Colonial Properties Trust Reports Results For Second Quarter 2013

Colonial Properties Trust (NYSE: CLP) announced its results for the second quarter ended June 30, 2013.

For the second quarter 2013, the company reported net income available to common shareholders (EPS) of $16.1 million, or $0.18 per diluted share, compared with net income available to common shareholders of $16.4 million, or $0.19 per diluted share, for the same period in 2012. For the six months ended June 30, 2013, the company reported net income available to common shareholders of $21.7 million, or $0.24 per diluted share, compared with net income available to common shareholders of $10.4 million, or $0.12 per diluted share, for the same period in 2012. The increase in the six months ended June 30, 2013, is primarily attributable to gains recognized from the sale of properties, improving rental rates resulting in an increase in multifamily same-property net operating income (NOI) and income derived from the acquisition and development of multifamily apartment communities, offset by properties sold since January 1, 2012.

Funds from Operations Available to Common Shareholders and Unitholders (FFO), a widely accepted measure of REIT performance, for the second quarter 2013 was $29.1 million, or $0.31 per diluted share, compared with $29.9 million, or $0.32 per diluted share, for the same period in 2012. FFO for the six months ended June 30, 2013, totaled $60.9 million, or $0.64 per diluted share, compared with $58.0 million, or $0.61 per diluted share, for the same period in 2012. The decrease in the second quarter 2013 FFO is primarily a result of properties sold since January 1, 2012, $1.2 million in transaction costs related to the proposed merger transaction with Mid-America Apartment Communities, Inc. (NYSE: MAA) recorded during the second quarter of 2012, and charges related to the settlement of certain litigation, offset by a 4.4 percent increase in multifamily same-property net operating income (NOI) from improving rental rates and the income derived from the acquisition and development of multifamily apartment communities.

A reconciliation of net income/loss available to common shareholders to FFO, and a reconciliation of NOI to income/loss from continuing operations, as well as definitions and statements of purpose are included in the financial tables accompanying this press release.

Thomas H. Lowder, Chairman and Chief Executive Officer, noted, “We are pleased with the solid performance of our multifamily portfolio and the continued execution of our commercial dispositions. Since announcing the merger agreement with MAA in early June, we have been working diligently with MAA toward the successful integration of our two companies and the completion of the merger.”

Highlights for the Second Quarter 2013
  • Multifamily same-property NOI increased 4.4 percent compared with second quarter 2012
  • Multifamily same-property revenue increased 4.3 percent compared with second quarter 2012
  • Ended the quarter with multifamily same-property physical occupancy of 94.9 percent
  • Acquired the 252-unit Colonial Reserve at Frisco Bridges in Dallas, Texas for $36.2 million
  • Sold Three Ravinia, a Class A office building, for a total sales price of $144 million
  • Completed the disposition of three apartment communities totaling 856 units for an aggregate sales price of $78.3 million
  • Completed the sale of the four remaining condominium units at Metropolitan Midtown and reduced for-sale residential land inventory
  • Announced definitive merger agreement MAA

Multifamily Operating Performance

Multifamily same-property NOI for the second quarter 2013 increased 4.4 percent compared with the second quarter 2012 for the 30,938 apartment homes included in the consolidated same-property results. Multifamily same-property revenues increased 4.3 percent and expenses increased 4.1 percent compared with the second quarter 2012. The increase in revenues was primarily due to an improvement in renewal lease rates and a consistently high occupancy level. The increase in expenses is primarily due to an increase in property taxes, as well as an increase in insurance expense, as a result of lower insurance claims in the second quarter 2012.

Sequentially, multifamily same-property NOI for the second quarter 2013 increased 0.4 percent compared with the first quarter 2013, with revenues increasing 0.9 percent and expenses increasing 1.8 percent compared with the prior quarter.

Development Activity

Construction continued during the quarter on four wholly-owned apartment communities: Colonial Grand at Ayrsley Phase II, a $9.1 million development with 81 units in Charlotte, North Carolina; Colonial Reserve at South End, a $59.3 million development with 353 units in Charlotte, North Carolina, Colonial Grand at Lake Mary III, a $16.1 million development with 132 units in Orlando, Florida and Colonial Grand at Randal Lakes, a $57.0 million development with 462 units in Orlando, Florida.

Multifamily Asset Recycling

During the quarter, the company sold Colonial Reserve at West Franklin, a 49 year old, 332-unit apartment community located in Richmond, Virginia, for $23.8 million and Colonial Village at Pinnacle Ridge, a 65 year old, 166-unit apartment community in Asheville, North Carolina, for a total sales price of $13.4 million. The proceeds from these sales were used to fund the acquisition of Colonial Reserve at Frisco Bridges, as discussed below.

In May 2013, the company purchased the 252-unit Colonial Reserve at Frisco Bridges (formerly Ablon at Frisco Bridges) located in Dallas, Texas, for $36.2 million. The multifamily apartment community is a new mid-rise development that was completed earlier this year and is currently in lease-up.

Commercial and Non-Core Asset Dispositions

In May 2013, the company sold Three Ravinia, an 814,000-square-foot Class A office building for a total sales price of $144.3 million. The property was unencumbered and sales proceeds were used to repay a portion of the outstanding balance on the company’s unsecured credit facility.

During May 2013, the company completed the sale of the four remaining condominium units at its Metropolitan Midtown mixed-use development located in Charlotte, North Carolina for an aggregate sales price of $2.5 million. The proceeds from the sale of these final four remaining units were used to pay down a portion of the outstanding balance on the company’s unsecured credit facility. As a result of the sale of the remaining units, the company recognized an impairment of $0.8 million, or $0.01 per diluted share, in the second quarter of 2013.

In May 2013, a joint venture in which the company owns a 40 percent interest sold its Regents Park II for-sale residential land located in Atlanta, Georgia for a total sales price of $6.2 million. The company received cash proceeds of $2.3 million from the transaction. The proceeds received by the company from the sale were used to pay down a portion of the outstanding balance on the company’s unsecured credit facility.

In June 2013, a joint venture in which the company owns a 20 percent interest sold Colonial Grand at Huntcliff, a 358-unit apartment community in Atlanta, Georgia, for a total sales price of $41.1 million. The company received cash proceeds of $3.1 million in cash and is no longer responsible for $4.9 million of associated joint venture mortgage debt, which represented the company’s pro-rata share of such debt. The cash proceeds received by the company from the sale were used to pay down a portion of the outstanding balance on the company’s unsecured credit facility.

Financing Activity

On April 15, 2013, the company’s outstanding 6.15 percent senior note matured, which the company satisfied with an aggregate payment of $102.6 million ($99.5 million of principal and $3.1 million of accrued interest) using borrowings under the company’s unsecured credit facility.

Mira Vista at James Island Litigation Settlement

As previously disclosed, the company along with multiple other parties, was named in 2010 as defendants in lawsuits with respect to condominium units at Mira Vista at James Island in Charleston, South Carolina. Mira Vista was acquired by certain of the company’s subsidiaries after the units were constructed and operated as a multifamily rental project, until all of the 230 units were converted to condominiums and subsequently sold.

In May 2013, the company reached an agreement with the plaintiffs to settle the Mira Vista litigation for a total payment of $3.3 million. As a result of the settlement agreement, the company recorded an increase to its loss contingency reserve of $1.6 million, or $0.02 per diluted share, in the second quarter 2013.

Quarterly Dividend on Common Shares

On July 8, 2013, the Board of Trustees declared a quarterly cash dividend on the company’s common shares for the third quarter 2013 of $0.21 per common share. The dividend was payable July 31, 2013, to shareholders of record as of July 19, 2013, representing an ex-dividend date of July 17, 2013.

Outlook

Given the company’s announcement on June 3, 2013 that it had entered into an agreement and plan of merger with MAA, the company is not providing an outlook for the remainder of 2013 or updating or affirming its previously issued guidance range for the full-year 2013 for EPS and FFO per share.

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 Thursday, August 1, 2013, at 1:30 p.m. Central Time. The call will include a review of the company’s second quarter performance.

To participate, please dial 1-866-952-1907 and reference the ID: COLONIALQ2. As with previous calls, a replay will be available for seven days by dialing 1-800-677-7320. Access to the live call and a replay will also be available through the company’s website at www.colonialprop.com under “Investors: Press Releases: Event Calendar.”

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 “Investors: Financial Information and Filings: Quarterly Supplemental Information” tab, or contact Jerry Brewer in Investor Relations at 1-800-645-3917.

Colonial Properties Trust is a multifamily focused real estate investment trust (REIT) that is engaged in the ownership, development, acquisition and management of quality real estate properties in the Sunbelt region of the United States. As of June 30, 2013, the company owns interests in 115 apartment properties containing 34,577 apartment homes and 1.2 million square feet of commercial space. Headquartered in Birmingham, Alabama, Colonial Properties Trust 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 NOI. 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 non-controlling 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 a widely recognized measure in the company’s industry and 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.

The company believes that the line on its consolidated statements of income 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, is 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.

Property Net Operating Income - The company uses property NOI, including same-property 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 (loss) income from continuing operations 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-property 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 statements of income entitled “(loss) income from continuing operations” 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 and NOI may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO and NOI should not 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 future dispositions and developments, development costs, 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 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. Other factors or risks that could cause our actual results to differ materially from the results we anticipate also include: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with MAA; (2) the inability to complete the proposed merger due to the failure to obtain the required shareholder approvals for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger; (3) risks related to disruption of management’s attention from the company’s ongoing business operations due to the proposed merger transaction; and (4) the effect of the announcement of the proposed merger on the company’s relationships with its customers, tenants, operating results and business 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, 2012, 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 2013
 
 
BALANCE SHEET  
       
($ in 000s) As of As of
6/30/2013 12/31/2012
ASSETS

Real Estate Assets
Operating Properties $ 3,443,165 $ 3,489,324
Undeveloped Land & Construction in Progress   289,645     296,153  
Total Real Estate, before Depreciation 3,732,810 3,785,477
 
Less: Accumulated Depreciation (843,435 ) (804,964 )
Real Estate Assets Held for Sale, net   41,279     93,450  
 
Net Real Estate Assets 2,930,654 3,073,963
 
Cash and Equivalents 20,944 11,674
Restricted Cash 10,212 38,128
Accounts Receivable, net 24,760 23,977
Notes Receivable 41,962 42,399
Prepaid Expenses 19,576 19,460
Deferred Debt and Lease Costs 16,253 23,938
Investment in Unconsolidated Subsidiaries 4,379 7,777
Other Assets   14,254     44,892  
 
Total Assets $ 3,082,994   $ 3,286,208  
 
LIABILITIES
Unsecured Credit Facility $ 105,000 $ 188,631
Notes and Mortgages Payable   1,542,326     1,643,361  
Total Debt 1,647,326 1,831,992
 
Accounts Payable 32,388 53,545
Accrued Interest 8,837 10,209
Accrued Expenses 56,331 41,652
Other Liabilities   22,001     36,751  
Total Liabilities   1,766,883     1,974,149  
 
Redeemable Common Units 179,576 162,056
 
EQUITY
Limited Partner's Noncontrolling Interest 182 695
 
Cumulative Earnings 1,297,803 1,276,118
Cumulative Distributions (1,963,333 ) (1,926,167 )
Common Equity, including Additional Paid-in Capital 1,966,139 1,974,532
Treasury Shares, at Cost (150,163 ) (150,163 )
Accumulated Other Comprehensive Loss   (14,093 )   (25,012 )
Total Equity, including Noncontrolling Interest   1,136,535     1,150,003  
 
Total Liabilities and Equity $ 3,082,994   $ 3,286,208  
 
SHARES & UNITS OUTSTANDING, END OF PERIOD  
 
(shares and units in 000s) As of As of
6/30/2013 12/31/2012
Basic
Shares 88,744 88,212
Operating Partnership Units (OP Units)   7,152     7,153  
Total Shares & OP Units 95,896 95,365
 
 
 
 
 
 
COLONIAL PROPERTIES TRUST
Financial Statements

Second Quarter 2013
             
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
($ in 000s, except per share data) Three Months Ended Six Months Ended
6/30/2013 6/30/2012 6/30/2013 6/30/2012

Revenue
Minimum Rent $ 82,331 $ 75,054 $ 163,407 $ 148,621
Tenant Recoveries 658 649 1,321 1,278
Other Property Related Revenue 19,028 13,350 35,130 25,885
Other Non-Property Related Revenue   126     1,471     304     2,815  
Total Revenues 102,143 90,524 200,162 178,599
 

Operating Expenses
Operating Expenses:
Property Operating Expense 27,156 24,641 53,208 48,626
Taxes, Licenses and Insurance   12,563     10,138     24,938     20,305  
Total Property Operating Expenses 39,719 34,779 78,146 68,931
 
Property Management Expense 4,895 3,001 9,311 5,847
General and Administrative Expense 4,518 5,446 9,306 11,213
Management Fee and Other Expenses 21 1,769 272 3,814

Investment and Development Expenses(1)
1,315 205 1,713 592
Depreciation 30,466 27,952 60,603 55,790
Amortization 930 710 2,050 1,906

Impairment and Other Losses(2)
  912     395     1,002     895  
Total Operating Expenses   82,776     74,257     162,403     148,988  
Income from Operations 19,367 16,267 37,759 29,611
 

Other Income (Expense)
Interest Expense (20,999 ) (23,277 ) (43,194 ) (46,330 )
Debt Cost Amortization (1,382 ) (1,402 ) (2,759 ) (2,835 )
Interest Income 201 556 930 1,550
Income from Partially-Owned Investments 2,327 21,349 2,998 22,022
Gain (Loss) on Sale of Property 14 (9 ) 25 (235 )
Taxes and Other   (267 )   (277 )   (455 )   (465 )
Total Other Income (Expense)   (20,106 )   (3,060 )   (42,455 )   (26,293 )
 
(Loss) Income from Continuing Operations (739 ) 13,207 (4,696 ) 3,318
 

Discontinued Operations

(Loss) Income from Discontinued Operations(3)
(159 ) 4,524 2,767 7,962
Gain (Loss) on Disposal of Discontinued Operations   18,726     (12 )   25,910     (14 )
Net Income from Discontinued Operations

 
  18,567     4,512     28,677     7,948  
 
Net Income   17,828     17,719     23,981     11,266  
 
Noncontrolling Interest

Continuing Operations
Noncontrolling Interest of Limited Partners (422 ) (8 ) (545 ) (17 )
Noncontrolling Interest in CRLP - Common 87 (995 ) 391 (249 )

Discontinued Operations
Noncontrolling Interest in CRLP - Common   (1,385 )   (339 )   (2,142 )   (599 )
Income Attributable to Noncontrolling Interest   (1,720 )   (1,342 )   (2,296 )   (865 )
Net Income Available to Common Shareholders $ 16,108   $ 16,377   $ 21,685   $ 10,401  
 
 
Income (Loss) per Share - Basic
Continuing Operations $ (0.01 ) $ 0.14 $ (0.06 ) $ 0.03
Discontinued Operations   0.19     0.05     0.30     0.09  
EPS - Basic $ 0.18   $ 0.19   $ 0.24   $ 0.12  
 
Income (Loss) per Share - Diluted
Continuing Operations $ (0.01 ) $ 0.14 $ (0.06 ) $ 0.03
Discontinued Operations   0.19     0.05     0.30     0.09  
EPS - Diluted $ 0.18   $ 0.19   $ 0.24   $ 0.12  
 
(1) Reflects costs incurred related to acquisitions and abandoned pursuits. These costs are volatile and therefore may vary between periods. The three and six months ended June 30, 2013, includes $1.2 million for merger related costs.
(2) The three and six months ended June 30, 2013, includes a $0.9 million non-cash impairment charge related to the sale of certain for-sale residential units.
(3) The three and six months ended June 30, 2013, includes a $1.6 million charge for a loss contingency related to certain litigation and a $0.3 million non-cash impairment charge related to the sale of an outparcel.
 
 
 
 
 
 

COLONIAL PROPERTIES TRUST

Financial Statements

Second Quarter 2013
 
 
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
             
(shares and units in 000s) Three Months Ended Six Months Ended
6/30/2013 6/30/2012 6/30/2013 6/30/2012
 
Basic
Shares 88,122 87,201 87,958 87,106
Operating Partnership Units (OP Units)   7,152     7,162     7,152     7,166  
Total Shares & OP Units 95,274 94,363 95,110 94,272
 
Dilutive Common Share Equivalents - 289 - 276
 

Diluted(1)
Shares 88,122 87,490 87,958 87,382
Total Shares & OP Units 95,274 94,652 95,110 94,548
 

(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
6/30/2013 6/30/2012 6/30/2013 6/30/2012
Net Income Available to Common Shareholders $ 16,108 $ 16,377 $ 21,685 $ 10,401
Noncontrolling Interest in CRLP (Operating Partnership Unitholders)   1,298     1,334     1,751     848  
Total 17,406 17,711 23,436 11,249
 

Adjustments - Consolidated Properties
Depreciation - Real Estate 30,830 31,169 62,427 63,131
Amortization - Real Estate 1,354 1,502 3,171 3,620
Impairment on Depreciable Asset - 271 - 271

Remove: Total Consolidated (Gain)/Loss on Sale of Property, net of Income Tax and Noncontrolling Interest
(18,315 ) 20 (25,509 ) 249

Include: Gain/(Loss) on Sale of Undepreciated Property, net of Income Tax and Noncontrolling Interest
  14     (8 )   21     (269 )
Total Adjustments - Consolidated 13,883 32,954 40,110 67,002
 

Adjustments - Unconsolidated Properties
Depreciation - Real Estate 46 1,035 142 2,151
Amortization - Real Estate 2 355 3 722
Remove: (Gain)/Loss on Sale of Property   (2,055 )   (21,906 )   (2,402 )   (22,709 )
Total Adjustments - Unconsolidated   (2,007 )   (20,516 )   (2,257 )   (19,836 )
 
Funds from Operations $ 29,282   $ 30,149   $ 61,289   $ 58,415  
 
Income Allocated to Participating Securities   (166 )   (242 )   (362 )   (460 )

Funds from Operations Available to Common Shareholders and Unitholders
$ 29,116   $ 29,907   $ 60,927   $ 57,955  
 
FFO per Share
Basic $ 0.31 $ 0.32 $ 0.64 $ 0.61
Diluted $ 0.31 $ 0.32 $ 0.64 $ 0.61
 
 
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 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 may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs. FFO should not 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
6/30/2013 6/30/2012 6/30/2013 6/30/2012
Divisional Total Revenues
Multifamily - Same Property $ 86,127 $ 82,609 $ 171,458 $ 163,650
Multifamily - Non-Same Property (1) 11,131 7,604 21,570 14,404
Commercial   9,604     17,671     20,350     35,387  
Total Divisional Revenues 106,862 107,884 213,378 213,441
 
Less: Unconsolidated Revenues - Multifamily (264 ) (480 ) (556 ) (952 )
Less: Unconsolidated Revenues - Commercial (409 ) (4,393 ) (865 ) (9,185 )
Discontinued Operations (4,172 ) (13,958 ) (12,099 ) (27,520 )
Unallocated Corporate Revenues   126     1,471     304     2,815  
Consolidated Revenue Adjusted -'12 Discontinued Operations (2)   102,143     90,524     200,162     178,599  
Add: Additional Discontinued Operations Revenue, post filing (3)   -     9,079     -     18,351  
Total Consolidated Revenue, per 10-Q (4) $ 102,143   $ 99,603   $ 200,162   $ 196,950  
 
RECONCILIATION OF EXPENSES
 
  6/30/2013     6/30/2012     6/30/2013     6/30/2012  
Divisional Total Expenses
Multifamily - Same Property $ 33,249 $ 31,939 $ 65,911 $ 63,734
Multifamily - Non-Same Property (1) 5,341 3,922 10,498 7,410
Commercial   2,992     5,922     6,650     11,653  
Total Divisional Expenses 41,582 41,783 83,059 82,797
 
Less: Unconsolidated Expenses - Multifamily (131 ) (220 ) (265 ) (437 )
Less: Unconsolidated Expenses - Commercial (112 ) (1,772 ) (227 ) (3,478 )
Discontinued Operations (3,477 ) (5,283 ) (6,278 ) (10,222 )
Impairment - Discontinued Operations (5)   1,857     271     1,857     271  
Total Property Operating Expenses 39,719 34,779 78,146 68,931
Property Management Expense 4,895 3,001 9,311 5,847
General & Administrative Expense 4,518 5,446 9,306 11,213
Management Fee and Other Expenses 21 1,769 272 3,814
Investment and Development Expenses (6) 1,315 205 1,713 592
Impairment and Other Losses (7) 912 395 1,002 895
Depreciation 30,466 27,952 60,603 55,790
Amortization   930     710     2,050     1,906  
Consolidated Expense Adjusted -'12 Discontinued Operations (2)   82,776     74,257     162,403     148,988  
Add: Additional Discontinued Operations Expense, post filing (3)   -     6,805     -     13,566  
Total Consolidated Expense, per 10-Q (4) $ 82,776   $ 81,062   $ 162,403   $ 162,554  
 
RECONCILIATION OF NOI
 
6/30/2013 6/30/2012 6/30/2013 6/30/2012
Divisional Total NOI
Multifamily - Same Property $ 52,878 $ 50,670 $ 105,547 $ 99,916
Multifamily - Non-Same Property (1) 5,790 3,682 11,072 6,994
Commercial   6,612     11,749     13,700     23,734  
Total Divisional NOI 65,280 66,101 130,319 130,644
 
Less: Unconsolidated NOI - Multifamily (133 ) (260 ) (291 ) (515 )
Less: Unconsolidated NOI - Commercial (297 ) (2,621 ) (638 ) (5,707 )
Discontinued Operations (695 ) (8,675 ) (5,821 ) (17,298 )
Impairment - Discontinued Operations (5) (1,857 ) (271 ) (1,857 ) (271 )
Unallocated Corporate Revenues 126 1,471 304 2,815
Property Management Expense (4,895 ) (3,001 ) (9,311 ) (5,847 )
General & Administrative Expense (4,518 ) (5,446 ) (9,306 ) (11,213 )
Management Fee and Other Expenses (21 ) (1,769 ) (272 ) (3,814 )
Investment and Development Expenses (6) (1,315 ) (205 ) (1,713 ) (592 )
Impairment and Other Losses (7) (912 ) (395 ) (1,002 ) (895 )
Depreciation (30,466 ) (27,952 ) (60,603 ) (55,790 )
Amortization   (930 )   (710 )   (2,050 )   (1,906 )
Income from Operations 19,367 16,267 37,759 29,611
Total Other Income (Expense)   (20,106 )   (3,060 )   (42,455 )   (26,293 )
(Loss) Income from Continuing Operations (8)   (739 )   13,207     (4,696 )   3,318  
Discontinued Operations   -     2,274     -     4,785  
(Loss) Income from Continuing Operations, per 10-Q (4) $ (739 ) $ 15,481   $ (4,696 ) $ 8,103  
 
(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) The three and six months ended June 30, 2013, includes a $1.6 million charge for a loss contingency related to certain litigation and a $0.3 million non-cash impairment charge related to the sale of an outparcel.
(6) Reflects costs incurred related to acquisitions and abandoned pursuits. These costs are volatile and therefore may vary between periods. The three and six months ended June 30, 2013, includes $1.2 million for merger related costs.
(7) The three and six months ended June 30, 2013, includes a $0.9 million non-cash impairment charge related to the sale of certain for-sale residential units.
(8) (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.
 
 
 

Copyright Business Wire 2010

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