Exhibit 99.1
Parkway Properties, Inc. Reports Second Quarter 2003 Results
JACKSON, Miss., Aug. 4 /PRNewswire-FirstCall/ -- Parkway Properties, Inc.
(NYSE: PKY) today announced results for its second quarter ended June 30,
2003.
Consolidated Financial Results
* Net income available to common shareholders for the three months ended
June 30, 2003 was $7,523,000 ($.72 per diluted share) compared to
$5,196,000 ($.55 per diluted share) for the three months ended June 30,
2002. Net income available to common shareholders for the six months
ended June 30, 2003 was $13,623,000 ($1.36 per diluted share) compared
to $10,706,000 ($1.13 per diluted share) for the six months ended June
30, 2002. Gains on sale of joint venture interests and real estate of
$4,545,000 and $5,641,000 were included in net income available to
common shareholders for the three months and six months ended June 30,
2003, respectively. A net gain on the sale of a joint venture interest
and real estate of $501,000 was included in net income available to
common shareholders for the three months and six months ended June 30,
2002. A $2,619,000 ($.21 per diluted share) non-cash adjustment for
original issue costs related to the redemption of Series A Preferred
Stock was recorded in the second quarter. The Series A Preferred Stock
was originally issued in April of 1998.
* Funds from operations ("FFO") totaled $13,085,000 ($1.16 per diluted
share) for the three months ended June 30, 2003 compared to $11,930,000
($1.16 per diluted share) for the three months ended June 30, 2002.
FFO totaled $25,850,000 ($2.38 per diluted share) for the six months
ended June 30, 2003 compared to $24,411,000 ($2.37 per diluted share)
for the six months ended June 30, 2002. FFO does not include the
impact of the $2,619,000 ($.21 per diluted share) non-cash adjustment
for original issue costs related to the redemption of Series A
Preferred Stock during the quarter.
* Funds available for distribution ("FAD") totaled $7,098,000 for the
three months ended June 30, 2003 compared to $7,072,000 for the three
months ended June 30, 2002. FAD totaled $13,461,000 for the six months
ended June 30, 2003 compared to $15,457,000 for the six months ended
June 30, 2002.
Acquisitions and Sales
* On May 28, 2003, the Company sold an 80% interest in two Jackson,
Mississippi, assets, River Oaks Place and the IBM Building, to
approximately 35 individual investors. Proceeds from the sale were
used to reduce short-term borrowings under the Company's lines of
credit pending reinvestment. The Company continues to provide
management and leasing services for the building. The Company
recognized a gain on this transaction of $4,183,000 in the second
quarter.
* On June 26, 2003, the Company sold .7407 acres of land in Houston Texas
for cash proceeds of $451,000. Proceeds from the sale were used to
reduce short-term borrowings under the Company's lines of credit. The
Company recognized a gain on this sale of land of $362,000 in the
second quarter.
* On August 1, 2003, the Company sold its investment in the BB&T
Financial Center in Winston-Salem, North Carolina, to Cabot Investment
Properties for $27.5 million plus the assumption of future tenant
improvements of approximately $500,000. Parkway Realty Services will
continue to manage and lease the property under a ten-year management
agreement and received an acquisition fee of $186,000, which will be
included in income in the third quarter. The Company expects to record
a gain on this sale of approximately $5 million in the third quarter.
Proceeds from the sale were used to reduce amounts outstanding under
bank lines of credit, pending the reinvestment in operating properties,
and towards the early extinguishment of the $11,201,000 mortgage
secured by the BB&T Financial Center.
Operations and Leasing
* Parkway's customer retention rate for the three months ending June 30,
2003 was 66% compared to 71% for the quarter ending Mach 31, 2003 and
58% for the quarter ending June 30, 2002. Customer retention for the
six months ending June 30, 2003 was 69% compared to 71% for the six
months ending June 30, 2002.
* As of July 1, 2003, occupancy of the office portfolio was 91.8%
compared to 92.1% as of April 1, 2003 and 92.3% as of July 1, 2002.
* During the quarter ending June 30, 2003, leases were renewed or
expanded on 264,000 net rentable square feet at an average rental rate
decrease of .7% and a cost of $1.84 per square foot per year of the
lease term in committed tenant improvements and leasing commissions.
New leases were signed during the quarter on 106,000 net rentable
square feet at a cost of $2.83 per square foot per year of the lease
term in committed tenant improvements and leasing commissions.
* Same store assets produced a decrease in net operating income ("NOI")
of $527,000 or 3% during the quarter compared to the second quarter of
2002. The decrease in same store revenue was attributable mainly to a
1.8% decrease in occupancy and a rental rate decrease of $1.86 per
square foot. The increase in same store operating expenses is mainly
attributable to increases in repairs and maintenance, utilities, and
insurance. Same store assets produced a decrease in NOI of $1,239,000
or 3.4% for the six months ended June 30, 2003 compared to the same
period of the prior year.
* During the second quarter and through August 1, 2003, the Company
collected all rents from WorldCom, Inc. or its subsidiaries as called
for under current leases. The Company currently recognizes rental
income from these leases on the cash basis.
Capital Markets and Financing
* The Company's previously announced cash dividend of $.65 per share for
the quarter ended June 30, 2003 represents a payout of approximately
56% of FFO per diluted share. The second quarter dividend was paid on
June 27, 2003 and equates to an annualized dividend of $2.60 per share,
a yield of 6.0% on the closing stock price on August 1, 2003 of $43.60.
* The Company closed an $18,800,000 non-recourse first mortgage secured
by two properties in Houston and one property in Phoenix on April 18,
2003. The mortgage, which is interest only for the first three years,
has a fixed interest rate of 5.27% with a 7-year term and a 25-year
amortization. Proceeds from the mortgage were used to reduce amounts
outstanding under the Company's lines of credit, pending future
reinvestment in operating properties.
* On May 8, 2003, the stockholders of the Company approved Parkway's 2003
Equity Incentive Plan that authorized the grant of restricted shares of
Common Stock and deferred share units payable in Common Stock to
employees of the Company. The stockholders approved the January 2,
2003 issuance of 132,000 shares of restricted stock to certain officers
of the Company effective May 8, 2003. The stock price on the date of
grant was $35.19, and the vesting period for the stock is 7 years or 36
months if certain operating results are achieved by the Company in the
VALUE2 Plan.
* Simultaneous with the closing of the sale of the Company's 80% interest
in the IBM Building and River Oaks Place, the partnership that owns the
properties closed an $11.525 million mortgage. The non-recourse first
mortgage has a fixed interest rate of 5.84%, amortizes over 28 years
and matures in ten years.
* During the second quarter, the Company completed a public offering of
2,400,000 shares of 8.0% Series D Cumulative Redeemable Preferred
Stock. The Series D Preferred Stock has a $25 liquidation value per
share and will be redeemable at the option of the Company on or after
June 27, 2008. The net proceeds from the offering of $58 million were
used to redeem the Company's 2,650,000 shares of 8.75% Series A
Cumulative Redeemable Preferred Stock. The Series A Preferred Stock
also had a $25 per share liquidation value. In connection with the
redemption of the Series A Preferred Stock, a $2,619,000 ($.21 per
diluted share) non-cash adjustment for original issue costs was
recorded in the second quarter. The non-cash adjustment for original
issue costs does not impact FFO.
* As of June 30, 2003 the Company's debt-to-total market capitalization
ratio was 38.4% compared to 40.7% as of March 31, 2003. The Company
anticipates that the debt-to-total market capitalization will increase
to approximately 45% upon reinvestment of the proceeds from the joint
ventures and equity issuance.
Outlook for 2003
The Company is forecasting FFO per diluted share of $4.67 to $4.75 and
earnings per diluted share ("EPS") of $2.92 to $2.97 for 2003. The
reconciliation of forecasted earnings per diluted share to forecasted FFO per
diluted share is as follows:
Guidance for 2003 Range
Fully diluted EPS $2.92 - $2.97
Plus: Real estate
depreciation and amortization $2.21 - $2.23
Plus: Depreciation on unconsolidated
joint ventures $0.16 - $0.17
Plus: Original issuance cost of redeemed
preferred stock $0.21 - $0.21
Less: Gain on sale of joint ventures and
real estate ($0.83 - $0.83)
Fully diluted FFO per share $4.67 - $4.75
The following assumptions were used in making this forecast:
* Occupancy of approximately 92% for the remainder of 2003.
* Same store net operating income growth in the range of zero to a
negative 3%.
* Average interest rate of 2.9% on short-term, floating rate debt in the
3rd and 4th quarters.
* Proceeds from the joint ventures, the equity offering, the issuance of
common shares, and the BB&T sale were assumed to be reinvested at a
9.0% to 9.5% cap rate with $50 million to be invested on September 1st
and $80 million on October 1st. No additional acquisitions or
dispositions were assumed in the 2003 budget.
Steven G. Rogers, President and Chief Executive Officer stated,
"Operations for the second quarter were flat reflecting a continuation of the
difficult office leasing environment. Occupancy held steady at 91.8% and
tenant retention was slightly below our target at 66%. The VALUE2 Plan is off
to a strong start with the joint ventures and recent asset sales. This,
coupled with the other positive capital events, enables us to continue to
profitably recycle the assets within our portfolio. For the balance of the
year we will focus our energy on making sound investments with the proceeds
from recent capital events, as well as continue our focus on occupancy and
operations."
Additional Information
January 1, 2003 marked the beginning of Parkway's VALUE2 Operating Plan,
which will span the three-year period ending December 31, 2005. This plan
reflects the employees' commitment to create Value for its shareholders while
holding firm to the core Values as espoused in the Parkway Commitment to
Excellence. The Company plans to create value by Venturing with best
partners, Asset recycling, Leverage neutral growth, Uncompromising focus on
operations, and providing an Equity return to its shareholders that is 10%
greater than that of its peer group, the NAREIT Office Index. Equity return
is defined as growth in FFO per diluted share.
Parkway will conduct a conference call to discuss the results of its
second quarter operations on Tuesday, August 5, 2003, at 10:00 am ET.
The number for the conference call is 1-800-478-6251. A taped replay of
the call can be accessed 24 hours a day through August 15, 2003 by dialing
1-888-203-1112, and using the pass code of 520642. An audio replay will be
archived and indexed in the investor relations section of Parkway's website at
www.pky.com. A copy of the Company's 2003 second quarter supplemental
financial and property information package is available by accessing the
Company's website, emailing your request to rjordan@pky.com or calling Rita
Jordan at 601-948-4091. Please participate in the visual portion of the
conference call by accessing the Company's website and clicking on the "2Q
Call" Icon. By clicking on topics in the left margin, you can follow visual
representations of the presentation.
Additional information on Parkway Properties, Inc., including an archive
of corporate press releases and conference calls, is available on the
Company's website. The Company's second quarter 2003 Supplemental Operating
and Financial Data, which includes a reconciliation of GAAP to Non-GAAP
financial measures, will be available on the Company's website prior to the
start of the conference call.
About Parkway Properties
Parkway Properties, Inc. is a self-administered real estate investment
trust specializing in the operations, acquisition, ownership, management, and
leasing of office properties. The Company is geographically focused on the
Southeastern and Southwestern United States and Chicago. Parkway owns or has
an interest in 55 office properties located in 11 states with an aggregate of
approximately 9,648,000 square feet of leasable space as of August 4, 2003.
The Company also offers fee based real estate services through its wholly
owned subsidiary, Parkway Realty Services.
Certain statements in this release that are not in the present tense or
discuss the Company's expectations (including the use of the words anticipate,
forecast or project) are forward-looking statements within the meaning of the
federal securities laws and as such are based upon the Company's current
belief as to the outcome and timing of future events. There can be no
assurance that future developments affecting the Company will be those
anticipated by the Company. These forward-looking statements involve risks
and uncertainties (some of which are beyond the control of the Company) and
are subject to change based upon various factors, including but not limited to
the following risks and uncertainties: changes in the real estate industry
and in performance of the financial markets; the demand for and market
acceptance of the Company's properties for rental purposes; the amount and
growth of the Company's expenses; tenant financial difficulties and general
economic conditions, including interest rates, as well as economic conditions
in those areas where the Company owns properties; the risks associated with
the ownership of real property; and other risks and uncertainties detailed
from time to time on the Company's SEC filings. Should one or more of these
risks or uncertainties occur, or should underlying assumptions prove
incorrect, the Company's results could differ materially from those expressed
in the forward-looking statements. The Company does not undertake to update
forward-looking statements.
PARKWAY PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
June 30 December 31
2003 2002
(Unaudited)
Assets
Real estate related investments:
Office and parking properties $778,837 $806,000
Accumulated depreciation (107,772) (99,449)
671,065 706,551
Land available for sale 3,528 3,528
Note receivable from Moore Building
Associates LP 5,996 5,996
Mortgage loans 866 869
Investment in unconsolidated joint ventures 20,036 15,640
701,491 732,584
Interest, rents receivable and other assets 30,221 29,759
Cash and cash equivalents 2,955 1,594
$734,667 $763,937
Liabilities
Notes payable to banks $67,918 $141,970
Mortgage notes payable without recourse 239,822 209,746
Accounts payable and other liabilities 31,117 35,400
338,857 387,116
Stockholders' Equity
8.75% Series A Preferred stock, $.001
par value, 2,760,000 shares authorized and
2,650,000 shares issued and outstanding
in 2002 --- 66,250
8.34% Series B Cumulative Convertible
Preferred stock, $.001 par value, 2,142,857
shares authorized, issued and outstanding 75,000 75,000
8.00% Series D Preferred stock, $.001
par value, 2,400,000 shares authorized,
issued and outstanding in 2003 58,094 ---
Common stock, $.001 par value,
65,057,143 shares authorized, 10,327,395
and 9,385,420 shares issued and outstanding
in 2003 and 2002, respectively 10 9
Common stock held in trust, at cost,
128,000 shares in 2003 (4,321) ---
Additional paid-in capital 234,889 199,979
Unearned compensation (4,313) ---
Accumulated other comprehensive loss (110) (170)
Retained earnings 36,561 35,753
395,810 376,821
$734,667 $763,937
PARKWAY PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended
June 30
2003 2002
(Unaudited)
Revenues
Income from office and parking properties $35,162 $38,419
Management company income 681 358
Interest on note receivable from
Moore Building Associates LP 204 245
Incentive management fee from Moore
Building Associates LP 87 100
Other income and deferred gains 281 274
36,415 39,396
Expenses
Office and parking properties:
Operating expense 15,817 16,534
Interest expense:
Contractual 4,056 5,173
Amortization of loan costs 75 57
Depreciation and amortization 6,598 7,081
Operating expense for other real
estate properties 10 8
Interest expense on bank notes:
Contractual 494 1,456
Amortization of loan costs 187 137
Management company expenses 175 155
General and administrative 962 1,265
28,374 31,866
Income before equity in earnings, gain
(loss), minority interest and
discontinued operations 8,041 7,530
Equity in earnings of unconsolidated
joint ventures 623 133
Gain (loss) on sale of joint venture
interests and real estate 4,545 (269)
Minority interest - unit holders --- (1)
Income from continuing operations 13,209 7,393
Discontinued operations:
Income from discontinued operations --- 47
Gain on sale of real estate from
discontinued operations --- 770
Net Income 13,209 8,210
Original issue costs associated with
redemption of preferred stock (2,619) -
Dividends on preferred stock (1,503) (1,449)
Dividends on convertible preferred stock (1,564) (1,565)
Net income available to common stockholders $7,523 $5,196
Net income per common share:
Basic $0.74 $0.56
Diluted $0.72 $0.55
Dividends per common share $0.65 $0.63
Weighted average shares outstanding:
Basic 10,224 9,285
Diluted 10,457 9,502
PARKWAY PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Six Months Ended
June 30
2003 2002
(Unaudited)
Revenues
Income from office and parking
properties $72,219 $79,011
Management company income 1,142 484
Interest on note receivable from
Moore Building Associates LP 406 482
Incentive management fee from Moore
Building Associates LP 155 160
Other income and deferred gains 487 323
74,409 80,460
Expenses
Office and parking properties:
Operating expense 32,379 33,462
Interest expense:
Contractual 8,026 10,717
Prepayment expenses --- 18
Amortization of loan costs 132 140
Depreciation and amortization 13,952 14,053
Operating expense for other real
estate properties 20 17
Interest expense on bank notes:
Contractual 1,523 2,935
Amortization of loan costs 364 249
Management company expenses 241 251
General and administrative 2,144 2,581
58,781 64,423
Income before equity in earnings,
gain (loss), minority interest and
discontinued operations 15,628 16,037
Equity in earnings of unconsolidated
joint ventures 1,054 149
Gain (loss) on sale of joint venture
interests and real estate 5,641 (269)
Minority interest - unit holders (1) (1)
Income from continuing operations 22,322 15,916
Discontinued operations:
Income from discontinued operations --- 47
Gain on sale of real estate from
discontinued operations --- 770
Net Income 22,322 16,733
Original issue costs associated with
redemption of preferred stock (2,619) ---
Dividends on preferred stock (2,952) (2,898)
Dividends on convertible preferred stock (3,128) (3,129)
Net income available to common stockholders $13,623 $10,706
Net income per common share:
Basic $1.38 $1.15
Diluted $1.36 $1.13
Dividends per common share $1.30 $1.26
Weighted average shares outstanding:
Basic 9,839 9,270
Diluted 10,039 9,453
In accordance with SFAS 145 "Rescission of FASB Statements No. 4, 44 and
64, Amendment of FASB Statement No. 13 and Technical Corrections,"
effective for fiscal years beginning after May 15, 2002, any gain or loss
on extinguishment of debt that was classified as an extraordinary item in
prior periods shall be reclassified. All such amounts recognized by
Parkway have been reclassified to "Interest expense - prepayment
expenses."
PARKWAY PROPERTIES, INC.
FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR DISTRIBUTION
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
(Unaudited) (Unaudited)
Net Income $13,209 $8,210 $22,322 $16,733
Adjustments to Net Income:
Preferred Dividends (1,503) (1,449) (2,952) (2,898)
Convertible Preferred Dividends (1,564) (1,565) (3,128) (3,129)
Depreciation and Amortization 6,598 7,081 13,952 14,053
Depreciation and Amortization -
Discontinued Operations --- 22 --- 22
Adjustments for Unconsolidated Joint
Ventures 529 133 938 135
Amortization of Deferred Gains (1) (2) (4) (5)
Minority Interest - Unit Holders --- 1 1 1
Gain on Sale of Joint Venture
Interests and Real Estate (4,183) (501) (5,279) (501)
Funds From Operations (1) $13,085 $11,930 $25,850 $24,411
Funds Available for Distribution
Funds From Operations $13,085 $11,930 $25,850 $24,411
Add (Deduct):
Adjustments for Unconsolidated Joint
Ventures (1,191) (32) (1,637) (32)
Straight-line rents (513) (487) (1,029) (1,185)
Amortization of Restricted Stock
Grants 332 547 332 1,095
Capital Expenditures:
Building Improvements (992) (977) (2,734) (1,349)
Tenant Improvements - New Leases (2,028) (2,136) (3,071) (3,056)
Tenant Improvements - Lease Renewals (1,057) (653) (2,805) (1,379)
Leasing Commissions - New Leases (273) (705) (495) (2,401)
Leasing Commissions - Lease Renewals (265) (415) (950) (647)
Funds Available for Distribution (1) $7,098 $7,072 $13,461 $15,457
Diluted Per Common Share/
Unit Information (**)
FFO per share $1.16 $1.16 $2.38 $2.37
Dividends paid $0.65 $0.63 $1.30 $1.26
Dividend payout ratio for FFO 55.92% 54.37% 54.65% 53.06%
Weighted average shares/units
outstanding 12,602 11,646 12,183 11,598
Other Supplemental Information
Upgrades on Acquisitions $2,202 $(303) $2,688 $785
Gain on Sale of Land $362 $--- $362 $---
**Information for Diluted Computations:
Convertible Preferred Dividends $1,564 $1,565 $3,128 $3,129
Basic Common Shares/Units Outstanding 10,226 9,286 9,840 9,271
Convertible Preferred Shares
Outstanding 2,143 2,143 2,143 2,143
Dilutive Effect of Stock Options and
Warrants 233 217 200 184
(1) FFO and FAD is included herein because we believe that these measures
are helpful to investors and our management as measures of the performance
of an equity REIT. These measures, along with cash flow from operating
activities, financing and investing activities, provide investors with an
indication of our ability to incur and service debt, to make capital
expenditures and to fund other cash needs.
Parkway believes it computes FFO in accordance with standards
established by the National Association of Real Estate Investment Trusts
("NAREIT"), which may not be comparable to FFO reported by other REITs
that do not define the term in accordance with the current NAREIT
definition. FFO is defined as net income, computed in accordance with
generally accepted accounting principles ("GAAP"), excluding gains or
losses from the sales of properties, plus real estate related depreciation
and amortization and after adjustments for unconsolidated partnerships and
joint ventures.
There is not a standard definition established for FAD. Therefore,
our measure of FAD may not be comparable to FAD reported by other
REITs. We define FAD as FFO increased by amortization of restricted stock
grants and reduced by straight line rents, non-revenue enhancing capital
expenditures for building improvements, tenant improvements and leasing
costs. Adjustments for unconsolidated partnerships and joint ventures are
included in the computation of FAD on the same basis.
PARKWAY PROPERTIES, INC.
CALCULATION OF EBITDA AND COVERAGE RATIOS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002
(In thousands)
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
(Unaudited) (Unaudited)
Net Income $13,209 $8,210 $22,322 $16,733
Adjustments to Net Income:
Interest Expense 4,550 6,629 9,549 13,652
Amortization of Financing Costs 262 194 496 389
Prepayment Expenses - Early
Extinguishment of Debt --- --- --- 18
Depreciation and Amortization 6,598 7,103 13,952 14,075
Amortization of Deferred Compensation 332 547 332 1,095
Gain on Sale of Joint Venture
Interests and Real Estate (4,545) (501) (5,641) (501)
Tax Expenses 48 30 88 61
EBITDA - Unconsolidated Joint Ventures 1,400 387 2,564 396
EBITDA (1) $21,854 $22,599 $43,662 $45,918
Interest Coverage Ratio:
EBITDA $21,854 $22,599 $43,662 $45,918
Interest Expense:
Interest Expense $4,550 $6,629 $9,549 $13,652
Interest Expense - Unconsolidated
Joint Ventures 708 205 1,317 212
Total Interest Expense $5,258 $6,834 $10,866 $13,864
Interest Coverage Ratio 4.16 3.31 4.02 3.31
Fixed Charge Coverage Ratio:
EBITDA $21,854 $22,599 $43,662 $45,918
Fixed Charges:
Interest Expense $5,258 $6,834 $10,866 $13,864
Preferred Dividends 3,067 3,014 6,080 6,027
Preferred Distributions -
Unconsolidated Joint Ventures 125 45 253 45
Principal Payments (Excluding Early
Extinguishment of Debt) 2,987 2,897 5,692 5,463
Principal Payments - Unconsolidated
Joint Ventures 141 48 277 56
Total Fixed Charges $11,578 $12,838 $23,168 $25,455
Fixed Charge Coverage Ratio 1.89 1.76 1.88 1.80
(1) EBITDA, a non-GAAP financial measure, means operating income before
mortgage and other interest expense, income taxes, depreciation and
amortization. We believe that EBITDA is useful to investors and Parkway's
management as an indication of the Company's ability to service debt and
pay cash distributions. EBITDA, as calculated by us, is not comparable to
EBITDA reported by other REITs that do not define EBITDA exactly as we do.
EBITDA does not represent cash generated from operating activities in
accordance with generally accepted accounting principles, and should not
be considered an alternative to operating income or net income as an
indicator of performance or as an alternative to cash flows from operating
activities as an indicator of liquidity.
PARKWAY PROPERTIES, INC.
NET OPERATING INCOME FROM OFFICE AND PARKING PROPERTIES
THREE MONTHS ENDED JUNE 30, 2003 AND 2002
(In thousands, except number of properties data)
Net Operating Income Occupancy
Number of % of
Properties Portfolio
(1) 2003 2002 2003 2002
Same store properties (2) 47 88.74% $17,166 $17,693 91.3% 93.1%
2002 Acquisitions 4 5.45% 1,055 310 92.2% 84.3%
2003 Acquisitions 1 4.75% 918 --- 95.2% N/A
Assets sold --- 1.06% 206 3,882 N/A N/A
Net Operating Income from
Office and Parking
Properties 52 100.00% $19,345 $21,885
(1) Percentage of portfolio based on 2003 net operating income.
(2) Parkway defines Same Store Properties as those properties that were
owned for the entire three-month periods ended June 30, 2003 and 2002.
Same Store net operating income ("SSNOI") includes income from real estate
operations less property operating expenses (before interest and
depreciation and amortization) for Same Store Properties. SSNOI as
computed by Parkway may not be comparable to SSNOI reported by other REITs
that do not define the measure exactly as we do. SSNOI is a supplemental
industry reporting measurement used to evaluate the performance of the
Company's investments in real estate assets. The following table is a
reconciliation of net income to SSNOI:
Three Months Ended Six Months Ended
June 30 June 30
2003 2002 2003 2002
Net income $13,209 $8,210 $22,322 $16,733
Add (Deduct):
Interest expense 4,812 6,823 10,045 14,059
Depreciation and amortization 6,598 7,081 13,952 14,053
Operating expense for other real
estate properties 10 8 20 17
Management company expenses 175 155 241 251
General and administrative expenses 962 1,265 2,144 2,581
(Gain) loss on sale of joint venture
interests and real estate (4,545) 269 (5,641) 269
Minority interest - unit holders --- 1 1 1
Income from discontinued operations --- (47) --- (47)
Gain on sale of real estate from
discontinued operations --- (770) --- (770)
Management company income (681) (358) (1,142) (484)
Interest income (204) (245) (406) (482)
Incentive management fee income (87) (100) (155) (160)
Equity in earnings of unconsolidated
joint ventures (623) (133) (1,054) (149)
Other income and deferred gains (281) (274) (487) (323)
Net operating income from office and
parking properties 19,345 21,885 39,840 45,549
Less: Net operating income from non
same store properties (2,179) (4,192) (4,643) (9,113)
Same Store net operating income $17,166 $17,693 $35,197 $36,436
FOR FURTHER INFORMATION:
Steven G. Rogers, President & Chief Executive Officer
Marshall A. Loeb, Chief Financial Officer
(601) 948-4091
SOURCE Parkway Properties, Inc.
-0- 08/04/2003
/CONTACT: Steven G. Rogers, President & Chief Executive Officer, or
Marshall A. Loeb, Chief Financial Officer, both of Parkway Properties, Inc.,
+1-601-948-4091/
/Company News On-Call: http://www.prnewswire.com/gh/cnoc/comp/103115.html/
/Web site: http://www.pky.com/
(PKY)
CO: Parkway Properties, Inc.
ST: Mississippi, Texas, Illinois
IN: RLT
SU: ERN CCA ERP