Parkway Reports Second Quarter 2015 Results

Aug 03, 2015, 16:40 ET from Parkway Properties, Inc.

ORLANDO, Fla., Aug. 3, 2015 /PRNewswire/ -- Parkway Properties, Inc. (NYSE: PKY) today announced results for its second quarter ended June 30, 2015.

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Highlights for Second Quarter 2015 and Subsequent Events

  • Reported second quarter FFO of $0.33 per diluted share, which includes $3.8 million, or $0.03 per share, in one-time charges related to the pre-payment of secured debt
  • Adjusted 2015 FFO guidance to a range of $1.32 to $1.38
  • Second quarter occupancy of 90.4%, with the portfolio 91.6% leased  
  • Reached an agreement to acquire Two Buckhead Plaza in the Buckhead submarket of Atlanta
  • Disposed of six assets for gross sales proceeds of approximately $173.1 million during the second quarter
  • Subsequent to quarter end, completed the sale of four assets for gross sales proceeds of approximately $93.4 million and under contract to sell the Comerica Bank Building in Houston for gross sales proceeds of $31.4 million

"Parkway's strong second quarter performance was supported by significant long-term value creation through lease-up of the core portfolio and the continued disposition of non-core assets at favorable economics," stated James R. Heistand, President and Chief Executive Officer of Parkway.

"We delivered superior operating results in the second quarter, highlighted by year-over-year recurring GAAP same-store NOI growth of 6.5% at share, the stabilization of our Hayden Ferry III development in Tempe, and the achievement of 180 basis points of year-to-date occupancy growth. We continued to execute our submarket concentration investment strategy with the pending acquisition of Two Buckhead Plaza in Atlanta, which provides a unique opportunity to unlock value through maximizing operating synergies with our recently acquired One Buckhead Plaza asset. Lastly, since the beginning of the second quarter, we have completed or are under contract to sell approximately $300 million of assets, with proceeds being used to fund the purchase of Two Buckhead and improve our cost of capital through the pre-payment of cumbersome secured debt."

For the second quarter 2015, funds from operations ("FFO") were $37.9 million, or $0.33 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") were $20.0 million, or $0.17 per diluted share, for the Parkway Portfolio. 

A reconciliation of FFO and FAD to net income (loss) is included below. Net income, FFO and FAD for the three and six months ended June 30, 2015 as well as a comparison to the prior-year periods, are as follows:

 

(Amounts in thousands, except per share data)

Three Months Ended June 30

Six Months Ended June 30

2015

2014

2015

2014

Amount

Per Share

Amount

Per Share

Amount

Per Share

Amount

Per Share

Net Income (Loss) – Common Stockholders

$

14,132

$

0.13

$

(9,845)

$

(0.10)

$

21,407

$

0.19

$

1,000

$

0.01

Funds From Operations

$

37,923

$

0.33

$

34,179

$

0.33

$

77,595

$

0.67

$

69,206

$

0.67

Funds Available for Distribution

$

20,001

$

0.17

$

24,427

$

0.23

$

41,946

$

0.36

$

47,239

$

0.46

Wtd. Avg. Diluted Shares/Units

116,666

104,533

116,638

103,619

 

Operational Results

Occupancy at the end of the second quarter 2015 was 90.4%, compared to 89.3% 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 second quarter 2015 was 91.6%, compared to 91.1% at the end of the prior quarter.

Parkway's share of recurring same-store net operating income ("NOI") for the Parkway Portfolio was $51.5 million on a GAAP basis during the second quarter 2015, which was an increase of $3.2 million, or 6.5%, 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 $40.2 million, which was a decrease of $2.6 million, or 6.1%, compared to the same period of the prior year. The year-over-year decline in recurring same-store cash NOI was principally attributable to elevated free rent, primarily associated with 2014 leasing activity in Houston and Charlotte.

The Company's portfolio GAAP NOI margin was 61.7% at Parkway's share during the second quarter 2015, compared to 60.3% during the same period of the prior year.

Leasing Activity

During the second quarter 2015, Parkway signed a total of 687,000 square feet of leases at an average rent per square foot of $28.92 and at an average cost of $5.64 per square foot per year.

New & Expansion Leasing – During the second quarter 2015, Parkway signed 258,000 square feet of new leases at an average rent per square foot of $33.25 and at an average cost of $7.40 per square foot per year. Included in this leasing activity was 180,000 square feet of first generation leasing at Parkway's Hayden Ferry III development in Tempe, Arizona.

Expansion leases during the quarter totaled 52,000 square feet at an average rent per square foot of $24.39 and at an average cost of $5.69 per square foot per year.

Renewal Leasing – Customer retention during the second quarter 2015 was 62.0%. The Company signed 377,000 square feet of renewal leases at an average rent per square foot of $26.59, representing a 1.4% rate increase from the expiring rate. The average cost of renewal leases was $3.75 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

06/30/15

03/31/15

12/31/14

09/30/14

06/30/14

Ending Occupancy

90.4 %

89.3%

88.6%

89.1%

89.2%

Customer Retention

62.0%

81.1%

82.6%

85.0%

76.9%

Square Footage of Total Leases Signed (in thousands)

687

642

936

978

811

Average Revenue Per Square Foot of Total Leases Signed

$28.92

$30.39

$32.20

$32.27

$30.08

Average Cost Per Square Foot Per Year of Total Leases Signed

$5.64

$5.76

$5.11

$6.98

$4.35

 

Acquisition and Disposition Activity

On April 8, 2015, Parkway completed the sale of Two Ravinia Drive, a 390,000 square foot office property located in Atlanta, Georgia, for a gross sale price of $78.0 million. Parkway had a 30% ownership interest in the property, which was owned by Parkway Properties Office Fund II L.P. ("Fund II").  During the second quarter of 2015, Fund II recognized a gain on the sale of Two Ravinia Drive of approximately $29.0 million, of which $8.7 million was Parkway's share.

On May 8, 2015, Parkway completed the sale of 400 North Belt, a 231,000 square foot office building located in Houston, Texas, for a gross sale price of $10.2 million. During the second quarter of 2015, Parkway recognized a loss on the sale of 400 North Belt of approximately $1.2 million.  

On May 13, 2015, Parkway completed the sale of Peachtree Dunwoody Pavilion, a 370,000 square foot office complex comprised of four buildings located in Atlanta, Georgia, for a gross sale price of $53.9 million. During the second quarter of 2015, Parkway recognized a gain on the sale of Peachtree Dunwoody of approximately $14.4 million.  

On May 23, 2015, Parkway reached an agreement to acquire Two Buckhead Plaza, a 209,000 square foot Class A office building located in the Buckhead submarket of Atlanta, Georgia, for a gross purchase price of $80 million. The seven-story office building, which includes approximately 50,000 square feet of ground floor retail, was 97.1% leased as of July 1, 2015. Parkway will own 100% of the asset and plans to assume 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 30, 2017. Closing is expected to occur in the third quarter of 2015, subject to customary closing conditions including the successful assumption of the existing first mortgage.

On June 5, 2015, Parkway completed the sale of Hillsboro Center I-IV and Hillsboro Center V, a 216,000 square foot office complex comprised of five office buildings located in Ft. Lauderdale, Florida, for a gross sale price of $22.0 million. During the second quarter of 2015, Parkway recognized a gain on the sale of Hillsboro Center I-IV and Hillsboro Center V of approximately $2.5 million.  

On June 12, 2015, Parkway completed the sale of Riverplace South, a 113,000 square foot office building located in Jacksonville, Florida, for a gross sale price of $9.0 million. During the second quarter of 2015, Parkway recognized a gain on the sale of Riverplace South of approximately $429,000.  

Subsequent Events

On July 7, 2015, Parkway completed the sale of Westshore Corporate Center, Cypress Center I – III and Cypress Center IV, an approximately 6.0 acre contiguous land parcel, all located in Tampa, Florida, for an aggregate gross sale price $66.0 million. The two office assets are comprised of four office buildings totaling 459,000 square feet. Parkway expects to recognize a gain on the sale of Westshore Corporate Center, Cypress Center I – III and Cypress Center IV of approximately $19.2 million in the third quarter of 2015.

On July 9, 2015, Parkway reached an agreement to sell the Comerica Bank Building, a 194,000 square foot office building located in Houston, Texas, for a gross sale price of $31.4 million. Parkway expects closing of the sale of the Comerica Bank Building to occur in the third quarter of 2015, subject to customary closing conditions.

On July 17, 2015, Parkway completed the sale of 245 Riverside, a 137,000 square foot office building located in Jacksonville, Florida, for a gross sale price of $25.1 million. Parkway had a 30% ownership interest in the property, which was owned by Fund II. During the third quarter 2015, Parkway expects Fund II to recognize a gain on the sale of 245 Riverside of approximately $6.5 million, of which $2.0 million would be Parkway's share.   

On July 31, 2015, Parkway completed the sale of 550 Greens Parkway, a 72,000 square foot office building located in Houston, Texas, for a gross sale price of $2.3 million. During the third quarter 2015, Parkway expects to recognize a gain on the sale of 550 Greens Parkway of approximately $64,000. During the second quarter 2015, Parkway recognized an impairment loss of $4.4 million in connection with the valuation of 550 Greens Parkway, based on the Company's estimated fair value of the asset.

Capital Structure

On April 3, 2015, Parkway paid in full the $68.0 million TIAA debt facility secured by Hillsboro Center I-IV, Hillsboro Center V, Peachtree Dunwoody Pavilion, One Commerce Green and the Comerica Bank Building, which had a 6.2% interest rate. Parkway incurred a $3.0 million prepayment fee associated with the payoff.

On April 6, 2015, Parkway paid in full the $31.9 million outstanding loan secured by 3350 Peachtree, which had an interest rate of 7.3%. Parkway incurred a $319,000 prepayment fee associated with the payoff.

On April 8, 2015, Fund II paid in full the remaining outstanding loan secured by Two Ravinia Drive, totaling $22.1 million, and incurred a prepayment fee and swap early termination fee of $1.8 million, $525,000 of which was Parkway's share.

On June 26, 2015, Parkway closed a $200 million unsecured term loan. The term loan has a maturity date of June 26, 2020, and has an accordion feature that allows for an increase in the size of the term loan to as much as $400 million.  Interest on the term loan is based on LIBOR plus an applicable margin, initially 1.35%.  The term loan has substantially the same operating and financial covenants as required by the Company's unsecured revolving credit facility. 

At June 30, 2015, the Company had $50.0 million outstanding under its unsecured revolving credit facility, $550.0 million outstanding under its unsecured term loans and held $73.4 million in cash and cash equivalents, of which $47.1 million of cash and cash equivalents was Parkway's share.  Parkway's share of secured debt totaled $1.0 billion at June 30, 2015.

At June 30, 2015, the Company's net debt to EBITDA multiple was 6.7x, using the quarter's annualized EBITDA after adjusting for the impact of investment activity completed during the period, as compared to 7.1x at March 31, 2015, and 6.6x at June 30, 2014.

Common Dividend

The Company's previously announced second quarter cash dividend of $0.1875 per share, which represents an annualized dividend of $0.75 per share, was paid on June 24, 2015 to stockholders of record as of June 10, 2015.

2015 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 disposition activity, Parkway is adjusting its 2015 FFO outlook to a range of $1.32 to $1.38 per diluted share for the Parkway Portfolio and adjusting its earnings per diluted share ("EPS") outlook to a range of $0.44 to $0.50 for the Parkway Portfolio. The adjustment to 2015 FFO outlook was precipitated principally by Parkway's accelerated disposition activity, which negatively impacted assumptions regarding full-year recurring cash NOI, partially offset by positive adjustments resulting from year-to-date leasing activity and the pending acquisition of Two Buckhead Plaza. 

The reconciliation of projected EPS to projected FFO per diluted share is as follows:

 

Outlook for 2015

Range

Fully diluted EPS

   $0.44 - $0.50

Parkway's share of depreciation and amortization

   $1.46 - $1.46

Impairment loss on depreciable real estate

   $0.05 - $0.05

Gain on sale of real estate

   ($0.63 - $0.63)

Reported FFO per diluted share

  $1.32 - $1.38

 

The 2015 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 2015 outlook are at Parkway's share and dollars and shares are in thousands.

 

2015 Core Operating Assumptions

Revised

2015

Outlook

Previous

2015

Outlook

Recurring cash NOI

$195,000 - $  201,000

$198,000 - $  205,000

Straight-line rent and amortization of above market rent

$  53,000 - $    55,000

$  50,000 - $    52,000

Lease termination fee income

$    1,000 - $      1,000

$    1,000 - $      1,000

Management fee after-tax net income

$    4,000 - $      5,000

$    4,000 - $      5,000

General and administrative expense

$  33,000 - $    34,000

$  31,500 - $    32,500

Share based compensation expense included in G&A above

$    6,500 - $      7,000

$    6,500 - $      7,000

Acquisition costs included in G&A above

$    1,800 - $      1,800

$       471 - $         471

Mortgage and credit facilities interest expense

$  66,000 - $    67,000

$  66,000 - $    67,000

Debt and swap termination fees included in interest expense above

$    4,000 - $      4,000

$    4,000 - $      4,000

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

$  12,000 - $    13,000

$  11,000 - $    12,000

Recurring capital expenditures for building improvements, tenant   improvements and leasing commissions

$  50,000 - $    55,000

$  64,000 - $    68,000

Recurring same-store GAAP NOI

3.5% - 4.5%

2.5% - 3.5%

Portfolio ending occupancy

 90.0% - 91.0%

 90.0% - 91.0%

Weighted average annual diluted common shares/units

 116,600 – 116,600

 116,600 – 116,600

 

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 second quarter earnings conference call on Tuesday, August 4, 2015 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 August 18, 2015, by dialing 877-870-5176, or 1-858-384-5517 for international callers, and using the passcode 13613687.

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 44 office properties located in seven states with an aggregate of approximately 16.2 million square feet of leasable space at July 1, 2015. Fee-based real estate services are offered through wholly owned subsidiaries of the Company, which in total manage and/or lease approximately 4.2 million square feet for third-party owners at July 1, 2015.

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, gain 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, 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; 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 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 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. 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 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. 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 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. FAD measures 100% of the operating performance of Parkway Properties LP's real estate properties in which Parkway Properties, Inc. owns an interest.  

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 share data)

June 30,

December 31,

2015

2014

(Unaudited)

(Unaudited)

Assets

Real estate related investments:

   Office and parking properties

$

3,316,873

$

3,333,900

   Accumulated depreciation

(316,512)

(309,629)

3,000,361

3,024,271

   Condominium units

669

9,318

   Mortgage loan receivable

3,374

3,417

   Investment in unconsolidated joint ventures

53,721

55,550

3,058,125

3,092,556

Receivables and other assets:

   Rents and fees receivable, net

2,293

4,032

   Straight line rents receivable

72,443

63,236

   Other receivables

6,930

20,395

   Unamortized lease costs

135,391

129,781

   Unamortized loan costs

11,300

10,185

   Escrows and other deposits

29,127

28,263

   Prepaid assets

11,065

18,426

   Investment in preferred interest

3,500

3,500

   Fair value of interest rate swaps

434

1,131

Deferred tax asset - non-current

5,489

5,040

   Other assets

929

978

Land available for sale

250

250

Intangible assets, net

163,986

185,488

Assets held for sale

51,327

24,079

Management contracts,net

756

1,133

Cash and cash equivalents

73,390

116,241

     Total assets

$

3,626,735

$

3,704,714

Liabilities

Notes payable to banks

$

600,000

$

481,500

Mortgage notes payable

1,201,806

1,339,450

Accounts payable and other liabilities:

   Corporate payables

7,602

11,854

   Deferred tax liability - non-current

518

470

   Accrued payroll

2,682

3,210

   Fair value of interest rate swaps

9,927

11,077

   Interest payable

5,675

6,158

   Property payables:

     Accrued expenses and accounts payable

36,760

43,359

     Accrued property taxes

29,703

25,652

     Prepaid rents

15,302

16,311

     Deferred revenue

20

105

     Security deposits

7,417

7,964

     Unamortized below market leases

70,868

76,253

Liabilities related to assets held for sale

2,214

2,035

     Total liabilities

1,990,494

2,025,398

Equity

Parkway Properties, Inc. stockholders' equity:

Common stock, $.001 par value, 215,500,000 shares authorized

     and 111,558,076 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

1,852,167

1,842,581

Accumulated other comprehensive loss

(6,635)

(6,166)

Accumulated deficit

(464,019)

(443,757)

   Total Parkway Properties, Inc. stockholders' equity

1,381,629

1,392,773

Noncontrolling interests

254,612

286,543

   Total equity

1,636,241

1,679,316

     Total liabilities and equity

$

3,626,735

$

3,704,714

 

PARKWAY PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

Revenues

Income from office and parking properties

$

114,252

$

102,208

$

231,167

$

197,504

Management company income

2,821

5,446

5,586

11,429

Sale of condominium units

9,832

2,805

9,836

5,639

Total revenues

126,905

110,459

246,589

214,572

Expenses

Property operating expense

43,580

40,487

88,574

77,641

Management company expenses

2,571

7,356

5,291

12,006

Cost of sales - condominium units

9,889

2,319

10,091

4,338

Depreciation and amortization

47,056

44,981

96,192

85,261

Impairment loss on real estate

4,400

5,400

General and administrative

7,747

7,757

16,631

17,169

Acquisition costs

196

489

667

1,134

Total expenses

115,439

103,389

222,846

197,549

Operating income

11,466

7,070

23,743

17,023

Other income and expenses

Interest and other income

312

463

482

832

Equity in earnings (loss) of unconsolidated joint ventures

422

(557)

584

(1,035)

Net gains on sale of real estate

45,246

59,562

6,289

Loss on extinguishment of debt

(4,919)

(4,840)

Interest expense

(17,676)

(17,132)

(36,874)

(32,377)

Income (loss) before income taxes

34,851

(10,156)

42,657

(9,268)

Income tax expense

(326)

(257)

(518)

(599)

Income (loss) from continuing operations

34,525

(10,413)

42,139

(9,867)

Discontinued operations:

Loss from discontinued operations

(50)

(93)

Net gains on sale of real estate from discontinued operations

10,463

Total discontinued operations

(50)

10,370

Net income (loss)

34,525

(10,463)

42,139

503

Net (income) loss attributable to noncontrolling interests - unit holders

(607)

571

(955)

7

Net (income) loss attributable to noncontrolling interests - real estate partnerships

(19,786)

47

(19,777)

490

Net income (loss) for Parkway Properties, Inc. and attributable to common stockholders

$

14,132

$

(9,845)

$

21,407

$

1,000

Net income (loss) per common share attributable to Parkway Properties, Inc.

Basic:

Income (loss) from continuing operations attributable to Parkway Properties, Inc.

$

0.13

$

(0.10)

$

0.19

$

(0.09)

Discontinued operations

0.10

Basic net income (loss) attributable to Parkway Properties, Inc.

$

0.13

$

(0.10)

$

0.19

$

0.01

Diluted:

Income (loss) from continuing operations attributable to Parkway Properties, Inc.

$

0.13

$

(0.10)

$

0.19

$

(0.09)

Discontinued operations

0.10

Diluted net income (loss) attributable to Parkway Properties, Inc.

$

0.13

$

(0.10)

$

0.19

$

0.01

Weighted average shares outstanding

Basic

111,543

99,092

111,381

98,219

Diluted

116,666

99,092

116,638

103,619

Amounts attributable to Parkway Properties, Inc. common stockholders

Income (loss) from continuing operations attributable to Parkway Properties, Inc.

$

14,132

$

(9,798)

$

21,407

$

(8,854)

Discontinued operations

(47)

9,854

Net income (loss) attributable to common stockholders

$

14,132

$

(9,845)

$

21,407

$

1,000

 

PARKWAY PROPERTIES, INC.

RECONCILIATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE

FOR DISTRIBUTION TO NET INCOME (LOSS) AT PARKWAY'S SHARE

(In thousands, except per share data)

Three Months Ended

Six Months Ended

June 30,

June 30,

2015

2014

2015

2014

(Unaudited)

(Unaudited)

Net income (loss) for Parkway Properties, Inc.

$

14,132

$

(9,845)

$

21,407

$

1,000

Adjustments to net income (loss) for Parkway Properties, Inc.:

Depreciation and amortization

43,706

44,595

89,071

84,965

Noncontrolling interest - unit holders

607

(571)

955

(7)

Impairment loss on depreciable real estate

4,400

5,400

Net gains on sale of real estate

(24,922)

(39,238)

(6,289)

Net gains on sale of real estate - discontinued operations

(10,463)

Funds from operations attributable to the operating partnership

$

37,923

$

34,179

$

77,595

$

69,206

Adjustments to derive recurring funds from operations:

Non-recurring lease termination fee income

(70)

(254)

(1,029)

(313)

Loss on extinguishment of debt

3,831

339

3,752

339

Acquisition costs

196

489

667

1,134

Non-cash adjustment for interest rate swap

(43)

121

205

121

Realignment expenses

1,870

4,044

Recurring funds from operations attributable to the operating partnership

$

41,837

$

36,744

$

81,190

$

74,531

Funds available for distribution

Funds from operations

$

37,923

$

34,179

$

77,595

$

69,206

Add (deduct):

Straight-line rents

(8,502)

(4,144)

(16,798)

(9,285)

Amortization of below market leases, net

(4,823)

(3,086)

(9,438)

(5,996)

Amortization of share-based compensation

1,726

2,247

3,462

4,735

Acquisition costs

196

489

667

1,134

Amortization of loan costs

824

1,108

1,495

1,517

Non-cash adjustment for interest rate swap

(43)

121

205

121

Loss on extinguishment of debt

3,831

339

3,752

339

Amortization of mortgage interest premium (1)

(2,943)

(1,930)

(5,949)

(2,763)

Recurring capital expenditures: (2)

Building improvements

(1,245)

(2,115)

(2,068)

(4,239)

Tenant improvements - new leases

(1,349)

(255)

(1,493)

(1,388)

Tenant improvements - renewal leases

(3,256)

(971)

(4,164)

(2,040)

Leasing costs - new leases

(1,036)

(480)

(2,928)

(1,719)

Leasing costs - renewal leases

(1,302)

(1,075)

(2,392)

(2,383)

Total recurring capital expenditures

(8,188)

(4,896)

(13,045)

(11,769)

Funds available for distribution attributable to the operating partnership

$

20,001

$

24,427

$

41,946

$

47,239

Diluted per common share/unit information (**)

FFO per share

$

0.33

$

0.33

$

0.67

$

0.67

Recurring FFO per share

$

0.36

$

0.35

$

0.70

$

0.72

FAD per share

$

0.17

$

0.23

$

0.36

$

0.46

Dividends paid

$

0.1875

$

0.1875

$

0.375

$

0.375

Dividend payout ratio for FFO

56.8

%

56.8

%

56.0

%

56.0

%

Dividend payout ratio for recurring FFO

52.1

%

53.6

%

53.6

%

52.1

%

Dividend payout ratio for FAD

110.3

%

81.5

%

104.2

%

81.5

%

Other supplemental information

Recurring capital expenditures

$

8,188

$

4,896

$

13,045

$

11,769

Upgrades on acquisitions

14,568

14,262

25,733

18,417

Total real estate improvements and leasing costs (2)

$

22,756

$

19,158

$

38,778

$

30,186

**Information for diluted computations:

Basic common shares/units outstanding

116,376

104,292

116,353

103,419

Dilutive effect of other share equivalents

290

241

285

200

Diluted weighted average shares/units outstanding

116,666

104,533

116,638

103,619

 

(1)

Amortization of mortgage interest premium was immaterial for the three months ended March 31, 2014; however, it is included in the six months ended June 30, 2014.

(2)

Development costs related to Hayden Ferry III are not included in these amounts. See Schedule of Development Activity on page 27.

 

PARKWAY PROPERTIES, INC.

EBITDA, COVERAGE RATIOS AND CAPITALIZATION INFORMATION

(In thousands, except per share, percentage and multiple data)

6/30/2015

3/31/2015

12/31/2014

9/30/2014

6/30/2014

Net income (loss) for Parkway Properties, Inc.

$

14,132

$

7,275

$

42,428

$

(485)

$

(9,845)

Adjustments at Parkway's share to net income (loss) for Parkway   Properties, Inc.:

Interest expense

14,700

15,795

15,910

16,407

16,531

Amortization of loan costs

824

671

681

613

1,108

Non-cash adjustment for interest rate swap

(43)

248

(56)

(84)

121

(Gain) loss on extinguishment of debt

3,831

(79)

2,066

339

Noncontrolling interest - unit holders

607

348

2,147

Acquisition costs

196

471

1,200

1,129

489

Depreciation and amortization

43,706

45,365

48,516

46,431

44,595

Amortization of share-based compensation

1,726

1,736

1,400

2,103

2,247

Net gains on sale of real estate

(24,922)

(14,316)

(69,197)

(6,664)

Impairment loss on real estate

4,400

1,000

11,700

Impairment loss on management contracts, net of tax

2,905

Income tax expense

326

192

1,221

164

257

EBITDA

$

59,483

$

58,706

$

60,921

$

59,614

$

55,842

Interest coverage ratio

4.0

3.7

3.8

3.6

3.4

Fixed charge coverage ratio

3.5

3.1

3.2

3.2

2.9

Capitalization information

Mortgage notes payable at Parkway's share

$

1,007,589

$

1,109,338

$

1,124,860

$

1,157,129

$

1,159,252

Notes payable to banks

600,000

593,000

481,500

350,000

377,000

Parkway's share of total debt

1,607,589

1,702,338

1,606,360

1,507,129

1,536,252

Less:  Parkway's share of cash

(47,142)

(37,323)

(82,353)

(104,661)

(57,444)

Parkway's share of net debt

1,560,447

1,665,015

1,524,007

1,402,468

1,478,808

Shares of common stock and operating units outstanding

116,391

116,372

116,327

114,777

104,469

Stock price per share at period end

$

17.44

$

17.35

$

18.39

$

18.78

$

20.65

Market value of common equity

$

2,029,859

$

2,019,054

$

2,139,254

$

2,155,512

$

2,157,285

Total market capitalization (including net debt)

$

3,590,306

$

3,684,069

$

3,663,261

$

3,557,980

$

3,636,093

Net debt as a percentage of market capitalization

43.5

%

45.2

%

41.6

%

39.4

%

40.7

%

EBITDA - annualized

$

237,932

$

234,824

$

243,684

$

238,456

$

223,368

Adjustment to annualized investment activities (1)

(4,011)

606

8,194

1,015

787

EBITDA - adjusted annualized

$

233,921

$

235,430

$

251,878

$

239,471

$

224,155

Net debt to EBITDA multiple

6.7

7.1

6.1

5.9

6.6

 

(1)

Adjustment to annualized EBITDA 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 June 30, 2015 and 2014

Net Operating Income

Average Occupancy

Square Feet

Number of Properties

Percentage of Portfolio (1)

2015

2014

2015

2014

Same-store properties:

Wholly owned

10,280

25

67.0

%

$

47,319

$

44,502

91.7

%

90.5

%

Fund II

2,087

6

15.3

%

10,820

10,640

96.9

%

97.1

%

Total same-store properties

12,367

31

82.3

%

$

58,139

$

55,142

92.6

%

91.7

%

Net operating income from consolidated office and parking properties (2)

15,607

42

100.0

%

$

70,672

$

67,343

(1) Percentage of portfolio based on net operating income for the three months ended June 30, 2015.

(2) Same-store net operating income for the three months ended June 30, 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 (loss) to Same-Store net operating income (SSNOI) and Recurring SSNOI:

Three Months Ended

Six Months Ended

June 30,

June 30,

2015

2014

2015

2014

Net income (loss) for Parkway Properties, Inc.

$       14,132

$        (9,845)

$       21,407

$         1,000

Add (deduct):

Interest expense

17,676

17,132

36,874

32,377

Loss on extinguishment of debt

4,919

-

4,840

-

Depreciation and amortization

47,056

44,981

96,192

85,261

Management company expenses

2,571

7,356

5,291

12,006

Income tax expense

326

257

518

599

General and administrative  

7,747

7,757

16,631

17,169

Acquisition costs

196

489

667

1,134

Equity in (earnings) loss of unconsolidated joint ventures

(422)

557

(584)

1,035

Sale of condominium units

(9,832)

(2,805)

(9,836)

(5,639)

Cost of sales - condominium units

9,889

2,319

10,091

4,338

Net income (loss) attributable to noncontrolling interests 

20,393

(618)

20,732

(497)

Loss from discontinued operations

-

50

-

93

Net gains on sale of real estate

(45,246)

-

(59,562)

(16,752)

Impairment loss on real estate

4,400

-

5,400

-

Management company income

(2,821)

(5,446)

(5,586)

(11,429)

Interest and other income 

(312)

(463)

(482)

(832)

Net operating income from consolidated office and parking properties

70,672

61,721

142,593

119,863

Less:  Net operating income from non same-store properties

(12,533)

(12,201)

(26,926)

(21,734)

Add: One Congress Plaza and San Jacinto Center (3)

-

5,622

-

10,798

Same-store net operating income (SSNOI)

58,139

55,142

115,667

108,927

Less: non-recurring lease termination fee income

-

(206)

(956)

(238)

Recurring SSNOI

$       58,139

$       54,936

$     114,711

$     108,689

Parkway's share of SSNOI

$       51,464

$       48,522

$     102,459

$       96,072

Parkway's share of recurring SSNOI

$       51,464

$       48,301

$     101,503

$       95,793

(3) Same-store net operating income and recurring same-store net operating income for the three and six months ended June 30, 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 JUNE 30, 2015 AND 2014

(In thousands)

Consolidated

Parkway's Share

2015

2014

Dollar Change

Percentage Change

2015

2014

Dollar Change

Percentage Change

Same-store assets GAAP NOI:

Revenues

  Wholly-owned properties

$

74,892

$

71,846

$

3,046

4.2

%

$

74,892

$

71,846

$

3,046

4.2

%

  Fund II

16,368

16,207

161

1.0

%

4,306

4,260

46

1.1

%

  Unconsolidated joint ventures

%

1,669

1,617

52

3.2

%

  Total same-store GAAP revenue

91,260

88,053

3,207

3.6

%

80,867

77,723

3,144

4.0

%

Expenses

  Wholly-owned properties

27,573

27,344

229

0.8

%

27,573

27,344

229

0.8

%

  Fund II

5,548

5,567

(19)

(0.3)

%

1,438

1,439

(1)

(0.1)

%

  Unconsolidated joint ventures

%

392

418

(26)

(6.2)

%

  Total same-store GAAP expenses

33,121

32,911

210

0.6

%

29,403

29,201

202

0.7

%

NOI - GAAP

$

58,139

$

55,142

$

2,997

5.4

%

$

51,464

$

48,522

$

2,942

6.1

%

Net margin - GAAP

63.7

%

62.6

%

1.1

%

63.6

%

62.4

%

1.2

%

Acquisitions & Development Properties

Revenues

  Wholly-owned properties

$

17,329

$

9,625

$

7,704

$

17,329

$

9,625

$

7,704

  Fund II

  Unconsolidated joint ventures

  Total acquisitions GAAP revenue

17,329

9,625

7,704

17,329

9,625

7,704

Expenses

  Wholly-owned properties

7,546

4,015

3,531

7,546

4,015

3,531

  Fund II

49

(7)

56

34

10

24

  Unconsolidated joint ventures

  Total acquisitions GAAP expenses

7,595

4,008

3,587

7,580

4,025

3,555

NOI

$

9,734

$

5,617

$

4,117

$

9,749

$

5,600

$

4,149

Net margin

56.2

%

58.4

%

(2.2)

%

56.3

%

58.2

%

(1.9)%

Office assets sold or held for sale

Revenues

  Wholly-owned properties

$

5,426

$

11,722

$

(6,296)

$

5,426

$

11,722

$

(6,296)

  Fund II

237

1,802

(1,565)

71

540

(469)

  Unconsolidated joint ventures

6,004

(6,004)

  Total sold properties GAAP revenue

5,663

13,524

(7,861)

5,497

18,266

(12,769)

Expenses

  Wholly-owned properties

2,674

6,081

(3,407)

2,674

6,081

(3,407)

  Fund II

190

859

(669)

57

265

(208)

  Unconsolidated joint ventures

2,406

(2,406)

  Total sold properties GAAP expenses

2,864

6,940

(4,076)

2,731

8,752

(6,021)

NOI

$

2,799

$

6,584

$

(3,785)

$

2,766

$

9,514

$

(6,748)

Total portfolio

Revenues

  Wholly-owned properties

$

97,647

$

93,193

$

4,454

$

97,647

$

93,193

$

4,454

  Fund II

16,605

18,009

(1,404)

4,377

4,800

(423)

  Unconsolidated joint ventures

1,669

7,621

(5,952)

Total revenues

$

114,252

$

111,202

$

3,050

$

103,693

$

105,614

$

(1,921)

Expenses

  Wholly-owned properties

37,793

37,440

353

37,793

37,440

353

  Fund II

5,787

6,419

(632)

1,529

1,714

(185)

  Unconsolidated joint ventures

392

2,824

(2,432)

Total expenses

$

43,580

$

43,859

$

(279)

$

39,714

$

41,978

$

(2,264)

NOI

$

70,672

$

67,343

$

3,329

$

63,979

$

63,636

$

343

Net margin

61.9

%

60.6

%

61.7

%

60.3

%

 

PARKWAY PROPERTIES, INC.

SAME-STORE NET OPERATING INCOME (Continued)

THREE MONTHS ENDED JUNE 30, 2015 AND 2014

(In thousands)

Consolidated

Parkway's Share

2015

2014

Dollar

Change

Percentage

Change

2015

2014

Dollar Change

Percentage

Change

Same-store assets recurring GAAP NOI:

Total same-store GAAP revenue

$

91,260

$

88,053

$

3,207

3.6

%

$

80,867

$

77,723

$

3,144

4.0

%

Non-recurring lease termination fee income

(206)

206

*N/M

(221)

221

*N/M

Recurring same-store revenue

91,260

87,847

3,413

3.9

%

80,867

77,502

3,365

4.3

%

Total same-store expenses

33,121

32,911

210

0.6

%

29,403

29,201

202

0.7

%

Recurring NOI - GAAP

$

58,139

$

54,936

$

3,203

5.8

%

$

51,464

$

48,301

$

3,163

6.5

%

Recurring net margin - GAAP

63.7

%

62.5

%

1.2

%

63.6

%

62.3

%

1.3

%

Same-store assets cash NOI:

Total same-store GAAP revenue

$

91,260

$

88,053

$

3,207

3.6

%

$

80,867

$

77,723

$

3,144

4.0

%

Amortization of below market leases, net

(4,424)

(2,191)

(2,233)

101.9

%

(4,613)

(2,415)

(2,198)

91.0

%

Straight-line rents

(6,379)

(3,428)

(2,951)

86.1

%

(6,672)

(3,117)

(3,555)

114.1

%

Total same-store cash revenue

80,457

82,434

(1,977)

(2.4)%

69,582

72,191

(2,609)

(3.6)

%

Total same-store expenses

33,121

32,911

210

0.6

%

29,403

29,201

202

0.7

%

NOI - cash

$

47,336

$

49,523

$

(2,187)

(4.4)%

$

40,179

$

42,990

$

(2,811)

(6.5)

%

Net margin - cash

58.8

%

60.1

%

(1.3)

%

57.7

%

59.6

%

(1.9)

%

Same-store assets recurring cash NOI:

Total same-store cash revenue

$

80,457

$

82,434

$

(1,977)

(2.4)

%

$

69,582

$

72,191

$

(2,609)

(3.6)

%

Non-recurring lease termination fee income

(206)

206

*N/M

(221)

221

*N/M

Recurring same-store cash revenue

80,457

82,228

(1,771)

(2.2)

%

69,582

71,970

(2,388)

(3.3)

%

Total same-store expenses

33,121

32,911

210

0.6

%

29,403

29,201

202

0.7

%

Recurring NOI - cash

$

47,336

$

49,317

$

(1,981)

(4.0)

%

$

40,179

$

42,769

$

(2,590)

(6.1)

%

Recurring net margin - cash

58.8

%

60.0

%

(1.2)

%

57.7

%

59.4

%

(1.7)

%

*N/M - Not Meaningful

 

 

PARKWAY PROPERTIES, INC.

SAME-STORE NET OPERATING INCOME (Continued)

SIX MONTHS ENDED JUNE 30, 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

$    148,771

$  141,332

$      7,439

5.3%

$    148,771

$  141,332

$      7,439

5.3%

Fund II 

32,822

32,178

644

2.0%

8,621

8,436

185

2.2%

Unconsolidated joint ventures

-

-

-

-

3,254

3,200

54

1.7%

Total same-store GAAP revenue 

181,593

173,510

8,083

4.7%

160,646

152,968

7,678

5.0%

Expenses

Wholly-owned properties

54,433

53,247

1,186

2.2%

54,433

53,247

1,186

2.2%

Fund II

11,493

11,336

157

1.4%

2,939

2,887

52

1.8%

Unconsolidated joint ventures

-

-

-

-

815

762

53

7.0%

Total same-store GAAP expenses

65,926

64,583

1,343

2.1%

58,187

56,896

1,291

2.3%

NOI - GAAP

$    115,667

$  108,927

$      6,740

6.2%

$    102,459

$    96,072

$      6,387

6.6%

Net margin - GAAP

63.7%

62.8%

0.9%

63.8%

62.8%

1.0%

Acquisitions & Development Properties

Revenues

Wholly-owned properties

$      34,472

$    14,813

$    19,659

$      34,472

$    14,813

$    19,659

Fund II 

-

-

-

-

-

-

Unconsolidated joint ventures

-

-

-

-

-

-

Total acquisitions GAAP revenue

34,472

14,813

19,659

34,472

14,813

19,659

Expenses

Wholly-owned properties

14,860

6,094

8,766

14,860

6,094

8,766

Fund II 

74

46

28

52

26

26

Unconsolidated joint ventures

-

-

-

-

-

-

Total acquisitions GAAP expenses

14,934

6,140

8,794

14,912

6,120

8,792

NOI

$      19,538

$      8,673

$    10,865

$      19,560

$      8,693

$    10,867

Net margin

56.7%

58.5%

(1.8)%

56.7%

58.7%

(2.0)%

Office assets sold or held for sale

Revenues

Wholly-owned properties

$      12,922

$    23,112

$   (10,190)

$      12,922

$    23,112

$   (10,190)

Fund II 

2,180

3,690

(1,510)

654

1,107

(453)

Unconsolidated joint ventures

-

-

-

-

12,064

(12,064)

Total sold properties GAAP revenue

15,102

26,802

(11,700)

13,576

36,283

(22,707)

Expenses

Wholly-owned properties

6,609

11,874

(5,265)

6,609

11,874

(5,265)

Fund II 

1,105

1,867

(762)

332

576

(244)

Unconsolidated joint ventures

-

-

-

-

4,809

(4,809)

Total sold properties GAAP expenses

7,714

13,741

(6,027)

6,941

17,259

(10,318)

NOI

$        7,388

$    13,061

$     (5,673)

$        6,635

$    19,024

$   (12,389)

Total portfolio

Revenues

Wholly-owned properties

$    196,165

$  179,257

$    16,908

$    196,165

$  179,257

$    16,908

Fund II 

35,002

35,868

(866)

9,275

9,543

(268)

Unconsolidated joint ventures

-

-

-

3,254

15,264

(12,010)

Total revenues

$    231,167

$  215,125

$    16,042

$    208,694

$  204,064

$      4,630

Expenses

Wholly-owned properties

75,902

71,215

4,687

75,902

71,215

4,687

Fund II 

12,672

13,249

(577)

3,323

3,489

(166)

Unconsolidated joint ventures

-

-

-

815

5,571

(4,756)

Total expenses

$      88,574

$    84,464

$      4,110

$      80,040

$    80,275

$        (235)

NOI

$    142,593

$  130,661

$    11,932

$    128,654

$  123,789

$      4,865

Net margin

61.7%

60.7%

61.6%

60.7%

 

 

PARKWAY PROPERTIES, INC.  SAME-STORE NET OPERATING INCOME (Continued)  SIX MONTHS ENDED JUNE 30, 2015 AND 2014  (In thousands)

Consolidated

Parkway's Share

2015

2014

Dollar Change

Percentage Change

2015

2014

Dollar Change

Percentage Change

Same-store assets recurring GAAP NOI:

Total same-store GAAP revenue

$ 181,593

$ 173,510

$ 8,083

4.7%

$ 160,646

$ 152,968

$ 7,678

5.0%

Non-recurring lease termination fee income

(956)

(238)

(718)

*N/M

(956)

(279)

(677)

*N/M

Recurring same-store revenue

180,637

173,272

7,365

4.3%

159,690

152,689

7,001

4.6%

Total same-store expenses

65,926

64,583

1,343

2.1%

58,187

56,896

1,291

2.3%

Recurring NOI - GAAP

$ 114,711

$ 108,689

$ 6,022

5.5%

$ 101,503

$ 95,793

$ 5,710

6.0%

Recurring net margin - GAAP

63.5%

62.7%

0.8%

63.6%

62.7%

0.9%

Same-store assets cash NOI:

Total same-store GAAP revenue

$ 181,593

$ 173,510

$ 8,083

4.7%

$ 160,646

$ 152,968

$ 7,678

5.0%

Amortization of below market leases, net

(8,850)

(3,880)

(4,970)

128.1%

(9,338)

(4,440)

(4,898)

110.3%

Straight-line rents

(11,702)

(8,489)

(3,213)

37.8%

(12,320)

(7,861)

(4,459)

56.7%

Total same-store cash revenue

161,041

161,141

(100)

(0.1)%

138,988

140,667

(1,679)

(1.2)%

Total same-store expenses

65,926

64,583

1,343

2.1%

58,187

56,896

1,291

2.3%

NOI - cash

$ 95,115

$ 96,558

$ (1,443)

(1.5)%

$ 80,801

$ 83,771

$ (2,970)

(3.5)%

Net margin - cash

59.1%

59.9%

(0.8)%

58.1%

59.6%

(1.5)%

Same-store assets recurring cash NOI:

Total same-store cash revenue

$ 161,041

$ 161,141

$ (100)

(0.1)%

$ 138,988

$ 140,667

$ (1,679)

(1.2)%

Non-recurring lease termination fee income

(956)

(238)

(718)

*N/M

(956)

(279)

(677)

*N/M

Recurring same-store cash revenue

160,085

160,903

(818)

(0.5)%

138,032

140,388

(2,356)

(1.7)%

Total same-store expenses

65,926

64,583

1,343

2.1%

58,187

56,896

1,291

2.3%

Recurring NOI - cash

$ 94,159

$ 96,320

$ (2,161)

(2.2)%

$ 79,845

$ 83,492

$ (3,647)

(4.4)%

Recurring net margin - cash

58.8%

59.9%

(1.1)%

57.8%

59.5%

(1.7)%

*N/M - Not Meaningful

 

SOURCE Parkway Properties, Inc.



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