Post Properties, Inc. (NYSE: PPS) announced today net income
available to common shareholders of $77.3 million for the fourth
quarter of 2007, compared to $45.0 million for the fourth quarter
of 2006. On a diluted per share basis, net income available to
common shareholders was $1.76 for the fourth quarter of 2007,
compared to $1.02 for the fourth quarter of 2006. Net income
available to common shareholders was $171.1 million for the year
ended December 31, 2007, compared to $93.8 million for the year
ended December 31, 2006. On a diluted per share basis, net income
available to common shareholders was $3.88 and $2.15 for the years
ended December 31, 2007 and 2006, respectively. The Company�s
reported net income for the fourth quarter and year ended December
31, 2007 included net gains on the sales of apartment communities
of approximately $44.8 million and $61.5 million, respectively, as
well as gains of approximately $26.0 million and $81.3 million,
respectively, on the sale of 75% interests in three apartment
communities converted to joint venture ownership. The Company uses
the National Association of Real Estate Investment Trusts
(�NAREIT�) definition of Funds from Operations (�FFO�) as an
operating measure of the Company�s financial performance. A
reconciliation of FFO to GAAP net income is included in the
financial data (Table 1) accompanying this press release. FFO for
the fourth quarter of 2007 totaled $22.7 million, or $0.51 per
diluted share, compared to $20.3 million, or $0.45 per diluted
share, for the fourth quarter of 2006. The Company�s reported FFO
for the fourth quarter of 2007 included a net gain of approximately
$1.2 million, or $0.03 per diluted share, on the sale of a land
site in Dallas, Texas. FFO for the fourth quarters of 2007 and 2006
also included $0.1 million and $0.4 million, respectively, of
non-cash losses on the early extinguishment of tax-exempt secured
indebtedness and related interest rate cap arrangements in
connection with asset sales. FFO for the year ended December 31,
2007 totaled $89.4 million, or $2.00 per diluted share, compared to
$83.2 million, or $1.87 per diluted share, for the year ended
December 31, 2006. The Company�s reported FFO for the year ended
December 31, 2007 included net gains of approximately $5.1 million,
or $0.12 per diluted share, on the sale of land sites in Atlanta,
Georgia and Dallas, Texas, offset partially by the $0.1 million
non-cash loss on the early extinguishment of debt. The Company�s
reported FFO for the year ended December 31, 2006 included
approximately $3.1 million, or $0.07 per diluted share, of other
income and gains related to the mark-to-market of an interest rate
swap, gain on sales of technology and other investments and the
sale of undeveloped land, offset by a $0.5 million, or $0.01 per
diluted share, non-cash loss on early extinguishment of debt and
related interest rate cap arrangements in connection with asset
sales. Mature (Same Store) Community Data For the fourth quarter of
2007, average economic occupancy at the Company�s 43 mature (same
store) communities, containing 16,308 apartment units, was 94.9%,
compared to 93.5% for the fourth quarter of 2006. Total revenues
for the mature communities increased 4.2% during the fourth quarter
of 2007, compared to the fourth quarter of 2006, and operating
expenses increased 4.2%, producing a 4.3% increase in same store
net operating income (�NOI�), or $1.6 million. The average monthly
rental rate per unit increased 3.0% during the fourth quarter of
2007, compared to the fourth quarter of 2006. Property tax and
insurance expenses accounted for a majority of the increase in
operating expenses. On a sequential basis, total revenues and
operating expenses for the mature communities decreased 0.7% and
7.6%, respectively, producing a 3.7% increase in same store NOI for
the fourth quarter of 2007, compared to the third quarter of 2007,
or $1.4 million. On a sequential basis, the average monthly rental
rate per unit increased 0.6%. Property tax, utility and maintenance
expenses accounted for a majority of the sequential decrease in
operating expenses. For the fourth quarter of 2007, average
economic occupancy at the mature communities was 94.9%, compared to
95.4% for the third quarter of 2007. For the years ended December
31, 2007 and 2006, average economic occupancy at the Company�s
mature communities was unchanged at 94.7%. Total revenues for the
mature communities increased 4.7% during the year ended December
31, 2007 compared to the year ended December 31, 2006, and
operating expenses increased 4.6%, producing a 4.7% increase in
same store NOI, or $6.9 million. The average monthly rental rate
per unit increased 4.9% during the year ended December 31, 2007,
compared to the year ended December 31, 2006. Same store NOI is a
supplemental non-GAAP financial measure. A reconciliation of same
store NOI to the comparable GAAP financial measure is included in
the financial data (Table 2) accompanying this press release. Same
store NOI by geographic market is also included in the financial
data (Table 3) accompanying this press release. Development,
Acquisitions, Dispositions and Other Investment Activity
Development and Acquisition Activity The Company announced today
that its Post Carlyle Square� community, containing 205 luxury
apartment units and located in Alexandria, Virginia, has achieved
stabilized occupancy. In October 2007, the Company announced the
start of construction of Post Frisco Bridges�, a new mixed-use
community in the Dallas suburb of Frisco, Texas. Located just off
the Dallas North Tollway, the development will consist of 269
luxury apartments and approximately 29,000 square feet of retail
space in its first phase. Post Frisco Bridges� will be situated on
an approximately 5-acre site within the master-planned Sierra
Frisco development. The Company�s total investment in this project
is currently expected to be approximately $41.3 million. The
Company also owns an approximately 6-acre site for a second phase.
In November 2007, the Company acquired a site in Houston, Texas for
a total investment of approximately $5.6 million. This
approximately 2-acre site, located less than one mile from
Houston�s Medical Center and Greenway Office Park with convenient
access to downtown, is currently expected to be developed by the
Company to include approximately 232 luxury apartment units. In
December 2007, the Company announced the start of construction on
Post Park�, a luxury residential community in the greater
Washington D.C. metropolitan area. The community is expected to
include 396 luxury rental units and 1,700 square feet of retail
space, and is located in Prince George�s County, Maryland adjacent
to the area�s largest regional shopping center. The Company�s total
investment in this project is currently expected to be
approximately $84.7 million. The Company announced today the start
of construction of Post West Austin�, a new apartment community in
Austin, Texas consisting of 329 luxury apartment units. Post West
Austin� will be situated on an approximately 5-acre in-fill site
located in close proximity to the Central Business District and the
University of Texas. The Company�s total investment in this project
is currently expected to be approximately $53.2 million. The
Company also announced today the start of construction of the Four
Seasons Residences, an approximately 400,000 square-foot luxury
residential tower located on an approximately 2-acre site adjacent
to the Four Seasons Hotel in Austin, Texas. The 32-story Michael
Graves-designed building will contain 168 luxury condominium homes
situated on the shores of Lady Bird Lake. Residents will have
access to the services of the Four Seasons Hotel. The Company has
been actively pre-selling units and, as of January 28, 2008, had
contracted to sell 54 units (32% of the total). The Company�s total
investment in this project is currently expected to be
approximately $133.5 million. As of December 31, 2007, the
Company�s aggregate pipeline of development projects under
construction totaled approximately $585.6 million (including the
Company�s share, net of joint venture partner interests, of $539.8
million). The Company also owns or has under contract land for
which it is in pre-development with respect to approximately 3,312
rental apartment units and approximately 198,000 square feet of
retail amenities. Total projected future development costs of this
pre-development pipeline are estimated to be approximately $750
million. There can be no assurance that projects in pre-development
will commence construction on the projected timeline or at all or
that actual pre-development costs will approximate estimated costs.
Disposition Activity The Company announced today that in November
2007 it closed the sale of an approximately 0.5-acre land site in
Dallas, Texas and realized a net gain of approximately $1.2
million. In December 2007, the Company announced the closing of the
sale of its Post Ashford� and Post Vinings� apartment communities
located in Atlanta, Georgia for a gross sales price of
approximately $67.8 million, the net proceeds of which were held by
an exchange intermediary at December 31, 2007. For the three months
ended December 31, 2007, the Company realized a net gain on the
sale of these communities of approximately $44.8 million. Post
Ashford� and Post Vinings� are garden-style communities with a
total of 625 apartment units, which were completed from 1987 to
1991. The Company also announced today the January 2008 closing of
the sale of Post Wilson Building� located in Dallas, Texas for a
gross sales price of approximately $19.9 million. Post Wilson
Building� contained 143 apartment units and is an historical
building located in downtown Dallas that the Company renovated in
1999. The Company sold each of these three communities as part of a
Section 1031 tax-deferred exchange transaction in conjunction with
its acquisition of Post Lake� at Baldwin Park in Orlando, Florida
in August 2007. In December 2007, the Company also announced that
it had added Post Lindbergh�, a 396-unit garden-style apartment
community located in Atlanta, Georgia to its existing joint venture
with Crow Holdings Realty Partners IV, L.P., an affiliate of Crow
Holdings of Dallas, Texas. Post has a 25% ownership interest in the
venture. The sale of the 75% interest generated net proceeds of
approximately $55.8 million (including secured debt financing
obtained at the venture level). The Company realized a gain from
continuing operations of approximately $26.0 million related to the
sale. In the first quarter of 2008, the Company expects to begin
marketing for sale two apartment communities located in Atlanta,
Georgia. The two garden style communities together comprise
approximately 750 apartment units. Gross proceeds from the sales of
these two communities are expected to be approximately $100
million. There can be no assurance that these sales will close. At
December 31, 2007, the two communities discussed above were
classified as mature (same-store) communities. Apartment Community
Renovation Program During 2007, the Company made substantial
renovations and improvements of two of its apartment communities,
containing 890 units, located in Atlanta, Georgia and Dallas,
Texas. The Company believes that the long-term value of these two
communities has been and will be enhanced as a result of the
renovations; however, operating results at these two communities
were affected negatively by increased vacancy during the renovation
period. As of December 31, 2007, the renovation of Post
Worthington� consisting of 332 units in Dallas, Texas was complete,
and this property had reached stabilized occupancy by year-end. As
of December 31, 2007, the Company had completed the renovation of
503 units (90% of the total) at Post Chastain� in Atlanta, Georgia.
The operating results of this community will continue to be
affected negatively until the renovation is complete. The Company
currently plans to renovate two additional communities, commencing
in 2008 - Post Heights�, containing 368 units and located in
Dallas, Texas, and Post Peachtree Hills�, containing 300 units and
located in Atlanta, Georgia. Condominium Activity During the fourth
quarter of 2007, the Company was converting two apartment
communities, initially consisting of 349 units, to condominiums
through a taxable REIT subsidiary. For the three months ended
December 31, 2007, the Company closed the sales of 11 units for
aggregate gross sales revenues of approximately $2.4 million. In
the aggregate, as of January 28, 2008, the Company has closed the
sales of 229 (66% of the total) of the units in these two
condominium conversions. The Company currently has four condominium
communities in various stages of the development and sales process,
containing 535 units, located in the Washington D.C. metropolitan
area, Dallas, Texas, Austin, Texas and Atlanta, Georgia. Of those
units, as of January 28, 2008, six were under contract and 103
units (71% of the total) had closed at the Washington D.C.
development, one unit was under contract and 29 units (34% of the
total) had closed at the Dallas, Texas development, and 54 units
were under contract at the Austin, Texas development. For the three
months ended December 31, 2007, the Company closed the sales of 38
units at its Washington D.C. and Dallas, Texas communities for
aggregate gross sales revenues of approximately $13.4 million.
There can be no assurance that condominium units under contract at
any of the Company�s condominium conversion or development
communities will close. The Company recognized approximately $0.1
million of incremental gains on condominium sales, net of minority
interest, in FFO during the fourth quarter of 2007, compared to net
gains of approximately $0.3 million, or $0.01 per diluted share,
during the fourth quarter of 2006. For the years ended December 31,
2007 and 2006, the Company recognized $5.5 million, or $0.12 per
diluted share, and $1.5 million, or $0.03 per diluted share,
respectively, of incremental gains on condominium sales, net of
minority interest, in FFO. The Company reports condominium gains
(losses) in its consolidated statement of operations in the
captions titled gains (losses) on sales of real estate assets in
continuing and discontinued operations and in equity in income of
unconsolidated real estate entities. Financing Activity In November
2007, the Company amended its syndicated lines of credit to
increase the borrowing capacity by $150 million to $600 million.
The pricing terms and the maturity date of the syndicated line
remain unchanged. The amended syndicated line continues to contain
customary representations, covenants and events of default, certain
of which were modified in conjunction with the expansion of the
credit facility. In December 2007, the Company retired
approximately $9.9 million of low-floater, variable rate tax-exempt
bonds in connection with the sale of Post Ashford� discussed above.
In January 2008, the Company closed a 7-year (with an automatic
1-year extension), fixed-to-floating, $120 million secured mortgage
loan with Freddie Mac. The loan has a fixed interest rate of 4.88%
and matures on February 1, 2016, including the one-year floating
rate extension option. The loan was priced at 168 basis points over
the applicable Treasury rate. Net loan proceeds were used to repay
outstanding borrowings on the Company�s unsecured, variable line of
credit. This loan is secured by a mortgage on the Company�s Post
Addison Circle� community. Total debt and preferred equity as a
percentage of undepreciated real estate assets (adjusted for joint
venture partners� share of debt) was 43.8% at December 31, 2007,
and variable rate debt as a percentage of total debt was 24.3% as
of that same date. As of December 31, 2007, the Company had
outstanding borrowings of approximately $257.3 million on its
combined $630 million unsecured lines of credit. After repayment of
borrowings using asset sale and secured loan proceeds discussed
above, the Company had outstanding borrowings of approximately $85
million on its combined lines of credit as of January 31, 2008, and
its variable rate debt as a percentage of total debt declined to
8.4% as of that same date. Computations of debt ratios and
reconciliations of the ratios to the appropriate GAAP measures in
the Company�s financial statements are included in the financial
data (Table 4) accompanying this press release. Board Authorization
to Seek a Potential Sale of the Company On January 23, 2008, the
Company announced that its Board of Directors had authorized
management, working with financial and legal advisors, to initiate
a formal process to pursue a potential sale or other business
combination and to seek proposals from potentially interested
parties. The process commenced immediately after the announcement
and is continuing. The Company does not expect to disclose
information regarding the status of the process until it has been
completed. There can be no assurance that the process will result
in a sale or other business combination. As a result of the
commencement of the process discussed above, the Company will not
provide earnings or FFO guidance for 2008. As a result of this
announcement, both Standard and Poors and Moody�s rating agencies
placed the Company�s credit rating outlook on �credit watch� or
�developing,� pending the outcome of this process. Supplemental
Financial Data The Company also produces Supplemental Financial
Data that includes detailed information regarding the Company�s
operating results and balance sheet. This Supplemental Financial
Data is considered an integral part of this earnings release and is
available on the Company�s website. The Company�s Earnings Release
and the Supplemental Financial Data are available through the
investor relations/financial reports/quarterly and other reports
section of the Company�s website at www.postproperties.com. The
ability to access the attachments on the Company�s website requires
the Adobe Acrobat 4.0 Reader, which may be downloaded at
http://www.adobe.com/products/acrobat/readstep.html. Non-GAAP
Financial Measures and Other Defined Terms The Company uses certain
non-GAAP financial measures and other defined terms in this press
release and in its Supplemental Financial Data available on the
Company�s website. The non-GAAP financial measures include FFO,
Adjusted Funds from Operations (�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 and on page 23 of the Supplemental Financial Data. 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 (or 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 Company�s 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 Company�s 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 Company�s
results to those of other equity REITs. The Company believes that
the line on its consolidated statement of operations entitled �net
income 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 and after adjusting for the non-cash impact of
straight-line, long-term ground lease expense and other income
related to the mark-to-market of an interest rate swap arrangement.
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 REIT�s ability to fund its
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 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 REIT�s 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. 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 Company�s other operating segments consisting
of communities stabilized in the prior year, lease-up communities,
rehabilitation properties, sold properties and commercial
properties in addition to same store information. Therefore, the
Company believes that the Company�s 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 Company�s 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 assets (adjusted for joint venture
partner�s share of debt); (4) total debt plus preferred equity as a
percentage of undepreciated real estate assets (adjusted for joint
venture partner�s 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 Company�s debt agreements,
including, among others, the Company�s senior unsecured notes. In
addition, the Company presents these measures because the degree of
leverage could affect the Company�s 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
Company�s 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. Conference Call Information The Company
will hold its quarterly conference call on Tuesday, February 5, at
10:00 a.m. ET. The telephone numbers are 888-668-1640 for US and
Canada callers and 913-312-1489 for international callers. The
access code is 9164515. The conference call will be open to the
public and can be listened to live on Post�s website at
www.postproperties.com under investor relations/event calendar. The
replay will begin at 1:00 p.m. ET on February 5, and will be
available until Monday, February 11, at 11:59 p.m. ET. The
telephone numbers for the replay are 888-203-1112 for US and Canada
callers and 719-457-0820 for international callers. The access code
for the replay is 9164515. A replay of the call also will be
archived on Post�s website under investor relations/audio archive.
The financial and statistical information that will be discussed on
the call is contained in this press release and the Supplemental
Financial Data. Both documents will be available through the
investor relations/financial reports/quarterly & other section
of the Company�s website at www.postproperties.com. Post
Properties, founded more than 35 years ago, is one of the largest
developers and operators of upscale multifamily communities in the
United States. The Company�s mission is delivering superior
satisfaction and value to its residents, associates, and investors,
with a vision of being the first choice in quality multifamily
living. Operating as a real estate investment trust (�REIT�), the
Company focuses on developing and managing Post� branded
resort-style garden and high density urban apartments. In addition,
the Company develops high-quality condominiums and converts
existing apartments to for-sale multifamily communities. Post
Properties is headquartered in Atlanta, Georgia, and has operations
in ten markets across the country. Post Properties owns 22,578
apartment homes in 63 communities, including 1,747 apartment units
in five communities held in unconsolidated entities, 2,266
apartment units in seven communities (and the expansion of one
community) currently under construction and/or in lease-up. The
Company is also developing and selling 535 for-sale condominium
homes in four communities (including 137 units in one community
held in an unconsolidated entity) and is converting apartment units
in two communities initially consisting of 349 units into for-sale
condominium homes through a taxable REIT subsidiary. Forward
Looking Statements Certain statements made in this press release
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. Statements regarding future
events and developments and the Company�s future performance, as
well as management�s expectations, beliefs, plans, estimates or
projections relating to the future, are forward-looking statements
within the meaning of these laws. Examples of such statements in
this press release include the Company�s anticipated development
and sales activities (including the projected costs for such
activities), anticipated renovation projects and anticipated
condominium conversion activity and sales. 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 Company�s actual results to differ materially
from the expected results described in the Company�s
forward-looking statements: the success of the Company�s business
strategies discussed in its Annual Report on Form 10-K dated
December 31, 2006; future local and national economic conditions,
including changes in job growth, interest rates, the availability
of financing and other factors; demand for apartments in the
Company�s markets and the effect on occupancy and rental rates; the
impact of competition on the Company�s business, including
competition for tenants and development locations for its apartment
communities and competing for-sale housing in the markets where the
Company is completing condominium conversions or developing new
condominiums; the Company�s ability to obtain financing or
self-fund the development or acquisition of additional multifamily
rental and for-sale housing; the uncertainties associated with the
Company�s current and planned future real estate development,
including actual costs exceeding the Company�s budgets or
development periods exceeding expectations; uncertainties
associated with the timing and amount of asset sales and the
resulting gains/losses associated with such asset sales;
uncertainties associated with the Company�s expansion into the
condominium conversion and for-sale housing business; conditions
affecting ownership of residential real estate and general
conditions in the multifamily residential real estate market;
uncertainties associated with environmental and other regulatory
matters; the impact of our ongoing litigation with the Equal Rights
Center regarding compliance with the Americans with Disabilities
Act and the Fair Housing Act (including any award of compensatory
or punitive damages or injunctive relief requiring us to retrofit
apartments or public use areas or prohibiting the sale of apartment
communities or condominium units) as well as the impact of other
litigation; the effects of changes in accounting policies and other
regulatory matters detailed in the Company�s filings with the
Securities and Exchange Commission; the Company�s ability to
continue to qualify as a real estate investment trust under the
Internal Revenue Code; and the progress and results of the
Company�s formal process to pursue a potential sale or other
business combination. Other important risk factors regarding the
Company are included under the caption �Risk Factors� in the
Company�s Annual Report on Form 10-K dated December 31, 2006 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 press release.
Financial Highlights (Unaudited; in thousands, except per share and
unit amounts) � � � Three months ended Year Ended December 31,
December 31, � 2007 � � 2006 � 2007 � 2006 OPERATING DATA Revenues
from continuing operations $ 78,106 $ 74,530 $ 307,542 $ 291,545
Net income available to common shareholders $ 77,333 $ 44,974 $
171,062 $ 93,832 Funds from operations available to common
shareholders and unitholders (Table 1) $ 22,713 $ 20,292 $ 89,382 $
83,222 � Weighted average shares outstanding - diluted 44,006
44,175 44,129 43,594 Weighted average shares and units outstanding
- diluted 44,541 44,880 44,738 44,427 � PER COMMON SHARE DATA -
DILUTED Net income available to common shareholders $ 1.76 $ 1.02 $
3.88 $ 2.15 � Funds from operations available to common
shareholders and unitholders (Table 1) $ 0.51 $ 0.45 $ 2.00 $ 1.87
� Dividends declared $ 0.45 $ 0.45 $ 1.80 $ 1.80 Table 1
Reconciliation of Net Income Available to Common Shareholders to
Funds From Operations Available to Common Shareholders and
Unitholders (Unaudited; in thousands, except per share amounts) � �
� Three months ended Year Ended December 31, December 31, � 2007 �
� � 2006 � � 2007 � � � 2006 � Net income available to common
shareholders $ 77,333 $ 44,974 $ 171,062 $ 93,832 Minority interest
of common unitholders - continuing operations 419 74 1,491 418
Minority interest in discontinued operations 606 741 903 1,399
Depreciation on wholly-owned real estate assets, net 16,241 16,645
65,560 66,574 Depreciation on real estate assets held in
unconsolidated entities 320 227 1,143 906 Gains on sales of real
estate assets (72,588 ) (42,448 ) (157,620 ) (80,927 ) Incremental
gains on condominium sales (1) 382 174 6,922 1,406 Gains on sales
of real estate assets - unconsolidated entities (16 ) (236 ) (186 )
(482 ) Incremental gains on condominium sales - unconsolidated
entities (1) � 16 � � 141 � � 107 � � 96 � Funds from operations
available to common shareholders and unitholders $ 22,713 � $
20,292 � $ 89,382 � $ 83,222 � � Funds from operations - per share
and unit - diluted $ 0.51 � $ 0.45 � $ 2.00 � $ 1.87 � Weighted
average shares and units outstanding - diluted � 44,541 � � 44,880
� � 44,738 � � 44,427 � � (1) For condominium conversion projects,
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 and expenses, from the sale of
condominium units exceeds the greater of their fair value or net
book value as of the date the property is acquired by the Company�s
taxable REIT subsidiary. For condominium development projects,
gains on condominium sales in FFO are equivalent to gains reported
under GAAP. See the table entitled �Summary of Condominium
Projects� on page 17 of the Supplemental Financial Data for further
detail. Table 2 Reconciliation of Same Store Net Operating Income
(NOI) to GAAP Net Income (Unaudited; In thousands) � � � � � Three
months ended Year ended Dec. 31, � Dec. 31, Sept. 30, Dec. 31, Dec.
31, � 2007 � � 2006 � � 2007 � � 2007 � � 2006 � Total same store
NOI $ 39,565 $ 37,936 $ 38,166 $ 152,200 $ 145,346 Property NOI
from other operating segments � 3,608 � � 2,983 � � 3,960 � �
13,598 � � 12,307 � Consolidated property NOI � 43,173 � � 40,919 �
� 42,126 � � 165,798 � � 157,653 � Add (subtract): Interest income
170 279 189 822 1,261 Other revenues 186 202 171 602 402 Minority
interest in consolidated property partnerships (441 ) (80 ) (585 )
(1,857 ) (257 ) Depreciation (16,461 ) (16,813 ) (16,638 ) (66,371
) (65,687 ) Interest expense (13,266 ) (12,801 ) (12,831 ) (52,116
) (52,533 ) Amortization of deferred financing costs (828 ) (875 )
(828 ) (3,297 ) (3,526 ) General and administrative (5,169 ) (5,038
) (4,761 ) (21,337 ) (18,502 ) Investment and development (1,551 )
(1,924 ) (2,006 ) (7,063 ) (6,424 ) Gains on sales of real estate
assets, net 28,509 2,356 5,061 100,015 12,881 Equity in income of
unconsolidated real estate entities 340 562 402 1,556 1,813 Other
income (expense) (314 ) - (262 ) (1,098 ) 2,592 Minority interest
of common unitholders � (419 ) � (74 ) � (91 ) � (1,491 ) � (418 )
� Income from continuing operations 33,929 6,713 9,947 114,163
29,255 Income from discontinued operations � 45,313 � � 40,170 � �
1,102 � � 64,536 � � 72,214 � � Net income $ 79,242 � $ 46,883 � $
11,049 � $ 178,699 � $ 101,469 � Table 3 Same Store Net Operating
Income (NOI) Summary by Market (In thousands) � � � � � Three
Months Ended Q4 '07 vs. Q4 '06 % Change Q4 '07 vs. Q3 '07 % Change
Q4 '07 % Same Store NOI Dec. 31, � Dec. 31, Sept. 30, 2007 2006
2007 Rental and other revenues Atlanta $ 22,002 $ 21,187 $ 21,997
3.8 % 0.0 % Dallas 11,273 10,584 11,393 6.5 % (1.1 )% Washington,
D.C. 8,693 8,505 8,799 2.2 % (1.2 )% Tampa 7,198 7,171 7,395 0.4 %
(2.7 )% Charlotte 4,835 4,578 4,909 5.6 % (1.5 )% New York 3,806
3,509 3,729 8.5 % 2.1 % Houston 3,006 2,749 3,007 9.3 % (0.0 )%
Orlando � 1,007 � 1,017 � 1,033 (1.0 )% (2.5 )% Total rental and
other revenues � 61,820 � 59,300 � 62,262 4.2 % (0.7 )% � Property
operating and maintenance expenses (exclusive of depreciation and
amortization) � � Atlanta 8,051 7,612 8,862 5.8 % (9.2 )% Dallas
4,665 4,459 4,980 4.6 % (6.3 )% Washington, D.C. 2,683 2,204 2,845
21.7 % (5.7 )% Tampa 2,858 3,095 3,116 (7.7 )% (8.3 )% Charlotte
1,298 1,515 1,597 (14.3 )% (18.7 )% New York 1,104 953 966 15.8 %
14.3 % Houston 1,197 1,153 1,309 3.8 % (8.6 )% Orlando � 399 � 373
� 421 7.0 % (5.2 )% Total � 22,255 � 21,364 � 24,096 4.2 % (7.6 )%
� Net operating income Atlanta 13,951 13,575 13,135 2.8 % 6.2 %
35.3 % Dallas 6,608 6,125 6,413 7.9 % 3.0 % 16.7 % Washington, D.C.
6,010 6,301 5,954 (4.6 )% 0.9 % 15.2 % Tampa 4,340 4,076 4,279 6.5
% 1.4 % 11.0 % Charlotte 3,537 3,063 3,312 15.5 % 6.8 % 8.9 % New
York 2,702 2,556 2,763 5.7 % (2.2 )% 6.8 % Houston 1,809 1,596
1,698 13.3 % 6.5 % 4.6 % Orlando � 608 � 644 � 612 (5.6 )% (0.7 )%
1.5 % Total same store NOI $ 39,565 $ 37,936 $ 38,166 4.3 % 3.7 %
100.0 % Table 3 con�t Same Store Net Operating Income (NOI) Summary
by Market (In thousands) � � � Year ended Dec. 31, Dec. 31, 2007
2006 % Change Rental and other revenues Atlanta $ 86,606 $ 83,252
4.0 % Dallas 44,325 42,396 4.5 % Washington, D.C. 34,574 33,584 2.9
% Tampa 29,261 27,902 4.9 % Charlotte 19,201 18,155 5.8 % New York
14,694 13,509 8.8 % Houston 11,751 10,848 8.3 % Orlando � 4,125 �
3,991 3.4 % Total rental and other revenues � 244,537 � 233,637 4.7
% � Property operating and maintenance expenses (exclusive of
depreciation and amortization) � � Atlanta 33,339 31,322 6.4 %
Dallas 19,002 18,883 0.6 % Washington, D.C. 10,942 10,618 3.1 %
Tampa 11,872 10,839 9.5 % Charlotte 6,109 6,128 (0.3 )% New York
4,115 3,844 7.0 % Houston 5,125 5,080 0.9 % Orlando � 1,833 � 1,577
16.2 % Total � 92,337 � 88,291 4.6 % � Net operating income Atlanta
53,267 51,930 2.6 % Dallas 25,323 23,513 7.7 % Washington, D.C.
23,632 22,966 2.9 % Tampa 17,389 17,063 1.9 % Charlotte 13,092
12,027 8.9 % New York 10,579 9,665 9.5 % Houston 6,626 5,768 14.9 %
Orlando � 2,292 � 2,414 (5.1 )% Total same store NOI $ 152,200 $
145,346 4.7 % Table 4 Computation of Debt Ratios (In thousands) �
As of December 31, 2007 � � 2006 � Total real estate assets per
balance sheet $ 2,111,612 $ 2,028,580 Plus: Company share of real
estate assets held in unconsolidated entities 91,085 41,344 Company
share of accumulated depreciation - assets held in unconsolidated
entities 5,149 3,864 Accumulated depreciation per balance sheet
562,226 547,477 Accumulated depreciation on assets held for sale �
4,031 � � 4,035 � Total undepreciated real estate assets (A) $
2,774,103 � $ 2,625,300 � � Total debt per balance sheet $
1,059,066 $ 1,033,779 Plus: Company share of third party debt held
in unconsolidated entities 60,959 23,449 Less: Joint venture
partners' share of mortgage debt of the company � - � � (8,550 )
Total debt (adjusted for joint venture partners' share of debt) (B)
$ 1,120,025 � $ 1,048,678 � � Total debt as a % of undepreciated
real estate assets (adjusted for joint venture partners' share of
debt (B�A) � 40.4 % � 39.9 % Total debt per balance sheet $
1,059,066 $ 1,033,779 Plus: Company share of third party debt held
in unconsolidated entities 60,959 23,449 Preferred shares at
liquidation value 95,000 95,000 Less: Joint venture partners' share
of mortgage debt of the company � - � � (8,550 ) Total debt and
preferred equity (adjusted for joint venture partners' share of
debt) (C) $ 1,215,025 � $ 1,143,678 � � Total debt and preferred
equity as a % of undepreciated real estate assets (adjusted for
joint venture partners' share of debt) (C�A) � 43.8 % � 43.6 %
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