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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
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 NUMBER 0-28226
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POST APARTMENT HOMES, L.P.
(Exact name of registrant as specified in its charter)
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)
----------------------------------------------------
Securities registered pursuant to section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
NAME OF EACH
TITLE OF EACH CLASS EXCHANGE ON WHICH REGISTERED
------------------- ----------------------------
Units of the Limited Partnership ("Units") N/A
----------------------------------------------------
Indicate by check mark whether the Registrant (1) has 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) has been subject to such
filing requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
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POST APARTMENT HOMES, L.P.
TABLE OF CONTENTS
ITEM FINANCIAL INFORMATION PAGE
NO. NO.
--- ---
PART I
1. Business ........................................................................... 1
2. Properties ......................................................................... 7
3. Legal Proceedings .................................................................. 10
4. Submission of Matters to a Vote of Security holders ................................ 10
10
PART II
5. Market Price of the Registrant's Common Stock and Related Stockholder Matters....... 13
6. Selected Financial Data ............................................................ 14
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations ........................................................ 17
8. Financial Statements and Supplementary Data ........................................ 30
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ......................................................... 30
PART III
10. Directors and Executive Officers of the Registrant ................................. 30
11. Executive Compensation ............................................................. 30
12. Security Ownership of Certain Beneficial Owners and Management ..................... 30
13. Certain Relationships and Related Transactions ..................................... 30
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K .................. 31
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PART I
ITEM 1.BUSINESS
THE COMPANY
The Company is one of the largest developers and operators of upscale
multifamily apartment communities in the Southeastern United States. The Company
currently owns 49 stabilized communities (the "Communities") containing 17,930
apartment units located primarily in metropolitan Atlanta, Georgia and Tampa,
Florida. In addition, the Company currently has under construction or in initial
lease-up nine new communities and additions to two existing communities in the
Atlanta, Tampa, Nashville and Charlotte metropolitan areas that will contain an
aggregate of 3,271 apartment units when completed. For the year ended December
31, 1996, the average economic occupancy rate of the 40 Communities and the
first phase of an additional Community stabilized for the entire period was
95.4%. The average monthly rental rate per apartment unit at these Communities
for the same period was $767. The Company also manages through affiliates one
community with 260 apartment units under the Post(R) brand name for a third
party and approximately 7,800 additional apartment units owned by third parties.
The Company is a fully-integrated organization with multifamily development,
acquisition, operation and asset management expertise and has approximately
1,100 employees, none of whom is a party to a collective bargaining agreement.
Since founded in 1971, the Company and its predecessor, collectively referred to
as the "Company" has pursued three distinctive core business strategies that,
for over 25 years, have remained substantially unchanged:
Investment Building
Investment building means taking a long-term view of the assets the Company
creates. The Company develops communities with the intention of operating them
for periods that are relatively long by the standards of the apartment industry.
Key elements of the Company's investment building strategy include instilling a
disciplined team approach to development decisions; selecting sites in niche and
infill locations in strong primary markets; consistently constructing new
apartment communities with a uniformly high quality; and conducting ongoing
property improvements.
Promotion of the Post(R) Brand Name
The Post(R) brand name strategy has been integral to the success of the Company
and, to the knowledge of the Company, has not been successfully duplicated
within the multifamily real estate industry in any major U.S. market. For such a
strategy to work, a company must develop and implement systems to achieve
uniformly high quality and value throughout its operations. As a result of the
Company's efforts in developing and maintaining its communities, the Company
believes that the Post(R) brand name is synonymous with quality upscale
apartment communities that are situated in desirable locations and provide
superior resident service. Key elements in implementing the Company's brand name
strategy include extensively utilizing the trademarked brand name; adhering to
quality in all aspects of the Company's operations; developing and implementing
leading edge training programs; and coordinating the Company's advertising
programs to increase brand name recognition.
Service Orientation
The Company's mission statement is: "To provide the superior apartment living
experience for our residents." By striving to provide a superior product and
superior service, the Company believes that it will be able to achieve its
long-term goals. The Company believes that it provides its residents with
superior product and superior service through its uniformly high quality
construction, award winning landscaping and numerous amenities, including on
site business centers, on site courtesy officers, urban vegetable gardens and
state of the art fitness centers.
The Company believes that with the implementation of these strategies,
multifamily properties in its primary markets have the potential over the long
term to provide investment returns that exceed national averages. According to
recent market surveys, employment growth, population growth and household
formation growth in the Company's primary markets have exceeded and are
forecasted to continue to exceed national averages.
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ORGANIZATION STRUCTURE
The Company's general partner, Post Properties, Inc. ("PPI") is a
self-administered and self-managed equity real estate investment trust (a
"REIT"). On July 22, 1993, PPI completed an initial public offering of
10,580,000 shares of Common Stock (the "Initial Offering") and a business
combination involving entities under varying common ownership (the "Formation
Transactions"). On February 7, 1994, PPI completed a second public offering of
3,000,000 shares of Common Stock (the "Second Offering"). On October 20, 1995,
PPI completed a third public offering of 3,710,500 additional shares of Common
Stock (the "Third Offering"). Proceeds from the Initial Offering were (i) used
by PPI to acquire a controlling interest in the Company which was formed to
succeed to substantially all of the ownership interest in a portfolio of 40
Post(R) multifamily apartment communities, all of which were developed by the
Company and owned by affiliates of the Company, and to the development, leasing,
landscaping and management business of the Company and certain other affiliates
and (ii) contributed by PPI to the Company to pay down existing indebtedness on
certain communities. Proceeds of the Second and Third Offerings were contributed
by PPI to the Company and used by the Company to pay down existing indebtedness.
On October 1, 1996, PPI sold one million non-convertible 8.5% Series A
Cumulative Redeemable Preferred Shares (the "Perpetual Preferred Shares") with a
liquidation preference equivalent to $50 per share. Proceeds from the sale of
the Perpetual Preferred Shares were contributed by PPI to the Company in
exchange for one million Series A Preferred Partnership Units (the "Perpetual
Preferred Units"). The Company used the proceeds to repay outstanding
indebtedness. PPI is the sole general partner of, and controls a majority of the
limited partnership interests in, the Company. PPI conducts all of its business
through the Company and its subsidiaries.
The Company's executive offices are located at 3350 Cumberland Circle, Atlanta,
Georgia 30339 and its telephone number is (770) 850-4400. PPI, a Georgia
corporation, was incorporated on January 25, 1984, and is the successor by
merger to the original Post Properties, Inc., a Georgia corporation, which was
formed in 1971. The Company is a Georgia limited partnership that was formed in
July 1993 for the purpose of consolidating the operating and development
businesses of the original Post Properties, Inc. and the Post(R) apartment
portfolio described herein.
The Company, through the operating divisions and subsidiaries described below,
is the entity through which all of the PPI's operations are conducted. At
December 31, 1996, PPI controlled the Company as the sole general partner and as
the holder of 80.8% of the common units in the Company ("Units") and 100% of the
Perpetual Preferred Units. The other limited partners of the Company are those
persons (including certain officers and directors of PPI) who, at the time of
the Initial Offering, elected to hold all or a portion of their interest in PPI
in the form of Units rather than receiving shares of PPI Common Stock. Each Unit
may be redeemed by the holder thereof for either one share of PPI Common Stock
or cash equal to the fair market value thereof at the time of such redemption,
at the option of PPI. PPI has issued Common Stock in connection with all
redemptions to date. With each redemption of outstanding Units for PPI's Common
Stock, PPI's percentage ownership interest in the Company will increase.
In addition, whenever PPI issues shares of Common Stock, PPI will contribute any
net proceeds therefrom to the Company and the Company will issue an equivalent
number of Units to PPI.
As sole general partner, PPI has the exclusive power under the agreement of
limited partnership of the Company to manage and conduct the business of the
Company, subject to the consent of the holders of the Units in connection with
the sale of all or substantially all of the assets of the Company or in
connection with a dissolution of the Company. The board of directors of PPI
manages the affairs of PPI, which directs the affairs of the Company. The
Company cannot be terminated, except in connection with a sale of all or
substantially all of the assets of the Company, for a period of 50 years without
a vote of limited partners of the Company. PPI's limited and general partner
interests in the Company entitle it to share in cash distributions from, and in
the profits and losses of, the Company in proportion to PPI's percentage
interest therein and entitle PPI to vote on all matters requiring a vote of the
limited partners.
As part of the formation of the Company, a new holding company, Post Services,
Inc. ("Post Services") was organized as a separate corporate subsidiary of the
Company. Post Services, in turn, owns all the outstanding stock of three
operating subsidiaries, RAM Partners, Inc. ("RAM"), Post Asset Management, Inc.
("Post Asset Management") and Post Landscape Services, Inc. ("Post Landscape").
Certain officers and directors of PPI received 99%, collectively, of the voting
common stock of Post Services, and the Company received 1% of the voting common
stock and 100% of the nonvoting common stock of Post Services. The voting and
nonvoting common stock of Post Services held by the Company represents 99% of
the equity interests therein. The voting common stock held by officers and
directors in Post
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Services is subject to an agreement that is designed to ensure that the stock
will be held by one or more officers of Post Services. The by-laws of Post
Services provide that a majority of the board of directors of Post Services must
be persons who are not employees, members of management or affiliates of PPI or
its subsidiaries. This by-law provision cannot be amended without the vote of
100% of the outstanding voting common stock of Post Services. Post Services
currently has the same board of directors as PPI.
OPERATING DIVISIONS
The major operating divisions of the Company include:
Post Management Services
Post Management Services is responsible for the day-to-day operations of all the
Post(R) communities and is itself comprised of two divisions: one responsible
for community leasing, property management and personnel recruiting, training
and development, and the other for maintenance and security. Post Management
Services also conducts short-term leasing activities and is the largest division
in the Company.
Post Apartment Development
Post Apartment Development conducts the development and construction activities
of the Company. Development activities include site selection, zoning and
regulatory approvals, project design, and the full range of construction
management services.
Post Landscape Operations
This division works closely with Post Apartment Development in the initial
design of each Post(R) community and then has primary responsibility for
maintaining each community's landscape. The division maintains each community's
grounds on a cost effective basis for seasonal impact and has earned national
recognition for the Company. Post Landscape Operations employs professionals
specializing in landscape architecture, horticulture, floriculture, and general
landscape maintenance.
Post Corporate Services
Post Corporate Services provides executive direction and control to the
Company's other divisions and subsidiaries and has responsibility for the
creation and implementation of all Company financing and capital strategies. All
accounting, management reporting, information systems and insurance services
required by the Company and all of its affiliates are centralized in Post
Corporate Services.
OPERATING SUBSIDIARIES
The operating subsidiaries of the Company, each of which is wholly owned by Post
Services, include:
RAM
RAM provides third party asset management and leasing services for multifamily
properties that do not operate under the Post(R) name. RAM's clients include
pension funds, independent private investors, financial institutions and
insurance companies. RAM's asset management contracts generally are subject to
annual renewal or are terminable upon specified notice. As of December 31, 1996,
RAM managed 35 properties (located in Georgia, California, Florida, North
Carolina, Virginia and Pennsylvania) with approximately 7,800 units under
management.
Post Asset Management
Post Asset Management currently provides management services to a Post(R)
community (260 apartment units) owned by a third party, which was originally
developed by the Company but sold prior to the Initial Offering. Use of the
Post(R) name and other of the Company's federally registered service marks in
connection with each such community is limited to the period during which the
Company continues to manage the community.
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Post Landscape
As a result of the reputation the Company developed in connection with the
landscaping of Post(R) communities, in 1990 the Company began providing third
party landscape services for clients other than Post(R) communities. Projects
with third parties include the maintenance and design of the landscape for
office parks, commercial buildings and other commercial enterprises, and private
residences. Post Landscape provides such third party landscape services.
HISTORY OF POST PROPERTIES, INC.
The Company and its affiliates have developed a total of 71 Post(R) upscale
garden and mid-rise apartment communities containing approximately 23,432
apartment units and have acquired one community containing 80 units. Of these
communities, 49 communities comprising 17,930 apartment units are owned by the
Company in fee simple or pursuant to a long-term ground lease, and are operated
by the Company. The Company and its affiliates sold 24 communities between 1972
and 1996 to parties not affiliated with the Company, one of which was reacquired
during 1996 and one of which the Company continues to manage under the Post(R)
name. As of March 7, 1997, nine additional Post(R) communities and additions to
two existing communities are under construction and are owned and operated by
the Company.
During the five-year period from January 1, 1992 through December 31, 1996, the
Company and its predecessors and affiliates have developed and completed 4,256
apartment units in 14 apartment communities, acquired 890 units in two apartment
communities and sold four apartment communities containing an aggregate of 748
apartment units. Historically, the Company has developed its apartment
communities to the Company's specifications as opposed to buying and
refurbishing existing properties built by others. During 1996, the Company
reacquired a community it had previously developed and sold. Also during 1996,
the Company also purchased two communities located in Nashville, Tennessee, in a
single transaction, containing 181 apartment units. The first, a 101 unit
community, is currently being completely renovated and 100 units are being
constructed on adjacent land. The second is an 80 unit community that the
Company is currently operating, while evaluating whether to hold , renovate or
sell. The Company and its affiliates have sold apartment communities after
holding them for investment periods that typically have been seven to twelve
years after development. The following table shows the results of the Company's
developments during this period:
1996 1995 1994 1993 1992
-------- -------- -------- -------- -------
Units completed ...................................... 2,258 685 575 182 556
Units acquired ....................................... 890 -- -- -- --
Units sold ........................................... (180) (568) -- -- --
Total units owned by Company affiliates
at end of year ..................................... 17,930 14,962 14,845 14,270 14,088
Total apartment rental income (in
thousands) ......................................... $157,735 $133,817 $115,309 $104,482 $94,754
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CURRENT DEVELOPMENT ACTIVITY
The Company currently has, under construction or in initial lease-up, nine new
communities and additions to two existing communities that will contain an
aggregate of 3,271 units. The Company's communities under development or in
initial lease up are summarized in the following chart:
ACTUAL OR ACTUAL OR
ESTIMATED ESTIMATED
QUARTER OF QUARTER QUARTER OF
# OF CONSTRUCTION FIRST UNITS STABILIZED
METROPOLITAN AREA UNITS COMMENCEMENT AVAILABLE OCCUPANCY
- ----------------- ----- ------------ --------- ---------
ATLANTA, GA
Post Collier Hills(TM) ................................... 396 4Q'95 4Q'96 4Q'97
Post Glen(R) ............................................. 314 1Q'96 1Q'97 1Q'98
Post Lindbergh(TM) ....................................... 396 3Q'96 3Q'97 1Q'99
Post Gardens(R) .......................................... 397 3Q'96 4Q'97 1Q'99
Riverside by Post(TM) .................................... 537 3Q'96 1Q'98 4Q'99
Post Ridge(TM) ........................................... 232 1Q'97 4Q'97 3Q'98
Post River(R)II .......................................... 88 1Q'97 4Q'97 2Q'98
-----
2,360
-----
TAMPA, FL
Post Walk at Hyde Park(TM) ............................... 134 1Q'96 1Q'97 3Q'97
Post Rocky Point(R)II .................................... 174 4Q'96 3Q'97 1Q'98
-----
308
-----
CHARLOTTE, NC
Post Park at Phillips Place(TM) .......................... 402 4Q'95 4Q'96 1Q'98
-----
NASHVILLE, TN
Post Hillsboro Village(TM) ............................... 201 1Q'97 3Q'97 1Q'98
-----
3,271
=====
The Company has acquired a parcel of land in Atlanta on which it plans to build
a new community. Adjacent to the parcel, Home Depot, Inc. is constructing its
corporate headquarters campus and extensive infrastructure improvements are
being made by the county. The Company will review its development plan for this
parcel closer to completion of these improvements. In addition, the Company
holds land for a third phase of Post Rocky Point in Tampa, Florida. The Company
is also currently conducting feasibility and other pre-development studies for
possible new Post(R) communities in its primary market areas.
COMPETITION
All of the Communities are located in developed areas that include other upscale
apartments. The number of competitive upscale apartment properties in a
particular area could have a material effect on the Company's ability to lease
apartment units at the Communities or at any newly developed or acquired
communities and on the rents charged. The Company may be competing with others
that have greater resources than the Company. In addition, other forms of
residential properties, including single family housing, provide housing
alternatives to potential residents of upscale apartment communities.
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AMERICANS WITH DISABILITIES ACT
The Communities and any newly acquired apartment communities must comply with
Title III of the Americans with Disabilities Act (the "ADA") to the extent that
such properties are "public accommodations" and/or "commercial facilities" as
defined by the ADA. Compliance with the ADA requirements could require removal
of structural barriers to handicapped access in certain public areas of the
Company's Communities where such removal is readily achievable. The ADA does
not, however, consider residential properties, such as apartment communities, to
be public accommodations or commercial facilities, except to the extent portions
of such facilities, such as the leasing office, are open to the public. The
Company believes that its properties comply with all present requirements under
the ADA and applicable state laws. Noncompliance could result in imposition of
fines or an award of damages to private litigants. If required to make material
additional changes, the Company's results of operations could be adversely
affected.
ENVIRONMENTAL REGULATIONS
The Company is subject to Federal, state and local environmental regulations
that apply to the development of real property, including construction
activities, the ownership of real property, and the operation of multifamily
apartment communities.
In developing properties and constructing apartments, the Company utilizes
environmental consultants to determine whether there are any flood plains,
wetlands or environmentally sensitive areas that are part of the property to be
developed. If flood plains are identified, development and construction is
planned so that flood plain areas are preserved or alternative flood plain
capacity is created in conformance with Federal and local flood plain management
requirements.
Storm water discharge from a construction facility is evaluated in connection
with the requirements for storm water permits under the Clean Water Act. This is
an evolving program in most states. The Company currently anticipates it will be
able to obtain storm water permits for existing or new development.
The Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. sec. 9601 et seq. ("CERCLA"), and applicable state superfund laws subject
the owner of real property to claims or liability for the costs of removal or
remediation of hazardous substances that are disposed of on real property in
amounts that require removal or remediation. Liability under CERCLA and
applicable state superfund laws can be imposed on the owner of real property or
the operator of a facility without regard to fault or even knowledge of the
disposal of hazardous substances on the property or at the facility. The
presence of hazardous substances in amounts requiring response action or the
failure to undertake remediation where it is necessary may adversely affect the
owner's ability to sell real estate or borrow money using such real estate as
collateral. In addition to claims for cleanup costs, the presence of hazardous
substances on a property could result in a claim by a private party for personal
injury or a claim by an adjacent property owner for property damage.
The Company has instituted a policy that requires an environmental investigation
of each property that it considers for purchase or that it owns and plans to
develop. The environmental investigation is conducted by a qualified
environmental consultant. If there is any indication of contamination, sampling
of the property is performed by the environmental consultant. The environmental
investigation report is reviewed by the Company and counsel prior to purchase of
any property. If necessary, remediation of contamination, including underground
storage tanks, is undertaken prior to development.
The Company has not been notified by any governmental authority of any
noncompliance, claim, or liability in connection with any of the Communities.
The Company has not been notified of a claim for personal injury or property
damage by a private party in connection with any of the Communities in
connection with environmental conditions. The Company is not aware of any other
environmental condition with respect to any of the Communities that could be
considered to be material.
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ITEM 2.PROPERTIES
The Communities consist of 48 stabilized Post(R) multifamily apartment
communities and one acquired community located in the following metropolitan
areas:
METROPOLITAN AREA COMMUNITIES # OF UNITS % OF TOTAL
----------------- ----------- ---------- ----------
Atlanta, GA .................................... 35 13,058 72.8%
Tampa, FL ...................................... 7 2,262 12.6%
Orlando, FL .................................... 2 1,248 7.0%
Fairfax, VA .................................... 2 700 3.9%
Pompano Beach, FL .............................. 1 416 2.3%
Nashville, TN .................................. 2 246 1.4%
------ ------ -----
49 17,930 100.0%
====== ====== =====
The Company developed all of the Post(R) Communities and currently manages all
of the Communities. Thirty-three of the Communities have in excess of 300
apartment units, with the largest Community having a total of 810 apartment
units. The oldest of the Communities was first occupied in 1977 and 42 of the 49
Communities, comprising approximately 86% of such Communities' apartment units,
were completed after January 1, 1986. The average economic occupancy rate for
communities stabilized for each of the entire years ended December 31, 1996 and
1995 was 95.4% and 96.0% respectively. The average monthly rental rate per unit
(stabilized communities) during 1996 and 1995 was $767 and $710, respectively.
See "Selected Financial Information".
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COMMUNITY INFORMATION
DECEMBER
1996 1996
AVERAGE AVERAGE AVERAGE
YEAR UNIT SIZE NUMBER OF RENTAL RATES ECONOMIC
POST COMMUNITIES LOCATION(1) COMPLETED (SQUARE FEET) UNITS PER UNIT OCCUPANCY(2)
- ---------------- ----------- --------- ------------- ----- -------- ------------
GEORGIA
Post Ashford(R) .......................... Atlanta 1987 872 222 $ 761 96.9%
Post Bridge(R) ........................... Atlanta 1986 847 354 660 95.7%
Post Brook(R) ............................ Atlanta 1984 916 130 779 97.4%
Post Brookhaven(R) ....................... Atlanta 1990-92(3) 991 735 960 94.7%
Post Canyon(R) ........................... Atlanta 1986 899 494 691 94.7%
Post Chase(R) ............................ Atlanta 1987 938 410 697 94.6%
Post Chastain(R) ......................... Atlanta 1990 965 558 979 95.3%
Post Corners(R) .......................... Atlanta 1986 860 460 672 95.4%
Post Court(R) ............................ Atlanta 1988 838 446 668 95.5%
Post Creek(TM) ........................... Atlanta 1983(4) 1,180 810 857 89.0%(5)
Post Crest(R) ............................ Atlanta 1996 1,073 410 919 N/A (6)
Post Crossing(R) ......................... Atlanta 1995 1,067 354 1,028 95.3%
Post Dunwoody(R) ......................... Atlanta 1989-96(3) 941 530 901 93.4%(8)
Post Lane(R) ............................. Atlanta 1988 840 166 706 97.6%
Post Lenox Park(TM) ...................... Atlanta 1995 1,030 206 1,049 97.2%
Post Mill(R) ............................. Atlanta 1985 952 398 711 96.8%
Post Oak(TM) ............................. Atlanta 1993 1,003 182 956 97.8%
Post Oglethorpe(R) ....................... Atlanta 1994 1,205 250 1,236 95.5%
Post Park(R) ............................. Atlanta 1988-90(3) 904 770 787 94.6%
Post Parkwood(TM) ........................ Atlanta 1995 1,071 125 930 97.4%
Post Peachtree Hills(R) .................. Atlanta 1992-94(3) 982 300 979 98.3%
Post Pointe(R) ........................... Atlanta 1988 835 360 655 94.7%
Post Renaissance(R)(7) ................... Atlanta 1992-94(3) 890 342 893 97.1%
Post River(R) ............................ Atlanta 1991 983 125 1,141 94.7%
Post Summit(R) ........................... Atlanta 1990 957 148 833 97.4%
Post Terrace(R) .......................... Atlanta 1996 1,144 296 1,022 N/A (6)
Post Valley(R) ........................... Atlanta 1988 854 496 655 96.8%
Post Village(R) .......................... Atlanta 906 718 94.3%
The Arbors .............................. 1983 1,063 301
The Fountains ........................... 1987 850 352
The Gardens ............................. 1986 891 494
The Hills ............................... 1984 953 241
The Meadows ............................. 1988 817 350
Post Vinings(R) .......................... Atlanta 1989-91(3) 964 403 791 94.4%
Post Walk(R) ............................. Atlanta 1987 932 346 812 96.7%
Post Woods(R) ............................ Atlanta 1977-83(3) 1,057 494 827 96.0%
----- ------ ---- ----
Subtotal-- Atlanta ....................... 958 13,058 820 95.2%
----- ------ ---- ----
FLORIDA
Post Bay(R) .............................. Tampa 1988 782 312 650 96.5%
Post Court(R) ............................ Tampa 1991 1,018 228 748 94.5%
Post Crossing(R) ......................... Pompano 1989 847 416 777 94.8%
Post Fountains(TM) ....................... Orlando 1988 835 508 585 94.8%
Post Hyde Park(R) ........................ Tampa 1996 1,009 270 907 N/A (6)
Post Lake(R) ............................. Orlando 1988 850 740 610 97.5%
Post Rocky Point(R) ...................... Tampa 1996 1,018 452 826 N/A (6)
Post Village(R) .......................... Tampa 941 700 93.2%
The Arbors .............................. 1991 967 304
The Lakes ............................... 1989 895 360
The Oaks ................................ 1991 968 336
----- ------ ---- ----
Subtotal-- Florida ...................... 921 3,926 704 95.0%
----- ------ ---- ----
VIRGINIA
Post Corners(R) at Trinity Centre ........ Fairfax 1996 1,030 336 935 N/A (6)
Post Forest(R) ........................... Fairfax 1990 889 364 883 93.6%
Subtotal-- Virginia ...................... 960 700 908 93.6%
----- ------ ---- ----
TENNESSEE
Post Green Hills(R) ...................... Nashville 1996 1,056 166 1,087 N/A (6)
----- ------ ---- ----
ACQUIRED COMMUNITY
- ------------------
TENNESSEE
The Lee Apartments ....................... Nashville 1924(9) 808 80 600 91.8%(10)
----- ------ ---- ----
TOTAL ............................... 941 17,930 $ 838 95.1%
===== ====== ===== ====
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- ----------
(1) Refers to greater metropolitan areas of cities ind icated.
(2) 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.
(3) These dates represent the respective completion dates for multiple
phases of a Community.
(4) This community was completed by the Company in 1983, sold during 1986,
managed by the Company through 1993 and reacquired by the Company in
1996.
(5) Represents average economic occupancy since acquisition on May 7, 1996.
(6) During 1996, this Community was in the lease-up phase and, therefore,
is not included.
(7) The Company has a leasehold interest in the land underlying Post
Renaissance pursuant to a ground lease that expires on January 1, 2040.
(8) Represents amounts only for the first phase of the Community since the
second phase of this Community was in the lease-up phase during the
year ended December 31, 1996.
(9) This community was acquired by the Company during 1996.
(10) Represents average economic occupancy since acquisition on August 26,
1996.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET PRICE OF THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
There is no established public trading market for the Units. As of February 21,
1997, the Company had 122 holders of record of Units of the Company.
9
12
ITEM 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
POST APARTMENT HOMES, L.P.
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT AND APARTMENT UNIT DATA)
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- --------- --------- ---------
OPERATING DATA:
Revenue:
Rental ................................................ $ 157,735 $ 133,817 $ 115,309 $ 104,482 $ 94,754
Property management (1) ............................... 2,828 2,764 2,508 3,057 2,793
Landscape services (1) ................................ 4,834 4,647 3,799 3,829 2,240
Other ................................................. 5,311 3,477 3,123 2,879 2,750
--------- --------- --------- --------- ---------
Total revenue ......................................... 170,708 144,705 124,739 114,247 102,537
Property operating and maintenance
expense (exclusive of depreciation
and amortization) ..................................... 57,335 49,912 43,376 41,209 39,080
Depreciation (real estate assets) ...................... 22,676 20,127 19,967 19,427 19,085
Depreciation (non-real estate assets) .................. 927 692 241 303 195
Property management expenses (1) ....................... 2,055 2,166 2,229 2,453 2,057
Landscape services expenses (1) ........................ 3,917 3,950 3,098 3,151 1,998
Interest expense ....................................... 22,131 22,698 19,231 34,309 41,548
Amortization of deferred loan costs .................... 1,352 1,967 1,999 969 2,105
General and administrative ............................. 7,716 6,071 6,269 4,384 5,015
REIT formation expense ................................. -- -- -- 2,783 --
Minority interest in consolidated
property partnership .................................. -- 451 680 692 655
--------- --------- --------- --------- ---------
Income (loss) before net gain on sale of assets,
net of related income taxes, and
extraordinary item .................................... 52,599 36,671 27,649 4,567 (9,201)
Net gain on sale of assets, net of related .............
income taxes .......................................... 854 1,746 1,494 --
--------- --------- --------- --------- ---------
Income (loss) before extraordinary item ................ 53,453 38,417 29,143 4,567 (9,201)
Extraordinary item ..................................... -- (1,120) (4,413)(2) (13,628)(2) --
--------- --------- --------- --------- ---------
Net Income (loss) ...................................... 53,453 37,297 24,730 (9,061) (9,201)
Distribution to preferred unitholders .................. (1,063) -- -- -- --
--------- --------- --------- --------- ---------
Net income (loss) available to
common unitholders .................................... $ 52,390 $ 37,297 $ 24,730 $ (9,061) $ (9,201)
========= ========= ========= ========= =========
(Selected financial data continued on following page)
10
13
YEAR ENDED DECEMBER 31,
---------------------------------------------
1996 1995 1994 1993 1992
----- ----- ----- ------ ----
PER COMMON UNIT DATA:
Income before extraordinary item
(net of preferred distribution) ............... $1.95 $1.63 $1.32 $ 0.34 N/A
Net income (loss) available to common
unitholders.................................... $1.95 $1.58 $1.12 $(0.67) N/A
Distributions declared .......................... $2.16 $1.96 $1.80 $ 0.77 (3) N/A
DECEMBER 31,
-------------------------------------------------------------------
1996 1995 1994 1993 1992
---------- -------- -------- -------- ---------
BALANCE SHEET DATA:
Real estate, before accumulated depreciation .......... $1,109,342 $937,924 $828,585 $722,266 $ 616,289
Real estate, net of accumulated depreciation .......... 931,670 781,100 686,009 599,898 513,651
Total assets .......................................... 958,675 812,984 710,973 627,322 536,961
Total debt ............................................ 434,319 349,719 362,045 357,809 540,900
Partners' equity (deficit) ............................ 482,434 425,489 313,367 246,342 (25,812)
DECEMBER 31,
--------------------------------------------------------------------------------
1996 1995 1,994 1993 1992
------------ ------------ ------------ ------------ --------
OTHER DATA:
Cash flow provided from (used in):
Operating activities ................... $ 78,966 $ 57,362 $ 43,807 $ 2,412 $ 11,400
Investing activities ................... $ (166,762) $ (114,531) $ (99,364) $ (51,152) $(28,696)
Financing activities ................... $ 79,021 $ 60,885 $ 46,508 $ 49,647 $ 19,902
Funds from operations (4) .................. $ 74,212 $ 56,798 $ 47,616 $ 26,777 $ 9,884
Weighted average Units outstanding ......... 26,917,723 23,541,639 22,125,890 13,574,767 N/A
Total stabilized communities
(at end of period) ......................... 49 42 42 41 40
Total stabilized apartment units
(at end of period) ......................... 17,930 14,962 14,845 14,270 14,088
Average economic occupancy
(stabilized communities) (5) ............... 95.3% 96.0% 96.4% 94.7% 93.0%
- --------------
(1) Consists of revenues and expenses from property management and
landscape services provided to properties owned by third parties
(including services provided to third-party owners of properties
previously developed and sold by the Company that operate under the
Post(R) name).
(2) The extraordinary item resulted from costs associated with the early
extinguishment of indebtedness.
(3) The distribution paid by the Company for the portion of the quarter
ended September 30, 1993 after the Initial Offering was $.320 per Unit,
which is an amount equivalent to a quarterly distribution of $.415 per
Unit (which, if annualized, would equal $1.66 per Unit).
(4) The Company uses the National Association of Real Estate Investment
Trust ("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 ("GAAP"). 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. 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 or ability to
service indebtedness or make distributions.
(5) Amount represents average economic occupancy for communities stabilized
for both the current and prior respective periods. 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, taking account of these amounts,
would have been 94.7% and 95.5% for the year ended December 31, 1996
and 1995, respectively). Concessions were $428 and $296 and employee
discounts were $261 and $213 for the years ended December 31, 1996 and
1995, respectively. A community is 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.
11
14
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
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 the Company.
As of December 31, 1996, there were 27,145,386 Units outstanding, of which
21,922,393, or 80.8%, were owned by PPI and 5,222,993, or 19.2% were owned by
other limited partners ( including certain officers and directors of PPI). As of
December 31, 1996, there were 1,000,000 Perpetual Preferred Units outstanding,
all of which were owned by PPI.
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
The Company recorded net income available for common unitholders of $52,390,
$37,297 and $24,730 for the year ended December 31, 1996, 1995 and 1994,
respectively. The increases in net income in 1996 and 1995 were primarily due to
increased rental rates for fully stabilized communities and an increase in units
placed in service.
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.
At December 31, 1996, the Company's portfolio of apartment communities consisted
of the following: (i) 36 communities and the first phase of 2 additional
communities which were completed and stabilized for all of the current and prior
year, (ii) 3 communities and the second phase of an existing community which
achieved full stabilization during the prior year, (iii) 6 communities and the
second phase of an existing community which reached stabilization during 1996,
(iv) 2 communities which were acquired during 1996 and (v) 9 communities and the
second phase of two existing 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 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 initially exceed rental revenues, resulting
in a "lease-up deficit," which continues until such time as rental revenues
exceed such expenses.
12
15
Therefore, in order to evaluate the operating performance of its communities,
the Company has presented financial information which summarizes the revenue in
excess of specified expense on a comparative basis for all of its operating
communities combined and for communities which have reached stabilization prior
to January 1, 1995. 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 each period are included and, accordingly, different communities may be
included in each period.
ALL OPERATING COMMUNITIES
The operating performance for all of the Company's apartment communities
combined for the years ended December 31, 1996, 1995 and 1994 is summarized as
follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------------------- -------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
-------- -------- ------- -------- -------- -------
Rental and other revenue:
Fully stabilized communities (1) ...................... $123,887 $118,744 4.3% $118,744 $110,047 7.9%
Communities stabilized during 1995 .................... 9,354 6,702 39.6% 6,702 148 N/A
Acquired communities (2) .............................. 5,127 -- N/A -- -- N/A
Development and lease-up communities (3) .............. 20,154 4,150 N/A 4,150 2 N/A
Sold communities (4) .................................. 1,001 4,647 N/A 4,647 5,736 N/A
Other revenue (5) ...................................... 3,197 2,458 30.1% 2,458 2,057 19.5%
-------- -------- -------- --------
162,720 136,701 19.0% 136,701 117,990 15.9%
-------- -------- -------- --------
Property operating and maintenance expense
(exclusive of depreciation and
amortization):
Fully stabilized communities .......................... 41,186 39,787 3.5% 39,787 37,495 6.1%
Communities stabilized during 1995 .................... 2,606 1,886 38.2% 1,886 313 N/A
Acquired communities .................................. 1,956 -- N/A -- -- N/A
Development and lease-up communities .................. 6,766 2,513 N/A 2,513 38 N/A
Sold communities ...................................... 345 1,890 N/A 1,890 2,344 N/A
Other expenses (6) ..................................... 4,476 3,836 16.7% 3,836 3,186 20.4%
-------- -------- -------- --------
57,335 49,912 14.9% 49,912 43,376 15.1%
-------- -------- -------- --------
Revenue in excess of specified expense ................. $105,385 $ 86,789 21.4% $ 86,789 $ 74,614 16.3%
======== ======== ======== ========
Recurring capital expenditures: (7)
Carpet ................................................ $ 1,087 $ 897 21.2% $ 897 $ 729 23.0%
Other ................................................. 1,874 803 133.4% 803 1,087 (26.1%)
-------- -------- -------- --------
Total ............................................. $ 2,961 $ 1,700 74.2% $ 1,700 $ 1,816 (6.4%)
======== ======== ======== ========
Average apartment units in service ..................... 17,089 15,519 10.1% 15,519 14,619 6.2%
======== ======== ======== ========
- ---------------
13
16
(1) Communities which reached stabilization prior to January 1, 1995.
(2) On May 7, 1996, the Company reacquired three contiguous Atlanta
apartment communities containing a total of 810 units which the Company
now operates as a single community. On August 26, 1996, the Company
acquired an apartment community containing 80 units in Nashville,
Tennessee. See "Current Development Activity".
(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 three communities, containing 568 units, which were sold on
September 13, 1995 and one community, containing 180 units, which was
sold on July 19, 1996. The revenues and expenses for these communities
had previously been included in the fully stabilized group.
(5) Other revenue includes revenue on furnished apartment rentals above the
unfurnished rental rates and any revenue not directly related to
property operations. Other revenue also includes, for the year ended
December 31, 1996, approximately $527 which resulted from the Company's
Olympic-related housing initiatives.
(6) Other expenses includes certain indirect central office operating
expenses related to management, grounds maintenance, and costs
associated with furnished apartment rentals.
(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.
For the year ended December 31, 1996, rental and other revenue increased
$26,019, or 19.0% compared to the same period in the prior year, primarily as a
result of increased rental rates for fully stabilized communities, an increase
in units placed in service, the acquisition of communities and the Company's
Olympic-related housing initiatives, partially offset by a decrease in rental
and other revenue due to the sale of three communities during the third quarter
of 1995 and the sale of one community during the third quarter of 1996.
For the year ended December 31, 1996, recurring capital expenditures increased
$1,261, or 74.2%, compared to the same period in the prior year, primarily due
to additional units placed in service and the timing of scheduled capital
improvements.
Property operating and maintenance expenses (exclusive of depreciation and
amortization) increased from 1995 to 1996 and 1994 to 1995 primarily due to the
increase in the units placed in service through the development and acquisition
of communities.
FULLY STABILIZED COMMUNITIES
The Company defines fully stabilized communities as those which have reached
stabilization prior to the beginning of the previous calendar year.
The operating performance of the 36 communities and the first phase of two
additional communities containing an aggregate of 13,980 units which were
stabilized as of January 1, 1995, are summarized as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
--------------------------------- ----------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
-------- -------- ------- -------- -------- -------
Rental and other revenue .............................. $123,887 $118,744 4.3% $118,744 $110,047 7.9%
Property operating and maintenance expense
(exclusive of depreciation and 6.1%
amortization)(1) ..................................... 41,186 39,787 3.5% 39,787 37,495
-------- -------- -------- --------
Revenue in excess of specified expense ................ $ 82,701 $ 78,957 4.7% $ 78,957 $ 72,552 8.8%
======== ======== ======== ========
Average economic occupancy (2) ........................ 95.3% 96.2% 96.2% 95.3%
======== ======== ======== ========
Average monthly rental rate per apartment 7.0%
unit(3) .............................................. $ 754 $ 721 4.6% $ 721 $ 674
======== ======== ======== ========
Apartment units in service ............................ 13,980 13,980 13,980 13,980
======== ======== ======== ========
- ---------------
(1) 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. For the year ended December 31, 1996 and
1995, recurring expenditures were $2,782 and $1,607, or $199 and $115
on a per unit basis, respectively.
14
17
(2) 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, taking account of
these amounts would have been 94.7% and 95.8% for the years ended
December 31, 1996 and 1995, respectively.) Concessions were $428 and
$297 and employee discounts were $261 and $239 for the years ended
December 31, 1996 and 1995, respectively.
(3) Average monthly rental rate is defined as the average of the gross
actual rental rates for leased units and the average of the anticipated
rental rates for unoccupied units.
Rental and other revenue increased from 1995 to 1996 due to higher rental rates
with occupancy slightly declining. The modest increase in property and
maintenance expense (exclusive of depreciation and amortization) from 1995 to
1996 was primarily due to increases in ad valorem real estate taxes and
personnel costs.
Rental and other revenue increased from 1994 to 1995 due to higher rental rates.
Property operating and maintenance expenses (exclusive of depreciation and
amortization) increased $2,292, or 6.1%. Ad valorem real estate taxes increased
from $9,439 in 1994 to $10,973 in 1995, an increase of 16.3%. This increase
alone accounted for 67% of the overall operating expense increase. The remaining
increase was primarily due to modest increases in utilities, advertising and
promotion and building repairs and maintenance offset by a modest decrease in
landscaping and grounds and maintenance expense.
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 during each
period are included in that period and, accordingly, different communities may
be included in different periods.
For each quarter of the year ended December 31, 1996, the "lease-up deficit"
charged to and included in results of operations are summarized as follows:
YEAR ENDED DECEMBER 31,
---------------------------
1996 1995 1994
------- ------- -----
Rental and other revenue .................................... $ 974 $ 3,327 $ 331
Property operating and maintenance expense (exclusive of
depreciation and amortization) ............................ 1,056 2,422 800
------- ------- -----
Revenue in excess of specified expense ...................... (82) 905 (469)
Interest expense ............................................ 673 2,072 214
------- ------- -----
Lease-up deficit ............................................ $ (755) $(1,167) $(683)
======= ======= =====
THIRD PARTY MANAGEMENT SERVICES
The Company provides asset management, leasing and other consulting services to
non-related owners of apartment communities through two of its subsidiaries, RAM
and Post Asset Management.
15
18
The operating performance of RAM and Post Asset Management for the years ended
December 31, 1996, 1995 and 1994 are summarized as follows:
RAM PARTNERS, INC.
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------------------- ------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
------ ------ ------- ------ ------ -------
Property management and other revenue ............ $2,562 $2,331 9.9% $2,331 $2,184 6.7%
Property management expense ...................... 1,244 1,213 2.6% 1,213 1,278 (5.1)%
General and administrative expense ............... 502 467 7.5% 467 433 7.9%
------ ------ ------ ------
Revenue in excess of specified expense ........... $ 816 $ 651 25.3% $ 651 $ 473 37.6%
====== ====== ====== ======
Average apartment units in service ............... 8,852 8,798 0.6% 8,798 8,488 3.7%
====== ====== ====== ======
The change in property management revenues and expenses from 1995 to 1996 and
from 1994 to 1995 is primarily attributable to the change in the average number
and the average gross revenues of units managed.
POST ASSET MANAGEMENT
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- --------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
----- ------ ------- ------ ------ --------
Property management and other revenue .......... $ 282 $ 550 (48.7)% $ 550 $ 578 (4.8)%
Property management expense .................... 255 392 (35.0)% 392 408 (3.9)%
General and administrative expense ............. 54 94 (42.6)% 94 110 (14.5)%
----- ------ ------ ------
Revenue in excess of specified expense ......... $ (27) $ 64 (142.2)% $ 64 $ 60 6.7 %
===== ====== ====== ======
Average apartment units in service ............. 563 1,061 (46.9)% 1,061 1,498 (29.2)%
===== ====== ====== ======
The decreases in property management revenues and the related expenses from 1995
to 1996 and 1994 to 1995 were primarily due to the reduction in the average
number of apartment units managed during the periods. These reductions were
primarily due to the termination of one management contract during 1994 for
communities developed by the Company and sold to third-party owners prior to the
Initial Offering. Four additional contracts were terminated effective during
1996. As of December 31, 1996, Post Asset Management provided management
services to one Post(R) community, containing 260 apartment units. The Company
anticipates that the remaining contract will be terminated during 1997.
THIRD PARTY LANDSCAPE SERVICES
The Company provides landscape maintenance, design and installation services to
non-related parties through a subsidiary, Post Landscape.
The operating performance of Post Landscape for the years ended December 31,
1996, 1995 and 1994 are summarized as follows:
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
---------------------------------- ---------------------------------
1996 1995 %CHANGE 1995 1994 %CHANGE
------ ------ ------- ------ ------ -------
Landscape services and other revenue ............... $4,882 $4,662 4.7% $4,662 $3,808 22.4%
Landscape services expense ......................... 3,459 3,255 6.3% 3,255 2,685 21.2%
General and administrative expense ................. 458 695 (34.1)% 695 413 68.3%
------ ------ ------ ------
Revenue in excess of specified expense ............. $ 965 $ 712 35.5% $ 712 $ 710 0.3%
====== ====== ====== ======
16
19
The change in landscape services revenue, landscape services expense and general
and administrative expense from 1995 to 1996 and 1994 to 1995 is primarily due
to an increase in landscape contracts.
OTHER INCOME AND EXPENSES
Depreciation expense increased from 1995 to 1996 and 1994 to 1995 primarily due
to the completion of new communities and the acquisition of communities.
Interest expense decreased from 1995 to 1996 primarily due to the repayment of
debt with proceeds from the Third Offering and the Perpetual Preferred Shares.
Interest expense increased from 1994 to 1995 due to additional outstanding
borrowings until the time of the Third Offering.
Amortization of deferred loan costs decreased from 1995 to 1996 as a result of
repayment of indebtedness with proceeds of the Third Offering.
General and administrative expense increased from 1995 to 1996 primarily as a
result of increased travel-related expenses and personnel costs. General and
administrative expense remained relatively consistent from 1994 to 1995.
The net gain on sale of assets resulted from the sale of a community and other
assets during 1996, the sale of three communities during 1995 and a parcel of
land during 1994.
The extraordinary item of $1,120 and $4,413 for the years ended December 31,
1995 and 1994, respectively, 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 $43,807
in 1994 to $57,362 in 1995 and to $78,966 in 1996, principally due to increased
property operating income. Net cash used in investing activities increased from
$99,364 in 1994 to $114,531 in 1995, principally due to a $27,740 increase in
spending on new community development and acquisition activity offset by an
increase in net proceeds of $15,152 from the sale of real estate assets. Net
cash used in investing activities increased from $114,531 in 1995 to $166,762 in
1996 primarily due to a $41,616 increase in spending on construction and
acquisition of real estate assets and a $10,360 decrease in proceeds from the
sale of assets. The Company's net cash provided by financing activities
increased from $46,508 in 1994 to $60,885 in 1995, primarily due to the effects
of contributions from PPI of proceeds from the Third Offering and dividend
reinvestment plan ("DRIP"), and the Company's additional borrowings and
distributions. Net cash provided by financing activities increased from $60,885
in 1995 to $79,021 in 1996 primarily as a result of a decrease in net borrowings
and an increase in contributions from PPI of offering proceeds from the Notes
and the Perpetual Preferred Shares.
PPI 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
makes distributions to enable PPI to satisfy this requirement. As a REIT, the
Company generally will not be subject to Federal income tax on net income.
At December 31, 1996, the Company had total indebtedness of $434,319 and cash
and cash equivalents of $233. The Company's indebtedness includes approximately
$36,281 in conventional mortgages payable and $149,038 in tax-exempt bond
indebtedness secured by communities, senior unsecured notes of $225,000, and
borrowings under unsecured lines of credit totaling approximately $24,000.
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
17
20
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, possible sale of properties
and the issuance of debt securities or additional equity securities of PPI, or,
possibly in connection with acquisitions of land or improved properties, Units
of the Company. 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 distributions by the Company in
accordance with REIT requirements, of which PPI is subject to, 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 a syndicated line of credit (the "Revolver") in the amount of
$180,000 to provide funding for future construction, acquisitions and general
business obligations. The Revolver matures on May 1, 1999 and as of December 31,
1996, borrowings bore interest at LIBOR plus .80% or prime minus .25%. The
Revolver provides for the rate to be adjusted up or down based on changes in the
credit ratings on the Company's senior unsecured debt. The credit agreement for
the Revolver contains customary representations, covenants and events of
default, including covenants which restrict the ability of the Company to make
distributions, in excess of stated amounts, which in turn restricts the
discretion of PPI to declare and pay dividends. In general, during any fiscal
year the Company may only distribute up to 100% of the Company's consolidated
income available for distribution (as defined in the credit agreement) exclusive
of distributions of up to $30,000 of capital gains for such year. The credit
agreement contains exceptions to these limitations to allow the Company to make
distributions necessary to allow PPI to maintain its status as a REIT. The
Company does not anticipate that this covenant will adversely affect its ability
to make required distributions.
On July 26, 1996, the Company closed a $20,000 unsecured line of credit with
Wachovia Bank of Georgia, N.A. (The "Cash Management Line"), which was fully
funded and used to pay down the outstanding balance on the Revolver. The Cash
Management Line bears interest at LIBOR plus .75% or prime minus .25% and has a
maturity date of July 25, 1997. The Revolver requires three days advance notice
to repay borrowings whereas the Cash Management Line provides the Company with
an automatic daily sweep which applies all available cash to reduce the
outstanding balance. At December 31, 1996, the Company had $176,000 available
under the Revolver to fund future development and general corporate obligations.
In addition, the Company has a $3,000 facility to provide letters of credit for
general business purposes.
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 Federal
National Mortgage Association ("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 seven bond issues, aggregating $84,280,
which were concurrently reissued, and has agreed, subject to certain conditions,
to provide credit enhancement through November 14, 2025 for up to an additional
$70,248 ($5,490 of which is currently defeased) with respect to eight other bond
issues which mature and may be refunded during 1997 and 1998. Under this
agreement, on January 1, 1997, the Post Bridge and Post Gardens bonds were
refunded in the amount of $12,450 ($2,490 of which had previously been defeased)
and $14,500, respectively, with an issue enhanced by FNMA and maturing on June
1, 2025. The agreement with FNMA contains representations, covenants, and events
of default customary to such secured loans.
Refundable Tax Exempt Bonds
The Company has previously issued tax-exempt bonds, secured by certain
communities, totaling $235,880, of which $86,842 has been economically defeased
at December 31, 1996, leaving $149,038 of principal amount of tax-exempt bonds
outstanding at December 31, 1996 of which $84,280 of the bonds outstanding have
been reissued with a maturity of June 1, 2025. The remaining outstanding bonds,
together with the economically defeased bonds, mature and may be reissued,
during the years 1997 and 1998. On January 1, 1997, the Post Bridge and Post
Gardens bonds were refunded in the amount of $12,450 ($2,490 of which had
previously been defeased) and $14,500, respectively, with an issue enhanced by
FNMA and maturing on June 1, 2025. The Company has chosen economic defeasance of
the bond obligations rather than a legal defeasance in order to preserve the
legal right to refund such
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obligations on a tax-exempt basis at the stated maturity if the Company then
determines that such refunding is beneficial to the Company.
The following table shows the amount of bonds (both defeased and outstanding) at
December 31, 1996, which the Company may reissue during the years 1997 through
2025:
DEFEASED OUTSTANDING TOTAL REISSUE
PORTION PORTION CAPACITY
-------- ----------- -------------
1997 (1)............. $ 5,490 $ 51,460 $ 56,950
1998................. 81,352 13,298 94,650
Thereafter........... -- 84,280 84,280
------- -------- --------
$86,842 $149,038 $235,880
======= ======== ========
- ---------------
(1) 1997 amounts include Post Bridge and Post Gardens bonds which matured
on January 1, 1997.
Senior Unsecured Debt Offering
On September 30, 1996, the Company completed a $125,000 senior unsecured debt
offering comprised of two tranches. The first tranche, $100,000 of 7.25% Notes
due on October 1, 2003 (the "2003 Notes"), was priced at 99.642% to yield
7.316%, or 71 basis points over the rate on U.S. Treasury securities with a
comparable maturity. The second tranche, $25,000 or 7.50% Notes due on October
1, 2006 (the "2006 Notes", and together with the 2003 Notes, the "Notes"), was
priced at 99.694% to yield 7.544%, or 83 basis points over the rate on U.S.
Treasury securities with a comparable maturity. Proceeds from the Notes were
used to pay down the Revolver.
Perpetual Preferred Stock Offering
On October 1, 1996, PPI sold one million non-convertible 8.5% Series A
Cumulative Redeemable Shares (the "Perpetual Preferred Shares"), raising $50
million. Net proceeds of $48,700 from the sale of the Perpetual Preferred Shares
were contributed to the Company in exchange for one million Series A Preferred
Partnership Units (the "Perpetual Preferred Units"). The Company used the
proceeds to repay outstanding indebtedness.
Dividend Reinvestment Plan
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of PPI.
Under the DRIP, shareholders may elect for their dividends to be used to acquire
additional shares of PPI's Common Stock directly from PPI, for 95% of the market
price on the date of purchase.
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Schedule of Indebtedness
The following table reflects the Company's indebtedness at December 31, 1996.
MATURITY PRINCIPAL
COMMUNITY LOCATION INTEREST RATE DATE (1) BALANCE
- --------- ------------ ---------------------------- ----------------- ---------
TAX EXEMPT FIXED RATE (SECURED)
Post Bridge ....................... Atlanta, GA 7.5% + .575% (3)(4) 01/01/97 (5)(2) $ 9,960
Post Village (Atlanta) Gardens .... Atlanta, GA 7.5% + .575% (3)(4) 01/01/97 (5)(2) 14,500
Post Chase ........................ Atlanta, GA 7.5% + .575% (3)(4) 07/01/97 (5) 12,000
Post Walk ......................... Atlanta, GA 7.5% + .575% (3)(4) 07/01/97 (5) 15,000
Post Court ........................ Atlanta, GA 7.5% + .575% (3)(4) 06/01/98 (5) 13,298
--------
64,758
--------
CONVENTIONAL FIXED RATE (SECURED)
Post Village (Atlanta) Arbors ..... Atlanta, GA 8.16% 02/10/97 (6) 7,640
Post Summit ....................... Atlanta, GA 7.72% 02/01/98 5,315
Post River ........................ Atlanta, GA 7.72% 03/01/98 5,875
Post Hillsboro Village ............ Nashville, TN 9.20% 10/01/2001 3,051
--------
21,881
--------
TAX EXEMPT FLOATING RATE (SECURED)
Post Ashford Series 1995 .......... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 9,895
Post Valley Series 1995 ........... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 18,600
Post Brook Series 1995 ............ Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 4,300
Post Village (Atlanta) Hills
Series 1995 ..................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 7,000
Post Mill ......................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 12,880
Post Canyon ....................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 16,845
Post Corners ...................... Atlanta, GA "AAA" NON-AMT + .575% (3)(4) 06/01/2025 14,760
--------
84,280
--------
CONVENTIONAL FLOATING RATE (SECURED)
Post Renaissance (Phase I and II) Atlanta, GA LIBOR + .55% 07/01/99 14,400
--------
14,400
--------
SENIOR NOTES (UNSECURED)
Wachovia Bank of Georgia .......... N/A 7.15% 09/29/99 25,000
Northwestern Mutual Life .......... N/A 8.21% 06/07/2000 30,000
Wachovia Bank of Georgia .......... N/A 7.15% 09/29/2001 25,000
Northwestern Mutual Life .......... N/A 8.37% 06/07/2002 20,000
Senior Notes ...................... N/A 7.25% 10/01/2003 100,000
Senior Notes ...................... N/A 7.50% 10/01/2006 25,000
--------
225,000
--------
LINE OF CREDIT (UNSECURED)
Revolver .......................... N/A LIBOR + .80 % or prime minus .25% 05/01/99 4,000
Cash Management Line .............. N/A LIBOR + .75 % or prime minus .25% 11/14/97 20,000
--------
24,000
--------
TOTAL ............................. $434,319
========
- -----------------------------
(1) All of the debt can be prepaid at any time, subject to certain
prepayment penalties. All dates listed are final maturity dates
assuming the exercise of any available extension option by the Company.
(2) On January 1, 1997, this bond was refunded with an issue having a
maturity date of June 1, 2025 and an interest rate of SunTrust Bank,
Atlanta Non-AMT "AAA" tax free rate plus a credit enhancement fee of
.575%.
(3) Bond Financed (interest rate on bonds + credit enhancement fees).
(4) These bonds are cross collateralized and are also secured by Post
Fountains at Lee Vista, Post Lake (Orlando) and the Fountains and
Meadows of Post Village for which the Company has economically defeased
their respective bond indebtedness.
(5) Subject to certain conditions at re-issuance, the credit enhancement
runs to June 1, 2025.
(6) On February 10, 1997, this mortgage was paid off with proceeds drawn on
the Revolver.
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Current Development Activity
The Company's communities under development or in initial lease-up are
summarized in the following table:
ACTUAL OR UNITS
ACTUAL OR ESTIMATED LEASED
QUARTER OF ESTIMATED QUARTER OF AS OF
# OF CONSTRUCTION QUARTER FIRST STABILIZED FEBRUARY 22,
METROPOLITAN AREA UNITS COMMENCEMENT UNITS AVAILABLE OCCUPANCY 1997
----------------- ----- ------------ --------------- --------- ----
ATLANTA, GA
-----------
Post Collier Hills(TM) .................. 396 4Q'95 4Q'96 4Q'97 158
Post Glen(R) ............................ 314 1Q'96 1Q'97 1Q'98 38
Post Lindbergh(TM) ...................... 396 3Q'96 3Q'97 1Q'99 N/A
Post Gardens(R) ......................... 397 3Q'96 4Q'97 1Q'99 N/A
Riverside by Post(TM) ................... 537 3Q'96 1Q'98 4Q'99 N/A
Post Ridge(TM) .......................... 232 1Q'97 4Q'97 3Q'98 N/A
Post River(R)II ......................... 88 1Q'97 4Q'97 2Q'98 N/A
----- ---
2,360 196
----- ---
TAMPA, FL
---------
Post Walk at Hyde ....................... 134 1Q'96 1Q'97 3Q'97 62
Post Rocky .............................. 174 4Q'96 3Q'97 1Q'98 N/A
----- ---
308 62
----- ---
CHARLOTTE, NC
Post Park at Phillips ................... 402 4Q'95 4Q'96 1Q'98 139
----- ---
NASHVILLE, TN
Post Hillsboro .......................... 201 1Q'97 3Q'97 1Q'98 N/A
----- ---
3,271 397
===== ===
Land
The Company has acquired a parcel of land in Atlanta on which it plans to build
a new community. The Home Depot, Inc. is constructing its corporate headquarters
campus and extensive infrastructure improvements are being made by the county
adjacent to the parcel. The Company will review its development plan for this
parcel closer to completion of these improvements. In addition, the Company
holds land for a third phase of Post Rocky Point in Tampa, Florida. The Company
is also currently conducting feasibility and other pre-development studies for
possible new Post(R) communities in its primary market areas.
Other Activities
On May 7, 1996, the Company reacquired three contiguous Atlanta apartment
communities, containing 810 units, which the Company developed in the early
1980's and managed under the Post(R) brand name through mid-1993. The Company's
capital investment, after capital improvements, will be approximately $48
million, or $59,000 per apartment unit. The Company is operating this as one
community under the name Post Creek(TM) .
On July 19, 1996, the Company sold a community located in Florida, containing
180 units. The sale of the community is consistent with the Company's strategy
of selling communities when the market demographics for a community are no
longer consistent with the Company's existing ownership strategy.
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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 year ended
December 31, 1996 and 1995 are summarized as follows:
YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
-------- --------
New community development and acquisition activity ..... $173,328 $132,922
Nonrecurring capital expenditures
Vehicle access control gates ......................... 66 428
Other community additions and improvements ........... 1,872 859
Recurring capital expenditures
Carpet replacements .................................. 1,087 897
Other community additions and improvements ........... 1,874 803
Corporate additions and improvements ................... 820 1,267
-------- --------
$179,047 $137,176
======== ========
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.
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. FFO is defined to mean net income (loss)
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.
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FFO and CAD for the year ended December 31, 1996, 1995 and 1994 presented on a
historical basis are summarized in the following table:
Calculations of Funds from Operations and Cash Available for Distribution
YEAR ENDED DECEMBER 31,
1996 1994 1995
------------ ------------ ------------
Net income available to common unitholders ............. $ 52,390 $ 37,297 $ 24,730
Extraordinary item .................................... -- 1,120 4,413
Net gain on sale of assets, net of related income taxes (854) (1,494) (1,746)
------------ ------------ ------------
Adjusted net income .................................... 51,536 36,671 27,649
Depreciation of real estate assets ..................... 22,676 20,127 19,967
------------ ------------ ------------
Funds from Operations (1) .............................. 74,212 56,798 47,616
Recurring capital expenditures (2) .................... (2,961) (1,700) (1,816)
Non-recurring capital expenditures (3) ................ (1,938) (1,287) (1,302)
Loan amortization payments ............................ (228) (199) (184)
------------ ------------ ------------
Cash Available for Distribution ........................ $ 69,085 $ 53,612 $ 44,314
============ ============ ============
Cash Flow Provided From (Used In):
Operating activities .................................. $ 78,966 $ 57,362 $ 43,807
Investing activities .................................. $ (166,762) $ (114,531) $ (99,364)
Financing activities ................................... $ 79,021 $ 60,885 $ 46,508
Weighted average Units outstanding ..................... 26,917,723 23,541,639 22,125,890
============ ============ ============
- ---------------
(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 $1,087, $897 and
$729 of carpet replacement and $1,874, $803 and $1,087 of other
community additions and improvements to existing communities for the
years ended December 31, 1996, 1995 and 1994, respectively. Since the
Company does not add back the depreciation of non-real estate assets in
its calculation of FFO, capital expenditures of $820, $1,267 and $783
are excluded from the calculation of CAD for the years ended December
31, 1996, 1995 and 1994, respectively.
(3) Non-recurring capital expenditures consisted of the additions of
vehicle access control gates to communities of $66, $428 and $1,302 and
other community additions and improvements of $1,872, $859 and $0 for
the years ended December 31, 1996, 1995 and 1994, respectively.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The Company considers portions of this information to be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of The Securities Exchange Act of 1934. Although the Company
believes that the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, it can give no assurance that its
expectations will be achieved.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements are listed under Item 14(a) and are filed as part of
this report on the pages indicated. The supplementary data are included in Note
13 of the Notes to Consolidated Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company, a Georgia limited partnership, has no directors.
The persons who are executive officers of the Company and its affiliates and
their positions are as follows:
NAME POSITIONS AND OFFICES HELD
- -----------------------------------------------------------------------
John A. Williams.......................... Chairman of the Board, Chief Executive Officer and Director
John T. Glover............................ President, Chief Operating Officer, Treasurer and Director
W. Daniel Faulk, Jr....................... President -- Post Apartment Development
Jeffrey A. Harris......................... President -- Post Management Services
Martha J. Logan........................... President -- Post Management Division
Terry L. Chapman.......................... Executive Vice President -- Post Management Services
Richard A. Denny, III..................... Executive Vice President -- Post Apartment Development
John D. Hooks............................. Executive Vice President -- Post Management Services
William F. Leseman........................ Executive Vice President -- RAM Partners, Inc.
William C. Lincicome...................... Executive Vice President -- Post Landscape Services
Timothy A. Peterson....................... Executive Vice President -- Post Corporate Services
Sherry W. Cohen........................... Senior Vice President -- Post Corporate Services and Secretary
Judy M. Denman............................ Senior Vice President -- Post Corporate Services
R. Gregory Fox............................ Senior Vice President -- Post Corporate Services
Katharine W. Kelley....................... Senior Vice President -- Post Apartment Development
John B. Mears............................. Senior Vice President -- Post Apartment Development
Janie S. Maddox........................... Vice President -- Post Corporate Services
Donald J. Rutzen.......................... Vice President -- Post Apartment Development
The following is a biographical summary of the experience of the executive
officers of the company:
John A. Williams. Mr. Williams is the Chairman of the Board and Chief Executive
Officer of the Company. Mr. Williams founded the business of the Company in 1971
and since that time has acted as Chairman and Chief Executive Officer. Mr.
Williams is currently serving on the board of directors of Barnett Banks, Inc.,
Crawford & Co. and the Atlanta Regional Commission. Mr. Williams is 54 years
old.
John T. Glover. Mr. Glover is the President, Chief Operating Officer and
Treasurer of the Company and a director. Mr. Glover joined the Company in 1984
and since that time has acted as its President. Mr. Glover is a Director of
SunTrust Banks of Georgia Inc., SunTrust Bank, Atlanta, N.A. and Haverty's
Furniture Companies, Inc. In addition, he is a member of the Board of Governors
of the National Association of Real Estate Investment Trusts, and a member of
the board of directors of the National Realty Committee, and the National
Multi-Housing Council. Mr. Glover is 50 years old.
W. Daniel Faulk, Jr. Mr. Faulk has been with the Company for nine years. Since
April 1993, he has been President of Post Apartment Development, which is
responsible for the development and construction of all Post apartment
communities. Prior thereto, Mr. Faulk was President of Post Atlanta since
February 1987. Mr. Faulk is currently on the board of directors of Mountain
National Bank. Mr. Faulk is 54 years old.
Jeffrey A. Harris. Mr. Harris has been with the Company for twelve years. Since
October 1995, he has been President of Post Management Services and President of
Post Landscape. Prior thereto, Mr. Harris was President of Post Management
Division from March 1995, Executive Vice President of Post Management Division
from April 1993 and Senior Vice President from 1989. Mr. Harris is on the Board
of Directors and is President of the Atlanta Apartment Association. Mr. Harris
is 39 years old.
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27
Martha J. Logan. Ms. Logan has been with the Company for five years. Since
October 1995, she has been President of Post Management Division. Prior thereto,
Ms. Logan was President of RAM since July 1994, Executive Vice President of RAM
from January 1994 and was Vice President of RAM since 1991. Ms. Logan is 42
years old.
Terry L. Chapman. Mr. Chapman has been with the Company for twenty-three years
and is currently, and has been for more than five years, an Executive Vice
President of Post Management Services responsible for maintenance, quality
assurance, security, and preventive maintenance for all Post(R) communities. Mr.
Chapman is 50 years old.
Richard A. Denny, III. Mr. Denny has been with the Company for sixteen years.
Since July 1993, he has been an Executive Vice President of Post Apartment
Development responsible for construction of all Post(R) apartment communities.
Prior thereto, he was a Senior Vice President of Post Atlanta since June 1987.
Mr. Denny is 39 years old.
John D. Hooks. Mr. Hooks has been with the Company for eighteen years. Since
July 1993, he has been an Executive Vice President of Post Landscape responsible
for landscape design, installation and maintenance on all Post(R) communities.
Prior thereto, he was the Senior Vice President of Landscape since January 1987.
Mr. Hooks is 42 years old.
William F. Leseman. Mr. Leseman has been with the Company for