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EXHIBIT 99.2
FOURTH 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) 2004 Post Apartment Homes, LP All Rights Reserved 2
POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share, per share or unit data)
(UNAUDITED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- ----------------------------
2003 2002 2003 2002
------------ ------------- ------------- -------------
REVENUES
Rental $ 70,540 $ 69,753 $ 279,325 $ 275,605
Other 2,198 2,193 10,165 10,413
Interest 187 286 894 1,288
------------ ------------ ------------ ------------
Total revenues 72,925 72,232 290,384 287,306
------------ ------------ ------------ ------------
EXPENSES
Property operating and maintenance (exclusive of items shown
separately below) 30,393 28,457 121,741 115,382
Depreciation 21,603 21,124 83,700 76,760
Interest 15,914 14,650 64,905 52,035
Amortization of deferred financing costs 962 616 3,801 2,327
General and administrative 4,400 3,450 15,102 14,431
Minority interest in consolidated property partnerships (665) (576) (2,024) (2,055)
Development costs and other (1) 1,298 694 2,138 830
Severance charges (2) - - 21,506 -
Proxy and related costs (3) - - 5,231 -
------------ ------------ ------------ ------------
Total expenses 73,905 68,415 316,100 259,710
------------ ------------ ------------ ------------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EQUITY IN
INCOME (LOSSES) OF UNCONSOLIDATED ENTITIES, GAINS ON PROPERTY
SALES AND MINORITY INTEREST (980) 3,817 (25,716) 27,596
Equity in income (losses) of unconsolidated real estate
entities 23 (306) 7,791 (1,590)
Gains on property sales (4) - - - 13,275
Minority interest of preferred unitholders (1,400) (1,400) (5,600) (5,600)
Minority interest of common unitholders 393 101 3,552 (2,681)
------------ ------------ ------------ ------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (1,964) 2,212 (19,973) 31,000
------------ ------------ ------------ ------------
DISCONTINUED OPERATIONS (4)
Income from discontinued operations, net of minority interest 4,216 3,239 632 15,179
Gains on property sales, net of minority interest 6,453 7,060 33,497 14,567
------------ ------------ ------------ ------------
INCOME FROM DISCONTINUED OPERATIONS 10,669 10,299 34,129 29,746
------------ ------------ ------------ ------------
NET INCOME 8,705 12,511 14,156 60,746
Dividends to preferred shareholders (2,862) (2,862) (11,449) (11,449)
------------ ------------ ------------ ------------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 5,843 $ 9,649 $ 2,707 $ 49,297
============ ============ ============ ============
PER COMMON SHARE DATA - BASIC (5)
Income (loss) from continuing operations (net of preferred
dividends) $ (0.13) $ (0.02) $ (0.83) $ 0.53
Income from discontinued operations 0.28 0.28 0.90 0.80
------------ ------------ ------------ ------------
Net income available to common shareholders $ 0.15 $ 0.26 $ 0.07 $ 1.33
============ ============ ============ ============
Dividends declared $ 0.45 $ 0.78 $ 1.80 $ 3.12
============ ============ ============ ============
Weighted average common shares outstanding - basic 38,176,235 37,061,628 37,687,524 36,939,144
============ ============ ============ ============
Weighted average common shares and units outstanding - basic 42,228,473 42,032,638 42,134,072 42,020,759
============ ============ ============ ============
PER COMMON SHARE DATA - DILUTED (5)
Income (loss) from continuing operations (net of preferred
dividends) $ (0.13) $ (0.02) $ (0.83) $ 0.53
Income from discontinued operations 0.28 0.28 0.90 0.80
------------ ------------ ------------ ------------
Net income available to common shareholders $ 0.15 $ 0.26 $ 0.07 $ 1.33
============ ============ ============ ============
Dividends declared $ 0.45 $ 0.78 $ 1.80 $ 3.12
============ ============ ============ ============
Weighted average common shares outstanding - diluted 38,176,235 37,061,628 37,687,524 36,953,962
============ ============ ============ ============
Weighted average common shares and units outstanding - diluted 42,228,473 42,032,638 42,134,072 42,035,577
============ ============ ============ ============
Copyright(C)2004 Post Apartment Homes, LP All Rights Reserved 3
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED
STATEMENTS OF OPERATIONS
(1) Development costs and other expenses for the three months ended
December 31, 2003 include development personnel and associated costs
not allocable to development projects and the write off of the
Company's remaining investment in a property management software
company. Other expenses for the twelve months ended December 31, 2003
also included legal expenses related to board of director governance
and transition matters, the settlement costs related to the bankruptcy
of a former technology investment and losses on the disposal of the
Company's partial ownership interest in corporate aircraft. Other
expenses for the year ended December 31, 2002 represent costs
associated with the write down of the Company's investment in a
property management software development company and the early
extinguishment of indebtedness.
(2) For the twelve months ended December 31, 2003, 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.
(3) Proxy and related costs for the twelve months ended December 31, 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 in 2004.
(4) 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 twelve months ended December 31, 2003, income from
discontinued operations included the results of operations of 9
communities, containing 4,340 units, classified as held for sale at
December 31, 2003 and the results of operations of four communities
sold in 2003 through their sale date. For the three and twelve months
ended December 31, 2002, income from discontinued operations included
the results of operations of all communities classified as held for
sale at December 31, 2003, communities sold in 2003 and the results of
operations of seven communities and one commercial property sold in
2002 through their sale dates.
The revenues and expenses of these communities for the three and twelve
months ended December 31, 2003 and 2002 were as follows:
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
2003 2002 2003 2002
--------- --------- -------- ---------
REVENUES
Rental $ 9,513 $ 12,839 $ 42,350 $ 59,585
Other 414 506 1,935 2,531
-------- -------- -------- --------
Total revenues 9,927 13,345 44,285 62,116
-------- -------- -------- --------
EXPENSES
Property operating and maintenance
(exclusive of items shown separately below) 3,880 4,940 17,362 23,906
Depreciation - 2,527 6,276 11,167
Interest 1,371 2,204 5,955 9,776
Asset impairment charge - - 14,118 -
-------- -------- -------- --------
Total expenses 5,251 9,671 43,711 44,849
-------- -------- -------- --------
INCOME FROM DISCONTINUED OPERATIONS 4,676 3,674 574 17,267
BEFORE MINORITY INTEREST
Minority interest (460) (435) 58 (2,088)
-------- -------- -------- --------
INCOME FROM DISCONTINUED OPERATIONS $ 4,216 $ 3,239 $ 632 $ 15,179
======== ======== ======== ========
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 reflected the designation of this community as held for sale
during the third quarter of 2003 and the final sale of the community in
the fourth quarter of 2003.
Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 4
For the three months ended December 31, 2003, the Company recognized
net gains from discontinued operations of $7,103 ($6,453 net of
minority interest) from the sale of two communities containing 835
units. For the twelve months ended December 31, 2003, the Company
recognized net gains from discontinued operations of $42,205 ($37,736
net of minority interest) on the sale of four communities containing
1,844 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.
(5) 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 December 31, 2003, there
were 42,353,822 units of the Operating Partnership outstanding, of
which 38,686,315 or 91.3% were owned by the Company. For the three and
twelve months ended December 31, 2003, the potential dilution from the
Company's outstanding stock options of 36,010 and 11,052 shares,
respectively, was antidilutive to the continuing operations per share
calculation. As such, these amounts were excluded form weighted average
shares and units and the income (loss) per share calculations for the
three and twelve months ended December 31, 2003.
Copyright (C) 2004 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 share, 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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------------- ----------------------------
2003 2002 (1) 2003 (1) 2002 (1)
------------- ------------- ------------- -------------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 5,843 $ 9,649 $ 2,707 $ 49,297
Minority interest of common unitholders - continuing operations (393) (101) (3,552) 2,681
Minority interest in discontinued operations (2) 1,110 1,382 3,893 4,091
Gains on property sales - continuing operations - - - (13,275)
Gains on property sales - unconsolidated entities - - (8,395) -
Gains on property sales - discontinued operations (excluding
asset impairment charges) (7,103) (9,856) (40,793) (27,921)
Depreciation on wholly-owned real estate assets, net (3) 19,975 22,283 84,530 82,917
Depreciation on real estate assets held in unconsolidated
entities 332 367 1,568 1,104
------------ ------------ ------------ ------------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS,
AS DEFINED (A) 19,764 23,724 39,958 98,894
Severance charges - - 21,506 -
Proxy and related costs - - 5,231 -
Asset impairment charges - 1,849 17,462 11,351
------------ ------------ ------------ ------------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS,
EXCLUDING SEVERANCE, PROXY AND IMPAIRMENT CHARGES (B) $ 19,764 $ 25,573 $ 84,157 $ 110,245
============ ============ ============ ============
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS, AS DEFINED $ 19,764 $ 23,724 $ 39,958 $ 98,894
Recurring capital expenditures (2,490) (2,066) (9,473) (9,381)
Non-recurring capital expenditures (1,921) (1,367) (5,152) (3,441)
------------ ------------ ------------ ------------
FUNDS AVAILABLE FOR DISTRIBUTION TO COMMON SHAREHOLDERS (4) (C) 15,353 20,291 25,333 86,072
Severance charges - - 21,506 -
Proxy and related costs - - 5,231 -
Asset impairment charges - 1,849 17,462 11,351
------------ ------------ ------------ ------------
FUNDS AVAILABLE FOR DISTRIBUTION TO COMMON SHAREHOLDERS, EXCLUDING
SEVERANCE, PROXY AND IMPAIRMENT CHARGES (4) (D) $ 15,353 $ 22,140 $ 69,532 $ 97,423
============ ============ ============ ============
PER COMMON SHARE DATA - BASIC
Funds from operations per share or unit, as defined (A/F) $ 0.47 $ 0.56 $ 0.95 $ 2.35
Funds available for distribution per share or unit, as defined (4)
(C/F) $ 0.36 $ 0.48 $ 0.60 $ 2.05
Funds from operations per share or unit, excluding severance,
proxy and impairment charges (B/F) $ 0.47 $ 0.61 $ 2.00 $ 2.62
Funds available for distribution per share or unit, excluding
severance, proxy and impairment charges (4) (D/F) $ 0.36 $ 0.53 $ 1.65 $ 2.32
Dividends declared (E) $ 0.45 $ 0.78 $ 1.80 $ 3.12
Weighted average shares outstanding 38,176,236 37,061,628 37,687,524 36,939,144
Weighted average shares and units outstanding (F) 42,228,473 42,032,638 42,134,072 42,020,759
PER COMMON SHARE DATA - DILUTED
Funds from operations per share or unit, as defined (A/G=W) $ 0.47 $ 0.56 $ 0.95 $ 2.35
Funds available for distribution per share or unit, as defined (4)
(C/G=X) $ 0.36 $ 0.48 $ 0.60 $ 2.05
Funds from operations per share or unit, excluding severance,
proxy and impairment charges (B/G=Y) $ 0.47 $ 0.61 $ 2.00 $ 2.62
Funds available for distribution per share or unit, excluding
severance, proxy and impairment charges (4) (D/G=Z) $ 0.36 $ 0.53 $ 1.65 $ 2.32
Dividends declared (E) $ 0.45 $ 0.78 $ 1.80 $ 3.12
Weighted average shares outstanding (5) 38,212,245 37,061,628 37,698,578 36,953,962
Weighted average shares and units outstanding (5) (G) 42,264,483 42,032,638 42,145,124 42,035,577
Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 6
DIVIDEND PAYOUT RATIO PER COMMON SHARE
Payout ratio - funds from operations, as defined (E/W) 95.7% 139.3% 189.5% 132.8%
Payout ratio - funds available for distribution, as defined (E/X) 125.0% 162.5% 300.0% 152.2%
Payout ratio - funds from operations, excluding severance, proxy
and impairment charges (E/Y) 95.7% 127.9% 90.0% 119.1%
Payout ratio - funds available for distribution, excluding
severance, proxy and impairment charges (E/Z) 125.0% 147.2% 109.1% 134.5%
(1) For the three and twelve months ended December 31, 2002, FFO available
to common shareholders has been restated from the prior year
presentation to reflect a reduction of $1,849 and $11,351 for
impairment losses on real estate assets resulting from the NAREIT
modification of the definition of FFO. Additionally, for the twelve
months ended December 31, 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. For the
twelve months ended December 31, 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 quarter of
2003.
(2) Represents the minority interest in earnings and gains 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 $278 and $177 for the three months
ended December 31, 2003 and 2002, respectively, and $799 and $1,100 for
the twelve months ended December 31, 2003 and 2002, respectively, are
excluded from the calculation of funds available for distribution.
(5) Diluted weighted average shares and units for the three and twelve
months ended December 31, 2003 include 36,010 and 11,052 shares and
units, respectively, that were antidilutive to all income (loss) per
share computations under generally accepted accounting principles.
Copyright (C) 2004 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 23 for a reconciliation of same store net operating income to GAAP income
from continuing operations. The operating performance of the 53 communities
containing 19,646 apartment units which were fully stabilized as of January 1,
2002, is summarized as follows:
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- -------------------------
2003 2002 % CHANGE 2003 2002 % CHANGE
----------- ----------- -------- ----------- ---------- --------
Rental and other revenues $ 55,051 $ 56,041 (1.8)% $ 221,592 $ 229,477 (3.4)%
Property operating and maintenance
expenses (excluding depreciation
and amortization) 19,612 18,874 3.9% 80,173 78,934 1.6%
----------- ----------- ----------- ----------
Same store net operating income $ 35,439 $ 37,167 (4.6)% $ 141,419 $ 150,543 (6.1)%
=========== =========== =========== ==========
Capital expenditures (1)
Recurring
Carpet $ 565 $ 413 36.8% $ 2,202 $ 1,692 30.1%
Other 1,386 1,117 24.1% 4,906 4,457 10.1%
----------- ----------- ----------- ----------
Total recurring 1,951 1,530 27.5% 7,108 6,149 15.6%
Non-recurring 1,490 258 477.5% 3,704 1,487 149.1%
----------- ----------- ----------- ----------
Total capital expenditures (A) $ 3,441 $ 1,788 92.4% $ 10,812 $ 7,636 41.6%
=========== =========== =========== ==========
Total capital expenditures per
unit (A/19,646 UNITS) $ 175 $ 91 92.3% $ 550 $ 389 41.4%
=========== =========== =========== ==========
Average monthly rental rate per
unit (2) $ 970 $ 1,022 (5.1)% $ 989 $ 1,043 (5.2)%
=========== =========== =========== ==========
(1) See Table 3 on page 25 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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------------------------------------ --------------------------------------------------
AVERAGE AVERAGE
ECONOMIC ECONOMIC
MARKET REVENUES (1) EXPENSES (1) NOI (1) OCCUPANCY REVENUES (1) EXPENSES (1) NOI (1) OCCUPANCY
- -------------------------------------------------- --------- ------------ ----------- ------ ---------
Atlanta (3.0)% 1.1% (5.1)% 1.9% (4.3)% 2.3% (7.5)% 0.9%
Dallas (0.6)% 12.7% (7.7)% 3.0% (2.6)% 1.3% (5.1)% 1.1%
Tampa 1.1% 2.2% 0.4% 4.0% (4.0)% (0.7)% (6.0)% (0.5)%
Other (2) 0.5% 2.2% (0.2)% 1.7% 0.2% 0.2% 0.2% 1.9%
---- ---- ---- --- ---- ---- ---- -----
Total (1.8)% 3.9% (4.7)% 2.3% (3.4)% 1.6% (6.1)% 0.9%
==== ==== ==== === ==== ==== ==== =====
(1) See Table 2 on page 24 for a reconciliation of these components of same
store net operating income and Table 1 on page 23 for a reconciliation of
same store net operating income to GAAP income from continuing
operations.
(2) Includes communities located in Orlando, FL; Washington, DC; Houston, TX;
Charlotte, NC and Nashville, TN.
Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 8
SAME STORE OCCUPANCY BY MARKET
AVERAGE ECONOMIC AVERAGE ECONOMIC
OCCUPANCY (1) OCCUPANCY (1)
-------------------- --------------------
THREE MONTHS ENDED TWELVE MONTHS ENDED PHYSICAL
DECEMBER 31, DECEMBER 31, OCCUPANCY (2)
APARTMENT % OF -------------------- -------------------- DECEMBER 31,
MARKET UNITS UNITS 2003 2002 2003 2002 2003
- ------ ----- ----- ---- ---- ---- ---- ----
Atlanta 11,886 60.5% 93.3% 91.4% 92.0% 91.1% 93.9%
Dallas 4,353 22.2% 91.8% 88.8% 90.6% 89.5% 93.4%
Tampa 1,439 7.3% 95.3% 91.3% 93.1% 93.6% 96.1%
Other 1,968 10.0% 93.7% 92.0% 92.9% 91.0% 93.8%
------ ----- ---- ---- ---- ---- ----
Total 19,646 100.0% 93.2% 90.9% 91.9% 91.0% 94.0%
====== ===== ==== ==== ==== ==== ====
(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 92.5% and 89.3% for the three months ended
December 31, 2003 and 2002, respectively, and 90.8% and 89.1% for the
twelve months ended December 31, 2003 and 2002, respectively. For the
three months ended December 31, 2003 and 2002, concessions were $284 and
$832, respectively, and employee discounts were $92 and $129,
respectively. For the twelve months ended December 31, 2003 and 2002,
concessions were $2,129 and $3,924, respectively, and employee discounts
were $424 and $614, 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
DECEMBER 31, 2003 SEPTEMBER 30, 2003 % CHANGE
----------------- ------------------ --------
Rental and other revenues $ 55,051 $ 55,974 (1.6)%
Property operating and maintenance expenses
(excluding depreciation and amortization) 19,612 20,727 (5.4)%
---------- ----------
Same store net operating income (1) $ 35,439 $ 35,247 0.5%
========== ==========
Average economic occupancy 93.2% 93.1% 0.1%
========== ==========
Average monthly rental rate per unit $ 970 $ 980 (1.0)%
========== ==========
SEQUENTIAL SAME STORE OPERATING RESULTS BY MARKET -
COMPARISON OF FOURTH QUARTER OF 2003 TO THIRD QUARTER 2003
(Increase (decrease) between periods)
AVERAGE
ECONOMIC
MARKET REVENUES (1) EXPENSES (1) NOI (1) OCCUPANCY
- ------ ----------- ----------- ------ ---------
Atlanta (2.0)% (5.3)% (0.1)% (0.3)%
Dallas (1.6)% (3.9)% - 0.8%
Tampa 0.3% (7.2)% 5.3% 0.9%
Other (2) (1.5)% (7.7)% 1.8% (0.4)%
---- ---- ---- -----
Total (1.6)% (5.4)% 0.5% 0.1%
==== ==== ==== =====
(1) See Table 2 on page 24 for a reconciliation of these components of same
store net operating income and Table 1 on page 23 for a reconciliation
of same store net operating income to GAAP income from continuing
operations.
(2) Includes communities located in Orlando, FL; Washington, DC; Houston,
TX; Charlotte, NC and Nashville, TN. (1)
Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 9
POST PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share or unit data)
DECEMBER 31, DECEMBER 31,
2003 2002
------------ ------------
ASSETS
Real estate assets
Land $ 254,000 $ 273,058
Building and improvements 1,883,582 1,976,809
Furniture, fixtures and equipment 214,002 246,634
Construction in progress 12,946 92,945
Investments in and advances to unconsolidated real estate entities 74,786 182,285
Land held for future development 11,994 24,879
----------- ------------
2,451,310 2,796,610
Less: accumulated depreciation (432,157) (426,136)
Assets held for sale, net of accumulated depreciation of $74,614 and
$17,829 at December 31, 2003 and 2002, respectively 145,238 73,061
----------- ------------
Total real estate assets 2,164,391 2,443,535
Cash and cash equivalents 1,334 6,390
Restricted cash 2,065 1,369
Deferred charges, net 12,285 15,584
Other assets 35,376 41,273
----------- ------------
Total assets $ 2,215,451 $ 2,508,151
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 1,186,322 $ 1,414,555
Accrued interest payable 6,923 8,994
Dividend and distribution payable 19,509 33,252
Accounts payable and accrued expenses 65,872 49,124
Security deposits and prepaid rents 7,890 8,250
----------- ------------
Total liabilities 1,286,516 1,514,175
----------- ------------
Minority interest of preferred unitholders in Operating Partnership 70,000 70,000
----------- ------------
Minority interest of common unitholders in Operating Partnership 62,409 90,277
----------- ------------
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, 38,686,315 and 37,202,290 shares
outstanding at December 31, 2003 and 2002, respectively 396 396
Additional paid-in capital 849,632 940,122
Accumulated earnings - -
Accumulated other comprehensive income (12,362) (14,822)
Deferred compensation (4,424) (639)
----------- ------------
833,291 925,106
Less common stock in treasury, at cost, 989,889 shares and 2,473,914 shares at
December 31, 2003 and 2002, respectively (36,765) (91,407)
----------- ------------
Total shareholders' equity 796,526 833,699
----------- ------------
Total liabilities and shareholders' equity $ 2,215,451 $ 2,508,151
=========== ============
Copyright (C) 2004 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 DECEMBER 31, 2003
WEIGHTED AVERAGE RATE (1)
THREE MONTHS ENDED DECEMBER 31,
PERCENTAGE -------------------------------
TYPE OF INDEBTEDNESS BALANCE OF TOTAL 2003 2002
-------------------- ---------- ---------- ---- ----
Unsecured fixed rate senior notes $ 608,000 51.25% 7.43% 7.40%
Secured tax exempt variable rate notes (2) 214,380 18.07% 1.71% 2.10%
Secured conventional fixed rate notes 291,932 24.61% 6.77% 6.77%
Lines of credit 72,010 6.07% 1.90% 2.53%
---------- ------ ---- ----
$1,186,322 100.00% 5.90% 5.79%
========== ====== ==== ====
PERCENTAGE
BALANCE OF TOTAL DEBT
---------- -------------
Total fixed rate debt $ 899,932 75.9%
Total variable rate debt 286,390 24.1%
---------- ------
Total debt $1,186,322 100.00%
========== ======
DEBT MATURITIES
WEIGHTED AVERAGE RATE
AGGREGATE DEBT MATURITIES BY YEAR (3) AMOUNT ON DEBT MATURITIES (1)
- ------------------------------------- ---------- ----------------------
2004 $ 27,094 7.04%
2005 204,402 (4) 7.83%
2006 79,732 6.98%
2007 112,178 7.16%
2008 4,014 6.52%
2009 and thereafter 686,892 (4) 5.40%
----------
$1,114,312
==========
DEBT STATISTICS
TWELVE MONTHS ENDED
DECEMBER 31,
--------------------
2003 2002
---- ----
Interest coverage ratio (5)(6) 2.4x (9) 3.0x
Fixed charge coverage ratio (5)(7) 1.9x (9) 2.3x
Total debt as a % of undepreciated real estate (8) 44.4% 49.0%
Total debt and preferred shares and units as % of undepreciated assets (8) 52.5% 56.4%
Total debt as a % of undepreciated real estate (adjusted for joint venture partners' share
of debt) (8) 43.7% 47.1%
Total debt and preferred shares and units as % of undepreciated assets (adjusted for joint
venture partners' share of debt) (8) 51.8% 54.8%
(1) Weighted average rate includes credit enhancements and other fees, where
applicable. The weighted average rates for the three months ended
December 31, 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 $72,010 maturing in
2004. In January, 2004, the Company refinanced its primary unsecured
revolving line of credit for 3-year term maturing in January 2007. The
outstanding balance on this revolving line of credit was $60,000 at
December 31, 2003.
(4) Aggregate debt maturities for years ended in 2009 and thereafter include
$100,000 of Mandatory Par Put Remarked Securities ("MOPPRS"). The MOPPRS
mature in March 2015, but are subject to mandatory tender for remarketing
in March 2005. In March 2005, if the remarking dealer elects not to
remarket the MOPPRS, the Company is required to redeem the MOPPRS at par.
If the remarketing dealer elects to remarket the securities in March
2005, the interest rate on the MOPPRS will be established at a rate of
5.715% plus the Company's applicable credit spread for Company securities
with similar maturities. The MOPPRS may be redeemed, at the Company's
option, immediately prior to their remarketing in March 2005 at an
optional redemption price equal to the outstanding principal balance plus
a prepayment penalty.
(5) Calculated for the twelve months ended December 31, 2003 and 2002.
(6) 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 25.
(7) 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 25.
(8) At December 31, 2003, the Company has provided construction financing to
one 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 December 31, 2003 and 2002,
the venture partner's share of the construction loans was $34,950 and
$104,191, respectively. A computation of the debt ratios is included in
Table 5 on page 26.
(9) The interest coverage and fixed charge coverage ratios, including
discontinued operations, for the twelve months ended December 31, 2003
would be 2.5x and 2.0x, respectively.
Copyright (C) 2004 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) DECEMBER 31, 2003
- ----------------------------------------------------------------------------- ------------------
Consolidated Debt to Total Assets cannot exceed 60% 44%
Secured Debt to Total Assets cannot exceed 40% 19%
Total Unencumbered Assets to Unsecured Debt must be at least 1.50/1 2.87/1
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.
RATIO OF CONSOLIDATED DEBT TO TOTAL ASSETS
AS OF
DECEMBER 31, 2003
-----------------
Consolidated debt, per balance sheet (A) $ 1,186,322
==============
Total assets, as defined (B) (Table A) $ 2,709,704
==============
Computed ratio (A/B) 44%
==============
Required ratio (cannot exceed) 60%
==============
RATIO OF SECURED DEBT TO TOTAL ASSETS
Secured conventional fixed rate notes $ 291,932
Secured tax exempt variable rate notes 214,380
--------------
Total secured debt (C) $ 506,312
==============
Computed ratio (C/B) 19%
==============
Required ratio (cannot exceed) 40%
==============
RATIO OF TOTAL UNENCUMBERED ASSETS TO UNSECURED DEBT
Consolidated debt, per balance sheet (A) $ 1,186,322
Total secured debt (C) (506,312)
--------------
Total unsecured debt (D) $ 680,010
==============
Total unencumbered assets, as defined (E) (Table A) $ 1,954,199
==============
Computed ratio (E/D) 2.87x
==============
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) $ 182,651
==============
Annual Debt Service Charge, as defined (G) (Table B) $ 72,197
==============
Computed ratio (F/G) 2.53x
==============
Required minimum ratio 1.50x
==============
Copyright (C) 2004 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
DECEMBER 31, 2003
-----------------
Total real estate assets $ 2,164,391
Add:
Accumulated depreciation 432,157
Accumulated depreciation - assets held for sale 74,614
Other tangible assets (cash, restricted cash,
other assets, exclusive of receivables) 38,542
--------------
Total assets for public debt covenant computations 2,709,704
Less:
Encumbered real estate assets 755,505
Total unencumbered assets for public debt covenant computations
--------------
$ 1,954,199
==============
TABLE B
CALCULATION OF CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE AND
ANNUAL DEBT SERVICE CHARGE FOR PUBLIC DEBT COVENANT COMPUTATIONS (1)
TWELVE MONTHS ENDED
CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE DECEMBER 31, 2003
---------------------------------------------- -----------------
Net income $ 14,156
Add:
Minority interests 5,941
--------------
Income before minority interest 20,097
Add:
Depreciation 83,700
Depreciation (company share) of assets held in unconsolidated
entities 1,568
Depreciation of discontinued operations 6,276
Amortization of deferred financing costs 3,801
Severance charges 21,506
Proxy and related costs 5,231
Asset impairment charge 14,118
Interest expense 64,905
Interest expense (company share) of assets held in unconsolidated
entities 1,337
Interest expense of discontinued operations 5,955
Less:
Gains on property sales (before minority interest) (37,448)
Gains on property sales - unconsolidated entities (8,395)
--------------
Consolidated income available for debt service $ 182,651
==============
ANNUAL DEBT SERVICE CHARGE
Consolidated interest expense $ 64,905
Interest expense (company share) of assets held in unconsolidated
entities 1,337
Interest expense of discontinued operations 5,955
--------------
$ 72,197
==============
(1) The actual calculation of these ratios requires the use of annual
trailing financial data. These computations reflect 2003 results for
comparison and presentation purposes. The computations using annual
trailing financial data also reflect compliance with the debt covenants.
Copyright (C) 2004 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
METROPOLITAN AREA UNITS ($ IN MILLIONS) 12/31/2003 START AVAILABLE OCCUPANCY (1)
----------------- --------- -------------- ---------- ------------ ----------- -------------
WHOLLY OWNED CONSTRUCTION/LEASE-UP
COMMUNITIES
NEW YORK CITY, NY
POST TOSCANA (TM) 199 $ 92 $ .92 1Q '02 1Q '03 1Q '04
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 1Q '04
--- ------- -------
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) 6.8%
=======
% %
LEASED OCCUPIED
METROPOLITAN AREA 2/7/2004 2/7/2004
----------------- -------- --------
WHOLLY OWNED CONSTRUCTION/LEASE-UP
COMMUNITIES
NEW YORK CITY, NY
POST TOSCANA (TM) 92.5% 86.9%
SUBTOTAL WHOLLY-OWNED
CONSTRUCTION/LEASE-UP COMMUNITIES
CO-INVESTMENT CONSTRUCTION/LEASE-UP
COMMUNITIES
WASHINGTON D.C.
POST MASSACHUSETTS AVENUE(TM) (2) 90.7% 88.5%
SUBTOTAL CO-INVESTMENT
CONSTRUCTION/LEASE-UP COMMUNITIES
CONSTRUCTION TOTALS
LESS PARTNERS' PORTION
POST PROPERTIES' FUNDING COMMITMENT
WEIGHTED AVERAGE PROJECTED PROPERTY NET
OPERATING INCOME AS A % OF TOTAL ESTIMATED
CONSTRUCTION COST (3)
(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) 2004 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 $ 69,175
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
=============
Weighted Average Cap Rata -
Apartment Assets - 2002 8.30%(8)
=============
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
Q4 2003
Post Hackberry Creek (R) Dallas, TX 1988-1996 $ 64,916
Post Roosevelt Square(TM) (7) Phoenix AZ 2000 90,456 $ 64,497,000
-------------
2003 YTD Total $ 252,877,000
=============
Weighted Average Cap Rate -
Apartment Assets - 2003 6.10%(8)
=============
(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) Includes approximately 11,000 square feet of retail space.
(8) 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) 2004 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 twelve months ended December 31, 2003 and 2002 is
detailed below.
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
-------------------------- --------------------------
2003 2002 2003 2002
----------- ----------- ----------- -----------
NEW COMMUNITY DEVELOPMENT AND ACQUISITION ACTIVITY $ 2,091 $ 33,870 $ 24,914 $ 152,163
NON-RECURRING CAPITAL EXPENDITURES
Revenue generating additions and improvements (1) 403 730 1,240 2,035
Other community additions and improvements (2) 1,921 1,367 5,152 3,441
RECURRING CAPITAL EXPENDITURES
Carpet replacements and other community additions
and improvements (3) 2,490 2,066 9,473 9,381
Corporate additions and improvements 278 177 799 1,100
----------- ----------- ----------- -----------
$ 7,183 $ 38,210 $ 41,578 $ 168,120
=========== =========== =========== ===========
OTHER DATA
Capitalized interest $ 217 $ 1,930 $ 3,555 $ 13,223
=========== =========== =========== ===========
Capitalized personnel and associated costs (4) $ - $ 1,201 $ 1,566 $ 5,196
=========== =========== =========== ===========
(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) 2004 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 December 31, 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 December 31, 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 twelve months
ended December 31, 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 $6,740 at
December 31, 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:
DECEMBER 31, DECEMBER 31,
Balance Sheet Data 2003 2002
- ----------------------------------------- ----------- -----------
Real estate assets, net $ 127,513 $ 198,854
Cash and other 2,516 2,330
----------- -----------
Total assets $ 130,029 $ 201,184
=========== ===========
Mortgage notes payable $ 33,763 $ -
Construction notes payable to Company (1) 53,769 160,294
Other liabilities 1,742 3,975
----------- -----------
Total liabilities 89,274 164,269
Members' equity 40,755 36,915
----------- -----------
Total liabilities and members' equity $ 130,029 $ 201,184
=========== ===========
Company's equity investment $ 21,017 $ 21,991
=========== ===========
Company's share of notes payable $ 30,636 $ 56,103
=========== ===========
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
--------------------------------------------------------
INCOME STATEMENT DATA 2003 2002 2003 2002
- ------------------------------------- ----------- ----------- ----------- -----------
Revenue
Rental $ 2,916 $ 1,286 $ 9,350 $ 3,174
Other 112 98 470 322
----------- ----------- ----------- -----------
Total revenues 3,028 1,384 9,820 3,496
----------- ----------- ----------- -----------
Expenses
Property operating and maintenance 1,196 783 4,497 2,578
Depreciation 959 647 3,757 1,990
Interest 765 543 3,061 1,601
----------- ----------- ----------- -----------
Total expenses 2,920 1,973 11,315 6,169
----------- ----------- ----------- -----------
Income (loss) from continuing operations 108 (589) (1,495) (2,673)
----------- ----------- ----------- -----------
Discontinued operations
Loss from discontinued operations (86) (319) (274) (1,871)
Gain on property sale - - 26,179 -
----------- ----------- ----------- -----------
Income (loss) from discontinued operations (86) (319) 25,905 (1,871)
----------- ----------- ----------- -----------
Net income (loss) $ 22 $ (908) $ 24,410 $ (4,544)
=========== =========== =========== ===========
Company's share of net income (loss) $ 23 $ (306) $ 7,791 $ (1,590)
=========== =========== =========== ===========
(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 December 31, 2003 and 2002, the venture partner's share
of the construction loans was $34,950 and $104,191, respectively.
Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 17
The Company has committed construction financing to one of the Property LLCs
totaling $56,696 ($53,769 funded at December 31, 2003). This loan earns interest
at LIBOR plus 1.75% and is secured by the apartment community. The loan matures
in November 2004 and is expected to be repaid from the proceeds of a permanent
project financing. 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. In the fourth quarter of 2003,
a second Property LLC repaid its outstanding construction note payable to the
Company of $28,710 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 4.04%, requires interest only payments and
matures in December 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. As of December 31, 2003, the Company had met its
remaining completion date requirement and will not be subject to any additional
costs.
Copyright(C)2004 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 December 31, 2003
for properties stabilized by the beginning of the quarter ended December 31,
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 December 31, 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 DECEMBER, 2003 ADJUSTMENTS ADJUSTED
- ------------------------------------------------------- ------------------ ------------- ------------
Rental revenues $ 70,540 $ 5,884 (1) $ 76,424
Other property revenues 2,198 246 (1) 2,444
------------- ------------ ------------
Total rental and other revenues (A) 72,738 6,130 78,868
Property operating & maintenance expenses
(excluding depreciation and amortization) (B) 30,393 (1,921) (1) 28,472
------------- ------------ ------------
Property net operating income (Table 1) (A-B) $ 42,345 $ 8,051 $ 50,396
============= ============ ============
Apartment units represented 28,081 (726) (2) 27,355
AS OF AS
OTHER ASSET DATA DECEMBER 31, 2003 ADJUSTMENTS ADJUSTED
- ------------------------------------------------------- ------------------ ------------- ------------
Cash & equivalents $ 1,334 $ - $ 1,334
Construction in progress 12,946 91,906 (3) 104,852
Land held for development or sale 11,994 10,166 (4) 22,160
Investments in and advances to unconsolidated real
estate entities (including construction loans
receivable) 74,786 (21,017) (5) 53,769
Other assets (6) 37,441 - 37,441
Total assets of unconsolidated real estate entities (7) $ 130,029 $ (105,234) (7) $ 24,795
LIABILITY DATA
Tax-exempt debt 214,380 - 214,380
Other notes payable 971,942 - 971,942
Other liabilities (8) 100,194 - 100,194
Total liabilities of unconsolidated
real estate entities (9) 89,274 (58,028) (9) 31,246
OTHER DATA
Liquidation value of preferred shares $ 145,000 $ - $ 145,000
Liquidation value of preferred units $ 70,000 $ - $ 70,000
Common shares outstanding 38,686 - 38,686
Common units outstanding 3,668 - 3,668
(1) The adjustments reflect a reduction in rental revenues ($1,109) and other
property revenues ($9) and property operating and maintenance expenses
(excluding depreciation and amortization) ($545) from a property that had
not reached a stabilized occupancy of 95% by December 31, 2003 (Post
Toscana). The adjustments also include additions for the rental revenues
($8,099) and other property revenues ($350) and property operating and
maintenance expenses (excluding depreciation and amortization) ($3,229) of
held for sale properties included in discontinued operations and for the
company's 35% share of rental revenues ($521) and other property revenues
($29) and property operating and maintenance expenses (excluding
depreciation and amortization) ($221) from Post Biltmore and Post
Peachtree, properties accounted for on the equity method of accounting. In
addition, the adjustments reflect a reduction of rental revenues ($1,629)
and other revenues ($124) and property operating and maintenance expenses
(excluding depreciation and amortization) ($1,733) relating to the
company's corporate apartment business. Lastly, the adjustment to operating
and maintenance expenses (excluding depreciation and amortization) also
includes a reduction for corporate property management expenses ($3,093).
Copyright(C)2004 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 December
31, 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 December 31, 2003 (Post Toscana(TM)).
(4) The adjustment reflects land parcels included on the balance sheet as a
component of assets held for sale.
(5) The "As of December 31, 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 December 31, 2003" amount represents total assets of
unconsolidated entities. The adjustment includes the additions to add back
the accumulated depreciation of such assets ($5,939) and a reduction for
the venture partner's 65% share of assets before accumulated depreciation
of Post Massachusetts Avenue(TM) ($44,885). The adjustment also includes a
reduction for all of the undepreciated real estate assets ($65,125) and a
reduction for the venture partners' 65% share of cash and other assets
($1,163) of the company's Post Biltmore(TM) and Post Peachtree(TM) projects
as those projects reached stabilized occupancy prior to December 31, 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 December 31, 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)2004 Post Apartment Homes, LP All Rights Reserved 20
POST PROPERTIES, INC.
NON-GAAP FINANCIAL MEASURES AND OTHER DEFINED TERMS
(Dollars in thousands, except per share or unit data)
(Unaudited)
DEFINITIONS OF SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES AND OTHER DEFINED TERMS
The company uses certain non-GAAP financial measures and other defined terms in
this accompanying Supplemental Financial Data. These non-GAAP financial measures
include FFO, FAD, net operating income, same store capital expenditures, net
income, FFO and FAD excluding certain accounting charges, certain debt
statistics and ratios and economic gains on property sales. The definitions of
these non-GAAP financial measures are summarized below. The company believes
that these measures are helpful to investors in measuring financial performance
and/or liquidity and comparing such performance and/or liquidity to other REITS.
FUNDS FROM OPERATIONS - The company uses FFO as an operating measure. The
company uses the NAREIT definition of FFO. FFO is defined by NAREIT to mean
net income (loss) available to common shareholders determined in accordance
with GAAP, excluding gains (losses) from extraordinary items and sales of
property, plus depreciation and amortization of real estate assets, and
after adjustment for unconsolidated partnerships and joint ventures all
determined on a consistent basis in accordance with GAAP. 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 and losses 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 adopted the modifications to the definition of FFO effective
with its reported results for the third quarter of 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 press release and
Supplemental Financial Data is not necessarily comparable to FFO presented
by other real estate companies because not all real estate companies use
the same definition. The company's FFO is comparable to the FFO of real
estate companies that use the current NAREIT definition.
Accounting for real estate assets using historical cost accounting under
GAAP assumes that the value of real estate assets diminishes predictably
over time. NAREIT stated in its April 2002 White Paper on Funds from
Operations that "since real estate asset values have historically risen or
fallen with market conditions, many industry investors have considered
presentations of operating results for real estate companies that use
historical cost accounting to be insufficient by themselves." As a result,
the concept of FFO was created by NAREIT for the REIT industry to provide
an alternate measure. Since the company agrees with the concept of FFO and
appreciates the reasons surrounding its creation, the company believes that
FFO is an important supplemental measure of operating performance. In
addition, since most equity REITs provide FFO information to the investment
community, the company believes that FFO is a useful supplemental measure
for comparing the company's results to those of other equity REITs. The
company believes that the line on its consolidated statement of operations
entitled "net income 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 operating capital expenditures. 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 operating capital expenditures through earnings. 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 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" 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 communities in
addition to same store information. Therefore, the company believes that
the company's presentation of same store
Copyright(C)2004 Post Apartment Homes, LP All Rights Reserved 21
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 certain severance, proxy and impairment
charges as operating measures. The company reports net income, FFO and FAD
excluding certain charges as alternative financial measures of core
operating performance. The company believes net income, FFO and FAD before
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
charges of the nature incurred in 2003 and 2002 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 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 charges in order to provide
investors with alternate earnings measures to compare the relationship of
FFO and FAD, excluding certain 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) total debt plus
preferred shares and units as a percentage of undepreciated real estate
(total debt unadjusted and adjusted for joint venture partners' share of
debt); (5) a ratio of consolidated debt to total assets; (6) a ratio of
secured debt to total assets; (7) a ratio of total unencumbered assets to
unsecured debt; and (8) a ratio of consolidated income available to debt
service to annual debt service charge. A number of these debt statistics
and ratios are derived from covenants found in the company's debt
agreements, including, among others, the company's senior unsecured notes.
In addition, the company presents these measures because the degree of
leverage could affect the company's ability to obtain additional financing
for working capital, capital expenditures, acquisitions, development or
other general corporate purposes. The company uses these measures
internally as an indicator of liquidity and the company believes that these
measures are also utilized by the investment and analyst communities to
better understand the company's liquidity.
ECONOMIC GAINS ON PROPERTY SALES - The company uses economic gains on
property sales as a supplemental measure of operating performance. Economic
gains on property sales are defined as gains on property sales in
accordance with GAAP, before accumulated depreciation and any prior period
write-downs for asset impairment charges on such assets. The company
believes economic gains on property sales is an important supplemental
measure to gains on property sales in accordance with GAAP because it
assists investors and analysts in understanding the relationship between
the cash proceeds from the sale of an asset and the cash invested in that
asset. The company believes the line on its consolidated statement of
operations entitled "gains on property sales - discontinued operations" is
the most directly comparable GAAP measure to economic gains on property
sales.
AVERAGE ECONOMIC OCCUPANCY - The company uses average economic occupancy as
a statistical measure of operating performance. The company defines average
economic occupancy as gross potential rent less vacancy losses, model
expenses and bad debt expenses divided by gross potential rent for the
period, expressed as a percentage.
Copyright(C)2004 Post Apartment Homes, LP All Rights Reserved 22
RECONCILIATIONS OF SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
TABLE 1
RECONCILIATION OF SAME STORE NET OPERATING INCOME (NOI) TO INCOME (LOSS) FROM
CONTINUING OPERATIONS (Dollars in thousands)
THREE MONTHS ENDED TWELVE MONTHS ENDED
-------------------------------------------- -------------------------------
DECEMBER 31 DECEMBER 31, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
2003 2002 2003 2003 2002
------------ ------------- -------------- -------------- ---------------
Total same store NOI $ 35,439 $ 37,167 $ 35,247 $ 141,419 $ 150,543
Property NOI from other operating segments 6,906 6,322 6,763 26,330 20,093
----------- ----------- ----------- ----------- -----------
Consolidated property NOI 42,345 43,489 42,010 167,749 170,636
Add:
Interest income 187 286 223 894 1,288
Minority interest in consolidated property
partnerships 665 576 677 2,024 2,055
Gains on property sales - continuing
operations - - - - 13,275
Less:
Depreciation (21,603) (21,124) (21,553) (83,700) (76,760)
Interest (15,914) (14,650) (17,122) (64,905) (52,035)
Amortization of deferred loan costs (962) (616) (1,084) (3,801) (2,327)
General and administrative (4,400) (3,450) (3,735) (15,102) (14,431)
Development costs and other expenses (1,298) (694) (277) (2,138) (830)
Severance charges - - - (21,506) -
Proxy and related costs - - - (5,231) -
Equity in income (losses) of unconsolidated
entities 23 (306) 60 7,791 (1,590)
Minority interest of preferred unitholders (1,400) (1,400) (1,400) (5,600) (5,600)
Minority interest of common unitholders 393 101 457 3,552 (2,681)
----------- ----------- ----------- ----------- -----------
Income (loss) from continuing operations $ (1,964) $ 2,212 $ (1,744) $ (19,973) $ 31,000
=========== =========== =========== =========== ===========
Copyright(C)2004 Post Apartment Homes, LP All Rights Reserved 23
TABLE 2
SAME STORE NET OPERATING INCOME (NOI) SUMMARY BY MARKET
(Dollars in thousands)
THREE MONTHS ENDED
--------------------------------------------------- 4Q'03 VS 4Q'03 VS
DECEMBER 31, DECEMBER 31, SEPTEMBER 30, 4Q'02 3Q'03
2003 2002 2003 % CHANGE % CHANGE
--------------- --------------- ---------------- ----------- ------------
Rental and other revenues
Atlanta $ 32,092 $ 33,094 $ 32,740 (3.0)% (2.0)%
Dallas 12,009 12,078 12,200 (0.6)% (1.6)%
Tampa 4,414 4,368 4,400 1.1% 0.3%
Other 6,536 6,501 6,634 0.5% (1.5)%
----------- ----------- -----------
Total rental and other revenues 55,051 56,041 55,974 (1.8)% (1.6)%
----------- ----------- -----------
Property operating and maintenance
expenses
(exclusive of depreciation and
amortization)
Atlanta 11,109 10,986 11,727 1.1% (5.3)%
Dallas 4,748 4,214 4,941 12.7% (3.9)%
Tampa 1,626 1,591 1,753 2.2% (7.2)%
Other 2,129 2,083 2,306 2.2% (7.7)%
----------- ----------- -----------
Total 19,612 18,874 20,727 3.9% (5.4)%
----------- ----------- -----------
Net operating income
Atlanta 20,983 22,108 21,013 (5.1)% (0.1)%
Dallas 7,261 7,864 7,259 (7.7)% 0.0%
Tampa 2,788 2,777 2,647 0.4% 5.3%
Other 4,407 4,418 4,328 (0.2)% 1.8%
----------- ----------- -----------
Total same store NOI $ 35,439 $ 37,167 $ 35,247 (4.6)% 0.5%
=========== =========== ===========
TWELVE MONTHS ENDED
DECEMBER 31,
----------------------------
2003 2002 % CHANGE
---------------------------- -------------
Rental and other revenues
Atlanta $ 129,601 $ 135,492 (4.3)%
Dallas 48,371 49,677 (2.6)%
Tampa 17,464 18,197 (4.0)%
Other 26,156 26,111 0.2%
----------- -----------
Total rental and other revenues 221,592 229,477 (3.4)%
----------- -----------
Property operating and maintenance expenses
(exclusive of depreciation and amortization)
Atlanta 44,891 43,867 2.3%
Dallas 19,479 19,232 1.3%
Tampa 6,772 6,823 (0.7)%
Other 9,031 9,012 0.2%
----------- -----------
Total 80,173 78,934 1.6%
----------- -----------
Net operating income
Atlanta 84,710 91,625 (7.5)%
Dallas 28,892 30,445 (5.1)%
Tampa 10,692 11,374 (6.0)%
Other 17,125 17,099 0.2%
----------- -----------
Total same store NOI $ 141,419 $ 150,543 (6.1)%
=========== ===========
Copyright(C)2004 Post Apartment Homes, LP All Rights Reserved 24
TABLE 3
RECONCILIATION OF SEGMENT CASH FLOW DATA TO STATEMENTS OF CASH FLOWS
(Dollars in thousands)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
--------------------------- ---------------------------
2003 2002 2003 2002
------------- ------------ ------------ -------------
Recurring capital expenditures by operating segment
Same store $ 1,951 $ 1,530 $ 7,108 $ 6,149
Partially stabilized 8 22 50 54
Construction and lease-up 32 12 74 67
Other segments 499 502 2,241 3,111
----------- ----------- ----------- -----------
Total recurring capital expenditures per statements of cash
flows $ 2,490 $ 2,066 $ 9,473 $ 9,381
=========== =========== =========== ===========
Non-recurring capital expenditures by operating segment
Same store $ 1,490 $ 258 $ 3,704 $ 1,487
Partially stabilized 26 33 68 48
Construction and lease-up 287 3 335 14
Other segments 118 1,073 1,045 1,892
----------- ----------- ----------- -----------
Total non-recurring capital expenditures per statements of cash
flows $ 1,921 $ 1,367 $ 5,152 $ 3,441
=========== =========== =========== ===========
TABLE 4
COMPUTATION OF INTEREST AND FIXED CHARGE COVERAGE RATIOS
(Dollars in thousands)
TWELVE MONTHS ENDED
DECEMBER 31,
-------------------------------------
2003 2002
----------------- -----------------
Income (loss) from continuing operations $ (19,973) $ 31,000
Minority interest of common unitholders (3,552) 2,681
Minority interest of preferred unitholders 5,600 5,600
Gains on property sales - (13,275)
Gains on property sales - unconsolidated entities (8,395) -
Depreciation expense 83,700 76,760
Depreciation (company share) of assets held in unconsolidated
entities 1,568 1,104
Interest expense 64,905 52,035
Interest expense (company share) of assets held in
unconsolidated entities 1,337 972
Amortization of deferred financing costs 3,801 2,327
Severance charges 21,506 -
Proxy and related costs 5,231 -
----------- -----------
Income available for debt service (A) $ 155,728 $ 159,204
=========== ===========
Interest expense $ 64,905 $ 52,035
Interest expense (company share) of assets held in
unconsolidated entities 1,337 972
----------- -----------
Interest expense for purposes of computation (B) 66,242 53,007
Dividends and distributions to preferred shareholders and
unitholders 17,049 17,049
----------- -----------
Fixed charges for purposes of computation (C) $ 83,291 $ 70,056
=========== ===========
Interest coverage ratio (A/B) (1) 2.4x 3.0x
=========== ===========
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 twelve months ended December 31, 2003
would be 2.5x and 2.0x, respectively.
Copyright(C)2004 Post Apartment Homes, LP All Rights Reserved 25
TABLE 5
COMPUTATION OF DEBT RATIOS
(Dollars in thousands)
AS OF AS OF
DECEMBER 31, 2003 DECEMBER 31, 2002
--------------------- --------------------
Total real estate assets per balance sheet $ 2,164,391 $ 2,443,535
Plus:
Accumulated depreciation per balance sheet 432,157 426,136
Accumulated depreciation on assets held for sale 74,614 17,829
------------ ------------
Total undepreciated real estate assets (A) 2,671,162 2,887,500
Less:
Advances to unconsolidated joint ventures equal to
joint venture partner's share of joint venture
construction debt (34,950) (104,191)
------------ ------------
Total undepreciated real estate assets
(adjusted for joint venture partner's share of debt)
(B) $ 2,636,212 $ 2,783,309
============ ============
Total debt per balance sheet (C) $ 1,186,322 $ 1,414,555
Less:
Joint venture partners' share of joint venture
construction debt (34,950) (104,191)
------------ ------------
Total debt (adjusted for joint venture partners' share)
(D) $ 1,151,372 $ 1,310,364
============ ============
Total debt as a % of undepreciated real estate assets
(C/A) 44.4% 49.0%
============ ============
Total debt as a % of undepreciated real estate assets
(adjusted for joint venture partner's share of
debt) (D+B) 43.7% 47.1%
============ ============
Total debt per balance sheet $ 1,186,322 $ 1,414,555
Plus:
Preferred shares at liquidation value 145,000 145,000
Preferred units at liquidation value 70,000 70,000
------------ ------------
Total debt and preferred shares and units (E) 1,401,322 1,629,555
Less:
Joint venture partners' share of joint venture
construction debt (34,950) (104,191)
------------ ------------
Total debt and preferred shares and units (adjusted for
joint venture partners' share of debt) (F) $ 1,366,372 $ 1,525,364
============ ============
Total debt and preferred shares and units as a % of
undepreciated assets (E+A) 52.5% 56.4%
============ ============
Total debt and preferred shares and units as a % of
undepreciated assets(adjusted for joint venture
partners' share of debt) (F+B) 51.8% 54.8%
============ ============
Copyright(C)2004 Post Apartment Homes, LP All Rights Reserved 26