POST APARTMENT HOMES LP - 10-Q Quarterly Report

4401 Northside Parkway, Suite 800, Atlanta, Georgia 30327
(Address of principal executive offices — zip 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.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date:

37,783,328 shares of common stock outstanding as of August 8, 2003 (excluding treasury stock).


			Page

Part I	FINANCIAL INFORMATION
	Item 1	Financial Statements
	POST PROPERTIES, INC.
	Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002			1
	Consolidated Statements of Operations for the three and six months ended June 30, 2003 and 2002			2
	Consolidated Statement of Shareholders’ Equity and Accumulated Earnings for the six months ended June 30, 2003			3
	Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002			4
	Notes to Consolidated Financial Statements			5
	POST APARTMENT HOMES, L.P.
	Consolidated Balance Sheets as of June 30, 2003 and December 31, 2002			16
	Consolidated Statements of Operations for the three and six months ended June 30, 2003 and 2002			17
	Consolidated Statement of Partners’ Equity for the six months ended June 30, 2003			18
	Consolidated Statements of Cash Flows for the six months ended June 30, 2003 and 2002			19
	Notes to Consolidated Financial Statements			20
	Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations		32
	Item 3	Quantitative and Qualitative Disclosures about Market Risk		50
	Item 4	Controls and Procedures		51
Part II	OTHER INFORMATION			52
	Item 1	Legal Proceedings		52
	Item 2	Changes in Securities and Use of Proceeds		52
	Item 3	Defaults Upon Senior Securities		52
	Item 4	Submission of Matters to a Vote of Security Holders		53
	Item 5	Other Information		53
	Item 6	Exhibits and Reports on Form 8-K		54
	Signatures			55
	Exhibit Index			57


				June 30,			December 31,
				2003			2002

				(Unaudited)
Assets
	Real estate assets
		Land		$	286,757		$	273,058
		Building and improvements			2,033,983			1,976,809
		Furniture, fixtures and equipment			244,985			246,634
		Construction in progress			33,784			92,945
		Investments in and advances to unconsolidated real estate entities			100,356			182,285
		Land held for future development			24,299			24,879

					2,724,164			2,796,610
		Less: accumulated depreciation			(470,307	)		(426,136	)
		Assets held for sale			10,705			73,061

			Total real estate assets		2,264,562			2,443,535
	Cash and cash equivalents				4,302			6,390
	Restricted cash				1,707			1,369
	Deferred charges, net				14,235			15,584
	Other assets				40,126			41,273

		Total assets		$	2,324,932		$	2,508,151

Liabilities and shareholders’ equity
	Notes payable			$	1,259,926		$	1,414,555
	Accrued interest payable				8,874			8,994
	Dividend and distribution payable				19,406			33,252
	Accounts payable and accrued expenses				73,504			49,124
	Security deposits and prepaid rents				8,073			8,250

		Total liabilities			1,369,783			1,514,175

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

	Minority interest of common unitholders in Operating Partnership				78,646			90,277

	Commitments and contingencies
	Shareholders’ equity
		Preferred stock, $.01 par value, 20,000,000 authorized:
			8½% Series A Cumulative Redeemable Shares, liquidation preference $50 per share, 900,000 shares issued and outstanding		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, 37,656,778 and 37,202,290 shares outstanding at June 30, 2003 and December 31, 2002, respectively		396			396
		Additional paid-in capital			899,635			940,122
		Accumulated earnings			—			—
		Accumulated other comprehensive income			(17,594	)		(14,822	)
		Deferred compensation			(1,418	)		(639	)

					881,068			925,106
		Less common stock in treasury, at cost, 2,019,426 shares and 2,473,914 shares at June 30, 2003 and December 31, 2002, respectively			(74,565	)		(91,407	)

		Total shareholders’ equity			806,503			833,699

		Total liabilities and shareholders’ equity		$	2,324,932		$	2,508,151

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

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


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

			2003			2002			2003			2002

Revenues
	Rental		$	79,312		$	77,221		$	158,178		$	156,009
	Other			3,155			3,464			6,065			6,457
	Interest			251			281			485			686

		Total revenues		82,718			80,966			164,728			163,152

Expenses
	Property operating and maintenance (exclusive of items shown separately below)			34,611			32,031			68,236			64,882
	Depreciation			22,476			20,794			45,204			40,696
	Interest			17,396			13,700			33,957			26,844
	Amortization of deferred financing costs			968			569			1,756			1,123
	General and administrative			3,342			3,720			6,967			7,486
	Minority interest in consolidated property partnerships			(348	)		(460	)		(682	)		(943	)
	Other			—			136			567			136
	Severance charges			1,795			—			21,506			—
	Proxy and related costs			5,231			—			5,231			—
	Asset impairment charge			—			—			14,118			—

		Total expenses		85,471			70,490			196,860			140,224

Income (loss) from continuing operations before equity in income (losses) of unconsolidated entities, gains on property sales and minority interest				(2,753	)		10,476			(32,132	)		22,928
	Equity in income (losses) of unconsolidated real estate entities			8,101			(500	)		7,708			(843	)
	Gains on property sales			—			—			—			13,275
	Minority interest of preferred unitholders			(1,400	)		(1,400	)		(2,800	)		(2,800	)
	Minority interest of common unitholders			(146	)		(713	)		3,729			(3,261	)

		Income (loss) from continuing operations		3,802			7,863			(23,495	)		29,299

Discontinued operations
	Income from discontinued operations, net of minority interest			173			1,054			792			3,358
	Gains on properties held for sale and sold, net of minority interest			23,714			16,146			29,805			9,425

		Income from discontinued operations		23,887			17,200			30,597			12,783

Net income				27,689			25,063			7,102			42,082
	Dividends to preferred shareholders			(2,863	)		(2,863	)		(5,725	)		(5,725	)

Net income available to common shareholders			$	24,826		$	22,200		$	1,377		$	36,357

Per common share data — Basic
	Income (loss) from continuing operations (net of preferred dividends)		$	0.02		$	0.13		$	(0.78	)	$	0.64
	Income from discontinued operations			0.64			0.47			0.82			0.35

	Net income available to common shareholders		$	0.66		$	0.60		$	0.04		$	0.99

	Dividends declared		$	0.45		$	0.78		$	0.90		$	1.56

	Weighted average common shares outstanding — basic			37,459,530			36,904,954			37,361,132			36,890,139

	Weighted average common shares and units outstanding — basic			42,066,025			42,023,842			42,057,716			42,009,027

Per common share data — Diluted
	Income (loss) from continuing operations (net of preferred dividends)		$	0.02		$	0.13		$	(0.78	)	$	0.63
	Income from discontinued operations			0.64			0.47			0.82			0.35

	Net income available to common shareholders		$	0.66		$	0.60		$	0.04		$	0.98

	Dividends declared		$	0.45		$	0.78		$	0.90		$	1.56

	Weighted average common shares outstanding — diluted			37,467,388			36,981,334			37,361,902			36,975,168

	Weighted average common shares and units outstanding — diluted			42,073,883			42,100,222			42,058,486			42,094,056

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

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


[X]		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended June 30, 2003

		OR

[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Georgia		58-1550675
Georgia		58-2053632
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)


Post Properties, Inc.	Yes	[X]	No	[ ]
Post Apartment Homes, L.P.	Yes	[X]	No	[ ]


Post Properties, Inc.	Yes	[X]	No	[ ]
Post Apartment Homes, L.P.	Yes	[X]	No	[ ]