Exhibit 99.2
Second Quarter 2008
Supplemental Financial Data
Supplemental Financial Data
Table of Contents
Page | ||||
Consolidated Statements of Operations | 3 | |||
Calculation of Funds from Operations and Adjusted Funds From Operations | 6 | |||
Same Store Results | 7 | |||
Consolidated Balance Sheets | 10 | |||
Consolidated Debt Summary | 11 | |||
Summary of Communities Under Construction | 14 | |||
Summary of Future Projects | 15 | |||
Summary of Communities Under Rehabilitation | 16 | |||
Summary of Condominium Projects | 17 | |||
Community Acquisition and Disposition Summary | 18 | |||
Capitalized Costs Summary | 19 | |||
Investments in Unconsolidated Real Estate Entities | 20 | |||
Net Asset Value Supplemental Information | 21 | |||
Non-GAAP Financial Measures and Other Defined Terms | 23 |
The projections and estimates given in this document and other written or oral statements made by or on behalf of the Company may constitute “forward-looking statements” within the meaning of the federal securities laws. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. The following are some of the factors that could cause the Company’s actual results and its expectations with respect to strategies to enhance shareholder value to differ materially from those described in the Company’s forward-looking statements: the success of the Company’s business strategies discussed in its Annual Report on Form 10-K dated December 31, 2007, as amended, and in the Company’s press release; future local and national economic conditions, including changes in job growth, interest rates, the availability of mortgage and other financing and related factors; demand for apartments in the Company’s markets and the effect on occupancy and rental rates; the impact of competition on the Company’s business, including competition for tenants and development locations for its apartment communities and competing for-sale housing in the markets where the Company is completing condominium conversions or developing new condominiums; the uncertainties associated with the Company’s current and planned future real estate development, including actual costs exceeding the Company’s budgets or development periods exceeding expectations; uncertainties associated with the timing and amount of asset sales, the market for asset sales and the resulting gains/losses associated with such asset sales; the Company’s ability to enter into new joint ventures and the availability of equity financing from traditional real estate investors to fund development activities; the Company’s ability to obtain construction loan financing to fund development activities; uncertainties associated with the Company’s condominium conversion and for-sale housing business; uncertainties associated with loss of personnel in connection with the Company’s reduction of corporate and property development and management overhead; conditions affecting ownership of residential real estate and general conditions in the multifamily residential real estate market; uncertainties associated with environmental and other regulatory matters; the impact of our ongoing litigation with the Equal Rights Center regarding compliance with the Americans with Disabilities Act and the Fair Housing Act (including any award of compensatory or punitive damages or injunctive relief requiring us to retrofit apartments or public use areas or prohibiting the sale of apartment communities or condominium units) as well as the impact of other litigation; the effects of changes in accounting policies and other regulatory matters detailed in the Company’s filings with the Securities and Exchange Commission; and the Company’s ability to continue to qualify as a real estate investment trust under the Internal Revenue Code. Other important risk factors regarding the Company are included under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K dated December 31, 2007, as amended, and may be discussed in subsequent filings with the SEC. The risk factors discussed in Form 10-K, as amended, under the caption “Risk Factors” are specifically incorporated by reference into this document.
2
Post Properties, Inc.
Consolidated Statements of Operations
(In thousands, except per share or unit data)
(Unaudited)
Consolidated Statements of Operations
(In thousands, except per share or unit data)
(Unaudited)
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues | ||||||||||||||||
Rental | $ | 62,286 | $ | 60,873 | $ | 124,474 | $ | 121,538 | ||||||||
Other property revenues | 4,084 | 3,651 | 7,381 | 7,050 | ||||||||||||
Other | 235 | 128 | 474 | 245 | ||||||||||||
Total revenues | 66,605 | 64,652 | 132,329 | 128,833 | ||||||||||||
Expenses | ||||||||||||||||
Property operating and maintenance (exclusive of items shown separately below) | 33,555 | 32,265 | 66,012 | 63,616 | ||||||||||||
Depreciation | 14,386 | 14,375 | 28,649 | 28,726 | ||||||||||||
General and administrative (1) | 4,956 | 5,959 | 10,804 | 11,407 | ||||||||||||
Investment, development and other (2) | 1,356 | 1,955 | 2,814 | 3,505 | ||||||||||||
Strategic review costs (3) | 2,091 | — | 8,161 | — | ||||||||||||
Impairment and severance costs (4) | 29,300 | — | 29,300 | — | ||||||||||||
Total expenses | 85,644 | 54,554 | 145,740 | 107,254 | ||||||||||||
Operating income (loss) | (19,039 | ) | 10,098 | (13,411 | ) | 21,579 | ||||||||||
Interest income | 61 | 213 | 271 | 463 | ||||||||||||
Interest expense | (10,112 | ) | (10,863 | ) | (20,268 | ) | (21,908 | ) | ||||||||
Amortization of deferred financing costs | (859 | ) | (829 | ) | (1,710 | ) | (1,641 | ) | ||||||||
Gains (losses) on sales of real estate assets, net (5) | (368 | ) | 62,738 | 1,751 | 66,444 | |||||||||||
Equity in income of unconsolidated real estate entities | 420 | 310 | 821 | 814 | ||||||||||||
Other income (expense) (6) | 66 | (261 | ) | (108 | ) | (522 | ) | |||||||||
Minority interest in consolidated property partnerships | 427 | (716 | ) | 61 | (693 | ) | ||||||||||
Minority interest of common unitholders | 238 | (852 | ) | 284 | (882 | ) | ||||||||||
Income (loss) from continuing operations | (29,166 | ) | 59,838 | (32,309 | ) | 63,654 | ||||||||||
Discontinued operations(7) | ||||||||||||||||
Income from discontinued property operations, net of minority interest | 4,103 | 4,099 | 7,642 | 7,864 | ||||||||||||
Gains on sales of real estate assets, net of minority interest | — | — | 2,290 | 16,890 | ||||||||||||
Income from discontinued operations | 4,103 | 4,099 | 9,932 | 24,754 | ||||||||||||
Net income (loss) | (25,063 | ) | 63,937 | (22,377 | ) | 88,408 | ||||||||||
Dividends to preferred shareholders | (1,910 | ) | (1,910 | ) | (3,819 | ) | (3,819 | ) | ||||||||
Net income (loss) available to common shareholders | $ | (26,973 | ) | $ | 62,027 | $ | (26,196 | ) | $ | 84,589 | ||||||
Per common share data — Basic(8) | ||||||||||||||||
Income (loss) from continuing operations (net of preferred dividends) | $ | (0.71 | ) | $ | 1.33 | $ | (0.82 | ) | $ | 1.38 | ||||||
Income from discontinued operations | 0.09 | 0.09 | 0.23 | 0.57 | ||||||||||||
Net income (loss) available to common shareholders | $ | (0.61 | ) | $ | 1.43 | $ | (0.60 | ) | $ | 1.95 | ||||||
Weighted average common shares outstanding — basic | 44,011 | 43,463 | 43,939 | 43,416 | ||||||||||||
Per common share data — Diluted(8) | ||||||||||||||||
Income (loss) from continuing operations (net of preferred dividends) | $ | (0.71 | ) | $ | 1.31 | $ | (0.82 | ) | $ | 1.35 | ||||||
Income from discontinued operations | 0.09 | 0.09 | 0.23 | 0.56 | ||||||||||||
Net income (loss) available to common shareholders | $ | (0.61 | ) | $ | 1.40 | $ | (0.60 | ) | $ | 1.91 | ||||||
Weighted average common shares outstanding — diluted | 44,011 | 44,278 | 43,939 | 44,192 | ||||||||||||
3
Post Properties, Inc.
Notes to Consolidated
Statements of Operations
(In thousands, except per share or unit data)
Notes to Consolidated
Statements of Operations
(In thousands, except per share or unit data)
(1) | General and administrative costs for the six months ended June 30, 2008 included $353 compared to $283 for the three and six months ended June 30, 2007 of additional severance charges related to increased accruals for prior year severance arrangements. For the three months ended June 30, 2008, the Company recognized a reduction of general and administrative expenses of $153 related to changes in variable compensation costs under the Company’s Shareholder Value Plan due to the decrease in the Company’s share price during the quarter. For the three months ended June 30, 2007, the Company recognized a $431 increase in variable compensation costs under this plan. |
(2) | Investment, development and other expenses for the three and six months ended June 30, 2008 and 2007 included investment group expenses, development personnel and associated costs and land carry expenses not allocable to current development projects. |
(3) | Strategic review costs for the three and six months ended June 30, 2008 included financial, legal and other costs associated with the Company’s formal process to pursue a possible business combination or other sale transaction. In June 2008, the Company announced that the process had concluded without a business combination or other sale transaction. |
(4) | Impairment and severance costs for the three and six months ended June 30, 2008 included non-cash impairment charges of approximately $28,947 to write down land and pre-development costs associated with development projects that are no longer expected to be started in the near term, or that are expected to be marketed for sale, to their estimated fair values and to write off pursuit costs on certain abandoned development projects. Severance charges for the three and six months ended June 30, 2008 included approximately $353 related to a management and staff workforce reduction that was initiated in the second quarter of 2008. Subsequent to June 30, 2008, the Company recorded additional severance charges of approximately $1,600 upon the continuation of the management and staff workforce reductions through July 2008. |
(5) | For the three and six months ended June 30, 2008 and 2007, income (loss) from continuing operations included net gains from condominium sales activities at newly developed and condominium conversion projects representing portions of existing communities. In addition, condominium gains are net of certain expensed sales and marketing costs associated with pre-sale condominium communities and condominium communities under development totaling $160 and $291 for the three months ended and $407 and $451 for the six months ended June 30, 2008 and 2007, respectively. Net gains from condominium sales activities at other consolidated community conversion projects are included in discontinued operations under generally accepted accounting principles (see (7) below). A summary of revenues and costs and expenses of condominium activities included in continuing operations for the three and six months ended June 30, 2008 and 2007 was as follows: |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Condominium revenues | $ | 10,051 | $ | 25,222 | $ | 18,348 | $ | 31,091 | ||||||||
Condominium costs and expenses | (10,419 | ) | (19,524 | ) | (16,597 | ) | (23,885 | ) | ||||||||
Gains (losses) on sales of condominiums, net | $ | (368 | ) | $ | 5,698 | $ | 1,751 | $ | 7,206 | |||||||
For the three and six months ended June 30, 2007, the Company recognized a proportionate 75% gain on sale of real estate totaling approximately $55,300 related to the transfer of two operating apartment communities to newly formed unconsolidated entities, in which the Company retained a 25% non-controlling interest, for aggregate proceeds of approximately $89,352. The unconsolidated entities obtained mortgage financing secured by the apartment communities totaling approximately $85,772, of which approximately $21,431 was distributed to the Company. |
For the three and six months ended June 30, 2007, gains on sales of real estate assets in continuing operations also included gains of $1,740 and $3,938, respectively, on the sales of land sites in Atlanta, Georgia and Dallas, Texas. |
(6) | For the three and six months ended June 30, 2008 and 2007, other expenses primarily included estimated state franchise and other income taxes. |
4
(7) | Under SFAS No. 144, the operating results of real estate assets designated as held for sale are included in discontinued operations for all periods presented. Additionally, all subsequent gains or additional losses on the sale of these assets are included in discontinued operations. |
For the three and six months ended June 30, 2008, income from discontinued operations included the operating results of eight apartment communities, containing 2,615 units, held for sale at June 30, 2008 and one apartment community, containing 143 units, through its sale date in 2008. For the three and six months ended June 30, 2007, income from discontinued operations included the results of operations of the eight apartment communities held for sale at June 30, 2008, the apartment community sold in 2008, a condominium conversion community sold in 2007, and three apartment communities sold in 2007 through their sale dates. |
The operating revenues and expenses of these communities for the three and six months ended June 30, 2008 and 2007 were as follows: |
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Revenues | ||||||||||||||||
Rental | $ | 11,196 | $ | 13,013 | $ | 22,502 | $ | 26,272 | ||||||||
Other property revenues | 471 | 645 | 875 | 1,241 | ||||||||||||
Total revenues | 11,667 | 13,658 | 23,377 | 27,513 | ||||||||||||
Expenses | ||||||||||||||||
Property operating and maintenance (exclusive of items shown separately below) | 3,763 | 4,384 | 7,900 | 9,126 | ||||||||||||
Depreciation | 1,698 | 2,685 | 3,623 | 5,377 | ||||||||||||
Interest | 1,944 | 2,336 | 3,921 | 4,891 | ||||||||||||
Minority interest in consolidated property partnerships | 134 | 95 | 234 | 138 | ||||||||||||
Total expenses | 7,539 | 9,500 | 15,678 | 19,532 | ||||||||||||
Income from discontinued property operations before minority interest | 4,128 | 4,158 | 7,699 | 7,981 | ||||||||||||
Minority interest | (25 | ) | (59 | ) | (57 | ) | (117 | ) | ||||||||
Income from discontinued property operations | $ | 4,103 | $ | 4,099 | $ | 7,642 | $ | 7,864 | ||||||||
For the six months ended June 30, 2008, the Company recognized net gains in discontinued operations of $2,311 ($2,290 net of minority interest), from the sale of an apartment community, containing 143 units. This sale generated net proceeds of approximately $19,433. For the six months ended June 30, 2007, the Company recognized net gains in discontinued operations of $16,974 ($16,714 net of minority interest), from the sale of an apartment community, containing 182 units. |
For the six months ended June 30, 2007, gains on sales of real estate assets included in discontinued operations also included net gains from condominium sales activities at one condominium conversion community that sold out in the first quarter of 2007. A summary of revenues and costs and expenses of condominium activities included in discontinued operations was as follows: |
Six months ended | ||||
June 30, 2007 | ||||
Condominium revenues | $ | 560 | ||
Condominium costs and expenses | (381 | ) | ||
Gains on condominium sales, before minority interest | 179 | |||
Minority interest | (3 | ) | ||
Gains on condominium sales, net of minority interest | $ | 176 | ||
(8) | Post Properties, Inc. is structured as an UPREIT, or Umbrella Partnership Real Estate Investment Trust. Post GP Holdings, Inc., a wholly-owned subsidiary of the Company, is the sole general partner and, together with Post LP Holdings, Inc., also a wholly-owned subsidiary of the Company, owns the controlling interest in Post Apartment Homes, L.P., the Operating Partnership through which the Company conducts its operations. As of June 30, 2008, there were 44,404 units of the Operating Partnership outstanding, of which 44,111, or 99.3%, were owned by the Company. |
5
Post Properties, Inc.
Calculation of Funds from Operations
and Adjusted Funds From Operations Available
to Common Shareholders and Unitholders
(In thousands, except per share or unit data)
(Unaudited)
Calculation of Funds from Operations
and Adjusted Funds From Operations Available
to Common Shareholders and Unitholders
(In thousands, except per share or unit data)
(Unaudited)
A reconciliation of net income (loss) available to common shareholders to funds from operations available to common shareholders and unitholders and adjusted funds from operations available to common shareholders and unitholders is provided below.
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Net income (loss) available to common shareholders | $ | (26,973 | ) | $ | 62,027 | $ | (26,196 | ) | $ | 84,589 | ||||||
Minority interest of common unitholders — continuing operations | (238 | ) | 852 | (284 | ) | 882 | ||||||||||
Minority interest in discontinued operations (1) | 25 | 59 | 78 | 380 | ||||||||||||
Depreciation on consolidated real estate assets (2) | 15,582 | 16,524 | 31,284 | 33,013 | ||||||||||||
Depreciation on real estate assets held in unconsolidated entities | 345 | 274 | 693 | 500 | ||||||||||||
Gains on sales of real estate assets | 368 | (60,998 | ) | (4,062 | ) | (79,659 | ) | |||||||||
Incremental gains (losses) on condominium sales | (1,748 | ) | 3,360 | (244 | ) | 3,164 | ||||||||||
Gains on sales of real estate assets — unconsolidated entities | — | 40 | — | (162 | ) | |||||||||||
Incremental gains on condominium sales — unconsolidated entities (3) | — | (46 | ) | — | 87 | |||||||||||
Funds from operations available to common shareholders and unitholders (A) | $ | (12,639 | ) | $ | 22,092 | $ | 1,269 | $ | 42,794 | |||||||
Funds from operations available to common shareholders and unitholders (A) | $ | (12,639 | ) | $ | 22,092 | $ | 1,269 | $ | 42,794 | |||||||
Annually recurring capital expenditures | (3,382 | ) | (3,464 | ) | (5,640 | ) | (6,080 | ) | ||||||||
Periodically recurring capital expenditures | (1,738 | ) | (1,562 | ) | (3,331 | ) | (3,867 | ) | ||||||||
Non-cash impairment charges | 28,947 | — | 28,947 | — | ||||||||||||
Non-cash straight-line adjustment for ground lease expenses | 294 | 311 | 589 | 624 | ||||||||||||
Strategic review costs | 2,091 | — | 8,161 | — | ||||||||||||
Adjusted funds from operations available to common shareholders and unitholders (4) (B) | $ | 13,573 | $ | 17,377 | $ | 29,995 | $ | 33,471 | ||||||||
Per Common Share Data — Basic | ||||||||||||||||
Funds from operations per share or unit, as defined(A÷C) | $ | (0.29 | ) | $ | 0.50 | $ | 0.03 | $ | 0.97 | |||||||
Adjusted funds from operations per share or unit (4)(B÷C) | $ | 0.31 | $ | 0.39 | $ | 0.68 | $ | 0.76 | ||||||||
Dividends declared | $ | 0.45 | $ | 0.45 | $ | 0.90 | $ | 0.90 | ||||||||
Weighted average shares outstanding | 44,011 | 43,463 | 43,939 | 43,416 | ||||||||||||
Weighted average shares and units outstanding(C) | 44,305 | 44,086 | 44,287 | 44,064 | ||||||||||||
Per Common Share Data — Diluted | ||||||||||||||||
Funds from operations per share or unit, as defined(A÷D) | $ | (0.29 | ) | $ | 0.49 | $ | 0.03 | $ | 0.95 | |||||||
Adjusted funds from operations per share or unit (4)(B÷D) | $ | 0.31 | $ | 0.39 | $ | 0.67 | $ | 0.75 | ||||||||
Dividends declared | $ | 0.45 | $ | 0.45 | $ | 0.90 | $ | 0.90 | ||||||||
Weighted average shares outstanding (5) | 44,011 | 44,278 | 44,297 | 44,192 | ||||||||||||
Weighted average shares and units outstanding (5)(D) | 44,305 | 44,900 | 44,645 | 44,840 |
(1) | Represents the minority interest in earnings and gains on sales of real estate assets reported as discontinued operations for the periods presented. | |
(2) | Depreciation on wholly-owned real estate assets is net of the minority interest portion of depreciation in consolidated entities. | |
(3) | For condominium conversion projects, the Company recognizes incremental gains on condominium sales in FFO, net of provision for income taxes, to the extent that net sales proceeds, less costs of sales, from the sale of condominium units exceeds the greater of their fair value or net book value as of the date the property is acquired by the Company’s taxable REIT subsidiary. For condominium development projects, gains on condominium sales in FFO are equivalent to gains reported under GAAP. See the table entitled “Summary of Condominium Projects” on page 17 for further detail. | |
(4) | Since the Company does not add back the depreciation of non-real estate assets in its calculation of funds from operations, non-real estate related capital expenditures of $190 and $347 for the three months ended and $421 and $1,608 for the six months ended June 30, 2008 and 2007, respectively, are excluded from the calculation of adjusted funds from operations available to common shareholders and unitholders. | |
(5) | Funds from operations per share were computed using weighted average shares and units outstanding, including the impact of dilutive securities totaling 358 shares and units for the six months ended June 30, 2008. Such dilutive securities were antidilutive to the income (loss) per share computations for the six months ended June 30, 2008 since the Company reported a per share loss from continuing operations under generally accepted accounting principles for such period. Additionally, diluted weighted average shares and units for the three months ended June 30, 2008 excludes 307 shares and units that were antidilutive to all income (loss) per share computations under generally accepted accounting principles and the deficit in funds from operations for such period. |
6
Post Properties, Inc.
Same Store Results
(In thousands, except per share or unit data)
(Unaudited)
Same Store Results
(In thousands, except per share or unit data)
(Unaudited)
Same Store Results
The Company defines fully stabilized or same store communities as those which have reached stabilization prior to the beginning of the previous calendar year, adjusted by communities sold and classified as held for sale and communities under rehabilitation. Same store net operating income is a supplemental non-GAAP financial measure. See Table 1 on page 25 for a reconciliation of same store net operating income to GAAP net income. The operating performance and capital expenditures of the 36 communities containing 13,693 apartment units which were fully stabilized as of January 1, 2007, is summarized as follows:
Three months ended | Six months ended | |||||||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||||||
2008 | 2007 | % Change | 2008 | 2007 | % Change | |||||||||||||||||||
Rental and other revenues | $ | 51,585 | $ | 50,286 | 2.6 | % | $ | 102,518 | $ | 99,789 | 2.7 | % | ||||||||||||
Property operating and maintenance expenses (excluding depreciation and amortization) | 21,395 | 20,063 | 6.6 | % | 41,604 | 39,532 | 5.2 | % | ||||||||||||||||
Same store net operating income | $ | 30,190 | $ | 30,223 | (0.1 | )% | $ | 60,914 | $ | 60,257 | 1.1 | % | ||||||||||||
Capital expenditures (1) | ||||||||||||||||||||||||
Annually recurring: | ||||||||||||||||||||||||
Carpet | $ | 628 | $ | 643 | (2.3 | )% | $ | 1,154 | $ | 1,189 | (2.9 | )% | ||||||||||||
Other | 1,660 | 1,326 | 25.2 | % | 2,633 | 2,261 | 16.5 | % | ||||||||||||||||
Total annually recurring | 2,288 | 1,969 | 16.2 | % | 3,787 | 3,450 | 9.8 | % | ||||||||||||||||
Periodically recurring (2) | 1,575 | 571 | 175.8 | % | 2,813 | 1,136 | 147.6 | % | ||||||||||||||||
Total capital expenditures(A) | $ | 3,863 | $ | 2,540 | 52.1 | % | $ | 6,600 | $ | 4,586 | 43.9 | % | ||||||||||||
Total capital expenditures per unit(A ÷ 13,693 units) | $ | 282 | $ | 185 | 52.4 | % | $ | 482 | $ | 335 | 43.9 | % | ||||||||||||
Average monthly rental rate per unit (3) | $ | 1,246 | $ | 1,218 | 2.3 | % | $ | 1,244 | $ | 1,213 | 2.6 | % | ||||||||||||
(1) | See Table 3 on page 28 for a reconciliation of these segment components of property capital expenditures to total annually recurring capital expenditures and total periodically recurring capital expenditures as presented on the consolidated cash flow statements prepared under GAAP. | |
(2) | Periodically recurring expenditures for the three and six months ended June 30, 2008 include approximately $493 and $956, respectively related to the Company’s new “resident design center” program. | |
(3) | Average monthly rental rate is defined as the average of the gross actual rates for occupied units and the anticipated rental rates for unoccupied units divided by total units. |
7
Same Store Operating Results by Market -
Comparison of Second Quarter of 2008 to Second Quarter of 2007
(Increase (decrease) from same period in prior year)
Comparison of Second Quarter of 2008 to Second Quarter of 2007
(Increase (decrease) from same period in prior year)
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June 30, 2008 | June 30, 2008 | |||||||||||||||||||||||||||||||
Average | Average | |||||||||||||||||||||||||||||||
Economic | Economic | |||||||||||||||||||||||||||||||
Market | Revenues (1) | Expenses (1) | NOI (1) | Occupancy | Revenues (1) | Expenses (1) | NOI (1) | Occupancy | ||||||||||||||||||||||||
Atlanta | 3.8 | % | 1.9 | % | 5.1 | % | 0.7 | % | 3.8 | % | 2.9 | % | 4.3 | % | 0.8 | % | ||||||||||||||||
Dallas | 5.8 | % | 14.6 | % | (0.8 | )% | (0.2 | )% | 5.3 | % | 12.3 | % | 0.1 | % | 0.5 | % | ||||||||||||||||
Washington, DC | 2.2 | % | 7.0 | % | (0.0 | )% | 0.3 | % | 2.3 | % | 5.3 | % | 0.8 | % | 0.1 | % | ||||||||||||||||
Tampa | (3.3 | )% | 7.4 | % | (10.5 | )% | (1.9 | )% | (2.6 | )% | 4.5 | % | (7.4 | )% | (1.5 | )% | ||||||||||||||||
Charlotte | 2.4 | % | 14.4 | % | (3.5 | )% | (0.7 | )% | 2.5 | % | 5.1 | % | 1.2 | % | (0.8 | )% | ||||||||||||||||
Houston | 5.5 | % | 13.8 | % | (1.5 | )% | (0.7 | )% | 6.3 | % | 8.9 | % | 4.1 | % | 0.3 | % | ||||||||||||||||
Austin | 1.5 | % | (6.3 | )% | 9.2 | % | (3.5 | )% | 3.4 | % | (4.2 | )% | 11.2 | % | (1.7 | )% | ||||||||||||||||
Orlando | (5.8 | )% | (32.6 | )% | 26.0 | % | (2.6 | )% | (3.7 | )% | (20.0 | )% | 11.6 | % | (1.0 | )% | ||||||||||||||||
Total | 2.6 | % | 6.6 | % | (0.1 | )% | (0.3 | )% | 2.7 | % | 5.2 | % | 1.1 | % | 0.1 | % | ||||||||||||||||
(1) | See Table 2 on page 26 for a reconciliation of these components of same store net operating income and Table 1 on page 25 for a reconciliation of same store net operating income to GAAP net income. |
Same Store Occupancy by Market
Average Economic | Average Economic | |||||||||||||||||||||||||||
% of NOI | Occupancy (1) | Occupancy (1) | Physical | |||||||||||||||||||||||||
Three months ended | Three months ended | Six months ended | Occupancy | |||||||||||||||||||||||||
Apartment | June 30, | June 30, | June 30, | at June 30, | ||||||||||||||||||||||||
Market | Units | 2008 | 2008 | 2007 | 2008 | 2007 | 2008 (2) | |||||||||||||||||||||
Atlanta | 4,243 | 29.4 | % | 94.4 | % | 93.7 | % | 94.7 | % | 93.9 | % | 94.8 | % | |||||||||||||||
Dallas | 3,095 | 18.2 | % | 94.0 | % | 94.2 | % | 94.5 | % | 94.0 | % | 95.6 | % | |||||||||||||||
Washington, DC | 1,700 | 19.8 | % | 94.5 | % | 94.2 | % | 94.2 | % | 94.1 | % | 94.6 | % | |||||||||||||||
Tampa | 1,877 | 13.0 | % | 91.9 | % | 93.8 | % | 92.7 | % | 94.2 | % | 95.7 | % | |||||||||||||||
Charlotte | 1,388 | 10.3 | % | 94.3 | % | 95.0 | % | 93.5 | % | 94.3 | % | 95.7 | % | |||||||||||||||
Houston | 837 | 5.1 | % | 92.6 | % | 93.3 | % | 93.0 | % | 92.7 | % | 93.9 | % | |||||||||||||||
Austin | 308 | 2.2 | % | 94.0 | % | 97.5 | % | 94.9 | % | 96.6 | % | 94.2 | % | |||||||||||||||
Orlando | 245 | 2.0 | % | 93.6 | % | 96.2 | % | 94.2 | % | 95.2 | % | 96.3 | % | |||||||||||||||
Total | 13,693 | 100.0 | % | 93.8 | % | 94.1 | % | 94.1 | % | 94.0 | % | 95.1 | % | |||||||||||||||
(1) | The calculation of average economic occupancy does not include a deduction for net concessions and employee discounts. Average economic occupancy, including these amounts, would have been 93.0% and 93.4% for the three months ended and 93.2% and 93.3% for the six months ended June 30, 2008 and 2007, respectively. For the three months ended June 30, 2008 and 2007, net concessions were $320 and $216, respectively, and employee discounts were $143 and $153, respectively. For the six months ended June 30, 2008 and 2007, net concessions were $607 and $427, respectively, and employee discounts were $286 and $310, respectively. | |
(2) | Physical occupancy is defined as the number of units occupied divided by total apartment units, expressed as a percentage. |
8
Same Store Sequential Comparison
Three months ended | ||||||||||||
June 30, | March 31, | |||||||||||
2008 | 2008 | % Change | ||||||||||
Rental and other revenues | $ | 51,585 | $ | 50,933 | 1.3 | % | ||||||
Property operating and maintenance expenses (excluding depreciation and amortization) | 21,395 | 20,209 | 5.9 | % | ||||||||
Same store net operating income (1) | $ | 30,190 | $ | 30,724 | (1.7 | )% | ||||||
Average economic occupancy | 93.8 | % | 94.3 | % | (0.5 | )% | ||||||
Average monthly rental rate per unit | $ | 1,246 | $ | 1,241 | 0.4 | % | ||||||
(1) | See Table 2 on page 26 for a reconciliation of these components of same store net operating income and Table 1 on page 25 for a reconciliation of same store net operating income to GAAP net income. |
Sequential Same Store Operating Results by Market -
Comparison of Second Quarter of 2008 to First Quarter 2008
(Increase (decrease) between periods)
Comparison of Second Quarter of 2008 to First Quarter 2008
(Increase (decrease) between periods)
Average | ||||||||||||||||
Economic | ||||||||||||||||
Market | Revenues (1) | Expenses (1) | NOI (1) | Occupancy | ||||||||||||
Atlanta | 1.2 | % | 5.2 | % | (1.3 | )% | (0.6 | )% | ||||||||
Dallas | 2.9 | % | 7.3 | % | (0.7 | )% | (1.0 | )% | ||||||||
Washington, DC | 1.4 | % | (0.6 | )% | 2.5 | % | 0.7 | % | ||||||||
Tampa | (1.1 | )% | 7.1 | % | (6.9 | )% | (1.6 | )% | ||||||||
Charlotte | 2.7 | % | 15.8 | % | (3.7 | )% | 1.6 | % | ||||||||
Houston | 1.3 | % | 13.8 | % | (8.5 | )% | (0.8 | )% | ||||||||
Austin | (0.7 | )% | (4.6 | )% | 2.8 | % | (1.9 | )% | ||||||||
Orlando | (2.4 | )% | (9.4 | )% | 2.7 | % | (1.2 | )% | ||||||||
Total | 1.3 | % | 5.9 | % | (1.7 | )% | (0.5 | )% | ||||||||
(1) | See Table 2 on page 26 for a reconciliation of these components of same store net operating income and Table 1 on page 25 for a reconciliation of same store net operating income to GAAP net income. |
9
Post Properties, Inc.
Consolidated Balance Sheets
(In thousands, except per share or unit data)
Consolidated Balance Sheets
(In thousands, except per share or unit data)
June 30, | December 31, | |||||||
2008 | 2007 | |||||||
(Unaudited) | ||||||||
Assets | ||||||||
Real estate assets | ||||||||
Land | $ | 232,160 | $ | 276,680 | ||||
Building and improvements | 1,649,338 | 1,840,563 | ||||||
Furniture, fixtures and equipment | 190,407 | 204,433 | ||||||
Construction in progress | 135,232 | 134,125 | ||||||
Land held for future development | 123,167 | 154,617 | ||||||
2,330,304 | 2,610,418 | |||||||
Less: accumulated depreciation | (499,981 | ) | (562,226 | ) | ||||
For-sale condominiums | 26,314 | 38,844 | ||||||
Assets held for sale, net of accumulated depreciation of $93,844 and $4,031 at June 30, 2008 and December 31, 2007, respectively | 258,610 | 24,576 | ||||||
Total real estate assets | 2,115,247 | 2,111,612 | ||||||
Investments in and advances to unconsolidated real estate entities | 22,815 | 23,036 | ||||||
Cash and cash equivalents | 17,988 | 11,557 | ||||||
Restricted cash | 9,956 | 5,642 | ||||||
Deferred charges, net | 10,159 | 10,538 | ||||||
Other assets | 37,141 | 105,756 | ||||||
Total assets | $ | 2,213,306 | $ | 2,268,141 | ||||
Liabilities and shareholders’ equity | ||||||||
Indebtedness, including $34,261 and $0 secured by assets held for sale as of June 30, 2008 and December 31, 2007, respectively | $ | 1,064,405 | $ | 1,059,066 | ||||
Accounts payable and accrued expenses | 99,003 | 100,215 | ||||||
Dividend and distribution payable | 19,982 | 19,933 | ||||||
Accrued interest payable | 4,790 | 4,388 | ||||||
Security deposits and prepaid rents | 15,892 | 11,708 | ||||||
Total liabilities | 1,204,072 | 1,195,310 | ||||||
Minority interest of common unitholders in Operating Partnership | 6,034 | 10,354 | ||||||
Minority interests in consolidated real estate entities | 2,921 | 3,972 | ||||||
Total minority interests | 8,955 | 14,326 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ equity | ||||||||
Preferred stock, $.01 par value, 20,000 authorized: | ||||||||
8 1/2% Series A Cumulative Redeemable Shares, liquidation preference $50 per share, 900 shares issued and outstanding | 9 | 9 | ||||||
7 5/8% Series B Cumulative Redeemable Shares, liquidation preference $25 per share, 2,000 shares issued and outstanding | 20 | 20 | ||||||
Common stock, $.01 par value, 100,000 authorized: | ||||||||
44,119 and 43,825 shares issued, 44,111 and 43,825 shares outstanding at June 30, 2008 and December 31, 2007, respectively | 441 | 438 | ||||||
Additional paid-in-capital | 882,438 | 874,928 | ||||||
Accumulated earnings | 124,101 | 189,985 | ||||||
Accumulated other comprehensive income (loss) | (3,385 | ) | (3,962 | ) | ||||
1,003,624 | 1,061,418 | |||||||
Less common stock in treasury, at cost, 83 and 72 shares at June 30, 2008 and December 31, 2007, respectively | (3,345 | ) | (2,913 | ) | ||||
Total shareholders’ equity | 1,000,279 | 1,058,505 | ||||||
Total liabilities and shareholders’ equity | $ | 2,213,306 | $ | 2,268,141 | ||||
10
Post Properties, Inc.
Consolidated Debt Summary
(Dollars in thousands, except per share or unit data)
(Unaudited)
Consolidated Debt Summary
(Dollars in thousands, except per share or unit data)
(Unaudited)
Summary of Outstanding Debt at June 30, 2008
Weighted Average Rate (1) | ||||||||||||||||
Percentage | Three months ended June 30, | |||||||||||||||
Type of Indebtedness | Balance | of Total | 2008 | 2007 | ||||||||||||
Unsecured fixed rate senior notes | $ | 535,000 | 50.2 | % | 6.4 | % | 6.4 | % | ||||||||
Secured conventional fixed rate notes | 385,134 | 36.2 | % | 5.5 | % | 6.2 | % | |||||||||
Unsecured lines of credit | 144,271 | 13.6 | % | 3.1 | % | 5.6 | % | |||||||||
Secured tax exempt variable rate notes | — | 0.0 | % | — | 4.3 | % | ||||||||||
$ | 1,064,405 | 100.0 | % | 5.6 | % | 6.3 | % | |||||||||
Percentage | Weighted Average Maturity | |||||||||||||||
Balance | of Total Debt | of Total Debt (2) | ||||||||||||||
Total fixed rate debt | $ | 920,134 | 86.4 | % | 5.6 | |||||||||||
Total variable rate debt | 144,271 | 13.6 | % | 1.8 | ||||||||||||
Total debt | $ | 1,064,405 | 100.0 | % | 5.1 | |||||||||||
Debt Maturities
Weighted Average Rate | ||||||||
Aggregate debt maturities by year | Amount | on Debt Maturities (1) | ||||||
Remainder of 2008 | $ | 3,572 | 6.0 | % | ||||
2009 | 76,618 | 5.5 | % | |||||
2010 | 332,899 | (3) | 5.7 | % | ||||
2011 | 141,431 | 5.4 | % | |||||
2012 | 103,296 | 5.5 | % | |||||
Thereafter | 406,589 | 5.7 | % | |||||
$ | 1,064,405 | |||||||
Debt Statistics
Six months ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Interest coverage ratio (4)(5) | 2.2 | x | 2.3 | x | ||||
Fixed charge coverage ratio (4)(6) | 1.9 | x | 2.0 | x | ||||
Total debt as a % of undepreciated real estate assets (adjusted for joint venture partner’s share of debt) (7) | 40.2 | % | 37.0 | % | ||||
Total debt and preferred equity as a % of undepreciated real estate assets (adjusted for joint venture partner’s share of debt) (7) | 43.6 | % | 40.6 | % |
(1) | Weighted average rate includes credit enhancements and other fees, where applicable. The weighted average rates for the three months ended June 30, 2007 are based on the debt outstanding for that period. | |
(2) | Weighted average maturity of total debt represents number of years to maturity based on the debt maturities schedule above. | |
(3) | Includes outstanding balances on lines of credit of $144,271 maturing in 2010. | |
(4) | Calculated for the six months ended June 30, 2008 and 2007. | |
(5) | Interest coverage ratio is defined as net income available for debt service divided by interest expense. For purposes of this calculation, net income available for debt service represents income from continuing operations, before preferred or common minority interest, gains on sales of real estate and investment sales, interest expense, depreciation and amortization. Net income available for debt service was also adjusted for the Company’s share of depreciation and interest expense from unconsolidated entities, and interest expense used in the calculation was adjusted to include the Company’s share of interest expense from unconsolidated entities. The calculation of the interest coverage ratio is a non-GAAP financial measure. A reconciliation of net income available for debt service to income from continuing operations and interest expense to consolidated interest expense is included in Table 4 on page 29. | |
(6) | Fixed charge coverage ratio is defined as net income available for debt service divided by interest expense plus dividends to preferred shareholders and distributions to preferred unitholders. For purposes of this calculation, net income available for debt service represents earnings from continuing operations, before preferred or common minority interest, gains on sales of real estate and investment sales, interest expense, depreciation and amortization. Net income available for debt service was also adjusted for the Company’s share of depreciation and interest expense from unconsolidated entities, and interest expense used in the calculation was adjusted to include the Company’s share of interest expense from unconsolidated entities. The calculation of the fixed coverage ratio is a non-GAAP financial measure. A reconciliation of net income available for debt service to income from continuing operations and fixed charges to consolidated interest expense plus preferred dividends to shareholders and preferred distributions to unitholders is included in Table 4 on page 29. | |
(7) | A computation of the debt ratios is included in Table 5 on page 30. |
11
Post Properties, Inc.
Consolidated Debt Summary (cont.)
(Dollars in thousands, except per share or unit data)
(Unaudited)
Consolidated Debt Summary (cont.)
(Dollars in thousands, except per share or unit data)
(Unaudited)
Financial Debt Covenants — Senior Unsecured Public Notes
Covenant requirement(1) | As of June 30, 2008 | |||
Consolidated Debt to Total Assets cannot exceed 60% | 38 | % | ||
Secured Debt to Total Assets cannot exceed 40% | 14 | % | ||
Total Unencumbered Assets to Unsecured Debt must be at least 1.5/1 | 3.3 | x | ||
Consolidated Income Available for Debt Service Charge must be at least 1.5/1 | 2.4 | x |
(1) | A summary of the public debt covenant calculations and reconciliations of the financial components used in the public debt covenant calculations to the most comparable GAAP financial measures are detailed below. |
As of | ||||
June 30, 2008 | ||||
Ratio of Consolidate Debt to Total Assets | ||||
Consolidated debt, per balance sheet(A) | $ | 1,064,405 | ||
Total assets, as defined(B)(Table A) | $ | 2,796,972 | ||
Computed ratio(A÷B) | 38 | % | ||
Required ratio (cannot exceed) | 60 | % | ||
Ratio of Secured Debt to Total Assets | ||||
Total secured debt(C) | $ | 385,134 | ||
Computed ratio(C÷B) | 14 | % | ||
Required ratio (cannot exceed) | 40 | % | ||
Ratio of Total Unencumbered Assets to Unsecured Debt | ||||
Consolidated debt, per balance sheet(A) | $ | 1,064,405 | ||
Total secured debt(C) | (385,134 | ) | ||
Total unsecured debt(D) | $ | 679,271 | ||
Total unencumbered assets, as defined(E)(Table A) | $ | 2,207,991 | ||
Computed ratio(E÷D) | 3.3 | x | ||
Required minimum ratio | 1.5 | x | ||
Ratio of Consolidated Income Available for Debt Service to Annual Debt Service Charge | ||||
Consolidated Income Available for Debt Service, as defined(F)(Table B) | $ | 125,140 | ||
Annual Debt Service Charge, as defined(G)(Table B) | $ | 51,152 | ||
Computed ratio(F÷G) | 2.4 | x | ||
Required minimum ratio | 1.5 | x | ||
12
Post Properties, Inc.
Consolidated Debt Summary (cont.)
(Dollars in thousands, except per share or unit data)
(Unaudited)
Consolidated Debt Summary (cont.)
(Dollars in thousands, except per share or unit data)
(Unaudited)
Table A
Calculation of Total Assets and Total Unencumbered Assets for
Public Debt Covenant Computations
Public Debt Covenant Computations
As of | ||||
June 30, 2008 | ||||
Total real estate assets | $ | 2,115,247 | ||
Add: | ||||
Investments in and advances to unconsolidated real estate entities | 22,815 | |||
Accumulated depreciation | 499,981 | |||
Accumulated depreciation on assets held for sale | 93,844 | |||
Other tangible assets | 65,085 | |||
Total assets for public debt covenant computations | 2,796,972 | |||
Less: | ||||
Encumbered real estate assets | (588,981 | ) | ||
Total unencumbered assets for public debt covenant computations | $ | 2,207,991 | ||
Table B
Calculation of Consolidated Income Available for Debt Service and
Annual Debt Service Change for Public Covenant Computations
Annual Debt Service Change for Public Covenant Computations
Six months ended | ||||
Consolidated income available for debt service | June 30, 2008 | |||
Net income (loss) | $ | (22,377 | ) | |
Add: | ||||
Minority interest of common unitholders | (206 | ) | ||
Minority interest in consolidated property partnerships — gains on sales of real estate assets — continuing operations | 17 | |||
Income before minority interest | (22,566 | ) | ||
Add: | ||||
Non-cash impairment charges | 28,947 | |||
Depreciation | 28,649 | |||
Depreciation (company share) of assets held in unconsolidated entities | 693 | |||
Depreciation of discontinued operations | 3,623 | |||
Amortization of deferred financing costs | 1,710 | |||
Interest expense | 20,268 | |||
Interest expense (company share) of assets held in unconsolidated entities | 1,387 | |||
Interest expense of discontinued operations | 3,921 | |||
Less: | ||||
Gains on sales of real estate assets, net — continuing operations | (1,751 | ) | ||
Gains on sales of real estate assets — discontinued operations | (2,311 | ) | ||
Consolidated income available for debt service | $ | 62,570 | ||
Consolidated income available for debt service (annualized) | $ | 125,140 | ||
Annual debt service charge | ||||
Consolidated interest expense | $ | 20,268 | ||
Interest expense (company share) of assets held in unconsolidated entities | 1,387 | |||
Interest expense of discontinued operations | 3,921 | |||
Debt service charge | $ | 25,576 | ||
Debt service charge (annualized) | $ | 51,152 | ||
13
Post Properties, Inc.
Summary Of Communities Under Construction
($ in millions)
Summary Of Communities Under Construction
($ in millions)
Costs | Estimated | |||||||||||||||||||||||||||||||||||||||||||||||||||
Company | Incurred | Quarter | Quarter of | Quarter of | Units | |||||||||||||||||||||||||||||||||||||||||||||||
Number | Retail | Company | Estimated | Share of | as of | of Const. | First Units | Stabilized | Units | Under | Units | |||||||||||||||||||||||||||||||||||||||||
Community | Location | of Units | Sq. Ft. | Ownership | Cost | Est. Cost | 06/30/08 | Start | Available | Occupancy(1) | Leased(2) | Contract(3) | Closed(2) | |||||||||||||||||||||||||||||||||||||||
(Company | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Apartments(6): | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Post Alexander™ | Atlanta, GA | 307 | — | 100 | % | $ | 62.4 | $ | 62.4 | $ | 54.5 | 2Q 2006 | 1Q 2008 | 2Q 2009 | 97 | N/A | N/A | |||||||||||||||||||||||||||||||||||
Post Eastside™ | Dallas, TX | 435 | 37,900 | 100 | % | 56.7 | 56.7 | 35.0 | 4Q 2006 | 2Q 2008 | 4Q 2009 | 71 | N/A | N/A | ||||||||||||||||||||||||||||||||||||||
Post Frisco Bridges™ | Dallas, TX | 269 | 29,000 | 100 | % | 41.3 | 41.3 | 13.2 | 3Q 2007 | 1Q 2009 | 2Q 2010 | — | N/A | N/A | ||||||||||||||||||||||||||||||||||||||
Post Park® | Wash. DC | 396 | 1,700 | 100 | % | 84.7 | 84.7 | 29.1 | 4Q 2007 | 1Q 2009 | 3Q 2010 | — | N/A | N/A | ||||||||||||||||||||||||||||||||||||||
Post West Austin™ | Austin, TX | 329 | — | 100 | % | 53.2 | 53.2 | 20.8 | 4Q 2007 | 1Q 2009 | 1Q 2010 | — | N/A | N/A | ||||||||||||||||||||||||||||||||||||||
Total Apartments | 1,736 | 68,600 | $ | 298.3 | $ | 298.3 | $ | 152.6 | 168 | |||||||||||||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Condominiums(6): | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The Residences at 3630 Peachtree™ (4) | Atlanta, GA | 137 | — | 50 | % | $ | 93.4 | $ | 47.6 | $ | 15.2 | 3Q 2007 | 3Q 2009 | N/A | N/A | — | — | |||||||||||||||||||||||||||||||||||
Four Seasons Residences | Austin, TX | 147 | (5) | 8,000 | 100 | % | 133.5 | 133.5 | 29.3 | 1Q 2008 | 4Q 2009 | N/A | N/A | 60 | — | |||||||||||||||||||||||||||||||||||||
Total Condominiums | 284 | 8,000 | $ | 226.9 | $ | 181.1 | $ | 44.5 | 60 | — | ||||||||||||||||||||||||||||||||||||||||||
(1) | The Company defines stabilized occupancy as the earlier to occur of (i) the attainment of 95% physical occupancy on the first day of any month or (ii) one year after completion of construction. | |
(2) | As of July 28, 2008. | |
(3) | As of July 28, 2008, represents the total number of units under contract for sale upon completion and delivery of the units. There can be no assurance that condominium units under contract will close. | |
(4) | The amounts reflected for this project represent the condominium portion of a mixed-use development currently being developed in an entity owned with other third-party developers. This condominium portion of the project is co-owned with an Atlanta-based condominium development partner. | |
(5) | Due to the combination of certain contiguous units, the aggregate unit count was reduced from 168 units to 147 units. | |
(6) | Investments were generally underwritten to achieve targeted yields of approximately 6.00%-6.75% for apartment developments and approximately 20% pre-tax margins on estimated costs for condominium developments. Targeted yields for apartment developments represents the projected unlevered property net operating income (after adjustments for 3% management fee and $300 per unit capital reserves) as a percentage of total estimated construction costs. Targeted pre-tax margins for condominium developments represent projected pre-tax profits from condominium sales activities as a percentage of total estimated construction costs. There can be no assurance that these targets will be achieved. |
14
Post Properties, Inc.
Summary of Future Projects
Summary of Future Projects
The following are future projects for which the Company is currently in pre-development as well as other land positions. The estimates and assumptions detailed below, including the approximate number of units, approximate retail square footage and approximate total projected development costs, are forward-looking and are subject to risks outlined on page 2 of this supplemental financial data. There can be no assurance that projects in pre-development will commence construction in the future or at all, that the number of units, square footage or intended use of the product will not change in the future or that development costs will not differ materially from the estimates provided below. The Company assumes no obligation to update this outlook in the future.
Active Pre-Development Projects(1):
Carrying Value | Estimated | |||||||||||||||
At June 30, 2008 | Apartment Units | Estimated Retail | ||||||||||||||
Project | Metro Area | (in thousands) | For Rent | Square Feet | ||||||||||||
South Lamar | Austin, TX | $ | 9,052 | 302 | 10,000 | |||||||||||
Post Morningside™ (2) | Charlotte, NC | — | 400 | 25,000 | ||||||||||||
Post Midtown Square® III | Houston, TX | 3,438 | 124 | 11,000 | ||||||||||||
Post Richmond™ | Houston, TX | 6,851 | 232 | — | ||||||||||||
Wade I | Raleigh, NC | 8,498 | 432 | 81,000 | (3) | |||||||||||
Post Carlyle Square™ II | Washington, D.C. | 11,310 | 332 | 6,000 | ||||||||||||
$ | 39,149 | 1,822 | 133,000 | |||||||||||||
Other Land Held for Future Development(4):
Carrying Value | ||||||||||||
At June 30, 2008 | Estimated Usable | |||||||||||
Project | Metro Area | (in thousands) | Acreage | |||||||||
Alexander | Atlanta, GA | $ | 8,665 | 2.5 | ||||||||
Allen Plaza (three sites) | Atlanta, GA | 27,669 | 5.6 | |||||||||
Frisco Bridges II | Dallas, TX | 5,456 | 5.4 | |||||||||
Lake at Baldwin Park | Orlando, FL | 17,554 | 13.5 | |||||||||
Wade (two sites) | Raleigh, NC | 14,016 | 19.6 | |||||||||
Soho Square | Tampa, FL | 10,658 | 4.1 | |||||||||
$ | 84,018 | 50.7 | ||||||||||
Total Land and Pre-Development Costs | $ | 123,167 | ||||||||||
(1) | Total development costs are projected to be approximately $380 million and include projected costs of proposed retail amenities, as applicable. | |
(2) | Site under contract to purchase. There can be no assurance that this land purchase will close. As of June 30, 2008, the Company had incurred pursuit costs and deposits totaling approximately $967 related to this project. | |
(3) | The Company currently expects to develop the retail portion of this project in a partnership with a retail developer. The Company’s share of projected development costs is included in total projected development costs. | |
(4) | Excludes land held for sale. |
15
Post Properties, Inc.
Summary Of Communities Under Rehabilitation
(Dollars in thousands, except per square foot)
Summary Of Communities Under Rehabilitation
(Dollars in thousands, except per square foot)
Average Monthly Rental | Property NOI | Property NOI | Number of Units | |||||||||||||||||||||||||||||||||||||||||||||
Rate Per Sq. Ft. (1) | For the Fiscal | For the | Undepreciated | Projected | As of June 30, 2008 | |||||||||||||||||||||||||||||||||||||||||||
Average | Actual | Projected | Year Preceding | Three Months | Book Value | Total | ||||||||||||||||||||||||||||||||||||||||||
Year | Total | Sq. Ft. | Prior to | After | The Start of | Ended | Prior to | Rehabilitation | Out | |||||||||||||||||||||||||||||||||||||||
Project | Location | Completed | Units | Per Unit (1) | Rehabilitation | Rehabilitation | Rehabilitation | June 30, 2008 | Rehabilitation | Capital Cost (2) | Completed | of Service | ||||||||||||||||||||||||||||||||||||
Post Chastain® (3) | Atlanta, GA | 1990 | 558 | 867 | $ | 1.09 | $ | 1.29 | $ | 3,693 | $ | 830 | $ | 48,133 | $ | 16,445 | 558 | — | ||||||||||||||||||||||||||||||
Post Heights™ | Dallas, TX | 1998-1999 | 368 | 845 | 1.35 | 1.58 | 2,598 | 503 | 42,195 | 10,700 | 66 | 43 | ||||||||||||||||||||||||||||||||||||
Post Peachtree Hills® | Atlanta, GA | 1992-1994 | 300 | 978 | 1.12 | 1.42 | 2,436 | 479 | 19,539 | 10,600 | 40 | 37 | ||||||||||||||||||||||||||||||||||||
1,226 | $ | 109,867 | $ | 37,745 | 664 | 80 | ||||||||||||||||||||||||||||||||||||||||||
Rehabilitation Cost Incurred in | Projected | |||||||||||||||||||||||||||||||||||||||
The Three Months Ended | Rehabilitation Capital Cost Incurred | Remaining | ||||||||||||||||||||||||||||||||||||||
June 30, 2008 | As of June 30, 2008 | Rehabilitation | Projected | Projected | ||||||||||||||||||||||||||||||||||||
Revenue- | Non-Revenue- | Total | Revenue- | Non-Revenue- | Total | Capital Cost | Quarter of | Quarter of | Quarter of | |||||||||||||||||||||||||||||||
Generating | Generating | Capital | Generating | Generating | Capital | To be | Rehabilitation | Rehabilitation | Re-Stabilized | |||||||||||||||||||||||||||||||
Project | Capital Cost | Capital Cost | Cost | Capital Cost | Capital Cost | Cost | Incurred | Start | Completion | Occupancy | ||||||||||||||||||||||||||||||
Post Chastain® (3) | $ | 662 | $ | — | $ | 662 | $ | 15,938 | $ | 457 | $ | 16,395 | $ | 50 | 2Q 2006 | 2Q 2008 | 4Q 2008 | |||||||||||||||||||||||
Post Heights™ | 2,015 | 3 | 2,018 | 3,052 | 24 | 3,076 | 7,624 | 1Q 2008 | 2Q 2009 | 1Q 2010 | ||||||||||||||||||||||||||||||
Post Peachtree Hills® | 1,766 | 5 | 1,771 | 2,349 | 5 | 2,354 | 8,246 | 1Q 2008 | 1Q 2009 | 3Q 2009 | ||||||||||||||||||||||||||||||
$ | 4,443 | $ | 8 | $ | 4,451 | $ | 21,339 | $ | 486 | $ | 21,825 | $ | 15,920 | |||||||||||||||||||||||||||
(1) | Average square footage information is based on approximate amounts and individual unit sizes may vary. There can be no assurance that the projected average monthly rental rates after the rehabilitation will be achieved. | |
(2) | Includes approximately $2,800 of projected non-revenue generating capital costs. | |
(3) | The renovation of Post Chastain® was completed during the second quarter of 2008. The Company expects this community to reach stabilized occupancy later in 2008. |
16
Post Properties, Inc.
Summary Of Condominium Projects
(Dollars in thousands)
Summary Of Condominium Projects
(Dollars in thousands)
# of Rental Units | Average | Transfer Price/Est. | Book Value | Units(4) | ||||||||||||||||||||||||||||||||||||||||||||||||
Year | Sale | Total | Occupied as of | Unit | Project Transfer | Price/Est. Cost | as of | Available | ||||||||||||||||||||||||||||||||||||||||||||
Project | Location | Completed | Start Date | Units | 06/30/08 | Sq. Ft. (1) | Price/Est. Cost (2) | Per Unit | 06/30/08 (3) | Total | Closed | Under Contract | for Sale | |||||||||||||||||||||||||||||||||||||||
Condominium Conversion Projects | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Harbour Place City Homes™ | Tampa, FL | 1999 | Q2 2006 | 206 | 2 | 1,036 | $ | 37,000 | $ | 180 | $ | 3,087 | 206 | 163 | 1 | 42 | ||||||||||||||||||||||||||||||||||||
RISETM | Houston, TX | 2000 | Q2 2006 | 143 | 30 | 1,407 | 26,250 | 184 | 8,807 | 143 | 88 | 9 | 46 | |||||||||||||||||||||||||||||||||||||||
Condominium Development Projects | ||||||||||||||||||||||||||||||||||||||||||||||||||||
The Condominiums at Carlyle Square™ | Washington, DC | 2007 | 2Q2007 | 145 | N/A | 855 | 46,200 | 319 | 6,162 | 145 | 126 | 4 | 15 | |||||||||||||||||||||||||||||||||||||||
Mercer Square™ | Dallas, TX | 2007 | 3Q2007 | 85 | N/A | 1,094 | 18,600 | 218 | 8,258 | 85 | 45 | 4 | 36 | |||||||||||||||||||||||||||||||||||||||
579 | $ | 26,314 | 579 | 422 | 18 | 139 | ||||||||||||||||||||||||||||||||||||||||||||||
Financial Summary — Aggregate Condominium Activity
Three months ended | Three months ended | Six months ended | Six months ended | Cumulative through | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2008 | June 30, 2007 | June 30, 2008 | June 30, 2007 | June 30, 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FFO | FFO | FFO | FFO | FFO | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incremental | Incremental | Incremental | Incremental | Incremental | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Units | Gross | Gain on | Units | Gross | Gain on | Units | Gross | Gain on | Units | Gross | Gain on | Units | Gross | Gain on | ||||||||||||||||||||||||||||||||||||||||||||||
Project | Closed | Revenues | Sale (6)(7) | Closed | Revenues | Sale (6)(7) | Closed | Revenues | Sale (6)(7) | Closed | Revenues | Sale (6)(7) | Closed | Revenues | Sale (6) | |||||||||||||||||||||||||||||||||||||||||||||
Condominium Conversion Projects | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Harbour Place City Homes™ | 8 | $ | 1,857 | $ | (930 | ) | 20 | $ | 4,629 | $ | (355 | ) | 11 | $ | 2,505 | $ | (1,228 | ) | 35 | $ | 8,387 | $ | (561 | ) | 163 | $ | 40,250 | $ | (1,774 | ) | ||||||||||||||||||||||||||||||
RISETM | 8 | 2,372 | (579 | ) | 13 | 3,357 | 274 | 14 | 4,328 | (676 | ) | 20 | 5,409 | 277 | 87 | 22,872 | (1,396 | ) | ||||||||||||||||||||||||||||||||||||||||||
588TM (5) | — | — | — | — | — | — | — | — | — | 1 | 560 | 179 | 127 | 34,557 | 3,526 | |||||||||||||||||||||||||||||||||||||||||||||
The Peachtree ResidencesTM (5) | — | — | — | 1 | 220 | (46 | ) | — | — | — | 11 | 4,332 | 87 | 121 | 41,547 | 562 | ||||||||||||||||||||||||||||||||||||||||||||
Condominium Development Projects | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Condominiums at Carlyle Square™ | 6 | 2,849 | 5 | 35 | 17,236 | 3,009 | 22 | 7,918 | 1,566 | 35 | 17,295 | 2,975 | 123 | 54,241 | 9,333 | |||||||||||||||||||||||||||||||||||||||||||||
Mercer Square™ | 11 | 2,973 | 286 | — | — | — | 13 | 3,597 | 484 | — | — | — | 41 | 11,809 | 701 | |||||||||||||||||||||||||||||||||||||||||||||
33 | 10,051 | (1,218 | ) | 69 | 25,442 | 2,882 | 60 | 18,348 | 146 | 102 | 35,983 | 2,957 | 662 | 205,276 | 10,952 | |||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | (160 | ) | — | — | (269 | ) | — | — | (407 | ) | — | — | (407 | ) | — | 8 | (1,044 | ) | ||||||||||||||||||||||||||||||||||||||||
Total | 33 | $ | 10,051 | $ | (1,378 | ) | 69 | $ | 25,442 | $ | 2,613 | 60 | $ | 18,348 | $ | (261 | ) | 102 | $ | 35,983 | $ | 2,550 | 662 | $ | 205,284 | $ | 9,908 | |||||||||||||||||||||||||||||||||
(1) | Average square footage information is based on approximate amounts and individual unit sizes may vary. | |
(2) | Transfer price for purposes of computing incremental gains on condominium sales included in FFO at conversion projects reflects the greater of (1) the estimated fair value on the date the project was acquired by the Company’s taxable REIT subsidiary (as supported by independently-prepared, third-party appraisals) or (2) its net book value at that time. | |
(3) | Including the Company’s share of total estimated construction costs of ground-up condominiums being developed and not yet in active sales (see page 14) of approximately $181.1 million and book value of unsold condominiums above, committed capital to the condominium business at June 30, 2008 totaled approximately $207.4 million. | |
(4) | Unit status is as of July 28, 2008. There can be no assurance that condominium units under contract will close. | |
(5) | Final condominium closings occurred in 2007 at these communities. The Peachtree ResidencesTM is owned in an unconsolidated entity, where the Company’s equity ownership is 35%. Amounts shown, except for incremental gains on condominium sales included in FFO represents gross amounts at the unconsolidated entity level. | |
(6) | For conversion projects, the Company recognizes incremental gains on condominium sales in FFO, net of provision for income taxes, to the extent that net sales proceeds, less costs of sales, from the sale of condominium units exceed the “transfer price” as described in note 2 above. For development projects, gains on condominium sales in FFO are equivalent to gains reported under GAAP. | |
(7) | For co-investment projects, amounts are net of minority interests of $(370) and $701 for the three months and $17 and $701 for the six months ended June 30, 2008 and 2007, respectively. Excludes the impact of income tax expense attributable to gains on condominium sales, as applicable. There was no income tax provision for the three and six months ended June 30, 2008 and 2007. |
17
Post Properties, Inc.
Community Acquisition and Disposition Summary
Community Acquisition and Disposition Summary
Gross Amount | Gross | |||||||||||||||||||
Property Name/Period | Location | Units | Year Built | Per Unit | Amount | |||||||||||||||
Acquisitions | ||||||||||||||||||||
Q3 2007 | ||||||||||||||||||||
Post Lake® at Baldwin Park | Orlando, FL | 350 | 2004 - 2007 | $ | 211,429 | $ | 74,000,000 | |||||||||||||
2007 YTD Total | $ | 74,000,000 | ||||||||||||||||||
Average Cap Rate - Acquisitions - 2007 | 4.2% | (1) | ||||||||||||||||||
Dispositions | ||||||||||||||||||||
Q1 2007 | ||||||||||||||||||||
Post Oak™ | Atlanta, GA | 182 | 1993 | $ | 131,868 | $ | 24,000,000 | |||||||||||||
Q2 2007 | ||||||||||||||||||||
Post Collier Hills® | Atlanta, GA | 396 | 1997 | $ | 140,327 | 41,677,000 | (3) | |||||||||||||
Post Crest® | Atlanta, GA | 410 | 1996 | $ | 158,125 | 48,623,000 | (3) | |||||||||||||
Q4 2007 | ||||||||||||||||||||
Post Ashford® | Atlanta, GA | 222 | 1987 | $ | 103,603 | 23,000,000 | ||||||||||||||
Post Lindbergh® | Atlanta, GA | 396 | 1998 | $ | 154,542 | 45,899,000 | (3) | |||||||||||||
Post Vinings® | Atlanta, GA | 403 | 1989-1991 | $ | 111,166 | 44,800,000 | ||||||||||||||
2007 YTD Total | $ | 227,999,000 | ||||||||||||||||||
�� | ||||||||||||||||||||
Average Cap Rate - Dispositions - 2007 | 5.0% | (2) | ||||||||||||||||||
Q1 2008 | ||||||||||||||||||||
Post Wilson™ | Dallas, TX | 143 | 1999 | $ | 138,811 | $ | 19,850,000 | |||||||||||||
2008 YTD Total | $ | 19,850,000 | ||||||||||||||||||
Average Cap Rate - Acquisitions - 2008 | 5.6 | % | ||||||||||||||||||
(1) | Based on projected first twelve-month net operating income upon achievement of stabilized operations (as it relates to the second phase of Post Lake® at Baldwin Park which is in lease-up) and after adjustment for management fee (3.0%) and capital reserves ($300/unit). Also assumes that the Company will initially spend up to $2.9 million relating to closing costs and other amounts it plans to spend to improve this community. | |
(2) | Based on trailing twelve-month net operating income after adjustments for management fee (3.0%) and capital reserves ($300/unit). | |
(3) | The Company transferred these communities to an unconsolidated entity, in which the Company retained a 25% interest. These amounts reflect the 75% portion of the gross transfer price effectively acquired by the institutional investor. |
18
Post Properties, Inc.
Capitalized Costs Summary
(Dollars in thousands, except per share or unit data)
(Unaudited)
Capitalized Costs Summary
(Dollars in thousands, except per share or unit data)
(Unaudited)
The Company has a policy of capitalizing those expenditures relating to the acquisition of new assets and the development, construction and rehabilitation of apartment and condominium communities. In addition, the Company capitalizes expenditures that enhance the value of existing assets and expenditures that substantially extend the life of existing assets. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as incurred. Additionally, for new development communities, carpet, vinyl and blind replacements are expensed as incurred during the first five years (which corresponds to the estimated depreciable life of these assets) after construction completion. Thereafter, these replacements are capitalized. Further, the Company expenses as incurred the interior and exterior painting of operating communities, unless those communities are under major rehabilitation.
The Company capitalizes interest, real estate taxes, and certain internal personnel and associated costs related to apartment and condominium communities under development, construction, and major rehabilitation. The internal personnel and associated costs are capitalized to the projects under development based upon the effort identifiable with such projects. The Company treats each unit in an apartment and condominium community separately for cost accumulation, capitalization and expense recognition purposes. Prior to the commencement of leasing and sales activities, interest and other construction costs are capitalized and are reflected on the balance sheet as construction in progress. The Company ceases the capitalization of such costs as the residential units in a community become substantially complete and available for occupancy. This results in a proration of these costs between amounts that are capitalized and expensed as the residential units in a development community become available for occupancy. In addition, prior to the completion of units, the Company expenses as incurred substantially all operating expenses (including pre-opening marketing and property management and leasing personnel expenses) of such communities.
A summary of community acquisition and development improvements and other capitalized expenditures for the three and six months ended June 30, 2008 and 2007 is detailed below.
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Development and acquisition expenditures (1) | $ | 41,255 | $ | 37,030 | $ | 80,613 | $ | 66,620 | ||||||||
Periodically recurring capital expenditures | ||||||||||||||||
Community rehabilitation and other revenue generating improvements (2) | 4,443 | 2,539 | 7,951 | 7,206 | ||||||||||||
Other community additions and improvements (3) | 1,738 | 1,562 | 3,331 | 3,867 | ||||||||||||
Annually recurring capital expenditures | ||||||||||||||||
Carpet replacements and other community additions and improvements (4) | 3,382 | 3,464 | 5,640 | 6,080 | ||||||||||||
Corporate additions and improvements | 190 | 347 | 421 | 1,608 | ||||||||||||
$ | 51,008 | $ | 44,942 | $ | 97,956 | $ | 85,381 | |||||||||
Other Data | ||||||||||||||||
Capitalized interest | $ | 3,288 | $ | 2,688 | $ | 6,671 | $ | 5,795 | ||||||||
Capitalized development and associated costs (5) | $ | 1,568 | $ | 722 | $ | 3,328 | $ | 1,485 | ||||||||
(1) | Reflects aggregate community acquisition and development costs, exclusive of the change in construction payables and assumed debt, if any, between years. | |
(2) | Represents expenditures for community rehabilitations and other unit upgrade costs that enhance the rental value of such units (see page 16). | |
(3) | Represents community improvement expenditures (e.g. property upgrades) that generally occur less frequently than on an annual basis. | |
(4) | Represents community improvement expenditures (e.g. carpets, appliances) of a type that are expected to be incurred on an annual basis. | |
(5) | Reflects internal personnel and associated costs capitalized to construction and development activities. |
19
Post Properties, Inc.
Investments in Unconsolidated Real Estate Entities
(Dollars in thousands, except per share or unit data)
(Unaudited)
Investments in Unconsolidated Real Estate Entities
(Dollars in thousands, except per share or unit data)
(Unaudited)
Apartments and Condominium Conversion/Development Communities
The Company holds investments in four limited liability companies (the “Property LLCs”) with institutional investors and accounts for its investments in these Property LLCs using the equity method of accounting. A summary of non-financial and financial information for the Property LLCs is as follows:
Non-Financial Data
Property | Ownership | |||||||||||||||
Joint Venture Property | Location | Type | # of Units | Interest | ||||||||||||
Post Collier Hills® (1) | Atlanta, GA | Apartments | 396 | 25 | % | |||||||||||
Post Crest® (1) | Atlanta, GA | Apartments | 410 | 25 | % | |||||||||||
Post Lindbergh® (1) | Atlanta, GA | Apartments | 396 | 25 | % | |||||||||||
Post Biltmore™ | Atlanta, GA | Apartments | 276 | 35 | % | |||||||||||
Post Massachusetts Avenue™ | Washington, D.C. | Apartments | 269 | 35 | % | |||||||||||
The Residences at 3630 Peachtree™ (2) | Atlanta, GA | Condominiums | 137 | 50 | % |
Financial Data
As of | Three months ended | Six months ended | ||||||||||||||||||||||||||||||
June 30, 2008 | June 30, 2008 | June 30, 2008 | ||||||||||||||||||||||||||||||
Gross Investment | Mortgage/Construction | Entity | Company’s Equity | Entity | Company’s | Entity | Company’s | |||||||||||||||||||||||||
Joint Venture Property | in Real Estate (8) | Notes Payable | Equity | Investment | NOI | Equity in Earnings | NOI | Equity in Earnings | ||||||||||||||||||||||||
Post Collier Hills® (1) | $ | 54,462 | $ | 39,565 | (3) | $ | 14,314 | $ | (3,926 | ) (1) | $ | 721 | $ | 8 | $ | 1,475 | $ | 25 | ||||||||||||||
Post Crest® (1) | 63,698 | 46,159 | (3) | 16,661 | (6,280 | ) (1) | 808 | 4 | 1,578 | (1 | ) | |||||||||||||||||||||
Post Lindbergh® (1) | 60,142 | 41,000 | (4) | 19,424 | (3,679 | ) (1) | 851 | 27 | 1,614 | 31 | ||||||||||||||||||||||
Post Biltmore™ | 36,246 | 17,000 | (5) | 14,167 | 6,840 | 609 | 90 | 1,220 | 181 | |||||||||||||||||||||||
Post Massachusetts Avenue™ | 69,116 | 49,996 | (6) | 10,182 | 6,822 | 1,418 | 291 | 2,889 | 585 | |||||||||||||||||||||||
The Residences at 3630 Peachtree™ (2) | 96,733 | 56,550 | (7) | 34,271 | 9,153 | (13 | ) | — | (42 | ) | — | |||||||||||||||||||||
Total | $ | 380,397 | $ | 250,270 | $ | 109,019 | $ | 8,930 | $ | 4,394 | $ | 420 | $ | 8,734 | $ | 821 | ||||||||||||||||
(1) | In 2007, the Company’s investment in the 25% owned Property LLC resulted from the transfer of three previously owned apartment communities to the Property LLC co-owned with an institutional investor. The assets, liabilities and members’ equity of the Property LLC were recorded at fair value based on agreed-upon amounts contributed to the venture. The credit investments in the Company’s 25% owned Property LLC resulted from financing proceeds distributed in excess of the Company’s historical cost-basis investment. These credit investments are reflected in consolidated liabilities on the Company’s consolidated balance sheet. | |
(2) | This project commenced construction during the third quarter of 2007 and is expected to be completed in 2009. The development will consist of for-sale condominiums and class A office space. The Company holds a 50% equity interest in the for-sale condominium portion of the project. Consequently, the Company’s share of gross real estate assets and mortgage/construction notes payable at June 30, 2008 was $19,107 and $9,999, respectively. See page 14 for information regarding the for-sale condominium portion of the project. | |
(3) | These notes bear interest at a fixed rate of 5.63% and mature in 2017. | |
(4) | This note bears interest at a fixed rate of 5.71% and matures in 2017. | |
(5) | This note bears interest at a fixed rate of 4.04% and matures in 2008. | |
(6) | This note bears interest at a fixed rate of 4.13% and requires monthly interest payments and annual principal payments of $1 through 2009. Thereafter, the note requires monthly principal and interest payments based on a 25-year amortization schedule and matures in April 2034. The note is callable by the lender in May 2009 and on each successive fifth year anniversary of the note thereafter. The note is prepayable without penalty in May 2008. | |
(7) | At June 30, 2008, $56,550 was outstanding under a $187,128 construction loan facility bearing interest at a variable rate of LIBOR plus 1.35%. | |
(8) | Represents GAAP basis net book value plus accumulated depreciation. |
20
Post Properties, Inc.
Net Asset Value Supplemental Information
(Dollars in thousands, except per share or unit data)
(Unaudited)
Net Asset Value Supplemental Information
(Dollars in thousands, except per share or unit data)
(Unaudited)
This supplemental financial and other data provides adjustments to certain GAAP financial measures and Net Operating Income (“NOI”), which is a supplemental non-GAAP financial measure that the Company uses internally to calculate Net Asset Value (“NAV”). These measures, as adjusted, are also non-GAAP financial measures. With the exception of NOI, the most comparable GAAP measure for each of the non-GAAP measures presented below in the “As Adjusted” column is the corresponding number presented in the first column listed below.
The Company presents below NOI for the quarter ended June 30, 2008 for properties stabilized by April 1, 2008 so that a capitalization rate may be applied and an approximate value for the assets determined. Properties not stabilized by April 1, 2008 are presented at full undepreciated cost. Other tangible assets, total liabilities and the liquidation value of preferred shares are also presented.
Financial Data
(In thousands)
(In thousands)
Three months ended | As | |||||||||||
Income Statement Data | June 30, 2008 | Adjustments | Adjusted | |||||||||
Rental revenues | $ | 62,286 | $ | 4,066 | (1) | $ | 66,352 | |||||
Other property revenues | 4,084 | 99 | (1) | 4,183 | ||||||||
Total rental and other revenues(A) | 66,370 | 4,165 | 70,535 | |||||||||
Property operating & maintenance expenses (excluding depreciation and amortization)(B) | 33,555 | (5,918 | ) (1) | 27,637 | ||||||||
Property net operating income (Table 1)(A-B) | $ | 32,815 | $ | 10,083 | $ | 42,898 | ||||||
Assumed property management fee (calculated at 3% of revenues)(A x 3%) | (2,116 | ) | ||||||||||
Assumed property capital expenditure reserve ($300 per unit per year based on 17,294 units) | (1,297 | ) | ||||||||||
Adjusted property net operating income | $ | 39,485 | ||||||||||
Annualized property net operating income(C) | $ | 157,940 | ||||||||||
Apartment units represented | 22,140 | (4,846 | ) (1) | 17,294 | ||||||||
As of | As | |||||||||||
Other Asset Data | June 30, 2008 | Adjustments | Adjusted | |||||||||
Cash & equivalents | $ | 17,988 | $ | 17,988 | ||||||||
Real estate assets under construction, lease-up, conversion or rehabilitation, at cost (2) | 135,232 | 301,405 | (2) | 436,637 | ||||||||
Land held for future development | 123,167 | 123,167 | ||||||||||
For-sale condominiums and assets held for sale (3) | 284,924 | (217,707 | )(3) | 67,217 | ||||||||
Investments in and advances to unconsolidated real estate entities (4) | 22,815 | (3,708 | )(4) | 19,107 | ||||||||
Restricted cash and other assets | 47,097 | 47,097 | ||||||||||
Cash & other assets of unconsolidated real estate entities (5) | 7,242 | (5,160 | )(5) | 2,082 | ||||||||
Total(D) | $ | 638,465 | $ | 74,830 | $ | 713,295 | ||||||
Other Liability Data | ||||||||||||
Indebtedness | $ | 1,064,405 | $ | 1,064,405 | ||||||||
Other liabilities (6) | 142,588 | (26,969 | )(6) | 115,619 | ||||||||
Total liabilities of unconsolidated real estate entities (7) | 260,263 | (193,083 | )(7) | 67,180 | ||||||||
Total(E) | $ | 1,467,256 | $ | (220,052 | ) | $ | 1,247,204 | |||||
21
Other Data
As of June 30, 2008 | ||||||||||||
# Shares/Units | Stock Price | Implied Value | ||||||||||
Liquidation value of preferred shares(F) | $ | 95,000 | ||||||||||
Common shares outstanding | 44,111 | |||||||||||
Common units outstanding | 293 | |||||||||||
Total(G) | 44,404 | $ | 29.75 | $ | 1,321,019 | |||||||
Implied market value of Company gross real estate assets(H) = (E+F+G-D) | $ | 1,949,928 | ||||||||||
Implied Portfolio Capitalization Rate(C÷H) | 8.1 | % | ||||||||||
(1) | The following table summarizes the adjustments made to the components of property net operating income for the three months ended June 30, 2008 to adjust property net operating income to the Company’s share for fully stabilized communities: |
Rental Revenue | Other Revenue | Expenses | Units | |||||||||||||
Under construction, lease-up, conversion or rehabilitation | $ | (5,791 | ) | $ | (366 | ) | $ | (3,507 | ) | (3,546 | ) | |||||
Corporate property management expenses | (3,924 | ) | ||||||||||||||
Company share of unconsolidated entities | 2,003 | 140 | 750 | (1,256 | ) | |||||||||||
Held for sale operating properties | 10,682 | 461 | 3,602 | (44 | ) | |||||||||||
Corporate apartments and other | (2,828 | ) | (136 | ) | (2,839 | ) | ||||||||||
$ | 4,066 | $ | 99 | $ | (5,918 | ) | (4,846 | ) | ||||||||
(2) | The “As Adjusted” amount represents CIP balance per the Company’s balance sheet plus the costs of properties under construction and lease-up that have been transferred to operating real estate assets as apartment units are completed, plus the gross book value for communities under rehabilitation during the second quarter of 2008. | |
(3) | The adjustment reflects a reduction for the depreciated book value of eight apartment communities held for sale and included in discontinued operations at June 30, 2008, as the net property operating income of these communities has been included in adjusted property net operating income reflected above (see note 1). | |
(4) | The adjustment reflects a reduction for the investments in unconsolidated entities for entities with operating real estate assets as the Company’s net operating income of such investments is included in the adjusted net operating income reflected above, plus an adjustment to increase the Company’s investment in The Residences at 3630 Peachtree™ to the Company’s proportionate share of the real estate assets of such entity. The “As Adjusted” amount represents the Company’s share of the total assets of The Residences at 3630 Peachtree™. | |
(5) | The “As of June 30, 2008” amount represents cash and other assets of unconsolidated apartment and condominium entities. The adjustment includes a reduction for the venture partners’ respective share of cash and other assets of the Company’s unconsolidated apartment and condominium entities. The “As Adjusted” amount represents the Company’s respective share of the cash and other assets of unconsolidated apartment and condominium entities. | |
(6) | The “As of June 30, 2008” amount consists of the sum of accrued interest payable, dividends and distributions payable, accounts payable and accrued expenses, security deposits and prepaid rents, credit investment balances of the Company’s investment in unconsolidated entities and minority interests in consolidated real estate entities as reflected on the Company’s balance sheet. The adjustment represents a reduction for the non-cash liability associated with straight-line, long-term ground lease expense of $13,084 and for credit investment balances of the Company’s investment in three unconsolidated entities of $13,885. | |
(7) | The “As of June 30, 2008” amount represents total liabilities of unconsolidated apartment and condominium entities. The adjustment represents a reduction for the venture partner’s respective share of liabilities of unconsolidated apartment entities. The “As Adjusted” amount represents the Company’s respective share of liabilities of unconsolidated apartment and condominium entities. |
22
Post Properties, Inc.
Non-GAAP Financial Measures and Other Defined Terms
(Dollars in thousands, except per share or unit data)
(Unaudited)
Non-GAAP Financial Measures and Other Defined Terms
(Dollars in thousands, except per share or unit data)
(Unaudited)
Definitions of Supplemental Non-GAAP Financial Measures and Other Defined Terms
The Company uses certain non-GAAP financial measures and other defined terms in this accompanying Supplemental Financial Data. These non-GAAP financial measures include FFO, AFFO, net operating income, same store capital expenditures and certain debt statistics and ratios. The definitions of these non-GAAP financial measures are summarized below. The Company believes that these measures are helpful to investors in measuring financial performance and/or liquidity and comparing such performance and/or liquidity to other REITs.
Funds from Operations —The Company uses FFO as an operating measure. The Company uses the NAREIT definition of FFO. FFO is defined by NAREIT to mean net income (loss) available to common shareholders determined in accordance with GAAP, excluding gains (losses) from extraordinary items and sales of depreciable operating property, plus depreciation and amortization of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures all determined on a consistent basis in accordance with GAAP. FFO presented in the Company’s press release and Supplemental Financial Data is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Company’s FFO is comparable to the FFO of real estate companies that use the current NAREIT definition.
Accounting for real estate assets using historical cost accounting under GAAP assumes that the value of real estate assets diminishes predictably over time. NAREIT stated in its April 2002 White Paper on Funds from Operations that “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” As a result, the concept of FFO was created by NAREIT for the REIT industry to provide an alternate measure. Since the Company agrees with the concept of FFO and appreciates the reasons surrounding its creation, the Company believes that FFO is an important supplemental measure of operating performance. In addition, since most equity REITs provide FFO information to the investment community, the Company believes that FFO is a useful supplemental measure for comparing the Company’s results to those of other equity REITs. The Company believes that the line on its consolidated statement of operations entitled “net income (loss) available to common shareholders” is the most directly comparable GAAP measure to FFO.
Adjusted Funds From Operations —The Company also uses adjusted funds from operations (“AFFO”) as an operating measure. AFFO is defined as FFO less operating capital expenditures after adjusting for the impact of non-cash straight-line long-term ground lease expense, non-cash impairment charges and strategic review costs. The Company believes that AFFO is an important supplemental measure of operating performance for an equity REIT because it provides investors with an indication of the REIT’s ability to fund operating capital expenditures through earnings. In addition, since most equity REITs provide AFFO information to the investment community, the Company believes that AFFO is a useful supplemental measure for comparing the Company to other equity REITs. The Company believes that the line on its consolidated statement of operations entitled “net income (loss) available to common shareholders” is the most directly comparable GAAP measure to AFFO.
Property Net Operating Income —The Company uses property NOI, including same store NOI and same store NOI by market, as an operating measure. NOI is defined as rental and other revenues from real estate operations less total property and maintenance expenses from real estate operations (exclusive of depreciation and amortization). The Company believes that NOI is an important supplemental measure of operating performance for a REIT’s operating real estate because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs and general and administrative expenses generally incurred at the corporate level. This measure is particularly useful, in the opinion of the Company, in evaluating the performance of geographic operations, same store groupings and individual properties. Additionally, the Company believes that NOI, as defined, is a widely accepted measure of comparative operating performance in the real estate investment community. The Company believes that the line on its consolidated statement of operations entitled “net income” is the most directly comparable GAAP measure to NOI.
23
Same Store Capital Expenditures —The Company uses same store annually recurring and periodically recurring capital expenditures as cash flow measures. Same store annually recurring and periodically recurring capital expenditures are supplemental non-GAAP financial measures. The Company believes that same store annually recurring and periodically recurring capital expenditures are important indicators of the costs incurred by the Company in maintaining its same store communities on an ongoing basis. The corresponding GAAP measures include information with respect to the Company’s other operating segments consisting of communities stabilized in the prior year, lease-up communities, rehabilitation communities, sold properties and commercial properties in addition to same store information. Therefore, the Company believes that the Company’s presentation of same store annually recurring and periodically recurring capital expenditures is necessary to demonstrate same store replacement costs over time. The Company believes that the most directly comparable GAAP measure to same store annually recurring and periodically recurring capital expenditures are the lines on the Company’s consolidated statements of cash flows entitled “annually recurring capital expenditures” and “periodically recurring capital expenditures.”
Debt Statistics and Debt Ratios —The Company uses a number of debt statistics and ratios as supplemental measures of liquidity. The numerator and/or the denominator of certain of these statistics and/or ratios include non-GAAP financial measures that have been reconciled to the most directly comparable GAAP financial measure. These debt statistics and ratios include: (1) an interest coverage ratio; (2) a fixed charge coverage ratio; (3) total debt as a percentage of undepreciated real estate (adjusted for joint venture partner’s share of debt); (4) total debt plus preferred equity as a percentage of undepreciated real estate (adjusted for joint venture partner’s share of debt); (5) a ratio of consolidated debt to total assets; (6) a ratio of secured debt to total assets; (7) a ratio of total unencumbered assets to unsecured debt; and (8) a ratio of consolidated income available to debt service to annual debt service charge. A number of these debt statistics and ratios are derived from covenants found in the Company’s debt agreements, including, among others, the Company’s senior unsecured notes. In addition, the Company presents these measures because the degree of leverage could affect the Company’s ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. The Company uses these measures internally as an indicator of liquidity and the Company believes that these measures are also utilized by the investment and analyst communities to better understand the Company’s liquidity.
Average Economic Occupancy —The Company uses average economic occupancy as a statistical measure of operating performance. The Company defines average economic occupancy as gross potential rent less vacancy losses, model expenses and bad debt expenses divided by gross potential rent for the period, expressed as a percentage.
24
Reconciliations of Supplemental Non-GAAP Financial Measures
Table 1
Reconciliation of Same Store Net Operating Income (NOI) to GAAP Net Income
(Dollars in thousands)
(Unaudited)
Reconciliation of Same Store Net Operating Income (NOI) to GAAP Net Income
(Dollars in thousands)
(Unaudited)
Three months ended | Six months ended | |||||||||||||||||||
June 30, | June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
2008 | 2007 | 2008 | 2008 | 2007 | ||||||||||||||||
Total same store NOI | $ | 30,190 | $ | 30,223 | $ | 30,724 | $ | 60,914 | $ | 60,257 | ||||||||||
Property NOI from other operating segments | 2,625 | 2,036 | 2,304 | 4,929 | 4,715 | |||||||||||||||
Consolidated property NOI | 32,815 | 32,259 | 33,028 | 65,843 | 64,972 | |||||||||||||||
Add (subtract): | ||||||||||||||||||||
Interest income | 61 | 213 | 210 | 271 | 463 | |||||||||||||||
Other revenues | 235 | 128 | 239 | 474 | 245 | |||||||||||||||
Minority interest in consolidated property partnerships | 427 | (716 | ) | (366 | ) | 61 | (693 | ) | ||||||||||||
Depreciation | (14,386 | ) | (14,375 | ) | (14,263 | ) | (28,649 | ) | (28,726 | ) | ||||||||||
Interest expense | (10,112 | ) | (10,863 | ) | (10,156 | ) | (20,268 | ) | (21,908 | ) | ||||||||||
Amortization of deferred financing costs | (859 | ) | (829 | ) | (851 | ) | (1,710 | ) | (1,641 | ) | ||||||||||
General and administrative | (4,956 | ) | (5,959 | ) | (5,848 | ) | (10,804 | ) | (11,407 | ) | ||||||||||
Investment and development | (1,356 | ) | (1,955 | ) | (1,458 | ) | (2,814 | ) | (3,505 | ) | ||||||||||
Strategic review costs | (2,091 | ) | — | (6,070 | ) | (8,161 | ) | — | ||||||||||||
Impairment and severance charges | (29,300 | ) | — | — | (29,300 | ) | — | |||||||||||||
Gains (losses) on sales of real estate assets, net | (368 | ) | 62,738 | 2,119 | 1,751 | 66,444 | ||||||||||||||
Equity in income of unconsolidated real estate entities | 420 | 310 | 401 | 821 | 814 | |||||||||||||||
Other income (expense) | 66 | (261 | ) | (174 | ) | (108 | ) | (522 | ) | |||||||||||
Minority interest of common unitholders | 238 | (852 | ) | 46 | 284 | (882 | ) | |||||||||||||
Income (loss) from continuing operations | (29,166 | ) | 59,838 | (3,143 | ) | (32,309 | ) | 63,654 | ||||||||||||
Income from discontinued operations | 4,103 | 4,099 | 5,829 | 9,932 | 24,754 | |||||||||||||||
Net income (loss) | $ | (25,063 | ) | $ | 63,937 | $ | 2,686 | $ | (22,377 | ) | $ | 88,408 | ||||||||
25
Table 2
Same Store Net Operating Income (NOI) Summary by Market
(Dollars in thousands)
Same Store Net Operating Income (NOI) Summary by Market
(Dollars in thousands)
Three Months Ended | Q2 ’08 | Q2 ’08 | Q2 ’08 | |||||||||||||||||||||
June 30, | June 30, | March 31, | vs. Q2 '07 | vs. Q1 '08 | % Same | |||||||||||||||||||
2008 | 2007 | 2008 | % Change | % Change | Store NOI | |||||||||||||||||||
Rental and other revenues | ||||||||||||||||||||||||
Atlanta | $ | 14,969 | $ | 14,425 | $ | 14,787 | 3.8 | % | 1.2 | % | ||||||||||||||
Dallas | 10,320 | 9,752 | 10,031 | 5.8 | % | 2.9 | % | |||||||||||||||||
Washington, D.C. | 8,991 | 8,795 | 8,864 | 2.2 | % | 1.4 | % | |||||||||||||||||
Tampa | 7,101 | 7,342 | 7,181 | (3.3 | )% | (1.1 | )% | |||||||||||||||||
Charlotte | 4,912 | 4,797 | 4,784 | 2.4 | % | 2.7 | % | |||||||||||||||||
Houston | 3,070 | 2,910 | 3,031 | 5.5 | % | 1.3 | % | |||||||||||||||||
Austin | 1,231 | 1,213 | 1,240 | 1.5 | % | (0.7 | )% | |||||||||||||||||
Orlando | 991 | 1,052 | 1,015 | (5.8 | )% | (2.4 | )% | |||||||||||||||||
Total rental and other revenues | 51,585 | 50,286 | 50,933 | 2.6 | % | 1.3 | % | |||||||||||||||||
Property operating and maintenance expenses (exclusive of depreciation and amortization) | ||||||||||||||||||||||||
Atlanta | 6,072 | 5,959 | 5,773 | 1.9 | % | 5.2 | % | |||||||||||||||||
Dallas | 4,830 | 4,216 | 4,501 | 14.6 | % | 7.3 | % | |||||||||||||||||
Washington, D.C. | 3,023 | 2,825 | 3,040 | 7.0 | % | (0.6 | )% | |||||||||||||||||
Tampa | 3,187 | 2,968 | 2,976 | 7.4 | % | 7.1 | % | |||||||||||||||||
Charlotte | 1,813 | 1,585 | 1,566 | 14.4 | % | 15.8 | % | |||||||||||||||||
Houston | 1,519 | 1,335 | 1,335 | 13.8 | % | 13.8 | % | |||||||||||||||||
Austin | 566 | 604 | 593 | (6.3 | )% | (4.6 | )% | |||||||||||||||||
Orlando | 385 | 571 | 425 | (32.6 | )% | (9.4 | )% | |||||||||||||||||
Total | 21,395 | 20,063 | 20,209 | 6.6 | % | 5.9 | % | |||||||||||||||||
Net operating income Atlanta | 8,897 | 8,466 | 9,014 | 5.1 | % | (1.3 | )% | 29.4 | % | |||||||||||||||
Dallas | 5,490 | 5,536 | 5,530 | (0.8 | )% | (0.7 | )% | 18.2 | % | |||||||||||||||
Washington, D.C. | 5,968 | 5,970 | 5,824 | (0.0 | )% | 2.5 | % | 19.8 | % | |||||||||||||||
Tampa | 3,914 | 4,374 | 4,205 | (10.5 | )% | (6.9 | )% | 13.0 | % | |||||||||||||||
Charlotte | 3,099 | 3,212 | 3,218 | (3.5 | )% | (3.7 | )% | 10.3 | % | |||||||||||||||
Houston | 1,551 | 1,575 | 1,696 | (1.5 | )% | (8.5 | )% | 5.1 | % | |||||||||||||||
Austin | 665 | 609 | 647 | 9.2 | % | 2.8 | % | 2.2 | % | |||||||||||||||
Orlando | 606 | 481 | 590 | 26.0 | % | 2.7 | % | 2.0 | % | |||||||||||||||
Total same store NOI | $ | 30,190 | $ | 30,223 | $ | 30,724 | (0.1 | )% | (1.7 | )% | 100.0 | % | ||||||||||||
26
Table 2 (con’t)
Same Store Net Operating Income (NOI) Summary by Market
(Dollars in thousands)
Same Store Net Operating Income (NOI) Summary by Market
(Dollars in thousands)
Six months ended | ||||||||||||
June 30, | June 30, | |||||||||||
2008 | 2007 | % Change | ||||||||||
Rental and other revenues Atlanta | $ | 29,756 | $ | 28,679 | 3.8 | % | ||||||
Dallas | 20,351 | 19,319 | 5.3 | % | ||||||||
Washington, D.C. | 17,855 | 17,454 | 2.3 | % | ||||||||
Tampa | 14,283 | 14,668 | (2.6 | )% | ||||||||
Charlotte | 9,696 | 9,457 | 2.5 | % | ||||||||
Houston | 6,100 | 5,738 | 6.3 | % | ||||||||
Austin | 2,471 | 2,390 | 3.4 | % | ||||||||
Orlando | 2,006 | 2,084 | (3.7 | )% | ||||||||
Total rental and other revenues | 102,518 | 99,789 | 2.7 | % | ||||||||
Property operating and maintenance expenses (exclusive of depreciation and amortization) | ||||||||||||
Atlanta | 11,845 | 11,509 | 2.9 | % | ||||||||
Dallas | 9,331 | 8,311 | 12.3 | % | ||||||||
Washington, D.C. | 6,063 | 5,759 | 5.3 | % | ||||||||
Tampa | 6,164 | 5,898 | 4.5 | % | ||||||||
Charlotte | 3,379 | 3,214 | 5.1 | % | ||||||||
Houston | 2,853 | 2,619 | 8.9 | % | ||||||||
Austin | 1,159 | 1,210 | (4.2 | )% | ||||||||
Orlando | 810 | 1,012 | (20.0 | )% | ||||||||
Total | 41,604 | 39,532 | 5.2 | % | ||||||||
Net operating income | ||||||||||||
Atlanta | 17,911 | 17,170 | 4.3 | % | ||||||||
Dallas | 11,020 | 11,008 | 0.1 | % | ||||||||
Washington, D.C. | 11,792 | 11,695 | 0.8 | % | ||||||||
Tampa | 8,119 | 8,770 | (7.4 | )% | ||||||||
Charlotte | 6,317 | 6,243 | 1.2 | % | ||||||||
Houston | 3,247 | 3,119 | 4.1 | % | ||||||||
Austin | 1,312 | 1,180 | 11.2 | % | ||||||||
Orlando | 1,196 | 1,072 | 11.6 | % | ||||||||
Total same store NOI | $ | 60,914 | $ | 60,257 | 1.1 | % | ||||||
27
Table 3
Reconciliation of Segment Cash Flow Data to Statements of Cash Flows
(Dollars in thousands)
Reconciliation of Segment Cash Flow Data to Statements of Cash Flows
(Dollars in thousands)
Three months ended | Six months ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2008 | 2007 | 2008 | 2007 | |||||||||||||
Annually recurring capital expenditures by operating segment Fully stabilized | $ | 2,288 | $ | 1,969 | $ | 3,787 | $ | 3,450 | ||||||||
Communities stabilized during 2007 | 92 | — | 122 | 23 | ||||||||||||
Development, rehabilitation and lease-up | 416 | 410 | 655 | 661 | ||||||||||||
Condominium conversion and other | — | 277 | — | 616 | ||||||||||||
Acquired | 35 | — | 66 | — | ||||||||||||
Other segments | 551 | 808 | 1,010 | 1,330 | ||||||||||||
Total annually recurring capital expenditures per statements of cash flows | $ | 3,382 | $ | 3,464 | $ | 5,640 | $ | 6,080 | ||||||||
Periodically recurring capital expenditures by operating segment Fully stabilized | $ | 1,575 | $ | 571 | $ | 2,813 | $ | 1,136 | ||||||||
Communities stabilized during 2007 | — | 748 | 17 | 1,975 | ||||||||||||
Development, rehabilitation and lease-up | 25 | 49 | 93 | 273 | ||||||||||||
Condominium conversion and other | — | 101 | — | 225 | ||||||||||||
Acquired | — | — | 36 | — | ||||||||||||
Other segments | 138 | 93 | 372 | 258 | ||||||||||||
Total periodically recurring capital expenditures per statements of cash flows | $ | 1,738 | $ | 1,562 | $ | 3,331 | $ | 3,867 | ||||||||
28
Table 4
Computation of Interest and Fixed Charge Coverage Ratios
(Dollars in thousands)
Computation of Interest and Fixed Charge Coverage Ratios
(Dollars in thousands)
Six months ended | ||||||||
June 30, | ||||||||
2008 | 2007 | |||||||
Income (loss) from continuing operations | $ | (32,309 | ) | $ | 63,654 | |||
Minority interest of common unitholders | (284 | ) | 882 | |||||
Minority interest in consolidated property partnerships — gains on sales of real estate assets — continuing operations | 17 | 701 | ||||||
Gains on sales of real estate assets, net | (1,751 | ) | (66,444 | ) | ||||
Gains on sales of real estate assets — unconsolidated entities | — | (162 | ) | |||||
Non-cash impairment charges | 28,947 | — | ||||||
Depreciation expense | 28,649 | 28,726 | ||||||
Depreciation (company share) of assets held in unconsolidated entities | 693 | 500 | ||||||
Interest expense | 20,268 | 21,908 | ||||||
Interest expense (company share) of assets held in unconsolidated entities | 1,387 | 642 | ||||||
Amortization of deferred financing costs | 1,710 | 1,641 | ||||||
Income available for debt service(A) | $ | 47,327 | $ | 52,048 | ||||
Interest expense | $ | 20,268 | $ | 21,908 | ||||
Interest expense (company share) of assets held in unconsolidated entities | 1,387 | 642 | ||||||
Interest expense for purposes of computation(B) | 21,655 | 22,550 | ||||||
Dividends and distributions to preferred shareholders and unitholders | 3,819 | 3,819 | ||||||
Fixed charges for purposes of computation(C) | $ | 25,474 | $ | 26,369 | ||||
Interest coverage ratio(A÷B) | 2.2 | x | 2.3 | x | ||||
Fixed charge coverage ratio(A÷C) | 1.9 | x | 2.0 | x | ||||
29
Table 5
Computation of Debt Ratios
(Dollars in thousands)
Computation of Debt Ratios
(Dollars in thousands)
As of June 30, | ||||||||
2008 | 2007 | |||||||
Total real estate assets per balance sheet | $ | 2,115,247 | $ | 2,000,916 | ||||
Plus: | ||||||||
Company share of real estate assets held in unconsolidated entities | 94,510 | 71,395 | ||||||
Company share of accumulated depreciation — assets held in unconsolidated entities | 6,049 | 4,360 | ||||||
Accumulated depreciation per balance sheet | 499,981 | 560,927 | ||||||
Accumulated depreciation on assets held for sale | 93,844 | — | ||||||
Total undepreciated real estate assets(A) | $ | 2,809,631 | $ | 2,637,598 | ||||
Total debt per balance sheet | $ | 1,064,405 | $ | 938,998 | ||||
Plus: | ||||||||
Company share of third party debt held in unconsolidated entities | 65,128 | 44,880 | ||||||
Less: | ||||||||
Joint venture partners’ share of mortgage debt of the company | — | (8,550 | ) | |||||
Total debt (adjusted for joint venture partners’ share of debt)(B) | $ | 1,129,533 | $ | 975,328 | ||||
Total debt as a % of undepreciated real estate assets (adjusted for joint venture partners’ share of debt(B÷A) | 40.2 | % | 37.0 | % | ||||
Total debt per balance sheet | $ | 1,064,405 | $ | 938,998 | ||||
Plus: | ||||||||
Company share of third party debt held in unconsolidated entities | 65,128 | 44,880 | ||||||
Preferred shares at liquidation value | 95,000 | 95,000 | ||||||
Less: | ||||||||
Joint venture partners’ share of mortgage debt of the company | — | (8,550 | ) | |||||
Total debt and preferred equity (adjusted for joint venture partners’ share of debt)(C) | $ | 1,224,533 | $ | 1,070,328 | ||||
Total debt and preferred equity as a % of undepreciated real estate assets (adjusted for joint venture partners’ share of debt)(C÷A) | 43.6 | % | 40.6 | % | ||||
30
Table 6
Calculation of Company Undepreciated Book Value Per Share
(Dollars in thousands)
Calculation of Company Undepreciated Book Value Per Share
(Dollars in thousands)
June 30, 2008 | ||||
Total shareholders’ equity, per balance sheet | $ | 1,000,279 | ||
Plus: | ||||
Accumulated depreciation, per balance sheet | 499,981 | |||
Accumulated depreciation held for sale assets, per balance sheet | 93,844 | |||
Minority interest of common unitholders in Operating Partnership, per balance sheet | 6,034 | |||
Less: | ||||
Deferred charges, net, per balance sheet | (10,159 | ) | ||
Preferred shares at liquidation value | (95,000 | ) | ||
Total undepreciated book value(A) | $ | 1,494,979 | ||
Total common shares and units(B) | 44,404 | |||
Company undepreciated book value per share(A÷B) | $ | 33.67 | ||
31