Colonial Properties Trust Reports Results for Third Quarter 2009
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BIRMINGHAM, Ala.--(BUSINESS WIRE)-- Colonial Properties Trust (NYSE: CLP) announced its results for the third quarter ended September 30, 2009.
For the third quarter 2009, the company reported a net loss to common shareholders of $3.5 million, or $(0.07) per diluted share, compared with net income available to common shareholders of $27.2 million, or $0.57 per diluted share, for the same period in 2008. The company reported net income available to common shareholders for the nine months ended September 30, 2009, of $8.6 million, or $0.17 per diluted share, compared with net income available to common shareholders of $50.4 million, or $1.05 per diluted share, for the same period in 2008.
Funds from Operations Available to Common Shareholders and Unitholders (FFO), a widely accepted measure of REIT performance, for the third quarter 2009 were $28.7 million, or $0.49 per diluted share, compared with $27.9 million, or $0.49 per diluted share, in the same period a year ago. FFO for the nine months ended September 30, 2009, totaled $110.4 million, or $1.91 per diluted share, compared with $92.9 million, or $1.63 per diluted share, for the same period in 2008.
Operating FFO, which the company defines as FFO before transaction income (i.e. development gains, land/outparcel gains and bond/preferred stock repurchase gains/losses), for the third quarter 2009 was $13.8 million, or $0.23 per diluted share, compared with $23.3 million, or $0.41 per diluted share, in the same period a year ago. The decrease in operating FFO from the same prior-year period is primarily due to a decline in multifamily same-property net operating income (NOI) of 6.2 percent; $3.7 million in charges for an expected partial loan repayment guarantee and impairment on our 35 percent joint venture interest with respect to an apartment community; and a reduction in capitalized interest of approximately $3.1 million as a result of no longer capitalizing interest on land held for future developments. Operating FFO for the nine months ended September 30, 2009 was $51.5 million, or $0.89 per diluted share, compared with $76.2 million, or $1.34 per diluted share, in the same period a year ago.
The EPS, FFO per share and Operating FFO per share information provided above for the three and nine months ended September 30, 2009 reflect the dilutive effect of the issuance of 4,201,571 common shares and 4,802,971 shares during the three and nine months ended September 30, 2009, respectively, under our previously announced at-the-market equity offering program.
A reconciliation of net income (loss) available to common shareholders to FFO and to Operating FFO, as well as the definitions and statements of purpose, are included at the end of this press release and in the financial tables accompanying this press release.
Highlights for the Third Quarter 2009
-- Commenced an equity offering, which closed on October 6, 2009, issuing
12,109,500 common shares, including the underwriters' overallotment
option, raising net proceeds of $109.8 million
-- Issued 4.2 million common shares raising net proceeds of $37.8 million
through the company's at-the-market equity offering program, bringing
the proceeds of issuances under that program to $42.6 million since the
program's inception in April 2009
-- Multifamily same-property NOI declined 6.2 percent compared with third
quarter 2008
-- Ended the quarter with multifamily same-property physical occupancy of
94.4 percent
-- Completed the sale of 264 condominium units for total sales proceeds of
$24.7 million, including all remaining condominium units at Murano at
Delray Beach and Portofino at Jensen Beach, in two separate bulk
transactions
-- Recognized net gains of $14.3 million, or $0.24 per diluted share, in
net income and FFO from the repurchases of $166.8 million of outstanding
unsecured senior notes of the company's operating partnership, Colonial
Realty Limited Partnership ("Colonial Realty")
"Since the beginning of the third quarter, we have significantly enhanced our liquidity position with $180 million in proceeds from capital market activities and dispositions," stated Thomas H. Lowder, the company's Chairman and Chief Executive Officer. "The new capital allowed us to continue delevering the company. We again have made steady progress on simplifying our business by reducing the number of for-sale residential units on our balance sheet and exiting another joint venture."
Multifamily Operating Performance
Multifamily same-property NOI for the third quarter 2009 decreased 6.2 percent compared with the third quarter 2008 for the 28,285 apartment homes included in the consolidated same-property results. Multifamily same-property revenues decreased 4.1 percent and expenses decreased 1.1 percent compared with the third quarter 2008. Multifamily same-property physical occupancy as of September 30, 2009 was 94.4 percent compared with 96.0 percent at September 30, 2008.
A reconciliation of NOI to income from continuing operations, as well as definitions and the statements of purpose, is included at the end of this press release and in the financial tables accompanying this press release.
Capital Markets Activity
On October 6, 2009, the company completed an equity offering of 12,109,500 common shares, including shares issued to cover over-allotments, at $9.50 per share. Total net proceeds from this offering were approximately $109.8 million after deducting the underwriting discount and other offering expenses payable by the company. The company used the net proceeds from the offering to repay a portion of the outstanding balance under its unsecured revolving credit facility and for general corporate purposes.
During the third quarter 2009, the company issued a total of 4,201,571 common shares at a weighted average issue price of $9.20 per share under its previously announced $50 million at-the-market equity issuance program, raising net proceeds of $37.8 million. Year to date, the company has issued a total of 4,802,971 common shares at a weighted average issue price of $9.07 per share, raising net proceeds of $42.6 million under that program. Following the completion of the equity offering on October 6, 2009, as described above, the company terminated its at-the-market equity offering program.
Repurchases of Senior Unsecured Debt Securities
During the third quarter 2009, the company repurchased a total of $166.8 million in aggregate principal amount of Colonial Realty's outstanding unsecured senior notes, $148.2 million of which was repurchased through a cash tender offer. The third quarter 2009 repurchases were made at an average 10.0 percent discount to par value, which represents a 7.9 percent yield to maturity, and resulted in the recognition of net gains of $14.3 million, or $0.24 per diluted share, in EPS and FFO for the third quarter 2009. Year-to-date, the company has repurchased $579.2 million in aggregate principal amount of Colonial Realty's outstanding unsecured notes, with net gains reported totaling $54.8 million.
Disposition Activity
During the third quarter 2009, the company closed on the sale of the remaining 93 units at Murano at Delray Beach and 118 units at Portofino at Jensen Beach condominiums in two separate bulk transactions for total sales proceeds of $15.8 million in cash. Additionally, the company closed on the sale of 53 additional condominium units during the third quarter for total sales proceeds of $8.9 million. Subsequent to the end of the third quarter, the company completed the sale of the remaining 14 condominium units at the Grander located in Gulf Shores, Alabama, for a total sales price of $3.3 million.
After the closing of the remaining 14 units at the Grander in October 2009, the net book value of the company's remaining for sale condominium units is $24.5 million, which are classified as held for sale on the company's balance sheet.
Development Activity
During the third quarter, the company completed construction of Colonial Grand at Ashton Oaks, a 362-unit apartment community located in Austin, Texas, and Colonial Grand at Desert Vista, a 380-unit apartment community located in Las Vegas, Nevada. Additionally, the company completed construction of Colonial Pinnacle Turkey Creek III, a 166,000 square-foot retail center located in Knoxville, Tennessee.
The company had two active retail projects totaling 0.4 million square feet under construction at the end of the third quarter 2009, with an additional $10.4 million expected to be spent to complete the developments.
Joint Venture Transactions
During the third quarter 2009, certain of the company's unconsolidated joint ventures exercised options to extend an aggregate of approximately $48.5 million of outstanding mortgage debt from 2009 to 2010. In addition, one of the company's unconsolidated joint ventures disposed of its only property during the quarter, a 280-unit multifamily apartment community, of which a portion of the proceeds were used to repay an outstanding collateralized $14.0 million mortgage loan on the property (of which our pro rata share was $2.8 million).
During the third quarter 2009, the company completed the previously announced sale of its interests in four single-asset multifamily joint ventures with CMS, which collectively included 1,212 apartment units. Upon closing of the transaction, the company received a total of $2.0 million in cash. In conjunction with this transaction, the company agreed to provide an additional contribution to the CMS/Colonial Canyon Creek joint venture in connection with the refinancing of an existing $27.4 million construction loan which was secured by Colonial Grand at Canyon Creek, a 336-unit apartment community located in Austin, Texas. On September 14, 2009, the CMS/Colonial Canyon Creek joint venture refinanced its existing construction loan with a new $15.6 million, 10-year secured loan collateralized by the property with an interest rate of 5.64%. In connection with the refinancing, the company made a preferred equity contribution of $11.5 million, which was used by the joint venture to repay the balance of the then outstanding construction loan and closing costs. The preferred equity has a cumulative preferential return of 8.0%. As a result of the preferred equity contribution to the joint venture, we have consolidated the CMS/Colonial Canyon Creek joint venture in our financial statements for the quarter ending September 30, 2009.
Through Colonial Realty, the company owns a 35 percent joint venture interest in Colonial Grand at Traditions, a 324-unit apartment community located in Gulf Shores, Alabama that was completed in 2007. On September 25, 2009, the company determined it was probable that it will have to fund the $3.5 million partial loan repayment guarantee provided on the original construction loan for Colonial Grand at Traditions. Accordingly, the company recognized a charge to earnings of $3.5 million in the third quarter of 2009 for this expected payment. In addition, the company determined that its 35 percent joint venture interest is impaired and that this impairment is other than temporary. The impairment charge was calculated as the difference between the estimated fair value of our joint venture interest and the current book value of our joint venture interest. As a result, the company recognized a non-cash charge of $0.2 million in the third quarter of 2009 for this other-than-temporary impairment.
At September 30, 2009, the company's pro-rata share of mortgage debt of unconsolidated joint ventures that matures in 2009 and 2010 is $189.5 million. Approximately $7.0 million of this debt, which represents the company's pro-rata share, has already matured. The company intends to cooperate with its joint venture partners in connection with their efforts to refinance and/or replace outstanding joint venture indebtedness (which may also include, for example, property dispositions), which cooperation may include additional capital contributions from time to time. The failure of the company's joint venture partners to refinance and/or restructure such debt (or decisions by our joint venture partners not to refinance and/or restructure such debt) may have a material adverse impact on the value of our joint venture interests.
Additionally, on October 27, 2009, the company closed on the sale of its joint venture interest in Colony Woods, a 414-unit apartment community located in Birmingham, Alabama for total sales proceeds of $24.8 million (of which our pro-rata share was $2.5 million).
Quarterly Dividend on Common Shares
On October 28, 2009, the Board of Trustees approved a cash dividend of $0.15 per common share, payable November 16, 2009, to shareholders of record as of November 9, 2009, representing an ex-dividend date of November 5, 2009.
2009 EPS and FFO per Share Guidance
The company's updated guidance range for the full-year 2009 for EPS and FFO per share, with certain assumptions and timing of certain transactions, is set forth and reconciled below:
Full-Year
2009 Range
Low - High
Diluted EPS $ 0.11 - $0.28
Plus: Real Estate Depreciation & Amortization 1.87 - 1.87
Less: Gain on Sale of Operating Properties (0.00 ) - (0.05)
Total Diluted FFO per share $ 1.98- $2.10
Less: Transaction Income
Gain on Sale of Development Properties and Land (0.07 ) - (0.08)
Gain on Bond or Preferred Stock Repurchases (0.88 ) - (0.89)
Operating FFO per share $ 1.03- $1.13
Following are current assumptions reflected in the company's updated full-year 2009 guidance:
-- Multifamily same-property NOI: decline of 6.5 to 7.25 percent.
o Revenue: Decline of 3.0 to 3.25 percent
o Expense: Growth of 2.75 to 3.25 percent
-- Development spending of $40 million to $45 million.
-- Commercial development and for-sale residential property dispositions of
$80 million to $100 million.
-- New secured financings totaling up to $506 million; all of which has
already been obtained.
-- Corporate G&A expenses of $16 million to $18 million.
-- Increased number of common shares outstanding due to the sale of 12.1
million shares in the recent equity offering and 4.8 million shares
issued in the at-the-market equity issuance program
The company's guidance range reflects the existence of volatile economic conditions, and is based on a number of assumptions, many of which are outside the company's control and all of which are subject to change. Among the assumptions included in the company's guidance range are assumptions regarding the ability of the company and the company's joint venture partners to refinance and/or replace existing joint venture mortgage debt, including debt that has matured or matures in the near future, and potential costs and other impacts if such debt is not refinanced or replaced. The company's guidance may change if actual results vary from these assumptions.
For additional details regarding the company's disposition and investment activities, see the company's Supplemental Financial Highlights available on the company's website at www.colonialprop.com.
Conference Call and Supplemental Materials
The company will hold its quarterly conference call today at 1:00 p.m. Central Time. The call will include a review of the company's third quarter performance and a discussion of the company's strategy and expectations for the future.
To participate, please dial 1-866-454-3510. As with previous calls, a replay will be available for seven days by dialing 1-800-642-1687; the conference ID is 78509582. Access to the live call and a replay will also be available through the company's website at www.colonialprop.com under "Investor Services: General Information: Presentations."
Colonial Properties Trust produces a supplemental information package that provides detailed information regarding operating performance, investing activities and the company's overall financial position. For a copy of Colonial Properties' detailed Supplemental Financial Highlights, please visit the company's website at www.colonialprop.com under the "Investor Services: Financial Information and Filings" tab, or contact Jerry Brewer in Investor Relations at 1-800-645-3917.
Colonial Properties Trust is a multifamily real estate investment trust (REIT) that creates additional value for its shareholders by managing commercial assets through joint venture investments and pursuing development opportunities. As of September 30, 2009, the company owned or managed 34,644 apartment units, and 21.5 million square feet of office and retail space located in key Sunbelt states from Virginia to Nevada. Headquartered in Birmingham, Alabama, Colonial Properties is listed on the New York Stock Exchange under the symbol CLP and is included in the S&P SmallCap 600 Index. For more information, please visit the company's website at www.colonialprop.com.
Non-GAAP Financial Measures
The company uses certain non-GAAP financial measures in this press release. The non-GAAP financial measures include FFO and Operating FFO. The definitions of these non-GAAP financial measures are summarized below. The company believes that these measures are helpful to investors in measuring financial performance and comparing such performance to other REITs. Funds from Operations -- FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), means income (loss) before minority interest (determined in accordance with GAAP), excluding gains (losses) from debt restructuring and sales of depreciated property, plus real estate depreciation and after adjustments for unconsolidated partnerships and joint ventures. FFO is presented to assist investors in analyzing the company's performance. The company believes that FFO is useful to investors because it provides an additional indicator of the company's financial and operating performance. This is because, by excluding the effect of real estate depreciation and gains (or losses) from sales of properties (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO can facilitate comparison of operating performance among equity REITs. FFO is a widely recognized measure in the company's industry.
The company believes that the line on its consolidated statement of operations entitled "net income available to common shareholders" is the most directly comparable GAAP measure to FFO. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. Management believes that the use of FFO, combined with the required primary GAAP presentations, fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. In addition to company management evaluating the operating performance of its reportable segments based on FFO results, management uses FFO and FFO per share, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to key employees.
Operating FFO -- The company also uses operating funds from operations ("Operating FFO") as an operating measure. The company defines Operating FFO as FFO excluding gains on the sale of land and development properties and gains on the repurchase of bonds and preferred shares. The company believes Operating FFO is an important supplemental measure because it provides a measure of operating performance. While land and development gains or the repurchase of debt/preferred shares are components of our current business plan, the timing and amount of these transactions can vary significantly between periods. The company believes that the line on its consolidated statement of operations entitled "net income available to common shareholders" is the most directly comparable GAAP measure to Operating FFO.
Property Net Operating Income - The company uses property NOI, including same store NOI, as an operating measure. NOI is defined as total property revenues, including unconsolidated partnerships and joint ventures, less total property operating expenses (such items as repairs and maintenance, payroll, utilities, property taxes, insurance and advertising). The company believes that in order to facilitate a clear understanding of its operating results, NOI should be examined in conjunction with net income as presented in the company's consolidated financial statements. The company also believes that NOI is an important supplemental measure of operating performance for a REIT's operating real estate because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs and general and administrative expenses. This measure is particularly useful, in the opinion of the company, in evaluating the performance of geographic operations, same store groupings and individual properties. Additionally, the company believes that NOI is a widely accepted measure of comparative operating performance in the real estate investment community. The company believes that the line on its consolidated statement of operations entitled "net income" is the most directly comparable GAAP measure to NOI. In addition to company management evaluating the operating performance of its reportable segments based on NOI results, management uses NOI, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to key employees.
The company's method of calculating FFO, Operating FFO and NOI may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. Neither FFO, Operating FFO nor NOI should be considered (1) as an alternative to net income (determined in accordance with GAAP), (2) as an indicator of financial performance, (3) as cash flow from operating activities (determined in accordance with GAAP) or (4) as a measure of liquidity nor is it indicative of sufficient cash flow to fund all of the company's needs, including the company's ability to make distributions.
Safe Harbor Statement
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Estimates of future earnings are, by definition, and certain other statements in this press release, including statements regarding, the ability of the company's joint venture partners to refinance and/or replace outstanding joint venture indebtedness, the company's ability to complete developments in line with cost estimates, the company's ability to successfully complete unit sales at its condominium conversion projects may constitute, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance, achievements or transactions to be materially different from the results, performance, achievements or transactions expressed or implied by the forward looking statements. Factors that impact such forward looking statements include, among others, real estate conditions and markets, including recent deterioration in the multifamily market and the strength or duration of the current recession or recovery; increased exposure, as a multifamily focused REIT, to risks inherent in investments in a single industry; ability to obtain financing on reasonable rates, if at all; performance of affiliates or companies in which we have made investments; changes in operating costs; higher than expected construction costs; uncertainties associated with the timing and amount of real estate dispositions, including our existing inventory of condominium and for-sale residential assets; legislative or regulatory decisions; our ability to continue to maintain our status as a REIT for federal income tax purposes; price volatility, dislocations and liquidity disruptions in the financial markets and the resulting impact on availability of financing; the effect of any rating agency action on the cost and availability of new debt financings; level and volatility of interest rates or capital market conditions; effect of any terrorist activity or other heightened geopolitical crisis; or other factors affecting the real estate industry generally.
Except as otherwise required by the federal securities laws, the company assumes no responsibility to update the information in this press release.
The company refers you to the documents filed by the company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2008, as may be updated or supplemented in the company's Form 10-Q filings, which discuss these and other factors that could adversely affect the company's results.
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2009
BALANCE SHEET
($ in 000s) As of As of
9/30/2009 12/31/2008
ASSETS
Real Estate Assets
Operating Properties $ 3,045,801 $ 2,873,274
Undeveloped Land & Construction in Progress 246,413 309,010
Total Real Estate, before Depreciation 3,292,214 3,182,284
Less: Accumulated Depreciation (490,428 ) (403,858 )
Real Estate Assets Held for Sale, net 91,928 196,284
Net Real Estate Assets 2,893,714 2,974,710
Cash and Equivalents 3,851 9,185
Restricted Cash 26,178 29,766
Accounts Receivable, net 20,719 23,102
Notes Receivable 17,355 2,946
Prepaid Expenses 16,756 5,332
Deferred Debt and Lease Costs 19,223 16,783
Investment in Unconsolidated Subsidiaries 31,405 46,221
Other Assets 28,885 47,124
Total Assets $ 3,058,086 $ 3,155,169
LIABILITIES
Long-Term Liabilities
Unsecured Credit Facility $ 278,950 $ 311,630
Notes and Mortgages Payable 1,393,967 1,450,389
Total Long-Term Liabilities 1,672,917 1,762,019
Other Liabilities 88,555 120,693
Total Liabilities 1,761,472 1,882,712
REDEEMABLE NONCONTROLLING INTEREST & EQUITY
Redeemable Common Units 125,002 124,848
Preferred Shares and Units, at Liquidation
Value
Series B 7 1/4%, Preferred Units 100,000 100,000
Series D 8 1/8%, Preferred Shares 100,118 100,281
Total Preferred Shares and Units, at 200,118 200,281
Liquidation Value
Common Equity, including Noncontrolling 971,494 947,328
Interest in Operating Partnership
Total Equity, including Noncontrolling Interest 1,296,614 1,272,457
Total Liabilities and Equity $ 3,058,086 $ 3,155,169
SHARES & UNITS OUTSTANDING, END OF PERIOD
(shares and units in 000s) As of As of
9/30/2009 12/31/2008
Basic
Shares 54,198 48,546
Operating Partnership Units (OP Units) 8,186 8,861
Total Shares & OP Units 62,384 57,407
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2009
CONSOLIDATED
STATEMENTS OF
INCOME
($ in 000s,
except per Three Months Ended Nine Months Ended
share data)
9/30/2009 9/30/2008 9/30/2009 9/30/2008
Revenue
Minimum Rent $ 69,028 $ 70,131 $ 209,476 $ 205,073
Tenant 848 1,116 2,823 3,256
Recoveries
Other Property 10,823 9,070 30,191 26,109
Related Revenue
Construction - 654 36 9,102
Revenues
Other
Non-Property 3,987 5,186 11,366 15,542
Related Revenue
Total Revenue 84,686 86,157 253,892 259,082
Operating
Expenses
Operating
Expenses:
Property
Operating 25,615 23,093 70,979 62,783
Expenses
Taxes,
Licenses and 8,385 10,347 29,672 29,238
Insurance
Total Property
Operating 34,000 33,440 100,651 92,021
Expenses
Construction - 673 35 8,503
Expenses
Property
Management 1,728 2,088 5,329 6,402
Expenses
General and
Administrative 4,073 5,993 12,982 17,562
Expenses
Management Fee
and Other 3,340 4,335 11,096 12,269
Expenses
Restructuring 588 - 1,400 -
Charges
Investment and 100 80 1,585 956
Development (1)
Depreciation 28,070 24,191 84,130 70,568
Amortization 864 833 2,936 2,560
Impairment (2) 221 - 1,839 -
Total
Operating 72,984 71,633 221,983 210,841
Expenses
Income from 11,702 14,524 31,909 48,241
Operations
Other Income
(Expense)
Interest Expense &
Debt Cost (23,840 ) (18,998 ) (69,192 ) (56,026 )
Amortization
Gain on
Retirement of 14,929 2,515 56,480 10,716
Debt
Interest 345 634 1,095 2,609
Income
(Loss) Income from
Partially-Owned (3,317 ) 1,190 (4,595 ) 13,497
Investments (3)
Loss on
Hedging (649 ) (46 ) (1,709 ) (127 )
Activities
Gain on Sale of
Property, net of income
taxes of $1 (Q3) and
$3,157 (YTD) in 2009
and $643 (Q3) and 507 1,814 5,745 4,250
$1,309 (YTD) in 2008
Income Taxes (352 ) 216 2,518 892
and Other
Total Other
Income (12,377 ) (12,675 ) (9,658 ) (24,189 )
(Expense)
(Loss) Income from
Continuing (675 ) 1,849 22,251 24,052
Operations
Discontinued
Operations
Income (Loss) from
Discontinued 280 1,048 (198 ) 5,760
Operations (2)
(Loss) Gain on Disposal
of Discontinued
Operations, net of
income taxes of $0 (Q3)
and $70 (YTD) in 2009
and $41 (Q3) and
$1,064 (YTD) in (6 ) 33,355 6 43,213
2008
Income (Loss) from
Discontinued # 274 34,403 (192 ) 48,973
Operations
Net (Loss) (401 ) 36,252 22,059 73,025
Income
Noncontrolling
Interest
Continuing
Operations
Noncontrolling
Interest of Limited - (68 ) (999 ) (316 )
Partners
Noncontrolling
Interest in CRLP - (1,813 ) (1,813 ) (5,438 ) (5,452 )
Preferred
Noncontrolling
Interest in CRLP - 623 304 (1,445 ) (1,981 )
Common
Discontinued
Operations
Noncontrolling
Interest in CRLP - (60 ) (5,733 ) (60 ) (8,458 )
Common
Noncontrolling
Interest of Limited 155 71 597 341
Partners
Income Attributable
to Noncontrolling (1,095 ) (7,239 ) (7,345 ) (15,866 )
Interest
Net (Loss) Income
Attributable to (1,496 ) 29,013 14,714 57,159
Parent Company
Dividends to
Preferred (1,998 ) (2,037 ) (6,108 ) (6,705 )
Shareholders
Preferred Share
Issuance Costs, Net 30 240 25 (27 )
of Discount
Net (Loss) Income
Available to Common $ (3,464 ) $ 27,216 $ 8,631 $ 50,427
Shareholders
(Loss) Earnings per
Share - Basic
Continuing $ (0.08 ) $ (0.04 ) $ 0.17 $ 0.19
Operations
Discontinued 0.01 0.61 - $ 0.87
Operations
EPS - Basic $ (0.07 ) $ 0.57 $ 0.17 $ 1.06
(Loss) Earnings
per Share -
Diluted
Continuing $ (0.08 ) $ (0.04 ) $ 0.17 $ 0.19
Operations
Discontinued 0.01 0.61 - $ 0.86
Operations
EPS - Diluted $ (0.07 ) $ 0.57 $ 0.17 $ 1.05
(1) Reflects costs incurred related to potential mergers, acquisitions and
abandoned pursuits . These costs are volatile and therefore may vary between
periods.
(2) For the three months ended September 30, 2009, the Company recorded a $0.5
million non-cash impairment charge. Of the charge, $0.2 million (presented in
"Impairment" in continuing operations) is related to the Company's
noncontrolling interest in the Colonial Grand at Traditions joint venture and
$0.3 million (presented as a part of "(Loss) Income from Discontinued
Operations") is related to the sale of the remaining units at Portofino at
Jensen Beach, a for-sale residential project. For the nine months ended
September 30, 2009, in addition to the charges described above, the Company
recorded a $3.4 million non-cash impairment charge. Of the charge, $0.7 million
is related to the Company's noncontrolling interest in the Craft Farms joint
venture, $0.3 million is related to the sale of the remaining 17 units at the
Regents Park for-sale residential project and $0.6 million is related to an
additional for-sale residential project and sale of outparcels (presented in
"Impairment" in continuing operations). In addition, $1.8 million is related to
two multifamily apartment communities sold during the quarter (presented as a
part of "(Loss) Income from Discontinued Operations".
(3) The three and nine months ended September 30, 2009 includes a $3.5 million
charge due to the probability that the Company will have to fund the partial
loan repayment guarantee provided on the original construction loan for Colonial
Grand at Traditions, a property in which the Company has a 35% noncontrolling
interest.
COLONIAL PROPERTIES TRUST
Financial Statements
Third Quarter 2009
THIRD QUARTER FUNDS FROM OPERATIONS (FFO) RECONCILIATION
($ in 000s, except Three Months Ended Nine Months Ended
per share data)
9/30/2009 9/30/2008 9/30/2009 9/30/2008
Net (Loss) Income
Available to Common $ (3,464 ) $ 27,216 $ 8,631 $ 50,427
Shareholders
Noncontrolling
Interest in CRLP (563 ) 5,429 1,506 10,439
(Operating Ptr
Unitholders)
Noncontrolling
Interest in Gain/Loss
of Sale of - - 992 -
Undepreciated
Property
Total (4,027 ) 32,645 11,129 60,866
Adjustments -
Consolidated
Properties
Depreciation
- Real 27,567 24,108 82,753 70,414
Estate
Amortization
- Real 288 331 1,016 1,033
Estate
Remove: Gain/(Loss)
on Sale of
Property, net of
Income
Tax and
Noncontrolling (503 ) (35,170 ) (5,753 ) (47,464 )
Interest
Include: Gain/
(Loss) on Sale of
Undepreciated
Property, net of
Income Tax and 589 1,846 4,133 5,976
Noncontrolling
Interest
Total
Adjustments - 27,941 (8,885 ) 82,149 29,959
Consolidated
Adjustments -
Unconsolidated
Properties
Depreciation
- Real 5,016 4,124 14,250 14,565
Estate
Amortization
- Real 1,700 1,973 5,152 6,791
Estate
Remove: Gain/(Loss) (1,787 ) (1,763 ) (1,736 ) (18,558 )
on Sale of Property
Total
Adjustments - 4,929 4,334 17,666 2,798
Unconsolidated
Funds from $ 28,843 $ 28,094 $ 110,944 $ 93,623
Operations
Income Allocated to
Participating (136 ) (233 ) (534 ) (761 )
Securities
Funds from Operations Available to
Common Shareholders
and $ 28,707 $ 27,861 $ 110,410 $ 92,862
Unitholders
FFO per
Share
Basic $ 0.49 $ 0.49 $ 1.91 $ 1.63
Diluted $ 0.49 $ 0.49 $ 1.91 $ 1.63
Operating
FFO:
Funds from $ 28,707 $ 27,861 $ 110,410 $ 92,862
Operations
Less:
Transaction
Income
- Development and (589 ) (1,846 ) (4,133 ) (5,976 )
Land (Gains) Losses
- Bond / Preferred (14,959 ) (2,755 ) (56,505 ) (10,639 )
Repurchase Gains
- Write-off of OCI
as a Result of Bond 649 - 1,709 -
Repurchases
Operating $ 13,808 $ 23,260 $ 51,481 $ 76,247
FFO
Operating
FFO per
Share
Basic $ 0.23 $ 0.41 $ 0.89 $ 1.34
Diluted $ 0.23 $ 0.41 $ 0.89 $ 1.34
FFO, as defined by the National Association of Real Estate Investment Trusts
(NAREIT), means income (loss) before Noncontrolling Interest (determined in
accordance with GAAP), excluding gains (losses) from debt restructuring and
sales of depreciated property, plus real estate depreciation and after
adjustments for unconsolidated partnerships and joint ventures. FFO is presented
to assist investors in analyzing the Company's performance. The Company believes
that FFO is useful to investors because it provides an additional indicator of
the Company's financial and operating performance. This is because, by excluding
the effect of real estate depreciation and gains (or losses) from sales of
properties (all of which are based on historical costs which may be of limited
relevance in evaluating current performance), FFO can facilitate comparison of
operating performance among equity REITs. FFO is a widely recognized measure in
the Company's industry.
The Company defines Operating FFO as FFO excluding gains on the sale of land and
development properties and gains on the repurchase of bonds and preferred
shares. The Company believes Operating FFO is an important supplemental measure
because it provides a measure of operating performance. While land and
development gains or the repurchase of debt/preferred shares are components of
our current business plan, the timing and amount of these transactions can vary
significantly between periods.
The Company's method of calculating FFO and Operating FFO may be different from
methods used by other REITs and, accordingly, may not be comparable to such
other REITs. Neither FFO nor Operating FFO should be considered (1) as an
alternative to net income (determined in accordance with GAAP), (2) as an
indicator of financial performance, (3) as cash flow from operating activities
(determined in accordance with GAAP) or (4) as a measure of liquidity nor is it
indicative of sufficient cash flow to fund all of our needs, including our
ability to make distributions.
THIRD QUARTER SHARES AND UNITS OUTSTANDING, WEIGHTED
(shares and units in Three Months Ended Nine Months Ended
000s)
9/30/2009 9/30/2008 9/30/2009 9/30/2008
Basic
Shares 50,787 47,369 49,222 47,046
Operating Partnership Units (OP 8,325 9,553 8,636 9,842
Units)
Total Shares & OP Units 59,112 56,922 57,858 56,888
Dilutive Common Share - - - 107
Equivalents
Diluted (1)
Shares 50,787 47,369 49,222 47,153
Total Shares & OP Units 59,112 56,922 57,858 56,995
Notes:
(1) For periods where the Company reported a net loss from continuing
operations (after preferred dividends), the effect of dilutive shares has been
excluded from per share computations as including such shares would be
anti-dilutive.
COLONIAL PROPERTIES TRUST
Corporate Reconciliations
($ in 000s, except per share data)
RECONCILIATION OF
REVENUES
Three Months Ended Nine Months Ended
3Q09 3Q08 3Q09 3Q08
Divisional Total
Revenues
Multifamily - Same-Property $ 67,518 $ 70,412 $ 204,706 $ 209,921
Multifamily - Non 9,048 8,493 26,624 27,353
Same-Property
Commercial 22,470 23,489 68,980 69,991
Total Divisional 99,036 102,394 300,310 307,265
Revenues
Less: Unconsolidated (1,485 ) (2,137 ) (5,527 ) (6,484 )
Revenues - Mfam
Less: Unconsolidated (15,814 ) (17,296 ) (48,418 ) (53,437 )
Revenues - Commercial
Discontinued (1,038 ) (2,644 ) (3,875 ) (12,906 )
Operations
Construction - 654 36 9,102
Revenues
Unallocated Corporate 3,987 5,186 11,366 15,542
Revenues
Cons. Rev, adj -'09 84,686 86,157 253,892 259,082
Disc Ops
Add: Add'l Disc Ops Rev, - (5,827 ) - (17,516 )
post filing
Total Consol. Rev, per $ 84,686 $ 80,330 $ 253,892 $ 241,566
10-Q / K
RECONCILIATION OF
EXPENSES
3Q09 3Q08 3Q09 3Q08
Divisional Total
Expenses
Multifamily - Same-Property $ 28,436 $ 28,765 $ 83,433 $ 81,412
Multifamily - Non 4,553 4,881 14,785 14,698
Same-Property
Commercial 8,236 8,620 24,931 24,802
Total Divisional 41,225 42,266 123,149 120,912
Expenses
Less: Unconsolidated (766 ) (1,150 ) (2,736 ) (3,374 )
Expenses - Mfam
Less: Unconsolidated (5,952 ) (6,450 ) (17,872 ) (19,557 )
Expenses - Commercial
Discontinued (758 ) (1,226 ) (3,941 ) (5,960 )
Operations
Impairment - Discontinued 251 - 2,051 -
Operations (1)
Total Property Operating 34,000 33,440 100,651 92,021
Expenses
Construction - 673 35 8,503
Expenses
Property Management 1,728 2,088 5,329 6,402
Expenses
General & Administrative 4,073 5,993 12,982 17,562
Expenses
Management Fee and Other 3,340 4,335 11,096 12,269
Expenses
Restructure 588 - 1,400 -
Charges
Investment and 100 80 1,585 956
Development (2)
Impairment - Continuing 221 - 1,839 -
Operations (1)
Depreciation 28,070 24,191 84,130 70,568
Amortization 864 833 2,936 2,560
Cons. Exp, adj -'09 72,984 71,633 221,983 210,841
Disc Ops
Add: Add'l Disc Ops Exp, - (1,981 ) - (7,880 )
post filing
Total Consol. Exp, per $ 72,984 $ 69,652 $ 221,983 $ 202,961
10-Q / K
RECONCILIATION OF
NOI
3Q09 3Q08 3Q09 3Q08
Divisional Total
NOI
Multifamily - Same-Property $ 39,082 $ 41,647 $ 121,273 $ 128,509
Multifamily - Non 4,495 3,612 11,839 12,655
Same-Property
Commercial 14,234 14,869 44,049 45,189
Total Divisional 57,811 60,128 177,161 186,353
NOI
Less: Unconsolidated NOI - (719 ) (987 ) (2,791 ) (3,110 )
Mfam
Less: Unconsolidated NOI - (9,862 ) (10,846 ) (30,546 ) (33,880 )
Commercial
Discontinued (280 ) (1,418 ) 66 (6,946 )
Operations
Impairment - Discontinued (251 ) - (2,051 ) -
Operations (1)
Unallocated Corporate 3,987 5,186 11,366 15,542
Revenues
Construction NOI - (19 ) 1 599
Property Management (1,728 ) (2,088 ) (5,329 ) (6,402 )
Expenses
General & Administrative (4,073 ) (5,993 ) (12,982 ) (17,562 )
Expenses
Management Fee and Other (3,340 ) (4,335 ) (11,096 ) (12,269 )
Expenses
Restructure (588 ) - (1,400 ) -
Charges
Investment and (100 ) (80 ) (1,585 ) (956 )
Development (2)
Impairment - Continuing (221 ) - (1,839 ) -
Operations (1)
Depreciation (28,070 ) (24,191 ) (84,130 ) (70,568 )
Amortization (864 ) (833 ) (2,936 ) (2,560 )
Income from 11,702 14,524 31,909 48,241
Operations
Total Other Income (12,377 ) (12,675 ) (9,658 ) (24,189 )
(Expense)
Income from Contin'g (675 ) 1,849 22,251 24,052
Ops (3)
Disc Ops - (3,846 ) - (9,636 )
08 & 09 Disc Ops Other - (1,363 ) - (7,657 )
Inc(Exp)
Income from Cont (3), per $ (675 ) $ (3,360 ) $ 22,251 $ 6,759
10-Q / K (3)
Notes:
(1) For the three months ended September 30, 2009, the Company recorded a $0.5
million non-cash impairment charge. Of the charge, $0.2 million (presented in
"Impairment" in continuing operations) is related to the Company's
noncontrolling interest in the Colonial Grand at Traditions joint venture and
$0.3 million (presented as a part of "(Loss) Income from Discontinued
Operations") is related to the sale of the remaining units at Portofino at
Jensen Beach, a for-sale residential project. For the nine months ended
September 30, 2009, in addition to the charges described above, the Company
recorded a $3.4 million non-cash impairment charge. Of the charge, $0.7 million
is related to the Company's noncontrolling interest in the Craft Farms joint
venture, $0.3 million is related to the sale of the remaining 17 units at the
Regents Park for-sale residential project and $0.6 million is related to an
additional for-sale residential project and sale of outparcels (presented in
"Impairment" in continuing operations). n addition, $1.8 million is related to
two multifamily apartment communities sold during the quarter (presented as a
part of "(Loss) Income from Discontinued Operations".
(2) Reflects costs incurred related to potential mergers, acquisitions and
abandoned pursuits. These costs are volatile and therefore may vary between
periods.
(3) Income from Continuing Operations before extraordinary items, minority
interest and discontinued operations. Adjustments for additional discontinued
operations have restated prior periods in accordance with FAS 144.
Source: Colonial Properties Trust
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