Condominium Activity

During the fourth quarter of 2012, the Company closed 27 condominium units at its Austin and Atlanta condominium projects for aggregate gross revenue of $25.7 million. For the full year 2012, the Company closed 96 condominium units for aggregate gross proceeds of $89.7 million. As of February 1, 2013, the Company has, in the aggregate, closed 214 units at the Austin and Atlanta condominium projects and has 16 units under contract. There can be no assurance that condominium units under contract will close.

The Company recognized net gains in FFO of $10.6 million, or $0.19 per diluted share, from condominium sales activities during the fourth quarter of 2012, compared to $0.8 million, or $0.015 per diluted share, during the fourth quarter of 2011.

2013 Outlook

The estimates and assumptions presented below are forward looking and are based on the Company’s future view of the apartment and condominium markets and of general economic conditions, as well as other risks outlined below under the caption “Forward-Looking Statements.” There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth below. The Company assumes no obligation to update this guidance in the future.

Based on its current outlook, the Company anticipates that FFO per diluted share for the full year 2013 will be in the range set forth below. The tables below reflect anticipated net gains from condominium sales (for purposes of this discussion, "Condo FFO") and FFO before Condo FFO (for purposes of this discussion, "Core FFO").

Core FFO $2.46 - $2.56
Condo FFO $0.20 - $0.37
FFO $2.66 - $2.93
Same Store Assumptions Current

Revenue 4.25% - 5.25%
Operating expenses 4.25% - 5.25%
Net operating income (NOI) 4.00% - 5.50%

The above estimates of FFO per diluted share are also based on the following assumptions:
  • Projected net operating income from lease up activities, net of operating deficits, expected to contribute approximately $0.13 per diluted share at the mid-point of the estimated range of Core FFO;
  • Projected development expenditures of approximately $125 million in 2013, including planned development starts in the latter half of the year, funded with available cash, retained cash flow and net proceeds from condominium sales;
  • Projected decrease in capitalized interest and development overhead costs, expected to cause Core FFO to decline by approximately $0.05 per diluted share in 2013, offset in large part by decreased interest expenditures resulting from 2012 refinancing activities;
  • In the aggregate, projected 3-4% increase in general and administrative expenses, corporate property management expenses and investment and development expenses (gross of amounts capitalized to development projects), including expenses relating to planned information technology systems upgrades in 2013;
  • Decreases in interest and other income (specifically, litigation settlements, tax increment financing interest and technology investment gains that were realized in 2012) that are expected to cause miscellaneous income to decline by approximately $0.03 per diluted share in 2013; and
  • Projected weighted average diluted shares of approximately 55.1 million for the full year 2013, with no share issuance under the Company’s ATM program required to fund the investment activity included in the Company’s guidance.

The Company anticipates that net income available to common shareholders will be in the range of $1.05 to $1.35 per diluted share for 2013. The difference between net income available to common shareholders and FFO per diluted share is depreciation on real estate assets, which is anticipated to be $1.58 to $1.61 per diluted share for 2013.

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