Exhibit 99.2
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SECOND QUARTER 2004
Supplemental Financial Data
TABLE OF CONTENTS
Page
Consolidated Statements of Operations ..................................... 3
Calculation of Funds from Operations and Adjusted Funds From Operations ... 6
Same Store Results ........................................................ 8
Consolidated Balance Sheets ............................................... 10
Consolidated Debt Summary ................................................. 11
Asset Acquisition and Disposition Summary ................................. 14
Capitalized Costs Summary ................................................. 15
Investments in Unconsolidated Real Estate Entities ........................ 16
Net Asset Value Supplemental Information .................................. 17
Definitions and Reconciliations of Supplemental Non-GAAP Financial Measures 19
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, 2003 and
may be discussed in subsequent filings with the SEC. These risk factors are
specifically incorporated by reference into this document.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 2
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POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share or unit data)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
2004 2003 2004 2003
-------- -------- -------- --------
REVENUES
Rental ....................................................... $ 72,180 $ 69,479 $143,428 $138,344
Other property revenues(1) ................................... 4,510 4,124 8,685 8,111
Other ........................................................ 45 147 122 277
-------- -------- -------- --------
Total revenues ............................................. 76,735 73,750 152,235 146,732
-------- -------- -------- --------
EXPENSES
Property operating and maintenance (exclusive of items
shown separately below) ..................................... 33,388 32,097 66,605 63,341
Depreciation ................................................. 21,177 20,253 42,363 40,542
General and administrative(2) ................................ 5,477 3,342 10,119 6,967
Development costs and other(3) ............................... 381 - 916 567
Proxy contest and related costs(4) ........................... - 5,231 - 5,231
Severance charges(5) ......................................... - 1,795 - 21,506
-------- -------- -------- --------
Total expenses ............................................. 60,423 62,718 120,003 138,154
-------- -------- -------- --------
OPERATING INCOME ............................................... 16,312 11,032 32,232 8,578
Interest income .............................................. 213 251 392 485
Interest expense ............................................. (16,726) (16,250) (33,007) (31,879)
Amortization of deferred financing costs ..................... (1,092) (968) (2,208) (1,756)
Equity in income of unconsolidated real estate entities ...... 207 8,103 422 7,710
Minority interest in consolidated property partnerships ...... 303 349 575 682
Minority interest of preferred unitholders ................... (1,400) (1,400) (2,800) (2,800)
Minority interest of common unitholders ...................... 246 164 719 2,778
-------- -------- -------- --------
INCOME (LOSS) FROM CONTINUING OPERATIONS ................... (1,937) 1,281 (3,675) (16,202)
-------- -------- -------- --------
DISCONTINUED OPERATIONS(6)
Income (loss) from discontinued operations, net of minority
interest .................................................... 2,366 2,694 6,004 (6,501)
Loss on early extinguishment of indebtedness associated with
property sales, net of minority interest(7) ................. (3,849) - (3,849) -
Gains on property sales, net of minority interest ............ 104,530 23,714 106,039 29,805
-------- -------- -------- --------
INCOME FROM DISCONTINUED OPERATIONS ........................ 103,047 26,408 108,194 23,304
-------- -------- -------- --------
NET INCOME ..................................................... 101,110 27,689 104,519 7,102
Dividends to preferred shareholders .......................... (1,909) (2,862) (4,507) (5,725)
Redemption costs on preferred stock .......................... - - (1,716) -
-------- -------- -------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS .................... $ 99,201 $ 24,827 $ 98,296 $ 1,377
======== ======== ======== ========
PER COMMON SHARE DATA - BASIC(8)
Loss from continuing operations (net of preferred dividends
and redemption costs) ....................................... $ (0.10) $ (0.04) $ (0.25) $ (0.58)
Income from discontinued operations .......................... 2.59 0.70 2.73 0.62
-------- -------- -------- --------
Net income available to common shareholders .................. $ 2.49 $ 0.66 $ 2.48 $ 0.04
======== ======== ======== ========
Dividends declared ........................................... $ 0.45 $ 0.45 $ 0.90 $ 0.90
======== ======== ======== ========
Weighted average common shares outstanding - basic ........... 39,807 37,460 39,595 37,361
======== ======== ======== ========
Weighted average common shares and units outstanding - basic . 42,478 42,066 42,469 42,058
======== ======== ======== ========
PER COMMON SHARE DATA - DILUTED(8)
Loss from continuing operations (net of preferred dividends
and redemption costs) ....................................... $ (0.10) $ (0.04) $ (0.25) $ (0.58)
Income from discontinued operations .......................... 2.59 0.70 2.73 0.62
-------- -------- -------- --------
Net income available to common shareholders .................. $ 2.49 $ 0.66 $ 2.48 $ 0.04
======== ======== ======== ========
Dividends declared ........................................... $ 0.45 $ 0.45 $ 0.90 $ 0.90
======== ======== ======== ========
Weighted average common shares outstanding - diluted ......... 39,807 37,467 39,595 37,362
======== ======== ======== ========
Weighted average common shares and units outstanding - diluted 42,478 42,074 42,469 42,058
======== ======== ======== ========
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 3
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POST PROPERTIES, INC.
NOTES TO CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per share or unit data)
(1) Other property revenues include charges to residents for services, utility
reimbursements from residents and other miscellaneous property revenues. In
prior years, utility reimbursements from residents were classified as
reductions of property operating and maintenance expenses. Prior year
amounts have been reclassified to conform with the current year
presentation.
(2) General and administrative expenses for the three and six months ended June
30, 2004 include legal and other professional fees totaling $700 and $887,
respectively, related to a shareholder proposal, shareholder litigation and
other matters.
(3) Development costs and other expenses for the three and six months ended
June 30, 2004 include development personnel and associated costs not
allocable to development projects. Other expenses for the three and six
months ended June 30, 2003 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.
(4) Proxy and related costs for the six months ended June 30, 2003 represented
the legal, advisory and other expenses associated with the proxy contest
concluded in the second quarter of 2003. 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.
(5) For the three months ended June 30, 2003, severance charges of $1,795
represent the costs associated with the departure of two executive
officers. For the six months ended June 30, 2003, the charges also included
a first quarter charge of $19,711 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 severance charges represented the
discounted present value of the estimated payments to be made to these
individuals under their existing employment arrangements.
(6) Under SFAS No. 144, the operating results of real estate assets designated
as held for sale are included in discontinued operations for all periods
presented. Additionally, all subsequent gains or additional losses on the
sale of these assets are included in discontinued operations.
For the three and six months ended June 30, 2004, income from discontinued
operations included the results of operations of one community, containing
460 units, classified as held for sale at June 30, 2004 and the results of
operations of eight communities sold in 2004 through their sale dates. For
the three and six months ended June 30, 2003, income from discontinued
operations included the results of operations of the community classified
as held for sale at June 30, 2004, eight communities sold in 2004 and the
results of operations of four communities sold in 2003 through their sale
dates.
The revenues and expenses of these communities for the three and six months
ended June 30, 2004 and 2003 were as follows:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- ---------------------
2004 2003 2004 2003
------ ------- ------- -------
REVENUES
Rental ..................................... $6,767 $10,750 $14,699 $22,920
Other ...................................... 665 853 1,363 1,685
------ ------- ------- -------
Total revenues ........................... 7,432 11,603 16,062 24,605
------ ------- ------- -------
EXPENSES
Property operating and maintenance
(exclusive of items shown separately below) 3,519 4,807 7,304 9,960
Depreciation ............................... - 2,229 - 4,667
Interest ................................... 769 1,542 1,692 3,213
Asset impairment charge .................... 626 - 626 14,118
------ ------- ------- -------
Total expenses ........................... 4,914 8,578 9,622 31,958
------ ------- ------- -------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
BEFORE MINORITY INTEREST .................... 2,518 3,025 6,440 (7,353)
Minority interest .......................... (152) (331) (436) 852
------ ------- ------- -------
INCOME (LOSS) FROM DISCONTINUED OPERATIONS ... $2,366 $ 2,694 $ 6,004 $(6,501)
====== ======= ======= =======
In the second quarter of 2004, the Company recorded an asset impairment
loss of $626 to write-down the cost of an apartment community, located in
Dallas, Texas, to its realized value. In the third quarter of 2003, the
Company recorded a $3,344 asset impairment charge to write-down this asset
to its estimated fair value at the date the asset was classified as held
for sale. In the first quarter of 2003, the Company recorded an asset
impairment charge to write-down the cost of the Company's apartment
community located in Phoenix, Arizona to its estimated fair value. This
impairment loss, originally reflected in continuing operations, was
reclassified to discontinued operations to reflect 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.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 4
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For the three months ended June 30, 2004, the Company recognized net gains
from discontinued operations of $112,112 ($104,530 net of minority
interest) from the sale of seven communities containing 3,482 units. These
sales generated net proceeds of approximately $218,983, including debt
assumed by the purchasers. For the six months ended June 30, 2004, the
Company recognized gains from discontinued operations of $113,739 ($106,039
net of minority interest) from the sale of eight communities containing
3,880 units and certain land parcels. These sales generated net proceeds of
approximately $242,962, including debt assumed by the purchasers.
For the three months ended June 30, 2003, the Company recognized gains from
discontinued operations of $26,630 ($23,714 net of minority interest), from
the sale of one community, containing 770 apartment units and certain land
parcels. For the six months ended June 30, 2003, the Company recognized net
gains from discontinued operations of $33,504 ($29,805 net of minority
interest) from the sale of two communities containing 1,009 units and
certain land parcels.
(7) Includes the write-off of unamortized deferred costs of $3,187 ($2,972, net
of minority interest) relating to tax-exempt indebtedness assumed in
connection with the sale of five properties in June 2004, plus a loss of
$941 ($877, net of minority interest) in connection with the termination of
related interest rate cap agreements that were used as cash flow hedges of
the assumed debt.
(8) Post Properties, Inc. is structured as an UPREIT, or Umbrella Partnership
Real Estate Investment Trust. Post GP Holdings, Inc., a wholly owned
subsidiary of the Company, is the sole general partner and, together with
Post LP Holdings, Inc., owns the controlling interest in Post Apartment
Homes, L.P., the Operating Partnership, through which the Company conducts
its operations. As of June 30, 2004, there were 42,478 units of Operating
Partnership outstanding, of which 39,917, or 94.0%, were owned by the
Company. For the three and six months ended June 30, 2004, the potential
dilution from the Company's outstanding stock options of 46 and 51,
respectively, was antidilutive to the continuing operations per share
calculation. As such, these amounts were excluded from weighted average
shares and units and the income (loss) per share calculations for the three
and six months ended June 30, 2004.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 5
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POST PROPERTIES, INC.
CALCULATION OF FUNDS FROM OPERATIONS
AND ADJUSTED FUNDS FROM OPERATIONS AVAILABLE
TO COMMON SHAREHOLDERS AND UNITHOLDERS
(In thousands, except per share or unit data)
(Unaudited)
A reconciliation of net income available to common shareholders to funds from
operations available to common shareholders and unitholders and adjusted funds
from operations available to common shareholders and unitholders is provided
below.
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- ---------------------
2004 2003 2004 2003
--------- -------- --------- --------
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS ............................ $ 99,201 $ 24,827 $ 98,296 $ 1,377
Minority interest of common unitholders - continuing operations ...... (246) (164) (719) (2,778)
Minority interest in discontinued operations (2) ..................... 7,455 3,247 7,856 2,847
Gains on property sales - discontinued operations .................... (112,112) (26,630) (113,739) (33,504)
Gains on property sales - unconsolidated entities .................... - (8,395) - (8,395)
Depreciation on wholly-owned real estate assets, net (3) ............. 20,107 21,366 40,145 42,984
Depreciation on real estate assets held in unconsolidated entities ... 331 439 663 904
--------- -------- --------- --------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS AND UNITHOLDERS,
AS DEFINED (1)(A) ..................................................... 14,736 14,690 32,502 3,435
Redemption costs on preferred stock .................................. - - 1,716 -
Severance charges .................................................... - 1,795 - 21,506
Proxy and related costs .............................................. - 5,231 - 5,231
Loss on early extinguishment of indebtedness associated with property
sales ............................................................... 4,128 - 4,128 -
Asset impairment charges ............................................. 626 - 626 14,118
--------- -------- --------- --------
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS AND UNITHOLDERS,
EXCLUDING CERTAIN CHARGES (B) ......................................... $ 19,490 $ 21,716 $ 38,972 $ 44,290
========= ======== ========= ========
FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS AND UNITHOLDERS,
AS DEFINED ............................................................ $ 14,736 $ 14,690 $ 32,502 $ 3,435
Recurring capital expenditures ....................................... (2,771) (2,524) (5,193) (3,986)
Non-recurring capital expenditures ................................... (1,302) (1,218) (2,546) (2,176)
--------- -------- --------- --------
ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS AND
UNITHOLDERS (4)(C) .................................................... 10,663 10,948 24,763 (2,727)
Redemption costs on preferred stock .................................. - - 1,716 -
Severance charges .................................................... - 1,795 - 21,506
Proxy and related costs .............................................. - 5,231 - 5,231
Loss on early extinguishment of indebtedness associated with property
sales ............................................................... 4,128 - 4,128 -
Asset impairment charges ............................................. 626 - 626 14,118
--------- -------- --------- --------
ADJUSTED FUNDS FROM OPERATIONS AVAILABLE TO COMMON SHAREHOLDERS AND
UNITHOLDERS, EXCLUDING CERTAIN CHARGES (4)(D) ......................... $ 15,417 $ 17,974 $ 31,233 $ 38,128
========= ======== ========= ========
PER COMMON SHARE DATA - BASIC
Funds from operations per share or unit, as defined (A/F) .............. $ 0.35 $ 0.35 $ 0.77 $ 0.08
Adjusted funds from operations per share or unit, as defined (4)(C/F) .. $ 0.25 $ 0.26 $ 0.58 $ (0.06)
Funds from operations per share or unit, excluding certain charges (B/F) $ 0.46 $ 0.52 $ 0.92 $ 1.05
Adjusted funds from operations per share or unit, excluding certain
charges (4) (D/F) ..................................................... $ 0.36 $ 0.43 $ 0.74 $ 0.91
Dividends declared (E) ................................................. $ 0.45 $ 0.45 $ 0.90 $ 0.90
Weighted average shares outstanding .................................... 39,807 37,460 39,595 37,361
Weighted average shares and units outstanding (F) ...................... 42,478 42,066 42,469 42,058
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 6
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PER COMMON SHARE DATA - DILUTED
Funds from operations per share or unit, as defined (A/G) .............. $ 0.35 $ 0.35 $ 0.76 $ 0.08
Adjusted funds from operations per share or unit, as defined (4)(C/G) .. $ 0.25 $ 0.26 $ 0.58 $ (0.06)
Funds from operations per share or unit, excluding certain charges (B/G) $ 0.46 $ 0.52 $ 0.92 $ 1.05
Adjusted funds from operations per share or unit, excluding certain
charges (4)(D/G) ...................................................... $ 0.36 $ 0.43 $ 0.73 $ 0.91
Dividends declared (E) ................................................. $ 0.45 $ 0.45 $ 0.90 $ 0.90
Weighted average shares outstanding (5) ................................ 39,853 37,467 39,645 37,362
Weighted average shares and units outstanding (5)(G) ................... 42,524 42,074 42,520 42,058
(1) For the six months ended June 30, 2003, FFO available to common
shareholders has been restated from the prior period presentation to
reflect a reduction of $14,118 for impairment losses on real estate assets
resulting from the NAREIT modification of the definition of FFO in 2003.
(2) Represents the minority interest in earnings and gains on property sales
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 $154 and $131 for the three months ended June 30,
2004 and 2003, respectively, and $287 and $339 for the six months ended
June 30, 2004 and 2003, respectively, are excluded from the calculation of
funds available for distribution.
(5) Diluted weighted average shares and units for the three and six months
ended June 30, 2004 include 46 and 51 shares and units, respectively, that
were antidilutive to all income (loss) per share computations under
generally accepted accounting principles.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 7
POST PROPERTIES, INC.
SAME STORE RESULTS
(In thousands, except per share or unit data)
(Unaudited)
- --------------------------------------------------------------------------------
SAME STORE RESULTS
The Company defines fully stabilized or same store communities as those which
have reached stabilization prior to the beginning of the previous calendar year,
adjusted by communities sold and classified as held for sale. Same store net
operating income is a supplemental non-GAAP financial measure. See Table 1 on
page 21 for a reconciliation of same store net operating income to GAAP net
income. The operating performance and capital expenditures of the 57 communities
containing 21,954 apartment units which were fully stabilized as of January 1,
2003, is summarized as follows:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- ---------------------
2004 2003 % CHANGE 2004 2003 % CHANGE
------- ------- -------- -------- -------- ---------
Rental and other revenues .............. $65,274 $64,603 1.0% $129,983 $129,547 0.3%
Property operating and maintenance
expenses (excluding depreciation and
amortization) ......................... 25,575 24,617 3.9% 50,849 48,498 4.8%
------- ------- -------- --------
Same store net operating income ........ $39,699 $39,986 (0.7)% $ 79,134 $ 81,049 (2.4)%
======= ======= ======== ========
Capital expenditures(1)
Recurring
Carpet ............................... $ 649 $ 556 16.7% $ 1,345 $ 988 36.1%
Other ................................ 1,788 1,361 31.4% 3,126 1,937 61.4%
------- ------- -------- --------
Total recurring .................... 2,437 1,917 27.1% 4,471 2,925 52.9%
Non-recurring ........................ 1,048 899 16.6% 2,196 1,334 64.6%
------- ------- -------- --------
Total capital expenditures (A) ..... $ 3,485 $ 2,816 24.2% $ 6,667 $ 4,259 56.5%
======= ======= ======== ========
Total capital expenditures per unit
(A/21,954 UNITS) .................... $ 159 $ 128 24.2% $ 304 $ 194 56.7%
======= ======= ======== ========
Average monthly rental rate per unit(2) $ 985 $ 1,017 (3.1)% $ 986 $ 1,026 (3.9)%
======= ======= ======== ========
(1) See Table 3 on page 23 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 2004 TO 2003
(Increase (decrease) from same period in prior year)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 2004 JUNE 30, 2004
--------------------------------------------------- -------------------------------------------------
AVERAGE AVERAGE
ECONOMIC ECONOMIC
MARKET REVENUES(1) EXPENSES(1) NOI(1) OCCUPANCY REVENUES(1) EXPENSES(1) NOI(1) OCCUPANCY
- ------ ----------- ----------- ------ --------- ----------- ----------- ------ ---------
Atlanta 1.1% 2.3% 0.4% 2.6% (0.3)% 4.5% (3.0)% 2.4%
Dallas (0.3)% 9.0% (7.1)% 1.1% 0.2% 6.3% (4.4)% 2.0%
Tampa 1.9% 0.3% 3.1% 1.3% 2.6% 5.8% 0.4% 2.8%
Washington, DC 4.0% 6.9% 2.7% 1.5% 3.9% 6.0% 2.9% 2.1%
Charlotte 5.2% (6.2)% 11.4% 3.5% 4.9% (3.6)% 9.5% 4.2%
Other(2) (1.9)% 5.6% (7.1)% 1.4% (2.6)% 5.6% (8.0)% 1.0%
---- --- ---- --- ---- --- ---- ---
Total 1.0% 3.9% (0.7)% 2.1% 0.3% 4.8% (2.4)% 2.3%
==== === ==== === ==== === ==== ===
(1) See Table 2 on page 22 for a reconciliation of these components of same
store net operating income and Table 1 on page 21 for a reconciliation of
same store net operating income to GAAP net income.
(2) Includes communities located in Orlando, FL; Houston, TX; Denver, CO and
Nashville, TN.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 8
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SAME STORE OCCUPANCY BY MARKET
AVERAGE ECONOMIC AVERAGE ECONOMIC
OCCUPANCY(1) OCCUPANCY(1)
-------------------- ------------------- PHYSICAL
THREE MONTHS ENDED SIX MONTHS ENDED OCCUPANCY(2)
JUNE 30, JUNE 30, AT JUNE 30,
APARTMENT % OF -------------------- ------------------- -------------
MARKET UNITS UNITS 2004 2003 2004 2003 2004
- ------ --------- ------ ----- ----- ----- ----- -------------
Atlanta 11,886 54.1% 93.6% 91.0% 93.1% 90.7% 95.1%
Dallas 4,353 19.8% 92.3% 91.2% 91.9% 89.9% 95.7%
Tampa 1,439 6.6% 94.1% 92.8% 94.3% 91.5% 96.4%
Washington, DC 1,204 5.5% 97.3% 95.8% 97.3% 95.2% 97.6%
Charlotte 1,065 4.9% 96.4% 92.9% 95.2% 91.0% 98.2%
Other 2,007 9.1% 91.1% 89.7% 90.9% 89.9% 95.0%
------ ----- ---- ---- ---- ---- ----
Total 21,954 100.0% 93.6% 91.5% 93.2% 90.9% 95.6%
====== ===== ==== ==== ==== ==== ====
(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 93.2% and 89.7% for the three months ended June 30, 2004
and 2003, respectively and 92.9% and 89.3% for the six months ended June
30, 2004 and 2003, respectively. For the three months ended June 30, 2004
and 2003, net concessions were $125 and $1,041, respectively, and employee
discounts were $114 and $144, respectively. For the six months ended June
30, 2004 and 2003, net concessions were $174 and $1,764, respectively, and
employee discounts were $231 and $290, 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
JUNE 30, 2004 MARCH 31, 2004 % CHANGE
------------------ ------------------ --------
Rental and other revenues ................. $65,274 $64,709 0.9%
Property operating and maintenance expenses
(excluding depreciation and amortization) 25,575 25,274 1.2%
------- -------
Same store net operating income(1) ........ $39,699 $39,435 0.7%
======= =======
Average economic occupancy ................ 93.6% 92.8% 0.8%
======= =======
Average monthly rental rate per unit ...... $ 985 $ 988 (0.3)%
======= =======
- --------------------------------------------------------------------------------
SEQUENTIAL SAME STORE OPERATING RESULTS BY MARKET -
COMPARISON OF SECOND QUARTER OF 2004 TO FIRST QUARTER 2004
(Increase (decrease) between periods)
AVERAGE
ECONOMIC
MARKET REVENUES(1) EXPENSES(1) NOI(1) OCCUPANCY
- ------ ----------- ----------- ------ ---------
Atlanta 1.5% 1.0% 1.8% 1.0%
Dallas - 6.6% (5.1)% 0.8%
Tampa (0.9)% (9.2)% 5.6% (0.4)%
Washington, DC 1.5% (2.6)% 3.6% 0.1%
Charlotte 2.4% (1.3)% 4.2% 2.4%
Other(2) (0.8)% 2.2% (2.9)% 0.5%
---- --- ---- ---
Total 0.9% 1.2% 0.7% 0.8%
==== === ==== ===
(1) See Table 2 on page 22 for a reconciliation of these components of same
store net operating income and Table 1 on page 21 for a reconciliation of
same store net operating income to GAAP net income (loss).
(2) Includes communities located in Orlando, FL; Houston, TX; Denver, CO and
Nashville, TN.
================================================================================
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)
JUNE 30, DECEMBER 31,
2004 2003
---------- ------------
ASSETS
Real estate assets
Land ........................................................................ $ 274,000 $ 254,000
Building and improvements ................................................... 1,948,854 1,883,582
Furniture, fixtures and equipment ........................................... 219,450 214,002
Construction in progress .................................................... 14,851 12,946
Land held for future development ............................................ 13,384 11,994
---------- ----------
2,470,539 2,376,524
Less: accumulated depreciation .............................................. (474,016) (432,157)
Assets held for sale, net of accumulated depreciation of $7,836 and
$74,614 at June 30, 2004 and December 31, 2003 respectively ................ 16,977 145,238
---------- ----------
Total real estate assets ................................................... 2,013,500 2,089,605
Investments in and advances to unconsolidated real estate entities ............ 22,165 74,786
Cash and cash equivalents ..................................................... 55,291 1,334
Restricted cash ............................................................... 2,085 2,065
Deferred charges, net ......................................................... 11,504 12,285
Other assets .................................................................. 36,766 35,376
---------- ----------
Total assets ............................................................... $2,141,311 $2,215,451
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable, including $14,760 and $119,035 of debt secured by assets
held for sale at June 30, 2004 and December 31, 2003, respectively ........... $1,080,327 $1,186,322
Accrued interest payable ...................................................... 6,889 6,923
Dividend and distribution payable ............................................. 19,582 19,509
Accounts payable and accrued expenses ......................................... 71,700 65,872
Security deposits and prepaid rents ........................................... 7,324 7,890
---------- ----------
Total liabilities ........................................................... 1,185,822 1,286,516
---------- ----------
Minority interest of preferred unitholders in Operating Partnership ........... 70,000 70,000
---------- ----------
Minority interest of common unitholders in Operating Partnership .............. 47,968 62,409
---------- ----------
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
Common stock, $.01 par value, 100,000,000 authorized:
39,917,075 and 39,676,204 shares issued, 39,917,075 and 38,686,315 shares
outstanding at June 30, 2004 and December 31, 2003, respectively ......... 399 396
Additional paid-in capital .................................................. 769,007 849,632
Accumulated earnings ........................................................ 81,236 -
Accumulated other comprehensive income ...................................... (8,679) (12,362)
Deferred compensation ....................................................... (4,471) (4,424)
---------- ----------
837,521 833,291
Less common stock in treasury, at cost, 989,889 shares
at December 31, 2003 ....................................................... - (36,765)
---------- ----------
Total shareholders' equity .................................................. 837,521 796,526
---------- ----------
Total liabilities and shareholders' equity .................................. $2,141,311 $2,215,451
========== ==========
================================================================================
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 JUNE 30, 2004
WEIGHTED AVERAGE RATE(1)
THREE MONTHS ENDED JUNE 30,
PERCENTAGE -----------------------------
TYPE OF INDEBTEDNESS BALANCE OF TOTAL 2004 2003
- -------------------- ---------- ---------- ----------- ----------
Unsecured fixed rate senior notes ................. $ 595,000 55.08% 7.43% 7.40%
Secured tax exempt variable rate notes(2) ......... 110,055 10.19% 1.71% 1.81%
Secured conventional fixed rate notes ............. 375,272 34.73% 6.52% 6.77%
Lines of credit .................................. - -% 1.81% 2.09%
---------- ------ ---- ----
$1,080,327 100.00% 6.53% 6.12%
========== ====== ==== ====
PERCENTAGE
BALANCE OF TOTAL DEBT
Total fixed rate debt ............................. $ 970,272 89.81%
Total variable rate debt .......................... 110,055 10.19%
---------- ------
Total debt ...................................... $1,080,327 100.00%
========== ======
- --------------------------------------------------------------------------------
DEBT MATURITIES
WEIGHTED AVERAGE RATE
AGGREGATE DEBT MATURITIES BY YEAR AMOUNT ON DEBT MATURITIES(1)
- --------------------------------- ---------- ---------------------
Remainder of 2004 ................................... $ 13,411 6.32%
2005 ................................................ 205,799(3) 7.81%
2006 ................................................ 81,208 6.95%
2007 ................................................ 158,327 7.05%
2008 ................................................ 4,014 6.52%
2009 and thereafter ................................. 617,568(3) 5.92%
----------
$1,080,327
==========
- --------------------------------------------------------------------------------
DEBT STATISTICS
2004 2003
----- -----
Interest coverage ratio(4)(5)......................................... 2.3x(8) 2.7x
Fixed charge coverage ratio(4)(6)..................................... 1.9x(8) 2.1x
Total debt as a % of undepreciated real estate assets (adjusted for
joint venture partner's share of debt)(7)............................ 43.6% 45.2%
Total debt and preferred equity as % of undepreciated real estate
assets (adjusted for joint venture partner's share of debt)(7) ...... 50.1% 53.2%
(1) Weighted average rate includes credit enhancements and other fees, where
applicable. The weighted average rates for the three months ended June 30,
2003 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) Aggregate debt maturities for years ended in 2009 and thereafter include
$100,000 of Mandatory Par Put Remarketed Securities ("MOPPRS"). The MOPPRS
mature in March 2015, but are subject to mandatory tender for remarketing
in March 2005. In March 2005, if the remarketing 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.
(4) Calculated for the six months ended June 30, 2004 and 2003.
(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 23.
(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 23.
(7) A computation of the debt ratios is included in Table 5 on page 24.
(8) The interest coverage and fixed charge coverage ratios, including
discontinued operations, for the six months ended June 30, 2004 would be
2.4x 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) JUNE 30, 2004
- --------------------------------------------------------------------- ------------------
Consolidated Debt to Total Assets cannot exceed 60% ................. 41%
Secured Debt to Total Assets cannot exceed 40% ...................... 19%
Total Unencumbered Assets to Unsecured Debt must be
at least 1.50/1 .................................................... 3.10/1
Consolidated Income Available for Debt Service Charge
must be at least 1.50/1 ............................................ 2.44/1
(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
JUNE 30, 2004
-------------
Consolidated debt, per balance sheet (A) ........................... $1,080,327
==========
Total assets, as defined (B) (Table A) ............................. $2,611,611
==========
Computed ratio (A/B) ............................................... 41%
==========
Required ratio (cannot exceed) ..................................... 60%
==========
RATIO OF SECURED DEBT TO TOTAL ASSETS
- --------------------------------------------------------------------------------------
Secured conventional fixed rate notes ............................... $ 375,272
Secured tax exempt variable rate notes .............................. 110,055
----------
Total secured debt (C) ............................................ $ 485,327
==========
Computed ratio (C/B) ................................................ 19%
==========
Required ratio (cannot exceed) ...................................... 40%
==========
RATIO OF TOTAL UNENCUMBERED ASSETS TO UNSECURED DEBT
- --------------------------------------------------------------------------------------
Consolidated debt, per balance sheet (A) ............................ $1,080,327
Total secured debt (C) .............................................. (485,327)
----------
Total unsecured debt (D) .......................................... $ 595,000
==========
Total unencumbered assets, as defined (E) (Table A) ................. $1,844,265
==========
Computed ratio (E/D) ................................................ 3.10x
==========
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) .......................................................... $ 171,954
==========
Annual Debt Service Charge, as defined (G) (Table B) ................ $ 70,546
==========
Computed ratio (F/G) ................................................ 2.44x
==========
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
JUNE 30, 2004
-------------
Total real estate assets ...................................... $2,013,500
Add:
Investments in unconsolidated real estate entities .......... 22,165
Accumulated depreciation .................................... 474,016
Accumulated depreciation - assets held for sale ............. 7,836
Other tangible assets (cash, restricted cash,
other assets, exclusive of receivables) .................... 94,094
----------
Total assets for public debt covenant computations ............ $2,611,611
Less:
Encumbered real estate assets ............................... 767,346
----------
Total unencumbered assets for public debt covenant computations $1,844,265
==========
TABLE B
CALCULATION OF CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE
AND ANNUAL DEBT SERVICE CHARGE FOR PUBLIC DEBT COVENANT
COMPUTATIONS(1)
- --------------------------------------------------------------------------------
SIX MONTHS ENDED
CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE JUNE 30, 2004
- ---------------------------------------------- ----------------
Net income .................................................... $ 104,519
Add:
Minority interests .......................................... 9,938
---------
Income before minority interest ............................... 114,457
Add:
Depreciation ................................................ 42,363
Depreciation (company share) of assets held in unconsolidated
entities ................................................... 661
Amortization of deferred financing costs .................... 2,208
Interest expense ............................................ 33,007
Interest expense (company share) of assets held in
unconsolidated entities .................................... 574
Interest expense of discontinued operations ................. 1,692
Asset impairment charge ..................................... 626
Loss on early extinguishment of debt ........................ 4,128
Less:
Gains on property sales (before minority interest) .......... (113,739)
---------
Consolidated income available for debt service ................ $ 85,977
=========
Consolidated income available for debt service (annualized) ... $ 171,954
=========
ANNUAL DEBT SERVICE CHARGE
- --------------------------------------------------------------------------------
Consolidated interest expense ................................. $ 33,007
Interest expense (company share) of assets held in
unconsolidated entities ...................................... 574
Interest expense of discontinued operations ................... 1,692
---------
$ 35,273
=========
Annual debt service charge (interest expense annualized) ...... $ 70,546
=========
(1) The actual calculation of these ratios requires the use of annual trailing
financial data. These computations reflect annualized 2004 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.
ASSET ACQUISITION AND DISPOSITION SUMMARY
GROSS AMOUNT GROSS
PROPERTY NAME/PERIOD LOCATION YEAR BUILT PER UNIT AMOUNT
- -------------------- ---------------- ---------- ------------ ------------
ACQUISITIONS
Q1 2004
None
Q2 2004
Post Tysons Corner(TM) Washington, D.C. 1990 $171,972 $ 85,814,000
============
Weighted Average Cap Rate -
Acquisitions - 2004 5.5%(1)
============
DISPOSITIONS
Q1 2003
Post West Avenue(TM)(1) Austin, TX 2000 $126,360 $ 30,200,000(3)
Q2 2003
Post Park(R) Atlanta, GA 1988-1990 $ 78,156
Post Paseo Colorado Pasadena, CA 2002 250,639 $158,180,000(4)(5)
Q3 2003
None
Q4 2003
Post Hackberry Creek(R) Dallas, TX 1988-1996 $ 64,916
Post Roosevelt Square(TM)(6) Phoenix AZ 2000 90,456 $ 64,497,000
------------
2003 YTD Total $252,877,000
============
Weighted Average Cap Rate -
Dispositions - 2003 6.1%(7)
============
Q1 2004
Post Townlake(R) Dallas, TX 1986-1987 $ 56,212 $ 22,372,000(8)
Q2 2004
Post Windhaven(TM) Dallas, TX 1991 $ 52,743
Post Mill(R)(9) Atlanta, GA 1985-1986
Post Canyon(R)(9) Atlanta, GA 1986
Post Chase(R)(9) Atlanta, GA 1987
Post Court(R)(9) Atlanta, GA 1988
Post Lane(R)(9) Atlanta, GA 1988
Post Lake(R)(9) Orlando, FL 1988 65,409 $221,750,000
------------
2004 YTD Total $244,122,000
============
Weighted Average Cap Rate -
Dispositions - 2004 6.7%(7)
============
(1) Based on projected first twelve-month net operating income after adjustment
for management fee (3.0%) and capital reserves ($300/unit). Also assumes
that the Company will initially spend up to $2 million to improve the
community for total capitalized costs of approximately $88 million.
(2) Includes approximately 7,400 square feet of retail space.
(3) Excludes approximately $8.6 million in gross proceeds from the sale of land
in Tampa, FL and Austin, TX.
(4) 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.
(5) Excludes approximately $2.6 million of gross proceeds from the sale of land
in Dallas, TX.
(6) Includes approximately 11,000 square feet of retail space.
(7) Based on trailing twelve-month 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.
(8) Excludes approximately $2.1 million in gross proceeds from the sale of land
in Dallas, TX and Tampa, FL.
(9) The gross amount per unit for these properties is $65,409.
================================================================================
Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 14
================================================================================
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 six months ended June 30, 2004 and 2003 is
detailed below.
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ------------------------
2004 2003 2004 2003
------- ------- ------- -------
NEW COMMUNITY DEVELOPMENT AND ACQUISITION ACTIVITY ................. $37,249 $ 5,720 $37,542 $19,832
NON-RECURRING CAPITAL EXPENDITURES
Revenue generating additions and improvements(1) ................. - 643 26 732
Other community additions and improvements(2) .................... 1,302 1,218 2,546 2,176
RECURRING CAPITAL EXPENDITURES
Carpet replacements and other community additions
and improvements(3) ............................................. 2,771 2,524 5,193 3,986
Corporate additions and improvements ............................. 153 131 287 339
------- ------- ------- -------
$41,475 $10,236 $45,593 $27,064
======= ======= ======= =======
OTHER DATA
Capitalized interest ............................................. $ 261 $ 1,244 $ 500 $ 3,113
======= ======= ======= =======
Capitalized personnel and associated costs(4) .................... $ 250 $ 579 $ 499 $ 1,179
======= ======= ======= =======
(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 15
================================================================================
POST PROPERTIES, INC.
INVESTMENTS IN UNCONSOLIDATED REAL ESTATE ENTITIES
(Dollars in thousands, except per share or unit data)
(Unaudited)
At June 30, 2004, 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 June 30, 2004, each
of the apartment communities had achieved stabilized occupancy. 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.
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 $6,666 at June
30, 2004. 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 for which it earns fees.
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:
JUNE 30, DECEMBER 31,
Balance Sheet Data 2004 2003
- ------------------------------------------------------ -------- ------------
Real estate assets, net of accumulated depreciation of
$7,806 and $5,939, respectively ..................... $125,751 $127,513
Cash and other ....................................... 4,177 2,516
-------- --------
Total assets ......................................... $129,928 $130,029
======== ========
Mortgage notes payable ............................... $ 83,617 $ 33,763
Construction notes payable to Company(1) ............. - 53,769
Other liabilities .................................... 1,824 1,742
-------- --------
Total liabilities .................................... 85,441 89,274
Members' equity ...................................... 44,487 40,755
-------- --------
Total liabilities and members' equity ................ $129,928 $130,029
======== ========
Company's equity investment .......................... $ 22,165 $ 21,017
======== ========
Company's share of notes payable ..................... $ 29,266 $ 30,636
======== ========
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
Income Statement Data 2004 2003 2004 2003
- ---------------------------------------------------------- ------ ------- ------ -------
Revenue
Rental ................................................. $3,290 $ 2,107 $6,538 $ 3,796
Other .................................................. 259 125 471 227
------ ------- ------ -------
Total revenues ......................................... 3,549 2,232 7,009 4,023
------ ------- ------ -------
Expenses
Property operating and maintenance ..................... 1,224 1,209 2,445 2,436
Depreciation and amortization .......................... 970 949 1,920 1,844
Interest ............................................... 866 810 1,640 1,518
------ ------- ------ -------
Total expenses ......................................... 3,060 2,968 6,004 35,798
------ ------- ------ -------
Income (loss) from continuing operations ................. 489 (736) 1,005 (1,775)
------ ------- ------ -------
Discontinued Operations
Loss from discontinued operations ...................... - (103) - (188)
Gain on property sales ................................. - 25,340 - 25,991
------ ------- ------ -------
Income from discontinued operations ...................... - 25,340 - 25,991
------ ------- ------ -------
Net income ............................................... $ 489 $25,340 $1,005 $24,216
====== ======= ====== =======
Company's share of net income ............................ $ 171 $11,899 $ 352 $11,505
====== ======= ====== =======
(1) All of the Company's construction financing to these unconsolidated real
estate entities is included in the Company's outstanding debt and total
assets. At December 31, 2003, the venture partner's share of the
construction loans was $34,950. All construction financing previously
provided by the Company was refinanced with permanent loans from
unaffiliated entities as of March 31, 2004.
The income from discontinued operations represents the operating results and the
gain on sale of an apartment community (held by a fourth Property LLC) that was
sold in June 2003.
At June 30, 2004, mortgage notes payable include a $50,000 mortgage note that
bears interest at 4.13%, requires monthly interest payments and annual principal
payment of $1 through 2009. Thereafter, the note requires monthly principal and
interest payments based on a 25-year amortization schedule and matures in April
2034. The note is callable by the lender in May 2009 and on each successive
fifth year anniversary of the note thereafter. The note is prepayable without
penalty in May 2008. The additional mortgage notes payable bear interest at
rates ranging from 4.04% to 4.28% and mature in 2008.
================================================================================
Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 16
================================================================================
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 June 30, 2004 for
properties stabilized by the beginning of the quarter ended June 30, 2004 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 June 30, 2004 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 develop 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 JUNE 30, 2004 ADJUSTMENTS ADJUSTED
- -------------------------------------------------------------------- ------------------ ----------- --------
Rental revenues .................................................... $72,180 $ (331)(1) $71,849
Other property revenues ............................................ 4,510 104(1) 4,614
------- ------- -------
Total rental and other revenues (A) .............................. 76,690 (227) 76,463
Property operating & maintenance expenses
(excluding depreciation and amortization) (B) ..................... 33,388 (3,897)(1) 29,491
------- ------- -------
Property net operating income (Table 1) (A-B) ...................... $43,302 $ 3,670 $46,972
======= ======= =======
Apartment units represented ........................................ 24,700 (932)(2) 23,768
AS OF AS
OTHER ASSET DATA JUNE 30, 2004 ADJUSTMENTS ADJUSTED
- ----------------------------------------------------------------------- ------------- ----------- --------
Cash & equivalents .................................................... $ 55,291 $ - $ 55,291
Construction in progress and real estate assets
acquired, at cost(3) ................................................. 14,851 85,814(3) 100,665
Land held for development or sale ..................................... 13,384 7,066(4) 20,450
Investments in and advances to unconsolidated real
estate entities (including construction loans
receivable) .......................................................... 22,165 (22,165)(5) -
Other assets(6) ....................................................... 38,851 - 38,851
Cash and other assets of unconsolidated real estate
entities(7) .......................................................... 4,177 (2,715)(7) 1,462
LIABILITY DATA
Tax-exempt debt ....................................................... 110,055 - 110,055
Other notes payable ................................................... 970,272 - 970,272
Other liabilities(8) .................................................. 105,495 - 105,495
Total liabilities of unconsolidated
real estate entities(9) .............................................. 85,441 (55,537)(8) 29,904
OTHER DATA
Liquidation value of preferred shares ................................. 95,000 - 95,000
Liquidation value of preferred units .................................. 70,000 - 70,000
Common shares outstanding ............................................. 39,917 - 39,917
Common units outstanding .............................................. 2,561 - 2,561
(1) The adjustments reflect a reduction in rental revenues ($206) and property
operating and maintenance expenses (excluding depreciation and
amortization) ($57) from an acquisition property that was not included in
operating results for the full second quarter of 2004 (Post Tysons
Corner(TM)). The adjustments also include additions for the rental revenues
($803) and other property revenues ($110) and property operating and
maintenance expenses (excluding depreciation and amortization) ($380) of a
held for sale property included in discontinued operations and for the
Company's 35% share of rental revenues ($1,141) and other property revenues
($101) and property operating and maintenance expenses (excluding
depreciation and amortization) ($425) from all properties accounted for on
the equity method of accounting. In addition, the adjustments reflect a
reduction of rental revenues ($2,069) and other revenues ($107) and
property operating and maintenance expenses (excluding depreciation and
amortization) ($1,791) relating to the Company's corporate
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 17
================================================================================
apartment business. Lastly, the adjustment to operating and maintenance
expenses (excluding depreciation and amortization) also includes a
reduction for corporate property management expenses ($2,854).
(2) The adjustment reflects a reduction of total apartment units for an
acquisition property that was not included in operating results for full
second quarter of 2004 (Post Tysons CornerTM - 499 unit total reduction)
and a reduction of 65% of the 666 units held in unconsolidated entities (a
433 unit reduction) to adjust the units held in unconsolidated entities to
the Company's 35% share of the units.
(3) The "As of June 30, 2004" amount represents the construction in progress
balance per the Company's balance sheet. The adjustment amount equals the
aggregate cost investment in an acquisition property that was not included
in operating results for full second quarter of 2004 (Post Tysons
CornerTM).
(4) The adjustment reflects land parcels included on the balance sheet as a
component of assets held for sale.
(5) The "As of June 30, 2004" 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 (none at June 30, 2004).
(6) These amounts consist of restricted cash and other assets, per the
Company's balance sheet.
(7) The "As of June 30, 2004" amount represents cash and other assets of
unconsolidated entities. The adjustment includes a reduction for the
venture partners' 65% share of cash and other assets ($2,715) of the
Company's projects held in unconsolidated entities as those projects
reached stabilized occupancy prior to the second quarter of 2004. The "As
Adjusted" amount represents 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 June 30, 2004" 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.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 18
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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, AFFO, net operating income, same store capital expenditures, FFO
and AFFO excluding certain accounting charges, certain debt statistics and
ratios and economic gains (losses) 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.
ADJUSTED FUNDS FROM OPERATIONS - The Company also uses adjusted funds from
operations ("AFFO") as an operating measure. AFFO is defined as FFO less
operating capital expenditures. The Company believes that AFFO is an
important supplemental measure of operating performance for an equity REIT
because it provides investors with an indication of the REIT's ability to
fund operating capital expenditures through earnings. In addition, since
most equity REITs provide AFFO information to the investment community, the
Company believes that AFFO is a useful supplemental measure for comparing
the Company to other equity REITs. The Company believes that the line on
its consolidated statement of operations entitled "net income (loss)
available to common shareholders" is the most directly comparable GAAP
measure to AFFO.
PROPERTY NET OPERATING INCOME - The Company uses property NOI, including
same store NOI and same store NOI by market, as an operating measure. NOI
is defined as rental and other revenues from real estate operations less
total property and maintenance expenses from real estate operations
(exclusive of depreciation and amortization). The Company believes that NOI
is an important supplemental measure of operating performance for a REIT's
operating real estate because it provides a measure of the core operations,
rather than factoring in depreciation and amortization, financing costs and
general and administrative expenses generally incurred at the corporate
level. This measure is particularly useful, in the opinion of the Company,
in evaluating the performance of geographic operations, same store
groupings and individual properties. Additionally, the Company believes
that NOI, as defined, is a widely accepted measure of comparative operating
performance in the real estate investment community. The Company believes
that the line on its consolidated statement of operations entitled "net
income" is the most directly comparable GAAP measure to NOI.
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, sold properties and
commercial properties 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."
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 19
================================================================================
NET INCOME, FFO AND AFFO EXCLUDING CERTAIN CHARGES - The Company uses net
income, FFO and AFFO excluding certain preferred stock redemption costs,
severance, proxy, loss on early extinguishment of debt and impairment
charges as operating measures. The Company reports net income, FFO and AFFO
excluding certain charges as alternative financial measures of core
operating performance. The Company believes net income, FFO and AFFO 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 2004 and 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 AFFO, excluding certain charges, is the line
on the Company's consolidated statements of operations entitled "net income
available to common shareholders."
DEBT STATISTICS AND DEBT RATIOS - The Company uses a number of debt
statistics and ratios as supplemental measures of liquidity. The numerator
and/or the denominator of certain of these statistics and/or ratios include
non-GAAP financial measures that have been reconciled to the most directly
comparable GAAP financial measure. These debt statistics and ratios
include: (1) an interest coverage ratio; (2) a fixed charge coverage ratio;
(3) total debt as a percentage of undepreciated real estate (adjusted for
joint venture partner's share of debt); (4) total debt plus preferred
equity as a percentage of undepreciated real estate (adjusted for joint
venture partner's share of debt); (5) a ratio of consolidated debt to total
assets; (6) a ratio of secured debt to total assets; (7) a ratio of total
unencumbered assets to unsecured debt; and (8) a ratio of consolidated
income available to debt service to annual debt service charge. A number of
these debt statistics and ratios are derived from covenants found in the
Company's debt agreements, including, among others, the Company's senior
unsecured notes. In addition, the Company presents these measures because
the degree of leverage could affect the Company's ability to obtain
additional financing for working capital, capital expenditures,
acquisitions, development or other general corporate purposes. The Company
uses these measures internally as an indicator of liquidity and the Company
believes that these measures are also utilized by the investment and
analyst communities to better understand the Company's liquidity.
ECONOMIC GAINS ON PROPERTY SALES - The Company uses economic gains losses
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.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 20
================================================================================
RECONCILIATIONS OF SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
TABLE 1
RECONCILIATION OF SAME STORE NET OPERATING INCOME (NOI) TO GAAP NET INCOME
(Dollars in thousands)
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------------------- ------------------------
JUNE 30, JUNE 30, MARCH 31, JUNE 30, JUNE 30,
2004 2003 2004 2004 2003
-------- -------- --------- -------- --------
Total same store NOI ............................... $ 39,699 $ 39,986 $ 39,435 $ 79,134 $ 81,049
Property NOI from other operating
segments ......................................... 3,603 1,520 2,772 6,374 2,065
-------- -------- -------- -------- --------
Consolidated property NOI .......................... 43,302 41,506 42,207 85,508 83,114
Add (subtract):
Other revenues ................................... 45 147 76 122 277
Interest income .................................. 213 251 180 392 485
Minority interest in consolidated
property partnerships ........................... 303 349 272 575 682
Depreciation ..................................... (21,177) (20,253) (21,186) (42,363) (40,542)
Interest expense ................................. (16,726) (16,250) (16,281) (33,007) (31,879)
Amortization of deferred financing
costs ........................................... (1,092) (968) (1,116) (2,208) (1,756)
General and administrative ....................... (5,477) (3,342) (4,642) (10,119) (6,967)
Development costs and other expenses ............. (381) - (535) (916) (567)
Proxy contest and related costs .................. - (5,231) - - (5,231)
Severance charges ................................ - (1,795) - - (21,506)
Equity in income of unconsolidated
entities ........................................ 207 8,103 216 422 7,710
Minority interest of preferred
unitholders ..................................... (1,400) (1,400) (1,400) (2,800) (2,800)
Minority interest of common
unitholders ..................................... 246 164 473 719 2,778
-------- -------- -------- -------- --------
Loss from continuing operations .................. (1,937) 1,281 (1,736) (3,675) (16,202)
Income from discontinued operations .............. 103,047 26,408 5,147 108,194 23,304
-------- -------- -------- -------- --------
Net income ......................................... $101,110 $ 27,689 $ 3,411 $104,519 $ 7,102
======== ======== ======== ======== ========
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 21
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TABLE 2
SAME STORE NET OPERATING INCOME (NOI) SUMMARY BY MARKET
(Dollars in thousands)
THREE MONTHS ENDED
------------------------------------------ 2Q '04 VS 2Q '04 VS
JUNE 30, JUNE 30, MARCH 31, 2Q '03 1Q '04
2004 2003 2004 % CHANGE % CHANGE
-------- -------- --------- --------- ---------
Rental and other revenues
Atlanta ............................. $33,386 $33,011 $32,887 1.1% 1.5%
Dallas .............................. 12,481 12,519 12,481 (0.3)% -
Tampa ............................... 4,517 4,431 4,558 1.9% (0.9)%
Washington, DC ...................... 5,444 5,234 5,364 4.0% 1.5%
Charlotte ........................... 3,226 3,067 3,151 5.2% 2.4%
Other ............................... 6,220 6,341 6,268 (1.9)% (0.8)%
------- ------- -------
Total rental and other revenues .. 65,274 64,603 64,709 1.0% 0.9%
------- ------- -------
Property operating and maintenance
expenses (exclusive of depreciation
and amortization)
Atlanta ............................. 12,480 12,194 12,352 2.3% 1.0%
Dallas .............................. 5,788 5,312 5,429 9.0% 6.6%
Tampa ............................... 1,806 1,801 1,990 0.3% (9.2)%
Washington, DC ...................... 1,760 1,647 1,807 6.9% (2.6)%
Charlotte ........................... 1,022 1,089 1,035 (6.2)% (1.3)%
Other ............................... 2,719 2,574 2,661 5.6% 2.2%
------- ------- -------
Total ............................ 25,575 24,617 25,274 3.9% 1.2%
------- ------- -------
Net operating income
Atlanta ............................. 20,906 20,817 20,535 0.4% 1.8%
Dallas .............................. 6,693 7,207 7,052 (7.1)% (5.1)%
Tampa ............................... 2,711 2,630 2,568 3.1% 5.6%
Washington, DC ...................... 3,684 3,587 3,557 2.7% 3.6%
Charlotte ........................... 2,204 1,978 2,116 11.4% 4.2%
Other ............................... 3,501 3,767 3,607 (7.1)% (2.9)%
------- ------- -------
Total same store NOI ............. $39,699 $39,986 $39,435 (0.7)% 0.7%
======= ======= =======
SIX MONTHS ENDED
JUNE 30,
------------------------
2004 2003 % CHANGE
-------- -------- --------
Rental and other revenues
Atlanta ............................. $ 66,273 $ 66,478 (0.3)%
Dallas .............................. 24,963 24,922 0.2%
Tampa ............................... 9,075 8,846 2.6%
Washington, DC ...................... 10,809 10,401 3.9%
Charlotte ........................... 6,376 6,080 4.9%
Other ............................... 12,487 12,820 (2.6)%
-------- --------
Total rental and other revenues .. 129,983 129,547 0.3%
-------- --------
Property operating and maintenance
expenses (exclusive of depreciation
and amortization)
Atlanta ............................. 24,831 23,763 4.5%
Dallas .............................. 11,217 10,549 6.3%
Tampa ............................... 3,796 3,588 5.8%
Washington, DC ...................... 3,567 3,366 6.0%
Charlotte ........................... 2,057 2,134 (3.6)%
Other ............................... 5,381 5,098 5.6%
-------- --------
Total ............................ 50,849 48,498 4.8%
-------- --------
Net operating income
Atlanta ............................. 41,442 42,715 (3.0)%
Dallas .............................. 13,746 14,373 (4.4)%
Tampa ............................... 5,279 5,258 0.4%
Washington, DC ...................... 7,242 7,035 2.9%
Charlotte ........................... 4,319 3,946 9.5%
Other ............................... 7,106 7,722 (8.0)%
-------- --------
Total same store NOI ............. $ 79,134 $ 81,049 (2.4)%
======== ========
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 22
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TABLE 3
RECONCILIATION OF SEGMENT CASH FLOW DATA TO STATEMENTS OF CASH FLOWS
(Dollars in thousands)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -----------------
2004 2003 2004 2003
------ ------ ------ ------
Recurring capital expenditures by operating segment
Same store ........................................... $2,437 $1,917 $4,471 $2,925
Partially stabilized ................................. 38 17 87 26
Construction and lease-up ............................ 5 - 12 -
Other segments ....................................... 291 590 623 1,035
------ ------ ------ ------
Total recurring capital expenditures per statements of
cash flows .......................................... $2,771 $2,524 $5,193 $3,986
====== ====== ====== ======
Non-recurring capital expenditures by operating
segment
Same store ........................................... $1,048 $ 899 $2,196 $1,334
Partially stabilized ................................. 163 3 182 7
Construction and lease-up ............................ - - - -
Other segments ....................................... 91 316 168 835
------ ------ ------ ------
Total non-recurring capital expenditures per
statements of cash flows ............................ $1,302 $1,218 $2,546 $2,176
====== ====== ====== ======
TABLE 4
COMPUTATION OF INTEREST AND FIXED CHARGE COVERAGE RATIOS
(Dollars in thousands)
SIX MONTHS ENDED
JUNE 30,
---------------------
2004 2003
------- --------
Loss from continuing operations ...................... $(3,675) $(16,202)
Minority interest of common unitholders .............. (719) (2,778)
Minority interest of preferred unitholders ........... 2,800 2,800
Depreciation expense ................................. 42,363 40,542
Depreciation (company share) of assets held in
unconsolidated entities ............................. 661 909
Interest expense ..................................... 33,007 31,879
Interest expense (company share) of assets held in
unconsolidated entities ............................. 574 271
Amortization of deferred financing costs ............. 2,208 1,756
Severance charges .................................... 21,506
Proxy contest and related costs ...................... - 5,231
------- --------
Income available for debt service (A) ................ $77,219 $ 85,914
======= ========
Interest expense ..................................... $33,007 $ 31,879
Interest expense (company share) of assets held in
unconsolidated entities ............................. 574 271
------- --------
Interest expense for purposes of computation (B) ..... 33,581 32,150
Dividends and distributions to preferred shareholders
and unitholders ..................................... 7,307 8,525
------- --------
Fixed charges for purposes of computation (C) ........ $40,888 $ 40,675
======= ========
Interest coverage ratio (A/B) (1) .................... 2.3x 2.7x
======= ========
Fixed charge coverage ratio (A/C) (1) ................ 1.9x 2.1x
======= ========
(2) The interest coverage and fixed charge coverage ratios, including
discontinued operations, for the six months ended June 30, 2004 would be
2.4x and 2.0x, respectively.
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 23
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TABLE 5
COMPUTATION OF DEBT RATIOS
(In thousands)
AS OF JUNE 30,
--------------------------
2004 2003
---------- ----------
Total real estate assets per balance sheet ........................... $2,013,500 $2,164,206
Plus:
Company share of real estate assets held in unconsolidated entities .. 44,013 45,124
Company share of accumulated depreciation - assets held in
unconsolidated entities ............................................. 2,732 1,407
Accumulated depreciation per balance sheet ........................... 474,016 470,307
Accumulated depreciation on assets held for sale ..................... 7,836 -
---------- ----------
Total undepreciated real estate assets (A) ........................... $2,542,097 $2,681,044
========== ==========
Total debt per balance sheet ......................................... $1,080,327 $1,259,926
Plus:
Company share of debt held in unconsolidated entities ................ 29,266 5,917
Less:
Joint venture partner's share of construction debt to the Company .... - (54,051)
---------- ----------
Total debt (adjusted for joint venture partner's share of debt) (B) .. $1,109,593 $1,211,792
========== ==========
Total debt as a % of undepreciated real estate assets (adjusted for
joint venture partner's share of debt) (B/A) ........................ 43.6% 45.2%
========== ==========
Total debt per balance sheet ......................................... $1,080,327 $1,259,926
Plus:
Company share of debt held in unconsolidated entities ................ 29,266 5,917
Preferred shares at liquidation value ................................ 95,000 145,000
Preferred units at liquidation value ................................. 70,000 70,000
Less:
Joint venture partner's share of construction debt to the Company .... - (54,051)
---------- ----------
Total debt and preferred equity (adjusted for joint venture partner's
share of debt) (1) (C) .............................................. $1,274,593 $1,426,792
========== ==========
Total debt and preferred equity as a % of undepreciated assets
(adjusted for joint venture partner's share of debt) (1) (C/A) ..... 50.1% 53.2%
========== ==========
(1) If total debt and preferred equity were reduced by available cash and cash
equivalent balances of $55,291 at June 30, 2004, the ratio of debt and
preferred equity as a percent of undepreciated assets (adjusted for joint
venture partners' share of debt) would have been 48.0% at June 30, 2004..
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 24
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TABLE 6
CALCULATION OF COMPANY UNDEPRECIATED BOOK VALUE PER SHARE
(In thousands)
JUNE 30, 2004
-------------
Total shareholders' equity, per balance sheet ........................ $ 837,521
Plus:
Accumulated depreciation, per balance sheet .......................... 474,016
Accumulated depreciation - held for sale assets, per balance sheet ... 7,836
Minority interest of common unitholders in Operating Partnership,
per balance sheet ................................................... 47,968
Minority interest of preferred unitholders in Operating Partnership,
per balance sheet ................................................... 70,000
Less:
Deferred charges, net, per balance sheet ............................. (11,504)
Preferred shares at liquidation value ................................ (95,000)
Preferred units at liquidation value ................................. (70,000)
----------
Total undepreciated book value (A).................................... $1,260,837
==========
Total common shares and units (B) .................................... 42,478
==========
Company undepreciated book value per share (A/B) ..................... $ 29.68
==========
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Copyright (C) 2004 Post Apartment Homes, LP All Rights Reserved 25