Post Properties, Inc. (NYSE: PPS) announced today net income
available to common shareholders of $8.8 million, or $0.17 per
diluted share, for the second quarter of 2011, compared to a net
loss attributable to common shareholders of $35.5 million, or a net
loss of $0.73 per diluted share, for the second quarter of
2010.
Net income available to common shareholders for the six months
ended June 30, 2011, was $8.4 million compared to a net loss of
$38.6 million for the six months ended June 30, 2010. On a diluted
per share basis, net income available to common shareholders was
$0.17 for the six months ended June 30, 2011, compared to a net
loss of $0.79 for the six months ended June 30, 2010.
The Company’s net income available to common shareholders for
the three and six months ended June 30, 2011 included a $0.4
million gain on the sale of a technology investment and for the six
months ended June 30, 2011 included $1.8 million of costs
associated with the Company’s redemption of its Series B preferred
stock. The Company’s net loss attributable to common shareholders
for the three and six months ended June 30, 2010 included non-cash
impairment charges of approximately $35.1 million.
Funds From Operations
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 second quarter of 2011 was $27.7 million, or $0.55
per diluted share, compared to a deficit of $17.2 million, or a
deficit of $0.35 per diluted share, for the second quarter of 2010.
The Company’s reported FFO for the second quarter of 2011 included
the technology sale gain discussed above of $0.4 million, or $0.01
per diluted share. The Company’s reported FFO for the second
quarter of 2010 included the non-cash impairment charges discussed
above of approximately $35.1 million, or $0.72 per diluted
share.
FFO for the six months ended June 30, 2011 was $46.0 million, or
$0.92 per diluted share, compared to a deficit of $2.1 million, or
a deficit of $0.04 per diluted share, for the first six months of
2010. The Company’s reported FFO for the first half of 2011
included costs related to the redemption of the Company’s Series B
preferred stock, offset by the technology sale gain as discussed
above, totaling a net reduction to FFO of $1.3 million, or $0.03
per diluted share. The Company’s reported FFO for the six months
ended June 30, 2010 included the non-cash impairment charges
discussed above of approximately $35.1 million, or $0.72 per
diluted share.
Said Dave Stockert, CEO and President of Post, “We are very
pleased with our results in the second quarter. Both our apartment
and condominium businesses performed well. With the expectation of
continued favorable conditions, we are again raising full-year
guidance for portfolio operating results and funds from
operations.”
Mature (Same Store) Community Data
Average economic occupancy at the Company’s 46 mature (same
store) communities, containing 16,688 apartment units, was 95.5%
and 95.1% for the second quarter of 2011 and 2010,
respectively.
Total revenues for the mature communities increased 4.9% and
total operating expenses increased 0.8% during the second quarter
of 2011, compared to the second quarter of 2010, resulting in a
7.7% increase in same store net operating income (“NOI”). The
average monthly rental rate per unit increased 3.5% during the
second quarter of 2011, compared to the second quarter of 2010.
On a sequential basis, total revenues for the mature communities
increased 2.3% and total operating expenses increased 1.3%,
producing a 3.0% increase in same store NOI for the second quarter
of 2011, compared to the first quarter of 2011. On a sequential
basis, the average monthly rental rate per unit increased 1.4%. For
the second quarter of 2011, average economic occupancy at the
mature communities was 95.5%, compared to 95.3% for the first
quarter of 2011.
For the six months ended June 30, 2011, average economic
occupancy at the Company’s mature communities was 95.4%, compared
to 95.0% for the six months ended June 30, 2010.
Total revenues for the mature communities increased 4.2% and
total operating expenses decreased 0.7% during the first half of
2011, compared to the first half of 2010, resulting in a 7.8%
increase in same store NOI. The average monthly rental rate per
unit increased 2.9% for the six months ended June 30, 2011,
compared to the six months ended June 30, 2010.
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. Information on 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.
Development and Acquisition Activity
As previously announced, the Company has commenced development
of Post Lake® at Baldwin Park, Phase III and Post Parkside™ at
Wade, Phase I. Post Lake® at Baldwin Park is located in Orlando, FL
and is planned to consist of 410 apartment units and is expected to
have a total development cost of approximately $58.6 million. Post
Parkside™ at Wade is located in Raleigh, NC and is planned to
consist of 392 apartment units and approximately 18,148 square feet
of retail space, and is expected to have a total development cost
of approximately $55.0 million. The Company currently expects the
stabilized yield on these projects to average approximately 7.0%,
after a 3% management fee and $300 per unit reserve, and based on
current market rents, without trending.
In the aggregate, the Company has 1,568 units in five apartment
communities, and approximately 37,567 square feet of retail space,
under development with a total estimated cost of $272.1
million.
In June 2011, the Company acquired the 11.2 acres of land under
its 342-unit Post Renaissance® apartment community, located in
Midtown Atlanta, for approximately $6.7 million, and the former
ground leases associated with the land were terminated.
Financing Activity
Leverage and Line Capacity
Total debt and preferred equity as a percentage of undepreciated
real estate assets (adjusted for joint venture partners’ share of
real estate assets and debt) was 40.0% at June 30, 2011.
As of July 29, 2011, the Company had cash and cash equivalents
of $30.2 million. The Company had no outstanding borrowings and
letters of credit totaling $0.7 million under its combined $330
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.
At-the-Market Common Equity Activity
The Company has an at-the-market common equity program for the
sale of up to 4 million shares of common stock. The Company expects
to use this program in 2011 as an additional source of capital and
liquidity, to maintain the strength of its balance sheet and to
fund its planned investment activities. Sales under this program
will be dependent upon a variety of factors, including, among
others, market conditions, the trading price of the Company’s
common stock and potential use of proceeds. During the second
quarter of 2011, the Company sold 577,798 shares, at an average
gross price per share of $40.19, producing net proceeds of $22.7
million. During the first half of 2011, the Company sold 998,687
shares, at an average gross price per share of $39.11, producing
net proceeds of $38.2 million. The Company has approximately 3.0
million shares remaining for issuance under this program.
Condominium Activity
During the second quarter of 2011, the Company closed 18
condominium units at its Austin and Atlanta condominium projects
for aggregate gross revenue of $19.1 million. As of July 29, 2011,
the Company has, in the aggregate, closed 95 units at the Austin
and Atlanta condominium projects and had 8 units under contract.
There can be no assurance that condominium units under contract
will close.
The Company recognized net gains in FFO of $5.4 million, or
$0.11 per diluted share, from condominium sales activities during
the second quarter of 2011, and $0.2 million, or less than $0.01
per diluted share, during the second quarter of 2010.
2011 Outlook
The estimates and assumptions presented below are forward
looking and are based on the Company’s 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 revised outlook, the Company anticipates that FFO
for the full year 2011 will be in the range set forth below, as
compared to its previous outlook disclosed in its May 2011 earnings
release. The tables below reflect the anticipated range of FFO
before and after charges recorded in connection with the redemption
of preferred stock discussed above, and reflect anticipated net
gains from condominium sales (for purposes of this discussion,
"Condo FFO") and FFO before charges and Condo FFO (for purposes of
this discussion, "Core FFO").
CurrentOutlook
PreviouslyIssued Outlook
Core FFO, before charges $1.64 to $1.70 $1.57 to $1.63 Condo FFO
$0.14 to $0.18 $0.00 to $0.08 FFO, before charges $1.78 to $1.88
$1.57 to $1.71 Preferred redemption charges ($0.035) ($0.035) FFO
$1.75 to $1.84 $1.54 to $1.68
Same Store
Assumptions
CurrentOutlook
PreviouslyIssued Outlook
Revenue 4.5% to 5.0% 3.9% to 4.3% Operating expenses 1.4% to 1.8%
1.4% to 2.0% Net operating income (NOI) 6.5% to 7.5% 5.2% to 6.3%
Supplemental Financial Data
The Company also produces Supplemental Financial Data that
includes detailed information regarding the Company’s operating
results, investment activity, financing activity, balance sheet and
properties. 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 19 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 debt
extinguishment gains and preferred stock redemption 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 is the line on the Company’s consolidated statements
of cash flows entitled “property capital expenditures,” which also
includes revenue generating 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) interest coverage
ratios; (2) fixed charge coverage ratios; (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; (8) a ratio of consolidated income available for
debt service to annual debt service charge; and (9) a debt to
annualized income available for debt service ratio. 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.
The Company uses income available for debt service to calculate
certain debt ratios and statistics. Income available for debt
service is defined as net income (loss) before interest, taxes,
depreciation, amortization, gains on sales of real estate assets,
non-cash impairment charges and other non-cash income and expenses.
Income available for debt service is a supplemental measure of
operating performance that does not represent and should be
considered as an alternative to net income or cash flow from
operating activities as determined under GAAP, and the Company’s
calculation thereof may not be comparable to similar measures
reported by other companies, including EBITDA or Adjusted
EBITDA.
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 August 2,
at 10:00 a.m. ET. The telephone numbers are 877-741-4248 for US and
Canada callers and 719-325-4870 for international callers. The
access code is 7840943. 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, August 2, and will be
available until Monday, August 8, 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 7840943. A replay of the call also will be archived on
Post’s website under For Investors/Audio Archives. 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 40 years ago, is a leading developer
and operator of upscale multifamily communities. 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. Post Properties is headquartered in Atlanta,
Georgia, and has operations in ten markets across the country.
Post Properties has interests in 21,431 apartment units in 57
communities, including 1,747 apartment units in five communities
held in unconsolidated entities and 1,568 apartment units in five
communities currently under development. The Company is also
selling luxury for-sale condominium homes in two 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 regarding future operating
conditions, including the Company’s current outlook as to expected
funds from operations, revenue, operating expenses, net operating
income, newly stabilized property net operating income, interest
capitalized to development projects, interest expense, preferred
dividends, number of diluted shares, condominium profits and
underlying assumptions, charges and overhead expenses, anticipated
development activities (including the projected costs, projected
construction expenditures, projected yield, timing and anticipated
potential sources of financing of projected future development
activities), expectations regarding the for-sale condominium
business and the timing, sales pace and closing volumes of
condominium homes, and expectations regarding offerings of the
Company’s common stock and the use of proceeds thereof. 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, 2010 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; 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 economic
stabilization actions of the U.S. government, U.S. Treasury,
Federal Reserve and other governmental and regulatory bodies;
uncertainties associated with the Company’s real estate development
and construction; uncertainties associated with the timing and
amount of apartment community sales; the Company’s ability to
generate sufficient cash flows to make required payments associated
with its debt financing; the effects of the Company’s leverage on
its risk of default and debt service requirements; the impact of a
downgrade in the credit rating of the Company’s securities; 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; the
effects of covenants of the Company’s or its subsidiaries’ mortgage
indebtedness on operational flexibility and default risks; the
effects of any decision by the government to eliminate Fannie Mae
or Freddie Mac or reduce government support for apartment mortgage
loans; the Company’s ability to maintain its current dividend
level; uncertainties associated with the Company’s condominium
for-sale housing business, including the timing and volume of
condominium sales; 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 Company’s business, including competition for residents in the
Company’s apartment communities and buyers of the Company’s
for-sale condominium homes and development locations; the Company’s
ability to renew leases or relet units as leases expire; the
Company’s ability to succeed in new markets; the costs associated
with compliance with laws requiring access to the Company’s
properties by persons with disabilities; the impact of the
Company’s ongoing litigation with the U.S. Department of Justice
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 Company’s ability to control joint
ventures, properties in which it has joint ownership and
corporations and limited partnership in which it has partial
interests; the Company’s 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
Company’s filings with the Securities and Exchange Commission.
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, 2010 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 Six months ended
June 30, June 30, 2011
2010 2011 2010
OPERATING DATA Revenues from continuing operations $ 75,424
$ 70,831 $ 148,955 $ 139,974 Net income (loss) available to common
shareholders $ 8,824 $ (35,543 ) $ 8,403 $ (38,618 ) Funds
(deficit) from operations available to common shareholders and
unitholders (Table 1) $ 27,677 $ (17,170 ) $ 46,018 $ (2,126 )
Weighted average shares outstanding - diluted 50,266 48,432
49,854 48,401
Weighted average shares and units
outstanding - diluted
50,435 48,603 50,024 48,574 PER COMMON SHARE DATA - DILUTED
Net income (loss) available to common shareholders $ 0.17 $ (0.73 )
$ 0.17 $ (0.79 ) Funds (deficit) from operations available
to common shareholders and unitholders (Table 1) (1) $ 0.55 $ (0.35
) $ 0.92 $ (0.04 ) Dividends declared $ 0.20 $ 0.20 $ 0.40 $
0.40
1) Funds (deficit) from operations per
share was computed using weighted average shares and units
outstanding, including the impact of dilutive securities totaling
391 and 154 for the three months and 394 and 133 for the six months
ended June 30, 2011 and 2010, respectively. The dilutive securities
for the three and six months ended June 30, 2010 were antidilutive
to the computation of income (loss) per share, as the Company
reported a net loss attributable to common shareholders for these
periods under generally accepted accounting principles.
Additionally, basic and diluted weighted average shares and units
included the impact of non-vested shares and units totaling 169 and
217 for the three months and 161 and 202 for the six months ended
June 30, 2011 and 2010, 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 Six months ended
June 30, June 30, 2011
2010 2011
2010 Net income (loss) available to common
shareholders $ 8,824 $ (35,543 ) $ 8,403 $ (38,618 )
Noncontrolling interests - Operating Partnership 30 (125 ) 29 (136
) Depreciation on consolidated real estate assets, net 18,461
18,180 36,864 36,182 Depreciation on real estate assets held in
unconsolidated entities 362 355 722 709 Gains on sales of
condominiums (5,432 ) (187 ) (6,176 ) (1,135 ) Incremental gains on
condominium sales 5,432 150
6,176 872
Funds (deficit) from operations
available to common shareholders and unitholders $
27,677 $ (17,170 ) $ 46,018 $ (2,126 )
Funds (deficit) from operations - per share and unit - diluted
(1) $ 0.55 $ (0.35 ) $ 0.92 $ (0.04 )
Weighted
average shares and units outstanding - diluted (1)
50,604 48,974 50,185
48,909
1) Diluted weighted average shares and
units include the impact of dilutive securities totaling 391 and
154 for the three months and 394 and 133 for the six months ended
June 30, 2011 and 2010, respectively. The dilutive securities for
the three and six months ended June 30, 2010 were antidilutive to
the computation of income (loss) per share, as the Company reported
a net loss attributable to common shareholders for these periods
under generally accepted accounting principles. Additionally, basic
and diluted weighted average shares and units included the impact
of non-vested shares and units totaling 169 and 217 for the three
months and 161 and 202 for the six months ended June 30, 2011 and
2010, 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 Six months ended June 30,
June 30, March 31, June 30,
June 30, 2011
2010 2011 2011
2010 Total same store NOI $ 39,073 $
36,274 $ 37,950 $ 77,024 $ 71,444 Property NOI from other operating
segments 2,918 1,371 2,748
5,665 1,570 Consolidated
property NOI 41,991 37,645
40,698 82,689 73,014 Add
(subtract): Interest income 516 196 92 608 365 Other revenues 227
271 216 443 554 Depreciation (18,808 ) (18,643 ) (18,752 ) (37,560
) (37,114 ) Interest expense (14,437 ) (12,561 ) (14,475 ) (28,912
) (25,174 ) Amortization of deferred financing costs (721 ) (653 )
(647 ) (1,368 ) (1,486 ) General and administrative (4,246 ) (3,967
) (4,116 ) (8,362 ) (8,643 ) Investment and development (296 ) (678
) (478 ) (774 ) (1,280 ) Other investment costs (455 ) (490 ) (494
) (949 ) (1,159 ) Impairment losses - (35,091 ) - - (35,091 ) Gains
on condominium sales activities, net 5,432 187 744 6,176 1,135
Equity in income of unconsolidated real estate entities, net 346
173 209 555 296 Other income (expense), net 285
(142 ) 16 301 (297 )
Net income (loss) $ 9,834 $ (33,753 ) $ 3,013
$ 12,847 $ (34,880 )
Table 3
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Three months ended
Q2 '11
Q2 '11
Q2 '11 June 30, June 30,
March 31, vs. Q2 '10 vs. Q1 '11 % Same
2011 2010 2011 %
Change % Change Store NOI Rental and other
revenues Atlanta $ 18,927 $ 17,987 $ 18,513 5.2 % 2.2 % Washington,
D.C. 10,701 10,353 10,412 3.4 % 2.8 % Dallas 12,270 11,613 12,042
5.7 % 1.9 % Tampa 8,052 7,714 7,922 4.4 % 1.6 % Charlotte 4,440
4,199 4,267 5.7 % 4.1 % New York 3,520 3,394 3,413 3.7 % 3.1 %
Houston 3,018 2,856 2,964 5.7 % 1.8 % Orlando 2,511 2,376 2,479 5.7
% 1.3 % Austin 1,261 1,206 1,225 4.6 % 2.9 %
Total rental and other revenues 64,700 61,698
63,237 4.9 % 2.3 % Property operating and maintenance
expenses (exclusive of depreciation and amortization) Atlanta 7,896
7,950 7,822 (0.7 )% 0.9 % Washington, D.C. 3,155 3,463 3,242 (8.9
)% (2.7 )% Dallas 5,433 5,219 5,266 4.1 % 3.2 % Tampa 3,096 2,947
2,954 5.1 % 4.8 % Charlotte 1,739 1,691 1,600 2.8 % 8.7 % New York
1,521 1,406 1,550 8.2 % (1.9 )% Houston 1,251 1,286 1,337 (2.7 )%
(6.4 )% Orlando 1,002 945 981 6.0 % 2.1 % Austin 534
517 535 3.3 % (0.2 )% Total 25,627 25,424
25,287 0.8 % 1.3 % Net operating income Atlanta
11,031 10,037 10,691 9.9 % 3.2 % 28.2 % Washington, D.C. 7,546
6,890 7,170 9.5 % 5.2 % 19.3 % Dallas 6,837 6,394 6,776 6.9 % 0.9 %
17.5 % Tampa 4,956 4,767 4,968 4.0 % (0.2 )% 12.7 % Charlotte 2,701
2,508 2,667 7.7 % 1.3 % 6.9 % New York 1,999 1,988 1,863 0.6 % 7.3
% 5.1 % Houston 1,767 1,570 1,627 12.5 % 8.6 % 4.5 % Orlando 1,509
1,431 1,498 5.5 % 0.7 % 3.9 % Austin 727 689
690 5.5 % 5.4 % 1.9 % Total same store NOI $ 39,073 $ 36,274 $
37,950 7.7 % 3.0 % 100.0 % Average rental rate per
unit Atlanta $ 1,108 $ 1,067 $ 1,092 3.8 % 1.5 % Washington, D.C.
1,850 1,786 1,830 3.6 % 1.1 % Dallas 1,058 1,024 1,045 3.3 % 1.2 %
Tampa 1,227 1,179 1,205 4.1 % 1.8 % Charlotte 1,039 1,010 1,018 2.9
% 2.1 % New York 3,685 3,591 3,672 2.6 % 0.4 % Houston 1,190 1,183
1,174 0.6 % 1.4 % Orlando 1,355 1,287 1,336 5.3 % 1.4 % Austin
1,323 1,279 1,301 3.4 % 1.7 % Total average rental rate per unit
1,260 1,217 1,243 3.5 % 1.4 %
Table 3 (con’t)
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Six months ended June 30,
June 30, 2011 2010 % Change Rental and
other revenues Atlanta $ 37,440 $ 35,865 4.4% Washington, D.C.
21,113 20,438 3.3% Dallas 24,312 23,145 5.0% Tampa 15,974 15,435
3.5% Charlotte 8,707 8,355 4.2% New York 6,933 6,677 3.8% Houston
5,982 5,711 4.7% Orlando 4,991 4,715 5.9% Austin 2,486 2,400 3.6%
Total rental and other revenues 127,938 122,741 4.2%
Property operating and maintenance expenses (exclusive of
depreciation and amortization) Atlanta 15,718 15,790 (0.5)%
Washington, D.C. 6,397 7,296 (12.3)% Dallas 10,699 10,431 2.6%
Tampa 6,050 5,989 1.0% Charlotte 3,338 3,358 (0.6)% New York 3,071
2,890 6.3% Houston 2,588 2,516 2.9% Orlando 1,984 1,989 (0.3)%
Austin 1,069 1,038 3.0% Total 50,914 51,297 (0.7)% Net
operating income Atlanta 21,722 20,075 8.2% Washington, D.C. 14,716
13,142 12.0% Dallas 13,613 12,714 7.1% Tampa 9,924 9,446 5.1%
Charlotte 5,369 4,997 7.4% New York 3,862 3,787 2.0% Houston 3,394
3,195 6.2% Orlando 3,007 2,726 10.3% Austin 1,417 1,362 4.0% Total
same store NOI $ 77,024 $ 71,444 7.8% Average rental
rate per unit Atlanta $ 1,100 $ 1,066 3.2% Washington, D.C. 1,840
1,780 3.4% Dallas 1,051 1,025 2.5% Tampa 1,216 1,176 3.4% Charlotte
1,029 1,013 1.6% New York 3,679 3,588 2.5% Houston 1,182 1,186
(0.3)% Orlando 1,346 1,283 4.9% Austin 1,312 1,277 2.7% Total
average rental rate per unit 1,251 1,216 2.9%
Table 4
Computation of Debt Ratios
(In thousands)
As of June 30, 2011
2010 Total real estate assets per
balance sheet $ 2,025,740 $ 2,066,697 Plus: Company share of real
estate assets held in unconsolidated entities 70,828 102,109
Company share of accumulated depreciation - assets held in
unconsolidated entities 11,611 9,631 Accumulated depreciation per
balance sheet 729,759 655,559 Total
undepreciated real estate assets
(A) $ 2,837,938 $
2,833,996 Total debt per balance sheet $ 1,031,878 $
1,007,340 Plus: Company share of third party debt held in
unconsolidated entities 59,601 125,758
Total debt (adjusted for joint venture partners' share of debt)
(B) $ 1,091,479 $ 1,133,098 Total debt
as a % of undepreciated real estate assets (adjusted for joint
venture partners' share of debt)
(B÷A) 38.5 %
40.0 % Total debt per balance sheet $ 1,031,878 $ 1,007,340
Plus: Company share of third party debt held in unconsolidated
entities 59,601 125,758 Preferred shares at liquidation value
43,392 93,039 Total debt and preferred
equity (adjusted for joint venture partners' share of debt)
(C) $ 1,134,871 $ 1,226,137 Total debt
and preferred equity as a % of undepreciated real estate assets
(adjusted for joint venture partners' share of debt)
(C÷A)
40.0 % 43.3 %
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