American Land Lease (NYSE:ANL)
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American Land Lease, Inc. (NYSE: ANL)
today released first quarter 2007 results.
Summary Financial Results
First Quarter
Diluted Earnings Per Share (“Diluted EPS”)
were $0.16 for the three-month period ended March 31, 2007 compared to
$0.36 for the same period one-year ago, a decrease of 55.6% on a per
share basis.
Funds From Operations (“FFO”;
a non-GAAP financial measure defined on page 9 of this press release
and reconciled to net income on page 13 of this press release) were
$2.7 million, or $0.30 per diluted common share, for the quarter
compared to $4.3 million or $0.48 per diluted common share from the
same period one year ago, a decrease of 37.5% on a per share basis.
Home sales volume was $7,665,000 down by 43.2% from the same period
one year ago, with 55 new home closings, including 53 new homes sold
on expansion home sites. This compares with 104 new home closings in
first quarter 2006.
“Same Store”
results (a non-GAAP financial measure defined on page 9 of this press
release and reconciled on page 14 of this press release) provided a
revenue increase of 7.8%, an expense increase of 4.0% and an increase
of 9.7% in Net Operating Income (“NOI”).
“Same Site”
results (a non-GAAP financial measure defined on page 9 of this press
release and reconciled on page 14 of this press release) provided a
revenue increase of 4.5%, an expense increase of 2.6% and an increase
of 5.5% in NOI.
Supplemental Information
The full text of this press release is available upon request or through
the Company’s web site at www.americanlandlease.com.
Management Comments
Bob Blatz, President of American Land Lease, commented, “We
Continue to build NAV through excellent same site and same store
results. These results reflect the stability and strength of our core
residential land lease business. The continued expansion of operating
margins at the property level speaks to the strength of our properties
and personnel who serve our customers well. We increased our focus on
certain expense areas, especially utilities and insurance, in this
quarter which yielded improved results. We continue to view our core
business as owning and operating land leases –
and in that core business our performance was outstanding.”
“We view the new home sales business as an
activity that complements our residential land lease business by
creating new revenue generating home sites. New home sales activity
continues to decline as our buyers take longer to sell their current
home. We continue to put our emphasis on our lifestyle and the quality
of our communities and homes as we maintain pricing within our
communities. We did not achieve our objective for the number of new
contracts during the quarter as traffic was not as strong as we
anticipated, but saw an increase over fourth quarter and a decrease in
cancellations as compared to the year prior. So while we are
disappointed by unit sales, we are pleased we have been able to continue
to expand our land lease business, albeit at a slower rate.”
“Our core business, owning land lease
communities, is solid. Its returns grow with increased rents and with
home sales. The latter has been affected by the national decline in new
home sales. That said, we have solid locations, attractive homes, a
hardworking sales team, and we are still selling homes at good prices. I
remain upbeat and optimistic about the future of our company.”
Dividend Declaration
On May 3, 2007, the Board of Directors declared a first quarter common
stock dividend of $0.25 per share payable on May 31, 2007, to
stockholders of record on May 18, 2007.
On May 3, 2007, the Board of Directors also declared a cash dividend of
$0.4844 per share of Class A Preferred Stock for the quarter ended March
31, 2007, payable on May 31, 2007 to shareholders of record on May 18,
2007.
The Board of Directors reviews the dividend policy quarterly. The
Company's dividends are set quarterly and are 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. Further, the Board has and
will continue to consider the downturn in new home sales in the context
of its quarterly review and dividend decision. 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
First Quarter Property Operations
First quarter revenue from property operations was $9,721,000 as
compared to $8,173,000 in the same period one year ago, a 18.9%
increase. First quarter property operating expenses totaled $3,329,000
as compared to $2,916,000 in the same period one year ago, a 14.2%
increase. The Company realized significant increases in rental income
driven by annual rental rate increases, the absorption of new home sites
through its home sales efforts and the acquisition of three additional
communities in 2006.
First quarter property operating expenses increased primarily due to
increases in utility costs, tenant related legal costs, insurance
premiums and the aforementioned acquisition of three properties. In a
majority of the communities we operate, the Company has previously
implemented contractual terms under its leases to pass on increases in
property taxes through billings to homeowners for their proportional
share of increased taxes. In addition, in 24 of the 31 communities we
operate, the individual homeowner’s energy is
metered and changes in consumption are billed to the homeowner.
First quarter property operating margins before depreciation expense
increased to 63.9% from 62.0% in the prior year’s
first quarter.
First Quarter “Same
Store”
Results
First quarter “same store”
results reflect the results of operations for properties and golf
courses owned during the first quarters of both 2007 and 2006. Same
store properties accounted for 89.3% of property operating revenues for
first quarter 2007. Same store results is defined on page 9 of this
press release and reconciled on page 14 of this press release. We
believe that same store information provides an opportunity to
understand changes in profitability for properties owned during both
reporting periods that cannot be obtained from a review of the
consolidated income statement in periods where properties are acquired.
Our presentation of same store 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.
The same store % change results are as follows:
1Q07
Revenue
7.8%
Expense
4.0%
Net Operating Income
9.7%
Our same store revenues reflect reimbursements from our tenants for
certain expense items, principally utilities and real estate taxes. When
these revenues are associated with the expenses we incur, the change in
revenues and expenses for the quarter are shown below.
1Q07
Revenues
7.8%
Less: Reimbursements
(1.2%)
Revenue growth net of reimbursements
6.6%
Expenses
4.0%
Less: Reimbursements
(2.6%)
Expense growth net of reimbursements
1.4%
Same Store NOI Growth
9.7%
While we are focused on controlling operating expenses, our leases also
provide some insulation from increased expenses.
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. Same site results
is defined on page 9 of this press release and reconciled on page 14 of
this press release. 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 and golf operations contributions to total
same store results for first quarter are as follows:
Same Site Rental
Absorption
Same Site Golf
Same Store
Revenue
4.5%
3.8%
(0.5)%
7.8%
Expense
2.6%
2.6%
(1.2)%
4.0%
NOI
5.5%
4.4%
(0.2)%
9.7%
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, 2007 and
2006 can be found on page 14 of this earnings release.
First Quarter Home Sales Operations
First quarter 2007 new home sales were $7,665,000, a 43.2% decrease from
the same period in the prior year. We had 55 closings, a 47.1% decrease
from the 104 closings in the same period in the prior year. Average
selling price per home was $135,000 as compared to $128,000 in the same
period in the prior year, a 5.5% increase. Twelve communities reported
average selling prices in excess of $100,000 and one of the closings
during the quarter exceeded $200,000 in selling price. The decrease in
closings compared to the same period in the prior year was primarily due
to decreased sales at six of the Company’s
expansion communities in Florida. Brokerage profits were down 59.7% as
compared with the same period in the prior year. Selling gross margins,
excluding brokerage activities, decreased to 26.5% in the quarter as
compared to 33.0% in the same period in the prior year. This decrease
was driven primarily by decreased manufacturer rebates associated with
lower purchasing volumes and increases in costs of homes purchased
partially offset by increases attributable to increased selling prices.
Selling costs as a percentage of sales revenue increased from 20.7% in
the prior year’s period to 30.4% in the first
quarter of 2007, reflecting overhead being allocated against fewer
sales, plus an increase in the relative percentage of advertising and
marketing expenses to home sales as result of fewer sales. Total
advertising and marketing dollars were down 16.9% as compared to the
same period in the prior year. The backlog of contracts for closing
stood at 58, a decrease of 22.7% or 17 from the same period in the prior
year.
The Company remains committed to generating 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, though at a slower rate than in
2006.
Summary of home sales activity:
Quarter ended
March 31, 2007
Quarter ended
March 31, 2006
New home closings – Same Store
49
104
New home closings – Acquisitions
6
--
Total new home closings
55
104
New home contracts – Same Store
84
113
New home contracts – Acquisitions
12
4
Total new home contracts
96
117
Home resales
3
--
Brokered home sales
31
62
New home contract backlog – Same Store
51
71
New home contract backlog - Acquisitions
7
4
Total new home contract backlog
58
75
Outlook for 2007
The table below summarizes the Company’s
projected financial outlook for 2007 as of the date of this release and
is based on the estimates and assumptions disclosed in this and previous
press releases:
Full Year 2007 Projected
FFO
$1.40 to $1.65
AFFO
$1.24 to $1.45
Diluted EPS
$0.85 to $1.05
Same Store
Revenue Growth
6.5% to 8.5%
Expense Growth
6.0% to 9.0%
NOI Growth
7.0% to 9.0%
Contribution from Acquired Properties and Redevelopment
$2.4M to $2.8M
Growth in Income from Property Operations Before Depreciation Expense
9.5% to 12.5%
Home Sales Operating Income
$1.5M to $4.0M
Home Sales Net Contribution
$0.65M to $3.2M
General and Administrative Expenses
$4.2M to $4.7M
Capital Replacements (per site)
$140 to $170
Depreciation
$4.8M to $5.5M
A portion of the Company’s earnings from
property operations is a result of new leases originated on expansion
sites within its same store properties. The number of new leases impacts
the rate at which Net Operating Income grows. New leases are originated
through the sale of a new home on expansion home sites. The number of
new home sales, and in turn new leases on expansion sites, are subject
to volatility. In addition, the Company’s
earnings from property operations will be impacted by the renewal of
property and casualty insurance policies during 2007.
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
new home sales are subject to greater volatility than are the earnings
from land leases. The Company expects near term home closings at a rate
similar to first quarter of 2007. The Company's earnings estimates would
be impacted positively or negatively by changes in the unit volume of
new home sales or in the gross margins from new home sales. Home sales
volume and gross margins are dependent upon a number of factors,
including consumer confidence, the cost of homeowners’
insurance, and consumers’ access to financing
sources for home purchases and the sale of their current homes.
The Company’s projected results are impacted
by the amount of interest capitalized on its development properties. The
amount of interest capitalized is dependent on the rate of completion of
home sites, the timing and amount of capital expenditures and continuing
development activities at each location. Changes in each of the
preceding factors, along with changes in applicable interest rate, will
result in either increases or decreases in the actual amount of interest
capitalized. Changes in the amount of interest capitalized will increase
or decrease the Company’s earnings as
compared to historical financial results.
The Company's projected results for 2007 include a reduction in
regulatory compliance costs. Non-employee director compensation
continues to be paid in stock and all stock based compensation is
expensed within the 2007 projections. The Company's earnings estimates
would be adversely impacted by any 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.
Development Activity
The Company ended the quarter with an inventory of 1,140 home sites that
are fully developed. We sell new homes to be located on these home sites
so that they will become revenue generating.
In addition, the company has an inventory of 1,566 home sites that are
partially developed or undeveloped. All of these sites are fully
entitled and zoned for a land lease community. With the exception of
Sebastian Beach and Tennis Village and the Villages at Country Club, all
are contiguous and a part of a current ANL land lease community where
there are ongoing property operations and a proven customer base.
Significant development activity during the quarter included:
At Sebastian Beach and Tennis Village, construction and site work
continued. As reported in prior quarters, a new municipality was
formed in July of 2006 which impacts the largest part of this site. We
are working with the Town and County to accomplish the platting of the
community under this unique set of circumstances. Pre-sales and
marketing activities for the community have already begun at an off
site sales office opened in January 2006 and we expect to begin home
and Village Centre construction in the second half of 2007.
At the Villages at Country Club project in Mesa, Arizona, site work
neared completion for Phase I. We expect to begin home building and
homes sales activities in Q207 and look towards home closings in late
Q407.
At Sun Lake, construction was completed for the expansion and
renovation of the community center complex. The grand opening event
was well attended and this substantial amenity reopened for resident
use during first quarter.
American Land Lease, Inc. is a REIT that held interests in 31
manufactured home communities with 8,100 operational home sites, 1,140
developed expansion sites, 1,566 undeveloped expansion sites and 129
recreational vehicle sites as of March 31, 2007.
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, results of operations, 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, Tuesday, May 8, 2007 at 9:00
a.m. Eastern Daylight Time to discuss first quarter 2007 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 2007 results conference call. If you are unable
to participate at the scheduled time, this information will be available
for recorded playback from 12:30 p.m. Eastern Daylight Time, May 8, 2007
until midnight on May 15, 2007. To access the replay, dial toll free,
(800) 642-1687 and request information from conference ID 8314737.
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
used by American Land Lease management. Such measurements include Funds
from Operations (“FFO”),
which is an industry-accepted measurement based in part on the
definition of the National Association of Real Estate Investment Trusts
(NAREIT) and “same store”
and same site” results. 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, dispositions 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 Lease’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 Capital Replacement 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 while also reflecting that Capital
Replacements are necessary to maintain the associated real estate assets.
SAME STORE RESULTS: represent an operating measure that is used
to compare the results of properties that have been in the portfolio for
both accounting periods being compared.
SAME SITE RESULTS: represent an operating measure that is used to
compare the results of home sites that have been in the portfolio for
both accounting periods being compared. Home sites that are leased or “absorbed”
during the accounting periods 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 the greater part of their
infrastructure has been completed.
UNDEVELOPED HOME SITE: represent those sites within our portfolio
that have not been fully developed and that 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
revenue source or material feature that increases overall community
value. 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 the third party.
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
As of
As of
March 31, 2007
December 31, 2006
September 30, 2006
June 30, 2006
March 31, 2006
(unaudited)
(unaudited)
(unaudited)
(unaudited)
ASSETS
Real Estate
$ 303,432
$ 301,392
$ 298,293
$ 264,947
$ 254,690
Less accumulated depreciation
(30,120)
(29,068)
(28,041)
(27,836)
(26,132)
Real estate under development
115,798
110,682
103,940
95,195
87,068
Total Real Estate
390,162
383,006
374,192
332,306
315,626
Cash and cash equivalents
293
253
311
8,497
8,384
Inventory
20,705
22,827
23,731
23,588
20,654
Other assets
15,662
15,969
14,845
14,488
12,785
Assets Held for Sale
--
--
3,874
3,897
3,890
Total Assets
$ 426,822
$ 422,055
$ 416,953
$ 382,776
$ 361,339
LIABILITIES AND EQUITY
Liabilities
Secured long-term notes payable
$ 234,826
$ 235,567
$ 203,428
$ 199,746
$ 182,762
Secured short-term financing
25,012
20,059
43,783
19,462
16,742
Accounts payable and accrued liabilities
13,239
13,216
17,359
12,036
12,006
Liabilities related to assets held for sale
--
--
2,261
2,273
2,304
Total Liabilities
273,077
268,842
266,831
233,517
213,814
Minority Interest in Operating Partnership
16,475
16,502
16,333
16,245
16,137
STOCKHOLDERS’ EQUITY
Preferred Stock, par value $.01 per share; 3,000 shares authorized,
1,000 shares issued and outstanding
25,000
25,000
25,000
25,000
25,000
Common Stock, par value $.01 per share; 12,000 shares authorized
95
94
92
92
92
Additional paid-in capital
292,757
291,460
289,223
288,581
287,206
Dividends in excess of accumulated earnings
(153,970)
(153,231)
(153,914)
(154,047)
(154,298)
Treasury stock at cost
(26,612)
(26,612)
(26,612)
(26,612)
(26,612)
Total Stockholders Equity
137,270
136,711
133,789
133,014
131,388
Total Liabilities and Stockholders’
Equity
$ 426,822
$ 422,055
$ 416,953
$ 382,776
$ 361,339
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended
March 31,
2007
December 31,
2006
September 30,
2006
June 30,
2006
RENTAL PROPERTY OPERATIONS
Rental and other property revenues
$ 9,721
$ 9,347
$ 9,121
$ 8,507
Golf course operating revenues
430
249
154
213
Total property operating revenues
10,151
9,596
9,275
8,720
Property operating expenses
(3,329)
(3,193)
(3,136)
(3,056)
Golf course operating expenses
(335)
(313)
(296)
(373)
Total property operating expenses
(3,664)
(3,506)
(3,432)
(3,429)
Depreciation
(1,229)
(1,199)
(1,136)
(1,032)
Income from rental property operations
5,258
4,891
4,707
4,259
SALES OPERATIONS
Home sales revenue
7,665
9,493
12,197
12,052
Cost of home sales
(5,633)
(6,323)
(8,244)
(7,914)
Gross profit on home sales
2,032
3,170
3,953
4,138
Commissions earned on brokered sales
75
86
45
164
Commissions paid on brokered sales
(44)
(43)
(27)
(76)
Gross profit on brokered sales
31
43
18
88
Selling and marketing expenses
(2,328)
(2,416)
(2,582)
(2,754)
Income (loss) from sales operations
(265)
797
1,389
1,472
General and administrative expenses
(964)
(1,054)
(1,055)
(995)
Interest and other income
170
115
34
91
Interest expense
(2,243)
(2,251)
(2,218)
(1,832)
Income before minority interest in Operating Partnership
1,956
2,498
2,857
2,995
Minority interest in Operating Partnership
(221)
(295)
(330)
(350)
Income from continuing operations
1,735
2,203
2,527
2,645
DISCONTINUED OPERATIONS
Income (loss) from discontinued operations, net of Minority Interest
--
923
40
51
Net Income
1,735
3,126
2,567
2,696
Cumulative preferred stock dividends
(484)
(485)
(485)
(484)
Net Income Attributable to common shareholders
$ 1,251
$ 2,641
$ 2,082
$ 2,212
Basic earnings from continuing operations (net of cumulative unpaid
preferred dividends)
$ 0.16
$ 0.23
$ 0.27
$ 0.29
Basic earnings (loss) from discontinued operations
--
0.12
0.01
0.01
Basic earnings per common share
$ 0.16
$ 0.35
$ 0.28
$ 0.30
Diluted earnings from continuing operations
$ 0.16
$ 0.22
$ 0.26
$ 0.28
Diluted earnings (loss) from discontinued operations
--
0.11
0.01
0.01
Diluted earnings per common share
$ 0.16
$ 0.33
$ 0.27
$ 0.29
Weighted average common shares outstanding
7,688
7,553
7,507
7,465
Weighted average common shares and common share equivalents
outstanding
8,054
7,953
7,808
7,836
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 31, 2007
December 31, 2006
September 30, 2006
June 30, 2006
March 31, 2006
DEBT OUTSTANDING
Mortgage Loans Payable – Fixed
$ 223,470
$ 224,211
$ 192,072
$ 188,975
$ 178,317
Mortgage Loans Payable – Floating
11,356
11,356
11,356
10,771
4,445
Floor Plan Facility
19,636
14,754
23,813
19,462
16,642
Acquisition Bridge Loan
--
--
10,000
--
--
Line of Credit
5,376
5,305
9,970
--
100
Total Debts
$ 259,838
$ 255,626
$ 247,211
$ 219,208
$ 199,504
% FIXED FLOATING
Fixed
86.0%
87.7%
77.7%
86.2%
89.5%
Floating
14.0%
12.3%
22.3%
13.8%
10.5%
Total
100.00%
100.00%
100.00%
100.00%
100.00%
AVERAGE INTEREST RATES
Mortgage Loans Payable – Fixed
6.4%
6.4%
6.4%
6.4%
6.4%
Mortgage Loans Payable – Floating
7.1%
7.1%
6.9%
7.4%
7.2%
Floor Plan Facility
8.5%
8.5%
8.6%
8.75%
8.2%
Acquisition Bridge Loan
--
--
7.3%
--
--
Line of Credit
6.9%
7.3%
7.0%
7.35%
6.6%
Total Weighted Average
6.6%
6.6%
6.7%
6.7%
6.6%
DEBT RATIOS
Debt/Total Market Cap(1)
50.8%
49.4%
51.4%
47.6%
42.7%
Debt/Gross Assets
60.9%
60.6%
59.3%
57.3%
55.2%
MATURITIES
December 31, 2007
December 31, 2008
December 31, 2009
December 31, 2010
December 31, 2011
Mortgage Loan Scheduled Principal Payments
2,278
3,175
3,658
3,904
4,057
Mortgage Loans Balloon Maturities
2,665
-
-
-
21,740
Total
$ 4,943
$ 3,175
$ 3,658
$ 3,904
$ 25,797
(1) Computed based upon closing price as
reported on NYSE as of the period ended.
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO FFO/AFFO AND PAYOUT RATIOS
(Amounts in thousands, except per share/OP unit amounts)
(Unaudited)
Three Months Ended
March 31,
2007
2006
Net Income
$1,251
$2,818
Adjustments
Cumulative unpaid preferred stock dividends
484
484
Minority interest in operating partnership
221
435
Real estate depreciation
1,229
979
Discontinued operations:
Real estate depreciation, net of minority interests
--
18
Minority interest in operating partnership attributed
discontinued operations
--
6
Funds From Operations (FFO)
$3,185
$4,740
Cumulative unpaid preferred stock dividends
(484)
(484)
Funds From Operations attributable to common
Stockholders
2,701
4,256
Capital Replacements
(342)
(753)
Adjusted Funds from Operations (AFFO)
$2,359
$3,503
Weighted Average Common Shares/OP Units Outstanding
9,047
8,872
Per Common Share and OP Unit:
FFO:
$0.30
$0.48
AFFO:
$0.26
$0.39
Payout Ratio Per Common Share and OP Unit:
Gross Distribution Payout
FFO:
83.3%
52.1%
AFFO:
96.2%
64.1%
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS
FOR THE QUARTER ENDED MARCH 31, 2007 AND MARCH 31, 2006
(in thousands)
(unaudited)
Three Months
Ended
March 31, 2007
Three Months
Ended
March 31, 2006
Change
% Change
Contribution to Same Store
% Change(1)
Same site rental revenues
$ 8,279
$ 7,900
$ 379
4.8%
4.5%
Absorption rental revenues
354
34
320
941.2%
3.8%
Same store golf revenues
430
470
(40)
(8.5)%
(0.5)%
Same store revenues A
9,063
8,404
659
7.8%
7.8%
Re-development and newly acquired property revenues
1,088
239
849
(355.2)%
Total property revenues C
$ 10,151
$ 8,643
$ 1,508
17.4%
Same site rental expenses
$ 2,438
$ 2,368
$ 70
3.0%
2.6%
Absorption rental expenses
70
-
70
100.0%
2.6%
Same store golf expenses
335
365
(30)
(8.2)%
(1.2)%
Same store expenses B
2,843
2,733
110
4.0%
4.0%
Re-development and newly acquired property expenses
348
96
252
262.5%
Expenses related to offsite management2
473
452
21
4.6%
Total property operating expenses D
$ 3,664
$ 3,281
$ 383
11.7%
Same store net operating income A-B
$ 6,220
$ 5,671
549
9.7%
Total net operating income C-D
$ 6,487
$ 5,362
$ 1,125
21.0%
(1) 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 2006 period. For example,
same site rental revenues of $379 as compared to the total same
store revenues in 2006 of $8,404 is a 4.5% increase
($379/$8,404=4.5%).
(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, 2007
Community
Location
Operational Home Sites
(1)
Occupancy
Average Monthly Rent
RV
Sites
Undeveloped Home Sites
Developed Home Sites
Owned Communities
Blue Heron Pines
Punta Gorda, FL
343
100%
$351
--
--
46
Brentwood Estates
Hudson, FL
139
99%
279
--
--
52
Sebastian Beach & Tennis Club
Micco, FL
--
0%
--
--
533
--
Serendipity
Ft. Myers, FL
338
96%
364
--
--
--
Stonebrook
Homosassa, FL
191
100%
303
--
--
11
Sunlake Estates
Grand Island, FL
356
100%
360
--
--
44
Sun Valley
Tarpon Springs, FL
261
97%
406
--
--
--
Forest View
Homosassa, FL
271
100%
328
--
--
33
Gulfstream Harbor
Orlando, FL
382
99%
422
--
50
--
Gulfstream Harbor II
Orlando, FL
306
100%
417
--
37
1
Gulfstream Harbor III
Orlando, FL
164
99%
393
--
--
120
Lakeshore Villas
Tampa, FL
281
98%
437
--
--
--
Park Place
Sebastian, FL
368
100%
330
--
--
98
Park Royale
Pinellas Park, FL
296
94%
441
--
--
13
Pleasant Living
Riverview, FL
245
96%
364
--
--
--
Riverside GCC
Ruskin, FL
452
100%
529
--
311
177
Royal Palm Village
Haines City, FL
281
97%
355
--
--
106
Cypress Greens
Lakeland, FL
218
100%
263
--
--
40
Savanna Club
Port St Lucie, FL
983
100%
299
--
--
84
Woodlands
Groveland, FL
160
99%
291
--
--
132
Subtotal—Florida
6,035
931
957
Blue Star
Apache Junction AZ
22
55%
305
129
--
--
Brentwood West
Mesa, AZ
350
94%
471
--
--
--
Casa Encanta
Mesa, AZ
--
0%
--
--
375
--
Desert Harbor
Apache Junction AZ
199
100%
379
--
--
7
Fiesta Village
Mesa, AZ
172
86%
386
--
--
--
La Casa Blanca
Apache Junction AZ
197
99%
401
--
--
--
Lost Dutchman
Apache Junction AZ
201
80%
317
--
--
41
Rancho Mirage
Apache Junction AZ
312
95%
435
--
--
--
Reserve at Fox Creek
Bull Head City, AZ
247
100%
323
--
--
67
Sun Valley
Apache Junction AZ
268
91%
348
--
--
--
Subtotal—Arizona
1,968
129
375
115
Foley Grove
Foley, AL
97
100%
291
--
260
68
Total Communities
31
8,100
97%
$371
129
1,566
1,140
(1) We define operational home sites as those sites within our
portfolio that have been leased to a tenant during our ownership
of the community. Since our portfolio 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 without
our portfolio. The occupancy of all developed sites was 84.2%
across the entire portfolio. Including sites not yet developed,
occupancy was at 73% at March 31, 2007.
Portfolio Summary
Operational
Home sites
Developed Home sites
Undeveloped Home sites
RV Sites
Total
As of January 1, 2007
8,044
1,192
1,566
129
10,931
New lots purchased
--
4
--
--
4
New leases originated
54(1)
(54)
--
--
--
Adjust for site plan changes
2
(2)
--
--
158
As of March 31, 2007
8,100(2)
1,140
1,566
129
10,935
(1) During the quarter ended December 31, 2006, a new lease was
originated for a used home at one community. The company
inadvertently reported the home site as non-operational.
(2) As of March 31, 2007, 7,890 of these operational home sites
were occupied.
Occupancy Roll Forward
Occupied
Home sites
Operational
Home sites
Occupancy
As of January 1, 2007
7,833
8,044
97.4%
New home sales
55
53
Used home sales
3
2
Used homes acquired
(2)
--
Homes constructed by others
3(1)
1
Homes removed from previously leased sites
(2)
--
As of March 31, 2007
7,890
8,100
97.4%
(1)At December 31, 2006, the occupancy at
one community was under reported by 2 occupied lots, which is
adjusted here.
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
RETURN ON INVESTMENT FROM HOME SALES
(unaudited)
Three Months Ended
March 31, 2007
Three Months Ended
March 31, 2006
Expansion sites leased during the period
53
85
Estimated first year annualized profit on leases originated during
the period
A
$174
$332
Costs, including development costs of sites leased
$3,284
$4,922
Home sales (loss) income attributable to sites leased
(381)
1,652
Total costs incurred to originate ground leases
B
$3,665
$3,270
Estimated first year returns from the leases originated on expansion
home sites during the period
A/B
4.7%
10.2%
For the three months ended March 31, 2007 and 2006, we estimate
our profit or loss attributable to the sale of homes situated on
expansion home sites as follows (in thousands):
Three Months EndedMarch 31, 2007
Three Months EndedMarch 31, 2006
Reported (loss)/income from sales operations
$ (294)
$1,729
Brokerage business income
(31)
(77)
Used home sales
(56)
--
Adjusted income for projection analysis
$ (381)
$1,652
The reconciliation of our estimated first year return on
investment in expansion home sites to our return on investment in
operational home sites for the year ended December 31, 2006 in
accordance with GAAP is shown below (in thousands):
Total Portfolio for Year Ended December 31, 2006
Property income before depreciation
A
$ 22,847
Total investment in operating home sites
B
$ 294,394
Return on investment from earning home sites(1)
A/B
7.8%
(1) Our return on investment in operational
sites reflects our income from and investment in sites that were leased
for the first time during the year ended December 31, 2006. For these
leases, the income reported above includes less than a full twelve
months of operating results. Consequently, when compared to the
investment we have made in these home sites, the return on investment
during the year ended December 31, 2006 is less than the return when
measured using a full twelve months of operating results.
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
KEY HOME SALES STATISTICS
March 31, 2006
June 30, 2006
September 30, 2006
December 31, 2006
March 31, 2007
1Q07 over 4Q06 Increase/ Decrease
1Q07 over 4Q06 % Change
1Q07 over 1Q06 Increase/ Decrease
1Q07 over 1Q06 % Change
New home contracts
117
125
81
73
96
23
31.5%
-21
-17.9%
New home closings
104
95
92
71
55
-16
-22.5%
-49
-47.1%
Home resales
--
3
2
1
3
2
200.0%
3
100%
Brokered home sales
62
54
20
27
31
4
14.8%
-31
-50.0%
New home contract backlog
75
86
51
34
58
24
70.6%
-17
-22.7%
Average Selling Price
$128,000
$124,000
$129,000
$131,000
$135,000
$4,000
3.1%
$7,000
5.5%
Average Gross Margin Percentage
33.0%
34.3%
32.4%
33.4%
26.5%