Post Properties, Inc. (NYSE: PPS) announced today net income
available to common shareholders of $7.9 million, or $0.15 per
diluted share, for the third quarter of 2011, compared to $21.7
million, or $0.44 per diluted share, for the third quarter of
2010.
Net income available to common shareholders for the nine months
ended September 30, 2011, was $16.3 million, or $0.32 per diluted
share, compared to a net loss of $16.9 million, or a net loss of
$0.35 per diluted share, for the nine months ended September 30,
2010.
The Company’s net income available to common shareholders for
the nine months ended September 30, 2011 included a $0.4 million
gain on the sale of a technology investment and $1.8 million of
costs associated with the Company’s redemption of its Series B
preferred stock.
The Company’s net income (loss) available to common shareholders
for the three and nine months ended September 30, 2010 included a
net gain of $20.9 million related to the acquisition of all
remaining interests in its Atlanta condominium project, adjacent
land and infrastructure and the acquisition of the related
construction loans. The Company’s net loss attributable to common
shareholders for the nine months ended September 30, 2010 also
included non-cash impairment charges of approximately $35.1 million
primarily relating to the Company’s Austin condominium project.
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 third quarter of 2011 was $26.7 million, or $0.52
per diluted share, compared to $40.3 million, or $0.82 per diluted
share, for the third quarter of 2010. FFO for the third quarter of
2010 included the net gain discussed above totaling $20.9 million,
or $0.43 per diluted share.
FFO for the nine months ended September 30, 2011 was $72.8
million, or $1.44 per diluted share, compared to $38.1 million, or
$0.78 per diluted share, for the nine months ended September 30,
2010. FFO for the first nine months 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 first nine months of 2010 included
the net gain discussed above totaling $20.9 million, offset by the
non-cash impairment charges discussed above of $35.1 million,
resulting in total net charges included in FFO of $14.2 million, or
$0.29 per diluted share.
Said Dave Stockert, CEO and President of Post, “The Company
again put up a strong performance in the third quarter, with solid
rent growth and sustained high occupancy. Ongoing favorable supply
and demand conditions are prevailing against the uncertain economic
environment, and support another increase in our full-year guidance
for property operating results and FFO.”
Mature (Same Store) Community Data
Average economic occupancy at the Company’s 46 mature (same
store) communities, containing 16,688 apartment units, was 96.7%
and 95.8% for the third quarter of 2011 and 2010, respectively.
Total revenues for the mature communities increased 6.7% and
total operating expenses increased 1.1% during the third quarter of
2011, compared to the third quarter of 2010, resulting in a 10.8%
increase in same store net operating income (“NOI”). The average
monthly rental rate per unit increased 5.0% during the third
quarter of 2011, compared to the third quarter of 2010.
On a sequential basis, total revenues for the mature communities
increased 3.5% and total operating expenses increased 4.7%,
producing a 2.7% increase in same store NOI for the third quarter
of 2011, compared to the second quarter of 2011. On a sequential
basis, the average monthly rental rate per unit increased 2.3%. For
the third quarter of 2011, average economic occupancy at the mature
communities was 96.7%, compared to 95.5% for the second quarter of
2011.
For the nine months ended September 30, 2011, average economic
occupancy at the Company’s mature communities was 95.8%, compared
to 95.3% for the nine months ended September 30, 2010.
Total revenues for the mature communities increased 5.1% and
total operating expenses decreased 0.1% during the first nine
months of 2011, compared to the first nine months of 2010,
resulting in an 8.8% increase in same store NOI. The average
monthly rental rate per unit increased 3.6% for the first nine
months of 2011, compared to the first nine months of 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 Activity
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.
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 39.7% at September 30, 2011.
In October 2011, the Company repaid $9.6 million of its 5.13%
senior unsecured notes at their maturity.
As of October 27, 2011, the Company had cash and cash
equivalents of $73.3 million. The Company had no outstanding
borrowings and had 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 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 third
quarter of 2011, the Company sold 1,322,800 shares, at an average
gross price per share of $41.34, producing net proceeds of $53.5
million. During the first nine months of 2011, the Company sold
2,321,487 shares, at an average gross price per share of $40.38,
producing net proceeds of $91.7 million. The Company has
approximately 1.6 million shares remaining for issuance under this
program.
Condominium Activity
During the third quarter of 2011, the Company closed 14
condominium units at its Austin and Atlanta condominium projects
for aggregate gross revenue of $13.7 million. As of October 27,
2011, the Company has, in the aggregate, closed 103 units at the
Austin and Atlanta condominium projects and had 10 units under
contract. There can be no assurance that condominium units under
contract will close.
The Company recognized net gains in FFO of $2.6 million, or
$0.05 per diluted share, from condominium sales activities during
the third quarter of 2011, compared to $1.2 million, excluding
impairment charges, or $0.02 per diluted share, during the third
quarter of 2010. The Company recognized net gains in FFO of $8.8
million, or $0.17 per diluted share, from condominium activities
during the nine months ended September 30, 2011, and $2.1 million,
excluding impairment charges, or $0.04 per diluted share, during
the nine months ended September 30, 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 provided in its August 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, 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").
Current
Outlook
Previously
Issued
Outlook
Core FFO, before charges $1.74 to $1.76 $1.64 to
$1.70 Condo FFO $0.18 to $0.19 $0.14 to $0.18 FFO, before charges
$1.92 to $1.95 $1.78 to $1.88 Preferred redemption charges ($0.034)
($0.035) FFO $1.89 to $1.92 $1.75 to $1.84
Same Store
Assumptions
Current
Outlook
Previously
Issued
Outlook
Revenue 5.4% to 5.5% 4.5% to 5.0% Operating expenses 1.6% to 1.7%
1.4% to 1.8% Net operating income (NOI) 7.9% to 8.1% 6.5% to 7.5%
The above per share outlook is based on the assumption that
fully diluted weighted average shares and units are expected to be
just over 51 million for the full year 2011.
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 telephone numbers are 877-723-9518 for US and Canada callers
and 719-325-4888 for international callers. The access code is
9148864. 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, November 1, and will be available until Monday,
November 7, 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 9148864. A
replay of the call also will be archived on Post’s website under
For Investors/Audio Archives. 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 Nine months ended
September 30, September 30, 2011
2010 2011 2010
OPERATING DATA Revenues from continuing operations $ 78,612
$ 72,895 $ 227,567 $ 212,869 Net income (loss) available to common
shareholders $ 7,872 $ 21,670 $ 16,275 $ (16,948 ) Funds from
operations available to common shareholders and unitholders (Table
1) $ 26,735 $ 40,269 $ 72,753 $ 38,144 Weighted average
shares outstanding - diluted 51,053 48,670 50,259 48,446 Weighted
average shares and units outstanding - diluted 51,215 48,841 50,426
48,618 PER COMMON SHARE DATA - DILUTED Net income (loss)
available to common shareholders $ 0.15 $ 0.44 $ 0.32 $ (0.35 )
Funds from operations available to common shareholders and
unitholders (Table 1) (1) $ 0.52 $ 0.82 $ 1.44 $ 0.78
Dividends declared $ 0.22 $ 0.20 $ 0.62 $ 0.60
1) Funds from operations per share was
computed using weighted average shares and units outstanding,
including the impact of dilutive securities totaling 402 and 135
for the three months and 397 and 134 for the nine months ended
September 30, 2011 and 2010, respectively. The dilutive securities
for the nine months ended September 30, 2010 were antidilutive to
the computation of income (loss) per share, as the Company reported
a net loss attributable to common shareholders for this period
under generally accepted accounting principles. Additionally, basic
and diluted weighted average shares and units included the impact
of non-vested shares and units totaling 164 and 212 for the three
months and 162 and 205 for the nine months ended September 30, 2011
and 2010, respectively, for the computation of funds from
operations per share. Such non-vested shares and units are
considered in the income (loss) per share computations under
generally accepted accounting principles using the “two-class
method.”
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 Nine months ended
September 30, September 30, 2011
2010 2011
2010 Net income (loss) available to common
shareholders $ 7,872 $ 21,670 $ 16,275 $ (16,948 )
Noncontrolling interests - Operating Partnership 25 76 54 (60 )
Depreciation on consolidated real estate assets, net 18,475 18,167
55,340 54,349 Depreciation on real estate assets held in
unconsolidated entities 363 356 1,084 1,065 Gains on sales of
condominiums (2,581 ) (1,184 ) (8,757 ) (2,319 ) Incremental gains
on condominium sales 2,581 1,184
8,757 2,057
Funds from operations available
to common shareholders and unitholders $ 26,735 $
40,269 $ 72,753 $ 38,144
Funds from
operations - per share and unit - diluted (1) $ 0.52 $
0.82 $ 1.44 $ 0.78
Weighted average shares
and units outstanding - diluted (1) 51,379
49,053 50,588 48,957
1) Diluted weighted average shares and
units include the impact of dilutive securities totaling 402 and
135 for the three months and 397 and 134 for the nine months ended
September 30, 2011 and 2010, respectively. The dilutive securities
for the nine months ended September 30, 2010 were antidilutive to
the computation of income (loss) per share, as the Company reported
a net loss attributable to common shareholders for this period
under generally accepted accounting principles. Additionally, basic
and diluted weighted average shares and units included the impact
of non-vested shares and units totaling 164 and 212 for the three
months and 162 and 205 for the nine months ended September 30, 2011
and 2010, respectively, for the computation of funds from
operations per share. Such non-vested shares and units are
considered in the income (loss) per share computations under
generally accepted accounting principles using the “two-class
method.”
Table 2
Reconciliation of Same Store Net Operating
Income (NOI) to GAAP Net Income
(Unaudited; In thousands)
Three months ended
Nine months ended
September 30, September 30, June 30,
September 30, September 30, 2011
2010 2011
2011 2010 Total same store NOI $
40,130 $ 36,217 $ 39,073 $ 117,154 $ 107,661 Property NOI from
other operating segments 3,621 2,497
2,918 9,286 4,067
Consolidated property NOI 43,751 38,714
41,991 126,440 111,728
Add (subtract): Interest income 374 390 516 982 755 Other revenues
243 223 227 686 777 Depreciation (18,823 ) (18,623 ) (18,808 )
(56,383 ) (55,737 ) Interest expense (14,207 ) (13,646 ) (14,437 )
(43,119 ) (38,820 ) Amortization of deferred financing costs (717 )
(611 ) (721 ) (2,085 ) (2,097 ) General and administrative (3,970 )
(3,927 ) (4,246 ) (12,332 ) (12,570 ) Investment and development
(239 ) (569 ) (296 ) (1,013 ) (1,849 ) Other investment costs (329
) (669 ) (455 ) (1,278 ) (1,828 ) Impairment losses - - - - (35,091
) Gains on condominium sales activities, net 2,581 1,184 5,432
8,757 2,319 Equity in income of unconsolidated real estate
entities, net 235 18,258 346 790 18,554 Other income (expense), net
(71 ) 26 285 230 (271 ) Net gain on extinguishment of indebtedness
- 2,845 -
2,845 Net income (loss) $ 8,828 $ 23,595
$ 9,834 $ 21,675 $ (11,285 )
Table 3
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Three months ended Q3 '11 Q3 '11
Q3 '11
September 30, September 30, June 30,
vs. Q3 '10 vs. Q2 '11 % Same 2011
2010 2011 % Change % Change Store
NOI Rental and other revenues Atlanta $ 19,655 $ 18,378 $
18,927 6.9 % 3.8 % Washington, D.C. 11,033 10,560 10,701 4.5 % 3.1
% Dallas 12,845 11,881 12,270 8.1 % 4.7 % Tampa 8,226 7,762 8,052
6.0 % 2.2 % Charlotte 4,594 4,251 4,440 8.1 % 3.5 % New York 3,580
3,396 3,520 5.4 % 1.7 % Houston 3,135 2,929 3,018 7.0 % 3.9 %
Orlando 2,584 2,416 2,511 7.0 % 2.9 % Austin 1,321
1,207 1,261 9.4 % 4.8 %
Total rental and other revenues
66,973 62,780 64,700 6.7 % 3.5 %
Property operating and maintenance expenses (exclusive of
depreciation and amortization) Atlanta 7,963 7,850 7,896 1.4 % 0.8
% Washington, D.C. 3,681 3,888 3,155 (5.3 )% 16.7 % Dallas 5,765
5,710 5,433 1.0 % 6.1 % Tampa 3,153 2,978 3,096 5.9 % 1.8 %
Charlotte 1,730 1,831 1,739 (5.5 )% (0.5 )% New York 1,561 1,426
1,521 9.5 % 2.6 % Houston 1,388 1,338 1,251 3.7 % 11.0 % Orlando
1,029 971 1,002 6.0 % 2.7 % Austin 573 571 534
0.4 % 7.3 % Total 26,843 26,563 25,627 1.1 %
4.7 % Net operating income Atlanta 11,692 10,528 11,031 11.1
% 6.0 % 29.2 % Washington, D.C. 7,352 6,672 7,546 10.2 % (2.6 )%
18.3 % Dallas 7,080 6,171 6,837 14.7 % 3.6 % 17.6 % Tampa 5,073
4,784 4,956 6.0 % 2.4 % 12.6 % Charlotte 2,864 2,420 2,701 18.3 %
6.0 % 7.1 % New York 2,019 1,970 1,999 2.5 % 1.0 % 5.0 % Houston
1,747 1,591 1,767 9.8 % (1.1 )% 4.4 % Orlando 1,555 1,445 1,509 7.6
% 3.0 % 3.9 % Austin 748 636 727 17.6 % 2.9 %
1.9 %
Total same store NOI
$ 40,130 $ 36,217 $ 39,073 10.8 % 2.7 % 100.0 %
Average rental rate per unit Atlanta $ 1,139 $ 1,079 $ 1,108 5.6 %
2.8 % Washington, D.C. 1,876 1,813 1,850 3.5 % 1.4 % Dallas 1,083
1,030 1,058 5.1 % 2.4 % Tampa 1,260 1,189 1,227 6.0 % 2.7 %
Charlotte 1,071 1,009 1,039 6.1 % 3.0 % New York 3,715 3,631 3,685
2.3 % 0.8 % Houston 1,218 1,180 1,190 3.2 % 2.3 % Orlando 1,383
1,302 1,355 6.2 % 2.0 % Austin 1,375 1,288 1,323 6.8 % 3.9 %
Total average rental rate per unit
1,289 1,228 1,260 5.0 % 2.3 %
Table 3 (con’t)
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Nine months ended
September 30, September 30,
2011 2010 % Change Rental and other
revenues Atlanta $ 57,095 $ 54,243 5.3 % Washington, D.C. 32,146
30,998 3.7 % Dallas 37,157 35,027 6.1 % Tampa 24,200 23,197 4.3 %
Charlotte 13,301 12,605 5.5 % New York 10,513 10,073 4.4 % Houston
9,116 8,640 5.5 % Orlando 7,575 7,131 6.2 % Austin 3,808
3,607 5.6 % Total rental and other revenues 194,911
185,521 5.1 % Property operating and maintenance
expenses (exclusive of depreciation and amortization) Atlanta
23,681 23,640 0.2 % Washington, D.C. 10,078 11,184 (9.9 )% Dallas
16,464 16,141 2.0 % Tampa 9,203 8,967 2.6 % Charlotte 5,068 5,188
(2.3 )% New York 4,632 4,316 7.3 % Houston 3,976 3,854 3.2 %
Orlando 3,012 2,961 1.7 % Austin 1,643 1,609 2.1 %
Total
77,757 77,860 (0.1 )% Net operating income
Atlanta 33,414 30,603 9.2 % Washington, D.C. 22,068 19,814 11.4 %
Dallas 20,693 18,886 9.6 % Tampa 14,997 14,230 5.4 % Charlotte
8,233 7,417 11.0 % New York 5,881 5,757 2.2 % Houston 5,140 4,786
7.4 % Orlando 4,563 4,170 9.4 % Austin 2,165 1,998
8.4 %
Total same store NOI
$ 117,154 $ 107,661 8.8 % Average rental rate per
unit Atlanta $ 1,113 $ 1,070 4.0 % Washington, D.C. 1,852 1,791 3.4
% Dallas 1,062 1,027 3.4 % Tampa 1,231 1,180 4.3 % Charlotte 1,043
1,012 3.1 % New York 3,691 3,603 2.4 % Houston 1,194 1,184 0.8 %
Orlando 1,358 1,290 5.3 % Austin 1,333 1,280 4.1 % Total average
rental rate per unit 1,264 1,220 3.6 %
Table 4
Computation of Debt Ratios
(In thousands)
As of September 30, 2011
2010 Total real
estate assets per balance sheet $ 2,025,333 $ 2,059,461 Plus:
Company share of real estate assets held in unconsolidated entities
70,419 71,857 Company share of accumulated depreciation - assets
held in unconsolidated entities 12,091 10,187 Accumulated
depreciation per balance sheet 748,306 673,982
Total undepreciated real estate assets
(A) $
2,856,149 $ 2,815,487 Total debt per balance
sheet $ 1,030,852 $ 1,013,972 Plus: Company share of third party
debt held in unconsolidated entities 59,601
59,601 Total debt (adjusted for joint venture partners'
share of debt)
(B) $ 1,090,453 $ 1,073,573
Total debt as a % of undepreciated real estate assets
(adjusted for joint venture partners' share of debt)
(B÷A)
38.2 % 38.1 % Total debt per balance sheet $
1,030,852 $ 1,013,972 Plus: Company share of third party debt held
in unconsolidated entities 59,601 59,601 Preferred shares at
liquidation value 43,392 92,963 Total
debt and preferred equity (adjusted for joint venture partners'
share of debt)
(C) $ 1,133,845 $ 1,166,536
Total debt and preferred equity as a % of undepreciated real
estate assets (adjusted for joint venture partners' share of debt)
(C÷A) 39.7 % 41.4 %
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