PART I
The Company
Post Properties, Inc. and its subsidiaries develop, own and manage upscale multi-family apartment communities in selected markets in the
United States. As used in this report, the term Company includes Post Properties, Inc. and its subsidiaries, including Post Apartment Homes, L.P. (the Operating Partnership), unless the context indicates otherwise. The
Company, through its wholly-owned subsidiaries, is the general partner and owns a majority interest in the Operating Partnership which, through its subsidiaries, conducts substantially all of the on-going operations of the Company. At
December 31, 2012, approximately 31.5%, 22.6%, 13.9% and 10.1% (on a unit basis) of the Companys operating communities were located in the Atlanta, Georgia, Dallas, Texas, the greater Washington, D.C. and Tampa, Florida metropolitan
areas, respectively. At December 31, 2012, the Company had 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 at 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. The Company is a fully integrated organization with multi-family development, operations
and asset management expertise. The Company has approximately 625 employees, 16 of whom are parties to a collective bargaining agreement.
The Company is a self-administrated and self-managed equity real estate investment trust (a REIT). A REIT is a legal entity which holds real estate interests and is generally not subject to
federal income tax on the income it distributes to its shareholders.
The Companys and the
Operating Partnerships executive offices are located at 4401 Northside Parkway, Suite 800, Atlanta, Georgia 30327 and their telephone number is (404) 846-5000. Post Properties, Inc., a Georgia corporation, was incorporated on
January 25, 1984, and is the successor by merger to the original Post Properties, Inc., a Georgia corporation, which was formed in 1971. The Operating Partnership is a Georgia limited partnership that was formed in July 1993 for the purpose of
consolidating the operating and development businesses of the Company and the Post
®
apartment portfolio
described herein.
The Operating Partnership
The Operating Partnership, through the operating divisions and subsidiaries described below, is the entity through which all of the Companys operations are conducted. At December 31, 2012, the
Company, through wholly-owned subsidiaries, controlled the Operating Partnership as the sole general partner and as the holder of 99.7% of the common units in the Operating Partnership (the Common Units) and 100% of the preferred units
(the Perpetual Preferred Units). The other limited partners of the Operating Partnership who hold Common Units are those persons who, at the time of the Companys initial public offering, elected to hold all or a portion of their
interests in the form of Common Units rather than receiving shares of common stock. Holders of Common Units may cause the Operating Partnership to redeem any of their Common Units for, at the option of the Operating Partnership, either one share of
Common Stock or cash equal to the fair market value thereof at the time of such redemption. The Operating Partnership presently anticipates that it will cause shares of common stock to be issued in connection with each such redemption (as has been
done in all redemptions to date) rather than paying cash. With each redemption of outstanding Common Units for common stock, the Companys percentage ownership interest in the Operating Partnership will increase. In addition, whenever the
Company issues shares of common or preferred stock, the Company will contribute any net proceeds to the Operating Partnership, and the Operating Partnership will issue an equivalent number of Common Units or Perpetual Preferred Units, as
appropriate, to the Company.
As the sole shareholder of the Operating Partnerships sole general partner, the Company
has the exclusive power under the limited partnership agreement of the Operating Partnership to manage and conduct the business of the Operating Partnership, subject to the consent of a majority of the outstanding Common Units in connection with the
sale of all or substantially all of the assets of the Operating Partnership or in connection with a dissolution of the Operating Partnership. The board of directors of the Company manages the affairs of the Operating Partnership by directing the
affairs of the Company. In general, the Operating Partnership cannot be terminated, except in connection with a sale of all or substantially all of the assets of the Company, until January 2044 without the approval of each limited partner who
received Common Units of the Operating Partnership in connection with the Companys initial public offering. The Companys indirect limited and general partner interests in the Operating Partnership entitle it to share in cash
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Post Properties, Inc.
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1
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Post Apartment Homes, L.P.
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distributions from, and in the profits and losses of, the Operating Partnership in proportion to the Companys percentage interest in the Operating Partnership and indirectly entitle the
Company to vote on all matters requiring a vote of the Operating Partnership.
As part of the formation of the Operating
Partnership, a holding company, Post Services, Inc. (Post Services) was organized as a separate corporate subsidiary of the Operating Partnership. Through Post Services and its subsidiaries, the Operating Partnership owns and sells
for-sale condominium homes and provides other services to third parties. Post Services is a taxable REIT subsidiary as defined in the Internal Revenue Code of 1986, as amended. The Operating Partnership owns 100% of the voting and
nonvoting common stock of Post Services, Inc.
Business Strategy
The Companys mission is to deliver superior satisfaction and value to its residents, associates and investors, with a vision to be
the first choice in quality multi-family living. Key elements of the Companys business strategy, as may be adjusted from time to time in response to current conditions in the capital markets and the U.S. economy discussed later, are as
follows:
Investment, Disposition and Acquisition Strategy
The Companys investment, disposition and acquisition strategy is aimed to achieve a real estate portfolio that
has uniformly high quality, low average age properties and cash flow diversification. The Companys plans to achieve its objectives have included reducing its asset concentration in Atlanta, Georgia, while at the same time, building critical
mass in other core markets where it may currently lack the portfolio size to achieve operating efficiencies and the full value of the Post
®
brand.
The Company is focusing on a
limited number of major cities and has regional value creation capabilities. The Company has investment and development personnel to pursue acquisitions, development, rehabilitations and dispositions of apartment communities that are consistent with
its market strategy. The Companys value creation capabilities include the regional value creation teams in Atlanta, Georgia (focusing on the Southeast and the mid-Atlantic markets and New York, New York) and Dallas, Texas (focusing on the
Southwest, currently limited to the Texas market). The Company operates in nine markets as of December 31, 2012; however, the Companys first community in the Raleigh, North Carolina market is currently under construction and is expected
to begin delivering units in early 2013.
Key elements of the Companys investment and acquisition
strategy include instilling a disciplined team approach to development and acquisition decisions and selecting sites and properties in infill suburban and urban locations in strong primary markets that serve the higher-end multi-family consumer. The
Company plans to develop, construct and continually maintain and improve its apartment communities consistent with quality standards management believes are synonymous with the Post
®
brand. New acquisitions will be limited to properties that meet, or that are expected to be repositioned and improved to meet, its quality and location requirements.
Post
®
Brand Name Strategy
The Post
®
brand name has been cultivated for more than 40 years, and its promotion has been integral to the Companys success. Company management believes that the Post
®
brand name is synonymous with quality upscale apartment communities that are situated in desirable locations and
that provide a high level of resident service. The Company believes that it provides its residents with a high level of service, including attractive landscaping and numerous amenities, including controlled access, high-speed connectivity, on-site
business centers, on-site courtesy officers, urban vegetable gardens and fitness centers at a number of its communities.
Key
elements in implementing the Companys brand name strategy include extensively utilizing the trademarked brand name and coordinating its advertising programs to increase brand name recognition. During recent years, the Company implemented new
internet-based marketing, started new customer service programs designed to maintain high levels of resident satisfaction and provided employees and residents new opportunities for community involvement, all intended to enhance what it believes is a
valuable asset.
Service and Associate Development Strategy
The Companys service orientation strategy includes utilizing independent third parties to periodically measure resident satisfaction and providing performance incentives to its associates linked to
delivering a high level of service and enhancing resident satisfaction. The Company also achieves its objective by investing in the development and implementation of training programs focused on associate development, improving the quality of its
operations and the delivery of resident service.
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Post Properties, Inc.
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Post Apartment Homes, L.P.
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Operating Strategy
The Companys operating strategy includes striving to be an innovator and a leader in anticipating customer needs while achieving operating consistency across its properties. The Company also will
continue to explore opportunities to improve processes and technology that drive efficiency in its business.
Financing and Liquidity
Strategy
The Companys financing and liquidity strategy has been to maintain a strong balance sheet and to maintain
its investment grade credit rating. The Companys plans to achieve its objectives have included generally limiting total effective leverage (debt and preferred equity) as a percentage of undepreciated real estate assets to not more than 55%,
generally limiting variable rate indebtedness as a percentage of total indebtedness to not more than 25% and maintaining adequate liquidity through available cash and its unsecured lines of credit. At December 31, 2012, the Companys total
effective leverage (debt and preferred equity) as a percentage of undepreciated real estate assets, and its total variable rate indebtedness as a percentage of total indebtedness were below these percentages.
Operating Divisions
The major operating divisions of the Company include Post Apartment Management, Post Construction and Property Services, Post Investment
Group and Post Corporate Services. Each of these operating divisions is discussed below.
Post Apartment Management
Post Apartment Management is responsible for the day-to-day operations of all Post
®
communities including community leasing and property management. Post Apartment Management also conducts short-term
corporate apartment leasing activities and is the largest division in the Company (based on the number of employees).
Post Construction
and Property Services
Post Construction and Property Services are responsible for overseeing all
construction and physical asset maintenance activities of the Company for all Post
®
communities.
Post Investment Group
Post Investment Group is responsible for all development, acquisition, rehabilitation, disposition, for-sale (condominium) and asset
management activities of the Company. For development, this includes site selection, zoning and regulatory approvals and project design. This division is also responsible for apartment community acquisitions as well as property dispositions and
strategic joint ventures that the Company undertakes as part of its investment strategy. The division recommends and executes major value added renovations and redevelopments of existing communities.
Post Corporate Services
Post Corporate Services provides executive direction and control to the Companys other divisions and subsidiaries and has
responsibility for the creation and implementation of all Company financing, capital and risk management strategies. All accounting, management reporting, compliance, information systems, human resources, personnel recruiting, training and
development, legal, security, risk management and insurance services required by the Company and all of its affiliates are centralized in Post Corporate Services.
Operating Segments
The Post Apartment Management division of the Company
manages the owned apartment communities based on the operating segments associated with the various stages in the apartment ownership lifecycle. The Companys primary operating segments are described below. In addition to these segments, all
commercial properties and other ancillary service and support operations are reviewed and managed separately and in the aggregate by Company management.
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Fully stabilized (same store) communities - those apartment communities which have been stabilized (the earlier of the point at which a property
reaches 95% occupancy or one year after completion of construction) for both the current and prior year.
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Communities stabilized during prior year - communities which reached stabilized occupancy in the prior year.
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Development and lease-up communities - those communities that are under development, rehabilitation and in lease-up but were not stabilized by the
beginning of the current year, including communities that stabilized during the current year.
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Acquired communities - those communities acquired in the current or prior year.
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Post Properties, Inc.
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Post Apartment Homes, L.P.
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A summary of segment operating results for 2012, 2011 and 2010 is included in note 15 to the
Companys consolidated financial statements. Additionally, segment operating performance for such years is discussed in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations in this
annual report on Form 10-K.
Summary of Investment and Disposition Activity
During the five-year period from January 1, 2008 through December 31, 2012, the Company and its affiliates have developed and
completed 1,735 apartment units in five apartment communities and sold eight apartment communities containing an aggregate of 2,697 apartment units (including a joint venture interest in one apartment community consisting of 276 units in 2012).
During the same period, the Company acquired two apartment communities containing 587 units. The Company and its affiliates have sold apartment communities after holding them for investment periods that generally range up to twenty years after
acquisition or development. The following table shows a summary of the Companys development and sales activity during these periods.
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2012
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2011
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2010
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2009
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2008
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Units developed and completed
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-
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-
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396
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1,032
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307
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Units acquired
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360
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227
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-
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-
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-
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Units sold
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(278
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) (1)
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-
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-
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(1,325
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) (5)
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(1,093
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Total units completed and owned by the Company and its affiliates (including units held for sale) at year-end
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20,172
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(2)
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20,090
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(3)
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19,863
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(4)
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19,467
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(6)
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19,760
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(7)
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Total revenues from continuing operations (in thousands)
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$
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334,911
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$
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305,316
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$
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285,138
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$
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276,323
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$
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281,940
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(1)
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Includes a net decrease of two apartment units to reflect the conversion of two apartment units into commercial space.
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(2)
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Excludes 2,046 units currently under development (including 662 units in lease-up) at December 31, 2012.
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(3)
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Excludes 1,568 units under development at December 31, 2011.
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(4)
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Excludes 642 units under development at December 31, 2010.
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(5)
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Includes a net increase of three apartment units to reflect the addition of three apartment units.
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(6)
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Excludes 396 units under development at December 31, 2009.
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(7)
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Excludes 994 units under development and 435 units in lease-up at December 31, 2008.
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Current Development Activity
At December 31, 2012, the Company had 2,046 apartment units in seven communities under development or in lease-up. These communities are summarized in the table below ($ in millions except cost per
square foot data).
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Community
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Location
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Number
of Units
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Estimated
Average
Unit Size
Sq. Ft. (1)
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Estimated
Retail Sq.
Ft. (1)
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Estimated
Total
Cost (2)
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Estimated
Total
Cost Per
Sq. Ft. (3)
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Costs
Incurred
as of
12/31/2012
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Quarter of
First Units
Available
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Estimated
Quarter of
Stabilized
Occupancy (4)
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Percent
Leased (5)
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Post Carlyle Square, II
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Wash. DC
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344
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906
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$
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87.0
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$
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279
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$
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83.1
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2Q 2012
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4Q 2013
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55.8
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%
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Post South Lamar
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Austin, TX
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298
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852
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9,263
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41.7
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159
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36.8
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3Q 2012
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4Q 2013
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52.7
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%
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Post Midtown Square
®
, III
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Houston, TX
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124
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889
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10,358
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21.8
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181
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20.0
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4Q 2012
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4Q 2013
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53.2
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%
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Post Lake
®
at Baldwin
Park, III
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Orlando, FL
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410
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960
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58.6
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149
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30.2
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1Q 2013
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3Q 2014
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N/A
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Post Parkside at Wade
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Raleigh, NC
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397
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882
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14,908
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55.0
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151
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29.6
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1Q 2013
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3Q 2014
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N/A
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Post Richmond Avenue
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Houston, TX
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242
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857
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34.3
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165
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12.6
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4Q 2013
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4Q 2014
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N/A
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Post Soho Square
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Tampa, FL
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231
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880
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10,556
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39.8
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186
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7.3
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1Q 2014
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2Q 2015
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N/A
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Total
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2,046
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45,085
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$
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338.2
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$
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219.6
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(1)
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Square footage amounts are approximate. Actual square footage may vary.
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(2)
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To the extent that developments contain a retail component, total estimated cost includes estimated first generation tenant improvements and leasing
commissions.
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(3)
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The estimated total cost per square foot is calculated using net rentable residential and retail square feet, where applicable. Square footage
amounts used are approximate. Actual amounts may vary.
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(4)
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The Company defines stabilized occupancy as the earlier to occur of (i) the attainment of 95% physical occupancy on the first day of any month
or (ii) one year after completion of construction.
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(5)
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Represents unit status as of February 15, 2013.
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In addition, the Company may commence development activities at more of its existing land sites over the next year or so. Management believes, however, that the timing of such development starts will
depend largely on a continued favorable outlook for multi-family apartment rentals and capital market conditions and the U.S. economy. Until such time as additional development activities commence or certain land positions are sold, the Company
expects that operating results will be adversely impacted by costs of carrying land held for future investment or sale.
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Post Properties, Inc.
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4
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Post Apartment Homes, L.P.
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Condominium Activities
At December 31, 2012, the Company was selling for-sale condominium homes in two communities. The Four Seasons Private Residences, Austin (the Austin Condominium Project) consists of 148
homes, of which three homes were under contract and 129 units were closed as of February 15, 2013. The Companys other condominium project, The Ritz-Carlton Residences, Atlanta Buckhead (the Atlanta Condominium Project),
consists of 129 homes. There were 19 units under contract and 85 units were closed at the Atlanta Condominium Project at February 15, 2013. Units under contract listed above include all units currently under contract. However, the
Company has experienced contract terminations in prior condominium projects and may experience additional terminations in connection with existing projects. Accordingly, there can be no assurance that units under contract for sale will actually
close. The Company recognized impairment charges in 2010 and prior years to write-down the Companys investments in these two properties to their estimated fair value. These impairment charges are discussed further in Item 7,
Managements Discussion and Analysis of Financial Condition and Results of Operations in this annual report on Form 10-K.
Competition
All of the
Companys apartment and for-sale (condominium) communities are located in developed markets that include other upscale apartments and for-sale (condominium) projects owned by numerous public and private companies. Some of these companies may
have substantially greater resources and greater access to capital than the Company, allowing them to grow at rates greater than the Company. The number of competitive upscale apartment and for-sale (condominium) properties and companies in a
particular market could have a material effect on the Companys ability to lease apartment units at its apartment communities, including any newly developed or acquired communities, and on the rents charged, and could have a material effect on
the Companys ability to sell for-sale (condominium) units and on the selling prices of such units. In addition, other forms of residential properties, including single family housing and town homes, provide housing alternatives to potential
residents of upscale apartment communities or potential purchasers of for-sale (condominium) units.
The Company competes for
residents in its apartment communities based on its high level of resident service, the quality of its apartment communities (including its landscaping and amenity offerings) and the desirability of its locations. Resident leases at its apartment
communities are priced competitively based on market conditions, supply and demand characteristics, and the quality and resident service offerings of its communities. The Company does not seek to compete on the basis of providing the low-cost
solution for all residents.
Americans with Disabilities Act and Fair Housing Act
The Companys multi-family housing communities and any newly acquired multi-family housing communities must comply with Title III of
the Americans with Disabilities Act (the ADA) to the extent that such properties are public accommodations and/or commercial facilities as defined by the ADA. Compliance with the ADA requirements could require
removal of structural barriers to handicapped access in certain public areas of the Companys multi-family housing communities where such removal is readily achievable. The ADA does not, however, consider residential properties, such as
multi-family housing communities, to be public accommodations or commercial facilities, except to the extent portions of such facilities, such as the leasing office, are open to the public. The Company must also comply with the Fair Housing Act (the
FHA), which requires that apartment communities first occupied after March 13, 1991 be accessible to persons with disabilities.
Noncompliance with the FHA and ADA could result in the imposition of fines, awards of damages to private litigants, payment of attorneys fees and other costs to plaintiffs, substantial litigation
costs and substantial costs of remediation. Compliance with the FHA could require removal of structural barriers to handicapped access in a community, including the interiors of multi-family housing units covered under the FHA. In addition to the
ADA and FHA, state and local laws exist that impact the Companys multi-family housing communities with respect to access thereto by persons with disabilities. Further, legislation or regulations adopted in the future, as well as
interpretations of the ADA and FHA by courts, may impose additional burdens or restrictions on the Company with respect to improved access by persons with disabilities. The ADA, FHA, or other existing or new legislation may require the Company to
modify its existing properties. These laws may also restrict renovations by requiring improved access to such buildings or may require the Company to add other structural features that increase its construction costs.
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Post Properties, Inc.
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In recent years, there has been heightened scrutiny of the multi-family housing industry for
compliance with the requirements of the FHA and ADA. In September 2010, the United States Department of Justice (the DOJ) filed a lawsuit against the Company in the United States District Court for the Northern District of Georgia. The
suit alleges various violations of the FHA and the ADA at properties designed, constructed or operated by the Company in the District of Columbia, Virginia, Florida, Georgia, New York, North Carolina and Texas. The plaintiff seeks statutory damages
and a civil penalty in unspecified amounts, as well as injunctive relief that includes retrofitting apartments and public use areas to comply with the FHA and the ADA and prohibiting construction or sale of noncompliant units or complexes. The
Company filed a motion to transfer the case to the United States District Court for the District of Columbia, where a previous civil case involving alleged violations of the FHA and ADA by the Company was filed and ultimately dismissed. On
October 29, 2010, the United States District Court for the Northern District of Georgia issued an opinion finding that the complaint shows that the DOJs claims are essentially the same as the previous civil case, and, therefore, granted
the Companys motion and transferred the DOJs case to the United States District Court for the District of Columbia. Limited discovery is proceeding. Under the Courts scheduling order, the deadline for completion of discovery is
November 2013 and briefing of any dispositive motions would be accomplished by March 2014. Due to the preliminary nature of the litigation, it is not possible to predict or determine the outcome of the legal proceeding, nor is it possible to
estimate the amount of loss, if any, that would be associated with an adverse decision.
The Company cannot ascertain the
ultimate cost of compliance with the ADA, FHA or other similar state and local legislation and such costs are not likely covered by insurance policies. The cost associated with ongoing litigation or compliance could be substantial and could
adversely affect the Companys business, results of operations, cash flows and financial condition.
Environmental Regulations
The Company is subject to federal, state and local environmental laws, ordinances, and regulations that apply to the
development of real property, including construction activities, the ownership of real property, and the operation of multi-family apartment and for-sale (condominium) communities.
The Company has instituted a policy that requires an environmental investigation of each property that it considers for purchase or that
it owns and plans to develop. The environmental investigation is conducted by a qualified third-party environmental consultant in accordance with recognized industry standards. The environmental investigation report is reviewed by the Company and
counsel prior to purchase and/or development of any property. If the environmental investigation identifies evidence of potentially significant environmental contamination that merits additional investigation, sampling of the property is performed
by the environmental consultant.
If necessary, remediation or mitigation of contamination, including removal of contaminated
soil and/or underground storage tanks, placement of impervious barriers, or creation of land use or deed restrictions, is undertaken either prior to development or at another appropriate time. When performing remediation activities, the Company is
subject to a variety of environmental requirements. In some cases, the Company obtains state approval of the selected remediation and mitigation measures by entering into voluntary environmental cleanup programs administered by state agencies.
In developing properties and constructing apartment and for-sale (condominium) communities, the Company utilizes independent
environmental consultants to determine whether there are any flood plains, wetlands or other environmentally sensitive areas that are part of the property to be developed. If flood plains are identified, development and construction work is planned
so that flood plain areas are preserved or alternative flood plain capacity is created in conformance with federal and local flood plain management requirements. If wetlands or other environmentally sensitive areas are identified, the Company plans
and conducts its development and construction activities and obtains the necessary permits and authorizations in compliance with applicable legal standards. In some cases, however, the presence of wetlands and/or other environmentally sensitive
areas could preclude, severely limit, or otherwise alter the proposed site development and construction activities.
Storm
water discharge from a construction site is subject to the storm water permit requirements mandated under the Clean Water Act. In most jurisdictions, the state administers the permit programs. The Company currently anticipates that it will be able
to obtain and materially comply with any storm water permits required for new development. The Company has obtained and is in material compliance with the construction site storm water permits required for its existing development activities.
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The Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) and comparable state laws subject the owner or operator of real property or a facility and persons who arranged for off-site disposal activities to claims or liability for the costs of removal or remediation of hazardous
substances that are released at, in, on, under, or from real property or a facility. In addition to claims for cleanup costs, the presence of hazardous substances on or the release of hazardous substances from a property or a facility could result
in a claim by a private party for personal injury or property damage or could result in a claim from a governmental agency for other damages, including natural resource damages. Liability under CERCLA and comparable state laws can be imposed on the
owner or the operator of real property or a facility without regard to fault or even knowledge of the release of hazardous substances and other regulated materials on, at, in, under, or from the property or facility. Environmental liabilities
associated with hazardous substances also could be imposed on the Company under other applicable environmental laws, such as the Resource Conservation and Recovery Act (and comparable state laws), or common-law principles. The presence of hazardous
substances in amounts requiring response action or the failure to undertake necessary remediation may adversely affect the owners ability to use or sell real estate or borrow money using such real estate as collateral.
Various environmental laws govern certain aspects of the Companys ongoing operation of its communities. Such environmental laws
include those regulating the existence of asbestos-containing materials in buildings, management of surfaces with lead-based paint (and notices to residents about the lead-based paint), use of active underground petroleum storage tanks, and
waste-management activities. The failure to comply with such requirements could subject the Company to a government enforcement action and/or claims for damages by a private party.
The Company has not been notified by any governmental authority of any material noncompliance, claim or liability in connection with
environmental conditions associated with any of its apartment and for-sale (condominium) communities. The Company has not been notified of a material claim for personal injury or property damage by a private party relating to any of its apartment
and for-sale (condominium) communities in connection with environmental conditions. The Company is not aware of any environmental condition with respect to any of its apartment and for-sale (condominium) communities that could be considered to be
material.
It is possible, however, that the environmental investigations of the Companys properties might not have
revealed all potential environmental liabilities associated with the Companys real property and its apartment and for-sale (condominium) communities or the Company might have underestimated any potential environmental issues identified in the
investigations. It is also possible that future environmental laws, ordinances, or regulations or new interpretations of existing environmental laws, ordinances, or regulations will impose material environmental liabilities on the Company; the
current environmental conditions of properties that the Company owns or operates will be affected adversely by hazardous substances associated with other nearby properties or the actions of third parties unrelated to the Company; or our residents
and/or commercial tenants may engage in activities prohibited by their leases or otherwise expose the Company to liability under applicable environmental laws, ordinances or regulations. The costs of defending any future environmental claims,
performing any future environmental remediation, satisfying any such environmental liabilities or responding to any changed environmental conditions could materially adversely affect the Companys financial conditions and results of operations.
Where You Can Find More Information
The Company makes its annual report on Form l0-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to such reports filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, available (free of charge) on or through its Internet website, located at http://www.postproperties.com, as soon as reasonably practicable after they are filed with or furnished to the SEC.
ITEM 1A.
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RISK FACTORS (In thousands, except per share amounts)
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The following risk factors apply to the Company and the Operating Partnership. All indebtedness described in the risk factors has been incurred by the Operating Partnership or one of its subsidiaries.
Unfavorable changes in apartment markets and economic conditions could adversely affect occupancy levels and rental rates.
Market and economic conditions in the various metropolitan areas of the United States where the Company operates,
particularly Atlanta, Georgia, Dallas, Texas, Tampa, Florida and the greater Washington, D.C. area where a substantial
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majority of the Companys apartment communities are located, may significantly affect occupancy levels and rental rates and therefore profitability. A lack of economic growth may have a
disproportionate impact on the Company as discussed above. In general, factors that may adversely affect market and economic conditions include the following:
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the economic climate, which may be adversely impacted by a reduction in jobs, industry slowdowns and other factors;
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local conditions, such as oversupply of, or reduced demand for, apartment homes;
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declines in household formation;
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favorable residential mortgage rates;
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rent control or stabilization laws, or other laws regulating rental housing, which could prevent the Company from raising rents to offset increases
in operating costs; and
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competition from other available apartments and other housing alternatives and changes in market rental rates.
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Any of these factors would adversely affect the Companys ability to achieve desired operating results from its communities.
Development and construction risks could impact the Companys profitability.
The Company may develop and construct apartment communities. The Company is currently developing its Post South
Lamar apartment community in Austin, Texas, its Post Parkside at Wade apartment community in Raleigh, North Carolina, a second phase of its Post Carlyle Square apartment community in Alexandria, Virginia, a third phase of its Post
Midtown Square
®
apartment community in Houston, Texas, a third phase of its Post Lake
®
at Baldwin Park apartment community in Orlando, Florida, its Post Richmond Avenue community in Houston, Texas
and its Post Soho Square community in Tampa, Florida. Development activities may be conducted through wholly-owned affiliated companies or through joint ventures with unaffiliated parties. The Companys development and construction
activities may be exposed to the following risks:
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the Company may be unable to obtain, or face delays in obtaining, necessary zoning, land-use, building, occupancy, and other required governmental
permits and authorizations, which could result in increased development costs;
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the Company may incur construction costs for a property that exceed original estimates due to increased materials, labor or other costs or
unforeseen environmental conditions, which could make completion of the property uneconomical, and the Company may not be able to increase rents to compensate for the increase in construction costs;
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the Company may abandon development opportunities that it has already begun to explore, and it may fail to recover expenses already incurred in
connection with exploring those opportunities, causing potential impairment losses to be incurred;
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the Company has at times been and may continue to be unable to complete construction and lease-up of a community on schedule and meet financial
goals for development projects;
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because occupancy rates and rents at a newly developed community may fluctuate depending on a number of factors, including market and economic
conditions, the Company may be unable to meet its profitability goals for that community; and
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land costs and construction costs have been volatile in the Companys markets and may continue to be volatile in the future and, in some cases,
the costs of upgrading acquired communities have, and may continue to, exceed original estimates and the Company may be unable to charge rents that would compensate for these increases in costs.
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Possible difficulty of selling apartment communities could limit the Companys operational and financial flexibility.
Purchasers may not be willing to pay acceptable prices for apartment communities that the Company wishes to sell. A weak
market may limit the Companys ability to change its portfolio promptly in response to changing economic conditions. Furthermore, general uncertainty in the real estate markets may result in conditions where the pricing of certain real estate
assets may be difficult due to uncertainty with respect to capitalization rates and valuations, among other things, which may add to the difficulty of potential buyers to obtain financing to acquire such properties on favorable terms or cause
potential buyers to not complete acquisitions of such properties. Also, if the Company is unable to sell apartment communities or if it can only sell apartment communities at prices lower than are generally acceptable, then the Company may have to
take on additional leverage in order to provide adequate capital to execute its development
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and construction and acquisitions strategy. Furthermore, a portion of the proceeds from the Companys overall property sales in the future may be held in escrow accounts in order for some
sales to qualify as like-kind exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the Code) so that any related capital gain can be deferred for federal income tax purposes. As a result, the Company may
not have immediate access to all of the cash flow generated from property sales.
The Company is subject to increased
exposure to economic and other competitive factors due to the concentration of its investments in certain markets.
At
December 31, 2012, approximately 31.5%, 22.6%, 13.9% and 10.1% (on a unit basis) of the Companys operating communities were located in the Atlanta, Georgia, Dallas, Texas, greater Washington, D.C. and Tampa, Florida metropolitan areas,
respectively. The Companys strategy in recent years has focused on reducing its concentration in Atlanta, Georgia and building critical mass in fewer markets. The Company is currently subject to increased exposure to economic and other
competitive factors specific to its markets within these geographic areas.
Economic slowdowns in the U.S. and declines in
the condominium and single family housing markets may negatively affect the Companys financial condition and results of operations.
There was a significant decline in economic growth, both in the U.S. and globally, that began in 2008 and continued through 2009. Although the real estate development industry and the U.S. economy has
seen gradual improvement beginning in 2010, there can be no assurance that market conditions will remain or improve further in the near future. Negative trends may materially and adversely affect the Companys revenues from its apartment
communities. The Companys apartment communities compete with lower cost apartments in most markets. The Companys ability to lease its units in these communities at favorable rates, or at all, is dependent upon the overall level of
spending, which is affected by, among other things, employment levels, recession, personal debt levels, conditions in the housing market, stock market volatility and uncertainty about the future. The Company may be disproportionately vulnerable to
reduced spending arising from any economic downturn as compared to owners of lower cost apartment communities. The rental of excess for-sale condominiums and single family homes in an already competitive multi-family market may also reduce the
Companys ability to lease its apartment units and depress rental rates in certain markets.
The excess in for-sale
condominiums in the Companys markets also affects the Companys profits in its for-sale condominium business. The market for the Companys for-sale condominium homes depends on an active demand for new for-sale housing and high
consumer confidence. Decline in demand, exacerbated by tighter credit standards for home buyers, has led to an oversupply of new for-sale housing in recent years that has affected the price at which the Company is able to sell condominium homes. The
Company cannot predict how long demand and other factors in the real estate market will remain at current levels, but if the markets do not significantly improve, the moderate pace of condominium sales and closings could remain during 2013.
Failure to generate sufficient cash flows could affect the Companys debt financing and create refinancing risk.
The Company is subject to the risks normally associated with debt financing, including the risk that its cash flow will
be insufficient to make required payments of principal and interest. Although the Company may be able to use cash flow generated by its apartment communities or through the sale of for-sale (condominium) housing to make future principal payments, it
may not have sufficient cash flow available to make all required principal payments and still meet the distribution requirements that the Company must satisfy in order to maintain its status as a real estate investment trust or REIT for
federal income tax purposes. The following factors, among others, may affect the cash flows generated by the Companys apartment communities and through the sale of for-sale (condominium) housing:
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the national and local economies;
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local real estate market conditions, such as an oversupply of apartment homes or competing for-sale (condominium) housing;
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the perceptions by prospective residents or buyers of the safety, convenience and attractiveness of the Companys communities and the
neighborhoods in which they are located;
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the Companys ability to provide adequate management, maintenance and insurance for its apartment communities;
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rental expenses for its apartment communities, including real estate taxes, insurance and utilities; and
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the level of mortgage interest rates and its impact on the demand for prospective buyers of for-sale (condominium) housing.
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Expenses associated with the Companys investment in apartment communities, such as
debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in cash flows from operations from that community. If a community is mortgaged to secure payment of debt and the Company
is unable to make the mortgage payments, the Company could sustain a loss as a result of foreclosure on the community or the exercise of other remedies by the mortgagor. The Company is likely to need to refinance at least a portion of its
outstanding debt as it matures. There is a risk that the Company may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of the existing debt. As of December 31, 2012, the Company
had outstanding mortgage indebtedness of $402,464, senior unsecured notes of $400,000, unsecured term loan indebtedness of $300,000 and no outstanding borrowings on its unsecured revolving lines of credit. None of the Companys indebtedness
matures in 2013 or 2014.
The Company could become more highly leveraged, which could result in an increased risk of
default and in an increase in its debt service requirements.
The Companys stated goal is to generally maintain
total effective leverage (debt and preferred equity) as a percentage of undepreciated real estate assets to not more than 55%, to generally limit variable rate indebtedness as a percentage of total indebtedness to not more than 25% and to maintain
adequate liquidity through the Companys available cash and unsecured lines of credit. At December 31, 2012, the Companys total effective leverage (debt and preferred equity) as a percentage of undepreciated real estate assets and
the Companys total variable rate indebtedness as a percentage of total indebtedness were below these percentages. If management adjusts the Companys stated goal in the future, the Company could become more highly leveraged, resulting in
an increase in debt service that could adversely affect funds from operations, adversely affect the Companys ability to make expected distributions to its shareholders and the Operating Partnerships ability to make expected distributions
to its limited partners and result in an increased risk of default on the obligations of the Company and the Operating Partnership.
In addition, the Companys ability to incur debt is limited by covenants in bank and other credit agreements and in the Companys outstanding senior unsecured notes. The Company manages its debt
to be in compliance with its stated policy and with its debt covenants, but the Company may increase the amount of outstanding debt at any time without a concurrent improvement in the Companys ability to service the additional debt.
Accordingly, the Company could become more leveraged, resulting in an increased risk of default of its debt covenants or on its debt obligations and in an increase in debt service requirements. Any covenant breach or significant increase in the
Companys leverage could materially adversely affect the Companys financial condition and ability to access debt and equity capital markets in the future.
A downgrade in the credit rating of the Companys securities could materially adversely affect the Companys business and financial condition.
The Companys senior unsecured debt is rated investment grade by Standard & Poors Corporation and Moodys
Investors Service. In determining the Companys credit ratings, the rating agencies consider a number of both quantitative and qualitative factors. These factors include earnings, fixed charges such as interest, cash flows, total debt
outstanding, total secured debt, off balance sheet obligations and other commitments, total capitalization and various ratios calculated from these factors. The rating agencies also consider predictability of cash flows, business strategy and
diversity, property development risks, industry conditions and contingencies. Therefore, deterioration in the Companys operating performance could also cause the Companys investment grade rating to come under pressure.
Standard & Poors Ratings Service corporate credit rating on the Company is BBB with a stable outlook. The Companys corporate credit rating at Moodys Investor Service is currently Baa2 with a stable outlook. There can be no
assurance that the Company will be able to maintain its credit ratings or that the Companys credit ratings will not be lowered or withdrawn in their entirety. A negative change in the Companys ratings outlook or any downgrade in the
Companys current investment-grade credit ratings by the Companys rating agencies could adversely affect the Companys cost and/or access to sources of liquidity and capital. Additionally, a downgrade could, among other things,
significantly increase the costs of borrowing under the Companys unsecured credit lines and bank term loan, adversely impact the Companys ability to obtain unsecured debt or refinance its unsecured credit facilities on competitive terms
in the future, or require the Company to take certain actions to support its obligations, any of which would adversely affect the Companys business and financial condition.
If the Company or its subsidiaries defaults on an obligation to repay outstanding indebtedness when due, the default could trigger a
cross-default or cross-acceleration under other indebtedness.
If the Company or one of its subsidiaries defaults on its
obligations to repay outstanding indebtedness, the default could cause a cross-default or cross-acceleration under other indebtedness and off-balance sheet derivative obligations. A default under the agreements governing the Companys or its
subsidiaries indebtedness, including a default under
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mortgage indebtedness, revolving lines of credit, bank term loan, or the indenture for the Companys outstanding senior notes, that is not waived by the required lenders or holders of
outstanding notes, could trigger cross-default or cross-acceleration provisions under one or more agreements governing the Companys indebtedness and off-balance sheet derivative obligations, which could cause an immediate default or allow the
lenders or counterparties to declare all funds borrowed thereunder to be due and payable.
Covenants of the Companys
or its subsidiaries mortgage indebtedness place restrictions on the Company, which reduce operational flexibility and create default risks.
Mortgages on the Companys or its subsidiaries properties may contain customary negative covenants that, among other things, limit the property owners ability, without the prior consent
of the lender, to further mortgage the property and to reduce or change insurance coverage. If the Company or its subsidiaries were to breach any debt covenants and did not cure the breach within any applicable cure period, its lenders could require
the Company to repay the debt immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. In addition, if a property is mortgaged to secure debt, and the Company is unable to
meet the mortgage payments, the holder of the mortgage could foreclose on the property, resulting in loss of income and asset value. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness could materially adversely
affect the Companys financial condition and results of operations.
Debt financing may not be available and equity issuances could be
dilutive to the Companys shareholders.
The Companys ability to execute its business strategy depends on its
access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including common and preferred equity.
Debt financing may not be available in sufficient amounts, or on favorable terms or at all. Uncertainty in the credit markets may
negatively impact the Companys ability to borrow and refinance existing borrowings at acceptable rates or at all. In addition, if the Company issues additional equity securities through its at-the-market offering program or in one or more
registered offerings to finance developments and acquisitions instead of incurring debt, the interests of existing shareholders could be diluted.
The Company may not be able to maintain its current dividend level.
The
Company pays regular quarterly dividends to holders of shares of its common stock. Commencing with the dividend paid in July 2012, the Company established a quarterly dividend payment rate to common shareholders of $0.25 per share, previously $0.22
per share. To the extent the Company continues to pay dividends at the current dividend rate, it expects to use cash flows from operations reduced by annual operating capital expenditures to fund the dividend payments to common and preferred
shareholders in 2013. The Company expects to use cash and cash equivalents and, if its net cash flows from operations are not sufficient to meet its anticipated dividend payment rate, line of credit borrowings to fund dividend payments in 2013.
The Companys board of directors reviews the dividend quarterly. The Companys dividends can be paid as a
combination of cash and stock in order to satisfy the annual distribution requirements applicable to REITs. To the extent that management considers it advisable to distribute gains from any asset sales to shareholders in the form of a special
dividend, the Company may pay a portion of such dividend in the form of stock to preserve liquidity.
Future dividend payments
by the Company will be paid at the discretion of the board of directors. In evaluating whether to pay any dividends and the level and form of such dividends, the Company anticipates that the board of directors will consider, among other factors, the
following:
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funds from our operations, the Companys financial condition and capital requirements in light of the current economic climate and the
resulting impact on the Companys business, which may persist in 2013;
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the annual distribution requirements under the REIT provisions of the Code;
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the impact of the payment of any special dividend, including any additional shares issued in connection with a special dividend paid in the form of
stock;
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the impact of any additional shares issued in connection with the Companys at-the-market common equity program; and
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other factors that the board of directors deems relevant.
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There can be no assurance that the current dividend level will be maintained in future periods.
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Unfavorable changes in for-sale (condominium) housing in the Companys markets and
general economic conditions could adversely affect the profitability of the Companys for-sale condominium housing business.
Units in the Companys The Four Seasons Private Residences luxury condominium project in Austin, Texas, (the Austin Condominium Project), and The Ritz-Carlton Residences, Atlanta,
Buckhead luxury condominium project, (the Atlanta Condominium Project), became available in the second and third quarters of 2010, respectively. As of February 15, 2013, 129 units had closed, three units were under contract and 16
units remained available for sale at the Austin Condominium Project and 85 units had closed, 19 units were under contract and 25 units remained available for sale at the Atlanta Condominium Project.
The Companys ability to successfully sell remaining for-sale housing in its portfolio and achieve managements economic goals
in connection with such sales is subject to various risks and challenges, which if they materialize, may have an adverse effect on the Companys business, results of operations and financial condition. In general, profits realized to date from
the Companys sale of condominium homes have been more volatile than the Companys core apartment rental operations. In recent years, there has been weakness in the condominium and single family housing markets due to elevated supplies of
such assets, weak consumer confidence, tighter credit standards for home purchases, which the Company believes has negatively impacted the ability of prospective condominium buyers to qualify for mortgage financing, and general weakness in the
residential housing market in the U.S. Further, the instability in the global capital markets and a significant decline in economic growth in the U.S. economy in 2008 and 2009 resulted in a decline in demand in the for-sale housing markets. In
recent years, pressure on demand, fueled by tighter credit standards for home buyers, led to an oversupply of new for-sale housing that affected the price at which the Company is able to sell condominium homes. In addition, if the Company is unable
to sell condominium units, the expenses and carrying costs associated with the ownership of such units continue which could cause the Company to realize losses in future periods. In an effort to reduce its unsold inventory, the Company implemented
reduced pricing programs in prior years which resulted in lower condominium profits.
As a result of these factors, the
moderate pace of condominium closings continued in 2012. The Company cannot predict how long demand and other factors in the real estate market will remain at current levels, but if the markets continue to be weak or deteriorate further, the
moderate pace of condominium sales and closings will remain during 2013. There can be no assurance of the amount or pace of future for-sale condominium sales and closings. To the extent that condominium pricing pressure continues or worsens or the
Company is required to hold unsold units longer than anticipated (requiring the Company to continue to pay on-going carrying costs), the profitability of these projects may be materially adversely affected and it could cause the Company to realize
impairment losses in future periods.
The Companys real estate assets may be subject to impairment charges.
The Company continually evaluates the recoverability of the carrying value of its real estate assets under generally accepted accounting
principles. Factors considered in evaluating impairment of the Companys existing multi-family real estate assets held for investment include significant declines in property operating profits, recurring property operating losses and other
significant adverse changes in general market conditions that are considered permanent in nature. Generally, a multi-family real estate asset held for investment is not considered impaired if the undiscounted, estimated future cash flows of the
asset over its estimated holding period are in excess of the assets net book value at the balance sheet date. Assumptions used to estimate annual and residual cash flow and the estimated holding period of such assets require the judgment of
management.
In addition, for-sale condominium assets are evaluated for impairment using the methodology for assets held for
sale (using discounted projected future cash flows), as construction of these assets is complete and units are ready for their intended use. Thus, should the Companys estimates of discounted future cash flows from completed condominium assets
be deemed insufficient to recover the carrying value of those assets in future periods, the Company may be required to recognize future impairment losses on those assets in such periods.
The Company recorded aggregate impairment charges of $34,691 in 2010 to write down the carrying value of its investment in the Austin
Condominium Project. The Company also recorded non-cash impairment charges of $400 in 2010 associated with a land parcel in Tampa, Florida. Additionally, the Company recorded aggregate impairment charges of $89,883 in 2010 and 2009 to write-down the
carrying value of its investment in the Atlanta Condominium Project and a parcel of adjacent land.
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There can be no assurance that the Company will not take additional charges in the future
related to the impairment of the Companys assets. The Companys management believes it has applied reasonable estimates and judgments in determining the proper classification of its real estate assets. However, these estimates require the
use of estimated market values, which are currently difficult to assess. Should external or internal circumstances change requiring the need to shorten the holding periods or adjust the estimated future cash flows of certain of its assets, the
Company could be required to record additional impairment charges. Any future impairment could have a material adverse effect on the Companys results of operations and funds from operations in the period in which the charge is taken.
Increased competition and increased affordability of residential homes could limit the Companys ability to retain
its residents, lease apartment homes or increase or maintain rents.
The Companys apartment communities compete with
numerous housing alternatives in attracting residents, including other apartment communities and single-family rental homes, as well as owner occupied single and multi-family homes. Competitive housing in a particular area and the increasing
affordability of owner occupied single and multi-family homes caused by declining housing prices, mortgage interest rates and government programs to promote home ownership could adversely affect the Companys ability to retain its residents,
lease apartment homes and increase or maintain rents.
Limited investment opportunities could adversely affect the Companys growth.
The Company expects that other real estate investors will compete to acquire existing properties and to develop new
properties. These competitors include insurance companies, pension and investment funds, developer partnerships, investment companies and other multi-family REITs. This competition could increase prices for properties of the type that the Company
would likely pursue, and competitors may have greater resources than the Company. As a result, the Company may not be able to make attractive investments on favorable terms, which could adversely affect its growth.
The Company could be negatively impacted by the condition of Fannie Mae or Freddie Mac and by changes in government support for
multi-family housing.
Fannie Mae and Freddie Mac are a major source of financing for multi-family real estate in the
United States. The Company utilizes loan programs sponsored by these entities as a key source of capital to finance its growth and its operations. In September 2008, the U.S. government assumed control of Fannie Mae and Freddie Mac and placed both
companies into a government conservatorship under the Federal Housing Finance Agency. In December 2009, the U.S. Treasury increased its financial support for these conservatorships. In February 2011, the Obama administration released its blueprint
for winding down Fannie Mae and Freddie Mac and for reforming the system of housing finance. Since that time, members of Congress have introduced and Congressional committees have considered a substantial number of bills that include comprehensive
or incremental approaches to winding down Fannie Mae and Freddie Mac or changing their purposes, businesses, or operations. A decision by the U.S. government to eliminate or downscale Fannie Mae or Freddie Mac or to reduce government support for
multi-family housing more generally may adversely affect interest rates, capital availability, development of multi-family communities and the value of multi-family residential real estate and, as a result, may adversely affect the Company and its
growth and operations.
Changing interest rates could increase interest costs and could affect the market price of the Companys
securities.
The Company has incurred, and expects to continue to incur, debt bearing interest at rates that vary with
market interest rates. Therefore, if interest rates increase, the Companys interest costs will rise to the extent its variable rate debt is not hedged effectively. Further, while the Companys stated goal is to limit variable rate debt to
not more than 25% of total indebtedness, management may adjust these levels over time. In addition, an increase in market interest rates may lead purchasers of the Companys securities to demand a higher annual yield, which could adversely
affect the market price of the Companys common and preferred stock and debt securities.
Interest rate hedging contracts may be
ineffective and may result in material charges.
From time to time when the Company anticipates issuing debt securities,
it may seek to limit exposure to fluctuations in interest rates during the period prior to the pricing of the securities by entering into interest rate hedging contracts. The Company may do this to increase the predictability of its financing costs.
Also, from time to time, the Company may rely on interest rate hedging contracts to limit its exposure under variable rate debt to unfavorable changes in market interest rates. If the pricing of new debt securities is not within the parameters of,
or market interest rates produce a lower interest cost than the Company incurs under, a particular interest rate hedging contract, the contract may be ineffective.
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Post Properties, Inc.
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13
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Post Apartment Homes, L.P.
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|
Furthermore, the settlement of interest rate hedging contracts has at times involved and may
in the future involve material charges. These charges are typically related to the extent and timing of fluctuations in interest rates. Despite the Companys efforts to minimize its exposure to interest rate fluctuations, the Company may not
maintain coverage for all of its outstanding indebtedness at any particular time. If the Company does not effectively protect itself from this risk, it may be subject to increased interest costs resulting from interest rate fluctuations.
Acquired apartment communities may not achieve anticipated results.
The Company may selectively acquire apartment communities that meet its investment criteria. The Companys acquisition activities and their success may be exposed to the following risks:
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|
an acquired community may fail to achieve expected occupancy and rental rates and may fail to perform as expected;
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the Company may not be able to successfully integrate acquired properties and operations; and
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the Companys estimates of the costs of repositioning or redeveloping the acquired property may prove inaccurate, causing the Company to fail
to meet its profitability goals.
|
Failure to succeed in new markets may limit the Companys growth.
The Company may from time to time commence development activity or make acquisitions outside of its existing market areas if appropriate
opportunities arise. The Companys historical experience in its existing markets does not ensure that it will be able to operate successfully in new markets. The Company may be exposed to a variety of risks if it chooses to enter new markets.
These risks include, among others:
|
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an inability to evaluate accurately local apartment market conditions and local economies;
|
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|
an inability to obtain land for development or to identify appropriate acquisition opportunities;
|
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an inability to hire and retain key personnel; and
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lack of familiarity with local governmental and permitting procedures.
|
Compliance or failure to comply with laws requiring access to the Companys properties by persons with disabilities could result
in substantial cost.
The Companys multi-family housing communities and any newly acquired multi-family housing
communities must comply with Title III of the Americans with Disabilities Act, or the ADA, to the extent that such properties are public accommodations and/or commercial facilities as defined by the ADA. Compliance with the
ADA requirements could require removal of structural barriers to handicapped access in certain public areas of the Companys multi-family housing communities where such removal is readily achievable. The ADA does not, however, consider
residential properties, such as multi-family housing communities to be public accommodations or commercial facilities, except to the extent portions of such facilities, such as the leasing office, are open to the public.
The Company must also comply with the Fair Housing Act, or the FHA, which requires that multi-family housing communities first occupied
after March 13, 1991 be accessible to persons of disabilities. Noncompliance with the FHA and ADA could result in the imposition of fines, awards of damages to private litigants, payment of attorneys fees and other costs to plaintiffs,
substantial litigation costs and substantial costs of remediation. Compliance with the FHA could require removal of structural barriers to handicapped access in a community, including the interiors of apartment units covered under the FHA. In
addition to the ADA and FHA, state and local laws exist that impact the Companys multi-family housing communities with respect to access thereto by persons with disabilities. Further, legislation or regulations adopted in the future may impose
additional burdens or restrictions on the Company with respect to improved access by persons with disabilities. The ADA, FHA, or other existing or new legislation may require the Company to modify its existing properties. These laws may also
restrict renovations by requiring improved access to such buildings or may require the Company to add other structural features that increase its construction costs.
Within the past few years, there has been heightened scrutiny of the multi-family housing industry for compliance with the requirements of the FHA and ADA. In September 2010, the United States Department
of Justice (the DOJ) filed a lawsuit against the Company in the United States District Court for the Northern District of Georgia. The suit alleges various violations of the Fair Housing Act (FHA) and the Americans with
Disabilities Act (ADA) at properties designed, constructed or operated by the Company in the District of Columbia, Virginia, Florida, Georgia, New York, North Carolina and Texas. The plaintiff seeks statutory damages and a civil penalty
in unspecified amounts, as well as
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Post Properties, Inc.
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14
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Post Apartment Homes, L.P.
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injunctive relief that includes retrofitting apartments and public use areas to comply with the FHA and the ADA and prohibiting construction or sale of noncompliant units or complexes. The
Company filed a motion to transfer the case to the United States District Court for the District of Columbia, where a previous civil case involving alleged violations of the FHA and ADA by the Company was filed and ultimately dismissed. On
October 29, 2010, the United States District Court for the Northern District of Georgia issued an opinion finding that the complaint shows that the DOJs claims are essentially the same as the previous civil case, and, therefore, granted
the Companys motion and transferred the DOJs case to the United States District Court for the District of Columbia. Limited discovery is proceeding. Under the Courts scheduling order, the deadline for completion of discovery is
November 2013 and briefing of any dispositive motions would be accomplished by March 2014. Due to the preliminary nature of the litigation, it is not possible to predict or determine the outcome of the legal proceeding, nor is it possible to
estimate the amount of loss, if any, that would be associated with an adverse decision.
The Company cannot ascertain the
ultimate cost of compliance with the ADA, FHA or other similar state and local legislation and such costs are not likely covered by insurance policies. The cost associated with ongoing litigation or compliance could be substantial and could
adversely affect the Companys business, results of operations and financial condition. In addition, in connection with certain property dispositions or formations of strategic joint ventures, the Company may be required to provide
indemnification against liabilities associated with the litigation.
Losses from natural catastrophes may exceed insurance coverage.
The Company carries comprehensive liability, fire, flood, extended coverage and rental loss insurance on its properties,
which are believed to be of the type and amount customarily obtained on real property assets. The Company intends to obtain similar coverage for properties acquired or developed in the future. However, some losses, generally of a catastrophic
nature, such as losses from floods or wind storms, may be subject to limitations. The Company exercises discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining appropriate insurance on
its investments at a reasonable cost and on suitable terms; however, the Company may not be able to maintain its insurance at a reasonable cost or in sufficient amounts to protect it against potential losses. Further, the Companys insurance
costs could increase in future periods. If the Company suffers a substantial loss, its insurance coverage may not be sufficient to pay the full current market value or current replacement value of the lost investment. Inflation, changes in building
codes and ordinances, environmental considerations and other factors also might make it infeasible to use insurance proceeds to replace a property after it has been damaged or destroyed.
Potential liability for environmental contamination could result in substantial costs.
The Company is in the business of owning, operating, developing, acquiring and, from time to time, selling real estate. Under various federal, state and local environmental laws, as a current or former
owner or operator, the Company could be required to investigate and remediate the effects of contamination of currently or formerly owned real estate by hazardous or toxic substances, often regardless of its knowledge of or responsibility for the
contamination and solely by virtue of its current or former ownership or operation of the real estate. In addition, the Company could be held liable to a governmental authority or to third parties for property and other damages and for investigation
and clean-up costs incurred in connection with the contamination. These costs could be substantial, and in many cases environmental laws create liens in favor of governmental authorities to secure their payment. The presence of such substances or a
failure to properly remediate any resulting contamination could materially and adversely affect the Companys ability to borrow against, sell or rent an affected property.
Costs associated with moisture infiltration and resulting mold remediation may be costly.
As a general matter, concern about indoor exposure to mold has been increasing as such exposure has been alleged to have a variety of adverse effects on health. As a result, there have been a number of
lawsuits in the Companys industry against owners and managers of apartment communities relating to moisture infiltration and resulting mold. Mold growth may be attributed to the use of exterior insulation finishing systems. The Company has
implemented guidelines and procedures to address moisture infiltration and resulting mold issues if and when they arise. The terms of the Companys property and general liability policies generally exclude certain mold-related claims. Should an
uninsured loss arise against the Company, it would be required to use its funds to resolve the issue, including litigation costs. The Company makes no assurance that liabilities resulting from moisture infiltration and the presence of or exposure to
mold will not have a future adverse impact on its business, results of operations and financial condition.
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Post Properties, Inc.
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15
|
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Post Apartment Homes, L.P.
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The Companys joint ventures and joint ownership of properties and partial interests
in corporations and limited partnerships could limit the Companys ability to control such properties and partial interests.
Instead of purchasing certain apartment communities directly, the Company has invested and may continue to invest as a co-venturer. The Company has also chosen to sell partial interests in certain
apartment communities to co-venturers and may continue this strategy in the future. Joint venturers often have shared control over the operations of the joint venture assets. Therefore, it is possible that the co-venturer in an investment might
become bankrupt, or have economic or business interests or goals that are inconsistent with the Companys business interests or goals, or be in a position to take action contrary to the Companys instructions, requests, policies or
objectives. Consequently, a co-venturers actions might subject property owned by the joint venture to additional risk. Although the Company seeks to maintain sufficient influence of any joint venture to achieve its objectives, the Company may
be unable to take action without the Companys joint venture partners approval, or joint venture partners could take actions binding on the joint venture without the Companys consent. Additionally, should a joint venture partner
become bankrupt, the Company could become liable for such partners share of joint venture liabilities.
The Company may be unable to
renew leases or relet units as leases expire.
When the Companys residents decide not to renew their leases upon
expiration, the Company may not be able to relet their units. Even if the residents do renew or the Company can relet the units, the terms of renewal or reletting may be less favorable than current lease terms. Because the majority of the
Companys leases are for apartments, they are generally for no more than one year. If the Company is unable to promptly renew the leases or relet the units, or if the rental rates upon renewal or reletting are significantly lower than expected
rates, then the Companys results of operations and financial condition will be adversely affected. Consequently, the Companys cash flow and ability to service debt and make distributions to security holders would be reduced.
The Company may fail to qualify as a REIT for federal income tax purposes.
The Companys qualification as a REIT for federal income tax purposes depends upon its ability to meet on a continuing basis,
through actual annual operating results, distribution levels and diversity of stock ownership, the various qualification tests and organizational requirements imposed upon REITs under the Code. The Company believes that it has qualified for taxation
as a REIT for federal income tax purposes commencing with its taxable year ended December 31, 1993, and plans to continue to meet the requirements to qualify as a REIT in the future. Many of these requirements, however, are highly technical and
complex. Therefore, the Company may not have qualified or may not continue to qualify in the future as a REIT. The determination that the Company qualifies as a REIT for federal income tax purposes requires an analysis of various factual matters
that may not be totally within the Companys control. Even a technical or inadvertent mistake could jeopardize the Companys REIT status. Furthermore, Congress and the Internal Revenue Service (IRS) might make changes to the
tax laws and regulations, and the courts might issue new decisions that make it more difficult, or impossible, for the Company to remain qualified as a REIT. The Company does not believe, however, that any pending or proposed tax law changes would
jeopardize its REIT status.
If the Company were to fail to qualify for taxation as a REIT in any taxable year, and certain
relief provisions of the Internal Revenue Code did not apply, the Company would be subject to tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates, leaving less money available for distributions to
its shareholders. In addition, distributions to shareholders in any year in which the Company failed to qualify would not be deductible by the Company for federal income tax purposes nor would they be required to be made. Unless entitled to relief
under specific statutory provisions, the Company also would be disqualified from taxation as a REIT for the four taxable years following the year during which it ceased to qualify as a REIT. It is not possible to predict whether in all circumstances
the Company would be entitled to such statutory relief. The Companys failure to qualify as a REIT likely would have a significant adverse effect on the value of its securities.
The Operating Partnership may fail to be treated as a partnership for federal income tax purposes.
Management believes that the Operating Partnership qualifies, and has so qualified since its formation, as a partnership for federal income tax purposes and not as a publicly traded partnership taxable as
a corporation. No assurance can be provided, however, that the IRS will not challenge the treatment of the Operating Partnership as a partnership for federal income tax purposes or that a court would not sustain such a challenge. If the IRS were
successful in treating the Operating Partnership as a corporation for federal income tax purposes, then the taxable income of the Operating Partnership would be taxable at regular corporate income tax rates. In addition, the treatment of the
Operating Partnership
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Post Properties, Inc.
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16
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Post Apartment Homes, L.P.
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as a corporation would cause the Company to fail to qualify as a REIT. See The Company may fail to qualify as a REIT for federal income tax purposes above.
The Companys shareholders may not be able to effect a change of control.
The articles of incorporation and bylaws of the Company and the partnership agreement of the Operating Partnership contain a number of
provisions that could delay, defer or prevent a transaction or a change of control that might involve a premium price for the Companys shareholders or otherwise be in their best interests, including the following:
Preferred shares.
The Companys articles of incorporation provide that the Company has the authority to issue up to 20,000
shares of preferred stock, of which 868 were outstanding as of December 31, 2012. The board of directors has the authority, without the approval of the shareholders, to issue additional shares of preferred stock and to establish the preferences
and rights of such shares. The issuance of preferred stock could have the effect of delaying or preventing a change of control of the Company, even if a change of control were in the shareholders interest.
Consent Rights of the Unitholders.
Under the partnership agreement of the Operating Partnership, the Company may not merge or
consolidate with another entity unless the merger includes the merger of the Operating Partnership, which requires the approval of the holders of a majority of the outstanding units of the Operating Partnership. If the Company were to ever hold less
than a majority of the units, this voting requirement might limit the possibility for an acquisition or a change of control.
Ownership Limit.
One of the requirements for maintenance of the Companys qualification as a REIT for federal income tax
purposes is that no more than 50% in value of its outstanding capital stock may be owned by five or fewer individuals, including entities specified in the Internal Revenue Code, during the last half of any taxable year. To facilitate maintenance of
its qualification as a REIT for federal income tax purposes, the ownership limit under the Companys articles of incorporation prohibits ownership, directly or by virtue of the attribution provisions of the Internal Revenue Code, by any person
or persons acting as a group of more than 6.0% of the issued and outstanding shares of the Companys common stock, subject to certain exceptions, including an exception for shares of common stock held by the Companys former chairman and
former vice chairman and certain investors for which the Company has waived the ownership limit. Together, these limitations are referred to as the ownership limit. Further, the Companys articles of incorporation include provisions
allowing it to stop transfers of its shares and to redeem its shares that are intended to assist the Company in complying with these requirements.
The Company may experience increased costs arising from health care reform.
In March 2010, the United States government enacted comprehensive health care reform legislation which, among other things, includes
guaranteed coverage requirements, eliminates pre-existing condition exclusions and annual and lifetime maximum limits, restricts the extent to which policies can be rescinded and imposes new and significant taxes on health insurers and health care
benefits. The legislation imposes implementation effective dates extending through 2020, and many of the changes require additional guidance from government agencies or federal regulations. Therefore, due to the phased-in nature of the
implementation and the lack of interpretive guidance, in some cases, it is difficult to determine at this time what impact the health care reform legislation will have on the Companys financial results. Possible adverse effects of the health
reform legislation include increased costs, exposure to expanded liability and requirements for the Company to revise ways in which it provides healthcare and other benefits to its employees. In addition, the Companys results of operations,
financial position and cash flows could be materially adversely affected.
A breach of the Companys privacy or
information security systems could materially adversely affect the Companys business and financial condition.
Privacy and information security risks have generally increased in recent years because of the proliferation of new technologies and the
increased sophistication and activities of perpetrators of cyber attacks. As a result, privacy and information security and the continued development and enhancement of the controls and processes designed to protect the Companys systems,
computers, software, data and networks from attack, damage or unauthorized access remain a priority for the Company.
The
Companys business requires it to use and store customer and employee personal identifying information. This may include names, addresses, phone numbers, email addresses, contact preferences, tax identification numbers, and payment account
information. The collection and use of personal identifying information is governed by federal and state laws and
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Post Properties, Inc.
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17
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Post Apartment Homes, L.P.
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regulations. Privacy and information security laws continue to evolve and may be inconsistent from one jurisdiction to another. Compliance with all such laws and regulations may increase the
Companys operating costs and adversely impact the Companys ability to market the Companys properties and services.
The Company devotes significant resources to network security to protect the Companys systems and data. The Companys security measures include user names and passwords to access Company
information technology systems. The Company also uses encryption and authentication technologies to secure the transmission and storage of data. These security measures, however, cannot provide absolute security. They may be compromised as a result
of third-party security breaches, employee error, malfeasance, faulty password management, or other irregularity, and result in persons obtaining unauthorized access to company data or accounts. As cyber threats continue to evolve, the Company may
be required to expend additional resources to continue to enhance the Companys information security measures and/or to investigate and remediate any information security vulnerabilities. Regardless, the Company may experience a breach of the
Companys systems and may be unable to protect sensitive data. Moreover, if a computer security breach affects the companys systems or results in the unauthorized release of personal identifying information, the Companys reputation
and brand could be materially damaged and materially adversely affect the Companys business. The Company also may be exposed to a risk of loss or litigation and possible liability, which could result in a material adverse effect on the
Companys business, results of operations and financial condition.
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
None.
At December 31, 2012, the Company owned 57 Post
®
multi-family
apartment communities, including three communities in lease-up and four communities held in unconsolidated entities. These communities are summarized below by metropolitan area.
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Metropolitan Area
|
|
Communities
|
|
|
# of Units
|
|
|
% of Total
|
|
Atlanta, GA
|
|
|
16
|
|
|
|
6,609
|
|
|
|
31.5
|
%
|
Dallas, TX
|
|
|
15
|
|
|
|
4,725
|
|
|
|
22.6
|
%
|
Greater Washington, D.C.
|
|
|
7
|
|
|
|
2,914
|
|
|
|
13.9
|
%
|
Tampa, FL
|
|
|
4
|
|
|
|
2,111
|
|
|
|
10.1
|
%
|
Charlotte, NC
|
|
|
5
|
|
|
|
1,748
|
|
|
|
8.3
|
%
|
Houston, TX
|
|
|
2
|
|
|
|
961
|
|
|
|
4.6
|
%
|
Austin, TX
|
|
|
4
|
|
|
|
935
|
|
|
|
4.5
|
%
|
Orlando, FL
|
|
|
2
|
|
|
|
598
|
|
|
|
2.9
|
%
|
New York, NY
|
|
|
2
|
|
|
|
337
|
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57
|
|
|
|
20,938
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirty-seven of the communities have in excess of 300 apartment units, with the largest community having
a total of 1,334 apartment units. The average age of the communities is approximately 13.1 years. The average economic occupancy rate was 96.0% and 95.6% for 2012 and 2011, respectively, and the average monthly rental rate per apartment unit was
$1,353 and $1,274, respectively, for the 50 communities stabilized for 2012 and 2011. See Selected Financial Information.
At December 31, 2012, the Company had 2,046 apartment units in seven communities currently under development or in lease-up. Three communities in lease-up totaling 766 apartment units are included in
the table above and the community information on pages 19 and 20.
At December 31, 2012, the Company, through a taxable
REIT subsidiary, was selling condominium homes in two ground-up luxury condominium projects and had 66 units under contract and available for sale. There can be no assurances that units under contract will actually close.
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Post Properties, Inc.
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18
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Post Apartment Homes, L.P.
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C
OMMUNITY
I
NFORMATION
|
|
|
|
|
|
|
|
|
|
|
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|
|
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Market /
Submarket /
Community
|
|
Year
Completed/Year of
Substantial
Renovations
|
|
No. of Units
|
|
|
December 2012
Average Rental Rates
Per Unit
|
|
|
2012 Average
Economic Occ. (1)
|
|
Atlanta
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buckhead / Brookhaven
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Alexander
|
|
2008
|
|
|
307
|
|
|
$
|
1,656
|
|
|
|
95.8
|
%
|
Post Brookhaven
®
|
|
1990-1992 (3)
|
|
|
735
|
|
|
|
1,058
|
|
|
|
96.8
|
%
|
Post Chastain
®
|
|
1990/2008
|
|
|
558
|
|
|
|
1,172
|
|
|
|
97.2
|
%
|
Post Collier Hills
®
(2)
|
|
1997
|
|
|
396
|
|
|
|
1,063
|
|
|
|
96.5
|
%
|
Post Gardens
®
|
|
1998
|
|
|
397
|
|
|
|
1,238
|
|
|
|
96.5
|
%
|
Post Glen
®
|
|
1997
|
|
|
314
|
|
|
|
1,242
|
|
|
|
97.0
|
%
|
Post Lindbergh
®
(2)
|
|
1998
|
|
|
396
|
|
|
|
1,114
|
|
|
|
97.1
|
%
|
Post Peachtree Hills
®
|
|
1992-1994/2009 (3)
|
|
|
300
|
|
|
|
1,331
|
|
|
|
95.8
|
%
|
Post Stratford
TM
(4)
|
|
2000
|
|
|
250
|
|
|
|
1,287
|
|
|
|
96.7
|
%
|
Dunwoody
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Crossing
®
|
|
1995
|
|
|
354
|
|
|
|
1,128
|
|
|
|
97.3
|
%
|
Emory Area
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Briarcliff
TM
|
|
1999
|
|
|
688
|
|
|
|
1,199
|
|
|
|
96.5
|
%
|
Midtown
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Parkside
TM
|
|
2000
|
|
|
188
|
|
|
|
1,459
|
|
|
|
96.4
|
%
|
Post Renaissance
®
|
|
1992-1994(3)
|
|
|
342
|
|
|
|
1,073
|
|
|
|
96.3
|
%
|
Northwest Atlanta
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Crest
®
(2)
|
|
1996
|
|
|
410
|
|
|
|
1,048
|
|
|
|
96.7
|
%
|
Post Riverside
®
|
|
1998
|
|
|
522
|
|
|
|
1,495
|
|
|
|
96.4
|
%
|
Post Spring
TM
|
|
2000
|
|
|
452
|
|
|
|
1,033
|
|
|
|
96.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Atlanta
|
|
|
|
|
6,609
|
|
|
|
1,202
|
|
|
|
96.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dallas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Dallas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Addison Circle
TM
|
|
1998-2000(3)
|
|
|
1,334
|
|
|
|
1,060
|
|
|
|
95.0
|
%
|
Post Eastside
TM
|
|
2008
|
|
|
435
|
|
|
|
1,145
|
|
|
|
94.5
|
%
|
Post Legacy
|
|
2000
|
|
|
384
|
|
|
|
1,033
|
|
|
|
95.8
|
%
|
Post Sierra at Frisco Bridges
|
|
2009
|
|
|
268
|
|
|
|
1,101
|
|
|
|
94.6
|
%
|
Uptown Dallas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Abbey
TM
|
|
1996
|
|
|
34
|
|
|
|
1,897
|
|
|
|
98.3
|
%
|
Post Coles Corner
TM
|
|
1998
|
|
|
186
|
|
|
|
1,166
|
|
|
|
96.9
|
%
|
Post Gallery
TM
|
|
1999
|
|
|
34
|
|
|
|
2,782
|
|
|
|
97.3
|
%
|
Post Heights
TM
|
|
1998-1999/2009(3)
|
|
|
368
|
|
|
|
1,324
|
|
|
|
95.4
|
%
|
Post Katy Trail
|
|
2010
|
|
|
227
|
|
|
|
1,619
|
|
|
|
96.1
|
%
|
Post Meridian
TM
|
|
1991
|
|
|
133
|
|
|
|
1,313
|
|
|
|
95.8
|
%
|
Post Square
TM
|
|
1996
|
|
|
216
|
|
|
|
1,280
|
|
|
|
96.5
|
%
|
Post Uptown Village
TM
|
|
1995-2000(3)
|
|
|
496
|
|
|
|
1,101
|
|
|
|
96.9
|
%
|
Post Vineyard
TM
|
|
1996
|
|
|
116
|
|
|
|
1,153
|
|
|
|
96.5
|
%
|
Post Vintage
TM
|
|
1993
|
|
|
160
|
|
|
|
1,187
|
|
|
|
96.9
|
%
|
Post Worthington
TM
|
|
1993/2008
|
|
|
334
|
|
|
|
1,430
|
|
|
|
94.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Dallas
|
|
|
|
|
4,725
|
|
|
|
1,192
|
|
|
|
95.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Austin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Barton Creek
|
|
1998
|
|
|
160
|
|
|
|
1,667
|
|
|
|
96.7
|
%
|
Post Park Mesa
|
|
1992
|
|
|
148
|
|
|
|
1,399
|
|
|
|
97.1
|
%
|
Post South Lamar (5)
|
|
2012
|
|
|
298
|
|
|
|
1,597
|
|
|
|
N/A
|
|
Post West Austin
|
|
2009
|
|
|
329
|
|
|
|
1,415
|
|
|
|
95.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Austin (5)
|
|
|
|
|
935
|
|
|
|
1,475
|
|
|
|
96.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
19
|
|
|
Post Apartment Homes, L.P.
|
|
|
C
OMMUNITY
I
NFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market /
Submarket /
Community
|
|
Year
Completed/Year
of
Substantial
Renovations
|
|
No. of Units
|
|
|
December 2012
Average Rental Rates
Per Unit
|
|
|
2012 Average
Economic Occ. (1)
|
|
Houston
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Midtown Square
®
|
|
1999
|
|
|
529
|
|
|
$
|
1,300
|
|
|
|
97.0
|
%
|
Post Midtown Square
®
Phase III
(5)
|
|
2012
|
|
|
124
|
|
|
|
1,787
|
|
|
|
N/A
|
|
Post Rice Lofts
TM
(4)
|
|
1998
|
|
|
308
|
|
|
|
1,503
|
|
|
|
95.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Houston (5)
|
|
|
|
|
961
|
|
|
|
1,375
|
|
|
|
96.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tampa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Bay at Rocky Point
|
|
1997
|
|
|
150
|
|
|
|
1,395
|
|
|
|
97.1
|
%
|
Post Harbour Place
TM
|
|
1999-2002 (3)
|
|
|
578
|
|
|
|
1,479
|
|
|
|
97.9
|
%
|
Post Hyde Park
®
|
|
1996-2008
|
|
|
467
|
|
|
|
1,435
|
|
|
|
97.4
|
%
|
Post Rocky Point
®
|
|
1996-1998 (3)
|
|
|
916
|
|
|
|
1,248
|
|
|
|
95.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Tampa
|
|
|
|
|
2,111
|
|
|
|
1,363
|
|
|
|
96.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orlando
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Lake
®
at Baldwin Park
|
|
2004-2007 (3)
|
|
|
350
|
|
|
|
1,536
|
|
|
|
97.0
|
%
|
Post Parkside
TM
|
|
1999
|
|
|
248
|
|
|
|
1,456
|
|
|
|
98.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Orlando
|
|
|
|
|
598
|
|
|
|
1,503
|
|
|
|
97.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charlotte
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Ballantyne
|
|
2004
|
|
|
323
|
|
|
|
1,141
|
|
|
|
95.1
|
%
|
Post Gateway Place
TM
|
|
2000
|
|
|
436
|
|
|
|
1,089
|
|
|
|
95.6
|
%
|
Post Park at Phillips Place
®
|
|
1998
|
|
|
402
|
|
|
|
1,342
|
|
|
|
96.4
|
%
|
Post South End
|
|
2009
|
|
|
360
|
|
|
|
1,349
|
|
|
|
95.8
|
%
|
Post Uptown Place
TM
|
|
2000
|
|
|
227
|
|
|
|
1,131
|
|
|
|
97.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Charlotte
|
|
|
|
|
1,748
|
|
|
|
1,215
|
|
|
|
96.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington D.C.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maryland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Fallsgrove
|
|
2003
|
|
|
361
|
|
|
|
1,743
|
|
|
|
96.3
|
%
|
Post Park
®
|
|
2010
|
|
|
396
|
|
|
|
1,613
|
|
|
|
95.2
|
%
|
Virginia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Carlyle Square
|
|
2006
|
|
|
205
|
|
|
|
2,414
|
|
|
|
96.7
|
%
|
Post Carlyle Square Phase II (5)
|
|
2012
|
|
|
344
|
|
|
|
2,528
|
|
|
|
N/A
|
|
Post Corners at Trinity Centre
|
|
1996
|
|
|
336
|
|
|
|
1,604
|
|
|
|
96.2
|
%
|
Post Pentagon Row
TM
|
|
2001
|
|
|
504
|
|
|
|
2,339
|
|
|
|
94.5
|
%
|
Post Tysons Corner
TM
|
|
1990
|
|
|
499
|
|
|
|
1,743
|
|
|
|
93.5
|
%
|
Washington D.C.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Massachusetts Avenue
TM
(2)
|
|
2002
|
|
|
269
|
|
|
|
3,135
|
|
|
|
96.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average Washington, D.C. (5)
|
|
|
|
|
2,914
|
|
|
|
2,021
|
|
|
|
95.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York City
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Luminaria
TM
|
|
2002
|
|
|
138
|
|
|
|
3,829
|
|
|
|
97.0
|
%
|
Post Toscana
TM
|
|
2003
|
|
|
199
|
|
|
|
3,888
|
|
|
|
94.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subtotal/Average New York City
|
|
|
|
|
337
|
|
|
|
3,864
|
|
|
|
95.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
20,938
|
|
|
$
|
1,391
|
|
|
|
96.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Average economic occupancy is defined as gross potential rent less vacancy losses, model expenses and bad debt divided by gross potential rent for
the period, expressed as a percentage.
|
(2)
|
These communities are owned in unconsolidated entities.
|
(3)
|
These dates represent the respective completion dates for multiple phases of a community.
|
(4)
|
The Company has a leasehold interest in the land underlying these communities.
|
(5)
|
These communities, or portions thereof, are in lease-up, therefore the average economic occupancy information is not included above. As such, the
respective market average economic occupancy and market average rental rate totals exclude these communities.
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
20
|
|
|
Post Apartment Homes, L.P.
|
|
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
In
September 2010, the United States Department of Justice (the DOJ) filed a lawsuit against the Company in the United States District Court for the Northern District of Georgia. The suit alleges various violations of the Fair Housing Act
(FHA) and the Americans with Disabilities Act (ADA) at properties designed, constructed or operated by the Company in the District of Columbia, Virginia, Florida, Georgia, New York, North Carolina and Texas. The plaintiff
seeks statutory damages and a civil penalty in unspecified amounts, as well as injunctive relief that includes retrofitting apartments and public use areas to comply with the FHA and the ADA and prohibiting construction or sale of noncompliant units
or complexes. The Company filed a motion to transfer the case to the United States District Court for the District of Columbia, where a previous civil case involving alleged violations of the FHA and ADA by the Company was filed and ultimately
dismissed. On October 29, 2010, the United States District Court for the Northern District of Georgia issued an opinion finding that the complaint shows that the DOJs claims are essentially the same as the previous civil case, and,
therefore, granted the Companys motion and transferred the DOJs case to the United States District Court for the District of Columbia. Limited discovery is proceeding. Under the Courts scheduling order, the deadline for completion
of discovery is November 2013 and briefing of any dispositive motions would be accomplished by March 2014. Due to the preliminary nature of the litigation, it is not possible to predict or determine the outcome of the legal proceeding, nor is it
possible to estimate the amount of loss, if any, that would be associated with an adverse decision.
The Company is involved
in various other legal proceedings incidental to their business from time to time, most of which are expected to be covered by liability or other insurance. Management of the Company believes that any resolution of pending proceedings or liability
to the Company which may arise as a result of these various other legal proceedings will not have a material effect on the Companys results of operations, cash flow or financial position.
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
Not applicable
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
21
|
|
|
Post Apartment Homes, L.P.
|
|
|
ITEM X.
|
EXECUTIVE OFFICERS OF THE REGISTRANT
|
The persons who are executive officers of the Company and its affiliates and their positions as of February 15, 2013 are as follows:
|
|
|
NAME
|
|
POSITIONS AND OFFICES HELD
|
David P. Stockert
|
|
President and Chief Executive Officer
|
Christopher J. Papa
|
|
Executive Vice President and Chief Financial Officer
|
Sherry W. Cohen
|
|
Executive Vice President and Corporate Secretary
|
Charles A. Konas
|
|
Executive Vice President, Construction and Property Services
|
S. Jamie Teabo
|
|
Executive Vice President, Property Management
|
Arthur J. Quirk
|
|
Senior Vice President and Chief Accounting Officer
|
The following is a biographical summary of the experience of the executive officers of the Company:
David P. Stockert
. Mr. Stockert is the President and Chief Executive Officer of the Company.
Mr. Stockert has been the Chief Executive Officer since July 2002. From January 2001 to June 2002, Mr. Stockert was President and Chief Operating Officer. From July 1999 to October 2000, Mr. Stockert was Executive Vice President of
Duke Realty Corporation, a publicly traded real estate Company. From June 1995 to July 1999, Mr. Stockert was Senior Vice President and Chief Financial Officer of Weeks Corporation, also a publicly traded real estate Company that was a
predecessor by merger to Duke Realty Corporation. From August 1990 to May 1995, Mr. Stockert was an investment banker in the Real Estate Group at Dean Witter Reynolds Inc. (now Morgan Stanley). Mr. Stockert is 50 years old.
Christopher J. Papa
. Mr. Papa has been an Executive Vice President and Chief Financial Officer of the Company
since December 2003. Prior to joining the Company, he was an audit partner at BDO Seidman, LLP from June 2003 to November 2003, the Chief Financial Officer at Plast-O-Matic Valves, Inc., a privately-held company, from June 2002 to June 2003, and
until June 2002, an audit partner at Arthur Andersen LLP where he was employed for over 10 years. Mr. Papa is a Certified Public Accountant. Mr. Papa is 47 years old.
Sherry W. Cohen
. Ms. Cohen has been with the Company for twenty-eight years. Since October 1997, she has been an
Executive Vice President of the Company and is responsible for oversight of all legal matters of the Company and risk management. Since April 1990, Ms. Cohen has also been Corporate Secretary. She was a Senior Vice President with Post Corporate
Services from July 1993 to October 1997. Prior thereto, Ms. Cohen was a Vice President of Post Properties, Inc. since April 1990. Ms. Cohen is 58 years old.
Charles A. Konas.
Mr. Konas has been an Executive Vice President, Construction and Property Services of the Company since January 2010 responsible for construction management and
property maintenance. Mr. Konas served as Executive Vice President, Construction/Development from January 2007 to January 2010 and as Senior Vice President, Construction/Development from October 2004 to January 2007. Prior to joining the
Company, Mr. Konas was a Senior Vice President with Carter & Associates, a leading regional full service real estate firm, from May 1998 to October 2004. Mr. Konas is 54 years old.
S. Jamie Teabo
. Ms. Teabo has been with the Company for twenty-six years. Since February 2010, she has been an
Executive Vice President, Property Management of the Company responsible for the management and leasing operations of the Companys apartment communities. She was a Senior Vice President in the property management division of the Company from
1998 to 2010. Prior thereto, Ms. Teabo was a Group Vice President in the property management division of the Company since 1995. Ms. Teabo is a Certified Property Manager and a member of the Institute of Real Estate Management.
Ms. Teabo is 49 years old.
Arthur J. Quirk
. Mr. Quirk has been a Senior Vice President and Chief
Accounting Officer of the Company since January 2003. Mr. Quirk served as the Companys Vice President and Chief Accounting Officer from March 2001 to December 2002. From July 1999 to March 2001, Mr. Quirk was Vice President and
Controller of Duke Realty Corporation, a publicly traded real estate Company. From December 1994 to July 1999, Mr. Quirk was the Vice President and Controller of Weeks Corporation, also a publicly traded real estate Company that was a
predecessor by merger to Duke Realty Corporation. Mr. Quirk is a Certified Public Accountant. Mr. Quirk is 54 years old.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
22
|
|
|
Post Apartment Homes, L.P.
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
1.
|
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
|
Organization
Post Properties, Inc. (the Company) and its subsidiaries develop, own and manage upscale multi-family apartment communities in selected markets in the United States. The Company through its
wholly-owned subsidiaries is the sole general partner, a limited partner and owns a majority interest in Post Apartment Homes, L.P. (the Operating Partnership), a Georgia limited partnership. The Operating Partnership, through its
operating divisions and subsidiaries conducts substantially all of the on-going operations of the Company, a publicly traded corporation which operates as a self-administered and self-managed real estate investment trust (REIT). As used
herein, the term Company includes Post Properties, Inc. and its subsidiaries, including Post Apartment Homes, L.P., unless the context indicates otherwise.
The Company has elected to qualify and operate as a self-administrated and self-managed REIT for federal income tax purposes. A REIT is a legal entity which holds real estate interests and is generally
not subject to federal income tax on the income it distributes to its shareholders. The Operating Partnership is governed under the provisions of a limited partnership agreement, as amended. Under the provisions of the limited partnership agreement,
as amended, Operating Partnership net profits, net losses and cash flow (after allocations to preferred ownership interests) are allocated to the partners in proportion to their common ownership interests. Cash distributions from the Operating
Partnership shall be, at a minimum, sufficient to enable the Company to satisfy its annual dividend requirements to maintain its REIT status under the Internal Revue Code of 1986, as amended.
At December 31, 2012, the Company had 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. At December 31, 2012, approximately 31.5%, 22.6%, 13.9% and 10.1% (on a unit basis) of the Companys operating communities were located in the Atlanta, Georgia, Dallas, Texas, the greater Washington, D.C. and Tampa, Florida
metropolitan areas, respectively.
At December 31, 2012, the Company had outstanding 54,470 shares of common stock and
owned the same number of units of common limited partnership interests (Common Units) in the Operating Partnership, representing a 99.7% ownership interest in the Operating Partnership. Common Units held by persons other than the Company
totaled 143 at December 31, 2012 and represented a 0.3% common minority interest in the Operating Partnership. Each Common Unit may be redeemed by the holder thereof for either one share of Company common stock or cash equal to the fair market
value thereof at the time of redemption, at the option, but outside the control, of the Operating Partnership. The Operating Partnership presently anticipates that it will cause shares of common stock to be issued in connection with each such
redemption rather than paying cash (as has been done in all redemptions to date). With each redemption of outstanding Common Units for Company common stock, the Companys percentage ownership interest in the Operating Partnership will increase.
In addition, whenever the Company issues shares of common stock, the Company will contribute any net proceeds therefrom to the Operating Partnership and the Operating Partnership will issue an equivalent number of Common Units to the Company. The
Companys weighted average common ownership interest in the Operating Partnership was 99.7% for the years ended December 31, 2012, 2011 and 2010.
Basis of presentation
The accompanying consolidated financial statements
include the consolidated accounts of the Company, the Operating Partnership and their wholly owned subsidiaries. The Company also consolidates other entities in which it has a controlling financial interest or entities where it is determined to be
the primary beneficiary under ASC Topic 810, Consolidation. Under ASC Topic 810, variable interest entities (VIEs) are generally entities that lack sufficient equity to finance their activities without additional financial
support from other parties or whose equity holders lack adequate decision making ability. The primary beneficiary is required to consolidate a VIE for financial reporting purposes. The application of ASC Topic 810 requires management to make
significant estimates and judgments about the Companys and its other partners rights, obligations and economic interests in such entities. For entities in which the Company has less than a controlling financial interest or entities where
it is not deemed to be the primary beneficiary, the entities are accounted for using the equity method of accounting. Accordingly, the Companys share of the net earnings or losses of
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
75
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
these entities is included in consolidated net income. All significant inter-company accounts and transactions have been eliminated in consolidation. The Companys noncontrolling interest of
common unitholders (also referred to as Redeemable Common Units) in the operations of the Operating Partnership is calculated based on the weighted average unit ownership during the period.
Revenue recognition
Residential properties are leased under operating leases with terms of generally one year or less. Rental revenues from residential
leases are recognized on the straight-line method over the approximate life of the leases, which is generally one year. The recognition of rental revenues from residential leases when earned has historically not been materially different from rental
revenues recognized on a straight-line basis.
Under the terms of residential leases, the residents of the Companys
residential communities are obligated to reimburse the Company for certain utility usage, water and electricity (at selected properties), where the Company is the primary obligor to the public utility entity. These utility reimbursements from
residents are reflected as other property revenues in the consolidated statements of operations.
Sales and the associated
gains or losses of real estate assets and for-sale condominiums are recognized in accordance with the provisions of ASC Topic 360-20, Property, Plant and Equipment Real Estate Sales. The Company accounts for each project under
either the Deposit Method or the Percentage of Completion Method, based on a specific evaluation of the factors specified in ASC Topic 360-20. The factors used to determine the appropriate accounting method are the legal
commitment of the purchaser in the real estate contract, whether the construction of the project is beyond a preliminary phase, whether sufficient units have been contracted to ensure the project will not revert to a rental project, the ability to
reasonably estimate the aggregate project sale proceeds and aggregate project costs and the determination that the buyer has made an adequate initial and continuing cash investment under the contract in accordance with ASC Topic 360-20. As of
December 31, 2012, all condominium communities are accounted for under the Deposit Method. Under ASC Topic 360-20, the Company uses the relative sales value method to allocate costs and recognize profits from condominium sales. Under the
relative sales value method, estimates of aggregate project revenues and aggregate project costs are used to determine the allocation of project cost of sales and the resulting profit in each accounting period. In subsequent periods, cumulative
project cost of sale allocations and the resulting profits are adjusted to reflect changes in the actual and estimated costs and revenues of each project.
Cost capitalization
The Company capitalizes those expenditures relating
to the acquisition of new assets and the development and construction of new apartment and condominium communities. In addition, the Company capitalizes expenditures that enhance the value of existing assets and expenditures that substantially
extend the life of existing assets. Annually recurring capital expenditures are expenditures of a type that are expected to be incurred on an annual basis during the life of an apartment community, such as carpet, appliances and flooring.
Periodically recurring capital expenditures are expenditures that generally occur less frequently than on an annual basis, such as major exterior projects relating to landscaping and structural improvements. Revenue generating capital expenditures
are expenditures for the rehabilitation of communities and other property upgrade costs that enhance the rental value of such communities. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as
incurred. Additionally, for new development communities, carpet, vinyl, and blind replacements are expensed as incurred during the first five years (which corresponds to their estimated depreciable life). Thereafter, these replacements are
capitalized and depreciated. The Company expenses as incurred interior and exterior painting of its operating communities, unless those communities are under rehabilitation or major remediation.
For communities under development or rehabilitation, the Company capitalizes interest, real estate taxes, and certain internal personnel
and associated costs associated with the development and construction activity. Interest is capitalized to projects under development or construction based upon the weighted average cumulative project costs for each month multiplied by the
Companys weighted average borrowing costs, expressed as a percentage. Weighted average borrowing costs include the costs of the Companys fixed rate secured and unsecured borrowings and the variable rate unsecured
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
76
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
borrowings under its line of credit facilities. The weighted average borrowing costs, expressed as a percentage, were 5.4%, 6.0% and 6.3% for 2012, 2011 and 2010, respectively. Internal
development and construction personnel and associated costs are capitalized to projects under development or construction based upon the effort associated with such projects. Aggregate internal development and construction personnel and associated
costs capitalized to projects under development or construction were $3,755, $2,854 and $719 in 2012, 2011 and 2010, respectively. The Company treats each unit in an apartment community separately for cost accumulation, capitalization and expense
recognition purposes. Prior to the completion of rental and condominium units, interest and other construction costs are capitalized and reflected on the balance sheet as construction in progress. The Company ceases the capitalization of such costs
as the residential units in a community become substantially complete and available for occupancy or sale. This results in a proration of costs between amounts that are capitalized and expensed as the residential units in apartment and condominium
development communities become available for occupancy or sale. In addition, prior to the completion of rental units, the Company expenses as incurred substantially all operating expenses (including pre-opening marketing as well as property
management and leasing personnel expenses) of such rental communities. Prior to the completion and closing of condominium units, the Company expenses all sales and marketing costs related to such units.
For cash flow statement purposes, the Company classifies capital expenditures for developed condominium communities in investing
activities in the caption titled, Construction and acquisition of real estate assets. Likewise, the proceeds from the sales of such condominiums are included in investing activities in the caption titled, Net proceeds from sales of
real estate assets.
Real estate assets, depreciation and impairment
Real estate assets are stated at the lower of depreciated cost or fair value, if deemed impaired. Major replacements and betterments are
capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over the useful lives of the properties (buildings and components, - 40 years; other building and land improvements 20 years;
furniture, fixtures and equipment 5-10 years).
The Company continually evaluates the recoverability of the carrying
value of its real estate assets using the methodology prescribed in ASC Topic 360, Property, Plant and Equipment. Factors considered by management in evaluating impairment of its existing real estate assets held for investment include
significant declines in property operating profits, annually recurring property operating losses and other significant adverse changes in general market conditions that are considered permanent in nature. Under ASC Topic 360, a real estate asset
held for investment is not considered impaired if the undiscounted, estimated future cash flows of an asset (both the annual estimated cash flow from future operations and the estimated cash flow from the theoretical sale of the asset) over its
estimated holding period are in excess of the assets net book value at the balance sheet date. If any real estate asset held for investment is considered impaired, a loss is provided to reduce the carrying value of the asset to its estimated
fair value. In addition, for-sale condominium units completed and ready for their intended use are evaluated for impairment using the methodology for assets held for sale (using discounted projected future cash flows).
The Company periodically classifies real estate assets as held for sale. An asset is classified as held for sale after the approval of
the Companys board of directors and after an active program to sell the asset has commenced. Upon the classification of a real estate asset as held for sale, the carrying value of the asset is reduced to the lower of its net book value or its
estimated fair value, less costs to sell the asset. Subsequent to the classification of assets as held for sale, no further depreciation expense is recorded. Real estate assets held for sale are stated separately on the accompanying consolidated
balance sheets. Upon a decision to no longer market an asset for sale, the asset is classified as an operating asset and depreciation expense is reinstated. As of December 31, 2012, there were no real estate assets held for sale.
For condominium communities, the operating results and associated gains and losses are reflected on the consolidated statement of
operations in the caption titled Net gains on condominium sales activities (see discussion under revenue recognition above), and the net book value of the condominium assets is reflected separately on the consolidated balance
sheet in the caption titled, For-sale condominiums.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
77
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Fair value measurements
The Company applies the guidance in ASC Topic 820, Fair Value Measurements and Disclosures, to the valuation of real estate assets recorded at fair value, if any, to its impairment valuation
analysis of real estate assets, to its disclosure of the fair value of financial instruments, principally indebtedness and to its derivative financial instruments. Fair value disclosures required under ASC Topic 820 are summarized in note 14
utilizing the following hierarchy:
|
|
|
Level 1 Quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.
|
|
|
|
Level 2 Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.
|
|
|
|
Level 3 Unobservable inputs for the assets or liability.
|
Long-term ground leases
The Company is party to certain long-term ground
leases associated with land underlying certain of the Companys apartment communities. The ground leases generally provide for future increases in minimum lease payments tied to an inflation index or contain stated rent increases that generally
compensate for the impact of inflation. Ground lease expense is recognized on the straight-line method over the life of the leases that contain stated rent increases.
Apartment community acquisitions
The Company accounts for its apartment
community acquisitions in accordance with ASC Topic 805, Business Combinations. In accordance with the provisions of ASC Topic 805, the aggregate purchase price of apartment community acquisitions is allocated to the tangible assets and
liabilities (including mortgage indebtedness, if any) as well as the intangible assets acquired in each transaction based on their estimated fair values at the acquisition date. In determining the acquisition date fair value of the component assets
and liabilities, the Company uses independent market data, internal analysis of comparable communities, relevant historical data from the acquired community as well as other market data. The acquired tangible assets, principally land, building and
improvements and furniture, fixtures and equipment are reflected in real estate assets, and such assets, excluding land, are depreciated over their estimated useful lives. The acquired intangible assets, principally the value of above/below market
leases and the value of in-place leases are reflected in other assets and amortized over the average remaining lease terms of the acquired leases (generally 6 to 12 months for residential leases and 5 to 10 years for retail leases). The legal,
professional and other expenses associated with acquisition related activities are expensed as incurred.
Stock-based compensation
The Company accounts for stock-based compensation under the fair value method prescribed by ASC Topic 505,
Equity-Based Payments to Non-Employees, and ASC Topic 718, CompensationStock Compensation. This guidance requires the Company to expense the fair value of employee stock options and other forms of stock-based
compensation.
Derivative financial instruments
The Company accounts for derivative financial instruments at fair value under the provisions of ASC Topic 815, Derivatives and Hedging. In conjunction with its implementation of updates to the
fair value measurements guidance, the Company made an accounting policy election as of January 1, 2012 to measure derivative financial instruments subject to master netting agreements on a net basis. The Company uses derivative financial
instruments, primarily interest rate swap arrangements to manage or hedge its exposure to interest rates changes. Under ASC Topic 815, derivative instruments qualifying as hedges of specific cash flows are recorded on the balance sheet at fair value
with an offsetting increase or decrease to accumulated other comprehensive income, an equity account, until the hedged transactions are recognized in earnings. Quarterly, the Company evaluates the effectiveness of its cash flow hedges. Any
ineffective portion of cash flow hedges are recognized immediately in earnings.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
78
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Cash and cash equivalents
All investments purchased with an original maturity of three months or less are considered to be cash equivalents.
Restricted cash
Restricted cash is generally comprised of resident
security deposits for apartment communities located in Georgia, Florida, Virginia, Maryland, North Carolina and New York and earnest money and escrow deposits associated with the Companys for-sale condominium business.
Deferred financing costs
Deferred financing costs are amortized using the straight-line method, which approximates the interest method, over the terms of the
related indebtedness.
Per share and per unit data
The Company and Operating Partnership report both basic and diluted earnings per share and per unit, respectively, as prescribed by ASC Topic 260, Earnings Per Share. The guidance also
requires entities with participating securities that contain non-forfeitable rights to dividends, like the Companys unvested share-based payment awards (see note 10), to use the two-class method for computing basic and dilutive earnings per
share and unit. Under the two-class method earnings (losses) are allocated to each class of common stock and to participating securities according to the dividends paid or declared and the relative participation of such securities to remaining
undistributed earnings (losses).
Basic earnings per common share and earnings per common unit are computed by dividing net
income (loss) available to common shareholders or unitholders by the weighted average number of common shares or units outstanding during the year. Diluted earnings per common share and diluted earnings per common unit are computed by dividing net
income (loss) available to common shareholders or unitholders by the weighted average number of common shares or units and common share or unit equivalents outstanding during the year, which are computed using the treasury stock method for
outstanding stock options. Common share and unit equivalents are excluded from the computations in years in which they have an anti-dilutive effect. The computation of basic and diluted earnings per share and basic and diluted earnings per common
unit for income from continuing operations is detailed in notes 6 and 7 for the Company and the Operating Partnership, respectively.
Noncontrolling interests
The Company accounts for noncontrolling interests in accordance with ASC Topic 810, Consolidation. ASC Topic 810, in
conjunction with other existing GAAP, established criterion used to evaluate the characteristics of noncontrolling interests in consolidated entities to determine whether noncontrolling interests are classified and accounted for as permanent equity
or temporary equity (presented between liabilities and permanent equity on the consolidated balance sheet). ASC Topic 810 also clarified the treatment of noncontrolling interests with redemption provisions. If a noncontrolling interest
has a redemption feature that permits the issuer to settle in either cash or common shares at the option of the issuer but the equity settlement feature is deemed to be outside of the control of the issuer, then those noncontrolling interests are
classified as temporary equity. The Company currently has two types of noncontrolling interests, (1) noncontrolling interests related to the common unitholders of its Operating Partnership and (2) noncontrolling interests
related to its consolidated real estate entities (see note 5).
The Company accounts for the redemption of noncontrolling
interests in the Operating Partnership in exchange for shares of company common stock at fair value in accordance with ASC Topic 810. These transactions result in a reduction in the noncontrolling interest of common unitholders in the Operating
Partnership and a corresponding increase in equity in the accompanying consolidated balance sheet at the date of conversion. In accordance with guidance in ASC Topic 810 the noncontrolling interest in the Operating Partnership is carried at the
greater of its redemption value or net book value.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
79
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Supplemental cash flow information
Supplemental cash flow information for 2012, 2011 and 2010 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Interest paid, including interest capitalized
|
|
$
|
51,417
|
|
|
$
|
60,447
|
|
|
$
|
60,589
|
|
Income tax payments (refunds), net
|
|
|
3
|
|
|
|
386
|
|
|
|
(1,100
|
)
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and distributions payable
|
|
|
13,653
|
|
|
|
11,692
|
|
|
|
9,814
|
|
Conversions of redeemable common units
|
|
|
591
|
|
|
|
547
|
|
|
|
74
|
|
Common stock 401k matching contribution
|
|
|
639
|
|
|
|
655
|
|
|
|
700
|
|
Construction cost accruals, increase (decrease)
|
|
|
7,422
|
|
|
|
1,475
|
|
|
|
(5,324
|
)
|
Adjustments to equity related to redeemable common units, net
|
|
|
(850
|
)
|
|
|
(1,270
|
)
|
|
|
(3,041
|
)
|
Distribution from and consolidation of assets and liabilities of unconsolidated entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
For-sale condominium and other assets
|
|
|
-
|
|
|
|
-
|
|
|
|
27,343
|
|
Cash
|
|
|
-
|
|
|
|
-
|
|
|
|
28
|
|
Indebtedness
|
|
|
-
|
|
|
|
-
|
|
|
|
44,553
|
|
Accounts payable and accrued expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
3,029
|
|
2.
|
REAL ESTATE ACTIVITIES
|
Acquisitions
In July 2012, the Company acquired a 360-unit apartment community, including approximately 7,612 square feet of retail space, located in Charlotte, North Carolina for an aggregate gross purchase price of
$74,000. The purchase price of this community was allocated to land ($7,732), building, improvements and equipment ($65,521), other assets ($296) and identified lease related intangible assets ($451) based on their estimated fair values.
In December 2011, the Company acquired a 227-unit apartment community, including approximately 9,080 square feet of retail space, located
in Dallas, Texas for an aggregate gross purchase price of $48,500. The purchase price of this community was allocated to land ($7,324), building, improvements and equipment ($39,531), other assets ($881) and identified lease related intangible
assets ($764) based on their estimated fair values. The Company did not acquire any apartment communities in 2010.
Dispositions
The Company classifies real estate assets as held for sale after the approval of its board of directors and after the
Company has commenced an active program to sell the assets. Under ASC Topic 360, the operating results of real estate assets designated as held for sale and sold are included in discontinued operations in the consolidated statement of operations for
all periods presented. Additionally, all gains and losses on the sale of these assets are included in discontinued operations. There were no discontinued operations in 2012, 2011 and 2010 and there were no apartment communities or land parcels
classified as held for sale at December 31, 2012.
In 2010, the Company sold two land parcels, located in Tampa, Florida
and Raleigh, North Carolina, for net proceeds of approximately $8,888. No gain or loss was recognized, as the land parcels were previously recorded as held for sale at their fair values.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
80
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Condominium activities
At December 31, 2012, the Company was selling condominium homes in two wholly owned condominium communities. The Companys condominium community in Austin, Texas (the Austin Condominium
Project), originally consisting of 148 condominium units, had an aggregate carrying value of $14,433 at December 31, 2012. The Austin Condominium Project commenced closings of condominium units in the second quarter of 2010. The
Companys condominium community in Atlanta, Georgia (the Atlanta Condominium Project), originally consisting of 129 condominium units, had an aggregate carrying value of $8,848 at December 31, 2012. The Atlanta Condominium
Project commenced closings of condominium units in the fourth quarter of 2010. These amounts were included in the accompanying balance sheet under the caption, For-sale condominiums. Additionally, in the first half of 2010, the Company
completed its final sales of condominium units at two condominium conversion communities.
The revenues, costs and expenses
associated with consolidated condominium activities included in continuing operations in 2012, 2011 and 2010 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Condominium revenues
|
|
$
|
89,698
|
|
|
$
|
57,944
|
|
|
$
|
68,500
|
|
Condominium costs and expenses
|
|
|
(54,037
|
)
|
|
|
(48,407
|
)
|
|
|
(62,339
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains on sales of residential condominiums, before income tax
|
|
|
35,661
|
|
|
|
9,537
|
|
|
|
6,161
|
|
Net gain on sale of retail condominium, before income tax
|
|
|
-
|
|
|
|
977
|
|
|
|
-
|
|
Income tax benefit
|
|
|
612
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains on sales of condominiums
|
|
$
|
36,273
|
|
|
$
|
10,514
|
|
|
$
|
6,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company closed 96, 58 and 66 condominium homes for the years ended December 31, 2012, 2011 and
2010, respectively, at its condominium communities. In 2012, the Company recognized an income tax benefit of $612 related to the recovery of income taxes paid in prior years by the Companys taxable REIT subsidiaries (see note 9). In 2011, the
Company sold a retail condominium, representing a portion of the available retail space, at the Austin Condominium Project and recognized a net gain of $977.
3.
|
INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES
|
Apartment LLCs
At December 31, 2012, the Company held investments in two individual limited liability companies (the Apartment LLCs) with institutional investors that own four apartment communities,
including three communities located in Atlanta, Georgia and one community located in Washington, D.C. The Company has a 25% and 35% equity interest in these Apartment LLCs.
The Company accounts for its investments in the Apartment LLCs using the equity method of accounting. At December 31, 2012 and 2011, the Companys investment in the 35% owned Apartment LLCs
totaled $4,533 and $7,344, respectively, excluding the credit investments discussed below. The excess of the Companys investment over its equity in the underlying net assets of these Apartment LLCs was approximately $2,830 at December 31,
2012. The excess investment related to these Apartment LLCs is being amortized as a reduction to earnings on a straight-line basis over the lives of the related assets. The Companys investment in the 25% owned Apartment LLCs at
December 31, 2012 and 2011 reflects a credit investment of $16,297 and $15,945, respectively. These credit balances resulted from distribution of financing proceeds in excess of the Companys historical cost upon the formation of the
Apartment LLCs and are reflected in consolidated liabilities on the Companys consolidated balance sheet. The operating results of the Company include its allocable share of net income from the investments in the Apartment LLCs. The Company
provides property and asset management services to the Apartment LLCs for which it earns fees.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
81
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
A summary of financial information for the Apartment LLCs in the aggregate is as follows:
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
Apartment LLCs - Balance Sheet
Data
|
|
2012
|
|
|
2011
|
|
Real estate assets, net of accumulated depreciation of $38,332
and $32,780 at December 31, 2012 and 2011,
respectively
|
|
$
|
212,877
|
|
|
$
|
217,443
|
|
Assets held for sale, net
|
|
|
-
|
|
|
|
28,846
|
|
Cash and other
|
|
|
5,103
|
|
|
|
6,526
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
217,980
|
|
|
$
|
252,815
|
|
|
|
|
|
|
|
|
|
|
Mortgage notes payable
|
|
$
|
177,723
|
|
|
$
|
206,495
|
|
Other liabilities
|
|
|
2,588
|
|
|
|
2,737
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
180,311
|
|
|
|
209,232
|
|
Members equity
|
|
|
37,669
|
|
|
|
43,583
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and members equity
|
|
$
|
217,980
|
|
|
$
|
252,815
|
|
|
|
|
|
|
|
|
|
|
Companys equity investment in Apartment LLCs (1)
|
|
$
|
(11,764
|
)
|
|
$
|
(8,601
|
)
|
|
|
|
|
|
|
|
|
|
(1)
|
At December 31, 2012 and 2011, the Companys equity investment includes its credit investments of $16,297 and $15,945, respectively, discussed above.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
Apartment LLCs - Income Statement
Data
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
|
|
$
|
24,659
|
|
|
$
|
23,504
|
|
|
$
|
22,444
|
|
Other property revenues
|
|
|
1,844
|
|
|
|
1,823
|
|
|
|
1,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues
|
|
|
26,503
|
|
|
|
25,327
|
|
|
|
24,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating and maintenance
|
|
|
10,541
|
|
|
|
9,896
|
|
|
|
9,945
|
|
Depreciation and amortization
|
|
|
5,768
|
|
|
|
5,934
|
|
|
|
5,836
|
|
Interest
|
|
|
9,181
|
|
|
|
10,247
|
|
|
|
10,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
25,490
|
|
|
|
26,077
|
|
|
|
26,028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations
|
|
|
1,013
|
|
|
|
(750
|
)
|
|
|
(1,866
|
)
|
Gain (loss) from discontinued operations
|
|
|
21,667
|
|
|
|
(151
|
)
|
|
|
(254
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
22,680
|
|
|
$
|
(901
|
)
|
|
$
|
(2,120
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Companys share of net income in Apartment LLCs
|
|
$
|
7,995
|
|
|
$
|
1,001
|
|
|
$
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In February 2012, a 35% owned Apartment LLCs sold an apartment community located in Atlanta, Georgia. The
net cash proceeds from the sale of approximately $50,500 were used to retire the Apartment LLCs outstanding mortgage note payable of $29,272 and to make distributions to its members. The results of operations and the gain on sale of the apartment
community from this Apartment LLC are included in discontinued operations for all periods presented in the financial data listed above. The Companys equity in income of unconsolidated entities for the year ended December 31, 2012 includes
a net gain of $6,055 resulting from this transaction.
At December 31, 2012, mortgage notes payable included four
mortgage notes. The first $51,000 mortgage note bears interest at 3.50%, requires monthly interest only payments and matures in 2019. The second and third mortgage notes total $85,724, bear interest at 5.63%, require interest only payments and
mature in 2017. The fourth mortgage note totals $41,000, bears interest at 5.71%, requires interest only payments, and matures in January 2018 with a one-year automatic extension at a variable interest rate.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
82
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Condominium LLCs
In periods prior to September 2010, the Company and its partner held an approximate pro-rata 49% interest in a limited partnership (the Mixed-Use LP) that was constructing a mixed-use
development, consisting of the Atlanta Condominium Project and Class A office space, sponsored by two additional independent investors. Prior to September 2010, the Company accounted for its investment in the Mixed-Use LP using the equity
method of accounting.
In September 2010, the Atlanta Condominium Project and associated liabilities (including construction
indebtedness) were conveyed to a majority owned subsidiary of the Company in full redemption of the subsidiarys equity investment in the Mixed-Use LP. The net condominium assets and associated construction indebtedness were distributed at
their fair values. As part of the transaction, a separate wholly owned subsidiary of the Company acquired the lenders interest in the construction indebtedness of the Atlanta Condominium Project and a related land entity (which owned related
land and infrastructure that was previously impaired in 2009) for aggregate consideration of $49,793, effectively extinguishing the indebtedness. As a result of this distribution, equity in income of unconsolidated real estate entities includes a
gain of $23,596, net of transaction expenses and income taxes, related to the construction indebtedness, partially offset by an impairment loss of $5,492 related to the condominium assets. The Company also recognized a debt extinguishment gain of
$2,845 on the related debt retirement associated with the related land entity. Subsequent to the purchase of the construction indebtedness, and in exchange for the release of the guarantors of the indebtedness, the Company acquired the remaining
noncontrolling interest in the majority owned subsidiary that owned the community and the related land entity. As a result of these transactions, the Company wholly owned and consolidated the Atlanta Condominium Project for financial reporting
purposes as of September 2010.
A summary of results of operations for the Mixed-Use LP through September 2010 was as follows:
|
|
|
|
|
Mixed-Use LP - Income Statement Data
|
|
Period
ended
September 24,
2010
|
|
Revenues
|
|
$
|
90
|
|
Expenses
|
|
|
(1,648
|
)
|
Gain on distribution of assets / liabilities at fair value
|
|
|
20,049
|
|
|
|
|
|
|
Net income
|
|
$
|
18,491
|
|
|
|
|
|
|
Companys share of net income in Mixed-Use LP
|
|
$
|
18,104
|
|
|
|
|
|
|
At December 31, 2012 and 2011, the Companys indebtedness consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment
Terms
|
|
|
|
|
Maturity
Date
|
|
|
December 31,
|
|
Description
|
|
|
Interest Rate
|
|
|
|
2012
|
|
|
2011
|
|
Senior Unsecured Notes
|
|
Int.
|
|
|
3.375% - 4.75%
|
|
|
|
2017-2022
|
(1)
|
|
$
|
400,000
|
|
|
$
|
375,775
|
|
Unsecured Bank Term Loan
|
|
Int.
|
|
|
LIBOR + 1.70% (2)
|
|
|
|
2018
|
|
|
|
300,000
|
|
|
|
-
|
|
Unsecured Revolving Lines of Credit
|
|
Int.
|
|
|
LIBOR + 1.225% (3)
|
|
|
|
2016
|
|
|
|
-
|
|
|
|
135,000
|
|
Secured Mortgage Notes
|
|
Prin. and Int.
|
|
|
4.88% - 5.99%
|
|
|
|
2015-2019
|
(4)
|
|
|
402,464
|
|
|
|
459,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,102,464
|
|
|
$
|
970,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
There are no maturities of senior unsecured notes in 2013. The outstanding unsecured notes mature in 2017 and 2022.
|
(2)
|
Represents stated rate at December 31, 2012. As discussed below, the Company has entered into interest rate swap arrangements that effectively
fix the interest rate under this facility. At December 31, 2012, the effective blended interest rate under the Term Loan was 3.24%.
|
(3)
|
Represents stated rate at December 31, 2012.
|
(4)
|
There are no maturities of secured notes in 2013. These notes mature between 2015 and 2019.
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
83
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Debt maturities
The aggregate maturities of the Companys indebtedness are as follows:
|
|
|
|
|
2013
|
|
$
|
3,731
|
|
2014
|
|
|
3,961
|
|
2015
|
|
|
124,205
|
|
2016
|
|
|
4,419
|
|
2017
|
|
|
154,736
|
|
Thereafter
|
|
|
811,412
|
|
|
|
|
|
|
|
|
$
|
1,102,464
|
|
|
|
|
|
|
Debt issuances, retirements and modifications
2012
In January 2012, the Company entered into a $300,000
unsecured bank term loan facility provided by a syndicate of eight financial institutions (the Term Loan). In conjunction with the closing of the Term Loan, the Company borrowed $100,000, which was used to pay down outstanding line of
credit borrowings. In May 2012, the Company borrowed an additional $130,000, which was primarily used to retire the senior unsecured notes that matured in June 2012, as discussed below. In July 2012, the Company borrowed the remaining available
capacity of $70,000 under the Term Loan, which was used for general corporate purposes, including the repayment of secured mortgage indebtedness discussed below. Through September 30, 2012, the Term Loan carried a stated interest rate of LIBOR
plus 1.90% and required the payment of unused commitment fees of 0.25% on the aggregate undrawn loan commitments through July 2, 2012. The Term Loan provides for the stated interest rate to be adjusted up or down based on changes in the credit
ratings on the Companys senior unsecured debt. The component of the interest rate based on the Companys credit ratings ranges from 1.50% to 2.30%. In September and October 2012, the Companys corporate and senior unsecured debt
credit ratings were upgraded by the two national credit rating services which rate the Companys debt. As a result, the stated interest rate under the Term Loan was reduced, effective October 1, 2012, to LIBOR plus 1.70% reflecting the
Companys revised credit rating.
The Term Loan matures in January 2018, includes two six-month extension options, and
carries other terms, including financial covenants, substantially consistent with the Syndicated Line discussed further below. As discussed in note 14, the Company entered into interest rate swap arrangements to serve as cash flow hedges of amounts
expected to be outstanding under the Term Loan. The interest rate swap arrangements effectively fix the LIBOR component of the interest rate paid under the Term Loan at a blended rate of approximately 1.54%. As a result, the effective blended
interest rate on the Term Loan was 3.24% as of December 31, 2012 (subject to any adjustment based on subsequent changes in the Companys credit ratings).
In June 2012, the Company repaid $95,684 of senior unsecured notes upon their maturity. The stated interest rate on these notes was 5.45%.
In October 2012, the Company prepaid $53,027 of secured mortgage indebtedness at par. The indebtedness was scheduled to mature in January
2013 and the stated interest rate on the indebtedness was 5.50%.
In November 2012, the Company issued $250,000 of senior
unsecured notes. These notes bear interest at 3.375% and are due in 2022. In December 2012, the Company used a portion of the proceeds from the $250,000 unsecured notes to prepay $130,091 of 6.30% senior unsecured notes. In conjunction with the
prepayment, the Company recognized an extinguishment loss of $4,017 related to prepayment premiums and the write-off of unamortized deferred loan costs.
2011
In October 2011, the Company repaid $9,637 of senior
unsecured notes upon their maturity. The stated interest rate on these notes was 5.125%.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
84
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
In December 2011, the Company prepaid $184,683 of secured mortgage indebtedness that was
scheduled to mature in 2014. In conjunction with the prepayment, the Company recognized an extinguishment loss of $6,919 related to the payment of prepayment premiums and the write-off of unamortized deferred loan costs. The stated interest rate on
this mortgage note was 6.09%.
Unsecured lines of credit
At December 31, 2012, the Company had a $300,000 syndicated unsecured revolving line of credit, which was amended in January 2012 (the Syndicated Line). At December 31, 2012, the
Syndicated Line had a stated interest rate of LIBOR plus 1.225%, was provided by a syndicate of eleven financial institutions and required the payment of annual facility fees of 0.225% of the aggregate loan commitments. The Syndicated Line matures
in January 2016 and may be extended for an additional year at the Companys option, subject to the satisfaction of certain conditions. The Syndicated Line provides for the interest rate and facility fee rate to be adjusted up or down based on
changes in the credit ratings on the Companys senior unsecured debt. The component of the interest rate and the facility fee rate that are based on the Companys credit ratings range from 1.00% to 1.80% and from 0.15% to 0.40%,
respectively. The Syndicated Line also includes a competitive bid option for borrowings up to 50% of the loan commitments, which may result in interest rates for such borrowings below the stated interest rates for the Syndicated Line, depending on
market conditions. The credit agreement for the Syndicated Line contains customary restrictions, representations, covenants and events of default, including minimum fixed charge coverage, minimum unsecured interest coverage, and maximum leverage
ratios. The Syndicated Line also restricts the amount of capital the Company can invest in specific categories of assets, such as improved land, properties under construction, condominium properties, non-multifamily properties, debt or equity
securities, notes receivable and unconsolidated affiliates. The Syndicated Line prohibits the Company from investing further capital in condominium assets, excluding its current investments in the Atlanta Condominium Project and the Austin
Condominium Project, and certain mixed-use projects, as defined. At December 31, 2012, letters of credit to third parties totaling $570 had been issued for the account of the Company under this facility.
Additionally, at December 31, 2012, the Company had a $30,000 unsecured line of credit, which was also amended in January 2012 (the
Cash Management Line). The Cash Management Line matures in January 2016, includes a one-year extension option, and carries pricing and terms, including financial covenants, substantially consistent with the Syndicated Line.
In connection with the refinancing of the line of credit facilities, the Company recognized an extinguishment loss of $301 related to the
write-off of a portion of unamortized deferred financing costs associated with the amendment of the Syndicated Line. In connection with the Term Loan financing, and the refinancing of the Syndicated Line and the Cash Management Line in January 2012,
the Company incurred fees and expenses of approximately $5,159.
Debt compliance and other
The Companys Syndicated Line, Cash Management Line, Term Loan and senior unsecured notes contain customary restrictions,
representations, covenants and events of default and require the Company to meet certain financial covenants. Debt service and fixed charge coverage covenants require the Company to maintain coverages of a minimum of 1.5 to 1.0, as defined in
applicable debt arrangements. Additionally, the Companys ratio of unencumbered adjusted property-level net operating income to unsecured interest expense may not be less than 2.0 to 1.0, as defined in the applicable debt arrangements. Leverage
covenants generally require the Company to maintain calculated covenants above/below minimum/maximum thresholds. The primary leverage ratios under these arrangements include total debt to total asset value (maximum of 60%), total secured debt to
total asset value (maximum of 40%) and unencumbered assets to unsecured debt (minimum of 1.5 to 1.0), as defined in the applicable debt arrangements. The Company believes it met these financial covenants at December 31, 2012.
The aggregate net book value at December 31, 2012 of property pledged as collateral for indebtedness amounted to approximately
$335,952.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
85
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
5.
|
EQUITY AND NONCONTROLLING INTERESTS
|
Common stock
In May 2012, the Company adopted a new at-the-market (ATM) common equity sales program for the sale of up to 4,000 shares of common stock. At December 31, 2012, the Company had not used
the new program and had 4,000 shares remaining for issuance. Sales of common stock under the previous ATM program totaled 550, 3,409 and 41 shares for gross process of $26,153, $138,628 and $1,144 in 2012, 2011 and 2010, respectively. The average
gross sales price per share was $47.55, $40.67 and $27.70, for 2012, 2011 and 2010, respectively. The Companys net proceeds of $25,457, $135,651 and $1,121 for 2012, 2011 and 2010, respectively, were contributed to the Operating Partnership in
exchange for a like number of common units. The Company and the Operating Partnership have and expect to use the proceeds from this program for general corporate purposes.
In December 2012, the Companys board of directors adopted a stock and unsecured note repurchase program under which the Company and the Operating Partnership may repurchase up to $200,000 of common
and preferred stock and unsecured notes through December 2014. There were no shares of common stock repurchased in 2012, 2011 or 2010 under this program or the previous stock repurchase program which expired December 2012. The Company made
repurchases of preferred stock under these programs in 2011 and 2010 as described below.
Preferred stock
At December 31, 2012, the Company had one outstanding series of cumulative redeemable preferred stock with the following
characteristics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Outstanding
Shares
|
|
|
Liquidation
Preference
|
|
|
Optional
Redemption
Date (1)
|
|
|
Redemption
Price
(1)
|
|
|
Stated
Dividend
Yield
|
|
|
Approximate
Dividend
Rate
|
|
|
|
|
|
|
(per share)
|
|
|
|
|
|
(per share)
|
|
|
|
|
|
(per share)
|
|
Series A
|
|
|
868
|
|
|
$
|
50.00
|
|
|
|
10/01/26
|
|
|
$
|
50.00
|
|
|
|
8-1/2
|
%
|
|
$
|
4.25
|
|
(1) The redemption price is the price at which the preferred stock is redeemable,
at the Companys option, for cash.
In March 2011, the Company redeemed its 7-5/8% Series B preferred stock at its
redemption value of $49,571, plus accrued and unpaid dividends through the redemption date. Correspondingly, the Operating Partnership redeemed its Series B preferred units on the same date and under the same terms. In connection with the issuance
of the Series B preferred stock in 1997, the Company incurred issuance costs and recorded such costs as a reduction of shareholders equity. The redemption price of the Series B preferred stock exceeded the related carrying value by the
associated issuance costs and expenses of $1,757. In connection with the redemption, the Company reflected $1,757 of issuance costs and expenses as a reduction of earnings in arriving at the net income available to common shareholders in 2011.
Likewise, the redemption price of the Series B preferred units exceeded the related carrying value by the associated issuance costs and expenses of $1,757, and the Operating Partnership reflected the $1,757 as a reduction of earnings in arriving at
the net loss attributable to common unitholders in 2011.
In 2010, the Company repurchased preferred stock with a liquidation
value of approximately $2,037 under a Rule 10b5-1 plan. Correspondingly, the Operating Partnership redeemed preferred units on the same date and under the same terms.
Noncontrolling interests
In accordance with ASC Topic 810, the Company
and the Operating Partnership determined that the noncontrolling interests related to the common units of the Operating Partnership, held by persons other than the Company, met the criterion to be classified and accounted for as
temporary equity (reflected outside of total equity as Redeemable Common Units). At December 31, 2012, the aggregate redemption value of the noncontrolling interests in the Operating Partnership of $7,159 was in excess
of its net book value of $2,820. At December 31, 2011, the aggregate redemption value of the noncontrolling interests in the Operating Partnership of $6,840 was in excess of its net book value of $2,935. The Company further determined that the
noncontrolling interests in its consolidated real estate entities met the criterion to be classified and accounted for as a component of permanent equity.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
86
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
A roll-forward of activity relating to the Companys redeemable common units for 2012, 2011 and
2010 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Redeemable common units, beginning of period
|
|
$
|
6,840
|
|
|
$
|
6,192
|
|
|
$
|
3,402
|
|
Comprehensive income (loss)
|
|
|
194
|
|
|
|
54
|
|
|
|
(51
|
)
|
Conversion of redeemable common units for shares
|
|
|
(591
|
)
|
|
|
(547
|
)
|
|
|
(74
|
)
|
Adjustment for ownership interest of redeemable common units
|
|
|
416
|
|
|
|
466
|
|
|
|
7
|
|
Stock-based compensation
|
|
|
7
|
|
|
|
7
|
|
|
|
11
|
|
Distributions to common unitholders
|
|
|
(141
|
)
|
|
|
(136
|
)
|
|
|
(137
|
)
|
Adjustment to redemption value of redeemable common units
|
|
|
434
|
|
|
|
804
|
|
|
|
3,034
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable common units, end of period
|
|
$
|
7,159
|
|
|
$
|
6,840
|
|
|
$
|
6,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
|
COMPANY EARNINGS PER SHARE
|
In 2012, 2011 and 2010, a reconciliation of the numerator and denominator used in the computation of basic and diluted
income (loss) from continued operations available to common shareholders of the Company was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Net income (loss) attributable to common shareholders (numerator):
|
|
|
|
|
|
Net income (loss)
|
|
$
|
84,291
|
|
|
$
|
25,595
|
|
|
$
|
(6,991
|
)
|
Noncontrolling interests - consolidated real estate entities
|
|
|
(135
|
)
|
|
|
(67
|
)
|
|
|
(20
|
)
|
Noncontrolling interests - Operating Partnership
|
|
|
(217
|
)
|
|
|
(62
|
)
|
|
|
51
|
|
Preferred stock dividends
|
|
|
(3,688
|
)
|
|
|
(4,455
|
)
|
|
|
(7,503
|
)
|
Preferred stock redemption costs
|
|
|
-
|
|
|
|
(1,757
|
)
|
|
|
(44
|
)
|
Unvested restricted stock (allocation of earnings)
|
|
|
(186
|
)
|
|
|
(59
|
)
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common shareholders
|
|
$
|
80,065
|
|
|
$
|
19,195
|
|
|
$
|
(14,442)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares (denominator):
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - basic
|
|
|
53,821
|
|
|
|
50,420
|
|
|
|
48,483
|
|
Dilutive shares from stock options
|
|
|
310
|
|
|
|
388
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - diluted
|
|
|
54,131
|
|
|
|
50,808
|
|
|
|
48,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-share amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.49
|
|
|
$
|
0.38
|
|
|
$
|
(0.30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
1.48
|
|
|
$
|
0.38
|
|
|
$
|
(0.30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options to purchase 158, 531 and 1,916 shares of common stock in 2012, 2011 and 2010, respectively,
were excluded from the computation of diluted earnings (loss) per common share as these stock options were antidilutive.
7.
|
OPERATING PARTNERSHIP EARNINGS PER SHARE
|
In 2012, 2011 and 2010, a reconciliation of the numerator and denominator used in the computation of basic and diluted
income (loss) from continuing operations available to common unitholders of the Operating Partnership was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Net income (loss) available to common unitholders (numerator):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
84,291
|
|
|
$
|
25,595
|
|
|
$
|
(6,991
|
)
|
Noncontrolling interests - consolidated real estate entities
|
|
|
(135
|
)
|
|
|
(67
|
)
|
|
|
(20
|
)
|
Preferred unit distributions
|
|
|
(3,688
|
)
|
|
|
(4,455
|
)
|
|
|
(7,503
|
)
|
Preferred unit redemption costs
|
|
|
-
|
|
|
|
(1,757
|
)
|
|
|
(44
|
)
|
Unvested restricted stock (allocation of earnings)
|
|
|
(186
|
)
|
|
|
(59
|
)
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common unitholders
|
|
$
|
80,282
|
|
|
$
|
19,257
|
|
|
$
|
(14,493)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
87
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Common units (denominator):
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average units outstanding - basic
|
|
|
53,968
|
|
|
|
50,584
|
|
|
|
48,655
|
|
Dilutive units from stock options
|
|
|
310
|
|
|
|
388
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average units outstanding - diluted
|
|
|
54,278
|
|
|
|
50,972
|
|
|
|
48,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per-unit amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.49
|
|
|
$
|
0.38
|
|
|
$
|
(0.30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
1.48
|
|
|
$
|
0.38
|
|
|
$
|
(0.30
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options to purchase 158, 531 and 1,916 shares of common stock in 2012, 2011 and 2010, respectively,
were excluded from the computation of diluted earnings (loss) per common unit as these stock options were antidilutive.
In 2010, the Company recorded an impairment charge of $34,691 to write down the Austin Condominium Project to its
estimated fair value. The estimated fair value of the project was derived from the discounted present value of the projects estimated future cash flows over an extended sell-out period, considering market conditions in the Austin market at
that time (see note 14). The Company also recorded impairment charges of $400 to write-down the carrying value of a land parcel to fair value prior to its sale in 2010 (see note 14).
In 2010, the Company also recorded impairment losses of $5,492 through its equity in earnings of unconsolidated entities related to the
distribution of the Atlanta Condominium Project to the Company at fair value (see notes 3 and 14).
The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the
Code). To qualify as a REIT, the Company must distribute annually at least 90% of its adjusted taxable income, as defined in the Code, to its shareholders and satisfy certain other organizational and operating requirements. It is
managements current intention to adhere to these requirements and maintain the Companys REIT status. As a REIT, the Company generally will not be subject to federal income tax at the corporate level on the taxable income it distributes
to its shareholders. Should the Company fail to qualify as a REIT in any tax year, it may be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not be able to qualify as a REIT for
four subsequent taxable years. The Company may be subject to certain state and local taxes on its income and property, and to federal income taxes and excise taxes on its undistributed taxable income.
The Operating Partnership files tax returns as a limited partnership under the Code. As a partnership, the income and losses of the
Operating Partnership are allocated to its partners, including the Company, for inclusion in their respective income tax returns. Accordingly, no provision or benefit for income taxes has been in the accompanying Operating Partnership financial
statements. The Operating Partnership intends to make sufficient cash distributions to the Company to enable it to meet its annual REIT distribution requirements.
In the preparation of income tax returns in federal and state jurisdictions, the Company, the Operating Partnership and its taxable REIT subsidiaries assert certain tax positions based on their
understanding and interpretation of the income tax law. The taxing authorities may challenge such positions and the resolution of such matters could result in the payment and recognition of additional income tax expense. Management believes it has
used reasonable judgments and conclusions in the preparation of its income tax returns. The Company and its subsidiaries (including the Companys taxable REIT subsidiaries (TRSs)) income tax returns are subject to examination
by federal and state tax jurisdictions for years 2009 through 2011. Net income tax loss carryforwards and other tax attributes generated in years prior to 2009 are also subject to challenge in any examination of the 2009 to 2011 tax years.
As of December 31, 2012 and 2011, the Companys TRSs had unrecognized tax benefits of approximately $797 which
primarily related to uncertainty regarding the sustainability of certain deductions taken on prior year income tax returns of the TRS with respect to the amortization of certain intangible assets. The uncertainty surrounding this unrecognized tax
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
88
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
benefit will generally be clarified in future periods as income tax loss carryforwards are utilized. To the extent these unrecognized tax benefits are ultimately recognized, they may affect the
effective tax rate in a future period. The Companys policy is to recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense. Accrued interest and penalties for 2012, 2011 and 2010 were not material to
the Companys results of operations, cash flows or financial position.
Reconciliation of net income (loss) available to the Company
to taxable income
As discussed in note 1, the Company conducts substantially all of its operations through its
majority-owned subsidiary, the Operating Partnership. For income tax reporting purposes, the Company receives an allocable share of the Operating Partnerships ordinary income (loss) and capital gains based on its weighted average ownership,
adjusted for certain specially allocated items. All adjustments to net income (loss) in the table below are net of amounts attributable to minority interests and taxable REIT subsidiaries. A reconciliation of net income (loss) available to the
Company to taxable income for 2012, 2011 and 2010 is detailed below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
(Estimate)
|
|
|
2011
(Actual)
|
|
|
2010
(Actual)
|
|
Net income (loss) available to the Company
|
|
$
|
83,939
|
|
|
$
|
25,466
|
|
|
$
|
(6,960
|
)
|
Add (subtract) net loss (income) of taxable REIT subsidiaries
|
|
|
(33,956
|
)
|
|
|
(739
|
)
|
|
|
11,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) available to the Company
|
|
|
49,983
|
|
|
|
24,727
|
|
|
|
4,185
|
|
Book/tax depreciation difference
|
|
|
(2,555
|
)
|
|
|
(3,863
|
)
|
|
|
(1,693
|
)
|
Book/tax difference on gains from real estate sales
|
|
|
1,718
|
|
|
|
-
|
|
|
|
(4,264
|
)
|
Book/tax difference on stock-based compensation
|
|
|
(15,706
|
)
|
|
|
(5,108
|
)
|
|
|
(2,784
|
)
|
Book/tax difference relating to real estate asset carrying values
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,848
|
)
|
Other book/tax differences, net
|
|
|
(1,090
|
)
|
|
|
(3,761
|
)
|
|
|
(1,707
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable income of the Company before allocation of taxable capital gains
|
|
|
32,350
|
|
|
|
11,995
|
|
|
|
(17,111
|
)
|
Income taxable as capital gains
|
|
|
(7,757
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable ordinary income (loss) of the Company
|
|
$
|
24,593
|
|
|
$
|
11,995
|
|
|
$
|
(17,111
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax characterization of dividends
For income tax purposes, dividends to common shareholders are characterized as ordinary income, capital gains or as a return of a shareholders invested capital. A summary of the income tax
characterization of the Companys dividends paid per common share is as follows for 2012, 2011 and 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
Amount (1)
|
|
|
% (1)
|
|
|
Amount (1)
|
|
|
% (1)
|
|
|
Amount (1)
|
|
|
% (1)
|
|
Ordinary income
|
|
$
|
0.53
|
|
|
|
56.6
|
%
|
|
$
|
0.23
|
|
|
|
28.0
|
%
|
|
$
|
-
|
|
|
|
-
|
%
|
Capital gains
|
|
|
0.07
|
|
|
|
7.0
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Unrecaptured Section 1250 gains
|
|
|
0.06
|
|
|
|
6.9
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Return of capital
|
|
|
0.28
|
|
|
|
29.5
|
|
|
|
0.59
|
|
|
|
72.0
|
|
|
|
0.80
|
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
0.94
|
|
|
|
100.0
|
%
|
|
$
|
0.82
|
|
|
|
100.0
|
%
|
|
$
|
0.80
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The amounts and percentages detailed in the table above represent average amounts for the years presented. Actual quarterly amounts may differ.
|
The income tax characterization of dividends to common shareholders is based on the calculation of Taxable
Earnings and Profits, as defined in the Code. Taxable Earnings and Profits differ from regular taxable income due primarily to differences in the estimated useful lives and methods used to compute depreciation and in the recognition of gains and
losses on the sale of real estate assets.
As of December 31, 2012, the net basis for federal income tax purposes, taking
into account the special allocation of gain to the partners contributing property to the Operating Partnership and including minority interest in the Operating Partnership, was higher than the net assets as reported in the Companys
consolidated financial statements by $21,393.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
89
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Taxable REIT subsidiaries
The Company utilizes TRSs principally to perform such non-REIT activities as asset and property management, for-sale housing
(condominiums) sales and other services. These TRSs are subject to federal and state income taxes. In 2012, the TRSs recognized an income tax benefit of $612 related to the recovery of income taxes paid in prior years. In 2011, the TRSs recognized
an income tax benefit of $470 resulting from adjustments of prior year state tax provisions based on filed tax returns. In 2010, the TRSs recognized an income tax provision of $503 primarily related to state income taxes. No additional tax provision
(benefit) was recognized for temporary differences originating or reversing in 2012, 2011 and 2010 based on a determination that aggregate deferred tax assets were not realizable through carryback claims to prior years or through expectations of
future earnings at the TRS level.
At December 31, 2012 and 2011, the TRSs net deferred tax assets totaled $38,559
and $60,197, respectively. The TRSs net deferred tax assets primarily reflect real estate asset basis differences between carrying amounts for financial and income tax reporting purposes, income tax loss carryforwards and the timing of income
and expense recognition for certain accrued liabilities and transactions. At December 31, 2012 and 2011, management had established valuation allowances to offset such net deferred tax assets due primarily to historical losses at the TRSs
in prior years and the variability of the income (loss) of these subsidiaries. The tax benefits associated with such unused valuation allowances may be recognized in future periods, if the TRSs generate sufficient taxable income to utilize such
amounts or if the TRSs determine that it is more likely than not that the related deferred tax assets are realizable.
Other
than the impact of state income taxes and the change in valuation allowances for all net deferred tax asset temporary differences, the income tax expense of the TRSs for 2012, 2011 and 2010 was consistent with the federal statutory rate of 35%.
10.
|
STOCK-BASED COMPENSATION PLANS
|
As the primary operating subsidiary of the Company, the Operating Partnership participates in and bears the
compensation expenses associated with the Companys stock-based compensation plans. The information discussed below relating to the Companys stock-based compensation plans is also applicable for the Operating Partnership.
Incentive stock plans
Incentive stock awards are granted under the Companys 2003 Incentive Stock Plan, as amended and restated in October 2008 (the
2003 Stock Plan). Under the 2003 Stock Plan, an aggregate of 3,469 shares of common stock were reserved for issuance. Of this amount, stock grants count against the total shares available under the 2003 Stock Plan as 2.7 shares for every
one share issued, while options (and stock appreciation rights (SAR) settled in shares) count against the total shares available as one share for every one share issued on the exercise of an option (or SAR). The exercise price of each
option granted under the 2003 Stock Plan may not be less than the market price of the Companys common stock on the date of the option grant and all options may have a maximum life of ten years. Participants receiving restricted stock grants
are generally eligible to vote such shares and receive dividends on such shares. Substantially all stock option and restricted stock grants are subject to annual vesting provisions (generally three to five years) as determined by the compensation
committee overseeing the 2003 Stock Plan.
Compensation costs for stock options have been estimated on the grant date using
the Black-Scholes option-pricing method. The weighted average assumptions used in the Black-Scholes option-pricing model are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Dividend yield
|
|
|
2.0%
|
|
|
|
2.2%
|
|
|
|
4.4
|
%
|
Expected volatility
|
|
|
43.3%
|
|
|
|
42.4%
|
|
|
|
41.6
|
%
|
Risk-free interest rate
|
|
|
1.1%
|
|
|
|
2.7%
|
|
|
|
2.8
|
%
|
Expected option term (years)
|
|
|
6.0 years
|
|
|
|
6.0 years
|
|
|
|
6.0 years
|
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
90
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
The Companys assumptions were derived from the methodologies discussed herein. The
expected dividend yield reflects the Companys current historical yield, which was expected to approximate the future yield. Expected volatility was based on the historical volatility of the Companys common stock. The risk-free interest
rate for the expected life of the options was based on the implied yields on the U.S. Treasury yield curve. The weighted average expected option term was based on the Companys historical data for prior period stock option exercise and
forfeiture activity.
Restricted stock
Compensation cost for restricted stock is amortized ratably into compensation expense over the applicable vesting periods. Total compensation expense related to restricted stock was $2,334, $2,004 and
$2,309 in 2012, 2011 and 2010, respectively. At December 31, 2012, there was $2,583 of unrecognized compensation cost related to restricted stock. This cost is expected to be recognized over a weighted average period of 2.0 years. The total
intrinsic value of restricted shares vested in 2012, 2011 and 2010 was $3,892, $4,246 and $3,561, respectively.
A summary of
the activity related to the Companys restricted stock for the years ended December 31, 2012, 2011 and 2010 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
|
|
|
Weighted-Avg.
|
|
|
|
|
|
Weighted-Avg.
|
|
|
|
|
|
Weighted-Avg.
|
|
|
|
|
|
|
Grant-Date
|
|
|
|
|
|
Grant-Date
|
|
|
|
|
|
Grant-Date
|
|
|
|
Shares
|
|
|
Fair Value
|
|
|
Shares
|
|
|
Fair Value
|
|
|
Shares
|
|
|
Fair Value
|
|
Unvested share, beginning of period
|
|
|
84
|
|
|
$
|
29
|
|
|
|
129
|
|
|
$
|
19
|
|
|
|
132
|
|
|
$
|
21
|
|
Granted (1)
|
|
|
59
|
|
|
|
45
|
|
|
|
52
|
|
|
|
38
|
|
|
|
98
|
|
|
|
20
|
|
Vested
|
|
|
(78
|
)
|
|
|
30
|
|
|
|
(97
|
)
|
|
|
21
|
|
|
|
(101
|
)
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unvested shares, end of period
|
|
|
65
|
|
|
|
42
|
|
|
|
84
|
|
|
|
29
|
|
|
|
129
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The total value of the restricted share grants in 2012, 2011 and 2010 was $2,657, $2,012 and $2,002, respectively.
|
Stock options
Compensation cost for stock options is amortized ratably into compensation expense over the applicable vesting periods. In 2012, 2011 and
2010, the Company recorded compensation expense related to stock options of $380, $379 and $317, respectively, recognized under the fair value method. At December 31, 2012, there was $419 of unrecognized compensation cost related to unvested
stock options. This cost is expected to be recognized over a weighted average period of 1.7 years.
A summary of stock option activity under
all plans in 2012, 2011 and 2010, is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
Shares
|
|
|
Exercise
Price
|
|
|
Shares
|
|
|
Exercise
Price
|
|
|
Shares
|
|
|
Exercise
Price
|
|
Options outstanding, beginning of period
|
|
|
1,501
|
|
|
$
|
31
|
|
|
|
2,068
|
|
|
$
|
31
|
|
|
|
2,516
|
|
|
$
|
31
|
|
Granted
|
|
|
29
|
|
|
|
44
|
|
|
|
25
|
|
|
|
37
|
|
|
|
66
|
|
|
|
18
|
|
Exercised
|
|
|
(845
|
)
|
|
|
30
|
|
|
|
(582
|
)
|
|
|
30
|
|
|
|
(267
|
)
|
|
|
20
|
|
Expired
|
|
|
-
|
|
|
|
-
|
|
|
|
(10
|
)
|
|
|
39
|
|
|
|
(247
|
)
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options outstanding, end of period (1)
|
|
|
685
|
|
|
|
34
|
|
|
|
1,501
|
|
|
|
31
|
|
|
|
2,068
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options exercisable, end of period (1)
|
|
|
617
|
|
|
|
34
|
|
|
|
1,348
|
|
|
|
33
|
|
|
|
1,834
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options vested and expected to vest, end of period (1)
|
|
|
682
|
|
|
|
34
|
|
|
|
1,494
|
|
|
|
31
|
|
|
|
2,057
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average fair value of options granted during the period
|
|
$
|
15.18
|
|
|
|
|
|
|
$
|
13.18
|
|
|
|
|
|
|
$
|
5.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
91
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
(1)
|
At December 31, 2012, the aggregate intrinsic value of stock options outstanding, exercisable and vested/expected to vest was $11,066, $9,988
and $11,008, respectively. At that same date, the weighted average remaining contractual lives of stock options outstanding, exercisable and vested/expected to vest was 3.8 years, 3.4 years and 3.8 years, respectively.
|
Upon the exercise of stock options, the Company issues shares of common stock from treasury shares or, to the extent treasury shares are
not available, from authorized common shares. The total intrinsic value of stock options exercised in 2012, 2011 and 2010 and was $15,808, $5,525 and $2,827, respectively.
At December 31, 2012, the Company segregated its outstanding options into two ranges, based on exercise prices, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Ranges
|
|
Options Outsanding
|
|
|
Options Exercisable
|
|
|
|
Shares
|
|
|
Weighted Avg.
Exercise Price
|
|
|
Weighted Avg. Life
(Years)
|
|
|
Shares
|
|
|
Weighted Avg.
Exercise Price
|
|
$12.22 - $32.53
|
|
|
343
|
|
|
$
|
24
|
|
|
|
3.7
|
|
|
|
322
|
|
|
$
|
25
|
|
$34.90 - $48.00
|
|
|
342
|
|
|
|
43
|
|
|
|
4.3
|
|
|
|
295
|
|
|
|
44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
685
|
|
|
|
34
|
|
|
|
3.8
|
|
|
|
617
|
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee stock purchase plan
The Company maintains an Employee Stock Purchase Plan (the ESPP) approved by Company shareholders in 2005. The maximum number of shares issuable under the ESPP is 300. The purchase price of
shares of common stock under the ESPP is equal to 85% of the lesser of the closing price per share of common stock on the first or last day of the trading period, as defined. The Company records the aggregate cost of the ESPP (generally the 15%
discount on the share purchases) as a period expense. Total compensation expense relating to the ESPP was $223, $198 and $384 in 2012, 2011 and 2010, respectively.
11.
|
EMPLOYEE BENEFIT PLAN
|
The Company maintains a defined contribution plan pursuant to Section 401 of the Code (the 401K Plan)
that allows eligible employees to contribute a percentage of their compensation to the 401K Plan. The Company matches 50% of the employees pre-tax contribution up to a maximum employee contribution of 6% of salary in 2012, 2011 and 2010.
Company contributions of $670, $639 and $655 were made to the 401K Plan in 2012, 2011 and 2010, respectively. Contributions are made in the Companys common stock.
12.
|
COMMITMENTS AND CONTINGENCIES
|
Land, office and equipment leases
The Company is party to two ground leases expiring in 2038 and 2074 for two separate operating communities as well as to other facility, office, equipment and other operating leases with terms expiring
through 2057. One of the ground leases contains stated rent increases that generally compensate for the impact of inflation. The other ground lease does not contain any escalating payments. Future minimum lease payments for non-cancelable land,
office, equipment and other leases at December 31, 2012, were as follows:
|
|
|
|
|
2013
|
|
$
|
718
|
|
2014
|
|
|
639
|
|
2015
|
|
|
623
|
|
2016
|
|
|
602
|
|
2017
|
|
|
614
|
|
2018 and thereafter
|
|
|
65,797
|
|
The Company incurred $3,738, $3,691 and $5,202 of rent expense, including rent expense under short-term
rental and lease arrangements, in 2012, 2011 and 2010, respectively.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
92
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
In June 2011, the Company acquired the land under its Post
Renaissance
®
apartment community for approximately $6,670 and the former ground leases associated with the land
were terminated.
In 2010, the land under the Companys and Federal Realty Investment Trusts (Federal)
Pentagon Row project was transferred to the Company and Federal pursuant to a final court order, and the former ground leases were terminated. The Company paid approximately $8,800 for its interest in the property, which for financial reporting
purposes was offset by a similar amount of accrued straight-line ground rent, previously recorded relating to the former ground leases. Other than the recognition of income of approximately $723 from the reimbursement of a portion of the ground
lease payments the Company incurred subsequent to the initial court ruling, the Company recognized no additional gain (loss) as a result of this transaction.
Legal proceedings
In September 2010, the United States Department of
Justice (the DOJ) filed a lawsuit against the Company in the United States District Court for the Northern District of Georgia. The suit alleges various violations of the Fair Housing Act (FHA) and the Americans with
Disabilities Act (ADA) at properties designed, constructed or operated by the Company in the District of Columbia, Virginia, Florida, Georgia, New York, North Carolina and Texas. The plaintiff seeks statutory damages and a civil penalty
in unspecified amounts, as well as injunctive relief that includes retrofitting apartments and public use areas to comply with the FHA and the ADA and prohibiting construction or sale of noncompliant units or complexes. The Company filed a motion to
transfer the case to the United States District Court for the District of Columbia, where a previous civil case involving alleged violations of the FHA and ADA by the Company was filed and ultimately dismissed. On October 29, 2010, the United
States District Court for the Northern District of Georgia issued an opinion finding that the complaint shows that the DOJs claims are essentially the same as the previous civil case, and, therefore, granted the Companys motion and
transferred the DOJs case to the United States District Court for the District of Columbia. Limited discovery is proceeding. Under the Courts scheduling order, the deadline for completion of discovery is November 2013 and briefing of any
dispositive motions would be accomplished by March 2014. Due to the preliminary nature of the litigation, it is not possible to predict or determine the outcome of the legal proceeding, nor is it possible to estimate the amount of loss, if any, that
would be associated with an adverse decision.
The Company is involved in various other legal proceedings incidental to their
business from time to time, most of which are expected to be covered by liability or other insurance. Management of the Company believes that any resolution of pending proceedings or liability to the Company which may arise as a result of these
various other legal proceedings will not have a material effect on the Companys results of operations, cash flows or financial position.
13.
|
RELATED PARTY TRANSACTIONS
|
In 2012, 2011 and 2010, the Company held investments in Apartment LLCs accounted for under the equity method of
accounting (see note 3). In 2012, 2011 and 2010, the Company recorded, before elimination of the Companys equity interests, project management fees, property management fees and expense reimbursements (primarily personnel costs) of
approximately $3,488, $3,978 and $3,894, respectively, from these related companies. The Companys portion of all significant intercompany transactions was eliminated in the accompanying consolidated financial statements.
14.
|
FAIR VALUE MEASURES AND FINANCIAL INSTRUMENTS
|
From time to time, the Company records certain assets and liabilities at fair value. Real estate assets may be stated
at fair value if they become impaired in a given period and may be stated at fair value if they are held for sale and the fair value of such assets is below historical cost. Additionally, the Company records derivative financial instruments at fair
value. The Company also uses fair value metrics to evaluate the carrying values of its real estate assets and for the disclosure of certain financial instruments. Fair value measurements were determined by management using available market
information and appropriate valuation methodologies available to management at December 31, 2012. Considerable judgment is necessary to interpret market data and estimate fair value. Accordingly, there can be no assurance that the estimates
discussed herein, using Level 2 and 3 inputs, are indicative of the amounts the Company could realize on disposition of the real estate assets or other financial instruments. The use of different market assumptions and/or estimation methodologies
could have a material effect on the estimated fair value amounts.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
93
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Real estate assets
The Company periodically reviews its real estate assets, including operating assets, construction in progress, land held for future investment and for-sale condominiums, for impairment purposes using
Level 3 inputs, primarily comparable sales and market data, independent valuations and discounted cash flow models.
In 2010,
the Company wrote down the carrying value of the Austin Condominium Project to its estimated fair value of $85,378 using level 3 inputs, primarily using a discounted present value of the projects estimated future cash flows over an extended
sell-out period, considering current market conditions in the Austin market at that time, and recorded impairment charges of $34,691 (see note 2). In addition, in 2010, the Company wrote down the carrying value of a land parcel classified as held
for sale to its estimated fair value of $3,177, using level 3 inputs, and recorded an impairment charge of $400.
Also in
2010, an unconsolidated entity distributed net condominium assets and construction indebtedness to the Company in settlement of the Companys equity investment in the entity (see note 3). Immediately prior to their distribution to the Company,
the condominium assets and construction indebtedness were written down to their fair values of $28,402 and $44,553, respectively. The condominium assets were valued using level 3 inputs, primarily a discounted cash flow model, and the construction
indebtedness was valued using level 2 inputs, primarily comparable market data.
Derivatives
The Company manages its exposure to interest rate changes through the use of derivative financial instruments, primarily interest rate
swap arrangements. In December 2011, the Company entered into three interest rate swap arrangements with substantially similar terms and conditions. These arrangements have an aggregate notional amount of $230,000 and require the Company to pay a
blended fixed rate of approximately 1.55% (with the counterparties paying the Company the floating one-month LIBOR rate). Additionally, in January 2012, the Company entered into a fourth interest rate swap arrangement with a notional amount of
$70,000 and it requires the Company to pay a fixed rate of approximately 1.50% (with the counterparty paying the Company the floating one-month LIBOR rate) (together, the Interest Rate Swaps). The Interest Rate Swaps serve as cash flow
hedges of amounts outstanding under the Companys variable rate Term Loan (see note 4) entered into in January 2012 and provide for an effective blended fixed rate for the corresponding amount of Term Loan borrowings, of approximately 3.44%
through September 30, 2012. Effective October 1, 2012, as discussed in note 4 (subject to an adjustment based on subsequent changes in the Companys credit ratings) the effective blended rate was reduced to 3.24%. The Interest Rate
Swaps terminate in January 2018.
The Interest Rate Swaps are measured and accounted for at fair value on a recurring basis.
The Interest Rate Swaps outstanding at December 31, 2012 and 2011 were valued as net liabilities of $11,710 and $2,641, respectively, primarily using level 2 inputs, as substantially all of the fair value was determined using widely accepted
discounted cash flow valuation techniques along with observable market-based inputs for similar types of arrangements. The Company reflects both the respective counterpartys nonperformance risks and its own nonperformance risks in its fair
value measurements using unobservable inputs. However, the impact of such risks was not considered material to the overall fair value measurements of the derivatives. These liabilities are included in accounts payable, accrued expenses and other
liabilities on the consolidated balance sheets. Under ASC Topic 815, a corresponding amount is included in accumulated other comprehensive income (loss), an equity account, until the hedged transactions are recognized in earnings. The following
table summarizes the effect of these Interest Rate Swaps (designated as cash flow hedges) on the Companys consolidated statements of operations and comprehensive income for 2012:
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
Interest Rate Swap / Cash Flow Hedging Instruments
|
|
2012
|
|
|
2011
|
|
Loss recognized in other comprehensive income
|
|
$
|
(11,804
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Loss reclassified from accumulated other comprehensive income into interest expense
|
|
$
|
(2,735
|
)
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
94
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
The amounts reported in accumulated other comprehensive income as of December 31,
2012 will be reclassified to interest expense as interest payments are made under the hedged indebtedness. Over the next year, the Company estimates that $3,993 will be reclassified from accumulated comprehensive income (loss) to interest expense.
As part of the Companys on-going procedures, the Company monitors the credit worthiness of its financial institution
counterparties and its exposure to any single entity, which it believes minimizes credit risk concentration. The Company believes the likelihood of realized losses from counterparty non-performance is remote. The Interest Rate Swaps are cross
defaulted with the Companys Term Loan and Syndicated Line (see note 4) and contain certain provisions consistent with these types of arrangements. If the Company was required to terminate the Interest Rate Swaps and settle the obligations
thereunder as of December 31, 2012, the termination payment by the Company would have been approximately $11,847.
Other financial
instruments
Cash equivalents, rents and accounts receivables, accounts payable, accrued expenses and other liabilities
are carried at amounts which reasonably approximate their fair values because of the short-term nature of these instruments. At December 31, 2012, the fair value of fixed rate debt was approximately $860,217 (carrying value of $802,464) and the
fair value of variable rate debt, including the Companys lines of credit, was approximately $298,551 (carrying value of $300,000). At December 31, 2011, the fair value of fixed rate debt was approximately $885,455 (carrying value of
$835,443) and the fair value of variable rate debt, including the Companys lines of credit, was approximately $137,495 (carrying value of $135,000). Long-term indebtedness was valued using Level 2 inputs, primarily market prices of comparable
debt instruments.
Segment description
In accordance with ASC Topic 280, Segment Reporting, the Company presents segment information based on the way that management organizes the segments within the enterprise for making operating
decisions and assessing performance. The segment information is prepared on the same basis as the internally reported information used by the Companys chief operating decision makers to manage the business.
The Companys chief operating decision makers focus on the Companys primary sources of income from apartment community rental
operations. Apartment community rental operations are generally broken down into segments based on the various stages in the apartment community ownership lifecycle. These segments are described below. All commercial properties and other ancillary
service and support operations are combined in the line item other property segments in the accompanying segment information. The segment information presented below reflects the segment categories based on the lifecycle status of each
community as of January 1, 2011.
|
|
|
Fully stabilized communities those apartment communities which have been stabilized (the earlier of the point at which a property reaches 95%
occupancy or one year after completion of construction) for both 2012 and 2011.
|
|
|
|
Communities stabilized during the prior year those apartment communities which reached stabilized occupancy in 2011.
|
|
|
|
Development and lease-up communities those apartment communities that are under development, rehabilitation and lease-up but were not
stabilized by the beginning of 2012, including communities that stabilized in 2012.
|
|
|
|
Acquired communities those communities acquired in 2012 or 2011.
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
95
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
Segment performance measure
Management uses contribution to consolidated property net operating income (NOI) as the performance measure for its operating
segments. The Company uses NOI, including NOI of stabilized communities, as an operating measure. NOI is defined as rental and other property revenue from real estate operations less total property and maintenance expenses from real estate
operations (excluding depreciation and amortization). The Company believes that NOI is an important supplemental measure of operating performance for a REITs 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
operating segment 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 the Companys consolidated statement of operations entitled net income (loss) is the most directly comparable GAAP measure to NOI.
Segment information
The following table reflects each segments
contribution to consolidated revenues and NOI together with a reconciliation of segment contribution to property NOI to consolidated net income (loss) in 2012, 2011 and 2010. Additionally, substantially all of the Companys assets relate to the
Companys property rental operations. Asset cost, depreciation and amortization by segment are not presented because such information at the segment level is not reported internally.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully stabilized communities
|
|
$
|
302,132
|
|
|
$
|
282,376
|
|
|
$
|
263,394
|
|
Development and lease-up communities
|
|
|
1,779
|
|
|
|
-
|
|
|
|
-
|
|
Acquired communities
|
|
|
7,101
|
|
|
|
117
|
|
|
|
-
|
|
Other property segments
|
|
|
23,049
|
|
|
|
21,905
|
|
|
|
20,749
|
|
Other
|
|
|
850
|
|
|
|
918
|
|
|
|
995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated revenues
|
|
$
|
334,911
|
|
|
$
|
305,316
|
|
|
$
|
285,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution to Property Net Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Fully stabilized communities
|
|
$
|
186,343
|
|
|
$
|
171,499
|
|
|
$
|
153,767
|
|
Development and lease-up communities
|
|
|
(5
|
)
|
|
|
-
|
|
|
|
|
|
Acquired communities
|
|
|
4,207
|
|
|
|
70
|
|
|
|
-
|
|
Other property segments, including corporate management expenses
|
|
|
(162
|
)
|
|
|
419
|
|
|
|
(1,002
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated property net operating income
|
|
|
190,383
|
|
|
|
171,988
|
|
|
|
152,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
393
|
|
|
|
1,021
|
|
|
|
841
|
|
Other revenues
|
|
|
850
|
|
|
|
918
|
|
|
|
995
|
|
Depreciation
|
|
|
(80,145
|
)
|
|
|
(75,263
|
)
|
|
|
(74,497
|
)
|
Interest expense
|
|
|
(46,419
|
)
|
|
|
(56,791
|
)
|
|
|
(54,613
|
)
|
Amortization of deferred financing costs
|
|
|
(2,695
|
)
|
|
|
(2,797
|
)
|
|
|
(2,987
|
)
|
General and administrative
|
|
|
(16,342
|
)
|
|
|
(16,100
|
)
|
|
|
(16,443
|
)
|
Investment and development
|
|
|
(1,317
|
)
|
|
|
(1,161
|
)
|
|
|
(2,415
|
)
|
Other investment costs
|
|
|
(1,401
|
)
|
|
|
(1,435
|
)
|
|
|
(2,417
|
)
|
Impairment, severance and other costs
|
|
|
-
|
|
|
|
-
|
|
|
|
(35,091
|
)
|
Gains on condominium sales activities, net
|
|
|
36,273
|
|
|
|
10,514
|
|
|
|
6,161
|
|
Equity in income of unconsolidated real estate entities, net
|
|
|
7,995
|
|
|
|
1,001
|
|
|
|
18,739
|
|
Other income (expense), net
|
|
|
1,034
|
|
|
|
619
|
|
|
|
(874
|
)
|
Net gain (loss) on extinguishment of indebtedness
|
|
|
(4,318
|
)
|
|
|
(6,919
|
)
|
|
|
2,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
84,291
|
|
|
$
|
25,595
|
|
|
$
|
(6,991
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
96
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
16.
|
OTHER INCOME (EXPENSE)
|
In 2012, 2011 and 2010, other expense included state franchise taxes of $625, $600 and $580, respectively. Franchise
taxes are associated with the income-based taxes in Texas that became effective in 2007. In addition for 2012, other income (expense) included income of $1,554 related to the settlement of construction litigation at one of the Companys
apartment communities, income of $62 from the sale of a technology investment and income of $43 related to receivable recoveries. In 2011, other income (expense) primarily included a state income tax benefit of $470 relating to the true-up of a
prior year tax provision, income of $475 related to the sale of a technology investment and income of $274 related to legal settlements and miscellaneous receivable recoveries. In 2010, other income (expense) also primarily included impairment
losses related to certain corporate assets of $1,165 partially offset by expense reimbursements of $517 related to the settlement of a legal matter associated with a former ground lease, income of $168 related to the sale of a technology investment
and adjustments to certain prior year loss accruals of $187.
17.
|
COMPANY QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
|
Quarterly financial information in 2012 and 2011 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
Revenues
|
|
$
|
80,276
|
|
|
$
|
82,160
|
|
|
$
|
86,374
|
|
|
$
|
86,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
21,865
|
|
|
|
21,170
|
|
|
|
22,322
|
|
|
|
18,934
|
|
Noncontrolling interests
|
|
|
(65
|
)
|
|
|
(91
|
)
|
|
|
(115
|
)
|
|
|
(81
|
)
|
Dividends to preferred shareholders
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders
|
|
$
|
20,878
|
|
|
$
|
20,157
|
|
|
$
|
21,285
|
|
|
$
|
17,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common shareholders basic
|
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
0.39
|
|
|
$
|
0.33
|
|
Net income available to common shareholders diluted
|
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
0.39
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2011
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
Revenues
|
|
$
|
73,531
|
|
|
$
|
75,424
|
|
|
$
|
78,612
|
|
|
$
|
77,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
3,013
|
|
|
|
9,834
|
|
|
|
8,828
|
|
|
|
3,920
|
|
Noncontrolling interests
|
|
|
12
|
|
|
|
(88
|
)
|
|
|
(34
|
)
|
|
|
(19
|
)
|
Dividends to preferred shareholders
|
|
|
(1,689
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
Preferred stock redemption costs
|
|
|
(1,757
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common shareholders
|
|
$
|
(421
|
)
|
|
$
|
8,824
|
|
|
$
|
7,872
|
|
|
$
|
2,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common shareholders basic
|
|
$
|
(0.01
|
)
|
|
$
|
0.18
|
|
|
$
|
0.15
|
|
|
$
|
0.06
|
|
Net income (loss) available to common shareholders diluted
|
|
$
|
(0.01
|
)
|
|
$
|
0.17
|
|
|
$
|
0.15
|
|
|
$
|
0.06
|
|
In the first quarter of 2012, the Company recognized a gain of on the sale of an apartment community held
in unconsolidated entity. In the fourth quarter of 2012, the reduction in net income available to common shareholders primarily resulted from a loss on the early extinguishment of indebtedness. In the fourth quarter of 2011, the reduction in net
income available to common shareholders primarily resulted from a loss on the early extinguishment of indebtedness.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
97
|
|
|
Post Apartment Homes, L.P.
|
|
|
POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per share or unit and apartment unit data)
18.
|
OPERATING PARTNERSHIP QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
|
Quarterly financial information in 2012 and 2011 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2012
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
Revenues
|
|
$
|
80,276
|
|
|
$
|
82,160
|
|
|
$
|
86,374
|
|
|
$
|
86,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
21,865
|
|
|
|
21,170
|
|
|
|
22,322
|
|
|
|
18,934
|
|
Noncontrolling interests consolidated real estate entities
|
|
|
(6
|
)
|
|
|
(35
|
)
|
|
|
(55
|
)
|
|
|
(39
|
)
|
Distributions to preferred unitholders
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common unitholders
|
|
$
|
20,937
|
|
|
$
|
20,213
|
|
|
$
|
21,345
|
|
|
$
|
17,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available to common unitholders basic
|
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
0.39
|
|
|
$
|
0.33
|
|
Net income available to common unitholders diluted
|
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
0.39
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2011
|
|
|
|
First
|
|
|
Second
|
|
|
Third
|
|
|
Fourth
|
|
Revenues
|
|
$
|
73,531
|
|
|
$
|
75,424
|
|
|
$
|
78,612
|
|
|
$
|
77,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
3,013
|
|
|
|
9,834
|
|
|
|
8,828
|
|
|
|
3,920
|
|
Noncontrolling interests consolidated real estate entities
|
|
|
11
|
|
|
|
(58
|
)
|
|
|
(9
|
)
|
|
|
(11
|
)
|
Distributions to preferred unitholders
|
|
|
(1,689
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
|
|
(922
|
)
|
Preferred unit redemption costs
|
|
|
(1,757
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common unitholders
|
|
$
|
(422
|
)
|
|
$
|
8,854
|
|
|
$
|
7,897
|
|
|
$
|
2,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per common unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) available to common unitholders basic
|
|
$
|
(0.01
|
)
|
|
$
|
0.18
|
|
|
$
|
0.15
|
|
|
$
|
0.06
|
|
Net income (loss) available to common unitholders diluted
|
|
$
|
(0.01
|
)
|
|
$
|
0.17
|
|
|
$
|
0.15
|
|
|
$
|
0.06
|
|
In the first quarter of 2012, the Operating Partnership recognized a gain on the sale of an apartment
community held in unconsolidated entity. In the fourth quarter of 2012, the reduction in net income available to common unitholders primarily resulted from a loss on the early extinguishment of indebtedness. In the fourth quarter of 2011, the
reduction in net income available to common unitholders primarily resulted from a loss on the early extinguishment of indebtedness.
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
98
|
|
|
Post Apartment Homes, L.P.
|
|
|
Schedule III
POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 2012
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Costs
|
|
|
Costs
Capitalized
Subsequent
To
Acquisition
|
|
|
Gross Amount at
Which
Carried at Close of Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
|
Related
Encumbrances
|
|
|
Land
|
|
|
Building
and
Improvements
|
|
|
|
Land
|
|
|
Building
and
Improvements
|
|
|
Total (1)
|
|
|
Accumulated
Depreciation
(2)
|
|
|
Date of
Construction
|
|
Date
Acquired
|
Georgia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Alexander
|
|
|
Apartments
|
|
|
$
|
-
|
|
|
$
|
7,392
|
|
|
$
|
-
|
|
|
$
|
49,718
|
|
|
$
|
7,392
|
|
|
$
|
49,718
|
|
|
$
|
57,110
|
|
|
$
|
11,119
|
|
|
04/06
|
|
N/A
|
Post Briarcliff
|
|
|
Apartments
|
|
|
|
58,729
|
|
|
|
13,344
|
|
|
|
-
|
|
|
|
50,654
|
|
|
|
13,344
|
|
|
|
50,654
|
|
|
|
63,998
|
|
|
|
23,797
|
|
|
12/96
|
|
09/96
|
Post Brookhaven
®
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
7,921
|
|
|
|
-
|
|
|
|
38,361
|
|
|
|
7,921
|
|
|
|
38,361
|
|
|
|
46,282
|
|
|
|
24,823
|
|
|
07/89 - 12/92
|
|
03/89
|
Post Chastain
®
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
6,352
|
|
|
|
-
|
|
|
|
62,110
|
|
|
|
6,779
|
|
|
|
61,683
|
|
|
|
68,462
|
|
|
|
32,499
|
|
|
06/88 - 10/90
|
|
06/88
|
Post Crossing
®
|
|
|
Apartments
|
|
|
|
26,368
|
|
|
|
3,951
|
|
|
|
-
|
|
|
|
22,638
|
|
|
|
3,951
|
|
|
|
22,638
|
|
|
|
26,589
|
|
|
|
11,831
|
|
|
04/94 - 08/95
|
|
11/93
|
Post Gardens
®
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
5,859
|
|
|
|
-
|
|
|
|
36,965
|
|
|
|
5,931
|
|
|
|
36,893
|
|
|
|
42,824
|
|
|
|
18,340
|
|
|
07/96
|
|
05/96
|
Post Glen
®
|
|
|
Apartments
|
|
|
|
27,395
|
|
|
|
5,591
|
|
|
|
-
|
|
|
|
24,398
|
|
|
|
5,784
|
|
|
|
24,205
|
|
|
|
29,989
|
|
|
|
12,025
|
|
|
07/96
|
|
05/96
|
Post Parkside
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
3,402
|
|
|
|
-
|
|
|
|
22,047
|
|
|
|
3,465
|
|
|
|
21,984
|
|
|
|
25,449
|
|
|
|
8,996
|
|
|
02/99
|
|
12/97
|
Post Peachtree Hills
®
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
4,215
|
|
|
|
-
|
|
|
|
26,565
|
|
|
|
4,857
|
|
|
|
25,923
|
|
|
|
30,780
|
|
|
|
10,522
|
|
|
02/92 - 09/94
|
|
02/92 & 9/92
|
Post Renaissance
®
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
32,418
|
|
|
|
7,391
|
|
|
|
25,027
|
|
|
|
32,418
|
|
|
|
13,650
|
|
|
07/91 - 12/94
|
|
06/91 & 01/94
|
Post Riverside
®
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
11,130
|
|
|
|
-
|
|
|
|
120,618
|
|
|
|
12,457
|
|
|
|
119,291
|
|
|
|
131,748
|
|
|
|
56,140
|
|
|
07/96
|
|
01/96
|
Post Spring
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
2,105
|
|
|
|
-
|
|
|
|
41,501
|
|
|
|
2,105
|
|
|
|
41,501
|
|
|
|
43,606
|
|
|
|
17,154
|
|
|
09/99
|
|
09/99
|
Post Stratford (3)
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
328
|
|
|
|
-
|
|
|
|
29,375
|
|
|
|
620
|
|
|
|
29,083
|
|
|
|
29,703
|
|
|
|
11,932
|
|
|
04/99
|
|
01/99
|
Virginia
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Carlyle Square
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
5,870
|
|
|
|
-
|
|
|
|
135,465
|
|
|
|
8,424
|
|
|
|
132,911
|
|
|
|
141,335
|
|
|
|
11,571
|
|
|
12/04 -08/10
|
|
N/A
|
Post Corners
®
|
|
|
Apartments
|
|
|
|
39,897
|
|
|
|
4,404
|
|
|
|
-
|
|
|
|
26,943
|
|
|
|
4,493
|
|
|
|
26,854
|
|
|
|
31,347
|
|
|
|
13,115
|
|
|
06/94
|
|
06/94
|
Post Pentagon Row
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
2,359
|
|
|
|
7,659
|
|
|
|
90,121
|
|
|
|
3,470
|
|
|
|
96,669
|
|
|
|
100,139
|
|
|
|
30,113
|
|
|
06/99
|
|
02/99
|
Post Tysons Corner
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
20,000
|
|
|
|
65,478
|
|
|
|
7,308
|
|
|
|
20,000
|
|
|
|
72,786
|
|
|
|
92,786
|
|
|
|
18,630
|
|
|
N/A
|
|
06/04
|
Maryland
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Fallsgrove
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
14,801
|
|
|
|
69,179
|
|
|
|
5,288
|
|
|
|
14,801
|
|
|
|
74,467
|
|
|
|
89,268
|
|
|
|
13,643
|
|
|
N/A
|
|
7/06
|
Post Park
®
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
8,555
|
|
|
|
-
|
|
|
|
75,311
|
|
|
|
8,555
|
|
|
|
75,311
|
|
|
|
83,866
|
|
|
|
11,125
|
|
|
12/07
|
|
N/A
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
99
|
|
|
Post Apartment Homes, L.P.
|
|
|
Schedule III cont
POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
REAL ESTATE INVESTMENTS AND ACCUMULATED
DEPRECIATION
December 31, 2012
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Costs
|
|
|
Costs
Capitalized
Subsequent
To
Acquisition
|
|
|
Gross Amount at
Which
Carried at Close of Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
|
Related
Encumbrances
|
|
|
Land
|
|
|
Building
and
Improvements
|
|
|
|
Land
|
|
|
Building
and
Improvements
|
|
|
Total (1)
|
|
|
Accumulated
Depreciation
(2)
|
|
|
Date of
Construction
|
|
Date
Acquired
|
Texas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Abbey
|
|
|
Apartments
|
|
|
$
|
-
|
|
|
$
|
575
|
|
|
$
|
6,276
|
|
|
$
|
2,736
|
|
|
$
|
575
|
|
|
$
|
9,012
|
|
|
$
|
9,587
|
|
|
$
|
3,377
|
|
|
N/A
|
|
10/97
|
Post Addison Circle
|
|
|
Mixed Use
|
|
|
|
120,000
|
|
|
|
2,885
|
|
|
|
41,482
|
|
|
|
136,450
|
|
|
|
8,382
|
|
|
|
172,435
|
|
|
|
180,817
|
|
|
|
74,260
|
|
|
10/97
|
|
10/97
|
Post Barton Creek
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
1,920
|
|
|
|
24,482
|
|
|
|
3,798
|
|
|
|
1,920
|
|
|
|
28,280
|
|
|
|
30,200
|
|
|
|
5,579
|
|
|
N/A
|
|
03/06
|
Post Coles Corner
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
1,886
|
|
|
|
18,006
|
|
|
|
4,541
|
|
|
|
2,086
|
|
|
|
22,347
|
|
|
|
24,433
|
|
|
|
10,212
|
|
|
N/A
|
|
10/97
|
Post Eastside
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
5,735
|
|
|
|
-
|
|
|
|
52,043
|
|
|
|
5,735
|
|
|
|
52,043
|
|
|
|
57,778
|
|
|
|
9,954
|
|
|
10/06
|
|
N/A
|
Post Heights/Gallery
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
5,455
|
|
|
|
15,559
|
|
|
|
42,428
|
|
|
|
5,812
|
|
|
|
57,630
|
|
|
|
63,442
|
|
|
|
24,469
|
|
|
10/97
|
|
10/97
|
Post Katy Trail
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
7,324
|
|
|
|
40,355
|
|
|
|
240
|
|
|
|
7,324
|
|
|
|
40,595
|
|
|
|
47,919
|
|
|
|
1,267
|
|
|
N/A
|
|
12/11
|
Post Legacy
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
684
|
|
|
|
-
|
|
|
|
37,209
|
|
|
|
811
|
|
|
|
37,082
|
|
|
|
37,893
|
|
|
|
13,844
|
|
|
03/99
|
|
03/99
|
Post Meridian
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
1,535
|
|
|
|
11,605
|
|
|
|
2,898
|
|
|
|
1,535
|
|
|
|
14,503
|
|
|
|
16,038
|
|
|
|
6,446
|
|
|
N/A
|
|
10/97
|
Post Midtown Square
®
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
6,282
|
|
|
|
1,412
|
|
|
|
74,893
|
|
|
|
5,311
|
|
|
|
77,276
|
|
|
|
82,587
|
|
|
|
22,103
|
|
|
10/97 - 05/11
|
|
10/97
|
Post Park Mesa
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
1,480
|
|
|
|
17,861
|
|
|
|
2,304
|
|
|
|
1,480
|
|
|
|
20,165
|
|
|
|
21,645
|
|
|
|
4,078
|
|
|
N/A
|
|
03/06
|
Post Rice Lofts (3)
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
449
|
|
|
|
13,393
|
|
|
|
36,100
|
|
|
|
449
|
|
|
|
49,493
|
|
|
|
49,942
|
|
|
|
16,248
|
|
|
10/97
|
|
10/97
|
Post Sierra at Frisco Bridges
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
3,581
|
|
|
|
-
|
|
|
|
38,096
|
|
|
|
3,581
|
|
|
|
38,096
|
|
|
|
41,677
|
|
|
|
6,020
|
|
|
10/07
|
|
N/A
|
Post South Lamar
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
4,263
|
|
|
|
-
|
|
|
|
23,029
|
|
|
|
4,263
|
|
|
|
23,029
|
|
|
|
27,292
|
|
|
|
226
|
|
|
02/11
|
|
N/A
|
Post Square
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
4,565
|
|
|
|
24,595
|
|
|
|
3,702
|
|
|
|
4,565
|
|
|
|
28,297
|
|
|
|
32,862
|
|
|
|
11,199
|
|
|
N/A
|
|
10/97
|
Post Uptown Village
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
3,955
|
|
|
|
22,120
|
|
|
|
21,843
|
|
|
|
6,195
|
|
|
|
41,723
|
|
|
|
47,918
|
|
|
|
16,136
|
|
|
N/A
|
|
10/97
|
Post Vineyard
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
1,133
|
|
|
|
8,560
|
|
|
|
1,729
|
|
|
|
1,133
|
|
|
|
10,289
|
|
|
|
11,422
|
|
|
|
3,884
|
|
|
N/A
|
|
10/97
|
Post Vintage
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
2,614
|
|
|
|
12,188
|
|
|
|
2,382
|
|
|
|
2,614
|
|
|
|
14,570
|
|
|
|
17,184
|
|
|
|
6,156
|
|
|
N/A
|
|
10/97
|
Post West Austin
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
10,865
|
|
|
|
-
|
|
|
|
40,379
|
|
|
|
10,865
|
|
|
|
40,379
|
|
|
|
51,244
|
|
|
|
7,213
|
|
|
02/08
|
|
N/A
|
Post Worthington
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
3,744
|
|
|
|
34,700
|
|
|
|
19,092
|
|
|
|
3,744
|
|
|
|
53,792
|
|
|
|
57,536
|
|
|
|
19,719
|
|
|
N/A
|
|
10/97
|
Florida
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Bay at Rocky Point
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
528
|
|
|
|
5,081
|
|
|
|
21,157
|
|
|
|
2,400
|
|
|
|
24,366
|
|
|
|
26,766
|
|
|
|
4,519
|
|
|
N/A
|
|
10/06
|
Post Harbour Place
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
3,854
|
|
|
|
-
|
|
|
|
71,310
|
|
|
|
8,312
|
|
|
|
66,852
|
|
|
|
75,164
|
|
|
|
28,111
|
|
|
03/97
|
|
01/97
|
Post Hyde Park
®
|
|
|
Apartments
|
|
|
|
45,408
|
|
|
|
3,498
|
|
|
|
-
|
|
|
|
44,069
|
|
|
|
9,680
|
|
|
|
37,887
|
|
|
|
47,567
|
|
|
|
15,824
|
|
|
09/94 - 10/06
|
|
07/94
|
Post Lake at Baldwin Park
®
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
17,500
|
|
|
|
56,702
|
|
|
|
2,594
|
|
|
|
17,500
|
|
|
|
59,296
|
|
|
|
76,796
|
|
|
|
9,958
|
|
|
N/A
|
|
07/07
|
Post Parkside
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
2,493
|
|
|
|
-
|
|
|
|
37,541
|
|
|
|
2,493
|
|
|
|
37,541
|
|
|
|
40,034
|
|
|
|
14,217
|
|
|
03/99
|
|
03/99
|
Post Rocky Point
®
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
10,510
|
|
|
|
-
|
|
|
|
74,158
|
|
|
|
10,567
|
|
|
|
74,101
|
|
|
|
84,668
|
|
|
|
32,877
|
|
|
04/94 - 11/96
|
|
02/94 & 09/96
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
100
|
|
|
Post Apartment Homes, L.P.
|
|
|
Schedule III cont
POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
REAL ESTATE INVESTMENTS AND ACCUMULATED
DEPRECIATION
December 31, 2012
(Dollars in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial Costs
|
|
|
Costs
Capitalized
Subsequent
To
Acquisition
|
|
|
Gross Amount at Which
Carried at Close
of Period
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
|
Related
Encumbrances
|
|
|
Land
|
|
|
Building and
Improvements
|
|
|
|
Land
|
|
|
Building and
Improvements
|
|
|
Total (1)
|
|
|
Accumulated
Depreciation (2)
|
|
|
Date of
Construction
|
|
Date
Acquired
|
New York
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Luminaria
|
|
|
Mixed Use
|
|
|
$
|
34,076
|
|
|
$
|
4,938
|
|
|
$
|
-
|
|
|
$
|
42,577
|
|
|
$
|
4,938
|
|
|
$
|
42,577
|
|
|
$
|
47,515
|
|
|
$
|
15,699
|
|
|
03/01
|
|
03/01
|
Post Toscana
|
|
|
Mixed Use
|
|
|
|
50,591
|
|
|
|
15,976
|
|
|
|
-
|
|
|
|
78,094
|
|
|
|
17,156
|
|
|
|
76,914
|
|
|
|
94,070
|
|
|
|
19,389
|
|
|
01/02
|
|
01/02
|
North Carolina
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Post Ballantyne
|
|
|
Apartments
|
|
|
|
-
|
|
|
|
6,400
|
|
|
|
30,850
|
|
|
|
3,566
|
|
|
|
6,400
|
|
|
|
34,416
|
|
|
|
40,816
|
|
|
|
8,813
|
|
|
11/04
|
|
05/05
|
Post Gateway Place
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
2,424
|
|
|
|
-
|
|
|
|
64,312
|
|
|
|
3,481
|
|
|
|
63,255
|
|
|
|
66,736
|
|
|
|
22,598
|
|
|
11/00
|
|
08/99
|
Post Park at Phillips Place
®
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
4,305
|
|
|
|
-
|
|
|
|
41,654
|
|
|
|
4,307
|
|
|
|
41,652
|
|
|
|
45,959
|
|
|
|
19,767
|
|
|
01/96
|
|
11/95
|
Post South End
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
7,732
|
|
|
|
65,803
|
|
|
|
449
|
|
|
|
7,732
|
|
|
|
66,252
|
|
|
|
73,984
|
|
|
|
897
|
|
|
N/A
|
|
07/12
|
Post Uptown Place
|
|
|
Mixed Use
|
|
|
|
-
|
|
|
|
2,336
|
|
|
|
-
|
|
|
|
30,525
|
|
|
|
2,363
|
|
|
|
30,498
|
|
|
|
32,861
|
|
|
|
11,261
|
|
|
09/98
|
|
09/98
|
Miscellaneous Investments (4)
|
|
|
|
|
|
|
-
|
|
|
|
78,310
|
|
|
|
1,304
|
|
|
|
101,687
|
|
|
|
79,651
|
|
|
|
101,650
|
|
|
|
181,301
|
|
|
|
25,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
$
|
402,464
|
|
|
$
|
359,313
|
|
|
$
|
594,650
|
|
|
$
|
2,057,389
|
|
|
$
|
397,100
|
|
|
$
|
2,614,252
|
(5)
|
|
$
|
3,011,352
|
(5)
|
|
$
|
842,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The aggregate cost for Federal Income Tax purposes to the Company was approximately $2,965,294 at December 31, 2012, taking into account the
special allocation of gain to the partners contributing property to the Operating Partnership.
|
(2)
|
Depreciation is computed on a straight-line basis over the useful lives of the properties: buildings 40 years, other building and land
improvements 20 years, and furniture, fixtures and equipment 5 - 10 years.
|
(3)
|
The Company has a leasehold interest in the land underlying these communities.
|
(4)
|
Miscellaneous investments include construction in progress, land held for investment and certain other corporate assets.
|
(5)
|
This total excludes for-sale condominiums and assets held for sale of $23,281 and $0, respectively, at December 31, 2012.
|
A summary of activity for real estate investments and accumulated depreciation is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
Real estate investments
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of year
|
|
$
|
2,787,689
|
|
|
$
|
2,652,630
|
|
|
$
|
2,726,046
|
|
Improvements
|
|
|
152,696
|
|
|
|
87,944
|
|
|
|
82,676
|
|
Acquisitions of communities
|
|
|
73,535
|
|
|
|
47,679
|
|
|
|
-
|
|
Asset impairment charges (a)
|
|
|
-
|
|
|
|
-
|
|
|
|
(34,691
|
)
|
Disposition of property (b)
|
|
|
(2,568
|
)
|
|
|
(564
|
)
|
|
|
(121,401
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
$
|
3,011,352
|
|
|
$
|
2,787,689
|
|
|
$
|
2,652,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of year
|
|
$
|
767,017
|
|
|
$
|
692,514
|
|
|
$
|
625,391
|
|
Depreciation (c)
|
|
|
78,476
|
|
|
|
74,678
|
|
|
|
73,628
|
|
Accumulated depreciation on disposed property
|
|
|
(2,568
|
)
|
|
|
(175
|
)
|
|
|
(6,505
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of year
|
|
$
|
842,925
|
|
|
$
|
767,017
|
|
|
$
|
692,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Represents reductions in total real estate assets due to non-cash impairment charges recorded in 2010.
|
(b)
|
Represents reductions for assets classified as held for sale, including for-sale condominiums in 2010, and other asset retirements.
|
(c)
|
Represents depreciation expense of real estate assets. Amounts exclude depreciation and amortization of lease intangible assets, commercial leasing
costs and excess joint venture investments.
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
101
|
|
|
Post Apartment Homes, L.P.
|
|
|
Certain exhibits required by Item 601 of Regulation S-K have been filed with previous reports by the registrants and are incorporated by reference herein.
The Registrants agree to furnish a copy of all agreements relating to long-term debt upon request of the SEC.
|
|
|
|
|
Exhibit
No.
|
|
|
|
Description
|
3.1(a)
|
|
-
|
|
Articles of Incorporation of the Company
|
3.2(b)
|
|
-
|
|
Articles of Amendment to the Articles of Incorporation of the Company
|
3.3(b)
|
|
-
|
|
Articles of Amendment to the Articles of Incorporation of the Company
|
3.4(b)
|
|
-
|
|
Articles of Amendment to the Articles of Incorporation of the Company
|
3.5(c)
|
|
-
|
|
Articles of Amendment to the Articles of Incorporation of the Company
|
3.6(d)
|
|
-
|
|
Bylaws of the Company (as Amended and Restated effective as of June 9, 2009)
|
4.1(f)
|
|
-
|
|
Indenture between the Company and SunTrust Bank, as Trustee
|
4.2(s)
|
|
-
|
|
First Supplemental Indenture to the Indenture between the Operating Partnership and SunTrust Bank, as Trustee
|
4.3(e)
|
|
-
|
|
Form of Post Apartment Homes, L.P. 4.75% Note due 2017
|
4.4(w)
|
|
-
|
|
Form of Post Apartment Homes, L.P. 3.375% Note due 2022
|
10.1(b)
|
|
-
|
|
Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership
|
10.2(b)
|
|
-
|
|
First Amendment to Second Amended and Restated Partnership Agreement
|
10.3(b)
|
|
-
|
|
Second Amendment to Second Amended and Restated Partnership Agreement
|
10.4(g)
|
|
-
|
|
Third Amendment to Second Amended and Restated Partnership Agreement
|
10.5(g)
|
|
-
|
|
Fourth Amendment to Second Amended and Restated Partnership Agreement
|
10.6(c)
|
|
-
|
|
Fifth Amendment to Second Amended and Restated Partnership Agreement
|
10.7(h)
|
|
-
|
|
Sixth Amendment to Second Amended and Restated Partnership Agreement
|
10.8(q)*
|
|
-
|
|
Amended and Restated Employee Stock Plan
|
10.9(j)*
|
|
-
|
|
Amended and Restated Post Properties Inc. 2003 Incentive Stock Plan
|
10.10(j)
|
|
-
|
|
Form of Amended and Restated Indemnification Agreement
|
10.11(k)*
|
|
-
|
|
Dividend Reinvestment Stock Purchase Plan
|
10.12(q)
|
|
-
|
|
Multi-Family Note, dated as of January 25, 2008 by and between Post Addison Circle, as the borrower, and Deutsche Bank Berkshire Mortgage, Inc., d/b/a DB
Berkshire Mortgage, Inc., a Delaware corporation, as the lender.
|
10.13(m)*
|
|
-
|
|
Deferred Compensation Plan for Directors and Eligible Employees (as amended and restated effective as of January 1, 2005)
|
10.14(q)*
|
|
-
|
|
Form of Change in Control Agreement (2.0X)
|
10.15(q)*
|
|
-
|
|
Form of Change in Control Agreement (1.5X)
|
10.16(q)*
|
|
-
|
|
Form of Change in Control Agreement (1.0X)
|
10.17(u)*
|
|
-
|
|
Amended and Restated Employment and Change in Control Agreement with David P. Stockert
|
10.18(u)*
|
|
-
|
|
Amended and Restated Employment and Change in Control Agreement with Christopher J. Papa
|
10.19(u)*
|
|
-
|
|
Amended and Restated Employment and Change in Control Agreement with Charles A. Konas
|
10.20(u)*
|
|
-
|
|
Amended and Restated Employment and Change in Control Agreement with Sherry W. Cohen
|
10.21(u)*
|
|
|
|
Employment and Change in Control Agreement with S. Jamie Teabo
|
10.21(n)*
|
|
-
|
|
Form of 2003 Incentive Stock Plan, Non-Incentive Stock Option and Stock Appreciation Right Certificate for Key Employees
|
10.22(n)*
|
|
-
|
|
Form of 2003 Incentive Stock Plan, Non-Incentive Stock Option and Stock Appreciation Right Certificate for Directors and Chairman
|
10.23(l)*
|
|
-
|
|
Form of 2003 Incentive Stock Plan Restricted Stock Grant Certificate for Key Employees
|
10.24(i)*
|
|
-
|
|
Form of 2003 Incentive Stock Plan Restricted Stock Grant Certificate for Directors and Chairman
|
10.25(o)
|
|
-
|
|
Second Amended and Restated Credit Agreement, dated as of January 21, 2011, by and among Post Apartment Homes, L.P., the financial institutions party thereto
and their assignees, Wells Fargo Bank, National Association, Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, JPMorgan Chase Bank, N.A., PNC Bank, National Association, Sumitomo Mitsui Banking Corporation and U.S. Bank National
Association
|
10.27(t)
|
|
-
|
|
Form of Multifamily Fixed Rate Note, effective as of January 29, 2009.
|
10.28(v)
|
|
-
|
|
Distribution Agreement, dated May 31, 2012 among the Company, the Operating Partnership and J.P. Morgan Securities,
Inc.
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
102
|
|
|
Post Apartment Homes, L.P.
|
|
|
|
|
|
|
|
10.29(v)
|
|
-
|
|
Distribution Agreement, dated May 31, 2012 among the Company, the Operating Partnership and Cantor Fitzgerald & Co.
|
10.30(v)
|
|
-
|
|
Distribution Agreement, dated May 31, 2012 among the Company, the Operating Partnership and Wells Fargo Securities, LLC
|
10.31(v)
|
|
-
|
|
Distribution Agreement, dated May 31, 2012 among the Company, the Operating Partnership and Mitsubishi UFJ Securities (USA), Inc.
|
10.32(r)
|
|
-
|
|
Loan Sale and Assignment Agreement among 3630 Acquisition, Inc., Bank of America, N.A. and Regions Bank
|
10.33(x)
|
|
|
|
Term Loan Agreement among the Operating Partnership, Wells Fargo Bank, National Association, as Administrative Agent, and each of the financial institutions a
signatory thereto
|
10.34(x)
|
|
|
|
First Amendment to the Second Amended and Restated Credit Agreement by and among the Operating Partnership, Wells Fargo Bank, National Association, as
Administrative Agent, and each of the financial institutions a signatory thereto
|
11.1(p)
|
|
-
|
|
Statement Regarding Computation of Per Share Earnings
|
21.1
|
|
-
|
|
List of Subsidiaries
|
23.1
|
|
-
|
|
Consent of Deloitte & Touche LLP Post Properties, Inc.
|
23.2
|
|
-
|
|
Consent of Deloitte & Touche LLP Post Apartment Homes, L.P.
|
31.1
|
|
-
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and adopted
under Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
-
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, and adopted
under Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
|
-
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted under Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
|
-
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted under Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
|
-
|
|
The following financial information for the Company and the Operating Partnership, formatted in XBRL (Extensible Business Reporting Language): (i) the
Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Equity and Accumulated Earnings, (v) the Consolidated Statements of Cash
Flows, and (vi) the Notes to the Consolidated Financial Statements.
|
*
|
Identifies each management contract or compensatory plan required to be filed.
|
(a)
|
Filed as an exhibit to the Registration Statement on Form S-11 (SEC File No. 33-61936), as amended, of the Company and incorporated herein by
reference.
|
(b)
|
Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2002 and incorporated herein by
reference.
|
(c)
|
Filed as an exhibit to the Quarterly Report on Form 10-Q of the Registrants for the quarter ended September 30, 1999 and incorporated herein by
reference.
|
(d)
|
Filed as an exhibit to the current Report on Form 8-K of the Registrants filed on February 12, 2009 and incorporated herein by reference.
|
(e)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed October 18, 2010 and incorporated herein by reference.
|
(f)
|
Filed as an exhibit to the Registration Statement on Form S-3 (SEC File No. 333-42884), as amended, of the Company and incorporated herein by
reference.
|
(g)
|
Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 1998 and incorporated herein by
reference.
|
(h)
|
Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2000 and incorporated herein by
reference.
|
(i)
|
Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2010 and incorporated herein by
reference.
|
(j)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed October 22, 2008 and incorporated herein by reference.
|
(k)
|
Filed as part of the Registration Statement on Form S-3 (File No. 333-39461) of the Company and incorporated herein by reference.
|
(l)
|
Filed as an exhibit to the Annual Report on Form 10-K for the Registrants for the year ended December 31, 2006 and incorporated herein by
reference.
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
103
|
|
|
Post Apartment Homes, L.P.
|
|
|
(m)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed August 15, 2005 and incorporated herein by reference.
|
(n)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed January 24, 2006 and incorporated herein by reference.
|
(o)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed January 24, 2011 and incorporated herein by reference.
|
(p)
|
The information required by this exhibit is included in note 6 to the consolidated financial statements and is incorporated herein by reference.
|
(q)
|
Filed as an exhibit to the Annual Report on Form 10-K of the Registrants for the year ended December 31, 2007 and incorporated herein by
reference.
|
(r)
|
Filed as an exhibit to the Quarterly Report on Form 10-Q of the Registrants for the quarter ended September 30, 2010 and incorporated herein by
reference.
|
(s)
|
Filed as an exhibit to the Registration Statement on Form S-3ASR (SEC File No. 333-139581) of the Company and incorporated herein by reference.
|
(t)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed April 22, 2009 and incorporated herein by reference.
|
(u)
|
Filed as an exhibit to the Quarterly Report on Form 10-Q of the Registrants for the quarter ended March 31, 2011 and incorporated herein by
reference.
|
(v)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed May 31, 2012 and incorporated herein by reference.
|
(w)
|
Filed as an exhibit to the Current Report on Form 8-K of the Registrants filed November 7, 2012 and incorporated herein by reference.
|
(x)
|
Filed as an exhibit to the Annual Report on Form 10-K for the Registrants for the year ended December 31, 2011 and incorporate herein by
reference.
|
|
|
|
|
|
|
|
Post Properties, Inc.
|
|
104
|
|
|
Post Apartment Homes, L.P.
|
|
|