, there are no executed sales contracts to date. |
15
POST PROPERTIES, INC.
COMMUNITY ACQUISITION AND DISPOSITION SUMMARY
Property Name/Period |
Location | Units | Year Built | Gross Amount
Per Unit |
Gross Amount |
||||||||
Acquisitions |
|||||||||||||
2009 |
|||||||||||||
None |
|||||||||||||
2010 |
|||||||||||||
None |
|||||||||||||
Dispositions |
|||||||||||||
Q2 2009 |
|||||||||||||
Post Dunwoody® |
Atlanta, GA | 530 | 1989-1996 | $ | 89,434 | $ | 47,400,000 | ||||||
Q3 2009 |
|||||||||||||
Post Forest® |
Washington, D.C. | 364 | 1990 | $ | 157,967 | 57,500,000 | |||||||
Post Ridge® |
Atlanta, GA | 434 | 1998 | $ | 103,226 | 44,800,000 | |||||||
2009 YTD Total |
$ | 149,700,000 | |||||||||||
Average Cap Rate Dispositions 2009 |
7.6% | (1) | |||||||||||
2010 |
|||||||||||||
None |
(1) | Based on trailing twelve-month net operating income after adjustments for management fee (3.0%) and capital reserves ($300/unit). |
16
POST PROPERTIES, INC.
CAPITALIZED COSTS SUMMARY
(Dollars in thousands, except per share or unit data)
(Unaudited)
The Company has a policy of capitalizing those expenditures relating to the acquisition of new assets and the development, construction and rehabilitation of apartment and condominium communities. In addition, the Company capitalizes expenditures that enhance the value of existing assets and expenditures that substantially extend the life of existing assets. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as incurred. Additionally, for new development communities, carpet, vinyl and blind replacements are expensed as incurred during the first five years (which corresponds to the estimated depreciable life of these assets) after construction completion. Thereafter, these replacements are capitalized. Further, the Company expenses as incurred the interior and exterior painting of operating communities, unless those communities are under major rehabilitation.
The Company capitalizes interest, real estate taxes, and certain internal personnel and associated costs related to apartment and condominium communities under development, construction, and major rehabilitation. The internal personnel and associated costs are capitalized to the projects under development based upon the effort identifiable with such projects. The Company treats each unit in an apartment and condominium community separately for cost accumulation, capitalization and expense recognition purposes. Prior to the commencement of leasing and sales activities, interest and other construction costs are capitalized and are reflected on the balance sheet as construction in progress. The Company ceases the capitalization of such costs as the residential units in a community become substantially complete and available for occupancy. This results in a proration of these costs between amounts that are capitalized and expensed as the residential units in a development community become available for occupancy. In addition, prior to the completion of units, the Company expenses as incurred substantially all operating expenses (including pre-opening marketing and property management and leasing personnel expenses) of such communities.
A summary of community acquisition and development improvements and other capitalized expenditures for the three months ended March 31, 2010 and 2009 is detailed below.
Three months ended March 31, | ||||||
2010 | 2009 | |||||
Development and acquisition expenditures (1) |
$ | 16,518 | $ | 49,242 | ||
Periodically recurring capital expenditures |
||||||
Community rehabilitation and other revenue generating improvements (2) |
33 | 1,647 | ||||
Other community additions and improvements (3) (6) |
5,446 | 9,096 | ||||
Annually recurring capital expenditures |
||||||
Carpet replacements and other community additions and improvements (4) |
2,578 | 2,633 | ||||
Corporate additions and improvements |
351 | 59 | ||||
$ | 24,926 | $ | 62,677 | |||
Other Data |
||||||
Capitalized interest |
$ | 2,394 | $ | 3,107 | ||
Capitalized development and associated costs (5) |
$ | 240 | $ | 1,305 | ||
(1) | Reflects aggregate community acquisition and development costs, exclusive of the change in construction payables and assumed debt, if any, between years. |
(2) | Represents expenditures for community rehabilitations and other unit upgrade costs that enhance the rental value of such units. |
(3) | Represents community improvement expenditures (e.g. property upgrades) that generally occur less frequently than on an annual basis. |
(4) | Represents community improvement expenditures (e.g. carpets, appliances) of a type that are expected to be incurred on an annual basis. |
(5) | Reflects internal personnel and associated costs capitalized to construction and development activities. |
(6) | Periodically recurring expenditures includes $4,895 and $5,372 for the three months ended March 31, 2010 and 2009, respectively, related to the Companys exterior remediation project. |
17
POST PROPERTIES, INC.
INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES
(Dollars in thousands, except per share or unit data)
(Unaudited)
Apartments and Condominium Development Communities
The Company holds investments in limited liability companies (the Property LLCs) with institutional investors and accounts for its investments in these Property LLCs using the equity method of accounting. A summary of non-financial and financial information for the Property LLCs is as follows:
Non-Financial Data | ||||||||
Joint Venture Property |
Location | Property Type |
# of Units | Ownership Interest | ||||
Post Collier Hills® (1) |
Atlanta, GA | Apartments | 396 | 25% | ||||
Post Crest® (1) |
Atlanta, GA | Apartments | 410 | 25% | ||||
Post Lindbergh® (1) |
Atlanta, GA | Apartments | 396 | 25% | ||||
Post Biltmore |
Atlanta, GA | Apartments | 276 | 35% | ||||
Post Massachusetts Avenue |
Washington, D.C. | Apartments | 269 | 35% | ||||
3630 Peachtree South Tower (2) |
Atlanta, GA | Mixed-Use | 129 | 49% |
Financial Data |
| ||||||||||||||||||||||||||
As of March 31, 2010 | Three months ended March 31, 2010 |
||||||||||||||||||||||||||
Joint Venture Property |
Gross Investment in Real Estate (9) |
Mortgage/ Construction Notes Payable |
Entity Equity |
Company's Equity Investment |
Entity NOI |
Company's Equity in Earnings |
Mgmt. Fees & Other |
||||||||||||||||||||
Post Collier Hills® (1) |
$ | 54,743 | $ | 39,565 | (4) | $ | 12,164 | $ | (4,239 | )(1) | $ | 614 | $ | (19 | ) | ||||||||||||
Post Crest® (1) |
64,047 | 46,159 | (4) | 13,712 | (6,705 | )(1) | 618 | (44 | ) | ||||||||||||||||||
Post Lindbergh® (1) |
60,363 | 41,000 | (5) | 16,852 | (4,085 | )(1) | 618 | (32 | ) | ||||||||||||||||||
Post Biltmore |
36,387 | 29,272 | (6) | 902 | 2,104 | 578 | (16 | ) | |||||||||||||||||||
Post Massachusetts Avenue |
69,611 | 50,500 | (7) | 8,547 | 6,090 | 1,625 | 234 | ||||||||||||||||||||
3630 Peachtree South Tower (2) |
118,258 | 135,223 | (8) | (21,764 | ) | (39,522 | )(3) | (122 | ) | - | |||||||||||||||||
Total |
$ | 403,409 | $ | 341,719 | $ | 30,413 | $ | (46,357 | ) | $ | 3,931 | $ | 123 | $ | 205 | (10) | |||||||||||
(1) | The Companys investment in the 25% owned Property LLC resulted from the transfer of three previously owned apartment communities to the Property LLC co-owned with an institutional investor. The assets, liabilities and members equity of the Property LLC were recorded at fair value based on agreed-upon amounts contributed to the venture. The credit investments in the Companys 25% owned Property LLC resulted from financing proceeds distributed in excess of the Companys historical cost-basis investment. These credit investments are reflected in consolidated liabilities on the Companys consolidated balance sheet. |
(2) | The mixed-use project (the Master LP) consists of 129 luxury for-sale condominiums to be marketed as The Ritz-Carlton Residences, Atlanta, Buckhead (sponsored through a joint venture between the Company and a private condominium developer; the Condo LLC) and approximately 425,000 square feet of Class A office space (sponsored through a joint venture between an office REIT and a private office developer). The Condo LLC owns an approximate 49% pro-rata interest in the Master LP accounted for on the equity method, representing the condominium portion of the project. Due to its majority ownership of the Condo LLC, the Company consolidates that entity on its consolidated balance sheet. The Companys share of gross real estate assets and construction notes payable at March 31, 2010 was $26,930 and $63,919, respectively. See page 15 for further information regarding the for-sale condominium portion of the project. |
(3) | The Companys credit investment primarily results from a non-cash impairment charge of $68,219, net of the allocable loss to the noncontrolling joint venture interest in the entity of $6,514, to write down its investment to fair value in 2009. The credit investment is reflected in consolidated liabilities on the Companys balance sheet. |
(4) | These notes bear interest at a fixed rate of 5.63% and mature in 2017. |
(5) | This note bears interest at a fixed rate of 5.71% and matures in 2017. |
(6) | This note bears interest at a fixed rate of 5.83% and requires monthly interest only payments through 2013. The note is prepayable without penalty in September 2011. |
(7) | This note bears interest at a fixed rate of 5.82% and requires monthly interest only payments through 2013. The note is prepayable without penalty in September 2011. |
(8) | At March 31, 2010, $135,223 was outstanding under a $178,840 construction loan facility bearing interest at a variable rate of LIBOR plus 1.35% and which matures in 2011. |
(9) | Represents GAAP basis net book value plus accumulated depreciation. |
(10) | Amounts include net property and asset management fees to the Company included in Other Revenues in the Companys consolidated statements of operations. |
18
POST PROPERTIES, INC.
NET ASSET VALUE SUPPLEMENTAL INFORMATION
(Dollars in thousands, except per share or unit data)
(Unaudited)
This supplemental financial and other data provides adjustments to certain GAAP financial measures and Net Operating Income (NOI), which is a supplemental non-GAAP financial measure that the Company uses internally to calculate Net Asset Value (NAV). These measures, as adjusted, are also non-GAAP financial measures. With the exception of NOI, the most comparable GAAP measure for each of the non-GAAP measures presented below in the As Adjusted column is the corresponding number presented in the first column listed below.
The Company presents below NOI for the quarter ended March 31, 2010 for properties stabilized by January 1, 2010 so that a capitalization rate may be applied and an approximate value for the assets determined. Properties not stabilized by January 1, 2010 are presented at full undepreciated cost. Other tangible assets, total liabilities and the liquidation value of preferred shares are also presented.
Financial Data
(In thousands)
Income Statement Data |
Three months ended March 31, 2010 |
Adjustments | As Adjusted | |||||||
Rental revenues |
$ | 65,134 | $ | (2,612) | (1) | $ | 62,522 | |||
Other property revenues |
3,726 | (117) | (1) | 3,609 | ||||||
Total rental and other revenues (A) |
68,860 | (2,729) | 66,131 | |||||||
Property operating & maintenance expenses (excluding depreciation and amortization) (B) |
33,491 | (5,882) | (1) | 27,609 | ||||||
Property net operating income (Table 1) (A-B) |
$ | 35,369 | $ | 3,153 | $ | 38,522 | ||||
Assumed property management fee (calculated at 3% of revenues) (A x 3%) |
(1,984) | |||||||||
Assumed property capital expenditure reserve ($300 per unit per year based on 17,179 units) |
(1,288) | |||||||||
Adjusted property net operating income |
$ | 35,250 | ||||||||
Annualized property net operating income (C) |
$ | 141,000 | ||||||||
Apartment units represented (D) |
19,863 | (2,684) | (1) | 17,179 | ||||||
Other Asset Data |
As
of March 31, 2010 |
Adjustments | As Adjusted | |||||||
Cash & equivalents |
$ | 11,299 | $ | - | $ | 11,299 | ||||
Real estate assets under construction, lease-up, conversion or rehabilitation, at cost (2) |
13,567 | 215,661 | (2) | 229,228 | ||||||
Land held for future investment |
93,800 | - | 93,800 | |||||||
Condominiums, for-sale and under construction |
121,519 | - | 121,519 | |||||||
Assets held for sale |
5,045 | - | 5,045 | |||||||
Investments in and advances to unconsolidated real estate entities (3) |
8,194 | (8,194) | (3) | - | ||||||
Restricted cash and other assets |
40,816 | - | 40,816 | |||||||
Cash & other assets of unconsolidated apartment entities (4) |
5,991 | (4,205) | (4) | 1,786 | ||||||
Total (E) |
$ | 300,231 | $ | 203,262 | $ | 503,493 | ||||
Other Liability Data |
||||||||||
Indebtedness |
$ | 1,008,551 | $ | - | $ | 1,008,551 | ||||
Investments in unconsolidated real estate entities (3) |
54,551 | (15,029) | (3) | 39,522 | ||||||
Other liabilities (including noncontrolling interests) (5) |
110,384 | (14,265) | (5) | 96,119 | ||||||
Total liabilities of unconsolidated apartment entities (6) |
209,376 | (148,943) | (6) | 60,433 | ||||||
Total (F) |
$ | 1,382,862 | $ | (178,237) | $ | 1,204,625 | ||||
19
Other Data
As of March 31, 2010 | ||||||||
# Shares/Units | Stock Price | Implied Value | ||||||
Liquidation value of preferred shares (G) |
$ | 94,068 | ||||||
Common shares outstanding |
48,598 | |||||||
Common units outstanding |
174 | |||||||
Total (H) |
48,772 | $ | 22.02 | $ | 1,073,959 | |||
Implied market value of Company gross real estate assets (I) = (F+G+H-E) |
$ | 1,869,159 | ||||||
Implied Portfolio Capitalization Rate (C÷I) |
7.5% | |||||||
Implied market value of Company gross real estate assets per unit (I÷D) |
$ | 108.8 | ||||||
(1) | The following table summarizes the adjustments made to the components of property net operating income for the three months ended March 31, 2010 to adjust property net operating income to the Companys share for fully stabilized communities: |
Rental Revenue | Other Revenue | Expenses | Units | ||||||||
Under construction and lease-up |
$ | (2,730) | $ | (188) | $ | (2,106) | (1,428) | ||||
Corporate property management expenses |
- | - | (2,457) | - | |||||||
Company share of unconsolidated entities |
1,937 | 132 | 753 | (1,256) | |||||||
Corporate apartments and other |
(1,819) | (61) | (2,072) | - | |||||||
$ | (2,612) | $ | (117) | $ | (5,882) | (2,684) | |||||
(2) | The As Adjusted amount represents CIP balance per the Companys balance sheet plus the costs of properties under construction and lease-up that have been transferred to operating real estate assets as apartment units are completed. The As Adjusted column consists of the following: |
As Adjusted CIP | |||
Post Eastside |
$ | 55,923 | |
Post Sierra at Frisco Bridges |
40,448 | ||
Post Park® |
81,629 | ||
Post West Austin |
51,228 | ||
$ | 229,228 | ||
(3) | The adjustment reflects a reduction for the investments in unconsolidated entities for entities with operating real estate assets, as the Companys net operating income of such investments is included in the adjusted net operating income reflected above. The As Adjusted liability amount represents the consolidated credit investment in 3630 Peachtree South Tower (i.e., The Ritz-Carlton Residences, Atlanta, Buckhead). |
(4) | The As of March 31, 2010 amount represents cash and other assets of unconsolidated apartment entities. The adjustment includes a reduction for the venture partners respective share of cash and other assets. The As Adjusted amount represents the Companys respective share of the cash and other assets of unconsolidated apartment entities. |
(5) | The As of March 31, 2010 amount consists of the sum of accrued interest payable, dividends and distributions payable, accounts payable and accrued expenses, security deposits and prepaid rents, and noncontrolling interests in consolidated real estate entities as reflected on the Companys balance sheet. The adjustment represents a reduction for the non-cash liability associated with straight-line, long-term ground lease expense. |
(6) | The As of March 31, 2010 amount represents total liabilities of unconsolidated apartment entities. The adjustments represent a reduction for the venture partners respective share of liabilities and the addition of noncontrolling interests of consolidated real estate entities of $818. The As Adjusted amount represents the Companys respective share of liabilities of unconsolidated apartment entities. |
20
POST PROPERTIES, INC.
NON-GAAP FINANCIAL MEASURES AND OTHER DEFINED TERMS
(Dollars in thousands, except per share or unit data)
(Unaudited)
Definitions of Supplemental Non-GAAP Financial Measures and Other Defined Terms
The Company uses certain non-GAAP financial measures and other defined terms in this accompanying Supplemental Financial Data. These non-GAAP financial measures include FFO, AFFO, net operating income, same store capital expenditures and certain debt statistics and ratios. The definitions of these non-GAAP financial measures are summarized below. The Company believes that these measures are helpful to investors in measuring financial performance and/or liquidity and comparing such performance and/or liquidity to other REITs.
Funds from Operations - The Company uses FFO as an operating measure. The Company uses the NAREIT definition of FFO. FFO is defined by NAREIT to mean net income (loss) available to common shareholders determined in accordance with GAAP, excluding gains (losses) from extraordinary items and sales of depreciable operating property, plus depreciation and amortization of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures all determined on a consistent basis in accordance with GAAP. FFO presented in the Companys press release and Supplemental Financial Data is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Companys FFO is comparable to the FFO of real estate companies that use the current NAREIT definition.
Accounting for real estate assets using historical cost accounting under GAAP assumes that the value of real estate assets diminishes predictably over time. NAREIT stated in its April 2002 White Paper on Funds from Operations that since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, the concept of FFO was created by NAREIT for the REIT industry to provide an alternate measure. Since the Company agrees with the concept of FFO and appreciates the reasons surrounding its creation, the Company believes that FFO is an important supplemental measure of operating performance. In addition, since most equity REITs provide FFO information to the investment community, the Company believes that FFO is a useful supplemental measure for comparing the Companys results to those of other equity REITs. The Company believes that the line on its consolidated statement of operations entitled net income (loss) available to common shareholders is the most directly comparable GAAP measure to FFO.
Adjusted Funds From Operations - The Company also uses adjusted funds from operations (AFFO) as an operating measure. AFFO is defined as FFO less operating capital expenditures after adjusting for the impact of non-cash straight-line long-term ground lease expense, non-cash impairment charges, non-cash income (loss) related to mark-to-market of interest rate swap agreements and non-cash debt extinguishment costs. The Company believes that AFFO is an important supplemental measure of operating performance for an equity REIT because it provides investors with an indication of the REITs ability to fund operating capital expenditures through earnings. In addition, since most equity REITs provide AFFO information to the investment community, the Company believes that AFFO is a useful supplemental measure for comparing the Company to other equity REITs. The Company believes that the line on its consolidated statement of operations entitled net income (loss) available to common shareholders is the most directly comparable GAAP measure to AFFO.
Property Net Operating Income - The Company uses property NOI, including same store NOI and same store NOI by market, as an operating measure. NOI is defined as rental and other revenues from real estate operations less total property and maintenance expenses from real estate operations (exclusive of depreciation and amortization). The Company believes that NOI is an important supplemental measure of operating performance for a REITs operating real estate because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs and general and administrative expenses generally incurred at the corporate level. This measure is particularly useful, in the opinion of the Company, in evaluating the performance of geographic operations, same store groupings and individual properties. Additionally, the Company believes that NOI, as defined, is a widely accepted measure of comparative operating performance in the real estate investment community. The Company believes that the line on its consolidated statement of operations entitled net income is the most directly comparable GAAP measure to NOI.
21
Same Store Capital Expenditures - The Company uses same store annually recurring and periodically recurring capital expenditures as cash flow measures. Same store annually recurring and periodically recurring capital expenditures are supplemental non-GAAP financial measures. The Company believes that same store annually recurring and periodically recurring capital expenditures are important indicators of the costs incurred by the Company in maintaining its same store communities on an ongoing basis. The corresponding GAAP measures include information with respect to the Companys other operating segments consisting of communities stabilized in the prior year, lease-up communities, rehabilitation communities, sold properties and commercial properties in addition to same store information. Therefore, the Company believes that the Companys presentation of same store annually recurring and periodically recurring capital expenditures is necessary to demonstrate same store replacement costs over time. The Company believes that the most directly comparable GAAP measure to same store annually recurring and periodically recurring capital expenditures are the lines on the Companys consolidated statements of cash flows entitled annually recurring capital expenditures and periodically recurring capital expenditures.
Debt Statistics and Debt Ratios - The Company uses a number of debt statistics and ratios as supplemental measures of liquidity. The numerator and/or the denominator of certain of these statistics and/or ratios include non-GAAP financial measures that have been reconciled to the most directly comparable GAAP financial measure. These debt statistics and ratios include: (1) an interest coverage ratio; (2) a fixed charge coverage ratio; (3) total debt as a percentage of undepreciated real estate (adjusted for joint venture partners share of debt); (4) total debt plus preferred equity as a percentage of undepreciated real estate (adjusted for joint venture partners share of debt); (5) a ratio of consolidated debt to total assets; (6) a ratio of secured debt to total assets; (7) a ratio of total unencumbered assets to unsecured debt; and (8) a ratio of consolidated income available to debt service to annual debt service charge. A number of these debt statistics and ratios are derived from covenants found in the Companys debt agreements, including, among others, the Companys senior unsecured notes. In addition, the Company presents these measures because the degree of leverage could affect the Companys ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. The Company uses these measures internally as an indicator of liquidity and the Company believes that these measures are also utilized by the investment and analyst communities to better understand the Companys liquidity.
Average Economic Occupancy - The Company uses average economic occupancy as a statistical measure of operating performance. The Company defines average economic occupancy as gross potential rent less vacancy losses, model expenses and bad debt expenses divided by gross potential rent for the period, expressed as a percentage.
22
Reconciliations of Supplemental Non-GAAP Financial Measures
Table 1
Reconciliation of Same Store Net Operating Income (NOI) to GAAP Net Income
(Dollars in thousands)
(Unaudited)
Three months ended | |||||||||
March 31, 2010 | March 31, 2009 | December 31, 2009 | |||||||
Total same store NOI |
$ | 33,198 | $ | 36,060 | $ | 33,813 | |||
Property NOI from other operating segments |
2,171 | 194 | 2,162 | ||||||
Consolidated property NOI |
35,369 | 36,254 | 35,975 | ||||||
Add (subtract): |
|||||||||
Interest income |
169 | 115 | 59 | ||||||
Other revenues |
283 | 226 | 271 | ||||||
Depreciation |
(18,471) | (17,592) | (20,053) | ||||||
Interest expense |
(12,613) | (14,178) | (12,979) | ||||||
Amortization of deferred financing costs |
(833) | (934) | (737) | ||||||
General and administrative |
(4,676) | (4,409) | (4,031) | ||||||
Investment and development |
(602) | (997) | (1,228) | ||||||
Other investment costs |
(669) | (653) | (111) | ||||||
Impairment, severance and other charges |
- | - | (4,040) | ||||||
Gains (losses) on condominium sales activities, net |
948 | (260) | 2,440 | ||||||
Equity in income of unconsolidated real estate entities |
123 | 110 | 130 | ||||||
Other income (expense), net |
(155) | 1,059 | (487) | ||||||
Net gain (loss) on early extinguishment of indebtedness |
- | 898 | (4,136) | ||||||
Loss from continuing operations |
|
(1,127) |
(361) | (8,927) | |||||
Income from discontinued operations |
- | 2,609 | - | ||||||
Net income (loss) |
$ | (1,127) | $ | 2,248 | $ | (8,927) | |||
23
Table 2
Same Store Net Operating Income (NOI) and Average Rental Rate per Unit by Market
(Dollars in thousands)
Three months ended | Q1
10 vs. Q1 09 % Change |
Q1
10 vs. Q4 09 % Change |
Q1 10 % Same Store NOI | ||||||||||||
March 31, 2010 |
March 31, 2009 |
December 31, 2009 |
|||||||||||||
Rental and other revenues |
|||||||||||||||
Atlanta |
$ | 15,596 | $ | 16,280 | $ | 15,653 | (4.2)% | (0.4)% | |||||||
Washington, D.C. |
10,085 | 10,121 | 10,070 | (0.4)% | 0.1 % | ||||||||||
Dallas |
10,364 | 11,189 | 10,384 | (7.4)% | (0.2)% | ||||||||||
Tampa |
7,721 | 7,923 | 7,651 | (2.5)% | 0.9 % | ||||||||||
Charlotte |
4,156 | 4,577 | 4,180 | (9.2)% | (0.6)% | ||||||||||
New York |
3,282 | 3,675 | 3,337 | (10.7)% | (1.6)% | ||||||||||
Houston |
2,855 | 3,063 | 2,941 | (6.8)% | (2.9)% | ||||||||||
Orlando |
2,340 | 2,306 | 2,318 | 1.5 % | 0.9 % | ||||||||||
Austin |
1,193 | 1,214 | 1,163 | (1.7)% | 2.6 % | ||||||||||
Total rental and other revenues |
57,592 | 60,348 | 57,697 | (4.6)% | (0.2)% | ||||||||||
Property operating and maintenance expenses (exclusive of depreciation and amortization) |
|||||||||||||||
Atlanta |
6,911 | 6,898 | 6,986 | 0.2 % | (1.1)% | ||||||||||
Washington, D.C. |
3,833 | 3,584 | 3,629 | 6.9 % | 5.6 % | ||||||||||
Dallas |
4,662 | 4,554 | 4,719 | 2.4 % | (1.2)% | ||||||||||
Tampa |
3,042 | 3,217 | 2,904 | (5.4)% | 4.8 % | ||||||||||
Charlotte |
1,667 | 1,576 | 1,642 | 5.8 % | 1.5 % | ||||||||||
New York |
1,484 | 1,420 | 1,487 | 4.5 % | (0.2)% | ||||||||||
Houston |
1,230 | 1,456 | 1,155 | (15.5)% | 6.5 % | ||||||||||
Orlando |
1,045 | 1,022 | 866 | 2.3 % | 20.7 % | ||||||||||
Austin |
520 | 561 | 496 | (7.3)% | 4.8 % | ||||||||||
Total |
24,394 | 24,288 | 23,884 | 0.4 % | 2.1 % | ||||||||||
Net operating income |
|||||||||||||||
Atlanta |
8,685 | 9,382 | 8,667 | (7.4)% | 0.2 % | 26.2% | |||||||||
Washington, D.C. |
6,252 | 6,537 | 6,441 | (4.4)% | (2.9)% | 18.8% | |||||||||
Dallas |
5,702 | 6,635 | 5,665 | (14.1)% | 0.7 % | 17.2% | |||||||||
Tampa |
4,679 | 4,706 | 4,747 | (0.6)% | (1.4)% | 14.1% | |||||||||
Charlotte |
2,489 | 3,001 | 2,538 | (17.1)% | (1.9)% | 7.5% | |||||||||
New York |
1,798 | 2,255 | 1,850 | (20.3)% | (2.8)% | 5.4% | |||||||||
Houston |
1,625 | 1,607 | 1,786 | 1.1 % | (9.0)% | 4.9% | |||||||||
Orlando |
1,295 | 1,284 | 1,452 | 0.9 % | (10.8)% | 3.9% | |||||||||
Austin |
673 | 653 | 667 | 3.1 % | 0.9 % | 2.0% | |||||||||
Total same store NOI |
$ | 33,198 | $ | 36,060 | $ | 33,813 | (7.9)% | (1.8)% | 100.0% | ||||||
Average rental rate per unit |
|||||||||||||||
Atlanta |
$ | 1,036 | $ | 1,131 | $ | 1,046 | (8.4)% | (1.0)% | |||||||
Washington, D.C. |
1,773 | 1,799 | 1,775 | (1.4)% | (0.1)% | ||||||||||
Dallas |
1,008 | 1,093 | 1,023 | (7.8)% | (1.5)% | ||||||||||
Tampa |
1,173 | 1,251 | 1,176 | (6.2)% | (0.3)% | ||||||||||
Charlotte |
1,016 | 1,151 | 1,040 | (11.7)% | (2.3)% | ||||||||||
New York |
3,586 | 3,939 | 3,641 | (9.0)% | (1.5)% | ||||||||||
Houston |
1,190 | 1,269 | 1,215 | (6.2)% | (2.1)% | ||||||||||
Orlando |
1,280 | 1,373 | 1,291 | (6.8)% | (0.8)% | ||||||||||
Austin |
1,274 | 1,346 | 1,278 | (5.3)% | (0.3)% | ||||||||||
Total average rental rate per unit |
1,213 | 1,303 | 1,225 | (6.9)% | (1.0)% |
24
Table 3
Quarterly Margin Analysis
(Dollars in thousands)
For the three months ended March 31, 2010 | |||||||||||||
Rental and Other Property Revenues |
Property Operating & Maintenance Expenses |
Net Operating Income (NOI) |
NOI Margin |
Expense Margin | |||||||||
Same store |
$ | 57,592 | $ | 24,394 | $ | 33,198 | 57.6% | 42.4% | |||||
Partially stabilized (1) |
3,451 | 1,480 | 1,971 | 57.1% | 42.9% | ||||||||
Development and lease-up communities (2) |
2,918 | 2,106 | 812 | 27.8% | 72.2% | ||||||||
Other property segments: |
|||||||||||||
Corporate apartments |
1,882 | 1,790 | 92 | 4.9% | 95.1% | ||||||||
Commercial |
3,017 | 1,264 | 1,753 | 58.1% | 41.9% | ||||||||
Corporate property management expenses (3) |
- | 2,457 | (2,457) | ||||||||||
$ | 68,860 | $ | 33,491 | ||||||||||
Consolidated property NOI (4) |
$ | 35,369 | |||||||||||
Third-party management fees |
$ | 205 | |||||||||||
(1) | Partially stabilized communities include Post Alexander, Post Peachtree Hills® and Post Heights. |
(2) | Development, rehabilitation and lease-up communities include Post Eastside, Post Sierra at Frisco Bridges, Post Park® and Post West Austin. |
(3) | The following table summarizes the Companys net property management expense as a percentage of adjusted property revenues: |
Numerator: | |||
Corporate property management expenses |
$ | 2,457 | |
Less: Third-party management fees |
(205) | ||
Net property management expenses |
$ | 2,252 | |
Denominator: |
|||
Total rental and other property revenues |
$ | 68,860 | |
Less: Corporate apartment revenues |
(1,882) | ||
Adjusted property revenues |
$ | 66,978 | |
Net property management expenses as a percentage of adjusted property revenues |
3.4% | ||
(4) | Consolidated property net operating income (NOI) is a non-GAAP financial measure. See Table 1 on page 23 for a reconciliation of consolidated property NOI to GAAP net income (loss). |
25
Table 4
Reconciliation of Segment Cash Flow Data to Statements of Cash Flows
(Dollars in thousands)
Three months ended
March 31, | ||||||
2010 | 2009 | |||||
Annually recurring capital expenditures by operating segment |
||||||
Fully stabilized |
$ | 2,476 | $ | 2,377 | ||
Communities stabilized during 2009 |
61 | 52 | ||||
Development and lease-up |
17 | 18 | ||||
Other segments |
24 | 186 | ||||
Total annually recurring capital expenditures per |
$ | 2,578 | $ | 2,633 | ||
Periodically recurring capital expenditures by operating segment |
||||||
Fully stabilized |
$ | 5,063 | $ | 6,418 | ||
Communities stabilized during 2009 |
8 | 1,918 | ||||
Development and lease-up |
36 | - | ||||
Other segments |
339 | 760 | ||||
Total periodically recurring capital expenditures per |
$ | 5,446 | $ | 9,096 | ||
(1) | Includes approximately $4,895 and $5,372 for the three months ended March 31, 2010 and 2009, respectively, of periodically recurring capital expenditures related to the Companys exterior remediation project. |
Table 5
Computation of Interest and Fixed Charge Coverage Ratios
(Dollars in thousands)
Three months ended
March 31, | ||||||
2010 | 2009 | |||||
Loss from continuing operations |
$ | (1,127) | $ | (361) | ||
Other non-cash expenses, net |
1,052 | 919 | ||||
Income tax expense |
280 | 281 | ||||
Losses (gains) on sales of real estate assets |
(948) | 260 | ||||
Net gains on early extinguishment of indebtedness |
- | (898) | ||||
Depreciation expense |
18,471 | 17,592 | ||||
Depreciation (company share) of assets held in unconsolidated entities |
354 | 350 | ||||
Interest expense |
12,613 | 14,178 | ||||
Interest expense (company share) of assets held in unconsolidated entities |
854 | 854 | ||||
Amortization of deferred financing costs |
833 | 934 | ||||
Income available for debt service (A) |
$ | 32,382 | $ | 34,109 | ||
Interest expense |
$ | 12,613 | $ | 14,178 | ||
Interest expense (company share) of assets held in unconsolidated entities |
854 | 854 | ||||
Interest expense for purposes of computation (B) |
13,467 | 15,032 | ||||
Dividends and distributions to preferred shareholders and unitholders |
1,890 | 1,909 | ||||
Fixed charges for purposes of computation (C) |
$ | 15,357 | $ | 16,941 | ||
Interest coverage ratio (A÷B) |
2.4x | 2.3x | ||||
Fixed charge coverage ratio (A÷C) |
2.1x | 2.0x | ||||
26
Table 6
Computation of Debt Ratios
(Dollars in thousands)
As of March 31, | ||||||
2010 | 2009 | |||||
Total real estate assets per balance sheet |
$ | 2,112,027 | $ | 2,126,091 | ||
Plus: |
||||||
Company share of real estate assets held in unconsolidated entities |
99,567 | 123,846 | ||||
Company share of accumulated depreciation - assets held in unconsolidated entities |
9,251 | 7,407 | ||||
Accumulated depreciation per balance sheet |
643,642 | 571,199 | ||||
Accumulated depreciation on assets held for sale |
- | 42,379 | ||||
Total undepreciated real estate assets (A) |
$ | 2,864,487 | $ | 2,870,922 | ||
Total debt per balance sheet |
$ | 1,008,551 | $ | 1,090,388 | ||
Plus: |
||||||
Company share of third party debt held in unconsolidated entities |
123,520 | 82,867 | ||||
Total debt (adjusted for joint venture partners share of debt) (B) |
$ | 1,132,071 | $ | 1,173,255 | ||
Total debt as a % of undepreciated real estate assets (adjusted for joint venture partners share of debt) (B÷A) |
39.5% | 40.9% | ||||
Total debt per balance sheet |
$ | 1,008,551 | $ | 1,090,388 | ||
Plus: |
||||||
Company share of third party debt held in unconsolidated entities |
123,520 | 82,867 | ||||
Preferred shares at liquidation value |
94,068 | 95,000 | ||||
Total debt and preferred equity (adjusted for joint venture partners share of debt) (C) |
$ | 1,226,139 | $ | 1,268,255 | ||
Total debt and preferred equity as a % of undepreciated real estate assets (adjusted for joint venture partners share of debt) (C÷A) |
42.8% | 44.2% | ||||
Table 7
Calculation of Company Undepreciated Book Value Per Share
(Dollars in thousands)
March 31, 2010 | |||
Total Company shareholders equity per balance sheet |
$ | 1,002,730 | |
Plus: |
|||
Accumulated depreciation, per balance sheet |
643,642 | ||
Noncontrolling interest of common unitholders in Operating Partnership, per balance sheet |
3,822 | ||
Less: |
|||
Deferred charges, net, per balance sheet |
(8,520) | ||
Preferred shares at liquidation value |
(94,068) | ||
Total undepreciated book value (A) |
$ | 1,547,606 | |
Total common shares and units (B) |
48,772 | ||
Company undepreciated book value per share (A÷B) |
$ | 31.73 | |
27