ORLANDO, Fla., Feb. 8, 2016 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) today announced results for its full year and fourth quarter ended December 31, 2015.
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Highlights
-- Fourth quarter 2015 FFO of $0.34 per diluted share, which includes $1.9 million, or $0.02 per diluted share, in one-time charges primarily related to acquisition costs and other non-recurring items -- Full-year 2015 FFO of $1.34 per diluted share -- Adjusted 2016 FFO guidance to a range of $1.21 to $1.31 per diluted share -- Year-over-year recurring same-store cash net operating income growth of 10.2% at share for the quarter -- Fourth quarter 2015 occupancy of 90.7%, with the portfolio 92.7% leased -- Full-year 2015 and year-to-date 2016 asset sales of approximately $624 million, of which approximately $500 million was Parkway's share -- Subsequent to quarter-end, completed previously announced recapitalization of Courvoisier Centre at a gross asset value of $175 million, resulting in net proceeds to Parkway of $154.3 million
"With occupancy at 90.7% and the portfolio 92.7% leased, the fourth quarter concluded a tremendous year for Parkway, in which we executed 2.7 million square feet of leases," stated James R. Heistand, President and Chief Executive Officer of Parkway. "Since January 2015, we have accelerated our capital recycling strategy with dispositions totaling approximately $624 million, including seven assets in Houston, which we sold for approximately $179 million. The continued portfolio transformation delivered superior operational results in 2015 with over 10% same-store cash NOI growth, 78.3% customer retention and an increase in average rent per square foot of $3.56. We believe we've effectively pruned the portfolio of substantially all of Parkway's non-core assets, leaving us with a collection of best-in-class assets that we believe is poised to continue our operational outperformance in 2016."
For the fourth quarter 2015, funds from operations ("FFO") was $39.8 million, or $0.34 per diluted share for Parkway Properties LP's real estate portfolio, in which Parkway owns an interest (the "Parkway Portfolio"). Funds available for distribution ("FAD") was $15.3 million, or $0.13 per diluted share for the Parkway Portfolio.
For the year ended December 31, 2015, FFO was $156.4 million, or $1.34 per diluted share for the Parkway Portfolio. FAD for the year ended December 31, 2015 was $71.1 million, or $0.61 per diluted share for the Parkway Portfolio.
A reconciliation of FFO and FAD to net income is included below. Net income to common stockholders and FFO and FAD for the Parkway Portfolio for the three months ended December 31, 2015 and full-year 2015, as well as a comparison to the prior-year periods, are as follows:
(Amounts in thousands, except per share data) Three Months Ended December 31 Year Ended December 31 ------------------------------ ---------------------- 2015 2014 2015 2014 ---- ---- ---- ---- Amount Per Amount Per Amount Per Amount Per Share Share Share Share --- --- --- ----- Net Income - Common Stockholders - Basic $8,677 $0.08 $42,428 $0.38 $67,335 $0.60 $42,943 $0.42 ====== ===== ======= ===== ======= ===== ======= ===== Wtd. Avg. Basic Shares 111,614 111,076 111,490 101,913 ======= ======= ======= ======= Funds From Operations $39,812 $0.34 $35,594 $0.31 $156,364 $1.34 $143,916 $1.34 ======= ===== ======= ===== ======== ===== ======== ===== Funds Available for Distribution $15,260 $0.13 $14,440 $0.12 $71,077 $0.61 $71,591 $0.67 ======= ===== ======= ===== ======= ===== ======= ===== Wtd. Avg. Diluted Shares/Units 116,760 116,521 116,691 107,319 ======= ======= ======= =======
Operational Results
Occupancy at the end of the fourth quarter 2015 was 90.7%, compared to 90.0% 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 fourth quarter 2015 was 92.7%, compared to 91.7% at the end of the prior quarter.
Parkway's share of recurring same-store net operating income ("NOI") for the Parkway Portfolio was $50.4 million on a GAAP basis during the fourth quarter 2015, which was an increase of $3.0 million, or 6.3%, compared to the same period of the prior year. On a cash basis, the Company's share of recurring same-store NOI for the Parkway Portfolio was $41.8 million, which was an increase of $3.9 million, or 10.2%, compared to the same period of the prior year.
For the year ended December 31, 2015, Parkway's share of recurring same-store NOI for the Parkway Portfolio was $191.9 million on a GAAP basis, which was an increase of $11.4 million, or 6.3%, compared to the prior year. On a cash basis, the Company's share of recurring same-store NOI for the Parkway Portfolio was $152.8 million, which was an increase of $3.1 million, or 2.1%, compared to the prior year.
The Company's portfolio GAAP NOI margin was 63.2% at Parkway's share during the fourth quarter 2015, compared to 57.0% during the same period of the prior year. For the full year 2015, the Company's portfolio GAAP NOI margin at Parkway's share was 61.7%, compared to 59.6% during the prior year.
Leasing Activity
During the fourth quarter 2015, Parkway signed a total of 631,000 square feet of leases at an average rent per square foot of $31.55 and at an average cost of $5.32 per square foot per year. For full-year 2015, the Company signed a total of 2.7 million square feet of leases, at an average rent per square foot of $30.76 and an average cost of $5.74 per square foot per year.
New & Expansion Leasing - During the fourth quarter 2015, Parkway signed 214,000 square feet of new leases at an average rent per square foot of $39.72 and at an average cost of $8.14 per square foot per year. Executing new leases at an all-time high rate of $39.72 effectively reduced Parkway's concession ratio on new leases quarter-over-quarter by 290 basis points to 20.5%.
For the full year 2015, the Company signed a total of 843,000 square feet of new leases, at an average rent per square foot of $34.25 and an average cost of $7.55 per square foot per year.
Expansion leases during the quarter totaled 72,000 square feet at an average rent per square foot of $24.37 and at an average cost of $3.47 per square foot per year. Expansion leases for the year totaled 227,000 square feet at an average rent per square foot of $28.46 and at an average cost of $5.72 per square foot per year.
Renewal Leasing - Customer retention during the fourth quarter 2015 was 81.9%. The Company signed 345,000 square feet of renewal leases at an average rent per square foot of $27.97, representing a 6.3% rate decrease from the expiring rate. The rate decrease in renewal leasing is principally attributable to significant renewal activity in Jacksonville, Orlando and Tampa, Florida. The average cost of renewal leases was $4.17 per square foot per year.
Customer retention for the full year 2015 was 78.3%. The Company signed 1.6 million square feet of renewal leases at an average rent per square foot of $29.27, representing a 2.5% rate increase from the expiring rate. The average cost of renewal leases was $4.79 per square foot per year.
Significant operational and leasing statistics for the quarter as compared to prior quarters are as follows:
For the Three Months Ended -------------------------- 12/31/15 09/30/15 06/30/15 03/31/15 12/31/14 -------- -------- -------- -------- -------- Ending Occupancy 90.7% 90.0% 90.4% 89.3% 88.6% Customer Retention 81.9% 86.6% 62.0% 81.1% 82.6% Square Footage of Total Leases Signed (in thousands) 631 734 687 642 936 Average Revenue Per Square Foot of Total Leases Signed $31.55 $32.12 $28.92 $30.39 $32.20 Average Cost Per Square Foot Per Year of Total Leases Signed $5.32 $6.19 $5.64 $5.76 $5.11
Acquisition and Disposition Activity
On October 1, 2015, Parkway acquired Two Buckhead Plaza, a 210,000 square foot office building located in the Buckhead submarket of Atlanta, Georgia, for a gross purchase price of $80.0 million. The seven-story office building, which includes 50,000 square feet of ground floor retail, was 96.6% occupied as of January 1, 2016 and is expected to generate an estimated forward twelve-month cash net operating income yield of approximately 6.0%. Parkway assumed the first mortgage secured by the property, which has a current outstanding balance of approximately $52.0 million with a current interest rate of 6.43% and a maturity date of October 1, 2017.
On November 6, 2015, a joint venture in which Parkway owns a 40% interest completed the sale of 7000 Central Park, a 415,000 square foot office building located in Atlanta, Georgia, for a gross sale price of $85.3 million. During the fourth quarter of 2015, the joint venture recognized a gain on the sale of 7000 Central Park of approximately $30.5 million, of which $9.8 million was Parkway's share.
On December 23, 2015, Parkway completed the sale of Millenia Park One, a 157,000 square foot office building located in Orlando, Florida, for a gross sale price of $28.2 million. During the fourth quarter of 2015, Parkway recognized a gain on the sale of Millenia Park One of approximately $3.5 million.
Subsequent Events
On January 22, 2016, Parkway completed the sale of 5300 Memorial, a 154,000 square foot office building, and Town & Country, a 149,000 square foot office building, both located in Houston, Texas, for an aggregate gross sale price of $60.0 million. Parkway expects to recognize a gain on the sale of 5300 Memorial and Town & Country of approximately $37.8 million in the first quarter of 2016.
On February 5, 2016, Parkway completed the sale of 80% of its interest in Courvoisier Centre, a 343,000 square foot office building located in Miami, Florida, at a gross asset value of $175.0 million. Parkway retained a 20% interest in the asset through a newly formed joint venture and will continue to perform the property management and leasing services for the asset. Simultaneous with the closing of the joint venture transaction, the joint venture closed on a $106.5 million first mortgage secured by the asset, which has a fixed interest rate of 4.6%, matures in March 2026 and is interest only through maturity. The recapitalization of Courvoisier Centre resulted in net proceeds to Parkway of $154.3 million.
Capital Structure
On December 22, 2015, the Company paid in full the remaining outstanding loan secured by 5300 Memorial and Town & Country totaling $17.2 million and incurred a prepayment fee of $503,000.
At December 31, 2015, the Company had no outstanding debt under its unsecured revolving credit facility, $550.0 million outstanding under its unsecured term loans and held $75.0 million in cash and cash equivalents, of which $58.0 million of cash and cash equivalents was Parkway's share. Parkway's share of secured debt totaled $1.0 billion at December 31, 2015.
At December 31, 2015, the Company's net debt to adjusted EBITDA multiple was 6.4x, using the quarter's annualized adjusted EBITDA after adjusting for the impact of investment activity completed during the period, as compared to 6.6x at September 30, 2015, and 6.1x at December 31, 2014.
Common Dividend
The Company's previously announced fourth quarter cash dividend of $0.1875 per share, which represents an annualized dividend of $0.75 per share, was paid on December 30, 2015 to stockholders of record as of December 16, 2015.
2016 Outlook
After considering recently announced dispositions, as well as the expected near-term sale of Two Liberty Place in Philadelphia, the Company is adjusting its 2016 FFO outlook to a range of $1.21 to $1.31 per diluted share for the Parkway Portfolio and adjusting its 2016 earnings per diluted share ("EPS") outlook to a range of $0.48 to $0.58 for the Parkway Portfolio. The Company is increasing its 2016 portfolio ending occupancy to a range of 91.0% to 92.0% as a result of U.S. Airways' decision not to exercise its early termination option for its lease at the U.S. Airways Building in Tempe, Arizona.
The reconciliation of projected EPS to projected FFO per diluted share is as follows:
Outlook for 2016 Range ---------------- ----- Fully diluted EPS $0.48 - $0.58 Parkway's share of depreciation and amortization $1.26 - $1.26 Gain on sale of real estate ($0.53 - $0.53) Reported FFO per diluted share $1.21 - $1.31
2016 Core Operating Assumptions Revised Previous 2016 2016 Outlook Outlook ------- ------- Recurring cash NOI $203,000 - $208,000 $210,500 - $ 215,500 Straight-line rent and amortization of above market rent $ 33,000 - $ 34,000 $ 33,500 - $ 34,500 Management fee after-tax net income $ 3,000 - $ 4,000 $ 3,000 - $ 4,000 General and administrative expense $ 35,000 - $ 37,000 $ 35,000 - $ 38,000 Share based compensation expense included in G&A above $ 5,000 - $ 6,000 $ 5,000 - $ 6,000 Mortgage and credit facilities interest expense $ 58,500 - $ 60,500 $ 58,000 - $ 60,000 Debt and swap termination fees included in interest expense above $ 2,200 - $ 2,200 $ 0 - $ 0 Non-cash loan cost amortization included in interest expense above $ 2,000 - $ 2,500 $ 2,000 - $ 2,500 Amortization of mortgage interest premium included in interest expense above $ 11,000 - $ 12,000 $ 11,000 - $ 12,000 Recurring capital expenditures for building improvements, tenant improvements and leasing commissions $ 44,000 - $ 49,000 $ 44,000 - $ 49,000 Recurring same-store GAAP NOI (2.0)% - 0.0% (2.0)% - 0.0% Recurring same-store Cash NOI 9.0% - 11.0% 9.0% -11.0% Portfolio ending occupancy 91.0% - 92.0% 89.5% - 90.5% Weighted average annual diluted common shares/units 116,800 - 116,800 116,800 - 116,800
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 other than those currently under contract, possible future capital markets activity, 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 not to issue quarterly earnings guidance or revise the annual earnings outlook unless a material event occurs that impacts the Company's 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 full-year and fourth quarter earnings conference call on Tuesday, February 9, 2016 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 February 23, 2016, by dialing 877-870-5176, or 1-858-384-5517 for international callers, and using the passcode 13627612.
About Parkway Properties
Parkway Properties, Inc. is a fully integrated, self-administered and self-managed real estate investment trust specializing in the acquisition, ownership, development 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 36 office properties located in six states with an aggregate of approximately 14.3 million square feet of leasable space as of January 1, 2016. Fee-based real estate services are offered through wholly owned subsidiaries of the Company, which in total manage and/or lease approximately 2.7 million square feet for third-party owners as of January 1, 2016.
Forward Looking Statements
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," "plan," "potential," "project," "should," "will" 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 projections relating to fully diluted EPS, share of depreciation and amortization, net gains on sales of real estate, reported FFO per share, recurring FFO per share, nonrecurring items, net operating income, cap rates, internal rates of return, dividend payment rates, FFO accretion, capital improvements, expected sources of financing, the timing of closing of acquisitions, dispositions or other 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; competition in the leasing market; the demand for and market acceptance of the Company's properties for rental purposes; oversupply of office properties in the Company's geographic markets; the amount and growth of the Company's expenses; customer financial difficulties and general economic conditions, including increasing interest rates and changes in the prices of commodities, as well as economic conditions in the Company's geographic markets; defaults or non-renewal of leases; risks associated with joint venture partners; risks associated with the ownership and development of real property, including risks related to natural disasters; risks associated with property acquisitions; the failure to acquire or sell properties as and when anticipated; illiquidity of real estate; termination or non-renewal of property management contracts; the bankruptcy or insolvency of companies for which the Company 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 businesses; compliance with environmental and other regulations, including real estate and zoning laws; the Company's inability to obtain financing; the Company's inability to use net operating loss carry forwards; the Company's failure to maintain its status as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended; 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 and NOI, 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 and NOI are helpful to investors as supplemental performance measures because these measures exclude the effect of depreciation, amortization, impairment 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 and NOI 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 and NOI 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 by NAREIT as net income (computed in accordance with GAAP), reduced by preferred dividends, excluding gains or losses from sale of previously depreciable real estate assets, impairment charges related to depreciable real estate under GAAP, plus depreciation and amortization related to depreciable real estate, and after adjustments to derive our pro rata share of FFO of consolidated and unconsolidated joint ventures. Further, we do not adjust FFO to eliminate the effects of non-recurring charges. FFO measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
Recurring FFO - In addition to FFO, Parkway also discloses recurring FFO, which excludes Parkway's share of non-cash adjustment for interest rate swaps, realignment expenses, adjustments for non-recurring lease termination fees, gains and losses on extinguishment of debt, acquisition costs 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. Recurring FFO measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
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 straight line rent adjustments, amortization of above and below market leases, share-based compensation expense, acquisition costs, amortization of loan costs, other non-cash charges, gain or loss on extinguishment of debt, amortization of mortgage interest premium 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. FAD measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA - Parkway defines EBITDA as net income before interest expense, income taxes and depreciation and amortization. Parkway further defines Adjusted EBITDA, a non-GAAP financial measure, as net income before interest expense, income taxes, depreciation and amortization expense, acquisition costs, gains and losses on early extinguishment of debt, impairment of real estate, impairment loss of management contracts net of tax, share-based compensation expense, realignment expenses, and gains and losses on sales of real estate. Adjustments for Parkway's share of partnerships and joint ventures are included in the computation of Adjusted EBITDA on the same basis. Adjusted 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. Adjusted EBITDA measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
Net Operating Income (NOI) - Parkway defines net operating income ("NOI") as income from office and parking properties less property operating expenses. NOI measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.
Same-Store Properties - Parkway defines same-store properties as those properties that were owned for the entire current and prior year reporting periods and excludes properties classified as discontinued operations or which meet held for sale criteria. Same-store net operating income ("SSNOI") includes income from real estate operations less property operating expenses (before interest and depreciation and amortization) for same-store properties. Recurring SSNOI includes adjustments for non-recurring lease termination fees or other unusual items. SSNOI as computed by Parkway may not be comparable to SSNOI reported by other REITs that do not define the measure exactly as we do. SSNOI is a supplemental industry reporting measurement used to evaluate the performance of the Company's investments in real estate assets.
Contact:
Parkway Properties, Inc.
David R. O'Reilly
Executive Vice President and Chief Financial Officer
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 share data) December 31, December 31, 2015 2014 ---- ---- (Unaudited) (Unaudited) Assets Real estate related investments: Office and parking properties $3,332,021 $3,333,900 Accumulated depreciation (308,772) (309,629) 3,023,249 3,024,271 Condominium units - 9,318 Mortgage loan receivable 3,331 3,417 Investment in unconsolidated joint ventures 39,592 55,550 3,066,172 3,092,556 Receivables and other assets: Rents and fees receivable, net 856 4,032 Straight line rents receivable 86,138 63,236 Other receivables 9,952 20,395 Unamortized lease costs 148,901 129,781 Unamortized loan costs 9,954 10,185 Escrows and other deposits 40,444 28,263 Prepaid assets 3,412 18,426 Investment in preferred interest 3,500 3,500 Fair value of interest rate swaps 474 1,131 Deferred tax asset - non-current 4,999 5,040 Other assets 858 978 Land available for sale 175 250 Intangible assets, net 146,688 185,488 Assets held for sale 21,373 24,079 Management contracts, net 378 1,133 Cash and cash equivalents 74,961 116,241 Total assets $3,619,235 $3,704,714 ========== ========== Liabilities Notes payable to banks $550,000 $481,500 Mortgage notes payable 1,238,336 1,339,450 Accounts payable and other liabilities: Corporate payables 4,077 11,854 Deferred tax liability - non-current 793 470 Accrued payroll 4,845 3,210 Fair value of interest rate swaps 9,026 11,077 Interest payable 5,944 6,158 Property payables: Accrued expenses and accounts payable 55,322 43,359 Accrued property taxes 22,857 25,652 Prepaid rents 18,787 16,311 Deferred revenue 25 105 Security deposits 7,135 7,964 Unamortized below market leases 64,874 76,253 Liabilities related to assets held for sale 1,003 2,035 Total liabilities 1,983,024 2,025,398 --------- --------- Equity Parkway Properties, Inc. stockholders' equity: Common stock, $.001 par value, 215,500,000 shares authorized and 111,631,153 and 111,127,386 shares issued and outstanding in 2015 and 2014, respectively 112 111 Limited voting stock, $.001 par value, 4,500,000 shares authorized and 4,213,104 shares issued and outstanding 4 4 Additional paid-in capital 1,854,913 1,842,581 Accumulated other comprehensive loss (6,199) (6,166) Accumulated deficit (460,131) (443,757) Total Parkway Properties, Inc. stockholders' equity 1,388,699 1,392,773 Noncontrolling interests 247,512 286,543 Total equity 1,636,211 1,679,316 Total liabilities and equity $3,619,235 $3,704,714 ========== ==========
PARKWAY PROPERTIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three Months Ended Year Ended December 31, December 31, ------------ ------------ 2015 2014 2015 2014 ---- ---- ---- ---- (Unaudited) (Unaudited) Revenues Income from office and parking properties $110,856 $114,995 $452,597 $418,007 Management company income 1,675 5,569 10,321 22,140 Sale of condominium units 20 5,818 11,065 16,554 Total revenues 112,551 126,382 473,983 456,701 ------- ------- ------- ------- Expenses Property operating expense 41,070 48,468 173,241 168,071 Management company expenses 1,729 4,915 9,935 20,280 Cost of sales - condominium units 41 4,485 11,120 13,199 Depreciation and amortization 47,577 51,213 190,387 182,955 Impairment loss on real estate - 11,700 5,400 11,700 Impairment loss on management contracts - 4,750 - 4,750 General and administrative 7,065 6,523 31,194 32,660 Acquisition costs 1,306 1,200 2,074 3,463 Total expenses 98,788 133,254 423,351 437,078 ------ ------- ------- ------- Operating income (loss) 13,763 (6,872) 50,632 19,623 Other income and expenses Interest and other income 203 561 903 1,452 Equity in earnings (loss) of unconsolidated joint ventures 1,281 (185) 2,204 (967) Net gains on sale of real estate 3,819 69,714 110,732 82,667 Gain on sale of unconsolidated property 9,698 - 9,698 - Loss on extinguishment of debt (520) (2,066) (6,062) (2,405) Interest expense (17,590) (17,514) (71,481) (66,095) ------- ------- ------- ------- Income before income taxes 10,654 43,638 96,626 34,275 Income tax (expense) benefit (894) 624 (1,903) (139) ---- --- ------ ---- Income from continuing operations 9,760 44,262 94,723 34,136 Discontinued operations: Loss from discontinued operations - (10) - (391) Net gains on sale of real estate from discontinued operations - - - 10,463 Total discontinued operations - (10) - 10,072 --- --- --- ------ Net income 9,760 44,252 94,723 44,208 Net income attributable to noncontrolling interests - unit holders (375) (2,147) (2,947) (2,089) Net (income) loss attributable to noncontrolling interests -real estate partnerships (708) 323 (24,441) 824 Net income for Parkway Properties, Inc. and attributable to common stockholders $8,677 $42,428 $67,335 $42,943 ====== ======= ======= ======= Net income per common share attributable to Parkway Properties, Inc.: Basic: Income from continuing operations attributable to Parkway Properties, Inc. $0.08 $0.38 $0.60 $0.33 Discontinued operations - - - 0.09 Basic net income attributable to Parkway Properties, Inc. $0.08 $0.38 $0.60 $0.42 ===== ===== ===== ===== Diluted: Income from continuing operations attributable to Parkway Properties, Inc. $0.08 $0.38 $0.60 $0.33 Discontinued operations - - - 0.09 Diluted net income attributable to Parkway Properties, Inc. $0.08 $0.38 $0.60 $0.42 ===== ===== ===== ===== Weighted average shares outstanding: Basic 111,614 111,076 111,490 101,913 ======= ======= ======= ======= Diluted 116,760 116,521 116,691 107,319 ======= ======= ======= ======= Amounts attributable to Parkway Properties, Inc. common stockholders: Income from continuing operations attributable to Parkway Properties, Inc. $8,677 $42,437 $67,335 $33,223 Discontinued operations - (9) - 9,720 Net income attributable to common stockholders $8,677 $42,428 $67,335 $42,943 ====== ======= ======= =======
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 Year Ended December 31, December 31, ------------ ------------ 2015 2014 2015 2014 ---- ---- ---- ---- (Unaudited) (Unaudited) Net income for Parkway Properties, Inc. $8,677 $42,428 $67,335 $42,943 Adjustments to net income for Parkway Properties, Inc.: Depreciation and amortization 44,333 48,516 175,802 179,797 Noncontrolling interest - unit holders 375 2,147 2,947 2,089 Impairment loss on depreciable real estate - 11,700 5,400 11,700 Net gains on sale of real estate (3,819) (69,197) (85,366) (82,150) Net gains on sale of real estate - discontinued operations - - - (10,463) Gain on sale of unconsolidated property (9,754) - (9,754) - ------ --- ------ --- Funds from operations attributable to the operating partnership $39,812 $35,594 $156,364 $143,916 Adjustments to derive recurring funds from operations: Non-recurring lease termination fee income (470) (539) (2,054) (1,443) Loss on extinguishment of debt 575 2,066 4,537 2,405 Acquisition costs 1,306 1,200 2,074 3,463 Impairment loss on management contracts, net of tax - 2,905 - 2,905 Non-cash adjustment for interest rate swap (52) (56) 370 (19) Realignment expenses 520 881 520 6,016 Recurring funds from operations attributable to the operating partnership $41,691 $42,051 $161,811 $157,243 ======= ======= ======== ======== Funds available for distribution Funds from operations $39,812 $35,594 $156,364 $143,916 Add (deduct): Straight-line rents (9,327) (5,692) (36,320) (22,310) Amortization of below market leases, net (4,427) (4,776) (18,149) (14,653) Amortization of share-based compensation 1,410 1,400 6,525 8,238 Impairment loss on management contracts, net of tax - 2,905 - 2,905 Acquisition costs 1,306 1,200 2,074 3,463 Amortization of loan costs 716 681 2,919 2,712 Non-cash adjustment for interest rate swap (52) (56) 370 (19) Loss on extinguishment of debt 575 2,066 4,537 2,405 Amortization of mortgage interest premium (3,327) (2,794) (12,268) (10,046) Recurring capital expenditures: (1) Building improvements (3,930) (2,913) (7,489) (9,510) Tenant improvements - new leases (1,872) (1,227) (5,020) (11,902) Tenant improvements - renewal leases (2,648) (2,135) (8,383) (5,377) Leasing costs - new leases (854) (3,138) (7,038) (5,820) Leasing costs - renewal leases (2,122) (6,675) (7,045) (12,411) Total recurring capital expenditures (11,426) (16,088) (34,975) (45,020) ------- ------- ------- ------- Funds available for distribution attributable to the operating partnership $15,260 $14,440 $71,077 $71,591 ======= ======= ======= ======= Diluted per common share/unit information (**) FFO per share $0.34 $0.31 $1.34 $1.34 Recurring FFO per share $0.36 $0.36 $1.39 $1.47 FAD per share $0.13 $0.12 $0.61 $0.67 Dividends paid $0.1875 $0.1875 $0.7500 $0.7500 Dividend payout ratio for FFO 55.1% 60.5% 56.0% 56.0% Dividend payout ratio for recurring FFO 52.1% 52.1% 54.0% 51.0% Dividend payout ratio for FAD 144.2% 156.3% 123.0% 111.9% Other supplemental information Recurring capital expenditures $11,426 $16,088 $34,975 $45,020 Upgrades on acquisitions 28,088 24,586 94,085 56,938 Total real estate improvements and leasing costs (1) $39,514 $40,674 $129,060 $101,958 ======= ======= ======== ======== **Information for diluted computations: Basic common shares/units outstanding 116,446 116,276 116,393 107,113 Dilutive effect of other share equivalents 314 245 298 206 Diluted weighted average shares/units outstanding 116,760 116,521 116,691 107,319 ======= ======= ======= ======= (1) Development costs related to Hayden Ferry III are not included in these amounts.
PARKWAY PROPERTIES, INC. EBITDA, ADJUSTED EBITDA, COVERAGE RATIOS AND CAPITALIZATION INFORMATION (In thousands, except per share, percentage and multiple data) 12/31/2015 9/30/2015 6/30/2015 3/31/2015 12/31/2014 ---------- --------- --------- --------- ---------- Net income for Parkway Properties, Inc. $8,677 $37,251 $14,132 $7,275 $42,428 Adjustments at Parkway's share to net income for Parkway Properties, Inc.: Interest expense 14,822 14,256 14,700 15,795 15,910 Depreciation and amortization 44,333 42,398 43,706 45,365 48,516 Income tax expense 894 491 326 192 1,221 --- --- --- --- ----- EBITDA 68,726 94,396 72,864 68,627 108,075 Amortization of loan costs 716 708 824 671 681 Non-cash adjustment for interest rate swap (52) 217 (43) 248 (56) (Gain) loss on extinguishment of debt 575 210 3,831 (79) 2,066 Noncontrolling interest - unit holders 375 1,617 607 348 2,147 Acquisition costs 1,306 101 196 471 1,200 Amortization of share-based compensation 1,410 1,653 1,726 1,736 1,400 Net gains on sale of real estate (3,819) (42,309) (24,922) (14,316) (69,197) Gain on sale of unconsolidated property (9,754) - - - - Impairment loss on real estate - - 4,400 1,000 11,700 Impairment loss on management contracts, net of tax - - - - 2,905 Realignment expenses 520 - - - - Adjusted EBITDA $60,003 $56,593 $59,483 $58,706 $60,921 ======= ======= ======= ======= ======= Interest coverage ratio 4.0 4.0 4.0 3.7 3.8 === === === === === Fixed charge coverage ratio 3.4 3.3 3.5 3.1 3.2 === === === === === Capitalization information Mortgage notes payable at Parkway's share $1,034,972 $1,007,528 $1,007,589 $1,109,338 $1,124,860 Notes payable to banks 550,000 550,000 600,000 593,000 481,500 Parkway's share of total debt 1,584,972 1,557,528 1,607,589 1,702,338 1,606,360 Less: Parkway's share of cash and cash equivalents (57,974) (88,878) (47,142) (37,323) (82,353) ------- ------- ------- ------- ------- Parkway's share of net debt 1,526,998 1,468,650 1,560,447 1,665,015 1,524,007 Shares of common stock and operating units outstanding 116,464 116,424 116,391 116,372 116,327 Stock price per share at period end $15.63 $15.56 $17.44 $17.35 $18.39 ------ ------ ------ ------ ------ Market value of common equity $1,820,332 $1,811,557 $2,029,859 $2,019,054 $2,139,254 Total market capitalization (including net debt) $3,347,330 $3,280,207 $3,590,306 $3,684,069 $3,663,261 ========== ========== ========== ========== ========== Net debt as a percentage of market capitalization 45.6% 44.8% 43.5% 45.2% 41.6% ==== ==== ==== ==== ==== Adjusted EBITDA annualized $240,012 $226,372 $237,932 $234,824 $243,684 Adjustment to annualize investment activities (1) (1,829) (2,747) (4,011) 606 8,194 Adjusted EBITDA - annualized investment activities $238,183 $223,625 $233,921 $235,430 $251,878 ======== ======== ======== ======== ======== Net debt to Adjusted EBITDA multiple 6.4 6.6 6.7 7.1 6.1 === === === === === (1) Adjustment to annualized investment activities represents the implied annualized impact of any acquisition or disposition activity for the period.
PARKWAY PROPERTIES, INC. SAME-STORE NET OPERATING INCOME (In thousands, except number of properties data) Three Months Ended December 31, 2015 and 2014 --------------------------------------------- Net Operating Income Average Occupancy -------------------- ----------------- Number of Percentage Square Feet Properties of Portfolio (1) 2015 2014 2015 2014 ----------- ---------- --------------- ---- ---- ---- ---- Same-store properties: Wholly owned 9,559 22 67.2% $46,887 $44,250 90.4% 89.5% Fund II 1,950 5 14.4% 10,050 9,940 96.9% 97.3% Total same-store properties 11,509 27 81.6% $56,937 $54,190 91.5% 90.8% ====== === ==== ======= ======= ==== ==== Net operating income from consolidated office and parking properties (2) 14,108 35 100.0% $69,786 $68,527 ====== === ===== ======= ======= (1) Percentage of portfolio based on net operating income for the three months ended December 31, 2015. (2) Same-store net operating income for the three months ended December 31, 2014 includes the effect of amounts from our One Congress Plaza and San Jacinto Center properties in Austin, Texas as these properties are included as same-store properties for comparative purposes. Previously, the activity from these properties was included in equity in earnings. The following table is a reconciliation of net income to Same-Store net operating income (SSNOI) and Recurring SSNOI: Three Months Ended Year Ended December 31, December 31, ------------ ------------ 2015 2014 2015 2014 ---- ---- ---- ---- Net income for Parkway Properties, Inc. $8,677 $42,428 $67,335 $42,943 Add (deduct): Interest expense 17,590 17,514 71,481 66,095 Loss on extinguishment of debt 520 2,066 6,062 2,405 Depreciation and amortization 47,577 51,213 190,387 182,955 Management company expenses 1,729 4,915 9,935 20,280 Income tax expense (benefit) 894 (624) 1,903 139 General and administrative 7,065 6,523 31,194 32,660 Acquisition costs 1,306 1,200 2,074 3,463 Equity in (earnings) loss of unconsolidated joint ventures (1,281) 185 (2,204) 967 Sale of condominium units (20) (5,818) (11,065) (16,554) Cost of sales - condominium units 41 4,485 11,120 13,199 Net income attributable to noncontrolling interests 1,083 1,824 27,388 1,265 Loss from discontinued operations - 10 - 391 Net gains on sale of real estate (3,819) (69,714) (110,732) (82,667) Net gains on sale of real estate - discontinued operations - - - (10,463) Gain on sale of unconsolidated property (9,698) - (9,698) - Impairment loss on real estate - 11,700 5,400 11,700 Impairment loss on management contracts - 4,750 - 4,750 Management company income (1,675) (5,569) (10,321) (22,140) Interest and other income (203) (561) (903) (1,452) ---- ---- ---- ------ Net operating income from consolidated office and parking properties 69,786 66,527 279,356 249,936 Less: Net operating income from non same-store properties (12,849) (14,337) (60,377) (60,755) Add: One Congress Plaza and San Jacinto Center (3) - 2,000 - 18,303 Same-store net operating income (SSNOI) 56,937 54,190 218,979 207,484 Less: non-recurring lease termination fee income (25) (269) (847) (871) Recurring SSNOI $56,912 $53,921 $218,132 $206,613 ======= ======= ======== ======== Parkway's share of SSNOI $50,466 $47,732 $192,796 $181,420 ======= ======= ======== ======== Parkway's share of recurring SSNOI $50,441 $47,455 $191,949 $180,568 ======= ======= ======== ======== (3) Same-store net operating income and recurring same-store net operating income for the three months and year ended December 31, 2014 includes the effect of amounts from our One Congress Plaza and San Jacinto Center properties in Austin, Texas as these properties are included as same-store properties for comparative purposes. Previously, the activity from these properties was included in equity in earnings.
PARKWAY PROPERTIES, INC. SAME-STORE NET OPERATING INCOME (Continued) THREE MONTHS ENDED DECEMBER 31, 2015 AND 2014 (In thousands) Consolidated Parkway's Share ------------ --------------- Dollar Percentage Dollar Percentage 2015 2014 Change Change 2015 2014 Change Change ---- ---- ------ ------ ---- ---- ------ ------ Same-store assets GAAP NOI: Revenues Wholly-owned properties $74,078 $76,572 $(2,494) -3.3% $74,078 $76,572 $(2,494) -3.3% Fund II 16,005 15,317 688 4.5% 4,238 4,006 232 5.8% Unconsolidated joint ventures - - - - 840 840 - - Total same-store GAAP revenue 90,083 91,889 (1,806) -2.0% 79,156 81,418 (2,262) -2.8% ------ ------ ------ ---- ------ ------ ------ ---- Expenses Wholly-owned properties 27,191 32,322 (5,131) -15.9% 27,191 32,322 (5,131) -15.9% Fund II 5,955 5,377 578 10.7% 1,495 1,362 133 9.8% Unconsolidated joint ventures - - - - 4 2 2 100.0% Total same-store GAAP expenses 33,146 37,699 (4,553) -12.1% 28,690 33,686 (4,996) -14.8% ------ ------ ------ ----- ------ ------ ------ ----- NOI - GAAP $56,937 $54,190 $2,747 5.1% $50,466 $47,732 $2,734 5.7% ------- ------- ------ --- ------- ------- ------ --- Net margin - GAAP 63.2% 59.0% 4.2% 63.8% 58.6% 5.2% ---- ---- --- ---- ---- --- Acquisitions & Development Properties Revenues Wholly-owned properties $17,276 $6,208 $11,068 $17,276 $6,208 $11,068 Fund II 859 - 859 602 - 602 Unconsolidated joint ventures - - - - - - Total acquisitions GAAP revenue 18,135 6,208 11,927 17,878 6,208 11,670 ------ ----- ------ ------ ----- ------ Expenses Wholly-owned properties 6,520 2,975 3,545 6,520 2,975 3,545 Fund II 108 (11) 119 76 7 69 Unconsolidated joint ventures - - - - - - Total acquisitions GAAP expenses 6,628 2,964 3,664 6,596 2,982 3,614 ----- ----- ----- ----- ----- ----- NOI $11,507 $3,244 $8,263 $11,282 $3,226 $8,056 ------- ------ ------ ------- ------ ------ Net margin 63.5% 52.3% 11.2% 63.1% 52.0% 11.1% ---- ---- ---- ---- ---- ---- Office assets sold or held for sale Revenues Wholly-owned properties $2,632 $18,210 $(15,578) $2,632 $18,210 $(15,578) Fund II 6 2,584 (2,578) 2 775 (773) Unconsolidated joint ventures - - - 342 3,994 (3,652) Total sold properties GAAP revenue 2,638 20,794 (18,156) 2,976 22,979 (20,003) ----- ------ ------- ----- ------ ------- Expenses Wholly-owned properties 1,290 8,566 (7,276) 1,290 8,566 (7,276) Fund II 6 1,135 (1,129) 2 339 (337) Unconsolidated joint ventures - - - 183 1,960 (1,777) Total sold properties GAAP expenses 1,296 9,701 (8,405) 1,475 10,865 (9,390) ----- ----- ------ ----- ------ ------ NOI $1,342 $11,093 $(9,751) $1,501 $12,114 $(10,613) ------ ------- ------- ------ ------- -------- Total portfolio Revenues Wholly-owned properties $93,986 $100,990 $(7,004) $93,986 $100,990 $(7,004) Fund II 16,870 17,901 (1,031) 4,842 4,781 61 Unconsolidated joint ventures - - - 1,182 4,834 (3,652) Total revenues $110,856 $118,891 $(8,035) $100,010 $110,605 $(10,595) -------- -------- ------- -------- -------- -------- Expenses Wholly-owned properties 35,001 43,863 (8,862) 35,001 43,863 (8,862) Fund II 6,069 6,501 (432) 1,573 1,708 (135) Unconsolidated joint ventures - - - 187 1,962 (1,775) Total expenses $41,070 $50,364 $(9,294) $36,761 $47,533 $(10,772) ------- ------- ------- ------- ------- -------- NOI $69,786 $68,527 $1,259 $63,249 $63,072 $177 ------- ------- ------ ------- ------- ---- Net margin 63.0% 57.6% 63.2% 57.0% ---- ---- ---- ---- Same-store assets recurring GAAP NOI: Total same-store GAAP revenue $90,083 $91,889 $(1,806) -2.0% $79,156 $81,418 $(2,262) -2.8% Non-recurring lease termination fee income (25) (269) 244 -90.7% (25) (277) 252 -91.0% Recurring same-store revenue 90,058 91,620 (1,562) -1.7% 79,131 81,141 (2,010) -2.5% Total same-store expenses 33,146 37,699 (4,553) -12.1% 28,690 33,686 (4,996) -14.8% Recurring NOI - GAAP $56,912 $53,921 $2,991 5.5% $50,441 $47,455 $2,986 6.3% ------- ------- ------ --- ------- ------- ------ --- Recurring net margin - GAAP 63.2% 58.9% 4.3% 63.7% 58.5% 5.2% ---- ---- --- ---- ---- --- Same-store assets cash NOI: Total same-store GAAP revenue $90,083 $91,889 $(1,806) -2.0% $79,156 $81,418 $(2,262) -2.8% Amortization of below market leases, net (3,750) (3,547) (203) 5.7% (3,934) (3,860) (74) 1.9% Straight-line rents (5,667) (5,407) (260) 4.8% (4,745) (5,688) 943 -16.6% Total same-store cash revenue 80,666 82,935 (2,269) -2.7% 70,477 71,870 (1,393) -1.9% Total same-store expenses 33,146 37,699 (4,553) -12.1% 28,690 33,686 (4,996) -14.8% NOI - cash $47,520 $45,236 $2,284 5.0% $41,787 $38,184 $3,603 9.4% ------- ------- ------ --- ------- ------- ------ --- Net margin - cash 58.9% 54.5% 4.4% 59.3% 53.1% 6.2% ---- ---- --- ---- ---- --- Same-store assets recurring cash NOI: Total same-store cash revenue $80,666 $82,935 $(2,269) -2.7% $70,477 $71,870 $(1,393) -1.9% Non-recurring lease termination fee income (25) (269) 244 -90.7% (25) (277) 252 -91.0% Recurring same-store cash revenue 80,641 82,666 (2,025) -2.4% 70,452 71,593 (1,141) -1.6% Total same-store expenses 33,146 37,699 (4,553) -12.1% 28,690 33,686 (4,996) -14.8% Recurring NOI - cash $47,495 $44,967 $2,528 5.6% $41,762 $37,907 $3,855 10.2% ------- ------- ------ --- ------- ------- ------ ---- Recurring net margin - cash 58.9% 54.4% 4.5% 59.3% 52.9% 6.4% ---- ---- --- ---- ---- --- *N/M - Not Meaningful
PARKWAY PROPERTIES, INC. SAME-STORE NET OPERATING INCOME (Continued) YEAR ENDED DECEMBER 31, 2015 AND 2014 (In thousands) Consolidated Parkway's Share ------------ --------------- Dollar Percentage Dollar Percentage 2015 2014 Change Change 2015 2014 Change Change ---- ---- ------ ------ ---- ---- ------ ------ Same-store assets GAAP NOI: Revenues Wholly-owned properties $283,690 $274,653 $9,037 3.3% $283,690 $274,653 $9,037 3.3% Fund II 63,297 61,774 1,523 2.5% 16,595 16,122 473 2.9% Unconsolidated joint ventures - - - - 3,359 3,359 - - Total same-store GAAP revenue 346,987 336,427 10,560 3.1% 303,644 294,134 9,510 3.2% ------- ------- ------ --- ------- ------- ----- --- Expenses Wholly-owned properties 104,991 107,204 (2,213) -2.1% 104,991 107,204 (2,213) -2.1% Fund II 23,017 21,739 1,278 5.9% 5,851 5,508 343 6.2% Unconsolidated joint ventures - - - - 6 2 4 *N/M Total same-store GAAP expenses 128,008 128,943 (935) -0.7% 110,848 112,714 (1,866) -1.7% ------- ------- ---- ---- ------- ------- ------ ---- NOI - GAAP $218,979 $207,484 $11,495 5.5% $192,796 $181,420 $11,376 6.3% -------- -------- ------- --- -------- -------- ------- --- Net margin - GAAP 63.1% 61.7% 1.4% 63.5% 61.7% 1.8% ---- ---- --- ---- ---- --- Acquisitions & Development Properties Revenues Wholly-owned properties $64,425 $26,580 $37,845 $64,425 $26,580 $37,845 Fund II 859 - 859 601 - 601 Unconsolidated joint ventures - - - - - - Total acquisitions GAAP revenue 65,284 26,580 38,704 65,026 26,580 38,446 ------ ------ ------ ------ ------ ------ Expenses Wholly-owned properties 26,986 11,205 15,781 26,986 11,205 15,781 Fund II 219 54 165 153 46 107 Unconsolidated joint ventures - - - - - - Total acquisitions GAAP expenses 27,205 11,259 15,946 27,139 11,251 15,888 ------ ------ ------ ------ ------ ------ NOI $38,079 $15,321 $22,758 $37,887 $15,329 $22,558 ------- ------- ------- ------- ------- ------- Net margin 58.3% 57.6% 0.7% 58.3% 57.7% 0.6% ---- ---- --- ---- ---- --- Office assets sold or held for sale Revenues Wholly-owned properties $36,461 $75,375 $(38,914) $36,461 $75,375 $(38,914) Fund II 3,865 10,338 (6,473) 1,160 3,101 (1,941) Unconsolidated joint ventures - - - 2,870 25,077 (22,207) Total sold properties GAAP revenue 40,326 85,713 (45,387) 40,491 103,553 (63,062) ------ ------ ------- ------ ------- ------- Expenses Wholly-owned properties 16,367 35,421 (19,054) 16,367 35,421 (19,054) Fund II 1,661 4,858 (3,197) 498 1,472 (974) Unconsolidated joint ventures - - - 1,683 10,656 (8,973) Total sold properties GAAP expenses 18,028 40,279 (22,251) 18,548 47,549 (29,001) ------ ------ ------- ------ ------ ------- NOI $22,298 $45,434 $(23,136) $21,943 $56,004 $(34,061) ------- ------- -------- ------- ------- -------- Total portfolio Revenues Wholly-owned properties $384,576 $376,608 $7,968 $384,576 $376,608 $7,968 Fund II 68,021 72,112 (4,091) 18,356 19,223 (867) Unconsolidated joint ventures - - - 6,229 28,436 (22,207) Total revenues $452,597 $448,720 $3,877 $409,161 $424,267 $(15,106) -------- -------- ------ -------- -------- -------- Expenses Wholly-owned properties 148,344 153,830 (5,486) 148,344 153,830 (5,486) Fund II 24,897 26,651 (1,754) 6,502 7,026 (524) Unconsolidated joint ventures - - - 1,689 10,658 (8,969) Total expenses $173,241 $180,481 $(7,240) $156,535 $171,514 $(14,979) -------- -------- ------- -------- -------- -------- NOI $279,356 $268,239 $11,117 $252,626 $252,753 $(127) -------- -------- ------- -------- -------- ----- Net margin 61.7% 59.8% 61.7% 59.6% ---- ---- ---- ---- Same-store assets recurring GAAP NOI: Total same-store GAAP revenue $346,987 $336,427 $10,560 3.1% $303,644 $294,134 $9,510 3.2% Non-recurring lease termination fee income (847) (871) 24 -2.8% (847) (852) 5 -0.6% Recurring same-store revenue 346,140 335,556 10,584 3.2% 302,797 293,282 9,515 3.2% Total same-store expenses 128,008 128,943 (935) -0.7% 110,848 112,714 (1,866) -1.7% Recurring NOI - GAAP $218,132 $206,613 $11,519 5.6% $191,949 $180,568 $11,381 6.3% -------- -------- ------- --- -------- -------- ------- --- Recurring net margin - GAAP 63.0% 61.6% 1.4% 63.4% 61.6% 1.8% ---- ---- --- ---- ---- --- Same-store assets cash NOI: Total same-store GAAP revenue $346,987 $336,427 $10,560 3.1% $303,644 $294,134 $9,510 3.2% Amortization of below market leases, net (16,610) (9,549) (7,061) 73.9% (17,408) (10,509) (6,899) 65.6% Straight-line rents (22,357) (20,814) (1,543) 7.4% (21,784) (20,391) (1,393) 6.8% Total same-store cash revenue 308,020 306,064 1,956 0.6% 264,452 263,234 1,218 0.5% Total same-store expenses 128,008 128,943 (935) -0.7% 110,848 112,714 (1,866) -1.7% NOI - cash $180,012 $177,121 $2,891 1.6% $153,604 $150,520 $3,084 2.0% -------- -------- ------ --- -------- -------- ------ --- Net margin - cash 58.4% 57.9% 0.5% 58.1% 57.2% 0.9% ---- ---- --- ---- ---- --- Same-store assets recurring cash NOI: Total same-store cash revenue $308,020 $306,064 $1,956 0.6% $264,452 $263,234 $1,218 0.5% Non-recurring lease termination fee income (847) (871) 24 -2.8% (847) (852) 5 -0.6% Recurring same-store cash revenue 307,173 305,193 1,980 0.6% 263,605 262,382 1,223 0.5% Total same-store expenses 128,008 128,943 (935) -0.7% 110,848 112,714 (1,866) -1.7% Recurring NOI - cash $179,165 $176,250 $2,915 1.7% $152,757 $149,668 $3,089 2.1% -------- -------- ------ --- -------- -------- ------ --- Recurring net margin - cash 58.3% 57.8% 0.5% 57.9% 57.0% 0.9% ---- ---- --- ---- ---- --- *N/M - Not Meaningful
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SOURCE Parkway Properties, Inc.