Post Properties, Inc. (NYSE: PPS) announced today net income
available to common shareholders of $26.6 million, or $0.48 per
diluted share, for the second quarter of 2013, compared to $20.2
million, or $0.37 per diluted share, for the second quarter of
2012.
Net income available to common shareholders for the six months
ended June 30, 2013, was $46.0 million, or $0.84 per diluted share,
compared to net income of $41.0 million, or $0.76 per diluted
share, for the six months ended June 30, 2012.
The Company’s net income available to common shareholders for
the three and six months ended June 30, 2012 included other income
of $0.9 million relating primarily to a construction litigation
settlement. For the six months ended June 30, 2012, the Company’s
net income available to common shareholders included a gain of $6.1
million, or $0.11 per diluted share, on the sale of an asset.
Funds From Operations
The Company uses the National Association of Real Estate
Investment Trusts (“NAREIT”) definition of Funds from Operations
(“FFO”) as an operating measure of the Company’s financial
performance. A reconciliation of FFO to GAAP net income is included
in the financial data (Table 1) accompanying this press
release.
FFO for the second quarter of 2013 was $47.9 million, or $0.87
per diluted share, compared to $39.7 million, or $0.73 per diluted
share for the second quarter of 2012. The Company’s reported FFO
for the second quarter of 2012 included the other income discussed
above, of $0.9 million, or $0.02 per diluted share.
FFO for the six months ended June 30, 2013 was $88.4 million, or
$1.61 per diluted share, compared to $73.9 million, or $1.37 per
diluted share, for the six months ended June 30, 2012. The
Company’s reported FFO for the first six months of 2012 included
the $0.9 million of other income discussed above, or $0.02 per
diluted share.
Said Dave Stockert, Post’s CEO, “We were pleased to produce
another quarter of strong earnings growth. Highlights included the
increasing contribution to earnings from the lease-up of apartment
communities in development and the 100% sell-out of our Austin
condominium project. We were also pleased to be able to increase
the dividend to common shareholders.”
Same Store Community Data
Average economic occupancy at the Company’s 51 same store
communities, containing 18,341 apartment units, was 95.5% and 96.1%
for the second quarter of 2013 and 2012, respectively.
Total revenues for the same store communities increased 4.0% and
total operating expenses increased 3.2% during the second quarter
of 2013, compared to the second quarter of 2012, resulting in a
4.5% increase in same store net operating income (“NOI”). The
average monthly rental rate per unit increased 4.6% during the
second quarter of 2013, compared to the second quarter of 2012.
On a sequential basis, total revenues for the same store
communities increased 1.3% and total operating expenses increased
0.6%, producing a 1.8% increase in same store NOI for the second
quarter of 2013, compared to the first quarter of 2013. On a
sequential basis, the average monthly rental rate per unit
increased 0.9%. For the second quarter of 2013, average economic
occupancy at the same store communities was 95.5%, compared to
95.3% for the first quarter of 2013.
For the six months ended June 30, 2013, average economic
occupancy at the Company’s same store communities was 95.4%,
compared to 96.0% for the six months ended June 30, 2012.
Total revenues for the same store communities increased 4.5% and
total operating expenses increased 4.1% during the first half of
2013, compared to the first half of 2012, resulting in a 4.8%
increase in same store NOI. The average monthly rental rate per
unit increased 4.9% for the six months ended June 30, 2013,
compared to the six months ended June 30, 2012.
Same store NOI is a supplemental non-GAAP financial measure. A
reconciliation of same store NOI to the comparable GAAP financial
measure is included in the financial data (Table 2) accompanying
this press release. Information on same store NOI and average
rental rate per unit by geographic market is also included in the
financial data (Table 3) accompanying this press release.
Acquisition and Planned Disposition Activity
As previously announced in May, the Company acquired Post
Lakeside™, a 300-unit apartment community located in Orlando,
Florida, for a purchase price of $48.5 million. This community was
completed in 2013 and was 95.3% leased as of July 26, 2013.
In connection with that acquisition, the Company expects to
commence the sale of one of its older Atlanta apartment
communities, with the intent to complete a reverse like-kind
exchange. That sale and exchange is currently expected to be
completed by the fourth quarter of 2013. There can be no assurance
that any sale or exchange will be completed.
Development Activity
In the aggregate, the Company has 1,964 units in six apartment
communities, and approximately 25,464 square feet of retail space,
under development or in lease-up with a total estimated cost of
$347.7 million. The Company currently expects to use available
cash, borrowings under its unsecured bank credit facilities, or
other indebtedness, as well as net proceeds from remaining
condominium sales and, from time to time, its at-the-market common
equity sales program to fund future estimated construction
expenditures.
As previously announced in May, the Company commenced the
development of a second phase of its Post Alexander™ apartment
community located in the Buckhead submarket of Atlanta, GA. Post
Alexander™ - Phase II is planned to consist of 340 high-rise
apartment units with an average unit size of approximately 830
square feet. The community is expected to have a total estimated
development cost of approximately $75.5 million. The Company
anticipates that first apartment unit deliveries will occur in the
first quarter of 2015.
Also as previously announced in May, the Company acquired a
3.9-acre development site, located in Houston, Texas, where the
Company expects to be able to develop approximately 390 luxury
apartment units. The purchase price of the site was $13.1
million.
During the second quarter of 2013, the Company’s Post South
Lamar™ apartment community in Austin, Texas and the third phase of
its Post Midtown Square® apartment community in Houston, Texas both
achieved stabilized residential occupancy. The Company is also
substantially complete with the development of the second phase of
its Post Carlyle Square™ apartment community in Washington D.C.,
and this community is nearing the end of its lease-up. During the
first half of 2013, the Company also began leasing the third phase
of its Post Lake™ at Baldwin Park apartment community in Orlando,
Florida and its Post Parkside™ at Wade apartment community in
Raleigh, North Carolina. As of July 26, 2013, Post Carlyle Square™
– Phase II, Post Lake® at Baldwin Park – Phase III and Post
Parkside™ at Wade were 86.8%, 29.3% and 23.7% leased,
respectively.
Financing Activity
Leverage, Line and Term Loan Capacity
Total debt and preferred equity as a percentage of undepreciated
real estate assets (adjusted for joint venture partners’ share of
real estate assets and debt) was 37.1% at June 30, 2013.
As of July 26, 2013, the Company had cash and cash equivalents
of $67.0 million. Additionally, the Company had no outstanding
borrowings, and letters of credit totaling $0.6 million under its
combined $330 million unsecured lines of credit. The Company has no
principal debt maturities in either the remainder of 2013 or
2014.
Computations of debt ratios and reconciliations of the ratios to
the appropriate GAAP measures in the Company’s financial statements
are included in the financial data (Table 4) accompanying this
press release.
Dividend Increase
As previously announced in May, the Company’s board of directors
increased the quarterly common dividend rate from $0.25 to $0.33
per common share.
At-the-Market Common Equity Activity
The Company has available an at-the-market (“ATM”) common equity
program that provides for the sale of up to 4 million shares of
common stock. As of June 30, 2013 and through July 26, 2013, no
shares have been issued under that program. The Company expects to
use its ATM program, from time to time, as an additional source of
capital and liquidity, to maintain the strength of its balance
sheet and to fund its future investment activities. Sales under
this program are dependent upon a variety of factors, including,
among others, market conditions, the trading price of the Company’s
common stock, the Company’s liquidity position and the potential
use of proceeds.
Condominium Activity
During the second quarter of 2013, the Company closed 30
condominium units at its Austin and Atlanta condominium projects
for aggregate gross revenue of $38.1 million. In addition, during
the quarter, the Company completed the sell-out of condominium
units at its Austin condominium project. As of July 26, 2013, the
Company had six units under contract at its Atlanta condominium
project with one unit remaining available for sale. There can be no
assurance that condominium units under contract will close.
The Company recognized net gains in FFO of $14.0 million, or
$0.25 per diluted share, from condominium sales activities during
the second quarter of 2013, compared to $8.5 million, or $0.16 per
diluted share, during the second quarter of 2012.
2013 Outlook
The estimates and assumptions presented below are forward
looking and are based on the Company’s future view of the apartment
and condominium markets and of general economic conditions, as well
as other risks outlined below under the caption “Forward-Looking
Statements.” There can be no assurance that the Company’s actual
results will not differ materially from the estimates set forth
below. The Company assumes no obligation to update this guidance in
the future.
Based on its current outlook, the Company anticipates that FFO
per diluted share for the full year 2013 will be in the range set
forth below. The tables below reflect anticipated net gains from
condominium sales (for purposes of this discussion, "Condo FFO")
and FFO before Condo FFO (for purposes of this discussion, "Core
FFO").
CurrentOutlook
PreviouslyIssued Outlook
Core FFO $2.47 - $2.55 $2.46 - $2.56 Condo FFO $0.46 - $0.48 $0.20
- $0.37 FFO $2.93 - $3.03 $2.66 - $2.93
Same Store
Assumptions
CurrentOutlook
PreviouslyIssued Outlook
Revenue 4.25% - 4.75% 4.25% - 5.25% Operating expenses 4.25% -
4.75% 4.25% - 5.25% Net operating income (NOI) 4.00% - 5.00% 4.00%
- 5.50%
The Company anticipates that net income available to common
shareholders will be in the range of $1.32 to $1.45 per diluted
share for the full year 2013. The difference between net income
available to common shareholders and FFO per diluted share is
depreciation on real estate assets, which is anticipated to be
$1.58 to $1.61 per diluted share for the full year 2013. Estimated
net income available to common shareholders excludes any gain on a
planned asset sale in the second half of 2013.
Supplemental Financial Data
The Company also produces Supplemental Financial Data that
includes detailed information regarding the Company’s operating
results, investment activity, financing activity, balance sheet and
properties. This Supplemental Financial Data is considered an
integral part of this earnings release and is available on the
Company’s website. The Company’s Earnings Release and the
Supplemental Financial Data are available through the
Investors/Financial Reports/Quarterly and Other Reports section of
the Company’s website at www.postproperties.com.
The ability to access the attachments on the Company’s website
requires the Adobe Acrobat Reader, which may be downloaded at
http://get.adobe.com/reader/.
Non-GAAP Financial Measures and Other Defined Terms
The Company uses certain non-GAAP financial measures and other
defined terms in this press release and in its Supplemental
Financial Data available on the Company’s website. The non-GAAP
financial measures include FFO, Adjusted Funds from Operations
(“AFFO”), net operating income, same store capital expenditures,
and certain debt statistics and ratios. The definitions of these
non-GAAP financial measures are listed below and on page 19 of the
Supplemental Financial Data. The Company believes that these
measures are helpful to investors in measuring financial
performance and/or liquidity and comparing such performance and/or
liquidity to other REITs.
Funds from Operations – The Company uses FFO as an operating
measure. The Company uses the NAREIT definition of FFO. FFO is
defined by NAREIT to mean net income (loss) available to common
shareholders determined in accordance with GAAP, excluding gains
(or losses) from extraordinary items and sales of depreciable
operating property, plus depreciation and amortization of real
estate assets, and after adjustment for unconsolidated partnerships
and joint ventures all determined on a consistent basis in
accordance with GAAP. FFO presented in the Company’s press release
and Supplemental Financial Data is not necessarily comparable to
FFO presented by other real estate companies because not all real
estate companies use the same definition. The Company’s FFO is
comparable to the FFO of real estate companies that use the current
NAREIT definition.
Accounting for real estate assets using historical cost
accounting under GAAP assumes that the value of real estate assets
diminishes predictably over time. NAREIT stated in its April 2002
White Paper on Funds from Operations that “since real estate asset
values have historically risen or fallen with market conditions,
many industry investors have considered presentations of operating
results for real estate companies that use historical cost
accounting to be insufficient by themselves.” As a result, the
concept of FFO was created by NAREIT for the REIT industry to
provide an alternate measure. Since the Company agrees with the
concept of FFO and appreciates the reasons surrounding its
creation, the Company believes that FFO is an important
supplemental measure of operating performance. In addition, since
most equity REITs provide FFO information to the investment
community, the Company believes that FFO is a useful supplemental
measure for comparing the Company’s results to those of other
equity REITs. The Company believes that the line on its
consolidated statement of operations entitled “net income available
to common shareholders” is the most directly comparable GAAP
measure to FFO.
Adjusted Funds From Operations – The Company also uses AFFO as
an operating measure. AFFO is defined as FFO less operating capital
expenditures and after adjusting for the impact of non-cash
straight-line, long-term ground lease expense, non-cash impairment
charges, debt extinguishment gains (losses) and preferred stock
redemption costs. The Company believes that AFFO is an important
supplemental measure of operating performance for an equity REIT
because it provides investors with an indication of the REIT’s
ability to fund its operating capital expenditures through
earnings. In addition, since most equity REITs provide AFFO
information to the investment community, the Company believes that
AFFO is a useful supplemental measure for comparing the Company to
other equity REITs. The Company believes that the line on its
consolidated statement of operations entitled “net income available
to common shareholders” is the most directly comparable GAAP
measure to AFFO.
Property Net Operating Income (“NOI”) – The Company uses
property NOI, including same store NOI and same store NOI by
market, as an operating measure. NOI is defined as rental and other
revenues from real estate operations less total property and
maintenance expenses from real estate operations (exclusive of
depreciation and amortization). The Company believes that NOI is an
important supplemental measure of operating performance for a
REIT’s operating real estate because it provides a measure of the
core operations, rather than factoring in depreciation and
amortization, financing costs and general and administrative
expenses generally incurred at the corporate level. This measure is
particularly useful, in the opinion of the Company, in evaluating
the performance of geographic operations, same store groupings and
individual properties. Additionally, the Company believes that NOI,
as defined, is a widely accepted measure of comparative operating
performance in the real estate investment community. The Company
believes that the line on its consolidated statement of operations
entitled “net income” is the most directly comparable GAAP measure
to NOI.
Same Store Capital Expenditures – The Company uses same store
annually recurring and periodically recurring capital expenditures
as cash flow measures. Same store annually recurring and
periodically recurring capital expenditures are supplemental
non-GAAP financial measures. The Company believes that same store
annually recurring and periodically recurring capital expenditures
are important indicators of the costs incurred by the Company in
maintaining its same store communities on an ongoing basis. The
corresponding GAAP measures include information with respect to the
Company’s other operating segments consisting of communities
stabilized in the prior year, lease-up communities, rehabilitation
properties, sold properties and commercial properties in addition
to same store information. Therefore, the Company believes that the
Company’s presentation of same store annually recurring and
periodically recurring capital expenditures is necessary to
demonstrate same store replacement costs over time. The Company
believes that the most directly comparable GAAP measure to same
store annually recurring and periodically recurring capital
expenditures is the line on the Company’s consolidated statements
of cash flows entitled “property capital expenditures,” which also
includes revenue generating capital expenditures.
Debt Statistics and Debt Ratios – The Company uses a number of
debt statistics and ratios as supplemental measures of liquidity.
The numerator and/or the denominator of certain of these statistics
and/or ratios include non-GAAP financial measures that have been
reconciled to the most directly comparable GAAP financial measure.
These debt statistics and ratios include: (1) interest coverage
ratios; (2) fixed charge coverage ratios; (3) total debt as a
percentage of undepreciated real estate assets (adjusted for joint
venture partner’s share of debt); (4) total debt plus preferred
equity as a percentage of undepreciated real estate assets
(adjusted for joint venture partner’s share of debt); (5) a ratio
of consolidated debt to total assets; (6) a ratio of secured debt
to total assets; (7) a ratio of total unencumbered assets to
unsecured debt; (8) a ratio of consolidated income available for
debt service to annual debt service charge; and (9) a debt to
annualized income available for debt service ratio. A number of
these debt statistics and ratios are derived from covenants found
in the Company’s debt agreements, including, among others, the
Company’s senior unsecured notes. In addition, the Company presents
these measures because the degree of leverage could affect the
Company’s ability to obtain additional financing for working
capital, capital expenditures, acquisitions, development or other
general corporate purposes. The Company uses these measures
internally as an indicator of liquidity, and the Company believes
that these measures are also utilized by the investment and analyst
communities to better understand the Company’s liquidity.
The Company uses income available for debt service to calculate
certain debt ratios and statistics. Income available for debt
service is defined as net income (loss) before interest, taxes,
depreciation, amortization, gains on sales of real estate assets,
non-cash impairment charges and other non-cash income and expenses.
Income available for debt service is a supplemental measure of
operating performance that does not represent and should not be
considered as an alternative to net income or cash flow from
operating activities as determined under GAAP, and the Company’s
calculation thereof may not be comparable to similar measures
reported by other companies, including EBITDA or Adjusted
EBITDA.
Property Operating Statistics – The Company uses average
economic occupancy, gross turnover, net turnover and percentage
increases in rent for new and renewed leases as statistical
measures of property operating performance. The Company defines
average economic occupancy as gross potential rent less vacancy
losses, model expenses and bad debt expenses divided by gross
potential rent for the period, expressed as a percentage. Gross
turnover is defined as the percentage of leases expiring during the
period that are not renewed by the existing residents. Net turnover
is defined as gross turnover decreased by the percentage of
expiring leases where the residents transfer to a new apartment
unit in the same community or in another Post® community. The
percentage increases in rent for new and renewed leases are
calculated using the respective new or renewed rental rate as of
the date of a new lease, as compared with the previous rental rate
on that same unit.
Conference Call Information
The Company will hold its quarterly conference call on Tuesday,
July 30, at 10:00 a.m. ET. The telephone numbers are 888-466-4462
for US and Canada callers and 719-325-2315 for international
callers. The access code is 6128507. The conference call will be
open to the public and can be listened to live on Post’s website at
www.postproperties.com. Click Investors in the top menu, then
select either Investor’s Overview or Events Calendar. The replay
will begin at 1:00 p.m. ET on Tuesday, July 30, and will be
available until Monday, August 5, at 11:59 p.m. ET. The telephone
numbers for the replay are 888-203-1112 for US and Canada callers
and 719-457-0820 for international callers. The access code for the
replay is 6128507. A replay of the call also will be archived on
Post’s website under Investors/Audio Archives.
About Post
Post Properties, founded more than 40 years ago, is a leading
developer and operator of upscale multifamily communities. The
Company’s mission is delivering superior satisfaction and value to
its residents, associates, and investors, with a vision of being
the first choice in quality multifamily living. Operating as a real
estate investment trust (“REIT”), the Company focuses on developing
and managing Post® branded high density urban and resort-style
garden apartments. Post Properties is headquartered in Atlanta,
Georgia, and has operations in ten markets across the country.
Post Properties has interests in 22,858 apartment units in 61
communities, including 1,471 apartment units in four communities
held in unconsolidated entities and 1,964 apartment units in six
communities currently under development or in lease-up. The Company
is also selling luxury for-sale condominium homes in one community
through a taxable REIT subsidiary.
Forward-Looking Statements
Certain statements made in this press release and other written
or oral statements made by or on behalf of the Company, may
constitute “forward-looking statements” within the meaning of the
federal securities laws. Statements regarding future events and
developments and the Company’s future performance, as well as
management’s expectations, beliefs, plans, estimates or projections
relating to the future, are forward-looking statements within the
meaning of these laws. Examples of such statements in this press
release include, expectations regarding apartment market
conditions, expectations regarding use of proceeds from unsecured
bank credit facilities, expectations regarding future operating
conditions, including the Company’s current outlook as to expected
funds from operations, revenue, operating expenses and net
operating income, anticipated development activities (including
projected construction expenditures and timing), expectations
regarding the for-sale condominium business, expectations regarding
apartment community sales, and expectations regarding offerings of
the Company’s common stock and the use of proceeds thereof. All
forward-looking statements are subject to certain risks and
uncertainties that could cause actual events to differ materially
from those projected. Management believes that these
forward-looking statements are reasonable; however, you should not
place undue reliance on such statements. These statements are based
on current expectations and speak only as of the date of such
statements. The Company undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of
future events, new information or otherwise.
The following are some of the factors that could cause the
Company’s actual results and its expectations to differ materially
from those described in the Company’s forward-looking statements:
the success of the Company’s business strategies discussed in its
Annual Report on Form 10-K for the year ended December 31, 2012 and
in subsequent filings with the SEC; conditions affecting ownership
of residential real estate and general conditions in the
multi-family residential real estate market; uncertainties
associated with the Company’s real estate development and
construction; uncertainties associated with the timing and amount
of apartment community sales; exposure to economic and other
competitive factors due to market concentration; future local and
national economic conditions, including changes in job growth,
interest rates, the availability of mortgage and other financing
and related factors; the Company’s ability to generate sufficient
cash flows to make required payments associated with its debt
financing; the effects of the Company’s leverage on its risk of
default and debt service requirements; the impact of a downgrade in
the credit rating of the Company’s securities; the effects of a
default by the Company or its subsidiaries on an obligation to
repay outstanding indebtedness, including cross-defaults and
cross-acceleration under other indebtedness; the effects of
covenants of the Company’s or its subsidiaries’ mortgage
indebtedness on operational flexibility and default risks; the
Company’s ability to maintain its current dividend level;
uncertainties associated with the Company’s condominium for-sale
housing business, including the timing and volume of condominium
sales and warranty and related obligations; the impact of any
additional charges the Company may be required to record in the
future related to any impairment in the carrying value of its
assets; the impact of competition on the Company’s business,
including competition for residents in the Company’s apartment
communities and buyers of the Company’s for-sale condominium homes
and development locations; the Company’s ability to compete for
limited investment opportunities; the effects of any decision by
the government to eliminate Fannie Mae or Freddie Mac or reduce
government support for apartment mortgage loans; the effects of
changing interest rates and effectiveness of interest rate hedging
contracts; the success of the Company’s acquired apartment
communities; the Company’s ability to succeed in new markets; the
costs associated with compliance with laws requiring access to the
Company’s properties by persons with disabilities; the impact of
the Company’s ongoing litigation with the U.S. Department of
Justice regarding the Americans with Disabilities Act and the Fair
Housing Act as well as the impact of other litigation; the effects
of losses from natural catastrophes in excess of insurance
coverage; uncertainties associated with environmental and other
regulatory matters; the costs associated with moisture infiltration
and resulting mold remediation; the Company’s ability to control
joint ventures, properties in which it has joint ownership and
corporations and limited partnership in which it has partial
interests; the Company’s ability to renew leases or relet units as
leases expire; the Company’s ability to continue to qualify as a
REIT under the Internal Revenue Code; the effects of changes in
accounting policies and other regulatory matters detailed in the
Company’s filings with the Securities and Exchange Commission;
increased costs arising from health care reform; and any breach of
the Company’s privacy or information security systems. Other
important risk factors regarding the Company are included under the
caption “Risk Factors” in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2012 and may be discussed in
subsequent filings with the SEC. The risk factors discussed in Form
10-K under the caption “Risk Factors” are specifically incorporated
by reference into this press release.
Financial Highlights
(Unaudited; in thousands, except per share
and unit amounts)
Three months ended Six months
ended June 30, June 30, 2013
2012 2013
2012 OPERATING DATA Total revenues $ 90,484 $ 82,160 $
178,013 $ 162,436 Net income available to common shareholders $
26,566 $ 20,157 $ 45,985 $ 41,035 Funds from operations available
to common shareholders and unitholders (Table 1) $ 47,906 $ 39,654
$ 88,443 $ 73,877 Weighted average shares outstanding -
diluted 54,658 54,096 54,648 53,799 Weighted average shares and
units outstanding - diluted 54,801 54,246 54,791 53,950 PER
COMMON SHARE DATA - DILUTED Net income available to common
shareholders $ 0.48 $ 0.37 $ 0.84 $ 0.76 Funds from
operations available to common shareholders and unitholders (Table
1) (1) $ 0.87 $ 0.73 $ 1.61 $ 1.37 Dividends declared $ 0.33
$ 0.25 $ 0.58 $ 0.47
1) Funds from operations available to common shareholders and
unitholders per share was computed using weighted average shares
and units outstanding, including the impact of dilutive securities
totaling 194 and 323 for the three months and 198 and 369 for the
six months ended June 30, 2013 and 2012, respectively.
Additionally, diluted weighted average shares and units included
the impact of non-vested shares and units totaling 127 and 130 for
the three months and 119 and 124 for the six months ended June 30,
2013 and 2012, respectively, for the computation of FFO per share.
Such non-vested shares and units are considered in the income per
share computations under GAAP using the “two-class method.”
Table 1
Reconciliation of Net Income Available to
Common Shareholders to
Funds From Operations Available to Common
Shareholders and Unitholders
(Unaudited; in thousands, except per share
and unit amounts)
Three months ended Six months
ended June 30, June 30, 2013
2012 2013
2012 Net income available to common
shareholders $ 26,566 $ 20,157 $ 45,985 $ 41,035 Noncontrolling
interests - Operating Partnership 68 56 120 115 Depreciation on
consolidated real estate assets, net 20,981 19,156 41,758 38,159
Depreciation on real estate assets held in unconsolidated entities
291 285 580 623 Gains on sales of depreciable real estate assets -
unconsolidated entities - - - (6,055 )
Funds from operations available to common shareholders
and unitholders $ 47,906 $ 39,654 $ 88,443 $ 73,877
Funds from operations - per share and unit - diluted
(1) $ 0.87 $ 0.73 $ 1.61 $ 1.37
Weighted average
shares and units outstanding - diluted (1) 54,928
54,376 54,910 54,074
1) Diluted weighted average shares and units include the impact
of dilutive securities totaling 194 and 323 for the three months
and 198 and 369 for the six months ended June 30, 2013 and 2012,
respectively. Additionally, diluted weighted average shares and
units included the impact of non-vested shares and units totaling
127 and 130 for the three months and 119 and 124 for the six months
ended June 30, 2013 and 2012, respectively, for the computation of
FFO per share. Such non-vested shares and units are considered in
the income per share computations under GAAP using the “two-class
method.”
Table 2
Reconciliation of Same Store Net Operating
Income (NOI) to GAAP Net Income
(Unaudited; In thousands)
Three months ended Six
months ended June 30, June 30,
March 31, June 30, June 30,
2013 2012
2013 2013 2012
Total same store NOI $ 48,871 $ 46,785 $ 48,008 $ 96,879 $
92,435 Property NOI from other operating segments 2,713
(62 ) 1,552 4,265
(295 ) Consolidated property NOI 51,584 46,723
49,560 101,144 92,140
Add (subtract): Interest income 23 288 36 59 339 Other
revenues 229 206 214 443 428 Depreciation (21,345 ) (19,497 )
(21,121 ) (42,466 ) (38,838 ) Interest expense (11,130 ) (11,103 )
(11,142 ) (22,272 ) (22,748 ) Amortization of deferred financing
costs (645 ) (698 ) (624 ) (1,269 ) (1,359 ) General and
administrative (4,170 ) (3,883 ) (4,245 ) (8,415 ) (8,168 )
Investment and development (592 ) (322 ) (489 ) (1,081 ) (802 )
Other investment costs (516 ) (306 ) (305 ) (821 ) (612 ) Gains on
condominium sales activities, net 13,981 8,530 8,194 22,175 15,434
Equity in income of unconsolidated real estate entities, net 477
495 478 955 6,941 Other income (expense), net (282 ) 737 (166 )
(448 ) 581 Net loss on extinguishment of indebtedness -
- - - (301
) Net income $ 27,614 $ 21,170 $ 20,390
$ 48,004 $ 43,035
Table 3
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Three months ended Q2 '13 Q2 '13 Q2 '13
June 30, June 30, March 31,
vs. Q2 '12 vs. Q1 '13 % Same
2013 2012 2013 % Change
% Change Store NOI Rental and other
revenues Atlanta $ 21,405 $ 20,320 $ 20,989 5.3 % 2.0 % Dallas
17,370 16,811 17,263 3.3 % 0.6 % Houston 3,600 3,359 3,593 7.2 %
0.2 % Austin 2,944 2,770 2,884 6.3 % 2.1 % Washington, D.C. 13,199
13,108 13,040 0.7 % 1.2 % New York 3,721 3,668 3,611 1.4 % 3.0 %
Tampa 9,119 8,628 9,015 5.7 % 1.2 % Orlando 2,795 2,711 2,785 3.1 %
0.4 % Charlotte 5,096 4,845 5,019 5.2 % 1.5 %
Total rental and other revenues 79,249 76,220
78,199 4.0 % 1.3 % Property operating and maintenance
expenses (exclusive of depreciation and amortization) Atlanta 8,732
8,087 8,297 8.0 % 5.2 % Dallas 7,390 7,163 7,174 3.2 % 3.0 %
Houston 1,446 1,439 1,385 0.5 % 4.4 % Austin 1,200 1,192 1,223 0.7
% (1.9 )% Washington, D.C. 4,186 3,946 4,291 6.1 % (2.4 )% New York
1,559 1,607 1,768 (3.0 )% (11.8 )% Tampa 3,314 3,257 3,310 1.8 %
0.1 % Orlando 920 1,001 1,104 (8.1 )% (16.7 )% Charlotte
1,631 1,743 1,639 (6.4 )% (0.5 )% Total 30,378
29,435 30,191 3.2 % 0.6 % Net operating income
Atlanta 12,673 12,233 12,692 3.6 % (0.1 )% 25.9 % Dallas 9,980
9,648 10,089 3.4 % (1.1 )% 20.4 % Houston 2,154 1,920 2,208 12.2 %
(2.4 )% 4.4 % Austin 1,744 1,578 1,661 10.5 % 5.0 % 3.6 %
Washington, D.C. 9,013 9,162 8,749 (1.6 )% 3.0 % 18.4 % New York
2,162 2,061 1,843 4.9 % 17.3 % 4.4 % Tampa 5,805 5,371 5,705 8.1 %
1.8 % 11.9 % Orlando 1,875 1,710 1,681 9.6 % 11.5 % 3.8 % Charlotte
3,465 3,102 3,380 11.7 % 2.5 % 7.2 % Total
same store NOI $ 48,871 $ 46,785 $ 48,008 4.5 % 1.8 % 100.0 %
Average rental rate per unit Atlanta $ 1,251 $ 1,187
$ 1,236 5.4 % 1.2 % Dallas 1,213 1,159 1,199 4.7 % 1.1 % Houston
1,399 1,292 1,381 8.3 % 1.3 % Austin 1,509 1,421 1,490 6.2 % 1.2 %
Washington, D.C. 1,898 1,859 1,889 2.1 % 0.5 % New York 3,869 3,777
3,874 2.4 % (0.1 )% Tampa 1,386 1,321 1,371 4.9 % 1.1 % Orlando
1,518 1,447 1,512 4.9 % 0.4 % Charlotte 1,195 1,129 1,180 5.8 % 1.2
% Total average rental rate per unit 1,406 1,344 1,393 4.6 % 0.9 %
Table 3 (con’t)
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Six months ended June 30,
June 30, 2013 2012 %
Change Rental and other revenues Atlanta $ 42,394 $
40,290 5.2 % Dallas 34,633 32,991 5.0 % Houston 7,193 6,604 8.9 %
Austin 5,828 5,462 6.7 % Washington, D.C. 26,239 25,962 1.1 % New
York 7,332 7,270 0.9 % Tampa 18,134 17,137 5.8 % Orlando 5,580
5,373 3.9 % Charlotte 10,115 9,508 6.4 % Total rental
and other revenues 157,448 150,597 4.5 %
Property operating and maintenance expenses (exclusive of
depreciation and amortization) Atlanta 17,029 15,903 7.1 % Dallas
14,564 14,164 2.8 % Houston 2,831 2,644 7.1 % Austin 2,423 2,395
1.2 % Washington, D.C. 8,477 7,969 6.4 % New York 3,327 3,293 1.0 %
Tampa 6,624 6,427 3.1 % Orlando 2,024 2,004 1.0 % Charlotte
3,270 3,363 (2.8 )% Total 60,569 58,162 4.1 %
Net operating income Atlanta 25,365 24,387 4.0 % Dallas
20,069 18,827 6.6 % Houston 4,362 3,960 10.2 % Austin 3,405 3,067
11.0 % Washington, D.C. 17,762 17,993 (1.3 )% New York 4,005 3,977
0.7 % Tampa 11,510 10,710 7.5 % Orlando 3,556 3,369 5.6 % Charlotte
6,845 6,145 11.4 % Total same store NOI $ 96,879 $
92,435 4.8 % Average rental rate per unit Atlanta $
1,244 $ 1,177 5.7 % Dallas 1,206 1,149 5.0 % Houston 1,390 1,278
8.8 % Austin 1,500 1,410 6.4 % Washington, D.C. 1,893 1,851 2.3 %
New York 3,871 3,760 3.0 % Tampa 1,378 1,309 5.3 % Orlando 1,515
1,436 5.5 % Charlotte 1,188 1,117 6.4 % Total average rental rate
per unit 1,399 1,334 4.9 %
Table 4
Computation of Debt Ratios
(In thousands)
As of June 30, 2013
2012 Total real estate assets per
balance sheet $ 2,260,846 $ 2,099,355 Plus: Company share of real
estate assets held in unconsolidated entities 58,187 59,450 Company
share of accumulated depreciation - assets held in unconsolidated
entities 11,896 10,284 Accumulated depreciation per balance sheet
884,571 805,129 Total undepreciated
real estate assets
(A) $ 3,215,500 $ 2,974,218
Total debt per balance sheet $ 1,100,604 $ 967,582 Plus:
Company share of third party debt held in unconsolidated entities
49,531 49,531 Total debt (adjusted for
joint venture partners' share of debt)
(B) $ 1,150,135
$ 1,017,113 Total debt as a % of undepreciated
real estate assets (adjusted for joint venture partners' share of
debt)
(B÷A) 35.8 % 34.2 % Total debt
per balance sheet $ 1,100,604 $ 967,582 Plus: Company share of
third party debt held in unconsolidated entities 49,531 49,531
Preferred shares at liquidation value 43,392
43,392 Total debt and preferred equity (adjusted for joint
venture partners' share of debt)
(C) $ 1,193,527 $
1,060,505 Total debt and preferred equity as a % of
undepreciated real estate assets (adjusted for joint venture
partners' share of debt)
(C÷A) 37.1 % 35.7 %
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