PS Business Parks, Inc. (NYSE:PSB) reported operating results for the second quarter ended June 30, 2014.
Funds from operations (“FFO”) were $43.2 million, or $1.26 per share, as adjusted, for the three months ended June 30, 2014, an increase of $4.3 million, or 11.0%, from the three months ended June 30, 2013 of $38.9 million, or $1.22 per share, as adjusted. FFO was $85.2 million, or $2.48 per share, as adjusted, for the six months ended June 30, 2014, an increase of $7.1 million, or 9.1%, from the six months ended June 30, 2013 of $78.0 million, or $2.45 per share, as adjusted. The three and six month increase in FFO was primarily the result of increases in both Same Park and Non-Same Park net operating income (“NOI”). Reported FFO per share for the three and six months ended June 30, 2014 compared to the same periods in 2013 was flat due to Long-Term Equity Incentive Plan (“LTEIP”) amortization. Both adjusted and reported FFO per share were impacted by an increase in shares outstanding as a result of the November, 2013 common equity offering.
In order to provide meaningful period-to-period comparisons of FFO derived from the Company’s ongoing business operations, the following table reconciles reported FFO to adjusted FFO, which excludes LTEIP amortization for the three and six months ended June 30, 2014 and 2013:
|For the Three Months||For the Six Months|
|Ended June 30,||Ended June 30,|
|FFO per share, as reported||$||1.19||$||1.19||—||$||2.39||$||2.39||—|
|FFO per share, as adjusted||$||1.26||$||1.22||3.3%||$||2.48||$||2.45||1.2%|
Noted in the table above are the following adjustments to reconcile adjusted FFO to reported FFO. In March of 2014, the Company put in place a new LTEIP and recorded $2.4 million and $3.2 million of amortization for the three and six months ended June 30, 2014 compared to $917,000 and $2.0 million for the three and six months ended June 30, 2013 related to the previous LTEIP.
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