1
EXHIBIT 99
POST PROPERTIES, INC.
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
The Post Properties, Inc. Unaudited Pro Forma Combined Balance Sheet gives
effect to the Merger of Post and Columbus as if the Merger had occurred on
September 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 September 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.
2
POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
PRO FORMA
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(A) HISTORICAL(A) ADJUSTMENTS(B) COMBINED
------------- ------------- -------------- ----------
(IN THOUSANDS)
ASSETS
Real estate assets
Land..................................... $ 151,041 $ 47,588 $ 20,982(C) $ 219,611
Building and improvements................ 747,715 349,530 146,117(C) 1,243,362
Furniture, fixtures and equipment........ 79,236 5,099 84,335
Construction in progress (includes land
on properties under development)...... 243,547 87,715 13,157(C) 344,419
Land held for future development......... 7,108 -- 7,108
---------- -------- -------- ----------
1,228,647 489,932 180,256 1,898,835
Less: accumulated depreciation........... (191,632) (49,898) (241,530)
---------- -------- -------- ----------
Real estate held for investment.......... 1,037,015 440,034 180,256 1,657,305
Cash and cash equivalents................ 2,619 2,240 4,859
Restricted cash.......................... 1,441 477 1,918
Deferred charges, net.................... 10,693 1,200 552 (D) 12,445
Other assets............................. 11,373 18,174 (2,218)(E) 27,329
---------- -------- -------- ----------
Total assets..................... $1,063,141 $462,125 $178,590 $1,703,856
========== ======== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable.............................. $ 510,637 $259,588 $ 22,486(F) $ 792,711
Accrued interest payable................... 8,643 408 9,051
Dividend and distribution payable.......... 16,270 -- 16,270
Accounts payable and accrued expenses...... 37,087 15,690 52,777
Security deposits and prepaid rents........ 5,177 2,348 7,525
Other liabilities.......................... -- 2,063 2,063
---------- -------- -------- ----------
Total liabilities................ 577,814 280,097 22,486 880,397
---------- -------- -------- ----------
Minority interest of unitholders in
Operating Partnership.................... 83,325 -- 29,629(G) 112,954
---------- -------- -------- ----------
Shareholders' equity
Preferred stock.......................... 10 -- 10
Common stock............................. 221 134 (50)(H) 305
Additional paid-in capital................. 401,771 214,647 93,772(I) 710,190
Accumulated earnings(deficit).............. -- (32,733) 32,733(J) -
Treasury stock............................. -- (20) 20(J) -
---------- -------- -------- ----------
Total shareholders' equity....... 402,002 182,028 126,475 710,505
---------- -------- -------- ----------
Total liabilities and
shareholders' equity........... $1,063,141 $462,125 $178,590 $1,703,856
========== ======== ======== ==========
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POST PROPERTIES, INC.
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
AND THE YEAR ENDED DECEMBER 31, 1996
The Post Properties, Inc. Unaudited Pro Forma Combined Statements of
Operations for the nine months ended September 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 nine months ended September 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.
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POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(K) HISTORICAL(K) ADJUSTMENTS COMBINED
------------- ------------- ----------- -----------
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
Revenues:
Rental................................ $ 127,988 $ 41,591 $ 169,579
Property management - third party..... 1,696 109 1,805
Landscape services - third party...... 3,792 -- 3,792
Interest.............................. 30 299 329
Other................................. 4,688 1,851 6,539
---------- ---------- ---------- -----------
Total revenues................ 138,194 43,850 - 182,044
---------- ---------- ---------- -----------
Expenses:
Property operating and maintenance
(exclusive of items shown
separately below).................. 47,366 14,611 61,977
Depreciation (real estate assets)..... 18,897 9,361 300(L) 28,558
Depreciation (non-real estate
assets)............................ 758 221 979
Property management - third party..... 1,302 -- 1,302
Landscape services - third party...... 3,117 -- 3,117
Interest.............................. 16,722 7,995 (1,054)(M) 23,663
Amortization of deferred loan costs... 747 392 (295)(N) 844
General and administrative............ 4,900 1,945 (1,087)(O) 5,758
---------- ---------- ---------- -----------
Total expenses................ 93,809 34,525 (2,136) 126,198
---------- ---------- ---------- -----------
Income before net gain on sale of
assets, minority interest of
unitholders in Operating
Partnership and extraordinary
item............................... 44,385 9,325 2,136 55,846
Net gain on sale of assets............ 3,512 888 4,400
Merger Costs.......................... - (595) 595 (P) -
Minority interest of unitholders in
Operating Partnership.............. (8,562) - 310 (Q) (8,252)
---------- ---------- ---------- -----------
Net income before extraordinary
item............................... 39,335 9,618 3,041 51,994
Dividend to preferred shareholders.... (3,187) -- (3,187)
---------- ---------- ---------- -----------
Net income available to common
shareholders before extraordinary
item............................... $ 36,148 $ 9,618 $ 3,041 $ 48,807
========== ========== ========== ===========
Per common share data - basic:
Weighted average common shares
outstanding -- .................... 22,032,237 30,304,322
========== ===========
Net income available to common
shareholders before extraordinary
item............................... $ 1.64 $ 1.61
========== ===========
Per common share data - diluted:
Weighted average common shares
outstanding -- .................... 22,213,618 30,763,549
========== ==========
Net income available to common
shareholders before extraordinary
item............................... $ 1.63 $ 1.59
========== ===========
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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 2,624(L) 35,557
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 37,318 607 156,034
---------- ---------- ---------- ----------
Income before net gain on sale of
assets, minority interest of
unitholders in Operation
Partnership and extraordinary
item............................. 52,599 11,212 (607) 63,204
Net gain on sale of assets.......... 854 246 1,100
Minority interest of unitholders in
Operating Partnership............ (9,984) -- 836(Q) (9,148)
---------- ---------- ---------- ----------
Net income before extraordinary
item............................. 43,469 11,458 229 55,156
Dividend to preferred
shareholders..................... (1,063) - (1,063)
---------- ---------- ---------- ----------
Net income available to common
shareholders before extraordinary
item............................. $ 42,406 $ 11,458 $ 229 $ 54,093
========== ========== ========== ==========
Per common share data - basic:
Weighted average common shares
outstanding...................... 21,787,648 30,227,494
========== ==========
Net income available to common
shareholders before extraordinary
item............................. $ 1.95 $ 1.79
========== ==========
Per common share data - diluted
Weighted average common shares
outstanding...................... 21,879,248 30,596,940
========== ==========
Net income available to common
shareholders before extraordinary
item............................. $ 1.94 $ 1.77
========== ==========
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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 September 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 $640,715
assuming a market value of $40.09 per share of Post's Common Stock, as
follows:
Issuance of 8,440 shares of Post Common Stock based on the
0.615 exchange for 13,724 Columbus Common Shares, which
includes 260 Columbus Common Shares issued immediately
prior to the Merger....................................... $338,332
Assumption of Columbus' liabilities (including $2,040 of
purchase adjustments)..................................... 282,137
Merger costs (see calculation below)........................ 20,246
--------
$640,715
========
The following is a calculation of the estimated fees and other expenses
related to the Merger:
Buyout of employment agreements............................. $ 8,614
Advisory fees............................................... 7,761
Legal and accounting fees................................... 2,437
Other, including printing, filing and transfer costs........ 1,434
-------
Total............................................. $20,246
=======
(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)................................. $640,715
Less: Historical basis of Columbus' net assets acquired
Real estate assets..................................... (440,034)
Other assets, net of purchase adjustments.............. (20,425)
--------
Step-up to record fair value of Columbus' real estate
assets.................................................... $180,256
========
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
($1,346) net of elimination of Columbus' historical deferred loan costs
($794).
(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........................................... $20,246
Loan costs on refinanced debt............................... 1,346
Prepayment penalties on existing debt....................... 694
Registration costs.......................................... 200
-------
$22,486
=======
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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..................................... $823,459
Less: Equity related to Post's Preferred Stock.............. (48,613)
--------
774,846
Minority Interest percentage ownership in Operating
Partnership (see Note I).................................. 14.6%
--------
Pro Forma Combined Minority Interest ownership in Operating
Partnership............................................... 112,954
Post historical Minority Interest ownership in Operating
Partnership............................................... (83,325)
--------
Adjustment to Minority Interest ownership in Operating
Partnership............................................... $ 29,629
========
(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 8,440 shares of Post Common Stock at $40.09 per
share..................................................... $ 338,332
Less: Par value of Common Stock issued.................... (84)
Registration costs incurred in connection with the
Merger.............................................. (200)
Columbus' historical paid in capital............... (214,647)
Adjustment to Minority Interest in Operating
Partnership (see Note G)........................... (29,629)
---------
$ 93,772
=========
The Minority Interest ownership in Post, is calculated as follows:
SHARES UNITS
------ -----
Columbus' historical Common Shares outstanding............ 13,724
======
Post Common Stock to be issued based on the .615 Merger
exchange ratio.......................................... 8,440
Post's historical Common Stock/Units outstanding.......... 22,128 5,216
------ -----
Post's pro forma Common Stock/Units outstanding........... 30,568 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
September 30, 1997 is as follows:
Historical basis of Columbus' real estate property, net..... $440,034
Plus: Step up to Columbus' real estate property, net (see
Note C)................................................... 180,256
--------
Pro forma basis of Columbus' real estate property at fair
value..................................................... 620,290
Less: Fair value allocated to land.......................... (68,570)
Construction in progress.............................. (100,871)
--------
Pro forma basis of Columbus' depreciable real estate
property at fair value.................................... $450,849
========
Calculation of depreciation of real estate property for the nine months
ended September 30, 1997:
Depreciation expense based upon an estimated useful life of
approximately 35 years.................................... $ 9,661
Less: Historic Columbus depreciation of real estate
property.................................................. (9,361)
-------
Pro forma adjustment........................................ $ 300
=======
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.................................... $12,881
Less: Historic Columbus depreciation of real estate
property.................................................. (10,257)
-------
Pro forma adjustment........................................ $ 2,624
=======
(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) Reflects the elimination of merger costs reflected in Columbus' statement
of operations for the nine months ended September 30, 1997.
(Q) 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.