JACKSON, Miss., Nov. 26 /PRNewswire-FirstCall/ -- Parkway Properties,
Inc. (NYSE: PKY) announced today its earnings outlook for 2008.
Parkway has historically provided an annual earnings outlook for the
following year to its investors, analysts and other public constituencies
in November, consisting of funds from operations (FFO) per share and net
income per share and the major assumptions used in preparing the earnings
outlook. Variance within the outlook range may occur due to variations in
the recurring revenue and expenses of the Company as well as certain
non-recurring items. Examples of non-recurring items would include
prepayment penalties, lease termination fees, late fees, unexpected
bankruptcies and other normal but difficult to project items. It has been
and will continue to be the Company's policy to not issue quarterly
earnings guidance or revise the annual earnings outlook unless such
estimates are outside of the original annual outlook range. This policy is
intended to lessen the emphasis on short term movements that do not have a
material impact on earnings or value of the Company.
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The Company is forecasting FFO per diluted share of $4.00 to $4.20 and
EPS of $0.00 to $0.10 for 2008.
Guidance for 2008 Range
Fully diluted EPS $0.00-$0.10
Plus: Real estate depreciation and amortization $4.75-$4.87
Plus: Depreciation on unconsolidated joint ventures $0.03-$0.04
Less: Minority interest depreciation and amortization ($0.78-$0.81)
Fully diluted FFO per share $4.00-$4.20
The 2008 earnings outlook is based on the core operating assumptions
and capital activity assumptions described below. These assumptions reflect
the Company's expectations based on its knowledge of current market
conditions and its experience.
Core Operating Assumptions
-- An average occupancy for the first and second half of the year of 92.3%
and 93.5%, respectively, with average annual occupancy of 92.9%.
-- Same store net operating income growth of 2% to 4% on a GAAP basis. On
a cash basis, annual same store net operating income is expected to
increase by 3% to 5%.
-- Average interest rate on non-hedged floating rate debt of 6.2%.
Average interest rate of 5.6% on $60 million in hedged debt through
December 31, 2008, and 6.2% on $30 million in hedged debt through
August 31, 2008.
-- Net general and administrative expenses are expected to be in the range
of $7.4 to $7.8 million.
2008 Capital Activity Assumptions
-- No fee simple acquisitions are included in the earnings outlook for
2008.
-- Construction for The Pinnacle at Jackson Place is scheduled to be
completed in December 2008. No incremental FFO has been included in
the earnings outlook from this asset.
-- No sales or joint ventures of wholly-owned properties are included in
the earnings outlook for 2008. However, the Company expects to
continue to pursue the GEAR UP disposition strategy that has been
outlined previously and will provide further information at such time
as a sale or joint venture is closed as to the impact on the earnings
outlook.
-- The sale or joint venture of One and Two Illinois Center in Chicago,
Illinois, is not included in the earnings outlook for 2008. Parkway
engaged Holliday Fenoglio Fowler, L.P. to market the Chicago assets,
which is expected to officially launch in January 2008.
-- No additional purchases of Company stock are included in the earnings
outlook for 2008.
-- New investments for the discretionary fund totaling $214 million to be
completed by July 2008, all at an average acquisition capitalization
rate of 7% on the assets and 9% to Parkway when including various
recurring fees.
-- Based on the 11/23/2007 closing stock price of $39.27, the Company's
debt to total market capitalization is expected to range from 55% to
57% throughout 2008.
Subsequent to September 30, 2007, the Company has purchased 176,997
shares of its outstanding common stock for $7.0 million, which equates to
an average price of $39.50 per share. During 2007, a total of 631,035
shares have been purchased at a total price of $26.9 million, which equates
to an average price of $42.67 per share under the 1.7 million share
authorization approved by the Board of Directors on August 3, 2007.
Subsequent to September 30, 2007, 10 new leases were signed on 27,000
square feet in addition to renewals and expansions of 231,000 square feet.
These renewals include three leases totaling 98,500 square feet which were
due to expire in 2008 including 43,700 square feet in Memphis, Tennessee
and 54,800 in Houston, Texas.
Parkway will host a 2008 Earnings Outlook conference call on Monday,
November 26, 2007, at 3:00 p.m. Eastern Time. 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.
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.
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 26, 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
26, 2007.
Parkway Properties, Inc.'s press releases and additional information
about the Company are available on the World Wide Web at http://www.pky.com.
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.
CONTACT: STEVEN G. ROGERS
PRESIDENT & CHIEF EXECUTIVE OFFICER
WILLIAM R. FLATT
CHIEF FINANCIAL OFFICER
(601) 948-4091
SOURCE Parkway Properties, Inc.
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Related links:
http://www.pky.com
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NewsCom: http://www.newscom.com/cgi-bin/prnh/20030513/PARKLOGO
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CONTACT:
Steven G. Rogers, President & Chief Executive
Officer, or William R. Flatt, Chief Financial Officer, both of
Parkway Properties, Inc., +1-601-948-4091
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