Exhibit 99.1
Third Quarter 2004
Earnings Release and
Supplemental Operating and Financial Data
Affordable Residential Communities
600 Grant Street, Suite 900
Denver, CO 80203
Phone: (866) 847-8931
Fax: (303) 294-0121
www.aboutarc.com
| Table of Contents |
Note: This earnings release and supplemental operating and financial data report contains certain non-GAAP financial measures that we believe are helpful in understanding our business as further described in Exhibit I. These financial measures that principally include Funds From Operations, Funds Available for Distribution, Earnings Before Interest, Taxes, Depreciation and Amortization, and Net Segment Income should not be considered an alternative to Loss Available to Common Stockholders or any other GAAP measurement of performance or as an alternative to cash flows from operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.
Press Release Text
AFFORDABLE RESIDENTIAL COMMUNITIES ANNOUNCES THIRD QUARTER RESULTS
DENVER, CO —(BUSINESS WIRE)—November 4, 2004—Affordable Residential Communities Inc. (NYSE:ARC) today announced results for the quarter ended September 30, 2004.
Revenue for the third quarter 2004 was $62.5 million, compared to $57.3 million in the second quarter 2004 and $42.9 million in the comparable quarter last year. Net loss to common shareholders for the third quarter 2004 was $17.2 million or $0.42 per share, versus a net loss of $7.1 million, or $0.17 per share in the second quarter 2004 and a net loss of $6.8 million, or $0.41 per share, in the comparable quarter last year.
Funds from operations (FFO1) available to common shareholders for the third quarter 2004 were $2.6 million, or $0.06 per share, versus FFO of $9.3 million, or $0.23 per share, for the second quarter 2004 and $(1.1) million, or $(0.06) per share, in the comparable quarter last year.
The net loss to common shareholders in the third quarter 2004 includes a charge of approximately $2.3 million, or $0.06 per share, for impairment of assets resulting from the previously announced sale of 15 non-core communities and vacant land. The Company has recast all previously issued results to reflect the communities sold as discontinued operations. Additionally, net loss to common shareholders and FFO in the third quarter 2004 include charges of:
• $0.5 million, or $0.01 per share, related to property damage sustained during the recent hurricanes in the Southeast,
• $2.1 million, or $0.05 per share, of marketing and promotion costs related to establishing a Hispanic branding program and a larger sales organization,
• $3.3 million, or $0.08 per share, related to the revolving line of credit that was canceled and replaced in the third quarter.
Third quarter 2004 net income, as compared to the second quarter of 2004 includes $0.8 million, or $0.02 per share, for the first full quarter related to the D.A.M. communities that the Company acquired on June 30, 2004. During the third quarter, the Company also incurred additional depreciation expense related to capital expenditures and the purchases of new homes of $0.6 million, or $0.01 per share. In addition, the Company’s interest expense rose $0.5 million, or $0.01 per share as a result of higher interest rates applicable to the Company’s variable rate indebtedness.
During the third quarter, the Company made a number of important changes focusing the organization on the sale of used homes and on lease-to-own products to drive occupancy and improve the stability of revenues and expenses. Despite persistently challenging industry fundamentals, the Company believes that its long-term goal of sustainable occupancy increases is attainable, but will take longer than initially expected.
Scott Jackson Chairman and Chief Executive Officer, commented, “While our performance did not meet our expectations, we believe we continued to make progress towards our goals of increasing occupancy and long-term
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consistent cash flow. Although we expect the challenging period in this industry will continue for some time, we are hopeful that over the long term we can strengthen our business by providing value to our current and future residents.”
On a same community basis, third quarter 2004 real estate segment revenue grew 1% versus the comparable quarter last year to $36.3 million from $36.0 million. This was a result of increases in home renter rental income from a larger rental home portfolio and partially offset by decreases in homeowner rental income as a result of occupancy declines. Same community expenses increased 16% to $16.8 million from $14.5 million primarily as a result of higher repairs and maintenance expenses, costs related to the larger rental home portfolio, and costs incurred to develop the Company’s in-community sales organization. As a result, same community real estate net segment income2 in the third quarter 2004 decreased 9% to $19.6 million from $21.5 million over the comparable period last year.
Total portfolio occupancy averaged 81.1% during the third quarter 2004. Average occupancy for same communities decreased to 82.2% during the third quarter 2004 from 86.5% in the third quarter 2003 due mainly to the lack of available financing for manufactured home buyers as well as lenders moving repossessed homes out of the communities.
Mr. Jackson continued, “Over the last several months, we made a number of important changes to drive occupancy, which include focusing the entire organization on the sale of used homes as well as our lease-to-own products. This strategy is unique and we believe differentiates ARC from our peers. Importantly, our marketing efforts are now directed at the community level, and therefore can be better targeted to the needs of local audiences.”
Since the Company reinvigorated its focus on selling previously owned homes within its communities, the Company has produced a measurable sequential monthly increase. Sales of previously owned homes, and, to a lesser extent, new homes were: 28 in June, 55 in July, 65 in August, 157 in September and, we estimate, approximately 305 in October. While the Company does not intend to report monthly results on an ongoing basis, it was determined that an exception should be made to demonstrate the Company’s ability to sell new homes, vacant homes and homes coming off lease, an integral part of its strategic plan, thereby increasing the number of homeowners in the Company’s communities, resulting in additional homeowner rental revenue.
Mr. Jackson continued, “As we have stated previously, our vision of building long term shareholder value, includes supporting our core communities, maximizing occupancy, and selling communities that do not offer favorable long-term growth prospects. Furthermore, we believe those proceeds can be redeployed to generate higher capital returns.”
For the nine months ended September 30, 2004, net loss available to common stockholders was $59.3 million or $1.60 per share as compared to a net loss of $23.7 million or $1.40 per share for the year-ago period ended September 30, 2003. For the nine months ended September 30, 2004, funds from operations available to common stockholders (FFO) was $(10.4) million or $(0.28) per share. The Company’s results through the first three quarters of 2004 include charges detailed above in the third quarter of 2004 and $27.9 million
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incurred in the first quarter of 2004 as a result of the IPO, related financings and the acquisition of the Hometown communities.
Capital Structure:
On September 30, 2004, Affordable Residential had $1,006.5 million of long-term debt outstanding, which included $40.7 million drawn under its $135 million of floorplan line of credit and revolving credit mortgage facilities. The weighted average rate of the Company’s debt was 6.0% and 72% of the Company’s debt is not due until 2008 or later. Fixed rate debt, including variable rate debt hedged by interest rate swaps, amounted to 88% of total debt.
Dividend:
The level of Affordable Residential common dividend will continue to be determined by the operating results of each quarter, economic conditions, capital requirements, and other operating trends. For the third quarter 2004, Affordable Residential Properties paid a $0.3125 common dividend per share.
Mr. Jackson concluded, “Our balance sheet remains strong and with our recent refinancing, even more flexible. We have $157 million at net book value of non-financed assets consisting of homes with an average age of 3.6 years. As these older homes come off lease we sell them in conjunction with a five year lot lease commitment from the buyer. This results in a more stable resident base, higher occupancy and increased cash flow over the long-term.”
Third Quarter Conference Call
The Company will host a conference call, today, Thursday November 4, 2004, at 5:00 PM Eastern. The call will be webcast live over the Internet from the Company’s website at www.aboutarc.com under the section titled “Webcast”. Participants should follow the instructions provided on the website for the download and installation of audio applications necessary to join the webcast. The call can also be accessed live over the phone by dialing (800) 561-2731 or for international callers by dialing (617) 614-3528.
The webcast is also being distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents (http://www.streetevents.com/).
A replay of the call will be available one hour after the call and can be accessed by dialing (888) 286-8010 or (617) 801-6888 for international callers; the password is 80731129. The replay will be available from November 4, 2004, through November 11, 2004 and will be archived on ARC’s website.
(1) As defined by NAREIT, FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. We present FFO because we consider it an important supplemental measure of our operating performance and believe it is frequently used by securities analysts, investors and other interested parties in
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the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income. We compute FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions.
(2) Real estate net segment income provides a measure of rental operating results that does not include property management, depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses. We present real estate net segment income because we consider it an important supplemental measure of the operating performance of our communities and believe it is frequently used by lenders, securities analysts, investors and other interested parties in the evaluation of REITs, many of which present real estate net segment income when reporting their results. Real estate net segment income is defined as income from rental and other property and manufactured homes less expenses for property operations and real estate taxes. Real estate net segment income does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends on common and preferred stock. Real estate net segment income should not be considered a substitute for net income (calculated in accordance with GAAP) nor a measure of results of operations or cash flows (calculated in accordance with GAAP) as a measure of liquidity.
The forward-looking statements contained in this news release are subject to certain risks and uncertainties including, but not limited to, general risks affecting the real estate industry; the Company’s ability to maintain or increase rental rates and occupancy with respect to properties currently owned; the Company’s assumptions on rental home and home sales and financing activity; completion of pending acquisitions and sales, if any, and timing with respect thereto; the Company’s growth and expansion into new markets or to integrate acquisitions successfully; and the effect of interest rates as well as other risks indicated from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any intention or obligation to provide public updates, revisions or amendments to any forward-looking statements that become untrue because of subsequent events.
Private Securities Litigation Reform Act of 1995. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. The forward-looking statements contained in
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this news release are subject to certain risks and uncertainties including, but not limited to, general risks affecting the real estate industry; the Company’s ability to maintain or increase rental rates and occupancy with respect to properties currently owned; the Company’s assumptions on rental home and home sales and financing activity; completion of pending acquisitions and sales, if any, and timing with respect thereto; the Company’s growth and expansion into new markets or to integrate acquisitions successfully; and the effect of interest rates as well as other risks indicated from time to time in the Company’s filings with the Securities and Exchange Commission. The Company expressly disclaims any intention or obligation to provide public updates, revisions or amendments to any forward-looking statements that become untrue because of subsequent events.
About Affordable Residential Communities Inc.
Affordable Residential Communities Inc. currently owns and operates approximately 70,000 homesites located in 340 communities in 31 states. ARC is a fully integrated, self-administered, self-managed equity real estate investment trust (REIT) focused on the acquisition, renovation, repositioning and operation of primarily all-age manufactured home communities with headquarters in Denver, CO.
CONTACT:
Affordable Residential Communities Inc.
Lawrence Kreider, Chief Financial Officer
866-847-8931
investor.relations@aboutarc.com
Or
Integrated Corporate Relations, Inc.
Brad Cohen, 203-682-8211
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Financial Highlights
| | Three Months Ended | |
($ in thousands, except per share data) | | 09/30/04 | | 06/30/04 | | 03/31/04 | |
Operating Data | | | | | | | |
Total revenue | | $ | 62,512 | | $ | 57,294 | | $ | 44,585 | |
Same community real estate net segment income (c) | | $ | 19,564 | | $ | 21,449 | | $ | 22,212 | |
Avg. monthly real estate revenue per occupied homesite | | 377 | | 374 | | 367 | |
Avg. monthly homeowner rental income per homeowner occupied homesite | | 288 | | 281 | | 283 | |
Weighted average occupied homesites | | 32,149 | | 32,515 | | 32,891 | |
| | | | | | | |
EBITDA (c) | | $ | 22,906 | | $ | 25,214 | | $ | 6,072 | |
Adjusted EBITDA (a) (c) | | 22,906 | | 25,214 | | 20,559 | |
| | | | | | | |
Funds from operations available to common stockholders and OP unitholders (c) | | $ | 3,180 | | $ | 9,854 | | $ | (23,609 | ) |
FFO per share – diluted | | 0.06 | | 0.23 | | (0.74 | ) |
FFO payout ratio | | 425.6 | % | 137.5 | % | NA | |
| | | | | | | |
Funds available for distribution (“FAD”) (c) | | $ | 2,665 | | $ | 7,490 | | $ | (11,401 | ) |
FAD per share – diluted | | 0.06 | | 0.17 | | (0.36 | ) |
FAD payout ratio | | 507.9 | % | 180.9 | % | NA | |
| | | | | | | |
Net income (loss) to common stockholders | | $ | (17,211 | ) | $ | (7,126 | ) | $ | (34,969 | ) |
Earnings (loss) per share – basic | | (0.42 | ) | (0.17 | ) | (1.20 | ) |
Earnings (loss) per share – diluted | | (0.42 | ) | (0.17 | ) | (1.20 | ) |
| | | | | | | |
Distributions per common share (through September 30, 2004) | | $ | 0.3125 | | $ | 0.3125 | | 0.1493 | |
Distributions per preferred share (through September 30, 2004) | | 0.5156 | | 0.5156 | | 0.4182 | |
| | | | | | | |
Interest expensed | | $ | 13,981 | | $ | 12,994 | | $ | 14,653 | |
Interest capitalized | | 1,145 | | 1,235 | | 544 | |
Total interest incurred | | $ | 15,126 | | $ | 14,229 | | $ | 15,197 | |
| | | | | | | |
EBITDA / interest | | 1.51 | x | 1.77 | x | 0.40 | x |
EBITDA / interest + preferred stock dividend | | 1.29 | x | 1.50 | x | 0.37 | x |
| | | | | | | |
Share Detail | | | | | | | |
Average number of common shares outstanding | | 40,857 | | 40,857 | | 29,233 | |
Average number of OP units outstanding | | 4,186 | | 2,412 | | 2,560 | |
Diluted shares outstanding | | 45,043 | | 43,269 | | 31,793 | |
| | | | | | | |
| | 09/30/04 | | 06/30/04 | | 03/31/04 | |
Balance Sheet Data | | | | | | | |
Total assets | | $ | 1,836,165 | | $ | 1,834,161 | | $ | 1,771,231 | |
Total debt | | 1,006,527 | | 966,942 | | 930,837 | |
Market equity value, end of period | | 657,626 | | 719,842 | | 802,234 | |
Debt / total assets | | 54.8 | % | 52.7 | % | 52.6 | % |
Debt / total market capitalization | | 60.5 | % | 57.3 | % | 53.7 | % |
| | | | | | | |
Other Data | | | | | | | |
Total properties (at period end) | | 329 | | 327 | | 288 | |
Total homesites (at period end) | | 67,336 | | 67,052 | | 63,236 | |
Occupied homesites (at period end) | | 54,512 | | 54,502 | | 51,829 | |
Occupancy percentage – total portfolio | | 81.0 | % | 81.3 | % | 82.0 | % |
(a) Adjusted EBITDA reflects the add-back of $27.9 million in one-time costs related to the IPO and the early termination of certain indebtedness.
(b) Reflects partial period.
(c) See Exhibit I for definition and reconciliation to nearest GAAP measure.
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First Quarter Adjustments
($ in thousands; except per share data) | | 3/31/04 | |
| | | |
FFO available to common stockholders & OP unitholders (a) | | $ | (23,609 | ) |
Plus: | | | |
Restricted stock grants | | 10,070 | |
IPO related costs | | 4,417 | |
Early termination of debt | | 13,427 | |
Adjusted FFO (a) | | $ | 4,305 | |
Less: | | | |
Income from discontinued operations | | (267 | ) |
Depreciation from discontinued operations | | (214 | ) |
Plus: | | | |
Preferred dividend | | 1,232 | |
Depreciation on F, F & E | | 369 | |
Amortization of loan origination fees | | 868 | |
Net interest expense | | 14,267 | |
Adjusted EBITDA (a) | | $ | 20,559 | |
| | | |
Adjusted FFO (a) | | $ | 4,305 | |
FFO per share – diluted | | 0.14 | |
FFO payout ratio | | 150.4 | % |
| | | |
Adjusted FAD (a) | | $ | 3,086 | |
FAD per share – diluted | | 0.10 | |
FAD payout ratio | | 209.8 | % |
| | | |
Adjusted EBITDA / interest | | 1.35 | x |
Adjusted EBITDA / interest + preferred dividend | | 1.25 | x |
| | | |
Distributions payable on common shares and OP units 1st Quarter | | $ | 6,474 | |
(a) See Exhibit I for definition and reconciliation to nearest GAAP measure.
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Balance Sheet
| | Period Ending | |
($ in thousands) | | 09/30/04 | | 06/30/04 | | 03/31/04 | | 12/31/03 | |
Assets | | | | | | | | | |
Rental property | | | | | | | | | |
Land | | $ | 219,458 | | $ | 219,484 | | $ | 206,844 | | $ | 124,486 | |
Land improvements and buildings | | 1,301,121 | | 1,283,521 | | 1,204,518 | | 732,126 | |
Manufactured homes and improvements | | 205,305 | | 189,015 | | 162,320 | | 134,343 | |
Furniture, equipment and vehicles | | 9,752 | | 9,302 | | 9,136 | | 8,833 | |
Rental property, gross | | 1,735,636 | | 1,701,322 | | 1,582,818 | | 999,788 | |
Accumulated depreciation | | (146,676 | ) | (130,580 | ) | (115,542 | ) | (102,513 | ) |
Rental property, net | | 1,588,960 | | 1,570,742 | | 1,467,276 | | 897,275 | |
| | | | | | | | | |
Assets held for sale | | 32,665 | | 35,432 | | 32,381 | | 9,799 | |
Cash and cash equivalents | | 35,482 | | 47,838 | | 88,021 | | 26,630 | |
Restricted cash | | — | | 935 | | 1,435 | | 13,669 | |
Tenant, notes and other receivables, net | | 16,674 | | 15,938 | | 14,712 | | 8,366 | |
Inventory | | 2,343 | | 2,521 | | 3,085 | | 3,878 | |
Loan origination costs, net | | 12,326 | | 14,965 | | 15,108 | | 11,921 | |
Loan reserves | | 31,977 | | 28,564 | | 29,643 | | 32,414 | |
Goodwill | | 86,126 | | 86,127 | | 86,127 | | 86,127 | |
Lease intangibles and customer relationships, net | | 21,414 | | 22,128 | | 23,800 | | 11,627 | |
Prepaid expenses and other assets | | 8,198 | | 8,972 | | 9,643 | | 24,127 | |
Total assets | | $ | 1,836,165 | | $ | 1,834,161 | | $ | 1,771,231 | | $ | 1,125,833 | |
Liabilities and Stockholders’ Equity | | | | | | | | | |
Notes payable and preferred interest | | $ | 1,006,527 | | $ | 966,942 | | $ | 930,837 | | $ | 786,671 | |
Liabilities related to assets held for sale | | 4,653 | | 6,418 | | 3,667 | | 3,036 | |
Accounts payable and accrued expenses | | 45,897 | | 42,688 | | 32,251 | | 20,120 | |
Tenant deposits and other liabilities | | 12,753 | | 19,724 | | 11,731 | | 8,022 | |
Total liabilities | | 1,069,830 | | 1,035,772 | | 978,486 | | 817,849 | |
| | | | | | | | | |
Minority interest | | 59,485 | | 61,896 | | 37,175 | | 42,639 | |
| | | | | | | | | |
Stockholders’ equity | | | | | | | | | |
Preferred stock | | 119,108 | | 119,108 | | 119,108 | | — | |
Common stock | | 410 | | 410 | | 410 | | 170 | |
Paid-in capital | | 792,462 | | 783,305 | | 784,342 | | 378,018 | |
Unearned compensation | | (873 | ) | (923 | ) | (1,760 | ) | — | |
Accumulated other comprehensive income (expense) | | 766 | | 1,284 | | (518 | ) | — | |
Retained deficit | | (205,023 | ) | (166,690 | ) | (146,012 | ) | (112,843 | ) |
Total stockholders’ equity | | 706,850 | | 736,494 | | 755,570 | | 265,345 | |
Total liabilities and stockholders’ equity | | 1,836,165 | | $ | 1,834,162 | | $ | 1,771,231 | | $ | 1,125,833 | |
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Debt Analysis
As of September, 30 2004
($ in thousands) | | Debt
Amount | | % of Total
Debt | | Interest
Rate | | Maturity
Date | | | | | |
| | | | | | | | | | | | | |
Fixed Rate Debt | | | | | | | | | | | | | |
Senior fixed rate mortgage due 2012 | | $ | 304,670 | | 30.3 | % | 7.35 | % | 2012 | | | | | |
Senior fixed rate mortgage due 2014 | | 214,024 | | 21.3 | % | 5.53 | % | 2014 | | | | | |
Senior fixed rate mortgage due 2009 | | 100,006 | | 9.9 | % | 5.05 | % | 2009 | | | | | |
Various individual fixed rate mortgages | | 165,336 | | 16.4 | % | 7.31 | % | 2004-2031 | | | | | |
Existing other loans | | 1,067 | | 0.1 | % | 8.67 | % | 2005 | | | | | |
Total fixed rate debt | | 785,103 | | 78.0 | % | 6.55 | % | | | | | | |
| | | | | | | | | | | | | |
Variable Rate Debt (a) | | | | | | | | | | | | | |
Senior variable rate mortgage due 2006 | | 180,754 | | 18.0 | % | 4.24 | % | 2006 | | | | | |
Floorplan lines of credit | | 20,670 | | 2.0 | % | 4.78 | % | 2005 | | | | | |
Revolving credit mortgage facility | | 20,000 | | 2.0 | % | 7.71 | % | 2004 | | | | | |
Total variable rate debt | | 221,424 | | 22.0 | % | 4.18 | % | | | | | | |
| | | | | | | | | | | | | |
Total debt | | $ | 1,006,527 | | 100.0 | % | 6.02 | % | | | | | | |
| | | | | | | | | | | | | |
% Fixed / Variable | | | | | | | | | | | | | |
Fixed | | $ | 785,103 | | 78.0 | % | 6.55 | % | | | | | | |
Variable | | 221,424 | | 22.0 | % | 4.18 | % | | | | | | |
Total debt | | $ | 1,006,527 | | 100.0 | % | 6.02 | % | | | | | | |
| | | | | | | | | | | | | |
| | 2004 | | 2005 | | 2006 | | 2007 | | 2008 | | Thereafter | |
Maturity Schedule (b) | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Senior fixed rate mortgages | | $ | 1,767 | | $ | 7,436 | | $ | 7,917 | | $ | 8,431 | | $ | 8,917 | | $ | 584,232 | |
Various individual fixed rate mortgages | | 10,882 | | 3,474 | | 14,570 | | 2,359 | | 52,704 | | 74,051 | |
Senior variable rate mortgage | | 0 | | 0 | | 180,754 | | 0 | | 0 | | 0 | |
Floorplan lines of credit | | 20,670 | | 0 | | 0 | | 0 | | 0 | | 0 | |
Revolving credit mortgage facility | | 20,000 | | 0 | | 0 | | 0 | | 0 | | 0 | |
Other debt | | 20 | | 1,047 | | 0 | | 0 | | 0 | | 0 | |
Total debt maturities | | $ | 53,338 | | $ | 11,958 | | $ | 203,240 | | $ | 10,790 | | $ | 61,621 | | $ | 658,283 | |
(a) In February 2004, we entered into a two-year $100 million swap and purchased interest rate caps covering our senior variable rate mortgage.
(b) Does not include debt premium.
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Statement of Operations
($ in thousands; except per share data) | | Three Months
Ended
09/30/04 | | Three Months
Ended
06/30/04 | | Three Months
Ended
03/31/04 | |
| | | | | | | |
Revenue | | | | | | | |
Communities | | $ | 58,328 | | $ | 55,175 | | $ | 43,710 | |
Retail Sales | | 4,024 | | 2,034 | | 732 | |
Consumer finance and insurance | | 160 | | 85 | | 134 | |
Corporate and other | | 0 | | 0 | | 9 | |
Total revenue | | 62,512 | | 57,294 | | 44,585 | |
| | | | | | | |
Operating Expenses | | | | | | | |
Communities | | $ | 26,578 | | 22,881 | | 16,669 | |
Retail Sales | | 6,293 | | 3,019 | | 915 | |
Consumer finance and insurance | | 175 | | 174 | | 170 | |
Corporate and other | | 141 | | 100 | | 84 | |
Property management | | 1,978 | | 1,613 | | 1,454 | |
General and administrative (a) | | 4,441 | | 4,292 | | 14,804 | |
IPO related costs (a) | | 0 | | 0 | | 4,417 | |
Total expenses | | 39,606 | | 32,080 | | 38,513 | |
EBITDA (b) | | 22,906 | | 25,214 | | 6,072 | |
| | | | | | | |
Early termination of debt (a) | | 3,258 | | 0 | | 13,427 | |
Depreciation & amortization | | 19,413 | | 17,949 | | 15,446 | |
Net interest expense | | 13,630 | | 12,537 | | 14,267 | |
Income (loss) before minority interest | | (13,395 | ) | (5,272 | ) | (37,067 | ) |
Minority interest | | 519 | | 438 | | 3,084 | |
Income (loss) from continuing operations | | (12,876 | ) | (4,834 | ) | (33,983 | ) |
Discontinued operations | | (1,758 | ) | 286 | | 245 | |
Income (loss) before preferred stock dividend | | (14,634 | ) | (4,548 | ) | (33,738 | ) |
Preferred stock dividend | | (2,577 | ) | (2,578 | ) | (1,232 | ) |
Income (loss) available to common stockholders | | $ | (17,211 | ) | $ | (7,126 | ) | $ | (34,969 | ) |
FFO Calculation (b) | | | | | | | |
Income (loss) before minority interest (a) | | $ | (13,395 | ) | $ | (5,272 | ) | $ | (37,067 | ) |
Plus: | Depreciation and amortization | | 19,413 | | 17,949 | | 15,446 | |
| Income from discontinued operations | | 430 | | 303 | | 267 | |
| Depreciation from discontinued operations | | 397 | | 388 | | 214 | |
Less: | Amortization of loan origination fees | | (725 | ) | (855 | ) | (868 | ) |
| Depreciation on F, F & E | | (363 | ) | (81 | ) | (369 | ) |
| Preferred stock dividends | | (2,577 | ) | (2,578 | ) | (1,232 | ) |
FFO available to common stockholders & OP unitholders (b) | | $ | 3,180 | | $ | 9,854 | | $ | (23,609 | ) |
| | | | | | | |
Plus: | Amortization of loan origination fees | | 725 | | 855 | | 868 | |
| Early termination of debt (a) | | 3,258 | | 0 | | 13,427 | |
| Depreciation on F, F & E | | 363 | | 81 | | 369 | |
| | | | | | | |
Less: | Recurring capital expenditures | | $ | (2,679 | ) | $ | (1,100 | ) | $ | (520 | ) |
| Scheduled principal amortization of indebtedness | | (2,182 | ) | (2,200 | ) | (1,936 | ) |
| | | | | | | |
Funds available for distribution (“FAD”) (b) | | $ | 2,665 | | $ | 7,490 | | $ | (11,401 | ) |
| | | | | | | |
FFO per share / unit | | $ | 0.06 | | $ | 0.23 | | $ | (0.74 | ) |
FAD per share / unit | | $ | 0.06 | | $ | 0.17 | | $ | (0.36 | ) |
Distribution per share / unit | | $ | 0.31 | | $ | 0.31 | | $ | 0.15 | |
| | | | | | | |
Diluted weighted average common shares and OP units | | 45,043 | | 43,269 | | 31,793 | |
(a) Includes certain one-time costs related to the IPO and the repayment of certain indebtedness.
(b) See Exhibit I for definition and reconciliation to nearest GAAP measure.
11
Comprehensive Income
($ in thousands) | | Three
Months Ended
09/30/04 | | Three
Months Ended
06/30/04 | | Three
Months Ended
03/31/04 | |
| | | | | | | |
Net income (loss) | | $ | (17,211 | ) | $ | (7,126 | ) | $ | (34,969 | ) |
Unrealized income (loss) on interest rate swap | | (518 | ) | 1,802 | | (518 | ) |
Comprehensive income (loss) | | $ | (17,729 | ) | $ | (5,324 | ) | $ | (35,487 | ) |
12
Segment Detail
| | Three Months Ended | |
($ in thousands) | | 9/30/2004 | | 6/30/2004 | | 03/31/04 (a) | | 12/31/03 | |
Revenue | | | | | | | | | |
Total real estate revenue | | $ | 58,328 | | $ | 55,175 | | $ | 43,710 | | $ | 36,281 | |
Retail homes sales revenue | | 4,024 | | 2,034 | | 732 | | 1,757 | |
Finance and insurance revenue | | 160 | | 85 | | 134 | | 675 | |
Corporate and other | | 0 | | 0 | | 9 | | (20 | ) |
Segment revenue | | 62,512 | | 57,294 | | 44,585 | | 38,693 | |
| | | | | | | | | |
Expenses | | | | | | | | | |
Property operations expense | | 22,311 | | 18,609 | | 13,226 | | 13,155 | |
Real estate taxes | | 4,267 | | 4,272 | | 3,444 | | 2,817 | |
Retail homes sales expense | | 6,293 | | 3,019 | | 915 | | 2,141 | |
Insurance and finance expense | | 175 | | 174 | | 170 | | 644 | |
Corporate and other | | 141 | | 100 | | 84 | | (198 | ) |
Segment expenses | | 33,187 | | 26,174 | | 17,839 | | 18,559 | |
| | | | | | | | | |
Net Segment Income | | | | | | | | | |
Real estate income | | 31,750 | | 32,294 | | 27,040 | | 20,309 | |
Retail homes sales income | | (2,269 | ) | (985 | ) | (183 | ) | (384 | ) |
Insurance and finance income | | (15 | ) | (90 | ) | (36 | ) | 31 | |
Corporate and other | | (141 | ) | (100 | ) | (75 | ) | 178 | |
Net segment income | | $ | 29,325 | | $ | 31,119 | | $ | 26,746 | | $ | 20,134 | |
| | | | | | | | | |
Other Data | | | | | | | | | |
EBITDA (b) | | $ | 22,906 | | $ | 25,214 | | $ | 6,072 | | $ | 13,341 | |
| | | | | | | | | |
FFO available to common stockholders and OP unitholders (b) | | $ | 3,180 | | $ | 9,854 | | $ | (23,609 | ) | $ | 1,572 | |
| | | | | | | | | |
Net income (loss) | | $ | (17,211 | ) | $ | (7,126 | ) | $ | (34,969 | ) | $ | (8,401 | ) |
| | | | | | | | | |
IPO Related Charges | | $ | 0 | | $ | 0 | | $ | 27,914 | | $ | 0 | |
(a) Results include one-time charges of $27.9 million related to the IPO and the repayment of certain indebtedness.
(b) See Exhibit I for definition and reconciliation to nearest GAAP measure.
13
Same Community Data
| | 2004 | | 2003 | |
($ in thousands) | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | | 4th Qtr | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | |
| | | | | | | | | | | | | | | |
For the full quarter noted: | | | | | | | | | | | | | | | |
Average total homesites | | 39,124 | | 39,122 | | 39,122 | | 39,122 | | 39,122 | | 39,106 | | 39,041 | |
Average total rental homes | | 6,969 | | 6,586 | | 6,039 | | 5,703 | | 5,303 | | 4,885 | | 4,650 | |
| | | | | | | | | | | | | | | |
Average occupied homesites – homeowners | | 26,714 | | 27,283 | | 28,149 | | 28,943 | | 29,664 | | 30,330 | | 30,918 | |
Average occupied homesites – home renters | | 5,435 | | 5,233 | | 4,742 | | 4,349 | | 4,169 | | 3,860 | | 3,386 | |
Average occupied homesites – total | | 32,149 | | 32,515 | | 32,891 | | 33,292 | | 33,833 | | 34,189 | | 34,304 | |
Average occupancy – rental homes | | 78.0 | % | 79.5 | % | 78.5 | % | 76.3 | % | 78.6 | % | 79.0 | % | 72.8 | % |
Average occupancy – total | | 82.2 | % | 83.1 | % | 84.1 | % | 85.1 | % | 86.5 | % | 87.4 | % | 87.9 | % |
| | | | | | | | | | | | | | | |
For the full quarter noted: | | | | | | | | | | | | | | | |
Real estate revenue | | | | | | | | | | | | | | | |
Homeowner rental income | | $ | 23,068 | | $ | 22,996 | | $ | 23,908 | | $ | 23,922 | | $ | 24,299 | | $ | 24,919 | | $ | 25,165 | |
Home renter rental income | | 9,474 | | 9,298 | | 8,777 | | 8,378 | | 8,051 | | 7,446 | | 6,635 | |
Other | | 141 | | 591 | | 127 | | 122 | | 47 | | 10 | | 55 | |
Rental income | | 32,683 | | 32,885 | | 32,812 | | 32,422 | | 32,397 | | 32,375 | | 31,855 | |
Utility and other income | | 3,654 | | 3,570 | | 3,375 | | 3,499 | | 3,625 | | 3,372 | | 3,476 | |
Total real estate revenue | | 36,337 | | 36,455 | | 36,187 | | 35,921 | | 36,022 | | 35,747 | | 35,331 | |
| | | | | | | | | | | | | | | |
Real estate expenses | | | | | | | | | | | | | | | |
Property operations expenses | | 13,883 | | 12,048 | | 11,014 | | 12,964 | | 11,954 | | 11,137 | | 11,023 | |
Real estate taxes | | 2,890 | | 2,958 | | 2,961 | | 2,767 | | 2,529 | | 2,506 | | 2,621 | |
Total real estate expenses | | 16,773 | | 15,006 | | 13,975 | | 15,731 | | 14,483 | | 13,643 | | 13,643 | |
| | | | | | | | | | | | | | | |
Real estate net segment income (a) | | $ | 19,564 | | $ | 21,449 | | $ | 22,212 | | $ | 20,190 | | $ | 21,539 | | $ | 22,104 | | $ | 21,688 | |
| | | | | | | | | | | | | | | |
Average monthly real estate revenue per total occupied homesite (b) | | $ | 377 | | $ | 374 | | $ | 367 | | $ | 360 | | $ | 355 | | $ | 349 | | $ | 343 | |
Average monthly homeowner rental income per homeowner occupied homesite (c) | | $ | 288 | | $ | 281 | | $ | 283 | | $ | 276 | | $ | 273 | | $ | 274 | | $ | 271 | |
Average monthly real estate revenue per total homesite (d) | | $ | 310 | | $ | 311 | | $ | 308 | | $ | 306 | | $ | 307 | | $ | 305 | | $ | 302 | |
Average monthly home renter income per occupied rental home (e) | | $ | 581 | | $ | 592 | | $ | 617 | | $ | 642 | | $ | 644 | | $ | 643 | | $ | 653 | |
At end of quarter: | | | | | | | | | | | | | | | |
Total communities owned | | 206 | | 206 | | 206 | | 206 | | 206 | | 206 | | 206 | |
Total homesites | | 39,124 | | 39,122 | | 39,122 | | 39,122 | | 39,122 | | 39,122 | | 39,059 | |
Occupied homesites | | 32,072 | | 32,232 | | 32,828 | | 32,949 | | 33,597 | | 34,056 | | 34,318 | |
| | | | | | | | | | | | | | | |
Total rental homes owned | | 7,095 | | 6,851 | | 6,329 | | 5,728 | | 5,656 | | 5,029 | | 4,736 | |
Occupied rental homes | | 5,607 | | 5,281 | | 5,189 | | 4,340 | | 4,305 | | 4,021 | | 3,650 | |
(a) See Exhibit I for definition and reconciliation to nearest GAAP measure.
(b) Average monthly real estate revenue per occupied homesite is defined as total real estate revenue divided by average total occupied homesites divided by the number of months in the period.
(c) Average monthly homeowner rental income per homeowner occupied homesite is defined as homeowner rental income divided by average homeowner occupied homesites divided by the number of months in the period.
(d) Average monthly real estate revenue per total homesite is defined as total real estate revenue divided by average total homesites divided by the number of months in the period.
(e) Average monthly home renter income per occupied rental home is defined as total home renter rental income divided by average occupied rental homes divided by the number of months in the period.
14
Same Community – Percentage Growth
| | Three
Months Ended
09/30/04
vs. 09/30/03 | | Three
Months Ended
06/30/04
vs. 06/30/03 | | Three
Months Ended
03/31/04
vs. 03/31/03 | |
| | | | | | | |
Real Estate Revenue | | | | | | | |
Homeowner rental income | | (5.1 | )% | (7.7 | )% | (5.0 | )% |
Home renter rental income | | 17.7 | % | 24.9 | % | 32.3 | % |
Other | | 197.9 | % | 5984.1 | % | 133.2 | % |
Rental income | | 0.9 | % | 1.6 | % | 3.0 | % |
Utility and other income | | 0.8 | % | 5.9 | % | (2.9 | )% |
Total real estate revenue | | 0.9 | % | 2.0 | % | 2.4 | % |
| | | | | | | |
Real Estate Expenses | | | | | | | |
Property operations expenses | | 16.1 | % | 8.2 | % | (0.1 | )% |
Real estate taxes | | 14.3 | % | 18.0 | % | 13.0 | % |
Total real estate expenses | | 15.8 | % | 10.0 | % | 2.4 | % |
| | | | | | | |
Net real estate segment income | | (9.2 | )% | (3.0 | )% | 2.4 | % |
15
Total Real Estate Segment
| | 2004 | | 2003 | |
($ in thousands) | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | | 4th Qtr | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | |
| | | | | | | | | | | | | | | |
For the full quarter noted: | | | | | | | | | | | | | | | |
Average total homesites | | 67,197 | | 64,190 | | 51,495 | | 39,753 | | 39,618 | | 39,433 | | 39,142 | |
Average total rental homes | | 8,610 | | 7,938 | | 6,609 | | 5,768 | | 5,323 | | 4,889 | | 4,651 | |
| | | | | | | | | | | | | | | |
Average occupied homesites – homeowners | | 48,203 | | 46,448 | | 37,605 | | 29,275 | | 30,022 | | 30,616 | | 30,993 | |
Average occupied homesites – home renters | | 6,295 | | 5,845 | | 5,007 | | 4,404 | | 4,185 | | 3,861 | | 3,403 | |
Average occupied homesites – total | | 54,498 | | 52,293 | | 42,612 | | 33,679 | | 34,207 | | 34,477 | | 34,396 | |
Average occupancy – rental homes | | 73.1 | % | 73.6 | % | 75.8 | % | 76.4 | % | 78.6 | % | 79.0 | % | 73.2 | % |
Average occupancy – total | | 81.1 | % | 81.5 | % | 82.8 | % | 84.7 | % | 86.3 | % | 87.4 | % | 87.9 | % |
| | | | | | | | | | | | | | | |
For the full quarter noted: | | | | | | | | | | | | | | | |
Real estate revenue | | | | | | | | | | | | | | | |
Homeowner rental income | | $ | 41,288 | | $ | 39,073 | | $ | 30,490 | | $ | 24,176 | | $ | 24,551 | | $ | 25,129 | | $ | 25,211 | |
Home renter rental income | | 10,952 | | 10,385 | | 9,087 | | 8,447 | | 8,137 | | 7,484 | | 6,632 | |
Other | | 337 | | 347 | | 195 | | 121 | | 46 | | 10 | | 55 | |
Rental income | | 52,577 | | 49,805 | | 39,772 | | 32,744 | | 32,734 | | 32,623 | | 31,898 | |
Utility and other income | | 5,751 | | 5,370 | | 3,939 | | 3,536 | | 3,656 | | 3,396 | | 3,482 | |
Total real estate revenue | | 58,328 | | 55,175 | | 43,711 | | 36,280 | | 36,390 | | 36,019 | | 35,380 | |
| | | | | | | | | | | | | | | |
Real estate expenses | | | | | | | | | | | | | | | |
Property operations expenses | | 22,311 | | 18,609 | | 13,226 | | 13,155 | | 12,091 | | 11,224 | | 11,028 | |
Real estate taxes | | 4,267 | | 4,272 | | 3,444 | | 2,817 | | 2,569 | | 2,509 | | 2,623 | |
Total real estate expenses | | 26,578 | | 22,881 | | 16,670 | | 15,972 | | 14,660 | | 13,733 | | 13,651 | |
| | | | | | | | | | | | | | | |
Real estate net segment income (a) | | $ | 31,750 | | $ | 32,294 | | $ | 27,041 | | $ | 20,307 | | $ | 21,730 | | $ | 22,286 | | $ | 21,729 | |
| | | | | | | | | | | | | | | |
Average monthly real estate revenue per total occupied homesite (b) | | $ | 357 | | $ | 352 | | $ | 342 | | $ | 359 | | $ | 355 | | $ | 348 | | $ | 343 | |
Average monthly homeowner rental income per homeowner occupied homesite (c) | | $ | 286 | | $ | 280 | | $ | 270 | | $ | 275 | | $ | 273 | | $ | 274 | | $ | 271 | |
Average monthly real estate revenue per total homesite (d) | | $ | 289 | | $ | 287 | | $ | 283 | | $ | 304 | | $ | 306 | | $ | 304 | | $ | 301 | |
Average monthly home renter income per occupied rental home (e) | | $ | 580 | | $ | 592 | | $ | 605 | | $ | 639 | | $ | 648 | | $ | 646 | | $ | 650 | |
At end of quarter: | | | | | | | | | | | | | | | |
Total communities owned | | 329 | | 327 | | 288 | | 209 | | 209 | | 208 | | 207 | |
Total homesites | | 67,336 | | 67,052 | | 63,236 | | 39,753 | | 39,753 | | 39,573 | | 39,261 | |
Occupied homesites | | 54,512 | | 54,502 | | 51,829 | | 33,325 | | 34,003 | | 34,446 | | 34,506 | |
| | | | | | | | | | | | | | | |
Total rental homes owned | | 8,858 | | 8,361 | | 7,470 | | 5,794 | | 5,721 | | 5,033 | | 4,740 | |
Occupied rental homes | | 6,631 | | 5,989 | | 5,702 | | 4,375 | | 4,366 | | 4,022 | | 3,654 | |
(a) See Exhibit I for definition and reconciliation to nearest GAAP measure.
(b) Average monthly real estate revenue per occupied homesite is defined as total real estate revenue divided by average total occupied homesites divided by the number of months in the period.
(c) Average monthly homeowner rental income per homeowner occupied homesite is defined as homeowner rental income divided by average homeowner occupied homesites divided by the number of months in the period.
(d) Average monthly real estate revenue per total homesite is defined as total real estate revenue divided by average total homesites divided by the number of months in the period.
(e) Average monthly home renter income per occupied rental home is defined as total home renter rental income divided by average occupied rental homes divided by the number of months in the period.
16
Capital Expenditure Summary
| | Three Months Ended | |
($ in thousands) | | 09/30/04 | | 06/30/04 | | 03/31/04 | | 12/31/03 | |
| | | | | | | | | |
Recurring capital expenditures (a) | | $ | 2,679 | | $ | 1,100 | | $ | 520 | | $ | 740 | |
| | | | | | | | | |
Recurring capital expenditures per average site per annum | | 159 | | 69 | | 39 | | 76 | |
| | | | | | | | | |
Homesite upgrades (b) | | 2,336 | | 1,482 | | 1,042 | | 904 | |
| | | | | | | | | |
Expansion, development, renovation and improvements (c) | | 5,337 | | 4,730 | | 1,955 | | 915 | |
| | | | | | | | | |
Utility recapture (d) | | — | | — | | — | | — | |
Total capital improvements | | $ | 10,352 | | $ | 7,312 | | $ | 3,517 | | $ | 2,559 | |
(a) Includes capital expenditures necessary to maintain asset quality, including purchasing and replacing assets used to operate the community. These capital expenditures include repairs of roads, driveways, pools, renovation of clubhouses and replacement or installation of street lights, playground equipment, signage, maintenance facilities, manager housing and property vehicles. These capital expenditures do not include water meters, sheds, homes or community acquisitions. Our minimum capitalizable amount of a project is $500.
(b) Includes capital expenditures that improve homesites for placement of a new home typically when an existing older home moves out and the site is prepared for a new home. Many of these activities are governed by manufacturers’ installation requirements and state building codes and include grading, electrical, concrete, landscaping, drainage and water/sewer lines. We estimate that the new home will be in the community for an average of at least 20 years although we depreciate these costs over 10 years.
(c) These are the costs to develop, expand, renovate and improve communities following acquisition. They include costs for engineering, driveways, paving, utilities, and amenities. They also include capitalized interest and capitalized internal costs of $694 in the first quarter of 2004, $1,336 in the second quarter of 2004 and $1,177 in the third quarter of 2004.
(d) Revenue producing includes costs related to revenue generating activities, consisting primarily of sub-metering of water and sewer service.
17
Manufactured Home Purchases
| | Three Months Ended | |
($ in thousands) | | 09/30/04 | | 06/30/04 | | 03/31/04 | |
| | | | | | | |
Manufactured home purchases (a)(b) | | $ | 16,652 | | $ | 26,855 | | $ | 18,001 | |
| | | | | | | |
Number of manufactured homes purchased (b) | | 744 | | 502 | | 1,172 | |
| | | | | | | | | | |
(a) Includes expenditures for manufactured homes and home setup expenditures in the period.
(b) Excludes manufactured homes purchased in the Hometown acquisition.
18
Top 20 Markets
| | Number of | | Percentage of | | | | | | | | Rental Income Per Occupied | |
| | Total | | Total | | Occupancy | | Homesite Per Month (c) (d) | |
Market (a) | | Homesites (b) | | Homesites | | 09/30/04 | | 06/30/04 | | 03/31/04 | | 09/30/04 | | 06/30/04 | | 03/31/04 (d) | |
| | | | | | | | | | | | | | | | | |
Dallas – Ft. Worth, TX | | 7,369 | | 10.9 | % | 76.1 | % | 76.0 | % | 78.0 | % | $ | 349 | | $ | 351 | | $ | 347 | |
Atlanta, GA | | 5,074 | | 7.5 | % | 84.0 | % | 83.1 | % | 83.5 | % | 328 | | 325 | | 323 | |
Salt Lake City, UT | | 3,835 | | 5.7 | % | 91.1 | % | 91.0 | % | 93.1 | % | 341 | | 347 | | 349 | |
Front Range of CO | | 3,301 | | 4.9 | % | 88.1 | % | 89.2 | % | 91.6 | % | 425 | | 423 | | 419 | |
Kansas City – Lawrence – Topeka, MO – KS | | 2,436 | | 3.6 | % | 88.4 | % | 88.9 | % | 89.3 | % | 283 | | 277 | | 274 | |
Wichita, KS | | 2,315 | | 3.4 | % | 64.8 | % | 65.5 | % | 69.7 | % | 282 | | 283 | | 282 | |
Jacksonville, FL | | 2,257 | | 3.4 | % | 86.0 | % | 86.3 | % | 86.8 | % | 331 | | 333 | | 330 | |
St. Louis, MO – IL | | 2,159 | | 3.2 | % | 80.4 | % | 82.1 | % | 81.4 | % | 288 | | 286 | | 276 | |
Orlando, FL | | 1,996 | | 3.0 | % | 86.3 | % | 87.1 | % | 87.7 | % | 329 | | 328 | | 326 | |
Oklahoma City, OK | | 1,911 | | 2.8 | % | 79.0 | % | 78.5 | % | 81.3 | % | 304 | | 301 | | 288 | |
Greensboro – Winston Salem, NC | | 1,416 | | 2.1 | % | 68.1 | % | 69.2 | % | 72.0 | % | 253 | | 259 | | 257 | |
Davenport – Moline – Rock Island, IA – IL | | 1,412 | | 2.1 | % | 85.7 | % | 84.7 | % | 84.5 | % | 264 | | 262 | | 258 | |
Charleston – North Charleston, SC | | 1,233 | | 1.8 | % | 76.2 | % | 76.5 | % | 78.4 | % | 233 | | 232 | | 239 | |
Elkhart – Goshen, IN | | 1,225 | | 1.8 | % | 79.5 | % | 79.4 | % | 79.7 | % | 314 | | 313 | | 305 | |
Inland Empire, CA | | 1,223 | | 1.8 | % | 91.7 | % | 89.4 | % | 90.6 | % | 410 | | 406 | | 412 | |
Nashville, TN | | 1,134 | | 1.7 | % | 71.5 | % | 71.1 | % | 70.8 | % | 273 | | 267 | | 262 | |
Southeast Florida | | 1,124 | | 1.7 | % | 95.9 | % | 95.7 | % | 94.4 | % | 476 | | 476 | | 473 | |
Raleigh – Durham –Chapel Hill, NC | | 1,095 | | 1.6 | % | 82.0 | % | 81.4 | % | 85.1 | % | 326 | | 324 | | 321 | |
Syracuse, NY | | 1,091 | | 1.6 | % | 56.9 | % | 62.0 | % | 61.9 | % | 338 | | 347 | | 354 | |
Tampa – Lakeland – Winter Haven, FL | | 1,005 | | 1.5 | % | 79.5 | % | 77.0 | % | 75.5 | % | 269 | | 265 | | 262 | |
Subtotal – Top 20 Markets | | 44,611 | | 66.1 | % | 81.3 | % | 81.3 | % | 82.6 | % | 331 | | 330 | | 325 | |
All Other Markets | | 22,725 | | 33.9 | % | 80.4 | % | 81.1 | % | 80.1 | % | 303 | | 300 | | 293 | |
Total / Weighted Average | | 67,336 | | 100.0 | % | 81.0 | % | 81.2 | % | 81.9 | % | $ | 321 | | $ | 320 | | $ | 321 | |
(a) Markets are defined by our management.
(b) Results of and for the quarter ended September 30, 2004 reflect acquisitions made during the quarter.
(c) Rental Income is defined as homeowner rental income, home renter rental income and other rental income reduced by move-in bonuses and rent concessions.
(d) For communities acquired during the quarter, weighted average all-in rent (homesite rent and home rent) was used as a proxy for “Rental Income Per Occupied Homesite Per Month”.
19
Acquisitions & Dispositions
($ in thousands)
Acquisitions
Acquisition
Date | | Market | | Number of
Communities | | Number of
Homesites | | Allocated
Purchase Price | | Debt
Assumed | | Cash | | Fair Market
Value of
OP Units/shares | |
| | | | | | | | | | | | | | | |
02/18/04 | | Various (a) | | 90 | | 26,406 | | $ | 615,270 | | $ | 92,434 | | $ | 522,836 | | $ | 0 | |
02/26/04 | | Nashville, TN | | 2 | | 401 | | 7,400 | | 0 | | 7,400 | | 0 | |
06/18/04 | | Salt Lake City | | 2 | | 243 | | 5,456 | | 0 | | 5,456 | | 0 | |
06/30/04 | | Various (b) | | 36 | | 3,573 | | 61,500 | | 28,358 | | 0 | | 33,142 | |
07/20/04 | | Salt Lake City | | 1 | | 145 | | 4,126 | | 3,759 | | 367 | | 0 | |
09/28/04 | | Salt Lake City | | 1 | | 137 | | 3,290 | | 0 | | 3,290 | | 0 | |
| | | | | | | | | | | | | | | | | | | |
Dispositions
Month
Held for Sale | | Market | | Number of
Communities | | Number of
Homesites | | Net Assets
Held for Sale | | Gain (Loss)
Held for Sale | | | | | |
September. 2004 | | Various | | 15 | | 4,006 | | $ | 28,012 | | $ | (2,292 | ) | | | | |
| | | | | | | | | | | | | | | | | |
20
Hometown Acquisition Data
| | 09/30/04 | | 06/30/04 | | 03/31/04 | |
| | | | | | | |
# of Communities (a) | | 78 | | 78 | | 76 | |
# of Homesites (a) | | 23,082 | | 23,082 | | 22,514 | |
| | | | | | | |
Total occupied homesites | | 18,189 | | 18,167 | | 17,860 | |
Occupancy % | | 78.8 | % | 78.7 | % | 79.3 | % |
| | | | | | | |
Homeowner occupied homesites | | 17,274 | | 17,522 | | 17,252 | |
Renter occupied homes | | 915 | | 645 | | 608 | |
Total occupied homesites | | 18,189 | | 18,167 | | 17,860 | |
Vacant homesites | | 4,893 | | 4,915 | | 4,654 | |
Total homesites | | 23,082 | | 23,082 | | 22,514 | |
| | | | | | | |
% of Total Homesites | | | | | | | |
Homeowner occupied homesites | | 74.8 | % | 75.9 | % | 76.6 | % |
Renter occupied homes | | 4.0 | % | 2.8 | % | 2.7 | % |
Vacant homesites | | 21.2 | % | 21.3 | % | 20.7 | % |
Total homesites | | 100.0 | % | 100.0 | % | 100.0 | % |
| | | | | | | |
% of Occupied Homesites | | | | | | | |
Homeowner occupied homesites | | 95.0 | % | 96.4 | % | 96.6 | % |
Renter occupied homes | | 5.0 | % | 3.6 | % | 3.4 | % |
Occupied homesites | | 100.0 | % | 100.0 | % | 100.0 | % |
| | | | | | | |
Number of owned homes | | 1,618 | | 1,362 | | 1,338 | |
Renter occupied homes | | 915 | | 645 | | 608 | |
Non-revenue producing homes | | 703 | | 717 | | 730 | |
| | | | | | | |
Number of repossessed homes | | 392 | | 387 | | 437 | |
as a % of total homesites | | 1.7 | % | 1.7 | % | 1.9 | % |
as a % of homeowner occupied homesites | | 2.3 | % | 2.2 | % | 2.5 | % |
| | | | | | | |
Financial Data | | | | | | | |
Bad debt as a % of total real estate revenue | | 2.7 | % | 0.9 | % | NM | |
| | | | | | | |
Revenue contribution | | $ | 18,372 | | $ | 18,082 | | $ | 7,108 | |
Expense contribution | | 7,717 | | 7,491 | | 2,488 | |
Net real estate segment income contribution | | $ | 10,655 | | $ | 10,591 | | $ | 4,620 | |
(a) First quarter does not reflect two communities acquired upon the completion of the loan assumption process on April 9, 2004.
21
Home Sales Data
| | Three
Months Ended
09/30/04 | | Three
Months Ended
06/30/04 | | Three
Months Ended
03/31/04 | |
Unit Data | | | | | | | |
New homes sold | | 24 | | 13 | | 15 | |
Used homes sold | | 258 | | 115 | | 12 | |
Total homes sales | | 282 | | 128 | | 27 | |
| | | | | | | |
Other Data | | | | | | | |
Average home sales price – new homes | | $ | 22,965 | | $ | 26,622 | | $ | 28,700 | |
Average home sales price – used homes | | 13,461 | | 13,170 | | 12,624 | |
| | | | | | | |
Average home sales price – total | | $ | 14,270 | | $ | 14,536 | | $ | 21,555 | |
22
Owned Home Data
| | As of and for the three months ended | |
| | 09/30/04 | | 06/30/04 | | 03/31/04 | | 12/31/03 | |
| | | | | | | | | |
Renter occupied homes | | 6,631 | | 5,989 | | 5,702 | | 4,375 | |
Non-revenue producing homes | | 2,227 | | 2,372 | | 1,768 | | 1,419 | |
Total home inventory | | 8,858 | | 8,361 | | 7,470 | | 5,794 | |
| | | | | | | | | |
Home Inventory Change Detail | | | | | | | | | |
Home inventory (BoP) | | 8,361 | | 7,470 | | 5,794 | | 5,721 | |
Net Home purchases / (Sales) | | 497 | | 891 | | 1,676 | | 73 | |
Home inventory (EoP) | | 8,858 | | 8,361 | | 7,470 | | 5,794 | |
| | | | | | | | | |
Renter occupied homes (BoP) | | 5,989 | | 5,702 | | 4,375 | | 4,366 | |
Leasing activity, net (a) | | 642 | | 287 | | 1,327 | | 9 | |
Renter occupied homes (EoP) | | 6,631 | | 5,989 | | 5,702 | | 4,375 | |
| | | | | | | | | |
Non-revenue producing (BoP) | | 2,372 | | 1,768 | | 1,419 | | 1,355 | |
Home purchases / (sales + leased) | | (145 | ) | 604 | | 349 | | 64 | |
Non-revenue producing (EoP) | | 2,227 | | 2,372 | | 1,768 | | 1,419 | |
| | | | | | | | | |
Home Inventory Financial Data | | | | | | | | | |
Gross asset value including setup costs ($000’s) | | $ | 205,305 | | $ | 189,015 | | $ | 162,320 | | | |
Gross asset value per home | | 23,177 | | 22,607 | | 21,730 | | | |
| | | | | | | | | |
Current asset value including setup costs ($000’s) | | $ | 178,464 | | $ | 166,019 | | $ | 143,019 | | | |
Current asset value per home | | 20,147 | | 19,856 | | 19,146 | | | |
| | | | | | | | | |
Total Non-Revenue Producing Inventory | | | | | | | | | |
Available for rent or for sale | | 1,624 | | 2,210 | | 1,061 | | | |
In-transit / in-process | | 603 | | 162 | | 707 | | | |
Total non-revenue producing inventory | | 2,227 | | 2,372 | | 1,768 | | | |
| | | | | | | | | |
Homes on order | | 233 | | 600 | | 377 | | | |
(a) Period ended 3/31/04 includes occupied homes acquired in the Hometown acquisition.
23
Investor Inquiries
Common stock symbol: | | ARC | | | | | |
Preferred stock symbol: | | ARC Pr A | | | | | |
| | | | | | | |
Exchange Traded: | | NYSE | | | | | |
| | | | | | | |
| | Q3
2004 | | Q2
2004 | | Q1
2004 (a) | |
Common Stock Dividend Information | | | | | | | |
Declaration date | | 9/14/2004 | | 06/14/04 | | 03/10/04 | |
Record date | | 9/30/2004 | | 06/30/04 | | 03/31/04 | |
Payment date | | 10/15/2004 | | 07/15/04 | | 04/15/04 | |
Distributions per share | | $ | 0.3125 | | $ | 0.3125 | | $ | 0.1493 | |
| | | | | | | |
Preferred Stock Dividend Information | | | | | | | |
Declaration date | | 9/14/2004 | | 06/14/04 | | 03/10/04 | |
Record date | | 10/15/2004 | | 07/15/04 | | 04/15/04 | |
Payment date | | 10/29/2004 | | 07/30/04 | | 04/30/04 | |
Distributions per share | | $ | 0.5156 | | $ | 0.5156 | | $ | 0.4182 | |
(a) Distributions reflect partial period.
Inquiries:
Affordable Residential Communities welcomes any questions or comments from our investors, prospective investors, analysts, investment managers or media professionals. Please direct all inquiries to one of the following contact points:
At our website: | | www.aboutarc.com | | | |
By phone: | | (866) 847-8931 | | | |
By fax: | | (303) 294-0121 | | | |
By e-mail: | | investor.relations@aboutarc.com | | | |
By mail: | | Affordable Residential Communities Inc. | | | |
| | Investor Relations Department | | | |
| | 600 Grant Street | | | |
| | Suite 900 | | | |
| | Denver, CO 80203 | | | |
24
Definitions of Non-GAAP Measures
Investors in and analysts following the real estate industry use funds from operations (“FFO”), net segment income, earnings before interest, taxes, depreciation and amortization (“EBITDA”) and funds available for distribution (“FAD”) as supplemental performance measures. While we believe that net income (as defined by GAAP) is the most appropriate measure, we also believe that FFO, net segment income, EBITDA and FAD are widely used by and relevant to investors, analysts and lenders and are appropriate supplemental measures. FFO reflects the assumption that real estate values rise or fall with market conditions and principally adjusts for the effects of GAAP depreciation and amortization of real estate assets. Net segment income provides a measure of rental operations and excludes deductions for depreciation and amortization and non-property specific expenses such as general and administrative expenses. EBITDA provides a measure to evaluate our ability to incur and service debt and to fund dividends and other cash needs. FAD provides a measure to evaluate our ability to fund dividends. In addition, FFO, net segment income, EBITDA and FAD are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.
FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as “net income, computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains (or losses) from sales of property, plus rental property depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.” Industry analysts consider FFO to be an appropriate supplemental measure of the operating performance of an equity REIT primarily because the computation of FFO excludes historical cost depreciation as an expense and thereby facilitates the comparison of REITs which have different cost bases in their assets. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time, whereas real estate values have instead historically risen or fallen based upon market conditions. FFO does not represent cash flow from operations as defined by GAAP and is a supplemental measure of performance that does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. In addition, FFO is not intended as a measure of a REIT’s ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. Please see the Reconciliation of Net Income to Funds from Operations set forth above.
Net segment income is defined as income from real estate operations and other segments of the Company, less expenses for property operations, real estate taxes, cost of manufactured homes sold, and retail home sales, finance, insurance and other operations.
EBITDA is defined as net loss available to common stockholders adjusted to exclude preferred stock dividend expense, income from discontinued operations net of minority interest, minority interest, interest income, interest expense, depreciation and amortization and early termination of debt expenses. It is a measure of net segment income less property management, general and administrative expenses and IPO related costs.
FAD is defined as FFO less non-revenue producing, recurring capital expenditures and scheduled principal amortization of indebtedness.
FFO, net segment income, EBITDA and FAD do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on indebtedness and payment of dividends and distributions. FFO, net segment income, EBITDA and FAD should not be considered as substitutes for net income (calculated in accordance with GAAP), as a measure of results of operations or cash flows (calculated in accordance with GAAP) as a measure of liquidity. FFO, net segment income, EBITDA and FAD as calculated by the Company may not be comparable to similarly titled, but differently calculated, measures of other REITs or to the definition of FFO published by NAREIT.
I-1
FFO, FAD and EBITDA Reconciliations
| | Three Months Ended | |
($ in thousands, except per share data) | | 09/30/04 | | 06/30/04 | | 03/31/04 | | 09/30/03 | |
| | | | | | | | | |
Funds from operations (“FFO”) and adjusted funds from operations | | | | | | | | | |
Net income (loss) before preferred stock dividend and minority interest | | (13,395 | ) | $ | (5,272 | ) | $ | (37,067 | ) | $ | (11,291 | ) |
Plus: | Depreciation and amortization | | 19,413 | | 17,949 | | 15,446 | | 11,912 | |
| Income (loss) from discontinued operations | | 430 | | 303 | | 267 | | 73 | |
| Depreciation from discontinued operations | | 397 | | 388 | | 214 | | 133 | |
Less: | Amortization of loan origination fees | | (725 | ) | (855 | ) | (868 | ) | (968 | ) |
| Depreciation expense on furniture, equipment and vehicles | | (363 | ) | (81 | ) | (369 | ) | (224 | ) |
| Preferred stock dividend | | (2,577 | ) | (2,578 | ) | (1,232 | ) | — | |
FFO available to common stockholders and OP unitholders | | 3,180 | | 9,854 | | (23,609 | ) | (365 | ) |
Plus: | Restricted stock grants | | — | | — | | 10,070 | | — | |
| IPO related costs | | — | | — | | 4,417 | | — | |
| Early termination of debt | | 3,258 | | — | | 13,427 | | — | |
Adjusted FFO | | $ | 6,438 | | $ | 9,854 | | $ | 4,305 | | $ | (365 | ) |
| | | | | | | | | |
Funds available for distribution (“FAD”) and adjusted FAD | | | | | | | | | |
FFO available to common stockholders & OP unitholders | | $ | 3,180 | | $ | 9,854 | | $ | (23,609 | ) | $ | (365 | ) |
Plus: | Amortization of loan origination fees | | 725 | | 855 | | 868 | | 968 | |
| Depreciation expense on furniture, equipment and vehicles | | 363 | | 81 | | 369 | | 224 | |
| Early termination of debt | | 3,258 | | — | | 13,427 | | — | |
Less: | Recurring capital expenditures | | (2,679 | ) | (1,100 | ) | (520 | ) | (1,330 | ) |
| Scheduled principal amortization of indebtedness | | (2,182 | ) | (2,200 | ) | (1,936 | ) | (3,273 | ) |
FAD | | | 2,665 | | 7,490 | | (11,401 | ) | (3,776 | ) |
Plus: | Restricted stock grants | | — | | — | | 10,070 | | — | |
| IPO related costs | | — | | — | | 4,417 | | — | |
Adjusted FAD | | $ | 2,665 | | $ | 7,490 | | $ | 3,086 | | $ | (3,776 | ) |
| | | | | | | | | |
EBITDA and adjusted EBITDA | | | | | | | | | |
Net loss available to common stockholders | | $ | (17,211 | ) | $ | (7,126 | ) | $ | (34,969 | ) | $ | (6,803 | ) |
Plus: | Preferred stock dividend | | 2,577 | | 2,578 | | 1,232 | | — | |
| Income from discontinued operations, net of minority interest | | 1,758 | | (286 | ) | (245 | ) | (2,935 | ) |
| Minority interest | | (519 | ) | (438 | ) | (3,084 | ) | (1,552 | ) |
| Interest income | | (351 | ) | (457 | ) | (386 | ) | (345 | ) |
| Interest expense | | 13,981 | | 12,994 | | 14,653 | | 14,453 | |
| Depreciation and amortization | | 19,413 | | 17,949 | | 15,446 | | 13,309 | |
| Early termination of debt | | 3,258 | | — | | 13,427 | | — | |
EBITDA | | 22,906 | | 25,214 | | 6,074 | | 16,127 | |
Plus: | Restricted stock grants | | — | | — | | 10,070 | | — | |
| IPO related costs | | — | | — | | 4,417 | | — | |
Adjusted EBITDA | | $ | 22,906 | | $ | 25,214 | | $ | 20,561 | | $ | 16,127 | |
I-2
Total Real Estate Net Segment Income Reconciliation
| | 2004 | | 2003 | |
($ in thousands) | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | | 4th Qtr | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | |
| | | | | | | | | | | | | | | |
Net segment income: | | | | | | | | | | | | | | | |
Real estate | | $ | 31,750 | | $ | 32,294 | | $ | 27,040 | | $ | 20,307 | | $ | 21,730 | | $ | 22,286 | | $ | 21,729 | |
Retail sales | | (2,269 | ) | (985 | ) | (183 | ) | (384 | ) | (713 | ) | (340 | ) | (314 | ) |
Insurance and Finance | | (15 | ) | (90 | ) | (36 | ) | 31 | | 10 | | (4 | ) | 95 | |
Corporate and other | | (141 | ) | (100 | ) | (75 | ) | 179 | | 58 | | 103 | | 80 | |
| | $ | 29,325 | | 31,119 | | 26,746 | | 20,133 | | 21,085 | | 22,045 | | 21,590 | |
Other expenses: | | | | | | | | | | | | | | | |
Property management | | 1,978 | | 1,613 | | 1,454 | | 1,673 | | 1,286 | | 1,382 | | 1,186 | |
General and administrative | | 4,441 | | 4,292 | | 14,804 | | 5,112 | | 3,670 | | 3,680 | | 4,369 | |
Initial public offering (“IPO”) related costs | | — | | — | | 4,417 | | — | | — | | — | | — | |
Early terminiation of debt | | 3,258 | | — | | 13,427 | | — | | — | | — | | — | |
Depreciation and amortization | | 19,413 | | 17,949 | | 15,446 | | 11,153 | | 11,925 | | 12,718 | | 12,437 | |
Retail home sales asset impairment and other exp. | | — | | — | | — | | — | | 1,385 | | — | | — | |
Interest expense | | 13,981 | | 12,994 | | 14,653 | | 15,001 | | 14,453 | | 14,601 | | 13,851 | |
Total other expenses | | 43,071 | | 36,849 | | 64,200 | | 32,939 | | 32,719 | | 32,381 | | 31,843 | |
Interest income | | 351 | | 457 | | 386 | | 343 | | 345 | | 404 | | 347 | |
Loss before allocation to mirority interest | | (13,395 | ) | (5,273 | ) | (37,068 | ) | (12,463 | ) | (11,289 | ) | (9,932 | ) | (9,906 | ) |
Minority interest | | 519 | | 438 | | 3,084 | | 1,719 | | 1,552 | | 1,381 | | 1,370 | |
Net loss from continuing operations | | (12,876 | ) | (4,835 | ) | (33,984 | ) | (10,743 | ) | (9,737 | ) | (8,552 | ) | (8,536 | ) |
| | | | | | | | | | | | | | | |
Income from discontinued operations | | 430 | | 303 | | 267 | | 52 | | 73 | | 29 | | 158 | |
Gain (loss) on sale of discontinued operations | | (2,292 | ) | — | | — | | — | | 3,333 | | — | | — | |
Minority interest in discontinued operations | | 104 | | (17 | ) | (21 | ) | (7 | ) | (471 | ) | (4 | ) | (22 | ) |
Net loss | | (14,634 | ) | (4,549 | ) | (33,739 | ) | (10,698 | ) | (6,802 | ) | (8,527 | ) | (8,400 | ) |
| | | | | | | | | | | | | | | |
Preferred stock dividend | | (2,577 | ) | (2,578 | ) | (1,232 | ) | — | | — | | — | | — | |
Net loss available to common stockholders | | $ | (17,211 | ) | $ | (7,127 | ) | $ | (34,970 | ) | $ | (10,698 | ) | $ | (6,802 | ) | $ | (8,527 | ) | $ | (8,400 | ) |
I-3
Same Community Net Segment Income Reconciliation
| | 2004 | | 2003 | |
($ in thousands) | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | | 4th Qtr | | 3rd Qtr | | 2nd Qtr | | 1st Qtr | |
| | | | | | | | | | | | | | | |
Net segment income: | | | | | | | | | | | | | | | |
Real estate (a) | | $ | 19,564 | | $ | 21,449 | | $ | 22,212 | | $ | 20,190 | | $ | 21,539 | | $ | 22,104 | | $ | 21,688 | |
Retail home sales and finance (b) | | — | | — | | — | | — | | — | | — | | — | |
Insurance | | (15 | ) | 580 | | (36 | ) | 31 | | 10 | | (4 | ) | 94 | |
Corporate and other | | (141 | ) | (141 | ) | (75 | ) | 179 | | 58 | | 103 | | 81 | |
| | 19,408 | | 21,889 | | 22,101 | | 20,400 | | 21,607 | | 22,204 | | 21,863 | |
Other expenses: | | | | | | | | | | | | | | | |
Property management | | 1,236 | | 1,000 | | 1,354 | (c) | 1,673 | | 1,286 | | 1,382 | | 1,186 | |
General and administrative | | 4,390 | | 4,275 | | 4,689 | (d) | 5,112 | | 3,670 | | 3,680 | | 4,369 | |
Initial public offering (“IPO”) related costs | | — | | — | | — | | — | | — | | — | | — | |
Early termination of debt | | — | | — | | — | | — | | — | | — | | — | |
Depreciation and amortization (e) | | 12,828 | | 12,336 | | 13,467 | | 11,031 | | 11,832 | | 12,682 | | 12,424 | |
Retail home sales asset impairment and other expense | | — | | — | | — | | — | | — | | — | | — | |
Interest expense (f) | | 10,028 | | 10,284 | | 12,529 | | 14,924 | | 14,366 | | 14,529 | | 13,837 | |
Total other expenses | | 28,482 | | 27,895 | | 32,039 | | 32,741 | | 31,154 | | 32,273 | | 31,816 | |
Interest income (g) | | 351 | | 292 | | 379 | | 343 | | 345 | | 404 | | 347 | |
Loss before allocation to minority interest | | (8,723 | ) | (5,715 | ) | (9,559 | ) | (11,998 | ) | (9,202 | ) | (9,666 | ) | (9,606 | ) |
Minority interest (h) | | 284 | | 475 | | 795 | | 1,655 | | 1,265 | | 1,343 | | 1,328 | |
Net loss from continuing operations | | (8,439 | ) | (5,240 | ) | (8,764 | ) | (10,343 | ) | (7,937 | ) | (8,322 | ) | (8,278 | ) |
| | | | | | | | | | | | | | | |
Income from discontinued operations | | — | | — | | — | | — | | — | | — | | — | |
Gain on sale of discontinued operations | | — | | — | | — | | — | | — | | — | | — | |
Minority interest in discontinued operations | | — | | — | | — | | — | | — | | — | | — | |
Net loss | | (8,439 | ) | (5,240 | ) | (8,764 | ) | (10,343 | ) | (7,937 | ) | (8,322 | ) | (8,278 | ) |
| | | | | | | | | | | | | | | |
Preferred stock dividend | | — | | — | | — | | — | | — | | — | | — | |
Net loss available to common stockholders | | $ | (8,439 | ) | $ | (5,240 | ) | $ | (8,764 | ) | $ | (10,343 | ) | $ | (7,937 | ) | $ | (8,322 | ) | $ | (8,278 | ) |
(a) Same communities real estate net segment income excludes results of communities acquired in the Hometown and other acquisitions after January 1, 2003 and the communities sold before June 30, 2004.
(b) Excludes segment results as a result of the restructuring in September 2003 in which we closed all stand-alone retail stores existing on January 1, 2003 at which time we had no significant in-community sales operations.
(c) Excludes additional property management expenses incurred in connection with the Hometown acquisition.
(d) Excludes restricted stock expenses of $10,115 recognized in connection with the IPO and vested in the three months ended June 30, 2004 and March 31, 2004.
(e) Excludes the following costs recognized due to the Hometown and other acquisitions:
Depreciation of rental and other property and manufactured homes acquired | | $ | 5,186 | | $ | 4,362 | | $ | 1,507 | | $ | 107 | | $ | 89 | | $ | 33 | | $ | 10 | |
Amortization of lease intangibles and customer relationships acquired | | 1,399 | | 1,251 | | 472 | | 14 | | 4 | | 4 | | 2 | |
| | $ | 6,585 | | $ | 5,613 | | $ | 1,979 | | $ | 122 | | $ | 93 | | $ | 36 | | $ | 13 | |
| | | | | | | | | | | | | | | |
(f) | Excludes the pro rata portion of interest expense on mortgage loans secured by properties acquired in the Hometown and other acquisitions as follows: | | $ | 3,953 | | $ | 2,710 | | $ | 2,124 | | $ | 76 | | $ | 87 | | $ | 72 | | $ | 13 | |
| | | | | | | | | | | | | | | | | | | | | | | |
(g) Excludes interest earned on additional cash received in connection with the IPO, the financing transaction and the Hometown acquisition
(h) Minority interest computed at the same rate as reflected in reported results.
I-4
