Post Properties, Inc. (NYSE: PPS) announced today net income
available to common shareholders of $21.3 million, or $0.39 per
diluted share, for the third quarter of 2012, compared to net
income of $7.9 million, or $0.15 per diluted share, for the third
quarter of 2011.
Net income available to common shareholders for the nine months
ended September 30, 2012, was $62.3 million, or $1.15 per diluted
share, compared to net income of $16.3 million, or $0.32 per
diluted share, for the nine months ended September 30, 2011.
The Company’s net income available to common shareholders for
the nine months ended September 30, 2012 included other income of
$0.9 million relating primarily to a construction litigation
settlement and a gain of $6.1 million on the sale of an asset. 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 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 third quarter of 2012 was $41.6 million, or $0.76
per diluted share, compared to $26.7 million, or $0.52 per diluted
share, for the third quarter of 2011.
FFO for the nine months ended September 30, 2012, was $115.5
million, or $2.13 per diluted share, compared to $72.8 million, or
$1.44 per diluted share, for the nine months ended September 30,
2011. The Company’s reported FFO for the nine months ended
September 30, 2012, included the $0.9 million of other income
discussed above, or $0.02 per diluted share. The Company’s reported
FFO for the nine months ended September 30, 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, “Our business continues to be
robust, across-the-board. Core funds from operations grew on a
per-share basis in the third quarter by more than 20%. We put up
another strong quarter of same-store operating results, closed a
significant number of condominium sales, and commenced another
apartment development that should create value, while complementing
our high-quality portfolio. Finally, we were delighted that both of
the major ratings agencies have now upgraded our corporate credit
ratings to reflect the work we’ve done to strengthen the balance
sheet.”
Same Store Community Data
Average economic occupancy at the Company’s 50 same store
communities, containing 18,114 apartment units, was 96.6% and 96.4%
for the third quarter of 2012 and 2011, respectively.
Total revenues for the same store communities increased 6.7% and
total operating expenses increased 3.2% during the third quarter of
2012, compared to the third quarter of 2011, resulting in a 9.0%
increase in same store net operating income (“NOI”). The average
monthly rental rate per unit increased 6.4% during the third
quarter of 2012, compared to the third quarter of 2011.
On a sequential basis, total revenues for the same store
communities increased 2.7% and total operating expenses increased
3.6%, producing a 2.1% increase in same store NOI for the third
quarter of 2012, compared to the second quarter of 2012. On a
sequential basis, the average monthly rental rate per unit
increased 2.2%. For the third quarter of 2012, average economic
occupancy at the same store communities was 96.6%, compared to
96.1% for the second quarter of 2012.
For the nine months ended September 30, 2012, average economic
occupancy at the Company’s same store communities was 96.2%,
compared to 95.5% for the nine months ended September 30, 2011.
Total revenues for the same store communities increased 7.4% and
total operating expenses increased 3.4% during the first nine
months of 2012, compared to the first nine months of 2011,
resulting in a 10.1% increase in same store NOI. The average
monthly rental rate per unit increased 6.4% for the nine months
ended September 30, 2012, compared to the nine months ended
September 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
The Company today announced the development of its Post Soho
Square™ apartment community located in the Hyde Park submarket of
Tampa, Florida. Post Soho Square™ is planned to consist of 231
apartment units with an average unit size of approximately 880
square feet and approximately 10,556 square feet of retail space.
The community is expected to have a total estimated development
cost of approximately $39.8 million. The Company currently expects
the stabilized yield on the project will be approximately 6.25%,
after a 3% management fee and $300 per unit reserve, and based on
current market rents, without trending. The Company anticipates
that first apartment unit deliveries will occur in the first
quarter of 2014.
In September and October 2012, the Company began leasing units
at its Post South Lamar™ apartment community located in Austin,
Texas and at the third phase of its Post Midtown Square® apartment
community in Houston, Texas. As of October 26, 2012, Post South
Lamar™ and Post Midtown Square® - Phase III were 11.7% and 3.2%
leased, respectively.
In the aggregate, the Company has 2,046 units in seven apartment
communities, and approximately 45,085 square feet of retail space,
under development or in lease-up with a total estimated cost of
$340.2 million. The Company currently expects to utilize available
borrowings under its unsecured bank credit facilities, or other
indebtedness, as well as net proceeds from its on-going condominium
sales and its at-the-market common equity sales program to fund
future estimated construction expenditures.
Financing Activity
Corporate Credit Ratings
In September and October 2012, Standard and Poor’s Ratings
Services and Moody’s Investors Service raised the Company’s
corporate credit and senior unsecured credit ratings to BBB/Baa2,
from BBB-/Baa3, respectively, and revised the Company’s outlook to
stable, from positive.
As a result of these ratings actions, effective as of October 1,
2012, the interest rate on the Company’s $300 million unsecured
bank term loan was reduced by 0.20%, to LIBOR plus 1.70%. After
considering the interest rate swaps that hedge this debt, the
unsecured term loan now bears interest at a blended fixed rate of
approximately 3.24% (subject to any further adjustment based on
subsequent changes in the Company’s credit ratings). The interest
rates on the Company’s combined $330 million unsecured revolving
lines of credit were also reduced as of that date by 0.175%, to
LIBOR plus 1.225%, and the annual facility fee on the syndicated
revolving line of credit was reduced as of that date by 0.075%, to
0.225% per annum.
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 36.8% at September 30, 2012.
On October 10, 2012, the Company repaid $53.0 million of secured
mortgage indebtedness that became open for prepayment at par. The
stated interest rate on the note was 5.50%, and it was scheduled to
mature in January 2013.
As of October 26, 2012, the Company had cash and cash
equivalents of $3.9 million. Additionally, the Company had
outstanding borrowings of $8.3 million 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
During the third quarter of 2012, the Company completed the
sell-out of its initial at-the-market (ATM) common equity program
that provided for the sale of up to 4 million shares of common
stock. The Company also has available a second ATM common equity
program that provides for the sale of up to an additional 4 million
shares of common stock. As of October 26, 2012, no shares have been
issued under that program. The Company expects to continue to use
its ATM 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 are
dependent upon a variety of factors, including, among others,
market conditions, the trading price of the Company’s common stock,
the Company’s liquidity position and the potential use of
proceeds.
During the third quarter of 2012, the Company sold 136,500
shares under the initial ATM program, at an average gross price of
$51.24 per share, producing net proceeds of $6.8 million. Since
inception of this program, the Company has sold 4,000,000 shares,
at an average gross price of $41.48 per share, producing net
proceeds of $162.2 million.
Condominium Activity
During the third quarter of 2012, the Company closed 24
condominium units at its Austin and Atlanta condominium projects
for aggregate gross revenue of $23.5 million. As of October 26,
2012, the Company has, in the aggregate, closed 188 units at the
Austin and Atlanta condominium projects and has 22 units under
contract. There can be no assurance that condominium units under
contract will close.
The Company recognized net gains in FFO of $10.3 million, or
$0.19 per diluted share, from condominium sales activities during
the third quarter of 2012, compared to $2.6 million, or $0.05 per
diluted share, during the third 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 July 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").
Previously Current
Issued
Outlook
Outlook
Core FFO $2.22 - $2.24 $2.14 - $2.20 Condo FFO $0.55 - $0.57 $0.36
- $0.40 FFO $2.77 - $2.81 $2.50 - $2.60
Previously
Current Issued
Same Store
Assumptions
Outlook
Outlook
Revenue 6.90% - 7.10% 6.25% - 6.75% Operating expenses 4.60% -
4.80% 4.25% - 4.75% Net operating income (NOI) 8.20% - 8.60% 7.20%
- 8.20%
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
Wednesday, October 31, at 12:00 noon ET. The telephone numbers are
800-533-7954 for U.S. and Canada callers and 785-830-1924 for
international callers. The access code is 7431207. 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 2:00 p.m. ET on Wednesday,
October 31, and will be available until Tuesday, November 6, at
11:59 p.m. ET. The telephone numbers for the replay are
888-203-1112 for U.S. and Canada callers and 719-457-0820 for
international callers. The access code for the replay is 7431207. 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 22,218 apartment units in 60
communities, including 1,471 apartment units in four communities
held in unconsolidated entities and 2,046 apartment units in seven
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 Nine months ended
September 30, September 30, 2012
2011 2012 2011 OPERATING DATA Total
revenues $ 86,374 $ 78,612 $ 248,810 $ 227,567 Net income available
to common shareholders $ 21,285 $ 7,872 $ 62,320 $ 16,275 Funds
from operations available to common shareholders and unitholders
(Table 1) $ 41,644 $ 26,735 $ 115,521 $ 72,753 Weighted
average shares outstanding - diluted 54,392 51,053 54,001 50,259
Weighted average shares and units outstanding - diluted 54,536
51,215 54,149 50,426 PER COMMON SHARE DATA - DILUTED Net
income available to common shareholders $ 0.39 $ 0.15 $ 1.15 $ 0.32
Funds from operations available to common shareholders and
unitholders (Table 1) (1) $ 0.76 $ 0.52 $ 2.13 $ 1.44
Dividends declared $ 0.25 $ 0.22 $ 0.72 $ 0.62
1)
Funds from operations available to common
shareholders and unitholders per share was computed using weighted
average shares and units outstanding, including the impact of
dilutive securities totaling 277 and 402 for the three months and
340 and 397 for the nine months ended September 30, 2012 and 2011,
respectively. Additionally, diluted weighted average shares and
units included the impact of non-vested shares and units totaling
129 and 164 for the three months and 126 and 162 for the nine
months ended September 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 Nine
months ended September 30, September 30,
2012 2011 2012 2011
Net income available to common shareholders $ 21,285 $ 7,872
$ 62,320 $ 16,275 Noncontrolling interests - Operating Partnership
60 25 175 54 Depreciation on consolidated real estate assets, net
20,012 18,475 58,171 55,340 Depreciation on real estate assets held
in unconsolidated entities 287 363 910 1,084 Gains on sales of
depreciable real estate assets - unconsolidated entities -
- (6,055 ) -
Funds from operations
available to common shareholders and unitholders $
41,644 $ 26,735 $ 115,521 $ 72,753
Funds from
operations - per share and unit - diluted (1) $ 0.76 $ 0.52 $
2.13 $ 1.44
Weighted average shares and units outstanding
- diluted (1) 54,665 51,379 54,275
50,588
1)
Diluted weighted average shares and units
include the impact of dilutive securities totaling 277 and 402 for
the three months and 340 and 397 for the nine months ended
September 30, 2012 and 2011, respectively. Additionally, diluted
weighted average shares and units included the impact of non-vested
shares and units totaling 129 and 164 for the three months and 126
and 162 for the nine months ended September 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 Nine
months ended September 30, September 30,
June 30, September 30, September 30,
2012 2011 2012 2012 2011 Total
same store NOI $ 47,185 $ 43,271 $ 46,202 $ 138,453 $ 125,748
Property NOI from other operating segments 1,639
480 521 2,511 692
Consolidated property NOI 48,824 43,751
46,723 140,964 126,440
Add (subtract): Interest income 20 374 288 359 982 Other
revenues 209 243 206 637 686 Depreciation (20,334 ) (18,823 )
(19,497 ) (59,172 ) (56,383 ) Interest expense (11,816 ) (14,207 )
(11,103 ) (34,564 ) (43,119 ) Amortization of deferred financing
costs (667 ) (717 ) (698 ) (2,026 ) (2,085 ) General and
administrative (3,763 ) (3,970 ) (3,883 ) (11,931 ) (12,332 )
Investment and development (203 ) (239 ) (322 ) (1,005 ) (1,013 )
Other investment costs (547 ) (329 ) (306 ) (1,159 ) (1,278 ) Gains
on condominium sales activities, net 10,261 2,581 8,530 25,695
8,757 Equity in income of unconsolidated real estate entities, net
475 235 495 7,416 790 Other income (expense), net (137 ) (71 ) 737
444 230 Net loss on extinguishment of indebtedness -
- - (301 ) -
Net income $ 22,322 $ 8,828 $ 21,170 $
65,357 $ 21,675
Table 3
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Three months ended Q3 '12 Q3 '12
Q3 '12 September 30, September 30, June
30, vs. Q3 '11 vs. Q2 '12 % Same
2012 2011 2012 % Change %
Change Store NOI Rental and other revenues
Atlanta $ 20,982 $ 19,655 $ 20,320 6.8% 3.3% Washington, D.C.
13,283 12,837 13,108 3.5% 1.3% Dallas 16,261 15,101 15,720 7.7%
3.4% Tampa 8,851 8,226 8,628 7.6% 2.6% Charlotte 5,013 4,594 4,845
9.1% 3.5% New York 3,709 3,580 3,668 3.6% 1.1% Houston 3,446 3,135
3,359 9.9% 2.6% Orlando 2,777 2,583 2,711 7.5% 2.4% Austin
2,845 2,619 2,770 8.6% 2.7% Total rental and other
revenues 77,167 72,330 75,129 6.7% 2.7%
Property operating and maintenance expenses (exclusive of
depreciation and amortization) Atlanta 8,569 7,963 8,087 7.6% 6.0%
Washington, D.C. 4,157 4,384 3,946 (5.2)% 5.3% Dallas 6,996 6,691
6,655 4.6% 5.1% Tampa 3,275 3,153 3,257 3.9% 0.6% Charlotte 1,675
1,729 1,742 (3.1)% (3.8)% New York 1,612 1,561 1,607 3.3% 0.3%
Houston 1,407 1,388 1,439 1.4% (2.2)% Orlando 1,042 1,028 1,001
1.4% 4.1% Austin 1,249 1,162 1,193 7.5% 4.7%
Total 29,982 29,059 28,927 3.2% 3.6%
Net operating income Atlanta 12,413 11,692 12,233 6.2% 1.5% 26.4%
Washington, D.C. 9,126 8,453 9,162 8.0% (0.4)% 19.3% Dallas 9,265
8,410 9,065 10.2% 2.2% 19.6% Tampa 5,576 5,073 5,371 9.9% 3.8%
11.8% Charlotte 3,338 2,865 3,103 16.5% 7.6% 7.1% New York 2,097
2,019 2,061 3.9% 1.7% 4.4% Houston 2,039 1,747 1,920 16.7% 6.2%
4.3% Orlando 1,735 1,555 1,710 11.6% 1.5% 3.7% Austin 1,596
1,457 1,577 9.5% 1.2% 3.4% Total same store NOI $
47,185 $ 43,271 $ 46,202 9.0% 2.1% 100.0% Average
rental rate per unit Atlanta $ 1,214 $ 1,139 $ 1,187 6.6% 2.3%
Washington, D.C. 1,883 1,826 1,859 3.1% 1.3% Dallas 1,160 1,080
1,137 7.4% 2.1% Tampa 1,348 1,260 1,321 7.0% 2.0% Charlotte 1,167
1,071 1,129 9.0% 3.4% New York 3,824 3,715 3,777 2.9% 1.2% Houston
1,338 1,218 1,292 9.9% 3.6% Orlando 1,487 1,383 1,447 7.5% 2.7%
Austin 1,466 1,350 1,421 8.6% 3.2% Total average rental rate per
unit 1,370 1,288 1,341 6.4% 2.2%
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, 2012 2011
% Change Rental and other revenues Atlanta $ 61,273 $ 57,095
7.3% Washington, D.C. 39,245 37,263 5.3% Dallas 47,103 43,569 8.1%
Tampa 25,988 24,199 7.4% Charlotte 14,521 13,301 9.2% New York
10,979 10,513 4.4% Houston 10,050 9,116 10.2% Orlando 8,150 7,575
7.6% Austin 8,307 7,421 11.9% Total rental and other
revenues 225,616 210,052 7.4% Property
operating and maintenance expenses (exclusive of depreciation and
amortization) Atlanta 24,472 23,681 3.3% Washington, D.C. 12,126
12,080 0.4% Dallas 20,178 19,384 4.1% Tampa 9,703 9,203 5.4%
Charlotte 5,037 5,068 (0.6)% New York 4,905 4,632 5.9% Houston
4,052 3,976 1.9% Orlando 3,046 3,012 1.1% Austin 3,644
3,268 11.5% Total 87,163 84,304 3.4%
Net operating income Atlanta 36,801 33,414 10.1% Washington, D.C.
27,119 25,183 7.7% Dallas 26,925 24,185 11.3% Tampa 16,285 14,996
8.6% Charlotte 9,484 8,233 15.2% New York 6,074 5,881 3.3% Houston
5,998 5,140 16.7% Orlando 5,104 4,563 11.9% Austin 4,663
4,153 12.3% Total same store NOI $ 138,453 $ 125,748 10.1%
Average rental rate per unit Atlanta $ 1,190 $ 1,113
6.9% Washington, D.C. 1,861 1,806 3.0% Dallas 1,138 1,061 7.3%
Tampa 1,322 1,231 7.4% Charlotte 1,134 1,043 8.7% New York 3,782
3,691 2.5% Houston 1,298 1,194 8.7% Orlando 1,453 1,358 7.0% Austin
1,429 1,316 8.6% Total average rental rate per unit 1,344 1,263
6.4%
Table 4
Computation of Debt Ratios
(In thousands)
As of September 30, 2012
2011 Total real estate assets per balance sheet $ 2,177,745
$ 2,025,333 Plus: Company share of real estate assets held in
unconsolidated entities 59,177 70,419 Company share of accumulated
depreciation - assets held in unconsolidated entities 10,658 12,091
Accumulated depreciation per balance sheet 825,015
748,306 Total undepreciated real estate assets
(A) $
3,072,595 $ 2,856,149 Total debt per balance sheet $
1,036,492 $ 1,030,852 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) $
1,086,023 $ 1,090,453
Total debt as a % of undepreciated real
estate assets (adjusted for joint venture partners' share of debt)
(B÷A)
35.3% 38.2% Total debt per balance sheet $
1,036,492 $ 1,030,852 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)
$ 1,129,415 $ 1,133,845 Total debt and preferred equity as a
% of undepreciated real estate assets (adjusted for joint venture
partners' share of debt)
(C÷A) 36.8% 39.7%
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