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TheStreet Open House

Colonial Properties Trust Reports Results For Fourth Quarter 2012

Stocks in this article: CLP

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, operating performance outlook, the outcome of litigation, 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 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
Fourth Quarter 2012
   
BALANCE SHEET        
 
($ in 000s) As of As of
12/31/2012 12/31/2011
ASSETS

Real Estate Assets

Operating Properties $ 3,489,324 $ 3,445,455
Undeveloped Land & Construction in Progress   296,153     306,826  
Total Real Estate, before Depreciation 3,785,477 3,752,281
 
Less: Accumulated Depreciation (804,964 ) (731,894 )
Real Estate Assets Held for Sale, net   93,450     10,543  
 
Net Real Estate Assets 3,073,963 3,030,930
 
Cash and Equivalents 11,674 6,452
Restricted Cash 38,128 43,489
Accounts Receivable, net 23,977 26,762
Notes Receivable 42,399 43,787
Prepaid Expenses 19,460 19,912
Deferred Debt and Lease Costs 23,938 22,408
Investment in Unconsolidated Subsidiaries 7,777 12,303
Other Assets   44,892     52,562  
 
Total Assets $ 3,286,208   $ 3,258,605  
 
LIABILITIES
Unsecured Credit Facility $ 188,631 $ 184,000
Notes and Mortgages Payable   1,643,361     1,575,727  
Total Debt 1,831,992 1,759,727
 
Accounts Payable 53,545 50,266
Accrued Interest 10,209 11,923
Accrued Expenses 28,952 15,731
Investment in Unconsolidated Subsidiaries - 31,577
Other Liabilities   36,751     25,208  
Total Liabilities   1,961,449     1,894,432  
 
Redeemable Common Units 162,150 159,582
 
EQUITY
Limited Partner's Noncontrolling Interest 695 728
 
Cumulative Earnings 1,287,863 1,267,958
Cumulative Distributions (1,926,167 ) (1,862,838 )
Common Equity, including Additional Paid-in Capital 1,975,393 1,965,812
Treasury Shares, at Cost (150,163 ) (150,163 )
Accumulated Other Comprehensive Loss   (25,012 )   (16,906 )
Total Equity, including Noncontrolling Interest   1,162,609     1,204,591  
 
Total Liabilities and Equity $ 3,286,208   $ 3,258,605  
 
SHARES & UNITS OUTSTANDING, END OF PERIOD        
 
(shares and units in 000s) As of As of
12/31/2012 12/31/2011
Basic
Shares 88,212 87,474
Operating Partnership Units (OP Units)   7,153     7,169  
Total Shares & OP Units 95,365 94,643
 
       
COLONIAL PROPERTIES TRUST
Financial Statements
Fourth Quarter 2012
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
($ in 000s, except per share data) Three Months Ended Twelve Months Ended

12/31/2012

12/31/2011

12/31/2012

12/31/2011

Revenue

Minimum Rent $ 83,061 $ 75,964 $ 320,489 $ 287,667
Tenant Recoveries 2,252 2,430 9,574 9,329
Other Property Related Revenue 16,076 12,829 57,769 48,346
Other Non-Property Related Revenue   1,622     2,097     5,712     8,047  
Total Revenues 103,011 93,320 393,544 353,389
 

Operating Expenses

Operating Expenses:
Property Operating Expenses 27,766 24,950 107,657 98,108
Taxes, Licenses and Insurance   11,740     10,410     44,413     40,039  
Total Property Operating Expenses 39,506 35,360 152,070 138,147
 
Property Management Expense 3,773 2,187 12,858 9,185
General and Administrative Expense 5,507 4,844 22,615 20,439
Management Fee and Other Expenses 1,092 2,386 6,298 8,067
Restructuring Charges 1,848 153 1,848 153

Investment and Development Expenses (1)

653 344 1,285 1,781
Depreciation 32,259 29,085 120,993 113,475
Amortization 1,425 1,804 6,122 7,446

Impairment and Other Losses (2)

  8,621     3,392     13,313     5,736  
Total Operating Expenses   94,684     79,555     337,402     304,429  
Income from Operations 8,327 13,765 56,142 48,960
 

Other Income (Expense)

Interest Expense (22,718 ) (22,991 ) (92,085 ) (86,573 )
Debt Cost Amortization (1,412 ) (1,252 ) (5,697 ) (4,767 )
Interest Income 493 276 2,569 1,521
Income from Partially-Owned Investments 10,358 18,588 31,862 17,497
(Loss) Gain on Sale of Property (3) (4,212 ) 96 (4,306 ) 115
Income Tax and Other   (218 )   (132 )   (907 )   (872 )
Total Other Income (Expense)   (17,709 )   (5,415 )   (68,564 )   (73,079 )
 
(Loss) Income from Continuing Operations (9,382 ) 8,350 (12,422 ) (24,119 )
 

Discontinued Operations

Income from Discontinued Operations 3,900 1,121 11,258 6,565
Gain on Disposal of Discontinued Operations   22,743     58     22,729     23,733  
Net Income from Discontinued Operations

 

  26,643     1,179     33,987     30,298  
 
Net Income   17,261     9,529     21,565     6,179  
 
Noncontrolling Interest

Continuing Operations

Noncontrolling Interest of Limited Partners (14 ) (6 ) (43 ) (53 )
Noncontrolling Interest in CRLP - Preferred - (867 ) - (3,586 )
Noncontrolling Interest in CRLP - Common 705 (658 ) 938 2,094

Discontinued Operations

Noncontrolling Interest in CRLP - Common   (1,998 )   (90 )   (2,555 )   (2,387 )
Income Attributable to Noncontrolling Interest   (1,307 )   (1,621 )   (1,660 )   (3,932 )
Net Income Attributable to Parent Company $ 15,954   $ 7,908   $ 19,905   $ 2,247  
 
Preferred Unit Repurchase Gains - 2,500 - 2,500
Preferred Share/Unit Issuance Costs   -     (1,319 )   -     (1,319 )
Net Income Available to Common Shareholders $ 15,954   $ 9,089   $ 19,905   $ 3,428  
 
       

 COLONIAL PROPERTIES TRUST

 Financial Statements

 Fourth Quarter 2012

 
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
Three Months Ended Twelve Months Ended

12/31/2012

12/31/2011

12/31/2012

12/31/2011

Income (Loss) per Share - Basic
Continuing Operations $ (0.10 ) $ 0.09 $ (0.14 ) $ (0.30 )
Discontinued Operations   0.28     0.01   0.36     0.34  
EPS - Basic $ 0.18   $ 0.10 $ 0.22   $ 0.04  
 
Income (Loss) per Share - Diluted
Continuing Operations $ (0.10 ) $ 0.09 $ (0.14 ) $ (0.30 )
Discontinued Operations   0.28     0.01   0.36     0.34  
EPS - Diluted $ 0.18   $ 0.10 $ 0.22   $ 0.04  
 
(1) Reflects costs incurred related to acquisitions and abandoned pursuits. These costs are volatile and therefore may vary between periods.
(2) For the three months ended December 31, 2012, the Company recorded a $4.9 million charge for a loss contingency related to certain litigation, a $3.3 million non-cash impairment charge related to for-sale residential land and a $0.4 million casualty loss due to property damage caused by a fire at one of the Company's multifamily apartment communities. In addition, during the twelve months ended December 31, 2012, the Company recorded a $0.9 million charge related to warranty claims on for-sale residential units previously sold, a $3.3 million non-cash impairment charge on one of the Company's commercial assets and a $0.4 million non-cash impairment charge related to a joint venture investment consisting of undeveloped land. For the three months ended December 31, 2011, the Company recorded a $3.3 million charge for a loss contingency related to certain litigation. In addition to these charges, for the twelve months ended December 31, 2011, the Company recorded a $1.5 million charge for a loss contingency related to certain litigation, $0.7 million in casualty losses as a result of property damage at eight multifamily apartment communities and $0.2 million in non-cash impairment charges related to various for-sale project and land outparcel transactions.
(3) Amounts presented in 2012 include $4.1 million of infrastructure costs for a commercial development previously sold. This liability was recorded as a reduction of gains previously recognized on the sale.
 
SHARES AND UNITS OUTSTANDING, WEIGHTED
(shares and units in 000s) Three Months Ended Twelve Months Ended

12/31/2012

12/31/2011

12/31/2012

12/31/2011

 
Basic
Shares 87,454 86,769 87,251 84,142
Operating Partnership Units (OP Units)   7,153     7,191   7,159     7,247  
Total Shares & OP Units 94,607 93,960 94,410 91,389
 
Dilutive Common Share Equivalents - 241 - -
 

Diluted (1)

Shares 87,454 87,010 87,251 84,142
Total Shares & OP Units 94,607 94,201 94,410 91,389
 
(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

 Financial Statements

 Fourth Quarter 2012

 
FUNDS FROM OPERATIONS (FFO) RECONCILIATION
 
($ in 000s, except per share data)

Three Months Ended

Twelve Months Ended

12/31/2012

12/31/2011

12/31/2012

12/31/2011

Net Income Available to Common Shareholders $ 15,954 $ 9,089 $ 19,905 $ 3,428
Noncontrolling Interest in CRLP (Operating Partnership Unitholders)   1,293     748     1,617     293  
Total 17,247 9,837 21,522 3,721
 

Adjustments - Consolidated Properties

Depreciation - Real Estate 32,099 31,531 126,222 126,696
Amortization - Real Estate 1,466 2,047 6,613 8,306
Impairment on Depreciable Asset - - 3,251 -
Remove: (Gain)/Loss on Sale of Property, net of Income Tax and
Noncontrolling Interest (18,530 ) (154 ) (18,423 ) (23,849 )
Include: Gain/(Loss) on Sale of Undepreciated Property, net of Income Tax and
Noncontrolling Interest   (4,212 )   96     (4,339 )   102  
Total Adjustments - Consolidated 10,823 33,520 113,324 111,255
 

Adjustments - Unconsolidated Properties

Depreciation - Real Estate 240 1,524 2,699 6,451
Amortization - Real Estate 59 459 843 2,822
Remove: (Gain)/Loss on Sale of Property   (10,102 )   (18,787 )   (32,501 )   (18,765 )
Total Adjustments - Unconsolidated   (9,803 )   (16,804 )   (28,959 )   (9,492 )
 
Funds from Operations $ 18,267   $ 26,553   $ 105,887   $ 105,484  
 
Income Allocated to Participating Securities   (135 )   (179 )   (817 )   (772 )
Funds from Operations Available to Common Shareholders
and Unitholders $ 18,132   $ 26,374   $ 105,070   $ 104,712  
                 
FFO per Share
Basic $ 0.19 $ 0.28 $ 1.11 $ 1.15
Diluted $ 0.19 $ 0.28 $ 1.11 $ 1.15
 
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 amortization, gains (or losses) from sales of properties and impairment write-downs of depreciable real estate (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 Twelve Months Ended
12/31/2012 12/31/2011 12/31/2012 12/31/2011
Divisional Total Revenues
Multifamily - Same Property $ 79,277 $ 75,252 $ 310,859 $ 294,800
Multifamily - Non-Same Property (1) 17,060 10,249 56,771 41,247
Commercial   13,003     19,401     62,084     77,850  
Total Divisional Revenues 109,340 104,902 429,714 413,897
 
Less: Unconsolidated Revenues - Multifamily (291 ) (459 ) (1,731 ) (2,336 )
Less: Unconsolidated Revenues - Commercial (1,148 ) (6,129 ) (11,500 ) (26,046 )
Discontinued Operations (6,512 ) (7,091 ) (28,651 ) (40,173 )
Unallocated Corporate Revenues   1,622     2,097     5,712     8,047  
Consolidated Revenue Adjusted -'11 Discontinued Operations (2)   103,011     93,320     393,544     353,389  
Add: Additional Discontinued Operations Revenue, post filing (3)   -     7,048     -     27,921  
Total Consolidated Revenue, per 10-Q/10-K (4) $ 103,011   $ 100,368   $ 393,544   $ 381,310  
 
RECONCILIATION OF EXPENSES                
 
12/31/2012 12/31/2011 12/31/2012 12/31/2011
Divisional Total Expenses
Multifamily - Same Property $ 30,470 $ 29,491 $ 121,990 $ 119,247
Multifamily - Non-Same Property (1) 7,811 5,080 25,704 20,756
Commercial   4,315     6,218     20,483     25,076  
Total Divisional Expenses 42,596 40,789 168,177 165,079
 
Less: Unconsolidated Expenses - Multifamily (135 ) (211 ) (807 ) (1,153 )
Less: Unconsolidated Expenses - Commercial (340 ) (2,147 ) (4,160 ) (8,728 )
Discontinued Operations   (2,615 )   (3,071 )   (11,140 )   (17,051 )
Total Property Operating Expenses 39,506 35,360 152,070 138,147
Property Management Expense 3,773 2,187 12,858 9,185
General and Administrative Expense 5,507 4,844 22,615 20,439
Management Fee and Other Expenses 1,092 2,386 6,298 8,067
Restructuring Charges 1,848

 

153

 

1,848

 

153
Investment and Development Expenses (5) 653 344 1,285 1,781
Impairment and Other Losses 8,621 3,392 13,313 5,736
Depreciation 32,259 29,085 120,993 113,475
Amortization   1,425     1,804     6,122     7,446  
Consolidated Expense Adjusted -'11 Discontinued Operations (2)   94,684     79,555     337,402     304,429  
Add: Additional Discontinued Operations Expense, post filing (3)   -     5,316     -     21,376  
Total Consolidated Expense, per 10-Q/10-K (4) $ 94,684   $ 84,871   $ 337,402   $ 325,805  
 
RECONCILIATION OF NOI                
 
12/31/2012 12/31/2011 12/31/2012 12/31/2011
Divisional Total NOI
Multifamily - Same Property $ 48,807 $ 45,761 $ 188,869 $ 175,553
Multifamily - Non-Same Property (1) 9,249 5,169 31,067 20,491
Commercial   8,688     13,183     41,601     52,774  
Total Divisional NOI 66,744 64,113 261,537 248,818
 
Less: Unconsolidated NOI - Multifamily (156 ) (248 ) (924 ) (1,183 )
Less: Unconsolidated NOI - Commercial (808 ) (3,982 ) (7,340 ) (17,318 )
Discontinued Operations (3,897 ) (4,020 ) (17,511 ) (23,122 )
Unallocated Corporate Revenues 1,622 2,097 5,712 8,047
Property Management Expense (3,773 ) (2,187 ) (12,858 ) (9,185 )
General and Administrative Expense (5,507 ) (4,844 ) (22,615 ) (20,439 )
Management Fee and Other Expenses (1,092 ) (2,386 ) (6,298 ) (8,067 )
Restructuring charges (1,848 ) (153 ) (1,848 ) (153 )
Investment and Development Expenses (5) (653 ) (344 ) (1,285 ) (1,781 )
Impairment and Other Losses (8,621 ) (3,392 ) (13,313 ) (5,736 )
Depreciation (32,259 ) (29,085 ) (120,993 ) (113,475 )
Amortization   (1,425 )   (1,804 )   (6,122 )   (7,446 )
Income from Operations 8,327 13,765 56,142 48,960
Total Other Income (Expense)   (17,709 )   (5,415 )   (68,564 )   (73,079 )
(Loss) Income from Continuing Operations (6)   (9,382 )   8,350     (12,422 )   (24,119 )
Discontinued Operations   -     1,735     -     6,527  
(Loss) Income from Continuing Operations, per 10-Q/10-K (4) $ (9,382 ) $ 10,085   $ (12,422 ) $ (17,592 )
 
(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) Reflects costs incurred related to acquisitions and abandoned pursuits. These costs are volatile and therefore may vary between periods.
(6) (Loss) Income 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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