Post Properties, Inc. (NYSE: PPS) announced today a net loss
attributable to common shareholders of $10.8 million for the fourth
quarter of 2009, compared to a net loss attributable to common
shareholders of $15.3 million for the fourth quarter of 2008. On a
diluted per share basis, the net loss attributable to common
shareholders was $0.22 for the fourth quarter of 2009, compared to
$0.35 for the fourth quarter of 2008.
The Company reported a net loss attributable to common
shareholders of $10.9 million for the year ended December 31, 2009,
compared to a net loss attributable to common shareholders of $16.3
million for the year ended December 31, 2008. On a diluted per
share basis, the net loss attributable to common shareholders was
$0.24 for the year ended December 31, 2009, compared to $0.37 for
the year ended December 31, 2008.
The Company’s net loss attributable to common shareholders for
the three months ended December 31, 2009 included approximately
$4.4 million of severance charges relating to headcount reductions
during the fourth quarter as well as a loss of approximately $4.1
million associated with the early extinguishment of indebtedness.
The Company’s net loss attributable to common shareholders for the
three months ended December 31, 2008 included net gains of
approximately $49.4 million on the sale of two apartment
communities, offset by non-cash impairment charges of approximately
$61.6 million, severance charges of approximately $2.9 million, and
a non-cash charge of approximately $0.9 million related to the
mark-to-market of a derivative instrument that had become
ineffective.
The Company’s net loss attributable to common shareholders for
the year ended December 31, 2009 included net gains of
approximately $79.4 million on the sales of three apartment
communities and income of approximately $1.8 million relating to
the mark-to-market of an interest rate swap and changes in previous
hurricane loss estimates. These gains were offset by non-cash
impairment charges of approximately $76.3 million relating to the
Company’s investment in a condominium project and adjacent land,
severance charges totaling approximately $4.8 million, an aggregate
loss of approximately $3.3 million related to the early
extinguishment of indebtedness and other charges totaling
approximately $0.5 million. The Company’s net loss attributable to
common shareholders for the year ended December 31, 2008 included
net gains of approximately $75.2 million on the sale of four
apartment communities, offset by non-cash impairment charges of
approximately $90.5 million, hurricane casualty losses of
approximately $2.8 million, severance charges of approximately $5.5
million, and charges of approximately $8.2 million relating to the
Company’s formal process to pursue a business combination or other
sale transaction.
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 2009 was $8.2 million, or $0.17
per diluted share, compared to a deficit of $47.2 million, or $1.06
per diluted share, for the fourth quarter of 2008. The Company’s
reported FFO for the fourth quarter of 2009 included the severance
charges and debt extinguishment loss discussed above totaling
approximately $8.5 million, or $0.17 per diluted share, and for the
fourth quarter of 2008 included the non-cash impairment charges,
severance charges and the loss on the mark-to-market of a
derivative instrument discussed above totaling approximately $65.4
million, or $1.47 per diluted share.
FFO for the year ended December 31, 2009 was a deficit of $20.0
million, or $0.44 per diluted share, compared to a deficit of $29.8
million, or $0.67 per diluted share, for the year ended December
31, 2008. The Company’s reported FFO for the year ended December
31, 2009 included the non-cash impairment charges, severance
charges, debt extinguishment loss and other charges discussed above
totaling approximately $84.9 million, offset by the income items
discussed above totaling approximately $1.8 million, resulting in
total net charges of approximately $83.1 million, or $1.82 per
diluted share. The Company’s reported FFO for the year ended
December 31, 2008 included the charges discussed above in the
aggregate of approximately $107.0 million, or $2.41 per diluted
share.
Mature (Same Store) Community Data
Average economic occupancy at the Company’s 41 mature (same
store) communities, containing 14,921 apartment units, was 94.4%
and 93.9% for the fourth quarters of 2009 and 2008,
respectively.
Total revenues for the mature communities decreased 6.0% and
total operating expenses increased 2.8% during the fourth quarter
of 2009, compared to the fourth quarter of 2008, resulting in an
11.3% decrease in same store net operating income (“NOI”). The
average monthly rental rate per unit decreased 6.8% during the
fourth quarter of 2009, compared to the fourth quarter of 2008.
On a sequential basis, total revenues for the mature communities
decreased 2.5% and total operating expenses decreased 5.4%,
producing a 0.3% decrease in same store NOI for the fourth quarter
of 2009, compared to the third quarter of 2009. On a sequential
basis, the average monthly rental rate per unit decreased 1.8%. For
the fourth quarter of 2009, average economic occupancy at the
mature communities was 94.4%, compared to 94.5% for the third
quarter of 2009.
For the year ended December 31, 2009, average economic occupancy
at the Company’s mature communities was 94.0%, compared to 94.2%
for the year ended December 31, 2008.
Total revenues for the mature communities decreased 4.2% and
total operating expenses decreased 2.5% for the year ended December
31, 2009, compared to the year ended December 31, 2008, resulting
in a 5.4% decrease in same store NOI. The average monthly rental
rate per unit decreased 4.2% for the year ended December 31, 2009,
compared to the year ended December 31, 2008.
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 and average rental rate per unit
by geographic market is also included in the financial data (Table
3) accompanying this press release.
Financing Activity
Debt Extinguishment
In October 2009, utilizing the net proceeds from its recent
$68.1 million common equity offering, the Company repaid
approximately $39.2 million of existing mortgage indebtedness
secured by the Company’s Post Fallsgrove property that was
scheduled to mature in November 2011. The Company incurred a
prepayment penalty of approximately $4.0 million in connection with
the early extinguishment of that debt. The interest rate on the
mortgage indebtedness was 6.1%.
In the fourth quarter of 2009, the Company also repurchased
approximately $19.9 million of its 6.3% senior unsecured notes due
2013 and approximately $4.3 million of its 5.45% senior unsecured
notes due 2012 through open-market repurchases at aggregate amounts
approximating par value.
Other Financing Activity
Total debt and preferred equity as a percentage of undepreciated
real estate assets (adjusted for joint venture partners’ share of
debt) was 42.4% at December 31, 2009, and variable rate debt as a
percentage of total debt was 0.8% as of that same date.
As of February 5, 2010, the Company had no outstanding
borrowings and letters of credit totaling approximately $4 million
under its combined $630 million unsecured lines of credit.
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.
Development and Other Investment Activity
Development Activity
As of December 31, 2009, the Company’s aggregate pipeline of
development projects under construction and/or in lease-up (net of
the impact of impairment charges recorded in the second quarter)
totaled approximately $415 million. As of that same date,
approximately $71 million of estimated construction costs remained
to be funded by the Company, including retainage and construction
payables. The Company expects to fund future estimated construction
expenditures primarily by utilizing available cash and cash
equivalents and borrowing capacity under its unsecured revolving
lines of credit and under a construction loan.
Apartment Community Renovation and Remediation
Activity
As previously announced, the Company continues its initiative to
remediate communities with stucco exteriors or exterior insulation
finishing systems. The Company currently estimates that the
aggregate cost of this initiative will be approximately $45
million. Through December 31, 2009, the Company had incurred
approximately $32.3 million of capital expenditures relating to
these remediation projects. The Company expects to fund future
estimated remediation expenditures primarily by utilizing available
cash and cash equivalents and borrowing capacity under its
revolving lines of credit.
Condominium Activity
The Company recognized incremental gains, net of income tax
expense, in FFO of approximately $1.5 million from condominium
sales activities during the fourth quarter of 2009 compared to FFO
of approximately $0.1 million during the fourth quarter of 2008.
During the fourth quarter of 2009, the Company sold 39 condominium
units for aggregate gross sales revenues of approximately $7.2
million, compared to 23 condominium units sold in the fourth
quarter of 2008 for aggregate gross sales revenues of approximately
$8.2 million.
2010 Outlook
The estimates and assumptions presented below are
forward-looking and are based on the Company’s current and expected
future view of the apartment and condominium markets and of general
economic conditions, as well as other risks outlined below under
the caption “Forward Looking Statements.” There can be no assurance
that the Company’s actual results will not differ materially from
the estimates set forth below. The Company assumes no obligation to
update this guidance in the future.
Based on its current outlook, the Company anticipates that FFO
for the full year 2010 will be in the range of $0.98 to $1.12 per
diluted share, excluding the impact of any charges that the Company
may record in 2010. As the Company has previously disclosed, it may
be required to record additional impairment charges in connection
with its two luxury condominium developments in the first half of
2010 when initial deliveries of condominium units at those projects
are expected to commence and those projects are expected to then be
reclassified as “held for sale” for financial reporting purposes.
Based on the anticipated change in classification and its current
fair value estimates, the Company currently anticipates that it may
be required to record additional impairment charges of as much as
$40 million in the first or second quarter of 2010. As there is
significant judgment required in developing such estimates of fair
value for impairment purposes, there can be no assurance that such
loss estimates will not change materially in subsequent periods.
Additionally, if the Company’s projections of future undiscounted
cash flows were to indicate in a future quarter that the carrying
value of the assets is not deemed recoverable prior to substantial
completion, it is possible that the Company would be required to
record an impairment charge in that earlier period even though the
asset had not yet been classified as “held for sale.” There can be
no assurance that the Company’s cash flow projections will not
change in future periods, that the estimated fair value of the
assets will not change in the future as a consequence, or that any
impairment charges will actually be realized. Nonetheless, after
the impact of the projected charges discussed above, the Company
anticipates that FFO for the full year 2010 will be in the range of
$0.18 to $0.32 per diluted share.
The above estimates of FFO for the full year 2010 are also based
on the following assumptions:
- a decrease in same store NOI of
6.9% to 8.6%, compared to 2009, based on:
- a decrease in same store revenue
of 3.4% to 4.1%, compared to 2009, and
- an increase in same store
operating expenses of 1.6% to 2.4%, compared to 2009;
- a decrease in overhead expenses
(G&A, property management and development and investment
expenses, net of development costs capitalized) of 6.0% to 9.0%,
compared to 2009;
- a net loss attributable to
condominium activities of $0.01 to $0.04 per diluted share
(excluding the impact of potential impairment losses as discussed
above).
Supplemental Financial Data
The Company also produces Supplemental Financial Data that
includes detailed information regarding the Company’s operating
results, investment activity, financing activity 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 For Investors/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 Reader, which may be downloaded at
http://get.adobe.com/reader/.
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 21 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 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,
non-cash debt extinguishment costs and strategic review 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 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 (“NOI”) – 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 9, at 10:00 a.m. ET. The telephone numbers are
800-390-5202 for US and Canada callers and 719-325-2387 for
international callers. The access code is 8346631. The conference
call will be open to the public and can be listened to live on
Post’s website at www.postproperties.com under For Investors/Event
Calendar. The replay will begin at 1:00 p.m. ET on Tuesday,
February 9, and will be available until Monday, February 15, 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 8346631. A
replay of the call also will be archived on Post’s website under
For Investors/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 For Investors/Financial
Reports/Quarterly & Other Reports section of the Company’s
website at www.postproperties.com.
About Post
Post Properties, founded more than 38 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 has also developed high-quality condominiums and
converted existing apartments to for-sale multifamily communities.
Post Properties is headquartered in Atlanta, Georgia, and has
operations in nine markets across the country.
Post Properties owns 19,863 apartment units in 55 communities,
including 1,747 apartment units in five communities held in
unconsolidated entities and 1,428 apartment units in four
communities currently under construction and/or in lease-up. The
Company is also developing and selling 277 luxury for-sale
condominium homes in two communities (including 129 units in one
community held in an unconsolidated entity) and is completing the
sell out of units in two other condominium conversion communities
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 expectations with respect to the Company’s
anticipated funds from operations and net operating income for the
year ending December 31, 2010, anticipated impairment losses and
the Company’s anticipated development, renovation and remediation
activities (including the projected costs, timing and anticipated
potential sources of financing of projected future development,
renovation and remediation activities). 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 and its expectations to differ materially
from those 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 for the year ended December 31, 2008 and
in subsequent filings with the SEC; future conditions in the global
capital markets, including changes in the availability of credit
and liquidity; future local and national economic conditions,
including changes in levels of employment, interest rates, the
availability of mortgage and other financing and related factors; a
downgrade in the credit rating of the Company’s securities; 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 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,
the market for asset sales and the resulting gains/losses
associated with such asset sales; the Company's ability to enter
into new joint ventures and the availability of equity financing
from traditional real estate investors to fund development
activities; the Company's ability to obtain construction loan
financing to fund development activities; 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; uncertainties associated with the Company’s condominium
conversion and for-sale housing business, including the lack of
demand for for-sale housing and the Company’s inability to sell
for-sale products at attractive pricing levels; uncertainties
associated with loss of personnel in connection with the Company’s
reduction of corporate and property development and management
overhead; 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 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 the
Company 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
costs of remediating damage to the Company’s communities that have
stucco or exterior insulation finishing systems for potential water
penetration and other related issues; and the Company’s ability to
continue to qualify as a real estate investment trust under the
Internal Revenue Code. Other important risk factors regarding the
Company are included under the caption “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2008 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,
2009 2008
2009 2008 OPERATING DATA
Revenues from continuing operations $ 68,640 $ 69,767 $ 276,323 $
281,940 Net loss attributable to common shareholders $ (10,790 ) $
(15,260 ) $ (10,860 ) $ (16,289 ) Funds (deficit) from operations
available to common shareholders and unitholders (Table 1) $ 8,162
$ (47,225 ) $ (20,029 ) $ (29,820 ) Weighted average shares
outstanding - diluted 48,230 44,146 45,179 44,009 Weighted average
shares and units outstanding - diluted 48,406 44,384 45,382 44,316
PER COMMON SHARE DATA - DILUTED Net loss attributable to
common shareholders $ (0.22 ) $ (0.35 ) $ (0.24 ) $ (0.37 )
Funds (deficit) from operations available to common shareholders
and unitholders (Table 1) (1) $ 0.17 $ (1.06 ) $ (0.44 ) $ (0.67 )
Dividends declared $ 0.20 $ 0.20 $ 0.80 $ 1.55
(1) Funds (deficit)
from operations per share were computed using weighted average
shares and units outstanding, including the impact of dilutive
securities totaling 83 for the three months ended December 31,
2009. 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, diluted
weighted average shares and units included the impact of non-vested
shares and units totaling 221 and 38 for the three months ended and
217 and 88 for the year ended December 31, 2009 and 2008,
respectively, for the computation of funds (deficit) 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.”
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, 2009
2008 2009 2008
Net loss attributable to common shareholders $
(10,790 ) $ (15,260 ) $ (10,860 ) $ (16,289 ) Noncontrolling
interests - Operating Partnership (48 ) (105 ) (48 ) (113 )
Depreciation on consolidated real estate assets, net 19,554 17,620
72,420 63,471 Depreciation on real estate assets held in
unconsolidated entities 353 349 1,405 1,391 Gains on sales of
apartment communities - (49,373 ) (79,366 ) (75,204 ) Gains on
sales of condominiums (2,440 ) (556 ) (3,481 ) (2,783 ) Incremental
gains on condominium sales (1) 1,533 100
(99 ) (293 )
Funds (deficit) from
operations available to common shareholders and
unitholders $ 8,162 $ (47,225 ) $ (20,029 ) $ (29,820 )
Funds (deficit) from operations - per share and unit -
diluted (2) $ 0.17 $ (1.06 ) $ (0.44 ) $ (0.67 )
Weighted average shares and units outstanding - diluted (2)
48,710 44,422 45,599
44,404 (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 15 of the Supplemental Financial Data for further
detail. (2) Diluted weighted average shares and units
include the impact of dilutive securities totaling 83 for the three
months ended December 31, 2009. 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,
diluted weighted average shares and units included the impact of
non-vested shares and units totaling 221 and 38 for the three
months ended and 217 and 88 for the year ended December 31, 2009
and 2008, respectively, for the computation of funds (deficit) 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.”
Table 2
Reconciliation of Same Store Net
Operating Income (NOI) to GAAP Net Income
(Unaudited; In thousands)
Three months ended Year ended
December 31, December 31,
September 30, December 31, December 31,
2009 2008 2009
2009 2008 Total
same store NOI $ 32,189 $ 36,284 $ 32,277 $ 133,680 $ 141,268
Property NOI from other operating segments 3,786
1,636 2,905 9,913
4,364 Consolidated property NOI 35,975
37,920 35,182 143,593
145,632 Add (subtract): Interest income 59 300 49 245 667
Other revenues 271 294 298 1,072 1,029 Depreciation (20,053 )
(18,241 ) (18,787 ) (74,442 ) (63,530 ) Interest expense (12,979 )
(14,487 ) (12,978 ) (52,377 ) (48,863 ) Amortization of deferred
financing costs (737 ) (894 ) (726 ) (3,079 ) (3,473 ) General and
administrative (4,031 ) (3,464 ) (3,892 ) (16,296 ) (16,808 )
Investment and development (1,228 ) (958 ) (1,096 ) (4,114 ) (5,131
) Other investment costs (111 ) (422 ) (697 ) (2,107 ) (1,384 )
Strategic review costs - - - - (8,161 ) Impairment, severance and
other charges (4,040 ) (64,560 ) (391 ) (13,507 ) (98,862 ) Gains
on sales of real estate assets, net 2,440 525 1,069 3,481 2,752
Equity in income (loss) of unconsolidated real estate entities 130
143 (31 ) (74,447 ) 1,224 Other income (expense), net (487 ) (1,665
) (472 ) (432 ) (1,239 ) Net gain on early extinguishment of
indebtedness (4,136 ) - -
(3,317 ) - Loss from continuing operations
(8,927 ) (65,509 ) (2,472 ) (95,727 ) (96,147 ) Income from
discontinued operations - 52,086
54,861 84,238 87,777 Net
income (loss) $ (8,927 ) $ (13,423 ) $ 52,389 $ (11,489 ) $
(8,370 )
Table 3
Same Store Net Operating Income
(NOI) and Average Rental Rate per Unit by Market
(In thousands)
Three months ended Q4
'09vs. Q4 '08% Change Q4 '09vs. Q3
'09% Change
Q4 '09% SameStore
NOI
December 31, December 31,
September 30, 2009 2008
2009 Rental and other revenues Atlanta $ 13,879 $ 14,729 $
14,040 (5.8 )% (1.1 )% Dallas 10,384 11,318 10,766 (8.3 )% (3.5 )%
Washington, D.C. 10,070 10,204 10,192 (1.3 )% (1.2 )% Tampa 6,706
7,053 6,908 (4.9 )% (2.9 )% Charlotte 4,180 4,681 4,371 (10.7 )%
(4.4 )% New York 3,337 3,772 3,467 (11.5 )% (3.7 )% Houston 2,940
3,084 3,074 (4.7 )% (4.4 )% Austin 1,163 1,236 1,206 (5.9 )% (3.6
)% Orlando 2,318 2,379 2,337 (2.6 )% (0.8 )%
Total rental and other revenues 54,977 58,456
56,361 (6.0 )% (2.5 )% Property operating and maintenance
expenses (exclusive of depreciation and amortization) Atlanta 6,204
6,162 6,720 0.7 % (7.7 )% Dallas 4,719 4,470 5,147 5.6 % (8.3 )%
Washington, D.C. 3,629 3,591 3,647 1.1 % (0.5 )% Tampa 2,591 2,680
2,614 (3.3 )% (0.9 )% Charlotte 1,642 1,516 1,696 8.3 % (3.2 )% New
York 1,487 1,131 1,436 31.5 % 3.6 % Houston 1,154 1,129 1,290 2.2 %
(10.5 )% Austin 496 525 573 (5.5 )% (13.4 )% Orlando 866
968 961 (10.5 )% (9.9 )% Total 22,788
22,172 24,084 2.8 % (5.4 )% Net operating income
Atlanta 7,675 8,567 7,320 (10.4 )% 4.8 % 23.8 % Dallas 5,665 6,848
5,619 (17.3 )% 0.8 % 17.6 % Washington, D.C. 6,441 6,613 6,545 (2.6
)% (1.6 )% 20.1 % Tampa 4,115 4,373 4,294 (5.9 )% (4.2 )% 12.8 %
Charlotte 2,538 3,165 2,675 (19.8 )% (5.1 )% 7.9 % New York 1,850
2,641 2,031 (30.0 )% (8.9 )% 5.7 % Houston 1,786 1,955 1,784 (8.6
)% 0.1 % 5.5 % Austin 667 711 633 (6.2 )% 5.4 % 2.1 % Orlando
1,452 1,411 1,376 2.9 % 5.5 % 4.5 % Total same
store NOI $ 32,189 $ 36,284 $ 32,277 (11.3 )% (0.3 )% 100.0 %
Average rental rate per unit Atlanta $ 1,048 $ 1,146
$ 1,073 (8.6 )% (2.3 )% Dallas 1,023 1,106 1,047 (7.5 )% (2.3 )%
Washington, D.C. 1,775 1,816 1,780 (2.3 )% (0.3 )% Tampa 1,159
1,237 1,180 (6.3 )% (1.8 )% Charlotte 1,040 1,183 1,055 (12.1 )%
(1.5 )% New York 3,641 3,938 3,730 (7.5 )% (2.4 )% Houston 1,215
1,266 1,247 (4.0 )% (2.5 )% Austin 1,278 1,347 1,296 (5.1 )% (1.4
)% Orlando 1,291 1,397 1,307 (7.6 )% (1.2 )% Total average rental
rate per unit 1,231 1,321 1,253 (6.8 )% (1.8 )%
Table 3 (con’t)
Same Store Net Operating Income
(NOI) and Average Rental Rate per Unit by Market
(In thousands)
Year ended December 31,
December 31, 2009
2008 % Change Rental and other revenues
Atlanta $ 56,860 $ 59,560 (4.5 )% Dallas 43,321 45,996 (5.8 )%
Washington, D.C. 40,599 41,134 (1.3 )% Tampa 27,610 28,476 (3.0 )%
Charlotte 17,571 19,314 (9.0 )% New York 14,112 15,074 (6.4 )%
Houston 12,149 12,319 (1.4 )% Austin 4,779 5,006 (4.5 )% Orlando
9,323 9,441 (1.2 )% Total rental and other revenues
226,324 236,320 (4.2 )% Property operating and
maintenance expenses (exclusive of depreciation and amortization)
Atlanta 24,947 24,823 0.5 % Dallas 19,071 20,316 (6.1 )%
Washington, D.C. 14,385 14,594 (1.4 )% Tampa 10,902 11,903 (8.4 )%
Charlotte 6,501 6,628 (1.9 )% New York 5,548 4,841 14.6 % Houston
5,160 5,506 (6.3 )% Austin 2,171 2,297 (5.5 )% Orlando 3,959
4,144 (4.5 )% Total 92,644 95,052 (2.5 )%
Net operating income Atlanta 31,913 34,737 (8.1 )% Dallas
24,250 25,680 (5.6 )% Washington, D.C. 26,214 26,540 (1.2 )% Tampa
16,708 16,573 0.8 % Charlotte 11,070 12,686 (12.7 )% New York 8,564
10,233 (16.3 )% Houston 6,989 6,813 2.6 % Austin 2,608 2,709 (3.7
)% Orlando 5,364 5,297 1.3 % Total same store NOI $
133,680 $ 141,268 (5.4 )% Average rental rate per
unit Atlanta $ 1,092 $ 1,149 (5.0 )% Dallas 1,060 1,103 (3.9 )%
Washington, D.C. 1,786 1,814 (1.5 )% Tampa 1,196 1,267 (5.6 )%
Charlotte 1,089 1,186 (8.2 )% New York 3,788 3,905 (3.0 )% Houston
1,248 1,252 (0.3 )% Austin 1,311 1,337 (1.9 )% Orlando 1,328 1,432
(7.3 )% Total average rental rate per unit 1,270 1,325 (4.2 )%
Table 4
Computation of Debt Ratios
(In thousands)
As of December 31, 2009
2008 Total real estate
assets per balance sheet $ 2,106,520 $ 2,083,151 Plus: Company
share of real estate assets held in unconsolidated entities 97,570
124,240 Company share of accumulated depreciation - assets held in
unconsolidated entities 8,787 6,952 Accumulated depreciation per
balance sheet 625,391 553,814 Accumulated depreciation on assets
held for sale - 42,379 Total
undepreciated real estate assets
(A) $ 2,838,268 $
2,810,536 Total debt per balance sheet $ 992,760 $
1,112,913 Plus: Company share of third party debt held in
unconsolidated entities 116,576 77,760
Total debt (adjusted for joint venture partners' share of debt)
(B) $ 1,109,336 $ 1,190,673 Total debt
as a % of undepreciated real estate assets (adjusted for joint
venture partners' share of debt
(B÷A) 39.1 %
42.4 % Total debt per balance sheet $ 992,760 $ 1,112,913
Plus: Company share of third party debt held in unconsolidated
entities 116,576 77,760 Preferred shares at liquidation value
95,000 95,000 Total debt and preferred
equity (adjusted for joint venture partners' share of debt)
(C) $ 1,204,336 $ 1,285,673 Total debt
and preferred equity as a % of undepreciated real estate assets
(adjusted for joint venture partners' share of debt)
(C÷A)
42.4 % 45.7 %
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