Investor/Analyst Conference Call Scheduled for
Friday, October 31, 2014 at 10:00 a.m. ET
Post Properties, Inc. (NYSE: PPS) announced today net income
available to common shareholders of $132.8 million, or $2.44 per
diluted share, for the third quarter of 2014, compared to $18.1
million, or $0.33 per diluted share, for the third quarter of
2013.
Net income available to common shareholders for the nine months
ended September 30, 2014, was $192.9 million, or $3.54 per diluted
share, compared to $64.0 million, or $1.17 per diluted share, for
the nine months ended September 30, 2013.
Net income for the three months ended September 30, 2014,
included gains on sales of apartment communities of $127.7 million,
offset by losses on the extinguishment of debt of $12.3 million,
both net of noncontrolling interest. Net income for the nine months
ended September 30, 2014, included gains on sales of apartment
communities of $163.7 million, offset by losses on the
extinguishment of indebtedness of $16.6 million, both net of
noncontrolling interest.
Funds From Operations
The Company uses the National Association of Real Estate
Investment Trusts (“NAREIT”) definition of Funds from Operations
(“FFO”) as an operating measure of the Company’s financial
performance. A reconciliation of FFO to GAAP net income is included
in the financial data (Table 1) accompanying this press
release.
FFO for the third quarter of 2014 was $26.2 million, or $0.48
per diluted share, compared to $39.9 million, or $0.73 per diluted
share, for the third quarter of 2013. For the third quarter of
2014, Core FFO (excluding FFO from condominium activities) was
$25.4 million, or $0.47 per diluted share, compared to $34.6
million, or $0.63 per diluted share, for the third quarter of
2013.
FFO for the nine months ended September 30, 2014 was $93.0
million, or $1.70 per diluted share, compared to $128.3 million, or
$2.34 per diluted share, for the nine months ended September 30,
2013. For the nine months ended September 30, 2014, Core FFO
(excluding FFO from condominium activities) was $91.4 million, or
$1.67 per diluted share, compared to $100.8 million, or $1.84 per
diluted share, for the nine months ended September 30, 2013.
FFO and Core FFO included losses on extinguishment of
indebtedness of $12.3 million, net of noncontrolling interest, or
$0.23 per diluted share, for the three months ended September 30,
2014 and $16.6 million, net of noncontrolling interest, or $0.30
per diluted share, for the nine months ended September 30,
2014.
Said Dave Stockert, the Company’s CEO and President, “The third
quarter was a productive and successful one. Highlights included
another double-digit increase in per share adjusted core funds from
operations and a highly profitable sale of assets, providing the
Company with substantial low-cost capital to fund future
investments.”
Same Store Community Data
Average economic occupancy at the Company’s 48 same store
communities, containing 17,714 apartment units, was 96.6% and 96.4%
for the third quarter of 2014 and 2013, respectively.
Total revenues for the same store communities increased 2.5% and
total operating expenses increased 3.5% during the third quarter of
2014, compared to the third quarter of 2013, producing a 1.9%
increase in same store net operating income (“NOI”). The average
monthly rental rate per unit increased 2.3% during the third
quarter of 2014, compared to the third quarter of 2013.
On a sequential basis, total revenues for the same store
communities increased 1.5% and total operating expenses decreased
0.7%, resulting in a 3.0% increase in same store NOI for the third
quarter of 2014, compared to the second quarter of 2014. On a
sequential basis, the average monthly rental rate per unit
increased 1.0%. For the third quarter of 2014, average economic
occupancy at the same store communities was 96.6%, compared to
96.2% for the second quarter of 2014.
For the nine months ended September 30, 2014, average economic
occupancy at the Company’s same store communities was 96.1%
compared to 95.8% for the nine months ended September 30, 2013.
Total revenues for the same store communities increased 2.6% and
total operating expenses increased 4.8% during the first nine
months of 2014, compared to the first nine months of 2013,
producing a 1.3% increase in same store NOI. The average monthly
rental rate per unit increased 2.3% for the nine months ended
September 30, 2014, compared to the nine months ended September 30,
2013.
Investment Activity
Development Activity
The Company announced today the commencement of the development
of the second phase at its Post Parkside™ at Wade apartment
community located in Raleigh, North Carolina. Post Parkside™ at
Wade, Phase II is planned to consist of 391 luxury apartment units
with an average unit size of approximately 872 square feet. The
second phase is expected to have a total estimated development cost
of approximately $53.0 million, and is expected to produce an
estimated stabilized yield on cost of approximately 5.8%,
calculated on current market rents and after a 3% management fee
and $300 per unit replacement reserve. The Company anticipates that
first apartment unit deliveries will occur in the first quarter of
2016.
In the aggregate, the Company has 1,592 units in five apartment
communities, and approximately 10,556 square feet of retail space,
under development or in lease-up with a total estimated cost of
$283.8 million, and a remaining funding requirement of $156.2
million. The Company believes it has adequate internal resources,
as well as sufficient capacity on its unsecured lines of credit, to
fund its development commitments.
Disposition Activity
As previously announced in September 2014, the Company closed
the sale of two apartment communities, located in New York, NY, for
a total gross sales price of $270 million. A portion of the net
proceeds from the sales were used to prepay approximately $82.6
million of secured mortgage indebtedness encumbering the two
communities along with related prepayment premiums.
In conjunction with the sale of the New York communities, the
Company recognized a gain on sale of $127.7 million, net of
noncontrolling interest, or $2.34 per diluted share, as well as
losses on early extinguishment of indebtedness of $12.3 million,
net of noncontrolling interest, or $0.23 per diluted share, during
the third quarter of 2014.
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 31.7% at September 30, 2014.
As of October 27, 2014, the Company had cash and cash
equivalents of $134.9 million. The Company had no outstanding
borrowings and letters of credit totaling $0.1 million under its
combined $330 million unsecured lines of credit. The Company has no
principal debt maturities until 2017.
Computations of debt ratios and reconciliations of the ratios to
the appropriate GAAP measures in the Company’s financial statements
are included in the financial data (Table 4) accompanying this
press release.
At-the-Market Common Equity Activity
The Company has 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 September 30, 2014, and since its inception, no
shares have been issued under that program. 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.
Information Technology Systems Initiatives
The Company has substantially completed the process of upgrading
and replacing its financial and property management information
technology systems. As part of this project, in addition to other
system implementation costs capitalized, the Company was required
to expense certain up-front implementation and training costs.
These expensed system implementation costs totaled $0.3 million and
$1.0 million for the three and nine months ended September 30,
2014, respectively. These expenses are currently projected to total
approximately $1.2 million for the full year of 2014.
2014 Outlook
The estimates and assumptions presented below are forward
looking and are based on the Company’s future view of its apartment
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 2014 will be in the range set
forth below. The tables below reflect net gains from condominium
sales (for purposes of this discussion, "Condo FFO") and FFO before
Condo FFO (for purposes of this discussion, "Core FFO"). Adjusted
Funds from Operations (“AFFO”) per share is defined as FFO per
share less operating property capital expenditures after adjusting
for the impact of non-cash straight-line long-term ground lease
expense and debt extinguishment losses. Core AFFO represents AFFO
excluding net gains from condominium sales.
Current
Outlook
Previously
Issued Outlook
Core FFO, before debt extinguishment losses $2.66 - $2.67 $2.62 -
$2.66
Debt extinguishment losses, net of
noncontrolling interest
($0.30) ($0.32) - ($0.31) Core FFO $2.36 - $2.37 $2.30 - $2.35
Condo FFO $0.03 $0.015 FFO $2.39 - $2.40 $2.32 - $2.37 Core AFFO
$2.20 - $2.22 $2.16 - $2.21
Same Store Assumptions
Current
Outlook
Previously
Issued Outlook
Revenue 2.80% - 2.90% 2.70% - 3.00% Operating expenses 4.80% -
5.00% 5.00% - 5.50% Net operating income (NOI) 1.50% - 1.70% 1.00%
- 1.60%
The Company anticipates that net income available to common
shareholders will be in the range of $3.82 to $3.84 per diluted
share for the full year 2014. The difference between net income
available to common shareholders and FFO per diluted share includes
depreciation on real estate assets, which is anticipated to be
$1.56 to $1.57 per diluted share and net gains on sales of real
estate assets of $3.00 per diluted share for the full year
2014.
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 newly stabilized
communities, lease-up communities, held for sale communities, sold
communities 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 Friday,
October 31, at 10:00 a.m. ET. The telephone numbers are
888-364-3109 for US and Canada callers and 719-457-2697 for
international callers. The access code is 7079880. 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 Friday, October
31, and will be available until Friday, November 7, at 1:00 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 7079880. 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 22,650 apartment units in 58
communities, including 1,471 apartment units in four communities
held in unconsolidated entities and 1,592 apartment units in five
communities currently under development or in lease-up.
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 and in the Company’s outlook include, expectations
regarding apartment market conditions, expectations regarding
future operating conditions, including the Company’s current
outlook as to expected funds from operations, adjusted funds from
operations, revenue, operating expenses, net operating income,
capital expenditures, depreciation, gains on sales and net income,
anticipated development activities (including projected
construction expenditures and timing), expectations regarding use
of proceeds from unsecured bank credit facilities, 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, 2013 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 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 for 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, 2013 and may be discussed in subsequent filings with the SEC.
The risk factors discussed in the Form 10-K under the caption “Risk
Factors” are specifically incorporated by reference into this press
release.
Financial Highlights
(Unaudited; in thousands, except per share
and unit amounts)
Three months ended Nine
months ended September 30, September 30,
2014 2013 2014 2013
OPERATING DATA Total revenues $ 96,461 $ 93,394 $ 284,999 $ 269,032
Net income available to common shareholders $ 132,784 $ 18,051 $
192,895 $ 64,037 Funds from operations available to common
shareholders and unitholders (Table 1) $ 26,177 $ 39,858 $ 93,004 $
128,301 Weighted average shares outstanding - diluted 54,373
54,539 54,336 54,611 Weighted average shares and units outstanding
- diluted 54,503 54,682 54,469 54,754 PER COMMON SHARE DATA
- DILUTED Net income available to common shareholders $ 2.44 $ 0.33
$ 3.54 $ 1.17 Funds from operations available to common
shareholders and unitholders (Table 1) (1) $ 0.48 $ 0.73 $ 1.70 $
2.34 Dividends declared $ 0.40 $ 0.33 $ 1.16 $ 0.91
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 72 and 168 for the three months and 103 and 187 for the
nine months ended September 30, 2014 and 2013, respectively.
Additionally, diluted weighted average shares and units included
the impact of non-vested shares and units totaling 129 and 122 for
the three months and 123 and 120 for the nine months ended
September 30, 2014 and 2013, 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 Nine
months ended September 30, September 30,
2014
2013
2014 2013 Net income available to common
shareholders $ 132,784 $ 18,051 $ 192,895 $ 64,037
Noncontrolling interests - Operating Partnership 313 48 464 167
Depreciation on consolidated real estate assets, net 20,724 21,468
62,795 63,226 Depreciation on real estate assets held in
unconsolidated entities 296 291 882 871 Gains on sales of
depreciable real estate assets (151,733 ) - (187,825 ) -
Noncontrolling interest share of gains on sales of depreciable real
estate assets 24,074 - 24,074 - Gain on sale of retail condominium
(281 ) - (281 ) -
Funds from
operations available to common shareholders and
unitholders $ 26,177 $ 39,858 $ 93,004 $ 128,301
Funds from operations available to common shareholders and
unitholders - core operations $ 25,406 $ 34,565 $ 91,423 $ 100,833
Funds from operations available to common shareholders and
unitholders - condominiums 771 5,293
1,581 27,468
Funds from operations available to
common shareholders and unitholders $ 26,177 $
39,858 $ 93,004 $ 128,301
Funds from operations -
per share and unit - diluted (1) $ 0.48 $ 0.73 $ 1.70
$ 2.34
Funds from operations per share and unit - core
operations $ 0.47 $ 0.63 $ 1.67 $ 1.84
Weighted average shares and units outstanding - diluted (1)
54,632 54,804 54,593
54,874
1) Diluted weighted average shares and units include the impact
of dilutive securities totaling 72 and 168 for the three months and
103 and 187 for the nine months ended September 30, 2014 and 2013,
respectively. Additionally, diluted weighted average shares and
units included the impact of non-vested shares and units totaling
129 and 122 for the three months and 123 and 120 for the nine
months ended September 30, 2014 and 2013, respectively, for the
computation of FFO per share. Such non-vested shares and units are
considered in the income per share computations under GAAP using
the “two-class method.”
Table 2
Reconciliation of Same Store Net Operating
Income (NOI) to GAAP Net Income
(Unaudited; In thousands)
Three months ended Nine months
ended September 30, September 30,
June 30, September 30, September 30,
2014 2013 2014 2014 2013 Total
same store NOI $ 47,472 $ 46,602 $ 46,086 $ 139,876 $ 138,126
Property NOI from held for sale and sold - residential 1,651 2,687
2,267 6,390 8,381 Property NOI from held for sale and sold -
commercial 160 399 307 767 1,247 Property NOI from other operating
segments 5,269 3,215 4,348
13,224 4,887 Consolidated
property NOI 54,552 52,903
53,008 160,257 152,641 Add
(subtract): Interest income 78 8 4 94 67 Other revenues 234 225 223
676 668 Depreciation (21,018 ) (21,580 ) (20,829 ) (63,614 )
(63,694 ) Interest expense (9,858 ) (11,186 ) (10,433 ) (31,535 )
(33,280 ) Amortization of deferred financing costs (588 ) (646 )
(620 ) (1,853 ) (1,915 ) General and administrative (4,784 ) (4,079
) (3,966 ) (12,878 ) (12,494 ) Investment and development (555 )
(367 ) (794 ) (2,160 ) (1,448 ) Other investment costs (224 ) (418
) (210 ) (707 ) (1,239 ) Severance, impairment and other (344 )
(1,981 ) (502 ) (1,753 ) (1,981 ) Gains on condominium sales
activities, net 1,052 5,293 - 1,862 27,468 Equity in income of
unconsolidated real estate entities, net 422 656 501 1,408 1,611
Other income (expense), net (195 ) (196 ) (196 ) (586 ) (644 ) Net
loss on extinguishment of indebtedness (14,070 ) -
(4,287 ) (18,357 ) -
Income from continuing operations, before gains on sales of real
estate assets 4,702 18,632 11,899 30,854 65,760 Gains on sales of
real estate assets 151,733 - 36,092 187,825 - Income from
discontinued operations - 421 -
- 1,297 Net income $
156,435 $ 19,053 $ 47,991 $ 218,679 $
67,057
Table 3
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Three months ended Q3
'14 Q3 '14 Q3 '14 September 30,
September 30, June 30, vs. Q3 '13
vs. Q2 '14 % Same 2014 2013 2014
% Change % Change Store NOI Rental and other
revenues Atlanta $ 21,762 $ 20,764 $ 21,305 4.8 % 2.1 % Dallas
18,297 17,867 17,970 2.4 % 1.8 % Houston 2,339 2,242 2,293 4.3 %
2.0 % Austin 3,052 3,008 3,036 1.5 % 0.5 % Washington, D.C. 13,156
13,226 13,037 (0.5 )% 0.9 % Tampa 9,448 9,207 9,350 2.6 % 1.0 %
Orlando 2,770 2,804 2,774 (1.2 )% (0.1 )% Charlotte 6,889
6,698 6,780 2.9 % 1.6 % Total rental and other
revenues 77,713 75,816 76,545 2.5 % 1.5 %
Property operating and maintenance expenses (exclusive of
depreciation and amortization) Atlanta 8,597 8,363 8,767 2.8 % (1.9
)% Dallas 7,985 7,691 7,881 3.8 % 1.3 % Houston 950 826 976 15.0 %
(2.7 )% Austin 1,366 1,348 1,328 1.3 % 2.9 % Washington, D.C. 4,627
4,493 4,640 3.0 % (0.3 )% Tampa 3,465 3,415 3,748 1.5 % (7.6 )%
Orlando 1,035 940 1,042 10.1 % (0.7 )% Charlotte 2,216
2,138 2,077 3.6 % 6.7 % Total 30,241
29,214 30,459 3.5 % (0.7 )% Net operating income
Atlanta 13,165 12,401 12,538 6.2 % 5.0 % 27.6 % Dallas 10,312
10,176 10,089 1.3 % 2.2 % 21.7 % Houston 1,389 1,416 1,317 (1.9 )%
5.5 % 2.9 % Austin 1,686 1,660 1,708 1.6 % (1.3 )% 3.6 %
Washington, D.C. 8,529 8,733 8,397 (2.3 )% 1.6 % 18.0 % Tampa 5,983
5,792 5,602 3.3 % 6.8 % 12.6 % Orlando 1,735 1,864 1,732 (6.9 )%
0.2 % 3.7 % Charlotte 4,673 4,560 4,703 2.5 %
(0.6 )% 9.8 % Total same store NOI $ 47,472 $ 46,602 $ 46,086 1.9 %
3.0 % 100.0 % Average rental rate per unit Atlanta $
1,347 $ 1,281 $ 1,323 5.2 % 1.8 % Dallas 1,247 1,225 1,240 1.8 %
0.6 % Houston 1,432 1,351 1,396 6.0 % 2.6 % Austin 1,576 1,535
1,566 2.7 % 0.6 % Washington, D.C. 1,876 1,896 1,871 (1.1 )% 0.2 %
Tampa 1,427 1,400 1,418 1.9 % 0.6 % Orlando 1,494 1,513 1,492 (1.3
)% 0.1 % Charlotte 1,267 1,237 1,255 2.4 % 1.0 % Total average
rental rate per unit 1,407 1,375 1,393 2.3 % 1.0 %
Table 3 (con’t)
Same Store Net Operating Income (NOI) and
Average Rental Rate per Unit by Market
(In thousands)
Nine months ended September 30,
September 30, % 2014 2013
Change Rental and other revenues Atlanta $ 63,913 $ 60,784
5.1 % Dallas 54,073 52,500 3.0 % Houston 6,888 6,552 5.1 % Austin
9,075 8,836 2.7 % Washington, D.C. 39,016 39,465 (1.1 )% Tampa
28,049 27,341 2.6 % Orlando 8,253 8,383 (1.6 )% Charlotte
20,265 19,804 2.3 % Total rental and other revenues
229,532 223,665 2.6 % Property operating and
maintenance expenses (exclusive of depreciation and amortization)
Atlanta 25,454 24,494 3.9 % Dallas 23,531 22,289 5.6 % Houston
2,796 2,480 12.7 % Austin 4,039 3,778 6.9 % Washington, D.C. 13,755
13,000 5.8 % Tampa 10,630 10,062 5.6 % Orlando 3,041 2,971 2.4 %
Charlotte 6,410 6,465 (0.9 )% Total 89,656
85,539 4.8 % Net operating income Atlanta 38,459
36,290 6.0 % Dallas 30,542 30,211 1.1 % Houston 4,092 4,072 0.5 %
Austin 5,036 5,058 (0.4 )% Washington, D.C. 25,261 26,465 (4.5 )%
Tampa 17,419 17,279 0.8 % Orlando 5,212 5,412 (3.7 )% Charlotte
13,855 13,339 3.9 % Total same store NOI $ 139,876 $
138,126 1.3 % Average rental rate per unit Atlanta $
1,324 $ 1,263 4.8 % Dallas 1,240 1,212 2.3 % Houston 1,401 1,328
5.5 % Austin 1,564 1,511 3.5 % Washington, D.C. 1,872 1,894 (1.2 )%
Tampa 1,416 1,386 2.2 % Orlando 1,490 1,514 (1.6 )% Charlotte 1,256
1,224 2.6 % Total average rental rate per unit 1,393 1,362 2.3 %
Table 4
Computation of Debt Ratios
(In thousands)
As of September 30, 2014
2013 Total real estate assets per balance sheet $ 2,118,469
$ 2,264,299 Plus: Company share of real estate assets held in
unconsolidated entities 57,421 57,939 Company share of accumulated
depreciation - assets held in unconsolidated entities 13,790 12,269
Accumulated depreciation per balance sheet 916,555 891,754
Accumulated depreciation on assets held for sale -
14,177 Total undepreciated real estate assets
(A) $ 3,106,235 $ 3,240,438 Total debt
per balance sheet $ 893,170 $ 1,099,698 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) $ 942,701 $ 1,149,229
Total debt as a % of undepreciated real estate assets
(adjusted for joint venture partners' share of debt)
(B÷A)
30.3 % 35.5 % Total debt per balance sheet $
893,170 $ 1,099,698 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) $ 986,093 $ 1,192,621
Total debt and preferred equity as a % of undepreciated real
estate assets (adjusted for joint venture partners' share of debt)
(C÷A) 31.7 % 36.8 %
Post Properties, Inc.Chris Papa, 404-846-5028
Grafico Azioni Post Properties (NYSE:PPS)
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