American Land Lease (NYSE:ANL)
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American Land Lease Announces First Quarter 2005 Financial
Results, 7.3% Increase in Funds From Operations per share over 2004
CLEARWATER, Fla., May 10 /PRNewswire-FirstCall/ -- American Land Lease, Inc.
(NYSE:ANL) today released results for first quarter 2005.
Summary Financial Results
First Quarter
* Diluted Earnings Per Common Share ("Diluted EPS") were $0.36 for the
three-month period ended March 31, 2005 as compared to $0.33 from the same
period one year ago, an increase of 9.1% on a per common share basis.
* Funds from Operations attributable to common stockholders ("FFO"; a non- GAAP
financial measure) were $3.7 million, or $0.44 per diluted common share, for
the quarter compared to $3.4 million, or $0.41 per diluted common share from
the same period one year ago, an increase of 7.3% on a per share basis.
* Diluted EPS and FFO for 2005 as compared to 2004 were negatively impacted by
a decrease in the unit volume of closings, higher inventory levels and lower
gross margins realized from home sales in the quarter. As a result of the
Company's preferred stock offering, earnings for the 2005 quarter were diluted
$0.02 per share by cumulative unpaid preferred dividends. In addition, the
Company realized a $0.03 per common share reduction in other income compared to
the 2004 quarter as a bond residual position matured in 2004 and did not
provide a contribution in the 2005 quarter.
* Diluted EPS and FFO for 2005 as compared to 2004 were positively impacted by
a correction in the Company's accounting for restricted stock awards under
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, or SFAS 123. The Company had previously valued certain
performance-based restricted stock based upon the market price of the Company's
common stock at the date of issuance and recognized the dividends paid on the
awards as compensation expense until the awards vested. In accordance with
SFAS 123, these awards have now been recorded at their fair value on the date
of issuance and dividends paid on non-vested restricted stock have been
recognized as a charge to retained earnings. This correction resulted in an
increase of $0.08 and $0.07 per share in FFO and Diluted EPS, respectively, as
a result of lower compensation expense in the first quarter of 2005 for amounts
related to prior periods.
* Unit volume in home sales was 77 new home closings, including 65 new homes
sold on expansion home sites. This compares with 91 new home closings in
fourth quarter 2004.
* "Same Store" results provided a revenue increase of 9.5%, an expense increase
of 4.9% and an increase of 11.8% in Net Operating Income ("NOI").
* "Same Site" results provided a revenue increase of 3.9%, an expense increase
of 2.1% and an increase of 4.8% in NOI.
Supplemental Information
The full text of this press release is available upon request or through the
Company's web site at http://www.americanlandlease.com/ .
Management Comments
Bob Blatz, President of American Land Lease, commented, "While we are reporting
FFO of $0.44, we evaluate our performance in terms of the $0.36 in FFO earned
before the accounting adjustment. The first quarter reflects the lingering
impact of the 2005 hurricanes in our business through lower home sales
closings. We are pleased to report strong results from our core property
operating business for the first quarter. The operating results reflect the
positive impact that absorption from home sales is having on our property
operations."
Mr. Blatz added, "The first quarter underscores the strength of our property
operating business and provides the challenge to return to higher levels of
home sales results. Within our home sales business, we continue to be pleased
with the increasing average home selling price that reached $112,000 for the
first quarter. This represents a 12% increase in average new home selling
price over the first quarter of 2005 of $100,000. As we look toward the
balance of 2005, we forecast continued success in our core property ownership
business and a return to higher levels of homes closings."
Dividend Declaration
On April 27, 2005, the Board of Directors declared a regular first quarter
common stock dividend of $0.25 per share payable on May 26, 2005, to
stockholders of record on May 12, 2005.
On April 27, 2005, the Board of Directors declared dividends on preferred
shares. Dividend information on Preferred Stock follows:
Per Share
Beginning of End of Dividend Dividend
Dividend Period Period Declared
February 23, 2005 May 12, 2005 $0.5167
Dividends on shares of Preferred Stock are payable on May 31, 2005 to
shareholders of record on May 12, 2005. The initial dividend payment on
Preferred Stock issued reflects dividends accrued from the issuance date
through the end of the dividend period indicated above. Future quarterly
dividend payments on all Preferred shares will be $0.4844 per share.
The Board of Directors reviews the dividend policy quarterly. The Company's
dividend is set quarterly and is subject to change or elimination at any time.
The Company's primary financial objective is to maximize long term, risk
adjusted returns on investment for common shareholders. While the dividend
policy is considered within the context of this objective, maintenance of past
dividend levels is not a primary investment objective of the Company and is
subject to numerous factors including the Company's profitability, capital
expenditure plans, obligations related to principal payments and capitalized
interest, and the availability of debt and equity capital at terms deemed
attractive by the Company to finance these expenditures. The Company's net
operating loss may be used to offset all or a portion of its real estate
investment trust ("REIT") taxable income, which may allow the Company to reduce
or eliminate its dividends and still maintain its REIT status.
Operational Results
First Quarter Property Operations
First quarter revenue from property operations was $8,036,000 as compared to
$7,371,000 in the same period one year ago, a 9.0% increase. First quarter
property operating expenses totaled $2,779,000 as compared to $2,818,000 in the
same period one year ago, a 1.4% decrease. The Company realized significant
increases in rental income driven by annual rental rate increases and the
absorption of new home sites through its home sales efforts. Property operating
expenses decreased in the first quarter 2005 as compared to the same period in
the prior year driven primarily by insurance proceeds of approximately $140,000
related to the recovery of expense incurred in prior periods as a result of
clean up costs from the hurricanes that traversed Florida in August and
September of 2004 offset by increases in labor and benefit costs and increases
in property taxes. The property operating margins before depreciation expense
increased from 61.8% in the prior year's first quarter to 65.4%. Excluding the
insurance recovery property operating margins before depreciation, expense
would have been 63.7%.
First Quarter "Same Store" Results
First quarter "same store" results reflect the results of operations for
properties and golf courses owned for both the first quarter of 2005 and the
prior year periods. The same store properties account for 96% of the property
operating revenues for the first quarter of 2004. We believe that same store
information provides the ability to understand the changes in profitability for
properties owned during both reporting periods that could not be obtained from
a review of the consolidated income statement in periods where properties are
acquired. A reconciliation of "same store" operating results reported below to
total property revenues and property expenses, as determined under GAAP, can be
found on page 14 of this press release.
The same store % change results are as follows:
1Q05
Revenue 9.5 %
Expense 4.9 %
Net Operating Income 11.8 %
We derive our increase in property revenue (i) from increases in rental rates
and other charges at our properties and (ii) through the origination of leases
on expansion home sites ("absorption"). "Same site" results reflect the
results of operations excluding those sites leased subsequent to the beginning
of the prior year period. We believe that "same site" information provides the
ability to understand the changes in profitability without the growth related
to the newly leased sites. Our presentation of same site results is a non-GAAP
measure and should not be considered in isolation from and is not intended to
represent an alternative measure to operating income or cash flow or any other
measure of performance as determined in accordance with GAAP.
We calculate absorption revenues as the rental revenue recognized on sites
leased subsequent to the beginning of the prior year period. We estimate that
50% of the increase in expenses over the prior year period is attributable to
newly leased sites in our calculation of same site results. We believe that
the allocation of expenses between same site and absorption is an appropriate
allocation between fixed and variable costs of operating our properties.
Our same site, absorption, golf operations and total same store results for
first quarter are as follows:
Same Site Rental Absorption Same Site Golf Same Store
Revenue 3.9 % 5.7 % (0.1)% 9.5 %
Expense 2.1 % 2.0 % 0.8 % 4.9 %
NOI 4.8 % 7.5 % (0.5)% 11.8 %
A reconciliation of same site and same store operating results used in the
above calculations to total property revenues and property expenses, as
determined under GAAP, for the three months ended March 31, 2005 and 2004 can
be found on page 14 of this press release.
First Quarter Home Sales Operations
First quarter 2005 new home sales volume was 77 closings, a 15.4% decrease from
the 91 closings in the same period in the prior year. Average selling price
per home was $112,000 as compared to $100,000 in the same period in the prior
year, a 12.0% increase. Brokerage profits were down 10.6% as compared with the
same period in the prior year. Selling gross margins, excluding brokerage
activities, decreased to 31.8% in the quarter as compared to 33.1% in the same
period in the prior year. This decrease was attributable to product mix and
increased cost of our product as purchase prices for materials and labor have
increased due to the 2004 hurricanes. Selling costs as a percentage of sales
revenue increased from 25.2% in the prior year's period to 25.9% in the first
quarter of 2005, reflecting decreased operating leverage at lower volume levels
and increased marketing costs for newly constructed subdivisions within
existing communities, offset by lower commission costs from a lower number of
closings. The backlog of contracts for closing stood at 105 home sales, a
decrease of 56 contracts from the same period in the prior year. The backlog
excludes 19 lot reservations originated for new homes in subdivisions under
construction.
The Company remains committed to its program of generating continued revenue
growth through new lease originations in its existing portfolio. The home
sales business continues to provide the Company with additional earning home
sites that have a greater return on investment than is currently available
through the purchase of occupied communities.
Summary of home sales activity:
Quarter ended Quarter ended
March 31, 2005 March 31, 2004
New home closings 77 91
New home contracts 91 148
Home resales 2 12
Brokered home sales 61 79
New home contract backlog 105 161
Outlook for 2005
The table below summarizes the Company's projected financial outlook for 2005
as of the date of this release and is based on the estimates and assumptions
disclosed in this and previous press releases:
Full Year 2005
Projected
FFO $1.45 to $1.75
AFFO $1.32 to $1.61
Diluted EPS $1.06 to $1.35
Same Store Sales
Revenue Growth 5.0% to 9.0%
Expense Growth 5.5% to 8.0%
NOI Growth 6.0% to 9.5%
$2,800,000 to
Home Sales Operating Income $4,600,000
$2,500,000 to
General and Administrative Expenses $3,200,000
$50,000 to
Other Income $150,000
Preferred Stock Dividends $1,775,000
Capital Replacements (per site) $125 to $145
$3,200,000 to
Depreciation $3,700,000
A portion of the Company's earnings is from the sale of new homes on expansion
home sites in its developing communities. The earnings from the new home sales
are subject to greater volatility than the earnings from rental property
activities. The Company's earnings estimates would be impacted positively by
increases in the unit volume of new home sales or increases in the gross
margins from new home sales. Conversely, decreases in the unit volume of new
home sales or decreases in the gross margins from new home sales would
negatively impact the Company's earnings estimates. Home sales volume is
dependent upon a number of factors, including consumer confidence and consumer
access to financing sources for home purchases and the sale of their current
home.
The Company's projected results for 2005 include a reduction in corporate
governance costs based upon current estimates of the cost of compliance. Non-
employee director compensation continues to be paid in stock, and all stock
based compensation is expensed within the 2005 projections. In addition, the
projected results include the expense for performance-based restricted stock.
The Company's earnings estimates would be adversely impacted by the increased
cost of compliance with regulations and laws applicable to public companies and
financial reporting.
The financial and operating projections provided in this release are the result
of management's consideration of past operating performance, current and
anticipated market conditions and other factors that management considers
relevant from its past experience. However, no assurance can be provided as to
the achievement of these projections and actual results will vary, perhaps
materially.
Stock-based Compensation Correction
During the course of the Company's review of its application of SFAS 123, it
determined that the accounting for certain aspects of its stock-based
compensation was in error. The Company had previously valued certain awards of
performance-based restricted stock at the market value of the Company's common
stock at the date of issuance. These awards have been determined to be target
stock price awards that should have been recorded at fair value on the date of
issuance. In accordance with SFAS 123, the Company has estimated the value of
HPS Share awards using a valuation model which considers the applicable
risk-free interest rate, expected dividend yield, the volatility factor of the
expected market price of the Company's common stock and the term over which the
performance conditions must be met to result in vesting of the awards. In
addition, the Company had previously treated dividends paid on non-vested
restricted stock as additional compensation expense until the vesting condition
was satisfied. Under SFAS 123, only the dividends paid on non-vested awards
that are not expected to vest should be accounted for as additional
compensation expense.
Following this review and in consultation with its external auditors, the
Company corrected these errors to conform with the provisions of SFAS 123 for
valuing target stock price awards and to reverse previously recorded
compensation expense related to the target stock price awards and dividends
paid on unvested awards that are expected to vest. The correction relates
solely to accounting treatment. It does not affect the Company's historical or
future cash flows and the impact on the Company's current or prior years'
earnings per share, cash from operations and shareholders' equity is
immaterial.
Casualty Event
Several of the Company's properties were impacted by the hurricanes that
challenged the state of Florida during the 2004 season. At December 31, 2004,
the Company had additional claims with its insurer related to recoveries of
damages caused during the hurricanes. During the first quarter 2005, the
Company received $524,000 related to damages that occurred in 2004. The
Company recognized additional casualty gain of approximately $237,000. In
addition, the Company recognized recoveries of previously expensed damages of
$140,000. The Company has additional claims with its insurer related to
recoveries and will record additional casualty gain in the period that the
insurance proceeds are realized.
Preferred Stock
As previously released, in February and March 2005, the Company sold 900,000
and 100,000 shares, respectively, of newly created 7.75% Class A Cumulative
Redeemable Preferred Stock, par value $0.01 per share, or the Class A Preferred
Stock, in a registered public offering generating net proceeds of approximately
$23,907,000. The net proceeds were used to repay indebtedness including
amounts outstanding under a promissory note in connection with the acquisition
of property in Micco, Florida and the Company's revolving line of credit.
Financing Activity
The Company originated a term loan with a bank secured by the property acquired
in Micco, Florida with a total commitment of $11,000,000. The loan matures in
August 2005 and bears interest at thirty-day LIBOR plus 200 basis points.
Development Activity
Construction continued at the Company's Blue Heron community on a new
subdivision of 65 home sites. New home construction in this new subdivision is
scheduled to begin in May 2005. Construction continued on the last phase of
the Company's Savanna Club project that will provide an additional 192 home
sites. Planning and permitting for subdivisions at three additional
communities continued during the quarter.
American Land Lease, Inc. is a REIT that holds interests in 29 manufactured
home communities with 6,993 operational home sites, 1,038 developed expansion
sites, 1,492 undeveloped expansion sites and 129 recreational vehicle sites as
of March 31, 2005.
Some of the statements in this press release, as well as oral statements made
by the Company's officials to analysts and stockholders in the course of
presentations about the Company and conference calls following quarterly
earnings releases, constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements may
include projections of the Company's cash flow, dividends and anticipated
returns on real estate investments. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or implied by
the forward-looking statements. Such factors include, but are not limited to:
general economic and business conditions; interest rate changes, financing and
refinancing risks; risks inherent in owning real estate; future development
rate of home sites; competition; the availability of real estate assets at
prices which meet the Company's investment criteria; the Company's ability to
reduce expense levels, implement rent increases, use leverage and other risks
set forth in the Company's Securities and Exchange Commission filings. We
assume no obligation to update or revise any forward-looking statements or to
update the reasons why actual results could differ from those projected in any
forward-looking statements.
Management will hold a teleconference call, Wednesday, May 11 at 4:00 p.m. EDT
for first quarter 2005 results. You can participate in the conference call by
dialing, toll-free, (800) 374-5458 approximately five minutes before the
conference call is scheduled to begin and indicating that you wish to join the
American Land Lease first quarter 2005 results conference call. If you are
unable to participate at the scheduled time, this information will be available
for recorded playback from 5:30 p.m. EDT, May 11, 2005 until midnight on May
18, 2005. To access the replay, dial toll- free, (800) 642-1687 and request
information from conference ID 6161541.
GLOSSARY
GLOSSARY OF NON-GAAP FINANCIAL AND OPERATING MEASUREMENTS Financial and
operational measurements found in the Earnings Release and Supplemental
Information include certain non-GAAP financial measurements standardly used by
American Land Lease management. Measurements include Funds from Operations
("FFO"), which is an industry-accepted measurement as based on the definition
of the National Association of Real Estate Investment Trusts (NAREIT). These
terms are defined below and, where appropriate, reconciled to the most
comparable Generally Accepted Accounting Principles (GAAP) measurements on the
accompanying supplement schedules.
FUNDS FROM OPERATIONS ("FFO"): is a commonly used term defined by NAREIT as
net income (loss), computed in accordance with GAAP, excluding gains and losses
from extraordinary items, dispositions of depreciable real estate property,
disposals of discontinued operations, net of related income taxes, plus real
estate related depreciation and amortization (excluding amortization of
financing costs), including depreciation for unconsolidated real estate
partnerships, joint ventures and discontinued operations. American Land Lease
calculates FFO based on the NAREIT definition, as further adjusted for the
minority interest in the American Land Leases's operating partnership (Asset
Investors Operating Partnership). This supplemental measure captures real
estate performance by recognizing that real estate generally appreciates over
time or maintains residual value to a much greater extent than do other
depreciable assets such as machinery, computers or other personal property.
There can be no assurance that American Land Lease's method for computing FFO
is comparable with that of other real estate investments trusts.
ADJUSTED FUNDS FROM OPERATIONS ("AFFO"): is FFO less both Capital Replacement
expenditures and Capital Enhancement expenditures. Similar to FFO, AFFO
captures real estate performance by recognizing that real estate generally
appreciates over time or maintains residual value to a much greater extent than
do other depreciating assets such as machinery, computers or other personal
property, and AFFO also reflects that Capital Replacements are necessary to
maintain the associated real estate assets.
SAME STORE RESULTS: represent an operating measure that is used commonly to
describe properties that have been in the portfolio for a period of time and
therefore serve as a good basis upon which to review comparative performance
data. American Land Lease's definition of Same Store communities are
communities that are owned during both the current and comparable prior year
period.
SAME SITE RESULTS: represent an operating measure that is used to describe
homesites that have been in the portfolio for a period of time and therefore
serve as a good basis upon which to review comparative performance data.
American Land Lease's definition of Same Site is individual homesites that were
operational during both the current and comparable prior year period. Absorbed
incremental homesites are not included in this calculation.
OPERATIONAL HOME SITE: represents those sites within our portfolio that are/or
have been leased to a tenant. Operational Home Sites and their relative
occupancy provide a measure of stabilized portfolio status.
DEVELOPED HOME SITE: represents those sites within our portfolio that have not
been occupied, but for which a majority of the infrastructure has been
completed.
UNDEVELOPED HOME SITE: represent those sites within our portfolio that have
not been fully developed and require construction of substantial lateral
improvements such as roads.
CAPITAL REPLACEMENT: represents capitalized spending which maintains a
property. American Land Lease generally capitalizes spending for items that
cost more than $250 and have a useful life of more than one year. A common
example is street repaving. This spending is better considered a recurring
cost of preserving an asset rather than as an additional investment. It is a
cash proxy for depreciation.
CAPITAL ENHANCEMENT: represents capitalized spending which adds a material
feature increases overall community value or revenue source. An example is the
addition of a marina facility to an existing community.
USED HOME SALE: represents the sale of a home previously owned by a third party
and where American Land Lease has acquired title through an eviction proceeding
or through purchase from a third party.
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
As of
March 31, December 31,
2005 2004
(unaudited)
ASSETS
Real Estate $227,073 $222,311
Less accumulated depreciation (23,574) (22,803)
Real estate under development 67,966 49,360
Total Real Estate 271,465 248,868
Cash and cash equivalents 870 820
Inventory 19,721 16,788
Other Assets 8,856 9,480
Assets held for sale -- --
Total Assets $300,912 $275,956
LIABILITIES AND EQUITY
Liabilities
Secured long-term notes payable $126,529 $127,338
Secured short-term financing 25,836 24,644
Accounts payable and accrued
liabilities 8,904 9,795
Liabilities related to assets
held for sale -- --
Total Liabilities 161,269 161,777
Minority Interest in Operating
Partnership 15,168 14,746
STOCKHOLDERS' EQUITY
Preferred Stock, par value $.01 per
share; 1,000 shares authorized,
1,000 and 0 shares issued and
outstanding, respectively 25,000 --
Common Stock, par value $.01 per
share; 12,000 shares authorized 92 91
Additional paid-in-capital 286,014 286,649
Notes receivable from officers re
common stock purchases (437) (748)
Deferred compensation re restricted
stock (2,573) (2,250)
Dividends in excess of accumulated
earnings (157,009) (157,697)
Treasury stock at cost (26,612) (26,612)
Total Stockholders' Equity 124,475 99,433
Total Liabilities and
Stockholders' Equity $300,912 $275,956
As of
September 30, June 30, March 31,
2004 2004 2004
(unaudited) (unaudited) (unaudited)
ASSETS
Real Estate $217,310 $215,155 $209,849
Less accumulated depreciation (22,116) (21,474) (20,779)
Real estate under development 47,662 44,636 42,223
Total Real Estate 242,856 238,317 231,293
Cash and cash equivalents 987 1,207 776
Inventory 14,987 13,073 11,330
Other Assets 10,425 9,729 8,566
Assets held for sale -- 313 361
Total Assets $269,255 $262,639 $252,326
LIABILITIES AND EQUITY
Liabilities
Secured long-term notes payable $128,130 $119,876 $118,478
Secured short-term financing 18,622 20,142 13,495
Accounts payable and accrued
liabilities 9,523 10,982 9,883
Liabilities related to assets
held for sale 8 6 4
Total Liabilities 156,283 151,006 141,860
Minority Interest in Operating
Partnership 14,552 14,497 14,319
STOCKHOLDERS' EQUITY
Preferred Stock, par value $.01 per
share; 1,000 shares authorized,
1,000 and 0 shares issued and
outstanding, respectively -- -- --
Common Stock, par value $.01 per
share; 12,000 shares authorized 91 90 90
Additional paid-in-capital 286,611 285,517 285,207
Notes receivable from officers re
common stock purchases (766) (775) (785)
Deferred compensation re restricted
stock (2,472) (2,719) (3,049)
Dividends in excess of accumulated
earnings (158,432) (158,365) (158,704)
Treasury stock at cost (26,612) (26,612) (26,612)
Total Stockholders' Equity 98,420 97,136 96,147
Total Liabilities and
Stockholders' Equity $269,255 $262,639 $252,326
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended
March December September June
31, 31, 30, 30,
2005 2004 2004 2004
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues $7,637 $7,188 $7,146 $7,001
Golf course operating
revenues 399 225 114 176
Total property operating
revenues 8,036 7,413 7,260 7,177
Property operating expenses (2,592) (2,790) (2,463) (2,422)
Recoveries of casualty
expenses related to
hurricanes 140
Golf course operating
expenses (327) (329) (283) (305)
Total property operating
expenses (2,779) (3,119) (2,746) (2,727)
Depreciation (841) (766) (746) (737)
Income from rental
property operations 4,416 3,528 3,768 3,713
SALES OPERATIONS
Home sales revenue 8,821 12,871 8,495 9,714
Cost of home sales (6,014) (8,665) (5,843) (6,474)
Gross profit on home
sales 2,807 4,206 2,652 3,240
Commissions earned on
brokered sales 163 124 115 227
Commissions paid on brokered
sales (87) (69) (64) (122)
Gross profit on brokered
sales 76 55 51 105
Selling and marketing
expenses (2,285) (2,616) (2,236) (2,455)
Income (loss) from sales
operations 598 1,645 467 890
General and administrative
expenses (429) (1,221) (959) (904)
Interest and other income 12 16 51 27
Casualty gain 237 -- -- --
Gain (loss) on sale of real
estate -- 438 -- --
Interest expense (1,533) (1,555) (1,426) (1,374)
Income before minority interest in
Operating Partnership 3,301 2,851 1,901 2,352
Minority interest in Operating
Partnership (398) (342) (223) (285)
Income from continuing
operations 2,903 2,509 1,678 2,067
DISCONTINUED OPERATIONS:
(Loss) Income from
discontinued operations -- -- 26 20
Net income 2,903 2,509 1,704 2,087
Net Income attributable
to preferred
stockholders 194 -- -- --
NET INCOME ATTRIBUTABLE TO COMMON
STOCKHOLDERS $2,709 $2,509 $1,704 $2,087
Earnings per common share -
basic:
Income from continuing
operations (net of
cumulative unpaid
preferred dividends) $0.38 $0.35 $0.24 $0.30
Net income attributable
to common stockholders $0.38 $0.35 $0.24 $0.30
Earnings per common share -
diluted:
Income from continuing
operations (net of
cumulative unpaid
preferred dividends) $0.36 $0.34 $0.23 $0.29
Net income attributable
to common stockholders $0.36 $0.34 $0.23 $0.29
Weighted average common
shares outstanding 7,122 7,089 7,050 6,971
Weighted average common
shares and common share
equivalents outstanding 7,548 7,402 7,297 7,236
Common dividends paid per
share $0.25 $0.25 $0.25 $0.25
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
DEBT ANALYSIS
(in thousands)
(unaudited)
As of
March December September June March
31, 31, 30, 30, 31,
2005 2004 2004 2004 2004
DEBT OUTSTANDING
Mortgage Loans
Payable - Fixed $100,901 $101,710 $102,502 $93,377 $94,107
Mortgage Loans
Payable - Floating 25,628 25,628 25,628 26,499 24,371
Floor Plan Facility 20,461 17,679 12,907 10,762 9,077
Line of Credit 5,375 6,965 5,715 9,380 4,418
Total Debt $152,365 $151,982 $146,752 $140,018 $131,973
% FIXED/FLOATING
Fixed 66.2% 66.9% 69.8% 66.7% 71.3%
Floating 33.8% 33.1% 30.2% 33.3% 28.7%
Total 100.00% 100.00% 100.00% 100.00% 100.00%
AVERAGE INTEREST RATES
Mortgage Loans
Payable - Fixed 7.0% 7.0% 7.0% 7.1% 7.1%
Mortgage Loans
Payable - Floating 4.9% 4.7% 4.7% 4.9% 4.8%
Floor Plan Facility 7.3% 6.8% 5.9% 6.5% 6.1%
Line of Credit 4.6% 4.6% 3.6% 3.2% 3.1%
Total Weighted
Average 6.6% 6.5% 6.4% 6.4% 6.5%
DEBT RATIOS
Debt/Total Market
Cap (1) 40.9% 44.6% 47.4% 47.5% 45.2%
Debt/Gross Assets 50.7% 55.1% 54.5% 53.3% 52.3%
December December December December December
31, 31, 31, 31, 31,
MATURITIES 2005 2006 2007 2008 2009
Mortgage Loans
Maturities -
Scheduled 2,459 3,552 3,809 4,042 4,291
Mortgage Loans
Maturities -
Balloon -- -- 13,278 -- 2,069
Floor Plan
Facility (2) -- -- -- -- --
Total $2,459 $3,552 $17,087 $4,042 $6,360
(1) Computed based upon closing price as reported on NYSE as of the period
ended.
(2) Discretionary, non-committed facility whose individual advances mature
at different dates between 360 and 540 days from advance date.
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO FFO AND AFFO
(Amounts in thousands, except per share/OP unit amounts) (Unaudited)
Three Months Ended
March 31,
2005 2004
Net Income $2,709 $2,374
Adjustments:
Cumulative unpaid preferred stock
dividends 194 --
Minority interest in operating
partnership 398 323
Casualty gain (237) --
Real estate depreciation 841 705
Discontinued Operations
Real estate depreciation -- 4
Minority interest in operating
partnership attributed to
discontinued operations -- 1
Funds From Operations (FFO) 3,905 3,407
Cumulative unpaid preferred
stock dividends (194) --
Funds From Operations attributable
to common stockholders 3,711 3,407
Capital Replacements (216) (357)
Adjusted Funds from Operations
(AFFO) $3,495 $3,050
Weighted Average Common Shares/OP Units
Outstanding: 8,524 8,246
Per Common Share and OP Unit:
FFO: $0.44 $0.41
AFFO: $0.41 $0.37
Payout Ratio Per Common Share and OP
Unit:
Gross Distribution Payout
FFO: 56.8 % 61.0 %
AFFO: 61.0 % 67.6 %
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS
FOR THE QUARTER ENDED MARCH 31, 2005
(in thousands)
Three Three
Months Months
Ended Ended Contribution
March March to Same
31, 31, % Store %
2005 2004 Change Change Change(1)
Same site rental revenues $6,921 $6,644 $277 4.2% 3.9%
Absorption rental revenues 434 32 402 1256.3% 5.7%
Same site golf revenues 399 403 (4) -1.0% -0.1%
Same store revenues A 7,754 7,079 675 9.5% 9.5%
Redevelopment property rental
revenues 275 286 (11) -3.8%
Other Income 7 6 1 16.7%
Total property revenues C 8,036 7,371 665 9.0%
Same site rental expenses $2,071 $2,023 48 2.4% 2.1%
Absorption rental expenses 48 -- 48 100.0% 2.0%
Same site golf expenses 327 308 19 6.2% 0.8%
Same store expenses B 2,446 2,331 115 4.9% 4.9%
Recoveries of casualty
expenses related to
hurricanes (140) -- (140) 100.0%
Redevelopment property
expenses 88 91 (3) -3.3%
Expenses related to offsite
management(2) 385 396 (11) -2.8%
Total property operating
expenses D $2,779 $2,818 $(39) -1.4%
Same Store net operating A-
income B $5,308 $4,748 $560 11.8% --
C-
Total net operating income D $5,257 $4,553 $704 15.5%
(1) Contribution to Same Store % change is computed as the change in the
individual component of same store revenue or expense divided by the total
applicable same store base (revenue or expense) for the 2005 period. For
example, same site rental revenue of $277 as compared to the total same store
revenues in 2004 of $7,079 is a 3.9% increase ($277/$7,079=3.9%).
(2) Expenses related to offsite management reflect portfolio property
management costs not attributable to a specific property.
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
NUMBER OF HOMESITES AND AVERAGE RENT BY COMMUNITY
AS OF MARCH 31, 2005
Undevel- Devel-
Average oped oped
Operational Monthly RV Home Home
Community Location Home Sites Occupancy Rent Sites Sites Sites
Owned
Communities
Blue Heron Punta Gorda,
Pines FL 309 98 % $367 -- 65 17
Brentwood Hudson, FL 120 98 % 250 -- 0 71
Crystal Bay Micco, FL -- 0 % -- -- 533 --
Serendipity Ft. Myers, FL 338 95 % 332 -- -- --
Stonebrook Homosassa, FL 168 100 % 284 -- -- 43
Sun Lake Grand Island, FL 329 100 % 337 -- -- 65
Sun Valley Tarpon Springs, FL 261 98 % 369 -- -- --
Caribbean
Cove Orlando, FL 272 71 % 385 -- -- 13
Forest View Homosassa, FL 252 100 % 297 -- -- 52
Gulfstream
Harbor Orlando, FL 382 97 % 387 -- 50 --
Gulfstream
Harbor II Orlando, FL 306 99 % 382 -- 37 1
Lakeshore
Villas Tampa, FL 281 100 % 402 -- -- --
Park Royale Pinellas Park, FL 285 95 % 414 -- -- 24
Pleasant
Living Riverview, FL 245 96 % 335 -- -- --
Riverside
GCC Ruskin, FL 372 100 % 530 -- 420 145
Royal Palm Haines City, FL 264 96 % 332 -- 0 121
Cypress
Greens Lakeland, FL 159 100 % 246 -- -- 99
Savanna Port St.
Club Lucie, FL 786 100 % 274 -- 192 84
Woodlands Groveland, FL 133 96 % 248 -- -- 159
Sub-total Florida 5,262 1,297 894
Apache
Blue Star Junction, AZ 22 73 % 284 129 -- --
Brentwood
West Mesa, AZ 350 92 % 428 -- -- --
Casa Mesa,
Encanta Mesa, AZ -- 0 % -- -- 195 --
Desert Apache
Harbor Junction, AZ 145 97 % 367 -- -- 61
Fiesta
Village Mesa, AZ 170 75 % 353 -- -- --
La Casa Apache
Blanca Junction, AZ 198 90 % 373 -- -- --
Lost Apache
Dutchman Junction, AZ 176 90 % 308 -- -- 83
Rancho Apache
Mirage Junction, AZ 312 89 % 409 -- -- --
Apache
Sun Valley Junction, AZ 268 94 % 317 -- -- --
Sub-total Arizona 1,641 195 144
Mullica Egg Harbor
Woods City, NJ 90 100 % 480 -- -- --
Total
Communities 29 6,993 95 % $351 129 1,492 1,038
(1) We define opertional home sites as those sites within our portfolio
that have been leased to a tenant during our ownership of the community.
Since our porfolio contains a large inventory of developed home sites
that have not been occupied during our ownership, we have expressed
occupancy as the number of occupied sites as a percentage of operational
home sites. We believe this measure most accurately describes the
performance of an individual property relative to prior periods and other
properties within our portfolio. The occupancy of all developed sites was
81.5% across the entire portfolio. Including sites not yet developed,
occupancy was at 69.9% March 31, 2005.
Portfolio Summary
Operational Developed Undeveloped
Home Home Home RV
site sites sites Sites Total
As of December 31, 2004 6,931 1,101 960 129 9,121
Properties developed -- -- -- -- --
New lots purchased -- 2 533 -- 535
Lots sold -- -- -- -- --
New leases originated 65 (65) -- -- --
Adjust for site plan
changes (3) -- (1) -- (4)
As of March 31, 2005 6,9931 (1) 1,038 1,492 129 9,652
(1) As of March 31, 2005, 6,657 of these operational home sites were occupied.
Occupancy Roll Forward
Occupied Operational
Home sites Home sites Occupancy
As of December 31, 2004 6,617 6,931 96.5 %
New home sales 77 65
Used home sales 2 --
Used homes acquired (19) --
Lots Sold -- --
Homes constructed by
others 2 --
Site plan changes -- (3)
Homes removed from
previously leased sites (22) --
As of March 31, 2005 6,657 6,993 95.2 %
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
RETURN ON INVESTMENT FROM HOME SALES
(unaudited)
Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004
Expansion sites leased during
the year 65 89
Estimated first year
annualized profit on leases
originated during the year A $260 $340
Costs, including development
costs of sites leased $3,236 $4,348
Home sales income (loss)
attributable to sites
leased 522 733
Total costs incurred to
originate ground leases B $2,714 $3,615
Estimated first year
annualized return on
investment for leases
originated during the year A/B 9.6 % 9.4 %
For the three months ended March 31, 2005 and 2004, we estimate our profit or
loss attributable to the sale of homes situated on expansion home sites as
follows (in thousands):
Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004
Reported income from sales
operations $598 $818
Used home sales and brokerage
business income (76) (85)
Adjusted income for pro forma
analysis $522 $733
The reconciliation of our estimated first year return on investment in
expansion home sites, a non-GAAP financial measure, to our return on investment
in operational home sites in accordance with GAAP is shown below (in
thousands):
Total Portfolio for
Year Ended
December 31, 2004
Property income before
depreciation A $18
Total investment in operating
home sites B $221
Return on investment from
earning home sites A/B 8.1%
AMERICAN LAND LEASE INC. AND
SUBSIDIARIES KEY HOME SALES STATISTICS
Qtr
Qtr over
over Qtr Qtr
March 31, June 30, Sept. 30, Dec 31, March 31, Increase/ %
2004 2004 2004 2004 2005 Decrease Change
New home
closings 91 103 77 121 77 -44 -36.4%
New home
contracts 168 144 69 65 91 26 40.0%
Home resales 12 5 3 3 2 -1 -33.3%
Brokered home
sales 79 83 48 55 61 6 10.9%
New home
contract
backlog 164 189 175 88 105 17 9.3%
Average
Selling
Price $100,000 $92,000 $108,000 $105,000 $112,000 7,000 6.7%
Average Gross
Margin
Percentage 33.2% 33.7% 33.10% 32.7% 31.8%
DATASOURCE: American Land Lease, Inc.
CONTACT: Robert G. Blatz, President, or Shannon E. Smith, Chief
Financial Officer, both of American Land Lease, Inc., +1-727-726-8868
Web site: http://www.americanlandlease.com/