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EXHIBIT 99.2
POST PROPERTIES, INC.
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED BALANCE SHEET
JUNE 30, 1997
The Post Properties, Inc. Unaudited Pro Forma Combined Balance Sheet gives
effect to the proposed Merger of Post and Columbus as if the Merger had occurred
on June 30, 1997. The Unaudited Pro Forma Combined Balance Sheet gives effect to
the Merger under the "purchase" method of accounting in accordance with
Accounting Principles Board Opinion No. 16. In the opinion of management, all
significant adjustments necessary to reflect the effects of the Merger have been
made.
The Unaudited Pro Forma Combined Balance Sheet is presented for comparative
purposes only and is not necessarily indicative of what the actual combined
financial position of Post and Columbus would have been at June 30, 1997, nor
does it purport to represent the future combined financial position of Post and
Columbus. This Post Properties, Inc. Unaudited Pro Forma Combined Balance Sheet
should be read in conjunction with, and is qualified in its entirety by, the
respective historical financial statements and notes thereto of Post and
Columbus incorporated by reference into this Joint Proxy Statement/Prospectus.
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POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 1997
PRO FORMA
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(A) HISTORICAL(A) ADJUSTMENTS(B) COMBINED
------------- ------------- -------------- ----------
(IN THOUSANDS)
ASSETS
Real estate assets
Land..................................... $ 149,071 $ 46,663 $ 21,907(C) $ 217,641
Building and improvements................ 736,891 331,380 154,204(C) 1,222,475
Furniture, fixtures and equipment........ 76,835 4,912 81,747
Construction in progress (includes land
on properties under development)...... 203,477 73,459 276,936
Land held for future development......... 8,660 -- 8,660
---------- -------- -------- ----------
1,174,934 456,414 176,111 1,807,459
Less: accumulated depreciation........... (185,068) (46,576) (231,644)
---------- -------- -------- ----------
Real estate held for investment.......... 989,866 409,838 176,111 1,575,815
Cash and cash equivalents................ 1,771 6,688 8,459
Restricted cash.......................... 1,016 313 1,329
Deferred charges, net.................... 9,652 1,361 375(D) 11,388
Other assets............................. 11,468 12,963 (2,078)(E) 22,353
---------- -------- -------- ----------
Total assets..................... $1,013,773 $431,163 $174,408 $1,619,344
========== ======== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable.............................. $ 473,683 $231,477 $ 20,943(F) $ 726,103
Accrued interest payable................... 4,305 332 4,637
Dividend and distribution payable.......... 16,220 -- 16,220
Accounts payable and accrued expenses...... 30,573 11,722 42,295
Security deposits and prepaid rents........ 5,179 2,225 7,404
Other liabilities.......................... -- 2,063 2,063
---------- -------- -------- ----------
Total liabilities................ 529,960 247,819 20,943 798,722
---------- -------- -------- ----------
Minority interest of unitholders in
Operating Partnership.................... 83,297 -- 29,611(G) 112,908
---------- -------- -------- ----------
Shareholders' equity
Preferred stock.......................... 10 -- 10
Common stock............................. 220 134 (50)(H) 304
Additional paid-in capital................. 400,286 213,981 93,133(I) 707,400
Accumulated earnings(deficit).............. -- (30,765) 30,765(J) 0
Treasury stock............................. -- (6) 6(J) 0
---------- -------- -------- ----------
Total shareholders' equity....... 400,516 183,344 123,854 707,714
---------- -------- -------- ----------
Total liabilities and
shareholders' equity........... $1,013,773 $431,163 $174,408 $1,619,344
========== ======== ======== ==========
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POST PROPERTIES, INC.
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
The Post Properties, Inc. Unaudited Pro Forma Combined Statements of
Operations for the six months ended June 30, 1997 and the year ended December
31, 1996 are presented as if the Merger had occurred on January 1, 1996. The
Post Properties, Inc. Unaudited Pro Forma Combined Statements of Operations give
effect to the Merger under the "purchase" method of accounting in accordance
with Accounting Principles Board Opinion No. 16. and assumes that the combined
entity qualifying as a REIT distributing at least 95% of its taxable income, and
therefore, incurring no federal income tax liability for the year. In the
opinion of management, all significant adjustments necessary to reflect the
effects of these transactions have been made.
The Post Properties, Inc. Unaudited Pro Forma Combined Statements of
Operations are presented for comparative purposes only and are not necessarily
indicative of what the actual combined results of Post and Columbus would have
been for the six months ended June 30, 1997 and the year ended December 31,
1996, nor do they purport to be indicative of the results of operations in
future periods. The Post Properties, Inc. Unaudited Pro Forma Combined
Statements of Operations should be read in conjunction with, and are qualified
in their entirety by, the respective historical financial statements and notes
thereto of Post and Columbus incorporated by reference into this Joint Proxy
Statement/Prospectus.
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POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(K) HISTORICAL(K) ADJUSTMENTS COMBINED
------------- ------------- ----------- -----------
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
Revenues:
Rental................................ $ 84,131 $ 26,879 $ 111,010
Property management - third party..... 1,092 71 1,163
Landscape services - third party...... 2,446 -- 2,446
Interest.............................. 15 181 196
Other................................. 2,996 1,176 4,172
---------- ---------- ---------- -----------
Total revenues................ 90,680 28,307 118,987
---------- ---------- ---------- -----------
Expenses:
Property operating and maintenance
(exclusive of items shown
separately below).................. 31,132 9,449 40,581
Depreciation (real estate assets)..... 12,563 6,056 286(L) 18,905
Depreciation (non-real estate
assets)............................ 495 145 640
Property management - third party..... 814 -- 814
Landscape services - third party...... 2,031 -- 2,031
Interest.............................. 11,070 4,898 (343)(M) 15,625
Amortization of deferred loan costs... 552 252 (187)(N) 617
General and administrative............ 3,419 1,331 (725)(O) 4,025
---------- ---------- ---------- -----------
Total expenses................ 62,076 22,131 (969) 83,238
---------- ---------- ---------- -----------
Income before net gain on sale of
assets, minority interest of
unitholders in Operating
Partnership and extraordinary
item............................... 28,604 6,176 969 35,749
Net gain on sale of assets............ 3,512 561 4,073
Minority interest of unitholders in
Operating Partnership.............. (5,751) -- 250(P) (5,501)
---------- ---------- ---------- -----------
Net income before extraordinary
item............................... 26,365 6,737 1,219 34,321
Dividend to preferred shareholders.... (2,125) -- (2,125)
---------- ---------- ---------- -----------
Net income available to common
shareholders before extraordinary
item............................... $ 24,240 $ 6,737 $ 1,219 $ 32,196
========== ========== ========== ===========
Per common share data:
Weighted average common shares
outstanding -- primary............. 21,989,132 13,496,035 (5,089,205)(Q) 30,395,962
Net income available to common
shareholders before extraordinary
item............................... $ 1.10 $ 0.50 $ (0.54) $ 1.06
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POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(K) HISTORICAL(K) ADJUSTMENTS COMBINED
------------- ------------- ----------- ----------
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
Revenues:
Rental.............................. $ 157,735 $ 45,910 $ 203,645
Property management - third party... 2,828 298 3,126
Landscape services - third party.... 4,834 - 4,834
Interest............................ 326 228 554
Other............................... 4,985 2,094 7,079
---------- ---------- ---------- ----------
Total revenues.............. 170,708 48,530 -- 219,238
---------- ---------- ---------- ----------
Expenses:
Property operating and maintenance
(exclusive of items shown
separately below)................ 57,335 16,365 73,700
Depreciation (real estate assets)... 22,676 10,257 2,426(L) 35,359
Depreciation (non-real estate
assets).......................... 927 346 1,273
Property management - third party... 2,055 - 2,055
Landscape services - third party.... 3,917 - 3,917
Interest............................ 22,131 7,884 (282)(M) 29,733
Amortization of deferred loan
costs............................ 1,352 393 (285)(N) 1,460
General and administrative.......... 7,716 2,073 (1,450)(O) 8,339
---------- ---------- ---------- ----------
Total expenses.............. 118,109 37,318 409 155,836
---------- ---------- ---------- ----------
Income before net gain on sale of
assets, minority interest of
unitholders in Operation
Partnership and extraordinary
item............................. 52,599 11,212 (409) 63,402
Net gain on sale of assets.......... 854 246 1,100
Minority interest of unitholders in
Operating Partnership............ (9,984) -- 807(P) (9,177)
---------- ---------- ---------- ----------
Net income before extraordinary
item............................. 43,469 11,458 398 55,325
Dividend to preferred
shareholders..................... (1,063) (1,063)
---------- ---------- ---------- ----------
Net income available to common
shareholders before extraordinary
item............................. $ 42,406 $ 11,458 $ 398 $ 54,262
========== ========== ========== ==========
Per common share data:
Weighted average common shares
outstanding - primary............ 21,787,648 12,142,069 (3,735,239)(Q) 30,194,478
Net income available to common
shareholders before extraordinary
item............................. $ 1.95 $ 0.94 $ (1.09) $ 1.80
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POST PROPERTIES, INC.
NOTES TO UNAUDITED PRO FORMA
BALANCE SHEET AND STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(A) Represents the respective historical balance sheet of Post and Columbus as
of June 30, 1997. Certain reclassifications have been made to Columbus'
historical balance sheet to conform to Post's balance sheet presentation.
(B) Represents adjustments to record the Merger in accordance with the purchase
method of accounting, based upon the assumed purchase price of $602,889
assuming a market value of $40.09 per share of Post's Common Stock, as
follows:
Issuance of 8,407 shares of Post Common Stock based on the
0.615 exchange for 13,669 Columbus Common Shares, which
includes 260 Columbus Common Shares issued immediately
prior to the Merger....................................... $337,009
Assumption of Columbus' liabilities (including $2,240 of
purchase adjustments)..................................... 249,859
Merger costs (see calculation below)........................ 18,703
--------
$605,571
========
The following is a calculation of the estimated fees and other expenses
related to the Merger:
Buyout of employment agreements............................. $ 8,800
Advisory fees............................................... 7,453
Legal and accounting fees................................... 1,500
Other, including printing, filing and transfer costs........ 950
-------
Total............................................. $18,703
=======
(C) Represents the estimated increase in Columbus' real estate assets, net
based upon Post's purchase price and the adjustment to eliminate the basis
of Columbus' net assets acquired:
Purchase Price (see Note B)................................. $605,571
Less: Historical basis of Columbus' net assets acquired
Real estate assets..................................... (409,838)
Other assets, net of purchase adjustments.............. (19,622)
--------
Step-up to record fair value of Columbus' real estate
assets.................................................... $176,111
========
The allocation to land and building and improvements to record the step-up
was based upon relative fair values of Columbus' real estate assets.
(D) Increase due to estimated loan costs incurred to refinance Columbus' debt
($1,345) net of elimination of Columbus' historical deferred loan costs
($970).
(E) Decrease due to recognition of historical deferred compensation expense
upon vesting of certain options of Columbus prior to the Merger.
(F) Increase to notes payable reflects the financing of the following:
Transaction costs........................................... $18,703
Loan costs on refinanced debt............................... 1,345
Prepayment penalties on existing debt....................... 695
Registration costs.......................................... 200
-------
$20,943
=======
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POST PROPERTIES, INC.
NOTES TO UNAUDITED PRO FORMA -- (CONTINUED)
BALANCE SHEET AND STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(G) The pro forma allocation to the Minority Interest in Operating Partnership
is based upon the percentage owned by such Minority Interest as follows:
Total Shareholders' Equity and Minority Interest in
Operating Partnership..................................... $820,622
Less: Equity related to Post's Preferred Stock.............. (48,613)
--------
772,009
Minority Interest percentage ownership in Operating
Partnership (see Note I).................................. 14.6%
--------
Pro Forma Combined Minority Interest ownership in Operating
Partnership............................................... 112,908
Post historical Minority Interest ownership in Operating
Partnership............................................... 83,297
--------
Adjustment to Minority Interest ownership in Operating
Partnership............................................... $ 29,611
========
(H) Decrease results from elimination of Columbus Common Shares at $.01 par
value ($134) net of the issuance of Post Common Stock at $.01 par value
($84) (see Note I).
(I) Increase to paid-in capital to reflect the following:
Issuance of 8,407 shares of Post Common Stock at $40.09 per
share..................................................... $ 337,009
Less: Par value of Common Stock issued.................... (84)
Registration costs incurred in connection with the
Merger.............................................. (200)
Columbus' historical paid in capital............... (213,981)
Adjustment to Minority Interest in Operating
Partnership (see Note G)........................... (29,611)
---------
$ 93,133
=========
The Minority Interest ownership in Post, is calculated as follows:
SHARES UNITS
------ -----
Columbus' historical Common Shares outstanding............ 13,669
======
Post Common Stock to be issued based on the .615 Merger
exchange ratio.......................................... 8,407
Post's historical Common Stock/Units outstanding.......... 22,044 5,216
------ -----
Post's pro forma Common Stock/Units outstanding........... 30,451 5,216
====== =====
Post's ownership percentage of the Operating
Partnership............................................. 85.4%
======
Minority Interest ownership percentage of the Operating
Partnership............................................. 14.6%
======
(J) Reflects the elimination of Columbus' distribution in excess of accumulated
earnings and treasury stock to paid in capital, as a result of the Merger.
(K) Represents the respective historical statement of operations of Post and
Columbus for the period indicated. Certain reclassifications have been made
to Columbus' Historical Statement of Operations to conform to Post's
Statement of Operations presentation.
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POST PROPERTIES, INC.
NOTES TO UNAUDITED PRO FORMA -- (CONTINUED)
BALANCE SHEET AND STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(L) Represents the net increase in depreciation of real estate owned as a
result of recording Columbus' real estate assets at fair value versus
historical cost. Depreciation is computed on a straight-line basis over the
estimated useful lives of the related assets which have a useful life of
approximately 35 years.
The calculation of the fair value of depreciable real estate assets at June
30, 1997 is as follows:
Historical basis of Columbus' real estate property, net..... $409,838
Plus: Step up to Columbus' real estate property, net (see
Note C)................................................... 176,111
--------
Pro forma basis of Columbus' real estate property at fair
value..................................................... 585,949
Less: Fair value allocated to land.......................... (68,570)
Construction in progress.............................. (73,459)
--------
Pro forma basis of Columbus' depreciable real estate
property at fair value.................................... $443,920
========
Calculation of depreciation of real estate property for the six months
ended June 30, 1997:
Depreciation expense based upon an estimated useful life of
approximately 35 years.................................... $ 6,342
Less: Historic Columbus depreciation of real estate
property.................................................. (6,056)
-------
Pro forma adjustment........................................ $ 286
=======
Calculation of depreciation of real estate property for the year ended
December 31, 1996 is as follows:
Depreciation expense based upon an estimated useful like of
approximately 35 years.................................... $12,683
Less: Historic Columbus depreciation of real estate
property.................................................. 10,257
-------
Pro forma adjustment........................................ $ 2,426
=======
(M) Decrease results from refinancing of Columbus' debt at lower interest
rates.
(N) Decrease results from the elimination of amortization of Columbus' deferred
financing costs, which costs would be eliminated in connection with the
Merger, net of estimated amortization of deferred financing costs for
refinanced debt.
(O) Decrease results from identified historical costs of certain items which
will be eliminated or reduced as a result of the Merger as follows:
Duplication of public company expenses...................... $ 650
Reduction in salaries and benefits.......................... 600
Other....................................................... 200
------
Annual total...................................... $1,450
======
(P) A portion of income was allocated to Minority Interest representing
interests in the Operating Partnership not owned by Post. The pro forma
allocation to Minority Interest is based upon the percentage estimated to
be owned by such Minority Interests as a result of the pro forma
transactions.
(Q) Decrease of Weighted Average Common Shares Outstanding based on the
conversion of Columbus Common Shares to Post Common Stock at a conversion
ratio of 0.615 Columbus Common Shares per Post Common Stock and a par value
of $.01.