ORLANDO, Fla., Aug. 7, 2014 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) today announced results for its second quarter ended June 30, 2014.
Highlights for Second Quarter 2014
- Second quarter FFO of $0.33 per share and Recurring FFO of $0.35 per share
- Increased 2014 reported and recurring FFO guidance to ranges of $1.34 to $1.41 per share and $1.39 to $1.46 per share, respectively
- Leased a total of 811,000 square feet at $30.08 per square foot, with 336,000 square feet of new leasing at $31.57 per square foot
- Executed 413,000 square feet of renewal leasing, representing a retention ratio of 76.9% and a positive cash renewal spread of 5.1% from the expiring rate
- Second quarter occupancy of 89.2%, with the portfolio 91.3% leased
"Improving office fundamentals across all of our targeted submarkets created a favorable operating environment during the second quarter," stated James R. Heistand, President and Chief Executive Officer of Parkway. "We completed 811,000 square feet of leasing at the highest rates achieved in the Company's history. Despite the addition of approximately 700,000 square feet of value-add assets that had a combined occupancy of approximately 82.5% during the quarter, total portfolio occupancy increased 70 basis points, and we are now over 91% leased. While leasing velocity has been led by our recently acquired assets, we continue to drive performance across our legacy portfolio, as evidenced by the 3.5% year-over-year increase in second quarter same-store recurring cash NOI. Based on our year-to-date performance and anticipation of continued execution of our leasing strategy, we believe we are in a great position to drive additional growth moving forward."
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For the second quarter 2014, funds from operations ("FFO") available to common stockholders was $34.2 million, or $0.33 per diluted share. Reported FFO during the second quarter 2014 includes the negative impact of one-time items totaling $2.6 million, or $0.02 per share, including $1.9 million in transition costs primarily related to the fourth-quarter 2013 merger with Thomas Properties Group, Inc. Recurring FFO was $36.7 million, or $0.35 per diluted share, and funds available for distribution ("FAD") was $24.4 million, or $0.23 per diluted share.
A reconciliation of FFO, recurring FFO and FAD to net income (loss) is included on page 12. Net income (loss), FFO, recurring FFO, and FAD for the three months and six months ended June 30, 2014, as well as a comparison to the prior-year periods, are as follows:
(Amounts in thousands, except share and per share data) |
|
|
|
| Three Months Ended June 30 |
| Six Months Ended June 30 |
| 2014 |
| 2013 |
| 2014 |
| 2013 |
| Amount | Per Share |
| Amount | Per Share |
| Amount | Per Share |
| Amount | Per Share |
Net Income (Loss) – Common Stockholders | $ | (9,845) | $ | (0.10) |
| $ | (14,946) | $ | (0.22) |
| $ | 1,000 | $ | 0.01 |
| $ | (18,825) | $ | (0.30) |
Funds From Operations | $ | 34,179 | $ | 0.33 |
| $ | 14,962 | $ | 0.22 |
| $ | 69,206 | $ | 0.67 |
| $ | 32,244 | $ | 0.51 |
Realignment Costs | $ | 1,870 | $ | 0.02 |
| $ | - | $ | 0.00 |
| $ | 4,044 | $ | 0.04 |
| $ | 460 | $ | 0.00 |
Acquisition Costs | $ | 489 | $ | 0.00 |
| $ | 515 | $ | 0.00 |
| $ | 1,134 | $ | 0.01 |
| $ | 1,645 | $ | 0.03 |
Preferred Stock Redemption | $ | - | $ | 0.00 |
| $ | 6,604 | $ | 0.10 |
| $ | - | $ | 0.00 |
| $ | 6,604 | $ | 0.11 |
Other Non-Recurring Items | $ | 206 | $ | 0.00 |
| $ | (107) | $ | 0.00 |
| $ | 147 | $ | 0.00 |
| $ | (253) | $ | 0.00 |
Recurring Funds From Operations | $ | 36,744 | $ | 0.35 |
| $ | 21,974 | $ | 0.32 |
| $ | 74,531 | $ | 0.72 |
| $ | 40,700 | $ | 0.65 |
Funds Available for Distribution | $ | 24,427 | $ | 0.23 |
| $ | 19,012 | $ | 0.28 |
| $ | 47,239 | $ | 0.46 |
| $ | 31,473 | $ | 0.50 |
Wtd. Avg. Diluted Shares/Units | 104,533 |
|
| 68,620 |
|
| 103,619 |
|
|
| 62,753 |
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Operational Results
Occupancy at the end of the second quarter 2014 was 89.2%, compared to 88.5% at the end of the prior quarter. Including leases that have been signed but have yet to commence, the Company's leased percentage at the end of the second quarter 2014 was 91.3%, compared to 90.2% at the end of the prior quarter.
Parkway's share of recurring same-store net operating income ("NOI") was $33.3 million on a GAAP basis during the second quarter 2014, which was an increase of $0.8 million, or 2.4%, compared to the same period of the prior year. On a cash basis, the Company's share of recurring same-store NOI increased 3.5% to $32.0 million compared to the same period of the prior year.
Portfolio GAAP NOI margin was 60.6% at Parkway's share during the second quarter 2014, compared to 59.6% during the same period of the prior year.
Leasing Activity
During the second quarter 2014, Parkway signed a total of 811,000 square feet of leases at an average rent per square foot of $30.08 and an average cost of $4.35 per square foot per year.
New & Expansion Leasing – During the second quarter 2014, Parkway signed 336,000 square feet of new leases at an average rent per square foot of $31.57 and at an average cost of $7.63 per square foot per year.
Expansion leases during the quarter totaled 62,000 square feet at an average rent per square foot of $35.16 and at an average cost of $6.32 per square foot per year.
Renewal Leasing – Customer retention during the second quarter 2014 was 76.9%. The Company signed 413,000 square feet of renewal leases at an average rent per square foot of $28.10, representing a 5.1% rate increase from the expiring rate. The average cost of renewal leases was $1.63 per square foot per year.
Significant operational and leasing statistics for the quarter as compared to prior quarters is as follows:
|
|
|
| For the Three Months Ended |
|
| 06/30/14 |
| 03/31/14 |
| 12/31/13 |
| 09/30/13 |
| 06/30/13 |
Ending Occupancy |
| 89.2% |
| 88.5% |
| 88.9% |
| 89.2% |
| 89.9% |
Customer Retention |
| 76.9% |
| 80.5% |
| 76.7% |
| 59.4% |
| 84.7% |
Square Footage of Total Leases Signed (in thousands) |
| 811 |
| 538 |
| 572 |
| 759 |
| 578 |
Average Revenue Per Square Foot of Total Leases Signed |
| $30.08 |
| $27.41 |
| $23.32 |
| $25.87 |
| $28.13 |
Average Cost Per Square Foot Per Year of Total Leases Signed |
| $4.35 |
| $4.40 |
| $3.53 |
| $5.33 |
| $4.78 |
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Acquisition, Disposition and Development Activity
On April 10, 2014, Parkway acquired Courvoisier Centre, a Class A two-building office complex totaling 343,000 square feet, located in the Brickell submarket of Miami, Florida. As of July 1, 2014, Courvoisier Centre had a combined occupancy of 83.7%. Parkway's purchase price for Courvoisier Centre was approximately $145.8 million, or $425 per square foot. The acquisition was funded using available cash and borrowings under the Company's unsecured seven-year term loan.
On April 14, 2014, Parkway acquired One Orlando Center, a 19-story Class A office building totaling 356,000 square feet located in the central business district of Orlando, Florida. The asset was built in 1987 and includes an eight-story structured parking garage. As of July 1, 2014, the property was 81.3% occupied. Parkway took ownership of the asset by making an $8.0 million equity investment that will be held in lender reserve accounts to fund the leasing and repositioning of the asset. Simultaneous with the equity investment, the existing $68.3 million first mortgage note was restructured into a new $54.0 million first mortgage and a $15.3 million B-note, which is subordinated to Parkway's equity investment. The restructured $54.0 million first mortgage has a fixed interest rate of 5.9%, matures in May 2017, is interest only through maturity, and includes an option to extend for an additional year. Upon the sale or recapitalization of the property, proceeds are to be distributed first to the lender up to the amount of outstanding principal of the first mortgage note; second, to Parkway up to its equity investment; third, to Parkway until it receives a 12.0% annual return on its equity investment; fourth, 60.0% to Parkway and 40.0% to the lender until the subordinated B-Note is repaid in full; and fifth to Parkway at 100%. Parkway's equity investment will provide for 100% ownership and management of the asset.
On April 14, 2014, Parkway commenced construction of Hayden Ferry III, a 264,000 square foot, Class A development in the Tempe submarket of Phoenix, Arizona. The 10-story property will be located along the south shore of Tempe Town Lake. Parkway expects total project costs of approximately $68.8 million, including tenant improvements and leasing costs. Parkway Properties Office Fund II L.P. ("Fund II") signed an amendment to its partnership agreement authorizing the Hayden Ferry III development and providing for an additional equity investment by Parkway that will give it a 70% combined interest, with its partner maintaining the remaining 30% interest. On July 2, 2014, the Company closed on a $43.0 million construction loan secured by Hayden Ferry III, which represents approximately 60% of the total estimated cost. The construction loan will be funded subsequent to Fund II's equity investment in the development. The loan bears interest at a rate of one-month LIBOR plus a margin of 1.8%, which will decrease to 1.6% when the property is stabilized. For the six months ended June 30, 2014, development costs incurred totaled $4.7 million, bringing the total investment in Hayden Ferry III to $9.6 million.
Subsequent Events
On July 3, 2014, Parkway acquired Millenia Park One, a six-story Class A office building totaling 157,000 square feet located in the Millenia submarket of Orlando, Florida. The property was 81.0% occupied at acquisition. Parkway's purchase price for Millenia Park One was approximately $25.6 million, or $163 per square foot. The acquisition was funded using available cash and borrowings under the Company's unsecured credit facility.
On July 29, 2014, Parkway acquired a $50.0 million first mortgage note secured by The Forum at West Paces, a 222,000 square foot Class A office building located in the Buckhead submarket of Atlanta, Georgia. The Forum was constructed in 2001 as part of a 17-acre, luxury mixed use development project. The property was 48.2% occupied at acquisition of the note. The total purchase price for the note, which was previously under special servicer oversight, was $47.0 million.
Capital Structure
On April 1, 2014, Parkway entered into an Amended, Restated and Consolidated Credit Agreement for its senior unsecured credit facilities (the "Amended Agreement"), which increased the size of the Company's revolving credit facility to $250.0 million and consolidated and increased its two existing unsecured term loans into a five-year term loan tranche totaling $250.0 million and a seven-year term loan tranche totaling $100.0 million. Additionally, the Company amended its $10.0 million working capital revolving credit facility under substantially the same terms and conditions.
On April 1, 2014, Parkway dedesignated two of its existing floating-to-fixed interest rate swaps totaling $125.0 million that were previously associated with the $125.0 million five-year term loan and redesignated the swaps to hedge against unspecified one-month LIBOR borrowings. The two swaps totaling $125.0 million lock LIBOR at 0.7% through September 27, 2017. Additionally, Parkway entered into a new $5.0 million floating-to-fixed interest rate swap attributable to one-month LIBOR. The new $5.0 million swap locks LIBOR at 1.7% and matures on April 1, 2019.
On April 8, 2014, Parkway borrowed the full amount of its $100 million unsecured seven-year term loan. Simultaneously, the Company repaid in full the first mortgage debt secured by the Bank of America Center in Orlando, Florida, which had an outstanding balance of $34.2 million, including breakage costs. The Company recognized a loss on extinguishment of debt of $339,000 on the repayment of the Bank of America Center mortgage. Simultaneously, Parkway entered into a new $100.0 million floating-to-fixed interest rate swap attributable to one-month LIBOR borrowings under the new seven-year term loan. The new swap has a fixed rate of 2.6% and matures on March 31, 2021. Parkway also terminated the $33.9 million swap designated to the Bank of America Center first mortgage. The net impact of the swap transactions during the quarter resulted in a one-time increase in interest expense of approximately $121,000.
On May 28, 2014, Parkway entered into an ATM Equity Offering Sales Agreement (the "Sales Agreement") with various agents whereby the Company may sell, from time to time, shares of its common stock, par value $.001 per share, having aggregate gross sales proceeds of up to $150.0 million through an "at-the-market" equity offering program. Sales may be made to the agents in their capacity as sales agents or as principals. Parkway is required to pay each agent a commission that will not exceed, but may be lower than, 2.0% of the gross sales price of the shares sold through such agent. During the three months ended June 30, 2014, Parkway sold 171,800 shares of common stock under the program for net offering proceeds of approximately $3.5 million after deducting commissions. The Company used the net proceeds for general corporate purposes, including repaying amounts outstanding under our unsecured revolving credit facility, and to fund acquisitions and development of office properties.
At June 30, 2014, the Company had $27.0 million outstanding under its revolving credit facility, $350.0 million outstanding under its unsecured term loans and held $82.8 million in cash and cash equivalents, of which $57.4 million of cash and cash equivalents was Parkway's share. Parkway's share of secured debt totaled $1.2 billion at June 30, 2014.
At June 30, 2014, the Company's net debt to EBITDA multiple was 6.6x, using the quarter's annualized EBITDA after adjusting for the impact of investment activity completed during the period, as compared to 5.9x at March 31, 2014, and 6.2x at June 30, 2013. Adjusting for certain nonrecurring transition costs related to the Company's fourth quarter 2013 merger with Thomas Properties Group, Inc., the Company's net debt to EBITDA multiple was 6.4x, which is within Parkway's stated target range of 5.5x to 6.5x.
Common Dividend
The Company's previously announced second quarter cash dividend of $0.1875 per share, which represents an annualized dividend of $0.75 per share, was paid on June 25, 2014 to shareholders of record as of June 11, 2014.
2014 Revised Outlook
After considering the Company's year-to-date performance and expected results for the remainder of the year, as well as recently announced investment activity, Parkway is increasing its 2014 FFO outlook to a range of $1.34 to $1.41 per share and adjusting its earnings (loss) per share ("EPS") outlook to a range of $(0.18) to $(0.11). Excluding the impact of projected significant one-time items, including (i) costs related to the Company's fourth quarter 2013 merger with Thomas Properties Group, Inc. and subsequent severance expenses, (ii) year-to-date property acquisition costs, (iii) lease termination fees, and (iv) an increase in interest expense associated with early extinguishment of debt and redesignation of interest rate swaps, all of which total approximately $5.5 million to $5.6 million, the Company's 2014 recurring FFO outlook is being increased to a range of $1.39 to $1.46 per share.
The reconciliation of projected EPS to projected FFO and recurring FFO per diluted share is as follows:
Outlook for 2014 |
| Range |
Fully diluted EPS |
| ($0.18 - $0.11) |
Parkway's share of depreciation and amortization |
| $1.68 - $1.68 |
Gain on sale of real estate |
| ($0.16 - $0.16) |
Reported FFO per diluted share |
| $1.34 - $1.41 |
Nonrecurring items |
| $0.05 - $0.05 |
Recurring FFO per diluted share |
| $1.39 - $1.46 |
|
|
The revised 2014 outlook is based on the core operating, financial and investment assumptions described below. These assumptions reflect the Company's expectations based on its knowledge of current market conditions and historical experience. All dollar amounts presented for the revised 2014 outlook are at Parkway's share and dollars and shares are in thousands.
2014 Core Operating Assumptions |
| Revised 2014 Outlook |
| Previous 2014 Outlook |
Recurring cash NOI |
| $201,000 - $ 206,000 |
| $197,000 - $202,000 |
Straight-line rent and amortization of above market rent |
| $ 33,000 - $ 35,000 |
| $ 31,000 - $ 32,000 |
Lease termination fee income |
| $ 400 - $ 400 |
| $ 400 - $ 400 |
Net income from sale of condominium units |
| $ 1,300 - $ 1,300 |
| $ 0 - $ 0 |
Management fee after-tax net income |
| $ 3,000 - $ 5,000 |
| $ 7,000 - $ 8,000 |
General and administrative expense |
| $ 31,000 - $ 32,000 |
| $ 31,000 - $ 32,000 |
Share based compensation expense included in G&A above |
| $ 8,500 - $ 9,000 |
| $ 8,500 - $ 9,000 |
TPGI merger expenses included in G&A above |
| $ 4,000 - $ 4,100 |
| $ 3,250 - $ 3,500 |
Year-to-date acquisition expenses included in G&A above |
| $ 1,400 - $ 1,500 |
| $ 1,250 - $ 1,500 |
Mortgage and credit facilities interest expense |
| $ 68,500 - $ 69,500 |
| $ 66,000 - $ 67,000 |
Nonrecurring interest expense included in interest expense above |
| $ 460 - $ 460 |
| $ 0 - $ 0 |
Recurring capital expenditures for building improvements, tenant improvements and leasing commissions |
| $ 33,000 - $ 37,000 |
| $ 32,000 - $ 36,000 |
Portfolio ending occupancy |
| 89.5% - 90.5% |
| 89.5% - 90.5% |
Weighted average annual diluted common shares/units |
| 104,000 - 104,000 |
| 104,000 - 104,000 |
Variance within the outlook range may occur due to variations in the recurring revenue and expenses of the Company, as well as certain non-recurring items. The earnings outlook does not include the impact of possible future gains or losses on early extinguishment of debt, possible future acquisitions or dispositions and related costs, possible future capital markets activity, the impact of fluctuations in the Company's stock price on share-based compensation, possible future impairment charges or other unusual charges that may occur during the year, except as noted. It has been and will continue to be the Company's policy to not issue quarterly earnings guidance or revise the annual earnings outlook unless a material event occurs that impacts the Company's original reported FFO outlook range. This policy is intended to lessen the emphasis on short-term movements that do not have a material impact on earnings or long-term value of the Company.
Webcast and Conference Call
The Company will conduct its second quarter earnings conference call on Friday, August 8, 2014 at 9:00 a.m. Eastern Time. To participate in the conference call, please dial 877-407-3982, or 1-201-493-6780 for international participants, at least five minutes prior to the scheduled start time. A live audio webcast will also be available on the Company's website (www.pky.com). A taped replay of the call can be accessed 24 hours a day through August 22, 2014, by dialing 877-870-5176, or 1-858-384-5517 for international callers, and using the passcode 13586066.
About Parkway Properties
Parkway Properties, Inc. is a fully integrated, self-administered and self-managed real estate investment trust specializing in the acquisition, ownership, development and management of quality office properties in higher growth submarkets in the Sunbelt region of the United States. Parkway owns or has an interest in 51 office properties located in eight states with an aggregate of approximately 18.3 million square feet of leasable space at July 1, 2014. Fee-based real estate services are offered through wholly owned subsidiaries of the Company, which in total manage and/or lease approximately 11.1 million square feet for third-party owners at July 1, 2014.
Forward Looking Statements
Certain statements in this press release that are not in the present or past tense or that discuss the Company's expectations (including any use of the words "anticipate," "assume," "believe," "estimate," "expect," "forecast," "guidance," "intend," "may," "might," "outlook," "project", "should" or similar expressions) are forward-looking statements within the meaning of the federal securities laws and as such are based upon the Company's current beliefs as to the outcome and timing of future events. There can be no assurance that actual future developments affecting the Company will be those anticipated by the Company. Examples of forward-looking statements include projections relating to 2014 fully diluted EPS, share of depreciation and amortization, gain on sales of real estate, reported FFO per share, recurring FFO per share, nonrecurring items, net operating income, cap rates, internal rates of return, dividend payment rates, FFO accretion, capital improvements, expected sources of financing, the timing of closing of acquisitions, dispositions or other transactions and descriptions relating to these expectations. These forward-looking statements involve risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors including, but not limited to, the following risks and uncertainties: changes in the real estate industry and in performance of the financial markets; the actual or perceived impact of U.S. monetary policy; competition in the leasing market; the demand for and market acceptance of the Company's properties for rental purposes; oversupply of office properties in the Company's geographic markets; the amount and growth of the Company's expenses; customer financial difficulties and general economic conditions, including increasing interest rates, as well as economic conditions in the Company's geographic markets; defaults or non-renewal of leases; risks associated with joint venture partners; risks associated with the ownership and development of real property, including risks related to natural disasters; risks associated with property acquisitions; the failure to acquire or sell properties as and when anticipated; termination or non-renewal of property management contracts; the bankruptcy or insolvency of companies for which the Company provides property management services or the sale of these properties; the outcome of claims and litigation involving or affecting the Company; the ability to satisfy conditions necessary to close pending transactions and the ability to successfully integrate businesses compliance with environmental and other regulations, including real estate and zoning laws; the Company's inability to obtain financing; the Company's inability to use net operating loss carry forwards; the Company's failure to maintain its status as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended; and other risks and uncertainties detailed from time to time in the Company's SEC filings. Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company's business, financial condition, liquidity, cash flows and financial results could differ materially from those expressed in the Company's forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company does not undertake to update forward-looking statements except as may be required by law.
Company's Use of Non-GAAP Financial Measures
FFO, FAD, NOI and EBITDA, including related per share amounts, are used by management, investors and industry analysts as supplemental measures of operating performance of equity REITs and should be evaluated along with GAAP net income and income per diluted share (the most directly comparable GAAP measures), as well as cash flow from operating activities, investing activities and financing activities, in evaluating the operating performance of the Company. Management believes that FFO, FAD, NOI and EBITDA are helpful to investors as supplemental performance measures because these measures exclude the effect of depreciation, amortization and gains or losses from sales of real estate, all of which are based on historical costs which implicitly assumes that the value of real estate diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, these non-GAAP measures can facilitate comparisons of operating performance between periods and among other equity REITs. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP. FFO, FAD, NOI and EBITDA do not represent cash generated from operating activities in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs as disclosed in the Company's Consolidated Statements of Cash Flows. FFO, FAD, NOI and EBITDA should not be considered as an alternative to net income as an indicator of the Company's operating performance or as an alternative to cash flows as a measure of liquidity. The Company's calculation of these non-GAAP measures may not be comparable to similarly titled measures reported by other companies.
FFO – Parkway computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts ("NAREIT"), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition. FFO is defined as net income, computed in accordance with GAAP, reduced by preferred dividends, excluding gains or losses on depreciable real estate, plus real estate related depreciation and amortization. Adjustments for Parkway's share of partnerships and joint ventures are included in the computation of FFO on the same basis. On October 31, 2011, NAREIT issued updated guidance on reporting FFO such that impairment losses on depreciable real estate should be excluded from the computation of FFO for current and prior periods presented.
Recurring FFO – In addition to FFO, Parkway also discloses recurring FFO, which considers Parkway's share of adjustments for non-recurring lease termination fees, gains and losses on extinguishment of debt, gains and losses, acquisition costs, fair value adjustments or other unusual items. Although this is a non-GAAP measure that differs from NAREIT's definition of FFO, the Company believes it provides a meaningful presentation of operating performance.
FAD – There is not a generally accepted definition established for FAD. Therefore, the Company's measure of FAD may not be comparable to FAD reported by other REITs. Parkway defines FAD as FFO, excluding the amortization of share-based compensation, amortization of above and below market leases, straight line rent adjustments, gains and losses, acquisition costs, fair value adjustments, gain or loss on extinguishment of debt, amortization of loan costs, non-cash charges and reduced by recurring non-revenue enhancing capital expenditures for building improvements, tenant improvements and leasing costs. Adjustments for Parkway's share of partnerships and joint ventures are included in the computation of FAD on the same basis.
EBITDA – Parkway defines EBITDA, a non-GAAP financial measure, as net income before interest expense, amortization of financing costs, amortization of share-based compensation, income taxes, depreciation, amortization, acquisition costs, gains and losses on early extinguishment of debt, other gains and losses and fair value adjustments. Adjustments for Parkway's share of partnerships and joint ventures are included in the computation of EBITDA on the same basis. EBITDA does not represent cash generated from operating activities in accordance with GAAP, and should not be considered an alternative to operating income or net income as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of liquidity.
NOI, Recurring NOI, Same-Store NOI and Recurring Same-Store NOI – NOI includes income from real estate operations less property operating expenses (before interest expense and depreciation and amortization). In addition to NOI, Parkway discloses recurring NOI, which considers adjustments for non-recurring lease termination fees or other unusual items. The Company's disclosure of same-store NOI and recurring same-store NOI includes those properties that were owned during the entire current and prior year reporting periods and excludes properties classified as discontinued operations.
Contact:
Parkway Properties, Inc.
Ted McHugh
Director of Investor Relations
Bank of America Center
390 N. Orange Ave., Suite 2400
Orlando, FL 32801
(407) 650-0593
www.pky.com
PARKWAY PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data) |
|
|
|
|
| June 30, |
| December 31, |
| 2014 |
| 2013 |
| (Unaudited) |
|
|
Assets |
|
|
|
Real estate related investments: |
|
|
|
Office and parking properties | $ 2,787,048 |
| $ 2,548,036 |
Accumulated depreciation | (278,725) |
| (231,241) |
| 2,508,323 |
| 2,316,795 |
|
|
|
|
Condominium units | 16,428 |
| 19,900 |
Land available for sale | 250 |
| 250 |
Mortgage loan | 3,459 |
| 3,502 |
Investment in unconsolidated joint ventures | 131,443 |
| 151,162 |
| 2,659,903 |
| 2,491,609 |
|
|
|
|
Receivables and other assets: |
|
|
|
Rents and fees receivable, net | 2,861 |
| 2,547 |
Straight line rents receivable | 53,401 |
| 44,006 |
Other receivables | 11,494 |
| 12,253 |
Unamortized lease costs | 104,858 |
| 86,479 |
Unamortized loan costs | 11,466 |
| 7,624 |
Escrows and other deposits | 25,002 |
| 13,701 |
Prepaid assets | 7,489 |
| 5,255 |
Investment in preferred interest | 3,500 |
| 3,500 |
Fair value of interest rate swaps | 1,043 |
| 2,021 |
Other assets | 665 |
| 1,048 |
Intangible assets, net | 157,222 |
| 166,756 |
Assets held for sale | - |
| 16,260 |
Management contracts, net | 9,824 |
| 13,764 |
Cash and cash equivalents | 82,793 |
| 58,678 |
Total assets | $ 3,131,521 |
| $ 2,925,501 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
Notes payable to banks | $ 377,000 |
| $ 303,000 |
Mortgage notes payable | 1,111,386 |
| 1,097,493 |
Accounts payable and other liabilities: |
|
|
|
Corporate payables | 7,660 |
| 5,486 |
Deferred tax liability - non-current | - |
| 11 |
Accrued payroll | 1,871 |
| 3,081 |
Fair value of interest rate swaps | 11,560 |
| 8,429 |
Interest payable | 5,312 |
| 5,249 |
Property payables: |
|
|
|
Accrued expenses and accounts payable | 32,646 |
| 51,572 |
Accrued property taxes | 23,966 |
| 16,529 |
Prepaid rents | 15,351 |
| 16,923 |
Deferred revenue | 99 |
| 654 |
Security deposits | 6,561 |
| 4,991 |
Unamortized below market leases | 73,459 |
| 75,996 |
Liabilities related to assets held for sale | - |
| 566 |
Total liabilities | 1,666,871 |
| 1,589,980 |
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
Parkway Properties, Inc. stockholders' equity: |
|
|
|
Common stock, $.001 par value, 215,500,000 shares |
|
|
|
authorized and 99,269,311 and 87,222,221 |
|
|
|
shares issued and outstanding in 2014 and 2013, respectively | 99 |
| 87 |
Limited voting stock, $.001 par value, 4,500,000 shares |
|
|
|
authorized and 4,213,104 shares issued and outstanding | 4 |
| 4 |
Additional paid-in capital | 1,631,215 |
| 1,428,026 |
Accumulated other comprehensive loss | (6,404) |
| (2,179) |
Accumulated deficit | (445,836) |
| (409,338) |
Total Parkway Properties, Inc. stockholders' equity | 1,179,078 |
| 1,016,600 |
Noncontrolling interests | 285,572 |
| 318,921 |
Total equity | 1,464,650 |
| 1,335,521 |
Total liabilities and equity | $ 3,131,521 |
| $ 2,925,501 |
|
|
|
|
PARKWAY PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Six Months Ended |
| June 30, |
| June 30, |
| 2014 |
| 2013 |
| 2014 |
| 2013 |
| (Unaudited) |
| (Unaudited) |
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Income from office and parking properties | $ 102,208 |
| $ 68,143 |
| $ 197,504 |
| $ 131,956 |
Management company income | 5,446 |
| 4,480 |
| 11,429 |
| 8,832 |
Sale of condominium units | 2,805 |
| - |
| 5,639 |
| - |
Total revenues | 110,459 |
| 72,623 |
| 214,572 |
| 140,788 |
|
|
|
|
|
|
|
|
Expenses and other |
|
|
|
|
|
|
|
Property operating expense | 40,487 |
| 27,424 |
| 77,641 |
| 52,112 |
Management company expenses | 7,356 |
| 4,591 |
| 12,006 |
| 8,981 |
Cost of sales - condominium units | 2,319 |
| - |
| 4,338 |
| - |
Depreciation and amortization | 44,981 |
| 29,831 |
| 85,261 |
| 57,776 |
General and administrative | 7,757 |
| 4,690 |
| 17,169 |
| 8,905 |
Acquisition costs | 489 |
| 511 |
| 1,134 |
| 1,646 |
Total expenses and other | 103,389 |
| 67,047 |
| 197,549 |
| 129,420 |
|
|
|
|
|
|
|
|
Operating income | 7,070 |
| 5,576 |
| 17,023 |
| 11,368 |
|
|
|
|
|
|
|
|
Other income and expenses |
|
|
|
|
|
|
|
Interest and other income | 463 |
| 82 |
| 832 |
| 185 |
Equity in income (loss) of unconsolidated joint ventures | (557) |
| 79 |
| (1,035) |
| 79 |
Gain on sale of in-substance real estate | - |
| - |
| 6,289 |
| - |
Interest expense | (17,132) |
| (11,162) |
| (32,377) |
| (21,491) |
|
|
|
|
|
|
|
|
Loss before income taxes | (10,156) |
| (5,425) |
| (9,268) |
| (9,859) |
|
|
|
|
|
|
|
|
Income tax benefit (expense) | (257) |
| 384 |
| (599) |
| 891 |
|
|
|
|
|
|
|
|
Loss from continuing operations | (10,413) |
| (5,041) |
| (9,867) |
| (8,968) |
Discontinued operations: |
|
|
|
|
|
|
|
Loss from discontinued operations | (50) |
| (3,628) |
| (93) |
| (2,668) |
Gain on sale of real estate from discontinued operations | - |
| - |
| 10,463 |
| 542 |
Total discontinued operations | (50) |
| (3,628) |
| 10,370 |
| (2,126) |
|
|
|
|
|
|
|
|
Net income (loss) | (10,463) |
| (8,669) |
| 503 |
| (11,094) |
Net loss attributable to noncontrolling interests - unit holders | 571 |
| - |
| 7 |
| 2 |
Net loss attributable to noncontrolling interests - real estate partnerships | 47 |
| 1,049 |
| 490 |
| 2,304 |
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. | (9,845) |
| (7,620) |
| 1,000 |
| (8,788) |
Dividends on preferred stock | - |
| (722) |
| - |
| (3,433) |
Dividends on preferred stock redemption |
|
| (6,604) |
| - |
| (6,604) |
Net income (loss) attributable to common stockholders | $ (9,845) |
| $ (14,946) |
| $ 1,000 |
| $ (18,825) |
|
|
|
|
|
|
|
|
Net income (loss) per common share attributable to Parkway Properties, Inc.: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Loss from continuing operations attributable to Parkway Properties, Inc. | $ (0.10) |
| $ (0.17) |
| $ (0.09) |
| $ (0.26) |
Discontinued operations | - |
| (0.05) |
| 0.10 |
| (0.04) |
Basic net income (loss) attributable to Parkway Properties, Inc. | $ (0.10) |
| $ (0.22) |
| $ 0.01 |
| $ (0.30) |
Diluted: |
|
|
|
|
|
|
|
Loss from continuing operations attributable to Parkway Properties, Inc. | $ (0.10) |
| $ (0.17) |
| $ (0.09) |
| $ (0.26) |
Discontinued operations | - |
| (0.05) |
| 0.10 |
| (0.04) |
Diluted net income (loss) attributable to Parkway Properties, Inc. | $ (0.10) |
| $ (0.22) |
| $ 0.01 |
| $ (0.30) |
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
Basic | 99,092 |
| 68,526 |
| 98,219 |
| 62,720 |
Diluted | 99,092 |
| 68,526 |
| 103,619 |
| 62,720 |
|
|
|
|
|
|
|
|
Amounts attributable to Parkway Properties, Inc. common stockholders: |
|
|
|
|
|
|
|
Loss from continuing operations attributable to Parkway Properties, Inc. | $ (9,798) |
| $ (11,292) |
| $ (8,854) |
| $ (16,432) |
Discontinued operations | (47) |
| (3,654) |
| 9,854 |
| (2,393) |
Net income (loss) attributable to common stockholders | $ (9,845) |
| $ (14,946) |
| $ 1,000 |
| $ (18,825) |
|
|
|
|
|
|
|
|
PARKWAY PROPERTIES, INC.
RECONCILIATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE
FOR DISTRIBUTION TO NET INCOME AT PARKWAY'S SHARE
(In thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Six Months Ended |
| June 30 |
| June 30 |
| 2014 |
| 2013 |
| 2014 |
| 2013 |
| (Unaudited) |
| (Unaudited) |
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. | $ (9,845) |
| $ (7,620) |
| $ 1,000 |
| $ (8,788) |
|
|
|
|
|
|
|
|
Adjustments to net income (loss) for Parkway Properties, Inc.: |
|
|
|
|
|
|
|
Preferred dividends | - |
| (722) |
| - |
| (3,433) |
Dividends on preferred stock redemption | - |
| (6,604) |
| - |
| (6,604) |
Depreciation and amortization | 44,595 |
| 25,308 |
| 84,965 |
| 47,013 |
Noncontrolling interest - unit holders | (571) |
| - |
| (7) |
| (2) |
Impairment loss on depreciable real estate | - |
| 4,600 |
| - |
| 4,600 |
Gain on sale of real estate | - |
| - |
| (16,752) |
| (542) |
FFO available to common stockholders | $ 34,179 |
| $ 14,962 |
| $ 69,206 |
| $ 32,244 |
|
|
|
|
|
|
|
|
Adjustments to derive recurring FFO: |
|
|
|
|
|
|
|
Non-recurring lease termination fee income | (254) |
| (49) |
| (313) |
| (195) |
Loss on early extinguishment of debt | 339 |
| 572 |
| 339 |
| 572 |
Acquisition costs | 489 |
| 515 |
| 1,134 |
| 1,645 |
Non-cash adjustment for interest rate swap | 121 |
| (630) |
| 121 |
| (630) |
Dividends on preferred stock redemption | - |
| 6,604 |
| - |
| 6,604 |
Realignment expenses | 1,870 |
| - |
| 4,044 |
| 460 |
Recurring FFO | $ 36,744 |
| $ 21,974 |
| $ 74,531 |
| $ 40,700 |
|
|
|
|
|
|
|
|
Funds available for distribution |
|
|
|
|
|
|
|
FFO available to common stockholders | $ 34,179 |
| $ 14,962 |
| $ 69,206 |
| $ 32,244 |
Add (Deduct): |
|
|
|
|
|
|
|
Straight-line rents | (4,144) |
| (1,931) |
| (9,285) |
| (4,649) |
Amortization of above/below market leases | (3,086) |
| 129 |
| (5,996) |
| 169 |
Amortization of share-based compensation | 2,247 |
| 1,232 |
| 4,735 |
| 1,321 |
Acquisition costs | 489 |
| 515 |
| 1,134 |
| 1,645 |
Amortization of loan costs | 1,108 |
| 602 |
| 1,517 |
| 1,001 |
Non-cash adjustment for interest rate swap | 121 |
| (630) |
| 121 |
| (630) |
Dividends on preferred stock redemption | - |
| 6,604 |
| - |
| 6,604 |
Loss on early extinguishment of debt | 339 |
| 572 |
| 339 |
| 572 |
Amortization of mortgage interest premium (1) | (1,930) |
| - |
| (2,763) |
| - |
Recurring capital expenditures: |
|
|
|
|
|
|
|
Building improvements | (2,115) |
| (700) |
| (4,239) |
| (2,211) |
Tenant improvements - new leases | (255) |
| (603) |
| (1,388) |
| (795) |
Tenant improvements - renewal leases | (971) |
| (735) |
| (2,040) |
| (2,075) |
Leasing costs - new leases | (480) |
| (204) |
| (1,719) |
| (260) |
Leasing costs - renewal leases | (1,075) |
| (801) |
| (2,383) |
| (1,463) |
Total recurring capital expenditures | (4,896) |
| (3,043) |
| (11,769) |
| (6,804) |
Funds available for distribution | $ 24,427 |
| $ 19,012 |
| $ 47,239 |
| $ 31,473 |
|
|
|
|
|
|
|
|
Diluted per common share/unit information (**) |
|
|
|
|
|
|
|
FFO per share | $ 0.33 |
| $ 0.22 |
| $ 0.67 |
| $ 0.51 |
Recurring FFO per share | $ 0.35 |
| $ 0.32 |
| $ 0.72 |
| $ 0.65 |
FAD per share | $ 0.23 |
| $ 0.28 |
| $ 0.46 |
| $ 0.50 |
Dividends paid | $ 0.1875 |
| $ 0.15 |
| $ 0.375 |
| $ 0.30 |
Dividend payout ratio for FFO | 56.8% |
| 68.2% |
| 56.0% |
| 58.8% |
Dividend payout ratio for recurring FFO | 53.6% |
| 46.9% |
| 52.1% |
| 46.2% |
Dividend payout ratio for FAD | 81.5% |
| 53.6% |
| 81.5% |
| 60.0% |
|
|
|
|
|
|
|
|
Other supplemental information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring capital expenditures | $ 4,896 |
| $ 3,043 |
| $ 11,769 |
| $ 6,804 |
Upgrades on acquisitions | 14,262 |
| 4,218 |
| 18,417 |
| 7,844 |
Total real estate improvements and leasing costs | $ 19,158 |
| $ 7,261 |
| $ 30,186 |
| $ 14,648 |
|
|
|
|
|
|
|
|
**Information for diluted computations: |
|
|
|
|
|
|
|
Basic common shares outstanding | 104,292 |
| 68,527 |
| 103,419 |
| 62,721 |
Dilutive effect of other share equivalents | 241 |
| 93 |
| 200 |
| 32 |
Diluted weighted average shares/units outstanding | 104,533 |
| 68,620 |
| 103,619 |
| 62,753 |
|
|
|
|
|
|
|
|
(1) Amortization of mortgage interest premium was immaterial for the three months ended March 31, 2014 however it is included in the six months ended June 30, 2014. |
PARKWAY PROPERTIES, INC.
EBITDA, COVERAGE RATIOS AND CAPITALIZATION INFORMATION
(In thousands, except per share, percentage and multiple data)
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6/30/2014 |
| 3/31/14 |
| 12/31/13 |
| 9/30/13 |
| 6/30/13 |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. |
| $ (9,845) |
| $ 10,845 |
| $ (8,557) |
| $ (2,306) |
| $ (7,620) |
|
|
|
|
|
|
|
|
|
|
|
Adjustments at Parkway's share to net income (loss) for Parkway Properties, Inc.: |
|
|
|
|
|
|
|
|
|
|
Interest expense |
| 16,531 |
| 14,738 |
| 9,399 |
| 8,143 |
| 7,787 |
Amortization of financing costs |
| 1,108 |
| 574 |
| 547 |
| 646 |
| 602 |
Non-cash adjustment for interest rate swap |
| 121 |
| - |
| - |
| - |
| (630) |
Loss on early extinguishment of debt |
| 339 |
| - |
| 645 |
| - |
| 572 |
Acquisition costs |
| 489 |
| 645 |
| 10,347 |
| 1,130 |
| 515 |
Depreciation and amortization |
| 44,595 |
| 40,370 |
| 26,047 |
| 24,828 |
| 25,308 |
Amortization of share-based compensation |
| 2,247 |
| 2,489 |
| 2,408 |
| 2,001 |
| 1,232 |
Gain on sale of real estate and other assets |
| - |
| (16,752) |
| (6,122) |
| (11,545) |
| - |
Non-cash losses |
| - |
| - |
| - |
| 5,600 |
| 4,600 |
Tax expense (benefit) |
| 257 |
| 341 |
| 326 |
| (839) |
| (384) |
EBITDA |
| $ 55,842 |
| $ 53,250 |
| $ 35,040 |
| $ 27,658 |
| $ 31,982 |
|
|
|
|
|
|
|
|
|
|
|
Interest coverage ratio |
| 3.4 |
| 3.6 |
| 3.7 |
| 3.4 |
| 4.1 |
|
|
|
|
|
|
|
|
|
|
|
Fixed charge coverage ratio |
| 2.9 |
| 3.1 |
| 3.2 |
| 2.8 |
| 3.1 |
|
|
|
|
|
|
|
|
|
|
|
Capitalization information |
|
|
|
|
|
|
|
|
|
|
Mortgage notes payable at Parkway's share |
| $ 1,159,252 |
| $ 1,141,546 |
| $ 1,102,295 |
| $ 492,336 |
| $ 493,877 |
Notes payable to banks |
| 377,000 |
| 245,000 |
| 303,000 |
| 391,000 |
| 313,000 |
Parkway's share of total debt |
| 1,536,252 |
| 1,386,546 |
| 1,405,295 |
| 883,336 |
| 806,877 |
Less: Parkway's share of cash |
| (57,444) |
| (128,711) |
| (39,354) |
| (24,585) |
| (16,249) |
Parkway's share of net debt |
| 1,478,808 |
| 1,257,835 |
| 1,365,941 |
| 858,751 |
| 790,628 |
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock and operating units outstanding |
| 104,469 |
| 104,275 |
| 92,336 |
| 68,628 |
| 68,563 |
Stock price per share at period end |
| $ 20.65 |
| $ 18.25 |
| $ 19.29 |
| $ 17.77 |
| $ 16.76 |
Market value of common equity |
| $ 2,157,285 |
| $ 1,903,019 |
| $ 1,781,161 |
| $ 1,219,520 |
| $ 1,149,116 |
Total market capitalization (including net debt) |
| $ 3,636,093 |
| $ 3,160,854 |
| $ 3,147,102 |
| $ 2,078,271 |
| $ 1,939,744 |
Net debt as a percentage of market capitalization |
| 40.7% |
| 39.8% |
| 43.4% |
| 41.3% |
| 40.8% |
|
|
|
|
|
|
|
|
|
|
|
EBITDA - annualized |
| 223,368 |
| 212,999 |
| $ 140,160 |
| $ 110,632 |
| $ 127,928 |
Adjustment to annualize investment activities (1) |
| 787 |
| 1,813 |
| 62,834 |
| 4,105 |
| 278 |
EBITDA - adjusted annualized |
| $ 224,155 |
| $ 214,812 |
| $ 202,994 |
| $ 114,737 |
| $ 128,206 |
Net debt to EBITDA multiple |
| 6.6 |
| 5.9 |
| 6.7 |
| 7.5 |
| 6.2 |
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
| $ 55,842 |
| $ 53,250 |
| $ 35,040 |
| $ 27,658 |
| $ 31,982 |
One time realignment charge |
| 1,870 |
| 2,174 |
| 850 |
| 3,635 |
| - |
Recurring EBITDA (2) |
| 57,712 |
| 55,424 |
| 35,890 |
| 31,293 |
| 31,982 |
Recurring EBITDA - annualized |
| 230,848 |
| 221,695 |
| 143,560 |
| 125,172 |
| 127,928 |
Adjustment to annualize investment activities (1) |
| 787 |
| 1,813 |
| 62,834 |
| 4,105 |
| 278 |
Recurring EBITDA - adjusted annualized |
| $ 231,635 |
| $ 223,508 |
| $ 206,394 |
| $ 129,277 |
| $ 128,206 |
Net debt to recurring EBITDA multiple |
| 6.4 |
| 5.6 |
| 6.6 |
| 6.6 |
| 6.2 |
|
|
|
|
|
|
|
|
|
|
|
(1) Adjustment to annualized EBITDA represents the implied annualized impact of any acquisition or disposition activity for the period. |
(2) Recurring EBITDA is adjusted to reflect the impact of nonrecurring realignment expenses. |
|
|
|
|
|
|
|
|
|
|
|
|
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME |
THREE MONTHS ENDED JUNE 30, 2014 AND 2013 |
(In thousands, except number of properties data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average |
|
|
|
|
| Net Operating Income |
| Occupancy |
| Square | Number of | Percentage |
|
|
|
|
|
|
|
|
| Feet | Properties | of Portfolio (1) |
| 2014 |
| 2013 |
| 2014 |
| 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
Same-store properties: |
|
|
|
|
|
|
|
|
|
|
|
Wholly owned | 9,240 | 30 | 49.0% |
| $ 30,213 |
| $ 29,583 |
| 87.3% |
| 88.1% |
Fund II | 2,481 | 7 | 18.7% |
| 11,569 |
| 10,971 |
| 95.3% |
| 93.0% |
Total same-store properties | 11,721 | 37 | 67.7% |
| $ 41,782 |
| $ 40,554 |
| 89.0% |
| 89.1% |
Net operating income from all |
|
|
|
|
|
|
|
|
|
|
|
office and parking properties | 18,319 | 51 | 100.0% |
| $ 61,721 |
| $ 40,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Percentage of portfolio based on 2014 net operating income for the three months ending June 30. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table is a reconciliation of net income (loss) to Same-Store net operating income (SSNOI) and Recurring SSNOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Year to Date Ended |
|
|
|
|
| June 30 |
| June 30 |
|
|
|
|
| 2014 |
| 2013 |
| 2014 |
| 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. |
| $ (9,845) |
| $ (7,620) |
| $ 1,000 |
| $ (8,788) |
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
| 17,132 |
| 11,162 |
| 32,377 |
| 21,491 |
Depreciation and amortization |
| 44,981 |
| 29,831 |
| 85,261 |
| 57,776 |
Management company expenses |
|
| 7,356 |
| 4,591 |
| 12,006 |
| 8,981 |
Income tax expense |
|
| 257 |
| (384) |
| 599 |
| (891) |
General and administrative expenses |
|
| 7,757 |
| 4,690 |
| 17,169 |
| 8,905 |
Acquisition costs |
|
| 489 |
| 511 |
| 1,134 |
| 1,646 |
Equity in (earnings) loss of unconsolidated joint ventures | 557 |
| (79) |
| 1,035 |
| (79) |
Sale of condominium Units |
|
| (2,805) |
| - |
| (5,639) |
| - |
Cost of sales - condominium units |
|
| 2,319 |
| - |
| 4,338 |
| - |
Net (income) loss attributable to noncontrolling interests |
| (618) |
| (1,049) |
| (497) |
| (2,306) |
Loss from discontinued operations |
|
| 50 |
| 3,628 |
| 93 |
| 2,668 |
Gain on sale of in-substance real estate |
| - |
| - |
| (6,289) |
| - |
Gain on sale of real estate from discontinued operations | - |
| - |
| (10,463) |
| (542) |
Management company income |
|
| (5,446) |
| (4,480) |
| (11,429) |
| (8,832) |
Interest and other income |
|
| (463) |
| (82) |
| (832) |
| (185) |
Net operating income from consolidated office and parking properties |
| 61,721 |
| 40,719 |
| 119,863 |
| 79,844 |
Less: Net operating income from non same-store properties |
| (19,939) |
| (165) |
| (40,134) |
| (2,174) |
Same-store net operating income (SSNOI) |
| 41,782 |
| 40,554 |
| 79,729 |
| 77,670 |
Less: non-recurring lease termination fee income |
| (55) |
| (49) |
| (88) |
| (321) |
Recurring SSNOI |
|
| $ 41,727 |
| $ 40,505 |
| $ 79,641 |
| $ 77,349 |
|
|
|
|
|
|
|
|
|
|
Parkway's share of SSNOI |
|
| $ 33,313 |
| $ 32,538 |
| $ 63,071 |
| $ 61,616 |
|
|
|
|
|
|
|
|
|
|
|
|
Parkway's share of recurring SSNOI |
|
| $ 33,261 |
| $ 32,491 |
| $ 62,987 |
| $ 61,402 |
|
|
|
|
|
|
|
|
|
|
|
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME (Continued) |
THREE MONTHS ENDED JUNE 30, 2014 AND 2013 |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| Parkway's Share |
|
|
| Dollar | Percentage |
|
|
| Dollar | Percentage |
| 2014 | 2013 | Change | Change |
| 2014 | 2013 | Change | Change |
Same-store assets GAAP NOI: |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ 51,307 | $ 50,498 | $ 809 | 1.6% |
| $ 51,307 | $ 50,498 | $ 809 | 1.6% |
Fund II | 18,008 | 17,623 | 385 | 2.2% |
| 4,801 | 4,678 | 123 | 2.6% |
Total same-store GAAP revenue | 69,315 | 68,121 | 1,194 | 1.8% |
| 56,108 | 55,176 | 932 | 1.7% |
Expenses |
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 21,094 | 20,915 | 179 | 0.9% |
| 21,094 | 20,915 | 179 | 0.9% |
Fund II | 6,439 | 6,652 | (213) | -3.2% |
| 1,701 | 1,723 | (22) | -1.3% |
Total same-store GAAP expenses | 27,533 | 27,567 | (34) | -0.1% |
| 22,795 | 22,638 | 157 | 0.7% |
NOI - GAAP | $ 41,782 | $ 40,554 | $ 1,228 | 3.0% |
| $ 33,313 | $ 32,538 | $ 775 | 2.4% |
Net margin - GAAP | 60.3% | 59.5% | 0.8% |
|
| 59.4% | 59.0% | 0.4% |
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
|
|
|
|
Revenues | $ 32,977 | $ - | $ 32,977 |
|
| $ 32,977 | $ - | $ 32,977 |
|
Expenses | 13,331 | (15) | 13,346 |
|
| 17,443 | (15) | 17,458 |
|
NOI | $ 19,646 | $ 15 | $ 19,631 |
|
| $ 15,534 | $ 15 | $ 15,519 |
|
Net margin | 59.6% | 0.0% | 59.6% |
|
| 47.1% | 0.0% | 47.1% |
|
|
|
|
|
|
|
|
|
|
|
Office assets sold |
|
|
|
|
|
|
|
|
|
Revenues | $ (84) | $ 22 | $ (106) |
|
| $ (84) | $ 25 | $ (109) |
|
Expenses | (377) | (128) | (249) |
|
| (1,080) | (173) | (907) |
|
NOI | $ 293 | $ 150 | $ 143 |
|
| $ 996 | $ 198 | $ 798 |
|
|
|
|
|
|
|
|
|
|
|
Total portfolio |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Consolidated properties | $ 102,208 | $ 68,143 | $ 34,065 |
|
| $ 89,001 | $ 55,201 | $ 33,800 |
|
Unconsolidated Joint Ventures | - | - | - |
|
| 11,219 | (1,410) | 12,629 |
|
Total revenues | $ 102,208 | $ 68,143 | $ 34,065 |
|
| $ 100,220 | $ 53,791 | $ 46,429 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Consolidated properties | $ 40,487 | $ 27,424 | $ 13,063 |
|
| $ 39,158 | $ 22,450 | $ 16,708 |
|
Unconsolidated Joint Ventures | - | - | - |
|
| 354 | (715) | 1,069 |
|
Total expenses | $ 40,487 | $ 27,424 | $ 13,063 |
|
| $ 39,512 | $ 21,735 | $ 17,777 |
|
|
|
|
|
|
|
|
|
|
|
NOI | $ 61,721 | $ 40,719 | $ 21,002 |
|
| $ 60,708 | $ 32,056 | $ 28,652 |
|
Net margin | 60.4% | 59.8% |
|
|
| 60.6% | 59.6% |
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring GAAP NOI: |
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ 69,315 | $ 68,121 | $ 1,194 | 1.8% |
| $ 56,108 | $ 55,176 | $ 932 | 1.7% |
Non-recurring lease termination fee income | (55) | (49) | (6) | 12.2% |
| (52) | (47) | (5) | 10.6% |
Recurring same-store revenue | 69,260 | 68,072 | 1,188 | 1.7% |
| 56,056 | 55,129 | 927 | 1.7% |
Total same-store expenses | 27,533 | 27,567 | (34) | -0.1% |
| 22,795 | 22,638 | 157 | 0.7% |
Recurring NOI - GAAP | $ 41,727 | $ 40,505 | $ 1,222 | 3.0% |
| $ 33,261 | $ 32,491 | $ 770 | 2.4% |
Recurring net margin - GAAP | 60.2% | 59.5% | 0.7% |
|
| 59.3% | 58.9% | 0.4% |
|
|
|
|
|
|
|
|
|
|
|
Same-store assets cash NOI: |
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ 69,315 | $ 68,121 | $ 1,194 | 1.8% |
| $ 56,108 | $ 55,176 | $ 932 | 1.7% |
Amortization of above (below) market leases | 343 | 725 | (382) | -52.7% |
| 86 | 398 | (312) | -78.4% |
Straight-line rents | (2,009) | (2,958) | 949 | -32.1% |
| (1,353) | (1,965) | 612 | -31.1% |
Total same-store cash revenue | 67,649 | 65,888 | 1,761 | 2.7% |
| 54,841 | 53,609 | 1,232 | 2.3% |
Total same-store expenses | 27,533 | 27,567 | (34) | -0.1% |
| 22,795 | 22,638 | 157 | 0.7% |
NOI - cash | $ 40,116 | $ 38,321 | $ 1,795 | 4.7% |
| $ 32,046 | $ 30,971 | $ 1,075 | 3.5% |
Net margin - cash | 59.3% | 58.2% | 1.1% |
|
| 58.4% | 57.8% | 0.6% |
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring cash NOI: |
|
|
|
|
|
|
|
|
|
Total same-store cash revenue | $ 67,649 | $ 65,888 | $ 1,761 | 2.7% |
| $ 54,841 | $ 53,609 | $ 1,232 | 2.3% |
Non-recurring lease termination fee income | (55) | (49) | (6) | 12.2% |
| (52) | (47) | (5) | 10.6% |
Recurring same-store cash revenue | 67,594 | 65,839 | 1,755 | 2.7% |
| 54,789 | 53,562 | 1,227 | 2.3% |
Total same-store expenses | 27,533 | 27,567 | (34) | -0.1% |
| 22,795 | 22,638 | 157 | 0.7% |
Recurring NOI - cash | $ 40,061 | $ 38,272 | $ 1,789 | 4.7% |
| $ 31,994 | $ 30,924 | $ 1,070 | 3.5% |
Recurring net margin - cash | 59.3% | 58.1% | 1.2% |
|
| 58.4% | 57.7% | 0.7% |
|
|
|
|
|
|
|
|
|
|
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME (Continued) |
YEAR ENDED JUNE 30, 2014 AND 2013 |
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
| Parkway's Share |
|
|
| Dollar | Percentage |
|
|
| Dollar | Percentage |
| 2014 | 2013 | Change | Change |
| 2014 | 2013 | Change | Change |
Same-store assets GAAP NOI: |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ 95,830 | $ 93,877 | $ 1,953 | 2.1% |
| $ 95,830 | $ 93,878 | $ 1,952 | 2.1% |
Fund II | 35,923 | 35,347 | 576 | 1.6% |
| 9,560 | 9,370 | 190 | 2.0% |
Total same-store GAAP revenue | 131,753 | 129,224 | 2,529 | 2.0% |
| 105,390 | 103,248 | 2,142 | 2.1% |
Expenses |
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 38,893 | 38,197 | 696 | 1.8% |
| 38,893 | 38,196 | 697 | 1.8% |
Fund II | 13,131 | 13,357 | (226) | -1.7% |
| 3,426 | 3,436 | (10) | -0.3% |
Total same-store GAAP expenses | 52,024 | 51,554 | 470 | 0.9% |
| 42,319 | 41,632 | 687 | 1.7% |
NOI - GAAP | $ 79,729 | $ 77,670 | $ 2,059 | 2.7% |
| $ 63,071 | $ 61,616 | $ 1,455 | 2.4% |
Net margin - GAAP | 60.5% | 60.1% | 0.4% |
|
| 59.8% | 59.7% | 0.1% |
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
|
|
|
|
Revenues | $ 65,946 | $ 2,672 | $ 63,274 |
|
| $ 65,946 | $ 2,672 | $ 63,274 |
|
Expenses | 25,990 | 775 | 25,215 |
|
| 25,851 | 775 | 25,076 |
|
NOI | $ 39,956 | $ 1,897 | $ 38,059 |
|
| $ 40,095 | $ 1,897 | $ 38,198 |
|
Net margin | 60.6% | 71.0% | -10.4% |
|
| 60.8% | 71.0% | -10.2% |
|
|
|
|
|
|
|
|
|
|
|
Office assets sold |
|
|
|
|
|
|
|
|
|
Revenues | $ (195) | $ 60 | $ (255) |
|
| $ (157) | $ 64 | $ (221) |
|
Expenses | (373) | (217) | (156) |
|
| (1,729) | (321) | (1,408) |
|
NOI | $ 178 | $ 277 | $ (99) |
|
| $ 1,572 | $ 385 | $ 1,187 |
|
|
|
|
|
|
|
|
|
|
|
Total portfolio |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
Consolidated properties | $ 197,504 | $ 131,956 | $ 65,548 |
|
| $ 171,179 | $ 105,984 | $ 65,195 |
|
Unconsolidated Joint Ventures | - | - | - |
|
| 22,336 | (5,948) | 28,284 |
|
Total revenues | $ 197,504 | $ 131,956 | $ 65,548 |
|
| $ 193,515 | $ 100,036 | $ 93,479 |
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
Consolidated properties | $ 77,641 | $ 52,112 | $ 25,529 |
|
| $ 66,441 | $ 42,086 | $ 24,355 |
|
Unconsolidated Joint Ventures | - | - | - |
|
| 9,284 | (2,513) | 11,797 |
|
Total expenses | $ 77,641 | $ 52,112 | $ 25,529 |
|
| $ 75,725 | $ 39,573 | $ 36,152 |
|
|
|
|
|
|
|
|
|
|
|
NOI | $ 119,863 | $ 79,844 | $ 40,019 |
|
| $ 117,790 | $ 60,463 | $ 57,327 |
|
Net margin | 60.7% | 60.5% |
|
|
| 60.9% | 60.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring GAAP NOI: |
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ 131,753 | $ 129,224 | $ 2,529 | 2.0% |
| $ 105,390 | $ 103,248 | $ 2,142 | 2.1% |
Non-recurring lease termination fee income | (88) | (321) | 233 | -72.6% |
| (84) | (214) | 130 | -60.7% |
Recurring same-store revenue | 131,665 | 128,903 | 2,762 | 2.1% |
| 105,306 | 103,034 | 2,272 | 2.2% |
Total same-store expenses | 52,024 | 51,554 | 470 | 0.9% |
| 42,319 | 41,632 | 687 | 1.7% |
Recurring NOI - GAAP | $ 79,641 | $ 77,349 | $ 2,292 | 3.0% |
| $ 62,987 | $ 61,402 | $ 1,585 | 2.6% |
Recurring net margin - GAAP | 60.5% | 60.0% | 0.5% |
|
| 59.8% | 59.6% | 0.2% |
|
|
|
|
|
|
|
|
|
|
|
Same-store assets cash NOI: |
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ 131,753 | $ 129,224 | $ 2,529 | 2.0% |
| $ 105,390 | $ 103,248 | $ 2,142 | 2.1% |
Amortization of above (below) market leases | 787 | 1,590 | (803) | -50.5% |
| 255 | 903 | (648) | -71.8% |
Straight-line rents | (4,689) | (6,831) | 2,142 | -31.4% |
| (3,299) | (4,776) | 1,477 | -30.9% |
Total same-store cash revenue | 127,851 | 123,983 | 3,868 | 3.1% |
| 102,346 | 99,375 | 2,971 | 3.0% |
Total same-store expenses | 52,024 | 51,554 | 470 | 0.9% |
| 42,319 | 41,632 | 687 | 1.7% |
NOI - cash | $ 75,827 | $ 72,429 | $ 3,398 | 4.7% |
| $ 60,027 | $ 57,743 | $ 2,284 | 4.0% |
Net margin - cash | 59.3% | 58.4% | 0.9% |
|
| 58.7% | 58.1% | 0.6% |
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring cash NOI: |
|
|
|
|
|
|
|
|
|
Total same-store cash revenue | $ 127,851 | $ 123,983 | $ 3,868 | 3.1% |
| $ 102,346 | $ 99,375 | $ 2,971 | 3.0% |
Non-recurring lease termination fee income | (88) | (321) | 233 | -72.6% |
| (84) | (214) | 130 | -60.7% |
Recurring same-store cash revenue | 127,763 | 123,662 | 4,101 | 3.3% |
| 102,262 | 99,161 | 3,101 | 3.1% |
Total same-store expenses | 52,024 | 51,554 | 470 | 0.9% |
| 42,319 | 41,632 | 687 | 1.7% |
Recurring NOI - cash | $ 75,739 | $ 72,108 | $ 3,631 | 5.0% |
| $ 59,943 | $ 57,529 | $ 2,414 | 4.2% |
Recurring net margin - cash | 59.3% | 58.3% | 1.0% |
|
| 58.6% | 58.0% | 0.6% |
|
|
|
|
|
|
|
|
|
|
|
