Post Properties Announces Fourth Quarter Earnings Investor/Analyst
Conference Call Scheduled for February 10, 2004 at 10:00 a.m. EST
ATLANTA, Feb. 9 /PRNewswire-FirstCall/ -- Post Properties, Inc.
announced today net income available to common shareholders of $5.8
million for the fourth quarter of 2003, compared to $9.6 million
for the fourth quarter of 2002. On a diluted per share basis, net
income available to common shareholders was $0.15 for the fourth
quarter of 2003, compared to $0.26 for the fourth quarter of 2002.
For the year ended December 31, 2003, net income available to
common shareholders was $2.7 million, compared to $49.3 million for
the year ended December 31, 2002. On a diluted per share basis, net
income available to common shareholders was $0.07 for the full year
of 2003, compared to $1.33 in 2002. Excluding severance and proxy
charges, net income available to common shareholders totaled $26.6
million, or $0.71 per diluted share, for the year ended December
31, 2003. Areconciliation of net income available to common
shareholders to net income available to common shareholders,
excluding severance and proxy charges is included in the financial
data (Table 1) accompanying this press release. 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. FFO for the fourth quarter
of 2003 totaled $19.8 million, or $0.47 per diluted share, compared
to $23.7 million, or $0.56 per diluted share, for the fourth
quarter of 2002. Excluding asset impairment charges, FFO for the
fourth quarter of 2002 was $25.6 million, or $0.61 per diluted
share. FFO for the fourth quarter of 2003 was consistent with
management's previously issued estimates. For the year ended
December 31, 2003, FFO totaled $40.0 million, or $0.95 per diluted
share, compared to $98.9 million, or $2.35 per diluted share, for
the year ended December 31, 2002. Excluding severance, proxy and
asset impairment charges, FFO for the year ended December 31, 2003,
totaled $84.2 million, or $2.00 per diluted share, compared to
$110.2 million, or $2.62 per diluted share, for the year ended
December 31, 2002. In October 2003, NAREIT clarified the definition
of FFO to include impairment losses. As such, prior period and
prior year presentations of FFO above have been restated to conform
with the revised NAREIT definition of FFO. Additionally, for the
year ended December 31, 2002, FFO has been restated from the prior
year presentation to reflect a reduction of $0.1 million for early
debt extinguishment costs reclassified from extraordinary items to
operating expenses under SFAS No. 145. A reconciliation of FFO to
GAAP net incomeis included in the financial data (Table 2)
accompanying this press release. Total revenues from continuing
operations were $72.9 million for the fourth quarter of 2003,
compared to $72.2 million for the fourth quarter of 2002. For the
year ended December 31, 2003, total revenues from continuing
operations were $290.4 million, compared to $287.3 million in 2002.
Said David P. Stockert, Post's CEO and President, "Operating
results for the fourth quarter met our expectations, with ongoing
signs of stabilizing market conditions. We are positioning our
business to take advantage of the recovery as we continue to shape
the portfolio, strengthen the balance sheet and build the
management team and the independent board." Mature Community Data
For the fourth quarter of 2003, average economic occupancy at the
company's 53 mature (same store) communities, containing 19,646
apartment units, was 93.2%, compared to 90.9% for the fourth
quarter of 2002. For the year ended December 31, 2003, average
economic occupancy for these mature communities was 91.9%, compared
to 91.0% in 2002. Total revenues for the mature communities
decreased 1.8% during the fourth quarter of 2003, compared to the
fourth quarter of 2002, and operating expenses increased
3.9%,resulting in a 4.6% decline in same store net operating income
(NOI), or $1.7 million ($0.04 per diluted share). For the year
ended December 31, 2003, total revenues for the mature communities
decreased 3.4% compared to 2002, while operating expenses increased
1.6%, resulting in a 6.1% decline in same store NOI, or $9.1
million ($0.22 per diluted share). On a sequential basis, same
store NOI increased by 0.5%, or $0.2 million ($0.005 per diluted
share) during the fourth quarter of 2003, compared tothe third
quarter of 2003. Total revenues for the mature communities
decreased 1.6% and operating expenses decreased 5.4%, between
periods. For the fourth quarter of 2003, average economic occupancy
was 93.2% compared to 93.1% for the third quarter of 2003. 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 3) accompanying
this press release. Same store NOI by market datais also included
in the financial data (Table 4) accompanying this press release.
Asset Sales and Capital Reinvestment Strategy; Redemption of 7-5/8%
Series C Preferred Stock During the fourth quarter of 2003, the
company sold two apartment communities, realizing net proceeds of
approximately $63 million. For the year ended December 31, 2003,
the company sold five apartment communities (one held in a joint
venture) and various land parcels and realized net proceeds of
approximately $238 million (including the repayment of a joint
venture loan of approximately $59 million made in connection with
the development of one of the five properties). For the year ended
December 31, 2003, the company realized GAAP accounting gains on
the sale of these five properties and land parcels of approximately
$35 million, and economic gains on property sales (before
accumulated depreciation and write-downs for asset impairment
charges) of approximately $4 million. A reconciliation of GAAP
accounting gains on property sales to economic gains on property
sales is included in the financial data (Table 6) accompanying this
press release. In connection with its previously announced asset
sales program, the company expects to sell nine additional
apartment communities for expected sales prices totaling
approximately $276 to $280 million. This asset sales program, which
the company currently expects to complete in the first and second
quarters of 2004, is consistent with an overall strategy to take
advantage ofhigh demand for apartment assets, reduce the average
age of the portfolio and lessen the company's market concentration
in Atlanta, GA and Dallas, TX. During 2003, the company also exited
certain single asset markets, including the Austin, TX, Pasadena,
CA and Phoenix, AZ markets, as it focuses on fewer markets where
the company can achieve operating efficiencies and leverage the
Post(R) brand. The apartment communities currently held for sale
include six properties in Atlanta, GA, two properties in Dallas, TX
and one property in Orlando, FL. In connection with the sale of six
of these properties (five in Atlanta, GA and one in Orlando, FL),
the company expects that the purchaser will acquire those
properties subject to a combined total of approximately $119
million of tax-exempt bond financing. Total estimated gross
proceeds from the company's asset sales program over the past four
years, including the nine properties currently held for sale, is
expected to exceed $1 billion. The company intends to use the
proceeds of its asset sales program for various corporate purposes,
which may include preferred equity redemptions, common equity
repurchases and debt reductions intended to maintain the strength
of the company's balance sheet, combined with reinvestment in
developments and acquisitions that enhance the diversification of
the company's cash flow stream and the quality of its portfolio. In
this regard, the company recently announced its intention to redeem
its 7-5/8% Series C Cumulative Redeemable Preferred Shares totaling
$50 million, plus accrued and unpaid dividends, on March 5, 2004.
Said Mr. Stockert, "We continue to pursue an aggressive program of
asset sales designed to take advantage of high demand for apartment
properties in an environment of strong capital flows and low cap
rates to realize the value of our assets, while repositioning our
portfolio over time to produce more diversified and stable cash
flow and improve its overall quality. We are also committed to
utilizing sales proceeds in ways that strengthen our balance sheet
and drive long-term value for our shareholders." With respect to
the nine asset sales planned in 2004, the company expects to
realize GAAP accounting gains of approximately $136 million to $140
million and economic gains on property sales (before accumulated
depreciation and write-downs for asset impairment charges) of
approximately $58 million to $62 million. A reconciliation of GAAP
accounting gains on property sales to economic gains onproperty
sales is included in the financial data (Table 6) accompanying this
press release. The company also expects to realize taxable capital
gains in 2004 from these sales totaling approximately $102 million
to $106 million. The company expects tobe able to use its regular
quarterly dividend of 45 cents per share, as well as other tax
planning strategies, to pay out or otherwise mitigate the impact of
these taxable capital gains. Although the company does not
currently have plans to do so, the company may also evaluate a
special dividend. In addition, upon issuance of the Series C
Preferred Shares in February 1998, the company incurred
approximately $1.7 million in issuance costs and recorded such
costs as a reduction of shareholders' equity. The redemption price
of the Series C Preferred Shares exceeds the related carrying value
by the approximately $1.7 million of issuance costs. Upon
redemption in the first quarter of 2004, in accordance with GAAP,
the company will reflect the approximately $1.7 million of issuance
costs as a reduction of earnings in arriving at both net income
available to common shareholders and funds from operations
available to common shareholders. Financing Activity; Refinancing
of Unsecured Line of Credit Upontheir maturity on October 1, 2003,
the company repaid $100 million of its 7.25% unsecured notes, using
borrowings under its unsecured line of credit. During the fourth
quarter of 2003, the company closed a 5-year mortgage loan on its
Post Biltmore(TM)property located in Atlanta, GA. The loan bears
interest at a rate of 4.04% per annum and matures on December 10,
2008. Post Biltmore(TM) is owned in an unconsolidated joint venture
with the New York State Common Retirement Fund. In January 2004,
the company closed a $350 million, three-year unsecured revolving
line of credit facility that matures in January 2007. The new
revolving credit facility reflects a $30 million increase in Post's
borrowing capacity over its prior facility. The new facility
currently bears an interest rate of 90 basis points over the London
Interbank Offered Rate (LIBOR) and was provided by a syndicate of
nine banks. This facility replaces Post's previous revolving line
of credit facility which was scheduled to maturein April 2004. As
of February 6, 2004, the company had approximately $70 million
outstanding under this new credit facility. During 2003, the
company used a portion of its net proceeds from asset sales to
reduce leverage and strengthen the balance sheet. Total debt as a
percentage of undepreciated real estate assets (adjusted for joint
venture partners' share of debt) declined from 47.1% at December
31, 2002 to 43.7% at December 31, 2003. Total debt and preferred
shares and units as a percentage of undepreciated assets (adjusted
for joint venture partners' share of debt) also declined from 54.8%
at December 31, 2002 to 51.8% at December 31, 2003. A computation
of debt ratios and reconciliation of the ratios to the appropriate
GAAP measures in the company's financial statements is included in
the financial data (Table 5) accompanying this press release. Board
and Senior Management Changes The company announced recently that
Douglas Crocker II, formerly Trustee, President, Chief Executive
Officer and Vice Chairman of Equity Residential, and Walter M.
"Sonny" Deriso, Jr., Vice Chairman of Synovus, will be standing for
election to the company's Board of Directors. Mr. Crocker and Mr.
Deriso are expected to join the Board when directors are elected at
the company's Annual Meeting of Shareholders on May 27, 2004. The
company also announced that John T. Glover and Robert L. Anderson
have decided not to stand for re- election as directors when their
terms expire at the 2004 Annual Meeting of Shareholders. In
addition, on November 5, 2003, Nicholas B. Paumgarten, Managing
Director at J.P. Morgan Chase & Co. and Chairman of J.P. Morgan
Corsair II Capital Partners, L.P., was appointed to the company's
Board of Directors. On December 1, 2003, Christopher J. Papa joined
the company as Executive Vice President and Chief Financial
Officer. Outlook The estimates presented below are forward-looking
and are based on current apartment market and general economic
conditions and other risks outlined below. Management believes that
the company's net loss per diluted share for the first quarter of
2004 will be in a range of $0.03 to $0.05. Management is currently
expecting to close the sale of one asset in the first quarter of
2004. Management believes that the company's FFO per share for the
first quarter of 2004 will be in a range of $0.39 to $0.41, or
$0.43 to $0.45, excluding charges for the preferred stock issuance
costs discussed above. Management's estimates of per share FFO for
the first quarter of 2004, excluding charges for preferred stock
issuance costs, are based on the following assumptions: seasonally
lower same store NOI, as compared to same store NOI for the fourth
quarter of 2003, due primarily to increased property operating
expenses; dilution from the sale of two assets completed in the
fourth quarter of 2003, the proceeds of which were used primarily
to pay down short-term floating rate debt; the previously announced
redemption of the company's 7-5/8% Series C Cumulative Redeemable
Preferred Shares on March 5, 2004; and modestly increased general
and administrative expenses. A reconciliation of projected net loss
per diluted share to projected FFO per diluted share for the first
quarter of 2004 is included in the financial data (Table 7)
accompanying this press release. Supplemental Financial Data The
company also produces Supplemental Financial Data that includes
detailed information regarding the company's operating results and
balance sheet. This SupplementalFinancial 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 is available through the company's web
site at
"http://www.postproperties.com/posthome.nsf/ExtList/2003-4QFinancials".
The ability to access the attachments on the company's web site
requires the Adobe Acrobat 4.0 Reader, which may be downloaded at
http://www.adobe.com/products/acrobat/readstep.html. 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,FAD,
net operating income, same store capital expenditures, net income,
FFO and FAD excluding certain accounting charges, certain debt
statistics and ratios and economic gains on property sales. The
definitions of these non-GAAP financial measures aresummarized
below and on page 21 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 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. In October 2003, NAREIT
issued additional guidance modifying the definition of FFO. The
first modification revised the treatment of asset impairment losses
and impairment losses incurred to write-down assets to their fair
value at the date assets are classified as held for sale, to
include such losses in FFO. Previously, such losses were excluded
from FFO consistent with the treatment of gains and losses on
property sales. The second modification clarified the treatment of
original issue costs and premiums paid on preferred stock
redemptions to deduct such costs and premiums in determining FFO
available to common shareholders. This modification was consistent
with the recently clarified treatment of these costs under GAAP.
The company adopted the modifications to the definition of FFO
effective with its reported results for the third quarter of 2003.
Prior period and prior year presentations of FFO have been restated
to conform with the revised definition of FFO. 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. The company also computes a
dividend payout ratio using dividends declared during the quarter
divided by FFO per diluted share in order to provide investors with
one alternate earnings measure to compare the relationship of FFO
to the company's quarterly dividends and distributions. Funds
Available for Distribution - The company also uses funds available
for distribution ("FAD") as an operating measure. FAD is defined as
FFO less operating capital expenditures. The company believes that
FAD 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 FAD
information tothe investment community, the company believes that
FAD 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 FAD. The company also computes a dividend payout ratio
using dividends declared during the quarter divided by FAD per
diluted share in order to provide investors with one alternate
earnings measure to compare the relationship of FAD to the
company's quarterly dividends and distributions. Property Net
Operating Income - 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 "income from continuing
operations" is the most directly comparable GAAP measure to NOI.
Same Store Capital Expenditures - The company uses same store
recurring and non-recurring capital expenditures as cash flow
measures. Same store recurring and non-recurring capital
expenditures are supplemental non-GAAP financial measures. The
company believes that same store recurring and non- 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,
and sold communities in addition to same store information.
Therefore, the company believes that the company's presentation of
same store recurring and non-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 recurring and non-recurring capital expenditures are
the lines on the company's consolidated statements of cash flows
entitled "recurring capital expenditures" and "non-recurring
capital expenditures." Net Income, FFO and FAD Excluding Certain
Charges - The company uses net income, FFO and FAD excluding
certain severance, proxy and impairment charges as operating
measures. The company reports net income, FFO and FAD excluding
certain charges as alternative financial measures of core operating
performance. The company believes net income, FFO and FAD before
certain charges are informative measures for comparing operating
performance between periods and for comparing operating performance
to other companies that have not incurred such charges. The company
further believes that charges of the nature incurred in 2003 and
2002 are not necessarily repetitive in nature and that it is
therefore meaningful to compare operating performance using
alternative, non-GAAP measures. In addition, the company believes
the investment and analyst communities desire to understand the
meaningful components of the company's performance and that these
non-GAAP measures assist in providing such supplemental measures.
The company believes that the most directly comparable GAAP
financial measures to each of net income, FFO and FAD, excluding
certain charges, is the line on the company's consolidated
statements of operations entitled "net income available to common
shareholders." The company computes dividend payout ratios using
dividends declared during the quarter divided by FFO and FAD per
diluted share, excluding certain charges in order to provide
investors with alternate earnings measures to compare the
relationship of FFO and FAD, excluding certain charges, to the
company's quarterly dividends and distributions. 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) an interest coverage ratio; (2)
a fixed charge coverage ratio; (3) total debt as a percentage of
undepreciated real estate (unadjusted and adjusted for joint
venture partners' share of debt); (4) total debt plus preferred
shares and units as a percentage of undepreciated real estate
(total debt unadjusted and adjusted for joint venture partners'
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; and (8) a ratio of
consolidated income available to debt service to annual debt
service charge. 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. Economic Gains on Property Sales - The company
uses economic gains on property sales as asupplemental measure of
operating performance. Economic gains on property sales are defined
as gains on property sales in accordance with GAAP, before
accumulated depreciation and any prior period write-downs for asset
impairment charges on such assets. The company believes economic
gains on property sales is an important supplemental measure to
gains on property sales in accordance with GAAP because it assists
investors and analysts in understanding the relationship between
the cash proceeds from the sale of an asset and the cash invested
in that asset. The company believes the line on its consolidated
statement of operations entitled "gains on property sales -
discontinued operations" is the most directly comparable GAAP
measure to economic gains on property sales. Average Economic
Occupancy - The company uses average economic occupancy as a
statistical measure of 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.
Conference Call Information The company will hold its quarterly
conference call on Tuesday, February 10, 2004, at 10 a.m. EST. The
telephone numbers are 1-800-881-7286 for domestic calls and
913-981-4902 for international callers. The access code is 218677.
The conference call will be open to the public and can be listened
to live on Post's web site at http://www.postproperties.com/ under
Corporate Information/Investor Info. The replay will begin at 1:00
p.m. EST on February 10, and will be available until Monday,
February 16, 2004, at 11:59 p.m. EST. The telephone numbers for the
replay are 1-888-203-1112 for domestic callers and 719-457-0820 for
international callers. The access code for the replay is 218677. A
replay of the call also will be available through Wednesday, March
31, 2004, on Post's web site. The financial and statistical
information that will be discussed on the call is contained in this
press release and the Supplemental Financial Data. Both documents
will be available on the company's website at
"http://www.postproperties.com/posthome.nsf/ExtList/2003-4QFinancials"
prior to the quarterly conference call. Post Properties, Inc., a
leading developer and operator of upscale apartment communities in
the United States, pioneered building and branding resort-style
garden apartments for more than 30 years. Post now also focuses on
the creation of high-quality, high-density, live-work-walk
neighborhoods in infill locations in major urban markets. The
company has been recognized locally, nationally and internationally
for building better neighborhoods and the preservation of historic
buildings. Operating as a self-administered and self-managed equity
real estate investment trust (REIT), the company's primary business
consists of developing and managing Post(R) brand-name apartment
communities. Nationwide, Post Properties owns approximately 28,081
apartment homes in 72 communities, including 468 units currently in
lease-up. Forward Looking Statement: 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 the
company's anticipated asset sales during the first half of 2004
(including the estimated proceeds, estimated gains on sales and the
useof proceeds from such sales) and the company's projected net
income per diluted share and projected FFO per diluted share for
the first quarter of 2004. 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 to differ materially from the expected
results described in the company's forward-looking statements:
future local and national economic conditions, including changes in
job growth, interest rates, the availability of financing and other
factors; demand for apartments in the company's markets and the
effect on occupancy and rental rates; the impact of competition on
the company's business, including competition for tenants and
development locations; the company's ability to obtain financing or
self-fund the development or acquisition of additional apartment
communities; the uncertainties associated with the company's
current and planned future real estate development, including
actual costs exceeding the company's budgets or development periods
exceeding expectations; uncertainties associated with the timing
and amount of asset sales and the resulting gains/losses associated
with such asset sales; conditions affecting ownership of
residential real estate andgeneral conditions in the multi-family
residential real estate market; the effects of changes in
accounting policies and other regulatory matters detailed in the
company's filings with the Securities and Exchange Commission and
uncertainties of litigation; and the company's ability to continue
to qualify as a real estate investment trust under the Internal
Revenue Code. 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, 2002 and
may be discussed in subsequent filings with the SEC. The risk
factors discussed in such Form 10-K under the caption "Risk
Factors" are specifically incorporated by reference into this press
release. Financial Highlights (Unaudited; in thousands, except
share and per share amounts) Three months ended Twelve months ended
December 31, December 31, 2003 2002 2003 2002 OPERATING DATA
Revenues $72,925 $72,232 $290,384 $287,306 Net income available to
common shareholders $5,843 $9,649 $2,707 $49,297 Net income
available to common shareholders, excluding severance and proxy
charges (Table 1) $5,843 $9,649 $26,623 $49,297 Funds from
operations available to common shareholders (Table 2) $19,764
$23,724 $39,958 $98,894 Funds from operations available to common
shareholders, excluding severance, proxy and asset impairment
charges (Table 2) $19,764 $25,573 $84,157 $110,245 Weighted average
shares outstanding - diluted 38,176,235 37,061,628 37,687,524
36,953,962 Weighted average shares and units outstanding - diluted
42,228,473 42,032,638 42,134,072 42,035,577 PER COMMON SHARE DATA -
DILUTED Net income available to common shareholders $0.15 $0.26
$0.07 $1.33 Net income available to common shareholders, excluding
severance and proxy charges (Table 1) $0.15 $0.26 $0.71 $1.33 Funds
from operations available to common shareholders (Table 2)(1) $0.47
$0.56 $0.95 $2.35 Funds from operations available to common
shareholders, excluding severance, proxy and asset impairment
charges (Table 2)(1) $0.47 $0.61 $2.00 $2.62 Dividends declared
$0.45 $0.78 $1.80 $3.12 (1) Funds from operations per share for the
three and twelve months ended December 31, 2003 were computed using
weighted average shares and units outstanding, including the impact
of dilutive securities of 36,010 and 11,052, respectively. Such
dilutive securities were antidilutive to all income (loss) per
share computations. Table 1 Reconciliation of Net Income Available
to Common Shareholders to Net Income Available to Common
Shareholders, Excluding Severance and Proxy Charges (Unaudited; in
thousands, except per share amounts) Three months Twelve months
ended ended December 31, December 31, 2003 2002 2003 2002 Net
income available to common shareholders $5,843 $9,649 $2,707
$49,297 Severance charges - - 21,506 - Proxy and related costs - -
5,231 - Minority interest impact of charges (1) - - (2,821) - Net
income available to common shareholders, excluding severance and
proxy charges $5,843 $9,649 $26,623 $49,297 Weighted average shares
outstanding - diluted 38,176 37,062 37,688 36,954 Net income
available to common shareholders, excluding severance and proxy
charges - per diluted share $0.15 $0.26 $0.71 $1.33 (1) Computed at
10.55% for the twelve months ended December 31, 2003. Table 2
Reconciliation of Net Income Available to Common Shareholders to
Funds From Operations Available to Common Shareholders (Unaudited;
in thousands, except per share amounts) Three months Twelve months
ended ended December 31, December 31, 2003 2002 2003 2002 Net
income available to common shareholders $5,843 $9,649 $2,707
$49,297 Minority interest of common unitholders - continuing
operations (393) (101) (3,552) 2,681 Minority interest in
discontinued operations 1,110 1,382 3,893 4,091 Gains on property
sales - continuing operations - - - (13,275) Gains on property
sales - unconsolidated entities - - (8,395) - Gains on property
sales - discontinued operations (excluding asset impairment losses)
(7,103) (9,856) (40,793) (27,921) Depreciation on wholly-owned real
estate assets, net 19,975 22,283 84,530 82,918 Depreciation on real
estate assets held in unconsolidated entities 332 367 1,568 1,103
Funds fromoperations available to common shareholders (1)(2) 19,764
23,724 39,958 98,894 Severance charges - - 21,506 - Proxy and
related costs - - 5,231 - Asset impairment charges - 1,849 17,462
11,351 Funds from operations available to common shareholders,
excluding severance, proxy and asset impairment charges $19,764
$25,573 $84,157 $110,245 Weighted average shares and units
outstanding - diluted (3) 42,264 42,033 42,145 42,036 Funds from
operations - per diluted share $0.47 $0.56 $0.95 $2.35 Funds from
operations, excluding severance, proxy and asset impairment charges
- per diluted share $0.47 $0.61 $2.00 $2.62 (1) In October 2003,
the National Association of Real Estate Investment Trusts
("NAREIT") issued additional guidance modifying the definition of
funds from operations ("FFO"). The first modification revised the
treatment of asset impairment losses and impairment losses incurred
to write-down assets to their fair value at the date assets are
classified as held for sale, to include such losses in FFO.
Previously such losses were excluded from FFO, consistent with the
treatment of gains on property sales. The second modification
clarified the treatment of original issue costs and premiums paid
on preferred stock redemptions to deduct such costs and premiums in
determining FFO available to common shareholders. This modification
was consistent with the recently clarified treatment of these costs
under GAAP. The company adopted the modifications to the definition
of FFO effective with its reported results for the third quarter of
2003. The modification of FFO related to preferred stock redemption
costs was not applicable for the company for the periods presented.
Prior period and prior year presentations of FFO have been restated
to conform with the revised NAREIT definition of FFO. FFO is a
supplemental non-GAAP financial measure used by real estate
investment trusts to measure and compare operating performance. (2)
For the three and twelve months ended December 31, 2002, FFO
available to common shareholders has been restated from the prior
year presentation to reflect a reduction of $1,849 and $11,351,
respectively, for impairment losses on real estate assets resulting
from the NAREIT modification of the definition of FFO. Additionally
for the twelve months ended December 31, 2002, FFO has been
restated from the prior year presentation to reflect a reduction of
$136 for early debt extinguishment costs reclassified from
extraordinary items to operating expenses under SFAS No. 145. For
the twelve months ended December 31, 2003,FFO available to common
shareholders has been restated to reflect a reduction of $14,118
for impairment losses on real estate recognized in the first
quarter of 2003. (3) Diluted weighted average shares and units for
the three and twelve months ended December 31, 2003 include 36 and
11 shares and units, respectively, that were antidilutive to all
income (loss) per share computations under generally accepted
accounting principles. Table 3 Reconciliation of Same Store Net
Operating Income (NOI) to Income (Loss) from Continuing Operations
(Dollars in thousands) Twelve months Three months ended ended
December December September December December 31, 31, 30, 31, 31,
2003 2002 2003 2003 2002 Total same store NOI $35,439 $37,167
$35,247 $141,419 $150,543 Property NOI from other operating
segments 6,906 6,322 6,763 26,330 20,093 Consolidated property NOI
42,345 43,489 42,010 167,749 170,636 Add: Interest income 187 286
223 894 1,288 Minority interest in consolidated property
partnerships 665 576 677 2,024 2,055 Gains on property sales -
continued operations - - - - 13,275 Less: Depreciation (21,603)
(21,124) (21,553) (83,700) (76,760) Interest (15,914) (14,650)
(17,122) (64,905) (52,035) Amortization of deferred loan costs
(962) (616) (1,084) (3,801) (2,327) General and administrative
(4,400) (3,450) (3,735) (15,102) (14,431) Development costs and
other expenses (1,298) (694) (277) (2,138) (830) Severance charges
- - - (21,506) - Proxy and related charges - - - (5,231) - Equity
in income (losses) of unconsolidated entities 23 (306) 60 7,791
(1,590) Minority interest of preferred unitholders (1,400) (1,400)
(1,400) (5,600) (5,600) Minority interest of common unitholders 393
101 457 3,552 (2,681) Income (loss) from continuing operations
$(1,964) $2,212 $(1,744) $(19,973) $31,000 Table 4 Same Store Net
Operating Income (NOI) Summary by Market (Dollars in thousands)
Three months ended 4Q'03 4Q'03 December December September vs vs
31, 31, 30, 4Q'02 3Q'03 2003 2002 2003 %Change %Change Rental and
other revenues Atlanta $32,092 $33,094 $32,740 (3.0)% (2.0)% Dallas
12,009 12,078 12,200 (0.6)% (1.6)% Tampa 4,414 4,368 4,400 1.1 %
0.3 % Other 6,536 6,501 6,634 0.5 % (1.5)% Total rental and other
revenues 55,051 56,041 55,974 (1.8)% (1.6)% Property operating and
maintenance expenses (exclusive of depreciation and amortization)
Atlanta 11,109 10,986 11,727 1.1 % (5.3)% Dallas 4,748 4,214 4,941
12.7 % (3.9)% Tampa 1,626 1,591 1,753 2.2 % (7.2)% Other 2,129
2,083 2,306 2.2 % (7.7)% Total 19,612 18,874 20,727 3.9 % (5.4)%
Net operating income Atlanta 20,983 22,108 21,013 (5.1)% (0.1)%
Dallas 7,261 7,864 7,259 (7.7)% - Tampa 2,788 2,777 2,647 0.4 % 5.3
% Other 4,407 4,418 4,328 (0.2)% 1.8 % Total same store NOI $35,439
$37,167 $35,247 (4.6)% 0.5 % Twelve months ended December 31, 2003
2002 %Change Rental and other revenues Atlanta $129,601 $135,492
(4.3)% Dallas 48,371 49,677 (2.6)% Tampa 17,464 18,197 (4.0)% Other
26,156 26,111 0.2 % Total rental and other revenues 221,592 229,477
(3.4)% Property operating and maintenance expenses (exclusive of
depreciation and amortization) Atlanta 44,891 43,867 2.3 % Dallas
19,479 19,232 1.3 % Tampa 6,772 6,823 (0.7)% Other 9,031 9,012 0.2
% Total 80,173 78,934 1.6 % Net operating income Atlanta 84,710
91,625 (7.5)% Dallas 28,892 30,445 (5.1)% Tampa 10,692 11,374
(6.0)% Other 17,125 17,099 0.2 % Total same store NOI $141,419
$150,543 (6.1)% Table 5 Computation of Debt Ratios (Dollars in
thousands) As of As of December 31, December 31, 2003 2002 Total
real estate assets per balance sheet $2,164,391 $2,443,535 Plus:
Accumulated depreciation per balance sheet 432,157 426,136
Accumulated depreciation on assets held for sale 74,614 17,829
Total undepreciated real estate assets (A) 2,671,162 2,887,500
Less: Advances to unconsolidated joint ventures equal to joint
venture partner's share of joint venture construction debt (34,950)
(104,191) Total undepreciated real estate assets (adjusted for
joint venture partner's share of debt) (B) $2,636,212 $2,783,309
Total debt per balance sheet (C) $1,186,322 $1,414,555 Less: Joint
venture partners' share of joint venture construction debt (34,950)
(104,191) Total debt (adjusted for joint venture partners' share)
(D) $1,151,372 $1,310,364 Total debt as a % of undepreciated real
estate assets (C/A) 44.4% 49.0% Total debt as a % of undepreciated
real estate assets (adjusted for joint venture partner's share of
debt) (D/B) 43.7% 47.1% Total debt per balance sheet $1,186,322
$1,414,555 Plus: Preferred shares at liquidation value 145,000
145,000 Preferred units at liquidation value 70,000 70,000 Total
debt and preferred shares and units (E) 1,401,322 1,629,555 Less:
Joint venture partners' share of joint venture construction debt
(34,950) (104,191) Total debt and preferred shares and units
(adjusted for joint venture partners' share of debt) (F) $1,366,372
$1,525,364 Total debt and preferred shares and units as a % of
undepreciated assets (E/A) 52.5% 56.4% Total debt and preferred
shares and units as a % of undepreciated assets (adjusted for joint
venture partners' share of debt) (F/B) 51.8% 54.8% Table 6
Reconciliation of Gains on Property Sales to Economic Gains on
Property Sales Year Ended 12/31/2003 Forecasted 2004 Low Range High
Range Gains on property sales - discontinued operations (before
minority interest) $37,448 $136,000 $140,000 Gains on property
sales - unconsolidated entities 8,395 - - 45,843 136,000 140,000
Less: Asset impairment loss (included in income from discontinued
operations) (14,118) - - Plus: Asset impairment loss (on assets
held for sale) included in gains on property sales - discontinued
operations 3,344 - - Gains on property sales $35,069 $136,000
$140,000 Gains on property sales $35,069 $136,000 $140,000 Less:
Accumulated depreciation on properties sold (25,501) (74,656)
(74,656) Accumulated depreciation on properties sold -
unconsolidated entities (947) - - Prior period asset impairment
losses on properties sold (4,964) (3,344) (3,344) Economic gains on
property sales $3,657 $58,000 $62,000 Table 7 Reconciliation of
Forecasted Net Income Per Common Share to Forecasted Funds From
Operations Per Common Share Three months ended March 31, 2004 Low
Range High Range Forecasted net loss, per share $(0.05) $(0.03)
Forecasted gains on property sales, per share (0.03) (0.04)
Forecasted real estate depreciation, per share 0.47 0.48 Forecasted
funds from operations, per share 0.39 0.41 Forecasted preferred
stock redemption costs 0.04 0.04 Forecasted funds from operations,
excluding preferred stock redemption costs, per share $0.43 $0.45
DATASOURCE: Post Properties, Inc. CONTACT: Janie Maddox of Post
Properties, Inc., +1-404-846-5056 Web site:
http://www.postproperties.com/
Copyright
Grafico Azioni Post Properties (NYSE:PPS)
Storico
Da Lug 2024 a Ago 2024
Grafico Azioni Post Properties (NYSE:PPS)
Storico
Da Ago 2023 a Ago 2024