.
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THIRD QUARTER 2003
Supplemental Financial Data
TABLE OF CONTENTS
Page
Consolidated Statements of Operations .......................................... 3
Calculation of Funds from Operations and Funds Available for Distribution ...... 6
Same Store Operating Results ................................................... 8
Consolidated Balance Sheets .................................................... 10
Consolidated Debt Summary ...................................................... 11
Summary of Construction and Initial Lease-Up Communities ....................... 14
Asset Sales Summary ............................................................ 15
Capitalized Costs Summary ...................................................... 16
Investments in Unconsolidated Real Estate Entities ............................. 17
Net Asset Value Supplemental Information ....................................... 19
Definitions and Reconciliations of Supplemental Non-GAAP Financial
Measures ....................................................................... 21
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 to differ materially from the expected results
described in the Company's forward-looking statements: future local and national
economic conditions, including changes in job growth, interest rates, the
availability of financing and other 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; the Company's ability to obtain financing or self-fund
the development or acquisition of additional apartment communities; the
uncertainties associated with the Company's current 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 and the resulting gains/losses associated with such asset sales;
conditions affecting ownership of residential real estate and general conditions
in the multi-family residential real estate market; the effects of changes in
accounting policies and other regulatory matters detailed in the Company's
filings with the Securities and Exchange Commission and uncertainties of
litigation; 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 for the year ended December 31, 2002 and
may be discussed in subsequent filings with the SEC. The risk factors discussed
in such Form 10-K under the caption "Risk Factors" are specifically incorporated
by reference into this document.
Copyright(C)2003 Post Apartment Homes, LP All Rights Reserved 2
POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share or unit data)
(Unaudited)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------
REVENUES
Rental $ 70,440 $ 70,263 $ 208,785 $ 205,853
Other 2,817 2,667 7,967 8,219
Interest 223 316 708 1,002
------------ ------------ ------------ ------------
Total revenues 73,480 73,246 217,460 215,074
------------ ------------ ------------ ------------
EXPENSES
Property operating and maintenance (exclusive of items shown
separately below) 31,247 29,995 91,348 86,925
Depreciation 21,553 19,311 62,097 55,637
Interest 17,122 13,676 48,992 37,386
Amortization of deferred financing costs 1,084 588 2,840 1,711
General and administrative 3,735 3,495 10,697 10,980
Minority interest in consolidated property partnerships (677) (537) (1,359) (1,480)
Other 277 - 844 136
Severance charges (1) - - 21,506 -
Proxy and related costs (2) - - 5,231 -
------------ ------------ ------------ ------------
Total expenses 74,341 66,528 242,196 191,295
------------ ------------ ------------ ------------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EQUITY IN INCOME
(LOSSES) OF UNCONSOLIDATED ENTITIES, GAINS ON PROPERTY SALES AND
MINORITY INTEREST (861) 6,718 (24,736) 23,779
Equity in income (losses) of unconsolidated real estate entities 60 (441) 7,768 (1,284)
Gains on property sales (3) - - - 13,275
Minority interest of preferred unitholders (1,400) (1,400) (4,200) (4,200)
Minority interest of common unitholders 457 (244) 3,160 (2,791)
------------ ------------ ------------ ------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (1,744) 4,633 (18,008) 28,779
------------ ------------ ------------ ------------
DISCONTINUED OPERATIONS (3)
Income (loss) from discontinued operations, net of minority interest 2,925 3,426 (3,584) 11,937
Gains (losses) on properties held for sale and sold, net of minority
interest (2,833) (1,906) 27,044 7,520
------------ ------------ ------------ ------------
INCOME FROM DISCONTINUED OPERATIONS 92 1,520 23,460 19,457
------------ ------------ ------------ ------------
NET INCOME (LOSS) (1,652) 6,153 5,452 48,236
Dividends to preferred shareholders (2,862) (2,862) (8,587) (8,587)
------------ ------------ ------------ ------------
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (4,514) $ 3,291 $ (3,135) $ 39,649
============ ============ ============ ============
PER COMMON SHARE DATA - BASIC (4)
Income (loss) from continuing operations (net of preferred dividends) $ (0.12) $ 0.05 $ (0.71) $ 0.55
Income from discontinued operations - 0.04 0.63 0.52
------------ ------------ ------------ ------------
Net income (loss) available to common shareholders $ (0.12) $ 0.09 $ (0.08) $ 1.07
============ ============ ============ ============
Dividends declared $ 0.45 $ 0.78 $ 1.35 $ 2.34
============ ============ ============ ============
Weighted average common shares outstanding - basic 37,840,954 36,913,074 37,522,832 36,897,867
============ ============ ============ ============
Weighted average common shares and units outstanding - basic 42,189,895 42,031,962 42,102,260 42,016,755
============ ============ ============ ============
PER COMMON SHARE DATA - DILUTED (4)
Income (loss) from continuing operations (net of preferred dividends) $ (0.12) $ 0.05 $ (0.71) $ 0.55
Income from discontinued operations - 0.04 0.63 0.52
------------ ------------ ------------ ------------
Net income (loss) available to common shareholders $ (0.12) $ 0.09 $ (0.08) $ 1.07
============ ============ ============ ============
Dividends declared $ 0.45 $ 0.78 $ 1.35 $ 2.34
============ ============ ============ ============
Weighted average common shares outstanding - diluted 37,857,411 36,916,835 37,524,488 36,941,598
============ ============ ============ ============
Weighted average common shares and units outstanding - diluted 42,206,352 42,035,723 42,103,916 42,060,486
============ ============ ============ ============
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 3
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED
STATEMENTS OF OPERATIONS
(1) For the nine months ended September 30, 2003, the severance charges
included a second quarter charge of $1,795 related to the departure of
two executive officers and a first quarter non-cash charge of $19,712
relating to the change in roles from executive to non-executive status
of the Company's former chairman and vice-chairman of the board of
directors. The first quarter charge consisted of a $13,994 charge
representing the discounted present value of the estimated payments to
be made to these individuals under their existing employment contracts
and a $5,718 charge representing the discounted present value of
estimated net costs that may be incurred by the Company as a result of
the settlement of split-dollar life insurance obligations to the
individuals under their employment contracts. The estimated charge for
the settlement of the split-dollar life insurance obligations may
change based upon a final legal determination regarding these insurance
contracts and a final settlement among the parties.
(2) Proxy and related costs for the nine months ended September 30, 2003
represented the legal, advisory and other expenses associated with the
proxy contest concluded in the second quarter. In addition, the amount
included the estimated legal and settlement costs associated with the
resolution of two derivative and purported class action lawsuits filed
against the Company during the proxy contest. These lawsuits are
expected to be settled subsequent to September 30, 2003.
(3) On January 1, 2002, the Company adopted SFAS No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets." In accordance with
the provisions of SFAS No. 144, the operating results of real estate
assets designated as held for sale subsequent to January 1, 2002 are
included in discontinued operations in the consolidated statement of
operations. Also under the provisions of SFAS No. 144, the reserves, if
any, to write down the carrying value of real estate assets designated
and classified as held for sale after January 1, 2002 are included in
discontinued operations. All subsequent gains or additional losses on
the sale of these assets are also included in discontinued operations.
The gains or losses on the sale of real estate assets held for sale at
December 31, 2001 are included in continuing operations. As a result,
income from continuing operations may not be comparable between the
periods presented.
For the three and nine months ended September 30, 2003, income from
discontinued operations included the results of operations of 11
communities, containing 5,175 units, classified as held for sale at
September 30, 2003 and the results of operations of communities sold in
2003 through their sale date. For the three and nine months ended
September 30, 2002, income from discontinued operations included the
results of operations of all communities classified as held for sale at
September 30, 3003, communities sold in 2003 and the results of
operations of communities and commercial properties sold in 2002
through their sale dates.
The revenues and expenses of these communities for the three and nine
months ended September 30, 2003 and 2002 were as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- --------------------
2003 2002 2003 2002
-------- -------- -------- --------
REVENUES
Rental $ 9,918 $ 14,085 $ 32,837 $ 46,746
Other 510 644 1,521 2,025
-------- -------- -------- --------
Total revenues 10,428 14,729 34,358 48,771
-------- -------- -------- --------
EXPENSES
Property operating and maintenance
(exclusive of items shown separately below) 4,196 5,772 13,482 18,966
Depreciation 1,610 2,816 6,276 8,640
Interest 1,361 2,240 4,584 7,572
Asset impairment charge - - 14,118 -
-------- -------- -------- --------
Total expenses 7,167 10,828 38,460 35,178
-------- -------- -------- --------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
BEFORE MINORITY INTEREST 3,261 3,901 (4,102) 13,593
Minority interest (336) (475) 518 (1,656)
-------- -------- -------- --------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS $ 2,925 $ 3,426 $ (3,584) $ 11,937
======== ======== ======== ========
During the third quarter of 2003, the Company reclassified an
impairment loss of $14,118 from continuing operations to discontinued
operations. The impairment loss, originally recorded in the first
quarter 2003, related to the write-down of the cost of the Company's
apartment community located in Phoenix, Arizona to its estimated fair
value. The reclassification of the impairment loss to discontinued
operations in the nine months ended September 30, 2003, reflects the
designation of this community as held for sale during the third quarter
of 2003.
For the three months ended September 30, 2003, the Company recognized
net losses from discontinued operations of $3,344 ($2,999 net of
minority interest), resulting from the reserve to write-down to fair
value one community classified as held for sale during the period
reduced by gains of $185 ($166 net of minority interest) from the sale
of land. For the nine months ended September 30, 2003, the Company
recognized net gains from discontinued operations of $35,102 ($31,283
net of minority interest) on the sale of two communities containing
1,009 units and a land parcel, reduced by losses of $4,757 ($4,239 net
of minority interest) resulting from losses on the sale of certain land
parcels and reserves to write-down to fair value one community and
certain other land parcels classified as held for sale.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 4
(4) 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. owns the controlling interest in
Post Apartment Homes, L.P., the Operating Partnership, through which the
Company conducts its operations. As of September 30, 2003, there were
42,220,022 units of the Operating Partnership outstanding, of which
37,999,594 or 90.0% were owned by the Company. The diluted weighted
average shares and units outstanding for the three and nine months ended
September 30, 2003 were 42,206,352 and 42,103,916, respectively. The
diluted weighted average shares and units outstanding for the three and
nine months ended September 30, 2002 were 42,035,723 and 42,060,486
respectively.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 5
POST PROPERTIES, INC.
CALCULATION OF FUNDS FROM OPERATIONS
AND FUNDS AVAILABLE FOR DISTRIBUTION AVAILABLE TO COMMON SHAREHOLDERS
(Dollars in thousands, except per share or unit data)
(Unaudited)
A reconciliation of net income available to common shareholders to funds from
operations available to common shareholders and funds available for distribution
to common shareholders is provided below.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------------------
2003 2002(1) 2003(1) 2002(1)
------------ ------------ ------------ ------------
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS $ (4,514) $ 3,291 $ (3,135) $ 39,649
Minority interest of common unitholders - continuing operations (457) 244 (3,160) 2,791
Minority interest in discontinued operations (2) 11 211 2,783 2,699
Gains on property sales - continuing operations - - - (13,275)
Gains on property sales - unconsolidated entities - - (8,395) -
Losses (gains) on property sales - discontinued operations (excluding
asset impairment charges) (185) 321 (33,690) (18,065)
Depreciation on wholly-owned real estate assets, net (3) 21,571 20,904 64,555 60,635
Depreciation on real estate assets held in unconsolidated entities 333 336 1,236 736
------------ ------------ ------------ ------------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS,
AS DEFINED (A) 16,759 25,307 20,194 75,170
Severance charges - - 21,506 -
Proxy and related costs - - 5,231 -
Asset impairment charges 3,344 1,849 17,462 9,502
------------ ------------ ------------ ------------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS,
EXCLUDING SEVERANCE, PROXY AND IMPAIRMENT CHARGES (B) $ 20,103 $ 27,156 $ 64,393 $ 84,672
============ ============ ============ ============
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS, AS DEFINED $ 16,759 $ 25,307 $ 20,194 $ 75,170
Recurring capital expenditures (2,996) (2,584) (6,982) (7,315)
Non-recurring capital expenditures (1,055) (810) (3,231) (2,075)
------------ ------------ ------------ ------------
FUNDS AVAILABLE FOR DISTRIBUTION TO COMMON SHAREHOLDERS (4) (C) 12,708 21,913 9,981 65,780
Severance charges - - 21,506 -
Proxy and related costs - - 5,231 -
Asset impairment charges 3,344 1,849 17,462 9,502
------------ ------------ ------------ ------------
FUNDS AVAILABLE FOR DISTRIBUTION TO COMMON SHAREHOLDERS, EXCLUDING
SEVERANCE, PROXY AND IMPAIRMENT CHARGES (4) (D) $ 16,052 $ 23,762 $ 54,180 $ 75,282
============ ============ ============ ============
PER COMMON SHARE DATA - BASIC
Funds from operations per share or unit, as defined (A/F) $ 0.40 $ 0.60 $ 0.48 $ 1.79
Funds available for distribution per share or unit, as defined (4) (C/F) $ 0.30 $ 0.52 $ 0.24 $ 1.57
Funds from operations per share or unit, excluding severance, proxy and
impairment charges (B/F) $ 0.48 $ 0.65 $ 1.53 $ 2.02
Funds available for distribution per share or unit, excluding severance,
proxy and impairment charges (4) D/F) $ 0.38 $ 0.57 $ 1.29 $ 1.79
Dividends declared (E) $ 0.45 $ 0.78 $ 1.35 $ 2.34
Weighted average shares outstanding 37,840,954 36,913,074 37,522,832 36,897,867
Weighted average shares and units outstanding (F) 42,189,895 42,031,962 42,102,260 42,016,755
PER COMMON SHARE DATA - DILUTED
Funds from operations per share or unit, as defined (A/G=W) $ 0.40 $ 0.60 $ 0.48 $ 1.79
Funds available for distribution per share or unit, as defined
(4) (C/G=X) $ 0.30 $ 0.52 $ 0.24 $ 1.56
Funds from operations per share or unit, excluding severance, proxy and
impairment charges (B/G=Y) $ 0.48 $ 0.65 $ 1.53 $ 2.01
Funds available for distribution per share or unit, excluding severance,
proxy and impairment charges (4) (D/G=Z) $ 0.38 $ 0.57 $ 1.29 $ 1.79
Dividends declared (E) $ 0.45 $ 0.78 $ 1.35 $ 2.34
Weighted average shares outstanding 37,857,411 36,916,835 37,524,488 36,941,598
Weighted average shares and units outstanding (G) 42,206,352 42,035,723 42,103,916 42,060,486
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 6
DIVIDEND PAYOUT RATIO PER COMMON SHARE
Payout ratio - funds from operations, as defined (E/W) 112.5% 130.0% 281.3% 130.7%
Payout ratio - funds available for distribution, as defined (E/X) 150.0% 150.0% 562.5% 150.0%
Payout ratio - funds from operations, excluding severance, proxy and
impairment charges (E/Y) 93.8% 120.0% 88.2% 116.4%
Payout ratio - funds available for distribution, excluding severance, proxy and
impairment charges (E/Z) 118.4% 136.8% 104.7% 130.7%
(1) For the three and nine months ended September 30, 2002, FFO available
to common shareholders has been restated from the prior year
presentation to reflect a reduction of $1,849 and $9,502 for impairment
losses on real estate assets resulting from the NAREIT modification of
the definition of FFO. For the nine months ended September 30, 2003,
FFO available to common shareholders has been restated to reflect a
reduction of $14,118 for impairment losses on real estate recognized in
the first half of 2003. Additionally, for the nine months ended
September 30, 2002, FFO available to common shareholders has been
restated from the prior year presentation to reflect a reduction of
$136 for early debt extinguishment costs reclassified from
extraordinary items to operating expenses under SFAS No. 145.
(2) Represents the minority interest in earnings and gains (losses) on
properties held for sale and sold reported as discontinued operations
for the periods presented.
(3) Depreciation on wholly-owned real estate assets is net of the minority
interest portion of depreciation in consolidated entities.
(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 $182 and $375 for the three months
ended September 30, 2003 and 2002, respectively, and $521 and $923 for
the nine months ended September 30, 2003 and 2002, respectively, are
excluded from the calculation of funds available for distribution.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 7
POST PROPERTIES, INC.
SAME STORE OPERATING RESULTS
(Dollars in thousands, except per share or unit data)
(Unaudited)
SAME STORE OPERATING 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. Same store net
operating income is a supplemental non-GAAP financial measure. See Table 1 on
page 22 for a reconciliation of same store net operating income to GAAP income
from continuing operations before equity in losses of unconsolidated entities,
gains on sales of property and minority interest. The operating performance of
the 57 communities containing 19,646 apartment units which were fully stabilized
as of January 1, 2002, is summarized as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ---------------------
2003 2002 % CHANGE 2003 2002 % CHANGE
-------- -------- -------- --------- --------- --------
Rental and other revenues $ 55,974 $ 58,007 (3.5)% $ 166,541 $ 173,436 (4.0)%
Property operating and maintenance expenses
(excluding depreciation and amortization) 20,727 20,524 1.0% 60,561 60,060 0.8%
-------- -------- --------- ---------
Same store net operating income $ 35,247 $ 37,483 (6.0)% $ 105,980 $ 113,376 (6.5)%
======== ======== ========= =========
Capital expenditures (1)
Recurring
Carpet $ 649 $ 536 21.1% $ 1,637 $ 1,279 28.0%
Other 1,604 1,259 27.5% 3,520 3,340 5.4%
-------- -------- --------- ---------
Total recurring 2,253 1,795 25.5% 5,157 4,619 11.6%
Non-recurring 912 438 108.2% 2,214 1,229 80.2%
-------- -------- --------- ---------
Total capital expenditures (A) $ 3,165 $ 2,233 41.7% $ 7,371 $ 5,848 26.0%
======== ======== ========= =========
Total capital expenditures per unit
(A/19,646 UNITS) $ 161 $ 114 41.2% $ 375 $ 298 25.8%
======== ======== ========= =========
Average monthly rental rate per unit (2) $ 980 $ 1,028 (4.7)% $ 995 $ 1,050 (5.2)%
======== ======== ========= =========
(1) See Table 3 on page 24 for a reconciliation of these segment components
of property capital expenditures to total recurring capital
expenditures and total non-recurring capital expenditures as presented
on the consolidated cash flow statements prepared under GAAP.
(2) 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.
SAME STORE OPERATING RESULTS BY MARKET -
COMPARISON OF 2003 TO 2002
(Increase(decrease) from same period in prior year)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------------------------- ----------------------------------------------
AVERAGE AVERAGE
ECONOMIC ECONOMIC
MARKET REVENUES (1) EXPENSES (1) NOI (1) OCCUPANCY REVENUES (1) EXPENSES (1) NOI (1) OCCUPANCY
- --------- ------------ ------------ ------- --------- ------------ ------------ ------- ---------
Atlanta (4.4)% 4.3% (8.6)% - (4.8)% 2.7% (8.3)% 0.6%
Dallas (3.1)% (5.6)% (1.3)% (0.3)% (3.3)% (1.9)% (4.2)% 0.5%
Tampa (3.9)% - (6.3)% 0.4% (5.6)% (1.7)% (8.0)% (2.0)%
Other (2) 0.6% 0.8% 0.5% 1.0% - 0.4% 0.3% 2.0%
---- ---- ---- ----- ---- ---- ---- ----
Total (3.5)% 1.0% (6.0)% 0.1% (4.0)% 0.8% (6.5)% 0.5%
==== ==== ==== ===== ==== ==== ==== ====
(1) See Table 2 on page 23 for a reconciliation of these components of same
store net operating income and Table 1 on page 22 for a reconciliation
of same store net operating income to GAAP income from continuing
operations before equity in income (losses) of unconsolidated entities,
gain on sales of property and minority interest.
(2) Includes communities located in Orlando, FL; Washington, DC; Houston,
TX; Charlotte, NC and Nashville, TN.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 8
SAME STORE OCCUPANCY BY MARKET
AVERAGE ECONOMIC AVERAGE ECONOMIC
OCCUPANCY (1) OCCUPANCY (1)
-------------------- --------------------
THREE MONTHS ENDED NINE MONTHS ENDED PHYSICAL
SEPTEMBER 30, SEPTEMBER 30, OCCUPANCY (2)
APARTMENT % OF -------------------- -------------------- SEPTEMBER 30,
MARKET UNITS UNITS 2003 2002 2003 2002 2003
- ------- --------- ----- ---- ---- ---- ---- -------------
Atlanta 11,886 60.5% 93.6% 93.6% 91.6% 91.0% 95.5%
Dallas 4,353 22.2% 91.0% 91.3% 90.3% 89.8% 93.5%
Tampa 1,439 7.3% 94.4% 94.0% 92.4% 94.4% 95.3%
Other 1,968 10.0% 94.1% 93.1% 92.6% 90.6% 95.4%
------ ----- ---- ---- ---- ---- ----
Total 19,646 100.0% 93.1% 93.0% 91.5% 91.0% 95.0%
====== ===== ==== ==== ==== ==== ====
(1) Average economic occupancy is defined 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. The calculation
of average economic occupancy does not include a deduction for
concessions and employee discounts. Average economic occupancy, including
these amounts would have been 92.2% and 91.4% for the three months ended
September 30, 2003 and 2002, respectively, and 90.3% and 89.0% for the
nine months ended September 30, 2003 and 2002, respectively. For the
three months ended September 30, 2003 and 2002, concessions were $428 and
$820, respectively, and employee discounts were $99 and $149,
respectively. For the nine months ended September 30, 2003 and 2002,
concessions were $1,844 and $3,092, respectively, and employee discounts
were $332 and $484, respectively.
(2) Physical occupancy is defined as the number of units occupied divided by
total apartment units, expressed as a percentage.
SAME STORE SEQUENTIAL COMPARISON
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, 2003 JUNE 30, 2003 % CHANGE
------------------ ------------------ --------
Rental and other revenues $ 55,974 $ 55,135 1.5%
Property operating and maintenance expenses
(excluding depreciation and amortization) 20,727 20,284 2.2%
---------- ----------
Same store net operating income (1) $ 35,247 $ 34,851 1.1%
========== ==========
Average economic occupancy 93.1% 91.4% 1.7%
========== ==========
Average monthly rental rate per unit $ 980 $ 995 (1.5)%
========== ==========
SEQUENTIAL SAME STORE OPERATING RESULTS BY MARKET -
COMPARISON OF THIRD QUARTER OF 2003 TO SECOND QUARTER 2003
(Increase (decrease) between periods)
AVERAGE
ECONOMIC
MARKET REVENUES (1) EXPENSES (1) NOI (1) OCCUPANCY
- --------- ------------ ------------ ------- ---------
Atlanta 1.8% 3.3% 0.9% 2.6 %
Dallas 0.7% 0.6% 0.7% (0.2)%
Tampa 1.3% 2.4% 0.6% 1.6 %
Other (2) 2.1% 0.2% 3.1% 1.7 %
--- --- --- ---
Total 1.5% 2.2% 1.1% 1.7 %
=== === === ===
(1) See Table 2 on page 23 for a reconciliation of these components of same
store net operating income and Table 1 on page 22 for a reconciliation
of same store net operating income to GAAP income from continuing
operations before equity in loses of unconsolidated entities, gains on
sale of property and minority interest.
(2) Includes communities located in Orlando, FL; Washington, DC; Houston,
TX; Charlotte, NC and Nashville, TN.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 9
POST PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share or unit data)
SEPTEMBER 30, DECEMBER 31,
2003 2002
------------- ------------
ASSETS
Real estate assets
Land $ 254,000 $ 273,058
Building and improvements 1,880,223 1,976,809
Furniture, fixtures and equipment 211,791 246,634
Construction in progress 12,466 92,945
Investments in and advances to unconsolidated real estate entities 100,908 182,285
Land held for future development 11,988 24,879
----------- -----------
2,471,376 2,796,610
Less: accumulated depreciation (411,312) (426,136)
Assets held for sale, net of accumulated depreciation of $82,286 and
$17,829 at September 30, 2003 and December 31, 2002, respectively 199,723 73,061
----------- -----------
Total real estate assets 2,259,787 2,443,535
Cash and cash equivalents 4,215 6,390
Restricted cash 2,024 1,369
Deferred charges, net 13,171 15,584
Other assets 37,270 41,273
----------- -----------
Total assets $ 2,316,467 $ 2,508,151
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 1,255,280 $ 1,414,555
Accrued interest payable 16,420 8,994
Dividend and distribution payable 19,466 33,252
Accounts payable and accrued expenses 81,706 49,124
Security deposits and prepaid rents 8,175 8,250
----------- -----------
Total liabilities 1,381,047 1,514,175
----------- -----------
Minority interest of preferred unitholders in Operating Partnership 70,000 70,000
----------- -----------
Minority interest of common unitholders in Operating Partnership 72,714 90,277
----------- -----------
Commitments and contingencies - -
Shareholders' equity
Preferred stock, $.01 par value, 20,000,000 authorized:
8 1/2 % Series A Cumulative Redeemable Shares, liquidation preference $50 per share,
900,000 shares issued and outstanding 9 9
7 5/8 % Series B Cumulative Redeemable Shares, liquidation preference $25 per share,
2,000,000 shares issued and outstanding 20 20
7 5/8 % Series C Cumulative Redeemable Shares, liquidation preference $25 per share,
2,000,000 shares issued and outstanding 20 20
Common stock, $.01 par value, 100,000,000 authorized:
39,676,204 and 39,676,204 shares issued, 37,999,594 and 37,202,290 shares
outstanding at September 30, 2003 and December 31, 2002, respectively 396 396
Additional paid-in capital 873,197 940,122
Accumulated earnings - -
Accumulated other comprehensive income (14,297) (14,822)
Deferred compensation (4,466) (639)
----------- -----------
854,879 925,106
Less common stock in treasury, at cost, 1,676,610 shares and 2,473,914 shares at
September 30, 2003 and December 31, 2002, respectively (62,173) (91,407)
----------- -----------
Total shareholders' equity 792,706 833,699
----------- -----------
Total liabilities and shareholders' equity $ 2,316,467 $ 2,508,151
=========== ===========
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 10
POST PROPERTIES, INC.
CONSOLIDATED DEBT SUMMARY
(Dollars in thousands, except per share or unit data)
(Unaudited)
SUMMARY OF OUTSTANDING DEBT AT SEPTEMBER 30, 2003
WEIGHTED AVERAGE RATE (1)
THREE MONTHS ENDED SEPTEMBER 30,
PERCENTAGE --------------------------------
TYPE OF INDEBTEDNESS BALANCE OF TOTAL 2003 2002
- ------------------------------------------ ---------- ---------- -------- ------
Unsecured fixed rate senior notes $ 708,000 56.40% 7.40% 7.40%
Secured tax exempt variable rate notes (2) 214,380 17.08% 1.50% 2.00%
Secured conventional fixed rate notes 292,599 23.31% 6.77% 7.08%
Lines of credit 40,301 3.21% 1.74% 2.71%
---------- ------ ---- ----
$1,255,280 100.00% 6.07% 5.76%
========== ====== ==== ====
PERCENTAGE
BALANCE OF TOTAL DEBT
---------- -------------
Total fixed rate debt $1,000,599 79.71%
Total variable rate debt 254,681 20.29%
---------- ------
Total debt $1,255,280 100.00%
========== ======
DEBT MATURITIES
WEIGHTED AVERAGE RATE
AGGREGATE DEBT MATURITIES BY YEAR (3) AMOUNT ON DEBT MATURITIES (1)
- ------------------------------------- -------------- ----------------------
Remainder of 2003 $ 100,601 (8) 7.24%
2004 27,094 7.04%
2005 204,402 7.83%
2006 79,732 6.98%
2007 112,178 7.16%
2008 and thereafter 690,972 5.36%
----------
$1,214,979
==========
DEBT STATISTICS
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
2003 2002
--------- ------
Interest coverage ratio (4)(5) 2.3 x (9) 3.1 x
Fixed charge coverage ratio (4)(6) 1.9 x (9) 2.3 x
Total debt as a % of undepreciated real estate (7) 45.6% 47.9%
Total debt as a % of undepreciated real estate
(adjusted for joint venture partner's share of debt) (7) 44.5% 46.1%
(1) Weighted average rate includes credit enhancements and other fees,
where applicable. The weighted average rates for the three months ended
September 30, 2002 are based on the debt outstanding for that period.
(2) The Company has purchased interest rate cap arrangements that limit the
Company's exposure to increases in the base rate to 5.00 percent.
(3) Excludes outstanding balances on lines of credit of $40,301 maturing in
2004.
(4) Calculated for the nine months ended September 30, 2003 and 2002.
(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
property sales, severance, proxy and asset impairment charges, 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 24.
(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 property sales, severance, proxy and asset
impairment charges, 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 24.
(7) At September 30, 2003, the Company has provided construction financing
to two unconsolidated development joint ventures with the New York
State Common Retirement Fund. 100% of this financing is included in the
Company's debt and its real estate assets. At September 30, 2003 and
2002, the venture partner's share of the construction loans was $54,309
and $97,627, respectively. A computation of the debt ratios is included
in Table 5 on page 25.
(8) Upon their maturity on October 1, 2003, the Company repaid $100 million
of its 7.25% unsecured notes, using borrowings under its unsecured line
of credit.
(9) The interest coverage and fixed charge coverage ratios, including
discontinued operations, for the nine months ended September 30, 2003
would be 2.5x and 2.1x, respectively.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 11
POST PROPERTIES, INC.
CONSOLIDATED DEBT SUMMARY (CONT.)
(Dollars in thousands, except per share or unit data)
(Unaudited)
FINANCIAL DEBT COVENANTS - SENIOR UNSECURED PUBLIC NOTES
ACTUAL RATIO AS OF
COVENANT REQUIREMENT (1) SEPTEMBER 30, 2003
- ----------------------------------------------------------------------------- ------------------
Consolidated Debt to Total Assets cannot exceed 60% 45%
Secured Debt to Total Assets cannot exceed 40% 18%
Total Unencumbered Assets to Unsecured Debt must be at least 1.50/1 2.73/1
Consolidated Income Available for Debt Service Charge must be at least 1.50/1 2.53/1
(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
SEPTEMBER 30, 2003
------------------
RATIO OF CONSOLIDATED DEBT TO TOTAL ASSETS
Consolidated debt, per balance sheet (A) $ 1,255,280
=============
Total assets, as defined (B) (Table A) $ 2,796,566
=============
Computed ratio (A/B) 45%
=============
Required ratio (cannot exceed) 60%
=============
RATIO OF SECURED DEBT TO TOTAL ASSETS
Secured conventional fixed rate notes $ 292,599
Secured tax exempt variable rate notes 214,380
-------------
Total secured debt (C) $ 506,979
=============
Computed ratio (C/B) 18%
=============
Required ratio (cannot exceed) 40%
=============
RATIO OF TOTAL UNENCUMBERED ASSETS TO UNSECURED DEBT
Consolidated debt, per balance sheet (A) $ 1,255,280
Total secured debt (C) (506,979)
-------------
Total unsecured debt (D) $ 748,301
=============
Total unencumbered assets, as defined (E) (Table A) $ 2,043,113
=============
Computed ratio (E/D) 2.73
=============
Required minimum ratio 1.50x
=============
RATIO OF CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE TO ANNUAL
DEBT SERVICE CHARGE
Consolidated Income Available for Debt Service, as defined (F)
(Table B) $ 184,645
=============
Annual Debt Service Charge, as defined (G) (Table B) $ 72,860
=============
Computed ratio (F/G) 2.53x
=============
Required minimum ratio 1.50x
=============
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 12
POST PROPERTIES, INC.
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
AS OF
SEPTEMBER 30, 2003
------------------
Total real estate assets $ 2,259,787
Add:
Accumulated depreciation 411,312
Accumulated depreciation - assets held for sale 82,286
Other tangible assets (cash, restricted cash,
other assets, exclusive of receivables) 43,181
-------------
Total assets for public debt covenant computations 2,796,566
Less:
Encumbered real estate assets 753,453
-------------
Total unencumbered assets for public debt
covenant computations $ 2,043,113
=============
TABLE B
CALCULATION OF CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE AND
ANNUAL DEBT SERVICE CHARGE FOR PUBLIC DEBT COVENANT COMPUTATIONS (1)
NINE MONTHS ENDED
SEPTEMBER 30, 2003
------------------
CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE
Net income $ 5,452
Add:
Minority interests 3,823
-------------
Income before minority interest 9,275
Add:
Depreciation 62,097
Depreciation (company share) of assets held in unconsolidated
entities 1,236
Depreciation of discontinued operations 6,276
Amortization of deferred financing costs 2,840
Severance charges 21,506
Proxy and related costs 5,231
Asset impairment charge 14,118
Interest expense 48,992
Interest expense (company share) of assets held in unconsolidated
entities 1,069
Interest expense of discontinued operations 4,584
Less:
Gains on property sales (before minority interest) (30,345)
Gains on property sales - unconsolidated entities (8,395)
-------------
Consolidated income available for debt service $ 138,484
=============
Consolidated income available for debt service (annualized) $ 184,645
=============
ANNUAL DEBT SERVICE CHARGE
Consolidated interest expense $ 48,992
Interest expense (company share) of assets held in unconsolidated
entities 1,069
Interest expense of discontinued operations 4,584
-------------
$ 54,645
=============
Annual debt service charge (interest expense annualized) $ 72,860
=============
(1) The actual calculation of these ratios requires the use of annual
trailing financial data. These computations reflect annualized
year-to-date 2003 results for comparison and presentation purposes. The
computations using annual trailing financial data also reflect
compliance with the debt covenants.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 13
POST PROPERTIES, INC.
SUMMARY OF CONSTRUCTION AND
INITIAL LEASE-UP COMMUNITIES
ESTIMATED AMOUNT ESTIMATED
CONSTRUCTION SPENT QUARTER OF QUARTER OF QUARTER OF % %
NUMBER OF COST AS OF CONSTRUCTION FIRST UNITS STABILIZED LEASED OCCUPIED
METROPOLITAN AREA UNITS ($ IN MILLIONS) 9/30/2003 START AVAILABLE OCCUPANCY (1) 11/1/2003 11/1/2003
- -------------------------- --------- --------------- --------- ------------ ----------- ------------- --------- ---------
WHOLLY OWNED CONSTRUCTION/
LEASE-UP COMMUNITIES
NEW YORK CITY, NY
POST TOSCANA(TM) 199 $ 92 $ 92 1Q '02 1Q '03 2Q '04 79.4% 74.9%
SUBTOTAL WHOLLY-OWNED
--- -------- -----
CONSTRUCTION/LEASE-UP
COMMUNITIES 199 $ 92 $ 92
--- -------- -----
CO-INVESTMENT CONSTRUCTION/
LEASE-UP COMMUNITIES
WASHINGTON D.C.
POST MASSACHUSETTS AVENUE
(TM) (2) 269 $ 72 $ 72 2Q '01 4Q '02 4Q '03 86.6% 84.4%
--- -------- -----
SUBTOTAL CO-INVESTMENT
CONSTRUCTION/LEASE-UP
COMMUNITIES 269 $ 72 $ 72
--- -------- -----
CONSTRUCTION TOTALS 468 $ 164 $ 164
=== ======== =====
LESS PARTNERS' PORTION $ (47) $ (47)
-------- -----
POST PROPERTIES' FUNDING
COMMITMENT $ 117 $ 117
======== =====
WEIGHTED AVERAGE PROJECTED
PROPERTY NET OPERATING
INCOME AS A % OF TOTAL
ESTIMATED CONSTRUCTION
COST (3) 7.0%
========
(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) This community is being developed as a joint venture (Post equity
ownership is 35%).
(3) The calculation represents the aggregate projected unlevered property
net operating income to be earned by each community in its first year
of stabilized operations divided by aggregate estimated construction
costs of the communities. The Company uses property net operating
income as a management tool to measure the operating performance of its
communities.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 14
POST PROPERTIES, INC.
ASSET SALES SUMMARY
GROSS PROCEEDS GROSS
PROPERTY NAME/PERIOD LOCATION YEAR BUILT PER UNIT PROCEEDS
- --------------------------- ----------------- ---------- -------------- --------------------
Q1 2002
Post Bay(R) Tampa, FL 1988 $ 58,013
Post Court(R) (FL) Clearwater, FL 1991 70,175
Post & Paddock (Industrial) Grand Prairie, TX 1986 (1) $ 41,900,000
Q2 2002
Post Village(R) (FL) Tampa, FL 1989-1991 $ 59,175
Post Commons(TM) Dallas, TX 1985 58,228
Post Residences(TM) (2) Dallas, TX 1986 91,327
Post Parkwood(R) (TX) Dallas, TX 1962-1970 73,958
Towne Crossing (Retail) Mesquite, TX 1985 (1) $ 100,725,000
Q3 2002
Post Ascension(R) Arlington, TX 1985-1995 $ 59,880 $ 10,000,000
Q4 2002
Post Fountains(TM) Orlando, FL 1988 $ 59,843 $ 30,400,000
-------------
2002 YTD Total $ 183,025,000
=============
Q1 2003
Post West Avenue (3) Austin, TX 2000 $126,360 $ 30,200,000 (4)
Q2 2003
Post Park(R) Atlanta, GA 1998-1990 $ 78,156
Post Paseo Colorado Pasadena, CA 2002 250,639 $ 158,180,000 (5)(6)
Q3 2003
None $ -
-------------
$ 188,380,000
=============
Weighted Average Cap Rate - Apartment Assets 7.1%(7)
=============
(1) Commercial property acquired in the Columbus Realty Trust merger.
(2) Includes approximately 14,000 square feet of retail space.
(3) Includes approximately 7,400 square feet of retail space.
(4) Excludes approximately $8.6 million in gross proceeds from the sale of
land in Tampa, FL and Austin, TX.
(5) Includes gross proceeds of $98.0 million from the sale of a property
held in joint venture. The company's share of the sale proceeds,
including repayment of the company's construction loan to the joint
venture, was approximately $75.0 million.
(6) Excludes approximately $2.6 million of gross proceeds from the sale of
land in Dallas, TX.
(7) Based on prior calendar year's net operating income after adjustments
for management fee (3.0%) and capital reserves ($300/unit), except for
Post Paseo Colorado, a recently completed development, which is based
on projected stabilized net operating income.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 15
POST PROPERTIES, INC.
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 and construction of new apartment
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
all interior and exterior painting of communities.
The Company capitalizes interest, real estate taxes, and certain internal
personnel and associated costs related to apartment communities under
development and construction. 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 community
separately for cost accumulation, capitalization and expense recognition
purposes. Prior to the commencement of leasing 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 as well as property management and leasing personnel
expenses) of such communities.
A summary of community development improvements and other capitalized
expenditures for the three and nine months ended September 30, 2003 and 2002 is
detailed below.
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------- --------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
NEW COMMUNITY DEVELOPMENT AND ACQUISITION ACTIVITY $ 2,991 $ 25,533 $ 22,823 $ 118,293
NON-RECURRING CAPITAL EXPENDITURES
Revenue generating additions and improvements (1) 105 340 837 1,306
Other community additions and improvements (2) 1,055 810 3,231 2,075
RECURRING CAPITAL EXPENDITURES
Carpet replacements and other community additions
and improvements (3) 2,996 2,584 6,982 7,315
Corporate additions and improvements 182 375 521 923
----------- ----------- ----------- -----------
$ 7,329 $ 29,642 $ 34,394 $ 129,912
=========== =========== =========== ===========
OTHER DATA
Capitalized interest $ 225 $ 2,753 $ 3,338 $ 11,293
=========== =========== =========== ===========
Capitalized personnel and associated costs (4) $ 387 $ 1,266 $ 1,566 $ 3,995
=========== =========== =========== ===========
(1) Represents expenditures for major renovations of communities, water
sub-metering equipment and other unit upgrade costs that enhance the
rental value of such units.
(2) Represents property improvement expenditures that generally occur less
frequently than on an annual basis.
(3) Represents property improvement expenditures of a type that are
expected to be incurred on an annual basis.
(4) Reflects personnel and associated costs capitalized to construction and
development activities.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 16
POST PROPERTIES, INC.
INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES
(Dollars in thousands, except per share or unit data)
(Unaudited)
At September 30, 2003, the Company holds investments in three individual limited
liability companies (the "Property LLCs") with an institutional investor. Each
Property LLC owns a newly developed apartment community. At September 30, 2003,
two of the apartment communities had achieved stabilized occupancy and one
apartment community was in initial lease-up. The Company holds a 35% equity
interest in the Property LLCs. The initial development costs of the apartment
communities were funded through member equity contributions proportionate to the
members' ownership interests and through construction financing provided by the
Company. In June 2003, the underlying apartment community held by a fourth
Property LLC was sold. The financial information below for the nine months
ended September 30, 2003 reflects the gain on property sale of $8,395 and the
operating results of this Property LLC through the sale date. The Company's
share of this gain is included in the Company's share of net income (loss) shown
in the table below.
The Company accounts for its investments in these Property LLCs using the equity
method of accounting. The excess of the Company's investment over its equity in
the underlying net assets of the Property LLCs was approximately $6,822 at
September 30, 2003. This excess investment is being amortized as a reduction to
earnings on a straight-line basis over the lives of the related assets. The
Company provides real estate services (development, construction and property
management) to the Property LLCs.
The operating results of the Company include its proportionate share of net
income (loss) from the investments in the Property LLCs. A summary of financial
information for the Property LLCs in the aggregate is as follows:
SEPTEMBER 30, DECEMBER 31,
BALANCE SHEET DATA 2003 2002
- ----------------------------------------- ---------- ----------
Real estate assets, net $ 128,278 $ 198,854
Cash and other 3,725 2,330
---------- ----------
Total assets 132,003 201,184
========== ==========
Mortgage notes payable $ 16,835 $ -
Construction notes payable to Company (1) 83,552 160,294
Other liabilities 1,593 3,975
---------- ----------
Total liabilities 101,980 164,269
Members' equity 30,023 36,915
---------- ----------
Total liabilities and members' equity $ 132,003 $ 201,184
========== ==========
Company's equity investment $ 17,356 $ 21,991
========== ==========
Company's share of notes payable $ 35,136 $ 56,103
========== ==========
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
INCOME STATEMENT DATA 2003 2002 2003 2002
- --------------------------------------------- ---------- ---------- ---------- ----------
Revenue
Rental $ 2,638 $ 1,006 $ 6,434 $ 1,888
Other 130 85 357 225
---------- ---------- ---------- ----------
Total revenues 2,768 1,091 6,791 2,113
---------- ---------- ---------- ----------
Expenses
Property operating and maintenance 866 665 3,301 1,796
Depreciation 954 502 2,798 1,343
Interest 777 450 2,296 1,058
---------- ---------- ---------- ----------
Total expenses 2,597 1,617 8,395 4,197
---------- ---------- ---------- ----------
Income (loss) from continuing operations 171 (526) (1,604) (2,084)
---------- ---------- ---------- ----------
Discontinued operations
Loss from discontinued operations - (700) (188) (1,553)
Gain on property sale - - 26,179 -
---------- ---------- ---------- ----------
Income (loss) from discontinued operations - (700) 25,991 (1,553)
---------- ---------- ---------- ----------
Net income (loss) $ 171 $ (1,226) $ 24,387 $ (3,637)
========== ========== ========== ==========
Company's share of net income (loss) $ 60 $ (441) $ 7,768 $ (1,284)
========== ========== ========== ==========
(1) All of the Company's construction financing to these unconsolidated real
estate entities is included in the Company's outstanding debt and real
estate assets. At September 30, 2003 and December 31, 2002, the venture
partner's share of the construction loans was $54,309 and $104,191,
respectively.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 17
The Company has committed construction financing to two of the Property LLCs
totaling $85,491 ($83,552 funded at September 30, 2003). These loans earn
interest at LIBOR plus 1.75% and are secured by the apartment communities. The
loans mature on dates ranging from November 2003 to November 2004 and are
expected to be repaid from the proceeds of permanent project financings. In the
first quarter of 2003, one of the Property LLCs repaid its outstanding
construction note payable to the Company of $24,071 through the proceeds from a
third-party non-recourse permanent mortgage note totaling $17,000 and from
member equity contributions. The mortgage note bears interest at 4.28%, requires
monthly principal and interest payments based on a 30-year amortization schedule
and matures in March 2008.
As part of the development and construction services agreements entered into
between the Company and the Property LLCs, the Company guaranteed the maximum
total amount for certain construction cost categories subject to aggregate
limits. The Company's remaining maximum exposure for the fourth Property LLC
totals approximately $5,200. The Company does not currently expect to be
required to fund any guarantees relating to this Property LLC. Additionally,
under these agreements, the Company was subject to project completion
requirements, as defined. At September 30, 2003, the Company had met its
remaining completion date requirement and will not be subject to any additional
costs.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 18
POST PROPERTIES, INC.
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, which is a supplemental non-GAAP
financial measure, that the company makes internally to calculate Net Asset
Value ("NAV"). In addition, the company believes that investors and analysts use
similar measures in estimating the company's NAV. These measures, as adjusted,
are supplemental non-GAAP financial measures. With the exception of Net
Operating Income, 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. In the information below, the
company presents Net Operating Income for the quarter ended September 30, 2003
for properties stabilized by the beginning of the quarter ended September 30,
2003 so that a capitalization rate may be applied and an approximate value for
the assets determined. Properties not stabilized by the beginning of the quarter
ended September 30, 2003 are presented at full undepreciated cost. Other
tangible assets are also presented, as well as total liabilities and the
liquidation value of preferred shares and units. The company believes it is
important to provide these measures to allow investors to easily come to their
own calculations of NAV. The company also believes that internal and external
NAV estimates are a useful benchmark of the value of the company's assets over
time and provide a useful measure for analyzing the company's trading price on
the New York Stock Exchange.
FINANCIAL DATA
(In thousands)
THREE MONTHS ENDED AS
INCOME STATEMENT DATA SEPTEMBER 30, 2003 ADJUSTMENTS ADJUSTED
- ------------------------------------------------ ------------------ ------------ ------------
Rental revenues $ 70,440 $ 7,843(1) $ 78,283
Other property revenues 2,817 383(1) 3,200
------------ ------------ ------------
Total rental and other revenues(A) 73,257 8,226 81,483
Property operating & maintenance expenses
(excluding depreciation and amortization)(E) 31,247 (696)(1) 30,551
------------ ------------ ------------
Property net operating income (Table 1)(A-B) $ 42,010 $ 8,922 $ 50,932
============ ============ ============
Apartment units represented 28,917 (726)(2) 28,191
AS OF AS
OTHER ASSET DATA SEPTEMBER 30, 2003 ADJUSTMENTS ADJUSTED
- --------------------------------------------------- ------------------ ------------ ------------
Cash & equivalents $ 4,215 $ - $ 4,215
Construction in progress 12,466 91,558(3) 104,024
Land held for development or sale 11,988 10,160(4) 22,148
Investments in and advances to unconsolidated real
estate entities (including construction loans
receivable) 100,908 (17,356)(5) 83,552
Other assets (6) 39,294 - 39,294
Total assets of unconsolidated real estate entities (7) $ 132,003 $ (106,841)(7) $ 25,162
LIABILITY DATA
Tax-exempt debt 214,380 - 214,380
Other notes payable 1,040,900 - 1,040,900
Other liabilities (8) 125,767 - 125,767
Total liabilities of unconsolidated
real estate entities (9) 101,980 (66,287)(9) 35,693
OTHER DATA
Liquidation value of preferred shares $ 145,000 $ - $ 145,000
Liquidation value of preferred units $ 70,000 $ - $ 70,000
Common shares outstanding 37,999 - 37,999
Common units outstanding 4,221 - 4,221
(1) The adjustments reflect a reduction of rental revenues ($634) and property
operating and maintenance expenses (excluding depreciation and
amortization) ($604) from a property that had not reached a stabilized
occupancy of 95% by September 30, 2003 (Post Toscana(TM)). The adjustments
also include additions for the rental revenues ($9,918) and other property
revenues ($510) and property operating and maintenance expenses (excluding
depreciation and amortization) ($4,196) of held for sale properties
included in discontinued operations and for the company's 35% share of
rental revenues ($528) and other property revenues ($28) and property
operating and maintenance expenses (excluding depreciation and
amortization) ($162) from Post Biltmore(TM) and Post Peachtree(TM),
properties accounted for on the equity method of accounting. In addition,
the adjustments reflect a reduction of rental revenues ($1,969) and other
revenues ($155) and property operating and maintenance expenses (excluding
depreciation and amortization) ($1,610) relating to the company's corporate
apartment business. Lastly, the adjustment to property operating and
maintenance expenses (excluding depreciation and amortization) also
includes a reduction for corporate property management expenses ($2,840).
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 19
(2) The adjustment reflects a reduction of total apartment units for properties
that had not reached a stabilized occupancy of 95% by June 30, 2003 (Post
Toscana(TM) and Post Massachusetts Avenue(TM) - 468 unit total reduction)
and a reduction of 65% of the 276 units at Post Biltmore(TM) (179 unit
reduction) and the 121 units at Post Peachtree(TM) (a 79 unit reduction) to
adjust the Post Biltmore(TM) and Post Peachtree(TM) units to the company's
35% share of the units.
(3) The adjustment reflects the amount required for the "As Adjusted" amount to
equal the aggregate cost investment in projects that had not reached a
stabilized occupancy of 95% as of June 30, 2003 (Post Toscana(Tm)) and land
and predevelopment costs of Post Carlyle.
(4) The adjustment reflects land parcels included on the balance sheet as a
component of assets held for sale.
(5) The "As of September 30, 2003" amount represents the company's investment
in and advances to unconsolidated entities. The adjustment reflects the
company's equity investments in unconsolidated entities. The "As Adjusted"
amount represents the construction loans receivable from the unconsolidated
entities.
(6) These amounts consist of restricted cash and other assets, per the
company's balance sheet.
(7) The "As of September 30, 2003" amount represents total assets of
unconsolidated entities. The adjustment includes the additions to add back
the accumulated depreciation of such assets ($4,980) and a reduction for
the venture partner's 65% share of assets before accumulated depreciation
of Post Massachusetts Avenue(TM) ($45,215). The adjustment also includes a
reduction for all of the undepreciated real estate assets ($65,094) and a
reduction for the venture partners' 65% share of cash and other assets
($1,512) of the company's Post Biltmore(TM) and Post Peachtree(TM) projects
as those projects reached stabilized occupancy prior to June 30, 2003. The
"As Adjusted" amount represents the company's 35% share of undepreciated
real estate assets of Post Massachusetts Avenue(TM) plus the company's 35%
share of the cash and other assets of all of the unconsolidated entities.
(8) These amounts consist of the sum of accrued interest payable, dividends and
distributions payable, accounts payable and accrued expenses and security
deposits and prepaid rents as reflected on the company's balance sheet.
(9) The "As of September 30, 2003" amount represents total liabilities of
unconsolidated entities. The adjustment represents a reduction for the
venture partner's 65% share of liabilities of unconsolidated entities. The
"As Adjusted" amount represents the company's 35% share of liabilities of
unconsolidated entities.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 20
POST PROPERTIES, INC.
DEFINITIONS AND RECONCILIATIONS OF SUPPLEMENTAL
NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, except per share or unit data)
(Unaudited)
DEFINITIONS OF SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
The company uses certain non-GAAP financial measures in this accompanying
Supplemental Financial Data. These non-GAAP financial measures include FFO, net
operating income, same store capital expenditures, net income, FFO and FAD
excluding certain accounting charges, 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 (or losses) from debt
restructuring and sales of property, plus depreciation of real estate
assets, and after adjustment for unconsolidated partnerships and joint
ventures all determined on a consistent basis in accordance with GAAP.
In October 2003, NAREIT issued additional guidance modifying the
definition of FFO. The first modification revised the treatment of
asset impairment losses and impairment losses incurred to write-down
assets to their fair value at the date assets are classified as held
for sale, to include such losses in FFO. Previously such losses were
excluded from FFO consistent with the treatment of gains on property
sales. The second modification clarified the treatment of original
issue costs and premiums paid on preferred stock redemptions to deduct
such costs and premiums in determining FFO available to common
shareholders. This modification was consistent with the recently
clarified treatment of these costs under GAAP. The company has adopted
the modifications to the definition of FFO effective with its reported
results for the period ended September 30, 2003. Prior period and prior
year presentations of FFO have been restated to conform with the
revised definition of FFO. FFO presented in the company's earnings
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 "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. The company also computes a dividend
payout ratio using dividends declared during the quarter divided by FFO
per diluted share in order to provide investors with one alternate
earnings measure to compare the relationship of FFO to the company's
quarterly dividends and distributions.
FUNDS AVAILABLE FOR DISTRIBUTION - The company also uses funds
available for distribution ("FAD") as an operating measure. FAD is
defined as FFO less capital expenditures funded by operations. The
company believes that FAD 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 its cash needs through
earnings, including debt service requirements, capital expenditures and
dividends and distributions. In addition, since most equity REITs
provide FAD information to the investment community, the company
believes that FAD 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 FAD. The company also computes a dividend payout ratio using
dividends declared during the quarter divided by FAD per diluted share
in order to provide investors with one alternate earnings measure to
compare the relationship of FAD to the company's quarterly dividends
and distributions.
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 "income from continuing operations before equity in
losses of unconsolidated entities, gains on property sales and minority
interest" is the most directly comparable GAAP measure to NOI.
SAME STORE CAPITAL EXPENDITURES - The company uses same store recurring
and non-recurring capital expenditures as cash flow measures. Same
store recurring and non-recurring capital expenditures are supplemental
non-GAAP financial measures. The company believes that same store
recurring and non-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, and sold
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 21
communities in addition to same store information. Therefore, the
company believes that the company's presentation of same store
recurring and non-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
recurring and non-recurring capital expenditures are the lines on the
company's consolidated statements of cash flows entitled "recurring
capital expenditures" and "non-recurring capital expenditures."
NET INCOME, FFO AND FAD EXCLUDING CERTAIN CHARGES - The company uses
net income, FFO and FAD excluding one-time severance, proxy and
impairment charges as operating measures. The company reports net
income, FFO and FAD excluding certain one-time, non-cash charges as
alternative financial measures of core operating performance. The
company believes net income, FFO and FAD before one-time, non-cash
charges are informative measures for comparing operating performance
between periods and for comparing operating performance to other
companies that have not incurred such charges. The company further
believes that one-time, non-cash charges of the nature incurred in 2003
are not necessarily repetitive in nature and that it is therefore
meaningful to compare operating performance using alternative, non-GAAP
measures. In addition, the company believes the investment and analyst
communities desire to understand the meaningful components of the
company's performance and that these non-GAAP measures assist in
providing such supplemental measures. The company believes that the
most directly comparable GAAP financial measures to each of net income,
FFO and FAD, excluding certain one-time, non-cash charges, is the line
on the company's consolidated statements of operations entitled "net
income (loss) available to common shareholders." The company computes
dividend payout ratios using dividends declared during the quarter
divided by FFO and FAD per diluted share, excluding certain one-time,
non-cash charges in order to provide investors with alternate earnings
measures to compare the relationship of FFO and FAD, excluding certain
one-time, non-cash charges, to the company's quarterly dividends and
distributions.
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 (unadjusted and adjusted for joint venture
partners' share of debt); (4) a ratio of consolidated debt to total
assets; (5) a ratio of secured debt to total assets; (6) a ratio of
total unencumbered assets to unsecured debt; and (7) 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 revolving line of credit and 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.
RECONCILIATIONS OF SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
TABLE 1
RECONCILIATION OF SAME STORE NET OPERATING INCOME (NOI) TO INCOME (LOSS) FROM
CONTINUING OPERATIONS BEFORE EQUITY IN INCOME (LOSSES) OF UNCONSOLIDATED
ENTITIES, GAINS ON PROPERTY SALES AND MINORITY INTEREST
(Dollars in thousands)
THREE MONTHS ENDED NINE MONTHS ENDED
---------------------------- ------------------------------------------
SEPTEMBER 30, SEPTEMBER 30, JUNE 30, SEPTEMBER 30, SEPTEMBER 30,
2003 2002 2003 2003 2002
------------- ------------- ---------- ------------ -------------
Total same store NOI $ 35,247 $ 37,483 $ 34,851 $ 105,980 $ 113,376
Property NOI from other operating segments 6,763 5,452 13,005 19,424 13,771
---------- ---------- ---------- ----------- -----------
Consolidated property NOI 42,010 42,935 47,856 125,404 127,147
Add:
Interest income 223 316 251 708 1,002
Minority interest in consolidated property
partnerships 677 537 348 1,359 1,480
Less:
Depreciation (21,553) (19,311) (22,476) (62,097) (55,637)
Interest (17,122) (13,676) (17,396) (48,992) (37,386)
Amortization of deferred loan costs (1,084) (588) (968) (2,840) (1,711)
General and administrative (3,735) (3,495) (3,342) (10,697) (10,980)
Other expenses (277) - - (844) (136)
Severance charges - - (1,795) (21,506) -
Proxy and related costs - - (5,231) (5,231) -
---------- ---------- ---------- ----------- -----------
Income (loss) from continuing operations before
equity in income (losses) of unconsolidated entities,
gains on property sales and minority interest $ (861) $ 6,718 $ (2,753) $ (24,736) $ 23,779
========== ========== ========== =========== ===========
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 22
TABLE 2
SAME STORE NET OPERATING INCOME (NOI) SUMMARY BY MARKET
(Dollars in thousands)
THREE MONTHS ENDED
------------------------------------------ 3Q'03 VS 3Q'03 VS
SEPTEMBER 30, SEPTEMBER 30, JUNE 30, 3Q'02 2Q'03
2003 2002 2003 % CHANGE % CHANGE
------------ ------------ ------------ ------------ ------------
Rental and other revenues
Atlanta $ 32,740 $ 34,242 $ 32,173 (4.4)% 1.8%
Dallas 12,200 12,591 12,121 (3.1)% 0.7%
Tampa 4,400 4,577 4,342 (3.9)% 1.3%
Other 6,634 6,597 6,499 0.6% 2.1%
------------ ------------ ------------
Total rental and other revenues 55,974 58,007 55,135 (3.5)% 1.5%
------------ ------------ ------------
Property operating and maintenance expenses
(exclusive of depreciation and amortization)
Atlanta 11,727 11,247 11,357 4.3% 3.3%
Dallas 4,941 5,236 4,914 (5.6)% 0.5%
Tampa 1,753 1,753 1,712 0.0% 2.4%
Other 2,306 2,288 2,301 0.8% 0.2%
------------ ------------ ------------
Total 20,727 20,524 20,284 1.0% 2.2%
------------ ------------ ------------
Net operating income
Atlanta 21,013 22,995 20,816 (8.6)% 0.9%
Dallas 7,259 7,355 7,207 (1.3)% 0.7%
Tampa 2,647 2,824 2,630 (6.3)% 0.6%
Other 4,328 4,309 4,198 0.5% 3.1%
------------ ------------ ------------
Total same store NOI $ 35,247 $ 37,483 $ 34,851 (6.0)% 1.1%
============ ============ ============
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------------
2003 2002 % CHANGE
------------ ------------ --------
Rental and other revenues
Atlanta $ 97,509 $ 102,398 (4.8)%
Dallas 36,362 37,598 (3.3)%
Tampa 13,051 13,829 (5.6)%
Other 19,619 19,611 0.0%
------------ ------------
Total rental and other revenues 166,541 173,436 (4.0)%
------------ ------------
Property operating and maintenance expenses
(exclusive of depreciation and amortization)
Atlanta 33,782 32,881 2.7%
Dallas 14,731 15,018 (1.9)%
Tampa 5,146 5,233 (1.7)%
Other 6,902 6,928 (0.4)%
------------ ------------
Total 60,561 60,060 0.8%
------------ ------------
Net operating income
Atlanta 63,727 69,517 (8.3)%
Dallas 21,631 22,580 (4.2)%
Tampa 7,905 8,596 (8.0)%
Other 12,717 12,683 0.3%
------------ ------------
Total same store NOI $ 105,980 $ 113,376 (6.5)%
============ ============
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 23
TABLE 3
RECONCILIATION OF SEGMENT CASH FLOW DATA TO STATEMENTS OF CASH FLOWS
(Dollars in thousands)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
2003 2002 2003 2002
------- ------- ------- -------
Recurring capital expenditures by operating segment
Same store $ 2,253 $ 1,795 $ 5,157 $ 4,619
Partially stabilized 21 19 42 33
Construction and lease-up 15 34 42 55
Other segments 707 736 1,741 2,608
------- ------- ------- -------
Total recurring capital expenditures per statements of cash
flows $ 2,966 $ 2,584 $ 6,982 $ 7,315
======= ======= ======= =======
Non-recurring capital expenditures by operating segment
Same store $ 912 $ 438 $ 2,214 $ 1,229
Partially stabilized 10 9 42 14
Construction and lease-up 41 3 48 11
Other segments 92 360 927 821
------- ------- ------- -------
Total non-recurring capital expenditures per statements of cash
flows $ 1,055 $ 810 $ 3,231 $ 2,075
======= ======= ======= =======
TABLE 4
COMPUTATION OF INTEREST AND FIXED CHARGE COVERAGE RATIOS
(Dollars in thousands)
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
2003 2002
--------- ---------
Income (loss) from continuing operations $ (18,008) $ 28,779
Minority interest of common unitholders (3,160) 2,791
Minority interest of preferred unitholders 4,200 4,200
Gain on property sales - (13,275)
Gains on property sales - unconsolidated entities (8,395) -
Depreciation expense 62,097 55,637
Depreciation (company share) of assets held in unconsolidated
entities 1,236 736
Interest expense 48,992 37,386
Interest expense (company share) of assets held in
unconsolidated entities 1,069 617
Amortization of deferred financing costs 2,840 1,711
Severance charges 21,506 -
Proxy and related costs 5,231 -
--------- ---------
Income available for debt service (A) $ 117,608 $ 118,582
========= =========
Interest expense $ 48,992 $ 37,386
Interest expense (company share) of assets held in
unconsolidated entities 1,069 617
--------- ---------
Interest expense for purposes of computation (B) 50,061 38,003
Dividends and distributions to preferred shareholders and
unitholders 12,787 12,787
--------- ---------
Fixed charges for purposes of computation (C) $ 62,848 $ 50,790
========= =========
Interest coverage ratio (A+B) (1) 2.3x 3.1x
========= =========
Fixed charge coverage ratio (A+C) (1) 1.9x 2.3x
========= =========
(1) The interest coverage and fixed charge coverage ratios, including
discontinued operations, for the nine months ended September 30, 2003 would
be 2.5x and 2.1x, respectively.
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 24
TABLE 5
COMPUTATION OF DEBT RATIOS
(Dollars in thousands)
AS OF AS OF
SEPTEMBER 30, 2003 SEPTEMBER 30, 2002
------------------ ------------------
Total real estate assets per balance sheet $ 2,259,787 $ 2,439,723
Plus:
Accumulated depreciation per balance sheet 411,312 421,150
Accumulated depreciation on assets held for sale 82,286 9,406
-------------- --------------
Total undepreciated real estate assets (A) 2,753,385 2,870,279
Less:
Advances to unconsolidated joint ventures equal to
joint venture partner's share of joint venture
construction debt (54,309) (97,627)
-------------- --------------
Total undepreciated real estate assets
(adjusted for joint venture partner's share of debt)(B) $ 2,699,076 $ 2,772,652
============== ==============
Total debt per balance sheet (C) $ 1,255,280 $ 1,375,339
Less:
Joint venture partner's share of joint venture
construction debt (54,309) (97,627)
-------------- --------------
Total debt adjusted for joint venture partner's share (D) $ 1,200,971 $ 1,277,712
============== ==============
Total debt as a % of undepreciated real estate assets
(C+A) 45.6% 47.9%
============== ==============
Total debt as a % of undepreciated real estate assets (adjusted for joint
venture partner's share of debt)(D+B) 44.5% 46.1%
============== ==============
Copyright (C) 2003 Post Apartment Homes, LP All Rights Reserved 25