1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file numbers 1-12080 and 0-28226
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POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1550675
GEORGIA 58-2053632
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3350 CUMBERLAND CIRCLE, SUITE 2200, ATLANTA, GEORGIA 30339
(Address of principal executive offices -- zip code)
(770) 850-4400
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrants (1) have filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days.
Post Properties, Inc. Yes X No
--- ---
Post Apartment Homes, L.P. Yes X No
--- ---
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APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
35,493,140 shares of common stock outstanding as of May 11, 1998.
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2
POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
INDEX
PAGE
----
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
POST PROPERTIES, INC.
Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997................3
Consolidated Statements of Operations for the three months ended
March 31, 1998 and 1997........................................................4
Consolidated Statement of Shareholders' Equity and Accumulated Earnings for the
three months ended March 31, 1998..............................................5
Consolidated Statements of Cash Flows for the three months ended
March 31, 1998 and 1997........................................................6
Notes to Consolidated Financial Statements............................................7
POST APARTMENT HOMES, L.P.
Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997...............10
Consolidated Statements of Operations for the three months ended
March 31, 1998 and 1997.......................................................11
Consolidated Statement of Partners' Equity for the three months ended
March 31, 1998................................................................12
Consolidated Statements of Cash Flows for the three months ended
March 31, 1998 and 1997.......................................................13
Notes to Consolidated Financial Statements ..........................................14
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.........................................................................17
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K...................................................32
SIGNATURES..................................................................................33
3
POST PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31,
1998 1997
---------- ------------
(UNAUDITED)
ASSETS
Real estate:
Land .................................................................. $ 233,595 $ 234,011
Building and improvements ............................................. 1,255,607 1,255,118
Furniture, fixtures and equipment ..................................... 90,979 89,251
Construction in progress .............................................. 427,222 342,071
Land held for future development ...................................... 3,544 15,560
---------- ----------
2,010,947 1,936,011
Less: accumulated depreciation ............................................ (211,658) (201,095)
---------- ----------
Real estate assets .................................................... 1,799,289 1,734,916
Cash and cash equivalents ................................................. 14,430 10,879
Restricted cash ........................................................... 951 1,542
Deferred charges, net ..................................................... 15,506 12,629
Other assets .............................................................. 16,589 20,597
---------- ----------
Total assets .......................................................... $1,846,765 $1,780,563
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable ............................................................. $ 709,435 $ 821,209
Accrued interest payable .................................................. 10,464 7,505
Dividends and distributions payable ....................................... 28,207 21,327
Accounts payable and accrued expenses ..................................... 47,563 53,101
Security deposits and prepaid rents ....................................... 8,372 8,117
---------- ----------
Total liabilities ..................................................... 804,041 911,259
---------- ----------
Minority interest of unitholders in Operating Partnership ................. 118,654 112,384
---------- ----------
Commitments and contingencies
Shareholders' equity
Preferred stock, $.01 par value, 20,000,000 authorized: 8 1/2% Series A
Cumulative Redeemable Shares, liquidation preference $50 per
share, 1,000,000 shares issued and outstanding ................... 10 10
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,
34,231,989 and 30,626,592 shares issued and outstanding at
March 31, 1998 and December 31, 1997, respectively ............... 342 306
Additional paid-in capital ................................................ 923,678 756,584
Accumulated earnings ...................................................... -- --
---------- ----------
Total shareholders' equity ............................................ 924,070 756,920
---------- ----------
Total liabilities and shareholders' equity ............................ $1,846,765 $1,780,563
========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
- 3 -
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POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-----------------------------
1998 1997
----------- -----------
REVENUES
Rental ................................................. $ 64,053 $ 41,581
Property management - third party ...................... 737 569
Landscape services - third party ....................... 1,326 1,054
Interest ............................................... 126 7
Other .................................................. 2,720 1,355
----------- -----------
Total revenues ..................................... 68,962 44,566
----------- -----------
EXPENSES
Property operating and maintenance (exclusive of
items shown separately below) ...................... 23,130 15,201
Depreciation (real estate assets) ...................... 10,415 6,137
Depreciation (non-real estate assets) .................. 345 242
Property management - third party ...................... 584 420
Landscape services - third party ....................... 1,273 901
Interest ............................................... 8,349 5,361
Amortization of deferred loan costs .................... 264 302
General and administrative ............................. 2,233 1,846
Minority interest in consolidated property partnership . 59 --
----------- -----------
Total expenses ..................................... 46,652 30,410
----------- -----------
Income before loss on unused treasury locks, minority
interest of unitholders in Operating Partnership and
extraordinary item ................................. 22,310 14,156
Loss on unused treasury locks .......................... (1,944) --
Minority interest of unitholders in
Operating Partnership .............................. (2,510) (2,515)
----------- -----------
Income before extraordinary item ....................... 17,856 11,641
Extraordinary item, net of minority interest of
unitholders in Operating Partnership ................... -- (75)
----------- -----------
Net income ......................................... 17,856 11,566
Dividend to preferred shareholders ................. (2,566) (1,063)
----------- -----------
Net income available to common shareholders ........ $ 15,290 $ 10,503
=========== ===========
EARNINGS PER COMMON SHARE - BASIC
Income before extraordinary item (net of preferred dividend) $ 0.48 $ 0.48
Extraordinary item .......................................... -- --
----------- -----------
Net income available to common shareholders ................. $ 0.48 $ 0.48
=========== ===========
Weighted average common shares outstanding .................. 31,762,278 21,949,107
=========== ===========
EARNINGS PER COMMON SHARE - DILUTED
Income before extraordinary item (net of preferred dividend) $ 0.47 $ 0.48
Extraordinary item .......................................... -- (0.01)
----------- -----------
Net income available to common shareholders ................. $ 0.47 $ 0.47
=========== ===========
Weighted average common shares outstanding .................. 32,217,089 22,136,234
=========== ===========
Dividends declared .......................................... $ 0.65 $ 0.595
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
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POST PROPERTIES, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
ADDITIONAL
PREFERRED COMMON PAID-IN ACCUMULATED
SHARES SHARES CAPITAL EARNINGS TOTAL
--------- ------ ---------- ----------- ---------
SHAREHOLDERS' EQUITY AND ACCUMULATED
EARNINGS, DECEMBER 31, 1997 ......................... $30 $306 $ 756,584 $ -- $ 756,920
Proceeds from Dividend Reinvestment and
Employee Stock Purchase Plans .............. -- 1 3,798 -- 3,799
Proceeds from sale of common shares, net
of underwriting discount and offering
costs of $7,321 ............................ -- 35 129,144 -- 129,179
Proceeds from sale of preferred shares, net
of underwriting discount and offering
costs of $1,716 ............................ 20 -- 48,264 -- 48,284
Adjustment for minority interest of unitholders
in Operating Partnership at dates of capital
transactions ............................... -- -- (7,151) -- (7,151)
Net income ...................................... -- -- -- 17,856 17,856
Dividends to preferred shareholders ............. -- -- -- (2,566) (2,566)
Dividends to common shareholders ................ -- -- (6,961) (15,290) (22,251)
--- ---- --------- -------- ---------
SHAREHOLDERS' EQUITY AND ACCUMULATED
EARNINGS, MARCH 31, 1998 ............................ $50 $342 $ 923,678 $ -- $ 924,070
=== ==== ========= ======== =========
The accompanying notes are an integral part of these consolidated
financial statements.
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POST PROPERTIES, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------------
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income .................................................................................. $ 17,856 $ 11,566
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on unused treasury locks ...................................................... 1,944 --
Minority interest of unitholders in Operating Partnership .......................... 2,510 2,515
Extraordinary item, net of minority interest of unitholders in Operating Partnership -- 75
Depreciation ....................................................................... 10,760 6,379
Amortization of deferred loan costs ................................................ 264 302
Other .............................................................................. (53) --
Changes in assets, (increase) decrease in:
Restricted cash .................................................................... 591 37
Other assets ....................................................................... 4,008 6,558
Deferred charges ................................................................... (2,520) (117)
Changes in liabilities, increase (decrease) in:
Accrued interest payable ........................................................... 2,959 3,283
Accounts payable and accrued expenses .............................................. (4,677) 2,551
Security deposits and prepaid rents ................................................ 255 73
--------- ---------
Net cash provided by operating activities .............................................. 33,897 33,222
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets, net of payables .................... (65,513) (40,960)
Capitalized interest ................................................................... (3,756) (1,829)
Recurring capital expenditures ......................................................... (1,152) (704)
Corporate additions and improvements ................................................... (880) (444)
Non-recurring capital expenditures ..................................................... (253) (374)
Revenue generating capital expenditures ................................................ (3,289) (1,050)
--------- ---------
Net cash (used in) investing activities ................................................ (74,843) (45,361)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs ............................................................. (1,944) (92)
Debt proceeds .......................................................................... 241,332 86,440
Proceeds from sale of notes ............................................................ 100,000 80,000
Proceeds from issuance of preferred shares ............................................. 48,284 --
Proceeds from issuance of common shares ................................................ 129,179 --
Debt payments .......................................................................... (453,106) (136,033)
Distributions to unitholders ........................................................... (3,104) (2,822)
Proceeds from Dividend Reinvestment and Employee Stock Purchase Plans .................. 3,796 986
Dividends paid to preferred shareholders ............................................... (1,719) (1,063)
Dividends paid to common shareholders .................................................. (18,221) (11,838)
--------- ---------
Net cash provided by financing activities .............................................. 44,497 15,578
--------- ---------
Net increase in cash and cash equivalents .............................................. 3,551 3,439
Cash and cash equivalents, beginning of period ......................................... 10,879 233
--------- ---------
Cash and cash equivalents, end of period ............................................... $ 14,430 $ 3,672
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
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POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. ORGANIZATION AND FORMATION OF THE COMPANY
ORGANIZATION AND FORMATION OF THE COMPANY
Post Properties, Inc. (the "Company"), which was incorporated on
January 25, 1984, is the successor by merger to the original Post
Properties, Inc., a Georgia Corporation which was formed in 1971. The
Company was formed to develop, lease and manage upscale multi-family
apartment communities.
The Company elected to be taxed as a real estate investment trust
("REIT") for Federal income tax purposes beginning with the taxable
year ended December 31, 1993. A REIT is a legal entity which holds real
estate interests and, through payments of dividends to shareholders, in
practical effect is not subject to Federal income taxes at the
corporate level.
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by
the Company's management in accordance with generally accepted
accounting principles for interim financial information and applicable
rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normally recurring adjustments) considered
necessary for a fair presentation have been included. The results of
operations for the three month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the full
year. These financial statements should be read in conjunction with the
Company's audited financial statements and notes thereto included in
the Post Properties, Inc. Annual Report on Form 10-K for the year ended
December 31, 1997.
2. NOTES PAYABLE
The Operating Partnership has established a program for the sale of up
to $344,000 aggregate principal amount of Medium-Term Notes due nine
months or more from date of issue (the "MTN Program"). On March 12,
1998, the Operating Partnership issued $100,000 of 6.85% Mandatory Par
Put Remarketed Securities ("MOPPRS") under the MTN Program. The net
proceeds from the MOPPRS were used to repay outstanding indebtedness.
In connection with the MOPPRS transaction, Merrill Lynch & Co.
purchased an option to remarket the securities as of March 16, 2005
(the "Remarketing Date"). The Operating Partnership will have an
effective borrowing rate through the Remarketing Date of approximately
6.59%. In anticipation of the offering, the Operating Partnership
entered into forward-treasury-lock agreements in the fall of 1997. As a
result of the termination of these agreements, the effective borrowing
rate will be approximately 6.85%, the coupon rate on the MOPPRS. As of
March 31, 1998, the Operating Partnership had $231,000 aggregate
principal amount of notes outstanding under the MTN Program.
3. EXTRAORDINARY ITEM
The extraordinary item for the three months ended March 31, 1997
resulted from costs associated with the early extinguishment of
indebtedness. The extraordinary item is net of minority interest of
unitholders of $18, calculated on the basis of weighted average units
and shares outstanding for the period.
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POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
4. EARNINGS PER SHARE
For the three months ended March 31, 1998 and 1997, basic and diluted
earnings per common share for income before extraordinary item, net of
preferred dividends, and net income available to common shareholders
before extraordinary item has been computed as follows:
THREE MONTHS ENDED
MARCH 31, 1998
---------------------------------------------
INCOME SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
Income before extraordinary item .............. $ 17,856
Less: Preferred stock dividends ............... (2,566)
--------
BASIC EPS
Income available to common shareholders
before extraordinary item .................. 15,290 31,762,278 $0.48
=====
EFFECT OF DILUTIVE SECURITIES
Options ....................................... -- 454,811
-------- ----------
DILUTED EPS
Income available to common shareholders
plus assumed conversion before extraordinary
item ....................................... $ 15,290 32,217,089 $0.47
======== ========== =====
THREE MONTHS ENDED
MARCH 31, 1997
---------------------------------------------
INCOME SHARES PER SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
Income before extraordinary item .............. $ 11,641
Less: Preferred stock dividends ............... (1,063)
--------
BASIC EPS
Income available to common shareholders
before extraordinary item .................. 10,578 21,949,107 $0.48
=====
EFFECT OF DILUTIVE SECURITIES
Options ....................................... -- 187,127
-------- ----------
DILUTED EPS
Income available to common shareholders
plus assumed conversion before extraordinary
item ....................................... $ 10,578 22,136,234 $0.48
======== ========== =====
5. SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash investing and financing activities for the three months ended
March 31, 1998 and 1997 are as follows:
(a) During the three months ended March 31, 1998, holders
of eight Units in Post Apartment Homes, L.P. (the
"Operating Partnership") exercised their option to
convert their units to shares of Common Stock of the
Company on a one-for-one basis. The net effect of
these conversions and adjustments to minority
interest for the dilutive impact of the Common Stock
Offering and the Dividend Reinvestment and Employee
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POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Stock Purchase Plans was a reclassification increasing minority
interest and decreasing shareholders' equity in the amount of $7,151
for the three months ended March 31, 1998.
(b) The Operating Partnership committed to distribute
$25,641 and $16,169 for the quarters ended March 31,
1998 and 1997, respectively. As a result, the Company
declared a dividend of $.65 and $.595 per common
share or $22,251 and $13,065 for the quarters ended
March 31, 1998 and 1997, respectively. The remaining
distributions from the Operating Partnership in the
amount of $3,390 and $3,104, respectively, were
distributed to minority interest unitholders in the
Operating Partnership.
6. SUBSEQUENT EVENTS
On April 8, 1998, the Operating Partnership sold $50,000 of Remarketed
Reset Notes due April 7, 2009. The notes bear an interest rate of LIBOR
plus the applicable spread for the first year they are outstanding,
with the spread being reset quarterly. The initial spread is equal to
.40%. Net proceeds in the amount $49,825 were used to pay down the
outstanding balance on the Revolver. The Company entered into an
interest rate swap to hedge the rate for the entire term of the note.
On April 29, 1998, the Company sold approximately 1.1 million shares of
its common stock to Merrill Lynch & Co. at a price of $40.5625 per
share. The shares have been deposited into a registered unit investment
trust, the Equity Investor Fund Cohen & Steers Realty Majors
Portfolio(Unit Investment Trust). Net proceeds in the amount of $44,059
were used to pay down the outstanding balance on the Revolver.
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POST APARTMENT HOMES, L.P.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
MARCH 31, DECEMBER 31,
1998 1997
---------- ------------
(UNAUDITED)
ASSETS
Real estate:
Land ................................. $ 233,595 $ 234,011
Building and improvements ............ 1,255,607 1,255,118
Furniture, fixtures and equipment .... 90,979 89,251
Construction in progress ............. 427,222 342,071
Land held for future development ..... 3,544 15,560
---------- ----------
2,010,947 1,936,011
Less: accumulated depreciation ........... (211,658) (201,095)
---------- ----------
Operating real estate assets ......... 1,799,289 1,734,916
Cash and cash equivalents ................ 14,430 10,879
Restricted cash .......................... 951 1,542
Deferred charges, net .................... 15,506 12,629
Other assets ............................. 16,589 20,597
---------- ----------
Total assets ......................... $1,846,765 $1,780,563
---------- ----------
LIABILITIES AND PARTNERS' EQUITY
Notes payable ............................ $ 709,435 $ 821,209
Accrued interest payable ................. 10,464 7,505
Distributions payable .................... 28,207 21,327
Accounts payable and accrued expenses .... 47,563 53,101
Security deposits and prepaid rents ...... 8,372 8,117
---------- ----------
Total liabilities .................... 804,041 911,259
---------- ----------
Commitments and contingencies
Partners' equity ......................... 1,042,724 869,304
---------- ----------
Total liabilities and partners' equity $1,846,765 $1,780,563
---------- ----------
The accompanying notes are an integral part of these consolidated
financial statements.
- 10 -
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POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
-------------------------------
1998 1997
----------- -----------
REVENUES
Rental ........................................................... $ 64,053 $ 41,581
Property management - third party ................................ 737 569
Landscape services - third party ................................. 1,326 1,054
Interest ......................................................... 126 7
Other ............................................................ 2,720 1,355
----------- -----------
Total revenues ............................................... 68,962 44,566
----------- -----------
EXPENSES
Property operating and maintenance (exclusive of ................. 23,130 15,201
items shown separately below)
Depreciation (real estate assets) ................................ 10,415 6,137
Depreciation (non-real estate assets) ............................ 345 242
Property management - third party ................................ 584 420
Landscape services - third party ................................. 1,273 901
Interest ......................................................... 8,349 5,361
Amortization of deferred loan costs .............................. 264 302
General and administrative ....................................... 2,233 1,846
Minority interest in consolidated property partnership ........... 59 --
----------- -----------
Total expenses ............................................... 46,652 30,410
----------- -----------
Income before loss on unused treasury locks and extraordinary item 22,310 14,156
Loss on unused treasury locks .................................... (1,944) --
----------- -----------
Income before extraordinary item ................................. 20,366 14,156
Extraordinary item ............................................... -- (93)
----------- -----------
Net income ................................................... 20,366 14,063
Distributions to preferred unitholders ....................... (2,566) (1,063)
----------- -----------
Net income available to common unitholders ................... $ 17,800 $ 13,000
=========== ===========
EARNINGS PER COMMON UNIT - BASIC
Income before extraordinary item (net of preferred distributions) $ 0.48 $ 0.48
Extraordinary item ............................................... -- --
----------- -----------
Net income available to common unitholders ....................... $ 0.48 $ 0.48
=========== ===========
Weighted average common units outstanding ........................ 36,977,423 27,167,244
=========== ===========
EARNINGS PER COMMON UNIT - DILUTED
Income before extraordinary item (net of preferred distributions) $ 0.47 $ 0.48
Extraordinary item ............................................... -- (0.01)
----------- -----------
Net income available to common unitholders ............................ $ 0.47 $ 0.47
=========== ===========
Weighted average common units outstanding ............................. 37,432,234 27,354,371
=========== ===========
Distributions declared ................................................ $ 0.65 $ 0.595
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
- 11 -
12
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENT OF PARTNERS' EQUITY
(DOLLARS IN THOUSANDS)
(UNAUDITED)
GENERAL LIMITED
PARTNER PARTNERS TOTAL
------- ---------- ----------
PARTNERS' EQUITY, DECEMBER 31, 1997 ...................... $ 9,085 $ 860,219 $ 869,304
Contributions from the Company related to Dividend
Reinvestment and Employee Stock Purchase Plans 38 3,761 3,799
Contributions from the Company related to the sale
of common shares ............................. 1,292 127,887 129,179
Contributions from the Company related to the sale
of preferred shares .......................... -- 48,284 48,284
Distributions to preferred unitholders ............ -- (2,566) (2,566)
Distributions to common unitholders ............... (256) (25,386) (25,642)
Net income ........................................ 204 20,162 20,366
------- ---------- ----------
PARTNERS' EQUITY, MARCH 31, 1998 ......................... $10,363 $1,032,361 $1,042,724
======= ========== ==========
The accompanying notes are an integral part of these consolidated
financial statements.
- 12 -
13
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------------
1998 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ........................................................................... $ 20,366 $ 14,063
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on unused treasury locks ............................................... 1,944 --
Extraordinary item .......................................................... -- 93
Depreciation ................................................................ 10,760 6,379
Amortization of deferred loan costs ......................................... 264 302
Write-off fully amortized assets ............................................ (53) --
Changes in assets, (increase) decrease in:
Restricted cash ............................................................. 591 37
Other assets ................................................................ 4,008 6,558
Deferred charges ............................................................ (2,520) (117)
Changes in liabilities, increase (decrease) in:
Accrued interest payable .................................................... 2,959 3,283
Accounts payable and accrued expenses ....................................... (4,677) 2,551
Security deposits and prepaid rents ......................................... 255 73
--------- ---------
Net cash provided by operating activities ....................................... 33,897 33,222
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets, net of payables ............. (65,513) (40,960)
Capitalized interest ............................................................ (3,756) (1,829)
Recurring capital expenditures .................................................. (1,152) (704)
Corporate additions and improvements ............................................ (880) (444)
Non-recurring capital expenditures .............................................. (253) (374)
Revenue generating capital expenditures ......................................... (3,289) (1,050)
--------- ---------
Net cash (used in) investing activities ......................................... (74,843) (45,361)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs ...................................................... (1,944) (92)
Debt proceeds ................................................................... 241,332 86,440
Proceeds from sale of notes ..................................................... 100,000 80,000
Proceeds from issuance of preferred units ....................................... 48,284 --
Proceeds from issuance of common units .......................................... 129,179 --
Debt payments ................................................................... (453,106) (136,033)
Proceeds from contributions from PPI related to Dividend Reinvestment
and Employee Stock Purchase Plans ........................................... 3,796 986
Distributions paid to preferred unitholders ..................................... (1,719) (1,063)
Distributions paid to common unitholders ........................................ (21,325) (14,660)
--------- ---------
Net cash provided by financing activities ....................................... 44,497 15,578
--------- ---------
Net increase in cash and cash equivalents ....................................... 3,551 3,439
Cash and cash equivalents, beginning of period .................................. 10,879 233
--------- ---------
Cash and cash equivalents, end of period ........................................ $ 14,430 $ 3,672
========= ---------
The accompanying notes are an integral part of these consolidated
financial statements.
- 13 -
14
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
1. ORGANIZATION AND FORMATION OF THE COMPANY
ORGANIZATION AND FORMATION OF THE COMPANY Post Apartment Homes, L.P.
(the "Operating Partnership"), a Georgia limited partnership, was
formed on January 22, 1993, to conduct the business of developing,
leasing and managing upscale multi-family apartment communities for
Post Properties, Inc. (the "Company").
The Company elected to be taxed as a real estate investment trust
("REIT") for Federal income tax purposes beginning with the taxable
year ended December 31, 1993. A REIT is a legal entity which holds real
estate interests and, through payments of dividends to shareholders, in
practical effect is not subject to Federal income taxes at the
corporate level.
BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by
the Company's management in accordance with generally accepted
accounting principles for interim financial information and applicable
rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting only of normally recurring adjustments) considered
necessary for a fair presentation have been included. The results of
operations for the three month period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the full
year. These financial statements should be read in conjunction with the
Company's audited financial statements and notes thereto included in
the Post Apartment Homes, L.P. Annual Report on Form 10-K for the year
ended December 31, 1997.
2. NOTES PAYABLE
The Operating Partnership has established a program for the sale of up
to $344,000 aggregate principal amount of Medium-Term Notes due nine
months or more from date of issue (the "MTN Program"). On March 12,
1998, the Operating Partnership issued $100,000 of 6.85% Mandatory Par
Put Remarketed Securities ("MOPPRS") under the MTN Program. The net
proceeds from the MOPPRS were used to repay outstanding indebtedness.
In connection with the MOPPRS transaction, Merrill Lynch & Co.
purchased an option to remarket the securities as of March 16, 2005
(the "Remarketing Date"). The Operating Partnership will have an
effective borrowing rate through the Remarketing Date of approximately
6.59%. In anticipation of the offering, the Operating Partnership
entered into forward-treasury-lock agreements in the fall of 1997. As a
result of the termination of these agreements, the effective borrowing
rate will be approximately 6.85%, the coupon rate on the MOPPRS. As of
March 31, 1998, the Operating Partnership had $231,000 aggregate
principal amount of notes outstanding under the MTN Program.
3. EXTRAORDINARY ITEM
The extraordinary item for the nine months ended March 31, 1997
resulted from costs associated with the early extinguishment of
indebtedness.
- 14 -
15
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
4. EARNINGS PER UNIT
For the three months ended March 31, 1998 and 1997, basic and diluted
earnings per common unit for income before extraordinary item, net of
preferred distributions, and net income available to common unitholders
before extraordinary item has been computed as follows:
THREE MONTHS ENDED
MARCH 31, 1998
-------------------------------------------
INCOME UNITS PER UNIT
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- --------
Income before extraordinary item .............. $ 20,366
Less: Preferred stock distributions ........... (2,566)
--------
BASIC EPS
Income available to common unitholders
before extraordinary item .................. 17,800 36,977,423 $0.48
=====
EFFECT OF DILUTIVE SECURITIES
Options ....................................... -- 454,811
-------- ----------
DILUTED EPS
Income available to common unitholders
plus assumed conversion before extraordinary
item ....................................... $ 17,800 37,432,234 $0.47
======== ========== =====
THREE MONTHS ENDED
MARCH 31, 1997
-------------------------------------------
INCOME UNITS PER UNIT
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- --------
Income before extraordinary item .............. $ 14,156
Less: Preferred stock distributions ........... (1,063)
--------
BASIC EPS
Income available to common unitholders
before extraordinary item .................. 13,093 27,167,244 $0.48
=====
EFFECT OF DILUTIVE SECURITIES
Options ....................................... -- 187,127
-------- ----------
DILUTED EPS
Income available to common unitholders
plus assumed conversion before extraordinary
item ....................................... $ 13,093 27,354,371 $0.48
======== ========== =====
5. SUPPLEMENTAL CASH FLOW INFORMATION
The Operating Partnership committed to distribute $25,641 and $16,169
for the quarters ended March 31, 1998 and 1997, respectively.
- 15 -
16
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
6. SUBSEQUENT EVENTS
On April 8, 1998, the Operating Partnership sold $50,000 of Remarketed
Reset Notes due April 7, 2009. The notes bear an interest rate of LIBOR
plus the applicable spread for the first year they are outstanding,
with the spread being reset quarterly. The initial spread is equal to
.40%. Net proceeds in the amount of $49,825 were used to pay down the
outstanding balance on the Revolver. The Company entered into an
interest rate swap to hedge the rate for the entire term of the note.
On April 29, 1998, the Company issued approximately 1.1 million shares
of its common stock at a price of $40.5625 per share. The shares have
been deposited into a registered unit investment trust, the Equity
Investor Fund Cohen & Steers Realty Majors Portfolio(Unit Investment
Trust). Net proceeds in the amount of $44,059 were contributed to the
Operating Partnership and used to pay down the outstanding balance on
the Revolver.
- 16 -
17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with all of the financial
statements appearing elsewhere in this report. The following discussion is based
primarily on the Consolidated Financial Statements of Post Properties, Inc. (the
"Company") and Post Apartment Homes, L.P. (the "Operating Partnership"). Except
for the effect of minority interest in the Operating Partnership, the following
discussion with respect to the Company is the same for the Operating
Partnership.
As of March 31, 1998, there were 39,447,713 units in the Operating Partnership
outstanding, of which 34,231,989, or 86.8%, were owned by the Company and
5,215,724, or 13.2% were owned by other limited partners (including certain
officers and directors of the Company). As of March 31, 1998, there were
5,000,000 Perpetual Preferred Units outstanding, all of which were owned by the
Company.
On October 24, 1997 Columbus Realty Trust ("Columbus"), a Texas real estate
investment trust, was merged into a wholly owned subsidiary of the Company.
Pursuant to the merger agreement, each outstanding share of Columbus common
stock was converted into .615 shares of common stock of the Company, which
resulted in the issuance of approximately 8,400 shares of common stock of the
Company.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
The Company recorded net income available to common shareholders of $15,290 for
the three months ended March 31, 1998, an increase of 45.6% over the
corresponding period in 1997 primarily as a result of the merger with Columbus
and additional units placed in service through the development of new
communities.
COMMUNITY OPERATIONS
The Company's net income is generated primarily from the operation of its
apartment communities. For purposes of evaluating comparative operating
performance, the Company categorizes its operating communities based on the
period each community reaches stabilized occupancy. A community is generally
considered by the Company to have achieved stabilized occupancy on the earlier
to occur of (i) attainment of 95% physical occupancy on the first day of any
month or (ii) one year after completion of construction.
As of March 31, 1998, the Company's portfolio of apartment communities consisted
of the following: (i) 64 communities which were completed and stabilized for all
of the current and prior year, (ii) nine communities which achieved full
stabilization during the prior year and (iii) 11 communities in the development
or lease-up stage.
For communities with respect to which construction is completed and the
community has become fully operational, all property operating and maintenance
expenses are expensed as incurred and those recurring and non-recurring
expenditures relating to acquiring new assets, materially enhancing the value of
an existing asset, or substantially extending the useful life of an existing
asset are capitalized. (See "Capitalization of Fixed Assets and Community
Improvements").
The Company has adopted an accounting policy related to communities in the
development and lease-up stage whereby substantially all operating expenses
(including pre-opening marketing expenses) are expensed as incurred. 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
- 17 -
18
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
capitalized and reflected on the balance sheet as construction in progress. Once
a unit is placed in service, all operating expenses allocated to that unit,
including interest, are expensed as incurred. During the lease-up phase, the sum
of interest expense on completed units and other operating expenses (including
pre-opening marketing expenses) will typically exceed rental revenues, resulting
in a "lease-up deficit," which continues until such time as rental revenues
exceed such expenses.
Therefore, in order to evaluate the operating performance of its communities,
the Company has presented financial information which summarizes the operating
income on a comparative basis for all of its operating communities combined and
for communities which have reached stabilization prior to January 1, 1997. The
Company has also presented quarterly financial information reflecting the
dilutive impact of lease-up deficits incurred for communities in the development
and lease-up stage and not yet operating at break-even. In this presentation,
only those communities which were dilutive during the period are included and,
accordingly, different communities may be included in each period.
- 18 -
19
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
ALL OPERATING COMMUNITIES
The operating performance for all of the Company's apartment communities
combined for the three months ended March 31, 1998 and 1997 is summarized as
follows:
THREE MONTHS ENDED
MARCH 31,
---------------------------------------
1998 1997 % CHANGE
------- -------- --------
Rental and other revenue:
Mature communities (1) .................................................. $51,616 $ 49,892 3.5%
Adjustment for acquired mature communities (2) .......................... -- (10,815) N/M
Communities stabilized during 1997 ................................... 6,917 408 N/M
Development and lease-up
communities (3) ...................................................... 6,107 1,802 N/M
Sold communities (4) ................................................... -- 966 N/M
Other revenue (5) ....................................................... 2,133 683 212.3%
------- --------
66,773 42,936 55.5%
------- --------
Property operating and maintenance expense (exclusive of depreciation and
amortization):
Mature communities (1) ................................................. 16,045 15,708 2.2%
Adjustment for acquired mature communities (2) .......................... -- (3,664) N/M
Communities stabilized during 1997 ...................................... 2,004 345 N/M
Development and lease-up
communities (3) ...................................................... 3,037 682 N/M
Sold communities (4) .................................................... -- 360 N/M
Other expenses (6) ...................................................... 2,044 1,770 15.5%
------- --------
23,130 15,201 52.2%
------- --------
Revenue in excess of specified
expense .............................................................. $43,643 $ 27,735 57.4%
======= ========
Recurring capital expenditures: (7)
Carpet ............................................................... $ 583 $ 319 82.8%
Other ................................................................ 569 385 47.8%
------- --------
Total ................................................................ $ 1,152 $ 704 63.6%
======= ========
Average apartment units in service ...................................... 26,462 18,266 44.9%
======= ========
Recurring capital expenditures per
apartment unit ....................................................... $ 44 $ 39 12.8%
======= ========
(1) Communities which reached stabilization prior to January 1, 1997.
Includes mature communities acquired through the merger with Columbus.
(2) The adjustment for acquired mature communities represents the
operating results of the mature communities owned by Columbus prior to
the merger.
(3) Communities in the "construction", "development" or "lease-up" stage
during 1996 and, therefore, not considered fully stabilized for all of
the periods presented.
(4) Includes one community, containing 416 units, which was sold on May 22,
1997.
(5) Other revenue includes revenue from furnished apartment rentals above
the unfurnished rental rates, revenue from commercial properties and
other revenue not directly related to property operations.
(6) Other expenses includes certain indirect central office operating
expenses related to management, grounds maintenance, costs associated
with furnished apartment rentals and operating expenses from commercial
properties.
(7) In addition to those expenses which relate to property operations, the
Company incurs recurring and non-recurring expenditures relating to
acquiring new assets, materially enhancing the value of an existing
asset, or substantially extending the useful life of an existing asset,
all of which are capitalized.
N/M - Not meaningful.
- 19 -
20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
For the three months ended March 31, 1998, rental and other revenue increased
$23,837, or 55.5% compared to the same period in the prior year primarily as a
result of an increase in units placed in service through the merger with
Columbus ($18,737) and the completion of new communities. For the three months
ended March 31, 1998, property operating and maintenance expenses increased
$7,929, or 52.2% compared to the same period in the prior year, primarily as a
result of an increase in the number of units placed in service through the
merger with Columbus ($6,296) and the completion of new communities.
For the three months ended March 31, 1998, recurring capital expenditures
increased $448, or 63.6%, compared to the same period in the prior year,
primarily due to the increase in the average number of apartment units in
service as a result of the merger with Columbus and the completion of new
communities.
- 20 -
21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
MATURE COMMUNITIES
The Company defines mature communities as those which have reached stabilization
prior to the beginning of the previous calendar year.
The operating performance of the 64 communities containing an aggregate of
21,819 units which were fully stabilized as of January 1, 1997, is summarized as
follows:
THREE MONTHS ENDED
MARCH 31,
----------------------------------------
1998 1997 % CHANGE
------- -------- --------
Rental and other revenue (1) ........................... $51,616 $ 49,892 3.5%
------- --------
Adjustment for acquired mature communities (2) ......... -- (10,815) N/M
------- --------
Rental and other revenue (3) ........................... 51,616 39,077 32.1%
------- --------
Property operating and maintenance expense
(exclusive of depreciation and
amortization) (1) ................................... 16,045 15,708 2.2%
Adjustment for acquired mature communities (2) ......... -- (3,664) N/M
------- --------
Property operating and maintenance expense (exclusive of
depreciation and amortization) - historical (3) ..... 16,045 12,044 33.2%
------- --------
Revenue in excess of specified expense ................. $35,571 $ 27,033 31.6%
======= ========
Recurring capital expenditures: (4)
Carpet ............................................ $ 414 $ 308 34.4%
Other ............................................. 417 323 29.1%
------- --------
Total ......................................... $ 831 $ 631 31.7%
======= ========
Recurring capital expenditures per
apartment unit (5) .................................. $ 38 $ 37 2.7%
======= ========
Average economic occupancy (6) ......................... 96.3% 93.7% 2.6%
------- --------
Average monthly rental rate per
apartment unit (7) ................................... $ 806 $ 796 1.3%
======= ========
Apartment units in service ............................. 21,819 16,937 28.8%
======= ========
(1) Communities which reached stabilization prior to January 1, 1997.
Includes mature communities acquired through the merger with Columbus.
(2) The adjustment for acquired mature communities represents the
operations results of the mature communities owned by Columbus prior to
the merger. This adjustment was included to reduce the rental and other
revenue of mature communities to the historical results in order to
provide a more meaningful analysis of the mature communities results.
(3) Represents the Company's historical results of operations for mature
communities.
(4) In addition to those expenses which relate to property operations, the
Company incurs recurring and non-recurring expenditures relating to
acquiring new assets, materially enhancing the value of an existing
asset, or substantially extending the useful life of an existing asset,
all of which are capitalized.
(5) In addition to such capitalized expenditures, the Company expensed $144
and $126 per unit on building maintenance (inclusive of direct
salaries) and $42 and $47 per unit on landscaping (inclusive of direct
salaries) for the three months ended March 31, 1998 and 1997,
respectively.
(6) Average economic occupancy is defined as gross potential rent less
vacancy losses, model expenses and bad debt 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 94.6% and 93.0%
- 21 -
22
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
for the three months ended March 31, 1998 and 1997, respectively. For
the three months ended March 31, 1998 and 1997, concessions were $788
and $190, respectively, and employee discounts were $111 and $86,
respectively. For the three months ended March 31, 1997, average
economic occupancy for all mature communities, including mature
communities acquired through the merger with Columbus, was 94.3%.
(7) Average monthly rental rate is defined as the average of the gross
actual rental rates for occupied units and the anticipated rental rates
for unoccupied units.
N/M - Not meaningful.
For the three months ended March 31, 1998, rental and other revenue increased
$12,539, or 32.1%, compared to the same period in the prior year, due to
increase in units in service as a result of the merger with Columbus and
increased rental rates and occupancy for mature communities owned prior to the
merger with Columbus. For the three months ended March 31, 1998, property
operating and maintenance expenses (exclusive of depreciation and amortization)
increased $4,001, or 33.2%, compared to the same period in the prior year,
primarily as a result of an increase in units in service as a result of the
merger with Columbus.
For the three months ended March 31, 1998, recurring capital expenditures per
apartment unit decreased $7, or 15.6% compared to the same periods in the prior
year, primarily due to the timing of carpet replacements and other recurring
capital expenditures for communities.
LEASE-UP DEFICITS
As noted in the overview of Community Operations, the Company has adopted an
accounting policy related to communities in the development and lease-up stage
whereby substantially all operating expenses (including pre-opening marketing
expenses) are expensed as incurred. 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
as well as other construction costs are capitalized and reflected on the balance
sheet as construction in progress. Once a unit is placed in service, all
expenses allocated to that unit, including interest, are expensed as incurred.
During the lease-up phase, the sum of interest expense on completed units and
other operating expenses (including pre-opening marketing expenses) will
typically exceed rental revenues, resulting in a "lease-up deficit," which
continues until rental revenues exceed such expenses.
In this presentation, only those communities which were dilutive for the
respective period are included and, accordingly, different communities may be
included in different quarters.
For the three months ended March 31, 1998 and 1997, respectively, the "lease-up
deficit" charged to and included in results of operations is summarized as
follows:
THREE MONTHS ENDED
MARCH 31,
--------------------
1998 1997
------ -----
Rental and other revenue ............................... $1,123 $ 117
Property operating and maintenance expense (exclusive of
depreciation and amortization) ...................... 1,315 207
------ -----
Revenue (expense) in excess of specified
expense/revenue ..................................... (192) (90)
Interest expense ....................................... 629 89
------ -----
Lease-up deficit ....................................... $ (821) $(179)
====== =====
- 22 -
23
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
THIRD PARTY SERVICES
THIRD PARTY MANAGEMENT SERVICES
The Company provides asset management, leasing and other consulting services to
non-related owners of apartment communities through its subsidiary, RAM
Partners, Inc. ("RAM"). The operating performance of RAM for the three months
ended March 31, 1998 and 1997 is summarized as follows:
THREE MONTHS ENDED
MARCH 31,
-----------------------------------
1998 1997 %CHANGE
------- ------ -------
Property management and other
revenue ....................... $ 737 $ 554 33.0%
Property management expense ...... 408 295 38.3%
General and administrative expense 176 103 70.9%
Depreciation expense ............. 10 14 (28.6)%
------- ------
Revenue in excess of specified
expense ........................ $ 143 $ 142 0.7%
======= ======
Average apartment units managed .. 10,764 7,775 38.4%
======= ======
The increase in property management revenues and expenses for the three months
ended March 31, 1998 compared to the same periods in the prior year is primarily
attributable to an increase in the average number of units managed. The increase
in general and administrative expense is primarily due to start-up costs of the
new contracts attained in the first quarter of 1998.
THIRD PARTY LANDSCAPE SERVICES
The Company provides landscape maintenance, design and installation services to
non-related parties through a subsidiary, Post Landscape Services, Inc. ("Post
Landscape Services").
The operating performance of Post Landscape Services for the three months ended
March 31, 1998 and 1997 is summarized as follows:
THREE MONTHS ENDED
MARCH 31,
----------------------------------
1998 1997 % CHANGE
------ ------ --------
Landscape services and other
revenue ......................... $1,326 $1,054 25.8%
Landscape services expense ....... 1,060 756 40.2%
General and administrative expense 213 145 46.9%
Depreciation expense ............. 25 25 --
------ ------
Revenue in excess of specified
expense ........................ $ 28 $ 128 (78.1)%
====== ======
- 23 -
24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
The increase in landscape services revenue and expenses for the three months
ended March 31, 1998, compared to the same periods in 1997 is primarily due to
increases in landscape contracts. General and administrative expense increased
due to costs incurred in preparation for future growth plans.
OTHER REVENUES AND EXPENSES
Depreciation expense $4,381, or 68.7% and interest expense increased $2,988, or
55.7% from the three months ended March 31, 1997 to the three months ended March
31, 1998 primarily as a result of the merger with Columbus.
General and administrative expense increased from the three months ended March
31, 1997 to the three months ended March 31, 1998 primarily due to the merger
with Columbus. General and administrative expense as a percent of total revenues
decreased from 4.1% for the three months ended March 31, 1997 to 3.2% for the
three months ended March 31, 1998.
The loss on unused treasury locks of $1,944 resulted from the termination of
treasury locks intended for debt securities that were not issued by the
Operating Partnership.
The extraordinary item of $75 for the three months ended March 31, 1997, net of
minority interest portion, resulted from the costs associated with the early
retirement of debt.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company's net cash provided by operating activities increased from $33,222
for the three months ended March 31, 1997 to $33,897 for the three months ended
March 31, 1998, principally due to the increase in net income (primarily as a
result of the merger with Columbus) as adjusted for depreciation offset by
changes in accrued assets and liabilities. Net cash used in investing activities
increased from $45,361 in the three months ended March 31, 1997 to $74,843 in
the three months ended March 31, 1998, principally due to an increase in
construction spending. The Company's net cash provided by financing activities
increased from $15,578 in the three months ended March 31, 1997 to $44,497 in
the three months ended March 31, 1998, primarily due to increased debt proceeds
and proceeds from the sale of preferred stock and common stock.
The Company has elected to be taxed as a Real Estate Investment Trust ("REIT")
under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended,
commencing with its taxable year ended December 31, 1993. REITs are subject to a
number of organizational and operational requirements, including a requirement
that they currently distribute 95% of their ordinary taxable income. The Company
generally will not be subject to Federal income tax on net income.
- 24 -
25
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
At March 31, 1998, the Company had total indebtedness of $709,435 and cash and
cash equivalents of $14,430. The Company's indebtedness includes approximately
$32,907 in conventional mortgages payable secured by individual communities,
tax-exempt bond indebtedness of $230,528, senior unsecured notes of $406,000 and
borrowings under unsecured lines of credit of approximately $40,000.
The Company expects to meet its short-term liquidity requirements generally
through its net cash provided by operations and borrowings under credit
arrangements and expects to meet certain of its long-term liquidity
requirements, such as scheduled debt maturities, repayment of financing of
construction and development activities and possible property acquisitions,
through long-term secured and unsecured borrowings and the issuance of debt
securities or additional equity securities of the Company, sales of communities,
or, possibly in connection with acquisitions of land or improved properties,
units of the Operating Partnership. The Company believes that its net cash
provided by operations will be adequate and anticipates that it will continue to
be adequate to meet both operating requirements and payment of dividends by the
Company in accordance with REIT requirements in both the short and the long
term. The budgeted expenditures for improvements and renovations to certain of
the communities are expected to be funded from property operations.
Lines Of Credit
The Company has two unsecured lines of credit totaling $220,000. At March 31,
1998, borrowings under these lines of credit were approximately $40,000.
Medium Term Notes
The Operating Partnership has established a program for the sale of up to
$344,000 aggregate principal amount of Medium-Term Notes due nine months or more
from date of issue (the "MTN Program"). On March 12, 1998, the Operating
Partnership issued $100,000 of 6.85% Mandatory Par Put Remarketed Securities
("MOPPRS") under the MTN Program. The net proceeds from the MOPPRS were used to
repay outstanding indebtedness. In connection with MOPPRS transaction, Merrill
Lynch & Co. purchased an option to remarket the securities as of March 16, 2005
(the "Remarketing Date"). The Operating Partnership will have an effective
borrowing rate through the Remarketing Rate of approximately 6.59%. In
anticipation of the offering, the Operating Partnership entered into
forward-treasury-lock agreements in the fall of 1997. As a result of the
termination of these agreements, the effective borrowing rate will be
approximately 6.85%, the coupon rate on the MOPPRS. As of March 31, 1998, the
Operating Partnership had $231,000 aggregate principle amount of notes
outstanding under the MTN Program.
On April 8, 1998, the Operating Partnership sold $50,000 of Remarketed Reset
Notes due April 7, 2009. The notes bear an interest rate of LIBOR plus the
applicable spread for the first year they are outstanding, with the spread being
reset quarterly. The initial spread is equal to .40%. Net proceeds in the amount
$49,825 were used to pay down the outstanding balance on the Revolver. The
Company entered into an interest rate swap to hedge the rate for the entire
term of the note.
Tax Exempt Bonds
On June 29, 1995, the Company replaced the bank letters of credit providing
credit enhancement for twelve of its outstanding tax-exempt bonds and three of
its economically defeased tax-exempt bonds. Under an agreement with the Fannie
Mae ("FNMA"), FNMA now provides, directly or indirectly through other bank
letters of credit, credit enhancement with respect to such bonds. Under the
terms of such agreement, FNMA has provided replacement credit enhancement
through 2025 for 14 bond issues, aggregating $217,230, which were reissued, and
has agreed, subject to certain conditions, to provide credit enhancement through
June 1, 2025 for up to an additional $18,650 with respect to one other bond
issue which matures and may be refunded in 1998. The agreement with FNMA
contains representations, covenants, and events of default customary to such
secured loans.
- 25 -
26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
Refundable Tax Exempt Bonds The Company has previously issued tax-exempt bonds,
secured by certain communities, totaling $235,880 of which $5,352 has been
economically defeased, leaving $230,528 of principal amount of tax-exempt bonds
outstanding at March 31, 1998 of which $217,230 of the bonds outstanding has
been reissued with a maturity of June 1, 2025. The remaining outstanding bond,
together with the economically defeased portion of the bond, matures and may be
reissued during the second quarter 1998. The Company has chosen economic
defeasance of the bond obligation rather than a legal defeasance in order to
preserve the legal right to refund such obligation on a tax-exempt basis at the
stated maturity if the Company then determines that such refunding is
beneficial.
The following table shows the amount of bonds (both defeased and outstanding) at
March 31, 1998, which the Company may reissue during the years 1998 and 2025:
DEFEASED OUTSTANDING TOTAL REISSUE
PORTION PORTION CAPACITY
-------- ----------- -------------
1998 $5,352 $ 13,298 $ 18,650
2025 -- 217,230 217,230
------ -------- --------
$5,352 $230,528 $235,880
------ -------- --------
- 26 -
27
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
Schedule of Indebtedness
The following table reflects the Company's indebtedness at March 31, 1998:
Maturity Principal
Description Location Interest Rate Date(1) Balance
- --------------------------------------------- ------------- ---------------------------- ------------ ---------
TAX EXEMPT FIXED RATE (SECURED)
Post Court(R)................................ Atlanta, GA 7.5% + .575% (2)(3) 06/01/98 (4) $13,298
-------
13,298
-------
CONVENTIONAL FIXED RATE (SECURED)
Post Hillsboro Village....................... Nashville, TN 9.20% 10/01/01 2,999
Parkwood Townhomes(TM)....................... Dallas, TX 7.375% 04/01/14 851
-------
3,850
CONVENTIONAL FLOATING RATE
Addison Circle Apartment Homes
by Post(TM)- Phase I.................... Dallas, TX LIBOR + .75% 06/01/99 21,724
The Rice..................................... Houston, TX LIBOR + 1.90% 08/01/99 7,333
-------
29,057
TAX EXEMPT FLOATING RATE (SECURED)
Post Ashford(R)Series 1995................... Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 9,895
Post Valley(R)Series 1995.................... Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 18,600
Post Brook(R)Series 1995..................... Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 4,300
Post Village(R)(Atlanta) Hills
Series 1995................................ Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 7,000
Post Mill(R)Series 1995...................... Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 12,880
Post Canyon(R)Series 1996.................... Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 16,845
Post Corners(R)Series 1996................... Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 14,760
Post Bridge(R)............................... Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 12,450
Post Village(R)(Atlanta) Gardens............. Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 14,500
Post Chase(R)................................ Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 15,000
Post Walk(R)................................. Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 15,000
Post Lake(R)................................. Orlando, FL "AAA" NON-AMT + .575% (2)(3) 06/01/25 28,500
Post Fountains at Lee Vista(R)............... Orlando, FL "AAA" NON-AMT + .575% (2)(3) 06/01/25 21,500
Post Village(R)(Atlanta) Fountains
and Meadows............................ Atlanta, GA "AAA" NON-AMT + .575% (2)(3) 06/01/25 26,000
--------
217,230
--------
SENIOR NOTES (UNSECURED)
Medium Term Notes............................ N/A 6.22% 12/31/99 16,000
Medium Term Notes............................ N/A LIBOR + .25% 03/03/00 30,000
Northwestern Mutual Life..................... N/A 8.21% 06/07/00 30,000
Medium Tern Notes............................ N/A 7.02% 04/02/01 37,000
Northwestern Mutual Life..................... N/A 8.37% 06/07/02 20,000
Senior Notes................................. N/A 7.25% 10/01/03 100,000
Medium Term Notes............................ N/A 7.30% 04/01/04 13,000
Medium Term Notes............................ N/A 6.69% 09/22/04 10,000
Medium Term Notes............................ N/A 6.78% 09/22/05 25,000
Senior Notes................................. N/A 7.50% 10/01/06 25,000
Mandatory Par Put Remarketed Securities ..... N/A 6.85% (5) 03/16/15 100,000
--------
406,000
--------
28
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
LINES OF CREDIT (UNSECURED)
Revolver .................................. N/A LIBOR + .675% or prime minus .25% (6) 04/30/01 20,000
Cash Management Line....................... N/A LIBOR + .675% or prime minus .25% 03/31/99 20,000
--------
40,000
TOTAL...................................... $709,435
--------
(1) All of the mortgages can be prepaid at any time, subject to certain
prepayment penalties.
(2) Bond financed (interest rate on bonds + credit enhancement fees).
(3) These bonds are cross collateralized. The Company has purchased an
interest rate cap that limits the Company's exposure to increases in
the base rate to 5%.
(4) Subject to certain conditions at re-issuance, the credit enhancement
runs to June 1, 2025.
(5) The annual interest rate on these securities to March 16, 2005 (the
"Remarketing Date") is 6.85%. On the Remarketing Date, they are subject
to mandatory tender for remarketing.
(6) Represents stated rate. The Company may also make "money market" loans
of up to $100,000 at rates below the stated rate.
Preferred Stock Offering
On February 9, 1998, the Company issued two million non-convertible 7 5/8%
Series C Cumulative Redeemable Shares (the "Series C Perpetual Preferred
Shares") at a price of $25 per share. Net proceeds of $48,284 from the sale of
Series C Perpetual Preferred Shares were contributed to the Operating
Partnership in exchange for two million Series C Perpetual Preferred Units and
used by the Operating Partnership to repay outstanding indebtedness.
Common Stock Offering
On March 4, 1998, the Company issued 3.5 million shares of common stock to the
public. The net proceeds from this offering of $129,179 were contributed to the
Operating Partnership in exchange for 3.5 million common units and used by the
Operating Partnership to repay outstanding indebtedness. Proceeds from this
offering were used to repay outstanding indebtedness under the Revolver.
On April 29, 1998, the Company issued approximately 1.1 million shares of its
common stock at a price of $40.5625 per share. The shares have been deposited
into a registered unit investment trust, the Equity Investor Fund Cohen & Steers
Realty Majors Portfolio (Unit Investment Trust). Net proceeds in the amount of
$44,059 were used to pay down the outstanding balance on the Company's Revolver.
Dividend Reinvestment Plan
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of the
Company. Under the DRIP, shareholders may elect for their dividends to be used
to acquire additional shares of the Company's Common Stock directly from the
Company for 95% of the market price on the date of purchase. For the three
months ended March 31, 1998, contributions from the DRIP were $3,015.
- 28 -
29
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
Current Development Activity
The Company's apartment communities under development or in initial lease-up are
summarized in the following table:
ACTUAL OR ACTUAL OR UNITS
ESTIMATED ESTIMATED LEASED
QUARTER OF QUARTER QUARTER AS OF
# OF CONSTRUCTION FIRST UNITS OF STABILIZED MAY 11,
METROPOLITAN AREA UNITS COMMENCEMENT AVAILABLE OCCUPANCY 1998
- ----------------- ----- ------------ ----------- ------------- -------
Atlanta, GA
- -----------
Post Lindbergh(TM) ........... 396 3Q'96 3Q'97 1Q'99 216
Post Gardens(R) .............. 397 3Q'96 4Q'97 1Q'99 216
Riverside by Post(TM) ........ 536 3Q'96 2Q'98 1Q'00 31
Post River(R)- Phase II ...... 88 1Q'97 4Q'97 2Q'98 60
Post Ridge(TM) ............... 232 1Q'97 4Q'97 4Q'98 130
Post Ridge II ................ 202 2Q'98 4Q'98 2Q'99 n/a
Post Briarcliff(TM)- Phase I . 388 2Q'97 1Q'98 2Q'99 57
----- ---
2,239 710
----- ---
Tampa, FL
- ---------
Post Rocky Point(R)- Phase III 290 2Q'97 2Q'98 1Q'99 n/a
Post Harbour Island(TM) ...... 206 3Q'97 3Q'98 2Q'99 n/a
----- ---
496 n/a
----- ---
Dallas, TX
- ----------
Addison Circle - Phase II .... 473 4Q'97 1Q'99 1Q'00 n/a
American Beauty Mill ......... 80 2Q'97 2Q'98 3Q'98 42
Block 580 .................... 204 4Q'97 4Q'98 2Q'99 n/a
----- ---
757 42
----- ---
Houston, TX
- -----------
Rice Hotel ................... 312 1Q'97 2Q'98 4Q'98 228
Midtown - Phase I ............ 479 1Q'98 1Q'99 4Q'99 n/a
----- ---
791 228
----- ---
Denver, CO
- ----------
Denver Uptown ................ 467 4Q'97 1Q'99 1Q'00 n/a
----- ---
Phoenix, AZ
- -----------
Deck Park .................... 416 4Q'98 3Q'99 3Q'00 n/a
----- ---
5,166 980
----- ---
The Company is also currently conducting feasibility and other pre-development
studies for possible new Post(R) communities in its primary market areas.
- 29 -
30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
Capitalization of Fixed Assets and Community Improvements
The Company has established a policy of capitalizing those expenditures relating
to acquiring new assets, materially enhancing the value of an existing asset, or
substantially extending the useful life of an existing asset. All expenditures
necessary to maintain a community in ordinary operating condition are expensed
as incurred. During the first five years of a community (which corresponds to
the estimated depreciable life), carpet replacements are expensed as incurred.
Thereafter, carpet replacements are capitalized.
Acquisition of assets and community improvement expenditures for the three
months ended March, 31 1998 and 1997 are summarized as follows:
THREE MONTHS ENDED
MARCH 31,
----------------------
1998 1997
------- -------
New community development and acquisition activity ......... $69,269 $42,789
Non-recurring capital expenditures:
Revenue generating additions and improvements ........ 3,289 1,050
Other community additions and improvements ........... 253 374
Recurring capital expenditures:
Carpet replacements .................................. 582 319
Community additions and improvements ................. 570 385
Corporate additions and improvements ................. 880 444
------- -------
$74,843 $45,361
======= =======
INFLATION
Substantially all of the leases at the communities allow, at the time of
renewal, for adjustments in the rent payable thereunder, and thus may enable the
Company to seek increases in rents. The substantial majority of these leases are
for one year or less and the remaining leases are for up to two years. At the
expiration of a lease term, the Company's lease agreements provide that the term
will be extended unless either the Company or the lessee gives at least sixty
(60) days written notice of termination; in addition, the Company's policy
permits the earlier termination of a lease by a lessee upon thirty (30) days
written notice to the Company and the payment of one month's additional rent as
compensation for early termination. The short-term nature of these leases
generally serves to reduce the risk to the Company of the adverse effect of
inflation.
- 30 -
31
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
Historical Funds from Operations
The Company considers funds from operations ("FFO") an appropriate measure of
performance of an equity REIT. Funds from operations is defined to mean net
income (loss) available to common shareholders determined in accordance with
GAAP, excluding gains (or losses) from debt restructuring and sales of property,
plus depreciation of real estate assets, and after adjustment for unconsolidated
partnerships and joint ventures. FFO should not be considered as an alternative
to net income (determined in accordance with GAAP) as an indicator of the
Company's financial performance or to cash flow from operating activities
(determined in accordance with GAAP) as a measure of the Company's liquidity,
nor is it necessarily indicative of sufficient cash flow to fund all of the
Company's needs. Cash available for distribution ("CAD") is defined as FFO less
capital expenditures funded by operations and loan amortization payments. The
Company believes that in order to facilitate a clear understanding of the
consolidated historical operating results of the Company, FFO and CAD should be
examined in conjunction with net income as presented in the consolidated
financial statements and data included elsewhere in this report.
FFO and CAD for the three months ended March 31, 1998 and 1997 presented on a
historical basis are summarized in the following table:
Calculations of Funds from Operations and Cash Available for Distribution
THREE MONTHS ENDED
MARCH 31,
-------------------------------
1998 1997
----------- -----------
Net income available to common shareholders ....................... $ 15,290 $ 10,503
Extraordinary item, net of minority interest ................. -- 75
Minority interest ............................................ 2,510 2 ,515
Loss on unused treasury locks ................................ 1,944 --
----------- -----------
Adjusted net income ............................................... 19,744 13,093
Depreciation of real estate assets .............................. 10,415 6,137
----------- -----------
Funds from Operations (1) ......................................... 30,159 19,230
Recurring capital expenditures (2) ................................ (1,152) (704)
Non-recurring capital expenditures (3) ............................ (253) (374)
Loan amortization payments ........................................ (18) (59)
----------- -----------
Cash Available for Distribution ................................... $ 28,736 $ 18,093
=========== -----------
Revenue generating capital expenditures (4) ....................... $ 3,289 $ 1,050
=========== ===========
Cash Flow Provided By (Used In):
Operating activities .............................................. $ 33,897 $ 33,222
Investing activities .............................................. $ 74,843 $ (45,361)
Financing activities .............................................. $ 44,497 $ 15,578
Weighted average common shares outstanding - basic ................ 31,762,278 21,949,107
----------- ===========
Weighted average common shares and units outstanding - basic ...... 36,977,423 27,167,244
----------- ===========
Weighted average common shares outstanding - diluted .............. 32,217,089 22,136,234
=========== ===========
Weighted average common shares and units outstanding - diluted .... 37,432,234 27,354,371
=========== ===========
- 31 -
32
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
(1) The Company uses the National Association of Real Estate Investment
Trusts ("NAREIT") definition of FFO which was adopted for periods
beginning after January 1, 1996. FFO for any period means the
Consolidated Net Income of the Company and its subsidiaries for such
period excluding gains or losses from debt restructuring and sales of
property plus depreciation of real estate assets, and after adjustment
for unconsolidated partnerships and joint ventures, all determined on a
consistent basis in accordance with generally accepted accounting
principles. FFO presented herein is not necessarily comparable to FFO
presented by other real estate companies due to the fact that not all
real estate companies use the same definition. However, the Company's
FFO is comparable to the FFO of real estate companies that use the
current NAREIT definition.
(2) Recurring capital expenditures consisted primarily of $582 and $319 of
carpet replacement and $570 and $385 of other additions and
improvements to existing communities for the three months ended March
31, 1998 and 1997, respectively. Since the Company does not add back
the depreciation of non-real estate assets in its calculation of FFO,
capital expenditures of $880 and $444 for the three months ended March
31, 1998 and 1998, respectively, are excluded from the calculation of
CAD.
(3) Non-recurring capital expenditures consisted of community additions and
improvements of $253 and $374 for the three months ended March 31, 1998
and 1997, respectively.
(4) Revenue generating capital expenditures included a major renovation of
four communities in the amount of $2,861, for the three months ended
March 31, 1998 and one community in the amount of $961 for the three
months ended March 31, 1997, and submetering of water service to
communities in the amount of $428 and $89 for the three months ended
March 31, 1998 and 1997, respectively.
- 32 -
33
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule for the Company - First Quarter 1998 (for SEC
filing purposes only)
27.2 Restated Financial Data Schedule for the Company - First Quarter 1997
(for SEC filing purposes only)
27.3 Financial Data Schedule for the Operating Partnership - First Quarter
1998 (for SEC filing purposes only)
27.4 Restated Financial Data Schedule for the Operating Partnership - First
Quarter 1997 (for SEC filing purposes only)
The registrants agree to furnish a copy of all agreements relating to
long-term debt upon request of the Commission.
(b) Reports on Form 8-K
Reports on Form 8-K filed by each registrant on February 9, 1998,
February 26, 1998, March 3, 1998 and March 16, 1998.
- 33 -
34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
POST PROPERTIES, INC.
May 15, 1998 /s/ John T. Glover
- ------------ -----------------------------
(Date) John T. Glover, President
(Principal Financial Officer)
May 15, 1998 /s/ R. Gregory Fox
- ------------ -----------------------------
(Date) R. Gregory Fox
Senior Vice President, Chief
Accounting Officer
- 34 -
35
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
POST APARTMENT HOMES L.P.
By: Post GP Holdings, Inc., as General Partner
May 15, 1998 /s/ John T. Glover
- ------------ ----------------------------------------------
(Date) John T. Glover, President
(Principal Financial Officer)
May 15, 1998 /s/ R. Gregory Fox
- ------------ ----------------------------------------------
(Date) R. Gregory Fox
Senior Vice President, Chief
Accounting Officer
- 35 -