POST APARTMENT HOMES LP - 10-Q Quarterly Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(X BOX) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

(BOX) 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

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.)

4401 Northside Parkway, Suite 800, Atlanta, Georgia 30327
(Address of principal executive offices – zip code)

(404) 846-5000
(Registrant's telephone number, including area code)

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

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.

36,905,291 shares of common stock outstanding as of August 12, 2002 (excluding treasury stock).

TABLE OF CONTENTS


PART I FINANCIAL INFORMATION
	ITEM 1 FINANCIAL STATEMENTS
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY AND ACCUMULATED EARNINGS
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS
		CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY
		CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
PART II. OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS
	ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS
	ITEM 5. OTHER INFORMATION
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
	SIGNATURES
Section 906 Certification of the CEO
Section 906 Certification of the CFO

POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.

INDEX

Part I	FINANCIAL INFORMATION	Page

	Item 1 Financial Statements

	POST PROPERTIES, INC.
	Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001	1
	Consolidated Statements of Operations for the three and six months ended June 30, 2002 and 2001	2
	Consolidated Statement of Shareholders’ Equity and Accumulated Earnings for the six months ended June 30, 2002	3
	Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and 2001	4
	Notes to Consolidated Financial Statements	5

	POST APARTMENT HOMES, L.P.
	Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001	14
	Consolidated Statements of Operations for the three and six months ended June 30,2002 and 2001	15
	Consolidated Statement of Partners’ Equity and for the six months ended June 30, 2002	16
	Consolidated Statements of Cash Flows for the six months ended June 30, 2002 and 2001	17
	Notes to Consolidated Financial Statements	18

	Item 2 Management's Discussion and Analysis of Financial Condition and results of Operations	26
	Item 3 Quantitative and Qualitative Disclosures about Market Risk	39

Part II	OTHER INFORMATION	40

	Item 1 Legal proceedings
	Item 2 Changes in Securities and Use of Proceeds
	Item 3 Defaults Upon Senior Securities
	Item 4 Submission of matters to a Vote of Security-Holder
	Item 5 Other Information
	Item 6 Exhibits and Reports on Form 8-K

	Signatures	41

POST PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)

	June 30, 2002			December 31, 2001

	(Unaudited)
Assets
Real estate assets
Land	$	270,920		$	277,146
Building and improvements		1,888,235			1,794,658
Furniture, fixtures and equipment		231,400			212,390
Construction in progress		216,292			419,449
Investments in and advances to unconsolidated real estate entities		154,919			89,692
Land held for future development		25,526			23,658

		2,787,292			2,816,993
Less: accumulated depreciation		(399,386	)		(393,014	)
Assets held for sale		40,731			39,419

Total real estate assets		2,428,637			2,463,398
Cash and cash equivalents		9,527			4,803
Restricted cash		1,123			1,315
Deferred charges, net		17,927			18,203
Other assets		49,912			50,632

Total assets	$	2,507,126		$	2,538,351


Liabilities and shareholders' equity
Notes payable	$	1,338,317		$	1,336,520
Accrued interest payable		8,898			9,660
Dividend and distribution payable		33,245			33,208
Accounts payable and accrued expenses		66,485			72,277
Security deposits and prepaid rents		8,576			9,016

Total liabilities		1,455,521			1,460,681


Minority interest of preferred unitholders in Operating Partnership		70,000			70,000

Minority interest of common unitholders in Operating Partnership		102,717			106,153

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, 900,000 shares issued and outstanding at June 30, 2002 and December 31, 2001, respectively		9			9
7 % Series B Cumulative Redeemable Shares, liquidation preference $25 per share, 2,000,000 shares issued and outstanding		20			20
7 % Series C Cumulative Redeemable Shares, liquidation preference $25 per share, 2,000,000 shares issued and outstanding		20			20
Common stock, $.01 par value, 100,000,000 authorized: 39,676,204 and 39,676,204 shares issued, 36,905,021 and 36,856,559 shares outstanding at June 30, 2002 and December 31, 2001, respectively		396			396
Additional paid-in capital		989,741			1,010,954
Accumulated earnings		–			–
Accumulated other comprehensive income		(8,588	)		(5,864	)
Deferred compensation		(810	)		(445	)

		980,788			1,005,090
Less common stock in treasury, at cost, 2,771,183 shares and 2,819,645 shares at June 30, 2002 and December 31, 2001, respectively		(101,900	)		(103,573	)

Total shareholders' equity		878,888			901,517

Total liabilities and shareholders' equity	$	2,507,126		$	2,538,351


The accompanying notes are an integral part of these consolidated financial statements.

-1-

POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

	Three months ended June 30,						Six months ended June 30,

	2002			2001			2002			2001

Revenues
Rental	$	79,803		$	87,842		$	161,303		$	177,507
Interest		281			503			686			987
Other		3,353			4,072			6,228			7,523
Third party services		–			4,353			–			7,959

Total revenues		83,437			96,770			168,217			193,976


Expenses
Property operating and maintenance		33,007			33,080			66,796			66,600
Depreciation		21,645			17,740			42,275			34,504
Interest		14,231			13,803			27,953			27,833
Amortization of deferred loan costs		569			490			1,123			942
General and administrative		3,720			3,357			7,486			6,646
Minority interest in consolidated property partnerships		(460	)		(537	)		(943	)		(817	)
Third party services		–			3,729			–			6,927

Total expenses		72,712			71,662			144,690			142,635


Income from continuing operations before gains on property sales and minority interest		10,725			25,108			23,527			51,341
Gains on property sales		–			15,660			13,275			15,771
Minority interest of preferred unitholders		(1,400	)		(1,400	)		(2,800	)		(2,800	)
Minority interest of common unitholders		(803	)		(4,294	)		(3,430	)		(6,879	)

Income from continuing operations		8,522			35,074			30,572			57,433


Discontinued operations
Income from discontinued operations, net of minority interest		515			1,117			2,215			2,206
Gains on property sales, net of minority interest		16,146			–			9,415			–

Income from discontinued operations		16,661			1,117			11,630			2,206


Income before cumulative effect of accounting change and extraordinary items		25,183			36,191			42,202			59,639
Cumulative effect of accounting change, net of minority interest		–			–			–			(613	)
Extraordinary items, net of minority interest		(120	)		(77	)		(120	)		(77	)

Net income		25,063			36,114			42,082			58,949
Dividends to preferred shareholders		(2,863	)		(2,969	)		(5,725	)		(5,938	)

Net income available to common shareholders	$	22,200		$	33,145		$	36,357		$	53,011


Earnings per common share - basic
Income from continuing operations (net of preferred dividends)	$	0.15		$	0.83		$	0.67		$	1.33
Income from discontinued operations		0.45			0.03			0.32			0.06

Income before cumulative effect of accounting change and extraordinary items (net of preferred dividends)		0.60			0.86			0.99			1.39
Cumulative effect of accounting change, net of minority interest		–			–			–			(0.02	)
Extraordinary items, net of minority interest		–			–			–			–

Net income available to common shareholders	$	0.60		$	0.86		$	0.99		$	1.37

Weighted average common shares outstanding - basic		36,904,954			38,653,625			36,890,139			38,750,350


Earnings per common share - diluted
Income from continuing operations (net of preferred dividends)	$	0.15		$	0.83		$	0.67		$	1.32
Income from discontinued operations		0.45			0.02			0.31			0.06

Income before cumulative effect of accounting change and extraordinary items (net of preferred dividends)		0.60			0.85			0.98			1.38
Cumulative effect of accounting change, net of minority interest		–			–			–			(0.02	)
Extraordinary items, net of minority interest		–			–			–			–

Net income available to common shareholders	$	0.60		$	0.85		$	0.98		$	1.36

Weighted average common shares outstanding - diluted		36,981,334			38,884,223			36,975,168			38,995,749

Dividends declared	$	0.78		$	0.78		$	1.56		$	1.56


The accompanying notes are an integral part of these consolidated financial statements.

-2-

POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS
(In thousands)
(Unaudited)

	Preferred Stock		Common Stock		Additional Paid-in Capital		Accumulated Earnings			Accumulated Other Comprehensive Income		Deferred Compensation			Treasury Stock	Total

Shareholders' Equity and Accumulated
Earnings, December 31, 2001	$	49	$	396	$	1,010,954	$	–	$	(5,864	)	$	(445	)

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents