Post Properties, Inc. (NYSE: PPS) announced today net income
available to common shareholders of $20.2 million, or $0.37 per
diluted share, for the second quarter of 2012, compared to net
income of $8.8 million, or $0.17 per diluted share, for the second
quarter of 2011.
Net income available to common shareholders for the six months
ended June 30, 2012, was $41.0 million, or $0.76 per diluted share,
compared to net income of $8.4 million, or $0.17 per diluted share,
for the six months ended June 30, 2011.
The Company’s net income available to common shareholders for
the three and six months ended June 30, 2012 included other income
of $0.9 million relating primarily to a construction litigation
settlement, and for the six months ended June 30, 2012 included a
gain of $6.1 million on the sale of an asset. 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 redemption
of preferred stock.
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 2012 was $39.7 million, or $0.73
per diluted share, compared to $27.7 million, or $0.55 per diluted
share, for the second quarter of 2011. The Company’s reported FFO
for the second quarter of 2012 included the other income discussed
above, of $0.9 million, or $0.02 per diluted share, and for the
second quarter of 2011 included the technology sale gain of $0.4
million, or $0.01 per diluted share.
FFO for the six months ended June 30, 2012 was $73.9 million, or
$1.37 per diluted share, compared to $46.0 million, or $0.92 per
diluted share, for the six months ended June 30, 2011. The
Company’s reported FFO for the first half of 2012 included the $0.9
million of other income discussed above, or $0.02 per diluted
share. The Company’s reported FFO for the first half of 2011
included costs related to the redemption of preferred stock, offset
by the technology sale gain discussed above, totaling a net
reduction to FFO of $1.3 million, or $0.03 per diluted share.
Said Dave Stockert, Post’s CEO, “We are very pleased to deliver
another strong quarter of nearly 30% growth in per share core funds
from operations. We sustained a solid pace of year-over-year and
sequential growth in revenues from our apartment communities, and
achieved an outsized number of condominium closings. As a result,
we’ve again adjusted earnings guidance for the full year. In July,
we added another high-quality community to the Post portfolio, and
are off to a good start leasing up our first new development
delivery of this current cycle.”
Same Store Community Data
Average economic occupancy at the Company’s 50 same store
communities, containing 18,114 apartment units, was 96.1% and 95.1%
for the second quarter of 2012 and 2011, respectively.
Total revenues for the same store communities increased 7.8% and
total operating expenses increased 3.9% during the second quarter
of 2012, compared to the second quarter of 2011, resulting in a
10.4% increase in same store net operating income (“NOI”). The
average monthly rental rate per unit increased 6.5% during the
second quarter of 2012, compared to the second quarter of 2011.
On a sequential basis, total revenues for the same store
communities increased 2.5% and total operating expenses increased
2.4%, producing a 2.5% increase in same store NOI for the second
quarter of 2012, compared to the first quarter of 2012. On a
sequential basis, the average monthly rental rate per unit
increased 1.6%. For the second quarter of 2012, average economic
occupancy at the same store communities was 96.1%, compared to
95.8% for the first quarter of 2012.
For the six months ended June 30, 2012, average economic
occupancy at the Company’s mature communities was 96.0%, compared
to 95.0% for the six months ended June 30, 2011.
Total revenues for the mature communities increased 7.8% and
total operating expenses increased 3.5% during the first half of
2012, compared to the first half of 2011, resulting in a 10.7%
increase in same store NOI. The average monthly rental rate per
unit increased 6.3% for the six months ended June 30, 2012,
compared to the six months ended June 30, 2011.
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
During the second quarter of 2012, the Company began delivering
units at the second phase of its Post Carlyle Square™ community in
Washington, D.C. The Company also reduced the estimated total cost
of the project by $6.0 million. As of July 27, 2012, this community
was 20% leased.
In the aggregate, the Company has 1,810 units in six apartment
communities, and approximately 37,567 square feet of retail space,
under development or in lease-up with a total estimated cost of
$300.4 million. The Company currently expects to fund future
estimated construction expenditures primarily by utilizing
available borrowings under its unsecured bank credit facilities as
well as proceeds from its on-going condominium sales and its
at-the-market common equity sales program.
Acquisition Activity
As previously announced in July, the Company acquired Post South
End™, a 360-unit apartment community located in Charlotte, North
Carolina for a purchase price of $74.0 million. This community was
completed in 2009 and also includes approximately 7,612 square feet
of retail space.
Financing Activity
Leverage, Line and Term Loan 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 35.7% at June 30, 2012.
On May 31, 2012, the Company borrowed an additional $130 million
under its unsecured bank term loan facility. On June 1, 2012, the
Company repaid in full its $95.7 million of outstanding 5.45%
senior unsecured notes. On July 2, 2012, the Company borrowed the
remaining $70 million of available capacity under the term loan,
bringing total outstanding borrowings under the term loan facility
to $300 million.
As of July 27, 2012, the Company had cash and cash equivalents
of $38.7 million. The Company had no outstanding borrowings and had
letters of credit totaling $0.6 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’s initial at-the-market common equity program
provides for the sale of up to 4 million shares of common stock, of
which 136,500 shares remain available for issuance as of July 27,
2012. Upon that program’s completion, the Company also has
available a second at-the-market common equity program that
provides for the sale of up to an additional 4 million shares of
common stock. The Company expects to use these programs 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 these programs will be dependent upon a
variety of factors, including, among others, market conditions, the
trading price of the Company’s common stock and the potential use
of proceeds.
During the second quarter of 2012, the Company sold 96,500
shares under the initial program, at an average gross price of
$50.23 per share, producing net proceeds of $4.6 million. Since its
inception, the Company has sold 3,863,500 shares, at an average
gross price per share of $41.14, producing net proceeds of $155.4
million.
Condominium Activity
During the second quarter of 2012, the Company closed 26
condominium units at its Austin and Atlanta condominium projects
for aggregate gross revenue of $22.9 million. As of July 27, 2012,
the Company has, in the aggregate, closed 164 units at the Austin
and Atlanta condominium projects and had 24 units under contract.
There can be no assurance that condominium units under contract
will close.
The Company recognized net gains in FFO of $8.5 million, or
$0.16 per diluted share, from condominium sales activities during
the second quarter of 2012, compared to $5.4 million, or $0.11 per
diluted share, during the second quarter of 2011.
2012 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 2012 will be in the range set forth below, as
compared to its previous outlook issued in its May 2012 earnings
release. The tables below reflect anticipated net gains from
condominium sales (for purposes of this discussion, "Condo FFO")
and FFO before Condo FFO (for purposes of this discussion, "Core
FFO").
CurrentOutlook
Previously
IssuedOutlook
Core FFO $2.14 - $2.20 $2.07 - $2.14 Condo FFO $0.36
- $0.40 $0.19 - $0.24 FFO $2.50 - $2.60 $2.26 - $2.38
Same Store
Assumptions
CurrentOutlook
Previously
IssuedOutlook
Revenue 6.25% - 6.75% 5.75% - 6.25% Operating expenses 4.25% -
4.75% 3.75% - 4.75% Net operating income (NOI) 7.20% - 8.20% 6.40%
- 7.80%
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, debt
extinguishment gains (losses) 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 not 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.
Property Operating Statistics – The Company uses average
economic occupancy, gross turnover, net turnover and percentage
increases in rent for new and renewed leases as statistical
measures of property 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. Gross
turnover is defined as the percentage of leases expiring during the
period that are not renewed by the existing residents. Net turnover
is defined as gross turnover decreased by the percentage of
expiring leases where the residents transfer to a new apartment
unit in the same community or in another Post® community. The
percentage increases in rent for new and renewed leases are
calculated using the respective new or renewed rental rate as of
the date of a new lease, as compared with the previous rental rate
on that same unit.
Conference Call Information
The Company will hold its quarterly conference call on Tuesday,
July 31, at 10:00 a.m. ET. The telephone numbers are 888-337-8259
for US and Canada callers and 719-325-2146 for international
callers. The access code is 3916841. 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, July 31, and will be
available until Monday, August 6, 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 3916841. A replay of the call also will be archived on
Post’s website under For Investors/Audio Archives.
About Post
Post Properties, founded more than 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 21,982 apartment units in 59
communities, including 1,471 apartment units in four communities
held in unconsolidated entities and 1,810 apartment units in six
communities currently under development or in lease-up. 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 apartment market
conditions, expectations regarding use of proceeds from unsecured
bank credit facilities, expectations regarding future operating
conditions, including the Company’s current outlook as to expected
funds from operations, revenue, operating expenses and net
operating income, anticipated development activities (including
projected construction expenditures and timing), expectations
regarding the for-sale condominium business, 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, 2011 and
in subsequent filings with the SEC; conditions affecting ownership
of residential real estate and general conditions in the
multi-family residential real estate market; uncertainties
associated with the Company’s real estate development and
construction; uncertainties associated with the timing and amount
of apartment community sales; exposure to economic and other
competitive factors due to market concentration; future local and
national economic conditions, including changes in job growth,
interest rates, the availability of mortgage and other financing
and related factors; 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 compete for limited investment opportunities; the
effects of changing interest rates and effectiveness of interest
rate hedging contracts; the success of the Company’s acquired
apartment communities; 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 renew leases or relet
units as leases expire; 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; increased costs arising from health care reform; any
breach of the Company’s privacy or information security systems.
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, 2011 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, 2012 2011
2012 2011 OPERATING DATA Total revenues $
82,160 $ 75,424 $ 162,436 $ 148,955 Net income available to common
shareholders $ 20,157 $ 8,824 $ 41,035 $ 8,403 Funds from
operations available to common shareholders and unitholders (Table
1) $ 39,654 $ 27,677 $ 73,877 $ 46,018 Weighted average
shares outstanding - diluted 54,096 50,266 53,799 49,854 Weighted
average shares and units outstanding - diluted 54,246 50,435 53,950
50,024 PER COMMON SHARE DATA - DILUTED Net income available
to common shareholders $ 0.37 $ 0.17 $ 0.76 $ 0.17 Funds
from operations available to common shareholders and unitholders
(Table 1) (1) $ 0.73 $ 0.55 $ 1.37 $ 0.92 Dividends declared
$ 0.25 $ 0.20 $ 0.47 $ 0.40
1) Funds from operations per share was
computed using weighted average shares and units outstanding,
including the impact of dilutive securities totaling 323 and 391
for the three months and 369 and 394 for the six months ended June
30, 2012 and 2011, respectively. Additionally, diluted weighted
average shares and units included the impact of non-vested shares
and units totaling 130 and 169 for the three months and 124 and 161
for the six months ended June 30, 2012 and 2011, respectively, for
the computation of FFO per share. Such non-vested shares and units
are considered in the income per share computations under GAAP
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, 2012
2011 2012 2011
Net income available to common shareholders $ 20,157 $ 8,824
$ 41,035 $ 8,403 Noncontrolling interests - Operating Partnership
56 30 115 29 Depreciation on consolidated real estate assets, net
19,156 18,461 38,159 36,864 Depreciation on real estate assets held
in unconsolidated entities 285 362 623 722 Gains on sales of
depreciable real estate assets - unconsolidated entities -
- (6,055 ) -
Funds from operations
available to common shareholders and unitholders $
39,654 $ 27,677 $ 73,877 $ 46,018
Funds from
operations - per share and unit - diluted (1) $ 0.73 $ 0.55 $
1.37 $ 0.92
Weighted average shares and units outstanding
- diluted (1) 54,376 50,604 54,074
50,185
1) Diluted weighted average shares and
units include the impact of dilutive securities totaling 323 and
391 for the three months and 369 and 394 for the six months ended
June 30, 2012 and 2011, respectively. Additionally, diluted
weighted average shares and units included the impact of non-vested
shares and units totaling 130 and 169 for the three months and 124
and 161 for the six months ended June 30, 2012 and 2011,
respectively, for the computation of FFO per share. Such non-vested
shares and units are considered in the income per share
computations under GAAP 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,
2012 2011
2012 2012 2011
Total same store NOI $ 46,202 $ 41,850 $ 45,066 $ 91,268 $
82,476 Property NOI from other operating segments 521
141 351 872 213
Consolidated property NOI 46,723 41,991
45,417 92,140 82,689
Add (subtract): Interest income 288 516 51 339 608 Other
revenues 206 227 222 428 443 Depreciation (19,497 ) (18,808 )
(19,341 ) (38,838 ) (37,560 ) Interest expense (11,103 ) (14,437 )
(11,645 ) (22,748 ) (28,912 ) Amortization of deferred financing
costs (698 ) (721 ) (661 ) (1,359 ) (1,368 ) General and
administrative (3,883 ) (4,246 ) (4,285 ) (8,168 ) (8,362 )
Investment and development (322 ) (296 ) (480 ) (802 ) (774 ) Other
investment costs (306 ) (455 ) (306 ) (612 ) (949 ) Gains on
condominium sales activities, net 8,530 5,432 6,904 15,434 6,176
Equity in income of unconsolidated real estate entities, net 495
346 6,446 6,941 555 Other income (expense), net 737 285 (156 ) 581
301 Net loss on extinguishment of indebtedness -
- (301 ) (301 ) -
Net income $ 21,170 $ 9,834 $ 21,865 $ 43,035
$ 12,847
Table 3
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Three months ended Q2
'12 Q2 '12 Q2 '12 June 30,
June 30, March 31, vs. Q2 '11 vs. Q1
'12 % Same 2012 2011 2012 %
Change % Change Store NOI Rental and other
revenues Atlanta $ 20,320 $ 18,927 $ 19,970 7.4 % 1.8 % Washington,
D.C. 13,108 12,377 12,854 5.9 % 2.0 % Dallas 15,720 14,420 15,123
9.0 % 3.9 % Tampa 8,628 8,052 8,509 7.2 % 1.4 % Charlotte 4,845
4,440 4,663 9.1 % 3.9 % New York 3,668 3,520 3,602 4.2 % 1.8 %
Houston 3,359 3,018 3,245 11.3 % 3.5 % Orlando 2,711 2,511 2,662
8.0 % 1.8 % Austin 2,770 2,438 2,692 13.6 %
2.9 % Total rental and other revenues 75,129 69,703
73,320 7.8 % 2.5 % Property operating and maintenance
expenses (exclusive of depreciation and amortization) Atlanta 8,087
7,896 7,816 2.4 % 3.5 % Washington, D.C. 3,946 3,927 4,024 0.5 %
(1.9 )% Dallas 6,655 6,369 6,527 4.5 % 2.0 % Tampa 3,257 3,096
3,170 5.2 % 2.7 % Charlotte 1,742 1,739 1,620 0.2 % 7.5 % New York
1,607 1,521 1,686 5.7 % (4.7 )% Houston 1,439 1,251 1,205 15.0 %
19.4 % Orlando 1,001 1,002 1,003 (0.1 )% (0.2 )% Austin
1,193 1,052 1,203 13.4 % (0.8 )% Total 28,927
27,853 28,254 3.9 % 2.4 % Net operating income
Atlanta 12,233 11,031 12,154 10.9 % 0.6 % 26.5 % Washington, D.C.
9,162 8,450 8,830 8.4 % 3.8 % 19.8 % Dallas 9,065 8,051 8,596 12.6
% 5.5 % 19.6 % Tampa 5,371 4,956 5,339 8.4 % 0.6 % 11.6 % Charlotte
3,103 2,701 3,043 14.9 % 2.0 % 6.7 % New York 2,061 1,999 1,916 3.1
% 7.6 % 4.5 % Houston 1,920 1,767 2,040 8.7 % (5.9 )% 4.2 % Orlando
1,710 1,509 1,659 13.3 % 3.1 % 3.7 % Austin 1,577
1,386 1,489 13.8 % 5.9 % 3.4 %
Total same store NOI
$ 46,202 $ 41,850 $ 45,066 10.4 % 2.5 % 100.0 %
Average rental rate per unit Atlanta $ 1,187 $ 1,108 $ 1,168 7.1 %
1.6 % Washington, D.C. 1,859 1,804 1,843 3.0 % 0.9 % Dallas 1,121
1,042 1,101 7.6 % 1.8 % Tampa 1,321 1,227 1,297 7.7 % 1.8 %
Charlotte 1,129 1,039 1,105 8.7 % 2.2 % New York 3,777 3,685 3,744
2.5 % 0.9 % Houston 1,292 1,190 1,264 8.6 % 2.2 % Orlando 1,447
1,355 1,424 6.8 % 1.6 % Austin 1,572 1,449 1,548 8.5 % 1.6 % Total
average rental rate per unit 1,341 1,259 1,320 6.5 % 1.6 %
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, 2012
2011 % Change Rental and other revenues
Atlanta $ 40,291 $ 37,440 7.6 % Washington, D.C. 25,962 24,426 6.3
% Dallas 30,842 28,467 8.3 % Tampa 17,137 15,973 7.3 % Charlotte
9,508 8,707 9.2 % New York 7,270 6,933 4.9 % Houston 6,604 5,982
10.4 % Orlando 5,373 4,991 7.7 % Austin 5,462 4,802
13.7 %
Total rental and other revenues
148,449 137,721 7.8 % Property operating and
maintenance expenses (exclusive of depreciation and amortization)
Atlanta 15,903 15,718 1.2 % Washington, D.C. 7,969 7,696 3.5 %
Dallas 13,182 12,693 3.9 % Tampa 6,428 6,050 6.2 % Charlotte 3,363
3,338 0.7 % New York 3,293 3,071 7.2 % Houston 2,644 2,588 2.2 %
Orlando 2,004 1,984 1.0 % Austin 2,395 2,107 13.7 %
Total 57,181 55,245 3.5 % Net operating income
Atlanta 24,388 21,722 12.3 % Washington, D.C. 17,993 16,730 7.5 %
Dallas 17,660 15,774 12.0 % Tampa 10,709 9,923 7.9 % Charlotte
6,145 5,369 14.5 % New York 3,977 3,862 3.0 % Houston 3,960 3,394
16.7 % Orlando 3,369 3,007 12.0 % Austin 3,067 2,695
13.8 % Total same store NOI $ 91,268 $ 82,476 10.7 %
Average rental rate per unit Atlanta $ 1,177 $ 1,100 7.0 %
Washington, D.C. 1,851 1,795 3.1 % Dallas 1,111 1,037 7.1 % Tampa
1,309 1,216 7.6 % Charlotte 1,117 1,029 8.6 % New York 3,760 3,679
2.2 % Houston 1,278 1,182 8.1 % Orlando 1,436 1,346 6.7 % Austin
1,560 1,437 8.6 % Total average rental rate per unit 1,330 1,251
6.3 %
Table 4
Computation of Debt Ratios
(In thousands)
As of June 30, 2012
2011 Total real estate
assets per balance sheet $ 2,099,355 $ 2,025,740 Plus: Company
share of real estate assets held in unconsolidated entities 59,450
70,828 Company share of accumulated depreciation - assets held in
unconsolidated entities 10,284 11,611 Accumulated depreciation per
balance sheet 805,129 729,759 Total
undepreciated real estate assets
(A) $ 2,974,218 $
2,837,938 Total debt per balance sheet $ 967,582 $
1,031,878 Plus: Company share of third party debt held in
unconsolidated entities 49,531 59,601
Total debt (adjusted for joint venture partners' share of debt)
(B) $ 1,017,113 $ 1,091,479 Total debt
as a % of undepreciated real estate assets (adjusted for joint
venture partners' share of debt)
(B÷A) 34.2 %
38.5 % Total debt per balance sheet $ 967,582 $ 1,031,878
Plus: Company share of third party debt held in unconsolidated
entities 49,531 59,601 Preferred shares at liquidation value
43,392 43,392 Total debt and preferred equity
(adjusted for joint venture partners' share of debt)
(C) $
1,060,505 $ 1,134,871 Total debt and preferred
equity as a % of undepreciated real estate assets (adjusted for
joint venture partners' share of debt)
(C÷A) 35.7 %
40.0 %
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