ORLANDO, Fla., Feb. 9, 2015 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) today announced results for its full year and fourth quarter ended December 31, 2014.
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Highlights
- Leased a total of 3.3 million square feet in 2014 at $30.91 per square foot, representing the strongest year in leasing velocity in Parkway's history
- Executed 304,000 square feet of new leases during the fourth quarter 2014 at $35.98 per square foot
- Fourth quarter 2014 FFO of $0.31 per diluted share and Recurring FFO of $0.36 per diluted share
- Full-Year 2014 FFO of $1.34 per diluted share and Recurring FFO of $1.47 per diluted share
- Sold 525 North Tryon in Charlotte for $60 million and acquired One Buckhead Plaza in Atlanta for $157 million
- Received investment grade credit ratings of Baa3 and BBB- from Moody's Investors Service and Standard and Poor's Ratings Services, respectively
"With over 900,000 square feet of leasing completed, the fourth quarter capped off the strongest year of leasing activity in Parkway's history," stated James R. Heistand, President and Chief Executive Officer of Parkway. "Our full-year 2014 leasing velocity was highlighted by 1.1 million square feet of leasing in our Houston portfolio, which we believe creates a roadmap to long-term value creation, while significantly lowering our exposure to near-term expirations. Further, we have continued to execute a proactive capital recycling strategy, underscored by seven asset sales, totaling $733 million, during 2014. Lastly, our recent investment grade credit ratings should enable us to lower our long-term cost of capital and increase financial flexibility."
For the fourth quarter 2014, funds from operations ("FFO") was $35.6 million, or $0.31 per diluted share for Parkway Properties LP's real estate portfolio, in which Parkway owns an interest (the "Parkway Portfolio"). Reported FFO during the fourth quarter 2014 includes the negative impact of one-time items totaling $6.5 million, or $0.05 per share, including a $2.9 million management contract intangible impairment charge, net of tax, a $2.1 million loss on extinguishment of debt in anticipation of the sale of Raymond James Tower, $1.2 million in acquisition costs, $881,000 in severance and realignment expenses primarily associated with the termination of Henry F. Pratt, III's employment, partially offset by other non-recurring items. Recurring FFO for the fourth quarter was $42.1 million, or $0.36 per diluted share for the Parkway Portfolio, and funds available for distribution ("FAD") was $14.4 million, or $0.12 per diluted share for the Parkway Portfolio.
For the year ended December 31, 2014, FFO was $143.9 million, or $1.34 per diluted share for the Parkway Portfolio. Reported FFO for full-year 2014 includes the negative impact of one-time items totaling $13.3 million, or $0.13 per share, which in addition to the above mentioned fourth-quarter non-recurring items, includes $5.1 million in transition costs primarily related to the fourth-quarter 2013 merger with Thomas Properties Group, Inc. and $2.3 million in acquisition costs, partially offset by other non-recurring items. Recurring FFO for the year ended December 31, 2014 was $157.2 million, or $1.47 per diluted share for the Parkway Portfolio, and FAD was $71.6 million, or $0.67 per diluted share for the Parkway Portfolio.
A reconciliation of FFO, recurring FFO and FAD to net income (loss) is included on page 13. Net income (loss), FFO, recurring FFO, and FAD for the three months ended December 31, 2014 and full-year 2014, as well as a comparison to the prior-year periods, are as follows:
(Amounts in thousands, except per share data) |
|
|
|
| Three Months Ended December 31 |
| Year Ended December 31 |
| 2014 |
| 2013 |
| 2014 |
| 2013 |
| Amount | Per
Diluted Share |
| Amount | Per
Diluted Share |
| Amount | Per
Diluted Share |
| Amount | Per
Diluted
Share |
Net Income (Loss) – Common Stockholders | $ | 42,428 | $ | 0.38 |
| $ | (8,557) | $ | (0.12) |
| $ | 42,943 | $ | 0.42 |
| $ | (29,687) | $ | (0.45) |
Funds From Operations | $ | 35,594 | $ | 0.31 |
| $ | 11,081 | $ | 0.15 |
| $ | 143,916 | $ | 1.34 |
| $ | 59,901 | $ | 0.90 |
Realignment Costs | $ | 881 | $ | 0.00 |
| $ | 850 | $ | 0.01 |
| $ | 6,016 | $ | 0.06 |
| $ | 4,945 | $ | 0.07 |
Acquisition Costs | $ | 1,200 | $ | 0.01 |
| $ | 10,347 | $ | 0.14 |
| $ | 3,463 | $ | 0.03 |
| $ | 13,122 | $ | 0.20 |
Impairment Loss on Contracts, Net of Tax | $ | 2,905 | $ | 0.02 |
| $ | - | $ | - |
| $ | 2,905 |
| 0.03 |
| $ | - | $ | - |
Loss on Early Extinguishment of Debt | $ | 2,066 | $ | 0.02 |
| $ | 645 | $ | 0.01 |
| $ | 2,405 |
| 0.02 |
| $ | 1,216 | $ | 0.02 |
Preferred Stock Redemption | $ | - | $ | - |
| $ | - | $ | - |
| $ | - | $ | - |
| $ | 6,604 | $ | 0.10 |
Other Non-Recurring Items | $ | (595) | $ | 0.00 |
| $ | (162) | $ | 0.00 |
| $ | (1,462) | $ | (0.01) |
| $ | (1,841) | $ | (0.03) |
Recurring Funds From Operations | $ | 42,051 | $ | 0.36 |
| $ | 22,761 | $ | 0.31 |
| $ | 157,243 | $ | 1.47 |
| $ | 83,947 | $ | 1.26 |
Funds Available for Distribution | $ | 14,440 | $ | 0.12 |
| $ | 12,525 | $ | 0.17 |
| $ | 71,591 | $ | 0.67 |
| $ | 57,417 | $ | 0.86 |
Wtd. Avg. Diluted Shares/Units | 116,521 |
|
| 72,332 |
|
| 107,319 |
|
| 66,657 |
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The quarter-over-quarter and year-over-year decline in FAD per diluted share is attributable to an elevated level of lease-related gross capital expenditures associated with Parkway's substantial gross leasing activity in 2014. The increase in leasing costs was primarily driven by multiple long-term strategic lease deals within Parkway's Houston, Charlotte and Atlanta markets.
Operational Results
Excluding the impact of fourth-quarter acquisition and disposition activity, fourth quarter occupancy was 89.2% and the portfolio was 91.0% leased, which represents an increase of 10 basis points in occupancy and no change in leased percentage compared to the end of the prior quarter.
Including the impact of fourth-quarter acquisition and disposition activity, occupancy at the end of the fourth quarter 2014 was 88.6%, compared to 89.1% 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 fourth quarter 2014 was 90.0%, compared to 91.0% at the end of the prior quarter.
Parkway's share of recurring same-store net operating income ("NOI") for the Parkway Portfolio was $32.1 million on a GAAP basis during the fourth quarter 2014, which was an increase of $299,000, or 0.9%, compared to the same period of the prior year. On a cash basis, the Company's share of recurring same-store NOI for the Parkway Portfolio increased 2.7% to $29.8 million compared to the same period of the prior year.
For the year ended December 31, 2014, Parkway's share of recurring same-store NOI for the Parkway Portfolio was $122.6 million on a GAAP basis, which was an increase of $4.3 million, or 3.6%, compared to the same period of the prior year. On a cash basis, the Company's share of recurring same-store NOI for the Parkway Portfolio increased 2.6% to $113.0 million compared to the same period of the prior year.
The Company's portfolio GAAP NOI margin was 57.1% at Parkway's share during the fourth quarter 2014, compared to 60.5% during the same period of the prior year. For the full year 2014, the Company's portfolio GAAP NOI margin at Parkway's share was 59.6%, compared to 60.0% during the same period of the prior year.
Leasing Activity
During the fourth quarter 2014, Parkway signed a total of 936,000 square feet of leases at an average rent per square foot of $32.20 and at an average cost of $5.11 per square foot per year. For full-year 2014, the Company signed a total of 3.3 million square feet of leases, at an average rent per square foot of $30.91 and an average cost of $5.36 per square foot per year.
New & Expansion Leasing – During the fourth quarter 2014, Parkway signed 304,000 square feet of new leases at an average rent per square foot of $35.98 and at an average cost of $6.65 per square foot per year. For full-year 2014, the Company signed 968,000 square feet of new leases at an average rent per square foot of $32.42 and at an average cost of $7.13 per square foot per year.
Expansion leases during the quarter totaled 228,000 square feet at an average rent per square foot of $27.51 and at an average cost of $4.61 per square foot per year. Expansion leases for the full-year totaled 420,000 square feet at an average rent per square foot of $29.42 and at an average cost of $5.54 per square foot per year.
Renewal Leasing – Customer retention during the fourth quarter 2014 was 82.6%. The Company signed 404,000 square feet of renewal leases at an average rent per square foot of $32.02, representing a 13.4% rate increase from the expiring rate. The average cost of renewal leases was $4.34 per square foot per year.
Customer retention for the full-year 2014 was 81.7%. The Company signed 1.9 million square feet of renewal leases at an average rent per square foot of $30.46, representing a 12.1% rate increase from the expiring rate. The average cost of renewal leases was $4.53 per square foot per year.
Significant operational and leasing statistics for the quarter as compared to prior quarters are as follows:
|
|
|
| For the Three Months Ended |
|
| 12/31/14 |
| 09/30/14 |
| 06/30/14 |
| 03/31/14 |
| 12/31/13 |
Ending Occupancy |
| 88.6% |
| 89.1% |
| 89.2% |
| 88.5% |
| 88.9% |
Customer Retention |
| 82.6% |
| 85.0% |
| 76.9% |
| 80.5% |
| 76.7% |
Square Footage of Total Leases Signed (in thousands) |
| 936 |
| 978 |
| 811 |
| 538 |
| 572 |
Average Revenue Per Square Foot of Total Leases Signed |
| $32.20 |
| $32.27 |
| $30.08 |
| $27.41 |
| $23.32 |
Average Cost Per Square Foot Per Year of Total Leases Signed |
| $5.11 |
| $6.98 |
| $4.35 |
| $4.40 |
| $3.53 |
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Acquisition and Disposition Activity
On October 6, 2014, Parkway Properties Office Fund II sold Tempe Town Lake, a parcel of land zoned for a hotel development in Tempe, Arizona, for a gross sale price of $2.0 million. During the fourth quarter of 2014, Fund II recognized a gain of $739,000, of which $221,700 was Parkway's share.
On November 17, 2014, Parkway and The California State Teachers' Retirement System ("CalSTRS") unwound their joint venture that owned five assets located in the central business district of Austin, Texas. As part of the agreement, Parkway acquired CalSTRS' 60% interest in San Jacinto Center and One Congress Plaza, resulting in Parkway's 100% ownership of these two assets, and sold its 40% interest in Frost Bank Tower, 300 West 6th Street and One American Center to CalSTRS. Parkway also received net proceeds of approximately $43.6 million from CalSTRS in connection with the transaction, which were used to partially fund acquisitions. Parkway recognized a gain of $52.8 million during the fourth quarter 2014 in connection with the sale of the Austin assets.
On December 9, 2014, Parkway acquired Corporate Center I, II and III at International Plaza, located in the Westshore submarket of Tampa, Florida, for a gross purchase price of $238.0 million. The acquisition of the Corporate Center assets was funded through a combination of proceeds received from Parkway's September 2014 public offering of common stock and borrowings under the Company's unsecured credit facility. In connection with the closing of the Corporate Center acquisition, Parkway completed the previously announced purchase and subsequent sale of 19 additional office properties located in six states totaling approximately 2.1 million square feet. Parkway sold these 19 office assets, which were not consistent with Parkway's investment strategy, for a gross sale price of $237.0 million.
On December 29, 2014, Parkway sold 525 North Tryon, a 405,000 square foot office property located in Charlotte, North Carolina, for a gross sale price of $60.0 million. During the fourth quarter, Parkway recognized a gain on the sale of 525 North Tryon of $16.1 million in the fourth quarter 2014.
On December 30, 2014, Parkway purchased a leasehold interest in approximately seven acres of developable land and, on December 31, 2014, acquired another approximately 6.5 acres of developable land, each of which is located in Tampa, Florida adjacent to the Company's Corporate Center I, II and III at International Plaza assets. The total purchase price for the two land interests totaled $9.5 million.
Subsequent Events
On January 8, 2015, Parkway acquired One Buckhead Plaza, a 462,000 square foot Class A office building located in the Buckhead submarket of Atlanta, Georgia, for a gross purchase price of $157.0 million. The 20-story office building, which includes 36,000 square feet of ground floor retail, was 88.6% occupied as of January 8, 2015.
On January 15, 2015, Parkway sold Raymond James Tower, a 337,000 square foot office property located in Memphis, Tennessee. Parkway sold the asset for a gross sale price of $19.3 million and recorded an impairment loss of $11.7 million during the fourth quarter of 2014 as a result of the pending sale. The Company also recorded a loss on extinguishment of debt of $2.1 million in the fourth-quarter 2014 upon the repayment of the Raymond James Tower mortgage principal balance of $7.9 million.
On January 20, 2015, the Company received investment grade credit ratings of Baa3 from Moody's Investors Service and a BBB- from Standard and Poor's Ratings Services. Both credit ratings have a stable outlook.
On January 27, 2015, the Company completed a $200.0 million increase in revolving commitments using the accordion option available under its existing amended, restated and consolidated credit agreement. With this increase, the unsecured revolving credit facility now totals $450.0 million. This increase did not result in any changes to any terms or covenants associated with the unsecured credit facility.
On February 4, 2015, Parkway completed the sale of the Honeywell Building, a 157,000 square foot office property located in Houston, Texas, for a gross sale price of $28.0 million. Parkway expects to recognize a gain of approximately $14.3 million during the first quarter of 2015.
Impairment
On December 15, 2014, Parkway concluded that a non-cash charge was required for the impairment of certain management contracts associated with Eola Capital LLC acquired as part of the Company's combination with Eola in 2011. The impairment relates to termination notices received with respect to certain of the Eola management and leasing agreements. As a result, Parkway recorded a pre-tax impairment charge of $4.8 million in the fourth quarter of 2014.
Capital Structure
At December 31, 2014, the Company had $131.5 million outstanding under its revolving credit facility, $350.0 million outstanding under its unsecured term loans and held $116.2 million in cash and cash equivalents, of which $82.4 million of cash and cash equivalents was Parkway's share. Parkway's share of secured debt totaled $1.1 billion at December 31, 2014.
At December 31, 2014, the Company's net debt to EBITDA multiple was 6.1x, using the quarter's annualized EBITDA after adjusting for the impact of investment activity completed during the period, as compared to 5.9x at September 30, 2014, and 6.7x at December 31, 2013. Adjusting for certain nonrecurring realignment costs primarily related to the termination of Henry F. Pratt, III's employment, the Company's net debt to recurring EBITDA multiple was 6.0x. Parkway's stated target leverage range is 5.5x to 6.5x.
Common Dividend
The Company's previously announced fourth quarter cash dividend of $0.1875 per share, which represents an annualized dividend of $0.75 per share, was paid on December 31, 2014 to stockholders of record as of December 17, 2014.
2015 Outlook
The Company is reiterating its previously announced 2015 FFO outlook range of $1.32 to $1.42 per diluted share for the Parkway Portfolio and EPS range of $0.02 to $0.12 per diluted share for the Parkway Portfolio.
The reconciliation of projected EPS to projected FFO per diluted share is as follows:
Outlook for 2015 |
| Range |
Fully diluted EPS |
| $0.02 - $0.12 |
Parkway's share of depreciation and amortization Gain on sale of real estate |
| $1.42 - $1.42 ($0.12- $0.12) |
Reported FFO per diluted share |
| $1.32 - $1.42 |
Recurring FFO per diluted share |
| $1.32 - $1.42 |
The 2015 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 2015 outlook are at Parkway's share and dollars and shares are in thousands.
2015 Core Operating Assumptions |
|
| 2015 Outlook |
|
Recurring cash NOI |
|
| $203,000 - $ 209,000 |
|
Straight-line rent and amortization of above market rent |
|
| $ 47,000 - $ 49,000 |
|
Management fee after-tax net income |
|
| $ 4,000 - $ 5,000 |
|
General and administrative expense |
|
| $ 29,500- $ 30,500 |
|
Share based compensation expense included in G&A above |
|
| $ 5,000 - $ 5,500 |
|
Mortgage and credit facilities interest expense |
|
| $ 68,000 - $ 70,000 |
|
Non-cash loan cost amortization included in interest expense above |
|
| $ 2,000 - $ 2,500 |
|
Amortization of mortgage interest premium included in interest
expense above |
|
| $ 9,500 -$ 10,000 |
|
Recurring capital expenditures for building improvements, tenant
improvements and leasing commissions |
|
| $ 64,000 - $ 68,000 |
|
Recurring same-store GAAP NOI |
| 2.5% - 3.5% |
|
Portfolio ending occupancy |
| 89.5% - 90.5% |
|
Weighted average annual diluted common shares/units |
| 116,300 - 116,300 |
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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 other than those currently under contract, 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 not to issue quarterly earnings guidance or revise the annual earnings outlook unless a material event occurs that impacts the Company's 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 full-year and fourth quarter earnings conference call on Tuesday, February 10, 2015 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 February 24, 2015, by dialing 877-870-5176, or 1-858-384-5517 for international callers, and using the passcode 13599221.
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 17.2 million square feet of leasable space at January 1, 2015. Fee-based real estate services are offered through wholly owned subsidiaries of the Company, which in total manage and/or lease approximately 6.0 million square feet for third-party owners at January 1, 2015.
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," "plan," "potential," "project," "should," "will" 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 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 and NOI, 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 and NOI 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 and NOI 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 and NOI 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. FFO measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
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. Recurring FFO measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
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. FAD measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
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 share data) |
| December 31, |
| December 31, |
| 2014 |
|
| 2013 |
|
| (Unaudited) |
| (Unaudited) |
Assets |
|
|
|
|
|
Real estate related investments: |
|
|
|
|
|
Office and parking properties | $ | 3,333,900 |
|
| $ | 2,548,036 |
|
Accumulated depreciation | (309,629) |
|
| (231,241) |
|
| 3,024,271 |
|
| 2,316,795 |
|
|
|
|
|
|
|
Condominium units | 9,318 |
|
| 19,900 |
|
Mortgage loan receivable | 3,417 |
|
| 3,502 |
|
Investment in unconsolidated joint ventures | 55,550 |
|
| 151,162 |
|
| 3,092,556 |
|
| 2,491,359 |
|
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Receivables and other assets: |
|
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|
Rents and fees receivable, net | 4,032 |
|
| 2,547 |
|
Straight line rents receivable | 63,236 |
|
| 44,006 |
|
Other receivables | 20,395 |
|
| 12,253 |
|
Unamortized lease costs | 129,781 |
|
| 86,479 |
|
Unamortized loan costs | 10,185 |
|
| 7,624 |
|
Escrows and other deposits | 28,263 |
|
| 13,701 |
|
Prepaid assets | 18,426 |
|
| 5,255 |
|
Investment in preferred interest | 3,500 |
|
| 3,500 |
|
Fair value of interest rate swaps | 1,131 |
|
| 2,021 |
|
Deferred tax asset - non-current | 5,040 |
|
| — |
|
Other assets | 978 |
|
| 1,048 |
|
Land available for sale | 250 |
|
| 250 |
|
Intangible assets, net | 185,488 |
|
| 166,756 |
|
Assets held for sale | 24,079 |
|
| 16,260 |
|
Management contracts,net | 1,133 |
|
| 13,764 |
|
Cash and cash equivalents | 116,241 |
|
| 58,678 |
|
Total assets | $ | 3,704,714 |
|
| $ | 2,925,501 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Notes payable to banks | $ | 481,500 |
|
| $ | 303,000 |
|
Mortgage notes payable | 1,339,450 |
|
| 1,097,493 |
|
Accounts payable and other liabilities: |
|
|
|
|
|
Corporate payables | 11,854 |
|
| 5,486 |
|
Deferred tax liability - non-current | 470 |
|
| 11 |
|
Accrued payroll | 3,210 |
|
| 3,081 |
|
Fair value of interest rate swaps | 11,077 |
|
| 8,429 |
|
Interest payable | 6,158 |
|
| 5,249 |
|
Property payables: |
|
|
|
|
|
Accrued expenses and accounts payable | 43,359 |
|
| 51,572 |
|
Accrued property taxes | 25,652 |
|
| 16,529 |
|
Prepaid rents | 16,311 |
|
| 16,923 |
|
Deferred revenue | 105 |
|
| 654 |
|
Security deposits | 7,964 |
|
| 4,991 |
|
Unamortized below market leases | 76,253 |
|
| 75,996 |
|
Liabilities related to assets held for sale | 2,035 |
|
| 566 |
|
Total liabilities | 2,025,398 |
|
| 1,589,980 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Parkway Properties, Inc. stockholders' equity: |
|
|
|
|
|
Common stock, $.001 par value, 215,500,000 shares authorized |
|
|
|
|
|
and 111,127,386 and 87,222,221 shares issued and |
|
|
|
|
|
outstanding in 2014 and 2013, respectively | 111 |
|
| 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 | 1,842,581 |
|
| 1,428,026 |
|
Accumulated other comprehensive loss | (6,166) |
|
| (2,179) |
|
Accumulated deficit | (443,757) |
|
| (409,338) |
|
Total Parkway Properties, Inc. stockholders' equity | 1,392,773 |
|
| 1,016,600 |
|
Noncontrolling interests | 286,543 |
|
| 318,921 |
|
Total equity | 1,679,316 |
|
| 1,335,521 |
|
Total liabilities and equity | $ | 3,704,714 |
|
| $ | 2,925,501 |
|
PARKWAY PROPERTIES, INC. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(In thousands, except per share data) |
| Three Months Ended |
| Year Ended |
| December 31, |
| December 31, |
| 2014 |
|
| 2013 |
|
| 2014 |
|
| 2013 |
|
| (Unaudited) |
| (Unaudited) |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Income from office and parking properties | $ | 114,995 |
|
| $ | 72,623 |
|
| $ | 418,007 |
|
| $ | 273,434 |
|
Management company income | 5,569 |
|
| 4,843 |
|
| 22,140 |
|
| 18,145 |
|
Sale of condominium units | 5,818 |
|
| — |
|
| 16,554 |
|
| — |
|
Total revenues | 126,382 |
|
| 77,466 |
|
| 456,701 |
|
| 291,579 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Property operating expense | 48,468 |
|
| 28,625 |
|
| 168,071 |
|
| 108,867 |
|
Management company expenses | 4,915 |
|
| 5,409 |
|
| 20,280 |
|
| 19,399 |
|
Cost of sales - condominium units | 4,485 |
|
| 15 |
|
| 13,199 |
|
| 15 |
|
Depreciation and amortization | 51,213 |
|
| 30,427 |
|
| 182,955 |
|
| 118,031 |
|
Impairment loss on real estate | 11,700 |
|
| — |
|
| 11,700 |
|
| — |
|
Impairment loss on management contracts | 4,750 |
|
| — |
|
| 4,750 |
|
| — |
|
General and administrative | 6,523 |
|
| 7,382 |
|
| 32,660 |
|
| 25,653 |
|
Acquisition costs | 1,200 |
|
| 10,347 |
|
| 3,463 |
|
| 13,126 |
|
Total expenses | 133,254 |
|
| 82,205 |
|
| 437,078 |
|
| 285,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) | (6,872) |
|
| (4,739) |
|
| 19,623 |
|
| 6,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
|
|
|
|
|
|
|
|
|
|
|
Interest and other income | 561 |
|
| 1,617 |
|
| 1,452 |
|
| 2,236 |
|
Equity in earnings (loss) of unconsolidated joint ventures | (185) |
|
| (295) |
|
| (967) |
|
| 178 |
|
Gain on sale of in-substance real estate | — |
|
| — |
|
| 6,289 |
|
| — |
|
Gain on sale of real estate | 69,714 |
|
| — |
|
| 76,378 |
|
| — |
|
Loss on extinguishment of debt | (2,066) |
|
| — |
|
| (2,405) |
|
| — |
|
Interest expense | (17,514) |
|
| (12,609) |
|
| (66,095) |
|
| (45,622) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes | 43,638 |
|
| (16,026) |
|
| 34,275 |
|
| (36,720) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense) | 624 |
|
| (327) |
|
| (139) |
|
| 1,405 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations | 44,262 |
|
| (16,353) |
|
| 34,136 |
|
| (35,315) |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations | (10) |
|
| (1,684) |
|
| (391) |
|
| (9,215) |
|
Gain on sale of real estate from discontinued operations | — |
|
| 20,406 |
|
| 10,463 |
|
| 32,493 |
|
Total discontinued operations | (10) |
|
| 18,722 |
|
| 10,072 |
|
| 23,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) | 44,252 |
|
| 2,369 |
|
| 44,208 |
|
| (12,037) |
|
Net (income) loss attributable to noncontrolling interests - unit holders | (2,147) |
|
| 288 |
|
| (2,089) |
|
| 291 |
|
Net (income) loss attributable to noncontrolling interests - real estate partnerships | 323 |
|
| (11,214) |
|
| 824 |
|
| (7,904) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. | 42,428 |
|
| (8,557) |
|
| 42,943 |
|
| (19,650) |
|
Dividends on preferred stock | — |
|
| — |
|
| — |
|
| (3,433) |
|
Dividends on preferred stock redemption | — |
|
| — |
|
| — |
|
| (6,604) |
|
Net income (loss) attributable to common stockholders | $ | 42,428 |
|
| $ | (8,557) |
|
| $ | 42,943 |
|
| $ | (29,687) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share attributable to Parkway Properties, Inc. |
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Parkway Properties, Inc. | $ | 0.38 |
|
| $ | (0.20) |
|
| $ | 0.33 |
|
| $ | (0.60) |
|
Discontinued operations | — |
|
| 0.08 |
|
| 0.09 |
|
| 0.15 |
|
Basic net income (loss) attributable to Parkway Properties, Inc. | $ | 0.38 |
|
| $ | (0.12) |
|
| $ | 0.42 |
|
| $ | (0.45) |
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Parkway Properties, Inc. | $ | 0.38 |
|
| $ | (0.20) |
|
| $ | 0.33 |
|
| $ | (0.60) |
|
Discontinued operations | — |
|
| 0.08 |
|
| 0.09 |
|
| 0.15 |
|
Diluted net income (loss) attributable to Parkway Properties, Inc. | $ | 0.38 |
|
| $ | (0.12) |
|
| $ | 0.42 |
|
| $ | (0.45) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic | 111,076 |
|
| 71,221 |
|
| 101,913 |
|
| 66,336 |
|
Diluted | 116,521 |
|
| 71,221 |
|
| 107,319 |
|
| 66,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts attributable to Parkway Properties, Inc. common stockholders |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to Parkway Properties, Inc. | $ | 42,437 |
|
| $ | (14,369) |
|
| $ | 33,223 |
|
| $ | (39,522) |
|
Discontinued operations | (9) |
|
| 5,812 |
|
| 9,720 |
|
| 9,835 |
|
Net income (loss) attributable to common stockholders | $ | 42,428 |
|
| $ | (8,557) |
|
| $ | 42,943 |
|
| $ | (29,687) |
|
PARKWAY PROPERTIES, INC. |
RECONCILIATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE |
FOR DISTRIBUTION TO NET INCOME (LOSS) AT PARKWAY'S SHARE |
(In thousands, except per share data) |
| Three Months Ended |
| Year Ended |
| December 31, |
| December 31, |
| 2014 |
| 2013 |
| 2014 |
| 2013 |
| (Unaudited) |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. | $ | 42,428 |
|
| $ | (8,557) |
|
| $ | 42,943 |
|
| $ | (19,650) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to net income (loss) for Parkway Properties, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
Preferred dividends | — |
|
| — |
|
| — |
|
| (3,433) |
|
Dividends on preferred stock redemption | — |
|
| — |
|
| — |
|
| (6,604) |
|
Depreciation and amortization | 48,516 |
|
| 26,047 |
|
| 179,797 |
|
| 97,888 |
|
Noncontrolling interest - unit holders | 2,147 |
|
| (288) |
|
| 2,089 |
|
| (291) |
|
Impairment loss on depreciable real estate | 11,700 |
|
| — |
|
| 11,700 |
|
| 10,200 |
|
Gain on sale of real estate and in-substance real estate | (69,197) |
|
| — |
|
| (82,150) |
|
| — |
|
Gain on sale of real estate - discontinued operations | — |
|
| (6,121) |
|
| (10,463) |
|
| (18,209) |
|
Funds from operations | $ | 35,594 |
|
| $ | 11,081 |
|
| $ | 143,916 |
|
| $ | 59,901 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to derive recurring funds from operations: |
|
|
|
|
|
|
|
|
|
|
|
Non-recurring lease termination fee income | (539) |
|
| (162) |
|
| (1,443) |
|
| (1,211) |
|
Loss on early extinguishment of debt | 2,066 |
|
| 645 |
|
| 2,405 |
|
| 1,216 |
|
Acquisition costs | 1,200 |
|
| 10,347 |
|
| 3,463 |
|
| 13,122 |
|
Impairment loss on management contracts, net of tax | 2,905 |
|
| — |
|
| 2,905 |
|
| — |
|
Non-cash adjustment for interest rate swap | (56) |
|
| — |
|
| (19) |
|
| (630) |
|
Dividends on preferred stock redemption | — |
|
| — |
|
| — |
|
| 6,604 |
|
Realignment expenses | 881 |
|
| 850 |
|
| 6,016 |
|
| 4,945 |
|
Recurring funds from operations | $ | 42,051 |
|
| $ | 22,761 |
|
| $ | 157,243 |
|
| $ | 83,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds available for distribution |
|
|
|
|
|
|
|
|
|
|
|
Funds from operations | $ | 35,594 |
|
| $ | 11,081 |
|
| $ | 143,916 |
|
| $ | 59,901 |
|
Add (Deduct): |
|
|
|
|
|
|
|
|
|
|
|
Straight-line rents | (5,692) |
|
| (3,623) |
|
| (22,310) |
|
| (10,888) |
|
Amortization of above (below) market leases | (4,776) |
|
| (443) |
|
| (14,653) |
|
| (197) |
|
Amortization of share-based compensation | 1,400 |
|
| 2,408 |
|
| 8,238 |
|
| 5,730 |
|
Acquisition costs | 1,200 |
|
| 10,347 |
|
| 3,463 |
|
| 13,122 |
|
Amortization of loan costs | 681 |
|
| 547 |
|
| 2,712 |
|
| 2,194 |
|
Impairment loss on management contracts, net of tax | 2,905 |
|
| — |
|
| 2,905 |
|
| — |
|
Non-cash adjustment for interest rate swap | (56) |
|
| — |
|
| (19) |
|
| (630) |
|
Dividends on preferred stock redemption | — |
|
| — |
|
| — |
|
| 6,604 |
|
Loss on early extinguishment of debt | 2,066 |
|
| 645 |
|
| 2,405 |
|
| 1,216 |
|
Amortization of mortgage interest premium | (2,794) |
|
| — |
|
| (10,046) |
|
| — |
|
Recurring capital expenditures: (1) |
|
|
|
|
|
|
|
|
|
|
|
Building improvements | (2,913) |
|
| (1,395) |
|
| (9,510) |
|
| (4,325) |
|
Tenant improvements - new leases | (1,227) |
|
| (1,366) |
|
| (11,902) |
|
| (2,711) |
|
Tenant improvements - renewal leases | (2,135) |
|
| (1,335) |
|
| (5,377) |
|
| (4,402) |
|
Leasing costs - new leases | (3,138) |
|
| (3,549) |
|
| (5,820) |
|
| (4,302) |
|
Leasing costs - renewal leases | (6,675) |
|
| (792) |
|
| (12,411) |
|
| (3,895) |
|
Total recurring capital expenditures | (16,088) |
|
| (8,437) |
|
| (45,020) |
|
| (19,635) |
|
Funds available for distribution | $ | 14,440 |
|
| $ | 12,525 |
|
| $ | 71,591 |
|
| $ | 57,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted per common share/unit information (**) |
|
|
|
|
|
|
|
|
|
|
|
FFO per share | $ | 0.31 |
|
| $ | 0.15 |
|
| $ | 1.34 |
|
| $ | 0.90 |
|
Recurring FFO per share | $ | 0.36 |
|
| $ | 0.31 |
|
| $ | 1.47 |
|
| $ | 1.26 |
|
FAD per share | $ | 0.12 |
|
| $ | 0.17 |
|
| $ | 0.67 |
|
| $ | 0.86 |
|
Dividends paid | $ | 0.1875 |
|
| $ | 0.1875 |
|
| $ | 0.75 |
|
| $ | 0.64 |
|
Dividend payout ratio for FFO | 60.5 | % |
| 130.0 | % |
| 56.0 | % |
| 70.9 | % |
Dividend payout ratio for recurring FFO | 52.1 | % |
| 60.5 | % |
| 51.0 | % |
| 50.6 | % |
Dividend payout ratio for FAD | 156.3 | % |
| 110.3 | % |
| 111.9 | % |
| 74.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
Other supplemental information |
|
|
|
|
|
|
|
|
|
|
|
Recurring capital expenditures | $ | 16,088 |
|
| $ | 8,437 |
|
| $ | 45,020 |
|
| $ | 19,635 |
|
Upgrades on acquisitions | 24,586 |
|
| 6,098 |
|
| 56,938 |
|
| 21,267 |
|
Total real estate improvements and leasing costs (1) | $ | 40,674 |
|
| $ | 14,535 |
|
| $ | 101,958 |
|
| $ | 40,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
**Information for diluted computations: |
|
|
|
|
|
|
|
|
|
|
|
Basic common shares/units outstanding | 116,276 |
|
| 72,175 |
|
| 107,113 |
|
| 66,598 |
|
Dilutive effect of other share equivalents | 245 |
|
| 157 |
|
| 206 |
|
| 59 |
|
Diluted weighted average shares/units outstanding | 116,521 |
|
| 72,332 |
|
| 107,319 |
|
| 66,657 |
|
|
(1) Development costs related to Hayden Ferry III are not included in these amounts. |
PARKWAY PROPERTIES, INC. |
EBITDA, COVERAGE RATIOS AND CAPITALIZATION INFORMATION |
(In thousands, except per share, percentage and multiple data) |
|
| 12/31/2014 |
| 9/30/2014 |
| 6/30/2014 |
| 3/31/2014 |
| 12/31/2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. |
| $ | 42,428 |
|
| $ | (485) |
|
| $ | (9,845) |
|
| $ | 10,845 |
|
| $ | (8,557) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments at Parkway's share to net income (loss) for
Parkway Properties, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
| 15,910 |
|
| 16,407 |
|
| 16,531 |
|
| 14,738 |
|
| 9,399 |
|
Amortization of financing costs |
| 681 |
|
| 613 |
|
| 1,108 |
|
| 574 |
|
| 547 |
|
Non-cash adjustment for interest rate swap |
| (56) |
|
| (84) |
|
| 121 |
|
| — |
|
| — |
|
Loss on early extinguishment of debt |
| 2,066 |
|
| — |
|
| 339 |
|
| — |
|
| 645 |
|
Noncontrolling interest - unit holders |
| 2,147 |
|
| — |
|
| — |
|
| — |
|
| — |
|
Acquisition costs |
| 1,200 |
|
| 1,129 |
|
| 489 |
|
| 645 |
|
| 10,347 |
|
Depreciation and amortization |
| 48,516 |
|
| 46,431 |
|
| 44,595 |
|
| 40,370 |
|
| 26,047 |
|
Amortization of share-based compensation |
| 1,400 |
|
| 2,103 |
|
| 2,247 |
|
| 2,489 |
|
| 2,408 |
|
Gain on sale of real estate and other assets |
| (69,197) |
|
| (6,664) |
|
| — |
|
| (16,752) |
|
| (6,122) |
|
Impairment loss on real estate |
| 11,700 |
|
| — |
|
| — |
|
| — |
|
| — |
|
Impairment loss on management contracts, net of tax |
| 2,905 |
|
| — |
|
| — |
|
| — |
|
| — |
|
Tax expense |
| 1,221 |
|
| 164 |
|
| 257 |
|
| 341 |
|
| 326 |
|
EBITDA |
| $ | 60,921 |
|
| $ | 59,614 |
|
| $ | 55,842 |
|
| $ | 53,250 |
|
| $ | 35,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage ratio |
| 3.8 |
|
| 3.6 |
|
| 3.4 |
|
| 3.6 |
|
| 3.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed charge coverage ratio |
| 3.2 |
|
| 3.2 |
|
| 2.9 |
|
| 3.1 |
|
| 3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization information |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage notes payable at Parkway's share |
| $ | 1,124,860 |
|
| $ | 1,157,129 |
|
| $ | 1,159,252 |
|
| $ | 1,141,546 |
|
| $ | 1,102,295 |
|
Notes payable to banks |
| 481,500 |
|
| 350,000 |
|
| 377,000 |
|
| 245,000 |
|
| 303,000 |
|
Parkway's share of total debt |
| 1,606,360 |
|
| 1,507,129 |
|
| 1,536,252 |
|
| 1,386,546 |
|
| 1,405,295 |
|
Less: Parkway's share of cash |
| (82,353) |
|
| (104,661) |
|
| (57,444) |
|
| (128,711) |
|
| (39,354) |
|
Parkway's share of net debt |
| 1,524,007 |
|
| 1,402,468 |
|
| 1,478,808 |
|
| 1,257,835 |
|
| 1,365,941 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of common stock and operating units outstanding |
| 116,327 |
|
| 114,777 |
|
| 104,469 |
|
| 104,275 |
|
| 92,336 |
|
Stock price per share at period end |
| $ | 18.39 |
|
| $ | 18.78 |
|
| $ | 20.65 |
|
| $ | 18.25 |
|
| $ | 19.29 |
|
Market value of common equity |
| $ | 2,139,254 |
|
| $ | 2,155,512 |
|
| $ | 2,157,285 |
|
| $ | 1,903,019 |
|
| $ | 1,781,161 |
|
Total market capitalization (including net debt) |
| $ | 3,663,261 |
|
| $ | 3,557,980 |
|
| $ | 3,636,093 |
|
| $ | 3,160,854 |
|
| $ | 3,147,102 |
|
Net debt as a percentage of market capitalization |
| 41.6 | % |
| 39.4 | % |
| 40.7 | % |
| 39.8 | % |
| 43.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA - annualized |
| $ | 243,684 |
|
| $ | 238,456 |
|
| $ | 223,368 |
|
| $ | 212,999 |
|
| $ | 140,160 |
|
Adjustment to annualized investment activities (1) |
| 8,194 |
|
| 1,015 |
|
| 787 |
|
| 1,813 |
|
| 62,834 |
|
EBITDA - adjusted annualized |
| $ | 251,878 |
|
| $ | 239,471 |
|
| $ | 224,155 |
|
| $ | 214,812 |
|
| $ | 202,994 |
|
Net debt to EBITDA multiple |
| 6.1 |
|
| 5.9 |
|
| 6.6 |
|
| 5.9 |
|
| 6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
| $ | 60,921 |
|
| $ | 59,614 |
|
| $ | 55,842 |
|
| $ | 53,250 |
|
| $ | 35,040 |
|
Realignment expenses |
| 881 |
|
| 1,091 |
|
| 1,870 |
|
| 2,174 |
|
| 850 |
|
Recurring EBITDA (2) |
| 61,802 |
|
| 60,705 |
|
| 57,712 |
|
| 55,424 |
|
| 35,890 |
|
Recurring EBITDA - annualized |
| 247,208 |
|
| 242,820 |
|
| 230,848 |
|
| 221,695 |
|
| 143,560 |
|
Adjustment to annualized investment activities (1) |
| 8,194 |
|
| 1,015 |
|
| 787 |
|
| 1,813 |
|
| 62,834 |
|
Recurring EBITDA - adjusted annualized |
| $ | 255,402 |
|
| $ | 243,835 |
|
| $ | 231,635 |
|
| $ | 223,508 |
|
| $ | 206,394 |
|
Net debt to recurring EBITDA multiple |
| 6.0 |
|
| 5.8 |
|
| 6.4 |
|
| 5.6 |
|
| 6.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 realignment expenses. |
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME |
THREE MONTHS ENDED DECEMBER 31, 2014 AND 2013 |
(In thousands, except number of properties data) |
|
|
|
|
|
|
|
|
|
| Net Operating Income |
| Average Occupancy |
| Square Feet |
| Number of Properties |
| Percentage of Portfolio (1) |
| 2014 |
|
| 2013 |
|
| 2014 |
|
| 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store properties: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly owned | 8,183 |
|
| 26 |
|
| 42.7 | % |
| $ | 28,379 |
|
| $ | 28,091 |
|
| 90.3 | % |
| 87.6 | % |
Fund II | 2,477 |
|
| 7 |
|
| 17.0 | % |
| 11,303 |
|
| 10,895 |
|
| 95.7 | % |
| 94.6 | % |
Total same-store properties | 10,660 |
|
| 33 |
|
| 59.6 | % |
| $ | 39,682 |
|
| $ | 38,986 |
|
| 91.6 | % |
| 89.2 | % |
Net operating income from all |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
office and parking properties | 17,169 |
|
| 51 |
|
| 100.0 | % |
| $ | 66,527 |
|
| $ | 43,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Percentage of portfolio based on net operating income for the three months ended December 31, 2014. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table is a reconciliation of net income (loss) to Same-Store net operating income (SSNOI) and Recurring SSNOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Year Ended |
|
|
|
|
|
|
|
|
|
| December 31, |
| December 31, |
|
|
|
|
|
|
|
|
|
| 2014 |
|
| 2013 |
|
| 2014 |
|
| 2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) for Parkway Properties, Inc. |
|
|
|
|
|
|
| $ | 42,428 |
|
| $ | (8,557) |
|
| $ | 42,943 |
|
| $ | (19,650) |
|
Add (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
|
|
|
|
|
|
| 17,514 |
|
| 12,609 |
|
| 66,095 |
|
| 45,622 |
|
Loss on extinguishment of debt |
|
|
|
|
|
|
|
|
| 2,066 |
|
| — |
|
| 2,405 |
|
| — |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
| 51,213 |
|
| 30,427 |
|
| 182,955 |
|
| 118,031 |
|
Management company expenses |
|
|
|
|
|
|
|
|
| 4,915 |
|
| 5,409 |
|
| 20,280 |
|
| 19,399 |
|
Income tax expense (benefit) |
|
|
|
|
|
|
|
|
| (624) |
|
| 327 |
|
| 139 |
|
| (1,405) |
|
General and administrative expenses |
|
|
|
|
|
|
|
|
| 6,523 |
|
| 7,382 |
|
| 32,660 |
|
| 25,653 |
|
Acquisition costs |
|
|
|
|
|
|
|
|
| 1,200 |
|
| 10,347 |
|
| 3,463 |
|
| 13,126 |
|
Equity in loss (earnings) of unconsolidated joint ventures |
|
|
|
| 185 |
|
| 295 |
|
| 967 |
|
| (178) |
|
Sale of condominium units |
|
|
|
| (5,818) |
|
| — |
|
| (16,554) |
|
| — |
|
Cost of sales - condominium units |
|
|
|
| 4,485 |
|
| 15 |
|
| 13,199 |
|
| 15 |
|
Net loss attributable to noncontrolling interests |
|
|
|
| 1,824 |
|
| 10,926 |
|
| 1,265 |
|
| 7,613 |
|
Loss from discontinued operations |
|
|
|
|
|
|
|
|
| 10 |
|
| 1,684 |
|
| 391 |
|
| 9,215 |
|
Gain on sale of real estate from discontinued operations |
|
|
|
| — |
|
| (20,406) |
|
| (10,463) |
|
| (32,493) |
|
Gain on sale of real estate |
|
|
|
|
|
|
|
|
| (69,714) |
|
| — |
|
| (76,378) |
|
| — |
|
Gain on sale of in-substance real estate |
|
|
|
|
|
|
| — |
|
| — |
|
| (6,289) |
|
| — |
|
Impairment loss on real estate |
|
|
|
|
|
|
|
|
| 11,700 |
|
| — |
|
| 11,700 |
|
| — |
|
Impairment loss on management contracts |
|
|
|
|
|
|
|
|
| 4,750 |
|
| — |
|
| 4,750 |
|
| — |
|
Management company income |
|
|
|
|
|
|
|
|
| (5,569) |
|
| (4,843) |
|
| (22,140) |
|
| (18,145) |
|
Interest and other income |
|
|
|
|
|
|
|
|
| (561) |
|
| (1,617) |
|
| (1,452) |
|
| (2,236) |
|
Net operating income from consolidated office and parking properties |
|
|
|
| 66,527 |
|
| 43,998 |
|
| 249,936 |
|
| 164,567 |
|
Less: Net operating income from non same-store properties |
|
|
|
| (26,845) |
|
| (5,012) |
|
| (95,291) |
|
| (14,887) |
|
Same-store net operating income (SSNOI) |
|
|
|
|
|
|
| 39,682 |
|
| 38,986 |
|
| 154,645 |
|
| 149,680 |
|
Less: non-recurring lease termination fee income |
|
|
|
|
|
|
| (458) |
|
| (160) |
|
| (686) |
|
| (1,338) |
|
Recurring SSNOI |
|
|
|
|
|
|
|
|
| $ | 39,224 |
|
| $ | 38,826 |
|
| $ | 153,959 |
|
| $ | 148,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parkway's share of SSNOI |
|
|
|
|
|
|
|
|
| $ | 32,570 |
|
| $ | 31,992 |
|
| $ | 123,224 |
|
| $ | 119,501 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parkway's share of recurring SSNOI |
|
|
|
|
|
|
| $ | 32,133 |
|
| $ | 31,834 |
|
| $ | 122,565 |
|
| $ | 118,273 |
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME (Continued) |
THREE MONTHS ENDED DECEMBER 31, 2014 AND 2013 |
(In thousands) |
| Consolidated |
| Parkway's Share |
| 2014 |
| 2013 |
| Dollar Change | Percentage Change |
| 2014 |
| 2013 |
| Dollar
Change | Percentage
Change |
Same-store assets GAAP NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 48,193 |
| $ | 46,629 |
| $ | 1,564 |
| 3.4 | % |
| $ | 48,193 |
| $ | 46,629 |
| $ | 1,564 |
| 3.4 | % |
Fund II | 17,787 |
| 17,646 |
| 141 |
| 0.8 | % |
| 4,747 |
| 4,707 |
| 40 |
| 0.8 | % |
Unconsolidated joint ventures | — |
| — |
| — |
| — | % |
| 1,565 |
| 1,269 |
| 296 |
| 23.3 | % |
Total same-store GAAP revenue | 65,980 |
| 64,275 |
| 1,705 |
| 2.7 | % |
| 54,505 |
| 52,605 |
| 1,900 |
| 3.6 | % |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 19,814 |
| 18,538 |
| 1,276 |
| 6.9 | % |
| 19,814 |
| 18,538 |
| 1,276 |
| 6.9 | % |
Fund II | 6,484 |
| 6,751 |
| (267) |
| (4.0)% |
|
| 1,694 |
| 1,763 |
| (69) |
| (3.9)% |
|
Unconsolidated joint ventures | — |
| — |
| — |
| — | % |
| 427 |
| 312 |
| 115 |
| — | % |
Total same-store GAAP expenses | 26,298 |
| 25,289 |
| 1,009 |
| 4.0 | % |
| 21,935 |
| 20,613 |
| 1,322 |
| 6.4 | % |
NOI - GAAP | $ | 39,682 |
| $ | 38,986 |
| $ | 696 |
| 1.8 | % |
| $ | 32,570 |
| $ | 31,992 |
| $ | 578 |
| 1.8 | % |
Net margin - GAAP | 60.1 | % | 60.7 | % | (0.6) | % |
|
|
| 59.8 | % | 60.8 | % | (1.0)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 44,966 |
| $ | 3,504 |
| $ | 41,462 |
|
|
|
| $ | 44,966 |
| $ | 3,504 |
| $ | 41,462 |
|
|
|
Fund II | — |
| — |
| — |
|
|
|
| — |
| — |
| — |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| — |
| — |
| — |
|
|
|
Total acquisitions GAAP revenue | 44,966 |
| 3,504 |
| 41,462 |
|
|
|
| 44,966 |
| 3,504 |
| 41,462 |
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 20,300 |
| 711 |
| 19,589 |
|
|
|
| 20,300 |
| 711 |
| 19,589 |
|
|
|
Fund II | 23 |
| — |
| 23 |
|
|
|
| 17 |
| — |
| 17 |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| — |
| — |
| — |
|
|
|
Total acquisitions GAAP expenses | 20,323 |
| 711 |
| 19,612 |
|
|
|
| 20,317 |
| 711 |
| 19,606 |
|
|
|
NOI | $ | 24,643 |
| $ | 2,793 |
| $ | 21,850 |
|
|
|
| $ | 24,649 |
| $ | 2,793 |
| $ | 21,856 |
|
|
|
Net margin | 54.8 | % | 79.7 | % | (24.9) | % |
|
|
| 54.8 | % | 79.7 | % | (24.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office assets sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 3,935 |
| $ | 4,784 |
| $ | (849) |
|
|
|
| $ | 3,935 |
| $ | 4,784 |
| $ | (849) |
|
|
|
Fund II | 114 |
| 60 |
| 54 |
|
|
|
| 35 |
| 18 |
| 17 |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 4,827 |
| 1,051 |
| 3,776 |
|
|
|
Total sold properties GAAP revenue | 4,049 |
| 4,844 |
| (795) |
|
|
|
| 8,797 |
| 5,853 |
| 2,944 |
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 1,854 |
| 2,610 |
| (756) |
|
|
|
| 1,854 |
| 2,610 |
| (756) |
|
|
|
Fund II | (7) |
| 15 |
| (22) |
|
|
|
| (3) |
| 5 |
| (8) |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 2,293 |
| 539 |
| 1,754 |
|
|
|
Total sold properties GAAP expenses | 1,847 |
| 2,625 |
| (778) |
|
|
|
| 4,144 |
| 3,154 |
| 990 |
|
|
|
NOI | $ | 2,202 |
| $ | 2,219 |
| $ | (17) |
|
|
|
| $ | 4,653 |
| $ | 2,699 |
| $ | 1,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 97,094 |
| $ | 54,917 |
| $ | 42,177 |
|
|
|
| $ | 97,094 |
| $ | 54,917 |
| $ | 42,177 |
|
|
|
Fund II | 17,901 |
| 17,706 |
| 195 |
|
|
|
| 4,782 |
| 4,725 |
| 57 |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 6,392 |
| 2,320 |
| 4,072 |
|
|
|
Total revenues | $ | 114,995 |
| $ | 72,623 |
| $ | 42,372 |
|
|
|
| $ | 108,268 |
| $ | 61,962 |
| $ | 46,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 41,968 |
| 21,859 |
| 20,109 |
|
|
|
| 41,968 |
| 21,859 |
| 20,109 |
|
|
|
Fund II | 6,500 |
| 6,766 |
| (266) |
|
|
|
| 1,708 |
| 1,768 |
| (60) |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 2,720 |
| 851 |
| 1,869 |
|
|
|
Total expenses | $ | 48,468 |
| $ | 28,625 |
| $ | 19,843 |
|
|
|
| $ | 46,396 |
| $ | 24,478 |
| $ | 21,918 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI | $ | 66,527 |
| $ | 43,998 |
| $ | 22,529 |
|
|
|
| $ | 61,872 |
| $ | 37,484 |
| $ | 24,388 |
|
|
|
Net margin | 57.9 | % | 60.6 | % |
|
|
|
|
| 57.1 | % | 60.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME (Continued) |
THREE MONTHS ENDED DECEMBER 31, 2014 AND 2013 |
(In thousands) |
| Consolidated |
| Parkway's Share |
| 2014 |
| 2013 |
| Dollar Change | Percentage Change |
| 2014 |
| 2013 |
| Dollar
Change | Percentage Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring GAAP NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ | 65,980 |
| $ | 64,275 |
| $ | 1,705 |
| 2.7 | % |
| $ | 54,505 |
| $ | 52,605 |
| $ | 1,900 |
| 3.6 | % |
Non-recurring lease termination fee income | (458) |
| (160) |
| (298) |
| 186.3 | % |
| (437) |
| (158) |
| (279) |
| 176.6 | % |
Recurring same-store revenue | 65,522 |
| 64,115 |
| 1,407 |
| 2.2 | % |
| 54,068 |
| 52,447 |
| 1,621 |
| 3.1 | % |
Total same-store expenses | 26,298 |
| 25,289 |
| 1,009 |
| 4.0 | % |
| 21,935 |
| 20,613 |
| 1,322 |
| 6.4 | % |
Recurring NOI - GAAP | $ | 39,224 |
| $ | 38,826 |
| $ | 398 |
| 1.0 | % |
| $ | 32,133 |
| $ | 31,834 |
| $ | 299 |
| 0.9 | % |
Recurring net margin - GAAP | 59.9 | % | 60.6 | % | (0.7)% |
|
|
|
| 59.4 | % | 60.7 | % | (1.3)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets cash NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ | 65,980 |
| $ | 64,275 |
| $ | 1,705 |
| 2.7 | % |
| $ | 54,505 |
| $ | 52,605 |
| $ | 1,900 |
| 3.6 | % |
Amortization of above (below) market leases | 627 |
| 679 |
| (52) |
| (7.7)% |
|
| 331 |
| 494 |
| (163) |
| (33.0)% |
|
Straight-line rents | (2,293) |
| (3,593) |
| 1,300 |
| (36.2)% |
|
| (2,616) |
| (3,270) |
| 654 |
| (20.0)% |
|
Total same-store cash revenue | 64,314 |
| 61,361 |
| 2,953 |
| 4.8 | % |
| 52,220 |
| 49,829 |
| 2,391 |
| 4.8 | % |
Total same-store expenses | 26,298 |
| 25,289 |
| 1,009 |
| 4.0 | % |
| 21,935 |
| 20,613 |
| 1,322 |
| 6.4 | % |
NOI - cash | $ | 38,016 |
| $ | 36,072 |
| $ | 1,944 |
| 5.4 | % |
| $ | 30,285 |
| $ | 29,216 |
| $ | 1,069 |
| 3.7 | % |
Net margin - cash | 59.1 | % | 58.8 | % | 0.3 | % |
|
|
| 58.0 | % | 58.6 | % | (0.6)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring cash NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same-store cash revenue | $ | 64,314 |
| $ | 61,361 |
| $ | 2,953 |
| 4.8 | % |
| $ | 52,220 |
| $ | 49,829 |
| $ | 2,391 |
| 4.8 | % |
Non-recurring lease termination fee income | (458) |
| (160) |
| (298) |
| 186.3 | % |
| (437) |
| (158) |
| (279) |
| 176.6 | % |
Recurring same-store cash revenue | 63,856 |
| 61,201 |
| 2,655 |
| 4.3 | % |
| 51,783 |
| 49,671 |
| 2,112 |
| 4.3 | % |
Total same-store expenses | 26,298 |
| 25,289 |
| 1,009 |
| 4.0 | % |
| 21,935 |
| 20,613 |
| 1,322 |
| 6.4 | % |
Recurring NOI - cash | $ | 37,558 |
| $ | 35,912 |
| $ | 1,646 |
| 4.6 | % |
| $ | 29,848 |
| $ | 29,058 |
| $ | 790 |
| 2.7 | % |
Recurring net margin - cash | 58.8 | % | 58.7 | % | 0.1 | % |
|
|
| 57.6 | % | 58.5 | % | (0.9)% |
|
|
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME (Continued) |
YEAR ENDED DECEMBER 31, 2014 AND 2013 |
(In thousands) |
| Consolidated |
| Parkway's Share |
| 2014 |
| 2013 |
| Dollar Change | Percentage Change |
| 2014 |
| 2013 |
| Dollar
Change | Percentage
Change |
Same-store assets GAAP NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 181,221 |
| $ | 176,918 |
| $ | 4,303 |
| 2.4 | % |
| $ | 181,221 |
| $ | 176,918 |
| $ | 4,303 |
| 2.4 | % |
Fund II | 72,114 |
| 70,527 |
| 1,587 |
| 2.3 | % |
| 19,224 |
| 18,739 |
| 485 |
| 2.6 | % |
Unconsolidated joint ventures | — |
| — |
| — |
| — | % |
| 2,405 |
| 2,140 |
| 265 |
| 12.4 | % |
Total same-store GAAP revenue | 253,335 |
| 247,445 |
| 5,890 |
| 2.4 | % |
| 202,850 |
| 197,797 |
| 5,053 |
| 2.6 | % |
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 72,295 |
| 71,035 |
| 1,260 |
| 1.8 | % |
| 72,295 |
| 71,035 |
| 1,260 |
| 1.8 | % |
Fund II | 26,395 |
| 26,730 |
| (335) |
| (1.3)% |
|
| 6,904 |
| 6,949 |
| (45) |
| (0.6)% |
|
Unconsolidated joint ventures | — |
| — |
| — |
| — | % |
| 427 |
| 312 |
| 115 |
| — | % |
Total same-store GAAP expenses | 98,690 |
| 97,765 |
| 925 |
| 0.9 | % |
| 79,626 |
| 78,296 |
| 1,330 |
| 1.7 | % |
NOI - GAAP | $ | 154,645 |
| $ | 149,680 |
| $ | 4,965 |
| 3.3 | % |
| $ | 123,224 |
| $ | 119,501 |
| $ | 3,723 |
| 3.1 | % |
Net margin - GAAP | 61.0 | % | 60.5 | % | 0.5 | % |
|
|
| 60.7 | % | 60.4 | % | 0.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 145,892 |
| $ | 6,182 |
| $ | 139,710 |
|
|
|
| $ | 145,892 |
| $ | 6,182 |
| $ | 139,710 |
|
|
|
Fund II | — |
| — |
| — |
|
|
|
| — |
| — |
| — |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 3,933 |
| 223 |
| 3,710 |
|
|
|
Total acquisitions GAAP revenue | 145,892 |
| 6,182 |
| 139,710 |
|
|
|
| 149,825 |
| 6,405 |
| 143,420 |
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 60,055 |
| 1,489 |
| 58,566 |
|
|
|
| 60,055 |
| 1,489 |
| 58,566 |
|
|
|
Fund II | 77 |
| — |
| 77 |
|
|
|
| 53 |
| — |
| 53 |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 1,152 |
| — |
| 1,152 |
|
|
|
Total acquisitions GAAP expenses | 60,132 |
| 1,489 |
| 58,643 |
|
|
|
| 61,260 |
| 1,489 |
| 59,771 |
|
|
|
NOI | $ | 85,760 |
| $ | 4,693 |
| $ | 81,067 |
|
|
|
| $ | 88,565 |
| $ | 4,916 |
| $ | 83,649 |
|
|
|
Net margin | 58.8 | % | 75.9 | % | (17.1)% |
|
|
|
| 59.1 | % | 76.8 | % | (17.7)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office assets sold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 18,780 |
| $ | 19,751 |
| $ | (971) |
|
|
|
| $ | 18,780 |
| $ | 19,751 |
| $ | (971) |
|
|
|
Fund II | — |
| 56 |
| (56) |
|
|
|
| — |
| 17 |
| (17) |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 34,407 |
| 1,051 |
| 33,356 |
|
|
|
Total sold properties GAAP revenue | 18,780 |
| 19,807 |
| (1,027) |
|
|
|
| 53,187 |
| 20,819 |
| 32,368 |
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 9,086 |
| 9,602 |
| (516) |
|
|
|
| 9,086 |
| 9,602 |
| (516) |
|
|
|
Fund II | 163 |
| 11 |
| 152 |
|
|
|
| 54 |
| 4 |
| 50 |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 14,052 |
| 539 |
| 13,513 |
|
|
|
Total sold properties GAAP expenses | 9,249 |
| 9,613 |
| (364) |
|
|
|
| 23,192 |
| 10,145 |
| 13,047 |
|
|
|
NOI | $ | 9,531 |
| $ | 10,194 |
| $ | (663) |
|
|
|
| $ | 29,995 |
| $ | 10,674 |
| $ | 19,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | $ | 345,893 |
| $ | 202,851 |
| $ | 143,042 |
|
|
|
| $ | 345,893 |
| $ | 202,851 |
| $ | 143,042 |
|
|
|
Fund II | 72,114 |
| 70,583 |
| 1,531 |
|
|
|
| 19,224 |
| 18,756 |
| 468 |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 40,745 |
| 3,414 |
| 37,331 |
|
|
|
Total revenues | $ | 418,007 |
| $ | 273,434 |
| $ | 144,573 |
|
|
|
| $ | 405,862 |
| $ | 225,021 |
| $ | 180,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wholly-owned properties | 141,436 |
| 82,126 |
| 59,310 |
|
|
|
| 141,436 |
| 82,126 |
| 59,310 |
|
|
|
Fund II | 26,635 |
| 26,741 |
| (106) |
|
|
|
| 7,011 |
| 6,953 |
| 58 |
|
|
|
Unconsolidated joint ventures | — |
| — |
| — |
|
|
|
| 15,631 |
| 851 |
| 14,780 |
|
|
|
Total expenses | $ | 168,071 |
| $ | 108,867 |
| $ | 59,204 |
|
|
|
| $ | 164,078 |
| $ | 89,930 |
| $ | 74,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI | $ | 249,936 |
| $ | 164,567 |
| $ | 85,369 |
|
|
|
| $ | 241,784 |
| $ | 135,091 |
| $ | 106,693 |
|
|
|
Net margin | 59.8 | % | 60.2 | % |
|
|
|
|
| 59.6 | % | 60.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARKWAY PROPERTIES, INC. |
SAME-STORE NET OPERATING INCOME (Continued) |
YEAR ENDED DECEMBER 31, 2014 AND 2013 |
(In thousands) |
| Consolidated |
| Parkway's Share |
| 2014 |
| 2013 |
| Dollar Change | Percentage Change |
| 2014 |
| 2013 |
| Dollar
Change | Percentage
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring GAAP NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ | 253,335 |
| $ | 247,445 |
| $ | 5,890 |
| 2.4 | % |
| $ | 202,850 |
| $ | 197,797 |
| $ | 5,053 |
| 2.6 | % |
Non-recurring lease termination fee income | (686) |
| (1,338) |
| 652 |
| (48.7)% |
|
| (659) |
| (1,228) |
| 569 |
| (46.3)% |
|
Recurring same-store revenue | 252,649 |
| 246,107 |
| 6,542 |
| 2.7 | % |
| 202,191 |
| 196,569 |
| 5,622 |
| 2.9 | % |
Total same-store expenses | 98,690 |
| 97,765 |
| 925 |
| 0.9 | % |
| 79,626 |
| 78,296 |
| 1,330 |
| 1.7 | % |
Recurring NOI - GAAP | $ | 153,959 |
| $ | 148,342 |
| $ | 5,617 |
| 3.8 | % |
| $ | 122,565 |
| $ | 118,273 |
| $ | 4,292 |
| 3.6 | % |
Recurring net margin - GAAP | 60.9 | % | 60.3 | % | 0.6 | % |
|
|
| 60.6 | % | 60.2 | % | 0.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets cash NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same-store GAAP revenue | $ | 253,335 |
| $ | 247,445 |
| $ | 5,890 |
| 2.4 | % |
| $ | 202,850 |
| $ | 197,797 |
| $ | 5,053 |
| 2.6 | % |
Amortization of above (below) market leases | 2,402 |
| 3,647 |
| (1,245) |
| (34.1)% |
|
| 1,367 |
| 2,461 |
| (1,094) |
| (44.5)% |
|
Straight-line rents | (12,188) |
| (14,096) |
| 1,908 |
| (13.5)% |
|
| (10,908) |
| (10,611) |
| (297) |
| 2.8 | % |
Total same-store cash revenue | 243,549 |
| 236,996 |
| 6,553 |
| 2.8 | % |
| 193,309 |
| 189,647 |
| 3,662 |
| 1.9 | % |
Total same-store expenses | 98,690 |
| 97,765 |
| 925 |
| 0.9 | % |
| 79,626 |
| 78,296 |
| 1,330 |
| 1.7 | % |
NOI - cash | $ | 144,859 |
| $ | 139,231 |
| $ | 5,628 |
| 4.0 | % |
| $ | 113,683 |
| $ | 111,351 |
| $ | 2,332 |
| 2.1 | % |
Net margin - cash | 59.5 | % | 58.7 | % | 0.8 | % |
|
|
| 58.8 | % | 58.7 | % | 0.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-store assets recurring cash NOI: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total same-store cash revenue | $ | 243,549 |
| $ | 236,996 |
| $ | 6,553 |
| 2.8 | % |
| $ | 193,309 |
| $ | 189,647 |
| $ | 3,662 |
| 1.9 | % |
Non-recurring lease termination fee income | (686) |
| (1,338) |
| 652 |
| (48.7)% |
|
| (659) |
| (1,228) |
| 569 |
| (46.3)% |
|
Recurring same-store cash revenue | 242,863 |
| 235,658 |
| 7,205 |
| 3.1 | % |
| 192,650 |
| 188,419 |
| 4,231 |
| 2.2 | % |
Total same-store expenses | 98,690 |
| 97,765 |
| 925 |
| 0.9 | % |
| 79,626 |
| 78,296 |
| 1,330 |
| 1.7 | % |
Recurring NOI - cash | $ | 144,173 |
| $ | 137,893 |
| $ | 6,280 |
| 4.6 | % |
| $ | 113,024 |
| $ | 110,123 |
| $ | 2,901 |
| 2.6 | % |
Recurring net margin - cash | 59.4 | % | 58.5 | % | 0.9 | % |
|
|
| 58.7 | % | 58.4 | % | 0.3 | % |
|
|
