American Land Lease (NYSE:ANL)
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From Jul 2019 to Jul 2024
American Land Lease, Inc. (NYSE:ANL)
today released results for third quarter 2006.
Summary Financial Results
Third Quarter
Diluted Earnings Per Share (“Diluted EPS”)
were $0.27 for the three-month period ended September 30, 2006
compared to $0.32 from the same period one-year ago.
Funds from Operations (“FFO”;
a non-GAAP financial measure defined on page 8 of this press release)
were $3.6 million, or $0.41 per diluted common share, for the quarter
compared to $3.7 million or $0.43 per diluted common share from the
same period one year ago, a decrease of 4.7% on a per share basis.
Unit volume in home sales was 92 new home closings, including 76 new
homes sold on expansion home sites. This compares with 115 new home
closings in third quarter 2005.
“Same Store”
results provided a revenue increase of 10.0%, an expense increase of
6.0% and an increase of 12.0% in Net Operating Income (“NOI”).
“Same Site”
results provided a revenue increase of 4.4%, an expense increase of
3.6% 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 www.americanlandlease.com.
Management Comments
Bob Blatz, President of American Land Lease, commented, “In
a very competitive environment, excellent same site and same store third
quarter results reflect the stability and strength of our core
residential land lease business. As compared to 2005, third quarter
property operating margins before depreciation expense were up 22%. We
increased our focus on certain expense areas, especially utilities and
insurance, in this quarter which yielded improved results.”
“We view the new home sales business as an
activity that complements our residential land lease business by
creating new revenue generating home sites. Consistent with the entire
home sales industry, our new home closings were not as high as we
projected at the beginning of the year. We did not achieve our objective
for new contracts during the quarter as traffic was not as strong as we
anticipated. We have a cautious outlook for the near term, but the
absence of hurricanes this season coupled with our focus on the senior
customer provide encouragement for the future. This outlook was
reinforced by our ability to generate over 40 `sign and close deals' in
the quarter which was evidence of pent up demand.”
“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 November 1, 2006, the Board of Directors declared a third quarter
common stock dividend of $0.25 per share payable on November 30, 2006,
to stockholders of record on November 16, 2006.
On November 1, 2006, the Board of Directors also declared a cash
dividend of $0.4844 per share of Class A Preferred Stock for the quarter
ended September 30, 2006, payable on November 30, 2006 to shareholders
of record on November 16, 2006.
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. 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 –
Third Quarter
Third Quarter Property Operations
Third quarter revenue from property operations was $9,121,000 as
compared to $7,740,000 in the same period one year ago, a 17.8%
increase. Third quarter property operating expenses totaled $3,136,000
as compared to $2,750,000 in the same period one year ago, a 14.0%
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 the 2006 period.
Third quarter property operating expenses increased primarily due to
increases in utility costs, tenant related legal costs, insurance
premiums and the acquisition of three properties. 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 32
communities we operate the individual homeowner’s
energy is metered and changes in consumption are billed to the homeowner.
Third quarter property operating margins before depreciation expense
increased to 63.0% from 60.6% in the prior year’s
third quarter.
Third Quarter “Same
Store”
Results
Third quarter “same store”
results reflect the results of operations for properties and golf
courses owned during the third quarters of both 2006 and 2005. Same
store properties account for 90% of property operating revenues for
third quarter 2006. 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.
The same store % change results are as follows:
3Q06
Revenue
10.0%
Expense
6.0%
Net Operating Income
12.0%
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.
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.
3Q06
Revenues
10.0%
Less: Reimbursements
(0.3%)
Revenue growth net of reimbursements
9.7%
Expenses
6.0%
Less: Reimbursements
(1.5%)
Expense growth net of reimbursements
4.5%
Same Store NOI Growth
12.0%
While we are focused on controlling operating expenses, our leases
provide some insulation from changes in uncontrollable expenses.
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 third quarter are as follows:
Same Site Rental
Absorption
Same Site Golf
Same Store
Revenue
4.4%
5.3%
0.3%
10.0%
Expense
3.6%
3.6%
(1.2)%
6.0%
NOI
4.7%
6.2%
1.1%
12.0%
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 September 30, 2006
and 2005 can be found on page 14 of this earnings release.
Third Quarter Home Sales Operations
Third quarter 2006 new home sales produced 92 closings, a 20.0% decrease
from the 115 closings in the same period in the prior year. Average
selling price per home was $129,000 as compared to $117,000 in the same
period in the prior year, a 10.3% increase. Fourteen communities
reported average selling prices in excess of $100,000 and five 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 three of the Company’s
expansion communities in Florida. Brokerage profits were down 59.3% as
compared with the same period in the prior year. Selling gross margins,
excluding brokerage activities, increased to 32.4% in the quarter as
compared to 30.1% in the same period in the prior year, but reflected a
rate lower than the 34.3% realized during second quarter 2006. This
increase was driven primarily by increased selling prices which were
partially offset by increases in costs of homes purchased. Selling costs
as a percentage of sales revenue increased from 18.6% in the prior year’s
period to 21.2% in the third quarter of 2006, reflecting incremental
advertising and marketing expenses incurred to drive traffic in a
slowing home sales market. The backlog of contracts for closing stood at
51, a decrease of 68% or 106 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.
Summary of home sales activity:
Quarter ended
Sept. 30, 2006
Quarter ended
Sept. 30, 2005
New home closings – Same Store
73
115
New home closings – Acquisitions
19
--
Total new home closings
92
115
New home contracts – Same Store
67
145
New home contracts – Acquisitions
14
--
Total new home contracts
81
145
Home resales
2
4
Brokered home sales
20
45
New home contract backlog – Same Store
36
157
New home contract backlog - Acquisitions
15
--
Total new home contract backlog
51
157
Outlook for 2006
The table below summarizes the Company’s
projected financial outlook for 2006 as of the date of this release and
is based on the estimates and assumptions disclosed in this and previous
press releases:
Full Year 2006 Projected
FFO
$1.70 to $1.75
AFFO
$1.50 to $1.55
Diluted EPS
$1.20 to $1.25
Same Store Sales
Revenue Growth
8% to 11%
Expense Growth
9% to 13%
NOI Growth
8% to 10%
Home Sales Operating Income
$4.5M to $6.0M
Home Sale Net Contribution
$3.2M to $4.6M
General and Administrative Expenses
$3.8M to $4.2 M
Capital Replacements (per site)
$163 to $190
Depreciation
$3.8M to $4.5M
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 market for new home sales has declined over the
first nine months of the year and the Company expects that trend to
continue through the fourth quarter of the year. 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. We have
adjusted our guidance as to annual ranges based upon lower expected
results from our home sales business. We expect full year results to be
within that reduced range.
The Company's projected results for 2006 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 2006 projections. In addition, projected results
include the expense for performance based restricted stock. 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.
Dispositions
During the quarter, the Company placed its New Jersey property under
contract for sale subject to customary contingencies. There can be no
assurance that the transaction will close.
Financing Activity
During the quarter, the Company closed four transactions.
The Company completed the refunding of a series of variable rate
mortgages and provided additional proceeds of approximately $2.5
million which were used for the continued development of the Company’s
inventory of home sites. The new note of $3.8 million bears interest
at 6.63% with a fourteen year term.
The Company issued a $10 million short-term note payable with a
variable rate of 200 basis points over the 1-month LIBOR rate maturing
on January 25, 2007 in conjunction with the acquisition of a
community. The Company expects to refund this bridge facility through
permanent financing of the community
The Company borrowed $1.9 million on its construction loan facility to
fund work at Sebastian Beach and Tennis Village.
The Company reduced the interest rate spread on its variable rate
floor plan facility by 25 basis points to prime plus 25 basis points.
After the end of the quarter, on October 13, 2006, the Company closed a
loan of $7.25 million for its Reserve at Fox Creek community that was
acquired in February of 2006. The loan has a ten-year term and bears
interest at 6.06%. The loan includes an interest only feature for five
years, provides for future advances totaling $3.75 million at the 6.06%
rate and provides further for additional advances above the $11 million
total loan amount during the first five years based upon achieving
certain levels of performance. The full funding of this loan will refund
the Company’s original purchase price for the
community.
Development Activity
The company maintains an inventory of 1,142 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 1,675 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 on schedule. The Company has learned that a new municipality
was formed in July of 2006 which impacts a majority of the project.
Known as the Town of Grant-Valkaria, the new municipality does not
have a building department and the election of the first mayor and
town council will be held on November 7, 2006. While the county
continues to inspect the project, we are unable to project what impact
the formation of the town may have on the timing of the project.
Pre-sales and marketing activities for the community have already
begun at an off site sales office opened in January.
At Savanna Club, construction on a 5,000+ square foot Fitness Center
was completed.
At the Villages at Country Club project in Mesa, Arizona, site work
continued.
At Riverside Club, construction neared completion for the community’s
second clubhouse, this one including more than 22,000 square feet.
This substantial amenity will be opened for resident use during fourth
quarter.
At Sun Lake, construction activities continued on the expansion and
renovation of the community center complex. This increased and
improved amenity is scheduled to open in first quarter 2007.
American Land Lease, Inc. is a REIT that held interests in 32
manufactured home communities with 8,075 operational home sites, 1,142
developed expansion sites, 1,675 undeveloped expansion sites and 129
recreational vehicle sites as of September 30, 2006.
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, Monday, November 6, 2006 at
4:00 p.m. Eastern Standard Time to discuss third quarter 2006 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 third quarter 2006 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. Eastern Standard Time, November 6,
2006 until midnight on November 13, 2006. To access the replay, dial
toll free, (800) 642-1687 and request information from conference ID
1428246.
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
standard 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, 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: represents 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
Sept. 30, 2006
June 30, 2006
March 31, 2006
Dec. 31, 2005
Sept. 30, 2005
(unaudited)
(unaudited)
(unaudited)
(unaudited)
ASSETS
Real Estate
$ 298,293
$ 264,947
$ 254,690
$ 244,987
$ 232,178
Lessaccumulateddepreciation
(28,041)
(27,836)
(26,132)
(25,277)
(24,451)
Real estate under development
103,940
95,195
87,068
74,416
74,818
Total Real Estate
374,192
332,306
315,626
294,126
282,545
Cash and cash equivalents
311
8,497
8,384
1,795
828
Inventory
23,731
23,588
20,654
18,759
19,431
Other assets
14,845
14,488
12,786
11,236
9,969
Assets Held for Sale
3,874
3,897
3,889
3,773
3,794
Total Assets
$ 416,953
$ 382,776
$ 361,339
$ 329,689
$ 316,567
LIABILITIES AND EQUITY
Liabilities
Secured long-term notes payable
$ 203,428
$ 199,746
$ 182,762
$ 149,388
$ 124,763
Secured short-term financing
43,783
19,462
16,742
19,669
33,777
Accounts payable and accrued liabilities
17,359
12,036
12,006
12,474
11,804
Liabilities related to assets held for sale
2,261
2,273
2,304
2,304
2,328
Total Liabilities
266,831
233,517
213,814
183,835
172,672
Minority Interest in Operating Partnership
16,333
16,245
16,137
15,945
15,511
STOCKHOLDERS’ EQUITY
Preferred Stock, par value $.01 per share; 1,000 shares authorized,
1,000 and 0 shares issued and outstanding, respectively
25,000
25,000
25,000
25,000
25,000
Common Stock, par value $.01 per share; 12,000 shares authorized
92
92
92
93
93
Additional paid-in capital
289,223
290,576
289,206
288,224
288,188
Deferred compensation re restricted stock
--
(1,995)
(2,000)
(1,651)
(1,959)
Dividends in excess of accumulated earnings
(153,914)
(154,047)
(154,298)
(155,145)
(156,326)
Treasury stock at cost
(26,612)
(26,612)
(26,612)
(26,612)
(26,612)
Total
Stockholders'
Equity
133,789
133,014
131,388
129,909
128,384
Total
Liabilities
and
Stockholders’
Equity
$ 416,953
$ 382,776
$ 361,339
$ 329,689
$ 316,567
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended
Sept. 30,
2006
June 30,
2006
March 31,
2006
Dec. 31,
2005
RENTAL PROPERTY OPERATIONS
Rental and other property revenues
$ 9,121
$ 8,507
$ 8,173
$ 7,684
Golf course operating revenues
154
213
470
232
Total property operating revenues
9,275
8,720
8,643
7,916
Property operating expenses
(3,136)
(3,056)
(2,916)
(2,827)
Recoveries of casualty expenses related to hurricanes
--
--
--
(6)
Golf course operating expenses
(296)
(373)
(365)
(346)
Total property operating expenses
(3,432)
(3,429)
(3,281)
(3,179)
Depreciation
(1,136)
(1,032)
(979)
(954)
Income from rental property operations
4,707
4,259
4,383
3,783
SALES OPERATIONS
Home sales revenue
12,197
12,052
13,496
16,781
Cost of home sales
(8,244)
(7,914)
(9,044)
(11,444)
Gross profit on home sales
3,953
4,138
4,452
5,337
Commissions earned on brokered sales
45
164
159
139
Commissions paid on brokered sales
(27)
(76)
(82)
(74)
Gross profit on brokered sales
18
88
77
65
Selling and marketing expenses
(2,582)
(2,754)
(2,800)
(3,162)
Income (loss) from sales operations
1,389
1,472
1,729
2,240
General and administrative expenses
(1,055)
(995)
(891)
(1,113)
Gain on sale of property
-
-
-
-
Interest and other income
34
91
53
1
Tax benefit
--
--
--
600
Interest expense
(2,218)
(1,832)
(1,579)
(1,498)
Income before minority interest in Operating Partnership
2,857
2,995
3,695
4,013
Minority interest in Operating Partnership
(330)
(350)
(435)
(479)
Income from continuing operations
2,527
2,645
3,260
3,534
DISCONTINUED OPERATIONS
Income (loss) from discontinued operations, net of Minority Interest
40
51
42
28
Net Income
Cumulative preferred stock dividends
(485)
(484)
(484)
(484)
Net Income Attributable to common shareholders
$ 2,082
$ 2,212
$ 2,818
$ 3,078
Basic earnings from continuing operations (net of cumulative unpaid
preferred dividends)
$ 0.27
$ 0.29
$ 0.37
$ 0.42
Basic earnings (loss) from discontinued operations
0.01
0.01
0.01
0.00
Basic earnings per common share
$ 0.28
$ 0.30
$ 0.38
$ 0.42
Diluted earnings from continuing operations
$ 0.26
$ 0.28
$ 0.35
$ 0.39
Diluted earnings (loss) from discontinued operations
0.01
0.01
0.01
0.01
Diluted earnings per common share
$ 0.27
$ 0.29
$ 0.36
$ 0.40
Weighted average common shares outstanding
7,507
7,465
7,423
7,341
Weighted average common shares and common share equivalents
outstanding
7,808
7,836
7,880
7,722
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
Sept. 30, 2006
June 30, 2006
March 31, 2006
Dec. 31, 2005
Sept. 30, 2005
DEBT OUTSTANDING
Mortgage Loans Payable – Fixed
$ 192,072
$ 191,215
$ 180,570
$ 136,641
$ 101,417
Mortgage Loans Payable – Floating
11,356
10,771
4,445
15,015
25,628
Floor Plan Facility
23,813
19,462
16,642
14,969
19,147
Acquisition Bridge Loan
10,000
--
--
--
--
Line of Credit
9,970
--
100
4,700
14,630
Total Debts
$ 247,211
$ 221,448
$ 201,757
$ 171,325
$ 160,822
% FIXED FLOATING
Fixed
77.7%
86.3%
89.5%
79.8%
63.1%
Floating
22.3%
13.7%
10.5%
20.2%
36.9%
Total
100.00%
100.00%
100.00%
100.00%
100.00%
AVERAGE INTEREST RATES
Mortgage Loans Payable – Fixed
6.4%
6.4%
6.4%
6.6%
7.0%
Mortgage Loans Payable – Floating
6.9%
7.4%
7.2%
6.7%
6.5%
Floor Plan Facility
8.6%
8.75%
8.2%
7.6%
7.1%
Acquisition Bridge Loan
7.3%
--
--
--
--
Line of Credit
7.0%
7.35%
6.6%
6.4%
5.8%
Total Weighted Average
6.7%
6.7%
6.6%
6.7%
6.8%
DEBT RATIOS
Debt/Total Market Cap(1)
51.4%
49.2%
43.0%
42.1%
41.2%
Debt/Gross Assets
59.2%
64.6%
55.8%
52.0%
50.8%
MATURITIES
Dec. 31, 2006
Dec. 31, 2007
Dec. 31, 2008
Dec. 31, 2009
Dec. 31, 2010
Mortgage Loan Scheduled Principal Payments
733
2,978
3,132
3,346
3,573
Mortgage Loans Balloon Maturities
-
2,665
-
-
-
Floor Plan Facility
-
-
-
-
-
Total
$ 733
$ 5,643
$ 3,132
$ 3,346
$ 3,573
(1) Computed based upon closing price as
reported on NYSE as of the period ended.
FFO/AFFO and Payout Ratios
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO FFO AND AFFO
(Amounts in thousands, except per share/OPunit amounts)
(Unaudited)
Three Months Ended
September 30,
2006
2005
Net Income
$2,082
$2,436
Adjustments
Cumulative unpaid preferred stock dividends
485
484
Minority interest in operating partnership
330
391
Minority interest related to discontinued operations
18
17
Depreciation from discontinued operations
6
4
Real estate depreciation
1,136
869
Funds From Operations (FFO)
$4,057
$4,201
Cumulative unpaid preferred stock dividends
(485)
(484)
Funds From Operations attributable to common Stockholders
3,572
3,717
Capital Replacements
(285)
(300)
Adjusted Funds from Operations (AFFO)
$3,287
$3,417
Weighted Average Common Shares/OP Units Outstanding
8,800
8,688
Per Common Share and OP Unit:
FFO:
$0.41
$0.43
AFFO:
$0.37
$0.39
Payout Ratio Per Common Share and OP Unit:
Gross Distribution Payout
FFO:
61.0%
58.1%
AFFO:
67.6%
64.1%
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS
FOR THE QUARTER ENDED SEPTEMBER 30, 2006 AND SEPTEMBER 30, 2005
(in thousands)
(unaudited)
Three Months
Ended
Sept. 30, 2006
Three Months
Ended
Sept. 30, 2005
Change
% Change
Contribution to Same Store
% Change(1)
Same site rental revenues
$ 7,661
$ 7,327
$ 334
4.6%
4.4%
Absorption rental revenues
577
171
406
237.4%
5.3%
Same site golf revenues
154
131
23
17.6%
0.3%
Same store revenues A
8,392
7,629
763
10.0%
10.0%
Re-development and newly acquired property revenues
883
242
641
264.9%
Total property revenues C
$ 9,275
$ 7,871
$ 1,404
17.8%
Same site rental expenses
$ 2,315
$ 2,223
$ 92
4.1%
3.6%
Absorption rental expenses
93
-
93
100.0%
3.6%
Same site golf expenses
296
329
(33)
(10.0)%
(1.2)%
Same store expenses B
2,704
2,552
152
6.0%
6.0%
Re-development and newly acquired property expenses
305
96
209
217.7%
Recoveries of casualty expenses related to hurricanes
--
(21)
21
100.00%
Expenses related to offsite management2
423
473
(50)
10.6%
Total property operating expenses D
$ 3,432
$ 3,100
$ 332
10.7%
Same Store net operating income A-B
$ 5,688
$ 5,077
611
12.0%
Total net operating income C-D
$ 5,843
$ 4,771
$ 1,072
22.5%
(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
revenues of $334 as compared to the total same store revenues in
2005 of $7,629 is a 4.4% increase ($334/$7,629=4.4%).
(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 SEPTEMBER 30, 2006
Community
Location
Oper-ational Home Sites
(1)
Occupancy
Average Monthly Rent
RV
Sites
Un-developed Home Sites
Developed Home Sites
Owned Communities
Blue Heron Pines
Punta Gorda, FL
341
100%
$333
--
--
48
Brentwood Estates
Hudson, FL
133
98%
264
--
--
58
Sebastian Beach & Tennis Club
Micco,FL
--
0%
--
--
533
--
Serendipity
Ft. Myers, FL
338
96%
348
--
--
--
Stonebrook
Homosassa, FL
188
100%
296
--
--
14
Sunlake Estates
Grand Island, FL
354
100%
351
--
--
42
Sun Valley
Tarpon Springs, FL
261
97%
382
--
--
--
Forest View
Homosassa, FL
268
100%
311
--
--
36
Gulfstream Harbor
Orlando, FL
382
98%
409
--
50
--
Gulfstream Harbor II
Orlando, FL
306
100%
402
--
37
1
Gulfstream Harbor III
Orlando, FL
158
100%
396
--
--
127
Lakeshore Villas
Tampa, FL
281
98%
419
--
--
--
Park Place
Sebastian, FL
368
100%
320
--
--
97
Park Royale
Pinellas Park, FL
294
95%
422
--
--
15
Pleasant Living
Riverview, FL
245
96%
358
--
--
--
Riverside GCC
Ruskin, FL
434
100%
505
--
420
86
Royal Palm Village
Haines City, FL
277
97%
340
--
--
110
Cypress Greens
Lakeland, FL
210
100%
251
--
--
48
SavannaClub
Port St Lucie, FL
959
100%
296
--
--
108
Woodlands
Groveland, FL
157
99%
308
--
--
135
Subtotal-Florida
5,954
1,040
925
Blue Star
Apache Junction AZ
22
55%
397
129
--
--
Brentwood West
Mesa, AZ
350
93%
447
--
--
--
CasaEncanta
Mesa, AZ
--
0%
--
--
375
--
Desert Harbor
Apache Junction, AZ
189
99%
359
--
--
17
Fiesta Village
Mesa, AZ
172
86%
378
--
--
--
La Casa Blanca
Apache Junction AZ
197
99%
378
--
--
--
Lost Dutchman
Apache Junction AZ
196
81%
321
--
--
46
Rancho Mirage
Apache Junction AZ
312
94%
418
--
--
--
Reserve at Fox Creek
Bull Head City, AZ
231
100%
315
--
--
83
Sun Valley
Apache Junction AZ
268
92%
347
--
--
--
Subtotal-Arizona
1,937
129
375
146
Foley Grove
Foley, AL
94
100%
282
260
71
Mullica Woods
Egg Harbor City, NJ
90
100%
491
--
--
--
Total Communities
32
8,075
97%
$362
129
1,675
1,142
(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 84.1%
across the entire portfolio. Including sites not yet developed,
occupancy was at 73.2% at September 30, 2006.
Portfolio Summary
Operational
Home sites
Developed Home sites
Undeveloped Home sites
RV Sites
Total
As of December 31, 2005
7,283
976
1,270
129
9,658
Properties developed
--
19
(19)
--
--
Redevelopment of lots
(114)
114
--
--
--
New lots purchased
667
278
260
1,205
New leases originated
240
(240)
--
--
--
Adjust for site plan changes
(1)
(5)
164
--
158
As of September 30, 2006
8,075(1)
1,142
1,675
129
11,021
(1) As of September 30, 2006, 7,862 of these operational home
sites were occupied.
Occupancy Roll Forward
Occupied
Home sites
Operational
Home sites
Occupancy
As of December 31, 2005
6,947
7,283
95.4%
New home sales
292
240
Used home sales
4
--
Used homes acquired
(30)
--
Redevelopment of lots
--
(114)
Lots acquired (sold)
667
667
Homes constructed by others
15
--
Homes removed from previously leased sites
(33)
(1)
As of September 30, 2006
7,862
8,075
97.4%
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
RETURN ON INVESTMENT FROM HOME SALES
(unaudited)
Three Months Ended
Sept. 30, 2006
Three Months Ended
Sept. 30, 2005
Expansion sites leased during the period
76
92
Estimated first year annualized profit on leases originated during
the period
A
$269
$369
Costs, including development costs of sites leased
$4,714
$4,607
Home sales income (loss) attributable to sites leased
1,370
1,564
Total costs incurred to originate ground leases
B
$3,344
$3,037
Estimated first year returns from the leases originated on expansion
home sites during the period
A/B
8.0%
12.1%
For the three months ended September 30, 2006 and 2005, we
estimate our profit or loss attributable to the sale of homes
situated on expansion home sites as follows (in thousands):
Three Months Ended Sept. 30, 2006
Three Months Ended Sept. 30, 2005
Reported income from sales operations
$ 1,389
$1,612
Used home sales and brokerage business income
(19)
(48)
Used home sales
--
--
Adjusted income for projection analysis
$ 1,370
$1,564
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, 2005 in
accordance with GAAP is shown below (in thousands):
Total Portfolio for Year Ended Dec. 31, 2005
Property income before depreciation
A
$ 19,819
Total investment in operating home sites
B
$ 242,304
Return on investment from earning home sites
A/B
8.2%
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
KEY HOME SALES STATISTICS
Sept. 30, 2005
Dec. 31, 2005
March 31, 2006
June 30, 2006
Sept. 30, 2006
3Q06 over 2Q06 Increase/ Decrease
3Q06 over 2Q06 % Change
3Q06 over 3Q05 Increase/ Decrease
3Q06 over 3Q05% Change
New home contracts
145
105
117
125
81
-44
-35.2%
-64
-44.1%
New home closings
115
133
104
95
92
-3
-3.2%
-23
-20.0%
Home resales
4
1
--
3
2
-1
-33.3%
-2
-50.0%
Brokered home sales
45
51
62
54
20
-34
-63.0%
-25
-55.6%
New home contract backlog
157
93
75
86
51
-35
-40.7%
-106
-67.5%
Average Selling Price
$117,000
$125,000
$128,000
$124,000
$129,000
$5,000
4.0%
$12,000
10.3%
Average Gross Margin Percentage
30.1%
31.8%
33.0%
34.3%
32.4%
--
--
--
--
American Land Lease, Inc. (NYSE:ANL) today released results for
third quarter 2006.
Summary Financial Results
Third Quarter
-- Diluted Earnings Per Share ("Diluted EPS") were $0.27 for the
three-month period ended September 30, 2006 compared to $0.32
from the same period one-year ago.
-- Funds from Operations ("FFO"; a non-GAAP financial measure
defined on page 8 of this press release) were $3.6 million, or
$0.41 per diluted common share, for the quarter compared to
$3.7 million or $0.43 per diluted common share from the same
period one year ago, a decrease of 4.7% on a per share basis.
-- Unit volume in home sales was 92 new home closings, including
76 new homes sold on expansion home sites. This compares with
115 new home closings in third quarter 2005.
-- "Same Store" results provided a revenue increase of 10.0%, an
expense increase of 6.0% and an increase of 12.0% in Net
Operating Income ("NOI").
-- "Same Site" results provided a revenue increase of 4.4%, an
expense increase of 3.6% 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 www.americanlandlease.com.
Management Comments
Bob Blatz, President of American Land Lease, commented, "In a very
competitive environment, excellent same site and same store third
quarter results reflect the stability and strength of our core
residential land lease business. As compared to 2005, third quarter
property operating margins before depreciation expense were up 22%. We
increased our focus on certain expense areas, especially utilities and
insurance, in this quarter which yielded improved results."
"We view the new home sales business as an activity that
complements our residential land lease business by creating new
revenue generating home sites. Consistent with the entire home sales
industry, our new home closings were not as high as we projected at
the beginning of the year. We did not achieve our objective for new
contracts during the quarter as traffic was not as strong as we
anticipated. We have a cautious outlook for the near term, but the
absence of hurricanes this season coupled with our focus on the senior
customer provide encouragement for the future. This outlook was
reinforced by our ability to generate over 40 `sign and close deals'
in the quarter which was evidence of pent up demand."
"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 November 1, 2006, the Board of Directors declared a third
quarter common stock dividend of $0.25 per share payable on November
30, 2006, to stockholders of record on November 16, 2006.
On November 1, 2006, the Board of Directors also declared a cash
dividend of $0.4844 per share of Class A Preferred Stock for the
quarter ended September 30, 2006, payable on November 30, 2006 to
shareholders of record on November 16, 2006.
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. 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 - Third Quarter
Third Quarter Property Operations
Third quarter revenue from property operations was $9,121,000 as
compared to $7,740,000 in the same period one year ago, a 17.8%
increase. Third quarter property operating expenses totaled $3,136,000
as compared to $2,750,000 in the same period one year ago, a 14.0%
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 the 2006 period.
Third quarter property operating expenses increased primarily due
to increases in utility costs, tenant related legal costs, insurance
premiums and the acquisition of three properties. 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 32
communities we operate the individual homeowner's energy is metered
and changes in consumption are billed to the homeowner.
Third quarter property operating margins before depreciation
expense increased to 63.0% from 60.6% in the prior year's third
quarter.
Third Quarter "Same Store" Results
Third quarter "same store" results reflect the results of
operations for properties and golf courses owned during the third
quarters of both 2006 and 2005. Same store properties account for 90%
of property operating revenues for third quarter 2006. 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.
The same store % change results are as follows:
-0-
*T
3Q06
------------------
Revenue 10.0%
Expense 6.0%
Net Operating Income 12.0%
*T
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.
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.
-0-
*T
3Q06
--------------
Revenues 10.0%
Less: Reimbursements (0.3%)
--------------
Revenue growth net of reimbursements 9.7%
Expenses 6.0%
Less: Reimbursements (1.5%)
--------------
Expense growth net of reimbursements 4.5%
Same Store NOI Growth 12.0%
*T
While we are focused on controlling operating expenses, our leases
provide some insulation from changes in uncontrollable expenses.
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 third quarter are as follows:
-0-
*T
Same Site Rental Absorption Same Site Golf Same Store
---------------- ------------ -------------- ----------
Revenue 4.4% 5.3% 0.3% 10.0%
Expense 3.6% 3.6% (1.2)% 6.0%
NOI 4.7% 6.2% 1.1% 12.0%
*T
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
September 30, 2006 and 2005 can be found on page 14 of this earnings
release.
Third Quarter Home Sales Operations
Third quarter 2006 new home sales produced 92 closings, a 20.0%
decrease from the 115 closings in the same period in the prior year.
Average selling price per home was $129,000 as compared to $117,000 in
the same period in the prior year, a 10.3% increase. Fourteen
communities reported average selling prices in excess of $100,000 and
five 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 three of the
Company's expansion communities in Florida. Brokerage profits were
down 59.3% as compared with the same period in the prior year. Selling
gross margins, excluding brokerage activities, increased to 32.4% in
the quarter as compared to 30.1% in the same period in the prior year,
but reflected a rate lower than the 34.3% realized during second
quarter 2006. This increase was driven primarily by increased selling
prices which were partially offset by increases in costs of homes
purchased. Selling costs as a percentage of sales revenue increased
from 18.6% in the prior year's period to 21.2% in the third quarter of
2006, reflecting incremental advertising and marketing expenses
incurred to drive traffic in a slowing home sales market. The backlog
of contracts for closing stood at 51, a decrease of 68% or 106 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.
Summary of home sales activity:
-0-
*T
Quarter ended Quarter ended
Sept. 30, 2006 Sept. 30, 2005
----------------- -----------------
New home closings - Same Store 73 115
New home closings - Acquisitions 19 --
----------------- -----------------
Total new home closings 92 115
New home contracts - Same Store 67 145
New home contracts - Acquisitions 14 --
----------------- -----------------
Total new home contracts 81 145
Home resales 2 4
Brokered home sales 20 45
New home contract backlog - Same
Store 36 157
New home contract backlog -
Acquisitions 15 --
----------------- -----------------
Total new home contract backlog 51 157
*T
Outlook for 2006
The table below summarizes the Company's projected financial
outlook for 2006 as of the date of this release and is based on the
estimates and assumptions disclosed in this and previous press
releases:
-0-
*T
Full Year 2006
Projected
----------------------------------------------------------------------
FFO $1.70 to $1.75
----------------------------------------------------------------------
AFFO $1.50 to $1.55
----------------------------------------------------------------------
Diluted EPS $1.20 to $1.25
----------------------------------------------------------------------
Same Store Sales
----------------------------------------------------------------------
Revenue Growth 8% to 11%
----------------------------------------------------------------------
Expense Growth 9% to 13%
----------------------------------------------------------------------
NOI Growth 8% to 10%
----------------------------------------------------------------------
Home Sales Operating Income $4.5M to $6.0M
----------------------------------------------------------------------
Home Sale Net Contribution $3.2M to $4.6M
----------------------------------------------------------------------
General and Administrative Expenses $3.8M to $4.2 M
----------------------------------------------------------------------
Capital Replacements (per site) $163 to $190
----------------------------------------------------------------------
Depreciation $3.8M to $4.5M
----------------------------------------------------------------------
*T
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 market for new home sales has declined
over the first nine months of the year and the Company expects that
trend to continue through the fourth quarter of the year. 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. We
have adjusted our guidance as to annual ranges based upon lower
expected results from our home sales business. We expect full year
results to be within that reduced range.
The Company's projected results for 2006 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 2006 projections. In addition, projected results
include the expense for performance based restricted stock. 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.
Dispositions
During the quarter, the Company placed its New Jersey property
under contract for sale subject to customary contingencies. There can
be no assurance that the transaction will close.
Financing Activity
During the quarter, the Company closed four transactions.
-- The Company completed the refunding of a series of variable
rate mortgages and provided additional proceeds of
approximately $2.5 million which were used for the continued
development of the Company's inventory of home sites. The new
note of $3.8 million bears interest at 6.63% with a fourteen
year term.
-- The Company issued a $10 million short-term note payable with
a variable rate of 200 basis points over the 1-month LIBOR
rate maturing on January 25, 2007 in conjunction with the
acquisition of a community. The Company expects to refund this
bridge facility through permanent financing of the community
-- The Company borrowed $1.9 million on its construction loan
facility to fund work at Sebastian Beach and Tennis Village.
-- The Company reduced the interest rate spread on its variable
rate floor plan facility by 25 basis points to prime plus 25
basis points.
After the end of the quarter, on October 13, 2006, the Company
closed a loan of $7.25 million for its Reserve at Fox Creek community
that was acquired in February of 2006. The loan has a ten-year term
and bears interest at 6.06%. The loan includes an interest only
feature for five years, provides for future advances totaling $3.75
million at the 6.06% rate and provides further for additional advances
above the $11 million total loan amount during the first five years
based upon achieving certain levels of performance. The full funding
of this loan will refund the Company's original purchase price for the
community.
Development Activity
The company maintains an inventory of 1,142 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 1,675 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 on schedule. The Company has learned that a new
municipality was formed in July of 2006 which impacts a
majority of the project. Known as the Town of Grant-Valkaria,
the new municipality does not have a building department and
the election of the first mayor and town council will be held
on November 7, 2006. While the county continues to inspect the
project, we are unable to project what impact the formation of
the town may have on the timing of the project. Pre-sales and
marketing activities for the community have already begun at
an off site sales office opened in January.
-- At Savanna Club, construction on a 5,000+ square foot Fitness
Center was completed.
-- At the Villages at Country Club project in Mesa, Arizona, site
work continued.
-- At Riverside Club, construction neared completion for the
community's second clubhouse, this one including more than
22,000 square feet. This substantial amenity will be opened
for resident use during fourth quarter.
-- At Sun Lake, construction activities continued on the
expansion and renovation of the community center complex. This
increased and improved amenity is scheduled to open in first
quarter 2007.
American Land Lease, Inc. is a REIT that held interests in 32
manufactured home communities with 8,075 operational home sites, 1,142
developed expansion sites, 1,675 undeveloped expansion sites and 129
recreational vehicle sites as of September 30, 2006.
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, Monday, November 6,
2006 at 4:00 p.m. Eastern Standard Time to discuss third quarter 2006
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 third quarter 2006 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.
Eastern Standard Time, November 6, 2006 until midnight on November 13,
2006. To access the replay, dial toll free, (800) 642-1687 and request
information from conference ID 1428246.
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 standard 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, 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: represents 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.
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AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
As of
---------------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2006 2006 2006 2005 2005
----------- ----------- ----------- --------- -----------
(unaudited) (unaudited) (unaudited) (unaudited)
ASSETS
Real Estate $298,293 $264,947 $254,690 $244,987 $232,178
Less
accumulated
depreciation (28,041) (27,836) (26,132) (25,277) (24,451)
Real estate
under
development 103,940 95,195 87,068 74,416 74,818
----------- ----------- ----------- --------- -----------
Total Real
Estate 374,192 332,306 315,626 294,126 282,545
Cash and
cash
equivalents 311 8,497 8,384 1,795 828
Inventory 23,731 23,588 20,654 18,759 19,431
Other assets 14,845 14,488 12,786 11,236 9,969
Assets Held
for Sale 3,874 3,897 3,889 3,773 3,794
----------- ----------- ----------- --------- -----------
Total
Assets $416,953 $382,776 $361,339 $329,689 $316,567
=========== =========== =========== ========= ===========
LIABILITIES
AND EQUITY
Liabilities
Secured
long-term
notes
payable $203,428 $199,746 $182,762 $149,388 $124,763
Secured
short-term
financing 43,783 19,462 16,742 19,669 33,777
Accounts
payable and
accrued
liabilities 17,359 12,036 12,006 12,474 11,804
Liabilities
related to
assets held
for sale 2,261 2,273 2,304 2,304 2,328
----------- ----------- ----------- --------- -----------
Total
Liabilities 266,831 233,517 213,814 183,835 172,672
Minority
Interest in
Operating
Partnership 16,333 16,245 16,137 15,945 15,511
STOCKHOLDERS'
EQUITY
Preferred
Stock, par
value $.01
per share;
1,000 shares
authorized,
1,000 and 0
shares
issued and
outstanding,
respectively 25,000 25,000 25,000 25,000 25,000
Common Stock,
par value
$.01 per
share;
12,000
shares
authorized 92 92 92 93 93
Additional
paid-in
capital 289,223 290,576 289,206 288,224 288,188
Deferred
compensation
re
restricted
stock -- (1,995) (2,000) (1,651) (1,959)
Dividends in
excess of
accumulated
earnings (153,914) (154,047) (154,298) (155,145) (156,326)
Treasury
stock at
cost (26,612) (26,612) (26,612) (26,612) (26,612)
----------- ----------- ----------- --------- -----------
Total
Stockholders'
Equity 133,789 133,014 131,388 129,909 128,384
----------- ----------- ----------- --------- -----------
Total
Liabilities
and
Stockholders'
Equity $416,953 $382,776 $361,339 $329,689 $316,567
=========== =========== =========== ========= ===========
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AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
Three Months Ended
---------------------------------------
Sept. 30, June 30, March 31, Dec. 31,
2006 2006 2006 2005
--------- --------- --------- ---------
RENTAL PROPERTY OPERATIONS
Rental and other property
revenues $9,121 $8,507 $8,173 $7,684
Golf course operating
revenues 154 213 470 232
--------- --------- --------- ---------
Total property operating
revenues 9,275 8,720 8,643 7,916
Property operating expenses (3,136) (3,056) (2,916) (2,827)
Recoveries of casualty
expenses related to
hurricanes -- -- -- (6)
Golf course operating
expenses (296) (373) (365) (346)
--------- --------- --------- ---------
Total property operating
expenses (3,432) (3,429) (3,281) (3,179)
Depreciation (1,136) (1,032) (979) (954)
--------- --------- --------- ---------
Income from rental
property operations 4,707 4,259 4,383 3,783
SALES OPERATIONS
Home sales revenue 12,197 12,052 13,496 16,781
Cost of home sales (8,244) (7,914) (9,044) (11,444)
--------- --------- --------- ---------
Gross profit on home sales 3,953 4,138 4,452 5,337
Commissions earned on
brokered sales 45 164 159 139
Commissions paid on brokered
sales (27) (76) (82) (74)
--------- --------- --------- ---------
Gross profit on brokered
sales 18 88 77 65
Selling and marketing
expenses (2,582) (2,754) (2,800) (3,162)
--------- --------- --------- ---------
Income (loss) from sales
operations 1,389 1,472 1,729 2,240
General and administrative
expenses (1,055) (995) (891) (1,113)
Gain on sale of property - - - -
Interest and other income 34 91 53 1
Tax benefit -- -- -- 600
Interest expense (2,218) (1,832) (1,579) (1,498)
--------- --------- --------- ---------
Income before minority
interest in Operating
Partnership 2,857 2,995 3,695 4,013
Minority interest in Operating
Partnership (330) (350) (435) (479)
--------- --------- --------- ---------
Income from continuing
operations 2,527 2,645 3,260 3,534
DISCONTINUED OPERATIONS
Income (loss) from
discontinued operations, net
of Minority Interest 40 51 42 28
--------- --------- --------- ---------
Net Income
Cumulative preferred stock
dividends (485) (484) (484) (484)
--------- --------- --------- ---------
Net Income Attributable to
common shareholders $2,082 $2,212 $2,818 $3,078
========= ========= ========= =========
Basic earnings from
continuing operations (net
of cumulative unpaid
preferred dividends) $0.27 $0.29 $0.37 $0.42
Basic earnings (loss) from
discontinued operations 0.01 0.01 0.01 0.00
--------- --------- --------- ---------
Basic earnings per common
share $0.28 $0.30 $0.38 $0.42
========= ========= ========= =========
Diluted earnings from
continuing operations $0.26 $0.28 $0.35 $0.39
Diluted earnings (loss)
from discontinued
operations 0.01 0.01 0.01 0.01
--------- --------- --------- ---------
Diluted earnings per common
share $0.27 $0.29 $0.36 $0.40
========= ========= ========= =========
Weighted average common
shares outstanding 7,507 7,465 7,423 7,341
Weighted average common
shares and common share
equivalents outstanding 7,808 7,836 7,880 7,722
Common dividends paid per
share $0.25 $0.25 $0.25 $0.25
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AMERICAN LAND LEASE INC. AND SUBSIDIARIES
DEBT ANALYSIS
(in thousands)
(unaudited)
As of
-------------------------------------------------
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2006 2006 2006 2005 2005
--------- --------- --------- --------- ---------
DEBT OUTSTANDING
Mortgage Loans
Payable - Fixed $192,072 $191,215 $180,570 $136,641 $101,417
Mortgage Loans
Payable - Floating 11,356 10,771 4,445 15,015 25,628
Floor Plan Facility 23,813 19,462 16,642 14,969 19,147
Acquisition Bridge
Loan 10,000 -- -- -- --
Line of Credit 9,970 -- 100 4,700 14,630
--------- --------- --------- --------- ---------
Total Debts $247,211 $221,448 $201,757 $171,325 $160,822
========= ========= ========= ========= =========
% FIXED FLOATING
Fixed 77.7% 86.3% 89.5% 79.8% 63.1%
Floating 22.3% 13.7% 10.5% 20.2% 36.9%
--------- --------- --------- --------- ---------
Total 100.00% 100.00% 100.00% 100.00% 100.00%
AVERAGE INTEREST
RATES
Mortgage Loans
Payable - Fixed 6.4% 6.4% 6.4% 6.6% 7.0%
Mortgage Loans
Payable - Floating 6.9% 7.4% 7.2% 6.7% 6.5%
Floor Plan Facility 8.6% 8.75% 8.2% 7.6% 7.1%
Acquisition Bridge
Loan 7.3% -- -- -- --
Line of Credit 7.0% 7.35% 6.6% 6.4% 5.8%
--------- --------- --------- --------- ---------
Total Weighted
Average 6.7% 6.7% 6.6% 6.7% 6.8%
========= ========= ========= ========= =========
DEBT RATIOS
Debt/Total Market
Cap(1) 51.4% 49.2% 43.0% 42.1% 41.2%
Debt/Gross Assets 59.2% 64.6% 55.8% 52.0% 50.8%
-------------------------------------------------
MATURITIES Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2007 2008 2009 2010
--------- --------- --------- --------- ---------
Mortgage Loan
Scheduled
Principal Payments 733 2,978 3,132 3,346 3,573
Mortgage Loans
Balloon Maturities - 2,665 - - -
Floor Plan Facility - - - - -
--------- --------- --------- --------- ---------
Total $733 $5,643 $3,132 $3,346 $3,573
========= ========= ========= ========= =========
(1) Computed based upon closing price as reported on NYSE as of the
period ended.
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FFO/AFFO and Payout Ratios
AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO FFO AND AFFO
(Amounts in thousands, except per share/OPunit amounts)
(Unaudited)
Three Months Ended
September 30,
-------------------
2006 2005
-------------------
Net Income $2,082 $2,436
Adjustments
Cumulative unpaid preferred stock dividends 485 484
Minority interest in operating partnership 330 391
Minority interest related to discontinued
operations 18 17
Depreciation from discontinued operations 6 4
Real estate depreciation 1,136 869
--------- ---------
Funds From Operations (FFO) $4,057 $4,201
Cumulative unpaid preferred stock dividends (485) (484)
--------- ---------
Funds From Operations attributable to common
Stockholders 3,572 3,717
Capital Replacements (285) (300)
--------- ---------
Adjusted Funds from Operations (AFFO) $3,287 $3,417
========= =========
Weighted Average Common Shares/OP Units Outstanding 8,800 8,688
========= =========
Per Common Share and OP Unit:
FFO: $0.41 $0.43
AFFO: $0.37 $0.39
Payout Ratio Per Common Share and OP Unit:
Gross Distribution Payout
FFO: 61.0% 58.1%
AFFO: 67.6% 64.1%
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AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS
FOR THE QUARTER ENDED SEPTEMBER 30, 2006 AND SEPTEMBER 30, 2005
(in thousands)
(unaudited)
Three Months Three Months Contribution
Ended Ended to Same
Sept. 30, Sept. 30, Store
2006 2005 Change % Change % Change(1)
------------ ------------ ------- --------- ------------
Same site
rental
revenues $7,661 $7,327 $334 4.6% 4.4%
Absorption
rental
revenues 577 171 406 237.4% 5.3%
Same site golf
revenues 154 131 23 17.6% 0.3%
------------ ------------ ------- ------------
Same store
revenues A 8,392 7,629 763 10.0% 10.0%
============
Re-development
and newly
acquired
property
revenues 883 242 641 264.9%
------------ ------------ -------
Total
property
revenues C $9,275 $7,871 $1,404 17.8%
============ ============ =======
Same site
rental
expenses $2,315 $2,223 $92 4.1% 3.6%
Absorption
rental
expenses 93 - 93 100.0% 3.6%
Same site golf
expenses 296 329 (33) (10.0)% (1.2)%
------------ ------------ ------- ------------
Same store
expenses B 2,704 2,552 152 6.0% 6.0%
============
Re-development
and newly
acquired
property
expenses 305 96 209 217.7%
Recoveries of
casualty
expenses
related to
hurricanes -- (21) 21 100.00%
Expenses
related to
offsite
management(2) 423 473 (50) 10.6%
------------ ------------ -------
Total
property
operating
expenses D $3,432 $3,100 $332 10.7%
============ ============ =======
Same Store net
operating
income A-B $5,688 $5,077 611 12.0%
============ ============ =======
Total net
operating
income C-D $5,843 $4,771 $1,072 22.5%
============ ============ =======
(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 revenues of $334 as
compared to the total same store revenues in 2005 of $7,629 is a 4.4%
increase ($334/$7,629=4.4%).
(2) Expenses related to offsite management reflect portfolio property
management costs not attributable to a specific property.
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AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
NUMBER OF HOMESITES AND AVERAGE RENT BY COMMUNITY
AS OF SEPTEMBER 30, 2006
Oper-
ational Un-
Home Average developed Developed
Sites Monthly RV Home Home
Community Location (1) Occupancy Rent Sites Sites Sites
----------------------------------------------------------------------
Owned
Communities
----------------------------------------------------------------------
Blue Heron Punta
Pines Gorda, FL 341 100% $333 -- -- 48
----------------------------------------------------------------------
Brentwood
Estates Hudson, FL 133 98% 264 -- -- 58
----------------------------------------------------------------------
Sebastian Micco,
Beach & FL
Tennis Club -- 0% -- -- 533 --
----------------------------------------------------------------------
Serendipity Ft. Myers,
FL 338 96% 348 -- -- --
----------------------------------------------------------------------
Stonebrook Homosassa,
FL 188 100% 296 -- -- 14
----------------------------------------------------------------------
Sunlake Grand
Estates Island,
FL 354 100% 351 -- -- 42
----------------------------------------------------------------------
Sun Valley Tarpon
Springs,
FL 261 97% 382 -- -- --
----------------------------------------------------------------------
Forest View Homosassa,
FL 268 100% 311 -- -- 36
----------------------------------------------------------------------
Gulfstream Orlando,
Harbor FL 382 98% 409 -- 50 --
----------------------------------------------------------------------
Gulfstream Orlando,
Harbor II FL 306 100% 402 -- 37 1
----------------------------------------------------------------------
Gulfstream Orlando,
Harbor III FL 158 100% 396 -- -- 127
----------------------------------------------------------------------
Lakeshore Tampa, FL
Villas 281 98% 419 -- -- --
----------------------------------------------------------------------
Park Place Sebastian,
FL 368 100% 320 -- -- 97
----------------------------------------------------------------------
Park Royale Pinellas
Park, FL 294 95% 422 -- -- 15
----------------------------------------------------------------------
Pleasant Riverview,
Living FL 245 96% 358 -- -- --
----------------------------------------------------------------------
Riverside
GCC Ruskin, FL 434 100% 505 -- 420 86
----------------------------------------------------------------------
Royal Palm Haines
Village City, FL 277 97% 340 -- -- 110
----------------------------------------------------------------------
Cypress Lakeland,
Greens FL 210 100% 251 -- -- 48
----------------------------------------------------------------------
Savanna Port St
Club Lucie, FL 959 100% 296 -- -- 108
----------------------------------------------------------------------
Woodlands Groveland,
FL 157 99% 308 -- -- 135
----------------------------------------------------------------------
Subtotal-
Florida 5,954 1,040 925
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Blue Star Apache
Junction
AZ 22 55% 397 129 -- --
----------------------------------------------------------------------
Brentwood
West Mesa, AZ 350 93% 447 -- -- --
----------------------------------------------------------------------
Casa Mesa, AZ
Encanta -- 0% -- -- 375 --
----------------------------------------------------------------------
Desert Apache
Harbor Junction,
AZ 189 99% 359 -- -- 17
----------------------------------------------------------------------
Fiesta
Village Mesa, AZ 172 86% 378 -- -- --
----------------------------------------------------------------------
La Casa Apache
Blanca Junction
AZ 197 99% 378 -- -- --
----------------------------------------------------------------------
Lost Apache
Dutchman Junction
AZ 196 81% 321 -- -- 46
----------------------------------------------------------------------
Rancho Apache
Mirage Junction
AZ 312 94% 418 -- -- --
----------------------------------------------------------------------
Reserve at Bull Head
Fox Creek City, AZ 231 100% 315 -- -- 83
----------------------------------------------------------------------
Sun Valley Apache
Junction
AZ 268 92% 347 -- -- --
----------------------------------------------------------------------
Subtotal-
Arizona 1,937 129 375 146
----------------------------------------------------------------------
----------------------------------------------------------------------
Foley Grove Foley, AL 94 100% 282 260 71
----------------------------------------------------------------------
----------------------------------------------------------------------
Mullica Egg Harbor
Woods City, NJ 90 100% 491 -- -- --
----------------------------------------------------------------------
----------------------------------------------------------------------
Total
Communities 32 8,075 97% $362 129 1,675 1,142
----------------------------------------------------------------------
(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 84.1% across the
entire portfolio. Including sites not yet developed, occupancy was at
73.2% at September 30, 2006.
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Portfolio Summary
Operational Developed Undeveloped RV
Home sites Home sites Home sites Sites Total
--------------------------------------------------
As of December 31,
2005 7,283 976 1,270 129 9,658
Properties developed -- 19 (19) -- --
Redevelopment of
lots (114) 114 -- -- --
New lots purchased 667 278 260 1,205
New leases
originated 240 (240) -- -- --
Adjust for site plan
changes (1) (5) 164 -- 158
--------------------------------------------------
As of September 30,
2006 8,075(1) 1,142 1,675 129 11,021
==================================================
(1) As of September 30, 2006, 7,862 of these operational home sites
were occupied.
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Occupancy Roll Forward
Occupied Operational
Home sites Home sites Occupancy
------------- ------------- -----------
As of December 31, 2005 6,947 7,283 95.4%
New home sales 292 240
Used home sales 4 --
Used homes acquired (30) --
Redevelopment of lots -- (114)
Lots acquired (sold) 667 667
Homes constructed by others 15 --
Homes removed from previously
leased sites (33) (1)
------------- -------------
As of September 30, 2006 7,862 8,075 97.4%
============= =============
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AMERICAN LAND LEASE, INC. AND SUBSIDIARIES
RETURN ON INVESTMENT FROM HOME SALES
(unaudited)
Three Months Ended Three Months Ended
Sept. 30, 2006 Sept. 30, 2005
------------------ -------------------
Expansion sites leased
during the period 76 92
================== ===================
Estimated first year
annualized profit on leases
originated during the
period A $269 $369
================== ===================
Costs, including development
costs of sites leased $4,714 $4,607
Home sales income (loss)
attributable to sites
leased 1,370 1,564
------------------ -------------------
Total costs incurred to
originate ground leases B $3,344 $3,037
================== ===================
Estimated first year returns
from the leases originated
on expansion home sites
during the period A/B 8.0% 12.1%
================== ===================
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For the three months ended September 30, 2006 and 2005, 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
Sept. 30, 2006 Sept. 30, 2005
------------------ ------------------
Reported income from sales
operations $1,389 $1,612
Used home sales and brokerage
business income (19) (48)
Used home sales -- --
------------------ ------------------
Adjusted income for projection
analysis $1,370 $1,564
================== ==================
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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, 2005 in accordance with GAAP is
shown below (in thousands):
Total Portfolio for Year
Ended Dec. 31, 2005
-------------------------
Property income before depreciation A $19,819
Total investment in operating home
sites B $242,304
Return on investment from earning
home sites A/B 8.2%
=========================
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AMERICAN LAND LEASE INC. AND SUBSIDIARIES
KEY HOME SALES STATISTICS
Sept. 30, Dec. 31, March 31, June 30, Sept. 30,
2005 2005 2006 2006 2006
--------------------------------------------------
New home contracts 145 105 117 125 81
New home closings 115 133 104 95 92
Home resales 4 1 -- 3 2
Brokered home sales 45 51 62 54 20
New home contract
backlog 157 93 75 86 51
Average Selling
Price $117,000 $125,000 $128,000 $124,000 $129,000
Average Gross Margin
Percentage 30.1% 31.8% 33.0% 34.3% 32.4%
3Q06 over 3Q06 over
2Q06 3Q06 over 3Q05 3Q06 over
Increase/ 2Q06 % Increase/ 3Q05%
Decrease Change Decrease Change
--------------------------------------------------
New home contracts -44 -35.2% -64 -44.1%
New home closings -3 -3.2% -23 -20.0%
Home resales -1 -33.3% -2 -50.0%
Brokered home sales -34 -63.0% -25 -55.6%
New home contract
backlog -35 -40.7% -106 -67.5%
Average Selling
Price $5,000 4.0% $12,000 10.3%
Average Gross Margin
Percentage -- -- -- --
*T