JACKSON, Miss., Nov. 5 /PRNewswire-FirstCall/ -- Parkway Properties,
Inc. (NYSE: PKY) today announced results for its third quarter ended
September 30, 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030513/PARKLOGO )
Consolidated Financial Results
-- Funds from operations ("FFO") applicable to common shareholders totaled
$15.0 million ($0.96 per diluted share) for the three months ended
September 30, 2007 compared to $13.1 million ($0.90 per diluted share)
for the three months ended September 30, 2006. FFO totaled $46.0
million ($2.92 per diluted share) for the nine months ended September
30, 2007 compared to $44.5 million ($3.07 per diluted share) for the
nine months ended September 30, 2006.
Through
The following items contributed to FFO September 30
(in thousands, except percentages) 3Q07 3Q06 2007 2006
Lease termination fees* $ 68 $ 124 $ 616 $ 588
Straight line rent* 34 746 1,231 3,393
Amortization of above market rent* (156) (468) (1,012) (1,060)
Impairment loss on securities (11) - (11) (119)
Gain on land 8 - 58 -
Prepayment expense on extinguishment of
debt - - (370) (325)
Incentive and management fees earned on
Viad - - 27 4,218
Average occupancy 91.8% 90.5% 91.4% 89.8%
* These items include 100% of amounts from wholly-owned assets plus
Parkway's allocable share of these items recognized from the assets
held in consolidated joint ventures.
-- Funds available for distribution ("FAD") totaled $10.6 million for the
three months ended September 30, 2007 compared to $4.8 million for the
three months ended September 30, 2006. FAD totaled $32.3 million for
the nine months ended September 30, 2007 compared to $21.4 million for
the nine months ended September 30, 2006.
-- Net loss available to common shareholders for the three months ended
September 30, 2007 was $2.1 million ($0.14 per diluted share) compared
net loss available to common shareholders of $3.6 million ($0.25 per
diluted share) for the three months ended September 30, 2006. Net
income available to common shareholders for the nine months ended
September 30, 2007 was $15.2 million ($0.96 per diluted share) compared
to $13.7 million ($0.96 per diluted share) for the nine months ended
September 30, 2006. Net gains on the sale of real estate and other
assets of $20.3 million and $13.7 million were included in net income
available to common shareholders for the nine months ended September
30, 2007 and 2006, respectively.
Operations and Leasing
-- Parkway's customer retention rate for the three months ending September
30, 2007 was 69.8% compared to 81.0% for the quarter ending June 30,
2007 and 73.8% for the quarter ending September 30, 2006. Customer
retention for the nine months ended September 30, 2007 and 2006 was
69.3% and 71.6%, respectively.
-- As of October 1, 2007, occupancy of the office portfolio was 92.3%
compared to 91.6% as of July 1, 2007 and 91.0% as of October 1, 2006.
Not included in the October 1, 2007 occupancy rate are 18 signed leases
totaling 88,000 square feet, which commence in the fourth quarter of
2007 through the first quarter of 2008. Including these leases, the
portfolio was 93.0% leased as of October 10, 2007. Average occupancy
for the third quarter of 2007 was 91.8% compared to average occupancy
for the third quarter of 2006 of 90.5%.
-- During the quarter ended September 30, 2007, 70 leases were renewed or
expanded on 290,000 rentable square feet at an average rental rate
increase of 0.1% on a cash basis and a cost of $2.53 per square foot
per year of the lease term in committed tenant improvements and leasing
commissions ("leasing costs"). During the nine months ending September
30, 2007, leases were renewed or expanded on 1.2 million rentable
square feet at an average cost of $2.59 per square foot per year of the
lease term in committed leasing costs.
-- During the quarter, 42 new leases were signed on 170,000 rentable
square feet at a cost of $3.79 per square foot per year of the lease
term in committed leasing costs. New leases were signed during the
nine months ending September 30, 2007 on 397,000 rentable square feet
at an average cost of $4.02 per square foot per year of the lease term
in committed leasing costs.
-- Same store assets produced an increase in net operating income ("NOI")
of $1.2 million or 5.3% for the quarter ended September 30, 2007
compared to the same period of the prior year on a GAAP basis. Same
store NOI increased $1.9 million or 8.4% for the three months ended
September 30, 2007 compared to the same period of the prior year on a
cash basis. The increase in same store NOI is primarily attributable
to an increase in same store average occupancy from 90.3% during the
third quarter of 2006 to 91.7% during the third quarter of 2007.
Additionally, same store rental rates increased 2.5% during the same
period. Same store NOI for the nine months ending September 30, 2007
increased $4.0 million or 5.5% compared to the same period of 2006 on a
GAAP basis and $6.4 million or 9.1% on a cash basis.
Capital Markets and Financing
-- The Company's previously announced cash dividend of $0.65 per share for
the quarter ended September 30, 2007 represents a payout of
approximately 68.0% of FFO per diluted share. The third quarter
dividend was paid on September 26, 2007 and equates to an annualized
dividend of $2.60 per share, a yield of 6.6% on the closing stock price
on November 2, 2007 of $39.50. This dividend is the 84th consecutive
quarterly distribution to Parkway's shareholders of common stock.
-- As of September 30, 2007, the Company's debt-to-total market
capitalization ratio was 51.8% based on a stock price of $44.14
compared to 48.3% as of June 30, 2007 based on a stock price of $48.03
and 52.1% as of September 30, 2006 based on a stock price of $46.49.
-- On August 3, 2007, the Company announced that its Board of Directors
had authorized the repurchase of up to 1.7 million shares of
outstanding common stock through July 30, 2008. As of September 30,
2007, the Company has purchased 454,038 shares for $19.9 million, which
equates to an average price of $43.91 per share.
-- In connection with the purchase of the Capital City Plaza in Atlanta,
Georgia on April 2, 2004, Parkway, through a subsidiary company,
issued $15.5 million in preferred membership interests to the seller.
The preferred membership interests paid the seller a 7% coupon rate and
were issued to accommodate their tax planning needs. The seller
previously redeemed $4.75 million of the preferred membership interest.
On August 7, 2007, the seller redeemed the remaining $10.7 million of
preferred membership interests.
-- On August 24, 2007, the Company entered into an interest rate swap
agreement with US Bank. The interest rate swap is for a $30 million
notional amount and fixes the 30-day LIBOR interest rate at 4.924%,
which equates to a total interest rate of 6.224%, for the period
September 4, 2007 through August 31, 2008. The swap agreement serves as
a hedge of the variable interest rates on a portion of the borrowings
under the Company's $200 million line of credit.
Outlook for 2007
The Company is forecasting FFO per diluted share of $3.80 to $4.00 and
EPS of $0.80 to $1.00 for 2007.
The reconciliation of forecasted EPS to forecasted FFO per diluted
share is as follows:
Guidance for 2007 Range
Fully diluted EPS $0.80 - $1.00
Plus: Real estate depreciation and amortization $4.89 - $4.91
Plus: Depreciation on unconsolidated joint ventures $0.04 - $0.06
Less: Gain on sale of real estate and
joint venture interests ($1.29 - $1.29)
Less: Minority interest depreciation and amortization ($0.64 - $0.68)
Fully diluted FFO per share $3.80 - $4.00
Earnings guidance is based on the following assumptions:
-- Average occupancy for the fourth quarter of 92%.
-- No investments for the discretionary fund and no fee simple
acquisitions for the remainder of 2007.
-- No asset sales for the remainder of 2007.
Outlook for 2008
Parkway will provide its 2008 earnings outlook in a separate press
release on Monday, November 26, 2007 followed by a conference call at 3:00
p.m. Eastern Time that same day. The number for the conference call is
888-819-8015. A taped replay of the 2008 earnings guidance conference call
can be accessed 24 hours a day through December 3, 2007 by dialing
888-203-1112 and using the pass code of 9968643.
Steven G. Rogers, President and Chief Executive Officer stated, "Our
third quarter results reflect steady performance across a wide range of
operating metrics. The recent volatility in the credit markets has slowed
the pace of our anticipated property dispositions, but we remain committed
to a disciplined allocation of capital on both the disposition and
acquisition fronts. We believe we are on track to meet our strategic and
financial goals as set forth in the GEAR UP Plan."
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 funds available for distribution is $7.18 per diluted share.
Additional Information
The Company will conduct a conference call to discuss the results of
its third quarter operations on Tuesday, November 6, 2007, at 11:00 a.m.
Eastern Time. The number for the conference call is 800-289-0518. A taped
replay of the call can be accessed 24 hours a day through November 16, 2007
by dialing 888-203-1112 and using the pass code of 9890477. 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 2007 third
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 "3Q 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 third quarter 2007 Supplemental
Operating and Financial Data, which includes a reconciliation of Non-GAAP
financial measures, is available on the Company's website.
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 66 office
properties located in 11 states with an aggregate of approximately 13.0
million square feet of leasable space as of November 5, 2007. Included in
the portfolio are 18 properties totaling 2.7 million square feet that are
owned jointly with other investors, representing 21% 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 November
5, 2007.
Certain statements in this release that are not in the present 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
William R. Flatt
Chief Financial Officer
(601) 948-4091
PARKWAY PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
September 30 December 31
2007 2006
(Unaudited)
Assets
Real estate related investments:
Office and parking properties $1,551,823 $1,517,468
Office property development 7,662 -
Accumulated depreciation (240,245) (211,187)
1,319,240 1,306,281
Land available for sale 1,467 1,467
Investment in unconsolidated joint ventures 11,068 11,179
1,331,775 1,318,927
Rents receivable and other assets 110,732 107,145
Intangible assets, net 73,962 81,800
Cash and cash equivalents 11,424 4,474
$1,527,893 $1,512,346
Liabilities
Notes payable to banks $186,799 $152,312
Mortgage notes payable 718,311 696,012
Accounts payable and other liabilities 85,688 72,659
Subsidiary redeemable preferred
membership interests - 10,741
990,798 931,724
Minority Interest
Minority Interest - unit holders 35 36
Minority Interest - real estate partnerships 77,751 90,280
77,786 90,316
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, 15,453,636 and 15,764,799 shares
issued and outstanding in 2007 and 2006,
respectively 15 16
Common stock held in trust, at cost,
104,500 and 115,000 shares in 2007 and 2006,
respectively (3,540) (3,894)
Additional paid-in capital 433,972 449,141
Accumulated other comprehensive income 137 828
Accumulated deficit (29,251) (13,761)
459,309 490,306
$1,527,893 $1,512,346
PARKWAY PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three Months Ended
September 30
2007 2006
(Unaudited)
Revenues
Income from office and parking properties $60,785 $54,923
Management company income 432 284
Total revenues 61,217 55,207
Expenses
Property operating expense 28,338 26,590
Depreciation and amortization 19,694 17,257
Operating expense for other real estate properties 2 1
Management company expenses 343 223
General and administrative 1,860 1,282
Total expenses 50,237 45,353
Operating income 10,980 9,854
Other income and expenses
Interest and other income 90 8
Equity in earnings of unconsolidated joint ventures 234 198
Loss on sale of real estate and other assets (3) -
Interest expense (13,374) (12,565)
Loss before minority interest and discontinued
operations (2,073) (2,505)
Minority interest - unit holders (2) (1)
Minority interest - real estate partnerships 1,088 225
Loss from continuing operations (987) (2,281)
Discontinued operations:
Income from discontinued operations 93 130
Gain on sale of real estate from discontinued
operations - 211
Net loss (894) (1,940)
Dividends on preferred stock (1,200) (1,200)
Dividends on convertible preferred stock - (481)
Net loss available to common stockholders $(2,094) $(3,621)
Net loss per common share:
Basic:
Loss from continuing operations $(0.14) $(0.28)
Discontinued operations - 0.03
Net loss $(0.14) $(0.25)
Diluted:
Loss from continuing operations $(0.14) $(0.28)
Discontinued operations - 0.03
Net loss $(0.14) $(0.25)
Dividends per common share $0.65 $0.65
Weighted average shares outstanding:
Basic 15,507 14,236
Diluted 15,507 14,236
PARKWAY PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Nine Months Ended
September 30
2007 2006
(Unaudited)
Revenues
Income from office and parking properties $183,408 $152,460
Management company income 1,196 5,082
Total revenues 184,604 157,542
Expenses
Property operating expense 85,391 73,011
Depreciation and amortization 58,073 44,864
Operating expense for other real estate properties 4 4
Management company expenses 887 898
General and administrative 5,105 3,405
Total expenses 149,460 122,182
Operating income 35,144 35,360
Other income and expenses
Interest and other income 308 34
Equity in earnings of unconsolidated joint ventures 782 524
Gain on sale of real estate and other assets 20,307 13,465
Interest expense (40,510) (31,787)
Income before minority interest and discontinued
operations 16,031 17,596
Minority interest - unit holders (2) (1)
Minority interest - real estate partnerships 2,575 369
Income from continuing operations 18,604 17,964
Discontinued operations:
Income from discontinued operations 170 785
Gain on sale of real estate from discontinued
operations - 211
Net income 18,774 18,960
Dividends on preferred stock (3,600) (3,600)
Dividends on convertible preferred stock - (1,654)
Net income available to common stockholders $15,174 $13,706
Net income per common share:
Basic:
Income from continuing operations $0.96 $0.90
Discontinued operations 0.01 0.07
Net income $0.97 $0.97
Diluted:
Income from continuing operations $0.95 $0.89
Discontinued operations 0.01 0.07
Net income $0.96 $0.96
Dividends per common share $1.95 $1.95
Weighted average shares outstanding:
Basic 15,598 14,108
Diluted 15,773 14,284
PARKWAY PROPERTIES, INC.
RECONCILIATION OF FUNDS FROM OPERATIONS AND
FUNDS AVAILABLE FOR DISTRIBUTION TO NET INCOME
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
(Unaudited) (Unaudited)
Net Income (Loss) $(894) $(1,940) $18,774 $18,960
Adjustments to Net Income (Loss):
Preferred Dividends (1,200) (1,200) (3,600) (3,600)
Convertible Preferred Dividends - (481) - (1,654)
Depreciation and Amortization 19,694 17,257 58,073 44,864
Depreciation and Amortization -
Discontinued Operations - 121 1 535
Minority Interest Depreciation
and Amortization (2,799) (648) (7,474) (1,473)
Adjustments for Unconsolidated
Joint Ventures 169 156 491 659
Minority Interest - Unit Holders 2 1 2 1
Gain on Sale of Real Estate - (211) (20,260) (13,795)
Funds From Operations Applicable
to Common Shareholders (1) $14,972 $13,055 $46,007 $44,497
Funds Available for Distribution
Funds From Operations Applicable
to Common Shareholders $14,972 $13,055 $46,007 $44,497
Add (Deduct) :
Adjustments for Unconsolidated
Joint Ventures (116) (82) (347) (1,055)
Adjustments for Minority Interest
in Real Estate Partnerships 296 190 1,066 333
Straight-line Rents (226) (992) (2,035) (3,913)
Straight-line Rents -
Discontinued Operations - 31 - 85
Amortization of Above/Below
Market Leases 56 493 754 1,171
Amortization of Share Based
Compensation 387 276 1,114 584
Capital Expenditures:
Building Improvements (1,892) (1,423) (4,824) (4,146)
Tenant Improvements - New Leases (616) (2,786) (2,310) (6,235)
Tenant Improvements - Renewal
Leases (1,281) (2,695) (4,365) (6,497)
Leasing Costs - New Leases (504) (879) (884) (1,726)
Leasing Costs - Renewal Leases (508) (358) (1,908) (1,711)
Funds Available for Distribution (1) $10,568 $4,830 $32,268 $21,387
Diluted Per Common Share/Unit Information (**)
FFO per share $0.96 $0.90 $2.92 $3.07
Dividends paid $0.65 $0.65 $1.95 $1.95
Dividend payout ratio for FFO 67.98% 72.40% 66.86% 63.54%
Weighted average shares/units
outstanding 15,658 15,076 15,774 15,038
Other Supplemental Information
Upgrades on Acquisitions $6,150 $902 $21,652 $4,072
Gain on Non Depreciable Assets $(3) $- $47 $(119)
**Information for Diluted Computations:
Convertible Preferred Dividends $- $481 $- $1,654
Basic Common Shares/Units
Outstanding 15,508 14,237 15,599 14,109
Convertible Preferred Shares
Outstanding - 652 - 753
Dilutive Effect of Other Share
Equivalents 150 187 175 176
(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 AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
(In thousands)
Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
(Unaudited) (Unaudited)
Net Income (Loss) $(894) $(1,940) $18,774 $18,960
Adjustments to Net Income (Loss):
Interest Expense 13,059 12,298 39,242 30,963
Amortization of Financing Costs 315 267 898 824
Prepayment Expense - Early
Extinguishment of Debt - - 370 -
Depreciation and Amortization 19,694 17,378 58,074 45,399
Amortization of Share Based
Compensation 387 276 1,114 584
Gain on Real Estate 3 (211) (20,307) (13,676)
Tax Expense 24 1 129 1
EBITDA Adjustments -
Unconsolidated Joint Ventures 299 288 882 1,915
EBITDA Adjustments - Minority
Interest in Real Estate
Partnerships (4,549) (1,041) (12,019) (2,546)
EBITDA (1) $28,338 $27,316 $87,157 $82,424
Interest Coverage Ratio:
EBITDA $28,338 $27,316 $87,157 $82,424
Interest Expense:
Interest Expense $13,059 $12,298 $39,242 $30,963
Capitalized Interest 78 - 115 -
Interest Expense -
Unconsolidated Joint Ventures 128 129 383 886
Interest Expense - Minority
Interest in Real Estate
Partnerships (1,705) (381) (4,428) (1,039)
Total Interest Expense $11,560 $12,046 $35,312 $30,810
Interest Coverage Ratio 2.45 2.27 2.47 2.68
Fixed Charge Coverage Ratio:
EBITDA $28,338 $27,316 $87,157 $82,424
Fixed Charges:
Interest Expense $11,560 $12,046 $35,312 $30,810
Preferred Dividends 1,200 1,681 3,600 5,254
Principal Payments (Excluding
Early Extinguishment of Debt) 3,711 3,952 11,770 11,327
Principal Payments -
Unconsolidated Joint Ventures 13 11 37 34
Principal Payments - Minority
Interest in Real Estate
Partnerships (83) (29) (229) (176)
Total Fixed Charges $16,401 $17,661 $50,490 $47,249
Fixed Charge Coverage Ratio 1.73 1.55 1.73 1.74
Modified Fixed Charge Coverage Ratio:
EBITDA $28,338 $27,316 $87,157 $82,424
Modified Fixed Charges:
Interest Expense $11,560 $12,046 $35,312 $30,810
Preferred Dividends 1,200 1,681 3,600 5,254
Total Modified Fixed Charges $12,760 $13,727 $38,912 $36,064
Modified Fixed Charge Coverage Ratio 2.22 1.99 2.24 2.29
The following table reconciles
EBITDA to cash flows provided
by operating activities:
EBITDA $28,338 $27,316 $87,157 $82,424
Amortization of Above Market
Leases 56 493 754 1,171
Operating Distributions from
Unconsolidated Joint Ventures 232 365 902 1,150
Interest Expense (13,059) (12,298) (39,242) (30,963)
Prepayment Expense - Early
Extinguishment of Debt - - (370) -
Tax Expense (24) (1) (129) (1)
(Increase) Decrease in
Receivables and Other Assets (4,926) (15,902) (7,360) (18,428)
Increase (Decrease) in Accounts
Payable and Other Liabilities 7,578 11,362 8,749 10,550
Adjustments for Minority
Interests 3,463 818 9,446 2,178
Adjustments for Unconsolidated
Joint Ventures (533) (486) (1,664) (2,439)
Cash Flows Provided by Operating
Activities $21,125 $11,667 $58,243 $45,642
(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 SEPTEMBER 30, 2007 AND 2006
(In thousands, except number of properties data)
Number Percentage Net Operating Average
of of Income Occupancy
Properties Portfolio(1) 2007 2006 2007 2006
Same store properties (2):
Wholly owned 47 71.69% $23,260 $22,082 91.7% 90.3%
Parkway Properties
Office Fund LP 4 3.19% 1,035 1,060 92.0% 96.8%
Other consolidated
joint venture 1 1.90% 617 585 87.6% 87.6%
Total same store
properties 52 76.78% 24,912 23,727 91.7% 90.4%
2006 acquisitions 6 20.38% 6,614 3,121 90.0% 89.6%
2007 acquisitions 2 2.95% 956 - 97.5% N/A
Office property
development - -0.08% (25) - N/A N/A
Assets sold - -0.03% (10) 1,485 N/A N/A
Net operating income
from office and parking
properties 60 100.00% $32,447 $28,333
(1) Percentage of portfolio based on 2007 net operating income.
(2) Parkway defines Same Store Properties as those properties that were
owned for the entire three-month periods ended September 30, 2007 and
2006 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 Nine Months Ended
September 30 September 30
2007 2006 2007 2006
Net income (loss) $(894) $(1,940) $18,774 $18,960
Add (deduct):
Interest expense 13,374 12,565 40,510 31,787
Depreciation and amortization 19,694 17,257 58,073 44,864
Operating expense for other real
estate properties 2 1 4 4
Management company expenses 343 223 887 898
General and administrative expenses 1,860 1,282 5,105 3,405
Equity in earnings of unconsolidated
joint ventures (234) (198) (782) (524)
Gain (loss) on sale of real estate
and other assets 3 - (20,307) (13,465)
Minority interest - unit holders 2 1 2 1
Minority interest - real estate
partnerships (1,088) (225) (2,575) (369)
Income from discontinued operations (93) (130) (170) (785)
Gain on sale of real estate from
discontinued operations - (211) - (211)
Management company income (432) (284) (1,196) (5,082)
Interest and other income (90) (8) (308) (34)
Net operating income from office
and parking properties 32,447 28,333 98,017 79,449
Less: Net operating income from
non same store properties (7,535) (4,606) (20,633) (6,007)
Same store net operating income $24,912 $23,727 $77,384 $73,442
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
http://www.prnewswire.com/comp/103115.html/
CONTACT:
Steven G. Rogers, President & Chief Executive
Officer; or William R. Flatt, Chief Financial Officer,
+1-601-948-4091, both of Parkway Properties, Inc.
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