GLENDALE, Calif. -- (Business Wire)
PS Business Parks, Inc. (NYSE:PSB) reported operating results for the
third quarter ended September 30, 2014.
Funds from operations (“FFO”) were $43.2 million, or $1.26 per share, as
adjusted, for the three months ended September 30, 2014, an increase of
$3.7 million, or 1.6% per share, from the three months ended
September 30, 2013 of $39.5 million, or $1.24 per share, as adjusted.
FFO was $128.4 million, or $3.74 per share, as adjusted, for the nine
months ended September 30, 2014, an increase of $10.8 million, or 1.4%
per share, from the nine months ended September 30, 2013 of $117.5
million, or $3.69 per share, as adjusted. The three and nine month
increases in FFO were primarily the result of an increase in net
operating income (“NOI”). Reported FFO per share for the three months
ended September 30, 2014 compared to the same period in 2013 was flat,
while the nine months ended September 30, 2014 decreased 0.3% compared
to the same period in 2013. 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 Long-Term
Equity Incentive Plan (“LTEIP”) amortization due to the change in plans
and acquisition transaction costs for the three and nine months ended
September 30, 2014 and 2013:
|
|
| For the Three Months |
|
| |
|
| For the Nine Months |
|
| |
| | Ended September 30, | | | | | | Ended September 30, | | | |
| | 2014 |
|
| 2013 | | | Change | | | 2014 |
|
| 2013 | | | Change |
FFO per share, as reported
| |
$
|
1.20
| | |
$
|
1.20
| | |
—
| | | |
$
|
3.58
| | |
$
|
3.59
| | |
(0.3
|
%)
|
LTEIP amortization
| | |
0.05
| | | |
0.03
| | | | | | |
0.15
| | | |
0.09
| | | |
Acquisition transaction costs
| |
|
0.01
| | |
|
0.01
| | | | | |
|
0.01
| | |
|
0.01
| | | |
FFO per share, as adjusted
| |
$
|
1.26
| | |
$
|
1.24
| | |
1.6
|
%
| | |
$
|
3.74
| | |
$
|
3.69
| | |
1.4
|
%
|
|
Noted in the table above are the following adjustments to reconcile
adjusted FFO to reported FFO. In March, 2014, the Company put in place a
new LTEIP and recorded $1.9 million and $5.1 million of amortization for
the three and nine months ended September 30, 2014 compared to $1.0
million and $3.0 million for the three and nine months ended September
30, 2013 related to the previous LTEIP. Acquisition transaction costs
were $124,000 and $153,000 for the three and nine months ended September
30, 2014 and 2013, respectively.
Same Park rental income increased $1.5 million, or 1.8%, and $6.5
million, or 2.6%, for the three and nine months ended September 30, 2014
compared to the same periods in 2013 as a result of an increase in
occupancy. Non-Same Park rental income increased $4.2 million and $12.8
million for the three and nine months ended September 30, 2014 compared
to the same periods in 2013 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 $901,000, or 3.3%, from
$27.1 million for the three months ended September 30, 2013 to $28.0
million for the three months ended September 30, 2014 primarily as a
result of higher repairs and maintenance and utility costs. Same Park
operating expenses increased $3.6 million, or 4.5%, from $80.2 million
for the nine months ended September 30, 2013 to $83.8 million for the
nine months ended September 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 $2.3 million, or
25.2%, from $9.0 million, or $0.37 per share, for the three months ended
September 30, 2013 to $11.3 million, or $0.42 per share, for the three
months ended September 30, 2014. Net income allocable to common
shareholders increased $4.8 million, or 18.2%, from $26.3 million, or
$1.07 per share, for the nine months ended September 30, 2013 to $31.0
million, or $1.15 per share, for the nine months ended September 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 (excludes the 1.2 million square
feet of assets sold subsequent to September 30, 2014). Operating
properties that the Company acquired subsequent to January 1, 2012 are
referred to as “Non-Same Park.” For the three and nine months ended
September 30, 2014 and 2013, the Same Park facilities constitute
25.8 million rentable square feet, representing 89.5% of the 28.8
million square feet in the Company’s portfolio as of September 30, 2014.
The following table presents the operating results of the Company’s
properties for the three and nine months ended September 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 Nine Months |
|
| |
| | | Ended September 30, | | | | | | Ended September 30, | | | |
| | | 2014 |
|
| 2013 | | | Change | | | 2014 |
|
| 2013 | | | Change |
Rental income:
| | | | | | | | | | | | | | | | | | | | | | |
Same Park (25.8 million rentable square feet)
| | |
$
|
84,994
| | | |
$
|
83,524
| | | |
1.8
|
%
| | |
$
|
254,823
| | | |
$
|
248,333
| | | |
2.6
|
%
|
Non-Same Park (3.0 million rentable square feet)
| | |
|
6,044
|
| | |
|
1,807
|
| | |
234.5
|
%
| | |
|
17,074
|
| | |
|
4,288
|
| | |
298.2
|
%
|
Total rental income
| | |
|
91,038
|
| | |
|
85,331
|
| | |
6.7
|
%
| | |
|
271,897
|
| | |
|
252,621
|
| | |
7.6
|
%
|
Cost of operations:
| | | | | | | | | | | | | | | | | | | | | | |
Same Park
| | | |
28,016
| | | | |
27,115
| | | |
3.3
|
%
| | | |
83,786
| | | | |
80,213
| | | |
4.5
|
%
|
Non-Same Park
| | |
|
2,688
|
| | |
|
795
|
| | |
238.1
|
%
| | |
|
7,369
|
| | |
|
1,908
|
| | |
286.2
|
%
|
Total cost of operations
| | |
|
30,704
|
| | |
|
27,910
|
| | |
10.0
|
%
| | |
|
91,155
|
| | |
|
82,121
|
| | |
11.0
|
%
|
Net operating income (1):
| | | | | | | | | | | | | | | | | | | | | | |
Same Park
| | | |
56,978
| | | | |
56,409
| | | |
1.0
|
%
| | | |
171,037
| | | | |
168,120
| | | |
1.7
|
%
|
Non-Same Park
| | |
|
3,356
|
| | |
|
1,012
|
| | |
231.6
|
%
| | |
|
9,705
|
| | |
|
2,380
|
| | |
307.8
|
%
|
Total net operating income
| | |
|
60,334
|
| | |
|
57,421
|
| | |
5.1
|
%
| | |
|
180,742
|
| | |
|
170,500
|
| | |
6.0
|
%
|
Other:
| | | | | | | | | | | | | | | | | | | | | | |
Net operating income from sold assets (2) | | | |
2,837
| | | | |
2,793
| | | |
1.6
|
%
| | | |
7,942
| | | | |
8,260
| | | |
(3.8
|
%)
|
LTEIP amortization:
| | | | | | | | | | | | | | | | | | | | | | |
Cost of operations
| | | |
(646
|
)
| | | |
(343
|
)
| | |
88.3
|
%
| | | |
(1,831
|
)
| | | |
(943
|
)
| | |
94.2
|
%
|
General and administrative
| | | |
(1,250
|
)
| | | |
(681
|
)
| | |
83.6
|
%
| | | |
(3,297
|
)
| | | |
(2,044
|
)
| | |
61.3
|
%
|
Facility management fees
| | | |
164
| | | | |
162
| | | |
1.2
|
%
| | | |
495
| | | | |
477
| | | |
3.8
|
%
|
Other income and expense
| | | |
(3,322
|
)
| | | |
(3,954
|
)
| | |
(16.0
|
%)
| | | |
(9,944
|
)
| | | |
(12,391
|
)
| | |
(19.7
|
%)
|
Depreciation and amortization
| | | |
(26,811
|
)
| | | |
(26,597
|
)
| | |
0.8
|
%
| | | |
(83,547
|
)
| | | |
(80,187
|
)
| | |
4.2
|
%
|
General and administrative
| | |
|
(1,828
|
)
| | |
|
(1,954
|
)
| | |
(6.4
|
%)
| | |
|
(5,631
|
)
| | |
|
(5,360
|
)
| | |
5.1
|
%
|
Income from continuing operations
| | |
$
|
29,478
|
| | |
$
|
26,847
|
| | |
9.8
|
%
| | |
$
|
84,929
|
| | |
$
|
78,312
|
| | |
8.4
|
%
|
Same Park gross margin (3) | | | |
67.0
|
%
| | | |
67.5
|
%
| | |
(0.7
|
%)
| | | |
67.1
|
%
| | | |
67.7
|
%
| | |
(0.9
|
%)
|
Same Park weighted average occupancy
| | | |
92.8
|
%
| | | |
91.4
|
%
| | |
1.5
|
%
| | | |
92.6
|
%
| | | |
91.1
|
%
| | |
1.6
|
%
|
Non-Same Park weighted average occupancy
| | | |
77.5
|
%
| | | |
69.0
|
%
| | |
12.3
|
%
| | | |
76.9
|
%
| | | |
62.8
|
%
| | |
22.5
|
%
|
Same Park annualized realized rent per square foot (4) | | |
$
|
14.19
| | | |
$
|
14.16
| | | |
0.2
|
%
| | |
$
|
14.22
| | | |
$
|
14.08
| | | |
1.0
|
%
|
|
(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) The Company sold two business parks located in Beaverton,
Oregon, on October 1, 2014. These assets generated rental income of $4.6
million and $13.0 million for the three and nine months ended
September 30, 2014, respectively, compared to $4.4 million and $13.2
million for the three and nine months ended September 30, 2013. Cost of
operations for the sold assets was $1.8 million and $5.1 million for the
three and nine months ended September 30, 2014, respectively, compared
to $1.6 million and $4.9 million for the three and nine months ended
September 30, 2013.
(3) Computed by dividing Same Park NOI by Same Park rental
income.
(4) Represents the annualized Same Park rental income earned
per occupied square foot.
Property Acquisitions
On August 21, 2014, the Company acquired five multi-tenant flex
buildings adjacent to its existing Springlake Business Center in the
Valwood submarket of Dallas, Texas, for $5.1 million. The buildings,
which comprise 145,000 square feet, were 35.4% leased at the time of
acquisition.
As previously announced, during the third quarter of 2014, the Company
acquired a 19,000 square foot multi-tenant flex building in Dallas,
Texas, for $1.1 million and a 149,000 square foot building in Miami,
Florida, for $12.7 million.
Financial Condition
The following are key financial ratios with respect to the Company’s
leverage as of and for the three months ended September 30, 2014:
|
|
| |
Ratio of FFO to fixed charges (1) | | |
16.4x
|
| | |
|
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 $76.14 at September 30, 2014)
| | |
32.3%
|
| | |
|
Available balance under the $250.0 million unsecured credit facility
at September 30, 2014
| | |
$250.0 million
|
| | |
|
(1) Fixed charges include interest expense and capitalized
interest of $3.6 million.
Regular and Special Distributions Declared
On October 27, 2014, the Board of Directors declared a regular quarterly
dividend of $0.50 per common share. As a result of the net taxable gains
generated by the sale of two business parks in Beaverton, Oregon, on
October 1, 2014 as well as additional anticipated asset sales, the Board
of Directors declared a one-time special cash dividend of $2.75 per
common share. Combined, the regular and special dividend will result in
a total dividend of $3.25 per common share. The dividends are payable on
December 30, 2014 to shareholders of record on December 15, 2014.
Distributions were also declared on the various series of depositary
shares, each representing 1/1,000 of a share of preferred stock listed
below.
|
|
|
| |
|
|
| |
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
|
| | | | | | | |
|
Distributions are payable on December 30, 2014 to shareholders of record
on December 15, 2014.
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 October 1, 2014, the Company wholly owned
28.8 million rentable square feet with approximately 5,140 customers
located in eight states, concentrated in California (11.5 million sq.
ft.), Texas (4.8 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.), Arizona (0.7 million sq. ft.) and
Oregon (0.1 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 third quarter operating results, is available
on the Internet. The Company’s website is www.psbusinessparks.com.
A conference call is scheduled for Tuesday, October 28, 2014, at 10:00
a.m. (PDT) to discuss the third quarter results. The toll free number is
(888) 299-3246; the conference ID is 19314826. 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 November 4, 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)
|
|
|
|
|
| September 30, |
|
| December 31, |
| | | 2014 | | | 2013 |
| | | (Unaudited) | | | |
ASSETS | | | | | | |
| | | | | |
|
Cash and cash equivalents
| | |
$
|
57,535
| | | |
$
|
31,481
| |
| | | | | |
|
Real estate facilities, at cost:
| | | | | | |
Land
| | | |
789,217
| | | | |
781,541
| |
Buildings and improvements
| | |
|
2,194,493
|
| | |
|
2,152,178
|
|
| | | |
2,983,710
| | | | |
2,933,719
| |
Accumulated depreciation
| | |
|
(990,782
|
)
| | |
|
(918,202
|
)
|
| | | |
1,992,928
| | | | |
2,015,517
| |
Properties held for disposition, net
| | | |
123,011
| | | | |
124,883
| |
Land and building held for development
| | |
|
24,028
|
| | |
|
22,253
|
|
| | | |
2,139,967
| | | | |
2,162,653
| |
Rent receivable
| | | |
3,581
| | | | |
5,248
| |
Deferred rent receivable
| | | |
28,036
| | | | |
25,903
| |
Other assets
| | |
|
12,891
|
| | |
|
13,274
|
|
| | | | | |
|
Total assets
| | |
$
|
2,242,010
|
| | |
$
|
2,238,559
|
|
| | | | | |
|
LIABILITIES AND EQUITY | | | | | | |
| | | | | |
|
Accrued and other liabilities
| | |
$
|
80,454
| | | |
$
|
73,919
| |
Mortgage note payable
| | |
|
250,000
|
| | |
|
250,000
|
|
Total liabilities
| | | |
330,454
| | | | |
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 September 30, 2014 and
December 31, 2013
| | | |
995,000
| | | | |
995,000
| |
Common stock, $0.01 par value, 100,000,000 shares authorized,
26,919,161 and 26,849,822 shares issued and outstanding at
September 30, 2014 and December 31, 2013, respectively
| | | |
268
| | | | |
267
| |
Paid-in capital
| | | |
706,503
| | | | |
699,314
| |
Cumulative net income
| | | |
1,147,474
| | | | |
1,070,975
| |
Cumulative distributions
| | |
|
(1,133,332
|
)
| | |
|
(1,047,615
|
)
|
Total PS Business Parks, Inc.’s shareholders’ equity
| | | |
1,715,913
| | | | |
1,717,941
| |
| | | | | |
|
Noncontrolling interests:
| | | | | | |
Common units
| | |
|
195,643
|
| | |
|
196,699
|
|
Total noncontrolling interests
| | |
|
195,643
|
| | |
|
196,699
|
|
Total equity
| | |
|
1,911,556
|
| | |
|
1,914,640
|
|
| | | | | |
|
Total liabilities and equity
| | |
$
|
2,242,010
|
| | |
$
|
2,238,559
|
|
| | | | | |
|
|
PS BUSINESS PARKS, INC.
|
CONSOLIDATED STATEMENTS OF INCOME
|
(Unaudited, in thousands, except per share amounts)
|
|
|
|
|
| For the Three Months |
|
| For the Nine Months |
| | | Ended September 30, | | | Ended September 30, |
| | | 2014 |
|
| 2013 | | | 2014 |
|
| 2013 |
Revenues:
| | | | | | | | | | | | |
Rental income
| | |
$
|
95,627
| | | |
$
|
89,772
| | | |
$
|
284,934
| | | |
$
|
265,822
| |
Facility management fees
| | |
|
164
|
| | |
|
162
|
| | |
|
495
|
| | |
|
477
|
|
Total operating revenues
| | |
|
95,791
|
| | |
|
89,934
|
| | |
|
285,429
|
| | |
|
266,299
|
|
Expenses:
| | | | | | | | | | | | |
Cost of operations
| | | |
33,102
| | | | |
29,901
| | | | |
98,081
| | | | |
88,005
| |
Depreciation and amortization
| | | |
26,811
| | | | |
26,597
| | | | |
83,547
| | | | |
80,187
| |
General and administrative
| | |
|
3,078
|
| | |
|
2,635
|
| | |
|
8,928
|
| | |
|
7,404
|
|
Total operating expenses
| | |
|
62,991
|
| | |
|
59,133
|
| | |
|
190,556
|
| | |
|
175,596
|
|
Other income and (expense):
| | | | | | | | | | | | |
Interest and other income
| | | |
90
| | | | |
63
| | | | |
247
| | | | |
175
| |
Interest and other expense
| | |
|
(3,412
|
)
| | |
|
(4,017
|
)
| | |
|
(10,191
|
)
| | |
|
(12,566
|
)
|
Total other income and (expense)
| | |
|
(3,322
|
)
| | |
|
(3,954
|
)
| | |
|
(9,944
|
)
| | |
|
(12,391
|
)
|
Income from continuing operations
| | |
|
29,478
|
| | |
|
26,847
|
| | |
|
84,929
|
| | |
|
78,312
|
|
Net income
| | |
$
|
29,478
|
| | |
$
|
26,847
|
| | |
$
|
84,929
|
| | |
$
|
78,312
|
|
| | | | | | | | | | | |
|
Net income allocation:
| | | | | | | | | | | | |
Net income allocable to noncontrolling interests:
| | | | | | | | | | | | |
Noncontrolling interests — common units
| | |
$
|
3,058
|
| | |
$
|
2,696
|
| | |
$
|
8,430
|
| | |
$
|
7,875
|
|
Total net income allocable to noncontrolling interests
| | |
|
3,058
|
| | |
|
2,696
|
| | |
|
8,430
|
| | |
|
7,875
|
|
Net income allocable to PS Business Parks, Inc.:
| | | | | | | | | | | | |
Preferred shareholders
| | | |
15,122
| | | | |
15,122
| | | | |
45,366
| | | | |
44,094
| |
Restricted stock unit holders
| | | |
30
| | | | |
28
| | | | |
99
| | | | |
91
| |
Common shareholders
| | |
|
11,268
|
| | |
|
9,001
|
| | |
|
31,034
|
| | |
|
26,252
|
|
Total net income allocable to PS Business Parks, Inc.
| | |
|
26,420
|
| | |
|
24,151
|
| | |
|
76,499
|
| | |
|
70,437
|
|
| | |
$
|
29,478
|
| | |
$
|
26,847
|
| | |
$
|
84,929
|
| | |
$
|
78,312
|
|
| | | | | | | | | | | |
|
Net income per common share:
| | | | | | | | | | | | |
Basic
| | |
$
|
0.42
| | | |
$
|
0.37
| | | |
$
|
1.15
| | | |
$
|
1.08
| |
Diluted
| | |
$
|
0.42
| | | |
$
|
0.37
| | | |
$
|
1.15
| | | |
$
|
1.07
| |
| | | | | | | | | | | |
|
Weighted average common shares outstanding:
| | | | | | | | | | | | |
Basic
| | |
|
26,914
|
| | |
|
24,386
|
| | |
|
26,892
|
| | |
|
24,351
|
|
Diluted
| | |
|
27,003
|
| | |
|
24,472
|
| | |
|
26,988
|
| | |
|
24,452
|
|
|
|
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 Nine Months |
| | | Ended September 30, | | | Ended September 30, |
| | | 2014 |
|
| 2013 | | | 2014 |
|
| 2013 |
Computation of Diluted Funds From
Operations (1): | | | | | | | | | | | | |
| | | | | | | | | | | |
|
Net income allocable to common shareholders
| | |
$
|
11,268
| | | |
$
|
9,001
| | | |
$
|
31,034
| | | |
$
|
26,252
| |
Adjustments:
| | | | | | | | | | | | |
Depreciation and amortization
| | | |
26,811
| | | | |
26,597
| | | | |
83,547
| | | | |
80,187
| |
Net income allocable to noncontrolling
| | | | | | | | | | | | |
interests — common units
| | | |
3,058
| | | | |
2,696
| | | | |
8,430
| | | | |
7,875
| |
Net income allocable to restricted stock unit holders
| | |
|
30
|
| | |
|
28
|
| | |
|
99
|
| | |
|
91
|
|
FFO allocable to common and dilutive shares
| | |
$
|
41,167
|
| | |
$
|
38,322
|
| | |
$
|
123,110
|
| | |
$
|
114,405
|
|
| | | | | | | | | | | |
|
Weighted average common shares outstanding
| | | |
26,914
| | | | |
24,386
| | | | |
26,892
| | | | |
24,351
| |
Weighted average common OP units outstanding
| | | |
7,305
| | | | |
7,305
| | | | |
7,305
| | | | |
7,305
| |
Weighted average restricted stock units outstanding
| | | |
55
| | | | |
92
| | | | |
54
| | | | |
95
| |
Weighted average common share equivalents outstanding
| | |
|
89
|
| | |
|
86
|
| | |
|
96
|
| | |
|
101
|
|
Total common and dilutive shares
| | |
|
34,363
|
| | |
|
31,869
|
| | |
|
34,347
|
| | |
|
31,852
|
|
| | | | | | | | | | | |
|
Net income per common share — diluted
| | |
$
|
0.42
| | | |
$
|
0.37
| | | |
$
|
1.15
| | | |
$
|
1.07
| |
Depreciation and amortization (2) | | |
|
0.78
|
| | |
|
0.83
|
| | |
|
2.43
|
| | |
|
2.52
|
|
FFO per common and dilutive share, as reported (2) | | |
$
|
1.20
|
| | |
$
|
1.20
|
| | |
$
|
3.58
|
| | |
$
|
3.59
|
|
| | | | | | | | | | | |
|
Computation of Funds Available for
Distribution ("FAD") (3): | | | | | | | | | | | | |
| | | | | | | | | | | |
|
FFO allocable to common and dilutive shares
| | |
$
|
41,167
| | | |
$
|
38,322
| | | |
$
|
123,110
| | | |
$
|
114,405
| |
| | | | | | | | | | | |
|
Adjustments:
| | | | | | | | | | | | |
Recurring capital improvements
| | | |
(3,713
|
)
| | | |
(4,590
|
)
| | | |
(7,494
|
)
| | | |
(8,194
|
)
|
Tenant improvements
| | | |
(8,196
|
)
| | | |
(8,804
|
)
| | | |
(19,733
|
)
| | | |
(21,757
|
)
|
Lease commissions
| | | |
(3,136
|
)
| | | |
(1,646
|
)
| | | |
(8,280
|
)
| | | |
(6,106
|
)
|
Straight-line rent
| | | |
(560
|
)
| | | |
(355
|
)
| | | |
(2,244
|
)
| | | |
(1,219
|
)
|
Non-cash stock compensation expense
| | | |
322
| | | | |
363
| | | | |
988
| | | | |
1,028
| |
Long-term equity incentive amortization
| | | |
1,896
| | | | |
1,024
| | | | |
5,128
| | | | |
2,987
| |
In-place lease adjustment
| | | |
(231
|
)
| | | |
27
| | | | |
(672
|
)
| | | |
148
| |
Tenant improvement reimbursements, net of lease incentives
| | | |
(356
|
)
| | | |
(370
|
)
| | | |
(1,195
|
)
| | | |
(995
|
)
|
Capitalized interest
| | |
|
(240
|
)
| | |
|
—
|
| | |
|
(697
|
)
| | |
|
—
|
|
FAD
| | |
$
|
26,953
|
| | |
$
|
23,971
|
| | |
$
|
88,911
|
| | |
$
|
80,297
|
|
| | | | | | | | | | | |
|
Distributions to common and dilutive shares
| | |
$
|
17,141
|
| | |
$
|
13,977
|
| | |
$
|
51,408
|
| | |
$
|
41,891
|
|
| | | | | | | | | | | |
|
Distribution payout ratio
| | |
|
63.6
|
%
| | |
|
58.3
|
%
| | |
|
57.8
|
%
| | |
|
52.2
|
%
|
|
(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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