Home Properties Reports Fourth Quarter and Year-End 2002 Results; 2002 Same-Store NOI Growth 3.6%.Business Editors ROCHESTER Rochester (rŏch`ĕstər, –ĭstər). 1 City (1990 pop. 70,745), seat of Olmsted co., SE Minn.; inc. 1858. , N.Y.--(BUSINESS WIRE)--Feb. 7, 2003 Home Properties Home Properties (NYSE: HME) is a real estate investment trust (REIT) that owns and manages apartments and apartment properties in the Midwest, New England, Mid-Atlantic and Southeast Florida. It manages or owns over 47,000 apartments. (NYSE NYSE See: New York Stock Exchange :HME HME Home Medical Equipment HME Home Media Engine (TiVo) HME Heat and Moisture Exchange HME Hierarchical Mixtures-of-Experts HME Happy Meal Ethernet (UNIX driver) HME Honeymoon Experience ) today released financial results for the quarter and year ending December December: see month. 31, 2002. All results are reported on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. "Despite the very challenging operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. for multifamily REITs that continued in 2002, Home Properties' operating results compared favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the overall sector performance," said Norman Norman, city (1990 pop. 80,071), seat of Cleveland co., central Okla.; inc. 1891. It is the center of a livestock region. Oil wells, food processing, and printing and publishing contribute to the economy, and there is diverse manufacturing (machinery, communication Leenhouts, Chairman and Co-CEO. "We were pleased that in 2002 the Company's total return to shareholders of 16.6% ranked Home Properties second among the 17 publicly traded multifamily REITs, far exceeding the negative average return for the sector. We believe the Company's net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. growth for the year is the highest in the apartment REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). sector, confirming the soundness of our business strategy of 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. apartment communities through capital improvement and upgrade programs. The Company's consistent success is also a tribute to our strong geographic markets, unique culture, and conservative balance sheet and governance Governance makes decisions that define expectations, grant power, or verify performance. It consists either of a separate process or of a specific part of management or leadership processes. Sometimes people set up a government to administer these processes and systems. . We are confident that these attributes will help us weather the ongoing challenges in 2003." For the quarter ended December 31, 2002, 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 ) was $16.6 million or $0.38 per share, compared with $37.1 million or $0.82 per share, for the quarter ended December 31, 2001. A reconciliation of FFO to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income is included in the financial data accompanying this press release. Results for the quarter and year ended December 31, 2002, reflect impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. and other charges relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc certain government assisted properties ("affordable properties") in which the Company is a general partner, as described below. Excluding the impairment and other charges of $16.4 million (from total charges of $17.9 million, a $1.5 million charge was added back to FFO), FFO for the fourth quarter of 2002 would have been $35.3 million, or $0.76 per share, which is within the range of guidance the Company issued at the time of its third quarter 2002 earnings announcement. For the year ended December 31, 2002, FFO was $121.7 million, or $2.62 per share, compared with $136.6 million, or $3.03 per share, in the prior year. For the full year 2002, excluding $16.4 million in impairment and other charges, FFO would have been $138.2 million or $2.97 per share, a 1.2% increase in total FFO from the prior year and a 2.0% decrease on a per share basis. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. for the quarter ended December 31, 2002, was a loss of $0.16 per share, compared with income of $0.50 per share for the quarter ended December 31, 2001. The decrease was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to a combination of significant gains on disposition of real estate during the fourth quarter of 2001 and the impairment and other charges of $17.9 million recorded in the fourth quarter of 2002. EPS for the year ended December 31, 2002, was $0.96, compared with $2.11 for the year ended December 31, 2001. The decrease was primarily attributable to the gain on disposition of real property in 2001 that was significantly higher than the real estate gains for 2002, the affordable property related charges recorded in 2002, and the preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. premium incurred in the second quarter of 2002. Fourth Quarter Operating Results For the fourth quarter of 2002, same-property comparisons (for 121 "Core" properties containing 34,464 apartment units owned since January January: see month. 1, 2001) reflected an increase in rental revenues of 3.0%, an increase in total revenues of 2.9%, and a net operating income decrease of 3.1% from the fourth quarter of 2001. Property level operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased by 11.9%, primarily due to increases in natural gas utility costs, property insurance, and real estate taxes. "The increase in natural gas costs was not unexpected, as we experienced a very mild winter last year. This year's gas costs actually came in below budget," said David Gardner David Gardner is one of the three founders of The Motley Fool. He is currently co-chairman of the board. He attended the University of North Carolina at Chapel Hill on a Morehead-Cain Scholarship. , Home Properties Chief Financial Officer. During the fourth quarter of 2001, the Company resolved a legal claim, which reduced Core insurance costs for the period by $2.1 million, which Gardner Gardner, city (1990 pop. 20,125), Worcester co., N central Mass.; settled 1764, inc. as a city 1921. Its furniture and lumber industries date from c.1805. Diversified metal and electronics manufactures add to the city's economic base. A state prison is there. said made for a very tough quarter-over-quarter comparison. Average economic occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy for the Core properties was 91.8% during the fourth quarter of 2002, down from 92.3% during the fourth quarter of 2001. Average monthly rental rates increased 3.5% to $853, compared to a year ago. Occupancies for the 7,312 apartment units acquired between January 1, 2001, and December 31, 2002, (the "Recently Acquired Communities") averaged 93.7% during the fourth quarter of 2002, at average monthly rents of $1,057. Full Year Operating Results For the year ended December 31, 2002, same-property comparisons for the Core properties showed an increase in rental revenue of 4.1% and a net operating income increase of 3.6% over 2001. Property level operating expenses increased by 5.1%, primarily due to increases in repairs and maintenance, personnel expense, property insurance, and real estate taxes, partially offset by reductions in natural gas utility expenses and snow removal costs. Average economic occupancy for the Core properties decreased from 93.6% to 92.0%, with average monthly rents rising 5.8%. The yield on the Recently Acquired Communities during 2002 averaged 8.8% 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 (calculated as the net operating income from the properties, less an allowance for general and administrative expenses equal to 3% of revenues, all divided by the acquisition costs plus capital improvement expenditures in excess of normalized levels). Interest and Dividend Income Interest and dividend income decreased $228,000 during the fourth quarter of 2002 from the prior year quarter, resulting from a combination of decreased levels of financing to affiliates and a lower interest rate environment. Acquisitions and Dispositions During the fourth quarter of 2002, in three unrelated transactions, the Company acquired seven communities with a total of 653 apartment units, located in the Hudson Valley
The Hudson Valley refers to the canyon of the Hudson River and its adjacent communities in New York State, generally from northern Westchester County northward to the cities of Albany and Troy. of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and in Northern Virginia Northern Virginia (NoVA) consists of Arlington, Fairfax, Loudoun, and Prince William counties and the independent cities of Alexandria, Falls Church, Fairfax, Manassas, and Manassas Park. . Total consideration for the seven communities was $67.3 million, including closing costs Closing Costs The numerous expenses (over and above the price of the property) that buyers and sellers normally incur to complete a real estate transaction. Costs incurred include loan origination fee, discount points, appraisal fee, title search, title insurance, survey, taxes, , or an average of $103,000 per unit. Consideration for the properties included $59.9 million in cash and $7.4 million in assumed debt. The weighted average first year cap rate on the acquisitions closed in the fourth quarter of 2002 was 7.2%. (Note: The purchase price reported is before any fair market value adjustment for above market interest rate on debt assumed). Included in the fourth quarter acquisitions referenced above is a transaction not previously reported in a news release. On December 16, 2002, the Company acquired The Sycamores, a 185-unit garden style apartment community in Reston, Virginia Reston is an internationally known planned community whose goal was to revolutionize post-World War II concepts of land use and residential/corporate development in American suburbia. , for $20.3 million in cash. Built in 1979, the community is currently 96.8% occupied, with average rents of $1,082. The Sycamores is located in western Fairfax Fairfax, city (1990 pop. 19,622), historic seat of Fairfax co., NE Va., a residential suburb of Washington, D.C.; inc. 1892, as a city 1961 (at which time it became independent and no longer included in a county). There is some light manufacturing. County, in the heart of an employment center known as the Dulles Dul·les , Allen Welsh 1893-1969. American public official. Director of the CIA (1953-1961), he resigned after the failed invasion of the Bay of Pigs. Noun 1. Corridor. It is located near the intersection intersection /in·ter·sec·tion/ (-sek´shun) a site at which one structure crosses another. intersection a site at which one structure crosses another. of the Dulles Toll Road and Reston Reston, uninc. city (1990 pop. 48,556), Fairfax co., N Va., a planned community established in 1961. A suburb of Washington, D.C., Reston is organized in a series of residential villages and commercial areas. Parkway, the site of a planned metro station For the band, see . A metro station is a railway station for a rapid transit system, often known by names such as "metro", "underground" and "subway". It is often underground or elevated. At crossings of metro lines they are multi-level. . Also during the fourth quarter, the Company sold Springwood spring·wood n. Young, usually soft wood that lies directly beneath the bark and develops in early spring. Gardens, a 77-unit property in Reading, Pennsylvania Reading (IPA:/ˈrɛdɪŋ/) is the county seat of Berks County, Pennsylvania and the center of the Greater Reading Area. , for total consideration of $3.2 million. The weighted average first year cap rate on the sale is 8.6% (before a reserve for capital expenditures). A loss on sale of approximately $347,000 (before allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of minority interest) was reported in the fourth quarter and is reflected in discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . In conformity with NAREIT NAREIT National Association of Real Estate Investment Trusts guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. , the gains or losses from real property are not included in reported FFO results. Subsequent to the end of the fourth quarter, the Company sold two communities with a total of 552 units for $20.6 million, including closing costs, which equates to approximately $37,400 per unit. The buyer assumed $8.7 million in debt and paid $11.7 million in cash. The weighted average expected first year cap rate for these communities is 8.8%. For the full year 2002, Home Properties acquired a total of 21 communities with a total of 4,492 units for total consideration of $415 million, or an average of approximately $92,400 per unit. During the same time period, the Company sold 12 properties with a total of 1,724 units for total consideration of $87 million, or an average of approximately $50,500 per unit. The weighted average expected first year cap rate for the acquired communities was 8.0% and for the disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. properties was 9.2%. Net acquisitions have resulted in a 7.1% increase in the number of apartment units wholly owned by the Company. Sale of General Partnership Interests and Other Assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. Associated with Affordable Properties In 2000, Home Properties sold the development operations of its affordable housing activity while retaining general partner interests and other assets related to approximately 7,400 apartment units in 129 affordable communities for which it also conducted property management operations. The Company, including its equity affiliates, now intends to sell virtually all of the assets associated with its general partnership interest including principally loans, advances and management contracts. The Company recorded impairment charges aggregating $14.1 million in the 2002 fourth quarter. Such charges principally relate to reducing recorded amounts of the previously mentioned assets to estimated fair value. In addition, the Company recorded charges aggregating $3.8 million arising from the operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. and other charges directly associated with the performance of these affordable properties due to the weak economy, which negatively affected the properties' revenue and occupancy. The Company intends to sell the assets in three phases: Phase I consists of the Company's interest in 37 properties containing 1,171 units, all New York State Rural Development properties, which are under contract to be sold. A closing is anticipated by the second quarter of 2003. Phase II consists of the Company's interest in 49 properties with 1,396 units, all Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York Rural Development properties. Several offers for these properties are under review. The Company hopes to close on this phase during the second half of 2003. Phase III Noun 1. phase III - a large clinical trial of a treatment or drug that in phase I and phase II has been shown to be efficacious with tolerable side effects; after successful conclusion of these clinical trials it will receive formal approval from the FDA consists of the Company's interest in the remaining 43 properties with 4,831 units, primarily located in Upstate New York Upstate New York is the region of New York State north of the core of the New York metropolitan area. It has a population of 7,121,911 out of New York State's total 18,976,457. Were it an independent state, it would be ranked 13th by population. and Pennsylvania, which will be aggressively marketed for sale. The Company's plan is to have the interest in the properties under contract to be sold by the end of 2003 or early in 2004. Losses anticipated in connection with the sale of the $30.2 million in assets (before impairment) related to the limited partnerships for which the Company is the general partner have been reflected in the $14.1 million impairment charges recorded in the fourth quarter of 2002. Gains on sale, if any, will be recognized when the sales actually occur. "We concluded that our sole strategic focus should be on the direct ownership and management of market rate apartment communities, which is the business that generates more than 99% of the net income and FFO of the Company," said Edward Edward killed his father at his mother’s instigation. [Br. Balladry: Edward in Benét, 302] See : Patricide Pettinella, Home Properties Executive Vice President. "While the Company's interests in affordable properties were largely profitable on a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. basis, we believe that, by discontinuing our ownership in these assets and redirecting the time and resources it requires to our core business of owning and managing apartments, we will incrementally enhance shareholder value." Home Properties will continue to own and manage four affordable housing communities with 486 apartment units it currently owns directly. Capital Markets Activities During the fourth quarter of 2002, the Company raised $6.4 million by issuing additional shares (at an average cost of $31.10 per share) under its Dividend Reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. and Direct Stock Purchase Plan ("DRIP"). Approximately $4.8 million was from reinvested dividends and $1.6 million from optional cash purchases. No shares were repurchased during the quarter, although the Company continues to have Board authorization The right or permission to use a system resource; the process of granting access. See access control. to buy back up to approximately 3.1 million shares of its common stock or OP units. As of December 31, 2002, the Company's ratio of debt-to-total market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. was 44.1%, with $35 million outstanding on its $115 million revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and $8.8 million of unrestricted cash on hand. Mortgage debt of $1.3 billion was outstanding, at fixed rates of interest averaging 6.5% and with staggered maturities staggered maturities In an investor's portfolio, bonds with differing maturity dates. For example, an investor may accumulate a $250,000 portfolio of bonds such that $10,000 face value of bonds matures each year for 25 years. averaging approximately 8 years. Interest coverage averaged 2.8 times during the quarter; and the fixed charge ratio, which includes preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) , averaged 2.3 times. During the fourth quarter, the Company continued to take advantage of the lower interest rate environment by refinancing Refinancing An extension and/or increase in amount of existing debt. existing high rate mortgage loans. The Company closed on various non-recourse mortgage loans totaling approximately $237 million with interest at a weighted average rate of 5.1% and an average term of 6.1 years. These loans replaced $101 million of existing financing at a weighted average interest rate of 8.23%. The annual savings in interest expense on the $101 million is projected to exceed $3.1 million. The proceeds of $136 million were used to pay closing costs, repay existing indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. on the Company's outstanding line of credit, fund fourth quarter acquisitions, and for other general corporate purposes. In connection with these transactions, an extraordinary item of approximately $3.2 million was incurred in the fourth quarter relative to prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. on the existing loans paid off before maturity. In conformity with NAREIT guidelines, extraordinary items are excluded when reporting FFO results. The Company estimates its net asset value at December 31, 2002, to be approximately $33.49 per share (based on capitalizing the annualized and seasonally adjusted Seasonally adjusted Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year. fourth quarter property net operating income net of a management fee at 8.75% and adding a 4% growth factor). The 8.75% capitalization rate Capitalization Rate According to the Appraisal Institute, it is a method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, by dividing the income estimate by an appropriate rate. , 0.25% lower than the previously quoted rate, is based on management's assessment of current market conditions. Outlook The Company has reduced its FFO guidance for 2003 to a range of $2.91 to $3.01 per share, which will produce FFO growth per share of -2.0% to 1.3% when compared to 2002 results before impairment and other charges associated with the assets associated with its general partnership interest. This is reduced from a range of $2.97 to $3.17 provided at the time of the release of third quarter earnings. This change, mostly on the high end of the range, reflects management's current assessment of economic and market conditions. In addition, the current guidance reflects the cost of expensing stock options, which reduces results by approximately $0.02 per share. The previous guidance assumed improvement in rental rates and economic occupancy starting in the third quarter of 2003. The current guidance assumes occupancy will not improve from 2002 results. The quarterly breakdown for 2003 guidance on FFO per share results is as follows: First quarter $0.60 to $0.62; second quarter $0.75 to $0.78; third quarter $0.81 to $0.83; fourth quarter $0.75 to $0.78. Assumptions used for the 2003 projections are included with the published supplemental information and will be discussed on the conference call today at 11:00 AM Eastern Time. Conference Call The Company will conduct a conference call and simultaneous Webcast today at 11:00 AM Eastern Time to review the information reported in this release. To listen to the call, please dial 800-547-9328. A replay of the call will be available by dialing 800-633-8284 or 402-977-9140 and entering 21106007. Call replay will become available beginning at approximately 1:00 PM Eastern Time and continue until approximately 1:00 PM on Saturday Saturday: see week; Sabbath. , February February: see month. 15th. The Company Webcast will be available live and archived by 2:30 PM through the "Investors" section of our Web site, www.homeproperties.com, under the heading, "Financial Information." The Company produces supplemental information that provides details regarding property operations, other income, acquisitions, sales, market geographic breakdown, debt, and net asset value. The supplemental information is available via the Company's Web site or via facsimile upon request. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Although the Company believes expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that may cause actual results to differ include general economic and local real estate conditions, the weather and other conditions that might affect operating expenses, the timely completion of repositioning activities within anticipated budgets, the actual pace of future acquisitions, and continued access to capital to fund growth. Home Properties is the sixth largest publicly traded apartment company in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . A real estate investment trust with operations in selected Northeast, Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians , and Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic markets, the Company owns, operates, acquires, and rehabilitates apartment communities. Currently, Home Properties operates 294 communities containing 51,289 apartment units. Of these, 41,224 units in 150 communities are owned directly by the Company; 8,061 units are partially owned and managed by the Company as general partner, and 2,004 units are managed for other owners. The Company also manages 2.2 million square feet of commercial space. For more information, view Home Properties' Web site at www.homeproperties.com.
Fourth Quarter Avg. Economic
Results Occupancy Q4 '02 Q4 '02 vs. Q4 '01
------------------ -------------- ------- --------------------------
Average
Monthly
Rent/ %Rental %Rental
Occ Rate Revenue % NOI
Q4 '02 Q4 '01 Unit Growth Growth Growth
------ ------ ------- ------- ------- ------
Core Properties(a) 91.8% 92.3% $ 853 3.5% 3.0% (3.1)%
Acquisition
Properties(b) 93.7% NA $1,057 NA NA NA
------ ------ ------- ------- ------- ------
TOTAL PORTFOLIO 92.2% $ 887 NA NA NA
Year-To-Date Avg. Economic
Results Occupancy 2002 2002 vs. 2001
------------------ -------------- ------- --------------------------
Average
Monthly
Rent/ %Rental %Rental
Occ Rate Revenue % NOI
2002 2001 Unit Growth Growth Growth
------ ------ ------- ------- ------- ------
Core Properties(a) 92.0% 93.6% $ 843 5.8% 4.1% 3.6%
Acquisition
Properties(b) 93.0% NA $1,054 NA NA NA
------ ------ ------- ------- ------- ------
TOTAL PORTFOLIO 92.2% $ 869 NA NA NA
(a) Core Properties includes 121 properties with 34,464 apartment
units owned throughout 2001 and 2002.
(b) Reflects 31 properties with 7,312 apartment units acquired
subsequent to January 1, 2001.
HOME PROPERTIES OF NEW YORK, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data - Unaudited)
Three Months Ended Year Ended
December 31 December 31
------------------- --------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Rental income $101,486 $ 86,206 $378,133 $333,923
Other income - property
related 3,054 3,522 13,316 12,954
Interest and dividend income 237 465 1,315 3,010
Other income 347 560 1,627 2,215
--------- --------- --------- ---------
Total revenues 105,124 90,753 394,391 352,102
--------- --------- --------- ---------
Operating and maintenance 44,199 35,291 165,087 147,026
General and administrative 3,891 3,250 12,649 10,542
Interest 20,350 17,197 77,314 65,699
Depreciation and amortization 18,199 16,725 66,388 61,917
Impairment of assets held as
General Partner 3,183 - 3,183 -
--------- --------- --------- ---------
Total expenses and charges 89,822 72,463 324,621 285,184
--------- --------- --------- ---------
Income from operations 15,302 18,290 69,770 66,918
Gain (loss) on disposition of
property 10 4,156 (356) 26,241
Equity in earnings of
unconsolidated affiliates (15,493) 106 (16,322) 61
--------- --------- --------- ---------
Income (loss) before minority
interest, discontinued
operations and extraordinary
item ( 181) 22,552 53,092 93,220
Minority interest ( 1,464) 7,545 12,703 31,574
--------- --------- --------- ---------
Income from continuing
operations 1,283 15,007 40,389 61,646
Discontinued operations
Income from operations,
net of minority interest 125 822 1,889 2,928
Gain on disposition of
property, net of minority
interest 95 - 4,720 -
--------- --------- --------- ---------
Income before extraordinary
item 1,503 15,829 46,998 64,574
Extraordinary item,
prepayment penalties, net of
minority interest (2,023) (68) (2,059) (68)
--------- --------- --------- ---------
Net Income(loss) ( 520) 15,761 44,939 64,506
Preferred dividends ( 3,717) (4,189) (14,744) (17,681)
Premium on Series B preferred
stock repurchase - - (5,025) -
--------- --------- --------- ---------
Net income (loss) available
to common shareholders ($4,237) $ 11,572 $ 25,170 $ 46,825
========= ========= ========= =========
Reconciliation from net
income available to common
shareholders to Funds From
Operations:
Net income (loss) available
to common shareholders ($4,237) $11,572 $ 25,170 $ 46,825
Preferred dividends -
convertible preferred stock - 4,189 10,589 17,681
Premium on Series B preferred
stock repurchase - - 5,025 -
Depreciation - real property 17,947 17,291 66,573 64,251
Depreciation - real property,
unconsolidated 842 47 1,346 338
Impairment on general partner
investment 1,470 - 1,470 -
(Gain) loss on disposition of
property ( 10) ( 4,156) 356 ( 26,241)
Minority Interest ( 1,464) 7,557 12,703 31,637
Minority Interest - income
from discontinued operations 75 567 1,174 2,045
(Gain) loss on disposition of
discontinued operations ( 95) - ( 4,720) -
Extraordinary item 2,023 68 2,059 68
--------- --------- --------- ---------
FFO (1) $16,551 $37,135 $121,745 $136,604
========= ========= ========= =========
HOME PROPERTIES OF NEW YORK, INC.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data - Unaudited)
Three Months Ended Year Ended
December 31 December 31
------------------- --------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Weighted average shares/units
outstanding:
Shares - basic 26,867.5 22,838.7 26,054.5 22,101.0
Shares - diluted 27,049.1 23,029.4 26,335.3 22,227.5
Shares/units - basic(2) 43,018.3 38,849.5 42,062.1 37,980.0
Shares/units - diluted(2) 43,199.9 45,536.6 46,466.4 45,063.6
Per share/unit:
Net income - basic ($.16) $.51 $.97 $2.12
Net income - diluted ($.16) $.50 $.96 $2.11
FFO - basic(3) $.38 $.84 $2.63 $3.12
FFO - diluted(4) $.38 $.82 $2.62 $3.03
AFFO(5) $.26 $.70 $2.15 $2.58
Common dividend paid $.61 $.60 $2.41 $2.31
Reconciliation of FFO
including impairment charge
to FFO excluding impairment
charge:
FFO including impairment
charge $16,551 $37,135 $121,745 $136,604
Charges related to
non-real estate assets
($3,183 - $1,470) 1,713 - 1,713 -
Impairment charge recorded
by affiliates 14,716 - 14,716 -
Convertible preferred
dividends 2,367 - - -
--------- --------- --------- ---------
FFO excluding impairment and
other charges associated
with the affordable
properties $35,347 $37,135 $138,174 $136,604
========= ========= ========= =========
Shares/units - diluted 46,766.1 45,536.6 46,466.4 45,063.6
FFO excluding impairment
charge-dilutive $.76 $.82 $2.97 $3.03
(1) FFO is defined as net income (calculated in accordance with
generally accepted accounting principles) excluding gains or
losses from sales of property or non-cash real estate impairment
charge, minority interest and extraordinary items plus
depreciation from real property. Other similarly titled measures
may not be calculated in the same manner. This presentation
assumes the conversion of dilutive common stock equivalents and
convertible preferred stock.
(2) Basic includes common stock outstanding plus operating partnership
units in Home Properties of New York, L.P., which can be converted
into shares of common stock. For the three-months ended December
31, 2002, diluted includes additional common stock equivalents.
For the year-ended December 31, 2002 and the three-month and
year-ended December 31, 2001 diluted includes additional common
stock equivalents and Series B through E (in 2002) and Series A
through E (in 2001) convertible cumulative preferred stock, which
can be converted into shares of common stock.
(3) FFO for the three-months ended December 31, 2002, as computed for
basic is gross FFO of $18,918 and $37,135 in 2002 and 2001,
respectively, less convertible preferred dividends of $2,367 and
$4,189 in 2002 and 2001, respectively. FFO for the year-ended
December 31, 2002 as computed for basic is gross FFO of $121,745
and $136,604 in 2002 and 2001, respectively, less convertible
preferred dividends of $10,589 and $17,861 in 2002 and 2001,
respectively. Gross FFO for the year-ended December 31, 2002
excludes the premium paid on the Series B preferred stock
repurchase of $5,025.
(4) FFO for the three-months ended December 31, 2002, as computed for
diluted is basic FFO of $16,551 and $32,946 in 2002 and 2001,
respectively, plus the Series A - E convertible preferred dividend
of $4,198 in 2001. FFO for the year-ended December 31, 2002, as
computed for diluted is basic FFO of $111,156 and $118,743 in 2002
and 2001, respectively, plus the Series B - E convertible
preferred dividend of $10,589 in 2002 and Series A - E convertible
preferred dividend of $17,861 in 2001. Gross FFO for year-ended
December 31, 2002 excludes the premium paid on the Series B
preferred stock repurchase of $5,025.
(5) Adjusted Funds From Operations ("AFFO") is defined as FFO less an
annual reserve for anticipated recurring, non-revenue generating
capitalized costs of $525 per apartment unit. AFFO is computed by
reducing FFO for each period by the share of annual reserve for
each period of: $5,483 for fourth quarter 2002; $5,075 for fourth
quarter 2001; $21,932 for 2002; and, $20,300 for 2001. The
resulting sum is divided by the weighted average shares/units on a
diluted basis to arrive at AFFO per share/unit.
HOME PROPERTIES OF NEW YORK, INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data - Unaudited)
December December
31, 31,
2002 2001
----------- -----------
Real estate $2,597,278 $2,135,078
Accumulated depreciation ( 257,284) ( 201,564)
----------- -----------
Real estate, net 2,339,994 1,933,514
Cash and cash equivalents 8,782 10,719
Cash in escrows 45,735 39,230
Accounts receivable 7,576 8,423
Prepaid expenses 19,046 17,640
Investment in and advances to affiliates 19,475 42,870
Deferred charges 9,093 5,279
Other assets 6,565 6,114
----------- -----------
Total assets $2,456,266 $2,063,789
=========== ===========
Mortgage notes payable 1,300,807 $ 960,358
Line of credit 35,000 32,500
Other liabilities 61,156 59,748
----------- -----------
Total liabilities 1,396,963 1,052,606
Minority interest 333,061 341,854
Series B convertible preferred stock - 48,733
Stockholders' equity 726,242 620,596
----------- -----------
Total liabilities and stockholders' equity $2,456,266 $2,063,789
=========== ===========
Total shares/units outstanding:
Common stock 27,027.0 24,010.8
Operating partnership units 16,122.3 16,002.1
Series B convertible cumulative preferred
stock(a) - 1,679.5
Series C convertible cumulative preferred
stock(a) 1,983.5 1,983.5
Series D convertible cumulative preferred
stock(a) 833.3 833.3
Series E convertible cumulative preferred
stock(a) 749.4 949.4
----------- -----------
46,715.5 45,458.6
(a)Potential common shares
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion