ORLANDO, Fla., Nov. 4, 2013 /PRNewswire/ -- Parkway
Properties, Inc. (NYSE: PKY) today announced results for its third
quarter ended September 30,
2013.
Highlights for Third Quarter 2013 and Recent Events
- Entered into a definitive merger agreement with Thomas
Properties Group, Inc. (NYSE: TPGI)
- FFO of $0.24 per share and
recurring FFO of $0.30 per
share
- FAD of $0.20 per
share
- Occupancy of 89.2%, with portfolio 91.1%
leased
(Logo: http://photos.prnewswire.com/prnh/20030513/PARKLOGO )
"During the third quarter, Parkway signed a definitive agreement
to merge with Thomas Properties, which will enable us to acquire
seven high-quality assets that we believe will significantly
upgrade our Houston portfolio
and allow us to enter the very attractive
Austin market with immediate
scale," stated James R. Heistand,
President and Chief Executive Officer of Parkway. "Our
enthusiasm to own these properties was further validated after
Thomas Properties announced this quarter that Statoil Gulf Services
L.L.C. entered into a long-term renewal and expansion lease of
581,000 square feet at CityWestPlace in Houston, which will backfill a large, pending
vacancy in 2014 and confirms the attractive market rates that we
believed were achievable at this asset. Separately, Parkway's
third quarter results demonstrated that our long-term strategic
vision to reposition and grow the portfolio is resonating. We
signed 759,000 square feet of leases in the quarter, which drove
the company's overall leased percentage up to 91.1%, and our
occupancy finished at 89.2% despite two previously announced large
move-outs that occurred during the quarter."
For the third quarter 2013, funds from operations ("FFO")
available to common shareholders was $16.6
million, or $0.24 per diluted
share. Recurring FFO was $20.5
million, or $0.30 per diluted
share, and funds available for distribution ("FAD") was
$13.4 million, or $0.20 per diluted share. Reported FFO
during the third quarter 2013 includes the negative impact of
one-time charges totaling $4.8
million, or $0.07 per share,
related to the closing of the Company's Jackson, Mississippi office and costs related
to the pending merger with Thomas Properties. A
reconciliation of FFO, recurring FFO and FAD to net income is
included in the financial tables that follow this earnings release.
Net income, FFO, recurring FFO, and FAD for the third quarter 2013
and year-to-date, as well as a comparison to the prior-year period,
are as follows:
|
(Amounts in
thousands, except per share data)
|
|
|
|
Three Months Ended
September 30
|
|
Nine Months Ended
September 30
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
Amount
|
Per
Share
|
|
Amount
|
Per
Share
|
|
Amount
|
Per
Share
|
|
Amount
|
Per
Share
|
Net Income (Loss) –
Common
Stockholders
|
$
|
(2,306)
|
$
|
(0.03)
|
|
$
|
(582)
|
$
|
(0.02)
|
|
$
|
(21,131)
|
$
|
(0.33)
|
|
$
|
464
|
$
|
0.02
|
Funds From
Operations
|
$
|
16,576
|
$
|
0.24
|
|
$
|
13,204
|
$
|
0.36
|
|
$
|
48,820
|
$
|
0.75
|
|
$
|
31,283
|
$
|
1.11
|
Recurring Funds From
Operations
|
$
|
20,485
|
$
|
0.30
|
|
$
|
13,220
|
$
|
0.36
|
|
$
|
61,185
|
$
|
0.95
|
|
$
|
32,809
|
$
|
1.16
|
Funds Available for
Distribution
|
$
|
13,420
|
$
|
0.20
|
|
$
|
9,890
|
$
|
0.27
|
|
$
|
44,893
|
$
|
0.69
|
|
$
|
16,169
|
$
|
0.57
|
Wtd. Avg. Diluted
Shares/Units
|
68,640
|
|
|
36,814
|
|
|
64,734
|
|
|
28,305
|
|
|
Operational Results
Occupancy at the end of the third quarter 2013 was 89.2%,
compared to 89.9% at the end of the prior quarter. Including
leases that have been signed but have yet to commence, the
Company's leased percentage at the end of the third quarter 2013
increased to 91.1%, compared to 90.6% at the end of the prior
quarter. As previously announced and as part of a long-term,
value-add leasing strategy, Parkway signed an early termination
with Helix Energy for 94,000 square feet at 400 North Belt in
Houston, Texas, and an early
renewal and contraction of 49,000 square feet with K&L Gates at
Hearst Tower in Charlotte, North
Carolina, both of which commenced during the third quarter
2013. The two combined vacancies represent approximately 1.0%
of the Company's current portfolio.
Parkway's share of recurring same-store net operating income
("NOI") was $19.0 million on a GAAP
basis during the third quarter 2013, which was a decrease of
$1.2 million, or 6.1%, as compared to
the same period of the prior year. On a cash basis, the Company's
share of recurring same-store NOI decreased 5.6% to $18.2 million as compared to the same period of
the prior year. These metrics include the negative impact of
the previously mentioned vacancies at Hearst Tower and 400 North
Belt. Excluding these two properties from the same-store pool
of assets, Parkway's share of recurring same-store NOI would have
increased $247,000, or 1.6%, on a
GAAP basis and would have increased $94,000, or 0.6%, on a cash basis during the
third quarter 2013.
The Company's portfolio GAAP NOI margin was 60.9% during the
third quarter 2013, as compared to 61.9% during the same period of
the prior year.
Leasing Activity
During the third quarter 2013, Parkway signed a total of 759,000
square feet of leases at an average rent per square foot of
$25.87 and an average cost of
$5.33 per square foot per year.
New & Expansion Leasing – During the third quarter 2013, the
Company signed 153,000 square feet of new leases at an average rent
per square foot of $27.19 and at an
average cost of $6.91 per square foot
per year. Expansion leases during the quarter totaled 219,000
square feet at an average rent per square foot of $24.12 and at an average cost of $5.25 per square foot per year.
Renewal Leasing – Customer retention during the third quarter
2013 was 59.4% and 72.2% year-to-date. Excluding the
previously mentioned vacancies at Hearst Tower and 400 North Belt,
customer retention would have been 75.2% for the third quarter 2013
and 79.2% year-to-date. During the quarter, the Company
signed 387,000 square feet of renewal leases at an average rent per
square foot of $26.34, representing a
0.8% rate decrease from the expiring rate. The average cost
of renewal leases was $4.14 per
square foot per year.
Significant
operational and leasing statistics for the quarter as compared to
prior quarters is as follows:
|
|
For the Three
Months Ended
|
|
09/30/13
|
|
06/30/13
|
|
03/31/13
|
|
12/31/12
|
|
09/30/12
|
Ending
Occupancy
|
89.2%
|
|
89.9%
|
|
88.7%
|
|
88.0%
|
|
89.6%
|
Customer
Retention
|
59.4%
|
|
84.7%
|
|
78.2%
|
|
68.9%
|
|
76.0%
|
Square Footage of
Total Leases Signed (in thousands)
|
759
|
|
578
|
|
501
|
|
413
|
|
439
|
Average Revenue Per
Square Foot of Total Leases Signed
|
$25.87
|
|
$28.13
|
|
$25.03
|
|
$25.35
|
|
$21.78
|
Average Cost Per
Square Foot Per Year of Total Leases Signed
|
$5.33
|
|
$4.78
|
|
$3.42
|
|
$4.74
|
|
$3.68
|
Acquisition and Disposition Activity
On July 10, 2013, the Company sold
its Waterstone and Meridian office properties, which represented
190,000 square feet in the aggregate in Atlanta, Georgia, for a combined gross sales
price of $10.2 million. During
the second quarter 2013 the Company recorded an impairment loss of
$4.6 million associated with the sale
of these assets. The Company received $9.5 million in net proceeds from the sale, which
was used to reduce amounts outstanding under the Company's
revolving credit facility.
On July 17, 2013, the Company sold
Bank of America Plaza, a 436,000 square foot office property
located in Nashville, Tennessee,
for a gross sales price of $42.8
million and recorded a gain of approximately $11.5 million during third quarter of 2013.
The Company received $40.8 million in
net proceeds from the sale, which was used to reduce amounts
outstanding under the Company's revolving credit facility.
On September 4, 2013, the Company
entered into a definitive merger agreement pursuant to which Thomas
Properties will merge with and into Parkway in a stock-for-stock
transaction valued at approximately $1.2
billion. Under the terms of the merger agreement,
Thomas Properties' shareholders will receive 0.3822 shares of newly
issued Parkway common stock in exchange for each outstanding share
of Thomas Properties common stock. The Company separately
reached an agreement with Brandywine Realty Trust (NYSE: BDN)
("Brandywine") to sell substantially all of Thomas Properties'
ownership interest in two office properties located in Philadelphia, Pennsylvania known as Commerce
Square, which sale will close concurrent with and be subject to the
closing of the merger transaction. Additionally, Parkway has agreed
to sell Thomas Properties' Four Points Centre and a contiguous land
parcel located in Austin, Texas to
Brandywine, subject to customary closing
conditions.
On September 11, 2013, Parkway,
through a joint venture, acquired a 40% common equity interest
in a mortgage note in the original principal amount of $65 million secured by 7000 Central Park, a
415,000 square foot office property located in the Central
Perimeter submarket of Atlanta,
Georgia. The total purchase price for the note, which was
previously under special servicer oversight, was $56.6 million plus an additional $318,000 in transaction costs. Parkway's
share of such amount was approximately $45.0 million, comprised of an investment of
approximately $37.0 million for a
preferred equity interest in the joint venture that acquired the
note and an investment of approximately $8.0
million for a 40% common equity investment in the joint
venture that acquired the note.
During the third quarter 2013, an impairment loss of
$5.6 million was recognized in
connection with the valuation of Mesa Corporate Center, a 106,000
square foot office property located in Phoenix, Arizona, based on the Company's
estimated fair value of the asset.
Subsequent Events
On October 7, 2013, the Company
entered into a purchase and sale agreement to sell Carmel Crossing,
a 326,000 square foot office complex located in Charlotte, North Carolina, for a gross sales
price of $37.5 million. Closing
is expected to occur during the fourth quarter of 2013, subject to
customary closing conditions.
On October 31, 2013, the Company
sold Lakewood II, a 123,000 square foot office property located in
Atlanta, Georgia, for a gross
sales price of $10.6 million.
The Company received $3.1 million in
its proportionate share of net proceeds from the sale, which was
used to reduce amounts outstanding under the Company's revolving
credit facility.
The Company remains under contract to acquire Lincoln Place, a 140,000 square foot office
building located in the South Beach submarket of Miami, Florida, in exchange for the assumption
of the existing secured first mortgage, which has a current
outstanding balance of approximately $49.6
million, a fixed interest rate of 5.9% and a maturity date
of June 11, 2016, and the issuance of 900,000 shares of
operating partnership units. Closing is expected to occur by the
end of the fourth quarter 2013, subject to customary closing
conditions.
Capital Structure
At September 30, 2013, the Company
had $146.0 million outstanding under
its revolving credit facility, $245.0
million outstanding under its unsecured term loans and held
$42.5 million in cash and cash
equivalents, of which $24.6 million
of cash and cash equivalents was Parkway's share. Parkway's
share of secured debt totaled $492.3
million at September 30,
2013.
On September 27, 2013, Parkway
provided Thomas Properties with a bridge loan in the amount of
$80 million to partially fund Thomas
Properties' required net equity contribution of approximately
$163 million in connection with the
liquidation of its joint venture with The California State
Teachers' Retirement System, which was consummated on September 30, 2013. The Company funded this
bridge loan using proceeds from its revolving credit facility. The
bridge loan initially earns a fixed annual interest rate of 6%. The
annual interest rate on the bridge loan will increase to 8% on the
six-month anniversary of funding and to 12% on the twelve-month
anniversary of funding. If the merger with Thomas Properties is not
consummated, the bridge loan will mature on January 15, 2015.
At September 30, 2013, the
Company's net debt to EBITDA multiple was 7.5x, using the quarter's
annualized EBITDA after adjusting for the impact of acquisitions
and dispositions completed during the period, as compared to 6.2x
at June 30, 2013, and 4.5x at
September 30, 2012. The
Company's net debt to EBITDA multiple increased at September 30, 2013 as a result of (i) an increase
in outstanding borrowings to fund the bridge loan to Thomas
Properties described above, (ii) the one-time, nonrecurring costs
associated with the pending merger with Thomas Properties, and
(iii) the one-time, nonrecurring G&A expense related to the
closing of the Company's Jackson,
Mississippi office. The Company anticipates that amounts
borrowed under its revolving credit facility to fund the bridge
loan will be repaid following consummation of the merger with
Thomas Properties using proceeds received from the simultaneous
asset sales associated with the merger. Excluding the impact
of the nonrecurring office closure and transition expense and the
nonrecurring costs associated with the pending Thomas Properties
merger, the Company's net debt to EBITDA multiple would have been
6.6x.
Common Dividend
The Company's previously announced third quarter cash dividend
of $0.15 per share, which represents
an annualized dividend of $0.60 per
share, was paid on September 25, 2013
to shareholders of record as of September
11, 2013.
2013 Revised Outlook
After considering the Company's year-to-date performance and
expected results for the remainder of the year, as well as recently
announced investment activity and expenses
associated with the pending merger with Thomas
Properties, Parkway is revising its 2013 FFO outlook to a range of
$0.79 to $0.84 per share and
adjusting its earnings (loss) per share ("EPS") to ($0.50) to ($0.45). Guidance has been
modified lower primarily as a result of expenses associated
with the pending merger with Thomas Properties and the
announced disposition of several assets, partially offset by
projected core operating performance for the year. Given the
uncertainty of timing related to the pending merger with Thomas
Properties and the significant impact such timing can have on these
metrics, the updated guidance only takes into account the estimated
transaction expenses associated with the merger that will impact
Parkway's financials, but does not take into account the potential
impact to revenue or expenses from the assets being acquired
through the merger nor the impact to diluted outstanding
shares. Excluding the impact of significant one-time items,
including (i) the previously announced redemption of the Company's
preferred stock in the second quarter of 2013, (ii) the previously
announced expenses related to the transition of its Jackson office operations, and (iii) the
acquisition costs related to the pending merger with Thomas
Properties, all of which total approximately $25.0 to $26.0 million, the Company's FFO outlook
would be revised to a range of $1.17 to
$1.24 per share. The reconciliation of projected EPS
to projected reported FFO and adjusted FFO per diluted share
is as follows:
Outlook for
2013
|
|
Range
|
Fully diluted
EPS
|
|
($0.50-$0.45)
|
Parkway's share of
depreciation and amortization
|
|
|
$1.42-$1.42
|
Impairment loss on
real estate
|
|
|
$0.15-$0.15
|
Gain on sale of real
estate
|
|
|
($0.28-$0.28)
|
Reported FFO per
diluted share
|
|
|
$0.79-$0.84
|
Redemption of Series
D preferred stock
|
|
|
$0.10-$0.10
|
Costs related to
Jackson office closing and Thomas
Properties merger
|
|
|
$0.28-$0.30
|
Adjusted FFO per
diluted share
|
|
|
$1.17-$1.24
|
|
|
The revised 2013 outlook is based on the core operating,
financial and investment assumptions described below. These
assumptions reflect the Company's expectations based on its
knowledge of current market conditions and historical
experience. All dollar amounts presented for the revised 2013
outlook and the previous 2013 outlook are at Parkway's share and
dollars and shares are in thousands.
2013 Core
Operating Assumptions
|
|
Revised
2013
Outlook
|
|
Previous
2013
Outlook
|
|
Recurring cash
NOI
|
|
$120,000 -
$121,500
|
|
$120,500 -
$122,500
|
Straight-line rent
and amortization of above market rent
|
|
$ 10,500 -
$ 11,000
|
|
$ 10,500 -
$ 11,500
|
Lease termination fee
income
|
|
$
1,000 - $ 1,000
|
|
$ 400 -
$ 400
|
Management fee
after-tax net income
|
|
$
7,000 - $ 7,500
|
|
$
7,000 - $ 7,500
|
General and
administrative expense (including acquisition costs)
|
|
$ 42,000 -
$ 43,500
|
|
$ 24,000 -
$ 25,500
|
Share based
compensation expense included in G&A above
|
|
$
5,500 - $ 6,000
|
|
$
5,000 - $ 6,000
|
One-time costs
related to Jackson office closing and
Thomas
Properties merger included in
G&A/acquisition costs above
|
|
$ 18,500 -
$ 19,500
|
|
$ 3,700 -
$ 3,700
|
Mortgage and credit
facilities interest expense
|
|
$ 33,500 -
$ 34,000
|
|
$ 33,500 -
$ 34,000
|
Original issue costs
– redemption of preferred stock
|
|
$
6,604 - $ 6,604
|
|
$
6,600 - $ 6,600
|
Recurring capital
expenditures for building improvements, tenant
improvements and leasing commissions
|
|
$ 15,500 -
$ 16,500
|
|
$ 16,500 -
$ 18,000
|
Portfolio ending
occupancy
|
|
89.0% -
89.5%
|
|
88.5% -
89.5%
|
Weighted average
annual diluted common shares/units
|
|
66,000 -
66,000
|
|
66,200 -
66,200
|
|
|
|
|
|
|
|
|
|
|
Variance within the outlook range may occur due to variations in
the recurring revenue and expenses of the Company, as well as
certain non-recurring items. The earnings outlook does not
include the impact of possible future gains or losses on early
extinguishment of debt, possible future acquisitions or
dispositions and related costs, the impact of fluctuations in the
Company's stock price on share-based compensation, possible future
impairment charges or other unusual charges that may occur during
the year, except as noted. It has been and will continue to
be the Company's policy to not issue quarterly earnings guidance or
revise the annual earnings outlook unless a material event occurs
that impacts our original reported FFO outlook range. This
policy is intended to lessen the emphasis on short-term movements
that do not have a material impact on earnings or long-term value
of the Company.
Webcast and Conference Call
The Company will conduct its third quarter earnings conference
call on Tuesday, November 5, 2013 at
9:00 a.m. Eastern Time. To
participate in the conference call, please dial 877-407-3982, or
1-201-493-6780 for international participants, at least five
minutes prior to the scheduled start time. A live audio
webcast will also be available on the Company's website
(www.pky.com). A taped replay of the call can be accessed 24
hours a day through November 19,
2013, by dialing 877-870-5176, or 1-858-384-5517 for
international callers, and using the passcode 10000514.
About Parkway Properties
Parkway Properties, Inc. is a fully integrated,
self-administered and self-managed real estate investment trust
("REIT") specializing in the acquisition, ownership and management
of quality office properties in higher growth submarkets in the
Sunbelt region of the United States. Parkway owns or has an
interest in 43 office properties located in eight states with an
aggregate of approximately 12.6 million square feet at October 1, 2013. Parkway also offers
fee-based real estate services which manage and/or lease
approximately 11.7 million square feet for third parties as of
October 1, 2013. Additional
information about Parkway is available on the Company's website at
www.pky.com.
Forward Looking Statement
Certain statements in this press release that are not in the
present or past tense or that discuss the Company's expectations
(including any use of the words "anticipate," "assume," "believe,"
"estimate," "expect," "forecast," "guidance," "intend," "may,"
"might," "outlook," "project", "should" or similar expressions) are
forward-looking statements within the meaning of the federal
securities laws and as such are based upon the Company's current
beliefs as to the outcome and timing of future events. There can be
no assurance that actual future developments affecting the Company
will be those anticipated by the Company. Examples of
forward-looking statements include projected 2013 fully diluted
EPS, share of depreciation and amortization, reported FFO per
share, projected net operating income, cap rates, internal rates of
return, future dividend payment rates, forecasts of FFO accretion,
projected capital improvements, expected sources of financing,
expectations as to the timing of closing of acquisitions,
dispositions and other potential transactions and descriptions
relating to these expectations. These forward-looking
statements involve risks and uncertainties (some of which are
beyond the control of the Company) and are subject to change based
upon various factors including, but not limited to, the following
risks and uncertainties: changes in the real estate industry and in
performance of the financial markets; the actual or perceived
impact of U.S. monetary policy; the demand for and market
acceptance of the Company's properties for rental purposes; the
ability of the Company to enter into new leases or renewal leases
on favorable terms; the amount and growth of the Company's
expenses; tenant financial difficulties and general economic
conditions, including interest rates, as well as economic
conditions in those areas where the Company owns properties; risks
associated with joint venture partners; risks associated with the
ownership and development of real property; termination of property
management contracts; the bankruptcy or insolvency of companies for
which Parkway provides property management services or the sale of
these properties; the outcome of claims and litigation involving or
affecting the Company; the ability to satisfy conditions necessary
to close pending transactions and the ability to successfully
integrate pending transactions; applicable regulatory changes; and
other risks and uncertainties detailed from time to time in the
Company's SEC filings. Should one or more of these risks or
uncertainties occur, or should underlying assumptions prove
incorrect, the Company's business, financial condition, liquidity,
cash flows and financial results could differ materially from those
expressed in the Company's forward-looking statements. Any
forward-looking statement speaks only as of the date on which it is
made. New risks and uncertainties arise over time, and it is
not possible for us to predict the occurrence of those matters or
the manner in which they may affect us. The Company does not
undertake to update forward-looking statements except as may be
required by law.
Company's Use of Non-GAAP Financial Measures
FFO, FAD, NOI and EBITDA, including related per share amounts,
are used by management, investors and industry analysts as
supplemental measures of operating performance of equity REITs and
should be evaluated along with GAAP net income and income per
diluted share (the most directly comparable GAAP measures), as well
as cash flow from operating activities, investing activities and
financing activities, in evaluating the operating performance of
the Company. Management believes that FFO, FAD, NOI and EBITDA are
helpful to investors as supplemental performance measures because
these measures exclude the effect of depreciation, amortization and
gains or losses from sales of real estate, all of which are based
on historical costs which implicitly assumes that the value of real
estate diminishes predictably over time. Since real estate values
instead have historically risen or fallen with market conditions,
these non-GAAP measures can facilitate comparisons of operating
performance between periods and among other equity REITs.
Non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with the Company's results of operations
determined in accordance with GAAP. FFO, FAD, NOI and EBITDA
do not represent cash generated from operating activities in
accordance with GAAP and are not necessarily indicative of cash
available to fund cash needs as disclosed in the Company's
Consolidated Statements of Cash Flows. FFO, FAD, NOI and
EBITDA should not be considered as an alternative to net income as
an indicator of the Company's operating performance or as an
alternative to cash flows as a measure of liquidity. The
Company's calculation of these non-GAAP measures may not be
comparable to similarly titled measures reported by other
companies.
FFO – Parkway computes FFO in accordance with standards
established by the National Association of Real Estate Investment
Trusts ("NAREIT"), which may not be comparable to FFO reported by
other REITs that do not define the term in accordance with the
current NAREIT definition. FFO is defined as net income,
computed in accordance with GAAP, reduced by preferred dividends,
excluding gains or losses on depreciable real estate, plus real
estate related depreciation and amortization. Adjustments for
Parkway's share of partnerships and joint ventures are included in
the computation of FFO on the same basis. On October 31, 2011, NAREIT issued updated guidance
on reporting FFO such that impairment losses on depreciable real
estate should be excluded from the computation of FFO for current
and prior periods presented.
Recurring FFO – In addition to FFO, Parkway also
discloses recurring FFO, which considers Parkway's share of
adjustments for non-recurring lease termination fees, gains and
losses on extinguishment of debt, gains and losses, acquisition
costs, fair value adjustments or other unusual items. Although this
is a non-GAAP measure that differs from NAREIT's definition of FFO,
the Company believes it provides a meaningful presentation of
operating performance.
FAD – There is not a generally accepted definition
established for FAD. Therefore, the Company's measure of FAD
may not be comparable to FAD reported by other REITs. Parkway
defines FAD as FFO, excluding the amortization of share-based
compensation, amortization of above and below market leases,
straight line rent adjustments, gains and losses, acquisition
costs, fair value adjustments, gain or loss on extinguishment of
debt, amortization of loan costs, non-cash charges and reduced by
recurring non-revenue enhancing capital expenditures for building
improvements, tenant improvements and leasing costs.
Adjustments for Parkway's share of partnerships and joint ventures
are included in the computation of FAD on the same basis.
EBITDA – Parkway defines EBITDA, a non-GAAP financial
measure, as net income before interest expense, amortization of
financing costs, amortization of share-based compensation, income
taxes, depreciation, amortization, acquisition costs, gains and
losses on early extinguishment of debt, other gains and losses and
fair value adjustments. Adjustments for Parkway's share of
partnerships and joint ventures are included in the computation of
EBITDA on the same basis. EBITDA, as calculated by us, is not
comparable to EBITDA reported by other REITs that do not define
EBITDA exactly as we do. EBITDA does not represent cash
generated from operating activities in accordance with GAAP, and
should not be considered an alternative to operating income or net
income as an indicator of performance or as an alternative to cash
flows from operating activities as an indicator of liquidity.
NOI, Recurring NOI, Same-Store NOI and Recurring Same-Store
NOI – NOI includes income from real estate operations less
property operating expenses (before interest expense and
depreciation and amortization). In addition to NOI, Parkway
discloses recurring NOI, which considers adjustments for
non-recurring lease termination fees or other unusual items.
The Company's disclosure of same-store NOI and recurring same-store
NOI includes those properties that were owned during the entire
current and prior year reporting periods and excludes properties
classified as discontinued operations.
Contact:
Parkway Properties, Inc.
Ted McHugh
Director of Investor Relations
Bank of America
Center
390 N. Orange Ave., Suite
2400
Orlando, FL
32801
(407) 650-0593
www.pky.com
PARKWAY
PROPERTIES, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30
|
|
December
31
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Real estate related
investments:
|
|
|
|
Office and parking
properties
|
$
1,873,094
|
|
$
1,762,566
|
Accumulated
depreciation
|
(220,164)
|
|
(199,849)
|
|
1,652,930
|
|
1,562,717
|
|
|
|
|
Land available for
sale
|
250
|
|
250
|
Mortgage
loan
|
3,523
|
|
-
|
Investment in
unconsolidated joint ventures
|
87,109
|
|
-
|
|
1,743,812
|
|
1,562,967
|
|
|
|
|
Receivables and other
assets:
|
|
|
|
Rents and fees
receivable, net
|
2,888
|
|
2,309
|
Straight line rents
receivable
|
43,236
|
|
34,205
|
Other
receivables
|
6,822
|
|
2,755
|
Notes receivable -
bridge loan
|
78,800
|
|
-
|
Unamortized lease
costs
|
66,741
|
|
62,978
|
Unamortized loan
costs
|
8,297
|
|
7,183
|
Escrows and other
deposits
|
11,668
|
|
7,606
|
Prepaid
assets
|
6,141
|
|
3,612
|
Investment in
preferred interest
|
3,500
|
|
3,500
|
Fair value of
interest rate swaps
|
1,661
|
|
-
|
Other
assets
|
533
|
|
543
|
Intangible assets,
net
|
109,163
|
|
118,097
|
Management contracts,
net
|
13,656
|
|
19,000
|
Cash and cash
equivalents
|
42,518
|
|
81,856
|
Total
assets
|
$
2,139,436
|
|
$
1,906,611
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
Notes payable to
banks
|
$
391,000
|
|
$
262,000
|
Mortgage notes
payable
|
722,313
|
|
605,889
|
Accounts payable and
other liabilities:
|
|
|
|
Corporate
payables
|
6,947
|
|
1,930
|
Deferred tax
liability - non-current
|
256
|
|
1,959
|
Accrued
payroll
|
3,132
|
|
2,980
|
Fair value of
interest rate swaps
|
10,391
|
|
16,285
|
Interest
payable
|
3,462
|
|
2,653
|
Property
payables:
|
|
|
|
Accrued
expenses and accounts payable
|
17,423
|
|
13,111
|
Accrued
property taxes
|
18,191
|
|
6,868
|
Prepaid
rents
|
13,243
|
|
9,488
|
Deferred
revenue
|
107
|
|
315
|
Security
deposits
|
4,817
|
|
4,680
|
Unamortized below market leases
|
24,685
|
|
22,390
|
Other
liabilities
|
-
|
|
57
|
Total
liabilities
|
1,215,967
|
|
950,605
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Parkway Properties,
Inc. stockholders' equity:
|
|
|
|
8.00% Series D
preferred stock, $.001 par value, 5,421,296
|
|
|
|
shares authorized,
issued and outstanding in 2012
|
-
|
|
128,942
|
Common stock, $.001
par value, 120,000,000 and 114,578,704
|
|
|
|
shares authorized in
2013 and 2012, respectively, 68,626,994
|
|
|
|
and 56,138,209 shares
issued and outstanding in 2013 and
|
|
|
|
2012,
respectively
|
69
|
|
56
|
Additional paid-in
capital
|
1,100,613
|
|
907,254
|
Accumulated other
comprehensive loss
|
(2,353)
|
|
(4,425)
|
Accumulated
deficit
|
(387,737)
|
|
(337,813)
|
Total Parkway Properties, Inc. stockholders' equity
|
710,592
|
|
694,014
|
Noncontrolling
interests
|
212,877
|
|
261,992
|
Total equity
|
923,469
|
|
956,006
|
Total
liabilities and equity
|
$
2,139,436
|
|
$
1,906,611
|
|
|
|
|
PARKWAY
PROPERTIES, INC.
|
CONSOLIDATED
STATEMENT OF OPERATIONS
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30
|
|
September
30
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
Income from office
and parking properties
|
$
70,106
|
|
$
52,458
|
|
$
204,936
|
|
$
142,229
|
Management company
income
|
4,470
|
|
4,591
|
|
13,302
|
|
14,996
|
Total
revenues
|
74,576
|
|
57,049
|
|
218,238
|
|
157,225
|
|
|
|
|
|
|
|
|
Expenses and
other
|
|
|
|
|
|
|
|
Property operating
expense
|
27,855
|
|
19,992
|
|
79,871
|
|
55,225
|
Depreciation and
amortization
|
30,679
|
|
20,959
|
|
90,283
|
|
56,534
|
Impairment loss on
real estate
|
5,600
|
|
-
|
|
5,600
|
|
-
|
Change in fair value
of contingent consideration
|
-
|
|
-
|
|
-
|
|
216
|
Management company
expenses
|
5,009
|
|
4,205
|
|
13,990
|
|
12,966
|
General and
administrative
|
9,366
|
|
3,749
|
|
18,271
|
|
11,266
|
Acquisition
costs
|
1,133
|
|
159
|
|
2,779
|
|
1,491
|
Total expenses and
other
|
79,642
|
|
49,064
|
|
210,794
|
|
137,698
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
(5,066)
|
|
7,985
|
|
7,444
|
|
19,527
|
|
|
|
|
|
|
|
|
Other income and
expenses
|
|
|
|
|
|
|
|
Interest and other
income
|
434
|
|
64
|
|
619
|
|
205
|
Equity in earnings of
unconsolidated joint ventures
|
393
|
|
-
|
|
472
|
|
-
|
Gain on sale of real
estate
|
-
|
|
48
|
|
-
|
|
48
|
Recovery of loss on
mortgage loan receivable
|
-
|
|
500
|
|
-
|
|
500
|
Interest
expense
|
(11,663)
|
|
(8,521)
|
|
(33,437)
|
|
(25,887)
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
(15,902)
|
|
76
|
|
(24,902)
|
|
(5,607)
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
839
|
|
7
|
|
1,730
|
|
(143)
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
(15,063)
|
|
83
|
|
(23,172)
|
|
(5,750)
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income (loss) from
discontinued operations
|
205
|
|
138
|
|
(3,322)
|
|
3,800
|
Gain on sale of real
estate from discontinued operations
|
11,545
|
|
995
|
|
12,087
|
|
9,767
|
Total discontinued
operations
|
11,750
|
|
1,133
|
|
8,765
|
|
13,567
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(3,313)
|
|
1,216
|
|
(14,407)
|
|
7,817
|
Net loss attributable
to noncontrolling interests - unit holders
|
1
|
|
17
|
|
3
|
|
1
|
Net loss attributable
to noncontrolling interests - real estate partnerships
|
1,006
|
|
896
|
|
3,310
|
|
1,789
|
|
|
|
|
|
|
|
|
Net income (loss)
for Parkway Properties, Inc.
|
(2,306)
|
|
2,129
|
|
(11,094)
|
|
9,607
|
Dividends on
preferred stock
|
-
|
|
(2,711)
|
|
(3,433)
|
|
(8,132)
|
Dividends on
convertible preferred stock
|
-
|
|
-
|
|
-
|
|
(1,011)
|
Dividends on
preferred stock redemption
|
-
|
|
-
|
|
(6,604)
|
|
-
|
Net income (loss)
attributable to common stockholders
|
$
(2,306)
|
|
$
(582)
|
|
$
(21,131)
|
|
$
464
|
|
|
|
|
|
|
|
|
Net income (loss)
per common share attributable to Parkway Properties,
Inc.:
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
Loss from continuing
operations attributable to Parkway Properties, Inc.
|
$
(0.20)
|
|
$
(0.03)
|
|
$
(0.46)
|
|
$
(0.32)
|
Discontinued
operations
|
0.17
|
|
0.01
|
|
0.13
|
|
0.34
|
Basic net income
(loss) attributable to Parkway Properties, Inc.
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.33)
|
|
$
0.02
|
Diluted:
|
|
|
|
|
|
|
|
Loss from continuing
operations attributable to Parkway Properties, Inc.
|
$
(0.20)
|
|
$
(0.03)
|
|
$
(0.46)
|
|
$
(0.32)
|
Discontinued
operations
|
0.17
|
|
0.01
|
|
0.13
|
|
0.34
|
Diluted net income
(loss) attributable to Parkway Properties, Inc.
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.33)
|
|
$
0.02
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
68,564
|
|
36,487
|
|
64,689
|
|
27,199
|
Diluted
|
68,564
|
|
36,487
|
|
64,689
|
|
27,199
|
|
|
|
|
|
|
|
|
Amounts
attributable to Parkway Properties, Inc. common
stockholders:
|
|
|
|
|
|
|
|
Loss from continuing
operations attributable to Parkway Properties, Inc.
|
$
(14,019)
|
|
$
(1,170)
|
|
$
(29,830)
|
|
$
(8,884)
|
Discontinued
operations
|
11,713
|
|
588
|
|
8,699
|
|
9,348
|
Net income (loss)
attributable to common stockholders
|
$
(2,306)
|
|
$
(582)
|
|
$
(21,131)
|
|
$
464
|
|
|
|
|
|
|
|
|
PARKWAY
PROPERTIES, INC.
|
RECONCILIATION OF
FUNDS FROM OPERATIONS AND FUNDS AVAILABLE
|
FOR DISTRIBUTION
TO NET INCOME AT PARKWAY'S SHARE
|
(In thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30
|
|
September
30
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Net income (loss)
for Parkway Properties, Inc.
|
$
(2,306)
|
|
$
2,129
|
|
$
(11,094)
|
|
$
9,607
|
|
|
|
|
|
|
|
|
Adjustments to net
income (loss) for Parkway Properties, Inc.:
|
|
|
|
|
|
|
|
Preferred
dividends
|
-
|
|
(2,711)
|
|
(3,433)
|
|
(8,132)
|
Convertible preferred
dividends
|
-
|
|
-
|
|
-
|
|
(1,011)
|
Dividends on
preferred stock redemption
|
-
|
|
-
|
|
(6,604)
|
|
-
|
Depreciation and
amortization
|
24,828
|
|
13,783
|
|
71,841
|
|
35,734
|
Noncontrolling
interest - unit holders
|
(1)
|
|
(17)
|
|
(3)
|
|
(1)
|
Impairment loss on
depreciable real estate
|
5,600
|
|
-
|
|
10,200
|
|
-
|
Gain on sale of real
estate
|
(11,545)
|
|
20
|
|
(12,087)
|
|
(4,914)
|
FFO available to
common stockholders
|
$
16,576
|
|
$
13,204
|
|
$
48,820
|
|
$
31,283
|
|
|
|
|
|
|
|
|
Adjustments to
derive recurring FFO:
|
|
|
|
|
|
|
|
Gain on
non-depreciable assets
|
-
|
|
(548)
|
|
-
|
|
(548)
|
Change in fair value
of contingent consideration
|
-
|
|
-
|
|
-
|
|
216
|
Non-recurring lease
termination fee income
|
(856)
|
|
(716)
|
|
(1,051)
|
|
(1,947)
|
Loss on early
extinguishment of debt
|
-
|
|
194
|
|
572
|
|
896
|
Non-cash adjustment
for interest rate swap
|
-
|
|
(77)
|
|
(630)
|
|
(215)
|
Dividends on
preferred stock redemption
|
-
|
|
-
|
|
6,604
|
|
-
|
Acquisition
costs
|
1,130
|
|
88
|
|
2,775
|
|
846
|
Realignment
expenses
|
3,635
|
|
1,075
|
|
4,095
|
|
2,278
|
Recurring
FFO
|
$
20,485
|
|
$
13,220
|
|
$
61,185
|
|
$
32,809
|
|
|
|
|
|
|
|
|
Funds available
for distribution
|
|
|
|
|
|
|
|
FFO available to
common stockholders
|
$
16,576
|
|
$
13,204
|
|
$
48,820
|
|
$
31,283
|
Add (Deduct)
:
|
|
|
|
|
|
|
|
Straight-line
rents
|
(2,616)
|
|
(1,290)
|
|
(7,265)
|
|
(7,168)
|
Amortization of above
market leases
|
77
|
|
486
|
|
246
|
|
1,136
|
Amortization of
share-based compensation
|
2,001
|
|
167
|
|
3,322
|
|
371
|
Acquisition
costs
|
1,130
|
|
88
|
|
2,775
|
|
846
|
Amortization of loan
costs
|
646
|
|
347
|
|
1,647
|
|
1,191
|
Non-cash adjustment
for interest rate swap
|
-
|
|
(77)
|
|
(630)
|
|
(215)
|
Dividends on
preferred stock redemption
|
-
|
|
-
|
|
6,604
|
|
-
|
Loss on early
extinguishment of debt
|
-
|
|
194
|
|
572
|
|
896
|
Loss on
non-depreciable assets
|
-
|
|
(548)
|
|
-
|
|
(548)
|
Change in fair value
of contingent consideration
|
-
|
|
-
|
|
-
|
|
216
|
Recurring capital
expenditures:
|
|
|
|
|
|
|
|
Building
improvements
|
(719)
|
|
(665)
|
|
(2,930)
|
|
(1,678)
|
Tenant
improvements - new leases
|
(550)
|
|
(1,111)
|
|
(1,345)
|
|
(4,994)
|
Tenant
improvements - renewal leases
|
(992)
|
|
(438)
|
|
(3,067)
|
|
(1,951)
|
Leasing
costs - new leases
|
(493)
|
|
(85)
|
|
(753)
|
|
(1,444)
|
Leasing
costs - renewal leases
|
(1,640)
|
|
(382)
|
|
(3,103)
|
|
(1,772)
|
Total recurring
capital expenditures
|
(4,394)
|
|
(2,681)
|
|
(11,198)
|
|
(11,839)
|
Funds available
for distribution
|
$
13,420
|
|
$
9,890
|
|
$
44,893
|
|
$
16,169
|
|
|
|
|
|
|
|
|
Diluted per common
share/unit information (**)
|
|
|
|
|
|
|
|
FFO per
share
|
$
0.24
|
|
$
0.36
|
|
$
0.75
|
|
$
1.11
|
Recurring FFO per
share
|
$
0.30
|
|
$
0.36
|
|
$
0.95
|
|
$
1.16
|
FAD per
share
|
$
0.20
|
|
$
0.27
|
|
$
0.69
|
|
$
0.57
|
Dividends
paid
|
$
0.15
|
|
$
0.1125
|
|
$
0.45
|
|
$
0.2625
|
Dividend payout ratio
for FFO
|
60.0%
|
|
31.3%
|
|
59.7%
|
|
23.8%
|
Dividend payout ratio
for recurring FFO
|
50.0%
|
|
31.3%
|
|
47.6%
|
|
22.6%
|
Dividend payout ratio
for FAD
|
75.0%
|
|
41.7%
|
|
64.9%
|
|
46.0%
|
|
|
|
|
|
|
|
|
Other supplemental
information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring capital
expenditures
|
$
4,394
|
|
$
2,681
|
|
$
11,198
|
|
$
11,839
|
Upgrades on
acquisitions
|
7,325
|
|
1,828
|
|
15,169
|
|
4,815
|
Total real estate
improvements and leasing costs
|
$
11,719
|
|
$
4,509
|
|
$
26,367
|
|
$
16,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
non-depreciable assets - mortgage loan
|
$
-
|
|
$
500
|
|
$
-
|
|
$
500
|
Gain on
non-depreciable assets - land
|
-
|
|
48
|
|
-
|
|
48
|
Gain on
non-depreciable assets included in FFO
|
$
-
|
|
$
548
|
|
$
-
|
|
$
548
|
|
|
|
|
|
|
|
|
**Information for
diluted computations:
|
|
|
|
|
|
|
|
Basic common
shares/units outstanding
|
68,565
|
|
36,795
|
|
64,691
|
|
27,909
|
Dilutive effect of
other share equivalents
|
75
|
|
19
|
|
43
|
|
396
|
Diluted weighted
average shares/units outstanding
|
68,640
|
|
36,814
|
|
64,734
|
|
28,305
|
|
|
|
|
|
|
|
|
PARKWAY
PROPERTIES, INC.
|
EBITDA, COVERAGE
RATIOS AND CAPITALIZATION INFORMATION
|
(In thousands, except
per share, percentage and multiple data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
09/30/13
|
|
06/30/13
|
|
03/31/13
|
|
12/31/12
|
|
09/30/12
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
for Parkway Properties, Inc.
|
$
(2,306)
|
|
$
(7,620)
|
|
$
(1,168)
|
|
$
(49,002)
|
|
$
2,129
|
|
|
|
|
|
|
|
|
|
|
Adjustments at
Parkway's share to net income (loss) for Parkway
Properties, Inc.:
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
8,143
|
|
7,787
|
|
6,638
|
|
4,830
|
|
4,661
|
Amortization of
financing costs
|
646
|
|
602
|
|
399
|
|
523
|
|
348
|
Non-cash adjustment
for interest rate swap
|
-
|
|
(630)
|
|
-
|
|
-
|
|
-
|
Loss on early
extinguishment of debt
|
-
|
|
572
|
|
-
|
|
-
|
|
117
|
Acquisition
costs
|
1,130
|
|
515
|
|
1,130
|
|
1,281
|
|
88
|
Depreciation and
amortization
|
24,828
|
|
25,308
|
|
21,705
|
|
14,626
|
|
13,781
|
Amortization of
share-based compensation
|
2,001
|
|
1,232
|
|
89
|
|
61
|
|
167
|
Gain on sale of real
estate and other assets
|
(11,545)
|
|
-
|
|
(542)
|
|
(3,172)
|
|
(527)
|
Non-cash
losses
|
5,600
|
|
4,600
|
|
-
|
|
51,167
|
|
-
|
Tax expense
(benefit)
|
(839)
|
|
(384)
|
|
(507)
|
|
118
|
|
(8)
|
EBITDA
|
$
27,658
|
|
$
31,982
|
|
$
27,744
|
|
$
20,432
|
|
$
20,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest coverage
ratio
|
3.4
|
|
4.1
|
|
4.2
|
|
4.2
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
Fixed charge
coverage ratio
|
2.8
|
|
3.1
|
|
2.5
|
|
2.2
|
|
2.3
|
|
|
|
|
|
|
|
|
|
|
Modified fixed
charge coverage ratio
|
3.4
|
|
3.8
|
|
3.0
|
|
2.7
|
|
2.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization
information
|
|
|
|
|
|
|
|
|
|
Mortgage notes
payable
|
$
722,313
|
|
$
724,090
|
|
$
768,005
|
|
$
605,889
|
|
$
549,429
|
Notes payable to
banks
|
391,000
|
|
313,000
|
|
125,000
|
|
262,000
|
|
125,000
|
Adjustments for
noncontrolling interest in real estate partnerships:
|
|
|
|
|
|
|
|
|
|
Mortgage notes
payable
|
(229,977)
|
|
(230,213)
|
|
(230,885)
|
|
(272,215)
|
|
(272,880)
|
Parkway's share of
total debt
|
883,336
|
|
806,877
|
|
662,120
|
|
595,674
|
|
401,549
|
Less: Parkway's
share of cash
|
(24,585)
|
|
(16,249)
|
|
(46,235)
|
|
(55,968)
|
|
(30,096)
|
Parkway's share of
net debt
|
858,751
|
|
790,628
|
|
615,885
|
|
539,706
|
|
371,453
|
Series D Preferred
stock (liquidation value)
|
-
|
|
-
|
|
135,532
|
|
135,532
|
|
135,532
|
Parkway's share of
net debt plus preferred stock
|
$
858,751
|
|
$
790,628
|
|
$
751,417
|
|
$
675,238
|
|
$
506,985
|
|
|
|
|
|
|
|
|
|
|
Shares of common
stock and operating units outstanding
|
68,628
|
|
68,563
|
|
68,767
|
|
56,140
|
|
41,499
|
Stock price per share
at period end
|
$
17.77
|
|
$
16.76
|
|
$
18.55
|
|
$
13.99
|
|
$
13.37
|
Market value of
common equity
|
$
1,219,520
|
|
$
1,149,116
|
|
$
1,275,628
|
|
$
785,399
|
|
$
554,842
|
Series D preferred
stock (liquidation value)
|
-
|
|
-
|
|
135,532
|
|
135,532
|
|
135,532
|
Series E convertible
preferred stock (liquidation value)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Total market
capitalization (including net debt)
|
$
2,078,271
|
|
$
1,939,744
|
|
$
2,027,045
|
|
$
1,460,637
|
|
$
1,061,827
|
Net debt as a % of
market capitalization
|
41.3%
|
|
40.8%
|
|
30.4%
|
|
37.0%
|
|
35.0%
|
|
|
|
|
|
|
|
|
|
|
EBITDA -
annualized
|
$
110,632
|
|
$
127,928
|
|
$
110,976
|
|
$
81,728
|
|
$
83,024
|
Adjustment to
annualize investment activities (1)
|
4,105
|
|
278
|
|
16,490
|
|
19,368
|
|
(141)
|
EBITDA - adjusted
annualized
|
$
114,737
|
|
$
128,206
|
|
$
127,466
|
|
$
101,096
|
|
$
82,883
|
Net debt to EBITDA
multiple
|
7.5
|
|
6.2
|
|
4.8
|
|
5.3
|
|
4.5
|
Net debt plus
preferred to EBITDA multiple
|
7.5
|
|
6.2
|
|
5.9
|
|
6.7
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
27,658
|
|
$
31,982
|
|
$
27,744
|
|
$
20,432
|
|
$
20,756
|
One time realignment
charge
|
3,635
|
|
-
|
|
-
|
|
-
|
|
-
|
Recurring EBITDA
(2)
|
31,293
|
|
31,982
|
|
27,744
|
|
20,432
|
|
20,756
|
Recurring EBITDA -
annualized
|
125,172
|
|
127,928
|
|
110,976
|
|
81,728
|
|
83,024
|
Adjustment to
annualize investment activities (1)
|
4,105
|
|
278
|
|
16,490
|
|
19,368
|
|
(141)
|
Recurring EBITDA -
adjusted annualized
|
$
129,277
|
|
$
128,206
|
|
$
127,466
|
|
$
101,096
|
|
$
82,883
|
Net debt to EBITDA
multiple
|
6.6
|
|
6.2
|
|
4.8
|
|
5.3
|
|
4.5
|
Net debt plus
preferred to EBITDA multiple
|
6.6
|
|
6.2
|
|
5.9
|
|
6.7
|
|
6.1
|
|
|
|
|
|
|
|
|
|
|
(1) Adjustment
to annualized EBITDA represents the implied annualized impact of
any acquisition or disposition activity for the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Recurring EBITDA
is adjusted to reflect the impact of the nonrecurring realignment
expenses and the annualized impact of the loan to TPGI.
|
|
|
PARKWAY
PROPERTIES, INC.
|
SAME-STORE NET
OPERATING INCOME
|
THREE MONTHS ENDED
SEPTEMBER 30, 2013 AND 2012
|
(In thousands, except
number of properties data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
Net Operating
Income
|
|
Occupancy
|
|
|
Number
of
|
Percentage
|
|
|
|
|
|
|
Square
Feet
|
Properties
|
of Portfolio
(1)
|
2013
|
2012
|
|
2013
|
2012
|
|
|
|
|
|
|
|
|
|
Same-store
properties:
|
|
|
|
|
|
|
|
|
Wholly
owned
|
5,881
|
24
|
41.80%
|
$
18,151
|
$
16,408
|
|
88.5%
|
89.9%
|
Fund II
|
3,772
|
9
|
30.17%
|
13,099
|
16,057
|
|
93.6%
|
89.3%
|
Total same-store
properties
|
9,653
|
33
|
71.97%
|
$
31,250
|
$
32,465
|
|
90.4%
|
89.7%
|
Net operating
income from all
|
|
|
|
|
|
|
|
|
office and parking
properties
|
12,640
|
43
|
100.00%
|
$
43,420
|
$
32,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Percentage
of portfolio based on 2013 net operating income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following
table is a reconciliation of net income (loss) to SSNOI and
Recurring SSNOI:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
September
30
|
|
September
30
|
|
|
|
|
2013
|
2012
|
|
2013
|
2012
|
|
|
|
|
|
|
|
|
|
Net income (loss) for
Parkway Properties, Inc.
|
|
|
$
(2,306)
|
$
2,129
|
|
$
(11,094)
|
$
9,607
|
Add
(deduct):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
11,663
|
8,521
|
|
33,437
|
25,887
|
Depreciation and
amortization
|
|
|
|
30,679
|
20,959
|
|
90,283
|
56,534
|
Management company
expenses
|
|
|
|
5,009
|
4,205
|
|
13,990
|
12,966
|
Income tax expense
(benefit)
|
|
|
|
(839)
|
(7)
|
|
(1,730)
|
143
|
General and
administrative expenses
|
|
|
|
9,366
|
3,749
|
|
18,271
|
11,266
|
Acquisition
costs
|
|
|
|
1,133
|
159
|
|
2,779
|
1,491
|
Equity in earnings of
unconsolidated joint ventures
|
|
|
(393)
|
-
|
|
(472)
|
-
|
Gain on sale of real
estate and recovery of loss on mortgage loan receivable
|
|
-
|
(548)
|
|
-
|
(548)
|
Non-cash impairment
loss on real estate
|
|
|
5,600
|
-
|
|
5,600
|
-
|
Change in fair value
of contingent consideration
|
|
|
-
|
-
|
|
-
|
216
|
Net loss attributable
to noncontrolling interests
|
|
|
(1,007)
|
(913)
|
|
(3,313)
|
(1,790)
|
(Income) loss from
discontinued operations
|
|
|
(205)
|
(138)
|
|
3,322
|
(3,800)
|
Gain on sale of real
estate from discontinued operations
|
|
|
(11,545)
|
(995)
|
|
(12,087)
|
(9,767)
|
Management company
income
|
|
|
|
(4,470)
|
(4,591)
|
|
(13,302)
|
(14,996)
|
Interest and other
income
|
|
|
|
(434)
|
(64)
|
|
(619)
|
(205)
|
Net operating income
from consolidated office and parking properties
|
|
42,251
|
32,466
|
|
125,065
|
87,004
|
Net operating income
from non same-store unconsolidated joint ventures
|
|
1,169
|
-
|
|
1,468
|
-
|
Less: Net
operating income from non same-store properties
|
|
(12,170)
|
(1)
|
|
(45,042)
|
(3,017)
|
Same-store net
operating income (SSNOI)
|
|
|
31,250
|
32,465
|
|
81,491
|
83,987
|
Less: non-recurring
lease termination fee income
|
|
|
(659)
|
(1,317)
|
|
(915)
|
(2,647)
|
Recurring
SSNOI
|
|
|
|
$
30,591
|
$
31,148
|
|
$
80,576
|
$
81,340
|
|
|
|
|
|
|
|
|
|
Parkway's share of
SSNOI
|
|
|
|
$
19,628
|
$
20,915
|
|
$
48,869
|
$
51,930
|
|
|
|
|
|
|
|
|
|
Parkway's share of
recurring SSNOI
|
|
|
$
18,970
|
$
20,199
|
|
$
48,059
|
$
50,097
|
SOURCE Parkway Properties, Inc.