PPS | Quote | Chart | News | PowerRating -- Post Properties, Inc. (NYSE: PPS | Quote | Chart | News | PowerRating) announced today net income available
to common shareholders of $50.2 million for the third quarter of 2009,
compared to net income available to common shareholders of $25.2 million
for the third quarter of 2008. On a diluted per share basis, net income
available to common shareholders was $1.13 for the third quarter of
2009, compared to $0.57 for the third quarter of 2008.
The Company reported a net loss attributable to common shareholders of
$0.1 million for the nine months ended September 30, 2009, compared to a
net loss attributable to common shareholders of $1.0 million for the
nine months ended September 30, 2008. On a diluted per share basis, the
net loss attributable to common shareholders was less than $0.01 for the
nine months ended September 30, 2009, compared to $0.02 for the nine
months ended September 30, 2008.
The Company's net income available to common shareholders for the three
months ended September 30, 2009 included net gains of approximately
$54.6 million on the sales of two apartment communities in July 2009,
offset by severance charges of approximately $0.4 million relating to
headcount reductions that were initiated during the third quarter. The
Company's net income available to common shareholders for the three
months ended September 30, 2008 included a net gain of approximately
$23.5 million on the sale of one apartment community, offset by
hurricane casualty losses of approximately $2.8 million and severance
charges totaling approximately $2.2 million.
The Company's net loss attributable to common shareholders for the nine
months ended September 30, 2009 included net gains of approximately
$79.4 million on the sales of three apartment communities and gains of
approximately $2.3 million relating to the early extinguishment of
indebtedness, the mark-to-market of an interest rate swap, and changes
in previous hurricane loss estimates. These gains were offset by
non-cash impairment charges of approximately $76.3 million relating to
the Company's investment in a condominium project and adjacent land and
the severance charges discussed above totaling approximately $0.4
million. The Company's net loss attributable to common shareholders for
the nine months ended September 30, 2008 included net gains of
approximately $25.8 million on the sale of two apartment communities,
offset by non-cash impairment charges of approximately $28.9 million,
hurricane casualty losses of approximately $2.8 million, severance
charges of approximately $2.6 million and approximately $8.2 million in
costs related to the Company's formal process to pursue a business
combination or other sale transaction.
The Company uses the National Association of Real Estate Investment
Trusts ("NAREIT") definition of Funds from Operations ("FFO") as an
operating measure of the Company's financial performance. A
reconciliation of FFO to GAAP net income is included in the financial
data (Table 1) accompanying this press release.
FFO for the third quarter of 2009 was $13.9 million, or $0.31 per
diluted share, compared to $16.1 million, or $0.36 per diluted share,
for the third quarter of 2008. The Company's reported FFO for the third
quarter of 2009 included the severance charges discussed above totaling
approximately $0.4 million, or $0.01 per diluted share, and for the
third quarter of 2008 included the severance charges and hurricane
casualty losses discussed above totaling approximately $5.0 million, or
$0.11 per diluted share.
FFO for the nine months ended September 30, 2009 was a deficit of $28.2
million, or $0.63 per diluted share, compared to FFO of $17.4 million,
or $0.39 per diluted share, for the nine months ended September 30,
2008. The Company's reported FFO for the nine months ended September 30,
2009 included the impairment and severance charges discussed above
totaling approximately $76.7 million, offset by the income items
discussed above totaling approximately $2.3 million, resulting in total
net charges of approximately $74.4 million, or $1.67 per diluted share.
The Company's reported FFO for the nine months ended September 30, 2008
included the charges discussed above in the aggregate of approximately
$42.5 million, or $0.95 per diluted share.
Mature (Same Store) Community Data
Average economic occupancy at the Company's 41 mature (same store)
communities, containing 14,921 apartment units, was 94.5% and 95.2% for
the third quarters of 2009 and 2008, respectively.
Total revenues for the mature communities decreased 6.0% and total
operating expenses decreased 0.1% during the third quarter of 2009,
compared to the third quarter of 2008, resulting in a 10.0% decrease in
same store net operating income ("NOI"). The average monthly rental rate
per unit decreased 5.5% during the third quarter of 2009, compared to
the third quarter of 2008.
On a sequential basis, total revenues for the mature communities
decreased 1.6% and total operating expenses increased 6.1%, producing a
6.7% decrease in same store NOI for the third quarter of 2009, compared
to the second quarter of 2009. On a sequential basis, the average
monthly rental rate per unit decreased 2.6%. For the third quarter of
2009, average economic occupancy at the mature communities was 94.5%,
compared to 93.4% for the second quarter of 2009.
For the nine months ended September 30, 2009, average economic occupancy
at the Company's mature communities was 93.9%, compared to 94.3% for the
nine months ended September 30, 2008.
Total revenues for the mature communities decreased 3.7% and total
operating expenses decreased 4.2% for the nine months ended September
30, 2009, compared to the nine months ended September 30, 2008,
resulting in a 3.3% decrease in same store NOI. The average monthly
rental rate per unit decreased 3.2% for the nine months ended September
30, 2009, compared to the nine months ended September 30, 2008.
Same store NOI is a supplemental non-GAAP financial measure. A
reconciliation of same store NOI to the comparable GAAP financial
measure is included in the financial data (Table 2) accompanying this
press release. Same store NOI and average rental rate per unit by
geographic market is also included in the financial data (Table 3)
accompanying this press release.
Financing Activity
Common Stock Offering and Debt Prepayment
Late in the third quarter, the Company completed a public offering of
4,025,000 shares of its common stock at a price of $17.75 per share. The
offering generated proceeds of approximately $68.0 million after
deducting the underwriting discount and estimated offering expenses
payable by the Company. In October 2009, the Company used a portion of
the net proceeds from the offering to repay approximately $39.2 million
of existing mortgage indebtedness secured by the Company's Post
Fallsgrove property that was scheduled to mature in November 2011, and
to pay an approximately $4.0 million prepayment penalty in connection
the early extinguishment of that debt. The interest rate on the mortgage
indebtedness was 6.1%. The remaining net proceeds from the offering will
be used for general corporate purposes, which may include funding the
Company's development pipeline or the repurchase of its outstanding
preferred stock or senior unsecured notes. In October 2009, the Company
repurchased approximately $6.1 million of its 6.3% senior unsecured
notes due 2013 through open-market repurchases.
Other Financing Activity
Total debt and preferred equity as a percentage of undepreciated real
estate assets (adjusted for joint venture partners' share of debt) was
44.8% at September 30, 2009, and variable rate debt as a percentage of
total debt was 0.8% as of that same date.
As of October 30, 2009, the Company had outstanding borrowings and
letters of credit totaling approximately $3.6 million under its combined
$630 million unsecured lines of credit and held available cash and cash
equivalents of approximately $54 million.
Computations of debt ratios and reconciliations of the ratios to the
appropriate GAAP measures in the Company's financial statements are
included in the financial data (Table 4) accompanying this press release.
Disposition, Development and Other Investment Activity
Disposition Activity
In July 2009, the Company closed the sale of its Post Forest(R) apartment
community located in the greater Washington, D.C. area for a gross sales
price of approximately $57.5 million. Post Forest(R) is a 364-unit
garden-style apartment community located in Fairfax County, VA and was
completed in 1990. The Company recognized a gain on the sale of
approximately $37.3 million in the third quarter of 2009.
The Company also closed in July 2009 the sale of its Post Ridge(R)
apartment community, located in Atlanta, Georgia, for a gross sales
price of approximately $44.8 million. Post Ridge(R) is a 434-unit
garden-style apartment community located in the northwest area of
Atlanta and was completed in 1998. The Company recognized a gain on the
sale of approximately $17.3 million in the third quarter of 2009.
The Company currently has no other apartment communities being marketed
for sale.
Development Activity
As of September 30, 2009, the Company's aggregate pipeline of
development projects under construction and/or in lease-up (before the
impact of impairment charges recorded in the second quarter) totaled
approximately $487 million. As of that same date, approximately $100
million of estimated construction costs remained to be funded by the
Company, including retainage and construction payables. The Company
expects to fund future estimated construction expenditures primarily by
utilizing available cash and cash equivalents and borrowing capacity
under its unsecured revolving lines of credit and under a construction
loan.
Apartment Community Renovation and Remediation Activity
As previously announced, the Company continues its initiative to
remediate communities with stucco exteriors or exterior insulation
finishing systems. The Company currently estimates that the aggregate
cost of this initiative will be approximately $45 million. Through
September 30, 2009, the Company had incurred approximately $23.9 million
of capital expenditures relating to these remediation projects. The
Company expects to fund future estimated remediation expenditures
primarily by utilizing available cash and cash equivalents and borrowing
capacity under its revolving lines of credit.
Condominium Activity
The Company recognized incremental gains in FFO of approximately $0.4
million, net of income tax expense, from condominium sales activities
during the third quarter of 2009 compared to incremental losses in FFO
of approximately $0.2 million during the third quarter of 2008. During
the third quarter of 2009, the Company sold 27 condominium units for
aggregate gross sales revenues of approximately $6.6 million, compared
to 30 condominium units sold in the third quarter of 2008 for aggregate
gross sales revenues of approximately $8.6 million. In October 2009, the
Company completed the sell out of the remaining units at its Mercer
Square(TM) condominium development in a bulk sale transaction totaling 15
units for a gross sales price of approximately $2.2 million.
Legal Matters
On September 28, 2009, the United States District Court for the District
of Columbia dismissed in its entirety the lawsuit filed against the
Company by the Equal Rights Center alleging various violations of the
Fair Housing Act and the Americans with Disabilities Act. In granting
the Company's request to dismiss the suit, the Court held that the
plaintiff lacked standing to bring the claims. Subsequent to the
dismissal, the Company asked the Court to require ERC's attorneys to
reimburse the Company's costs, expenses and attorney's fees incurred in
defending the action. ERC has filed a notice of appeal of the Court's
decision to dismiss the action to the United States Court of Appeals for
the District of Columbia Circuit. The Company's motion and the appeal
are both pending.
2009 Revised Outlook
The estimates and assumptions presented below are forward-looking and
are based on the Company's current and expected future view of the
apartment and condominium markets and general economic conditions, as
well as other risks outlined below under the caption "Forward Looking
Statements." There can be no assurance that the Company's actual results
will not differ materially from the estimates set forth below. The
Company assumes no obligation to update this guidance in the future.
Based on its current outlook, the Company expects that FFO for the full
year 2009 will be a deficit in the range of $0.40 to $0.45 per diluted
share, including net charges totaling $1.72 per diluted share relating
to non-cash impairment charges, severance charges and losses relating to
the early extinguishment of indebtedness, offset by income relating to
the mark-to-market of an interest rate swap and changes in previous
hurricane loss estimates, all as discussed previously in this earnings
release. Excluding the above-mentioned items totaling $1.72 per diluted
share, the revised estimates of $1.27 to $1.32 per diluted share of FFO
are within the Company's previously reported guidance.
The revised estimates include approximately $0.4 million of severance
charges recorded in the third quarter and an approximately $4.0 million
loss on the early extinguishment of indebtedness expected to be reported
in the fourth quarter that were not included in the Company's previously
reported guidance.
The revised estimates also reflect the impact on weighted average shares
outstanding of the Company's recent common stock offering. As previously
announced, the Company may use a portion of the proceeds from its common
stock offering to repurchase its preferred stock or senior unsecured
notes. If the Company does so, it could incur additional charges in the
fourth quarter of 2009 in connection with any repurchases completed in
2009, which charges are not included in its 2009 guidance described
above. Additionally, while the Company's 2009 guidance includes a $76.3
million loss relating to non-cash impairment charges, it does not assume
any additional impairment charges for 2009. The Company continually
evaluates the recoverability of the carrying value of its real estate
assets and there can be no assurance that the Company will not take
additional impairment charges in the future.
The revised estimates also assume that the Company's same store net
operating income for its fiscal year ending December 31, 2009 will be
within the range of its previously reported guidance, as follows:
--
same store revenues are expected to decline by 4.1% to 4.3% for the
full year 2009, compared to 2008,
--
same store operating expenses are expected to decline by 1.9% to 2.5%
for the full year 2009, compared to 2008, and
--
same store net operating income is expected to decline by 5.2% to 5.9%
for the full year 2009, compared to 2008.
Supplemental Financial Data
The Company also produces Supplemental Financial Data that includes
detailed information regarding the Company's operating results,
investment activity, financing activity and balance sheet. This
Supplemental Financial Data is considered an integral part of this
earnings release and is available on the Company's website. The
Company's Earnings Release and the Supplemental Financial Data are
available through the For Investors/Financial Reports/Quarterly and
Other Reports section of the Company's website at www.postproperties.com.
The ability to access the attachments on the Company's website requires
the Adobe Acrobat Reader, which may be downloaded at http://get.adobe.com/reader/.
Non-GAAP Financial Measures and Other Defined Terms
The Company uses certain non-GAAP financial measures and other defined
terms in this press release and in its Supplemental Financial Data
available on the Company's website. The non-GAAP financial measures
include FFO, Adjusted Funds from Operations ("AFFO"), net operating
income, same store capital expenditures, and certain debt statistics and
ratios. The definitions of these non-GAAP financial measures are
summarized below and on page 21 of the Supplemental Financial Data. The
Company believes that these measures are helpful to investors in
measuring financial performance and/or liquidity and comparing such
performance and/or liquidity to other REITs.
Funds from Operations -- The Company uses FFO as an operating
measure. The Company uses the NAREIT definition of FFO. FFO is defined
by NAREIT to mean net income (loss) available to common shareholders
determined in accordance with GAAP, excluding gains (or losses) from
extraordinary items and sales of depreciable operating property, plus
depreciation and amortization of real estate assets, and after
adjustment for unconsolidated partnerships and joint ventures all
determined on a consistent basis in accordance with GAAP. FFO presented
in the Company's press release and Supplemental Financial Data is not
necessarily comparable to FFO presented by other real estate companies
because not all real estate companies use the same definition. The
Company's FFO is comparable to the FFO of real estate companies that use
the current NAREIT definition.
Accounting for real estate assets using historical cost accounting under
GAAP assumes that the value of real estate assets diminishes predictably
over time. NAREIT stated in its April 2002 White Paper on Funds from
Operations that "since real estate asset values have historically risen
or fallen with market conditions, many industry investors have
considered presentations of operating results for real estate companies
that use historical cost accounting to be insufficient by themselves."
As a result, the concept of FFO was created by NAREIT for the REIT
industry to provide an alternate measure. Since the Company agrees with
the concept of FFO and appreciates the reasons surrounding its creation,
the Company believes that FFO is an important supplemental measure of
operating performance. In addition, since most equity REITs provide FFO
information to the investment community, the Company believes that FFO
is a useful supplemental measure for comparing the Company's results to
those of other equity REITs. The Company believes that the line on its
consolidated statement of operations entitled "net income available to
common shareholders" is the most directly comparable GAAP measure to FFO.
Adjusted Funds From Operations -- The Company also uses adjusted
funds from operations ("AFFO") as an operating measure. AFFO is defined
as FFO less operating capital expenditures and after adjusting for the
impact of non-cash straight-line, long-term ground lease expense,
non-cash impairment charges, non-cash income (loss) related to
mark-to-market of interest rate swap agreements, non-cash debt
extinguishment costs and strategic review costs. The Company believes
that AFFO is an important supplemental measure of operating performance
for an equity REIT because it provides investors with an indication of
the REIT's ability to fund its operating capital expenditures through
earnings. In addition, since most equity REITs provide AFFO information
to the investment community, the Company believes that AFFO is a useful
supplemental measure for comparing the Company to other equity REITs.
The Company believes that the line on its consolidated statement of
operations entitled "net income available to common shareholders" is the
most directly comparable GAAP measure to AFFO.
Property Net Operating Income ("NOI") -- The Company uses
property NOI, including same store NOI and same store NOI by market, as
an operating measure. NOI is defined as rental and other revenues from
real estate operations less total property and maintenance expenses from
real estate operations (exclusive of depreciation and amortization). The
Company believes that NOI is an important supplemental measure of
operating performance for a REIT's operating real estate because it
provides a measure of the core operations, rather than factoring in
depreciation and amortization, financing costs and general and
administrative expenses generally incurred at the corporate level. This
measure is particularly useful, in the opinion of the Company, in
evaluating the performance of geographic operations, same store
groupings and individual properties. Additionally, the Company believes
that NOI, as defined, is a widely accepted measure of comparative
operating performance in the real estate investment community. The
Company believes that the line on its consolidated statement of
operations entitled "net income" is the most directly comparable GAAP
measure to NOI.
Same Store Capital Expenditures -- The Company uses same store
annually recurring and periodically recurring capital expenditures as
cash flow measures. Same store annually recurring and periodically
recurring capital expenditures are supplemental non-GAAP financial
measures. The Company believes that same store annually recurring and
periodically recurring capital expenditures are important indicators of
the costs incurred by the Company in maintaining its same store
communities on an ongoing basis. The corresponding GAAP measures include
information with respect to the Company's other operating segments
consisting of communities stabilized in the prior year, lease-up
communities, rehabilitation properties, sold properties and commercial
properties in addition to same store information. Therefore, the Company
believes that the Company's presentation of same store annually
recurring and periodically recurring capital expenditures is necessary
to demonstrate same store replacement costs over time. The Company
believes that the most directly comparable GAAP measure to same store
annually recurring and periodically recurring capital expenditures are
the lines on the Company's consolidated statements of cash flows
entitled "annually recurring capital expenditures" and "periodically
recurring capital expenditures."
Debt Statistics and Debt Ratios -- The Company uses a number of
debt statistics and ratios as supplemental measures of liquidity. The
numerator and/or the denominator of certain of these statistics and/or
ratios include non-GAAP financial measures that have been reconciled to
the most directly comparable GAAP financial measure. These debt
statistics and ratios include: (1) an interest coverage ratio; (2) a
fixed charge coverage ratio; (3) total debt as a percentage of
undepreciated real estate assets (adjusted for joint venture partner's
share of debt); (4) total debt plus preferred equity as a percentage of
undepreciated real estate assets (adjusted for joint venture partner's
share of debt); (5) a ratio of consolidated debt to total assets; (6) a
ratio of secured debt to total assets; (7) a ratio of total unencumbered
assets to unsecured debt; and (8) a ratio of consolidated income
available to debt service to annual debt service charge. A number of
these debt statistics and ratios are derived from covenants found in the
Company's debt agreements, including, among others, the Company's senior
unsecured notes. In addition, the Company presents these measures
because the degree of leverage could affect the Company's ability to
obtain additional financing for working capital, capital expenditures,
acquisitions, development or other general corporate purposes. The
Company uses these measures internally as an indicator of liquidity and
the Company believes that these measures are also utilized by the
investment and analyst communities to better understand the Company's
liquidity.
Average Economic Occupancy -- The Company uses average economic
occupancy as a statistical measure of operating performance. The Company
defines average economic occupancy as gross potential rent less vacancy
losses, model expenses and bad debt expenses divided by gross potential
rent for the period, expressed as a percentage.
Conference Call Information
The Company will hold its quarterly conference call on Tuesday, November
3, at 10:00 a.m. ET. The telephone numbers are 888-686-9703 for US and
Canada callers and 913-981-5532 for international callers. The access
code is 2149705. The conference call will be open to the public and can
be listened to live on Post's website at www.postproperties.com
under For Investors/Event Calendar. The replay will begin at 1:00 p.m.
ET on Tuesday, November 3, and will be available until Monday, November
9, at 11:59 p.m. ET. The telephone numbers for the replay are
888-203-1112 for US and Canada callers and 719-457-0820 for
international callers. The access code for the replay is 2149705. A
replay of the call also will be archived on Post's website under For
Investors/Audio Archive. The financial and statistical information that
will be discussed on the call is contained in this press release and the
Supplemental Financial Data. Both documents will be available through
the For Investors/Financial Reports/Quarterly & Other Reports section of
the Company's website at www.postproperties.com.
About Post
Post Properties, founded more than 38 years ago, is one of the largest
developers and operators of upscale multifamily communities in the
United States. The Company's mission is delivering superior satisfaction
and value to its residents, associates, and investors, with a vision of
being the first choice in quality multifamily living. Operating as a
real estate investment trust ("REIT"), the Company focuses on developing
and managing Post(R) branded resort-style garden and high
density urban apartments. In addition, the Company has also developed
high-quality condominiums and converted existing apartments to for-sale
multifamily communities. Post Properties is headquartered in Atlanta,
Georgia, and has operations in nine markets across the country.
Post Properties owns 19,864 apartment units in 55 communities, including
1,747 apartment units in five communities held in unconsolidated
entities and 1,429 apartment units in four communities currently under
construction and/or in lease-up. The Company is also developing and
selling 277 luxury for-sale condominium homes in two communities
(including 129 units in one community held in an unconsolidated entity)
and is completing the sell out of units in two other condominium
conversion communities through a taxable REIT subsidiary.
Forward Looking Statements
Certain statements made in this press release and other written or oral
statements made by or on behalf of the Company, may constitute
"forward-looking statements" within the meaning of the federal
securities laws. Statements regarding future events and developments and
the Company's future performance, as well as management's expectations,
beliefs, plans, estimates or projections relating to the future, are
forward-looking statements within the meaning of these laws. Examples of
such statements in this press release include expectations with respect
to the Company's anticipated funds from operations and net operating
income for the year ending December 31, 2009, expected use of proceeds
from the Company's common stock offering, anticipated losses on early
extinguishment of indebtedness and the Company's anticipated
development, renovation and remediation activities (including the
projected costs, timing and anticipated potential sources of financing
of projected future development, renovation and remediation activities).
All forward-looking statements are subject to certain risks and
uncertainties that could cause actual events to differ materially from
those projected. Management believes that these forward-looking
statements are reasonable; however, you should not place undue reliance
on such statements. These statements are based on current expectations
and speak only as of the date of such statements. The Company undertakes
no obligation to publicly update or revise any forward-looking
statement, whether as a result of future events, new information or
otherwise.
The following are some of the factors that could cause the Company's
actual results and its expectations to differ materially from those
described in the Company's forward-looking statements: the success of
the Company's business strategies discussed in its Annual Report on Form
10-K dated December 31, 2008 and in subsequent filings with the SEC;
future conditions in the global capital markets, including changes in
the availability of credit and liquidity; future local and national
economic conditions, including changes in levels of employment, interest
rates, the availability of mortgage and other financing and related
factors; a downgrade in the credit rating of the Company's securities;
demand for apartments in the Company's markets and the effect on
occupancy and rental rates; the impact of competition on the Company's
business, including competition for tenants and development locations
for its apartment communities and competing for-sale housing in the
markets where the Company is completing condominium conversions or
developing new condominiums; the uncertainties associated with the
Company's current and planned future real estate development, including
actual costs exceeding the Company's budgets or development periods
exceeding expectations; uncertainties associated with the timing and
amount of asset sales, the market for asset sales and the resulting
gains/losses associated with such asset sales; the Company's ability to
enter into new joint ventures and the availability of equity financing
from traditional real estate investors to fund development activities;
the Company's ability to obtain construction loan financing to fund
development activities; uncertainties associated with the Company's
condominium conversion and for-sale housing business, including the lack
of demand for for-sale housing and the Company's inability to sell
for-sale products at attractive pricing levels; uncertainties associated
with loss of personnel in connection with the Company's reduction of
corporate and property development and management overhead; conditions
affecting ownership of residential real estate and general conditions in
the multifamily residential real estate market; uncertainties associated
with environmental and other regulatory matters; the impact of ongoing
litigation with the Equal Rights Center regarding compliance with the
Americans with Disabilities Act and the Fair Housing Act (including any
award of compensatory or punitive damages or injunctive relief requiring
the Company to retrofit apartments or public use areas or prohibiting
the sale of apartment communities or condominium units) as well as the
impact of other litigation; the effects of changes in accounting
policies and other regulatory matters detailed in the Company's filings
with the Securities and Exchange Commission; the costs of remediating
damage to the Company's communities that have stucco or exterior
insulation finishing systems for potential water penetration and other
related issues; and the Company's ability to continue to qualify as a
real estate investment trust under the Internal Revenue Code. Other
important risk factors regarding the Company are included under the
caption "Risk Factors" in the Company's Annual Report on Form 10-K dated
December 31, 2008 and may be discussed in subsequent filings with the
SEC. The risk factors discussed in Form 10-K under the caption "Risk
Factors" are specifically incorporated by reference into this press
release.
Financial Highlights
(Unaudited; in thousands, except per share and unit amounts)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
OPERATING DATA
Revenues from continuing operations $ 69,388 $ 71,910 $ 207,684 $ 212,173
Net income (loss) attributable to common shareholders $ 50,226 $ 25,167 $ (66 ) $ (1,029 )
Funds (deficit) from operations available to common shareholders $ 13,857 $ 16,136 $ (28,191 ) $ 17,405
and unitholders (Table 1)
Weighted average shares outstanding - diluted 44,220 44,047 44,151 43,976
Weighted average shares and units outstanding - diluted 44,419 44,340 44,363 44,306
PER COMMON SHARE DATA - DILUTED
Net income (loss) attributable to common shareholders $ 1.13 $ 0.57 $ - $ (0.02 )
Funds (deficit) from operations available to common shareholders $ 0.31 $ 0.36 $ (0.63 ) $ 0.39
and unitholders (Table 1) (1)
Dividends declared $ 0.20 $ 0.45 $ 0.60 $ 1.35
(1) Funds (deficit) from operations per share were computed using
weighted average shares and units outstanding, including the
impact of dilutive securities totaling 39 and 110 for the three
months ended and 0 and 242 for the nine months ended September 30,
2009 and 2008, respectively.These dilutive securities were
antidilutive to the computation of income (loss) per share, as the
Company reported a loss from continuing operations for these
periods under generally accepted accounting
principles.Additionally, diluted weighted average shares and
units included the impact of non-vested shares and units totaling
226 and 80 for the three months ended and 215 and 92 for the nine
months ended September 30, 2009 and 2008, respectively, for the
computation of funds (deficit) from operations per share.Such
non-vested shares and units are considered in the income (loss)
per share computations under generally accepted accounting
principles using the "two-class method."
Table 1
Reconciliation of Net Income Available to Common Shareholders to
Funds From Operations Available to Common Shareholders and
Unitholders
(Unaudited; in thousands, except per share amounts)
Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Net income (loss) available to common shareholders $ 50,226 $ 25,167 $ (66 ) $ (1,029 )
Noncontrolling interests - Operating Partnership 248 198 - (8 )
Depreciation on consolidated real estate assets, net 18,284 14,569 52,862 45,851
Depreciation on real estate assets held in unconsolidated entities 352 347 1,052 1,042
Gains on sales of apartment communities (54,624 ) (23,520 ) (79,366 ) (25,831 )
Gains on sales of condominiums (1,069 ) (476 ) (1,041 ) (2,227 )
Incremental gains on condominium sales (1) 440 (149 ) (1,632 ) (393 )
Funds (deficit) from operations available to common $ 13,857 $ 16,136 $ (28,191 ) $ 17,405
shareholders and unitholders
Funds (deficit) from operations - per share and unit - diluted $ 0.31 $ 0.36 $ (0.63 ) $ 0.39
(2)
Weighted average shares and units outstanding - diluted (2) 44,684 44,530 44,578 44,640
(1) For condominium conversion projects, the Company recognizes
incremental gains on condominium sales in FFO, net of provision
for income taxes, to the extent that net sales proceeds, less
costs of sales and expenses, from the sale of condominium units
exceeds the greater of their fair value or net book value as of
the date the property is acquired by the Company's taxable REIT
subsidiary. For condominium development projects, gains on
condominium sales in FFO are equivalent to gains reported under
GAAP. See the table entitled "Summary of Condominium Projects" on
page 15 of the Supplemental Financial Data for further detail.
(2) Diluted weighted average shares and units include the impact
of dilutive securities totaling 39 and 110 for the three months
ended and 0 and 242 for the nine months ended September 30, 2009
and 2008, respectively. These dilutive securities were
antidilutive to the computation of income (loss) per share, as the
Company reported a loss from continuing operations for this period
under generally accepted accounting principles. Additionally,
diluted weighted average shares and units included the impact of
non-vested shares and units totaling 226 and 80 for the three
months ended and 215 and 92 for the nine months ended September
30, 2009 and 2008, respectively, for the computation of funds
(deficit) from operations per share. Such non-vested shares and
units are considered in the income (loss) per share computations
under generally accepted accounting principles using the
"two-class method."
Table 2
Reconciliation of Same Store Net Operating Income (NOI) to GAAP
Net Income
(Unaudited; In thousands)
Three months ended Nine months ended
September 30, September 30, June 30, September 30, September 30,
2009 2008 2009 2009 2008
Total same store NOI $ 32,277 $ 35,845 $ 34,590 $ 101,491 $ 104,984
Property NOI from other operating segments 2,905 1,668 1,593 6,128 2,727
Consolidated property NOI 35,182 37,513 36,183 107,619 107,711
Add (subtract):
Interest income 49 96 23 187 367
Other revenues 298 261 277 801 735
Depreciation (18,787 ) (14,980 ) (18,009 ) (54,388 ) (45,290 )
Interest expense (12,978 ) (12,340 ) (12,241 ) (39,397 ) (34,375 )
Amortization of deferred financing costs (726 ) (869 ) (682 ) (2,342 ) (2,579 )
General and administrative (3,892 ) (3,859 ) (3,964 ) (12,265 ) (13,344 )
Investment and development (1,096 ) (1,509 ) (793 ) (2,886 ) (4,173 )
Other investment costs (697 ) (463 ) (646 ) (1,996 ) (962 )
Strategic review costs - - - - (8,161 )
Impairment, severance and other charges (391 ) (5,002 ) (9,658 ) (10,049 ) (34,302 )
Gains (losses) on sales of real estate assets, net 1,069 476 232 1,041 2,227
Equity in income (loss) of unconsolidated real estate entities (31 ) 260 (74,656 ) (74,577 ) 1,081
Other income (expense), net (472 ) 535 50 637 427
Net gain (loss) on early extinguishment of indebtedness - - (79 ) 819 -
Income (loss) from continuing operations (2,472 ) 119 (83,963 ) (86,796 ) (30,638 )
Income from discontinued operations 54,861 27,344 26,768 84,238 35,691
Net income (loss) $ 52,389 $ 27,463 $ (57,195 ) $ (2,558 ) $ 5,053
Table 3
Same Store Net Operating Income (NOI) and Average Rental Rate per
Unit by Market
(In thousands)
Three months ended Q3 '09 Q3 '09 Q3 '09
September 30, September 30, June 30, vs. Q3 '08 vs. Q2 '09 % Same
2009 2008 2009 % Change % Change Store NOI
Rental and other revenues
Atlanta $ 14,040 $ 15,075 $ 14,422 (6.9 )% (2.6 )%
Dallas 10,766 11,784 10,982 (8.6 )% (2.0 )%
Washington, D.C. 10,192 10,400 10,215 (2.0 )% (0.2 )%
Tampa 6,908 7,141 6,966 (3.3 )% (0.8 )%
Charlotte 4,371 4,937 4,443 (11.5 )% (1.6 )%
New York 3,467 3,809 3,634 (9.0 )% (4.6 )%
Houston 3,074 3,134 3,072 (1.9 )% 0.1 %
Austin 1,206 1,299 1,196 (7.2 )% 0.8 %
Orlando 2,337 2,379 2,362 (1.8 )% (1.1 )%
Total rental and other revenues 56,361 59,958 57,292 (6.0 )% (1.6 )%
Property operating and maintenance expenses (exclusive of
depreciation and amortization)
Atlanta 6,720 6,461 5,958 4.0 % 12.8 %
Dallas 5,147 5,143 4,650 0.1 % 10.7 %
Washington, D.C. 3,647 3,746 3,524 (2.6 )% 3.5 %
Tampa 2,614 2,930 2,866 (10.8 )% (8.8 )%
Charlotte 1,696 1,633 1,588 3.9 % 6.8 %
New York 1,436 1,119 1,206 28.3 % 19.1 %
Houston 1,290 1,464 1,259 (11.9 )% 2.5 %
Austin 573 589 541 (2.7 )% 5.9 %
Orlando 961 1,028 1,110 (6.5 )% (13.4 )%
Total 24,084 24,113 22,702 (0.1 )% 6.1 %
Net operating income
Atlanta 7,320 8,614 8,464 (15.0 )% (13.5 )% 22.7 %
Dallas 5,619 6,641 6,332 (15.4 )% (11.3 )% 17.4 %
Washington, D.C. 6,545 6,654 6,691 (1.6 )% (2.2 )% 20.3 %
Tampa 4,294 4,211 4,100 2.0 % 4.7 % 13.3 %
Charlotte 2,675 3,304 2,855 (19.0 )% (6.3 )% 8.3 %
New York 2,031 2,690 2,428 (24.5 )% (16.4 )% 6.3 %
Houston 1,784 1,670 1,813 6.8 % (1.6 )% 5.5 %
Austin 633 710 655 (10.8 )% (3.4 )% 2.0 %
Orlando 1,376 1,351 1,252 1.9 % 9.9 % 4.2 %
Total same store NOI $ 32,277 $ 35,845 $ 34,590 (10.0 )% (6.7 )% 100.0 %
Average rental rate per unit
Atlanta $ 1,073 $ 1,152 $ 1,114 (6.9 )% (3.6 )%
Dallas 1,047 1,108 1,078 (5.5 )% (2.9 )%
Washington, D.C. 1,780 1,819 1,787 (2.1 )% (0.4 )%
Tampa 1,180 1,250 1,214 (5.6 )% (2.8 )%
Charlotte 1,055 1,188 1,108 (11.2 )% (4.8 )%
New York 3,730 3,911 3,843 (4.6 )% (2.9 )%
Houston 1,247 1,266 1,263 (1.5 )% (1.2 )%
Austin 1,296 1,351 1,325 (4.1 )% (2.2 )%
Orlando 1,307 1,417 1,339 (7.8 )% (2.4 )%
Total average rental rate per unit 1,253 1,326 1,287 (5.5 )% (2.6 )%
Table 3 (con't)
Same Store Net Operating Income (NOI) and Average Rental Rate per
Unit by Market
(In thousands)
Nine months ended
September 30, September 30,
2009 2008 % Change
Rental and other revenues
Atlanta $ 42,981 $ 44,831 (4.1 )%
Dallas 32,937 34,677 (5.0 )%
Washington, D.C. 30,529 30,930 (1.3 )%
Tampa 20,904 21,424 (2.4 )%
Charlotte 13,391 14,633 (8.5 )%
New York 10,775 11,302 (4.7 )%
Houston 9,208 9,235 (0.3 )%
Austin 3,616 3,770 (4.1 )%
Orlando 7,005 7,062 (0.8 )%
Total rental and other revenues 171,346 177,864 (3.7 )%
Property operating and maintenance expenses (exclusive of
depreciation and amortization)
Atlanta 18,743 18,661 0.4 %
Dallas 14,351 15,846 (9.4 )%
Washington, D.C. 10,756 11,003 (2.2 )%
Tampa 8,311 9,223 (9.9 )%
Charlotte 4,859 5,112 (4.9 )%
New York 4,062 3,710 9.5 %
Houston 4,005 4,377 (8.5 )%
Austin 1,675 1,772 (5.5 )%
Orlando 3,093 3,176 (2.6 )%
Total 69,855 72,880 (4.2 )%
Net operating income
Atlanta 24,238 26,170 (7.4 )%
Dallas 18,586 18,831 (1.3 )%
Washington, D.C. 19,773 19,927 (0.8 )%
Tampa 12,593 12,201 3.2 %
Charlotte 8,532 9,521 (10.4 )%
New York 6,713 7,592 (11.6 )%
Houston 5,203 4,858 7.1 %
Austin 1,941 1,998 (2.9 )%
Orlando 3,912 3,886 0.7 %
Total same store NOI $ 101,491 $ 104,984 (3.3 )%
Average rental rate per unit
Atlanta $ 1,107 $ 1,149 (3.7 )%
Dallas 1,073 1,102 (2.6 )%
Washington, D.C. 1,789 1,813 (1.3 )%
Tampa 1,208 1,277 (5.4 )%
Charlotte 1,105 1,187 (6.9 )%
New York 3,837 3,894 (1.5 )%
Houston 1,259 1,248 0.9 %
Austin 1,322 1,334 (0.9 )%
Orlando 1,340 1,443 (7.1 )%
Total average rental rate per unit 1,283 1,326 (3.2 )%
Table 4
Computation of Debt Ratios
(In thousands)
As of September 30,
2009 2008
Total real estate assets per balance sheet $ 2,099,926 $ 2,123,061
Plus:
Company share of real estate assets held in unconsolidated entities 92,185 113,210
Company share of accumulated depreciation - assets held in 8,324 6,499
unconsolidated entities
Accumulated depreciation per balance sheet 605,694 514,029
Accumulated depreciation on assets held for sale - 86,383
Total undepreciated real estate assets (A) $ 2,806,129 $ 2,843,182
Total debt per balance sheet $ 1,056,499 $ 1,043,418
Plus:
Company share of third party debt held in unconsolidated entities 106,969 74,928
Total debt (adjusted for joint venture partners' share of debt) (B) $ 1,163,468 $ 1,118,346
Total debt as a % of undepreciated real estate assets (adjusted 41.5 % 39.3 %
for joint venture partners' share of debt (B/A)
Total debt per balance sheet $ 1,056,499 $ 1,043,418
Plus:
Company share of third party debt held in unconsolidated entities 106,969 74,928
Preferred shares at liquidation value 95,000 95,000
Total debt and preferred equity (adjusted for joint venture $ 1,258,468 $ 1,213,346
partners' share of debt) (C)
Total debt and preferred equity as a % of undepreciated real 44.8 % 42.7 %
estate assets (adjusted for joint venture partners' share of debt) (C/A)
SOURCE: Post Properties, Inc.
Post Properties, Inc.
Chris Papa, 404-846-5028
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