<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 26, 1998
POST PROPERTIES, INC.
-----------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Georgia 1-12080 58-1550675
- ---------------------------------- --------------------------- ----------------------------------
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
</TABLE>
3350 Cumberland Circle, Atlanta, Georgia 30339
- ------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
(770) 850-4400
-----------------------
(Registrant's telephone number, including area code)
The Exhibit Index is at page 4.
<PAGE> 2
Item 5. Other Events
The Registrant is filing this Current Report on Form 8-K so as to file
with the Commission certain items that are to be incorporated by reference into
its Registration Statement on Form S-3 (Registration No. 333-36595) with respect
to the offering of 3,000,000 shares of its Common Stock (the "Shares")(plus an
over-allotment option granted to the underwriters to purchase up to an
additional 450,000 shares of Common Stock).
Item 7. Financial Statements and Exhibits
(b) Pro Forma Financial Information
Certain pro forma financial information for the Registrant as of and
for the nine months unaudited ended September 30, 1997 and the year ended
December 31, 1996, relating to the merger (the "Merger") of Post Properties
Inc. ("Post") with Columbus Realty Trust ("Columbus") on October 24, 1997 is
attached as Exhibit 99.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1 -- Purchase Agreement between the Registrant, Post Apartment
Homes, L.P., and Merrill Lynch & Co., dated as of February
4, 1998 (incorporated by reference to Exhibit 1 to the Current
Report on Form 8-K of the Registrant dated February 4, 1998)
5 -- Opinion of King & Spalding regarding validity of the Shares
8 -- Opinion of King & Spalding relating to certain tax matters
23 -- Consent of King & Spalding (included in Exhibits 5 and 8)
99 -- Pro Forma Financial Information
The following pro forma consolidated financial information of
the Registrant:
(i) Unaudited Pro Forma Consolidated Balance Sheet as of
September 30, 1997
(ii) Unaudited Pro Forma Combined Statements of Operations For
the Nine Months Ended September 30, 1997 and the Year Ended
December 31, 1996
(iii) Notes to Unaudited Pro Forma Balance Sheet and Statements
of Operations
</TABLE>
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
POST PROPERTIES, INC.
(Registrant)
Date: February 26, 1998 By: /S/ John T. Glover
------------------
John T. Glover
President
-3-
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
1 -- Purchase Agreement between the Registrant, Post Apartment
Homes, L.P., and Merrill Lynch & Co., dated as of February
4, 1998 (incorporated by reference to Exhibit 1 to the Current
Report on Form 8-K of the Registrant dated February 4, 1998).
5 -- Opinion of King & Spalding regarding validity of the Shares
8 -- Opinion of King & Spalding relating to certain tax matters
23 -- Consent of King & Spalding (included in Exhibits 5 and 8)
99 -- Pro Forma Financial Information
The following pro forma consolidated financial information of the Registrant:
(i) Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 1997
(ii) Unaudited Pro Forma Combined Statements of Operations For the Nine Months Ended September 30, 1997 and
the Year Ended December 31, 1996
(iii) Notes to Unaudited Pro Forma Balance Sheet and Statements of Operations
</TABLE>
-4-
<PAGE> 1
EXHIBIT 5
February 24, 1998
Post Properties, Inc.
Suite 2200
3350 Cumberland Circle
Atlanta, Georgia 30339
Re: Post Properties, Inc. - Common Stock
Ladies and Gentlemen:
We have acted as counsel for Post Properties, Inc., a Georgia corporation
(the "Company"), in connection with the registration under the Securities Act
of 1933, as amended, of 3,000,000 Shares of Common Stock (the "Shares")
pursuant to a Prospectus Supplement dated February 12, 1998 (the "Prospectus
Supplement").
In connection with this opinion, we have examined and relied upon such
records, documents, certificates and other instruments as in our judgment are
necessary or appropriate to form the basis for the opinions hereinafter set
forth. In all such examinations, we have assumed the genuineness of signatures
on original documents and the conformity to such original documents of all
copies submitted to us as certified, conformed or photographic copies, and as
to certificates of public officials, we have assumed the same to have been
properly given and to be accurate. As to matters of fact material to this
opinion, we have relied upon statements and representations of representatives
of the Company and of public officials.
This opinion is limited in all respects to the federal laws of the United
States of America and the laws of the State of Georgia and New York, and no
opinion is expressed with respect to the laws of any other jurisdiction of any
effect which such laws may have on the opinions expressed herein. This opinion
is limited to the matters stated herein, and no opinion is implied or may be
inferred beyond the matters expressly stated herein.
Based upon the foregoing, and the other limitations and qualifications set
forth herein, we are of the opinion that:
(i) The Company is a corporation validly existing and, based solely
on a certificate of the Secretary of State of the State of Georgia, in
good standing under the laws of the State of Georgia;
(ii) Upon the issuance and sale of the Shares as described in the
Prospectus Supplement, such shares will be validly issued, fully paid and
nonassessable.
<PAGE> 2
Post Properties, Inc.
February 24, 1998
Page 2
The opinions set forth above are subject, as to enforcement, to (i)
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the enforcement of creditors' rights generally, and
(ii) general equitable principles (regardless of whether enforcement is
considered in proceeding in equity of law).
This opinion is given as of the date hereof, and we assume no obligation
to advise you after the date hereof of facts of circumstances that come to our
attention or changes in law that occur which could affect the opinions
contained herein. This letter is being rendered solely for the benefit of the
Company in connection with the matters addressed herein. This opinion may not
be furnished to or relied upon by any person or entity for any purpose without
our prior written consent. We hereby consent to the references to our firm
under the caption "Legal Matters" in the Prospectus Supplement and the
accompanying Prospectus.
Very truly yours,
KING & SPALDING
<PAGE> 1
EXHIBIT 8
[KING & SPALDING LETTERHEAD]
February 24, 1998
Post Properties, inc.
Suite 2200
3350 Cumberland Circle
Atlanta, Georgia 30309
Re: Post Properties, Inc. -- Common Stock
Ladies and Gentlemen:
We have acted as counsel to Post Properties, Inc., a Georgia
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 3,000,000 shares of Common Stock of the
Company (the "Shares") pursuant to a Prospectus Supplement dated February 12,
1998 (the "Prospectus Supplement"). You have requested our opinion as to the
accuracy of the information contained in the Prospectus Supplement under the
heading "Federal Income Tax Considerations."
We understand that our opinion will be attached as an exhibit to the
Company's Current Report on Form 8-K, which will be filed with the Securities
and Exchange Commission on February 25, 1998. We hereby consent to such use of
our opinion.
Unless otherwise indicated, all terms used herein with initial capital
letters shall have the same meaning as in the Prospectus Supplement.
In rendering the opinion expressed herein, we have examined such
documents as we have deemed appropriate. In our examination of documents, we
have assumed, with your consent, that all documents submitted to us are
authentic originals, or if submitted as photocopies or telecopies, that they
faithfully reproduce the originals thereof, that all such documents have been
or will be duly executed to the extent required, that all representations and
statements set forth in such documents are true and correct, and that all
obligations imposed by any such documents on the parties thereto have been or
will be performed or satisfied in accordance with their terms.
<PAGE> 2
Post Properties, Inc.
February 24, 1998
Page 2
We also have obtained such additional information and representations as we
have deemed relevant and necessary through consultation with officers of the
Company.
Based upon and subject to the foregoing, we are of the opinion that
the information in the Prospectus Supplement under the heading "Federal Income
Tax Considerations" constitutes, in all material respects, a fair and accurate
summary of the material United States federal income tax consequences of the
purchase, ownership and disposition of the Shares under current law, and, to
the extent such discussion contains statements of law or legal conclusions,
such statements and conclusions are the opinion of King & Spalding.
The opinion expressed herein is based upon the Internal Revenue Code
of 1986, as amended, the U.S. Treasury Regulations promulgated thereunder,
current administrative positions of the U.S. Internal Revenue Service, and
existing judicial decisions, any of which could be changed at any time,
possibly on a retroactive basis. Any such changes could adversely affect the
opinion rendered herein and the tax consequences to the Company and the
investors in the Shares. In addition, as noted above, our opinion is based
solely on the documents that we have examined, the additional information that
we have obtained, and the representations that have been made to us, and cannot
be relied upon if any of the facts contained in such documents or in such
additional information is, or later becomes, inaccurate or if any of the
representations made to us is, or later becomes, inaccurate. We are not,
however, aware of any facts or circumstances contrary to or inconsistent with
the information, assumptions, and representations upon which we have relied for
purposes of this opinion.
Finally, our opinion is limited to the tax matters specifically
covered thereby, and we have not been asked to address, nor have we addressed,
any other tax consequences of an investment in the Shares.
Very truly yours,
/s/ King & Spalding
King & Spalding
<PAGE> 1
EXHIBIT 99
POST PROPERTIES, INC.
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
The Post Properties, Inc. Unaudited Pro Forma Combined Balance Sheet gives
effect to the Merger of Post and Columbus as if the Merger had occurred on
September 30, 1997. The Unaudited Pro Forma Combined Balance Sheet gives effect
to the Merger under the "purchase" method of accounting in accordance with
Accounting Principles Board Opinion No. 16. In the opinion of management, all
significant adjustments necessary to reflect the effects of the Merger have been
made.
The Unaudited Pro Forma Combined Balance Sheet is presented for comparative
purposes only and is not necessarily indicative of what the actual combined
financial position of Post and Columbus would have been at September 30, 1997,
nor does it purport to represent the future combined financial position of Post
and Columbus. This Post Properties, Inc. Unaudited Pro Forma Combined Balance
Sheet should be read in conjunction with, and is qualified in its entirety by,
the respective historical financial statements and notes thereto of Post and
Columbus.
<PAGE> 2
POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRO FORMA
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(A) HISTORICAL(A) ADJUSTMENTS(B) COMBINED
------------- ------------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Real estate assets
Land..................................... $ 151,041 $ 47,588 $ 20,982(C) $ 219,611
Building and improvements................ 747,715 349,530 146,117(C) 1,243,362
Furniture, fixtures and equipment........ 79,236 5,099 84,335
Construction in progress (includes land
on properties under development)...... 243,547 87,715 13,157(C) 344,419
Land held for future development......... 7,108 -- 7,108
---------- -------- -------- ----------
1,228,647 489,932 180,256 1,898,835
Less: accumulated depreciation........... (191,632) (49,898) (241,530)
---------- -------- -------- ----------
Real estate held for investment.......... 1,037,015 440,034 180,256 1,657,305
Cash and cash equivalents................ 2,619 2,240 4,859
Restricted cash.......................... 1,441 477 1,918
Deferred charges, net.................... 10,693 1,200 552 (D) 12,445
Other assets............................. 11,373 18,174 (2,218)(E) 27,329
---------- -------- -------- ----------
Total assets..................... $1,063,141 $462,125 $178,590 $1,703,856
========== ======== ======== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable.............................. $ 510,637 $259,588 $ 22,486(F) $ 792,711
Accrued interest payable................... 8,643 408 9,051
Dividend and distribution payable.......... 16,270 -- 16,270
Accounts payable and accrued expenses...... 37,087 15,690 52,777
Security deposits and prepaid rents........ 5,177 2,348 7,525
Other liabilities.......................... -- 2,063 2,063
---------- -------- -------- ----------
Total liabilities................ 577,814 280,097 22,486 880,397
---------- -------- -------- ----------
Minority interest of unitholders in
Operating Partnership.................... 83,325 -- 29,629(G) 112,954
---------- -------- -------- ----------
Shareholders' equity
Preferred stock.......................... 10 -- 10
Common stock............................. 221 134 (50)(H) 305
Additional paid-in capital................. 401,771 214,647 93,772(I) 710,190
Accumulated earnings(deficit).............. -- (32,733) 32,733(J) -
Treasury stock............................. -- (20) 20(J) -
---------- -------- -------- ----------
Total shareholders' equity....... 402,002 182,028 126,475 710,505
---------- -------- -------- ----------
Total liabilities and
shareholders' equity........... $1,063,141 $462,125 $178,590 $1,703,856
========== ======== ======== ==========
</TABLE>
<PAGE> 3
POST PROPERTIES, INC.
BASIS OF PRESENTATION TO UNAUDITED PRO FORMA
COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
AND THE YEAR ENDED DECEMBER 31, 1996
The Post Properties, Inc. Unaudited Pro Forma Combined Statements of
Operations for the nine months ended September 30, 1997 and the year ended
December 31, 1996 are presented as if the Merger had occurred on January 1,
1996. The Post Properties, Inc. Unaudited Pro Forma Combined Statements of
Operations give effect to the Merger under the "purchase" method of accounting
in accordance with Accounting Principles Board Opinion No. 16. and assumes that
the combined entity qualifying as a REIT distributing at least 95% of its
taxable income, and therefore, incurring no federal income tax liability for the
year. In the opinion of management, all significant adjustments necessary to
reflect the effects of these transactions have been made.
The Post Properties, Inc. Unaudited Pro Forma Combined Statements of
Operations are presented for comparative purposes only and are not necessarily
indicative of what the actual combined results of Post and Columbus would have
been for the nine months ended September 30, 1997 and the year ended December
31, 1996, nor do they purport to be indicative of the results of operations in
future periods. The Post Properties, Inc. Unaudited Pro Forma Combined
Statements of Operations should be read in conjunction with, and are qualified
in their entirety by, the respective historical financial statements and notes
thereto of Post and Columbus.
<PAGE> 4
POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(K) HISTORICAL(K) ADJUSTMENTS COMBINED
------------- ------------- ----------- -----------
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues:
Rental................................ $ 127,988 $ 41,591 $ 169,579
Property management - third party..... 1,696 109 1,805
Landscape services - third party...... 3,792 -- 3,792
Interest.............................. 30 299 329
Other................................. 4,688 1,851 6,539
---------- ---------- ---------- -----------
Total revenues................ 138,194 43,850 - 182,044
---------- ---------- ---------- -----------
Expenses:
Property operating and maintenance
(exclusive of items shown
separately below).................. 47,366 14,611 61,977
Depreciation (real estate assets)..... 18,897 9,361 300(L) 28,558
Depreciation (non-real estate
assets)............................ 758 221 979
Property management - third party..... 1,302 -- 1,302
Landscape services - third party...... 3,117 -- 3,117
Interest.............................. 16,722 7,995 (1,054)(M) 23,663
Amortization of deferred loan costs... 747 392 (295)(N) 844
General and administrative............ 4,900 1,945 (1,087)(O) 5,758
---------- ---------- ---------- -----------
Total expenses................ 93,809 34,525 (2,136) 126,198
---------- ---------- ---------- -----------
Income before net gain on sale of
assets, minority interest of
unitholders in Operating
Partnership and extraordinary
item............................... 44,385 9,325 2,136 55,846
Net gain on sale of assets............ 3,512 888 4,400
Merger Costs.......................... - (595) 595 (P) -
Minority interest of unitholders in
Operating Partnership.............. (8,562) - 310 (Q) (8,252)
---------- ---------- ---------- -----------
Net income before extraordinary
item............................... 39,335 9,618 3,041 51,994
Dividend to preferred shareholders.... (3,187) -- (3,187)
---------- ---------- ---------- -----------
Net income available to common
shareholders before extraordinary
item............................... $ 36,148 $ 9,618 $ 3,041 $ 48,807
========== ========== ========== ===========
Per common share data - basic:
Weighted average common shares
outstanding -- .................... 22,032,237 30,304,322
========== ===========
Net income available to common
shareholders before extraordinary
item............................... $ 1.64 $ 1.61
========== ===========
Per common share data - diluted:
Weighted average common shares
outstanding -- .................... 22,213,618 30,763,549
========== ==========
Net income available to common
shareholders before extraordinary
item............................... $ 1.63 $ 1.59
========== ===========
</TABLE>
<PAGE> 5
POST PROPERTIES, INC.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
POST COLUMBUS MERGER PRO FORMA
HISTORICAL(K) HISTORICAL(K) ADJUSTMENTS COMBINED
------------- ------------- ----------- ----------
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
Revenues:
Rental.............................. $ 157,735 $ 45,910 $ 203,645
Property management - third party... 2,828 298 3,126
Landscape services - third party.... 4,834 - 4,834
Interest............................ 326 228 554
Other............................... 4,985 2,094 7,079
---------- ---------- ---------- ----------
Total revenues.............. 170,708 48,530 -- 219,238
---------- ---------- ---------- ----------
Expenses:
Property operating and maintenance
(exclusive of items shown
separately below)................ 57,335 16,365 73,700
Depreciation (real estate assets)... 22,676 10,257 2,624(L) 35,557
Depreciation (non-real estate
assets).......................... 927 346 1,273
Property management - third party... 2,055 - 2,055
Landscape services - third party.... 3,917 - 3,917
Interest............................ 22,131 7,884 (282)(M) 29,733
Amortization of deferred loan
costs............................ 1,352 393 (285)(N) 1,460
General and administrative.......... 7,716 2,073 (1,450)(O) 8,339
---------- ---------- ---------- ----------
Total expenses.............. 118,109 37,318 607 156,034
---------- ---------- ---------- ----------
Income before net gain on sale of
assets, minority interest of
unitholders in Operation
Partnership and extraordinary
item............................. 52,599 11,212 (607) 63,204
Net gain on sale of assets.......... 854 246 1,100
Minority interest of unitholders in
Operating Partnership............ (9,984) -- 836(Q) (9,148)
---------- ---------- ---------- ----------
Net income before extraordinary
item............................. 43,469 11,458 229 55,156
Dividend to preferred
shareholders..................... (1,063) - (1,063)
---------- ---------- ---------- ----------
Net income available to common
shareholders before extraordinary
item............................. $ 42,406 $ 11,458 $ 229 $ 54,093
========== ========== ========== ==========
Per common share data - basic:
Weighted average common shares
outstanding...................... 21,787,648 30,227,494
========== ==========
Net income available to common
shareholders before extraordinary
item............................. $ 1.95 $ 1.79
========== ==========
Per common share data - diluted
Weighted average common shares
outstanding...................... 21,879,248 30,596,940
========== ==========
Net income available to common
shareholders before extraordinary
item............................. $ 1.94 $ 1.77
========== ==========
</TABLE>
<PAGE> 6
POST PROPERTIES, INC.
NOTES TO UNAUDITED PRO FORMA
BALANCE SHEET AND STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(A) Represents the respective historical balance sheet of Post and Columbus as
of September 30, 1997. Certain reclassifications have been made to
Columbus' historical balance sheet to conform to Post's balance sheet
presentation.
(B) Represents adjustments to record the Merger in accordance with the purchase
method of accounting, based upon the assumed purchase price of $640,715
assuming a market value of $40.09 per share of Post's Common Stock, as
follows:
<TABLE>
<S> <C>
Issuance of 8,440 shares of Post Common Stock based on the
0.615 exchange for 13,724 Columbus Common Shares, which
includes 260 Columbus Common Shares issued immediately
prior to the Merger....................................... $338,332
Assumption of Columbus' liabilities (including $2,040 of
purchase adjustments)..................................... 282,137
Merger costs (see calculation below)........................ 20,246
--------
$640,715
========
</TABLE>
The following is a calculation of the estimated fees and other expenses
related to the Merger:
<TABLE>
<S> <C>
Buyout of employment agreements............................. $ 8,614
Advisory fees............................................... 7,761
Legal and accounting fees................................... 2,437
Other, including printing, filing and transfer costs........ 1,434
-------
Total............................................. $20,246
=======
</TABLE>
(C) Represents the estimated increase in Columbus' real estate assets, net
based upon Post's purchase price and the adjustment to eliminate the basis
of Columbus' net assets acquired:
<TABLE>
<S> <C>
Purchase Price (see Note B)................................. $640,715
Less: Historical basis of Columbus' net assets acquired
Real estate assets..................................... (440,034)
Other assets, net of purchase adjustments.............. (20,425)
--------
Step-up to record fair value of Columbus' real estate
assets.................................................... $180,256
========
</TABLE>
The allocation to land and building and improvements to record the step-up
was based upon relative fair values of Columbus' real estate assets.
(D) Increase due to estimated loan costs incurred to refinance Columbus' debt
($1,346) net of elimination of Columbus' historical deferred loan costs
($794).
(E) Decrease due to recognition of historical deferred compensation expense
upon vesting of certain options of Columbus prior to the Merger.
(F) Increase to notes payable reflects the financing of the following:
<TABLE>
<S> <C>
Transaction costs........................................... $20,246
Loan costs on refinanced debt............................... 1,346
Prepayment penalties on existing debt....................... 694
Registration costs.......................................... 200
-------
$22,486
=======
</TABLE>
<PAGE> 7
POST PROPERTIES, INC.
NOTES TO UNAUDITED PRO FORMA -- (CONTINUED)
BALANCE SHEET AND STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(G) The pro forma allocation to the Minority Interest in Operating Partnership
is based upon the percentage owned by such Minority Interest as follows:
<TABLE>
<S> <C>
Total Shareholders' Equity and Minority Interest in
Operating Partnership..................................... $823,459
Less: Equity related to Post's Preferred Stock.............. (48,613)
--------
774,846
Minority Interest percentage ownership in Operating
Partnership (see Note I).................................. 14.6%
--------
Pro Forma Combined Minority Interest ownership in Operating
Partnership............................................... 112,954
Post historical Minority Interest ownership in Operating
Partnership............................................... (83,325)
--------
Adjustment to Minority Interest ownership in Operating
Partnership............................................... $ 29,629
========
</TABLE>
(H) Decrease results from elimination of Columbus Common Shares at $.01 par
value ($134) net of the issuance of Post Common Stock at $.01 par value
($84) (see Note I).
(I) Increase to paid-in capital to reflect the following:
<TABLE>
<S> <C>
Issuance of 8,440 shares of Post Common Stock at $40.09 per
share..................................................... $ 338,332
Less: Par value of Common Stock issued.................... (84)
Registration costs incurred in connection with the
Merger.............................................. (200)
Columbus' historical paid in capital............... (214,647)
Adjustment to Minority Interest in Operating
Partnership (see Note G)........................... (29,629)
---------
$ 93,772
=========
</TABLE>
The Minority Interest ownership in Post, is calculated as follows:
<TABLE>
<CAPTION>
SHARES UNITS
------ -----
<S> <C> <C>
Columbus' historical Common Shares outstanding............ 13,724
======
Post Common Stock to be issued based on the .615 Merger
exchange ratio.......................................... 8,440
Post's historical Common Stock/Units outstanding.......... 22,128 5,216
------ -----
Post's pro forma Common Stock/Units outstanding........... 30,568 5,216
====== =====
Post's ownership percentage of the Operating
Partnership............................................. 85.4%
======
Minority Interest ownership percentage of the Operating
Partnership............................................. 14.6%
======
</TABLE>
(J) Reflects the elimination of Columbus' distribution in excess of accumulated
earnings and treasury stock to paid in capital, as a result of the Merger.
(K) Represents the respective historical statement of operations of Post and
Columbus for the period indicated. Certain reclassifications have been made
to Columbus' Historical Statement of Operations to conform to Post's
Statement of Operations presentation.
<PAGE> 8
POST PROPERTIES, INC.
NOTES TO UNAUDITED PRO FORMA -- (CONTINUED)
BALANCE SHEET AND STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(L) Represents the net increase in depreciation of real estate owned as a
result of recording Columbus' real estate assets at fair value versus
historical cost. Depreciation is computed on a straight-line basis over the
estimated useful lives of the related assets which have a useful life of
approximately 35 years.
The calculation of the fair value of depreciable real estate assets at
September 30, 1997 is as follows:
<TABLE>
<S> <C>
Historical basis of Columbus' real estate property, net..... $440,034
Plus: Step up to Columbus' real estate property, net (see
Note C)................................................... 180,256
--------
Pro forma basis of Columbus' real estate property at fair
value..................................................... 620,290
Less: Fair value allocated to land.......................... (68,570)
Construction in progress.............................. (100,871)
--------
Pro forma basis of Columbus' depreciable real estate
property at fair value.................................... $450,849
========
</TABLE>
Calculation of depreciation of real estate property for the nine months
ended September 30, 1997:
<TABLE>
<S> <C>
Depreciation expense based upon an estimated useful life of
approximately 35 years.................................... $ 9,661
Less: Historic Columbus depreciation of real estate
property.................................................. (9,361)
-------
Pro forma adjustment........................................ $ 300
=======
</TABLE>
Calculation of depreciation of real estate property for the year ended
December 31, 1996 is as follows:
<TABLE>
<S> <C>
Depreciation expense based upon an estimated useful like of
approximately 35 years.................................... $12,881
Less: Historic Columbus depreciation of real estate
property.................................................. (10,257)
-------
Pro forma adjustment........................................ $ 2,624
=======
</TABLE>
(M) Decrease results from refinancing of Columbus' debt at lower interest
rates.
(N) Decrease results from the elimination of amortization of Columbus' deferred
financing costs, which costs would be eliminated in connection with the
Merger, net of estimated amortization of deferred financing costs for
refinanced debt.
(O) Decrease results from identified historical costs of certain items which
will be eliminated or reduced as a result of the Merger as follows:
<TABLE>
<S> <C>
Duplication of public company expenses...................... $ 650
Reduction in salaries and benefits.......................... 600
Other....................................................... 200
------
Annual total...................................... $1,450
======
</TABLE>
(P) Reflects the elimination of merger costs reflected in Columbus' statement
of operations for the nine months ended September 30, 1997.
(Q) A portion of income was allocated to Minority Interest representing
interests in the Operating Partnership not owned by Post. The pro forma
allocation to Minority Interest is based upon the percentage estimated to
be owned by such Minority Interests as a result of the pro forma
transactions.
