GLENDALE, Calif. -- (Business Wire)
PS Business Parks, Inc. (NYSE:PSB) reported operating results for the
second quarter ended June 30, 2014.
Funds from operations (“FFO”) were $43.2 million, or $1.26 per share, as
adjusted, for the three months ended June 30, 2014, an increase of $4.3
million, or 11.0%, from the three months ended June 30, 2013 of $38.9
million, or $1.22 per share, as adjusted. FFO was $85.2 million, or
$2.48 per share, as adjusted, for the six months ended June 30, 2014, an
increase of $7.1 million, or 9.1%, from the six months ended June 30,
2013 of $78.0 million, or $2.45 per share, as adjusted. The three and
six month increase in FFO was primarily the result of increases in both
Same Park and Non-Same Park net operating income (“NOI”). Reported FFO
per share for the three and six months ended June 30, 2014 compared to
the same periods in 2013 was flat due to Long-Term Equity Incentive Plan
(“LTEIP”) amortization. Both adjusted and reported FFO per share were
impacted by an increase in shares outstanding as a result of the
November, 2013 common equity offering.
In order to provide meaningful period-to-period comparisons of FFO
derived from the Company’s ongoing business operations, the following
table reconciles reported FFO to adjusted FFO, which excludes LTEIP
amortization for the three and six months ended June 30, 2014 and 2013:
|
| | |
| | |
| |
| | |
| | |
| |
| | For the Three Months | | | | For the Six Months | | |
| | Ended June 30, | | | | Ended June 30, | | |
| | 2014 | | 2013 | | Change | | 2014 | | 2013 | | Change |
FFO per share, as reported
| |
$
|
1.19
| |
$
|
1.19
| |
—
| |
$
|
2.39
| |
$
|
2.39
| |
—
|
LTEIP amortization
| |
|
0.07
| |
|
0.03
| | | |
|
0.09
| |
|
0.06
| | |
FFO per share, as adjusted
| |
$
|
1.26
| |
$
|
1.22
| |
3.3%
| |
$
|
2.48
| |
$
|
2.45
| |
1.2%
|
| | | | | | | | | | | | | | | |
|
Noted in the table above are the following adjustments to reconcile
adjusted FFO to reported FFO. In March of 2014, the Company put in place
a new LTEIP and recorded $2.4 million and $3.2 million of amortization
for the three and six months ended June 30, 2014 compared to $917,000
and $2.0 million for the three and six months ended June 30, 2013
related to the previous LTEIP.
Rental income increased $6.1 million, or 6.9%, from $87.9 million for
the three months ended June 30, 2013 to $94.0 million for the three
months ended June 30, 2014 as a result of a $4.0 million increase in
rental income from Non-Same Park facilities and a $2.0 million, or 2.3%,
increase from the Same Park portfolio. Rental income increased $13.3
million, or 7.5%, from $176.1 million for the six months ended June 30,
2013 to $189.3 million for the six months ended June 30, 2014 as a
result of an $8.5 million increase in rental income from Non-Same Park
facilities and a $4.7 million, or 2.7%, increase from the Same Park
portfolio. The Same Park increase was due to an increase in occupancy,
while the increase in Non-Same Park was due to a combination of an
increase in occupancy and the acquisition of additional parks during the
latter half of 2013.
Same Park operating expenses increased $315,000, or 1.1%, from
$27.9 million for the three months ended June 30, 2013 to $28.2 million
for the three months ended June 30, 2014 primarily as a result of an
increase in occupancy. Same Park operating expenses increased $2.7
million, or 4.8%, from $56.4 million for the six months ended June 30,
2013 to $59.1 million for the six months ended June 30, 2014 primarily
as a result of a $1.6 million increase in snow removal costs due to the
severe winter in Virginia and Maryland.
Net income allocable to common shareholders increased $1.1 million, or
12.8%, from $8.7 million, or $0.36 per share, for the three months ended
June 30, 2013 to $9.8 million, or $0.36 per share, for the three months
ended June 30, 2014. Net income allocable to common shareholders
increased $2.5 million, or 14.6%, from $17.3 million, or $0.71 per
share, for the six months ended June 30, 2013 to $19.8 million, or $0.73
per share, for the six months ended June 30, 2014. These increases were
due to an increase in NOI combined with a decrease in interest expense,
partially offset by an increase in depreciation expense.
All per share amounts noted above are presented on a diluted basis.
Property Operations
To evaluate the performance of the Company’s portfolio over comparable
periods, management analyzes the operating performance of properties
owned and operated throughout both periods (herein referred to as “Same
Park”). The Same Park portfolio includes all operating properties owned
or acquired prior to January 1, 2012. Operating properties that the
Company acquired subsequent to January 1, 2012 are referred to as
“Non-Same Park.” For the three and six months ended June 30, 2014 and
2013, the Same Park facilities constitute 27.0 million rentable square
feet, representing 90.9% of the 29.7 million square feet in the
Company’s portfolio as of June 30, 2014.
The following table presents the operating results of the Company’s
properties for the three and six months ended June 30, 2014 and 2013 in
addition to other income and expense items affecting income from
continuing operations (unaudited, in thousands, except per square foot
amounts):
|
| | |
| | |
| |
| | |
| | |
| |
| | For the Three Months | | | | For the Six Months | | |
| | Ended June 30, | | | | Ended June 30, | | |
| | 2014 | | 2013 | | Change | | 2014 | | 2013 | | Change |
Rental income:
| | | | | | | | | | | | | | | | |
Same Park (27.0 million rentable square feet)
| |
$
|
88,654
| |
$
|
86,645
| |
2.3%
| |
$
|
178,277
| |
$
|
173,569
| |
2.7%
|
Non-Same Park (2.7 million rentable square feet)
| |
|
5,332
| |
|
1,285
| |
314.9%
| |
|
11,030
| |
|
2,481
| |
344.6%
|
Total rental income
| |
|
93,986
| |
|
87,930
| |
6.9%
| |
|
189,307
| |
|
176,050
| |
7.5%
|
Cost of operations:
| | | | | | | | | | | | | | | | |
Same Park
| | |
28,246
| | |
27,931
| |
1.1%
| | |
59,113
| | |
56,391
| |
4.8%
|
Non-Same Park
| |
|
2,433
| |
|
554
| |
339.2%
| |
|
4,681
| |
|
1,113
| |
320.6%
|
Total cost of operations
| |
|
30,679
| |
|
28,485
| |
7.7%
| |
|
63,794
| |
|
57,504
| |
10.9%
|
Net operating income (1):
| | | | | | | | | | | | | | | | |
Same Park
| | |
60,408
| | |
58,714
| |
2.9%
| | |
119,164
| | |
117,178
| |
1.7%
|
Non-Same Park
| |
|
2,899
| |
|
731
| |
296.6%
| |
|
6,349
| |
|
1,368
| |
364.1%
|
Total net operating income
| |
|
63,307
| |
|
59,445
| |
6.5%
| |
|
125,513
| |
|
118,546
| |
5.9%
|
Other:
| | | | | | | | | | | | | | | | |
LTEIP amortization:
| | | | | | | | | | | | | | | | |
Cost of operations
| | |
(856)
| | |
(235)
| |
264.3%
| | |
(1,185)
| | |
(600)
| |
97.5%
|
General and administrative
| | |
(1,518)
| | |
(682)
| |
122.6%
| | |
(2,047)
| | |
(1,363)
| |
50.2%
|
Facility management fees
| | |
165
| | |
157
| |
5.1%
| | |
331
| | |
315
| |
5.1%
|
Other income and expense
| | |
(3,308)
| | |
(3,892)
| |
(15.0%)
| | |
(6,622)
| | |
(8,437)
| |
(21.5%)
|
Depreciation and amortization
| | |
(28,295)
| | |
(26,629)
| |
6.3%
| | |
(56,736)
| | |
(53,590)
| |
5.9%
|
General and administrative
| |
|
(1,845)
| |
|
(1,688)
| |
9.3%
| |
|
(3,803)
| |
|
(3,406)
| |
11.7%
|
Income from continuing operations
| |
$
|
27,650
| |
$
|
26,476
| |
4.4%
| |
$
|
55,451
| |
$
|
51,465
| |
7.7%
|
Same Park gross margin (2) | | |
68.1%
| | |
67.8%
| |
0.4%
| | |
66.8%
| | |
67.5%
| |
(1.0%)
|
Same Park weighted average occupancy
| | |
92.5%
| | |
90.9%
| |
1.8%
| | |
92.4%
| | |
90.9%
| |
1.7%
|
Non-Same Park weighted average occupancy
| | |
77.9%
| | |
61.9%
| |
25.8%
| | |
76.7%
| | |
58.8%
| |
30.4%
|
Same Park annualized realized rent per square foot (3) | |
$
|
14.19
| |
$
|
14.11
| |
0.6%
| |
$
|
14.28
| |
$
|
14.13
| |
1.1%
|
| | | | | | | | | | | | | | | |
|
(1) |
|
NOI is an important measurement in the commercial real estate
industry for determining the value of the real estate generating
the NOI. The Company’s calculation of NOI may not be comparable to
those of other companies and should not be used as an alternative
to measures of performance in accordance with generally accepted
accounting principles (“GAAP”).
|
(2) | |
Computed by dividing Same Park NOI by Same Park rental income.
|
(3) | |
Represents the annualized Same Park rental income earned per
occupied square foot.
|
| |
|
Property Acquisitions
On July 24, 2014, the Company acquired a 149,000 square foot building in
Miami, Florida, for $12.7 million. The building, which is currently
vacant, is a free standing building located within the Company’s 3.3
million square foot Miami Industrial Commerce Center, which is currently
98.1% leased.
On July 28, 2014, the Company acquired a 19,000 square foot building in
Dallas, Texas, for $1.1 million. The flex building, which is 100.0%
occupied, is located in the Company’s 389,000 square foot Arapaho
Business Park.
Financial Condition
The following are key financial ratios with respect to the Company’s
leverage as of and for the three months ended June 30, 2014:
|
| |
Ratio of FFO to fixed charges (1) | |
16.5x
|
| |
|
Ratio of FFO to fixed charges and preferred distributions (1) | |
3.2x
|
| |
|
Debt and preferred equity to total market capitalization (based on
common stock price of $83.49 at June 30, 2014)
| |
30.4%
|
| |
|
Available balance under the $250.0 million unsecured credit facility
at June 30, 2014
| |
$250.0 million
|
| |
|
(1) |
|
Fixed charges include interest expense and capitalized interest of
$3.6 million.
|
| |
|
Distributions Declared
On July 28, 2014, the Board of Directors declared a quarterly dividend
of $0.50 per common share. Distributions were also declared on the
various series of depositary shares, each representing 1/1,000 of a
share of preferred stock listed below. Distributions are payable
September 30, 2014 to shareholders of record on September 15, 2014.
|
| |
| |
Series | | Dividend Rate | | Dividend Declared |
| | | |
|
Series R
| |
6.875%
| |
$0.429688
|
Series S
| |
6.450%
| |
$0.403125
|
Series T
| |
6.000%
| |
$0.375000
|
Series U
| |
5.750%
| |
$0.359375
|
Series V
| |
5.700%
| |
$0.356250
|
| | | |
|
Company Information
PS Business Parks, Inc., a member of the S&P SmallCap 600, is a
self-advised and self-managed real estate investment trust (“REIT”) that
acquires, develops, owns and operates commercial properties, primarily
multi-tenant flex, office and industrial space. The Company defines
“flex” space as buildings that are configured with a combination of
office and warehouse space and can be designed to fit a number of uses
(including office, assembly, showroom, laboratory, light manufacturing
and warehouse space). As of July 30, 2014, the Company wholly owned
29.9 million rentable square feet with approximately 5,100 customers
located in eight states, concentrated in California (11.5 million sq.
ft.), Texas (4.7 million sq. ft.), Virginia (4.0 million sq. ft.),
Florida (3.9 million sq. ft.), Maryland (2.3 million sq. ft.),
Washington (1.5 million sq. ft.), Oregon (1.3 million sq. ft.) and
Arizona (0.7 million sq. ft.).
Forward-Looking Statements
When used within this press release, the words “may,” “believes,”
“anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends” and
similar expressions are intended to identify “forward-looking
statements.” Such forward-looking statements involve known and unknown
risks, uncertainties and other factors, which may cause the actual
results and performance of the Company to be materially different from
those expressed or implied in the forward-looking statements. Such
factors include the impact of competition from new and existing
commercial facilities which could impact rents and occupancy levels at
the Company’s facilities; the Company’s ability to evaluate, finance and
integrate acquired and developed properties into the Company’s existing
operations; the Company’s ability to effectively compete in the markets
that it does business in; the impact of the regulatory environment as
well as national, state and local laws and regulations including,
without limitation, those governing REITs; the impact of general
economic conditions upon rental rates and occupancy levels at the
Company’s facilities; the availability of permanent capital at
attractive rates, the outlook and actions of Rating Agencies and risks
detailed from time to time in the Company’s SEC reports, including
quarterly reports on Form 10-Q, reports on Form 8-K and annual reports
on Form 10-K.
Additional information about PS Business Parks, Inc., including more
financial analysis of the second quarter operating results, is available
on the Internet. The Company’s website is www.psbusinessparks.com.
A conference call is scheduled for Thursday, July 31, 2014, at 10:00
a.m. (PDT) to discuss the second quarter results. The toll free number
is (888) 299-3246; the conference ID is 70833917. The call will also be
available via a live webcast on the Company’s website. A replay of the
conference call will be available through August 7, 2014 at
(855) 859-2056. A replay of the conference call will also be available
on the Company’s website.
Additional financial data attached.
|
PS BUSINESS PARKS, INC. CONSOLIDATED BALANCE SHEETS (In
thousands, except share data) |
|
| |
| |
| | June 30, | | December 31, |
| | 2014 | | 2013 |
| | (Unaudited) | | | |
ASSETS | | | | | | |
| | | | | |
|
Cash and cash equivalents
| |
$
|
62,523
| |
$
|
31,481
|
| | | | | |
|
Real estate facilities, at cost:
| | | | | | |
Land
| | |
790,346
| | |
790,346
|
Buildings and improvements
| |
|
2,209,513
| |
|
2,191,829
|
| | |
2,999,859
| | |
2,982,175
|
Accumulated depreciation
| |
|
(992,793)
| |
|
(942,959)
|
| | |
2,007,066
| | |
2,039,216
|
Properties held for disposition, net
| | |
99,438
| | |
101,184
|
Land and building held for development
| |
|
23,472
| |
|
22,253
|
| | |
2,129,976
| | |
2,162,653
|
Rent receivable
| | |
4,468
| | |
5,248
|
Deferred rent receivable
| | |
27,475
| | |
25,903
|
Other assets
| |
|
7,034
| |
|
13,274
|
| | | | | |
|
Total assets
| |
$
|
2,231,476
| |
$
|
2,238,559
|
| | | | | |
|
LIABILITIES AND EQUITY | | | | | | |
| | | | | |
|
Accrued and other liabilities
| |
$
|
69,813
| |
$
|
73,919
|
Mortgage note payable
| |
|
250,000
| |
|
250,000
|
Total liabilities
| | |
319,813
| | |
323,919
|
| | | | | |
|
Commitments and contingencies
| | | | | | |
| | | | | |
|
Equity:
| | | | | | |
PS Business Parks, Inc.’s shareholders’ equity:
| | | | | | |
Preferred stock, $0.01 par value, 50,000,000 shares authorized,
| | | | | | |
39,800 shares issued and outstanding at
| | | | | | |
June 30, 2014 and December 31, 2013
| | |
995,000
| | |
995,000
|
Common stock, $0.01 par value, 100,000,000 shares authorized,
| | | | | | |
26,904,436 and 26,849,822 shares issued and outstanding at
| | | | | | |
June 30, 2014 and December 31, 2013, respectively
| | |
268
| | |
267
|
Paid-in capital
| | |
704,343
| | |
699,314
|
Cumulative net income
| | |
1,121,054
| | |
1,070,975
|
Cumulative distributions
| |
|
(1,104,752)
| |
|
(1,047,615)
|
Total PS Business Parks, Inc.’s shareholders’ equity
| | |
1,715,913
| | |
1,717,941
|
| | | | | |
|
Noncontrolling interests:
| | | | | | |
Common units
| |
|
195,750
| |
|
196,699
|
Total noncontrolling interests
| |
|
195,750
| |
|
196,699
|
Total equity
| |
|
1,911,663
| |
|
1,914,640
|
| | | | | |
|
Total liabilities and equity
| |
$
|
2,231,476
| |
$
|
2,238,559
|
| | | | | |
|
|
PS BUSINESS PARKS, INC. CONSOLIDATED STATEMENTS OF
INCOME (Unaudited, in thousands, except per share
amounts) |
|
| | |
| | |
| | |
| | |
| | For the Three Months | | For the Six Months |
| | Ended June 30, | | Ended June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Revenues:
| | | | | | | | | | | | |
Rental income
| |
$
|
93,986
| |
$
|
87,930
| |
$
|
189,307
| |
$
|
176,050
|
Facility management fees
| |
|
165
| |
|
157
| |
|
331
| |
|
315
|
Total operating revenues
| |
|
94,151
| |
|
88,087
| |
|
189,638
| |
|
176,365
|
Expenses:
| | | | | | | | | | | | |
Cost of operations
| | |
31,535
| | |
28,720
| | |
64,979
| | |
58,104
|
Depreciation and amortization
| | |
28,295
| | |
26,629
| | |
56,736
| | |
53,590
|
General and administrative
| |
|
3,363
| |
|
2,370
| |
|
5,850
| |
|
4,769
|
Total operating expenses
| |
|
63,193
| |
|
57,719
| |
|
127,565
| |
|
116,463
|
Other income and (expense):
| | | | | | | | | | | | |
Interest and other income
| | |
95
| | |
69
| | |
157
| | |
112
|
Interest and other expense
| |
|
(3,403)
| |
|
(3,961)
| |
|
(6,779)
| |
|
(8,549)
|
Total other income and (expense)
| |
|
(3,308)
| |
|
(3,892)
| |
|
(6,622)
| |
|
(8,437)
|
Income from continuing operations
| |
|
27,650
| |
|
26,476
| |
|
55,451
| |
|
51,465
|
Net income
| |
$
|
27,650
| |
$
|
26,476
| |
$
|
55,451
| |
$
|
51,465
|
| | | | | | | | | | | |
|
Net income allocation:
| | | | | | | | | | | | |
Net income allocable to noncontrolling interests:
| | | | | | | | | | | | |
Noncontrolling interests — common units
| |
$
|
2,669
| |
$
|
2,613
| |
$
|
5,372
| |
$
|
5,179
|
Total net income allocable to noncontrolling interests
| |
|
2,669
| |
|
2,613
| |
|
5,372
| |
|
5,179
|
Net income allocable to PS Business Parks, Inc.:
| | | | | | | | | | | | |
Preferred shareholders
| | |
15,122
| | |
15,122
| | |
30,244
| | |
28,972
|
Restricted stock unit holders
| | |
33
| | |
30
| | |
69
| | |
63
|
Common shareholders
| |
|
9,826
| |
|
8,711
| |
|
19,766
| |
|
17,251
|
Total net income allocable to PS Business Parks, Inc.
| |
|
24,981
| |
|
23,863
| |
|
50,079
| |
|
46,286
|
| |
$
|
27,650
| |
$
|
26,476
| |
$
|
55,451
| |
$
|
51,465
|
| | | | | | | | | | | |
|
Net income per common share:
| | | | | | | | | | | | |
Basic
| |
$
|
0.37
| |
$
|
0.36
| |
$
|
0.74
| |
$
|
0.71
|
Diluted
| |
$
|
0.36
| |
$
|
0.36
| |
$
|
0.73
| |
$
|
0.71
|
| | | | | | | | | | | |
|
Weighted average common shares outstanding:
| | | | | | | | | | | | |
Basic
| |
|
26,899
| |
|
24,358
| |
|
26,881
| |
|
24,333
|
Diluted
| |
|
26,999
| |
|
24,470
| |
|
26,981
| |
|
24,441
|
| | | | | | | | | | | |
|
|
PS BUSINESS PARKS, INC. Computation of Diluted
Funds from Operations and Funds Available for Distribution (Unaudited,
in thousands, except per share amounts) |
|
| | |
| | |
| | |
| | |
| | For the Three Months | | For the Six Months |
| | Ended June 30, | | Ended June 30, |
| | 2014 | | 2013 | | 2014 | | 2013 |
Computation of Diluted Funds From
Operations (1): | | | | | | | | | | | | |
| | | | | | | | | | | |
|
Net income allocable to common shareholders
| |
$
|
9,826
| |
$
|
8,711
| |
$
|
19,766
| |
$
|
17,251
|
Adjustments:
| | | | | | | | | | | | |
Depreciation and amortization
| | |
28,295
| | |
26,629
| | |
56,736
| | |
53,590
|
Net income allocable to noncontrolling
| | | | | | | | | | | | |
interests — common units
| | |
2,669
| | |
2,613
| | |
5,372
| | |
5,179
|
Net income allocable to restricted stock unit holders
| |
|
33
| |
|
30
| |
|
69
| |
|
63
|
FFO allocable to common and dilutive shares
| |
$
|
40,823
| |
$
|
37,983
| |
$
|
81,943
| |
$
|
76,083
|
| | | | | | | | | | | |
|
Weighted average common shares outstanding
| | |
26,899
| | |
24,358
| | |
26,881
| | |
24,333
|
Weighted average common OP units outstanding
| | |
7,305
| | |
7,305
| | |
7,305
| | |
7,305
|
Weighted average restricted stock units outstanding
| | |
56
| | |
92
| | |
56
| | |
95
|
Weighted average common share equivalents outstanding
| |
|
100
| |
|
112
| |
|
100
| |
|
108
|
Total common and dilutive shares
| |
|
34,360
| |
|
31,867
| |
|
34,342
| |
|
31,841
|
| | | | | | | | | | | |
|
Net income per common share — diluted
| |
$
|
0.36
| |
$
|
0.36
| |
$
|
0.73
| |
$
|
0.71
|
Depreciation and amortization (2) | |
|
0.83
| |
|
0.83
| |
|
1.66
| |
|
1.68
|
FFO per common and dilutive share, as reported (2) | |
$
|
1.19
| |
$
|
1.19
| |
$
|
2.39
| |
$
|
2.39
|
| | | | | | | | | | | |
|
Computation of Funds Available for
Distribution (“FAD”) (3): | | | | | | | | | | | | |
| | | | | | | | | | | |
|
FFO allocable to common and dilutive shares
| |
$
|
40,823
| |
$
|
37,983
| |
$
|
81,943
| |
$
|
76,083
|
| | | | | | | | | | | |
|
Adjustments:
| | | | | | | | | | | | |
Recurring capital improvements
| | |
(2,534)
| | |
(2,695)
| | |
(3,781)
| | |
(3,604)
|
Tenant improvements
| | |
(6,348)
| | |
(7,161)
| | |
(11,538)
| | |
(12,953)
|
Lease commissions
| | |
(1,884)
| | |
(2,245)
| | |
(5,144)
| | |
(4,460)
|
Straight-line rent
| | |
(497)
| | |
(258)
| | |
(1,682)
| | |
(864)
|
Non-cash stock compensation expense
| | |
294
| | |
288
| | |
666
| | |
665
|
Long-term equity incentive amortization
| | |
2,374
| | |
917
| | |
3,232
| | |
1,963
|
In-place lease adjustment
| | |
(244)
| | |
49
| | |
(441)
| | |
121
|
Tenant improvement reimbursements, net of lease incentives
| | |
(401)
| | |
(348)
| | |
(839)
| | |
(625)
|
Capitalized interest
| |
|
(233)
| |
|
—
| |
|
(457)
| |
|
—
|
FAD
| |
$
|
31,350
| |
$
|
26,530
| |
$
|
61,959
| |
$
|
56,326
|
| | | | | | | | | | | |
|
Distributions to common and dilutive shares
| |
$
|
17,135
| |
$
|
13,971
| |
$
|
34,267
| |
$
|
27,914
|
| | | | | | | | | | | |
|
Distribution payout ratio
| |
|
54.7%
| |
|
52.7%
| |
|
55.3%
| |
|
49.6%
|
| | | | | | | | | | | |
|
(1) |
|
FFO is computed in accordance with the White Paper on FFO approved
by the Board of Governors of the National Association of Real
Estate Investment Trusts (“NAREIT”). The White Paper defines FFO
as net income, computed in accordance with GAAP, before
depreciation, amortization, gains or losses on asset dispositions,
net income allocable to noncontrolling interests — common units,
net income allocable to restricted stock unit holders, impairment
charges and nonrecurring items. FFO should be analyzed in
conjunction with net income. However, FFO should not be viewed as
a substitute for net income as a measure of operating performance
or liquidity as it does not reflect depreciation and amortization
costs or the level of capital expenditure and leasing costs
necessary to maintain the operating performance of the Company’s
properties, which are significant economic costs and could
materially impact the Company’s results from operations. Other
REITs may use different methods for calculating FFO and,
accordingly, the Company’s FFO may not be comparable to other real
estate companies.
|
| |
|
(2) | |
Per share amounts are computed using additional dilutive shares
related to noncontrolling interests and restricted stock units.
|
| |
|
(3) | |
FAD is computed by adjusting consolidated FFO for recurring
capital improvements, which the Company defines as those costs
incurred to maintain the assets’ value, tenant improvements, lease
commissions, straight-line rent, stock compensation expense,
in-place lease adjustment, amortization of lease incentives and
tenant improvement reimbursements, capitalized interest and the
effect of redemption/repurchase of preferred equity. Like FFO, the
Company considers FAD to be a useful measure for investors to
evaluate the operations and cash flows of a REIT. FAD does not
represent net income or cash flow from operations as defined by
GAAP.
|
| |
|
Contacts:
PS Business Parks, Inc.
Edward A. Stokx, 818-244-8080, Ext. 1649
Source: PS Business Parks, Inc.
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