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Colonial Properties Trust Reports Results For Second Quarter 2012

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 future dispositions and developments, development costs and projected stabilization dates, the company’s receipt of all or any part of the $2.0 million DRA/CLP office joint venture repurchase payment, the transition of management services for the DRA/CLP office joint venture properties and certain leasing responsibilities to a third party, operating performance outlook and other business fundamentals, 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, changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits (including the European sovereign debt crisis), high unemployment rates, decreased consumer confidence and liquidity concerns, particularly in markets in which we have a high concentration of properties; exposure, as a multifamily focused REIT, to risks inherent in investments in a single industry; ability to obtain financing on favorable 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 disposition and the resulting gains/losses associated with such dispositions; legislative or regulatory decisions; the company’s 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, 2011, 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
Second Quarter 2012
   
BALANCE SHEET
 
($ in 000s) As of As of
6/30/2012 12/31/2011
ASSETS

Real Estate Assets

Operating Properties $ 3,386,946 $ 3,445,455
Undeveloped Land & Construction in Progress   340,530     306,826  
Total Real Estate, before Depreciation 3,727,476 3,752,281
 
Less: Accumulated Depreciation (773,631 ) (731,894 )
Real Estate Assets Held for Sale, net   148,412     10,543  
 
Net Real Estate Assets 3,102,257 3,030,930
 
Cash and Equivalents 7,009 6,452
Restricted Cash 23,416 43,489
Accounts Receivable, net 25,432 26,762
Notes Receivable 42,761 43,787
Prepaid Expenses 17,412 19,912
Deferred Debt and Lease Costs 25,778 22,408
Investment in Unconsolidated Subsidiaries 9,293 12,303
Other Assets   49,305     52,562  
 
Total Assets $ 3,302,663   $ 3,258,605  
 
LIABILITIES
Unsecured Credit Facility $ 117,243 $ 184,000
Notes and Mortgages Payable   1,724,789     1,575,727  
Total Debt 1,842,032 1,759,727
 
Accounts Payable 33,193 50,266
Accrued Interest 12,030 11,923
Accrued Expenses 33,730 15,731
Investment in Unconsolidated Subsidiaries 6,795 31,577
Other Liabilities   33,185     25,208  
Total Liabilities   1,960,965     1,894,432  
 
Redeemable Common Units 167,310 159,582
 
EQUITY
Limited Partner's Noncontrolling Interest 707 728
 
Cumulative Earnings 1,278,359 1,267,958
Cumulative Distributions (1,894,461 ) (1,862,838 )
Common Equity, including Additional Paid-in Capital 1,963,309 1,965,812
Treasury Shares, at Cost (150,163 ) (150,163 )
Accumulated Other Comprehensive Loss   (23,363 )   (16,906 )
Total Equity, including Noncontrolling Interest   1,174,388     1,204,591  
 
Total Liabilities and Equity $ 3,302,663   $ 3,258,605  
 
SHARES & UNITS OUTSTANDING, END OF PERIOD        
 
(shares and units in 000s) As of As of
6/30/2012 12/31/2011
Basic
Shares 88,026 87,474
Operating Partnership Units (OP Units)   7,154     7,169  
Total Shares & OP Units 95,180 94,643
 
 

COLONIAL PROPERTIES TRUST

Financial Statements

Second Quarter 2012

           
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
($ in 000s, except per share data) Three Months Ended Six Months Ended

6/30/2012

6/30/2011

6/30/2012

6/30/2011

Revenue

Minimum Rent $ 81,582 $ 73,093 $ 161,628 $ 143,168
Tenant Recoveries 2,120 1,928 4,437 3,935
Other Property Related Revenue 14,430 12,711 28,070 24,580
Other Non-Property Related Revenue   1,471     2,173     2,815     3,984  
Total Revenues 99,603 89,905 196,950 175,667
 

Operating Expenses

Operating Expenses:
Property Operating Expenses 27,335 25,131 53,894 48,990
Taxes, Licenses and Insurance   11,115     10,045     22,339     20,291  
Total Property Operating Expenses 38,450 35,176 76,233 69,281
 
Property Management Expenses 3,001 2,181 5,847 4,603
General and Administrative Expenses 5,446 5,188 11,213 10,390
Management Fee and Other Expenses 1,769 1,884 3,814 3,653

Investment and Development Expenses (1)

205 393 592 979
Depreciation 30,472 29,130 60,818 57,874
Amortization 1,324 1,773 3,142 3,584

Impairment and Other Losses (2)

  395     148     895     2,244  
Total Operating Expenses   81,062     75,873     162,554     152,608  
Income from Operations 18,541 14,032 34,396 23,059
 

Other Income (Expense)

Interest Expense (23,277 ) (20,394 ) (46,330 ) (41,272 )
Debt Cost Amortization (1,402 ) (1,146 ) (2,835 ) (2,298 )
Interest Income 556 336 1,550 668
Income (Loss) from Partially-Owned Investments 21,349 (134 ) 22,022 (474 )
(Loss) Gain on Sale of Property (9 ) 23 (235 ) (56 )
Income Tax and Other   (277 )   (271 )   (465 )   (519 )
Total Other Income (Expense)   (3,060 )   (21,586 )   (26,293 )   (43,951 )
 
Income (Loss) from Continuing Operations 15,481 (7,554 ) 8,103 (20,892 )
 

Discontinued Operations

Income from Discontinued Operations (2)

2,250 1,510 3,177 3,092
Loss on Disposal of Discontinued Operations   (12 )   -     (14 )   -  
Net Income from Discontinued Operations

 

  2,238     1,510     3,163     3,092  
 
Net Income (Loss)   17,719     (6,044 )   11,266     (17,800 )
 
Noncontrolling Interest

Continuing Operations

Noncontrolling Interest of Limited Partners (8 ) (41 ) (17 ) (43 )
Noncontrolling Interest in CRLP - Preferred - (906 ) - (1,813 )
Noncontrolling Interest in CRLP - Common (1,166 ) 673 (609 ) 1,847

Discontinued Operations

Noncontrolling Interest in CRLP - Common   (168 )   (119 )   (239 )   (251 )
Income Attributable to Noncontrolling Interest   (1,342 )   (393 )   (865 )   (260 )

Net Income (Loss) Available to Common Shareholders

$ 16,377   $ (6,437 ) $ 10,401   $ (18,060 )
                     
 
Income (Loss) per Share - Basic
Continuing Operations $ 0.16 $ (0.09 ) $ 0.08 $ (0.26 )
Discontinued Operations   0.03     0.01     0.04     0.04  
EPS - Basic $ 0.19   $ (0.08 ) $ 0.12   $ (0.22 )
 
Income (Loss) per Share - Diluted
Continuing Operations $ 0.16 $ (0.09 ) $ 0.08 $ (0.26 )
Discontinued Operations   0.03     0.01     0.04     0.04  
EPS - Diluted $ 0.19   $ (0.08 ) $ 0.12   $ (0.22 )
 
(1) Reflects costs incurred related to acquisitions and abandoned pursuits . These costs are volatile and therefore may vary between periods.
(2) During the six months ended June 30, 2012, the Company recorded $0.9 million in charges as a result of warranty claims on units previously sold at two of the Company's for-sale residential projects and $0.3 million in non-cash impairment charges (classified in "Income from Discontinued Operations"). During the six months ended June 30, 2011, the Company recorded a $1.5 million charge for a loss contingency related to certain litigation, $0.5 million in casualty losses and $0.2 million in non-cash impairment charges.
 

COLONIAL PROPERTIES TRUST

Financial Statements

Second Quarter 2012

 
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
 
(shares and units in 000s) Three Months Ended Six Months Ended

6/30/2012

6/30/2011

6/30/2012

6/30/2011

 
Basic
Shares 87,201 83,588 87,106 81,562
Operating Partnership Units (OP Units)   7,162     7,259     7,166     7,271  
Total Shares & OP Units 94,363 90,847 94,272 88,833
 
Dilutive Common Share Equivalents 289 - 276 -
 

Diluted (1)

Shares 87,490 83,588 87,382 81,562
Total Shares & OP Units 94,652 90,847 94,548 88,833
 
(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.
 
FUNDS FROM OPERATIONS (FFO) RECONCILIATION
 
($ in 000s, except per share data) Three Months Ended Six Months Ended

6/30/2012

6/30/2011

6/30/2012

6/30/2011

Net Income (Loss) Available to Common Shareholders $ 16,377 $ (6,437 ) $ 10,401 $ (18,060 )
Noncontrolling Interest in CRLP (Operating Partnership Unitholders)   1,334     (554 )   848     (1,596 )
Total 17,711 (6,991 ) 11,249 (19,656 )
 

Adjustments - Consolidated Properties

Depreciation - Real Estate 31,169 31,779 63,131 63,530
Amortization - Real Estate 1,502 1,984 3,620 4,030
Impairment on Depreciable Asset 271 - 271 -

Remove: (Gain)/Loss on Sale of Property, net of Income Tax and Noncontrolling Interest

20 (23 ) 249 56

Include: Gain/(Loss) on Sale of Undepreciated Property, net of Income Tax and Noncontrolling Interest

  (8 )   10     (269 )   (69 )
Total Adjustments - Consolidated 32,954 33,750 67,002 67,547
 

Adjustments - Unconsolidated Properties

Depreciation - Real Estate 1,035 1,598 2,151 3,249
Amortization - Real Estate 355 528 722 1,182
Remove: (Gain)/Loss on Sale of Property   (21,906 )   4     (22,709 )   25  
Total Adjustments - Unconsolidated   (20,516 )   2,130     (19,836 )   4,456  
 
Funds from Operations $ 30,149   $ 28,889   $ 58,415   $ 52,347  
 
Income Allocated to Participating Securities   (242 )   (216 )   (460 )   (399 )

Funds from Operations Available to Common Shareholders and Unitholders

$ 29,907   $ 28,673   $ 57,955   $ 51,948  
                     
FFO per Share
Basic $ 0.32 $ 0.32 $ 0.61 $ 0.58
Diluted $ 0.32 $ 0.32 $ 0.61 $ 0.58
 
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 sales of depreciated property and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization 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'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.
 
 
COLONIAL PROPERTIES TRUST
Corporate Reconciliations
($ in 000s)
               

 

       
RECONCILIATION OF REVENUES
 
Three Months Ended Six Months Ended
6/30/2012 6/30/2011 6/30/2012 6/30/2011
Divisional Total Revenues
Multifamily - Same Property $ 80,277 $ 76,515 $ 159,120 $ 150,926
Multifamily - Non-Same Property (1) 9,936 7,534 18,934 13,216
Commercial   17,671     19,055     35,387     38,823  
Total Divisional Revenues 107,884 103,104 213,441 202,965
 
Less: Unconsolidated Revenues - Multifamily (480 ) (702 ) (952 ) (1,415 )
Less: Unconsolidated Revenues - Commercial (4,393 ) (6,533 ) (9,185 ) (13,104 )
Discontinued Operations (4,879 ) (8,137 ) (9,169 ) (16,763 )
Unallocated Corporate Revenues   1,471     2,173     2,815     3,984  
Consolidated Revenue Adjusted -'11 Discontinued Operations (2)   99,603     89,905     196,950     175,667  
Add: Additional Discontinued Operations Revenue, post filing (3)   -     8,132     -     16,756  
Total Consolidated Revenue, per 10-Q (4) $ 99,603   $ 98,037   $ 196,950   $ 192,423  
 
RECONCILIATION OF EXPENSES
 
6/30/2012 6/30/2011 6/30/2012 6/30/2011
Divisional Total Expenses
Multifamily - Same Property $ 31,394 $ 30,940 $ 62,642 $ 61,416
Multifamily - Non-Same Property (1) 4,467 3,808 8,502 6,756
Commercial   5,922     6,023     11,653     12,252  
Total Divisional Expenses 41,783 40,771 82,797 80,424
 
Less: Unconsolidated Expenses - Multifamily (220 ) (349 ) (437 ) (723 )
Less: Unconsolidated Expenses - Commercial (1,771 ) (2,174 ) (3,478 ) (4,301 )
Discontinued Operations (1,613 ) (3,072 ) (2,920 ) (6,119 )
Impairment - Discontinued Operations (5)   271     -     271     -  
Total Property Operating Expenses 38,450 35,176 76,233 69,281
Property Management Expenses 3,001 2,181 5,847 4,603
General & Administrative Expenses 5,446 5,188 11,213 10,390
Management Fee and Other Expenses 1,769 1,884 3,814 3,653
Investment and Development Expenses (6) 205 393 592 979
Impairment and Other Losses 395 148 895 2,244
Depreciation 30,472 29,130 60,818 57,874
Amortization   1,324     1,773     3,142     3,584  
Consolidated Expense Adjusted -'11 Discontinued Operations (2)   81,062     75,873     162,554     152,608  
Add: Additional Discontinued Operations Expense, post filing (3)   -     6,195     -     12,920  
Total Consolidated Expense, per 10-Q (4) $ 81,062   $ 82,068   $ 162,554   $ 165,528  
 
RECONCILIATION OF NOI
 
6/30/2012 6/30/2011 6/30/2012 6/30/2011
Divisional Total NOI
Multifamily - Same Property $ 48,883 $ 45,575 $ 96,478 $ 89,510
Multifamily - Non-Same Property (1) 5,469 3,726 10,432 6,460
Commercial   11,749     13,032     23,734     26,571  
Total Divisional NOI 66,101 62,333 130,644 122,541
 
Less: Unconsolidated NOI - Multifamily (260 ) (353 ) (515 ) (692 )
Less: Unconsolidated NOI - Commercial (2,622 ) (4,359 ) (5,707 ) (8,803 )
Discontinued Operations (3,266 ) (5,065 ) (6,249 ) (10,644 )
Impairment - Discontinued Operations (5) (271 ) - (271 ) -
Unallocated Corporate Revenues 1,471 2,173 2,815 3,984
Property Management Expenses (3,001 ) (2,181 ) (5,847 ) (4,603 )
General & Administrative Expenses (5,446 ) (5,188 ) (11,213 ) (10,390 )
Management Fee and Other Expenses (1,769 ) (1,884 ) (3,814 ) (3,653 )
Investment and Development Expenses (6) (205 ) (393 ) (592 ) (979 )
Impairment and Other Losses (395 ) (148 ) (895 ) (2,244 )
Depreciation (30,472 ) (29,130 ) (60,818 ) (57,874 )
Amortization   (1,324 )   (1,773 )   (3,142 )   (3,584 )
Income from Operations 18,541 14,032 34,396 23,059
Total Other Income (Expense)   (3,060 )   (21,586 )   (26,293 )   (43,951 )
Income (Loss) from Continuing Operations (7)   15,481     (7,554 )   8,103     (20,892 )
Discontinued Operations   -     1,619     -     3,235  
Income (Loss) from Continuing Operations, per 10-Q (4) $ 15,481   $ (5,935 ) $ 8,103   $ (17,657 )
 
(1) Includes operations from for-sale portfolio.

(2) Reflects total consolidated revenue and total consolidated expense (as applicable), adjusted to reflect discontinued operations classifications made after filing of prior period financials.

(3) Adjustment to prior period financials to reflect discontinued operations classifications made after filing of prior period financials.

(4) For prior period, reflects total consolidated revenue, expense or income (loss) from continuing operations (as applicable) as presented in prior period financials (i.e., excluding adjustment for discontinued operations classifications made after filing of prior period financials).

(5) Includes a non-cash impairment charge recorded on one of the Company's commercial assets, which is currently classified as held for sale.
(6) Reflects costs incurred related to acquisitions and abandoned pursuits. These costs are volatile and therefore may vary between periods.

(7) Income (Loss) from Continuing Operations before extraordinary items, noncontrolling interest and discontinued operations. Adjustments for additional discontinued operations have restated periods in accordance with ASC 205-20.

 




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