Highlights
- Completes $236.6 million in asset purchases to close fund with Ohio PERS
- Improves line of credit capacity through $60.0 million new mortgage loan
- Average rent per square foot up 5.0% to $21.73 for the first quarter 2008
- Embedded rent growth up 7.4% to $1.30 per square foot at quarter end
- Reiterates 2008 FFO guidance of $4.00 to $4.20 per diluted share
JACKSON, Miss., May 5 /PRNewswire-FirstCall/ -- Parkway Properties,
Inc. (NYSE: PKY) today announced results for its first quarter ended March
31, 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030513/PARKLOGO )
Steven G. Rogers, President and Chief Executive Officer stated, "For
the first quarter 2008 we achieved funds from operations ("FFO") of $0.95
per diluted share. Excluding one-time unusual items that negatively
affected FFO by approximately $1.1 million, or $0.07 per diluted share, our
first quarter operating results were in line with our expectations. For the
full year 2008, we currently are on track to meet our earnings outlook and
goals. We refinanced our only maturing loan in 2008, taking approximately
$18.4 million in excess loan proceeds and applying them against our line of
credit. We are also pleased to have completed the $500.0 million investment
goal of our Ohio PERS fund ("Fund I") with three high-quality, well-located
assets in growing markets during the quarter. Our efforts will now be
focused on improving operations at all of our properties in building per
share FFO growth. Finally, our marketing effort on Fund II has progressed
rapidly and we have received significant interest in a fund with a similar
structure to our Ohio PERS investment."
Consolidated Financial Results
-- FFO available to common shareholders totaled approximately $14.3
million, or $0.95 per diluted share, for the three months ended March 31,
2008 as compared to approximately $16.2 million, or $1.02 per diluted
share, for the three months ended March 31, 2007. Included in FFO per
diluted share are the following amounts (in thousands, except average rent
per square foot and average occupancy):
Description Q1 2008 Q1 2007
Unusual Items:
Non-cash purchase accounting adjustment $ (657) $ -
Net gain/(loss) on extinguishment of debt (401) 124
$ (1,058) $ 124
Other Items of Note:
Lease termination fees (1) $ 1,067 $ 194
Straight-line rent (1) $ 216 $ 959
Amortization of above market rent (1) $ (140) $ (426)
Gain on sale of land $ - $ 50
Average rent per square foot (2)(3) $ 21.73 $ 20.69
Average occupancy (2)(4) 91.0 % 91.1 %
Total office square feet under ownership (2) 14,120 13,258
Total office square feet under management (5) 15,846 14,430
(1) These items include 100% of amounts from wholly-owned assets plus the
Company's allocable share of these items recognized from the assets
held in consolidated joint ventures.
(2) Includes total office square feet of wholly-owned assets, consolidated
joint ventures and unconsolidated joint ventures.
(3) Average rent per square foot is defined as the weighted average annual
gross rental rate, including escalations for operating expenses,
divided by occupied square feet.
(4) Average occupancy is defined as average occupied square feet divided
by average total rentable square feet.
(5) Includes total office square feet of wholly-owned assets, consolidated
joint ventures, unconsolidated joint ventures and third-party
management agreements.
-- Funds available for distribution ("FAD") totaled approximately $10.2
million for the three months ended March 31, 2008 as compared to
approximately $11.5 million for the three months ended March 31, 2007.
-- Net loss available to common shareholders for the three months ended
March 31, 2008 was approximately $3.8 million, or $0.25 per diluted
share, as compared to a net loss available to common shareholders of
approximately $772,000, or $0.05 per diluted share, for the three
months ended March 31, 2007.
Asset Recycling
-- On January 18, 2008, Parkway acquired Gateway Center, a 228,000 square
foot Class A office property in the central business district of
Orlando, Florida for a purchase price of approximately $55.0 million on
behalf of Fund I. The property consists of ten floors of office space
above a six-story, 817-space structured parking facility, as well as an
adjacent 98-space surface parking area. Fund I expects to spend an
additional $2.8 million for closing costs, building improvements,
leasing costs and tenant improvements during the first two years of
ownership.
-- On January 31, 2008, the Company acquired Desert Ridge Corporate
Center, a 293,000 square foot office project in Phoenix, Arizona for a
purchase price of approximately $81.6 million on behalf of Fund I. The
project consists of two four-story Class A office buildings totaling
275,000 square feet, a free-standing retail building totaling 18,000
square feet, an adjacent 765-space structured parking facility and a
596 space surface parking lot. An additional $2.25 million is expected
to be spent for closing costs, building improvements, leasing costs
and tenant improvements during the first two years of ownership. Due
to Fund I's $80.0 million limit on a single investment, the Company's
effective ownership interest in this asset is 26.5%.
-- On February 15, 2008, the Company purchased Citicorp Plaza, a 600,000
square foot office project in the O'Hare submarket and within the city
limits of Chicago, Illinois for a purchase price of approximately
$100.0 million on behalf of Fund I. The project consists of three
interconnected, eleven-story Class A office buildings, an adjacent
1,712-space, three-story parking facility, as well as an adjacent 276-
space surface parking area. An additional $9.2 million is expected to
be spent for closing costs, building improvements, leasing costs
and tenant improvements during the first two years of ownership. Due
to Fund I's $80.0 million limit on a single investment, Parkway's
effective ownership interest in this asset is 40%. After the Citicorp
Plaza purchase, Fund I was fully invested ahead of its original
schedule.
Operations and Leasing
-- The Company's average rent per square foot increased 5.0% to $21.73 for
the first quarter 2008 as compared to $20.69 for the first quarter
2007. On a same-store basis, the Company's average rent per square
foot increased 2.1% to $21.58 for the first quarter 2008 as compared to
$21.14 for the first quarter 2007.
-- The Company's average occupancy for the first quarter 2008 declined 10
basis points to 91.0% as compared to 91.1% for the first quarter 2007.
This decline was primarily due to the purchase of three office
investments for Fund I in the first quarter 2008, which had an average
occupancy of 84.6%. On a same-store basis, the Company's average
occupancy for the first quarter 2008 increased 70 basis points to 91.2%
as compared to 90.5% for the first quarter 2007.
-- At April 1, 2008, occupancy of the office portfolio was 90.3% as
compared to 92.0% at January 1, 2008 and 90.9% at April 1, 2007. Not
included in the April 1, 2008 occupancy rate are 19 signed leases
totaling 128,000 square feet, which commence in the second and third
quarters of 2008. Including these leases, the portfolio was 91.2%
leased at April 11, 2008.
-- Parkway's customer retention rate was 57.6% for the quarter ending
March 31, 2008 as compared to 77.2% for the quarter ending December 31,
2007 and 52.4% for the quarter ending March 31, 2007. The largest
lease that was not retained during the quarter was First NLC Financial
Services ("FNLC"), a 50,100 square foot customer in Ft. Lauderdale,
Florida, that declared bankruptcy in early 2008. Excluding FNLC, the
Company's customer retention rate was 62.7% for the quarter ending
March 31, 2008.
-- During the first quarter 2008, 71 leases were renewed or expanded on
413,000 rentable square feet at an average rent per square foot of
$21.30, representing a 1.8% increase, and at a cost of $3.59 per square
foot of the lease term in annual leasing costs. Included in these
leases are 75,000 square feet of renewal and expansion leases in
Chicago at an average cost of $6.92 per year of the lease term,
accounting for 18% of the total renewal and expansion leases for the
first quarter 2008.
-- During the first quarter 2008, 27 new leases were signed on 87,000
rentable square feet at an average rent per square foot of $21.57 and
at a cost of $4.32 per square foot of the lease term in annual leasing
costs.
-- On a same-store basis, the Company's share of net operating income
("NOI") decreased $257,000 or 0.9% for the first quarter 2008 as
compared to the first quarter 2007 on a GAAP basis. On a cash basis,
the Company's share of same-store NOI increased $414,000 or 1.5% for
the first quarter 2008 as compared to the first quarter 2007. The
increase in same-store cash NOI is primarily attributable to an
increase in same-store average occupancy to 91.2% for the first quarter
2008 as compared to 90.5% for the first quarter 2007. Additionally,
same-store rental rates increased 2.1% during the same period.
Capital Structure
-- On May 2, 2008, the Company owed $238.4 million related to its $311.0
million line of credit. The Company is in compliance with all
covenants under the line of credit. The Company has no remaining debt
maturities for 2008. Additionally, the Company's FAD covered its
dividend in 2007 and for the first quarter 2008. For 2009, the Company
has $21.8 million in debt maturities related to three assets in
Houston, Texas that are currently 97.1% leased.
-- On May 2, 2008, the Company completed a $60.0 million recourse mortgage
loan related to the refinance of a $41.7 million mortgage that was
scheduled to mature in September 2008. The loan is secured by the
Company's Capital City Plaza building in Atlanta, Georgia. The
interest rate on the loan is a variable rate based on LIBOR plus 165
basis points. The loan term is for two years, with a one-year
extension option at the Company's discretion. The excess loan proceeds
of approximately $18.4 million were used to pay down the Company's line
of credit. During the second quarter 2008, the Company expects to
record a net gain on extinguishment of debt of approximately $500,000
associated with the prepayment of the maturing loan. The prepaid
mortgage represented the Company's only outstanding maturity in 2008.
-- The Company's previously announced cash dividend of $0.65 per diluted
share for the quarter ended March 31, 2008 represents a payout of
approximately 68.5% of FFO per diluted share. The first quarter
dividend was paid on March 26, 2008 and equates to an annualized
dividend of $2.60 per share, a yield of 6.4% on the closing stock price
on May 2, 2008 of $40.60. This dividend is the 86th consecutive
quarterly distribution to Parkway's common stock shareholders.
-- At March 31, 2008, the Company's debt-to-total market capitalization
ratio was 59.3% based on a stock price of $36.96 per share as compared
to 56.8% at December 31, 2007 based on a stock price of $36.98 per
share and 47.4% at March 31, 2007 based on a stock price of $52.25 per
share. Additionally, at May 2, 2008, the Company's debt-to-total
market capitalization ratio was 57.2% based on a stock price of $40.60
per share.
-- On February 1, 2008, the Company paid off $3.5 million in mortgage
notes payable related to our 400 North Belt and Woodbranch buildings in
Houston, Texas utilizing its line of credit. The mortgages had an
interest rate of 8.25% per annum and were scheduled to mature on August
1, 2011. The Company recognized $401,000 in prepayment expenses
associated with the extinguishment of these mortgages.
-- Mortgages were placed in connection with the asset purchases by Fund I
during the quarter ended March 31, 2008 and are described below:
-- On January 18, 2008, Fund I placed a $33.0 million non-recourse
first mortgage at a fixed interest rate of 5.92% in connection with
the purchase of Gateway Center. Payments during the initial 36
months are interest only and the loan matures on February 10, 2016.
-- On January 31, 2008, the Company placed a $49.2 million non-recourse
first mortgage on behalf of Fund I at a fixed interest rate of 5.77%
in connection with the purchase of Desert Ridge Corporate Center.
Payments during the initial 36 months are interest only and the loan
matures on February 10, 2016.
-- On February 15, 2008, the Company placed a $60.0 million non-
recourse first mortgage on behalf of Fund I at a fixed interest rate
of 5.53% in connection with the purchase of Citicorp Plaza.
Payments during the initial 12 months are interest only and the loan
matures on March 10, 2016.
Outlook for 2008
Based on current operating trends, the Company is reiterating its 2008
initial FFO outlook of $4.00 to $4.20 per diluted share. The reconciliation
of forecasted earnings per diluted share ("EPS") to forecasted FFO per
diluted share is as follows:
Outlook for 2008 Range
Fully diluted EPS ($0.40 - $0.25)
Plus: Real estate depreciation and amortization $5.35 - $5.42
Plus: Depreciation on unconsolidated joint ventures $0.05 - $0.05
Less: Minority interest depreciation and amortization ($1.00 - $1.02)
FFO per diluted share $4.00 - $4.20
(1) The assumptions used in the initial FFO outlook were discussed in
the November 26, 2007 earnings outlook press release. The above
outlook reflects Fund I acquisitions completed during the first
quarter 2008 and does not include any additional acquisitions,
dispositions, joint venture or fund-type investments.
GEAR UP
On January 1, 2006, the Company initiated a new operating plan that
will be referred to as the "GEAR UP" Plan. At the heart of the GEAR UP Plan
are Great People transforming Parkway through Equity Opportunities and
Asset Recycling from an owner-operator to an operator-owner. Our
long-standing commitment to Retain our Customers and provide an
Uncompromising Focus on Operations remains steadfast. We believe that by
accomplishing these goals we can deliver excellent Performance to our
shareholders. Performance for the GEAR UP Plan will be measured as the sum
of adjusted funds available for distribution, as defined by the Company,
cumulative over the three years of the plan. The goal for cumulative
adjusted FAD is $7.18 per diluted share.
About Parkway Properties
Parkway Properties, Inc., a member of the S&P Small Cap 600 Index, is a
self-administered real estate investment trust specializing in the
operation, leasing, acquisition, and ownership of office properties. The
Company is geographically focused on the Southeastern and Southwestern
United States and Chicago. Parkway owns or has an interest in 69 office
properties located in 11 states with an aggregate of approximately 14.1
million square feet of leasable space as of May 5, 2008. Included in the
portfolio are 21 properties totaling 3.8 million square feet that are owned
jointly with other investors, representing 27.2% of the portfolio. Under
the Company's GEAR UP plan, which started January 1, 2006, and ends
December 31, 2008, it is the Company's strategy to transform from an
owner-operator to an operator-owner. The strategy highlights the Company's
strength in providing excellent service in the operation of office
properties in addition to its direct ownership of real estate assets.
Fee-based real estate services are offered through the Company's wholly
owned subsidiary, Parkway Realty Services, which also manages and/or leases
approximately 1.8 million square feet for third party owners as of May 5,
2008.
Additional Information
The Company will conduct a conference call to discuss the results of
its first quarter operations on Tuesday, May 6, 2008, at 11:00 a.m. Eastern
Time. The number for the conference call is 877-879-6243. A taped replay of
the call can be accessed 24 hours a day through May 16, 2008, by dialing
888-203-1112 and using the pass code of 7487141. An audio replay will be
archived and indexed in the investor relations section of the Company's
website at http://www.pky.com . A copy of the Company's 2008 first quarter
supplemental financial and property information package is available by
accessing the Company's website, emailing your request to rjordan@pky.com
or calling Rita Jordan at 601-948-4091. Please participate in the visual
portion of the conference call by accessing the Company's website and
clicking on the "1Q Call" icon. By clicking on topics in the left margin,
you can follow visual representations of the presentation.
Additional information on Parkway Properties, Inc., including an
archive of corporate press releases and conference calls, is available on
the Company's website. The Company's first quarter 2008 Supplemental
Operating and Financial Data, which includes a reconciliation of Non-GAAP
financial measures, is available on the Company's website.
Forward Looking Statement
Certain statements in this release that are not in the present or past
tense or discuss the Company's expectations (including the use of the words
anticipate, forecast or project) are forward-looking statements within the
meaning of the federal securities laws and as such are based upon the
Company's current belief as to the outcome and timing of future events.
There can be no assurance that future developments affecting the Company
will be those anticipated by the Company. These forward-looking statements
involve risks and uncertainties (some of which are beyond the control of
the Company) and are subject to change based upon various factors,
including but not limited to the following risks and uncertainties: changes
in the real estate industry and in performance of the financial markets;
the demand for and market acceptance of the Company's properties for rental
purposes; the amount and growth of the Company's expenses; tenant financial
difficulties and general economic conditions, including interest rates, as
well as economic conditions in those areas where the Company owns
properties; the risks associated with the ownership and development of real
property; the failure to acquire or sell properties as and when
anticipated; and other risks and uncertainties detailed from time to time
on the Company's SEC filings. Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove incorrect, the
Company's results could differ materially from those expressed in the
forward-looking statements. The Company does not undertake to update
forward-looking statements.
FOR FURTHER INFORMATION:
Steven G. Rogers
President & Chief Executive Officer
J. Mitchell Collins
Chief Financial Officer
(601) 948-4091
PARKWAY PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31 December 31
2008 2007
(Unaudited)
Assets
Real estate related investments:
Office and parking properties $1,761,915 $1,552,982
Office property development 19,160 13,411
Accumulated depreciation (267,112) (251,791)
1,513,963 1,314,602
Land available for sale 1,467 1,467
Mortgage loan 7,124 7,001
Investment in unconsolidated joint
ventures 11,112 11,236
1,533,666 1,334,306
Rents receivable and other assets 113,496 119,457
Intangible assets, net 96,550 70,719
Cash and cash equivalents 14,906 11,312
$1,758,618 $1,535,794
Liabilities
Notes payable to banks $257,663 $212,349
Mortgage notes payable 855,664 714,501
Accounts payable and other liabilities 80,597 88,496
1,193,924 1,015,346
Minority Interest
Minority Interest - unit holders 34 34
Minority Interest - real estate
partnerships 137,935 80,506
137,969 80,540
Stockholders' Equity
8.00% Series D Preferred stock, $.001 par
value, 2,400,000 shares authorized,
issued and outstanding 57,976 57,976
Common stock, $.001 par value, 67,600,000
shares authorized, 15,276,367 and
15,223,350 shares issued and outstanding
in 2008 and 2007, respectively 15 15
Common stock held in trust, at cost,
84,000 and 104,500 shares in 2008 and 2007,
respectively (2,845) (3,540)
Additional paid-in capital 426,142 425,221
Accumulated other comprehensive loss (1,465) (358)
Accumulated deficit (53,098) (39,406)
426,725 439,908
$1,758,618 $1,535,794
PARKWAY PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended
March 31
2008 2007
(Unaudited)
Revenues
Income from office and parking
properties $66,022 $61,538
Management company income 497 333
Total revenues 66,519 61,871
Expenses
Property operating expense 31,753 28,234
Depreciation and amortization 22,168 19,211
Operating expense for other real
estate properties 1 1
Management company expenses 489 268
General and administrative 2,295 1,645
Total expenses 56,706 49,359
Operating income 9,813 12,512
Other income and expenses
Interest and other income 368 146
Equity in earnings of unconsolidated
joint ventures 258 305
Gain on sale of real estate - 50
Interest expense (15,521) (13,084)
Loss before minority interest and
discontinued operations (5,082) (71)
Minority interest - real estate
partnerships 2,487 471
Income (loss) from continuing
operations (2,595) 400
Discontinued operations:
Income from discontinued operations - 28
Net income (loss) (2,595) 428
Dividends on preferred stock (1,200) (1,200)
Net loss available to common
stockholders $(3,795) $(772)
Net loss per common share:
Basic $(0.25) $(0.05)
Diluted $(0.25) $(0.05)
Dividends per common share $0.65 $0.65
Weighted average shares outstanding:
Basic 15,003 15,616
Diluted 15,003 15,616
PARKWAY PROPERTIES, INC.
RECONCILIATION OF FUNDS FROM OPERATIONS AND
FUNDS AVAILABLE FOR DISTRIBUTION TO NET INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(In thousands, except per share data)
Three Months Ended
March 31
2008 2007
(Unaudited)
Net Income (Loss) $(2,595) $428
Adjustments to Net Income (Loss):
Preferred Dividends (1,200) (1,200)
Depreciation and Amortization 22,168 19,211
Minority Interest Depreciation and
Amortization (4,210) (2,391)
Adjustments for Unconsolidated Joint
Ventures 176 161
Funds From Operations Available to
Common Shareholders (1) $14,339 $16,209
Funds Available for Distribution
Funds From Operations Available
to Common Shareholders $14,339 $16,209
Add (Deduct):
Adjustments for Unconsolidated
Joint Ventures (54) (84)
Adjustments for Minority Interest
in Real Estate Partnerships 642 418
Straight-line Rents (773) (1,303)
Amortization of Above/Below Market
Leases 57 352
Amortization of Share Based
Compensation 454 353
Capital Expenditures:
Building Improvements (937) (918)
Tenant Improvements - New
Lease (1,102) (1,037)
Tenant Improvements -
Renewal Leases (1,240) (1,627)
Leasing Costs - New Leases (190) (441)
Leasing Costs - Renewal Leases (1,024) (395)
Funds Available for Distribution (1) $10,172 $11,527
Diluted Per Common Share/Unit
Information (**)
FFO per share $0.95 $1.02
Dividends paid $0.65 $0.65
Dividend payout ratio for FFO 68.54% 63.42%
Weighted average shares/units
outstanding 15,119 15,816
Other Supplemental Information
Upgrades on Acquisitions $5,173 $1,946
Gain (Loss) on Non Depreciable
Assets $ - $ 50
**Information for Diluted Computations:
Basic Common Shares/Units
Outstanding 15,005 15,617
Dilutive Effect of Other Share
Equivalents 114 199
(1) Parkway computes FFO in accordance with standards established by the
National Association of Real Estate Investment Trusts ("NAREIT"),
which may not be comparable to FFO reported by other REITs that do not
define the term in accordance with the current NAREIT definition. FFO
is defined as net income, computed in accordance with generally
accepted accounting principles ("GAAP"), excluding gains or losses
from the sales of properties, plus real estate related depreciation
and amortization and after adjustments for unconsolidated partnerships
and joint ventures.
There is not a standard definition established for FAD. Therefore, our
measure of FAD may not be comparable to FAD reported by other REITs. We
define FAD as FFO, excluding the amortization of restricted shares,
amortization of above/below market leases and straight line rent
adjustments, and reduced by non-revenue enhancing capital expenditures for
building improvements, tenant improvements and leasing costs. Adjustments
for unconsolidated partnerships and joint ventures are included in the
computation of FAD on the same basis.
PARKWAY PROPERTIES, INC.
CALCULATION OF EBITDA AND COVERAGE RATIOS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(In thousands)
Three Months Ended
March 31
2008 2007
(Unaudited)
Net Income (Loss) $(2,595) $428
Adjustments to Net Income (Loss):
Interest Expense 14,674 12,915
Amortization of Financing Costs 446 293
Prepayment Expense - Early
Extinguishment of Debt 401 (124)
Depreciation and Amortization 22,168 19,211
Amortization of Share Based
Compensation 454 353
Gain on Real Estate and Non
Depreciable Assets - (50)
Tax Expense - 13
EBITDA Adjustments - Unconsolidated
Joint Ventures 304 291
EBITDA Adjustments - Minority
Interest in Real Estate
Partnerships (6,883) (3,629)
EBITDA (1) $28,969 $29,701
Interest Coverage Ratio:
EBITDA $28,969 $29,701
Interest Expense:
Interest Expense $14,674 $12,915
Capitalized Interest 156 -
Interest Expense - Unconsolidated
Joint Ventures 125 127
Interest Expense - Minority
Interest in Real Estate
Partnerships (2,612) (1,203)
Total Interest Expense $12,343 $11,839
Interest Coverage Ratio 2.35 2.51
Fixed Charge Coverage Ratio:
EBITDA $28,969 $29,701
Fixed Charges:
Interest Expense $12,343 $11,839
Preferred Dividends 1,200 1,200
Principal Payments (Excluding Early
Extinguishment of Debt) 3,792 4,051
Principal Payments - Unconsolidated
Joint Ventures 13 12
Principal Payments - Minority
Interest in Real Estate
Partnerships (86) (65)
Total Fixed Charges $17,262 $17,037
Fixed Charge Coverage Ratio 1.68 1.74
Modified Fixed Charge Coverage Ratio:
EBITDA $28,969 $29,701
Modified Fixed Charges:
Interest Expense $12,343 $11,839
Preferred Dividends 1,200 1,200
Total Modified Fixed Charges $13,543 $13,039
Modified Fixed Charge Coverage Ratio 2.14 2.28
The following table reconciles EBITDA
to cash flows provided by operating
activities:
EBITDA $28,969 $29,701
Amortization of Above Market Leases 57 352
Amortization of Mortgage Loan
Discount (123) -
Operating Distributions from
Unconsolidated Joint Ventures 382 405
Interest Expense (14,674) (12,915)
Prepayment Expense - Early
Extinguishment of Debt (401) 124
Tax Expense - (13)
Increase in Deferred Leasing Costs (3,056) (836)
Decrease in Receivables and Other
Assets 10,403 2,226
Decrease in Accounts Payable
and Other Liabilities (12,582) (7,374)
Adjustments for Minority Interests 4,396 3,158
Adjustments for Unconsolidated Joint
Ventures (562) (596)
Cash Flows Provided by Operating
Activities $12,809 $14,232
(1) Parkway defines EBITDA, a non-GAAP financial measure, as net income
before interest expense, income taxes, depreciation, amortization,
losses on early extinguishment of debt and other gains and losses.
EBITDA, as calculated by us, is not comparable to EBITDA reported by
other REITs that do not define EBITDA exactly as we do. EBITDA does
not represent cash generated from operating activities in accordance
with generally accepted accounting principles, and should not be
considered an alternative to operating income or net income as an
indicator of performance or as an alternative to cash flows from
operating activities as an indicator of liquidity.
PARKWAY PROPERTIES, INC.
NET OPERATING INCOME FROM OFFICE AND PARKING PROPERTIES
THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(In thousands, except number of properties data)
Net Operating Average
Income Occupancy
Number of Percentage of
Properties Portfolio(1) 2008 2007 2008 2007
Same-store
properties (2):
Wholly-owned 48 79.44% $27,225 $27,238 91.0% 90.6%
Parkway
Properties Office
Fund LP 9 10.27% 3,518 4,288 93.0% 90.0%
Other consolidated
joint venture 1 1.76% 603 672 87.6% 87.6%
Total same-store
properties 58 91.47% 31,346 32,198 91.2% 90.5%
2007 acquisitions 2 2.90% 994 - 92.5% N/A
2008 acquisitions 3 5.77% 1,976 - 76.0% N/A
Office property
development - -0.01% (2) - N/A N/A
Assets sold - -0.13% (45) 1,106 N/A N/A
Net operating income
from office and
parking properties 63 100.00% $34,269 $33,304
(1) Percentage of portfolio based on 2008 net operating income.
(2) Parkway defines Same-Store Properties as those properties that were
owned for the entire three-month periods ended March 31, 2008 and
2007 and excludes properties classified as discontinued operations.
Same-Store net operating income ("SSNOI") includes income from real
estate operations less property operating expenses (before interest
and depreciation and amortization) for Same-Store Properties. SSNOI
as computed by Parkway may not be comparable to SSNOI reported by
other REITs that do not define the measure exactly as we do. SSNOI
is a supplemental industry reporting measurement used to evaluate the
performance of the Company's investments in real estate assets. The
following table is a reconciliation of net income to SSNOI:
Three Months Ended
March 31
2008 2007
(Unaudited)
Net Income (loss) $(2,595) $428
Add (deduct):
Interest expense 15,521 13,084
Depreciation and amortization 22,168 19,211
Operating expense for other real
estate properties 1 1
Management company expenses 489 268
General and administrative expenses 2,295 1,645
Equity in earnings of unconsolidated
joint ventures (258) (305)
Gain on sale of real estate and other
assets - (50)
Minority interest - real estate
partnerships (2,487) (471)
Income from discontinued
operations - (28)
Management company income (497) (333)
Interest and other income (368) (146)
Net operating income from office and
parking properties 4,269 33,304
Less: Net operating
income from non same-store properties (2,923) (1,106)
Same-store net operating income $31,346 $32,198
SOURCE Parkway Properties, Inc.
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Related links:
http://www.pky.com
Photo Notes:
NewsCom: http://www.newscom.com/cgi-bin/prnh/20030513/PARKLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Steven G. Rogers, President & Chief Executive
Officer, or J. Mitchell Collins, Chief Financial Officer, both of
Parkway Properties, Inc., +1-601-948-4091
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