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 September 30, 2002
OR
o
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 Georgia |
58-1550675 58-2053632 |
|
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer 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 o | |||
| Post Apartment Homes, L.P. | Yes x | No o |
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.
36,913,894 shares of common stock outstanding as of November 8, 2002 (excluding treasury stock).
POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
INDEX
| Page | ||||||
Part I FINANCIAL INFORMATION |
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Item 1 Financial Statements |
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POST PROPERTIES, INC. |
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Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001 |
1 | |||||
Consolidated Statements of Operations for the three and nine months ended
September 30, 2002 and 2001 |
2 | |||||
Consolidated Statement of Shareholders’ Equity and Accumulated Earnings for
the nine months ended September 30, 2002 |
3 | |||||
Consolidated Statements of Cash Flows for the nine months ended September 30,
2002 and 2001 |
4 | |||||
Notes to Consolidated Financial Statements |
5 | |||||
POST APARTMENT HOMES, L.P. |
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Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001 |
15 | |||||
Consolidated Statements of Operations for the three and nine months ended
September 30, 2002 and 2001 |
16 | |||||
Consolidated Statement of Partners’ Equity for the nine months ended
September 30, 2002 |
17 | |||||
Consolidated Statements of Cash Flows for the nine months ended September 30,
2002 and 2001 |
18 | |||||
Notes to Consolidated Financial Statements |
19 | |||||
Item 2 Management’s Discussion and Analysis of Financial Condition and
Results of Operations |
30 | |||||
Item 3 Quantitative and Qualitative Disclosures about Market Risk |
44 | |||||
Item 4 Controls and Procedures |
44 | |||||
Part II OTHER INFORMATION |
45 | |||||
Item 1 Legal Proceedings |
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Item 2 Changes in Securities and Use of Proceeds |
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Item 3 Defaults Upon Senior Securities |
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Item 4 Submission of Matters to a Vote of Security Holders |
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Item 5 Other Information |
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Item 6 Exhibits and Reports on Form 8-K |
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Signatures |
46 | |||||
Certifications |
48 | |||||
Exhibit
Index |
50 | |||||
POST PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
| September 30, | December 31, | ||||||||||
| 2002 | 2001 | ||||||||||
| (Unaudited) | |||||||||||
Assets |
|||||||||||
Real estate assets |
|||||||||||
Land |
$ | 282,414 | $ | 277,146 | |||||||
Building and improvements |
1,987,297 | 1,794,658 | |||||||||
Furniture, fixtures and equipment |
247,456 | 212,390 | |||||||||
Construction in progress |
115,320 | 419,449 | |||||||||
Investments in and advances to unconsolidated real estate entities |
170,240 | 89,692 | |||||||||
Land held for future development |
20,023 | 23,658 | |||||||||
| 2,822,750 | 2,816,993 | ||||||||||
Less: accumulated depreciation |
(421,150 | ) | (393,014 | ) | |||||||
Assets held for sale |
38,123 | 39,419 | |||||||||
Total real estate assets |
2,439,723 | 2,463,398 | |||||||||
Cash and cash equivalents |
5,046 | 4,803 | |||||||||
Restricted cash |
1,309 | 1,315 | |||||||||
Deferred charges, net |
17,093 | 18,203 | |||||||||
Other assets |
48,022 | 50,632 | |||||||||
Total assets |
$ | 2,511,193 | $ | 2,538,351 | |||||||
Liabilities and shareholders’ equity |
|||||||||||
Notes payable |
$ | 1,375,339 | $ | 1,336,520 | |||||||
Accrued interest payable |
16,417 | 9,660 | |||||||||
Dividend and distribution payable |
33,252 | 33,208 | |||||||||
Accounts payable and accrued expenses |
61,975 | 72,277 | |||||||||
Security deposits and prepaid rents |
8,412 | 9,016 | |||||||||
Total liabilities |
1,495,395 | 1,460,681 | |||||||||
Minority interest of preferred unitholders in Operating Partnership |
70,000 | 70,000 | |||||||||
Minority interest of common unitholders in Operating Partnership |
98,356 | 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 September 30, 2002 and December 31, 2001, respectively |
9 | 9 | |||||||||
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 | 20 | |||||||||
Common stock, $.01 par value, 100,000,000 authorized: |
|||||||||||
39,676,204 and 39,676,204 shares issued, 36,913,963 and
36,856,559 shares outstanding at September 30, 2002 and
December 31, 2001, respectively |
396 | 396 | |||||||||
Additional paid-in capital |
964,122 | 1,010,954 | |||||||||
Accumulated earnings |
— | — | |||||||||
Accumulated other comprehensive income |
(14,793 | ) | (5,864 | ) | |||||||
Deferred compensation |
(742 | ) | (445 | ) | |||||||
| 949,032 | 1,005,090 | ||||||||||
Less common stock in treasury, at cost, 2,762,241 shares and
2,819,645 shares at September 30, 2002 and December 31, 2001,
respectively |
(101,590 | ) | (103,573 | ) | |||||||
Total shareholders’ equity |
847,442 | 901,517 | |||||||||
Total liabilities and shareholders’ equity |
$ | 2,511,193 | $ | 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 | Nine months ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | ||||||||||||||||
Revenues |
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Rental |
$ | 83,232 | $ | 85,919 | $ | 244,534 | $ | 263,426 | |||||||||||
Other |
3,160 | 3,499 | 9,388 | 11,023 | |||||||||||||||
Interest |
316 | 370 | 1,002 | 1,358 | |||||||||||||||
Third party services |
— | 3,981 | — | 11,939 | |||||||||||||||
Total revenues |
86,708 | 93,769 | 254,924 | 287,746 | |||||||||||||||
Expenses |
|||||||||||||||||||
Property operating and maintenance |
35,232 | 32,542 | 102,028 | 99,143 | |||||||||||||||
Depreciation |
22,464 | 18,192 | 64,738 | 52,696 | |||||||||||||||
Interest |
15,763 | 13,101 | 43,716 | 40,934 | |||||||||||||||
Amortization of deferred loan costs |
588 | 513 | 1,711 | 1,456 | |||||||||||||||
General and administrative |
3,495 | 3,441 | 10,981 | 10,087 | |||||||||||||||
Minority interest in consolidated property partnerships |
(537 | ) | (527 | ) | (1,480 | ) | (1,344 | ) | |||||||||||
Third party services |
— | 3,676 | — | 10,603 | |||||||||||||||
Total expenses |
77,005 | 70,938 | 221,694 | 213,575 | |||||||||||||||
Income from continuing operations before gains on property sales and minority
interest |
9,703 | 22,831 | 33,230 | 74,171 | |||||||||||||||
Gains on property sales |
— | 8,179 | 13,275 | 23,950 | |||||||||||||||
Minority interest of preferred unitholders |
(1,400 | ) | (1,400 | ) | (4,200 | ) | (4,200 | ) | |||||||||||
Minority interest of common unitholders |
(661 | ) | (3,190 | ) | (4,090 | ) | (10,069 | ) | |||||||||||
Income from continuing operations |
7,642 | 26,420 | 38,215 | 83,852 | |||||||||||||||
Discontinued operations |
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Income from discontinued operations, net of minority interest |
417 | 969 | 2,632 | 3,175 | |||||||||||||||
Gains (losses) on properties held for sale and sold, net of minority interest |
(1,906 | ) | — | 7,509 | — | ||||||||||||||
Income
(loss) from discontinued operations |
(1,489 | ) | 969 | 10,141 | 3,175 | ||||||||||||||
Income before cumulative effect of accounting change and extraordinary items |
6,153 | 27,389 | 48,356 | 87,027 | |||||||||||||||
Cumulative effect of accounting change, net of minority interest |
— | — | — | (613 | ) | ||||||||||||||
Extraordinary items, net of minority interest |
— | — | (120 | ) | (77 | ) | |||||||||||||
Net income |
6,153 | 27,389 | 48,236 | 86,337 | |||||||||||||||
Dividends to preferred shareholders |
(2,862 | ) | (2,969 | ) | (8,587 | ) | (8,906 | ) | |||||||||||
Net income available to common shareholders |
$ | 3,291 | $ | 24,420 | $ | 39,649 | $ | 77,431 | |||||||||||
Earnings per common share — basic |
|||||||||||||||||||
Income from continuing operations (net of preferred dividends) |
$ | 0.13 | $ | 0.61 | $ | 0.80 | $ | 1.95 | |||||||||||
Income from discontinued operations |
(0.04 | ) | 0.03 | 0.27 | 0.08 | ||||||||||||||
Income before cumulative effect of accounting change and extraordinary items
(net of preferred dividends) |
0.09 | 0.64 | 1.07 | 2.03 | |||||||||||||||
Cumulative effect of accounting change, net of minority interest |
— | — | — | (0.02 | ) | ||||||||||||||
Extraordinary items, net of minority interest |
— | — | — | — | |||||||||||||||
Net income available to common shareholders |
$ | 0.09 | $ | 0.64 | $ | 1.07 | $ | 2.01 | |||||||||||
Weighted average common shares outstanding — basic |
36,913,074 | 37,899,668 | 36,897,867 | 38,463,672 | |||||||||||||||
Earnings per common share — diluted |
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Income from continuing operations (net of preferred dividends) |
$ | 0.13 | $ | 0.61 | $ | 0.80 | $ | 1.94 | |||||||||||
Income from discontinued operations |
(0.04 | ) | 0.03 | 0.27 | 0.08 | ||||||||||||||
Income before cumulative effect of accounting change and extraordinary items
(net of preferred dividends) |
0.09 | 0.64 | 1.07 | 2.02 | |||||||||||||||
Cumulative effect of accounting change, net of minority interest |
— | — | — | (0.02 | ) | ||||||||||||||
Extraordinary items, net of minority interest |
— | — | — | — | |||||||||||||||
Net income available to common shareholders |
$ | 0.09 | $ | 0.64 | $ | 1.07 | $ | 2.00 | |||||||||||
Weighted average common shares outstanding — diluted |
36,916,835 | 38,185,054 | 36,941,598 | 38,721,056 | |||||||||||||||
Dividends declared |
$ | 0.78 | $ | 0.78 | $ | 2.34 | $ | 2.34 | |||||||||||
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)
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