Bay Apartment Communities Reports Growth In FFO for Second Quarter.SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--August 2, 1995--Bay Apartment Communities (NYSE NYSE See: New York Stock Exchange Symbol: BYA) today reported results for the quarter and six months ended June 30, 1995. Funds From Operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) for the quarter were $5,308,000, or $.46 per share, on revenues of $12,847,000, after exclusion of $17,647,000 of proceeds from the sale of the Larkspur Larkspur, city, United States Larkspur, city (1990 pop. 11,070), Marin co., W Calif., a prestigious residential suburb of San Francisco near Mt. Tamalpais; inc. 1908. The region's scenic beauty and excellent beaches attract many visitors. Woods apartment community. Based on the new NAREIT NAREIT National Association of Real Estate Investment Trusts definition, FFO would have been $5,095,000, or $.44 per share. On an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, FFO for the quarter was $21,232,000, or $1.84 per share. Based on the revised NAREIT definition, FFO would have been $20,380,000, or $1.77 per share, on an annualized basis. Net income for the quarter was $4,419,000, or $.38 per share. Of this net income, $2,412,000, or $.21 per share, was attributable to the Larkspur Woods transaction. For the first six months of fiscal 1995, FFO was $10,488,000, or $.91 per share, on revenues of $27,109,000. Based on the new NAREIT definition, FFO would have been $10,065,000, or $.87 per share. Net income was $6,339,000, or $.55 per share. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Capitalized expenditures (excluding planned rehabilitation rehabilitation: see physical therapy. costs) were $32 per apartment home per quarter and $127 on an annualized basis. Capitalized expenditures represented 2.9 percent of FFO. "Our financial performance continues to be in line with our plan as we generate internal growth from increased rents and expand the portfolio through acquisition, reconstruction and new construction," said Gilbert M. Meyer, chairman and president of Bay. "Compared with the second quarter of 1994, our annualized FFO per share has increased by more than eight percent." "The company's second quarter," he continued, "was marked by several significant accomplishments, including our sale of Larkspur Woods and our $89.4 million bond refinancing Refinancing An extension and/or increase in amount of existing debt. ." Bay sold Larkspur Woods, a 232-apartment home community in Sacramento, for approximately $17,647,000 some 15 months after acquiring the community in March, 1994. Bay used all of the proceeds from the transaction to pay off short-term, variable rate debt. The company realized a gain of more than $2.4 million after consideration of its acquisition, reconstruction and carrying costs Carrying costs Costs that increase with increases in the level of investment in current assets. . The gain was treated as a nonrecurring event and not recognized in the company's calculation of FFO per share for the period. "This transaction represents our strategy of adding value to distressed assets through our strong in-house development, construction, financing and marketing skills," Meyer said. "As opportunities develop, we will take advantage of the enhanced value of an asset by selling it and redeploying the capital in other high yielding, value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. opportunities." At the close of the second quarter, Bay announced it had sold $89.4 million in new and restructured fixed-rate, tax-exempt bonds Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. , financing five of its apartment home communities. The new financing has an all-in interest rate of approximately 6.48 percent for the first 15 years of the financing. These bonds replaced $89.4 million in current outstanding variable rate debt. The bonds, which are rated AAA AAA: see American Automobile Association. (Triple A) A common single-cell battery used in a myriad of electronic devices of all variety. Like its double A (AA) cousin, it provides 1.5 volts of DC power. When used in series, the voltage is multiplied. & A1+ by Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index , have maturities ranging between 27 and 30 years and have a fully amortizing payment schedule over that period. The Federal National Mortgage Association (FNMA FNMA abbr. Federal National Mortgage Association Noun 1. FNMA - a federally chartered corporation that purchases mortgages Fannie Mae, Federal National Mortgage Association ) has provided credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing for the full term of the financing. "This refinancing epitomizes our use of fixed rate, tax-exempt bond financing to provide us with a very stable, inexpensive source of capital to fund our growth," Meyer noted. "As we generate continued income from our portfolio, the positive financial leverage provided by tax-exempt financing will significantly enhance returns to our shareholders," he added. Meyer said other events during the quarter included completing the acquisition of Rivershore Apartments, a 245-apartment home community east of San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , and the filing of a shelf registration statement covering up to $200 million aggregate amount of the company's securities. In addition, the company increased its quarterly dividend to the equivalent of an annual dividend of $1.56 per share, versus the annual dividend of $1.52 per share Bay has paid since completing its initial public offering. Meyer said leasing activity at the new communities was proceeding well and on or ahead of plan. Through June 30, 1995, Bay had either occupied or pre-leased 265 apartments at Carriage Square, a 324-apartment home community in San Jose, California San Jose (IPA: /ˌsænhoʊˈzeɪ/) is the third-largest city in California, and the tenth-largest in the United States. It is the county seat of Santa Clara County. . Bay also leased or pre-leased 241 apartment homes at Canyon Creek Canyon Creek can mean the following:
Bay also commenced a $5.8 million repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. program at Kimberly Woods, a 220-apartment home community in Pacifica, California Pacifica is a city in San Mateo County, California, on the coast of the Pacific Ocean between San Francisco and Half Moon Bay. According to City Limits signs in the year 2006, the population was 40,401. , some 15 miles south of San Francisco. This program includes reconstruction of apartment exteriors and interiors, garages, leasing and fitness facilities and landscaping. This repositioning program is scheduled for completion in the spring of 1996. The company's portfolio-wide occupancy at June 30, 1995, was 95.9 percent, compared with 95.0 percent at March 31, 1995. The current occupancy rate Noun 1. occupancy rate - the percentage of all rental units (as in hotels) are occupied or rented at a given time pct, per centum, percent, percentage - a proportion in relation to a whole (which is usually the amount per hundred) excludes Kimberly Woods, which is being vacated during the reconstruction program. Bay Apartment Communities is a self-managed, fully integrated multi-family real estate investment trust focused on the acquisition, development and management of high quality apartments in the San Francisco Bay Area “Bay Area” redirects here. For other uses, see Bay Area (disambiguation). The San Francisco Bay Area, colloquially known as the Bay Area or The Bay and Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern . The company has been operating in the market since the 1970s and currently owns 22 apartment communities totaling approximately 5,500 apartment homes. -0-
BAY APARTMENT COMMUNITIES, INC.
FINANCIAL AND OPERATIONAL DATA
(UNAUDITED)
Quarter ended
6/30 3/31 12/31 9/30 6/30
1995 1995 1994 1994 1994
Dollars in thousands,
expect per share and
per unit
Revenues:
Rental revenues $12,544 $11,434 $10,786 $10,263 $ 8,591
Other revenues 303 416 241 253 399
Gain on sale:
Proceeds $ 17,647
Cost (15,235)
Gain on sale 2,412
----------------------------------------------
Total revenues 15,259 11,850 11,027 10,516 8,990
Expenses:
Property operating 2,858 2,728 2,598 2,376 1,734
Property taxes 1,073 963 950 856 838
General and
administrative 612 494 497 553 453
Interest and financing 2,991 2,482 1,860 1,676 1,055
Depreciation and
amortization 3,301 3,260 2,708 2,754 2,521
----------------------------------------------
Total Expenses 10,835 9,927 8,613 8,215 6,601
Minority interest 5 3 0 5 9 Net income $ 4,419 $ 1,920 $ 2,414 $ 2,296 $ 2,380 Net income per share $ .38 $ .17 $ .21 $ .20 $ .21 Funds from operations $ 5,308 $ 5,180 $ 5,122 $ 5,050 $ 4,901
Funds from operations
per share $ .46 $ .45 $ .44 $ .44 $ .42
Funds from operations per share annualized $ 1.84 $ 1.79 $ 1.77 $ 1.75 $ 1.70 Funds available for distribution(1) $ 5,083 $ 4,977 $ 4,928 $ 4,945 $ 4,888 Funds available for distribution per share $ .44 $ .43 $ .43 $ .43 $ .42 Funds available for distribution per share annualized $ 1.76 $ 1.72 $ 1.71 $ 1.71 $ 1.69 Funds from operations - revised definition(2)$ 5,095 $ 4,970 $ 4,968 $ 4,912 $ 4,785 revised definition per share $ .44 $ .43 $ .43 $ .43 $ .41
revised definition per
share annualized $ 1.77 $ 1.72 $ 1.72 $ 1.70 $ 1.66
Funds available for
distribution -
revised $ 4,870 $ 4,767 $ 4,774 $ 4,807 $ 4,772
Funds available for distribution - revised per share $ .42 $ .41 $ .41 $ .42 $ .41 Funds available for distribution - revised per share annualized $ 1.69 $ 1.65 $ 1.65 $ 1.67 $ 1.65 Dividends declared per share(3) $ .39 $ .38 $ .38 $ .38 $ .44 Capital expenditure per unit(4) $ 32 $ 29 $ 57 $ 34 $ 2 Capital expenditure per unit annualized $ 127 $ 116 $ 227 $ 135 $ 8 Occupancy at end 95.9% 95.0% 96.3% 94.8% 95.9% of period Average rent at end of period $ 843 $ 827 $ 823 $ 821 $ 813 Average rent at end of period - same store $ 894 $ 890 $ 887 $ 874 $ 867 Number of units 5,461 5,196 4,844 4,542 4,251 Net real estate assets 396,620 394,827 375,783 348,788 327,688 Debt:
Fixed(5) $120,270 $96,186 $96,211 $87,380 $87,380
Variable 35,730 63,893 42,501 38,811 26,439
----------------------------------------------
Subtotal 156,000 160,079 138,712 126,191 113,819
Construction debt 50,633 41,932 43,019 30,976 25,333
----------------------------------------------
Total debt $206,633 $202,011 $181,731 $157,167 $139,152
Weighted average interest rate(6) 6.66% 6.82% 6.56% 6.11% 5.63% Total debt to total capitalization at market 47.86% 48.78% 43.89% 39.05% 37.03% Total debt to book capitalization(7) 47.20% 46.73% 44.05% 40.42% 37.84% Share price, end of period $ 19,500 $ 18,375 $ 20,125 $ 21,250 $20,500
----------------------------------------------------
6/30/95 3/31/95 12/31/94 9/30/94 6/30/94
Shares
outstanding 11,544,287 11,544,287 11,544,287 11,544,287 11,544,287-0-
Notes: (1) Funds available for distribution represents the definition of funds from operations ("FFO"), prior to the revision discussed below, less capital expenditures and loan principal payments. (2) Funds from operations - revised definition represents the definition of FFO adopted by the NAREIT Board of Governors and excludes recurring amortization and depreciation on non-real estate assets. (3) The June 30, 1994 dividend relates to the period from March 17 - June 30, 1994 (i.e. the dividend covers approximately 3.5 months of activities). (4) Capitalized expenditures per unit exclude planned major rehabilitation costs. These costs are considered part of the acquisition cost. (5) Fixed debt includes floating rate debt swapped Debt swap A set of transactions in which a firm buys a country's dollar bank debt at a discount and swaps this debt with the central bank for local currency that it can use to acquire local equity. Also called a debt-equity swap. to a long-term fixed rate. (6) Weighted average interest rate excludes construction debt interest, the bulk of which is capitalized. (7) Book capitalization excludes accumulated depreciation accumulated depreciation The total amount of depreciation that has been recorded for an asset since its date of acquisition. For example, a computer with a 5-year estimated life that was purchased for $2,000 would have accumulated depreciation of $800 [( . BAY APARTMENT COMMUNITIES, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . DEBT ANALYSIS JUNE 30, 1995 Balance Matures Rate Interest rate protection details Tax-exempt variable rate under interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. $32,890 November, 6.48%(a) Interest rate 2022-June, is fixed until 2025 June, 2010 Tax-exempt variable rate under interest rate swap 87,380 November, 5.88%(b) Interest rate 2007-March, is fixed until 2017 March, 2004 -------- Subtotal subtotal /sub·to·tal/ (sub-to´t'l) less than, but often almost, complete. 120,270 Line of credit 35,730 December, Libor + 1996 2.25%(c) Construction debt: Construction line 14,500 March, Libor + 1996 2.25%(c) Construction loans 36,133 April, Prime + 1996 .50% and Libor + 2.25% ------- Subtotal 50,633(d) Total $206,633 -0- (a) The 6.48% represents an all-in financing cost including amortization of deferred financing costs. All other interest rates are presented net of deferred financing amortization. (b) The 5.88% rate excludes the amortization of financing costs paid by the sponsor prior to the IPO; if such costs were included, the all-inclusive effective rate would be 6.30%. (c) The rate excludes the amortization of deferred financing costs of costs of approximately $600,000 per annum. (d) The construction loans excludes $56.4 million of new bonds issued on June 23, 1995. These bonds are currently collateralized. This cash will retire construction debt when construction and lease-up are completed. When the cash is used to retire the construction debt, the $56.4 million in new bond debt will be recognized. CONTACT: Bay Apartment Communities, San Jose Gilbert M. Meyer, 408/983-1500 |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion