Attached files
| file | filename |
|---|---|
| 8-K - 8-K - POST PROPERTIES INC | d793325d8k.htm |
| EX-2.4 - EX-2.4 - POST PROPERTIES INC | d793325dex24.htm |
| EX-2.1 - EX-2.1 - POST PROPERTIES INC | d793325dex21.htm |
| EX-2.3 - EX-2.3 - POST PROPERTIES INC | d793325dex23.htm |
| EX-99.2 - EX-99.2 - POST PROPERTIES INC | d793325dex992.htm |
| EX-2.2 - EX-2.2 - POST PROPERTIES INC | d793325dex22.htm |
Exhibit 99.1
UNAUDITED PROFORMA FINANCIAL INFORMATION
Basis of Presentation
The following unaudited pro forma financial information is based on the historical financial statements of Post Properties, Inc. (the “Company”) and Post Apartment Homes, L.P. (the “Operating Partnership”) (collectively the “Company”), and give effect to the Company’s sale of two mixed-use apartment communities (the “Communities”). These proforma financial statements were prepared in accordance with generally accepted accounting principles in the United States (GAAP) and do not assume any differences in accounting policies. The financial periods being presented are based on the Company’s fiscal periods.
The unaudited pro forma statements of operations for the six months ended June 30, 2014 and the year ended December 31, 2013 are presented as if the sale of the Communities had occurred on January 1, 2013. The unaudited pro forma balance sheets of the Company and the Operating Partnership at June 30, 2014 are presented as if the sale of the Communities had occurred on June 30, 2014. The historical financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the sale of the Communities; (ii) factually supportable; and (iii) with respect to the statements of operations, expected to have a continuing impact on the Company’s results of operations.
The unaudited pro forma statements of operations of the Company and the Operating Partnership are not intended to represent or be indicative of the consolidated results of operations or financial position that the Company and the Operating Partnership would have actually reported had the sale of the Communities been completed as of the dates presented, and should not be taken as representative of the Company’s and the Operating Partnership’s future consolidated results of operations or financial condition. The unaudited pro forma condensed combined statements of operations do not reflect any revenue enhancements or cost savings (or associated costs to achieve such savings) from operating efficiencies, synergies or other restructuring that could result from the sale of the Communities.
The unaudited pro forma balance sheets and statements of operations should be read in conjunction with the historical consolidated financial statements and accompanying notes of the Company and the Operating Partnership included in the Annual Report on Form 10-K for the year ended December 31, 2013 and the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2014.
-1-
POST PROPERTIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
As of June 30, 2014
(In thousands, except per share data)
| As Reported | Asset Sale Pro Forma Adjustments |
Pro Forma | ||||||||||
| Assets |
||||||||||||
| Real estate assets |
||||||||||||
| Land |
$ | 312,602 | $ | - | $ | 312,602 | ||||||
| Building and improvements |
2,290,362 | - | 2,290,362 | |||||||||
| Furniture, fixtures and equipment |
292,392 | - | 292,392 | |||||||||
| Construction in progress |
66,187 | - | 66,187 | |||||||||
| Land held for future investment |
48,689 | - | 48,689 | |||||||||
|
|
|
|
|
|
|
|||||||
| 3,010,232 | - | 3,010,232 | ||||||||||
| Less: accumulated depreciation |
(895,723) | - | (895,723) | |||||||||
| Assets held for sale, net of accumulated depreciation of $40,986 at |
107,229 | (107,229) | (1) | - | ||||||||
|
|
|
|
|
|
|
|||||||
| Total real estate assets |
2,221,738 | (107,229) | 2,114,509 | |||||||||
| Investments in and advances to unconsolidated real estate entities |
4,071 | - | 4,071 | |||||||||
| Cash and cash equivalents |
17,201 | 94,601 | (1) | 111,802 | ||||||||
| Restricted cash |
4,967 | (1,457) | (1) | 3,510 | ||||||||
| Deferred financing costs, net |
7,262 | (1,131) | (2) | 6,131 | ||||||||
| Other assets |
32,550 | 43,803 | (1) | 76,353 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
$ | 2,287,789 | $ | 28,587 | $ | 2,316,376 | ||||||
|
|
|
|
|
|
|
|||||||
| Liabilities and equity |
||||||||||||
| Indebtedness, including $82,922 secured by assets held for sale as of |
$ | 976,760 | $ | (82,922) | (2) | $ | 893,838 | |||||
| Accounts payable, accrued expenses and other |
77,313 | (481) | (1) | 76,832 | ||||||||
| Investments in unconsolidated real estate entities |
16,844 | - | 16,844 | |||||||||
| Dividends and distributions payable |
21,805 | - | 21,805 | |||||||||
| Accrued interest payable |
4,569 | (397) | (1) | 4,172 | ||||||||
| Security deposits and prepaid rents |
9,329 | (1,490) | (1) | 7,839 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
1,106,620 | (85,290) | 1,021,330 | |||||||||
|
|
|
|
|
|
|
|||||||
| Redeemable common units |
7,235 | - | 7,235 | |||||||||
|
|
|
|
|
|
|
|||||||
| Commitments and contingencies |
||||||||||||
| Equity |
||||||||||||
| Company shareholders’ equity |
||||||||||||
| Preferred stock, $.01 par value, 20,000 authorized: |
||||||||||||
| 8 1/2% Series A Cumulative Redeemable Shares, liquidation preference |
9 | - | 9 | |||||||||
| Common stock, $.01 par value, 100,000 authorized: |
- | |||||||||||
| 54,632 shares issued and 54,377 shares outstanding at June 30, 2014 |
546 | - | 546 | |||||||||
| Additional paid-in-capital |
1,113,733 | - | 1,113,733 | |||||||||
| Accumulated earnings |
81,230 | 113,680 | (3) | 194,910 | ||||||||
| Accumulated other comprehensive income (loss) |
(4,902) | - | (4,902) | |||||||||
|
|
|
|
|
|
|
|||||||
| 1,190,616 | 113,680 | 1,304,296 | ||||||||||
| Less common stock in treasury, at cost, 338 shares at June 30, 2014 |
(16,536) | - | (16,536) | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Company shareholders’ equity |
1,174,080 | 113,680 | 1,287,760 | |||||||||
| Noncontrolling interests - consolidated property partnerships |
(146) | 197 | (1) | 51 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total equity |
1,173,934 | 113,877 | 1,287,811 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities and equity |
$ | 2,287,789 | $ | 28,587 | $ | 2,316,376 | ||||||
|
|
|
|
|
|
|
|||||||
-2-
POST PROPERTIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the six months ended June 30, 2014
(In thousands, except per share data)
| As Reported | Asset Sale Pro Forma Adjustments |
Pro Forma | ||||||||||
| Revenues |
||||||||||||
| Rental |
$ | 177,442 | $ | (8,183) | (4) | $ | 169,259 | |||||
| Other property revenues |
10,654 | (40) | (4) | 10,614 | ||||||||
| Other |
442 | - | 442 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
188,538 | (8,223) | 180,315 | |||||||||
|
|
|
|
|
|
|
|||||||
| Expenses |
||||||||||||
| Property operating and maintenance (exclusive of items shown separately below) |
82,391 | (4,186) | (4) | 78,205 | ||||||||
| Depreciation |
42,596 | (849) | (4) | 41,747 | ||||||||
| General and administrative |
8,094 | - | 8,094 | |||||||||
| Investment and development |
1,605 | - | 1,605 | |||||||||
| Other investment costs |
483 | - | 483 | |||||||||
| Other expenses |
1,409 | - | 1,409 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total expenses |
136,578 | (5,035) | 131,543 | |||||||||
|
|
|
|
|
|
|
|||||||
| Operating income |
51,960 | (3,188) | 48,772 | |||||||||
| Interest income |
16 | - | 16 | |||||||||
| Interest expense |
(21,677) | 2,403 | (5) | (19,274) | ||||||||
| Amortization of deferred financing costs |
(1,265) | 118 | (5) | (1,147) | ||||||||
| Net gains on condominium sales activities |
810 | - | 810 | |||||||||
| Equity in income of unconsolidated real estate entities, net |
986 | - | 986 | |||||||||
| Other income (expense), net |
(391) | - | (391) | |||||||||
| Net loss on extinguishment of indebtedness |
(4,287) | - | (4,287) | |||||||||
|
|
|
|
|
|
|
|||||||
| Income from continuing operations, before gains on sales of real estate assets |
26,152 | (667) | 25,485 | |||||||||
| Gains on sales of real estate assets |
36,092 | - | 36,092 | |||||||||
|
|
|
|
|
|
|
|||||||
| Income from continuing operations |
$ | 62,244 | $ | (667) | $ | 61,577 | ||||||
|
|
|
|
|
|
|
|||||||
| Per common share data - Basic |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.11 | $ | 1.10 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - basic |
54,199 | 54,199 | ||||||||||
|
|
|
|
|
|||||||||
| Per common share data - Diluted |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.10 | $ | 1.09 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - diluted |
54,314 | 54,314 | ||||||||||
|
|
|
|
|
|||||||||
-3-
POST PROPERTIES, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2013
(In thousands, except per share data)
| As Reported | Asset Sale Pro Forma Adjustments |
Pro Forma | ||||||||||
| Revenues |
||||||||||||
| Rental |
$ | 341,902 | $ | (15,962) | (4) | $ | 325,940 | |||||
| Other property revenues |
19,963 | (83) | (4) | 19,880 | ||||||||
| Other |
872 | - | 872 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
362,737 | (16,045) | 346,692 | |||||||||
|
|
|
|
|
|
|
|||||||
| Expenses |
||||||||||||
| Property operating and maintenance (exclusive of items shown separately below) |
155,261 | (7,475) | (4) | 147,786 | ||||||||
| Depreciation |
85,608 | (3,327) | (4) | 82,281 | ||||||||
| General and administrative |
17,245 | - | 17,245 | |||||||||
| Investment and development |
1,755 | - | 1,755 | |||||||||
| Other investment costs |
1,324 | - | 1,324 | |||||||||
| Severance, impairment and other |
2,417 | - | 2,417 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total expenses |
263,610 | (10,802) | 252,808 | |||||||||
|
|
|
|
|
|
|
|||||||
| Operating income |
99,127 | (5,243) | 93,884 | |||||||||
| Interest income |
77 | - | 77 | |||||||||
| Interest expense |
(44,704) | 4,898 | (5) | (39,806) | ||||||||
| Amortization of deferred financing costs |
(2,573) | 237 | (5) | (2,336) | ||||||||
| Net gains on condominium sales activities |
27,944 | - | 27,944 | |||||||||
| Equity in income of unconsolidated real estate entities, net |
2,090 | - | 2,090 | |||||||||
| Other income (expense), net |
(839) | - | (839) | |||||||||
|
|
|
|
|
|
|
|||||||
| Income from continuing operations |
$ | 81,122 | $ | (108) | $ | 81,014 | ||||||
|
|
|
|
|
|
|
|||||||
| Per common share data - Basic |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.42 | $ | 1.42 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - basic |
54,336 | 54,336 | ||||||||||
|
|
|
|
|
|||||||||
| Per common share data - Diluted |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.41 | $ | 1.41 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - diluted |
54,508 | 54,508 | ||||||||||
|
|
|
|
|
|||||||||
-4-
POST APARTMENT HOMES, L.P.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
As of June 30, 2014
(In thousands, except per share data)
| As Reported | Asset Sale Pro Forma Adjustments |
Pro Forma | ||||||||||
| Assets |
||||||||||||
| Real estate assets |
||||||||||||
| Land |
$ | 312,602 | $ | - | $ | 312,602 | ||||||
| Building and improvements |
2,290,362 | - | 2,290,362 | |||||||||
| Furniture, fixtures and equipment |
292,392 | - | 292,392 | |||||||||
| Construction in progress |
66,187 | - | 66,187 | |||||||||
| Land held for future investment |
48,689 | - | 48,689 | |||||||||
|
|
|
|
|
|
|
|||||||
| 3,010,232 | - | 3,010,232 | ||||||||||
| Less: accumulated depreciation |
(895,723) | - | (895,723) | |||||||||
| For-sale condominiums |
- | - | - | |||||||||
| Assets held for sale, net of accumulated depreciation of $40,986 at |
107,229 | (107,229) | (1) | - | ||||||||
|
|
|
|
|
|
|
|||||||
| Total real estate assets |
2,221,738 | (107,229) | 2,114,509 | |||||||||
| Investments in and advances to unconsolidated real estate entities |
4,071 | - | 4,071 | |||||||||
| Cash and cash equivalents |
17,201 | 94,601 | (1) | 111,802 | ||||||||
| Restricted cash |
4,967 | (1,457) | (1) | 3,510 | ||||||||
| Deferred financing costs, net |
7,262 | (1,131) | (2) | 6,131 | ||||||||
| Other assets |
32,550 | 43,803 | (1) | 76,353 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total assets |
$ | 2,287,789 | $ | 28,587 | $ | 2,316,376 | ||||||
|
|
|
|
|
|
|
|||||||
| Liabilities and equity |
||||||||||||
| Indebtedness, including $82,922 secured by assets held for sale as of |
$ | 976,760 | $ | (82,922) | (2) | $ | 893,838 | |||||
| Accounts payable, accrued expenses and other |
77,313 | (481) | (1) | 76,832 | ||||||||
| Investments in unconsolidated real estate entities |
16,844 | - | 16,844 | |||||||||
| Dividends and distributions payable |
21,805 | - | 21,805 | |||||||||
| Accrued interest payable |
4,569 | (397) | (1) | 4,172 | ||||||||
| Security deposits and prepaid rents |
9,329 | (1,490) | (1) | 7,839 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities |
1,106,620 | (85,290) | 1,021,330 | |||||||||
|
|
|
|
|
|
|
|||||||
| Redeemable common units |
7,235 | - | 7,235 | |||||||||
|
|
|
|
|
|
|
|||||||
| Commitments and contingencies |
||||||||||||
| Equity |
||||||||||||
| Operating Partnership equity |
||||||||||||
| Preferred units |
43,392 | - | 43,392 | |||||||||
| Common units |
||||||||||||
| General partner |
12,952 | 1,137 | (3) | 14,089 | ||||||||
| Limited partner |
1,122,638 | 112,543 | (3) | 1,235,181 | ||||||||
| Accumulated other comprehensive income (loss) |
(4,902) | - | (4,902) | |||||||||
|
|
|
|
|
|
|
|||||||
| Total Operating Partnership equity |
1,174,080 | 113,680 | 1,287,760 | |||||||||
| Noncontrolling interests - consolidated property partnerships |
(146) | 197 | (1) | 51 | ||||||||
|
|
|
|
|
|
|
|||||||
| Total equity |
1,173,934 | 113,877 | 1,287,811 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total liabilities and equity |
$ | 2,287,789 | $ | 28,587 | $ | 2,316,376 | ||||||
|
|
|
|
|
|
|
|||||||
-5-
POST APARTMENT HOMES, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the six months ended June 30, 2014
(In thousands, except per share data)
| As Reported | Asset Sale Pro Forma Adjustments |
Pro Forma | ||||||||||
| Revenues |
||||||||||||
| Rental |
$ | 177,442 | $ | (8,183) | (4) | $ | 169,259 | |||||
| Other property revenues |
10,654 | (40) | (4) | 10,614 | ||||||||
| Other |
442 | - | 442 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
188,538 | (8,223) | 180,315 | |||||||||
|
|
|
|
|
|
|
|||||||
| Expenses |
||||||||||||
| Property operating and maintenance (exclusive of items shown separately below) |
82,391 | (4,186) | (4) | 78,205 | ||||||||
| Depreciation |
42,596 | (849) | (4) | 41,747 | ||||||||
| General and administrative |
8,094 | - | 8,094 | |||||||||
| Investment and development |
1,605 | - | 1,605 | |||||||||
| Other investment costs |
483 | - | 483 | |||||||||
| Other expenses |
1,409 | - | 1,409 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total expenses |
136,578 | (5,035) | 131,543 | |||||||||
|
|
|
|
|
|
|
|||||||
| Operating income |
51,960 | (3,188) | 48,772 | |||||||||
| Interest income |
16 | - | 16 | |||||||||
| Interest expense |
(21,677) | 2,403 | (5) | (19,274) | ||||||||
| Amortization of deferred financing costs |
(1,265) | 118 | (5) | (1,147) | ||||||||
| Net gains on condominium sales activities |
810 | - | 810 | |||||||||
| Equity in income of unconsolidated real estate entities, net |
986 | - | 986 | |||||||||
| Other income (expense), net |
(391) | - | (391) | |||||||||
| Net loss on extinguishment of indebtedness |
(4,287) | - | (4,287) | |||||||||
|
|
|
|
|
|
|
|||||||
| Income from continuing operations, before gains on sales of real estate assets |
26,152 | (667) | 25,485 | |||||||||
| Gains on sales of real estate assets |
36,092 | - | 36,092 | |||||||||
|
|
|
|
|
|
|
|||||||
| Income from continuing operations |
$ | 62,244 | $ | (667) | $ | 61,577 | ||||||
|
|
|
|
|
|
|
|||||||
| Per common share data - Basic |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.11 | $ | 1.10 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - basic |
54,334 | 54,334 | ||||||||||
|
|
|
|
|
|||||||||
| Per common share data - Diluted |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.10 | $ | 1.09 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - diluted |
54,449 | 54,449 | ||||||||||
|
|
|
|
|
|||||||||
-6-
POST APARTMENT HOMES, L.P.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 2013
(In thousands, except per share data)
| As Reported | Asset Sale Pro Forma Adjustments |
Pro Forma | ||||||||||
| Revenues |
||||||||||||
| Rental |
$ | 341,902 | $ | (15,962) | (4) | $ | 325,940 | |||||
| Other property revenues |
19,963 | (83) | (4) | 19,880 | ||||||||
| Other |
872 | - | 872 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total revenues |
362,737 | (16,045) | 346,692 | |||||||||
|
|
|
|
|
|
|
|||||||
| Expenses |
||||||||||||
| Property operating and maintenance (exclusive of items shown separately below) |
155,261 | (7,475) | (4) | 147,786 | ||||||||
| Depreciation |
85,608 | (3,327) | (4) | 82,281 | ||||||||
| General and administrative |
17,245 | - | 17,245 | |||||||||
| Investment and development |
1,755 | - | 1,755 | |||||||||
| Other investment costs |
1,324 | - | 1,324 | |||||||||
| Severance, impairment and other |
2,417 | - | 2,417 | |||||||||
|
|
|
|
|
|
|
|||||||
| Total expenses |
263,610 | (10,802) | 252,808 | |||||||||
|
|
|
|
|
|
|
|||||||
| Operating income |
99,127 | (5,243) | 93,884 | |||||||||
| Interest income |
77 | - | 77 | |||||||||
| Interest expense |
(44,704) | 4,898 | (5) | (39,806) | ||||||||
| Amortization of deferred financing costs |
(2,573) | 237 | (5) | (2,336) | ||||||||
| Net gains on condominium sales activities |
27,944 | - | 27,944 | |||||||||
| Equity in income of unconsolidated real estate entities, net |
2,090 | - | 2,090 | |||||||||
| Other income (expense), net |
(839) | - | (839) | |||||||||
|
|
|
|
|
|
|
|||||||
| Income from continuing operations |
$ | 81,122 | $ | (108) | $ | 81,014 | ||||||
|
|
|
|
|
|
|
|||||||
| Per common share data - Basic |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.42 | $ | 1.42 | ||||||||
|
|
|
|
|
|||||||||
| Weighted average common shares outstanding - basic |
54,478 | 54,478 | ||||||||||
|
|
|
|
|
|||||||||
| Per common share data - Diluted |
||||||||||||
| Income from continuing operations (net of preferred dividends) |
$ | 1.41 | $ | 1.41 | ||||||||
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| Weighted average common shares outstanding - diluted |
54,650 | 54,650 | ||||||||||
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POST PROPERTIES, INC. AND POST APARTMENT HOMES, L.P.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
Pro Forma Adjustments
The following pro forma adjustments have been reflected in the unaudited pro forma consolidated balance sheets and statements of operations. Such information does not purport to be indicative of the results of operations or financial position that actually would have resulted had the sale of the Communities occurred on the date indicated, nor is it indicative of the results that may be expected in future periods. The pro forma adjustments are based upon information and assumptions available at the time of the filing of the Current Report on Form 8-K to which these unaudited pro forma condensed combined statements of operations are an exhibit.
Pro forma balance sheet adjustments
| 1) | These pro forma adjustments reflect the impact of the assumed sale of the two mixed-use communities discussed in Item 2.01, as if they had occurred as of June 30, 2014. The pro forma sale adjustments include other estimated closing adjustments related to restricted cash, other assets, accounts payable and accrued expenses, security deposits and prepaid rents and accrued interest payable. The pro forma adjustments also reflect a promissory note received from a qualified tax intermediary, included in other assets, which was subsequently distributed to the Company in redemption of its interest in the consolidated joint venture that owned one of the communities. |
| 2) | These pro forma adjustments reflect the retirement of secured mortgage indebtedness of the communities from the net sale proceeds of the communities. In addition, the pro forma adjustments assume the write-off of unamortized deferred financing costs associated with the retired indebtedness. |
| 3) | This pro forma adjustment reflect the estimated net gains on the mixed-use community sales offset by prepayment penalties, net of non-controlling interests associated with the early retirement of mortgage indebtedness secured by the communities and losses related to the write-off of unamortized deferred loan costs on the retired indebtedness. |
Pro forma statement of operations adjustments
| 4) | These pro forma adjustments reflect the actual rental revenue, other property revenue, property operating and maintenance expenses and depreciation expense of the two mixed-use communities sold for the periods presented. |
| 5) | These pro forma adjustments reflect the reduction of interest expense and amortization of deferred financing costs related to the assumed retirement of mortgage indebtedness secured by the Communities. |
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