<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSMISSION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 1-12080
COMMISSION FILE NUMBER 0-28226
-------------------------------
POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
(Exact name of registrants as specified in their charters)
GEORGIA 58-1550675
GEORGIA 58-2053632
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4401 NORTHSIDE PARKWAY, SUITE 800, ATLANTA, GEORGIA 30327
(Address of principal executive offices -- zip code)
(404) 846-5000
(Registrant's telephone number, including area code)
-------------------------------
Securities registered pursuant to section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
Common Stock, $.01 par value New York Stock Exchange
8 1/2% Series A Cumulative New York Stock Exchange
Redeemable Preferred Shares,
$.01 par value
7 5/8% Series B Cumulative New York Stock Exchange
Redeemable Preferred Shares,
$.01 par value
7 5/8% Series C Cumulative New York Stock Exchange
Redeemable Preferred Shares,
$.01 par value
Securities registered pursuant to Section 12(g) of the Act: None
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------
Units of Limited Partnership None
-------------------------------
Indicate by check mark whether the Registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days.
Post Properties, Inc.: YES [x] NO [ ]
Post Apartment Homes, L.P.: YES [x] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the shares of common stock held by
non-affiliates (based upon the closing sale price on the New York Stock
Exchange) on March 10, 2000 was approximately $1,454,345,000. As of March 10,
2000, there were 39,042,806 shares of common stock, $.01 par value,
outstanding.
-------------------------------
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Proxy Statement in connection with its Annual
Meeting of Shareholders to be held May 17, 2000 are incorporated by reference
in Part III.
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<PAGE> 2
POST PROPERTIES, INC.
POST APARTMENT HOMES, L.P.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM FINANCIAL INFORMATION PAGE
NO. NO.
--- ---
<S> <C><C> <C>
PART I
1. Business.............................................................................. 1
2. Properties............................................................................ 8
3. Legal Proceedings..................................................................... 10
4. Submission of Matters to a Vote of Security Holders................................... 10
X. Executive Officers of the Registrant.................................................. 10
PART II
5. Market Price of the Registrant's Common Stock and Related Stockholder Matters......... 14
6. Selected Financial Data............................................................... 15
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................................... 19
7A. Quantitative and Qualitative Disclosures about Market Risk............................ 30
8. Financial Statements and Supplementary Data........................................... 32
9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure........................................................... 32
PART III
10. Directors and Executive Officers of the Registrant.................................... 33
11. Executive Compensation................................................................ 33
12. Security Ownership of Certain Beneficial Owners and Management........................ 33
13. Certain Relationships and Related Transactions........................................ 33
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K..................... 34
</TABLE>
<PAGE> 3
PART I
ITEM 1. BUSINESS
THE COMPANY
Post Properties, Inc. (the "Company") is one of the largest developers and
operators of upscale multifamily apartment communities in the Southeastern and
Southwestern United States. The Company currently owns 86 stabilized
communities (the "Communities") containing 29,720 apartment units located
primarily in metropolitan Atlanta, Georgia; Dallas, Texas and Tampa, Florida.
In addition, the Company currently has under construction or in initial
lease-up 16 new communities and additions to three existing communities in the
Atlanta, Georgia; Dallas, Houston and Austin, Texas; Tampa and Orlando,
Florida; Denver, Colorado; Charlotte, North Carolina; Phoenix, Arizona and
Washington D. C. metropolitan areas that will contain an aggregate of 6,018
apartment units upon completion. For the year ended December 31, 1999, the
average economic occupancy rate (defined as gross potential rent less vacancy
losses, model expenses and bad debt divided by gross potential rent) of the 76
Communities stabilized for the entire year was 96.4%. The average monthly
rental rate per apartment unit at these Communities for December 1999 was $885.
The Company also manages through affiliates 13,553 additional apartment units
owned by third parties. The Company is a fully integrated organization with
multifamily development, acquisition, operation and asset management expertise.
The Company has approximately 2,035 employees, none of whom is a party to a
collective bargaining agreement.
Since its founding in 1971, the Company has pursued three distinctive core
business strategies that have remained substantially unchanged:
Investment Building
Investment building means taking a long-term view of the assets the Company
creates. The Company develops communities with the intention of operating them
for periods that are relatively long by the standards of the apartment
industry. Key elements of the Company's investment building strategy include
instilling a disciplined team approach to development decisions, selecting
sites in urban infill locations in strong primary markets, consistently
constructing new apartment communities with a uniformly high quality, and
conducting ongoing property improvements.
Promotion of the Post(R) Brand Name
The Post(R) brand name strategy has been integral to the success of the Company
and, to the knowledge of the Company, has not been successfully duplicated
within the multifamily real estate industry in any major U.S. market. For such
a strategy to work, a company must develop and implement systems to achieve
uniformly high quality and value throughout its operations. As a result of the
Company's efforts in developing and maintaining its communities, the Company
believes that the Post(R) brand name is synonymous with quality upscale
apartment communities that are situated in desirable locations and provide
superior resident service. Key elements in implementing the Company's brand
name strategy include extensively utilizing the trademarked brand name,
adhering to quality in all aspects of the Company's operations, developing and
implementing leading edge training programs, and coordinating the Company's
advertising programs to increase brand name recognition.
Service Orientation
The Company's mission statement is: "To provide the superior apartment living
experience for our residents." By striving to provide a superior product and
superior service, the Company believes that it will be able to achieve its
long-term goals. The Company believes that it provides its residents with
superior product and superior service through its uniformly high quality
construction, selective urban infill locations, award winning landscaping and
numerous amenities, including on site business centers, on site courtesy
officers, urban vegetable gardens and state of the art fitness centers.
The Company believes that with the implementation of these strategies,
multifamily properties in its primary markets have the potential over the long
term to provide investment returns that exceed national averages. According to
recent market surveys, employment growth, population growth and household
formation growth in the Company's primary markets have exceeded, and are
forecasted to continue to exceed, national averages.
1
<PAGE> 4
The Company is a self-administered and self-managed equity real estate
investment trust (a "REIT"). In 1993, the Company completed an initial public
offering of its Common Stock (the "Initial Offering") and a business
combination involving entities under varying common ownership. Proceeds from
the Initial Offering were used by the Company, in part, to acquire a
controlling interest in Post Apartment Homes, L.P. (the "Operating
Partnership"), the Company's principal operating subsidiary, which was formed
to succeed to substantially all of the ownership interest in a portfolio of 40
Post(R) multifamily apartment communities, all of which were developed by the
Company and owned by affiliates of the Company, and to the development,
leasing, landscaping and management business of the Company and certain other
affiliates.
The Company, through wholly owned subsidiaries, is the sole general partner of,
and controls a majority of the limited partnership interests in, the Operating
Partnership. The Company conducts all of its business through the Operating
Partnership and its subsidiaries.
The Company's and the Operating Partnership's executive offices are located at
4401 Northside Parkway, Suite 800, Atlanta, Georgia 30327 and their telephone
number is (404) 846-5000. Post Properties, Inc., a Georgia corporation, was
incorporated on January 25, 1984, and is the successor by merger to the
original Post Properties, Inc., a Georgia corporation, which was formed in
1971. The Operating Partnership is a Georgia limited partnership that was
formed in July 1993 for the purpose of consolidating the operating and
development businesses of the Company and the Post(R) apartment portfolio
described herein.
THE OPERATING PARTNERSHIP
The Operating Partnership, through the operating divisions and subsidiaries
described below, is the entity through which all of the Company's operations
are conducted. At December 31, 1999, the Company, through wholly owned
subsidiaries, controlled the Operating Partnership as the sole general partner
and as the holder of 88.2% of the common units in the Operating Partnership
("Units") and 64.1% of the preferred Units (the "Perpetual Preferred Units").
The other limited partners of the Operating Partnership, who hold units, are
those persons (including certain officers and directors of the Company) who, at
the time of the Initial Offering, elected to hold all or a portion of their
interest in the form of Units rather than receiving shares of Common Stock.
Each Unit may be redeemed by the holder thereof for either one share of Common
Stock or cash equal to the fair market value thereof at the time of such
redemption, at the option of the Operating Partnership. The Operating
Partnership presently anticipates that it will cause shares of Common Stock to
be issued in connection with each such redemption rather than paying cash (as
has been done in all redemptions to date). With each redemption of outstanding
Units for Common Stock, the Company's percentage ownership interest in the
Operating Partnership will increase. In addition, whenever the Company issues
shares of stock, the Company will contribute any net proceeds therefrom to the
Operating Partnership and the Operating Partnership will issue an equivalent
number of Units or Perpetual Preferred Units, as appropriate, to the Company.
As the sole shareholder of the Operating Partnership's sole general partner,
the Company has the exclusive power under the agreement of limited partnership
of the Operating Partnership to manage and conduct the business of the
Operating Partnership, subject to the consent of the holders of the Units in
connection with the sale of all or substantially all of the assets of the
Operating Partnership or in connection with a dissolution of the Operating
Partnership. The board of directors of the Company manages the affairs of the
Operating Partnership by directing the affairs of the Company. The Operating
Partnership cannot be terminated, except in connection with a sale of all or
substantially all of the assets of the Company, for a period of 50 years
without a vote of limited partners of the Operating Partnership. The Company's
indirect limited and general partner interests in the Operating Partnership
entitle it to share in cash distributions from, and in the profits and losses
of, the Operating Partnership in proportion to the Company's percentage
interest therein and indirectly entitle the Company to vote on all matters
requiring a vote of the limited partners.
As part of the formation of the Operating Partnership, a new holding company,
Post Services, Inc. ("Post Services") was organized as a separate corporate
subsidiary of the Operating Partnership. Post Services, in turn, owns all the
outstanding stock of two operating subsidiaries, RAM Partners, Inc. ("RAM") and
Post Landscape Services, Inc. ("Post Landscape"). Certain officers and
directors of the Company received 99%, collectively, of the voting common stock
of Post Services, and the Operating Partnership received 1% of the voting
common stock and 100%
2
<PAGE> 5
of the nonvoting common stock of Post Services. The voting and nonvoting common
stock of Post Services held by the Operating Partnership represents 99% of the
equity interests therein. The voting common stock held by officers and
directors in Post Services is subject to an agreement that is designed to
ensure that the stock will be held by one or more officers of Post Services.
The by-laws of Post Services provide that a majority of the board of directors
of Post Services must be persons who are not employees, members of management
or affiliates of the Company or its subsidiaries. This by-law provision cannot
be amended without the vote of 100% of the outstanding voting common stock of
Post Services. Post Services currently has the same board of directors as the
Company.
OPERATING DIVISIONS
The major operating divisions of the Operating Partnership include:
Post Apartment Management
Post Apartment Management is responsible for the day-to-day operations of all
the Post(R) communities including community leasing, property management and
personnel recruiting, training and development, maintenance and security. Post
Apartment Management also conducts short-term corporate apartment leasing
activities and is the largest division in the Company.
Post Apartment Development
Post Apartment Development conducts the development and construction activities
of the Company. These activities include site selection, zoning and regulatory
approvals, project design, and the full range of construction management
services.
Post Corporate Services
Post Corporate Services provides executive direction and control to the
Company's other divisions and subsidiaries and has responsibility for the
creation and implementation of all Company financing and capital strategies.
All accounting, management reporting, information systems, human resources,
legal and insurance services required by the Company and all of its affiliates
are centralized in Post Corporate Services.
OPERATING SUBSIDIARIES
The operating subsidiaries of the Operating Partnership, each of which is
wholly owned by Post Services, include:
RAM
RAM provides third party asset management and leasing services for multifamily
properties that do not operate under the Post(R) name. RAM's clients include
pension funds, independent private investors, financial institutions and
insurance companies. RAM's asset management contracts generally are subject to
annual renewal or are terminable upon specified notice. As of December 31,
1999, RAM managed 67 properties (located in Georgia, Florida, Tennessee,
Kansas, Missouri, North Carolina, Texas and Virginia) with 13,553 units under
management.
Post Landscape Group
As a result of the reputation the Company developed in connection with the
landscaping of Post(R) communities, in 1990, the Company began providing third
party design landscape services for clients other than Post(R) communities.
Projects with third parties include the design, installation and maintenance of
the landscape for golf courses, office parks, commercial buildings and other
commercial enterprises, and private residences. Post Landscape Group provides
such third party landscape services.
See Note 14 to the Company's Consolidated Financial Statements for information
regarding the industry segments into which the Company organizes its
operations.
3
<PAGE> 6
HISTORY OF POST PROPERTIES, INC.
During the five-year period from January 1, 1995 through December 31, 1999, the
Company and affiliates have developed and completed 9,051 apartment units in 28
apartment communities, acquired 7,186 units in 28 apartment communities (26
communities containing 6,296 apartment units were as a result of the merger
with Columbus Realty Trust (the "Merger") and sold six apartment communities
containing an aggregate of 1,362 apartment units. Historically, the Company has
primarily developed its apartment communities to the Company's specifications
as opposed to buying or refurbishing existing properties built by others. The
Company and its affiliates have sold apartment communities after holding them
for investment periods that typically have been seven to twelve years after
development. The following table shows the results of the Company's
developments during this period:
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
--------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Units completed ........................ 1,955 2,025 2,128 2,258 685
Units acquired(1) ...................... -- -- 6,296 890 --
Units sold ............................. (198) -- (416) (180) (568)
Total units owned by Company
affiliates ............................ 29,720 27,963 25,938 17,930 14,962
Total apartment rental income (in
thousands) ............................ $ 318,697 $ 275,755 $ 185,732 $ 158,618 $ 133,817
</TABLE>
(1) As part of the Merger, the Company acquired 26 communities containing 6,296
units. Of the communities acquired in the Merger, 14 communities containing
3,916 units were built by Columbus and 12 communities containing 2,380
units were acquired by Columbus.
4
<PAGE> 7
CURRENT DEVELOPMENT ACTIVITY
The Company currently has under construction or in initial lease-up 16 new
communities and additions to three existing communities that will contain an
aggregate of 6,018 units upon completion. The Company's communities under
development or in initial lease-up are summarized in the following table:
<TABLE>
<CAPTION>
ACTUAL OR ACTUAL OR
ESTIMATED ESTIMATED
QUARTER OF QUARTER QUARTER OF
# OF CONSTRUCTION FIRST UNITS STABILIZED
METROPOLITAN AREA UNITS COMMENCEMENT AVAILABLE OCCUPANCY
- ----------------- ----- -------------- --------------- --------------
<S> <C> <C> <C> <C>
ATLANTA, GA
Post Parkside(TM) .................. 188 1Q'99 4Q'99 2Q'00
Post Spring(TM) .................... 452 3Q'99 2Q'00 3Q'01
Post Stratford(TM) ................. 250 2Q'99 1Q'00 1Q'01
-----
890
-----
CHARLOTTE, NC
Post Uptown Place(TM) .............. 227 3Q'98 1Q'00 3Q'00
Post Gateway Place(TM) ............. 232 3Q'99 3Q'00 2Q'01
-----
459
-----
DALLAS, TX
Post Block 588(TM) ................. 127 4Q'98 1Q'00 2Q'00
Post Addison Circle(TM) II ......... 610 1Q'98 1Q'99 2Q'00
Post Addison Circle(TM) III ........ 264 3Q'99 3Q'00 2Q'01
Legacy Town Center City
Apartment Homes by Post ......... 384 3Q'99 3Q'00 4Q'01
Uptown Village by Post(TM) II ...... 196 3Q'99 2Q'00 4Q'00
-----
1,581
-----
HOUSTON, TX
Post Midtown Square(TM) I .......... 479 1Q'98 2Q'99 3Q'00
Post Midtown Square(TM)Phase II .... 188 1Q'00 1Q'01 4Q'01
-----
667
-----
TAMPA, FL
Post Harbour Place(TM)Phase II ..... 319 4Q'98 1Q'00 1Q'01
-----
DENVER, CO
Post Uptown Square(TM) I ........... 449 1Q'98 3Q'99 4Q'00
Post Uptown Square(TM)Phase II ..... 247 1Q'00 1Q'01 4Q'01
-----
696
-----
PHOENIX, AZ
Post Roosevelt Square(TM) .......... 410 4Q'98 1Q'00 1Q'01
-----
ORLANDO, FL
Post Parkside(TM) .................. 244 1Q'99 2Q'99 3Q'00
-----
WASHINGTON, DC
Post Pentagon Row .................. 504 2Q'99 4Q'00 1Q'02
-----
AUSTIN, TX
Post West Avenue Lofts(TM) ......... 248 3Q'99 4Q'00 3Q'01
-----
TOTAL 6,018
=====
</TABLE>
The Company is also currently conducting feasibility and other pre-development
studies for possible new Post(R) communities in selected market areas.
5
<PAGE> 8
COMPETITION
All of the Communities are located in developed areas that include other
upscale apartments. The number of competitive upscale apartment properties in a
particular area could have a material effect on the Company's ability to lease
apartment units at the Communities or at any newly developed or acquired
communities and on the rents charged. The Company may be competing with others
that have greater resources than the Company. In addition, other forms of
residential properties, including single family housing, provide housing
alternatives to potential residents of upscale apartment communities.
AMERICANS WITH DISABILITIES ACT
The Communities and any newly acquired apartment communities must comply with
Title III of the Americans with Disabilities Act (the "ADA") to the extent that
such properties are "public accommodations" and/or "commercial facilities" as
defined by the ADA. Compliance with the ADA requirements could require removal
of structural barriers to handicapped access in certain public areas of the
Company's Communities where such removal is readily achievable. The ADA does
not, however, consider residential properties, such as apartment communities,
to be public accommodations or commercial facilities, except to the extent
portions of such facilities, such as the leasing office, are open to the
public. The Company believes that its properties comply with all present
requirements under the ADA and applicable state laws. Noncompliance could
result in imposition of fines or an award of damages to private litigants. If
required to make material additional changes, the Company's results of
operations could be adversely affected.
ENVIRONMENTAL REGULATIONS
The Company is subject to Federal, state and local environmental regulations
that apply to the development of real property, including construction
activities, the ownership of real property, and the operation of multifamily
apartment communities.
In developing properties and constructing apartments, the Company utilizes
environmental consultants to determine whether there are any flood plains,
wetlands or environmentally sensitive areas that are part of the property to be
developed. If flood plains are identified, development and construction is
planned so that flood plain areas are preserved or alternative flood plain
capacity is created in conformance with Federal and local flood plain
management requirements.
Storm water discharge from a construction facility is evaluated in connection
with the requirements for storm water permits under the Clean Water Act. This
is an evolving program in most states. The Company currently anticipates it
will be able to obtain storm water permits for existing or new development.
The Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. sec. 9601 et seq. ("CERCLA"), and applicable state superfund laws
subject the owner of real property to claims or liability for the costs of
removal or remediation of hazardous substances that are disposed of on real
property in amounts that require removal or remediation. Liability under CERCLA
and applicable state superfund laws can be imposed on the owner of real
property or the operator of a facility without regard to fault or even
knowledge of the disposal of hazardous substances on the property or at the
facility. The presence of hazardous substances in amounts requiring response
action or the failure to undertake remediation where it is necessary may
adversely affect the owner's ability to sell real estate or borrow money using
such real estate as collateral. In addition to claims for cleanup costs, the
presence of hazardous substances on a property could result in a claim by a
private party for personal injury or a claim by an adjacent property owner for
property damage.
The Company has instituted a policy that requires an environmental
investigation of each property that it considers for purchase or that it owns
and plans to develop. The environmental investigation is conducted by a
qualified environmental consultant. If there is any indication of
contamination, sampling of the property is performed by the environmental
consultant. The environmental investigation report is reviewed by the Company
and counsel prior to purchase of any property. If necessary, remediation of
contamination, including underground storage tanks, is undertaken prior to
development.
6
<PAGE> 9
The Company has not been notified by any governmental authority of any
noncompliance, claim, or liability in connection with any of the Communities.
The Company has not been notified of a claim for personal injury or property
damage by a private party in connection with any of the Communities in
connection with environmental conditions. The Company is not aware of any other
environmental condition with respect to any of the Communities that could be
considered to be material.
ITEM 2. PROPERTIES
At February 10, 2000, the Communities consisted of 86 stabilized Post(R)
multifamily apartment communities located in the following metropolitan areas:
<TABLE>
<CAPTION>
METROPOLITAN AREA COMMUNITIES # OF UNITS % OF TOTAL
----------------- ----------- ---------- ----------
<S> <C> <C> <C>
Atlanta, GA............................ 41 16,298 54.8%
Dallas, TX............................. 23 6,062 20.4%
Houston, TX............................ 1 309 1.0%
Tampa, FL.............................. 9 3,185 10.7%
Jackson, MS............................ 3 983 3.3%
Orlando, FL............................ 2 1,248 4.2%
Fairfax, VA............................ 2 700 2.4%
Nashville, TN.......................... 4 533 1.8%
Charlotte, NC.......................... 1 402 1.4%
--------- --------- ---------
86 29,720 100.0%
========= ========= =========
</TABLE>
The Company or its predecessors developed all but 14 of the Post(R) Communities
and currently manages all of the Communities. Fifty-one of the Communities have
in excess of 300 apartment units, with the largest Community having a total of
916 apartment units. Seventy-seven of the eighty-six Communities, comprising
approximately 91% of the Communities' apartment units, were completed after
January 1, 1986. The average age of the Communities is approximately nine
years. The average economic occupancy rate was 96.4% and 96.5%, respectively,
and the average monthly rental rate per apartment unit was $851 and $826,
respectively, for communities stabilized for each of the entire years ended
December 31, 1999 and 1998. See "Selected Financial Information."
7
<PAGE> 10
COMMUNITY INFORMATION
<TABLE>
<CAPTION>
DECEMBER 1999 1999
AVERAGE NUMBER AVERAGE AVERAGE
YEAR UNIT SIZE OF RENTAL RATES ECONOMIC
COMMUNITIES LOCATION(1) COMPLETED (SQUARE FEET) UNITS PER UNIT OCCUPANCY(2)
- ----------- ----------- --------- ------------- ------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
GEORGIA
Post Ashford(R).................... Atlanta 1987 872 222 $ 824 96.4%
Post Briarcliff(TM)................ Atlanta 1999 1,062 688 1,094 N/A (4)
Post Bridge(R)..................... Atlanta 1986 847 354 725 97.3%
Post Brookhaven(R)................. Atlanta 1990-92(3) 991 735 988 96.6%
Post Canyon(R)..................... Atlanta 1986 899 494 741 98.0%
Post Chase(R)...................... Atlanta 1987 938 410 734 94.1%
Post Chastain(R)................... Atlanta 1990 965 558 1,050 95.4%
Post Collier Hills(R).............. Atlanta 1997 967 396 1,047 96.0%
Post Corners(R).................... Atlanta 1986 860 460 733 94.9%
Post Court(R)...................... Atlanta 1988 838 446 701 95.7%
Post Creek(TM)..................... Atlanta 1983(5) 1,180 810 934 95.5%
Post Crest(R)...................... Atlanta 1996 1,073 410 1,050 98.3%
Post Crossing(R)................... Atlanta 1995 1,067 354 1,096 96.0%
Post Dunwoody(R)................... Atlanta 1989-96(3) 941 530 993 95.9%
Post Gardens(R).................... Atlanta 1998 1,066 397 1,248 96.2%
Post Glen(R)....................... Atlanta 1997 1,113 314 1,228 97.3%
Post Lane(R)....................... Atlanta 1988 840 166 761 97.2%
Post Lenox Park(TM)................ Atlanta 1995 1,030 206 1,137 96.9%
Post Lindbergh(R).................. Atlanta 1998 960 396 1,098 N/A (4)
Post Mill(R)....................... Atlanta 1985 952 398 765 97.6%
Post Oak(TM)....................... Atlanta 1993 1,003 182 1,073 98.0%
Post Oglethorpe(R)................. Atlanta 1994 1,205 250 1,317 96.3%
Post Park(R)....................... Atlanta 1988-90(3) 904 770 817 96.2%
Post Parkwood(R)................... Atlanta 1995 1,071 125 977 97.3%
Post Peachtree Hills(R)............ Atlanta 1992-94(3) 982 300 1,072 95.7%
Post Pointe(R)..................... Atlanta 1988 835 360 711 95.8%
Post Renaissance(R)(6)............. Atlanta 1992-94(3) 890 342 1,016 95.6%
Post Ridge(R)...................... Atlanta 1998 1,045 434 1,076 N/A (4)
Post River(R)...................... Atlanta 1991-98(3) 1,015 213 1,256 95.7%
Post Summit(R)..................... Atlanta 1990 957 148 914 97.4%
Post Terrace(R).................... Atlanta 1996 1,144 296 1,137 95.8%
Post Valley(R)..................... Atlanta 1988 854 496 716 97.6%
Post Village(R).................... Atlanta 764 97.0%
The Arbors........................ 1983 1,063 301
The Fountains..................... 1987 850 352
The Gardens....................... 1986 891 494
The Hills......................... 1984 953 241
The Meadows....................... 1988 817 350
Post Vinings(R).................... Atlanta 1989-91(3) 964 403 849 97.5%
Post Walk(R)....................... Atlanta 1984-87(3) 932 476 852 97.3%
Post Woods(R)...................... Atlanta 1977-83(3) 1,057 494 925 96.2%
Riverside by Post(TM).............. Atlanta 1998 989 527 1,569 N/A (4)
------ ------ ------ ------
Subtotal/Average--Georgia......... 973 16,298 947 96.4%
------ ------ ------ ------
TEXAS
Addison Circle Apartment Homes
by Post(TM) - Phase I............. Dallas 1998 896 460 917 95.9%
The American Beauty Mill by Post(TM) Dallas 1998 980 80 980 93.0%
Cole's Corner(TM)................... Dallas 1998 796 186 982 94.8%
Columbus Square by Post(TM)......... Dallas 1996 861 218 1,139 96.2%
Post Parkwood(R).................... Dallas 1962-70(3) 1,042 96 975 97.1%
Post Ascension(TM).................. Dallas 1985-95(3) 929 166 813 95.7%
Post Hackberry Creek(TM)............ Dallas 1988-96(3) 865 432 798 95.3%
Post Lakeside(TM)................... Dallas 1986 791 327 819 97.7%
Post Townlake(TM)/Parks............. Dallas 1986-87(3) 869 398 750 96.9%
Post White Rock(TM)................. Dallas 1988 659 207 736 96.8%
Post Winsted(TM).................... Dallas 1996 728 314 778 96.0%
The Shores by Post(TM).............. Dallas 1988-97(3) 874 907 924 96.0%
The Abbey of State-Thomas by Post(TM) Dallas 1996 1,276 34 1,924 96.4%
The Commons at Turtle Creek by Post(TM) Dallas 1985 645 158 781 97.4%
The Heights of State-Thomas by Post(TM) Dallas 1998 813 198 1,013 96.6%
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
AVERAGE DECEMBER 1999 1999
UNIT SIZE NUMBER AVERAGE AVERAGE
YEAR (SQUARE OF RENTAL RATES ECONOMIC
COMMUNITIES LOCATION(1) COMPLETED FEET) UNITS PER UNIT OCCUPANCY(2)
- ----------- ----------- --------- --------- ------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
TEXAS CONTINUED
Heights II.......................... Dallas 1999 894 170 1,074 N/A (4)
The Meridian of State-Thomas by
Post(TM)......................... Dallas 1991 798 132 1,089 96.1%
The Residences on McKinney by
Post(TM)......................... Dallas 1986 749 196 1,031 94.3%
The Rice by Post(TM)................ Houston 1998 977 309 1,369 N/A (4)
The Vineyard by Post(TM)............ Dallas 1996 728 116 949 97.4%
The Vintage by Post(TM)............. Dallas 1993 781 161 937 96.3%
The Worthington of State-Thomas
by Post(TM)...................... Dallas 1993 818 332 1,143 96.2%
Uptown Village by Post(TM).......... Dallas 1995 767 300 924 97.0%
Post Windhaven(TM)(7)............... Dallas 1991 825 474 611 100.0%
----- ------ ------- ------
Subtotal/Average -- Texas.......... 848 6,371 919 96.3%
----- ------ ------- ------
FLORIDA
Post Bay(R)......................... Tampa 1988 782 312 723 93.9%
Post Court(R)....................... Tampa 1991 1,018 228 827 95.1%
Post Fountains at Lee Vista(R)...... Orlando 1988 835 508 695 96.7%
Post Harbour Place.................. Tampa 1999 1,037 206 1,279 N/A (4)
Post Hyde Park(R)................... Tampa 1996 1,009 389 1,060 N/A (4)
Post Lake(R)........................ Orlando 1988 850 740 677 96.1%
Post Rocky Point(R)................. Tampa 1996-98 (3) 1,018 916 1,025 N/A (4)
Post Village(R)..................... Tampa 768 94.8%
The Arbors......................... 1991 967 304
The Lakes.......................... 1989 895 360
The Oaks........................... 1991 968 336
Post Walk(R) at
Old Hyde Park Village.............. Tampa 1997 984 134 1,259 95.9%
----- ------ ------- ------
Subtotal/Average -- Florida........ 942 4,433 862 95.4%
----- ------ ------- ------
MISSISSIPPI
Post Mark(TM)....................... Jackson 1984 988 256 625 95.9%
Post Pointe(R)...................... Jackson 1997 812 241 621 93.2%
Post Trace(R)....................... Jackson 1989-95 (3) 734 486 577 94.2%
----- ------ ------- ------
Subtotal/Average -- Mississippi 845 983 600 94.4%
----- ------ ------- ------
VIRGINIA
Post Corners(R) at Trinity Centre... Fairfax 1996 1,030 336 1,022 99.4%
Post Forest(R)...................... Fairfax 1990 889 364 989 99.8%
----- ------ ------- ------
Subtotal/Average -- Virginia....... 960 700 1,005 99.6%
----- ------ ------- ------
NORTH CAROLINA
Post Park at Phillips Place(R)...... Charlotte 1998 912 402 1,238 96.7%
----- ------ ------- ------
TENNESSEE
Post Hillsboro Village(R)........... Nashville 1998 910 201 1,054 96.7%
Post Green Hills(R)................. Nashville 1996 1,056 166 1,121 97.8%
Post Bennie Dillon(TM).............. Nashville 1999 719 86 1,061 N/A (4)
The Lee Apartments ................. Nashville 1924 (8) 808 80 678 98.7%
----- ------ ------- ------
Subtotal/Average -- Tennessee...... 873 533 1,020 97.4%
----- ------ ------- ------
TOTAL............................ 908 29,720 $ 923 96.4%
===== ====== ======= ======
</TABLE>
(1) Refers to greater metropolitan areas of cities indicated.
(2) Average economic occupancy is defined as gross potential rent less
vacancy losses, model expenses and bad debt divided by gross potential
rent for the period, expressed as a percentage.
(3) These dates represent the respective completion dates for multiple
phases of a community.
(4) During 1999, this community or a phase in this community was in
lease-up and, therefore, is not included.
(5) This community was completed by the Company in 1983, sold during 1986,
managed by the Company through 1993 and reacquired by the Company in
1996.
(6) The Company has a leasehold interest in the land underlying Post
Renaissance pursuant to a ground lease that expires on January 1,
2040.
(7) Post Windhaven(TM) is subject to a master lease with Electronic Data
Systems.
(8) The Company acquired this community in 1996.
9
<PAGE> 12
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT
The persons who are executive officers of the Company and its affiliates and
their positions are as follows:
<TABLE>
<CAPTION>
NAME POSITIONS AND OFFICES HELD
---- --------------------------
<S> <C>
John A. Williams........................ Chairman of the Board, Chief Executive Officer and Director
John T. Glover.......................... Vice Chairman and Director
Jeffrey A. Harris....................... President and Chief Operating Officer
W. Daniel Faulk, Jr..................... President -- Post Apartment Development and Chief Development
Officer
Arthur E. Lomenick...................... Senior Executive Vice President -- Post Apartment Development
R. Byron Carlock, Jr.................... Executive Vice President and Chief Investment Officer -- Post
Corporate Services
Sherry W. Cohen......................... Executive Vice President and Secretary -- Post Corporate Services
James F. Duffy.......................... Executive Vice President -- Post Apartment Development
R. Gregory Fox.......................... Executive Vice President and Chief Accounting Officer -- Post
Corporate Services
Martha J. Logan......................... Executive Vice President -- Post Apartment Management
John B. Mears........................... Executive Vice President -- Post Apartment Development
Michelle G. Toups....................... Executive Vice President -- Post Apartment Management
Thomas L. Wilkes........................ Executive Vice President -- Post Apartment Management
Terry L. Chapman........................ Senior Vice President -- Post Apartment Management
Douglas S. Gray......................... Senior Vice President -- Post Corporate Services
John D. Hooks........................... Senior Vice President -- Post Apartment Management
Joseph R. Taylor........................ Senior Vice President -- Post Apartment Development
Sheila James Teabo...................... Senior Vice President -- Post Apartment Management
Janie S. Maddox......................... Vice President -- Post Corporate Services
William F. Leseman...................... Executive Vice President -- RAM Partners, Inc.
William C. Lincicome.................... Executive Vice President -- Post Landscape Group, Inc.
Janet M. Appling........................ Vice President -- Post Corporate Apartments
</TABLE>
The following is a biographical summary of the experience of the executive
officers of the Company:
John A. Williams. Mr. Williams is the Chairman of the Board and Chief Executive
Officer of the Company and is a Director. Mr. Williams founded the business of
the Company in 1971 and since that time has acted as Chairman and Chief
Executive Officer. Mr. Williams is currently serving on the board of directors
of Crawford & Co. and the Atlanta Regional Commission and is Chairman of Metro
Atlanta Chamber of Commerce. Mr. Williams is 57 years old.
John T. Glover. Mr. Glover has been the Vice Chairman of the Company since
February 29, 2000 and a Director since 1984. From 1984 through February 29,
2000, Mr. Glover was President, Chief Operating Officer, and Treasurer of the
Company. Mr. Glover is a Director of SunTrust Bank, Haverty's Furniture
Companies, Inc. and Emory Healthcare, Inc. Mr. Glover is 53 years old.
Jeffrey A. Harris. Mr. Harris has been with the Company for fifteen years and,
as of March 1, 2000, is currently the President and Chief Operating Officer of
the Company. From December 1998 to December 1999, he was President
10
<PAGE> 13
of Post Apartment Management. From October 1995 to December 1998, he was
President of Post Management Services. Prior thereto, Mr. Harris was President
of Post Apartment Management from March 1995, Executive Vice President of Post
Apartment Management from April 1993 and Senior Vice President from 1989. Mr.
Harris is a former President of and currently serves on the Board of Directors
of the Atlanta Apartment Association. Mr. Harris is 42 years old.
W. Daniel Faulk, Jr. Mr. Faulk has been with the Company for thirteen years and
is currently President of Post Apartment Development and Chief Development
Officer. From April 1993 to December 1999, he was President of Post Apartment
Development, which is responsible for the development and construction of all
Post(R) apartment communities. Prior thereto, Mr. Faulk was President of Post
Atlanta since February 1987. Mr. Faulk is currently on the board of directors
of Mountain National Bank. Mr. Faulk is 57 years old.
Arthur E. Lomenick. Mr. Lomenick joined the Company in October 1997 and, since
December 1998, has been Senior Executive Vice President of Post Apartment
Development. From October 1997 to December 1998, he was an Executive Vice
President of Post West. He is responsible for new development in the Western
United States. Mr. Lomenick was a Senior Vice President of Columbus Realty
Trust ("Columbus") from October 1994 through October 1997 and was Vice
President from October 1993 to October 1994. Previously, Mr. Lomenick served as
Vice President, Investments, for Memphis Real Estate since January 1993. Mr.
Lomenick is 44 years old.
R. Byron Carlock, Jr. Mr. Carlock joined the Company in June 1998 as Executive
Vice President and Chief Investment Officer. Mr. Carlock was Chairman of The
Carlock Companies, Inc. from March 1998 through June 1998 and was President and
Chief Operating Officer of W.B. Johnson Properties, LLC from March 1997 through
February 1998. From June 1987 through March 1997 Mr. Carlock served the
Trammell Crow organization in various capacities including Managing Director of
Crow Investment Trust, Director of Trammell Crow Capital Markets, Associate of
Trammell Crow Ventures and Development Associate of Trammell Crow Company. Mr.
Carlock is a council member of the Urban Land Institute and a board member of
CHARIS Community Housing. Mr. Carlock is 37 years old.
Sherry W. Cohen. Ms. Cohen has been with the Company for fifteen years. Since
October 1997, she has been an Executive Vice President of Post Corporate
Services responsible for supervising and coordinating legal affairs and
insurance. Since April 1990, Ms. Cohen had also been Corporate Secretary. She
was a Senior Vice President with Post Corporate Services from July 1993 to
October 1997. Prior thereto, Ms. Cohen was a Vice President of Post Properties,
Inc. since April 1990. Ms. Cohen is 45 years old.
James F. Duffy. Mr. Duffy joined the Company in October 1997 and, since
December 1998, has been Executive Vice President of Post Apartment Development.
He is responsible for the construction of all Post apartment communities
located in the Western United States. From October 1997 to December 1998 he was
an Executive Vice President of Post West. He was a Senior Vice President of
Columbus from May 1996 through October 1997. Prior to his affiliation with
Columbus, Mr. Duffy was President of the JFD Group, a business consulting firm
specializing in the commercial construction industry from 1993 to 1996. Prior
thereto, he was President of the W. B. Moore Company from 1991 to 1993. Mr.
Duffy is 55 years old.
R. Gregory Fox. Mr. Fox has been with the Company since February 1996 and,
since December 1998, has served as Executive Vice President of Post Corporate
Services and the Company's Chief Accounting Officer responsible for financial
reporting and planning, accounting, management information systems and human
resources. From February 1996 to December 1998, Mr. Fox was a Senior Vice
President. Prior to joining the Company, he was a senior manager in the audit
division of Price Waterhouse LLP where he was employed for ten years. Mr. Fox
is a Certified Public Accountant. Mr. Fox is 40 years old.
Martha J. Logan. Ms. Logan has been with the Company for eight years. Since
December 1998, she has been Executive Vice President of Post Apartment
Management. From October 1997 to December 1998, Ms. Logan was Executive Vice
President of Post Management Services. From October 1995 to October 1997, she
was President of Post Management Services. Prior thereto, Ms. Logan was
President of RAM since July 1994, Executive Vice President of RAM from January
1994 and Vice President of RAM since 1991. Ms. Logan is 45 years old.
11
<PAGE> 14
John B. Mears. Mr. Mears has been with the Company since November 1993 and,
since December 1998, has been Executive Vice President of Post Apartment
Development. From October 1997 to December 1998, he was an Executive Vice
President of Post East Development. He is responsible for new development in
the Eastern United States. Prior thereto, he was a Senior Vice President of
Post Apartment Development since July 1994. Prior to joining the Company, Mr.
Mears was an associate in the Real Estate Investment Banking Group at Merrill
Lynch and Company since July 1992. Mr. Mears is 36 years old.
Michelle G. Toups. Ms. Toups joined the Company in November 1996 and is
currently an Executive Vice President for Post Apartment Management responsible
for the operations of Post(R) communities in the Eastern United States. From
November 1996 through December 1999, she was a Group Vice President for Post
Apartment Management. Prior thereto, she was a Senior Vice President at
Security Capital Atlantic for more than three years. Ms. Toups is 46 years old.
Thomas L. Wilkes. Mr. Wilkes joined the Company in October 1997 and, since
December 1998, has been an Executive Vice President and Director of Operations
for Post Apartment Management responsible for the operations of Post(R)
communities in the Western United States. From October 1997 to December 1998 he
was an Executive Vice President and Director of Operations of Post West. Mr.
Wilkes was a Senior Vice President of Columbus from October 1993 through
October 1997. Mr. Wilkes served as President of CRH Management Company, a
multifamily property management firm and a member of the Columbus Group, since
its formation in October 1990 to December 1993. Mr. Wilkes is a Certified
Property Manager. Mr. Wilkes is 40 years old.
Terry L. Chapman. Mr. Chapman has been with the Company for twenty-six years
and, since December 1998, has been a Senior Vice President of Post Apartment
Management. From October 1997 to December 1998, he was a Senior Vice President
of Post Management Services. Prior thereto, he was an Executive Vice President
of Post Management Services for more than five years. He is responsible for
maintenance, quality assurance, security, and preventive maintenance for all
Post(R) communities. Mr. Chapman is 53 years old.
Douglas S. Gray. Mr. Gray joined the Company in December 1997 and, since
January 1999, has been a Senior Vice President of Post Corporate Services
responsible for financial planning and asset management. He was a Vice
President of Post Corporate Services from December 1997 to December 1998. Prior
to joining Post, Mr. Gray was Vice President of Dutch Institutional Holding Co.
from July 1994 to November 1997. Prior thereto, he was Director of Property
Services for The Landmarks Group from June 1988 to June 1994. Mr. Gray is 40
years old.
John D. Hooks. Mr. Hooks has been with the Company for twenty-one years and
since December 1998 has been a Senior Vice President of Post Apartment
Management. From October 1997 to December 1998 Mr. Hooks was a Senior Vice
President of Post Management Services. He is responsible for landscape design,
installation and maintenance on all Post(R) communities. Prior thereto, he was
an Executive Vice President of Post Landscape since July 1993. He was the
Senior Vice President of Landscape from January 1987 to July 1993. Mr. Hooks is
45 years old.
Joseph R. Taylor. Mr. Taylor has been with the Company thirteen years and is
currently a Senior Vice President of Post Apartment Development. He is
responsible for the construction of all Post apartment communities located in
the Eastern United States. Prior thereto, he was a Vice President in 1998, a
Senior Project Manager in 1997, and a Project Manager for more than 5 years in
Post Apartment Development. Mr. Taylor is 36 years old.
Sheila James Teabo. Ms. Teabo has been with the Company thirteen years and is
currently a Senior Vice President of Post Apartment Management responsible for
the operations of certain Post(R) communities in the Eastern United States.
From 1995 through 1997, she was a Regional Vice President of Post Apartment
Management. Prior thereto, she was an Area Vice President for more than three
years of Post Apartment Management. Ms. Teabo is 36 years old.
Janie S. Maddox. Ms. Maddox has been with the Company for twenty-three years.
Since November 1995, she has been a Vice President of Post Corporate Services
responsible for public relations. Prior thereto, she was a Senior Vice
President of Post Management Services primarily responsible for human resources
since 1990. Ms. Maddox is 52 years old.
12
<PAGE> 15
William F. Leseman. Mr. Leseman has been with the Company for ten years. Since
October 1997, he has been Executive Vice President of RAM responsible for its
operations. Prior thereto, he was a Senior Vice President of RAM from 1995
through September 1997. Prior thereto, Mr. Leseman was Senior Vice President of
Post Management Services from 1994 to 1995 and an Area Vice President of Post
Management Services from 1989 to 1994. Mr. Leseman is 40 years old.
William C. Lincicome. Mr. Lincicome has been with the Company for nine years.
Since September 1996, he has been Executive Vice President of Post Landscape
Group responsible for its operations. He was an independent architectural
consultant from April 1996 to September 1996 and was Vice President and
Director of Land Planning of Post Landscape Services from 1989 to 1996. Mr.
Lincicome is 47 years old.
Janet M. Appling. Ms. Appling has been with the Company 23 years and is
currently a Vice President of Post Corporate Apartments responsible for its
operations. Prior thereto, she was the Director of Post Corporate Apartments
since 1986. Ms. Appling is 45 years old.
13
<PAGE> 16
PART II
ITEM 5. MARKET PRICE OF THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The Common Stock is traded on the New York Stock Exchange ("NYSE") under the
symbol "PPS." The following table sets forth the quarterly high and low closing
sales prices per share reported on the NYSE, as well as the quarterly dividends
declared per share:
<TABLE>
<CAPTION>
DIVIDENDS
QUARTER ENDED HIGH LOW DECLARED
------------------------- ---------- ---------- -----------
<S> <C> <C> <C>
1998
First Quarter............ $ 41.2500 $ 38.1250 $ 0.650
Second Quarter........... 41.2500 38.5000 0.650
Third Quarter............ 40.2500 36.3750 0.650
Fourth Quarter........... 40.7500 36.8750 0.650
1999
First Quarter............ $ 38.8125 $ 35.2500 $ 0.700
Second Quarter........... 42.0625 35.3750 0.700
Third Quarter............ 41.0000 38.8750 0.700
Fourth Quarter........... 39.7500 36.7500 0.700
</TABLE>
On February 17, 2000, the Company had 1,914 common shareholders of record.
The Company pays regular quarterly dividends to holders of shares of Common
Stock. Future distributions by the Company will be at the discretion of the
board of directors and will depend on the actual funds from operations of the
Company, the Company's financial condition and capital requirements, the annual
distribution requirements under the REIT provisions of the Internal Revenue
Code of 1986, as amended (the "Code") and such other factors as the board of
directors deems relevant. For a discussion of the Company's credit agreements
and their restrictions on dividend payments, see Liquidity and Capital
Resources at Management's Discussion and Analysis of Financial Condition and
Results of Operations.
During 1999, the Company did not sell any unregistered securities.
There is no established public trading market for the Units. As of February 17,
2000, the Operating Partnership had 110 holders of record of Units of the
Operating Partnership.
For each quarter during 1998 and 1999, the Operating Partnership paid a cash
distribution to holders of Units equal in amount to the dividend paid on the
Company's common stock for such quarter.
During 1999, the Operating Partnership did not sell any unregistered
securities, other than the Series D Preferred Units, as disclosed in "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" and the Form 10-Q for the
quarterly period ended September 30, 1999.
14
<PAGE> 17
ITEM 6. SELECTED FINANCIAL DATA
POST PROPERTIES, INC.
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND APARTMENT UNIT DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenue:
Rental .......................................... $ 318,697 $ 275,755 $ 185,732 $ 158,618 $ 133,817
Property management - third-party (1) ........... 3,368 3,164 2,421 2,828 2,764
Landscape services - third-party (1) ............ 9,118 7,252 5,148 4,882 4,647
Other ........................................... 14,744 12,734 6,815 5,247 3,477
--------- --------- --------- --------- ---------
Total revenue ............................... 345,927 298,905 200,116 171,575 144,705
--------- --------- --------- --------- ---------
Property operating and maintenance
expense (exclusive of depreciation
and amortization) ............................. 113,152 99,717 67,515 58,202 49,912
Depreciation .................................... 58,013 46,646 29,048 23,603 20,819
Property management expenses - third-party (1) . 2,925 2,499 1,959 2,055 2,166
Landscape services expenses - third-party (1) ... 7,904 6,264 4,284 3,917 3,950
Interest expense ................................ 33,192 31,297 24,658 22,131 22,698
Amortization of deferred loan costs ............. 1,496 1,185 980 1,352 1,967
General and administrative ...................... 7,788 8,495 7,364 7,716 6,071
Minority interest in consolidated property
partnerships .................................. 511 397 -- -- 451
--------- --------- --------- --------- ---------
Total expense .............................. 224,981 196,500 135,808 118,976 108,034
--------- --------- --------- --------- ---------
Income before minority interest of unitholders,
net gain (loss) on sale of assets, loss on unused
treasury locks, loss on relocation of corporate
office and extraordinary item ................... 120,946 102,405 64,308 52,599 36,671
Net gain (loss) on sale of assets ................. (1,522) -- 3,270 854 1,746
Loss on unused treasury locks ..................... -- (1,944) -- -- --
Loss on relocation of corporate office ............ -- -- (1,500) -- --
Minority interest of preferred unitholders in
Operating Partnership ........................... (1,851) -- -- -- --
Minority interest of common unitholders in
Operating Partnership ........................... (12,598) (11,511) (11,131) (9,984) (8,429)
--------- --------- --------- --------- ---------
Income before extraordinary item .................. 104,975 88,950 54,947 43,469 29,988
Extraordinary item, net of minority
interest (2) .................................... (458) -- (75) -- (870)
--------- --------- --------- --------- ---------
Net income ........................................ 104,517 88,950 54,872 43,469 29,118
Dividends to preferred shareholders ............... (11,875) (11,473) (4,907) (1,063) --
--------- --------- --------- --------- ---------
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS ............................. $ 92,642 $ 77,477 $ 49,965 $ 42,406 $ 29,118
========= ========= ========= ========= =========
PER COMMON SHARE DATA:
Income before extraordinary item
(net of preferred dividends) - basic ............ $ 2.42 $ 2.21 $ 2.11 $ 1.95 $ 1.63
Net income available to common
shareholders - basic ............................ 2.41 2.21 2.11 1.95 1.58
Income before extraordinary item
(net of preferred dividends) - diluted .......... 2.39 2.18 2.09 1.94 1.63
Net income available to common
shareholders - diluted .......................... 2.38 2.18 2.09 1.94 1.58
Dividends declared ................................ 2.80 2.60 2.38 2.16 1.96
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998 1997 1996 1995
---------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Real estate, before accumulated
depreciation.................................... $2,582,785 $2,255,074 $ 1,936,011 $ 1,109,342 $ 937,924
Real estate, net of accumulated
depreciation.................................... 2,279,769 2,007,926 1,734,916 931,670 781,100
Total assets..................................... 2,350,173 2,066,713 1,780,563 958,675 812,984
Total debt....................................... 989,583 800,008 821,209 434,319 349,719
Shareholders' equity............................. 1,058,862 1,051,686 756,920 398,993 343,624
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998 1997 1996 1995
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OTHER DATA:
Cash flow provided from (used in):
Operating activities .................... $ 153,038 $ 148,618 $ 109,554 $ 78,966 $ 57,362
Investing activities .................... $ (317,960) $ (328,216) $ (208,377) $ (166,762) $ (114,531)
Financing activities .................... $ 149,638 $ 189,873 $ 109,469 $ 79,021 $ 60,885
Funds from operations(3) .................... $ 162,581 $ 136,146 $ 87,392 $ 74,212 $ 56,798
Weighted average common shares
outstanding -- basic .................... 38,460,689 35,028,596 23,664,044 21,787,648 18,382,299
Weighted average common Units
outstanding -- basic .................... 43,663,373 40,244,351 28,880,928 26,917,723 23,541,639
Weighted average common shares
outstanding -- diluted ................... 38,916,987 35,473,587 23,887,906 21,879,248 18,387,894
Weighted average common Units
outstanding -- diluted .................. 44,119,671 40,689,342 29,104,790 27,009,323 23,547,234
Total stabilized communities
(at end of period) ...................... 85 83 78 49 42
Total stabilized apartment units
(at end of period) ...................... 29,032 27,568 25,938 17,930 14,962
Average economic occupancy
(fully stabilized communities)(4) ....... 96.4% 96.5% 94.8% 95.3% 96.0%
</TABLE>
(1) Consists of revenues and expenses from property management and
landscape services provided to properties owned by third parties.
(2) The extraordinary item resulted from costs associated with the early
extinguishment of indebtedness. The extraordinary item has been
reduced by the portion related to the minority interest of the
unitholders calculated on the basis of weighted average Units
outstanding for the year.
(3) The Company uses the National Association of Real Estate Investment
Trust ("NAREIT") definition of FFO, which was adopted for periods
beginning after January 1, 1996. FFO for any period means the
consolidated net income available to common shareholders of the
Company and its subsidiaries for such period excluding gains or losses
from debt restructuring and sales of property, plus depreciation of
real estate assets, and after adjustment for unconsolidated
partnerships and joint ventures, all determined on a consistent basis
in accordance with generally accepted accounting principles ("GAAP").
FFO presented herein is not necessarily comparable to FFO presented by
other real estate companies due to the fact that not all real estate
companies use the same definition. However, the Company's FFO is
comparable to the FFO of real estate companies that use the current
NAREIT definition. FFO should not be considered as an alternative to
net income (determined in accordance with GAAP) as an indicator of the
Company's financial performance or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of the
Company's liquidity, nor is it necessarily indicative of sufficient
cash flow to fund all of the Company's needs or ability to service
indebtedness or make distributions. NAREIT's definition of FFO
excludes items classified by GAAP as extraordinary or unusual and
significant non-recurring events that materially distort the
comparative measurement of performance over time. Effective January 1,
2000 NAREIT amended its definition of FFO to include in FFO all
non-recurring events, except for those that are defined as
extraordinary items under GAAP and gains and losses from sales of
property. The Company will use the amended definition of FFO in
reporting results for all periods on or after January 1, 2000. The
Company does not expect use of the amended definition to materially
affect FFO.
(4) Amount represents average economic occupancy for communities
stabilized for both the current and prior respective periods. Average
economic occupancy is defined as gross potential rent less vacancy
losses, model expenses and bad debt divided by gross potential rent
for the period, expressed as a percentage. The calculation of average
economic occupancy does not include a deduction for concessions and
employee discounts (average economic occupancy, taking account of
these amounts, would have been 95.0% for both years ended December 31,
1999 and 1998). Concessions were $2,847 and $3,141 and employee
discounts were $583 and $519 for the years ended December 31, 1999 and
1998, respectively. A community is considered by the Company to have
achieved stabilized occupancy on the earlier to occur of (i)
attainment of 95% physical occupancy on the first day of any month, or
(ii) one year after completion of construction.
16
<PAGE> 19
POST APARTMENT HOMES, L.P.
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT AND APARTMENT UNIT DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------------
1999 1998 1997 1996 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenue:
Rental ....................................... 318,697 275,755 185,732 158,618 133,817
Property management -- third-party(1) ........ 3,368 3,164 2,421 2,828 2,764
Landscape services -- third-party(1) ......... 9,118 7,252 5,148 4,882 4,647
Other ........................................ 14,744 12,734 6,815 5,247 3,477
--------- --------- --------- --------- ---------
Total revenue .............................. 345,927 298,905 200,116 171,575 144,705
--------- --------- --------- --------- ---------
Property operating and maintenance
expense (exclusive of depreciation
and amortization) ............................ 113,152 99,717 67,515 58,202 49,912
Depreciation (real estate and non-real estate .. 58,013 46,646 29,048 23,603 20,819
assets)
Property management expenses -- third-party(1) . 2,925 2,499 1,959 2,055 2,166
Landscape services expenses -- third-party(1) .. 7,904 6,264 4,284 3,917 3,950
Interest expense ............................... 33,192 31,297 24,658 22,131 22,698
Amortization of deferred loan costs ............ 1,496 1,185 980 1,352 1,967
General and administrative ..................... 7,788 8,495 7,364 7,716 6,071
Minority interest in consolidated
property partnerships ........................ 511 397 -- -- 451
--------- --------- --------- --------- ---------
Total expenses ............................. 224,981 196,500 135,808 118,976 108,034
--------- --------- --------- --------- ---------
Income before net gain (loss) on sale of assets,
loss on unused treasury locks, loss on
relocation of corporate office, and .......... 120,946 102,405 64,308 52,599 36,671
extraordinary item
Net gain (loss) on sale of assets .............. (1,522) -- 3,270 854 1,746
Loss on unused treasury locks .................. -- (1,944) -- -- --
Loss on relocation of corporate office ......... -- -- (1,500) -- --
--------- --------- --------- --------- ---------
Income before extraordinary item ............... 119,424 100,461 66,078 53,453 38,417
Extraordinary item(2) .......................... (521) -- (93) -- (1,120)
--------- --------- --------- --------- ---------
Net income ..................................... 118,903 100,461 65,985 53,453 37,297
Distributions to preferred unitholders ......... (13,726) (11,473) (4,907) (1,063) --
--------- --------- --------- --------- ---------
NET INCOME AVAILABLE TO
COMMON UNITHOLDERS ........................... $ 105,177 $ 88,988 $ 61,078 $ 52,390 $ 37,297
========= ========= ========= ========= =========
PER COMMON UNIT DATA:
Income before extraordinary item
(net of preferred distributions) -- basic .... $ 2.42 $ 2.21 $ 2.11 $ 1.95 $ 1.63
Net income available to common
unitholders -- basic ......................... 2.41 2.21 2.11 1.95 1.58
Income before extraordinary item
(net of preferred distributions) -- diluted .. 2.39 2.18 2.09 1.94 1.63
Net income available to common
unitholders -- diluted ....................... 2.38 2.18 2.09 1.94 1.58
Distributions declared ......................... 2.80 2.60 2.38 2.16 1.96
</TABLE>
17
<PAGE> 20
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Real estate, before accumulated
depreciation ........................... $ 2,582,785 $ 2,255,074 $ 1,936,011 $ 1,109,342 $ 937,924
Real estate, net of accumulated
depreciation............................ 2,279,769 2,007,926 1,734,916 931,670 781,100
Total assets ........................... 2,350,173 2,066,713 1,780,563 958,675 812,984
Total debt ............................. 989,583 800,008 821,209 434,319 349,719
Partners' equity ....................... 1,251,342 1,177,051 869,304 482,434 425,489
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998 1997 1996 1995
----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
OTHER DATA:
Cash flow provided from (used in):
Operating activities ................. $ 153,038 $ 148,618 $ 109,554 $ 78,966 $ 57,362
Investing activities ................. $ (317,960) $ (328,216) $ (208,377) $ (166,762) $ (114,531)
Financing activities ................. $ 149,638 $ 189,873 $ 109,469 $ 79,021 $ 60,885
Funds from operations(3) ............... $ 162,581 $ 136,146 $ 87,392 $ 74,212 $ 56,798
Weighted average common Units
outstanding -- basic .................. 43,663,373 40,244,351 28,880,928 26,917,723 23,541,639
Weighted average common Units
outstanding -- diluted ................ 44,119,671 40,689,342 29,104,790 27,009,323 23,547,234
Total stabilized communities
(at end of period) ................... 85 83 78 49 42
Total stabilized apartment units
(at end of period) ................... 29,032 27,568 25,938 17,930 14,962
Average economic occupancy
(fully stabilized communities)(4)..... 96.4% 96.5% 94.8% 95.3% 96.0%
</TABLE>
(1) Consists of revenues and expenses from property management and
landscape services provided to properties owned by third parties.
(2) The extraordinary item resulted from costs associated with the early
extinguishment of indebtedness. The extraordinary item has been
reduced by the portion related to the minority interest of the
unitholders calculated on the basis of weighted average Units
outstanding for the year.
(3) The Company uses the National Association of Real Estate Investment
Trust ("NAREIT") definition of FFO, which was adopted for periods
beginning after January 1, 1996. FFO for any period means the
consolidated net income available to common unitholders of the Company
and its subsidiaries for such period excluding gains or losses from
debt restructuring and sales of property, plus depreciation of real
estate assets, and after adjustment for unconsolidated partnerships
and joint ventures, all determined on a consistent basis in accordance
with generally accepted accounting principles ("GAAP"). FFO presented
herein is not necessarily comparable to FFO presented by other real
estate companies due to the fact that not all real estate companies
use the same definition. However, the Company's FFO is comparable to
the FFO of real estate companies that use the current NAREIT
definition. FFO should not be considered as an alternative to net
income (determined in accordance with GAAP) as an indicator of the
Company's financial performance or to cash flow from operating
activities (determined in accordance with GAAP) as a measure of the
Company's liquidity, nor is it necessarily indicative of sufficient
cash flow to fund all of the Company's needs or ability to service
indebtedness or make distributions. NAREIT's definition of FFO
excludes items classified by GAAP as extraordinary or unusual and
significant non-recurring events that materially distort the
comparative measurement of performance over time. Effective January 1,
2000 NAREIT amended its definition of FFO to include in FFO all
non-recurring events, except for those that are defined as
extraordinary items under GAAP and gains and losses from sales of
property. The Company will use the amended definition of FFO in
reporting results for all periods on or after January 1, 2000. The
Company does not expect use of the amended definition to materially
affect FFO.
(4) Amount represents average economic occupancy for communities
stabilized for both the current and prior respective periods. Average
economic occupancy is defined as gross potential rent less vacancy
losses, model expenses and bad debt divided by gross potential rent
for the period, expressed as a percentage. The calculation of average
economic occupancy does not include a deduction for concessions and
employee discounts (average economic occupancy, taking account of
these amounts, would have been 95.0% for each of the years ended
December 31, 1999 and 1998). Concessions were $2,847 and $3,141 and
employee discounts were $583 and $519 for the years ended December 31,
1999 and 1998, respectively. A community is considered by the Company
to have achieved stabilized occupancy on the earlier to occur of (i)
attainment of 95% physical occupancy on the first day of any month, or
(ii) one-year after completion of construction.
18
<PAGE> 21
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT APARTMENT UNIT DATA)
OVERVIEW
The following discussion should be read in conjunction with all of the
financial statements appearing elsewhere in this report. The following
discussion is based primarily on the Consolidated Financial Statements of Post
Properties, Inc. (the "Company") and Post Apartment Homes, L.P. (the "Operating
Partnership"). Except for the effect of minority interest in the Operating
Partnership, the following discussion with respect to the Company is the same
for the Operating Partnership.
As of December 31, 1999, there were 44,027,748 Units outstanding, of which
38,834,323 or 88.2%, were owned by the Company and 5,193,425, or 11.8% were
owned by other limited partners (including certain officers and directors of
the Company). As of December 31, 1999, there were 7,800,000 preferred units
outstanding, of which 5,000,000 were owned by the Company.
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
The Operating Partnership recorded net income available to common unitholders
of $105,177, $88,988, and $61,078 for the years ended December 31, 1999, 1998
and 1997, respectively. The Company recorded net income available to common
shareholders of $92,642, $77,477 and $49,965 for the years ended December 31,
1999, 1998 and 1997, respectively. The Company's increases in net income
available to common shareholders of $15,165, from 1998 to 1999, and $27,512,
from 1997 to 1998 were primarily related to the Merger (1997 to 1998 only),
increased rental rates for fully stabilized communities and an increase in
units placed in service.
COMMUNITY OPERATIONS
The Company's net income is generated primarily from the operation of its
apartment communities. For purposes of evaluating comparative operating
performance, the Company categorizes its operating communities based on the
period each community reaches stabilized occupancy. A community is generally
considered by the Company to have achieved stabilized occupancy on the earlier
to occur of (i) attainment of 95% physical occupancy on the first day of any
month or (ii) one year after completion of construction.
At December 31, 1999, the Company's portfolio of apartment communities
consisted of the following: (i) 68 communities that were completed and
stabilized for all of the current and prior year, (ii) seven communities that
achieved full stabilization during the prior year, (iii) 10 communities which
reached stabilization during 1999, and (iv) 16 communities and additions to
three existing communities currently in the development or lease-up stage.
For communities with respect to which construction is completed and the
community has become fully operational, all property operating and maintenance
expenses are expensed as incurred and those recurring and non-recurring
expenditures relating to acquiring new assets, materially enhancing the value
of an existing asset, or substantially extending the useful life of an existing
asset are capitalized. (See "Capitalization of Fixed Assets and Community
Improvements").
The Company has adopted an accounting policy related to communities in the
development and lease-up stage whereby substantially all operating expenses
(including pre-opening marketing expenses) are expensed as incurred. The
Company treats each unit in an apartment community separately for cost
accumulation, capitalization and expense recognition purposes. Prior to the
commencement of leasing activities, interest and other construction costs are
capitalized and reflected on the balance sheet as construction in progress.
Once a unit is placed in service, all operating expenses allocated to that
unit, including interest, are expensed as incurred. During the lease-up phase,
the sum of interest expense on completed units and other operating expenses
(including pre-opening marketing expenses) will initially exceed rental
revenues, resulting in a "lease-up deficit," which continues until such time as
rental revenues exceed such expenses. Lease up deficits for the years ended
December 31, 1999, 1998, and 1997 were $2,798, $2,063 and $1,339, respectively.
19
<PAGE> 22
In order to evaluate the operating performance of its communities, the Company
has presented financial information which summarizes the revenue in excess of
specified expense on a comparative basis for all of its operating communities
combined and for communities which have reached stabilization prior to January
1, 1998.
ALL OPERATING COMMUNITIES
The operating performance for all of the Company's apartment communities
combined for the years ended December 31, 1999, 1998 and 1997 is summarized as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------------- -----------------------------------
% %
1999 1998 CHANGE 1998 1997 CHANGE
--------- --------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Rental and other revenue:
Fully stabilized communities(1) .................... $ 236,923 $ 228,878 3.5% $ 228,878 $ 207,686 10.2%
Adjustment for acquired communities(2) ............. -- -- n/m -- (36,594) n/m
Communities stabilized during 1998 ................. 22,197 19,149 15.9% 19,149 5,441 n/m
Development and lease-up communities(3) ............ 58,486 23,708 146.7% 23,708 8,328 n/m
Sold communities(4) ................................ 318 3,867 (91.8)% 3,867 3,205 20.7%
Other revenue(5) ................................... 14,753 12,415 18.8% 12,415 4,392 182.7%
--------- --------- ------ --------- --------- ------
332,677 288,017 15.5% 288,017 192,458 49.7%
--------- --------- ------ --------- --------- ------
Property operating and maintenance expense
(exclusive of depreciation and amortization):
Fully stabilized communities(1) .................... 73,114 72,013 1.5% 72,013 54,556 32.0%
Adjustment for acquired
communities(2) .................................... -- -- n/m -- (689) n/m
Communities stabilized during 1998 ................. 7,028 6,183 13.7% 6,183 2,123 191.2%
Development and lease-up communities(3) ............ 22,580 11,199 101.6% 11,199 3,174 n/m
Sold communities(4) ................................ 128 621 (79.4)% 621 1,147 (45.9)%
Other expenses(6) .................................. 10,302 9,701 6.2% 9,701 7,204 34.7%
--------- --------- ------ --------- --------- ------
113,152 99,717 13.5% 99,717 67,515 47.7%
--------- --------- ------ --------- --------- ------
Revenue in excess of specified expense .............. $ 219,525 $ 188,300 16.6% $ 188,300 $ 124,943 50.7%
========= ========= ====== ========= ========= ======
Recurring capital expenditures:(7)
Carpet ............................................. $ 2,864 $ 2,550 12.3% $ 2,550 $ 1,617 57.7%
Other .............................................. 5,777 4,929 17.2% 4,929 2,058 139.5%
--------- --------- ------ --------- --------- ------
Total ............................................ $ 8,641 $ 7,479 15.5% $ 7,479 $ 3,675 103.5%
========= ========= ====== ========= ========= ======
Average apartment units in service .................. 29,304 27,416 6.9% 27,416 19,413 41.2%
========= ========= ====== ========= ========= ======
</TABLE>
(1) Communities which reached stabilization prior to January 1, 1998.
Includes fully stabilized communities acquired as a result of the Merger.
(2) The adjustment for acquired communities represents the operating results
of the fully stabilized communities owned by Columbus prior to the
Merger.
(3) Communities in the "construction", "development" or "lease-up" stage
during 1999 and, therefore, not considered fully stabilized for all of
the periods presented.
(4) Includes one community containing 416 units, which was sold on May 22,
1997 and one community containing 198 units which was sold March 19,
1999. The revenues and expenses for these communities had previously been
included in the fully stabilized group.
(5) Other revenue includes revenue on furnished apartment rentals above the
unfurnished rental rates and any revenue not directly related to property
operations.
(6) Other expenses includes certain indirect central office operating
expenses related to management, grounds maintenance, and costs associated
with furnished apartment rentals.
(7) In addition to those expenses which relate to property operations, the
Company incurs recurring and non-recurring expenditures relating to
acquiring new assets, materially enhancing the value of an existing
asset, or substantially extending the useful life of an existing asset,
all of which are capitalized.
n/m - not meaningful
For the year ended December 31, 1999, rental and other revenue increased
$44,660 or 15.5% compared to 1998, primarily as a result of the completion of
new communities and increased rental rates for existing communities.
For the year ended December 31, 1998, rental and other revenue increased
$95,559 or 49.7% compared to 1997, primarily as a result of the Merger,
completion of new communities and increased rental rate for existing
communities.
20
<PAGE> 23
Property operating and maintenance expenses (exclusive of depreciation and
amortization) increased from 1998 to 1999 primarily due to an increase in the
number of units placed in service through the development of communities.
Property operating and maintenance expenses (exclusive of depreciation and
amortization) increased from 1997 to 1998 primarily as a result of the Merger
and completion of new communities.
For the years ended December 31, 1999 and 1998, recurring capital expenditures
increased $1,162 or 15.5% and $3,804 or 103.5%, respectively, compared to the
prior years, primarily due to additional units placed in service, the Merger
(for 1997 to 1998) and the timing and extent of scheduled capital improvements.
FULLY STABILIZED COMMUNITIES
The Company defines fully stabilized communities as those which have reached
stabilization prior to the beginning of the previous calendar year. To enhance
comparability, Management has presented 1997 rental and other revenue and
property operating and maintenance expense on a pro forma and historical basis.
The adjustment for acquired communities represents the rental and other revenue
and property operating and maintenance expenses, for the periods prior to the
date of the Merger, of the 5,950 fully stabilized apartment units that were
acquired through the Merger.
The operating performance of the 68 communities containing an aggregate of
23,462 units which were stabilized as of January 1, 1998, are summarized as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------------------- --------------------------------------
% %
1999 1998 CHANGE 1998 1997 CHANGE
--------- --------- -------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Rental and other revenue(1) ................... $ 236,923 $ 228,878 3.5% $ 228,878 $ 207,686 10.2%
Adjustment for acquired communities(2) ........ -- -- -- -- (36,594) n/m
--------- --------- ---------- ----------
Historical - rental and other revenue(3) ...... 236,923 228,878 3.5% 228,878 171,092 33.8%
--------- --------- ---------- ----------
Property operating and maintenance
expense (exclusive of depreciation
and amortization)(1) ......................... 73,114 72,013 1.5% 72,013 54,556 32.0%
Adjustment for acquired communities(2) ........ -- -- -- -- (689) n/m
--------- --------- ---------- ----------
Historical-property operating and maintenance
expense (exclusive of depreciation and
amortization)(3)(4) .......................... 73,114 72,013 1.5% 72,013 53,867 33.7%
--------- --------- ---------- ----------
Revenue in excess of specified expense(3) ..... $ 163,809 $ 156,865 4.4% $ 156,865 $ 117,225 33.8%
========= ========= ========== ==========
Average economic occupancy(3)(5) .............. 96.4% 96.5% 96.5% 92.7%
========= ========= ========== ==========
Average monthly rental rate per apartment
unit(3)(6) ................................... $ 851 $ 826 3.0% $ 826 $ 773 6.9%
========= ========= ========== ==========
Apartment units in service ..................... 23,462 23,462 23,462 23,462
========= ========= ========== ==========
</TABLE>
(1) Communities which reached stabilization prior to January 1, 1998.
Includes fully stabilized communities acquired in October 1997 through
the Merger. As a result, 1997 rental and other revenue and property
operating and maintenance expense are presented on a pro forma basis.
(2) The adjustment for acquired communities represents the operating results
of the fully stabilized communities owned by Columbus prior to the
Merger.
(3) Represents the Company's historical results of operations for fully
stabilized communities.
(4) In addition to those expenses which relate to property operations, the
Company incurs recurring and non-recurring expenditures relating to
acquiring new assets, materially enhancing the value of an existing
asset, or substantially extending the useful life of an existing asset,
all of which are capitalized. For the years ended December 31, 1999 and
1998, recurring expenditures were $8,215 and $7,082 or $350 and $302 on a
per unit basis, respectively.
(5) Average economic occupancy is defined as gross potential rent less
vacancy losses, model expenses and bad debt divided by gross potential
rent for the period, expressed as a percentage. The calculation of
average economic occupancy does not include a deduction for concessions
and employee discounts. (Average economic occupancy, taking account of
these amounts would have been 95.0% for both years ended December 31,
1999 and 1998.) Concessions were $2,847 and $3,141 and employee discounts
were $583 and $519 for the years ended December 31, 1999 and 1998,
respectively.
(6) Average monthly rental rate is defined as the average of the gross actual
rental rates for leased units and the average of the anticipated rental
rates for unoccupied units.
21
<PAGE> 24
Rental and other revenue increased from 1998 to 1999 primarily due to increased
rental rates. The increase in property and maintenance expense (exclusive of
depreciation and amortization) from 1998 to 1999 was primarily due to increased
personnel and property tax expenses partially offset by a decline in utilities
expense as a result of water submetering.
Rental and other revenue increased from 1997 to 1998 due to increased rental
rates and the number of units in service as a result of the Merger. The
increase in property and maintenance expenses (exclusive of depreciation and
amortization) from 1997 to 1998 was primarily due to an increase in personnel
costs and the number of units in service as a result of the Merger.
THIRD PARTY SERVICES
THIRD PARTY MANAGEMENT SERVICES
The Company provides asset management, leasing and other consulting services to
non-related owners of apartment communities through its subsidiary, RAM. The
operating performance of RAM for the years ended December 31, 1999, 1998 and
1997 is summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
-------------------------------- ---------------------------------
% %
1999 1998 CHANGE 1998 1997 CHANGE
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Property management and
other revenue ................... $ 3,368 $ 3,164 6.4% $ 3,164 $ 2,444 29.5%
Property management expense ...... 2,925 2,499 17.0% 2,499 1,887 32.4%
Depreciation expense ............. 27 34 (20.6)% 34 44 (22.7)%
-------- -------- -------- --------
Revenue in excess of specified
expense ......................... $ 416 $ 631 (34.1)% $ 631 $ 513 23.0%
======== ======== ======== ========
Average apartment units in service 12,572 11,046 13.8% 11,046 9,061 21.9%
======== ======== ======== ========
</TABLE>
The change in revenue in excess of specified expense from 1998 to 1999 is
primarily attributable to the management of more communities in lease-up phases
as a result of turnover in management contract. The change from 1997 to 1998 is
primarily attributable to the change in the average number and average gross
revenue of units managed.
THIRD PARTY LANDSCAPE SERVICES
The Company provides landscape maintenance, design and installation services to
non-related parties through a subsidiary, Post Landscape Group, Inc., formerly
Post Landscape Services, Inc. ("Post Landscape Group").
The operating performance of Post Landscape Group for the years ended December
31, 1999, 1998 and 1997 are summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------- ------------------------------
% %
1999 1998 CHANGE 1998 1997 CHANGE
--------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Landscape services and
other revenue.......................... $ 9,118 $ 7,252 25.7% $ 7,252 $ 5,148 40.9%
Landscape services expense............... 7,904 6,264 26.2% 6,264 4,284 46.2%
Depreciation expense..................... 293 173 69.4% 173 107 61.7%
--------- -------- -------- ---------
Revenue in excess of specified
expense................................ $ 921 $ 815 13.0% $ 815 $ 757 7.7%
========= ======== ======== =========
</TABLE>
The change in landscape services revenue and landscape services expense from
1998 to 1999 and 1997 to 1998 is primarily due to an increase in landscape
contracts.
22
<PAGE> 25
OTHER INCOME AND EXPENSES
Depreciation expense increased from 1998 to 1999 and from 1997 to 1998
primarily as a result of an increase in units in service, additional leasehold
improvements and technology expenditures and communities acquired in the Merger
(1997 to 1998 only).
Interest expense increased from 1998 to 1999 and from 1997 to 1998 primarily
due to an increase in debt used to fund the development of new communities and
additional debt incurred in connection with the Merger (1997 to 1998 only).
Amortization of deferred loan costs increased from 1997 to 1998 due largely to
two public debt issuances completed by the Company in 1998. From 1998 to 1999,
amortization of deferred loan costs increased primarily due to two secured debt
issuances completed by the Company in 1999. See "Liquidity and Capital
Resources" below. General and administrative expenses increased from 1997 to
1998 primarily as a result of the Merger. General and administrative expenses
decreased from 1998 to 1999 as a result of a reduction in personnel related
expenditures and an increase in development support.
The net gain on sale of assets in 1997 resulted from the sale of a community
and the net loss on sale of assets in 1999 resulted from the net loss on the
sale of one community and two tracts of land.
The loss on unused treasury locks in 1998 resulted from the termination of
treasury locks intended for debt securities that were not issued by the
Operating Partnership.
The loss on relocation of corporate office in 1997 resulted from the relocation
of the Company's corporate office prior to the end of the lease term on the
Company's corporate office space.
The extraordinary items in 1997 and 1999, net of the minority interest portion,
resulted from the costs associated with the early retirement of debt.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
The Company's net cash provided by operating activities increased from $109,554
in 1997 to $148,618 in 1998, principally due to increased property operating
income. Net cash provided by operating activities increased from $148,618 in
1998 to $153,038 in 1999 primarily due to increased net income partially offset
by a net decrease in cash from changes in current assets. This change in
current assets is primarily attributable to $7,750 of employee loans (see
Related Party footnote to Consolidated Financial Statements), $9,500 in tax
increment financing receivables associated with public/private development
projects and additional expenditures for pre-development activities. Net cash
used in investing activities increased from $208,377 in 1997 to $328,216 in
1998, primarily due to increases in spending on construction and acquisition of
real estate assets. Net cash used in investing activities decreased from
$328,216 in 1998 to $317,960 in 1999 primarily due to proceeds from the sale of
one community in March 1999 and reduced capital expenditures. Net cash provided
by financing activities increased from $109,469 in 1997 to $189,873 in 1998
primarily due to proceeds from the public issuances of preferred stock and
common stock during 1998. Net cash provided by financing activities decreased
from $189,873 in 1998 to $149,638 in 1999 primarily due to reduced proceeds
from debt and equity offerings partially offset by reduced debt payments.
The Company has elected to be taxed as a Real Estate Investment Trust ("REIT")
under Sections 856 through 860 of the Code commencing with its taxable year
ended December 31, 1993. REITs are subject to a number of organizational and
operational requirements, including a requirement that they currently
distribute 95% of their ordinary taxable income. As a REIT, the Company
generally will not be subject to Federal income tax on net income.
At December 31, 1999, the Company had total indebtedness of $989,583 and cash
and cash equivalents of $5,870. The Company's indebtedness includes
approximately $179,277 in conventional mortgages payable and $235,880 in
tax-exempt bond indebtedness secured by communities, senior unsecured notes of
$390,000, and other unsecured
23
<PAGE> 26
debt and borrowings under unsecured lines of credit totaling approximately
$184,426. A schedule of indebtedness is included in Item 7.
The Company expects to meet its short-term liquidity requirements generally
through its net cash provided by operations and borrowings under credit
arrangements and expects to meet certain of its long-term liquidity
requirements, such as scheduled debt maturities, repayment of financing of
construction and development activities and possible property acquisitions,
through long-term secured and unsecured borrowings, possible sale of properties
and the issuance of debt securities or additional equity securities of the
Company or Units of the Operating Partnership in connection with acquisitions
of land or improved properties. The Company believes that its net cash provided
by operations will continue to be adequate to meet both operating requirements
and payment of dividends by the Company in accordance with REIT requirements in
both the short and the long term. The budgeted expenditures for improvements
and renovations to certain of the communities are expected to be funded from
property operations.
Lines of Credit
On May 7, 1999, the Company's syndicated line of credit (the "Revolver") was
amended, increasing its capacity to $350,000. The Revolver matures on April 30,
2002 and borrowings currently bear interest at LIBOR plus .825% or prime minus
.25%. The Revolver provides for the rate to be adjusted up or down based on
changes in the credit ratings on the Company's senior unsecured debt. The
Revolver also includes a money market competitive bid option for short-term
funds up to $175,000 at rates below the stated line rate. The credit agreement
for the Revolver contains customary representations, covenants and events of
default, including covenants which restrict the ability of the Operating
Partnership to make distributions, in excess of stated amounts, which in turn
restricts the discretion of the Company to declare and pay dividends. In
general, during any fiscal year the Operating Partnership may only distribute
up to 100% of the Operating Partnership's consolidated income available for
distribution (as defined in the credit agreement) exclusive of distributions of
up to $30,000 of capital gains for such year. The credit agreement contains
exceptions to these limitations to allow the Operating Partnership to make
distributions necessary to allow the Company to maintain its status as a REIT.
The Company does not anticipate that this covenant will adversely affect the
ability of the Operating Partnership to make distributions, or the Company to
declare dividends, under the Company's current dividend policy.
On July 26, 1996, the Company closed a $20,000 unsecured line of credit with
Wachovia Bank of Georgia, N.A. (The "Cash Management Line"), which was used to
pay down the outstanding balance on the Revolver. The Cash Management Line
bears interest at LIBOR plus .675% or prime minus .25% and matures on March 31,
2000. Management believes the Cash Management Line will be renewed at maturity
with similar terms. The Revolver requires three days advance notice to repay
borrowings whereas the Cash Management Line provides the Company with an
automatic daily sweep which applies all available cash to reduce the
outstanding balance. In addition, the Company has a $3,000 facility to provide
letters of credit for general business purposes.
Other Unsecured Debt
On March 1, 1998, the Company entered into a Disposition and Development
Agreement with the City of Phoenix, Arizona. Pursuant to this agreement, the
City of Phoenix loaned the Company $2,000. This loan is interest-free for the
first three years, with a 5.00% interest rate thereafter. Repayment of the loan
commences on March 1, 2001 with equal semi-annual payments due on March 1 and
September 1 of each year through March 1, 2021.
Tax Exempt Bonds
On June 29, 1995, the Company replaced the bank letters of credit providing
credit enhancement for its outstanding tax-exempt bonds. Under an agreement
with the Federal National Mortgage Association ("FNMA"), FNMA now provides,
directly or indirectly through other bank letters of credit, credit enhancement
with respect to such bonds. Under the terms of such agreement, FNMA has
provided replacement credit enhancement through 2025 for the bond issues,
aggregating $235,880, which were reissued. The agreement with FNMA contains
representations, covenants, and events of default customary to such secured
loans.
Secured Debt
On March 30, 1999, the Operating Partnership issued $50,000 of secured notes to
an insurance company. These notes bear interest at 6.5% with an effective rate
of 7.3% after consideration of a terminated swap agreement,
24
<PAGE> 27
mature on March 1, 2009 and are secured by two apartment communities. Net
proceeds of $49,933 were used to repay outstanding indebtedness.
On July 23, 1999, the Operating Partnership issued $104,000 of secured notes to
FNMA. These notes bear interest at 30-day LIBOR (capped at 7% for one year)
plus credit enhancement, liquidity and service fees of .935%, mature on July
23, 2029 and are secured by five apartment communities. The notes include a
prepayment penalty that is an amount equal to a percentage of the principle
amount remaining under the notes at the time of prepayment. The penalty ranges
from 4.8% in the first year to .65% in the tenth year. The Operating
Partnership has an option to call these notes after ten years from the issuance
date. As a requirement of the debt agreement with FNMA, the Company entered
into a fixed-rate swap which fixed the interest rate on the notes to 6.56% for
a period of ten years. The Company entered into a variable rate swap in which
the Company would pay a variable rate equal to the rate on the notes and
receive a fixed rate of 6.50%. Net proceeds of $101,988 were used to repay
outstanding indebtedness.
Senior Unsecured Debt Offerings
On June 7, 1995, the Company issued $50,000 of unsecured senior notes with The
Northwestern Mutual Life Insurance Company. The notes were in two tranches: the
first, totaling $30,000, carries an interest rate of 8.21% per annum (1.25%
over the corresponding treasury rate on the date such rate was set) and matures
on June 7, 2000; and the second, totaling $20,000 carries an interest rate of
8.37% per annum (1.35% over the corresponding treasury rate on the date such
rate was set) and matures on June 7, 2002. Proceeds from the notes were used to
reduce other secured indebtedness and to pay down the Revolver. The note
agreements pursuant to which the notes were purchased contain customary
representations, covenants and events of default similar to those contained in
the note agreement for the Revolver.
On September 30, 1996, the Company completed a public offering of $125,000
senior unsecured debt comprised of two tranches. The first tranche, $100,000 of
7.25% Notes due on October 1, 2003 (the "2003 Notes"), was priced at 99.642% to
yield 7.316%, or 71 basis points over the rate on U.S. Treasury securities with
a comparable maturity. The second tranche, $25,000 or 7.50% Notes due on
October 1, 2006 (the "2006 Notes", and together with the 2003 Notes, the
"Notes"), was priced at 99.694% to yield 7.544%, or 83 basis points over the
rate on U.S. Treasury securities with a comparable maturity. Proceeds from the
Notes were used to pay down the Revolver.
Medium Term Notes and Mandatory Par Put Remarketed Securities
On January 29, 1997, the Operating Partnership established a program for the
sale of up to $175,000 aggregate principal amount of Medium-Term Notes due nine
months or more from the date of issue (the "MTNs"). On October 20, 1997, the
Company increased the amount available under this program to $344,000. As of
December 31, 1999, the Operating Partnership had $215,000 aggregate principle
amount of notes outstanding under the MTN Program. Proceeds from the MTNs were
used to (i) prepay certain outstanding notes and (ii) pay down existing
indebtedness outstanding under the Company's Revolver.
On March 12, 1998, the Operating Partnership issued $100,000 of 6.85% Mandatory
Par Put Remarketed Securities(SM) ("MOPPRS(SM)") under the MTN Program. The net
proceeds of $99,087 from the sale of the MOPPRS(SM) were used to repay
outstanding indebtedness. In connection with the MOPPRS(SM) transaction, Merrill
Lynch & Co. purchased an option to remarket the securities as of March 16, 2005
(the "Remarketing Date") reducing the effective borrowing rate through the
Remarketing Date to 6.59%. In anticipation of the offering, the Operating
Partnership entered into forward-treasury-lock agreements in the fall of 1997.
As a result of the termination of these agreements, the effective borrowing rate
was increased to approximately 6.85%, the coupon rate on the MOPPRS(SM).
Preferred Unit Offerings
On September 3, 1999, the Operating Partnership issued $70,000 of Series D
Cumulative Redeemable Preferred Units of limited partnership interest (the
"Series D Preferred Units") to an institutional investor in a private placement
meeting the requirements of Regulation D promulgated under the Securities Act of
1933, as amended. The Series D Preferred Units are exchangeable for Series D
Preferred Shares on a one for one basis at any time on or after September 3,
2009, or prior thereto provided certain requirements specified in the Series D
Preferred Partnership Units Agreement have been met. Net proceeds to the
Operating Partnership of approximately $68,000 were used to repay outstanding
indebtedness.
25
<PAGE> 28
Perpetual Preferred Stock Offerings
On February 9, 1998, the Company sold two million non-convertible 7 5/8% Series
C Cumulative Redeemable Shares (the "Series C Perpetual Preferred Shares") with
a liquidation preference of $25 per share. Net proceeds of $48,284 from the
sale of Series C Perpetual Shares were contributed to the Operating Partnership
in exchange for two million Perpetual Preferred Units and used by the Operating
Partnership to repay outstanding indebtedness.
Common Stock Offerings
On December 8, 1998, the Company issued 730,000 shares of common stock at a
price of $37 per share. The net proceeds of approximately $27,000 were
contributed to the Operating Partnership and used to pay down outstanding
balances on the Company's lines of credit.
On November 4, 1998, the Company issued 1.15 million shares of common stock at
a price of $38.6875 per share. The net proceeds of approximately $42,200 were
contributed to the Operating Partnership and used to pay down outstanding
balances on the Company's lines of credit.
On May 28, 1998, the Company issued 373,250 shares of its common stock at a
price of $40.1875 per share. The shares were deposited into a registered unit
investment trust, the Paine Webber Equity Trust Reit Series 1. Net proceeds of
$13,662 were contributed to the Operating Partnership and were used to fund
development and other operating cash flow needs.
On April 29, 1998, the Company issued approximately 1.1 million shares of its
common stock at a price of $40.5625 per share. The shares were deposited into a
registered unit investment trust, the Equity Investor Fund Cohen & Steers
Realty Majors Portfolio. Net proceeds of $44,059 were contributed to the
Operating Partnership and used to repay outstanding indebtedness.
On March 4, 1998, the Company issued 3.5 million shares of common stock at a
price of $39 per share. Net proceeds of $129,179 were used by the Operating
Partnership to repay outstanding indebtedness.
Sale of Properties
In February 2000, the Company sold a 213 unit property located in Atlanta for
$32,350. Net proceeds estimated at $31,500 will be used to repay outstanding
indebtedness. In February 2000, the Company's Investment Committee approved the
sale of and subsequently listed for sale three properties in Mississippi
containing 983 units and a commercial property located in Dallas, TX.
Dividend Reinvestment Plan
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of the
Company. Under the DRIP, shareholders may elect for their dividends to be used
to acquire additional shares of the Company's Common Stock directly from the
Company, for 95% of the market price on the date of purchase.
26
<PAGE> 29
Schedule of Indebtedness
The following table reflects the Company's indebtedness at December 31, 1999:
<TABLE>
<CAPTION>
MATURITY PRINCIPAL
DESCRIPTION LOCATION INTEREST RATE DATE (1) BALANCE
----------- -------------- ------------- -------- ---------
<S> <C> <C> <C> <C>
CONVENTIONAL FIXED RATE (SECURED)
Post Hillsboro Village & The Lee Apartments.... Nashville, TN 9.20% 10/01/01 $ 2,915
Parkwood Townhomes(TM)......................... Dallas, TX 7.375% 04/01/14 833
Northwestern Mutual Life....................... N/A 6.50% 03/01/09 49,462
----------
53,210
----------
CONVENTIONAL FLOATING RATE (SECURED)
Addison Circle Apartment Homes
by Post(TM)- Phase I........................ Dallas, TX LIBOR + .75% 06/15/00 22,067
FNMA........................................... Atlanta, GA LIBOR + .935% 07/23/29 104,000
----------
126,067
----------
TAX EXEMPT FLOATING RATE (SECURED)
Post Ashford(R)Series 1995.................... Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 9,895
Post Valley(R)Series 1995..................... Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 18,600
Post Brook(R)Series 1995...................... Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 4,300
Post Village(R)(Atlanta) Hills Series 1995.... Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 7,000
Post Mill(R)Series 1995....................... Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 12,880
Post Canyon(R)Series 1996..................... Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 16,845
Post Corners(R)Series 1996.................... Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 14,760
Post Bridge(R)................................ Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 12,450
Post Village(R)(Atlanta) Gardens.............. Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 14,500
Post Chase(R)................................. Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 15,000
Post Walk(R).................................. Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 15,000
Post Lake(R).................................. Orlando, FL "AAA" NON-AMT + .515% (2)(3) 06/01/25 28,500
Post Fountains at Lee Vista(R)................ Orlando, FL "AAA" NON-AMT + .515% (2)(3) 06/01/25 21,500
Post Village(R) (Atlanta) Fountains
and Meadows................................ Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 26,000
Post Court(R)................................. Atlanta, GA "AAA" NON-AMT + .515% (2)(3) 06/01/25 18,650
----------
235,880
----------
SENIOR NOTES (UNSECURED)
Medium Term Notes............................. N/A LIBOR + .25% 03/03/00 30,000
Northwestern Mutual Life...................... N/A 8.21% 06/07/00 30,000
Medium Term Notes............................. N/A 7.02% 04/02/01 37,000
Northwestern Mutual Life...................... N/A 8.37% 06/07/02 20,000
Senior Notes.................................. N/A 7.25% 10/01/03 100,000
Medium Term Notes............................. N/A 7.30% 04/01/04 13,000
Medium Term Notes............................. N/A 6.69% 09/22/04 10,000
Medium Term Notes............................. N/A 6.78% 09/22/05 25,000
Senior Notes.................................. N/A 7.50% 10/01/06 25,000
Mandatory Par Put Remarketed.................. N/A 6.85% (4) 03/16/15 100,000
----------
390,000
----------
LINES OF CREDIT & OTHER UNSECURED DEBT
City of Phoenix................................ N/A 5.00% (5) 03/01/21 2,000
Revolver ...................................... N/A LIBOR + .825% or prime minus .25% 04/30/02 165,000
Cash Management Line........................... N/A LIBOR + .675% or prime minus .25% 03/31/00 17,426
-----------
184,426
-----------
TOTAL................................ $ 989,583
===========
</TABLE>
(1) All of the mortgages can be prepaid at any time, subject to certain
prepayment penalties.
(2) Bond financed (interest rate on bonds + credit enhancement fees
effective October 1, 1998).
(3) These bonds are cross collateralized. The Company has purchased an
interest rate cap that limits the Company's exposure to increases in
the base rate to 5%.
27
<PAGE> 30
(4) The annual interest rate on these securities to March 16, 2005 (the
"Remarketing Date") is 6.85%. On the Remarketing Date, they are
subject to mandatory tender for remarketing.
(5) This loan is interest free for the first three year, with interest at
5.00% thereafter. Repayment is to commence on March 1, 2001 subject to
the conditions set forth in the Agreement.
(6) Represents stated rate. The Company may also make "money market" loans
of up to $175,000 at rates below the stated rate. At December 31,
1999, the outstanding balance of the Revolver consisted of "money
market" loans with an average interest rate of 6.75%.
Capitalization of Fixed Assets and Community Improvements
The Company has established a policy of capitalizing those expenditures
relating to acquiring new assets, materially enhancing the value of an
existing asset, or substantially extending the useful life of an existing
asset. All expenditures necessary to maintain a community in ordinary
operating condition are expensed as incurred. During the first five years of
a community (which corresponds to the estimated depreciable life), carpet
replacements are expensed as incurred. Thereafter, carpet replacements are
capitalized.
Acquisition of assets and community improvement expenditures for the years
ended December 31, 1999 and 1998 are summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
<S> <C> <C>
New community development and acquisition activity ............................. $ 320,081 $ 288,002
Revenue generating additions and improvements:
Property renovations ........................................................ 7,826 12,896
Submetering of water service ................................................ 185 718
Nonrecurring capital expenditures:
Vehicle access control gates ................................................ 794 377
Other community additions and improvements .................................. 2,177 1,046
Corporate additions and improvements ........................................ -- 4,527
Recurring capital expenditures:
Carpet replacements ......................................................... 2,864 2,550
Other community additions and improvements .................................. 5,777 4,929
Corporate additions and improvements ........................................ 6,811 4,049
------------ ------------
$ 346,515 $ 319,094
============ ============
</TABLE>
INFLATION
Substantially all of the leases at the Communities allow, at the time of
renewal, for adjustments in the rent payable thereunder, and thus may enable
the Company to seek increases in rents. The substantial majority of these
leases are for one year or less and the remaining leases are for up to two
years. At the expiration of a lease term, the Company's lease agreements
provide that the term will be extended unless either the Company or the lessee
gives at least sixty (60) days written notice of termination; in addition, the
Company's policy permits the earlier termination of a lease by a lessee upon
thirty (30) days written notice to the Company and the payment of one month's
additional rent as compensation for early termination. The short-term nature of
these leases generally serves to reduce the risk to the Company of the adverse
effect of inflation.
YEAR 2000 ISSUE
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Company's
computer equipment and software and devices with embedded technology that are
time-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to engage in normal business activities.
The Company completed its Year 2000 project on schedule. No operational
problems were encountered as a result of the Year 2000 issue. The Company
incurred costs of approximately $2,900 related to the Year 2000 issue.
NEW ACCOUNTING PRONOUNCEMENTS
See Note 1 to Consolidated Financial Statements of the Company.
28
<PAGE> 31
FUNDS FROM OPERATIONS AND CASH AVAILABLE FOR DISTRIBUTION
Historical Funds from Operations
The Company considers funds from operations ("FFO") a useful measure of
performance of an equity REIT. FFO is defined to mean net income available to
common shareholders determined in accordance with GAAP, excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation of
real estate assets, and after adjustment for unconsolidated partnerships and
joint ventures. FFO should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indicator of the Company's financial
performance or to cash flow from operating activities (determined in accordance
with GAAP) as a measure of the Company's liquidity, nor is it necessarily
indicative of sufficient cash flow to fund all of the Company's needs. Cash
available for distribution ("CAD") is defined as FFO less capital expenditures
funded by operations and loan amortization payments. The Company believes that
in order to facilitate a clear understanding of the consolidated historical
operating results of the Company, FFO and CAD should be examined in conjunction
with net income as presented in the consolidated financial statements and data
included elsewhere in this report.
FFO and CAD for the years ended December 31, 1999, 1998 and 1997 presented on a
historical basis are summarized in the following table:
Calculations of Funds from Operations and Cash Available for Distribution
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Net income available to common shareholders....................... $ 92,642 $ 77,477 $ 49,965
Extraordinary item, net of minority interest...................... 458 -- 75
Minority interest................................................. 12,598 11,511 11,131
Net (gain) loss on sale of assets................................. 1,522 -- (3,270)
Loss on unused treasury locks..................................... -- 1,944 --
Loss on relocation of corporate office............................ -- -- 1,500
------------ ------------ ------------
Adjusted net income............................................... 107,220 90,932 59,401
Depreciation of real estate assets................................ 55,361 45,214 27,991
------------ ------------ ------------
Funds from Operations (1)......................................... 162,581 136,146 87,392
Recurring capital expenditures (2)................................ (8,641) (7,479) (3,675)
Non-recurring capital expenditures (3)............................ (2,971) (1,423) (605)
Loan amortization payments........................................ (81) (75) (179)
------------ ------------ ------------
Cash Available for Distribution................................... $ 150,888 $ 127,169 $ 82,933
============ ============ ============
Revenue generating capital expenditures (4)....................... $ 8,011 $ 13,614 $ 8,168
============ ============ ============
Cash Flow Provided From (Used In):
Operating activities............................................ $ 153,038 $ 148,618 $ 109,554
Investing activities............................................ $ (317,960) $ (328,216) $ (208,377)
Financing activities............................................ $ 149,638 $ 189,873 $ 109,469
Weighted average common shares outstanding - basic................ 38,460,689 35,028,596 23,664,044
============ ============ ============
Weighted average common shares outstanding - diluted.............. 38,916,987 35,473,587 23,887,906
============ ============ ============
Weighted average common shares and Units outstanding - basic...... 43,663,373 40,244,351 28,880,928
============ ============ ============
Weighted average common shares and Units outstanding - diluted.... 44,119,671 40,689,342 29,104,790
============ ============ ============
</TABLE>
(1) The Company uses the National Association of Real Estate Investment
Trusts ("NAREIT") definition of FFO which was adopted for periods
beginning after January 1, 1996. FFO for any period means the
consolidated net income available to common shareholders of the Company
and its subsidiaries for such period excluding gains or losses from debt
restructuring and sales of property plus depreciation of real estate
assets, and after adjustment for unconsolidated partnerships and joint
ventures, all determined on a consistent basis in accordance with
generally accepted accounting principles. FFO presented herein is not
necessarily comparable to FFO presented by other real estate companies
due to the fact that not all real estate companies use the same
definition. However, the Company's FFO is comparable to the FFO of real
estate companies that use the current NAREIT definition. NAREIT's
definition of FFO excludes items classified by GAAP as extraordinary or
unusual and significant non-recurring events that materially distort the
comparative measurement of performance over time. Effective January 1,
2000 NAREIT amended its definition of FFO to include in FFO all
non-recurring events, except for those that are defined as extraordinary
items under GAAP and gains and losses from sales of property. The
Company will use the amended definition of FFO in reporting results for
all periods on or after January 1, 2000. The Company does not expect use
of the amended definition to materially affect FFO.
(2) Recurring capital expenditures consisted primarily of $2,864, $2,550 and
$1,617 of carpet replacement and $5,777, $4,929 and $2,058 of other
community additions and improvements to existing communities for the
years ended December 31, 1999, 1998 and 1997, respectively. Since the
Company does not add back the depreciation of non-real estate assets in
its calculation of FFO, capital
29
<PAGE> 32
expenditures of $6,811, $8,576 and $3,220 are excluded from the
calculation of CAD for the years ended December 31, 1999, 1998 and 1997,
respectively.
(3) Non-recurring capital expenditures consisted of the additions of vehicle
access control gates to communities of $794, $377 and $115 and other
community additions and improvements of $2,177, $1,046 and $490 for the
years ended December 31, 1999, 1998 and 1997, respectively.
(4) Revenue generating capital expenditures included major renovations of
communities in the amount of $7,826, $12,896 and $5,532 for the years
ended December 31, 1999, 1998 and 1997, respectively, and submetering of
water service to communities in the amounts of $185, $718 and $2,636 for
the years ended December 31, 1999, 1998, and 1997, respectively.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements made in this report, and other written or oral statements
made by or on behalf of the Company, may constitute "forward-looking
statements" within the meaning of the federal securities laws. Statements
regarding future events and developments and the Company's future performance,
as well as management's expectations, beliefs, plans, estimates or projections
relating to the future, are forward-looking statements within the meaning of
these laws. Examples of such statements in this report include descriptions of
our plans with respect to the development of new apartment communities, our
plans to enter new markets and our expectations relating to our continuing
growth. All forward-looking statements are subject to certain risks and
uncertainties that could cause actual events to differ materially from those
projected. Management believes that these forward-looking statements are
reasonable; however, you should not place undue reliance on such statements.
These statements are based on current expectations and speak only as of the
date of such statements. The Company undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result of future
events, new information or otherwise. Additional information concerning the
risk and uncertainties listed above, and other factors that you may wish to
consider, is contained elsewhere in the Company's filings with the Securities
and Exchange Commission.
The following are some of the factors that could cause the Company's actual
results to differ materially from the expected results described in the
Company's forward-looking statements:
- - conditions affecting the acquisition, development and ownership of
residential real estate, including local zoning and land use issues,
environmental regulations, the Americans with Disabilities Act, the Fair
Housing Amendments Act of 1988 and general conditions in the
multi-family residential real estate market.
- - adverse or unanticipated weather conditions, which may affect the
Company's overall level of development.
- - the Company's ability to obtain financing for the development of
additional apartment communities.
- - the impact of competition, including competition for tenants and
locations and in other important aspects of the Company's business. The
Company's primary competitors include other regional or national
apartment communities. The multifamily apartment community business is
highly competitive.
- - general economic conditions which affected consumer confidence and
purchases of new homes, including interest rates, the overall level of
economic activity, the availability of consumer credit and mortgage
financing, unemployment rates, and other factors.
- - the Company's ability to continue to qualify as a real estate investment
trust under the Code.
- - changes in laws and regulations, including changes in accounting
standards, tax statutes or regulations, and environmental and land use
regulations, and uncertainties of litigation.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE SENSITIVITY
The Company and Operating Partnership's primary market risk exposure is
interest rate risk. At December 31, 1999, the Company and Operating Partnership
together had $338,493 of variable rate debt tied to LIBOR. In
30
<PAGE> 33
addition, they had $235,880 in variable tax-exempt debt tied to "AAA" NON-AMT.
In addition, the Company and Operating Partnership have interest rate risk
associated with fixed rate debt at maturity.
Management has and will continue to manage interest rate risk as follows:
- - maintain a conservative ratio of fixed rate, long-term debt to total
debt such that variable rate exposure is kept at an acceptable level;
- - fix certain long-term variable rate debt through the use of interest
rate swaps or interest rate caps with appropriately matching maturities;
- - use treasury locks where appropriate to fix rates on anticipated debt
transactions, and
- - take advantage of favorable market conditions for long-term debt and/or
equity.
Management uses various financial models and advisors to achieve these
objectives.
The table below provides information about the Company's derivative financial
instruments and other financial instruments that are sensitive to changes in
interest rates. For debt obligations, the table presents principal cash flows
and related weighted average interest rates by expected maturity dates. For
interest rate swaps, the table presents notional amounts and weighted average
interest rates by (expected) contractual maturity dates. Notional amounts are
used to calculate the contractual payments to be exchanged under the contract.
Weighted average variable rates are based upon implied forward rates in the
yield curve at the reporting date. The information is presented in U.S. dollar
equivalents, which is the Company's reporting currency.
<TABLE>
<CAPTION>
EXPECTED MATURITY DATE
----------------------------------------------------------------------------------------------------
THERE- FAIR
2000 2001 2002 2003 2004 AFTER TOTAL VALUE
--------- --------- --------- --------- --------- --------- --------- ---------
(IN MILLIONS)
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long-term Debt:
Fixed Rate ............... $ 30,949 $ 40,817 $ 21,122 $ 101,191 $ 24,894 $ 196,237 $ 415,210 $ 420,675
--------- --------- --------- --------- --------- --------- --------- ---------
Average interest rate ... 7.04% 7.02% 6.94% 6.81% 6.78% 6.67% 7.12%
to 6.80%
Floating Rate (1) ........
LIBOR-based:
Cash Management
Line (2)................ 17,426 17,426 17,426
Addison Circle........... 22,067 22,067 22,067
MTN (03/03/00)........... 30,000 30,000 30,000
Revolver (2)............. 165,000 165,000 165,000
FNMA..................... 104,000 104,000 104,000
-------- --------- --------- --------- --------- --------- --------- ---------
Total LIBOR-based....... 69,493 -- 165,000 -- -- 104,000 338,493 338,493
Tax-exempt (3)........... 235,880 235,880 235,880
-------- --------- --------- --------- --------- --------- --------- ---------
Total floating rate
Debt................... 69,493 -- 165,000 -- -- 339,880 574,373 574,373
-------- --------- --------- --------- --------- --------- --------- ---------
Total debt.................. $100,442 $ 40,817 $ 186,122 $ 101,191 $ 24,894 $ 536,117 $ 989,583 $ 995,048
======== ========= ========= ========= ========= ========= ========= =========
</TABLE>
(1) Interest on these debt instruments is based on LIBOR ranging from LIBOR
plus .25% to .935% above LIBOR. At December 31, 1999, the LIBOR rate was
5.8225%. See Schedule of Indebtedness in Management's Discussion and
Analyses for rates on individual debt instruments.
(2) Assumes the Company's Revolver and Cash Management Line are repaid at the
maturity date. Management believes these lines will be renewed at maturity
with similar terms.
(3) At December 31, 1999, the "AAA" NON-AMT rate was 5.50%. Interest on these
debt instruments is equal to the "AAA" NON-AMT rate plus .515%.
31
<PAGE> 34
<TABLE>
<CAPTION>
AVERAGE EXPECTED
PAY RATE/ AVERAGE SETTLEMENT FAIR
INTEREST RATE DERIVATIVES NOTIONAL AMOUNT CAPRATE RECEIVE RATE DATE VALUE
- -------------------------------- --------------------- --------- ---------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Interest Rate Swaps
$104,000 amortizing 1 month
Variable to fixed........... to $90,270 6.56% LIBOR 7/31/09 $ 3,591
$104,000 amortizing 1 month
Fixed to variable........... to $90,270 LIBOR 6.50% 7/31/09 (4,322)
1 month
Interest rate cap.............. $150,000 LIBOR -- 08/01/00 6
Interest rate caps............. $235,880 5.00% -- 2/01/03 1,323
--------
$ 598
========
</TABLE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements are listed under Item 14(a) and are filed as part of
this report on the pages indicated. The supplementary data are included in Note
13 of the Notes to Consolidated Financial Statements.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
32
<PAGE> 35
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The sections under the headings "Election of Directors" entitled "Nominees for
Election," "Incumbent Directors -- Term Expiring 2001," and "Incumbent
Directors -- Term Expiring 2002" of the Proxy Statement for Annual Meeting of
Shareholders to be held May 17, 2000 (the "Proxy Statement") are incorporated
herein by reference for information on Directors of the Registrant. See Item X
in Part I hereof for information regarding executive officers of the
Registrant. The section under the heading "Other Matters" entitled "Section
16(a) Beneficial Ownership Reporting Compliance" of the Proxy Statement is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The section under the heading "Election of Directors" entitled "Compensation of
Directors" of the Proxy Statement and the sections under the heading titled
"Executive Compensation" entitled "Summary Compensation Table," "Option Grants
Table," "Fiscal Year-End Option Value Table," "Profit Sharing Plan,"
"Noncompetition and Employment Contract," and "Compensation Committee
Interlocks and Insider Participation" of the Proxy Statement are incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section under the heading "Common Stock Ownership by Management and
Principal Shareholders" of the Proxy Statement is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section under the heading "Certain Transactions" of the Proxy Statement is
incorporated herein by reference.
33
<PAGE> 36
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
(A) 1. AND 2. FINANCIAL STATEMENTS AND SCHEDULES
The financial statements and schedules listed below are filed as part of this
annual report on the pages indicated.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
POST PROPERTIES, INC.
Consolidated Financial Statements:
Report of Independent Accountants...................................................................... 35
Consolidated Balance Sheets as of December 31, 1999 and 1998........................................... 36
Consolidated Statements of Operations for the Years Ended December 31, 1999, 1998 and 1997............. 37
Consolidated Statements of Shareholders' Equity and Accumulated Earnings for the
Years Ended December 31, 1999, 1998 and 1997......................................................... 38
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 1998 and 1997............. 39
Notes to the Consolidated Financial Statements......................................................... 40
POST APARTMENT HOMES, L.P.
Consolidated Financial Statements:
Report of Independent Accountants...................................................................... 55
Consolidated Balance Sheets as of December 31, 1999 and 1998........................................... 56
Consolidated Statements of Operations for the Years Ended December 31, 1999, 1998 and 1997............. 57
Consolidated Statements of Partners' Equity for the Years Ended December 31, 1999, 1998 and 1997....... 58
Consolidated Statements of Cash Flows for the Years Ended December 31, 1999, 1998 and 1997............. 59
Notes to the Consolidated Financial Statements......................................................... 60
Schedule III:
Real Estate and Accumulated Depreciation............................................................... 75
All other schedules are omitted because they are either not applicable or not
required.
POST PROPERTIES, INC. -- 1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
Financial Statements:
Report of Independent Accountants...................................................................... 78
Statement of Net Assets Available for Plan Benefits as of December 31, 1999 and 1998................... 79
Statement of Changes in Net Assets Available for Plan Benefits for the years ended
December 31, 1999 and 1998........................................................................... 80
Notes to Financial Statements.......................................................................... 81
</TABLE>
34
<PAGE> 37
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Post Properties, Inc.
In our opinion, the accompanying consolidated financial statements listed in
the index appearing under Item 14(a) 1. and 2. on page 34 present fairly, in
all material respects, the financial position of Post Properties, Inc. at
December 31, 1999 and 1998, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the management of Post
Properties, Inc.; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
35
<PAGE> 38
POST PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Real estate assets
Land ........................................................................ $ 277,784 $ 252,922
Building and improvements ................................................... 1,574,158 1,379,847
Furniture, fixtures and equipment ........................................... 137,602 108,233
Construction in progress .................................................... 576,361 480,267
Land held for future development ............................................ 16,880 33,805
------------ ------------
2,582,785 2,255,074
Less: accumulated depreciation .............................................. (303,016) (247,148)
------------ ------------
Real estate assets ........................................................ 2,279,769 2,007,926
Cash and cash equivalents ..................................................... 5,870 21,154
Restricted cash ............................................................... 1,380 1,348
Deferred charges, net ......................................................... 20,820 18,686
Other assets .................................................................. 42,334 17,599
------------ ------------
Total assets ........................................................... $ 2,350,173 $ 2,066,713
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable ................................................................. $ 989,583 $ 800,008
Accrued interest payable ...................................................... 9,160 7,609
Dividend and distribution payable ............................................. 31,285 25,115
Accounts payable and accrued expenses ......................................... 59,780 48,214
Security deposits and prepaid rents ........................................... 9,023 8,716
------------ ------------
Total liabilities ...................................................... 1,098,831 889,662
------------ ------------
Minority interest of preferred unitholders in Operating Partnership ........... 70,000 --
------------ ------------
Minority interest of common unitholders in Operating Partnership .............. 122,480 125,365
------------ ------------
Commitments and contingencies ................................................. -- --
Shareholders' equity
Preferred stock, $.01 par value, 20,000,000 authorized:
8 1/2% Series A Cumulative Redeemable Shares, liquidation
preference $50 per share, 1,000,000 shares issued and outstanding .......... 10 10
7 5/8% Series B Cumulative Redeemable Shares, liquidation
preference $25 per share, 2,000,000 shares issued and
outstanding ................................................................ 20 20
7 5/8% Series C Cumulative Redeemable Shares, liquidation
preference $25 per share, 2,000,000 shares issued and
outstanding ................................................................ 20 20
Common stock, $.01 par value, 100,000,000
authorized, 38,834,323 and 38,051,734 shares
issued and outstanding at December 31, 1999
and 1998, respectively ..................................................... 388 380
Additional paid-in capital .................................................. 1,058,424 1,051,256
Accumulated earnings ........................................................ -- --
------------ ------------
Total shareholders' equity ............................................. 1,058,862 1,051,686
------------ ------------
Total liabilities and shareholders' equity ............................. $ 2,350,173 $ 2,066,713
============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
36
<PAGE> 39
POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES
Rental ....................................................................... $ 318,697 $ 275,755 $ 185,732
Property management - third party ............................................ 3,368 3,164 2,421
Landscape services - third party ............................................. 9,118 7,252 5,148
Interest ..................................................................... 764 472 89
Other ........................................................................ 13,980 12,262 6,726
------------ ------------ ------------
Total revenue ............................................................ 345,927 298,905 200,116
------------ ------------ ------------
EXPENSES
Property operating and maintenance (exclusive of items
shown separately below) .................................................... 113,152 99,717 67,515
Depreciation ................................................................. 58,013 46,646 29,048
Property management - third party ............................................ 2,925 2,499 1,959
Landscape services - third party ............................................. 7,904 6,264 4,284
Interest ..................................................................... 33,192 31,297 24,658
Amortization of deferred loan costs .......................................... 1,496 1,185 980
General and administrative ................................................... 7,788 8,495 7,364
Minority interest in consolidated property partnerships ...................... 511 397 --
------------ ------------ ------------
Total expenses ........................................................... 224,981 196,500 135,808
------------ ------------ ------------
Income before net gain (loss) on sale of assets, loss on
unused treasury locks, loss on relocation of
corporate office, minority interest of unitholders
in Operating Partnership and extraordinary item ............................ 120,946 102,405 64,308
Net gain (loss) on sale of assets ............................................ (1,522) -- 3,270
Loss on unused treasury locks ................................................ -- (1,944) --
Loss on relocation of corporate office ....................................... -- -- (1,500)
Minority interest of preferred unitholders in Operating Partnership .......... (1,851) -- --
Minority interest of common unitholders in Operating Partnership ............. (12,598) (11,511) (11,131)
------------ ------------ ------------
Income before extraordinary item ............................................. 104,975 88,950 54,947
Extraordinary item, net of minority interest of unitholders
in Operating Partnership ................................................... (458) -- (75)
------------ ------------ ------------
Net income ................................................................... 104,517 88,950 54,872
Dividends to preferred shareholders .......................................... (11,875) (11,473) (4,907)
------------ ------------ ------------
Net income available to common shareholders .................................. $ 92,642 $ 77,477 $ 49,965
============ ============ ============
EARNINGS PER COMMON SHARE - BASIC
Income before extraordinary item (net of preferred dividends) ................ $ 2.42 $ 2.21 $ 2.11
Extraordinary item ........................................................... (0.01) -- --
------------ ------------ ------------
Net income available to common shareholders .................................. $ 2.41 $ 2.21 $ 2.11
============ ============ ============
Weighted average common shares outstanding ................................... 38,460,689 35,028,596 23,664,044
============ ============ ============
Dividends declared ........................................................... $ 2.80 $ 2.60 $ 2.38
============ ============ ============
EARNINGS PER COMMON SHARE - DILUTED
Income before extraordinary item (net of preferred dividends) ................ $ 2.39 $ 2.18 $ 2.09
Extraordinary item ........................................................... (0.01) -- --
------------ ------------ ------------
Net income available to common shareholders .................................. $ 2.38 $ 2.18 $ 2.09
============ ============ ============
Weighted average common shares outstanding ................................... 38,916,987 35,473,587 23,887,906
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
37
<PAGE> 40
POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PREFERRED COMMON PAID-IN ACCUMULATED
SHARES SHARES CAPITAL EARNINGS TOTAL
---------- --------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS,
DECEMBER 31, 1996 ..................................... $ 10 $ 219 $ 398,764 $ -- $ 398,993
Proceeds from Preferred Shares, net of underwriting
discount and offering costs of $1,709 ................ 20 -- 48,271 -- 48,291
Common shares issued in connection
with Merger .......................................... -- 84 338,269 -- 338,353
Proceeds from Dividend Reinvestment and
Employee Stock Purchase Plans ........................ -- 2 9,128 -- 9,130
Conversion of Units to shares ......................... -- 1 (1) -- --
Adjustment for minority interest of Unitholders
in Operating Partnership at dates of capital
transactions ......................................... -- -- (30,245) -- (30,245)
Net income ............................................ -- -- -- 54,872 54,872
Dividends to preferred shareholders ................... -- -- -- (4,907) (4,907)
Dividends declared and paid to common shareholders .... -- -- (3,273) (36,073) (39,346)
Dividends declared to common shareholders ............. -- -- (4,329) (13,892) (18,221)
--------- --------- ----------- --------- -----------
SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS,
DECEMBER 31, 1997 ..................................... 30 306 756,584 -- 756,920
Proceeds from Preferred Shares, net of
underwriting discount and offering
costs of $1,716 ...................................... 20 -- 48,264 -- 48,284
Proceeds from Common Shares, net of
Underwriting discount and offering
Costs of $13,592 ................................... -- 69 255,838 -- 255,907
Proceeds from Dividend Reinvestment and
Employee Stock Purchase Plans ....................... -- 5 18,855 -- 18,860
Adjustment for minority interest of
unitholders in Operating Partnership
at dates of capital transactions .................... -- -- (15,031) -- (15,031)
Net income ........................................... -- -- -- 88,950 88,950
Dividends to preferred shareholders ................... -- -- -- (11,473) (11,473)
Dividends declared and paid to common
Shareholders ........................................ -- -- (13,254) (55,752) (69,006)
Dividends declared to common shareholders ............. -- -- -- (21,725) (21,725)
--------- --------- ----------- --------- -----------
SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS,
DECEMBER 31, 1998 ..................................... 50 380 1,051,256 -- 1,051,686
Offering cost of redeemable preferred units -- -- (1,810) -- (1,810)
Proceeds from Dividend Reinvestment and
Employee Stock Purchase Plans ....................... -- 8 23,304 -- 23,312
Adjustment for minority interest of
unitholders in Operating Partnership
at dates of capital transactions .................... -- -- 857 -- 857
Net income ............................................ -- -- -- 104,517 104,517
Dividends to preferred shareholders ................... -- -- -- (11,875) (11,875)
Dividends declared and paid to common
Shareholders ......................................... -- -- (15,183) (65,458) (80,641)
Dividends declared to common shareholders ............. -- -- -- (27,184) (27,184)
--------- --------- ----------- --------- -----------
SHAREHOLDERS' EQUITY AND
ACCUMULATED EARNINGS,
DECEMBER 31, 1999 ..................................... $ 50 $ 388 $ 1,058,424 $ -- $ 1,058,862
========= ========= =========== ========= ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
38
<PAGE> 41
POST PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income ............................................................... $ 104,517 $ 88,950 $ 54,872
Adjustments to reconcile net income to net cash provided
by operating activities:
Minority interest of preferred unitholders in Operating Partnership ...... 1,851 -- --
Minority interest of common unitholders in Operating Partnership ......... 12,598 11,511 11,131
Net (gain) loss on sale of assets ........................................ 1,522 -- (3,270)
Loss on relocation of corporate office ................................... -- -- 1,500
Loss on unused treasury locks ............................................ -- 1,944 --
Extraordinary item, net of minority interest of unitholders in
Operating Partnership ................................................... 458 -- 75
Depreciation ............................................................. 58,013 46,623 29,048
Write-off of deferred financing costs .................................... -- -- (93)
Amortization of deferred loan costs ...................................... 1,496 1,209 980
Other .................................................................... -- 168 --
Changes in assets, (increase) decrease in:
Restricted cash ......................................................... (32) 194 (394)
Deferred charges ........................................................ (4,106) (7,115) --
Other assets ............................................................ (24,735) 2,998 11,797
Changes in liabilities, increase (decrease) in:
Accrued interest payable ................................................ 1,551 104 2,172
Accounts payable and accrued expenses ................................... (402) 1,433 1,341
Security deposits and prepaid rents ..................................... 307 599 395
---------- ---------- ----------
Net cash provided by operating activities ................................ 153,038 148,618 109,554
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets,
net of payables ......................................................... (286,696) (279,473) (190,810)
Proceeds from sale of assets ............................................. 16,587 -- 25,402
Acquisition of Columbus Realty Trust, net of
cash acquired ........................................................... -- -- (17,734)
Payment for unused treasury locks ........................................ -- (1,944) --
Capitalized interest ..................................................... (21,417) (15,707) (9,567)
Recurring capital expenditures ........................................... (8,641) (7,479) (3,675)
Corporate capital expenditures ........................................... (6,811) (8,576) (3,220)
Non-recurring capital expenditures ....................................... (2,971) (1,423) (605)
Revenue generating capital expenditures .................................. (8,011) (13,614) (8,168)
---------- ---------- ----------
Net cash used in investing activities .................................... (317,960) (328,216) (208,377)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs ............................................... (1,495) -- (4,208)
Debt proceeds ............................................................ 279,000 103,930 688,564
Debt payments ............................................................ (89,425) (275,131) (564,085)
Proceeds from preferred units, net of offering costs ..................... 68,190 -- --
Proceeds from the sale of notes .......................................... -- 150,000 --
Offering proceeds, net of underwriters discount
and offering costs ...................................................... -- 255,907 --
Proceeds from Preferred Shares ........................................... -- 48,284 48,291
Proceeds from Dividend Reinvestment Plan ................................. 23,312 18,860 9,130
Capital distributions to unitholders ..................................... (14,318) (13,277) (12,132)
Distributions paid to preferred unitholders .............................. (1,384) -- --
Dividends paid to preferred shareholders ................................. (11,875) (11,473) (4,907)
Dividends paid to common shareholders .................................... (102,367) (87,227) (51,184)
---------- ---------- ----------
Net cash provided by financing activities ................................ 149,638 189,873 109,469
---------- ---------- ----------
Net (decrease) increase in cash and cash equivalents ..................... (15,284) 10,275 10,646
Cash and cash equivalents, beginning of period ........................... 21,154 10,879 233
---------- ---------- ----------
Cash and cash equivalents, end of period ................................. $ 5,870 $ 21,154 $ 10,879
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
39
<PAGE> 42
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. ORGANIZATION AND FORMATION OF THE COMPANY
ORGANIZATION AND FORMATION OF THE COMPANY
Post Properties, Inc. (the "Company" or "PPI") through its majority owned
subsidiary, Post Apartment Homes, L.P. (the "Operating Partnership") currently
owns and manages or is in the process of developing apartment communities
located in the Atlanta, Dallas, Tampa, Orlando, Northern Virginia, Nashville,
Houston, Phoenix, Denver and Charlotte metropolitan areas. At December 31,
1999, approximately 54.8% and 20.4% (on a unit basis) of the Company's
communities are located in the Atlanta and Dallas metropolitan areas,
respectively.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the consolidated
accounts of the Company and the Operating Partnership. All significant
intercompany accounts and transactions have been eliminated in consolidation.
See Note 2 related to the acquisition of Columbus Realty Trust in 1997. Since
units can be redeemed for shares of the Company on a one-for-one basis at the
Operating Partnership's option, minority interest of unitholders in the
operations of the Operating Partnership is calculated based on the weighted
average of shares and units outstanding during the period.
Certain items in the 1998 and 1997 consolidated financial statements were
reclassified for comparative purposes with the 1999 consolidated financial
statements.
NEW ACCOUNTING PRONOUNCEMENTS
Beginning January 1, 2001, the Company is required to adopt SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. Due to the Company's limited hedging
activities, management does not believe the adoption of SFAS 133 will have a
material effect on the Company's financial position or results of operations,
nor will it significantly affect its financial statement disclosures.
REAL ESTATE ASSETS AND DEPRECIATION
Real estate assets are stated at the lower of depreciated cost or fair value,
if deemed impaired. Ordinary repairs and maintenance are expensed as incurred;
major replacements and betterments are capitalized and depreciated over their
estimated useful lives. Depreciation is computed on a straight-line basis over
the useful lives of the properties (buildings and components and related land
improvements -- 20-40 years; furniture, fixtures and equipment -- 5 - 10
years).
REVENUE RECOGNITION
Rental -- Residential properties are leased under operating leases with terms
of generally one year or less. Rental income is recognized when earned, which
is not materially different from revenue recognition on a straight line basis.
Property management and landscaping services -- Income is recognized when
earned for property management and landscaping services provided to third
parties.
40
<PAGE> 43
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, all investments purchased with an
original maturity of three months or less are considered to be cash
equivalents.
RESTRICTED CASH
Restricted cash generally is comprised of resident security deposits for
communities located in Florida and Tennessee and required maintenance reserves
for communities located in DeKalb County, Georgia.
DEFERRED FINANCING COSTS
Deferred financing costs are amortized using the interest method over the terms
of the related debt.
INTEREST AND REAL ESTATE TAXES
Interest and real estate taxes incurred during the construction period are
capitalized and depreciated over the lives of the constructed assets. Interest
paid (including capitalized amounts of $21,417, $15,707 and $9,567 during 1999,
1998 and 1997, respectively, and interest rate protection receipts of $0, $0
and $296 during 1999, 1998 and 1997, respectively) aggregated $51,337, $46,889
and $39,815 for the years ended December 31, 1999, 1998 and 1997, respectively.
DERIVATIVES
The Company may enter into various treasury lock arrangements from time to time
in anticipation of a specific debt transaction. These arrangements are used to
manage the Company's exposure to fluctuations in interest rates. The Company
does not utilize these arrangements for trading or speculative purposes. These
arrangements, considered qualifying hedges, are not recorded in the financial
statements until the debt transaction is consummated and the arrangement is
settled. The proceeds or payments resulting from the settlement of the
arrangement are deferred and amortized over the life of the debt as an
adjustment to interest expense. Any arrangements not deemed hedges are recorded
at fair value and recognized through the statement of operations.
Premiums paid to purchase interest rate protection agreements (i.e. interest
rate caps) are deferred and amortized over the terms of those agreements using
the interest method. Unamortized premiums are included in deferred charges in
the consolidated balance sheet. Amounts receivable under the interest rate
protection agreements are accrued as a reduction of interest expense.
Interest rate swaps qualifying for hedge accounting treatment are recorded on
an accrual basis as an adjustment of the interest rate yield. Interest rate
swaps not qualifying for hedge accounting treatment are recorded at fair value
and recognized through the statement of operations.
PER SHARE DATA
Basic earnings per common share with respect to the Company for the years ended
December 31, 1999, 1998 and 1997 is computed based upon the weighted average
number of shares outstanding during the period. Diluted earnings per common
share is based upon the weighted average number of shares outstanding during
the period and includes the effect of the potential issuance of additional
shares if stock options were exercised or converted into common stock.
41
<PAGE> 44
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
USE OF ESTIMATES IN FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. ACQUISITION OF COLUMBUS REALTY TRUST
On October 24, 1997, Columbus Realty Trust ("Columbus") a Texas real estate
investment trust, was merged into a wholly owned subsidiary of the Company (the
"Merger") and then transferred into the Operating Partnership. At the time of
the Merger, Columbus was operating 26 completed communities containing 6,296
apartment units and had an additional 5 communities under development that
would contain 1,243 apartment units upon completion located in Dallas and
Houston, Texas. Pursuant to the merger agreement, each outstanding share of
Columbus common stock was converted into 0.615 shares of common stock of the
Company, which resulted in the issuance of approximately 8.4 million shares of
common stock of the Company. The total purchase price including liabilities
assumed was $643,268. The Merger was accounted for as a purchase. Under the
purchase method of accounting, the assets acquired and liabilities assumed of
Columbus were recorded at their estimated fair market values and its results of
operations have been included in the accompanying consolidated statements of
operations from the date of the Merger, October 24, 1997. Unaudited,
supplemental pro-forma information, assuming the Merger had occurred on January
1, 1997, is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-----------------
<S> <C>
Total revenue .................................................................. $ 247,295
Net income available to common shareholders before extraordinary items ......... $ 60,242
Net income available to common shareholders .................................... $ 60,167
Earnings per share available to common shareholders - basic .................... $ 1.99
Earnings per share available to common shareholders - diluted .................. $ 1.96
</TABLE>
3. DEFERRED CHARGES
Deferred charges consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1999 1998
---------- ----------
<S> <C> <C>
Deferred financing costs ................................... $ 31,148 $ 26,568
Other ...................................................... 5,394 4,551
---------- ----------
36,542 31,119
Less: accumulated amortization ............................. (15,722) (12,433)
---------- ----------
$ 20,820 $ 18,686
========== ==========
</TABLE>
4. NOTES PAYABLE
The Company's indebtedness consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1999 1998
---------- ----------
<S> <C> <C>
Conventional fixed rate (secured) .......................... $ 53,210 $ 3,825
Conventional floating rate (secured) ....................... 126,067 42,303
Tax-exempt fixed rate bond indebtedness (secured) .......... -- --
Tax-exempt floating rate bond indebtedness (secured) ....... 235,880 235,880
Lines of credit & other (unsecured) ........................ 184,426 62,000
Senior notes (unsecured) ................................... 390,000 456,000
---------- ----------
Total ...................................................... $ 989,583 $ 800,008
========== ==========
</TABLE>
42
<PAGE> 45
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
CONVENTIONAL FIXED AND FLOATING RATE MORTGAGES PAYABLE (SECURED)
Conventional mortgages payable were comprised of five and four loans at
December 31, 1999 and 1998, respectively, each of which is collateralized by an
apartment community included in real estate assets. The mortgages payable are
generally due in monthly installments of interest only and mature at various
dates through 2029. The interest rates on the fixed rate mortgages payable
ranged from 6.50% to 9.20% at December 31, 1999. At December 31, 1999, the
interest rates on the variable rate mortgages payable were at a range from the
London Interbank Offered Rate ("LIBOR") plus .75% to .935% above LIBOR. At
December 31, 1999, LIBOR ranged from 5.82% to 6.50% for one, three, six, and
twelve month indices.
TAX-EXEMPT FLOATING RATE BOND INDEBTEDNESS (SECURED)
Tax exempt floating rate bond indebtedness is comprised of AAA Fannie Mae
credit enhanced debt maturing in 2025.
Certain of the apartment communities are encumbered to secure tax-exempt
housing bonds. Such bonds are generally payable in monthly or semi-annual
installments of interest only and mature at various dates through 2025.
Floating rate indebtedness reissued in 1995 through 1998, bears interest at the
"AAA" non-AMT tax exempt rate, set weekly, which was 5.50% at December 31, 1999
(average of 3.35% for 1999). With respect to such bonds, the Company pays
certain credit enhancement fees of .515% of the amount of such bonds or the
amount of such letters of credit, as the case may be.
The Federal National Mortgage Association ("FNMA") has provided replacement
credit enhancement through 2025 for the bond issues, aggregating $235,880,
which were reissued. The agreement with FNMA contains representations,
covenants, and events of default customary to such secured loans. Effective
October 1, 1998, the Company obtained fee reductions related to these loans
totaling .08% per annum. Of this savings, .06% was a reduction in the credit
enhancement fee. This fee reduction resulted in approximately $181 of annual
savings for the remaining term of these loans.
OTHER SECURED DEBT
On March 30, 1999, the Operating Partnership issued $50,000 of secured notes to
an insurance company. These notes bear interest at 6.5% with an effective rate
of 7.3% after considerations of a terminated swap agreement, mature on March 1,
2009 and are secured by two apartment communities. Net proceeds of $49,933 were
used to repay outstanding indebtedness.
On July 23, 1999, the Operating Partnership issued $104,000 of secured notes to
FNMA. These notes bear interest at 30-day LIBOR (capped at 7% for one year)
plus credit enhancement, liquidity and service fees of .935%, mature on July
23, 2029 and are secured by five apartment communities. The notes include a
prepayment penalty that is an amount equal to a percentage of the principal
amount remaining under the notes at the time of prepayment. The penalty ranges
from 4.8% in the first year to .65% in the tenth year. The Operating
Partnership has an option to call these notes after ten years from the issuance
date. As a requirement of the debt agreement with FNMA, the Company entered
into a fixed-rate swap which fixed the interest rate on the notes to 6.56% for
a period of ten years. The Company entered into a variable rate swap in which
the Company would pay a variable rate equal to the rate on the notes and
receive a fixed rate of 6.50%. Net proceeds of $101,988 were used to repay
outstanding indebtedness.
LINES OF CREDIT AND OTHER (UNSECURED)
In May 1999, the Company's syndicated line of credit (the "Revolver") was
amended, increasing its capacity to $350,000. The Revolver matures on April 30,
2002 and borrowings currently bear interest at LIBOR plus .825% or prime minus
.25%. The Revolver provides for the rate to be adjusted up or down based on
changes in the credit
43
<PAGE> 46
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
ratings on the Company's senior unsecured debt. The Revolver also includes a
money market competitive bid option for short-term funds up to $175,000 at
rates below the stated line rate. The credit agreement for the Revolver
contains customary representations, covenants and events of default, including
covenants which restrict the ability of the Operating Partnership to make
distributions, in excess of stated amounts, which in turn restrict the
discretion of the Company to declare and pay dividends. In general, during any
fiscal year the Operating Partnership may only distribute up to 100% of the
Operating Partnership's consolidated income available for distribution (as
defined in the credit agreement) exclusive of distributions of up to $30,000 of
capital gains for such year. The credit agreement contains exceptions to these
limitations to allow the Operating Partnership to make distributions necessary
to allow the Company to maintain its status as a REIT. The Company does not
anticipate that this covenant will adversely affect the ability of the
Operating Partnership to make distributions, or the Company to declare
dividends, under the Company's current dividend policy.
On July 26, 1996, the Company closed a $20,000 unsecured line of credit with
Wachovia Bank of Georgia, N.A. (The "Cash Management Line"), which was fully
funded and used to pay down the outstanding balance on the Revolver. The Cash
Management Line bears interest at LIBOR plus .675% or prime minus .25% and
mature on March 31, 2000. Management believes the Cash Management Line will be
renewed at maturity with similar terms. The Revolver requires three days
advance notice to repay borrowings whereas the Cash Management Line provides
the Company with an automatic daily sweep which applies all available cash to
reduce the outstanding balance.
In addition, the Company has a $3,000 facility to provide letters of credit for
general business purposes.
At December 31, 1999, the outstanding balances on the Revolver and Cash
Management Line were $165,000 and $17,426, respectively. There were no
outstanding balances on any of the other facilities at December 31, 1999.
On March 1, 1998 the Company entered into a Disposition and Development
Agreement with the City of Phoenix, Arizona. Pursuant to this agreement, the
City of Phoenix loaned the Company $2,000. This loan is interest-free for the
first three years, with a 5.00% interest rate thereafter. Repayment of the loan
commences on March 1, 2001 with equal semi-annual payments due on March 1 and
September 1 of each year through March 1, 2021. All repayment terms are subject
to the conditions set forth in the Agreement.
SENIOR NOTES (UNSECURED)
On June 7, 1995, the Company issued $50,000 of unsecured senior notes with the
Northwestern Mutual Life Insurance Company. The notes were in two tranches: the
first, totaling $30,000, carries an interest rate of 8.21% per annum (1.25%
over the corresponding treasury rate on the date such rate was set) and matures
on June 7, 2000; and the second, totaling $20,000 carries an interest rate of
8.37% per annum (1.35% over the corresponding treasury rate on the date such
rate was set) and matures on June 7, 2002. Proceeds from the notes were used to
reduce other secured indebtedness and to pay down the Revolver. The note
agreements pursuant to which the notes were purchased contain customary
representations, covenants and events of default similar to those contained in
the note agreement for the Revolver.
On September 30, 1996, the Company completed a $125,000 senior unsecured debt
offering comprised of two tranches. The first tranche, $100,000 of 7.25% Notes
due on October 1, 2003 (the "2003 Notes"), was priced at 99.642% to yield
7.316% per annum (.71% over the corresponding treasury rate on the date such
rate was set). The second tranche, $25,000 of 7.50% Notes due on October 1,
2006 (the "2006 Notes", and together with the 2003 Notes, the "Notes"), was
priced at 99.694% to yield 7.544% per annum (.83% over the corresponding
treasury rate on the date such rate was set). Proceeds from the Notes were used
to pay down existing indebtedness outstanding on the Revolver.
44
<PAGE> 47
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
MEDIUM-TERM NOTES
On January 29, 1997, the Operating Partnership established a program for the
sale of up to $175,000 aggregate principal amount of Medium-Term Notes due nine
months or more from the date of issue (the "MTNs"). On October 20, 1997, the
Company increased the amount available under this program to $344,000. Proceeds
from the MTNs were used to (i) prepay certain outstanding notes and (ii) pay
down existing indebtedness outstanding under the Company's Revolver.
The following table sets forth MTNs issued and outstanding as of December 31,
1999:
<TABLE>
<CAPTION>
ISSUE INTEREST MATURITY
DATE AMOUNT RATE DATE
------------------- ------------ --------------- ----------
<S> <C> <C> <C>
March 3, 1997 $ 30,000 LIBOR plus .25% 03/03/2000
March 31, 1997 37,000 7.02% 04/02/2001
March 31, 1997 13,000 7.30% 04/01/2004
September 22, 1997 10,000 6.69% 09/22/2004
September 22, 1997 25,000 6.78% 09/22/2005
March 12, 1998 100,000 6.85% 03/16/2015
------------
$ 215,000
============
</TABLE>
On March 12, 1998, the Operating Partnership issued $100,000 of 6.85% MandatOry
Par Put Remarketed Securities(SM) ("MOPPRS(SM)") under the MTN Program. The net
proceeds in the amount of $99,087 from the sale of the MOPPRS(SM) were used to
repay outstanding indebtedness. In connection with the MOPPRS(SM) transaction,
Merrill Lynch & Co. purchased an option to remarket the securities as of March
16, 2005 (the "Remarketing Date") reducing the effective borrowing rate through
the Remarketing Date to 6.59%. In anticipation of the offering, the Operating
Partnership entered into forward-treasury-lock agreements in the fall of 1997.
As a result of the termination of these agreements, the effective borrowing
rate was increased to approximately 6.85%, the coupon rate on the MOPPRS(SM).
On April 8, 1998, the Operating Partnership sold $50,000 of Remarketed Reset
Notes due April 7, 2009 under the MTN program. The notes bear an interest rate
of LIBOR plus the applicable spread with the spread being reset from time to
time. The initial spread is equal to .40% for a period of one year. The
Operating Partnership has entered into an interest rate swap for the entire
term of the notes to fix the interest rate index. Under the terms of the swap,
the Operating Partnership paid a fixed rate of 6.02% and received LIBOR. This
swap was settled in February 1999 at a loss of $1,495. This loss was deferred
to amortize over the remaining term of the Remarketed Reset Notes. On April 7,
1999, the Operating Partnership repaid the Remarketed Reset Notes with the
proceeds of conventional fixed rate secured debt. The remaining unamortized
balance of the deferred swap loss was redesignated to the new debt and will be
amortized over the remaining term of the new debt.
The aggregate maturities of the Company's indebtedness are as follows:
<TABLE>
<S> <C>
2000..................................... $ 100,442
2001..................................... 40,817
2002..................................... 186,122
2003..................................... 101,191
2004..................................... 24,894
Thereafter............................... 536,117
----------
$ 989,583
==========
</TABLE>
PLEDGED ASSETS
The aggregate net book value at December 31, 1999 of property pledged as
collateral for indebtedness amounted to approximately $417,772.
45
<PAGE> 48
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
UNUSED TREASURY LOCKS
The loss on unused treasury locks in 1998 resulted from the termination of
treasury locks intended for debt securities that were not issued by the
Operating Partnership.
EXTRAORDINARY ITEM
The extraordinary item for the year ended December 31, 1999 was due to the
write off of loan costs resulting from the early extinguishment of debt. The
extraordinary item is net of $63 in minority interest of the unitholders
calculated on the basis of weighted average units and common shares outstanding
for the year ended December 31, 1999. The extraordinary item for the year ended
December 31, 1997 resulted from the write-off of deferred financing costs on
the mortgage debt satisfied. The extraordinary item is net of $18 in minority
interest of the unitholders calculated on the basis of weighted average units
and common shares outstanding for the year ended December 31, 1997.
5. INCOME TAXES
The Company has elected to be taxed as a REIT under the Internal Revenue Code
of 1986, as amended (the "Code") commencing with the taxable year ended
December 31, 1993. In order for the Company to qualify as a REIT, it must
distribute annually at least 95% of its REIT taxable income, as defined in the
Code, to its shareholders and satisfy certain other requirements. As a result,
the Company generally will not be subject to Federal income taxation at the
corporate level on the income it distributes to the shareholders. Although Post
Properties, Inc. has elected to be taxed as a REIT, Post Services, Inc. ("Post
Services") was formed as a subsidiary of the Operating Partnership to provide
through its subsidiaries asset management, leasing and landscaping services to
third parties. The consolidated taxable income of Post Services, if any, will
be subject to tax at regular corporate rates.
As of December 31, 1999, the net basis for Federal income tax purposes taking
into account the special allocation of gain to the partners contributing
property to the Operating Partnership and including minority interest in the
Operating Partnership, was lower than the net assets as reported in the
Company's consolidated financial statements by $49,100.
6. RELATED PARTY TRANSACTIONS
The Company provides landscaping services for executive officers, employees,
directors and other related parties. For the years ended December 31, 1999,
1998 and 1997, the Company received landscaping fees of $610, $961 and $670 for
such services. These amounts include reimbursements of direct expenses in the
amount of $10, $295 and $138 which are not included in landscape services
revenue. Accordingly, these transactions resulted in the Company recording
landscape services net fees in excess of direct expenses of $600, $666 and $532
in the accompanying financial statements for the years ended December 31, 1999,
1998 and 1997, respectively.
The Company provides accounting and administrative services to entities
controlled by certain executive officers of the Company. Fees under this
arrangement aggregated $25 for each year ended December 31, 1999, 1998 and
1997, respectively.
The Company was contracted to assist in the development of apartment complexes
constructed by a former executive and current shareholder. Fees under this
arrangement were $100, $349, and $326 for the years ended December 31, 1999,
1998 and 1997, respectively.
On December 10, 1999, the Company loaned $7,750 to certain executives. These
loans are payable on December 10, 2009 and bear interest at a rate of 6.32% per
annum. Proceeds from these loans were used by these executives to acquire the
Company's common shares on the open market.
46
<PAGE> 49
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
7. EMPLOYEE BENEFIT PLANS
The employees of the Company are participants in a defined contribution plan
pursuant to Section 401 of the Internal Revenue Code. Beginning in 1996,
Company contributions, if any, to this plan are based on the performance of the
Company and are allocated to each participant based on the relative
contribution of the participant to the total contributions of all participants.
For purposes of allocating the Company contribution, the maximum employee
contribution included in the calculation is 3% of salary. Company contributions
of $346, $179 and $158 were made in 1999, 1998 and 1997, respectively.
The Company maintains an Employee Stock Purchase Plan ("ESPP") to encourage
stock ownership by eligible directors and employees. To participate in the
ESPP, (i) directors must not be employed by the Company or the Operating
Partnership and must have been a member of the Board of Directors for at least
one month and (ii) an employee must have been employed full or part-time by the
Company or the Operating Partnership for at least one month. The purchase price
of shares of Common Stock under the ESPP is equal to 85% of the lesser of the
closing price per share of Common Stock on the first or last day of the trading
period, as defined.
8. DIVIDEND REINVESTMENT PLAN
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of the
Company. Under the DRIP, shareholders may elect for their dividends to be used
to acquire additional shares of the Company's Common Stock directly from the
Company, for 95% of the market price on the date of purchase.
9. STOCK-BASED COMPENSATION PLANS
STOCK COMPENSATION PLANS
At December 31, 1999, the Company had two stock-based compensation plans, the
Employee Stock Plan (the "Stock Plan"), the Employee Stock Purchase Plan (the
"ESPP") and, under the Stock Plan, a stock grant program (the "Grant Plan") as
described below. The Company applies APB Opinion 25, "Accounting for Stock
Issued to Employees," and related Interpretations in accounting for its plans.
Accordingly, based upon the criteria of APB Opinion 25 no compensation cost is
required to be recognized for the Stock Plan and the ESPP. The compensation
cost which is required to be charged against income for the Grant Plan, was
$205, $182 and $209 for 1999, 1998 and 1997, respectively. Had compensation
cost for the Company's Stock Plan and ESPP been determined based on the fair
value at the grant dates for awards under the Plans consistent with the method
of FASB Statement 123, "Accounting for Stock-Based Compensation," the Company's
net income and earnings per share would have been reduced to the pro forma
amounts indicated below:
<TABLE>
<CAPTION>
1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income available to common
shareholders..................... As reported..... $ 92,642 $ 77,477 $ 49,965
Pro forma....... $ 90,459 $ 76,589 $ 49,579
Net income per common share -
basic............................ As reported..... $ 2.41 $ 2.21 $ 2.11
Pro forma....... $ 2.35 $ 2.19 $ 2.10
Net income per common share -
diluted.......................... As reported..... $ 2.38 $ 2.18 $ 2.09
Pro forma....... $ 2.32 $ 2.16 $ 2.08
</TABLE>
47
<PAGE> 50
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
For purposes of the pro forma presentation, the fair value of each option grant
is estimated as of the date of grant using the Black-Scholes option-pricing
model. The weighted-average of all assumptions used in the calculation for
various grants under all of the Company's plans during 1999, 1998, and 1997,
are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Dividend yield............................ 7.3% 7.0% 6.5%
Expected volatility....................... 15.4% 15.3% 14.5%
Risk-free interest rate................... 4.5% to 6.6% 4.7% to 5.8% 5.5% to 5.6%
Expected option life...................... 5 to 7 years 5 to 7 years 5 to 7 years
</TABLE>
FIXED STOCK OPTION PLANS
Under the Stock Plan, the Company may grant to its employees and directors
options to purchase up to 6,000,000 shares of common stock. Of this amount,
550,000 shares are available for grants of restricted stock. Options granted to
any key employee or officer cannot exceed 100,000 shares a year (500,000 shares
if such key employee or officer is a member of the Company's Executive
Committee). The exercise price of each option may not be less than the market
price on the date of grant and all options have a maximum term of ten years
from the grant date.
A summary of the status of the Company's Stock Plan as of December 31, 1999,
1998 and 1997, changes during the years then ended, and the weighted-average
fair value of options granted during the years is presented below:
<TABLE>
<CAPTION>
1999 1998 1997
------------------------ ------------------------ ----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year ............ 3,030,852 $ 31 2,237,551 $ 31 864,105 $ 31
Granted ..................................... 1,288,232 36 1,440,784 39 243,946 39
Converted in connection with the
Merger .................................... -- -- -- -- 1,192,230 30
Exercised ................................... (164,053) 30 (67,326) 31 (49,406) 31
Forfeited ................................... (100,155) 37 (580,157) 39 (13,324) 38
--------- --------- ---------
Outstanding at end of year .................. 4,054,876 35 3,030,852 34 2,237,551 31
========= ========= =========
Options exercisable at year-end 2,290,143 2,065,438 2,000,279
========= ========= =========
Weighted-average fair value of options
granted during the year $ 2.08 $ 2.54 $ 2.85
========= ========= =========
</TABLE>
At December 31, 1999, the range of exercise prices for options outstanding was
$27.625 - $40.63 and the weighted- average remaining contractual life was 7
years.
48
<PAGE> 51
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
10. COMMITMENTS AND CONTINGENCIES
LAND, OFFICE AND EQUIPMENT LEASES
The Company is party to two ground leases with terms expiring in years 2040 and
2043 relating to a single operating community, one ground lease expiring in
2038 for a second operating community, three ground leases expiring in 2066,
2069 and 2074 for three communities under development and to office, equipment
and other operating leases with terms expiring in years 2000 through 2004.
Future minimum lease payments for non-cancelable land, office, equipment and
other leases at December 31, 1999 are as follows:
<TABLE>
<S> <C>
2000......................... $ 1,992
2001......................... 1,830
2002......................... 1,190
2003......................... 1,275
2004......................... 1,243
2005 and thereafter.......... 160,163
</TABLE>
The Company incurred $5,109, $4,915 and $3,366 of rent expense for the years
ended December 31, 1999, 1998 and 1997, respectively.
CONTINGENCIES
The Company is party to various legal actions which are incidental to its
business. Management believes that these actions will not have a material
adverse affect on the consolidated balance sheets and statements of operations.
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosures of estimated fair value were determined by management
using available market information and appropriate valuation methodologies.
Considerable judgment is necessary to interpret market data and develop
estimated fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Company could realize on disposition
of the financial instruments. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.
Cash equivalents, rents and landscape service receivables, accounts payable,
accrued expenses, notes payable and other liabilities are carried at amounts
which reasonably approximate their fair values.
The fair value of fixed rate debt was approximately $420,675 at December 31,
1999.
The fair values of interest rate protection agreements and interest rate swaps
(used for hedging purposes) are estimated by obtaining quotes from an
investment broker. At December 31, 1999, there were no carrying amounts related
to these arrangements in the consolidated balance sheet. As of December 31,
1999, the expected net proceeds from settlement of these contracts was
approximately $598.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of December 31, 1999. Although
management is not aware of any factors that would significantly affect the
reasonable fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date and current
estimates of fair value may differ significantly from the amounts presented
herein.
49
<PAGE> 52
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
12. EARNINGS PER SHARE
For the years ended December 31, 1999, 1998 and 1997, basic and diluted
earnings per common share for income before extraordinary item, net of
preferred dividends, and net income available to common shareholders before
extraordinary item has been computed as follows:
<TABLE>
<CAPTION>
YEAR ENDED 1999
-----------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------ ------------- ------------
<S> <C> <C> <C>
Income before extraordinary item ...................... $ 104,975
Less: Preferred stock dividends ....................... (11,875)
------------
BASIC EPS
Income available to common shareholders before
extraordinary item .................................. 93,100 38,460,689 $ 2.42
============
EFFECT OF DILUTIVE SECURITIES
Options ............................................... -- 456,298
------------ ------------
DILUTED EPS
Income available to common shareholders + assumed
conversions before extraordinary item ............... $ 93,100 38,916,987 $ 2.39
============ ============ ============
<CAPTION>
YEAR ENDED 1998
-----------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------ ------------- ------------
<S> <C> <C> <C>
Income before extraordinary item ...................... $ 88,950
Less: Preferred stock dividends ....................... (11,473)
------------
BASIC EPS
Income available to common shareholders before
extraordinary item .................................. 77,477 35,028,596 $ 2.21
============
EFFECT OF DILUTIVE SECURITIES
Options ............................................... -- 444,991
------------ ------------
DILUTED EPS
Income available to common shareholders + assumed
conversions before extraordinary item ............... $ 77,477 35,473,587 $ 2.18
============ ============ ============
<CAPTION>
YEAR ENDED 1997
-----------------------------------------------
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
------------ ------------- ------------
<S> <C> <C> <C>
Income before extraordinary item ...................... $ 54,947
Less: Preferred stock dividends ....................... (4,907)
------------
BASIC EPS
Income available to common shareholders before
extraordinary item .................................. 50,040 23,664,044 $ 2.11
============
EFFECT OF DILUTIVE SECURITIES
Options ............................................... -- 223,862
------------ -------------
DILUTED EPS
Income available to common shareholders + assumed
conversions before extraordinary item ............... $ 50,040 23,887,906 $ 2.09
============ ============= ============
</TABLE>
13. SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash investing and financing activities for the years ended December 31,
1999, 1998 and 1997 are as follows:
(a) On the date of the Second Offering and Third Offering, holders of 5,401,185
and 5,139,243 Units of the Operating Partnership, respectively, were
allocated capital on a pro rata basis in proportion to their Units over
50
<PAGE> 53
POST PROPERTIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
total Units outstanding in the Operating Partnership. During 1999, 1998 and
1997, holders of 22,299, 750 and 6,519 Units in the Operating Partnership,
respectively, exercised their option to convert their Units to shares of
the Company on a one-for-one basis. During 1996, the Company exercised its
option to purchase land in exchange for 138,150 Units of the Operating
Partnership. The net effect of the capital allocated to the unitholders of
the Operating Partnership on the dates of the offerings, the subsequent
conversion of Units of the Operating Partnership to shares of the Company,
the adjustments to minority interest for the dilutive impact of the
Dividend Reinvestment and Employee Stock Purchase Plans and the issuance of
Units of the Operating Partnership in exchange for land was a
reclassification decreasing minority interest and increasing shareholders'
equity in the amount of $857 for the year ended December 31, 1999 and
increasing minority interest and decreasing shareholders' equity in the
amount of $15,031 and $30,245 for the years ended December 31, 1998 and
1997, respectively.
(b) The Operating Partnership committed to distribute $30,818, $25,115 and
$21,327 for the quarters ended December 31, 1999, 1998 and 1997,
respectively. As a result, the Company declared dividends of $27,184,
$21,725 and 18,221 for the quarters ended December 31, 1999, 1998 and 1997,
respectively. The remaining distributions from the Operating Partnership in
the amount of $3,634, $3,390 and $3,104 for the quarters ended December 31,
1999, 1998 and 1997, respectively, are distributed to minority interest
unitholders in the Operating Partnership.
(c) The Merger, which was completed in 1997, was a stock for stock transaction.
In connection with the Merger, the cash and non-cash components were are
follows:
<TABLE>
<S> <C>
Fair value of assets acquired........................ $ 643,268
Less:
Value of stock issued in exchange for
Stock of Columbus............................... 338,353
Liabilities assumed............................... 285,852
Cash acquired..................................... 1,329
----------
Cash component of purchase price, net of
cash acquired..................................... $ 17,734
==========
</TABLE>
14. SEGMENT INFORMATION
SEGMENT DESCRIPTION
In accordance with SFAS No. 131, "Disclosure About the Segments of an
Enterprise and Related Information," the Company presents segment information
based on the way that management organizes the segments within the enterprise
for making operating decisions and assessing performance. The segment
information is prepared on substantially the same basis as the internally
reported information used by the Company's chief operating decision makers to
manage the business.
The Company's chief operating decision makers focus on the Company's primary
sources of income which are property rental operations and third party
services. Third party services are designated as one segment. Property rental
operations are broken down into four segments based on the various stages in
the property ownership lifecycle. The Company's five segments are further
described as follows:
Property Rental Operations
- Fully stabilized communities - those apartment communities which
have been stabilized (the earlier of the point at which a
property reaches 95% occupancy or one year after completion of
construction) for both the current and prior year.
- Communities stabilized during 1998 - communities which reached
stabilized occupancy in the prior year.
51
<PAGE> 54
- Development and lease up communities - those communities
which are in lease-up but were not stabilized by the
beginning of the current year, including communities which
stabilized during the current year.
- Sold communities - communities which were sold in the current
or prior year.
Third Party Services - fee income and related expenses from the
Company's apartment community management, landscaping and corporate
apartment rental services.
SEGMENT PERFORMANCE MEASURE
Management uses contribution to funds from operations ("FFO") as the
performance measure for its segments. FFO is defined by the National
Association of Real Estate Investment Trusts as net income available to common
shareholders determined in accordance with GAAP, excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation of real estate
assets, and after adjustment for unconsolidated partnerships and joint
ventures. FFO should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indicator of the Company's financial
performance or to cash flow from operating activities (determined in accordance
with GAAP) as a measure of the Company's liquidity, nor is it necessarily
indicative of sufficient cash flow to fund all of the Company's needs. NAREIT's
definition of FFO excludes items classified by GAAP as extraordinary or unusual
and significant non-recurring events that materially distort the comparative
measurement of performance over time. Effective January 1, 2000 NAREIT amended
its definition of FFO to include in FFO all non-recurring events, except for
those that are defined as extraordinary items under GAAP and gains and losses
from sales of property. The Company will use the amended definition of FFO in
reporting results for all periods on or after January 1, 2000. The Company does
not expect use of the amended definition to materially affect FFO.
52
<PAGE> 55
POST PROPERTIES, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
SEGMENT INFORMATION
The following table reflects each segment's contribution to consolidated
revenues and FFO together with a reconciliation of segment contribution to FFO,
total FFO and income before extraordinary item and preferred dividends.
Additionally, substantially all of the Company's assets relate to the Company's
property rental operations. Asset cost, depreciation and amortization by
segment are not presented because such information at the segment level is not
reported internally.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------
1999 1998 1997
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES
Fully stabilized communities................................. $ 236,923 $ 228,878 $ 171,092
Communities stabilized during 1998........................... 22,197 19,149 5,441
Development and lease-up communities......................... 58,486 23,708 8,328
Sold communities............................................. 318 3,867 3,205
Third party services......................................... 12,486 10,416 7,569
Other........................................................ 15,517 12,887 4,481
------------- ------------- -------------
Consolidated revenues........................................ $ 345,927 $ 298,905 $ 200,116
============= ============= =============
CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities................................. $ 163,809 $ 156,865 $ 117,225
Communities stabilized during 1998........................... 15,169 12,966 3,318
Development and lease-up communities......................... 35,906 12,509 5,154
Sold communities............................................. 190 3,246 2,058
Third party services......................................... 1,657 1,653 1,326
------------- ------------- -------------
Contribution to FFO.......................................... 216,731 187,239 129,081
------------- ------------- -------------
Other operating income, net of expense....................... 2,674 3,186 (2,723)
Depreciation on non-real estate assets....................... (1,962) (1,432) (1,057)
Minority interest in consolidated property
Partnerships.............................................. (511) (397) --
Interest expense............................................. (33,192) (31,297) (24,658)
Amortization of deferred loan costs.......................... (1,496) (1,185) (980)
General and administrative................................... (7,788) (8,495) (7,364)
Dividends to preferred shareholders.......................... (11,875) (11,473) (4,907)
------------- ------------- -------------
Total FFO.................................................... 162,581 136,146 87,392
------------- ------------- -------------
Depreciation on real estate assets........................... (55,361) (45,214) (27,991)
Net gain (loss) on sale of assets............................ (1,522) -- 3,270
Loss on unused treasury locks................................ -- (1,944) --
Loss on relocation of office space........................... -- (1,500)
Minority interest of unitholders in
Operating Partnership...................................... (12,598) (11,511) (11,131)
Dividends to preferred shareholders.......................... 11,875 11,473 4,907
------------- ------------- -----------
Income before extraordinary item
and preferred dividends.................................... $ 104,975 $ 88,950 $ 54,947
============= ============= =============
</TABLE>
15. SUBSEQUENT EVENTS
In February 2000, the Company sold a 213 unit property located in Atlanta for
$32,350. Net proceeds estimated at $31,500 will be used to repay outstanding
indebtedness. In February 2000, the Company's Investment Committee approved the
sale of and subsequently listed for sale three properties in Mississippi
containing 983 units and a commercial property located in Dallas, TX.
53
<PAGE> 56
POST PROPERTIES, INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
16. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for the years ended 1999 and 1998 are
as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999*
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ 80,891 $ 85,503 $ 88,158 $ 91,375
---------- ---------- ---------- ----------
Net income before net gain (loss) on sale of assets,
minority interest of unitholders in Operating
Partnership and extraordinary items................................ 29,406 29,624 30,626 31,290
Net gain (loss) on sale of assets.................................... (1,567) 476 (246) (185)
Minority interest of preferred unitholders in
Operating Partnership.............................................. -- -- (435) (1,416)
Minority interest of common unitholders in
Operating Partnership.............................................. (2,992) (3,237) (3,206) (3,163)
Extraordinary items.................................................. (458) -- -- --
---------- ---------- ---------- ----------
Net income........................................................... 24,389 26,863 26,739 26,526
Dividends to preferred shareholders.................................. (2,969) (2,969) (2,969) (2,968)
---------- ---------- ---------- ----------
Net income available to common shareholders.......................... $ 21,420 $ 23,894 $ 23,770 $ 23,558
========== ========== ========== ==========
Earnings per common share:
Net income available to common shareholders - basic.................. $ 0.56 $ 0.62 $ 0.62 $ 0.61
Net income available to common shareholders - diluted................ $ 0.56 $ 0.61 $ 0.61 $ 0.60
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998*
-------------------------------------------------------
FIRST SECOND THIRD FOURTH
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues............................................................. $ 68,987 $ 73,455 $ 76,992 $ 79,471
---------- ---------- ---------- ----------
Net income before, loss on unused treasury locks and
minority interest of unitholders in Operating
Partnership........................................................ 22,310 25,437 26,825 27,833
Loss on unused treasury locks........................................ (1,944) -- -- --
Minority interest of unitholders in Operating
Partnership........................................................ (2,510) (2,902) (3,022) (3,077)
---------- ---------- ---------- ----------
Net income........................................................... 17,856 22,535 23,803 24,756
Dividends to preferred shareholders.................................. (2,566) (2,969) (2,969) (2,969)
---------- ---------- ---------- ----------
Net income available to common shareholders.......................... $ 15,290 $ 19,566 $ 20,834 $ 21,787
========== ========== ========== ==========
Earnings per common share:
Net income available to common shareholders - basic.................. $ 0.48 $ 0.56 $ 0.58 $ 0.59
Net income available to common shareholders - diluted................ $ 0.47 $ 0.55 $ 0.57 $ 0.58
</TABLE>
* The total of the four quarterly amounts for minority interest of unitholders
in Operating Partnership, extraordinary item, net income and earnings per share
may not equal the total for the year. These differences result from the use of
a weighted average to compute minority interest in the Operating Partnership
and average number of shares outstanding.
54
<PAGE> 57
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Post Apartment Homes, L.P.
In our opinion, the accompanying consolidated financial statements listed in
the index appearing under Item 14(a) 1. and 2. on page 34 present fairly, in
all material respects, the financial position of Post Apartment Homes, L.P. at
December 31, 1999 and 1998, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
These financial statements are the responsibility of the management of Post
Apartment Homes, L.P.; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
55
<PAGE> 58
POST APARTMENT HOMES, L.P.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
Real estate assets
Land ......................................................... $ 277,784 $ 252,922
Building and improvements..................................... 1,574,158 1,379,847
Furniture, fixtures and equipment............................. 137,602 108,233
Construction in progress...................................... 576,361 480,267
Land held for future development.............................. 16,880 33,805
----------- -----------
2,582,785 2,255,074
Less: accumulated depreciation................................ (303,016) (247,148)
----------- -----------
Real estate assets.......................................... 2,279,769 2,007,926
Cash and cash equivalents....................................... 5,870 21,154
Restricted cash................................................. 1,380 1,348
Deferred charges, net........................................... 20,820 18,686
Other assets.................................................... 42,334 17,599
----------- -----------
Total assets............................................. $ 2,350,173 $ 2,066,713
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Notes payable................................................... $ 989,583 $ 800,008
Accrued interest payable........................................ 9,160 7,609
Distribution payable............................................ 31,285 25,115
Accounts payable and accrued expenses........................... 59,780 48,214
Security deposits and prepaid rents............................. 9,023 8,716
----------- -----------
Total liabilities........................................ 1,098,831 889,662
----------- -----------
Commitments and contingencies................................... -- --
Partners' equity................................................ 1,251,342 1,177,051
----------- -----------
Total liabilities and partners' equity................... $ 2,350,173 $ 2,066,713
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
56
<PAGE> 59
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
REVENUES
Rental $ 318,697 $ 275,755 $ 185,732
Property management - third party ............................ 3,368 3,164 2,421
Landscape services - third party ............................ 9,118 7,252 5,148
Interest ..................................................... 764 472 89
Other ........................................................ 13,980 12,262 6,726
------------ ------------ ------------
Total revenue ............................................ 345,927 298,905 200,116
------------ ------------ ------------
EXPENSES
Property operating and maintenance (exclusive of items
shown separately below)..................................... 113,152 99,717 67,515
Depreciation ................................................. 58,013 46,646 29,048
Property management - third party ............................ 2,925 2,499 1,959
Landscape services - third party ............................. 7,904 6,264 4,284
Interest ..................................................... 33,192 31,297 24,658
Amortization of deferred loan costs .......................... 1,496 1,185 980
General and administrative ................................... 7,788 8,495 7,364
Minority interest in consolidated property partnerships....... 511 397 --
------------ ------------ ------------
Total expenses ........................................... 224,981 196,500 135,808
------------ ------------ ------------
Income before net gain (loss) on sale of assets, loss on
unused treasury locks, loss on relocation of
corporate office and extraordinary item ..................... 120,946 102,405 64,308
Net gain (loss) on sale of assets ............................. (1,522) -- 3,270
Loss on unused treasury locks ................................. -- (1,944) --
Loss on relocation of corporate office ........................ -- -- (1,500)
------------ ------------ ------------
Income before extraordinary item .............................. 119,424 100,461 66,078
Extraordinary item ............................................ (521) -- (93)
------------ ------------ ------------
Net income .................................................... 118,903 100,461 65,985
Distributions to preferred Unitholders ........................ (13,726) (11,473) (4,907)
------------ ------------ ------------
Net income available to common Unitholders .................... $ 105,177 $ 88,988 $ 61,078
============ ============ ============
EARNINGS PER COMMON UNIT - BASIC
Income before extraordinary item
(net of preferred distributions) ............................ $ 2.42 $ 2.21 $ 2.11
Extraordinary item ............................................ (.01) -- --
------------ ------------ ------------
Net income available to common Unitholders .................... $ 2.41 $ 2.21 $ 2.11
============ ============ ============
Weighted average common Units outstanding ..................... 43,663,373 40,244,351 28,880,928
============ ============ ============
Distributions declared ........................................ $ 2.80 $ 2.60 $ 2.38
============ ============ ============
EARNINGS PER COMMON UNIT - DILUTED
Income before extraordinary item
(net of preferred distributions) ........................... $ 2.39 $ 2.18 $ 2.09
Extraordinary item ........................................... (.01) -- --
------------ ------------ ------------
Net income available to common Unitholders ................... $ 2.38 $ 2.18 $ 2.09
============ ============ ============
Weighted average common Units outstanding .................... 44,119,671 40,689,342 29,104,790
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
57
<PAGE> 60
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNER PARTNERS TOTAL
------------ ------------ ------------
<S> <C> <C> <C>
PARTNERS' EQUITY, DECEMBER 31, 1996................................ $ 5,216 $ 477,218 $ 482,434
Contributions from PPI related to Preferred Shares................. 483 47,808 48,291
Common units issued in connection with Merger...................... 3,384 334,969 338,353
Contributions from PPI related to Dividend Reinvestment
and Employee Stock Purchase Plans................................ 91 9,039 9,130
Distributions to preferred Unitholders............................. (49) (4,858) (4,907)
Distributions to common Unitholders................................ (487) (48,172) (48,659)
Distributions declared to common Unitholders....................... (213) (21,110) (21,323)
Net income......................................................... 660 65,325 65,985
------------ ------------ ------------
PARTNERS' EQUITY, DECEMBER 31, 1997................................ 9,085 860,219 869,304
Contributions from PPI related to Preferred Shares................. -- 48,284 48,284
Contributions from PPI related to Common Shares.................... 2,559 253,348 255,907
Contributions from PPI related to Dividend Reinvestment
and Employee Stock Purchase Plans................................ 189 18,671 18,860
Distributions to preferred Unitholders............................. -- (11,473) (11,473)
Distributions to common Unitholders................................ (792) (78,385) (79,177)
Distributions declared to common Unitholders....................... (251) (24,864) (25,115)
Net income......................................................... 1,005 99,456 100,461
------------ ------------ ------------
PARTNERS' EQUITY, DECEMBER 31, 1998................................ 11,795 1,165,256 1,177,051
Contributions from PPI related to Dividend Reinvestment
and Employee Stock Purchase Plans................................ 233 23,079 23,312
Proceeds from issuance of preferred units, net of offering costs... -- 68,190 68,190
Distributions to preferred Unitholders............................. -- (13,726) (13,726)
Distributions to common Unitholders................................ (916) (90,654) (91,570)
Distributions declared to common Unitholders....................... (308) (30,510) (30,818)
Net income......................................................... 1,189 117,714 118,903
------------ ------------ ------------
PARTNERS' EQUITY, DECEMBER 31, 1999................................ $ 11,993 $ 1,239,349 $ 1,251,342
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
58
<PAGE> 61
POST APARTMENT HOMES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income......................................................$ 118,903 $ 100,461 $ 65,985
Adjustments to reconcile net income to net cash provided
by operating activities:
Net (gain) loss on sale of assets............................... 1,522 -- (3,270)
Loss on relocation of corporate office.......................... -- -- 1,500
Loss on unused treasury locks................................... -- 1,944 --
Extraordinary item.............................................. 521 -- 93
Depreciation.................................................... 58,013 46,623 29,048
Write-off of deferred financing costs........................... -- -- (93)
Amortization of deferred loan costs............................. 1,496 1,209 980
Other........................................................... -- 168 --
Changes in assets, (increase) decrease in:
Restricted cash............................................... (32) 194 (394)
Deferred charges.............................................. (4,106) (7,115) --
Other assets.................................................. (24,735) 2,998 11,797
Changes in liabilities, increase (decrease) in:
Accrued interest payable...................................... 1,551 104 2,172
Accounts payable and accrued expenses......................... (402) 1,433 1,341
Security deposits and prepaid rents........................... 307 599 395
------------ ------------ ------------
Net cash provided by operating activities....................... 153,038 148,618 109,554
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Construction and acquisition of real estate assets,
net of payables............................................... (286,696) (279,473) (190,810)
Proceeds from sale of assets.................................... 16,587 -- 25,402
Acquisition of Columbus Realty Trust, net of cash acquired...... -- -- (17,734)
Payment for unused treasury locks............................... -- (1,944) --
Capitalized interest............................................ (21,417) (15,707) (9,567)
Recurring capital expenditures.................................. (8,641) (7,479) (3,675)
Corporate capital expenditures.................................. (6,811) (8,576) (3,220)
Non-recurring capital expenditures.............................. (2,971) (1,423) (605)
Revenue generating capital expenditures......................... (8,011) (13,614) (8,168)
------------ ------------ ------------
Net cash used in investing activities........................... (317,960) (328,216) (208,377)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of financing costs...................................... (1,495) -- (4,208)
Debt proceeds................................................... 279,000 103,930 688,564
Debt payments................................................... (89,425) (275,131) (564,085)
Proceeds from the sale of notes................................. -- 150,000 --
Offering proceeds, net of underwriters discount
and offering costs............................................ -- 255,907 --
Proceeds from issuance of preferred units,
net of offering costs......................................... 68,190 -- --
Proceeds from contributions from PPI related
to Preferred Shares........................................... -- 48,284 48,291
Proceeds from contributions from PPI related
to Dividend Reinvestment Plan................................. 23,312 18,860 9,130
Capital distributions to preferred Unitholders.................. (13,259) (11,473) (4,907)
Capital distributions to common Unitholders..................... (116,685) (100,504) (63,316)
------------ ------------ ------------
Net cash provided by financing activities....................... 149,638 189,873 109,469
------------ ------------ ------------
Net (decrease) increase in cash and cash equivalents............ (15,284) 10,275 10,646
Cash and cash equivalents, beginning of period.................. 21,154 10,879 233
------------ ------------ ------------
Cash and cash equivalents, end of period........................ $ 5,870 $ 21,154 $ 10,879
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements
59
<PAGE> 62
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
1. ORGANIZATION AND FORMATION OF THE COMPANY
ORGANIZATION AND FORMATION OF THE COMPANY
Post Apartment Homes, L.P. (the "Operating Partnership"), a Georgia limited
partnership, was formed on January 22, 1993, to conduct the business of
developing, leasing and managing upscale multi-family apartment communities for
its general partner, Post Properties, Inc. (the "Company" or "PPI"). The
Operating Partnership, through its operating divisions and subsidiaries, is the
entity through which all of the Company's operations are conducted. At December
31, 1999, the Company, through wholly owned subsidiaries, controlled the
Operating Partnership as the sole general partner and as the holder of 88.2% of
the common units in the Operating Partnership ("Units") and 64.1% of the
Perpetual Preferred Units. The other limited partners of the Operating
Partnership, who hold Units, are those persons (including certain officers and
directors of the Company) who, at the time of the Initial Offering, elected to
hold all or a portion of their interest in the form of Units rather than
receiving shares of Common Stock. Each Unit may be redeemed by the holder
thereof for either one share of Common Stock or cash equal to the fair market
value thereof at the time of such redemption, at the option of the Operating
Partnership. The Operating Partnership presently anticipates that it will cause
shares of Common Stock to be issued in connection with each such redemption
rather than paying cash (as has been done in all redemptions to date). With
each redemption of outstanding Units for Common Stock, the Company's percentage
ownership interest in the Operating Partnership will increase. In addition,
whenever the Company issues shares of Common Stock, the Company will contribute
any net proceeds therefrom to the Operating Partnership and the Operating
Partnership will issue an equivalent number of Units to the Company.
The Company elected to be taxed as a real estate investment trust ("REIT") for
Federal income tax purposes beginning with the year ended December 31, 1993. A
REIT is a legal entity which holds real estate interest and, through payments
of dividends to shareholders, in practical effect is not subject to Federal
income taxes at the corporate level.
The Operating Partnership currently owns and manages or is in the process of
developing apartment communities located in the Atlanta, Dallas, Tampa,
Orlando, Northern Virginia, Nashville, Houston, Phoenix, Denver and Charlotte
metropolitan areas. At December 31, 1999, approximately 54.8% and 20.4% (on a
unit basis) of the Company's communities are located in the Atlanta and Dallas
metropolitan areas, respectively.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the consolidated
accounts of the Operating Partnership. All significant intercompany accounts
and transactions have been eliminated in consolidation. See Note 2 related to
the acquisition of Columbus Realty Trust in 1997.
Certain items in the 1998 and/or 1997 consolidated financial statements were
reclassified for comparative purposes with the 1999 consolidated financial
statements.
NEW ACCOUNTING PRONOUNCEMENTS
Beginning January 1, 2001, the Operating Partnership is required to adopt SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." This
statement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Due to the Operating
Partnership's limited hedging activities, management does not believe the
adoption of SFAS 133 will have a material effect on the Operating Partnership's
financial position or results of operations, nor will it significantly affect
its financial statement disclosures.
60
<PAGE> 63
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
REAL ESTATE ASSETS AND DEPRECIATION
Real estate assets are stated at the lower of depreciated cost or fair value,
if deemed impaired. Ordinary repairs and maintenance are expensed as incurred;
major replacements and betterments are capitalized and depreciated over their
estimated useful lives. Depreciation is computed on a straight-line basis over
the useful lives of the properties (buildings and components and related land
improvements -- 20-40 years; furniture, fixtures and equipment -- 5-10 years).
PREFERRED UNITS
On September 3, 1999, the Operating Partnership issued $70,000 of Series D
Cumulative Redeemable Preferred Units to an institutional investor in a private
placement meeting the requirements of Regulation D promulgated under the
Securities Act of 1933, as amended. The $25 preferred units may be redeemed by
the Company after five years at par, but are otherwise perpetual in term. The
preferred units may also be exchanged, under certain circumstances, for shares
of the Company's 8 percent Series D Cumulative Redeemable Preferred Stock. Net
proceeds to the Operating Partnership of approximately $68,000 were used to
repay outstanding indebtedness.
REVENUE RECOGNITION
Rental -- Residential properties are leased under operating leases with terms
of generally one year or less. Rental income is recognized when earned, which
is not materially different from revenue recognition on a straight line basis.
Property management and landscaping services -- Income is recognized when
earned for property management and landscaping services provided to third
parties.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, all investments purchased with an
original maturity of three months or less are considered to be cash
equivalents.
RESTRICTED CASH
Restricted cash generally is comprised of resident security deposits for
communities located in Florida and Tennessee and required maintenance reserves
for communities located in DeKalb County, Georgia.
DEFERRED FINANCING COSTS
Deferred financing costs are amortized using the interest method over the terms
of the related debt.
INTEREST AND REAL ESTATE TAXES
Interest and real estate taxes incurred during the construction period are
capitalized and depreciated over the lives of the constructed assets. Interest
paid (including capitalized amounts of $21,417, $15,707 and $9,567 during 1999,
1998 and 1997, respectively, and interest rate protection receipts of $0, $0
and $296 during 1999, 1998 and 1997, respectively) aggregated $51,337, $46,889
and $39,815 for the years ended December 31, 1999, 1998 and 1997, respectively.
DERIVATIVES
The Operating Partnership may enter into various treasury lock arrangements
from time to time in anticipation of a specific debt transaction. These
arrangements are used to manage the Operating Partnership's exposure to
61
<PAGE> 64
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
fluctuations in interest rates. The Operating Partnership does not utilize
these arrangements for trading or speculative purposes. These arrangements,
considered qualifying hedges, are not recorded in the financial statements
until the debt transaction is consummated and the arrangement is settled. The
proceeds or payments resulting from the settlement of the arrangement are
deferred and amortized over the life of the debt as an adjustment to interest
expense. Any arrangements not deemed hedges are recorded at fair value and
recognized through the statement of operations.
Premiums paid to purchase interest rate protection agreements (i.e. interest
rate caps) are capitalized and amortized over the terms of those agreements
using the interest method. Unamortized premiums are included in deferred
charges in the consolidated balance sheet. Amounts receivable under the
interest rate protection agreements are accrued as a reduction of interest
expense.
Interest rate swaps qualifying for hedge accounting treatment are recorded on
an accrual basis as an adjustment of the interest rate yield. Interest rate
swaps not qualifying for hedge accounting treatment are recorded at fair value
and recognized through the statement of operations.
PER UNIT DATA
Basic earnings per common Unit with respect to the Operating Partnership for
the years ended December 31, 1999, 1998 and 1997 is computed based upon the
weighted average number of units outstanding during the period. Diluted
earnings per common Unit is based upon the weighted average number of Units
outstanding during the period and includes the effect of the potential issuance
of additional Units if stock options were exercised or converted into common
stock of the Company.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. ACQUISITION OF COLUMBUS REALTY TRUST
On October 24, 1997, Columbus Realty Trust ("Columbus") a Texas real estate
investment trust, was merged into a wholly owned subsidiary of the Company (the
"Merger") and then transferred into the Operating Partnership. At the time of
the Merger, Columbus was operating 26 completed communities containing 6,296
apartment units and had an additional 5 communities under development that
would contain 1,243 apartment units upon completion located in Dallas and
Houston, Texas. Pursuant to the merger agreement, each outstanding share of
Columbus common stock was converted into 0.615 shares of common stock of the
Company, which resulted in the issuance of approximately 8.4 million shares of
common stock of the Company. The total purchase price including liabilities
assumed was $643,268. The Merger was accounted for as a purchase. Under the
purchase method of accounting, the assets acquired and liabilities assumed of
Columbus were recorded at their estimated fair market values and its results of
operations have been included in the accompanying consolidated statements of
operations from the date of the Merger, October 24, 1997.
62
<PAGE> 65
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
Unaudited, supplemental pro forma information, assuming the Merger had occurred
on January 1, 1997, is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1997
-----------------
<S> <C>
Total revenue ........................................................ $247,295
Net income available to common
unitholders before extraordinary items ............................ $ 69,978
Net income available to common unitholders ........................... $ 69,885
Earnings per unit available to common unitholders - basic ............ $ 1.99
Earnings per unit available to common unitholders - diluted .......... $ 1.96
</TABLE>
3. DEFERRED CHARGES
Deferred charges consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------
1999 1998
-------- --------
<S> <C> <C>
Deferred financing costs .................................... $ 31,148 $ 26,568
Other ....................................................... 5,394 4,551
-------- --------
36,542 31,119
Less: accumulated amortization .............................. (15,722) (12,433)
-------- --------
$ 20,820 $ 18,686
======== ========
</TABLE>
4. NOTES PAYABLE
The Operating Partnership's indebtedness consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
1999 1998
---------- ----------
<S> <C> <C>
Conventional fixed rate (secured)....................... $ 53,210 $ 3,825
Conventional floating rate (secured).................... 126,067 42,303
Tax-exempt fixed rate bond indebtedness (secured)....... -- --
Tax-exempt floating rate bond indebtedness (secured).... 235,880 235,880
Lines of credit & other (unsecured)..................... 184,426 62,000
Senior notes (unsecured)................................ 390,000 456,000
---------- ----------
Total................................................... $ 989,583 $ 800,008
========== ==========
</TABLE>
CONVENTIONAL FIXED AND FLOATING RATE MORTGAGES PAYABLE (SECURED)
Conventional mortgages payable were comprised of five and four loans at
December 31, 1999 and 1998, respectively, each of which is collateralized by an
apartment community included in real estate assets. The mortgages payable are
generally due in monthly installments of interest only and mature at various
dates through 2029. The interest rates on the fixed rate mortgages payable
ranged from 6.50% to 9.20% at December 31, 1999. At December 31, 1999, the
interest rates on the variable rate mortgages payable were at a range from the
London Interbank Offered Rate ("LIBOR") to .75% to .935% above LIBOR. At
December 31, 1999, LIBOR ranged from 5.82% to 6.50% for one, three, six, and
twelve month indices.
TAX-EXEMPT FLOATING RATE BOND INDEBTEDNESS (SECURED)
Tax exempt floating rate bond indebtedness is comprised of AAA Fannie Mae
credit enhanced debt maturing in 2025.
63
<PAGE> 66
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
Certain of the apartment communities are encumbered to secure tax-exempt housing
bonds. Such bonds are generally payable in monthly or semi-annual installments
of interest only and mature at various dates through 2025. Floating rate
indebtedness reissued in 1995 through 1998 bears interest at the "AAA" non-AMT
tax exempt rate, set weekly, which was 5.50% at December 31, 1999 (average of
3.35% for 1998). With respect to such bonds, the Operating Partnership pays
certain credit enhancement fees of .515% of the amount of such bonds or the
amount of such letters of credit, as the case may be.
The Federal National Mortgage Association ("FNMA") has provided replacement
credit enhancement through 2025 for the bond issues, aggregating $235,880,
which were reissued. The agreement with FNMA contains representations,
covenants, and events of default customary to such secured loans. Effective
October 1, 1998, the Company obtained fee reductions related to these loans
totaling .08% per annum. Of this savings, .06% was a reduction in the credit
enhancement fee. This fee reduction resulted in approximately $181 of annual
savings for the remaining term of these loans.
OTHER SECURED DEBT
On March 30, 1999, the Operating Partnership issued $50,000 of secured notes to
an insurance company. These notes bear interest at 6.5% with an effective rate
of 7.3% after consideration of a terminated swap agreement, mature on March 1,
2009 and are secured by two apartment communities. Net proceeds of $49,933 were
used to repay outstanding indebtedness.
On July 23, 1999, the Operating Partnership issued $104,000 of secured notes to
FNMA. These notes bear interest at 30-day LIBOR (capped at 7% for one year) plus
credit enhancement, liquidity and service fees of .935%, mature on July 23, 2029
and are secured by five apartment communities. The notes include a prepayment
penalty that is an amount equal to a percentage of the penalty amount remaining
under the notes at the time of prepayment. The penalty ranges from 4.8% in the
first year to .65% in the tenth year. The Operating Partnership has an option to
call these notes after 10 years from the issuance date. As a requirement of the
debt agreement with FNMA, the Company entered into a fixed-rate swap which fixed
the interest rate on the notes to 6.56% for a period of ten years. The Company
entered into a variable rate swap in which they would pay a variable rate equal
to the rate on the notes and receive a fixed rate of 6.50%. Net proceeds of
$101,988 were used to repay outstanding indebtedness.
LINES OF CREDIT AND OTHER (UNSECURED)
In May 1999, the Operating Partnership's syndicated line of credit (the
"Revolver") was amended, increasing its capacity to $350,000. The Revolver
matures on April 30, 2002 and borrowings currently bear interest at LIBOR plus
.825% or prime minus .25%. The Revolver provides for the rate to be adjusted up
or down based on changes in the credit ratings on the Operating Partnership's
senior unsecured debt. The Revolver also includes a money market competitive
bid option for short term funds up to $175,000 at rates below the stated line
rate. The credit agreement for the Revolver contains customary representations,
covenants and events of default, including covenants which restrict the ability
of the Operating Partnership to make distributions, in excess of stated
amounts, which in turn restricts the discretion of the Company to declare and
pay dividends. In general, during any fiscal year the Operating Partnership may
only distribute up to 100% of the Operating Partnership's consolidated income
available for distribution (as defined in the credit agreement) exclusive of
distributions of up to $30,000 of capital gains for such year. The credit
agreement contains exceptions to these limitations to allow the Operating
Partnership to make distributions necessary to allow the Company to maintain
its status as a REIT. The Operating Partnership does not anticipate that this
covenant will adversely affect the ability of the Operating Partnership to make
distributions, or the Company to declare dividends, under the Company's current
dividend policy.
On July 26, 1996, the Operating Partnership closed a $20,000 unsecured line of
credit with Wachovia Bank of Georgia, N.A. (The "Cash Management Line"), which
was fully funded and used to pay down the outstanding balance on the Revolver.
The Cash Management Line bears interest at LIBOR plus .675% or prime minus .25%
and mature on March 31, 1999. Management believes the Cash Management Line will
be renewed at maturity with
64
<PAGE> 67
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
similar terms. The Revolver requires three days advance notice to repay
borrowings whereas the Cash Management Line provides the Operating Partnership
with an automatic daily sweep which applies all available cash to reduce the
outstanding balance.
At December 31, 1999, the outstanding balances on the Revolver and Cash
Management Line were $165,000 and $17,426, respectively. There were no
outstanding balances on any of the other facilities at December 31, 1999.
In addition, the Operating Partnership has a $3,000 facility to provide letters
of credit for general business purposes.
On March 1, 1998, the Operating Partnership entered into a Disposition and
Development Agreement with the City of Phoenix, Arizona. Pursuant to this
agreement, the City of Phoenix loaned the Operating Partnership $2,000. This
loan is interest-free for the first three years, with a 5.00% interest rate
thereafter. Repayment of the loan commences on March 1, 2001 with equal
semi-annual payments due on March 1 and September 1 of each year through March
1, 2021. All repayment terms are subject to the conditions set forth in the
Agreement.
SENIOR NOTES (UNSECURED)
On June 7, 1995, the Operating Partnership issued $50,000 of unsecured senior
notes with the Northwestern Mutual Life Insurance Company. The notes were in
two tranches: the first, totaling $30,000, carries an interest rate of 8.21%
per annum (1.25% over the corresponding treasury rate on the date such rate was
set) and matures on June 7, 2000; and the second, totaling $20,000 carries an
interest rate of 8.37% per annum (1.35% over the corresponding treasury rate on
the date such rate was set) and matures on June 7, 2002. Proceeds from the
notes were used to reduce other secured indebtedness and to pay down the
Revolver. The note agreements pursuant to which the notes were purchased
contain customary representations, covenants and events of default similar to
those contained in the note agreement for the Revolver.
On September 30, 1996, the Operating Partnership completed a $125,000 senior
unsecured debt offering comprised of two tranches. The first tranche, $100,000
of 7.25% Notes due on October 1, 2003 (the "2003 Notes"), was priced at 99.642%
to yield 7.316% per annum (.71% over the corresponding treasury rate on the
date such rate was set). The second tranche, $25,000 of 7.50% Notes due on
October 1, 2006 (the "2006 Notes", and together with the 2003 Notes, the
"Notes"), was priced at 99.694% to yield 7.544% per annum (.83% over the
corresponding treasury rate on the date such rate was set). Proceeds from the
Notes were used to pay down existing indebtedness outstanding on the Revolver.
On January 29, 1997, the Operating Partnership established a program for the
sale of up to $175,000 aggregate principal amount of Medium-Term Notes due nine
months or more from the date of issue (the "MTNs"). On October 20, 1997, the
Operating Partnership increased the amount available under this program to $344
million. Proceeds from the MTNs were used to (i) prepay certain outstanding
notes and (ii) pay down existing indebtedness outstanding under the Operating
Partnership's Revolver.
The following table sets forth MTNs issued and outstanding as of December 31,
1999:
<TABLE>
<CAPTION>
ISSUE INTEREST MATURITY
DATE AMOUNT RATE DATE
------------------ -------- -------------- ----------
<S> <C> <C> <C>
March 3, 1997 $ 30,000 LIBOR plus .25% 03/03/2000
March 31, 1997 37,000 7.02% 04/02/2001
March 31, 1997 13,000 7.30% 04/01/2004
September 22, 1997 10,000 6.69% 09/22/2004
September 22, 1997 25,000 6.78% 09/22/2005
March 12, 1998 100,000 6.85% 03/16/2015
--------
$215,000
========
</TABLE>
65
<PAGE> 68
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
On March 12, 1998, the Operating Partnership issued $100,000 of 6.85% MandatOry
Par Put Remarketed Securities(SM) ("MOPPRS(SM)") under the MTN Program. The net
proceeds in the amount of $99,087 from the sale of the MOPPRS(SM) were used to
repay outstanding indebtedness. In connection with the MOPPRS(SM) transaction,
Merrill Lynch & Co. purchased an option to remarket the securities as of March
16, 2005 (the "Remarketing Date") reducing the effective borrowing rate through
the Remarketing Date to 6.59%. In anticipation of the offering, the Operating
Partnership entered into forward-treasury-lock agreements in the fall of 1997.
As a result of the termination of these agreements, the effective borrowing
rate was increased to approximately 6.85%, the coupon rate on the MOPPRS(SM).
On April 8, 1998, the Operating Partnership sold $50,000 of Remarketed Reset
Notes due April 7, 2009 under the MTN program. The notes bear an interest rate
of LIBOR plus the applicable spread with the spread being reset from time to
time. The initial spread is equal to .40% for a period of one year. The
Operating Partnership has entered into an interest rate swap for the entire
term of the notes to fix the interest rate index. Under the terms of the swap,
the Operating Partnership paid a fixed rate of 6.02% and received LIBOR. This
swap was settled in February 1999 at a loss of $1,495. This loss was deferred
to amortize over the remaining term of the Remarketed Reset Notes. On April 7,
1999, the Operating Partnership repaid the Remarketed Reset Notes with the
proceeds of conventional fixed rate secured debt. The remaining unamortized
balance of the deferred swap loss was redesignated to the new debt and will be
amortized over the remaining term of the new debt.
The aggregate maturities of the Operating Partnership's indebtedness are as
follows:
<TABLE>
<CAPTION>
<S> <C>
2000................................................... $ 100,442
2001................................................... 40,817
2002................................................... 186,122
2003................................................... 101,191
2004................................................... 24,894
Thereafter............................................. 536,117
---------
$ 989,583
=========
</TABLE>
PLEDGED ASSETS
The aggregate net book value at December 31, 1999 of property pledged as
collateral for indebtedness amounted to approximately $ 417,772.
UNUSED TREASURY LOCKS
The loss on unused treasury locks in 1998 resulted from the termination of
treasury locks intended for debt securities that were not issued by the
Operating Partnership.
EXTRAORDINARY ITEM
The extraordinary item for the year ended December 31, 1999 was due to the write
off of loan costs resulting from the early extinguishment of debt. The
extraordinary item for the year ended December 31, 1997 resulted from the
write-off of deferred financing costs on the mortgage debt satisfied.
5. INCOME TAXES
Income or losses of the Operating Partnership are allocated to the partners of
the Operating Partnership for inclusion in their respective income tax
returns. Accordingly, no provision or benefit for income taxes has been made
in the accompanying financial statements. The Company has elected to be taxed
as a REIT under the Internal Revenue Code of 1986, as amended (the "Code")
commencing with the taxable year ended December 31, 1993. In order for the
Company to qualify as a REIT, it must distribute annually at least 95% of its
REIT taxable income, as
66
<PAGE> 69
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
defined in the Code, to its shareholders and satisfy certain other requirements.
As a result, the Operating Partnership generally will not be subject to Federal
income taxation at the corporate level on the income the Company distributes to
the shareholders. Although the Company has elected to be taxed as a REIT, Post
Services, Inc. ("Post Services") was formed as a subsidiary of the Operating
Partnership to provide through its subsidiaries asset management, leasing and
landscaping services to third parties. The consolidated taxable income of Post
Services, if any, will be subject to tax at regular corporate rates.
As of December 31, 1999, the net basis for Federal income tax purposes, taking
into account the special allocation of gain to the partners contributing
property to the Operating Partnership, was lower than the net assets as reported
in the Operating Partnership's consolidated financial statements by $49,100.
6. RELATED PARTY TRANSACTIONS
The Operating Partnership provides landscaping services for executive officers,
employees, directors and other related parties. For the years ended December
31, 1999, 1998 and 1997, the Operating Partnership received landscaping fees of
$610, $961 and $670 for such services. These amounts include reimbursements of
direct expenses in the amount of $10, $295 and $138, which are not included in
landscape services revenue. Accordingly, these transactions resulted in the
Operating Partnership recording landscape services net fees in excess of direct
expenses of $600, $666 and $532 in the Operating Partnership financial
statements for the years ended December 31, 1999, 1998 and 1997, respectively.
The Operating Partnership provides accounting and administrative services to
entities controlled by certain executive officers of the Operating Partnership.
Fees under this arrangement aggregated $25 for each year ended December 31,
1999, 1998 and 1997, respectively.
The Operating Partnership was contracted to assist in the development of
apartment complexes constructed by a former executive and current shareholder.
Fees under this arrangement were $100, $349 and $326 for the years ended
December 31, 1999, 1998 and 1997, respectively.
On December 10, 1999, the Company loaned $7,750 to certain executives. These
loans are payable on December 10, 2009, and bear interest at a rate of 6.32%
per annum. Proceeds from these loans were used by these executives to acquire
the Company's common shares on the open market.
7. EMPLOYEE BENEFIT PLANS
Through a plan adopted by the Company, the employees of the Operating
Partnership are participants in a defined contribution plan pursuant to Section
401 of the Internal Revenue Code. Beginning in 1996, Operating Partnership
contributions, if any, to this plan are based on the performance of the Company
and are allocated to each participant based on the relative contribution of the
participant to the total contributions of all participants. For purposes of
allocating the Operating Partnership contribution, the maximum employee
contribution included in the calculation is 3% of salary. Operating Partnership
contributions of $346, $179 and $158 were made in 1999, 1998 and 1997,
respectively.
During 1995, the Company adopted the Employee Stock Purchase Plan ("ESPP") to
encourage stock ownership by eligible directors and employees. To participate
in the ESPP, (i) directors must not be employed by the Company or the Operating
Partnership and must have been a member of the Board of Directors for at least
one month and (ii) an employee must have been employed full-time by the Company
or the Operating Partnership for at least one month. The purchase price of
shares of Common Stock under the ESPP is equal to 85% of the lesser of the
closing price per share of Common Stock on the first or last day of the trading
period, as defined.
67
<PAGE> 70
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
8. DIVIDEND REINVESTMENT PLAN
The Dividend Reinvestment Plan ("DRIP") is available to all shareholders of the
Company. Under the DRIP, shareholders may elect for their dividends to be used
to acquire additional shares of the Company's Common Stock directly from the
Company, for 95% of the market price on the date of purchase.
9. STOCK-BASED COMPENSATION PLANS
STOCK COMPENSATION PLANS
At December 31, 1999, the Company had two stock-based compensation plans, the
Employee Stock Plan (the "Stock Plan"), the Employee Stock Purchase Plan (the
"ESPP") and, under the Stock Plan, a stock grant program (the "Grant Plan") as
described below. The Operating Partnership applies APB Opinion 25 and related
Interpretations in accounting for its plans. Accordingly, based upon the
criteria of APB Opinion 25 no compensation cost is required to be recognized
for the Stock Plan and the ESPP. The compensation cost which is required to be
charged against income for the Grant Plan was $205, $182 and $209 for 1999,
1998 and 1997, respectively. Had compensation cost for the Company's Stock Plan
and ESPP been determined based on the fair value at the grant dates for awards
under the Plans consistent with the method of FASB Statement 123, the Operating
Partnership's net income and earnings per Unit would have been reduced to the
pro forma amounts indicated below:
<TABLE>
<CAPTION>
1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Net income available to common
unitholders ......................... As reported........ $105,177 $ 88,988 $ 61,078
Pro forma.......... $102,994 $ 88,100 $ 60,692
Net income per common Unit -
basic ............................... As reported........ $ 2.41 $ 2.21 $ 2.11
Pro forma.......... $ 2.36 $ 2.19 $ 2.10
Net income per common Unit -
diluted ............................. As reported........ $ 2.39 $ 2.18 $ 2.09
Pro forma.......... $ 2.33 $ 2.16 $ 2.08
</TABLE>
For purposes of the pro forma presentation, the fair value of each option grant
is estimated as of the date of grant using the Black-Scholes option-pricing
model. The weighted-average of all assumptions used in the calculation for
various grants under all of the Company's plans during 1999, 1998 and 1997, are
as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Dividend yield ................................... 7.3% 7.0% 6.5%
Expected volatility .............................. 15.4% 15.3% 14.5%
Risk-free interest rate .......................... 4.5% to 6.6% 4.7% to 5.8% 5.5% to 5.6%
Expected option life ............................. 5 to 7 years 5 to 7 years 5 to 7 years
</TABLE>
FIXED STOCK OPTION PLANS
Under the Stock Plan, the Company may grant to its employees and directors
options to purchase up to 6,000,000 shares of common stock. Of this amount,
550,000 shares are available for grants of restricted stock. Options
68
<PAGE> 71
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
granted to any key employee or officer cannot exceed 100,000 shares a year
(500,000 shares if such key employee or officer is a member of the Company's
Executive Committee). The exercise price of each option may not be less than
the market price on the date of grant and all options have a maximum term of
ten years from the grant date.
A summary of the status of the Company's Stock Plan as of December 31, 1999,
1998 and 1997, changes during the years then ended, and the weighted-average
fair value of options granted during the years is presented below:
<TABLE>
<CAPTION>
1999 1998 1997
---------------------- ---------------------- ----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
---------- ------ ---------- ------ ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year ................. 3,030,852 $31 2,237,551 $31 864,105 $31
Granted .......................................... 1,288,232 36 1,440,784 39 243,946 39
Converted in connection with the
Merger ........................................ -- -- -- -- 1,192,230 30
Exercised ........................................ (164,053) 30 (67,326) 31 (49,406) 31
Forfeited ........................................ (100,155) 37 (580,157) 39 (13,324) 38
---------- ---------- ----------
Outstanding at end of year ....................... 4,054,876 35 3,030,852 34 2,237,551 31
========== ========== ==========
Options exercisable at year-end .................. 2,290,143 2,065,438 2,000,279
========== ========== ==========
Weighted-average fair value of options
granted during the year .......................... $ 2.08 $ 2.54 $ 2.85
========== ========== ==========
</TABLE>
At December 31, 1999, the range of exercise prices for options outstanding was
$27.625 - $40.63 and the weighted-average remaining contractual life was 7
years.
10. COMMITMENTS AND CONTINGENCIES
LAND, OFFICE AND EQUIPMENT LEASES
The Operating Partnership is party to two ground leases with terms expiring in
years 2040 and 2043 relating to a single operating community, one ground lease
expiring in 2038 for a second operating community, three ground leases expiring
in 2066, 2069 and 2074 for three communities under development and to office,
equipment and other operating leases with terms expiring in years 1999 through
2003. Future minimum lease payments for non-cancelable land, office, equipment
and other leases at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
<S> <C>
2000......................... $ 1,992
2001......................... 1,830
2002......................... 1,190
2003......................... 1,275
2004......................... 1,243
2005 and thereafter.......... 160,163
</TABLE>
The Operating Partnership incurred $5,109, $4,915 and $3,366 of rent expense for
the years ended December 31, 1999, 1998 and 1997, respectively.
69
<PAGE> 72
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
CONTINGENCIES
The Operating Partnership is party to various legal actions which are
incidental to its business. Management believes that these actions will not
have a material adverse affect on the consolidated balance sheets and
statements of operations.
11. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosures of estimated fair value were determined by management
using available market information and appropriate valuation methodologies.
Considerable judgment is necessary to interpret market data and develop
estimated fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Operating Partnership could realize
on disposition of the financial instruments. The use of different market
assumptions and/or estimation methodologies may have a material effect on the
estimated fair value amounts.
Cash equivalents, rents and landscape service receivables, accounts payable,
accrued expenses, and other liabilities are carried at amounts which reasonably
approximate their fair values.
The fair value of fixed rate debt was approximately $420,675 at December 31,
1999.
The fair values of interest rate protection agreements and an interest rate
swap (used for hedging purposes) are estimated by obtaining quotes from an
investment broker. At December 31, 1999, there were no carrying amounts related
to these arrangements in the consolidated balance sheet. As of December 31,
1999, the expected proceeds from settlement of these contracts was
approximately $598.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of December 31, 1999. Although
management is not aware of any factors that would significantly affect the
reasonable fair value amounts, such amounts have not been comprehensively
revalued for purposes of these financial statements since that date and current
estimates of fair value may differ significantly from the amounts presented
herein.
70
<PAGE> 73
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
12. EARNINGS PER UNIT
For the years ended December 31, 1999, 1998 and 1997, basic and diluted
earnings per common Unit for income before extraordinary item, net of
preferred distributions, and net income available to common Unitholders before
extraordinary item has been computed as follows:
<TABLE>
<CAPTION>
YEAR ENDED 1999
----------------------------------------
INCOME UNITS PER-UNIT
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- --------
<S> <C> <C> <C>
Income before extraordinary item ......................................... $ 119,424
Less: Preferred stock distributions ...................................... (13,726)
----------
BASIC EPS
Income available to common Unitholders before extraordinary item ......... 105,698 43,663,373 $ 2.42
========== =========== ========
EFFECT OF DILUTIVE SECURITIES
Options .................................................................. -- 456,298
---------- -----------
DILUTED EPS
Income available to common Unitholders + assumed
conversions before extraordinary item .................................. $ 105,698 44,119,671 $ 2.39
========== =========== ========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED 1998
----------------------------------------
INCOME UNITS PER-UNIT
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- --------
<S> <C> <C> <C>
Income before extraordinary item ......................................... $ 100,461
Less: Preferred stock distributions ...................................... (11,473)
----------
BASIC EPS
Income available to common Unitholders before extraordinary item ......... 88,988 40,244,351 $ 2.21
========
EFFECT OF DILUTIVE SECURITIES
Options .................................................................. -- 444,991
---------- -----------
DILUTED EPS
Income available to common Unitholders + assumed
conversions before extraordinary item .................................. $ 88,988 40,689,342 $ 2.18
========== =========== ========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED 1997
----------------------------------------
INCOME UNITS PER-UNIT
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- --------
<S> <C> <C> <C>
Income before extraordinary item ......................................... $ 66,078
Less: Preferred stock distributions ...................................... (4,907)
----------
BASIC EPS
Income available to common Unitholders before extraordinary item ......... 61,171 28,880,928 $ 2.11
========
EFFECT OF DILUTIVE SECURITIES
Options .................................................................. -- 223,862
---------- -----------
DILUTED EPS
Income available to common Unitholders + assumed
conversions before extraordinary item .................................. $ 61,171 29,104,790 $ 2.09
========== =========== ========
</TABLE>
13. SUPPLEMENTAL CASH FLOW INFORMATION
Non-cash investing and financing activities for the years ended December 31,
1999, 1998 and 1997 are as follows:
(a) The Operating Partnership committed to distribute $30,818, $25,115 and
$21,327 for the quarters ended December 31, 1999, 1998 and 1997,
respectively.
71
<PAGE> 74
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
(b) The Merger, which was completed in 1997, was a stock for stock
transaction. In connection with the Merger, the cash and non-cash
components were are follows:
<TABLE>
<S> <C>
Fair value of assets acquired .................... $ 643,268
Less:
Value of stock issued in exchange for
Stock of Columbus ............................ 338,353
Liabilities assumed ........................... 285,852
Cash acquired ................................. 1,329
----------
Cash component of purchase price, net of
Cash acquired ................................. $ 17,734
==========
</TABLE>
14. SEGMENT INFORMATION
SEGMENT DESCRIPTION
In accordance with SFAS No. 131, "Disclosure About the Segments of an
Enterprise and Related Information," the Operating Partnership presents
segment information based on the way that management organizes the segments
within the enterprise for making operating decisions and assessing
performance. The segment information is prepared on substantially the same
basis as the internally reported information used by the Operating
Partnership's chief operating decision makers to manage the business.
The Operating Partnership's chief operating decision makers focus on the
Operating Partnership's primary sources of income which are property rental
operations and third party services. Third party services are designated as
one segment. Property rental operations are broken down into four segments
based on the various stages in the property ownership lifecycle. The Operating
Partnership's five segments are further described as follows:
Property Rental Operations
- Fully stabilized communities -- those apartment communities which
have been stabilized (the earlier of the point at which a property
reached 95% occupancy or one year after completion of
construction) for both the current and prior year.
- Communities stabilized during 1998 -- communities which reached
stabilized occupancy in the prior year.
- Development and Lease up Communities -- those communities which are
in lease-up but were not stabilized by the beginning of the
current year including communities which stabilized during the
current year.
- Sold communities -- communities which were sold in the current or
prior year.
Third Party Services -- fee income and related expenses from the Operating
Partnership's apartment community management, landscaping and corporate
apartment rental services.
SEGMENT PERFORMANCE MEASURE
Management uses contribution to funds from operations ("FFO") as the
performance measure for its segments. FFO is defined by the National
Association of Real Estate Investment Trusts as net income available to common
unitholders determined in accordance with GAAP, excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation of real
estate assets, and after adjustment for unconsolidated partnerships and joint
ventures. FFO should not be considered as an alternative to net income
(determined in accordance with GAAP) as an indicator of the Operating
Partnership's financial performance or to cash flow from operating activities
(determined in accordance with GAAP) as a measure of the Operating
Partnership's liquidity, nor is it necessarily indicative of sufficient cash
flow to fund all of the Operating Partnership's needs. NAREIT's definition of
FFO
72
<PAGE> 75
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
excludes items classified by GAAP as extraordinary or unusual and significant
non-recurring events that materially distort the comparative measurement of
performance over time. Effective January 1, 2000 NAREIT amended its definition
of FFO to include in FFO all non-recurring events, except for those that are
defined as extraordinary items under GAAP and gains and losses from sales of
property. The Company will use the amended definition of FFO in reporting
results for all periods on or after January 1, 2000. The Company does not
expect use of the amended definition to materially affect FFO.
SEGMENT INFORMATION
The following table reflects each segment's contribution to consolidated
revenues and FFO together with a reconciliation of segment contribution to
FFO, total FFO and income before extraordinary item. Additionally,
substantially all of the Operating Partnership's assets relate to the
Operating Partnership's property rental operations. Asset cost, depreciation
and amortization by segment are not presented because such information at the
segment level is not reported internally.
Summarized financial information concerning the Company's reportable segments
is shown in the following tables.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES
Fully stabilized communities ......................................... $ 236,923 $ 228,878 $ 171,092
Communities stabilized during 1998 ................................... 22,197 19,149 5,441
Development and lease-up communities ................................. 58,486 23,708 8,328
Sold communities ..................................................... 318 3,867 3,205
Third party services ................................................. 12,486 10,416 7,569
Other ................................................................ 15,517 12,887 4,481
----------- ----------- -----------
Consolidated revenues ................................................ $ 345,927 $ 298,905 $ 200,116
=========== =========== ===========
CONTRIBUTION TO FUNDS FROM OPERATIONS
Fully stabilized communities ......................................... $ 163,809 $ 156,865 $ 117,225
Communities stabilized during 1998 ................................... 15,169 12,966 3,318
Development and lease-up communities ................................. 35,906 12,509 5,154
Sold communities ..................................................... 190 3,246 2,058
Third party services ................................................. 1,657 1,653 1,326
----------- ----------- -----------
Contribution to FFO .................................................. 216,731 187,239 129,081
----------- ----------- -----------
Other operating income, net of expense ............................... 4,525 3,186 (2,723)
Depreciation on non-real estate assets ............................... (1,962) (1,432) (1,057)
Minority interest in consolidated property
partnerships ................................................ (511) (397) --
Interest expense ..................................................... (33,192) (31,297) (24,658)
Amortization of deferred loan costs .................................. (1,496) (1,185) (980)
General and administrative ........................................... (7,788) (8,495) (7,364)
Distributions to preferred unitholders ............................... (13,726) (11,473) (4,907)
----------- ----------- -----------
Total FFO ............................................................ 162,581 136,146 87,392
----------- ----------- -----------
Depreciation on real estate assets ................................... (55,361) (45,214) (27,991)
Net gain (loss) on sale of assets .................................... (1,522) -- 3,270
Loss on unused treasury locks ........................................ -- (1,944) --
Loss on relocation of office space ................................... -- -- (1,500)
Distributions to preferred unitholders ............................... 13,726 11,473 4,907
----------- ----------- -----------
Income before extraordinary item and preferred distributions ......... $ 119,424 $ 100,461 $ 66,078
=========== =========== ===========
</TABLE>
73
<PAGE> 76
POST APARTMENT HOMES, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)
15. SUBSEQUENT EVENTS
In February 2000, the Company sold a 213 unit property located in Atlanta for
$32,350. Net proceeds estimated at $31,500 will be used to repay outstanding
indebtedness. In February 2000, the Company's Investment Committee approved
the sale of and subsequently listed for sale three properties in Mississippi
containing 983 units and a commercial property located in Dallas, TX.
16. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for the years ended 1999 and 1998 are as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999*
-------------------------------------------------------------
FIRST SECOND THIRD FOURTH
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues ............................................. $ 80,891 $ 85,503 $ 88,158 $ 91,375
Net income before gain (loss) on sale of
assets and extraordinary items .............. 29,406 29,624 30,626 31,290
Net gain (loss) on sale of assets .................... (1,567) 476 (246) (185)
Extraordinary items .................................. (521) -- -- --
---------- ---------- ---------- ----------
Net income ........................................... 27,318 30,100 30,380 31,105
Distributions to preferred Unitholders ............... (2,969) (2,969) (3,404) (4,384)
---------- ---------- ---------- ----------
Net income available to common Unitholders ........... $ 24,349 $ 27,131 $ 26,976 $ 26,721
========== ========== ========== ==========
Earnings per common Unit:
Net income available to common Unitholders --
basic ............................................ $ 0.56 $ 0.62 $ 0.62 $ 0.61
Net income available to common Unitholders --
diluted .......................................... $ 0.56 $ 0.61 $ 0.61 $ 0.60
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999*
-------------------------------------------------------------
FIRST SECOND THIRD FOURTH
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues ............................................. $ 68,987 $ 73,455 $ 76,992 $ 79,471
Net income before loss on unused
treasury locks .................................... 22,310 25,437 26,825 27,833
Loss on unused treasury locks ........................ (1,944) -- -- --
---------- ---------- ---------- ----------
Net income ........................................... 20,366 25,437 26,825 27,833
Distributions to preferred Unitholders ............... (2,566) (2,969) (2,969) (2,969)
---------- ---------- ---------- ----------
Net income available to common Unitholders ........... $ 17,800 $ 22,468 $ 23,856 $ 24,864
========== ========== ========== ==========
Earnings per common Unit:
Net income available to common Unitholders --
basic ............................................. $ 0.48 $ 0.56 $ 0.58 $ 0.59
Net income available to common Unitholders --
diluted ........................................... $ 0.47 $ 0.55 $ 0.57 $ 0.58
</TABLE>
* The total of the four quarterly amounts for earnings per Unit may not equal
the total for the year. These differences result from the use of a weighted
average to compute average number of Units outstanding.
74
<PAGE> 77
SCHEDULE III
POST PROPERTIES, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
INITIAL COSTS
-----------------------
COST
CAPITALIZED
RELATED BUILDING AND SUBSEQUENT
DESCRIPTION ENCUMBRANCES LAND IMPROVEMENTS TO ACQUISITION
----------- ------------ ------ ------------ --------------
<S> <C> <C> <C> <C> <C>
GEORGIA
Post Ashford ..................... Apartments $ 9,895 (2) $ 1,906 $ -- $ 8,444
Post Briarcliff .................. Apartments -- 12,634 -- 46,157
Post Bridge ...................... Apartments 12,450 (2) 868 -- 12,113
Post Brookhaven .................. Apartments -- 7,921 -- 30,926
Post Canyon ...................... Apartments 16,845 (2) 931 -- 17,833
Post Chase ....................... Apartments 15,000 (2) 1,438 -- 14,615
Post Chastain .................... Apartments 30,700 6,352 -- 39,732
Post Collier Hills .............. Apartments -- 6,487 -- 25,072
Post Corners ..................... Apartments 14,760 (2) 1,473 -- 14,783
Post Court ....................... Apartments 18,650 (2) 1,769 -- 17,206
Post Creek ....................... Apartments -- 10,406 36,756 3,914
Post Crest ....................... Apartments 27,995 4,733 -- 24,665
Post Crossing..................... Apartments -- 3,951 -- 19,429
Post Dunwoody..................... Apartments -- 4,917 -- 28,385
Post Gardens...................... Apartments -- 5,859 -- 33,747
Post Glen......................... Apartments 21,467 5,591 -- 21,529
Post Lane......................... Apartments -- 1,512 -- 8,243
Post Lenox Park................... Apartments 11,400 3,132 -- 10,706
Post Lindbergh.................... Apartments -- 6,268 -- 27,002
Post Mill ........................ Apartments 12,880 (2) 915 -- 12,644
Post Oak.......................... Apartments -- 2,028 -- 8,226
Post Oglethorpe................... Apartments -- 3,662 -- 16,952
Post Park......................... Apartments -- 6,253 -- 39,851
Post Parkwood..................... Apartments -- 1,331 -- 7,338
Post Peachtree Hills............. Apartments -- 4,215 -- 13,675
Post Pointe....................... Apartments -- 2,417 -- 15,741
Post Renaissance.................. Apartments -- -- -- 19,705
Post Ridge........................ Apartments -- 5,150 -- 31,486
Post River........................ Apartments -- 1,011 -- 9,440
Post River - Phase II............. Apartments -- 2,278 -- 8,264
Post Spring....................... Apartments -- 3,316 -- 6,694
Post Summit....................... Apartments -- 1,575 -- 6,287
Post Terrace...................... Apartments -- 4,131 -- 20,067
Post Valley ...................... Apartments 18,600 (2) 1,117 -- 18,822
Post Vinings...................... Apartments -- 4,322 -- 21,619
Post Village
The Arbors...................... Apartments -- 384 -- 16,031
The Fountains The Meadows ....... Apartments 26,000 (2) 611 -- 38,013
The Gardens .................... Apartments 14,500 (2) 187 -- 27,816
The Hills ...................... Apartments 7,000 (2) 91 -- 13,428
Post Walk ........................ Apartments 19,300 (2) 2,954 -- 17,337
Post Woods ....................... Apartments 27,100 1,378 -- 27,120
Parkside by Post.................. Apartments -- 3,402 -- 14,455
3400 Stratford.................... Apartments -- 328 -- 8,474
Riverside by Post................. Mixed Use -- 11,130 -- 107,506
TEXAS
Addison Circle Apartment
Homes by Post - Phase I........... Mixed Use 22,067 2,885 41,482 3,280
Addison Circle Apartment
Homes by Post - Phase II......... Mixed Use -- 3,417 1,128 78,307
Addison Circle Apartment
Homes by Post - Phase III........ Mixed Use -- 752 -- 4,361
American Beauty Mill.............. Apartments -- 234 2,786 3,312
Block 580......................... Mixed Use -- 2,825 2,536 27,604
Block 588......................... Apartments -- 1,278 48 17,272
Clyde Lane........................ Apartments -- 1,628 895 1,510
Cole's Corner..................... Mixed Use -- 1,886 18,006 1,423
Columbus Square by Post........... Mixed Use -- 4,565 24,595 438
EDS Legacy/Towncenter............. Apartments -- 683 -- 6,316
Fort Worth........................ Apartments -- -- 123 2
Heights of State-Thomas........... Mixed Use -- 2,161 15,559 3,650
Mattingly Site.................... Apartments -- 675 11 489
Midtown - Phase I................. Mixed Use -- 2,012 1,134 32,344
Midtown - Phase II................ Mixed Use -- 865 278 1,803
Post Parkwood..................... Apartments 833 306 2,592 4,474
Post Ascension.................... Apartments -- 1,230 8,976 336
Post Hackberry Creek............. Apartments -- 7,269 23,579 671
Post Lakeside..................... Apartments -- 3,924 20,334 983
Post Town Lake/Parks.............. Apartments -- 2,985 19,464 979
Post White Rock................... Apartments -- 1,560 9,969 912
Post Winsted...................... Apartments -- 2,826 18,632 256
Post Windhaven.................... Apartments -- 4,029 23,385 400
The Shores by Post................ Mixed Use -- 11,572 69,794 2,667
<CAPTION>
GROSS AMOUNTS AT WHICH
CARRIED AT CLOSE OF PERIOD
----------------------------------
DEPRECIABLE
BUILDING AND ACCUMULATED DATE OF DATE LIVES
LAND IMPROVEMENTS TOTAL (1) DEPRECIATION CONSTRUCTION ACQUIRED YEARS
-------- ------------ --------- ------------ ------------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
GEORGIA
Post Ashford ............... $ 1,906 $ 8,444 $ 10,350 $ 3,109 4/86 - 6/87 6/87 5 - 40 Years
Post Briarcliff ............ 12,634 46,157 58,791 1 12/96 9/96 5 - 40 Years
Post Bridge ................ 869 12,112 12,981 4,842 9/84 - 12/86 9/84 5 - 40 Years
Post Brookhaven ............ 7,921 30,926 38,847 10,160 7/89 - 12/92 3/89 5 - 40 Years
Post Canyon ................ 931 17,833 18,764 7,174 4/84 - 4/86 10/81 5 - 40 Years
Post Chase ................. 1,438 14,615 16,053 5,901 6/85 - 4/87 6/85 5 - 40 Years
Post Chastain .............. 6,779 39,305 46,084 12,317 6/88 - 10/90 6/88 5 - 40 Years
Post Collier Hills ........ 7,183 24,376 31,559 2,414 10/95 6/95 5 - 40 Years
Post Corners ............... 1,473 14,783 16,256 6,093 8/84 - 4/86 8/84 5 - 40 Years
Post Court ................. 1,769 17,206 18,975 6,221 6/86 - 4/88 12/85 5 - 40 Years
Post Creek ................. 10,442 40,634 51,076 5,406 9/81 - 8/83 5/96 5 - 40 Years
Post Crest ................. 4,763 24,635 29,398 3,219 9/95 10/94 5 - 40 Years
Post Crossing............... 3,951 19,429 23,380 2,926 4/94 - 8/95 11/93 5 - 40 Years
Post Dunwoody............... 4,961 28,341 33,302 5,710 11/88 12/84 & 8/94 (6) 5 - 40 Years
Post Gardens................ 5,931 33,675 39,606 875 7/96 5/96 5 - 40 Years
Post Glen................... 5,784 21,336 27,120 1,597 7/96 5/96 5 - 40 Years
Post Lane................... 2,067 7,688 9,755 2,889 4/87 - 5/88 1/87 5 - 40 Years
Post Lenox Park............. 3,132 10,706 13,838 1,764 3/94 - 5/95 3/94 5 - 40 Years
Post Lindbergh.............. 6,652 26,618 33,270 697 11/96 8/96 5 - 40 Years
Post Mill .................. 922 12,637 13,559 5,468 5/83 - 5/85 5/81 5 - 40 Years
Post Oak.................... 2,027 8,227 10,254 2,176 9/92 - 12/93 9/92 5 - 40 Years
Post Oglethorpe............. 3,662 16,952 20,614 2,909 3/93 - 10/94 3/93 5 - 40 Years
Post Park................... 8,830 37,274 46,104 12,809 6/87 - 9/90 6/87 5 - 40 Years
Post Parkwood............... 1,331 7,338 8,669 1,161 7/94 - 8/95 6/94 5 - 40 Years
Post Peachtree Hills....... 4,857 13,033 17,890 2,866 2/92 - 9/94 2 & 11/92 (6) 5 - 40 Years
Post Pointe................. 3,027 15,131 18,158 5,884 4/87 - 12/88 12/86 5 - 40 Years
Post Renaissance............ -- 19,705 19,705 4,701 7/91 - 12/94 6/91 & 1/94 (6) 5 - 40 Years
Post Ridge.................. 5,150 31,486 36,636 443 10/96 7/96 5 - 40 Years
Post River.................. 1,011 9,440 10,451 2,986 9/90 - 1/92 7/90 5 - 40 Years
Post River - Phase II....... 2,278 8,264 10,542 191 12/96 7/90 5 - 40 Years
Post Spring................. 3,316 6,694 10,010 -- 9/99 (4) 9/99 --
Post Summit................. 1,575 6,287 7,862 2,201 1/90 - 12/90 1/90 5 - 40 Years
Post Terrace................ 4,148 20,050 24,198 2,013 10/94 3/94 5 - 40 Years
Post Valley ................ 1,117 18,822 19,939 6,768 3/86 - 4/88 12/85 5 - 40 Years
Post Vinings................ 5,668 20,273 25,941 6,939 5/88 - 9/91 5/88 5 - 40 Years
Post Village
The Arbors................ 373 16,042 16,415 5,223 4/82 - 10/83 3/82 5 - 40 Years
The Fountains The Meadows . 878 37,746 38,624 12,289 8/85 - 5/88 8/85 5 - 40 Years
The Gardens .............. 637 27,366 28,003 8,909 6/88 - 7/89 5/84 5 - 40 Years
The Hills ................ 307 13,211 13,519 4,301 5/84 - 4/86 4/83 5 - 40 Years
Post Walk .................. 2,954 17,337 20,291 6,990 3/86 - 8/87 6/85 5 - 40 Years
Post Woods ................. 3,070 25,428 28,498 9,732 3/76 - 9/83 6/76 5 - 40 Years
Parkside by Post............ 3,402 14,455 17,857 -- 2/99 12/97 --
3400 Stratford.............. 328 8,474 8,802 -- 4/99 (4) 1/99 --
Riverside by Post........... 13,393 105,243 118,636 467 7/96 1/96 5 - 40 Years
TEXAS
Addison Circle Apartment
Homes by Post - Phase I..... 3,244 44,403 47,647 3,475 10/97 10/97 5 - 40 Years
Addison Circle Apartment
Homes by Post - Phase II... 3,417 79,435 82,852 -- 10/97 10/97 --
Addison Circle Apartment
Homes by Post - Phase III.. 752 4,361 5,113 -- 7/99 (4) 10/97 --
American Beauty Mill........ 571 5,761 6,332 186 10/97 10/97 --
Block 580................... 2,841 30,124 32,965 2 10/97 10/97 5 - 40 Years
Block 588................... 1,278 17,320 18,598 -- 10/97 (4) 10/97 --
Clyde Lane.................. 1,628 2,405 4,033 -- 10/97 (4) 10/97 --
Cole's Corner............... 2,086 19,229 21,315 1,631 n/a 10/97 5 - 40 Years
Columbus Square by Post..... 4,565 25,033 29,598 1,431 n/a 10/97 5 - 40 Years
EDS Legacy/Towncenter....... 684 6,315 6,999 -- n/a 10/97 --
Fort Worth.................. -- 125 125 -- 10/97 (4) 10/97 --
Heights of State-Thomas..... 2,235 19,135 21,370 1,559 10/97 10/97 5 - 40 Years
Mattingly Site.............. 675 500 1,175 -- 10/97 (4) 10/97 --
Midtown - Phase I........... 2,012 33,478 35,490 -- 10/97 10/97 --
Midtown - Phase II.......... 1,947 999 2,946 -- 10/97 (4) 10/97 --
Post Parkwood............... 864 6,508 7,372 416 n/a 10/97 5 - 40 Years
Post Ascension.............. 1,243 9,299 10,542 642 n/a 10/97 5 - 40 Years
Post Hackberry Creek....... 7,269 24,250 31,519 1,583 n/a 10/97 5 - 40 Years
Post Lakeside............... 3,924 21,317 25,241 1,626 n/a 10/97 5 - 40 Years
Post Town Lake/Parks........ 2,985 20,443 23,428 1,556 n/a 10/97 5 - 40 Years
Post White Rock............. 1,560 10,881 12,441 770 n/a 10/97 5 - 40 Years
Post Winsted................ 2,826 18,888 21,714 1,079 n/a 10/97 5 - 40 Years
Post Windhaven.............. 4,029 23,785 27,814 1,558 n/a 10/97 5 - 40 Years
The Shores by Post.......... 11,572 72,461 84,033 4,590 n/a 10/97 5 - 40 Years
</TABLE>
75
<PAGE> 78
<TABLE>
<S> <C> <C> <C> <C> <C>
The Abbey of State-Thomas........ Apartments -- 575 6,276 1,590
The Commons at Turtle Creek...... Apartments -- 1,406 7,938 394
The Meridian at State-Thomas.... Apartments -- 1,535 11,605 252
The Residences on McKinney....... Apartments -- 1,494 18,022 546
The Rice......................... Apartments -- -- 13,393 20,540
The Vineyard of Uptown........... Apartments -- 1,133 8,560 105
The Vintage of Uptown............ Apartments -- 2,614 12,188 216
The Worthington of
State-Thomas.................... Mixed Use -- 3,744 34,700 718
Thomas Tract..................... Apartments -- 1,934 68 5,087
Uptown Village................... Apartments -- 3,955 22,120 340
Wilson Building.................. Mixed Use 16,400 2,766 689 12,272
Campus Circle.................... Retail -- 1,045 3,084 444
Towne Crossing................... Retail -- 3,703 10,721 190
Post & Paddock................... Retail -- 2,352 7,383 496
FLORIDA
Post Bay......................... Apartments -- 2,203 -- 15,297
Post Court....................... Apartments -- 2,083 -- 9,953
Post Fountains................... Apartments 21,500 (2) 3,856 -- 23,561
Post Harbour Island.............. Apartments -- 3,854 -- 41,706
Post Hyde Park................... Apartments -- 3,498 -- 25,827
Post Lake ........................ Apartments 28,500 (2) 6,113 -- 31,298
Post Parkside (Orlando).......... Apartments -- 8,673 -- 11,791
Post Rocky Point................. Apartments -- 10,510 -- 59,352
Post Village
The Arbors...................... Apartments -- 2,063 -- 14,402
The Lakes....................... Apartments -- 2,813 -- 16,945
The Oaks........................ Apartments -- 3,229 -- 15,431
Post Walk at Hyde Park........... Apartments -- 1,943 -- 10,822
MISSISSIPPI
Post Mark........................ Apartments -- 716 13,879 376
Post Pointe...................... Apartments -- 723 14,091 428
Post Trace....................... Apartments -- 1,944 24,616 722
VIRGINIA
Post Corners at Trinity Centre... Apartments 18,400 4,404 -- 23,492
Post Forest...................... Apartments -- 8,590 -- 23,914
WASHINGTON, D.C.
Post Pentagon Row................ Mixed Use -- -- 7,659 --
NORTH CAROLINA
Uptown Place..................... Apartments -- 2,336 -- 15,421
Post Park at Phillips Place...... Mixed Use -- 4,305 -- 36,282
ARIZONA
Roosevelt Sq. I.................. Apartments -- 1,920 -- 16,441
Roosevelt Sq. II................. Apartments -- 1,175 -- 1,088
TENNESSEE
Bennie Dillon.................... Mixed Use -- 145 -- 8,350
Post Green Hills................. Apartments -- 2,464 -- 13,716
Post Hillsboro Village........... Apartments 2,085 2,255 2,555 15,944
The Lee Apartments............... Apartments 830 720 2,125 186
COLORADO
Uptown Denver I & II............. Apartments -- 3,257 580 43,361
MISCELLANEOUS
INVESTMENTS -- 16,580 4,024 25,342
-------- -------- -------- ----------
TOTAL $415,157 $344,529 $568,338 $1,669,918
======== ======== ======== ==========
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
The Abbey of State-Thomas........ 575 7,866 8,441 442 n/a 10/97 5 - 40 Years
The Commons at Turtle Creek...... 1,406 8,332 9,738 677 n/a 10/97 5 - 40 Years
The Meridian at State-Thomas..... 1,535 11,857 13,392 795 n/a 10/97 5 - 40 Years
The Residences on McKinney....... 1,494 18,568 20,062 1,509 n/a 10/97 5 - 40 Years
The Rice......................... -- 33,933 33,933 489 10/97 10/97 5 - 40 Years
The Vineyard of Uptown........... 1,133 8,665 9,798 493 n/a 10/97 5 - 40 Years
The Vintage of Uptown............ 2,614 12,404 15,018 785 n/a 10/97 5 - 40 Years
The Worthington of.............
State-Thomas.................... 3,744 35,418 39,162 2,248 n/a 10/97 5 - 40 Years
Thomas Tract..................... 1,934 5,155 7,089 -- 10/97 (4) 10/97 --
Uptown Village................... 3,955 22,460 26,415 1,354 n/a 10/97 5 - 40 Years
Wilson Building.................. 2,766 12,961 15,727 -- 10/97 10/97 --
Campus Circle.................... 1,045 3,528 4,573 208 n/a 10/97 5 - 40 Years
Towne Crossing................... 3,703 10,911 14,614 597 n/a 10/97 5 - 40 Years
Post & Paddock................... 2,352 7,879 10,231 420 n/a 10/97 5 - 40 Years
FLORIDA
Post Bay......................... 2,573 14,927 17,500 5,169 5/87 - 12/88 5/87 5 - 40 Years
Post Court....................... 2,083 9,953 12,036 3,360 4/90 - 5/91 10/87 5 - 40 Years
Post Fountains................... 3,856 23,561 27,417 7,822 12/85 - 3/88 12/85 5 - 40 Years
Post Harbour Island.............. 16,186 29,374 45,560 1 3/97 (4) 1/97 --
Post Hyde Park................... 4,950 24,375 29,325 2,088 9/94 7/94 5 - 40 Years
Post Lake........................ 6,724 30,687 37,411 11,362 11/85 - 3/88 10/85 5 - 40 Years
Post Parkside (Orlando).......... 8,673 11,791 20,464 1 03/99 03/99 5 - 40 Years
Post Rocky Point................. 10,510 59,352 69,862 4,138 4/94 - 11/96 2/94 & 9/96(6) 5 - 40 Years
Post Village
The Arbors...................... 2,906 13,558 16,465 4,372 6/90 - 12/91 11/90 5 - 40 Years
The Lakes....................... 3,488 16,270 19,758 5,246 7/88 - 12/89 5/88 5 - 40 Years
The Oaks........................ 3,294 15,366 18,660 4,955 11/89 - 7/91 12/89 5 - 40 Years
Post Walk at Hyde Park........... 1,974 10,791 12,765 1,357 10/95 - 9/97 9/95 5 - 40 Years
MISSISSIPPI
Post Mark........................ 717 14,254 14,971 1,187 n/a 10/97 5 - 40 Years
Post Pointe...................... 723 14,519 15,242 799 n/a 10/97 5 - 40 Years
Post Trace....................... 1,944 25,338 27,282 1,652 n/a 10/97 5 - 40 Years
VIRGINIA
Post Corners at Trinity Centre... 4,493 23,403 27,896 2,899 6/94 6/94 5 - 40 Years
Post Forest...................... 9,106 23,398 (3) 32,504 9,081 1/89 - 12/90 3/88 5 - 40 Years
WASHINGTON, D.C.
Post Pentagon Row................ -- 7,659 7,659 -- 06/99 (4) 02/99 --
NORTH CAROLINA
Uptown Place..................... 2,336 15,421 17,757 -- 09/98 (4) 09/98 --
Post Park at Phillips Place...... 4,305 36,282 40,587 3,021 1/96 11/95 5 - 40 Years
ARIZONA
Roosevelt Sq. I.................. 1,920 16,441 18,361 -- 02/99 (4) 02/99 --
Roosevelt Sq. II................. 1,175 1,088 2,263 -- -- (4) 02/99 --
TENNESSEE
Bennie Dillon.................... 145 8,350 8,495 -- 7/98 7/98 --
Post Green Hills................. 2,505 13,675 16,180 1,837 9/94 7/94 5 - 40 Years
Post Hillsboro Village........... 4,998 15,756 20,754 906 12/96 8/96 --
The Lee Apartments............... 720 2,311 3,031 194 n/a (5) 8/96 5 - 40 Years
COLORADO
Uptown Denver I & II............. 3,257 43,941 47,198 -- 10/97 (4) 10/97 --
MISCELLANEOUS
INVESTMENTS 19,457 26,490 45,947 8,707 5 - 40 Years
-------- ---------- ---------- --------
TOTAL $382,328 $2,200,457 $2,582,785 $303,016
======== ========== ========== ========
</TABLE>
(1) The aggregate cost for Federal Income Tax purposes to the Company was
approximately $2,167,029 at December 31, 1999, taking into account the
special allocation of gain to the partners contributing property to the
Operating Partnership.
(2) These properties serve as collateral for the Federal National Mortgage
Association credit enhancement.
(3) Balance includes an allowance for possible loss of $3,700 which was
taken in prior years.
(4) Construction still in process as of December 31, 1999.
(5) The Company acquired this community during 1996. The Company is
operating the community while evaluating whether to hold, renovate or
sell the community.
(6) Additional land was acquired for construction of a second phase.
76
<PAGE> 79
A summary of activity for real estate investments and accumulated depreciation
is as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Real estate investments:
Balance at beginning of year ...................................... $ 2,255,074 $ 1,936,011 $ 1,109,342
Purchase of minority interests in certain property partnerships ... -- -- --
Purchase of assets in connection with the Merger .................. -- -- 635,732
Improvements ................................................... 345,994 319,408 216,020
Disposition of property ........................................ (18,283) (345) (25,083)
----------- ----------- -----------
Balance at end of year ............................................ $ 2,582,785 $ 2,255,074 $ 1,936,011
=========== =========== ===========
Accumulated depreciation:
Balance at beginning of year ...................................... $ 247,148 $ 201,095 $ 177,672
Depreciation ................................................... 57,136 (a) 46,288 (a) 29,023 (a)
Joint Venture Depreciation ..................................... (690)
Depreciation on disposed property .............................. (578) (235) (5,600)
----------- ----------- -----------
Balance at end of year ............................................ $ 303,016 $ 247,148 $ 201,095
=========== =========== ===========
</TABLE>
(a) Depreciation expense in the Consolidated Statements for the years ended
December 31, 1999, 1998 and 1997, includes $877, $335 and $25,
respectively, of depreciation expense on other assets.
77
<PAGE> 80
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of the
Post Properties, Inc. 1995 Non-Qualified Employee Stock Purchase Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and of changes in net assets available for plan benefits present
fairly, in all material respects, the net assets of the Post Properties, Inc.
1995 Non-Qualified Employee Stock Purchase Plan at December 31, 1999 and 1998
and the changes in net assets available for plan benefits for the years then
ended, in conformity with accounting principles generally accepted in the
United States. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
78
<PAGE> 81
POST PROPERTIES, INC.
1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
Receivable from Post Apartment Homes, L.P ...... $ 492,698 $ 563,764
=========== ===========
NET ASSETS AVAILABLE FOR PLAN BENEFITS
Net assets available for plan benefits ......... $ 492,698 $ 563,764
=========== ===========
</TABLE>
79
<PAGE> 82
POST PROPERTIES, INC.
1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1999 1998
----------- -----------
<S> <C> <C>
NET ASSETS AVAILABLE FOR PLAN BENEFITS, JANUARY 1 ........ $ 563,764 $ 440,170
DEDUCTIONS:
Purchase of participants' shares ....................... (974,817) (985,593)
Payment for payroll taxes on behalf
of participants ...................................... (49,104) (44,035)
ADDITIONS:
Participant contributions .............................. 952,855 1,153,222
----------- -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS, DECEMBER 31 ...... $ 492,698 $ 563,764
=========== ===========
</TABLE>
80
<PAGE> 83
POST PROPERTIES, INC.
1995 NON-QUALIFIED EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Post Properties, Inc. (the "Company") established the 1995 Non-Qualified
Employee Stock Purchase Plan (the "Plan") to encourage stock ownership
by eligible directors and employees.
(B) The financial statements have been prepared on the accrual basis of
accounting.
(C) All expenses incurred in the administration of the Plan are paid by the
Company and are excluded from these financial statements.
NOTE 2 - THE PLAN
The Plan became effective as of January 1, 1995. Under the Plan, eligible
participating employees and directors of the Company can purchase Common Stock
at a discount (up to 15% as set by the Compensation Committee of the Company's
Board of Directors) from the Company through salary withholding or cash
contributions. The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974, nor is it intended to qualify for
special tax treatment under Section 401(a) of the Internal Revenue Code.
Directors who have been a member of the Board of Directors for at least one
full calendar month and full-time employees who have been employed a full
calendar month are eligible to participate in the Plan. Eligible directors and
employees (the "Participants") may contribute in cash or as a specified dollar
amount or percentage of their compensation to the Plan. The minimum payroll
deduction for a Participant for each payroll period for purchases under the
Plan is $10.00. The maximum contribution which a Participant can make for
purchases under the Plan for any calendar year is $100,000. All contributions
to the Plan are held in the general assets of Post Apartment Homes, L.P., the
Company's operating partnership.
Shares of the Company's Common Stock are purchased by an investment firm
semi-annually after the end of each six-month period, as defined, and credited
to each Participant's individual account. The purchase price of the Common
Stock purchased pursuant to the Plan is currently equal to 85% of the closing
price on either the first or last trading day of each purchase period,
whichever is lower.
All Common Stock of the Company purchased by Participants pursuant to the Plan
may be voted by the Participants or as directed by the Participants.
The Plan does not discriminate, in scope, terms, or operation, in favor of
officers or directors of the Company and is available, subject to the
eligibility rules of the Plan, to all employees of the Company on the same
basis.
NOTE 3 - FEDERAL INCOME TAXES
The Plan is not subject to Federal income taxes. The difference between the
fair market value of the shares acquired under the Plan, and the amount
contributed by the Participants is treated as ordinary income to the
Participants' for Federal income tax purposes. Accordingly, the Company
withholds all applicable taxes from the employee contributions. The fair
market value of the shares is determined as of the stock purchase date.
81
<PAGE> 84
3. EXHIBITS
Certain of the exhibits required by Item 601 of Regulation S-K have been filed
with previous reports by the registrant and are herein incorporated by
reference thereto.
The Registrant agrees to furnish a copy of all agreements relating to
long-term debt upon request of the Commission.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
<S> <C> <C>
3.1(a) -- Articles of Incorporation of the Company
3.2(b) -- Articles of Amendment to the Articles of Incorporation of the Company.
3.3(c) -- Articles of Amendment to the Articles of Incorporation of the Company.
3.4(d) -- Articles of Amendment to the Articles of Incorporation of the Company.
3.5(e) -- Articles of Amendment to the Articles of Incorporation of the Company.
3.6(a) -- Bylaws of the Company
4.1(f) -- Indenture between the Company and Sun Trust Bank, Atlanta, as Trustee
10.1(g) -- Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership
10.2(g) -- First Amendment to Second Amended and Restated Partnership Agreement
10.3(g) -- Second Amendment to Second Amended and Restated Partnership Agreement
10.4(k) -- Third Amendment to Second Amended and Restated Partnership Agreement
10.5(k) -- Fourth Amendment to Second Amended and Restated Partnership Agreement
10.6(e) -- Fifth Amendment to the Second Amended and Restated Partnership Agreement
10.7(h) -- Employee Stock Plan
10.8(g) -- Amendment to Employee Stock Plan
10.9(g) -- Amendment No. 2 to Employee Stock Plan
10.10(g) -- Amendment No. 3 to Employee Stock Plan
10.11(g) -- Amendment No. 4 to Employee Stock Plan
10.12(h) -- Noncompetition Agreement between the Company, the Operating Partnership and John A. Williams
10.13(h) -- Noncompetition Agreement between the Company, the Operating Partnership and John T. Glover
10.14(k) -- Amendment of Noncompetition Agreement between the Company, the Operating Partnership and John A. Williams
dated as of June 1, 1998
10.15(k) -- Amendment of Noncompetition Agreement between the Company, the Operating Partnership and John T.
Glover dated as of June 1, 1998
10.16(k) -- Master Employment Agreement between the Company, the Operating Partnership, Post Services, Inc. and
John A. Williams dated June 1, 1998
10.17(k) -- Master Employment Agreement between the Company, the Operating Partnership, Post Services, Inc. and John
T. Glover dated as of June 1, 1998
10.18(e) -- Option and Transfer Agreement among the Operating Partnership, Post Services, John A. Williams and
John T. Glover
10.19(h) -- Promissory Note made by Post Services, Inc. in favor of RAM Partners, Inc.
10.20(g) -- Form of officers and directors Indemnification Agreement
10.21(a) -- Form of Option Agreement to be entered into between the Operating Partnership and the owners of four
parcels of undeveloped land
10.22(a) -- Profit Sharing Plan of the Company
10.23(g) -- Amendment Number One to Profit Sharing Plan
10.24(g) -- Amendment Number Two to Profit Sharing Plan
</TABLE>
82
<PAGE> 85
<TABLE>
<S> <C> <C>
10.25(g) -- Amendment Number Three to Profit Sharing Plan
10.26(g) -- Amendment Number Four to Profit Sharing Plan
10.27(h) -- Form of General Partner 1% Exchange Agreement
10.28(i) -- Employee Stock Purchase Plan
10.29(g) -- Amendment to Employee Stock Purchase Plan
10.30(i) -- Amended and Restated Dividend Reinvestment and Stock Purchase Plan
10.31(k) -- Second Amended and Restated Credit Agreement dated as of November 20, 1998 among Post Apartment
Homes, L.P., Wachovia Bank of Georgia, N.A., and the banks listed on the signature pages there to (the
"Second Credit Agreement")
10.32(k) -- First Amendment to Second Credit Agreement
10.33 -- Third Amended and Restated Credit Agreement dated as of May 7, 1999 among Post Apartment Homes, L.P.,
Wachovia Bank, N.A., and the banks listed on the signature page thereto (the "Third Credit Agreement").
10.34 -- First Amendment to the Third Credit Agreement.
10.35 -- Deferred Compensation Plan for Directors and Executive Committee Members
21.1 -- List of Subsidiaries
23.1 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-62243)
23.2 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-70689)
23.3 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 33-81772)
23.4 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-39461)
23.5 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-36595)
23.6 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-3 (No. 333-47399)
23.7 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 33-00020)
23.8 -- Consent of PricewaterhouseCoopers LLP for Registration Statement on Form S-8 (No. 333-94121)
27.1 -- Financial Data Schedule for the Company for the year ended December 31, 1999 (for SEC use only)
27.2 -- Financial Data Schedule for the Operating Partnership for the year ended December 31, 1999 (for SEC use
only)
</TABLE>
- ------------------
(a) Filed as an exhibit to the Registration Statement on Form S-11 (SEC File
No. 33-61936), as amended, of the Company.
(b) Filed as an exhibit to the Current Report on Form 8-K, dated as of
October 1, 1996, of the Company.
(c) Filed as an exhibit to the Current Report on Form 8-K, dated as of
October 28, 1997, of the Company.
(d) Filed as an exhibit to the Current Report on Form 8-K, dated as of
February 9, 1998, of the Company.
(e) Filed as an exhibit to the Quarterly Report on Form 10-Q, dated as of
November 15, 1999, of the Company.
(f) Filed as an exhibit to the Registration Statement on Form S-3 (SEC File
No. 333-3555) of the Company.
(g) Filed as an exhibit to the Annual Report on Form 10-K of the Company for
the year ended December 31, 1997.
(h) Filed as an exhibit to the Registration Statement on Form S-11 (SEC File
No. 33-71650), as amended, of the Company.
(i) Filed as an exhibit to the Registration Statement on Form S-8 (SEC File
No. 33-86674) of the Company.
(j) Filed as part of the Registration Statement on Form S-3 (SEC File No.
333-39461) of the Company.
(k) Filed as an exhibit to the Annual Report on Form 10-K of the Company for
the year ended December 31, 1998.
The Company's proxy statement is expected to be filed with the
Commission on or about March 24, 2000.
(b) Reports on Form 8-K
None.
83
<PAGE> 86
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
March 14, 2000 John T. Glover
-----------------------------------------------
John T. Glover, Vice Chairman and Director
(Principal Financial Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
John A. Williams Chairman of the Board, Chief
- ---------------------------- Executive Officer and Director March 14, 2000
John A. Williams
John T. Glover Vice Chairman and Director March 14, 2000
----------------------------
John T. Glover
R. Gregory Fox Executive Vice President, Chief
- ---------------------------- Accounting Officer March 14, 2000
R. Gregory Fox
Arthur M. Blank Director
- ----------------------------
Arthur M. Blank March 14, 2000
Herschel M. Bloom Director
- ----------------------------
Herschel M. Bloom March 14, 2000
Russell R. French Director
- ----------------------------
Russell R. French March 14, 2000
Zell Miller Director
- ----------------------------
Zell Miller March 14, 2000
Charles Rice Director
- ----------------------------
Charles Rice March 14, 2000
J.C. Shaw Director
- ----------------------------
J.C. Shaw March 14, 2000
</TABLE>
84
<PAGE> 87
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 APARTMENT HOMES, L.P.
By: Post G.P. Holdings, Inc., as General Partner
March 14, 2000 By: John T. Glover
-----------------------------------------
John T. Glover, Vice Chairman
Principal Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
John A. Williams Chief Executive Officer March 14, 2000
- ----------------------------
John A. Williams
John T. Glover Vice Chairman March 14, 2000
---------------------------- Principal Financial Officer
John T. Glover
R. Gregory Fox Executive Vice President, Chief
- ---------------------------- Accounting Officer March 14, 2000
R. Gregory Fox
</TABLE>
85
<PAGE> 1
Exhibit 10.33
$350,000,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
May 7, 1999
among
POST APARTMENT HOMES, L.P.
The Banks Listed Herein,
WACHOVIA BANK, N.A.,
as Administrative Agent
and
FIRST UNION NATIONAL BANK,
as Syndication Agent
and
SUNTRUST BANK, ATLANTA
as Documentation Agent
<PAGE> 2
TABLE OF CONTENTS
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I DEFINITIONS.................................................................................1
SECTION 1.01. Definitions.................................................................................1
SECTION 1.02. Accounting Terms and Determinations........................................................19
SECTION 1.03. References.................................................................................20
SECTION 1.04. Use of Defined Terms.......................................................................20
SECTION 1.05. Terminology................................................................................20
ARTICLE II THE CREDITS................................................................................20
SECTION 2.01. Commitments to Lend Loans..................................................................20
SECTION 2.02. Method of Borrowing Loans other than Transaction Rate Loans................................22
SECTION 2.03. Money Market Loans.........................................................................25
SECTION 2.04. Notes......................................................................................29
SECTION 2.05. Maturity of Loans..........................................................................30
SECTION 2.06. Interest Rates.............................................................................31
SECTION 2.07. Fees.......................................................................................34
SECTION 2.08. Optional Termination or Reduction of Commitments...........................................35
SECTION 2.09. Mandatory Termination of Commitments.......................................................35
SECTION 2.10. Optional Prepayments.......................................................................35
SECTION 2.11. Mandatory Prepayments......................................................................36
SECTION 2.12. General Provisions as to Payments..........................................................36
SECTION 2.13. Computation of Interest and Fees...........................................................40
ARTICLE III CONDITIONS TO BORROWINGS...................................................................41
SECTION 3.01. Conditions to First Borrowing..............................................................41
SECTION 3.02. Conditions to All Borrowings...............................................................43
ARTICLE IV REPRESENTATIONS AND WARRANTIES.............................................................43
SECTION 4.01. Partnership or Corporate Existence and Power...............................................44
SECTION 4.02. Partnership or Corporate and Governmental Authorization; No Contravention..................44
SECTION 4.03. Binding Effect.............................................................................44
SECTION 4.04. Financial and Property Information.........................................................45
SECTION 4.05. No Litigation..............................................................................45
SECTION 4.06. Compliance with ERISA......................................................................45
SECTION 4.07. Compliance with Laws; Payment of Taxes.....................................................46
SECTION 4.08. Subsidiaries...............................................................................46
SECTION 4.09. Investment Company Act.....................................................................46
SECTION 4.10. Public Utility Holding Company Act.........................................................46
SECTION 4.11. Ownership of Property......................................................................46
SECTION 4.12. No Default.................................................................................46
SECTION 4.13. Full Disclosure............................................................................47
SECTION 4.14. Environmental Matters......................................................................47
SECTION 4.15. Partner Interests and Capital Stock........................................................48
SECTION 4.16. Margin Stock...............................................................................48
SECTION 4.17. Insolvency.................................................................................48
SECTION 4.18. Insurance..................................................................................48
ARTICLE V COVENANTS..................................................................................49
SECTION 5.01. Information................................................................................49
</TABLE>
(i)
<PAGE> 3
<TABLE>
Page
<S> <C>
SECTION 5.02. Inspection of Property, Books and Records..................................................51
SECTION 5.03. Consolidated Total Secured Debt............................................................52
SECTION 5.04. Ratio of Consolidated Total Debt to Consolidated Total Assets..............................52
SECTION 5.05. Interest Coverage..........................................................................52
SECTION 5.06. Restricted Payments........................................................................52
SECTION 5.07. Loans or Advances..........................................................................52
SECTION 5.08. Purchases of Stock by the Significant Subsidiaries.........................................53
SECTION 5.09. Investments................................................................................53
SECTION 5.10. Dissolution................................................................................54
SECTION 5.11. Consolidations, Mergers and Sales of Assets................................................54
SECTION 5.12. Use of Proceeds............................................................................55
SECTION 5.13. Compliance with Laws; Payment of Taxes.....................................................55
SECTION 5.14. Insurance..................................................................................56
SECTION 5.15. Change in Fiscal Year......................................................................56
SECTION 5.16. Maintenance of Property; Principal Business................................................56
SECTION 5.17. Environmental Notices......................................................................57
SECTION 5.18. Environmental Matters......................................................................57
SECTION 5.19. Environmental Release......................................................................57
SECTION 5.20. Transactions with Affiliates...............................................................57
SECTION 5.21. Qualification as a Real Estate Investment Trust; General Partner...........................57
SECTION 5.22. Certain Covenants Concerning Subsidiaries..................................................58
Section 5.23. Year 2000 Compliance Reports...............................................................58
SECTION 5.24. Consolidated Fixed Charges Coverage Ratio..................................................59
ARTICLE VI DEFAULTS...................................................................................59
SECTION 6.01. Events of Default..........................................................................59
SECTION 6.02. Notice of Default..........................................................................62
ARTICLE VII THE ADMINISTRATIVE AGENT...................................................................63
SECTION 7.01. Appointment; Powers and Immunities.........................................................63
SECTION 7.02. Reliance by Administrative Agent...........................................................64
SECTION 7.03. Defaults...................................................................................64
SECTION 7.04. Rights of Administrative Agent as a Bank...................................................64
SECTION 7.05. Indemnification............................................................................65
SECTION 7.06. Consequential Damages......................................................................65
SECTION 7.07. Payee of Note Treated as Owner.............................................................65
SECTION 7.08. Nonreliance on Administrative Agent and Other Banks........................................66
SECTION 7.09. Failure to Act.............................................................................66
SECTION 7.10. Resignation or Removal of Administrative Agent.............................................66
ARTICLE VIII CHANGE IN CIRCUMSTANCES; COMPENSATION......................................................67
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair...................................67
SECTION 8.02. Illegality.................................................................................67
SECTION 8.03. Increased Cost and Reduced Return..........................................................68
SECTION 8.04. Base Rate Loans or Other Euro-Dollar Loans Substituted for Affected
Euro-Dollar Loans..........................................................................70
SECTION 8.05. Compensation...............................................................................71
ARTICLE IX MISCELLANEOUS..............................................................................72
SECTION 9.01. Notices....................................................................................72
SECTION 9.02. No Waivers.................................................................................72
SECTION 9.03. Expenses; Documentary Taxes................................................................72
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<S> <C>
SECTION 9.04. Indemnification............................................................................73
SECTION 9.05. Setoff; Sharing of Setoffs.................................................................73
SECTION 9.06. Amendments and Waivers.....................................................................74
SECTION 9.07. No Margin Stock Collateral.................................................................76
SECTION 9.08. Successors and Assigns.....................................................................76
SECTION 9.09. Confidentiality............................................................................79
SECTION 9.10. Representation by Banks....................................................................80
SECTION 9.11. Obligations Several........................................................................80
SECTION 9.12. Georgia Law................................................................................81
SECTION 9.13. Severability...............................................................................81
SECTION 9.14. Interest...................................................................................81
SECTION 9.15. Interpretation.............................................................................82
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction..............................................82
SECTION 9.17. Counterparts...............................................................................82
SECTION 9.18. Source of Funds -- ERISA...................................................................82
SECTION 9.19. No Bankruptcy Proceedings..................................................................83
</TABLE>
(iii)
<PAGE> 5
EXHIBIT A-1 Form of Syndicated Loan Note
EXHIBIT A-2 Form of Swing Loan Note
EXHIBIT A-3 Form of Money Market Loan Note
EXHIBIT B Form of Opinion of Counsel for the Borrower and Guarantor
EXHIBIT C Form of Opinion of Special Counsel for the Administrative Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Guaranty
EXHIBIT I Form of Borrowing Base Certificate
EXHIBIT J Form of Money Market Quote Request
EXHIBIT K Form of Money Market Quote
EXHIBIT L Form of Designation Agreement
EXHIBIT M Form of Contribution Agreement
Schedule 4.08 Subsidiaries
(iv)
<PAGE> 6
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of May
7, 1999 among POST APARTMENT HOMES, L.P., the BANKS listed on the signature
pages hereof, FIRST UNION NATIONAL BANK (formerly First Union National Bank of
Georgia), as Syndication Agent, WACHOVIA BANK, N.A. (formerly Wachovia Bank of
Georgia, N.A.), as Administrative Agent and SUNTRUST BANK, ATLANTA, as
Documentation Agent.
This Third Amended and Restated Credit Agreement is an
amendment and restatement of the $180,000,000 Amended and Restated Credit
Agreement by and among the Borrower, Wachovia Bank of Georgia, N.A., First
Union National Bank of Georgia, SunTrust Bank, Atlanta, Corestates Bank, and
Commerzbank AG, Atlanta Agency, as Banks, First Union National Bank of Georgia,
as Co-Agent, and Wachovia Bank of Georgia, N.A., as Administrative Agent, dated
as of April 9, 1997, as amended by First Amendment to Amended and Restated
Credit Agreement dated December 17, 1997, Second Amendment to Amended and
Restated Credit Agreement dated July 31, 1998, as amended and restated by
Second Amended and Restated Credit Agreement by and among the Borrower, Wachovia
Bank, N.A., First Union National Bank, SunTrust Bank, Atlanta, Commerzbank AG,
Atlanta Agency, Four Winds Funding Corporation, Bank One, Texas, N.A., and
Chase Bank of Texas, National Association, as Banks, Wachovia Bank, N.A., as
Administrative Agent, First Union National Bank, as Syndication Agent, and,
SunTrust Bank, Atlanta, as Documentation Agent, dated as of November 20, 1998,
as amended by First Amendment to Second Amended and Restated Credit Agreement
dated February 18, 1999(collectively, the "Original Agreement"), all of which
are superseded hereby.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this
Section 1.01 shall, for all purposes of this Agreement and any amendment hereto
(except as herein otherwise expressly provided or unless the context otherwise
requires), have the meanings set forth herein:
"Affiliate" of any relevant Person means (i) any Person that
directly, or indirectly through one or more intermediaries, controls the
relevant Person (a "Controlling Person"), (ii) any Person (other than the
relevant Person or a Subsidiary of the relevant Person) which is controlled by
or is under common control with a Controlling Person, or (iii) any Person
(other than a Subsidiary of the relevant Person) of which
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the relevant Person owns, directly or indirectly, 20% or more of the voting
common stock, general partnership interest in a general or limited partnership
or equivalent equity interests in any other Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Administrative Agent" means Wachovia Bank, N.A., a national
banking association organized under the laws of the United States of America,
in its capacity as agent for the Banks hereunder, and its successors and
permitted assigns in such capacity.
"Administrative Agent's Letter Agreement" means that certain
letter agreement, dated as of February 7, 1997 between the Borrower and the
Administrative Agent relating to the structure of the Loans, and certain fees
from time to time payable by the Borrower to the Administrative Agent, together
with all amendments and supplements thereto.
"Agreement" means this Third Amended and Restated Credit
Agreement, together with all amendments and supplements hereto.
"Anniversary Date" means April 30, 2000, and each April 30
thereafter.
"Applicable Margin" has the meaning set forth in Section
2.06(a).
"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment and Acceptance" means an Assignment and
Acceptance executed in accordance with Section 9.08(c) in the form attached
hereto as Exhibit D.
"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof
as having a Commitment, and its successors and its assigns permitted hereby;
provided, however, that the term "Bank" shall exclude each Designated Bank when
used in reference to a Syndicated Loan, the Commitments or terms relating to
the Syndicated Loans and the Commitments.
"Base Rate" means for any Base Rate Loan for any day, the
rate per annum equal to the higher as of such day of (i) the Prime Rate, or
(ii) one-half of one percent above the Federal Funds Rate. For purposes of
determining the Base Rate for any
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day, changes in the Prime Rate or the Federal Funds Rate shall be effective on
the date of each such change.
"Base Rate Loan" means a Loan to be made as a Base Rate Loan
pursuant to the applicable Notice of Borrowing, Section 2.02(f), or Article
VIII, as applicable.
"Borrower" means Post Apartment Homes, L.P., a Georgia
limited partnership and its successors and its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of (i)
Syndicated Loans made to the Borrower at the same time by all of the Banks,
(ii) a Swing Loan made to the Borrower by Wachovia or (iii) a Money Market Loan
made to the Borrower separately by one or more Banks, in each case pursuant to
Article II. A Borrowing is a "Euro-Dollar Borrowing" if such Loans are made as
Euro-Dollar Loans. A Borrowing is a "Base Rate Borrowing" if such Loan is made
as a Base Rate Loan. A Borrowing is a "Transaction Rate Borrowing" if such Loan
is made as a Transaction Rate Loan. A Borrowing is a "Syndicated Loan
Borrowing" if such Loans are made as Syndicated Loans. A Borrowing is a "Swing
Loan Borrowing" if such Loans are made as Swing Loans. A Borrowing is a "Money
Market Borrowing" if such Loans are made pursuant to Section 2.03. A Borrowing
is a "Fixed Rate Borrowing" if such Loans are made as Fixed Rate Loans.
"Borrowing Base" means the sum of each of the following, as
determined by reference to the most recent Borrowing Base Certificate furnished
pursuant to Section 3.01(i) or Section 5.01(h), as applicable:
(i) an amount equal to the product of: (x) 7.42857; times (y) the Net
Operating Income for the 12 month period ending on the last day of the month
just ended prior to the date of determination, from each Eligible Property
which is not subject to a Mortgage and which either was on average at least 90%
economically occupied during, or with respect to which the Construction Period
Termination Date occurred prior to the commencement of, such 12 month period;
provided, that if an Eligible Property satisfies the criteria set forth in both
this clause (i) and clause (iii) below, it shall be included in the
calculations only in clause (iii) below; plus
(ii) an amount equal to the product of: (x) 7.42857; times (y) the Net
Operating Income for the 12 month period ending on the last day of the month
just ended prior to the date of determination, from each Eligible Property
which is financed as to Debt only by bonds, debentures, notes or other similar
instruments which have been fully in substance defeased in accordance with
GAAP; plus
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(iii) an amount equal to the product of: (x) 29.71428; times (y) the
Net Operating Income for the 3 month period ending on the last day of the month
just ended prior to the date of determination, from each Eligible Property
which is not subject to a Mortgage and with respect to which the Construction
Period Termination Date did not occur prior to the commencement of the 12 month
period ending on the last day of the month just ended prior to the date of
determination; plus
(iv) an amount equal to the lesser of: (x) 50% of the aggregate amount
of cash expenditures (including indirect costs internally allocated in
accordance with GAAP) as of the last day of the month just ended prior to the
date of determination on all Eligible Properties which are not subject to a
Mortgage and which consist of apartment communities as to which the
Construction Period Termination Date has not occurred as of such last day of
the month just ended; and (y) $75,000,000 less the amount determined pursuant
to clause (v); plus
(v) an amount equal to the lesser of: (x) the sum of (A) 45% of the
aggregate cost of all Eligible Properties which consist of raw land not subject
to a Mortgage, or which consist of land acquired with existing improvements
which are to be substantially demolished and the demolition of such
improvements has commenced, plus (B) with respect to Eligible Properties which
consist of land acquired with existing improvements which are to be
substantially demolished, so long as such Eligible Property was on average at
least 50% economically occupied during the 12 month period ending on the last
day of the month just ended prior to the date of determination and demolition
of such improvements has not commenced, the greater of 45% of the aggregate
cost of such Eligible Property or 5.71429 times the Net Operating Income of
such Eligible Property during such 12 month period; (y) $25,000,000; and (z)
33% of the sum of (A) the amounts determined pursuant to clauses (i) through
(iv), inclusive (but without giving effect to clause (iv)(y)); less
(vi) an amount equal to the greater of: (x) all outstanding Debt of
the Borrower and the Guarantors (other than the Loans and any Debt owing to the
Borrower or the Guarantors) which is not secured by a Lien (excluding Debt
consisting of a Guarantee, where the underlying Debt of the principal obligor
is subject to a Lien on property of the principal obligor); and (y) all
commitments (other than the Commitments) to the Borrower and the Guarantors
then available to be advanced, to fund Debt of the type described in clause
(vi)(x).
"Borrowing Base Certificate" means a certificate
substantially in the form of Exhibit I, duly executed by an Executive Officer,
setting forth in reasonable detail the calculations for each component of the
Borrowing Base.
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"Capital Stock" means any capital stock issued by any Person,
whether common or preferred, excluding Redeemable Preferred Stock.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss. 9601 et. seq. and its
implementing regulations and amendments.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
"Change in Control" shall mean the occurrence of either of
the following: (i) more than 50% of the outstanding voting common stock of PPI
is owned, directly or indirectly, by less than 6 "individuals" (as provided in
Section 542(a)(2) of the Code); or (ii) a majority of the Persons comprising
the Board of Directors of PPI shall during any 12 month period cease to serve
on the Board of Directors of PPI for any reason other than disability or death.
"Change of Law" shall have the meaning set forth in Section
8.02.
"Closing Certificate" has the meaning set forth in Section
3.01(e).
"Closing Date" means May 7, 1999.
"Code" means the Internal Revenue Code of 1986, as amended,
or any successor Federal tax code.
"Commitment" means, with respect to each Bank, (i) the amount
set forth opposite the name of such Bank on the signature pages hereof, and
(ii) as to any Bank which enters into any Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's
Commitment after giving effect to such Assignment and Acceptance, in each case
as such amount may be reduced from time to time pursuant to Sections 2.08 and
2.09.
"Compliance Certificate" has the meaning set forth in Section
5.01(c).
"Consolidated Debt" means at any date the Debt of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
as of such date.
"Consolidated Fixed Charges" for any period means the sum of
the following of the Borrower and its Subsidiaries, determined on a
consolidated basis (x) Consolidated Interest Expense, plus (y) all scheduled
principal payments (excluding balloon payments payable at maturity), plus (z)
the aggregate of all preferred dividends paid.
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"Consolidated Fixed Charges Coverage Ratio" means, at any
date, for the Fiscal Quarter most recently ended and the immediately preceding
3 Fiscal Quarters, the ratio of: (i) Consolidated Income Available for Debt
Service; to (ii) Consolidated Fixed Charges.
"Consolidated Income Available for Debt Service" shall mean,
calculated on a consolidated basis, the sum of the Borrower's and its
Subsidiaries': (i) net income before Minority Interests and extraordinary
items, plus (ii) depreciation and amortization, plus (iii) losses from sales or
joint ventures, plus (iv) increases in deferred taxes and other non-cash items,
minus (v) gains from sales or joint ventures, minus (vi) decreases in deferred
taxes and other non-cash items, plus (vii) interest expense and plus (viii)
taxes (excluding ad valorem taxes).
"Consolidated Income Available for Distribution" means, in
any calendar year, the sum of the following for such calendar year, calculated
on a consolidated basis for the Borrower and its Subsidiaries: (i) Consolidated
Income Available for Debt Service, less (ii) interest expense, and less (iii)
taxes (excluding ad valorem taxes and taxes on gains described in clause (v) of
the definition of Consolidated Income Available for Debt Service).
"Consolidated Interest Expense" for any period means interest
expensed during such period, determined on a consolidated basis for the Borrower
or any of its Subsidiaries.
"Consolidated Subsidiary" means at any date any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of the Borrower in its consolidated financial
statements as of such date.
"Consolidated Total Assets" shall mean (i) all Undepreciated
Real Estate Assets plus (ii) all other tangible assets of the Borrower and its
Subsidiaries.
"Consolidated Total Debt" shall mean the total liabilities of
the Borrower and its Subsidiaries, on a consolidated basis (excluding
liabilities on account of dividends which have been declared but not paid),
plus the aggregate amount of Debt Guaranteed by the Borrower, the Guarantors
and the Subsidiaries (other than of Debt of any of them) at the end of the
Borrower's most recent Fiscal Quarter.
"Consolidated Total Secured Debt" shall mean all Debt of the
Borrower and its Subsidiaries consisting of (i) capitalized leases, and (ii)
money borrowed or the deferred purchase price of real property which is also
secured by a Mortgage on any real property owned by the Borrower or its
Subsidiaries.
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"Construction Period Termination Date" means, with respect to
construction of apartment communities for Eligible Properties, the date which
is 3 months after the issuance of a permanent certificate of occupancy for the
last unit of such apartment community on such Eligible Property.
"Contribution Agreement" means the Contribution Agreement of
even date herewith in substantially the form of Exhibit M to be executed by the
Borrower and the Guarantors.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Debt" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all obligations of such Person as lessee under capital
leases, (v) all obligations of such Person to reimburse any bank or other
Person in respect of amounts payable under a banker's acceptance, (vi) all
Redeemable Preferred Stock of such Person (in the event such Person is a
corporation), (vii) all obligations of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument issued to assure the payment of Debt (but while such reimbursement
obligation remains contingent due to there having been no presenting and
honoring of a draft under any such letter of credit or similar instrument, only
the principal component of the underlying Debt shall be included as Debt under
this clause (vii)), (viii) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, and (ix) all
Debt of others Guaranteed by such Person; provided, however, that the term Debt
shall not include (A) any such obligations to the extent such obligations have
been in substance defeased in accordance with GAAP, or (B) obligations under
Redeemable Preferred Stock to the extent that any sinking fund payments have
been made in connection therewith.
"Debt Rating" means at any time whichever is the higher of
the rating of the Borrower's senior unsecured, unenhanced debt (or, if no such
debt exists, its prospective or implied credit rating for debt of such type) by
Moody's Investor Service or Standard and Poor's (as such rating may change from
time to time, either pursuant to Section 2.06(f) or otherwise) or if only one
of them rates the Borrower's senior unsecured, unenhanced debt (or, if no such
debt exists, has in effect a prospective or implied rating for such debt), such
rating.
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"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day,
the sum of 2% plus the then highest interest rate (including the Applicable
Margin) which may be applicable to any Loans hereunder.
"Designated Bank" means a special purpose corporation
sponsored by its Designating Bank that is identified as such on the signature
pages hereto next to the caption "Designated Bank" as well as each special
purpose corporation sponsored by its Designating Bank that (i) shall have
become a party to this Agreement pursuant to Section 9.08(g), and (ii) is not
otherwise a Bank.
"Designated Bank Note" means a Money Market Loan Note,
evidencing the obligation of the Borrower to repay Money Market Loans made by a
Designated Bank, and "Designated Bank Notes" means any and all such Money
Market Loan Notes to Designated Banks issued hereunder.
"Designating Bank" shall mean each Bank that is identified as
such on the signature pages hereto next to the caption "Designating Bank" and
immediately above the signature of its Designated Bank as well as each Bank
that shall designate a Designated Bank pursuant to Section 9.08(g).
"Designation Agreement" means a designation agreement in
substantially the form of Exhibit L, entered into by a Bank and a Designated
Bank and acknowledged by the Borrower and the Administrative Agent.
"Dollars" or "$" means dollars in lawful currency of the
United States of America.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in Georgia are authorized by law
to close.
"Eligible Properties" means any Property of the Borrower
consisting of real estate as to which the Administrative Agent has received or
reviewed each of the following, each in form and substance satisfactory to the
Administrative Agent, in its reasonable business judgment: (i) an environmental
report; (ii) a boundary survey; and (iii) an owner's title insurance policy,
without a general survey exception, issued by an insurer acceptable to the
Administrative Agent, in its reasonable business judgment; provided, however,
that for each apartment community which was or is being constructed in phases,
the term Eligible Property shall mean each such phase separately, except
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that all phases as to which a period of 12 months after the Construction Period
Termination Date has occurred for each such phase shall be treated as a single
Eligible Property.
"Environmental Authority" means any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits,
orders, approvals, notices, registrations or other legal prerequisites for
conducting the business of the Borrower or any Subsidiary required by any
Environmental Requirement.
"Environmental Judgments and Orders" means all judgments,
decrees or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent, or written agreements with
an Environmental Authority or other entity arising from or in any way
associated with any Environmental Requirement, whether or not incorporated in a
judgment, decree or order.
"Environmental Liabilities" means any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices" means notice from any Environmental
Authority or by any other person or entity, of possible or alleged
noncompliance with or liability under any Environmental Requirement, including
without limitation any complaints, citations, demands or requests from any
Environmental Authority or from any other person or entity for correction of
any violation of any Environmental Requirement or any investigations concerning
any violation of any Environmental Requirement.
"Environmental Proceedings" means any judicial or
administrative proceedings arising from or in any way associated with any
Environmental Requirement.
"Environmental Releases" means releases as defined in CERCLA
or under any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement
relating to health, safety or the environment and applicable to the Borrower,
any Subsidiary or the Properties, including but not limited to any such
requirement under CERCLA or similar state legislation and all federal, state
and local laws, ordinances, regulations, orders, writs, decrees and common law,
including without limitation, the Superfund Amendments and Reauthorization Act,
the Federal Water Pollution Control Act of 1972, the Clean Air Act, the Clean
Water Act, the Resource Conservation and Recovery Act of 1976 (including the
Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste Disposal
Act, the Toxic Substances Control Act, the Federal
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Insecticide, Fungicide and Rodenticide Act, or the Federal Occupational Safety
and Health Act of 1970, each as amended.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Euro-Dollar Business Day" means any Domestic Business Day on
which dealings in Dollar deposits are carried out in the London interbank
market.
"Euro-Dollar Loan" means a Syndicated Loan to be made as a
Euro-Dollar Loan pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" means, for any Bank which is
a member bank of the Federal Reserve System, on any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirement for such Bank in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which includes
deposits by reference to which the interest rate on Euro-Dollar Loans is
determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to United States
residents).
"Event of Default" has the meaning set forth in Section 6.01.
"Executive Officer" means any of the following officers of the
General Partner: the Chairman, the President, the Chief Financial Officer, the
Chief Accounting Officer, the Senior Vice President-Capital Markets and the
Secretary.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Domestic
Business Day next succeeding such day, provided that (i) if the day for which
such rate is to be determined is not a Domestic Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Domestic Business Day as so published on the next succeeding Domestic Business
Day, and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to the Administrative Agent
on such day on such transactions, as determined by the Administrative Agent.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
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"Fiscal Year" means, with reference to PPI, any fiscal year
of PPI, and with reference to the Borrower, any fiscal year of the Borrower.
"Fixed Rate Borrowing" means a Euro-Dollar Borrowing, a
Transaction Rate Borrowing or a Money Market Borrowing, or any or all of them,
as the context requires.
"Fixed Rate Loan" means any Euro-Dollar Loan, Transaction
Rate Loan or Money Market Loan, or any or all of them, as the context shall
require.
"GAAP" means generally accepted accounting principles applied
on a basis consistent with those which, in accordance with Section 1.02, are to
be used in making the calculations for purposes of determining compliance with
the terms of this Agreement.
"GP Sub" means Post GP Holdings, Inc., a Georgia corporation
which is a direct Subsidiary of PPI and the owner of a 1% general partner
interest in the Borrower as of the Closing Date.
"General Partner" means the sole general partner of the
Borrower (which, on the Closing Date, is PPI) or, if there is more than one
such general partner, the managing general partner of the Borrower.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to provide collateral security, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee
of such Debt or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part), provided that
the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guarantors" means, individually and collectively, as the
context shall require: (i) GP Sub, LP Sub and PPI; and (ii) any Significant
Subsidiary which becomes a Guarantor pursuant to Section 5.22(d).
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"Guaranty" means the Guaranty Agreement of even date herewith
in substantially the form of Exhibit "H" to be executed by the Guarantors,
unconditionally guaranteeing payment of the Loans, the Notes and all other
obligations of the Borrower to the Administrative Agent, the Syndication Agent,
the Administrative Agent and the Banks hereunder, including without limitation
all principal, interest, fees, costs, and compensation and indemnification
amounts.
"Hazardous Materials" includes, without limitation, (a) solid
or hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or
in any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof,
or (d) pesticides, as defined in the Federal Insecticide, Fungicide, and
Rodenticide Act of 1975, or in any applicable state or local law or regulation,
as each such Act, statute or regulation may be amended from time to time.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
(a) any Interest Period (subject to paragraph (c) below)
which would otherwise end on a day which is not a Euro-Dollar Business
Day shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month,
in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the appropriate subsequent calendar
month) shall, subject to paragraph (c) below, end on the last
Euro-Dollar Business Day of the appropriate subsequent calendar month;
and
(c) no Interest Period may be selected which begins before
the Termination Date and would otherwise end after the Termination
Date.
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter (or any lesser number of days
ending on the Termination Date); provided that:
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(a) any Interest Period (subject to paragraph (b) below)
which would otherwise end on a day which is not a Domestic Business
Day shall be extended to the next succeeding Domestic Business Day;
and
(b) no Interest Period which begins before the Termination
Date and would otherwise end after the Termination Date may be
selected.
(3) with respect to each Transaction Rate Borrowing, any period up to 14
days mutually agreeable to the Borrower and Wachovia which ends on or
prior to the Termination Date.
(4) with respect to each Money Market Borrowing, the period commencing on the
date of such Borrowing and ending on the Stated Maturity Date or such other
date or dates as may be specified in the applicable Money Market Quote;
provided that:
(a) any Interest Period (subject to clause (b) below) which
would otherwise end on a day which is not a Domestic Business Day
shall be extended to the next succeeding Domestic Business Day; and
(b) no Interest Period may be selected which begins before
the Termination Date and would otherwise end after the Termination
Date.
"Investment" means any investment in any Person, whether by
means of purchase or acquisition of obligations or securities of such Person,
capital contribution to such Person, loan or advance to such Person, making of
a time deposit with such Person, Guarantee or assumption of any obligation of
such Person or otherwise.
"Lending Office" means, as to each Bank, its office located
at its address set forth on the signature pages hereof (or identified on the
signature pages hereof as its Lending Office) or such other office as such Bank
may hereafter designate as its Lending Office by notice to the Borrower and the
Administrative Agent.
"Lien" means, with respect to any asset, any mortgage, deed
to secure debt, deed of trust, lien, pledge, charge, security interest,
security title, or preferential arrangement which has the practical effect of
constituting any of the foregoing in respect of such asset to secure or assure
payment of a Debt or a Guarantee, whether by consensual agreement or by
operation of statute or other law, or by any agreement, contingent or
otherwise, to provide any of the foregoing. For the purposes of this Agreement,
the Borrower or any Subsidiary shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
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"Liquidity Bank" means for any Designated Bank, at any date
of determination, the collective reference to the financial institutions which
at such date are providing liquidity or credit support facilities to or for the
account of such Designated Bank to fund such Designated Bank's obligations
hereunder or to support the securities, if any, issued by such Designated Bank
to fund such obligations.
"Loans" means, as the context shall require, either (i)
Syndicated Loans, which may be either Base Rate Loans or Euro-Dollar Loans made
pursuant to the terms and conditions set forth in Section 2.01(a), (ii) Swing
Loans, which may be either Base Rate Loans or Transaction Rate Loans made
pursuant to the terms and conditions set forth in Section 2.01(b) or (iii)
Money Market Loans made pursuant to the terms and conditions set forth in 2.03.
"Loan Documents" means this Agreement, the Notes, the
Guaranty, any other document evidencing, relating to or securing the Loans, and
any other document or instrument delivered from time to time in connection with
this Agreement, the Notes or the Loans, as such documents and instruments may
be amended or supplemented from time to time.
"London Interbank Offered Rate" has the meaning set forth in
Section 2.06(c).
"LP Sub" means Post LP Holdings, Inc., a Georgia corporation
which is a direct Subsidiary of PPI and the owner (as of the date of the
Closing Date) of limited partnership interests representing approximately 87%
of the partner interests in the Borrower.
"Margin Stock" means "margin stock" as defined in Regulations
T, U or X.
"Material Adverse Effect" means, with respect to any event,
act, condition or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, or governmental investigation or
proceeding), whether singly or in conjunction with any other event or events,
act or acts, condition or conditions, occurrence or occurrences, whether or not
related, a material adverse change in, or a material adverse effect upon, any
of (a) the financial condition, operations, business or properties of PPI, the
Borrower, and the Consolidated Subsidiaries taken as a whole, (b) the rights
and remedies of the Administrative Agent or the Banks under the Loan Documents,
or the ability of the Borrower to perform its obligations under the Loan
Documents to which it is a party, as applicable, or (c) the legality, validity
or enforceability of any Loan Document.
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"Minority Interests" shall mean the minority interests of
unit holders as shown on the then most recently available Form 10-K or 10-Q of
PPI.
"Money Market Borrowing Date" has the meaning specified in
Section 2.03.
"Money Market Loan Notes" means the promissory notes of the
Borrower, substantially in the form of Exhibit A-3, including any Designated
Bank Notes, evidencing the obligation of the Borrower to repay the Money Market
Loans, together with all amendments, consolidations, modifications, renewals
and supplements thereto.
"Money Market Loans" means Loans made pursuant to the terms
and conditions set forth in Section 2.03.
"Money Market Quote" has the meaning specified in Section
2.03.
"Money Market Quote Request" has the meaning specified in
Section 2.03(b).
"Money Market Rate" has the meaning specified in Section 2.03
(c)(ii)(C).
"Mortgage" means a mortgage, deed to secure debt, deed of
trust or similar instrument.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"Net Operating Income" means, for any Eligible Property, the
portion of Consolidated Income Available for Debt Service derived from such
Eligible Property (which calculation excludes intracompany charges for
management services that are eliminated in accordance with GAAP).
"Notes" means the Syndicated Loan Notes, the Swing Loan Note
or Money Market Loan Notes, or any one, or more, or all of them, as the context
shall require.
"Notice of Borrowing" has the meaning set forth in Section
2.02.
"Original Agreement" has the meaning set forth in the preamble
hereto.
"Original Notes" means the Notes executed and delivered
pursuant to the Original Agreement.
"Participant" has the meaning set forth in Section 9.08(b).
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<PAGE> 21
"Partner Interests" means any partner interests in the
Borrower, whether limited or general.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set
forth in Section 2.06(a).
"Person" means an individual, a corporation, a partnership,
an unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or an
agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Code and is either (i) maintained by a
member of the Controlled Group for employees of any member of the Controlled
Group or (ii) maintained pursuant to a collective bargaining agreement or any
other arrangement under which more than one employer makes contributions and to
which a member of the Controlled Group is then making or accruing an obligation
to make contributions or has within the preceding 5 plan years made
contributions.
"PPI" means Post Properties, Inc., a Georgia corporation, and
its successors and assigns.
"Prime Rate" refers to that interest rate so denominated and
set by Wachovia from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia. Wachovia
lends at interest rates above and below the Prime Rate.
"Properties" means all real property owned, leased or
otherwise used or occupied by the Borrower, the Guarantors or any Subsidiary,
wherever located.
"Redeemable Preferred Stock" of any Person means any
preferred stock issued by such Person which is at any time prior to the
Termination Date either (i) mandatorily redeemable (by sinking fund or similar
payments or otherwise) or (ii) redeemable at the option of the holder thereof.
"Refunding Loan" means a new Loan made on the day on which an
outstanding Loan is maturing or a Base Rate Borrowing is being converted to a
Euro-Dollar Borrowing or a Transaction Rate Borrowing, if and to the extent
that the proceeds thereof are used entirely for the purpose of paying such
maturing Loan or Loan being converted, excluding any difference between the
amount of such maturing Loan or Loan being converted and any greater amount
being borrowed on such day and actually either being made
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available to the Borrower pursuant to Section 2.02(c) or remitted to the
Administrative Agent as provided in Section 2.12, in each case as contemplated
in Section 2.02(d).
"Regulation T" means Regulation T of the Board of Governors
of the Federal Reserve System, as in effect from time to time, together with
all official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time, together with
all official rulings and interpretations issued thereunder.
"Regulation X" means Regulation X of the Board of Governors
of the Federal Reserve System, as in effect from time to time, together with
all official rulings and interpretations issued thereunder.
"Required Banks" means at any time Banks having at least 66
2/3% of the aggregate amount of the Commitments or, if the Commitments are no
longer in effect, Banks holding at least 66 2/3% of the aggregate outstanding
principal amount of the sum of the (i) Syndicated Loans and (ii) Money Market
Loans.
"Restricted Payment" means (i) any distribution on any
Partner Interests (other than distributions consisting solely of additional
Partner Interests) or (ii) any payment on account of the purchase, redemption,
retirement or acquisition of (a) any Partner Interests or (b) any option,
warrant or other right to acquire Partner Interests.
"Significant Subsidiary" means any Subsidiary which either
(x) has assets which constitute more than 5% of Consolidated Total Assets at
the end of the most recent Fiscal Quarter, or (y) contributed more than 5% of
Consolidated Income Available for Debt Service during the most recent Fiscal
Quarter and the 3 Fiscal Quarters immediately preceding such Fiscal Quarter
(or, with respect to any Subsidiary which existed during the entire 4 Fiscal
Quarter period but was acquired by the Borrower during such period, which would
have contributed more than 5% of Consolidated Income Available for Debt Service
during such period had it been a Subsidiary for the entire period).
"Stated Maturity Date" means, with respect to any Money
Market Loans, the Stated Maturity Date therefor specified by the Bank in the
applicable Money Market Quote.
"Subsidiary" means (i) any corporation or other entity the
majority of the shares of the non-voting capital stock or other equivalent
ownership interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by the Borrower and/or PPI, and the majority
of the shares of the voting capital stock or other equivalent
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<PAGE> 23
ownership interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by the Borrower, PPI, another Subsidiary,
and/or one or more of John A. Williams and John T. Glover (or, in the event of
death or disability of either of the foregoing individuals, his respective
legal representative(s)), or such individuals' successors in office as an
officer of such Subsidiary or the Secretary of such Subsidiary, and (ii) any
other entity (other than PPI or the Borrower) the accounts of which are
consolidated with the accounts of the Borrower.
"Subsidiary Consolidated Total Assets" means Consolidated
Total Assets, but without including assets of the Borrower or the Guarantors.
"Swing Loan" means a Loan made by Wachovia pursuant to
Section 2.01(b), which must be a Base Rate Loan or a Transaction Rate Loan.
"Swing Loan Note" means the promissory note of the Borrower,
substantially in the form of Exhibit A-2, evidencing the obligation of the
Borrower to repay the Swing Loans, together with all amendments,
consolidations, modifications, renewals, and supplements thereto.
"Syndicated Loan Notes" means the promissory notes of the
Borrower, substantially in the form of Exhibit A-1, evidencing the obligation
of the Borrower to repay Syndicated Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Taxes" has the meaning set forth in Section 2.12(c).
"Termination Date" means whichever is applicable of (i) April
30, 2002, or such later date to which it is extended by the Banks pursuant to
Section 2.05(b) or (ii) any earlier date which constitutes the Termination Date
pursuant to the provisions of and under the circumstances contained in Sections
2.08 or 2.09.
"Third Parties" means all lessees, sublessees, licensees and
other users of the Properties, excluding those users of the Properties in the
ordinary course of the Borrower's business.
"Transaction Rate" has the meaning set forth in Section
2.01(b)(ii).
"Transaction Rate Loan" means a Swing Loan to be made as a
Transaction Rate Loan pursuant to Section 2.01(b).
"Transaction Rate Request" has the meaning set forth in
Section 2.01(b)(ii).
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"Transferee" has the meaning set forth in Section 9.08(d).
"Undepreciated Real Estate Assets" shall mean the cost
(original cost plus capital improvements, if any) of real estate assets of the
Borrower and its Subsidiaries, before depreciation and amortization, in
accordance with GAAP.
"Unfunded Vested Liabilities" means, with respect to any Plan
at any time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the
PBGC or the Plan under Title IV of ERISA.
"Unused Commitment" means at any date, with respect to any
Bank, an amount equal to its Commitment less the aggregate outstanding
principal amount of its Syndicated Loans (but not, with respect to Wachovia,
its Swing Loans, or with respect to any Bank, its Money Market Loans).
"Wachovia" means Wachovia Bank, N.A., a national banking
association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the
shares of the non-voting capital stock or other equivalent ownership interests
of which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Borrower and/or PPI, and all of the shares of the
voting capital stock or other equivalent ownership interests of which are at
the time directly or indirectly owned by the Borrower, PPI, another Wholly
Owned Subsidiary, and/or one or more John A. Williams and John T. Glover (or,
in the event of death or disability of either of the foregoing individuals, his
respective legal representative(s)), or such individuals' successors in office
as an officer of such Subsidiary or the Secretary of such Subsidiary.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all terms of an accounting character used herein
shall be interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent (except for
changes concurred in by PPI's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of PPI or the Borrower and its Consolidated Subsidiaries,
as applicable, delivered to the Banks unless with respect to any such change
concurred in by PPI's independent public accountants or required by GAAP, in
determining compliance with any of the provisions of this Agreement or any of
the other Loan Documents: (i) the Borrower
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<PAGE> 25
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements, or (ii) the Required Banks shall so
object in writing within 30 days after the delivery of such financial
statements, in either of which events such calculations shall be made on a
basis consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which, if
objection is made in respect of the first financial statements delivered under
Section 5.01 hereof, shall mean the financial statements referred to in Section
4.04).
SECTION 1.03. References. Unless otherwise indicated,
references in this Agreement to "Articles", "Exhibits", "Schedules", "Sections"
and other Subdivisions are references to articles, exhibits, schedules,
sections and other subdivisions hereof.
SECTION 1.04. Use of Defined Terms. All terms defined in this
Agreement shall have the same defined meanings when used in any of the other
Loan Documents, unless otherwise defined therein or unless the context shall
require otherwise.
SECTION 1.05. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and the
plural shall include the singular. Titles of Articles and Sections in this
Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend Loans.
(a) Syndicated Loans. Each Bank severally agrees, on the
terms and conditions set forth herein, to make Syndicated Loans to the Borrower
from time to time before the Termination Date; provided that, immediately after
each such Syndicated Loan is made,
(i) the aggregate principal amount of Syndicated Loans by
such Bank shall not exceed the amount of its Commitment, and
(ii) the aggregate outstanding amount of all Syndicated
Loans, Swing Loans and Money Market Loans shall not exceed the lesser
of (A) the aggregate amount of the Commitments and (B) the Borrowing
Base.
Each Syndicated Loan Borrowing under this Section shall be in an aggregate
principal amount of $5,000,000 or any larger multiple
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<PAGE> 26
of $250,000 (except that any such Syndicated Loan Borrowing may be in the
aggregate amount of the Unused Commitments) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, repay or, to the
extent permitted by Section 2.10, prepay Syndicated Loans and reborrow under
this Section at any time before the Termination Date.
(b) Swing Loans. (i) In addition to the foregoing, Wachovia
shall from time to time, upon the request of the Borrower, if the applicable
conditions precedent in Article III have been satisfied, make Swing Loans to
the Borrower in an aggregate principal amount at any time outstanding not
exceeding $5,000,000; provided that, immediately after such Swing Loan is made,
the outstanding amount of the Syndicated Loans, Swing Loans and Money Market
Loans shall not exceed the lesser of (A) the aggregate amount of the Commitments
and (B) the Borrowing Base. Within the foregoing limits, the Borrower may
borrow under this Section 2.01(b), prepay and reborrow under this Section
2.01(b) at any time before the Termination Date. All Swing Loans shall be made
as either Base Rate Loans or, subject to the provisions of clause (ii) below,
Transaction Rate Loans.
(ii) Swing Loans may be Transaction Rate Loans, if the
Administrative Agent shall have determined that such Transaction Rate
Loan, including the principal amount thereof, the Interest Period and
the Transaction Rate applicable thereto, has been expressly agreed to
by the Borrower and Wachovia (such agreement may be obtained by
telephone, confirmed promptly to the Administrative Agent in writing)
pursuant to the following procedures. If the Borrower desires a
Transaction Rate Loan, (a) the Borrower shall provide Wachovia, with a
copy to the Administrative Agent, with notice of a request (a
"Transaction Rate Request") for a quote for a Transaction Rate
Borrowing prior to 1:00 p.m. (Atlanta, Georgia time) on the date
(which shall be a Domestic Business Day) of the proposed Transaction
Rate Borrowing, which Transaction Rate Request shall include the
principal amount and proposed Interest Period of the relevant
Transaction Rate Borrowing, (b) prior to 1:30 p.m. (Atlanta, Georgia
time) on such date, Wachovia shall furnish the Borrower, with a copy
to the Administrative Agent, with its rate quote (a "Transaction Rate
Quote") via facsimile transmission, (c) the Borrower shall immediately
inform Wachovia and the Administrative Agent of its decision as to
whether to request a Transaction Rate Borrowing at the Transaction
Rate specified in such Transaction Rate Quote (a "Transaction Rate")
(which may be done by telephone and promptly confirmed in writing, and
which decision shall be irrevocable), and (d) if the Borrower has so
informed Wachovia and the Administrative Agent that it does desire a
Transaction Rate Borrowing at the Transaction Rate specified in such
Transaction Rate Quote, then by 2:00 p.m. (Atlanta, Georgia time) on
the date
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of such decision, Wachovia shall make such Transaction Rate Borrowing,
with interest accruing thereon at such Transaction Rate, available to
the Administrative Agent in accordance with the procedures set forth
herein. The Administrative Agent shall notify the Banks of any
Transaction Rate Borrowing pursuant hereto.
(iii) At any time on or after the occurrence of an Event of
Default, upon the request of Wachovia, each Bank other than Wachovia
shall, on the third Domestic Business Day after such request is made,
purchase a participating interest in Swing Loans in an amount equal to
its ratable share (based upon its respective Commitment) of such Swing
Loans, and Wachovia shall furnish each Bank with a certificate
evidencing such participating interest. On such third Domestic
Business Day, each Bank will immediately transfer to Wachovia, in
immediately available funds, the amount of its participation.
Whenever, at any time after Wachovia has received from any such Bank
its participating interest in a Swing Loan, the Administrative Agent
receives any payment on account thereof, the Administrative Agent will
distribute to such Bank its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Bank's participating interest was
outstanding and funded); provided, however, that in the event that
such payment received by the Administrative Agent is required to be
returned, such Bank will return to the Administrative Agent any
portion thereof previously distributed by the Administrative Agent to
it. Each Bank's obligation to purchase such participating interests
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation: (1) any set-off,
counterclaim, recoupment, defense or other right which such Bank or
any other Person may have against Wachovia requesting such purchase or
any other Person for any reason whatsoever; (2) the occurrence or
continuance of a Default or an Event of Default or the termination of
the Commitments; (3) any adverse change in the condition (financial or
otherwise) of the Borrower, PPI or any other Person; (4) any breach of
this Agreement by the Borrower or any other Bank; or (5) any other
circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing.
SECTION 2.02. Method of Borrowing Loans other than
Transaction Rate Loans. For all Loans other than Transaction Rate Loans (which
shall be governed by the provisions of Section 2.01(b)(ii)):
(a) The Borrower shall give the Administrative Agent notice
(a "Notice of Borrowing"), which shall be substantially in the form of Exhibit
E, executed by the President of the General Partner or any person authorized in
writing by the
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President of the General Partner, prior to noon (Atlanta, Georgia time) on the
same Domestic Business Day for each Base Rate Borrowing and at least 3
Euro-Dollar Business Days before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to be
Syndicated Dollar Loans or Swing Loans, and whether they are to be
Base Rate Loans or Euro-Dollar Loans;
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period; and
(v) the amount available to be borrowed under Section 2.01.
(b) Upon receipt of a Notice of Borrowing, the
Administrative Agent shall promptly, and not later than 1:00 P.M., (Atlanta,
Georgia time), notify each Bank of the contents thereof and, if it is a
Syndicated Loan Borrowing, of such Bank's ratable share of such Borrowing and
such Notice of Borrowing, once received by the Administrative Agent, shall not
thereafter be revocable by the Borrower.
(c) Not later than 3:00 P.M. (Atlanta, Georgia time) on the
date of each Borrowing, each Bank (or Wachovia, with respect to Swing Loans)
shall (except as provided in paragraph (d) of this Section) make available its
ratable share of such Borrowing, in Federal or other funds immediately
available in Atlanta, Georgia, to the Administrative Agent at its address
determined pursuant to Section 9.01. Unless the Administrative Agent determines
in its reasonable business judgment that any applicable condition specified in
Article III has not been satisfied, the Administrative Agent will make the
funds so received from the Banks available to the Borrower at the
Administrative Agent's aforesaid address. Unless the Administrative Agent
receives notice from a Bank, at the Administrative Agent's address referred to
in or specified pursuant to Section 9.01, no later than 4:00 P.M. (local time
at such address) on the Domestic Business Day before the date of a Borrowing
stating that such Bank will not make a Syndicated Loan in connection with such
Borrowing, the Administrative Agent shall be entitled to assume that such Bank
will make a Syndicated Loan in connection with such Borrowing and, in reliance
on such assumption, the Administrative Agent may (but shall not be obligated
to) make available such Bank's ratable share of such Borrowing to the Borrower
for the account of such Bank. If the Administrative Agent makes such Bank's
ratable share available to
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the Borrower and such Bank does not in fact make its ratable share of such
Borrowing available on such date, the Administrative Agent shall be entitled to
recover such Bank's ratable share from such Bank or the Borrower (and for such
purpose shall be entitled to charge such amount to any account of the Borrower
maintained with the Administrative Agent), together with interest thereon for
each day during the period from the date of such Borrowing until such sum shall
be paid in full at a rate per annum equal to the rate at which the
Administrative Agent determines that it obtained (or could have obtained)
overnight Federal funds to cover such amount for each such day during such
period, provided that (i) any such payment by the Borrower of such Bank's
ratable share and interest thereon shall be without prejudice to any rights
that the Borrower may have against such Bank and (ii) until such Bank has paid
its ratable share of such Borrowing, together with interest pursuant to the
foregoing, it will have no interest in or rights with respect to such Borrowing
for any purpose hereunder. If the Administrative Agent does not exercise its
option to advance funds for the account of such Bank, it shall forthwith notify
the Borrower of such decision.
(d) If any Bank makes a new Syndicated Loan hereunder on a
day on which the Borrower is to repay all or any part of an outstanding
Syndicated Loan from such Bank, such Bank shall apply the proceeds of its new
Syndicated Loan to make such repayment as a Refunding Loan and only an amount
equal to the difference (if any) between the amount being borrowed and the
amount of such Refunding Loan shall be made available by such Bank to the
Administrative Agent as provided in paragraph (c) of this Section, or remitted
by the Borrower to the Administrative Agent as provided in Section 2.12, as the
case may be.
(e) Notwithstanding anything to the contrary contained in
this Agreement, the Borrower shall not be entitled to, and the Administrative
Agent shall not knowingly fund, a Fixed Rate Borrowing if there shall have
occurred a Default or an Event of Default, which Default or Event of Default
shall not have been cured or waived.
(f) In the event that a Notice of Borrowing fails to specify
whether the Loans comprising such Borrowing are to be Base Rate Loans or
Euro-Dollar Loans, such Loans shall be made as Base Rate Loans. If the Borrower
is otherwise entitled under this Agreement to repay any Loans maturing at the
end of an Interest Period applicable thereto with the proceeds of a new
Borrowing, and the Borrower fails to repay such Loans using its own moneys and
fails to give a Notice of Borrowing in connection with such new Borrowing, a
new Borrowing shall be deemed to be made on the date such Loans mature in an
amount equal to the principal amount of the Loans so maturing, and the Loans
comprising such new Borrowing shall be Base Rate Loans.
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(g) Notwithstanding anything to the contrary contained
herein, there shall not be more than 8 Euro-Dollar Loans and Money Market Loans
outstanding at any given time.
SECTION 2.03. Money Market Loans. (a) In addition to
making Syndicated Loan Borrowings, the Borrower may, as set forth in this
Section 2.03, request the Banks to make offers to make Money Market Borrowings
available to the Borrower. The Banks may, but shall have no obligation to, make
such offers and the Borrower may, but shall have no obligation to, accept any
such offers in the manner set forth in this Section 2.03, provided that:
(i) the number of interest rates applicable to Money Market
Loans which may be outstanding at any given time is subject to the
provisions of Section 2.02(g);
(ii) the aggregate outstanding amount of all Syndicated
Loans, Swing Loans and Money Market Loans shall not exceed the lesser
of (A) the aggregate amount of the Commitments and (B) the Borrowing
Base;
(iii) the Money Market Loans of any Bank will be deemed to be
usage of the Commitments for the purpose of calculating availability
pursuant to Section 2.01(a)(ii), 2.01(b)(ii) and 2.03(a)(ii) but will
not reduce such Bank's obligation to lend its pro rata share of the
remaining Unused Commitment; and
(iv) the aggregate principal amount of all Money Market Loans
shall not exceed fifty percent (50%) of the aggregate amount of the
Commitments of all the Banks at such time.
(b) When the Borrower wishes to request offers to make Money
Market Loans, it shall give the Administrative Agent (which shall promptly
notify the Banks) notice substantially in the form of Exhibit J hereto (a
"Money Market Quote Request") so as to be received no later than 10:00 A.M.
(Atlanta, Georgia time) at least 2 Domestic Business Days prior to the date of
the Money Market Borrowing proposed therein (or such other time and date as the
Borrower and the Administrative Agent, with the consent of the Required Banks,
may agree), specifying:
(i) the proposed date of such Money Market Borrowing, which
shall be a Domestic Business Day (the "Money Market Borrowing Date");
(ii) the maturity date (or dates) (each a "Stated Maturity
Date") for repayment of each Money Market Loan to be made as part of
such Money Market Borrowing (which Stated Maturity Date shall be that
date occurring not less than 7 days but not greater than 180 days from
the date of such Money Market Borrowing); provided that the Stated
Maturity
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Date for any Money Market Loan may not extend beyond the Termination
Date (as in effect on the date of such Money Market Quote Request);
and
(iii) the aggregate amount of principal to be received by the
Borrower as a result of such Money Market Borrowing, which shall be at
least $5,000,000 (and in larger integral multiples of $250,000) but
shall not cause the limits specified in Section 2.03(a) to be
violated.
The Borrower may request offers to make Money Market Loans having up to 3
different Stated Maturity Dates in a single Money Market Quote Request;
provided that the request for each separate Stated Maturity Date shall be
deemed to be a separate Money Market Quote Request for a separate Money Market
Borrowing. Except as otherwise provided in the immediately preceding sentence,
after the first Money Market Quote Request has been given hereunder, no Money
Market Quote Request shall be given until at least 5 Domestic Business Days
after all prior Money Market Quote Requests have been fully processed by the
Administrative Agent, the Banks and the Borrower pursuant to this Section 2.03.
(c) (i) Each Bank may, but shall have no obligation to,
submit a response containing an offer to make a Money Market Loan
substantially in the form of Exhibit K hereto (a "Money Market Quote")
in response to any Money Market Quote Request; provided that, if the
Borrower's request under Section 2.03(b) specified more than 1 Stated
Maturity Date, such Bank may, but shall have no obligation to, make a
single submission containing a separate offer for each such Stated
Maturity Date and each such separate offer shall be deemed to be a
separate Money Market Quote. Each Money Market Quote must be submitted
to the Administrative Agent not later than 10:00 A.M. (Atlanta,
Georgia time) on the Money Market Borrowing Date; provided that any
Money Market Quote submitted by Wachovia may be submitted, and may
only be submitted, if Wachovia notifies the Borrower of the terms of
the offer contained therein not later than 9:45 A.M. (Atlanta, Georgia
time) on the Money Market Borrowing Date (or 15 minutes prior to the
time that the other Banks must have submitted their respective Money
Market Quotes). Subject to Section 6.01, any Money Market Quote so
made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(ii) Each Money Market Quote shall specify:
(A) the proposed Money Market Borrowing
Date and the Stated Maturity Date therefor;
(B) the principal amounts of the Money
Market Loan which the quoting Bank is willing to
make for the applicable Money Market Quote, which
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<PAGE> 32
principal amounts (x) may be greater than or less
than the Commitment of the quoting Bank, (y) shall
be at least $5,000,000 or a larger integral multiple
of $250,000, and (z) may not exceed the principal
amount of the Money Market Borrowing for which
offers were requested;
(C) the rate of interest per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%)
offered for each such Money Market Loan (such
amounts being hereinafter referred to as the "Money
Market Rate"); and
(D) the identity of the quoting Bank.
Unless otherwise agreed by the Administrative Agent and the Borrower,
no Money Market Quote shall contain qualifying, conditional or similar
language or propose terms other than or in addition to those set forth
in the applicable Money Market Quote Request (other than setting forth
the maximum principal amounts of the Money Market Loan which the
quoting Bank is willing to make for the applicable Interest Period)
and, in particular, no Money Market Quote may be conditioned upon
acceptance by the Borrower of all (or some specified minimum) of the
principal amount of the Money Market Loan for which such Money Market
Quote is being made.
(d) The Administrative Agent shall as promptly as
practicable after the Money Market Quote is submitted (but in any event not
later than 10:30 A.M. (Atlanta, Georgia time)) on the Money Market Borrowing
Date, notify the Borrower of the terms (i) of any Money Market Quote submitted
by a Bank that is in accordance with Section 2.03(c) and (ii) of any Money
Market Quote that amends, modifies or is otherwise inconsistent with a previous
Money Market Quote submitted by such Bank with respect to the same Money Market
Quote Request. Any such subsequent Money Market Quote shall be disregarded by
the Administrative Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money Market Quote. The
Administrative Agent's notice to the Borrower shall specify (A) the principal
amounts of the Money Market Borrowing for which offers have been received and
(B) the respective principal amounts and Money Market Rates so offered by each
Bank (identifying the Bank that made each Money Market Quote).
(e) Not later than 11:00 A.M. (Atlanta, Georgia time) on the
Money Market Borrowing Date, the Borrower shall notify the Administrative Agent
of its acceptance or nonacceptance of the offers so notified to it pursuant to
Section 2.03(d) and the Administrative Agent shall promptly (but in no event
later than 11:30 A.M. on the Money Market Borrowing Date) notify each affected
Bank. In the case of acceptance, such notice shall specify the aggregate
principal amount of offers (for each Stated
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<PAGE> 33
Maturity Date) that are accepted. The Borrower may accept any Money Market
Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market
Borrowing may not exceed the applicable amount set forth in the
related Money Market Quote Request;
(ii) the aggregate principal amount of each Money Market Loan
comprising a Money Market Borrowing shall be at least $5,000,000 (and
in larger multiples of $250,000) but shall not cause the limits
specified in Section 2.03(a) to be violated;
(iii) acceptance of offers may only be made in ascending
order of Money Market Rates; and
(iv) the Borrower may not accept any offer where the
Administrative Agent has advised the Borrower that such offer fails to
comply with Section 2.03(c)(ii) or otherwise fails to comply with the
requirements of this Agreement (including without limitation, Section
2.03(a)).
If offers are made by 2 or more Banks with the same Money Market Rates for a
greater aggregate principal amount than the amount in respect of which offers
are accepted for the related Stated Maturity Date, the principal amount of
Money Market Loans in respect of which such offers are accepted shall be
allocated by the Borrower among such Banks as nearly as possible in proportion
to the aggregate principal amount of such offers. Determinations by the
Borrower of the amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
(f) any Bank whose offer to make any Money Market Loan has
been accepted shall, not later than 3:00 P.M. (Atlanta, Georgia time) on the
Money Market Borrowing Date, make the appropriate amount of such Money Market
Loan available to the Administrative Agent at its address referred to in
Section 9.01 in immediately available funds. The amount so received by the
Administrative Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower on such date by depositing the
same, in immediately available funds, not later than 4:00 P.M. (Atlanta,
Georgia time), in an account of such Borrower maintained with the
Administrative Agent.
(g) Money Market Loans by Designated Banks. For any Bank
which is a Designating Bank, any Money Market Loan to be made by such Bank may
from time to time be made by its Designated Bank in such Designated Bank's sole
discretion, and nothing herein shall constitute a commitment to make Money
Market Loans by such Designated Bank; provided that if any Designated Bank
elects not to, or fails to, make any such Money Market Loan pursuant to a Money
Market Quote that has been accepted by the Borrower in accordance with the
foregoing, its Designating Bank hereby agrees that it shall make such Money
Market Loan pursuant
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<PAGE> 34
to the terms hereof on the date such Money Market Loan is otherwise required to
be made to the Borrower hereunder.
SECTION 2.04. Notes. (a) The Syndicated Loans of each Bank
shall be evidenced by a single Syndicated Loan Note payable to the order of
such Bank for the account of its Lending Office in an amount equal to the
original principal amount of such Bank's Commitment. The Swing Loans shall be
evidenced by a single Swing Loan Note payable to the order of Wachovia in the
original principal amount of $5,000,000. Loans outstanding under the Original
Agreement on the Closing Date shall be deemed to have been made hereunder and
shall be evidenced by the Notes.
(b) The Money Market Loans made by any Bank to the Borrower
shall be evidenced by a single Money Market Loan Note payable to the order of
such Bank for the account of its Lending Office in an amount equal to 50% of
the original principal amount of the aggregate Commitments.
(c) Upon receipt of each Bank's Syndicated Loan Notes,
Wachovia's Swing Loan Note and each Bank's Money Market Loan Notes pursuant to
Section 3.01, the Administrative Agent shall deliver such Syndicated Loan Notes
to such Bank, the Swing Loan Note to Wachovia and such Money Market Loan Notes
to such Bank. Each Bank, as to the Syndicated Loans or the Money Market Loans
(or Wachovia, as to the Swing Loans), shall record, and prior to any transfer
of its Syndicated Loan Notes or Money Market Loan Notes (or Swing Loan Note)
shall endorse on the schedules forming a part thereof appropriate notations to
evidence, the date, amount and maturity of, and effective interest rate for,
each Syndicated Loan or Money Market Loan (or Swing Loan) made by it, the date
and amount of each payment of principal made by the Borrower with respect
thereto, and such schedules of each such Bank's Syndicated Loan Notes or Money
Market Loan Notes (or Wachovia's Swing Loan Note) shall constitute rebuttable
presumptive evidence of the respective principal amounts owing and unpaid on
such Bank's Syndicated Loan Notes or Money Market Loan Notes (or Wachovia's
Swing Loan Note); provided that the failure of any Bank (or Wachovia) to make
any such recordation or endorsement shall not affect the obligation of the
Borrower hereunder or under the Syndicated Loan Notes or the Money Market Loan
Notes (or Swing Loan Note) or the ability of any Bank to assign its Syndicated
Loan Notes or Money Market Loan Notes or Wachovia to assign its Swing Loan
Note. Each Bank (and Wachovia, with respect to the Swing Loan) is hereby
irrevocably authorized by the Borrower so to endorse its Syndicated Loan Notes
or Money Market Loan Notes (or Swing Loan Note) and to attach to and make a
part of any Syndicated Loan Note or Money Market Loan Note (or Swing Loan Note)
a continuation of any such schedule as and when required.
SECTION 2.05. Maturity of Loans. (a) Each Loan included
in any Borrowing shall mature, and the principal amount
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<PAGE> 35
thereof shall be due and payable, on the last day of the Interest Period
applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding principal
amount of the Loans, if any, together with all accrued but unpaid interest
thereon, if any, shall be due and payable on April 30, 2002, unless the
Termination Date is otherwise extended by the Banks, in their sole and absolute
discretion. Upon the written request of the Borrower, which request shall be
delivered to the Administrative Agent at least 60 days prior to April 30, 2000
(the "Extension Date"), the Banks shall have the option (without any obligation
whatsoever so to do) of extending the Termination Date for an additional
one-year period. In the event that a Bank chooses not to extend the Termination
Date for such an additional one-year period, notice shall be given by such Bank
to the Borrower and the Administrative Agent at least 30 days prior to the
Extension Date; provided, that the Termination Date shall not be extended with
respect to any of the Banks unless the Required Banks are willing to extend the
Termination Date. If less than all the Banks deliver favorable extension
notices, but at least the Required Banks do so, then:
(1) The Administrative Agent shall promptly notify those Banks
that have delivered favorable extension notices (each an
"Extending Bank") as to the amount of Commitments held by
those Banks that have elected not to extend the Termination
Date (each a "Terminating Bank"). Each Extending Bank shall
be entitled to commit, effective as of the Extension Date, to
purchase from the Terminating Banks, at any time after the
Extension Date and on or before the Termination Date (prior
to its extension hereunder), a ratable portion of the
Commitments and outstanding Loans of the Terminating Banks in
accordance with the Extending Bank's respective percentage of
the remaining Aggregate Commitments. In such event, the
Terminating Banks shall be required to sell to such Extending
Bank all or any portion of their respective Commitments and
outstanding Loans, at the times specified by the Extending
Banks after the Extension Date and on or prior to the
Termination Date (prior to its extension hereunder). Each
Extending Bank desiring to purchase a portion of such
Commitments and outstanding Loans shall notify the
Administrative Agent and the Borrower of such election and
shall deliver, in form satisfactory to the Administrative
Agent and the Borrower, a commitment to effect such purchase,
not later than fifteen (15) days prior to the Extension Date.
If any of the Extending Banks elect not to commit to make
such a purchase, the Administrative Agent shall again notify
the other Extending Banks as to the amount of Commitments
available to be purchased by them in the same manner as set
forth in this paragraph, with any commitment with respect to
such purchase to be
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<PAGE> 36
delivered to the Administrative Agent and the Borrower prior
to the Extension Date.
(2) If on the Extension Date, commitments to purchase all
Commitments and outstanding Loans of the Terminating Banks
pursuant to paragraph (1) above have not been delivered to
the Administrative Agent and the Borrower, the Borrower shall
be entitled to designate another bank or banks, acceptable to
the Administrative Agent, to purchase any remaining
Commitments and outstanding Loans from any Terminating Bank
at any time after the Extension Date and on or prior to the
Termination Date (prior to its extension hereunder). In such
event, the Terminating Bank shall be required to sell to such
designated bank or banks all or any portion of its Commitment
and outstanding Loans, at the time specified by the Borrower
after the Extension Date and on or prior to the Termination
Date (prior to its extension hereunder).
(3) If 30 days prior to the Termination Date (prior to its
extension hereunder) any Terminating Banks hold Commitments
that are not subject to purchase commitments from Extending
Banks or banks designated by the Borrower pursuant to
paragraph (2) above, then the Administrative Agent shall
again notify the Extending Banks of the Commitments available
to be purchased, and the Extending Banks shall be entitled to
purchase such Commitments in accordance with the procedure
set forth in paragraph (1) above.
(4) If on the Termination Date (prior to its extension hereunder)
any Commitments of any Terminating Banks are not purchased as
set forth above, the Aggregate Commitments under the Facility
shall be reduced by the aggregate amount of such Commitments
of such Terminating Banks, and the Loans of such Terminating
Banks shall be paid in full.
On each Extension Date on which the Termination Date is extended pursuant to
the foregoing, the Borrower shall pay the extension fee as required by Section
2.07(a).
SECTION 2.06. Interest Rates. (a) "Applicable Margin"
means:
(i) until the first Performance Pricing Determination Date,
(x) for any Base Rate Loan, 0.25%, (y) for each Euro-Dollar Loan,
0.825%; provided, however, that Euro-Dollar Loans made under the
Original Agreement which are outstanding on the Closing Date shall be
adjusted to reflect the provisions of this Section 2.06 for the
remainder of their respective Interest Periods; and
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<PAGE> 37
(ii) subject to the proviso at the end of Section 2.06(a)
(i), from and after the first Performance Pricing Determination Date,
(x) for any Base Rate Loan, 0.25%, and (y) for each Euro-Dollar Loan,
the percentage determined on each Performance Pricing Determination
Date by reference to the table set forth below as to such type of Loan
and the Debt Rating in effect on the last day of the quarterly or
annual period ending immediately prior to such Performance Pricing
Determination Date; provided, that if there is no Debt Rating, the
Applicable Margin for Euro-Dollar Loans shall be based upon Level V of
the table below.
<TABLE>
<CAPTION>
-------------------------------------------------------------
Level Level Level Level Level
I II III IV V
=============================================================
<S> <C> <C> <C> <C> <C>
Debt Rating Above BBB+/ BBB/ BBB-/ Below
BBB+/ Baa1 Baa2 Baa3 BBB-/
Baa1 Baa3
------------------------------------------------------------
Applicable Margin 0.675% 0.825% .95% 1.10% 1.30%
------------------------------------------------------------
</TABLE>
In determining the amounts to be paid by the Borrower
pursuant to Sections 2.06(a), the Borrower and the Banks shall refer
to PPI's Debt Rating from time to time. For purposes hereof,
"Performance Pricing Determination Date" shall mean each date on which
the Debt Rating changes. Each change in interest and fees as a result
of a change in Debt Rating shall be effective only for Loans
(including Refunding Loans) which are made on or after the relevant
Performance Pricing Determination Date. All determinations hereunder
shall be made by the Administrative Agent unless the Required Banks
shall object to any such determination. The Borrower shall promptly
notify the Administrative Agent of any change in the Debt Rating.
(b) Each Base Rate Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Loan is
made until it becomes due, at a rate per annum equal to the Base Rate for such
day less the Applicable Margin. Such interest shall be payable for each
Interest Period on the last day thereof. Any overdue principal of and, to the
extent permitted by applicable law, overdue interest on any Base Rate Loan
shall bear interest, payable on demand, for each day until paid at a rate per
annum equal to the Default Rate.
(c) Subject to the proviso at the end of Section 2.06(a)
(i), each Euro Dollar Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period
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<PAGE> 38
applicable thereto, at a rate per annum equal to the sum of the Applicable
Margin plus the applicable London Interbank Offered Rate for such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than 1 month, at intervals of 1
month after the first day thereof. Any overdue principal of and, to the extent
permitted by law, overdue interest on any Euro Dollar Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
Default Rate.
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar Loan, the
rate per annum determined on the basis of the offered rate for deposits in
Dollars of amounts equal or comparable to the principal amount of such
Euro-Dollar Loan offered for a term comparable to such Interest Period, which
rates appear on the Reuters Screen LIBO Page as of 11:00 A.M., London time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period,
provided that (i) if more than one such offered rate appears on the Reuters
Screen LIBO Page, the "London Interbank Offered Rate" will be the arithmetic
average (rounded upward, if necessary, to the next higher 1/100th of 1%) of
such offered rates; (ii) if no such offered rates appear on such page, the
"London Interbank Offered Rate" for such Interest Period will be the arithmetic
average (rounded upward, if necessary, to the next higher 1/100th of 1%) of
rates quoted by not less than 2 major banks in New York City, selected by the
Administrative Agent, at approximately 10:00 A.M., New York City time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period, for
deposits in Dollars offered to leading European banks for a period comparable
to such Interest Period in an amount comparable to the principal amount of such
Euro-Dollar Loan.
(d) Each Money Market Loan shall bear interest on the
outstanding principal amount thereof, for each day from the date such Money
Market Loan is made until it becomes due, at a rate per annum equal to the
applicable Money Market Rate set forth in the relevant Money Market Quote. Such
interest shall be payable on the Stated Maturity Date thereof, and, if the
Stated Maturity Date occurs more than 90 days after the date of the relevant
Money Market Loan, at intervals of 90 days after the first day thereof. Any
overdue principal of and, to the extent permitted by law, overdue interest on
any Money Market Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the Default Rate.
(e) The Administrative Agent shall determine each interest
rate applicable to the Loans hereunder. The Administrative Agent shall give
prompt notice to the Borrower and the Banks by telecopier of each rate of
interest so determined, and its determination thereof shall be conclusive in
the absence of manifest error.
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<PAGE> 39
(f) After the occurrence and during the continuance of an
Event of Default, the principal amount of the Loans (and, to the extent
permitted by applicable law, all accrued interest thereon) may, at the election
of the Required Banks, bear interest at the Default Rate.
SECTION 2.07. Fees.
(a) If the Termination Date is extended pursuant to Section
2.05(b), on each Extension Date on which the Termination Date is extended, the
Borrower shall pay to the Administrative Agent, for the ratable account of each
Bank which is an Extending Bank pursuant to such Section, a fully earned and
non-refundable extension fee in the amount of 0.10% of the aggregate amount of
the Commitments so extended (after giving effect to the amount of any
Commitment which each such Extending Bank has committed to purchase pursuant to
such Section).
(b) The Borrower shall pay to the Administrative Agent for
the ratable account of each Bank a facility fee (the "Facility Fee") on the
maximum amount of the aggregate Commitments in effect for any relevant period,
irrespective of usage, calculated in the manner provided in Section
2.06(a)(ii), at a rate per annum equal to (i) for the period commencing on the
Closing Date to and including the first Performance Pricing Determination Date,
0.125%; and (ii) from and after the first Performance Pricing Determination
Date, the percentage determined on each Performance Pricing Determination Date
by reference to the table set forth below and the Debt Rating for the quarterly
or annual period ending immediately prior to such Performance Pricing
Determination Date; provided, that if there is no Debt Rating, the Facility Fee
shall be based upon Level V of the table below. The Facility Fee shall accrue
at all times from and including the Closing Date to but excluding the
Termination Date and shall be payable, in arrears, on each March 31, June 30,
September 30 and December 31 and on the Termination Date.
<TABLE>
<CAPTION>
-------------------------------------------------------------
Level Level Level Level Level
I II III IV V
=============================================================
<S> <C> <C> <C> <C> <C>
Debt Rating Above BBB+ BBB BBB- Below
BBB+ BBB-
-------------------------------------------------------------
Facility Fee 0.125% 0.125% 0.15% 0.15% 0.15%
-------------------------------------------------------------
</TABLE>
(c) The Borrower shall pay to the Administrative Agent, for
the account and sole benefit of the Administrative Agent, such fees and other
amounts at such times as set forth in the Administrative Agent's Letter
Agreement.
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<PAGE> 40
SECTION 2.08. Optional Termination or Reduction of Commitments. The
Borrower may, upon at least 3 Domestic Business Days' notice to the
Administrative Agent, terminate at any time, or proportionately reduce the
Unused Commitments from time to time by an aggregate amount of at least
$5,000,000 or any larger multiple of $1,000,000. If the Commitments are
terminated in their entirety, the date of such termination shall be the
Termination Date for all purposes hereunder, and all Loans then outstanding,
together with accrued interest thereon and any amounts payable pursuant to
Section 8.05(a) in connection therewith, and all fees payable on the
Termination Date, shall be due and payable on such date.
SECTION 2.09. Mandatory Termination of Commitments. The Commitments shall
terminate on the Termination Date and any Loans then outstanding, together with
accrued interest thereon and any amounts payable pursuant to Section 8.05(a) in
connection therewith, and all fees payable on the Termination Date, shall be
due and payable on such date. In the event of a Change in Control, the
Administrative Agent (acting at the direction of the Required Banks) may
terminate the Commitments on a date specified in a notice to the Borrower,
which date (i) must be at least 3 Domestic Business Days following the date of
such notice, and (ii) shall constitute the Termination Date for all purposes
hereunder.
SECTION 2.10. Optional Prepayments. (a) The Borrower may, upon at least 1
Domestic Business Days' notice (or same Domestic Business Days' notice as to
Swing Loans) to the Administrative Agent, prepay any Base Rate Borrowing in
whole at any time, or from time to time in part in amounts aggregating at least
$5,000,000 or any larger multiple of $250,000 for Syndicated Borrowings (with
no minimum payment as to Swing Loan Borrowings), by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Base Rate
Loans of the several Banks (or of Wachovia, as to Swing Loans) included in such
Base Rate Borrowing.
(b) Subject to the provisions of Section 8.05(a) with respect to any
prepayment not made on the last day of the relevant Interest Period, the
Borrower may, upon at least 2 Euro-Dollar Business Days' notice (or same
Domestic Business Days' notice as to Swing Loans) to the Administrative Agent,
prepay any Fixed Rate Borrowing in whole at any time, or from time to time in
part in amounts aggregating at least $5,000,000 or any larger multiple of
$250,000 as to Syndicated Borrowings and Money Market Borrowings (with no
minimum payment as to Swing Loan Borrowings), by paying the principal amount to
be prepaid together with accrued interest thereon to the date of prepayment,
together with any amount required to be paid pursuant to Section 8.05(a). Each
such optional prepayment shall be applied to prepay ratably the Fixed Rate
Loans of the several Banks (or of Wachovia, as to Swing Loans) included in such
Fixed Rate Borrowing.
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<PAGE> 41
(c) Upon receipt of a notice of prepayment pursuant to this Section 2.10,
the Administrative Agent shall promptly notify each Bank of the contents
thereof and of such Bank's ratable share of such prepayment and such notice,
once received by the Administrative Agent, shall not thereafter be revocable by
the Borrower.
SECTION 2.11. Mandatory Prepayments. (a) On each date on which the
Commitments are reduced pursuant to Section 2.08, the Borrower shall repay or
prepay such principal amount of the outstanding Loans, if any (together with
interest accrued thereon and any amount required to be paid pursuant to Section
8.05(a)), as may be necessary so that after such payment the aggregate unpaid
principal amount of the Loans does not exceed the aggregate amount of the
Commitments as then reduced. On the Termination Date, the Borrower shall make
the payments required to be made pursuant to Section 2.09.
(b) On each date on which the aggregate principal amount of the Loans
outstanding exceeds the Borrowing Base on such date, the Borrower shall repay
or prepay such principal amount of the outstanding Loans (together with
interest thereon) as may be necessary so that after such payment the aggregate
unpaid principal amount of the Loans does not exceed the Borrowing Base on such
date.
(c) Each such payment or prepayment shall be applied to the Swing Loans or
ratably to the Loans of the Banks outstanding on the date of payment or
prepayment in the following order of priority: (i) first, to Swing Loans which
are Base Rate Loans; (ii) secondly, to Transaction Rate Loans; (iii) thirdly,
to Syndicated Loans which are Base Rate Loans; (iv) fourthly, to Euro-Dollar
Loans; and (v) lastly, to Money Market Loans.
SECTION 2.12. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Syndicated Loans, Money
Market Loans and Swing Loans and of fees hereunder, not later than noon
(Atlanta, Georgia time) on the date when due, in Federal or other funds
immediately available in Atlanta, Georgia, to the Administrative Agent at its
address referred to in Section 9.01. The Administrative Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Administrative Agent for the account of the Banks, and to Wachovia such payment
received by the Administrative Agent on account of the Swing Loans. If the
Administrative Agent fails to distribute to any Bank its ratable share of any
such payment (i) on the day received, if received not later than 1:00 p.m.
(Atlanta, Georgia time) or (ii) on the next Domestic Business Day, if received
after 1:00 p.m. (Atlanta, Georgia time) on such day, then such Bank shall be
entitled to recover such Bank's ratable share of such payment from the
Administrative Agent, together with interest thereon for each day during the
period from the date
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<PAGE> 42
such Bank's ratable share of such payment shall have become due until such
distribution shall be made, at a rate per annum equal to the rate at which the
Administrative Agent determines that it obtained (or could have obtained)
overnight federal funds in such amount for each such day during such period.
(b) Whenever any payment of principal of, or interest on, the Base Rate
Loans, Transaction Rate Loans or the Money Market Loans or of fees hereunder
shall be due on a day which is not a Domestic Business Day, the date for
payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of or interest on, the Euro-Dollar Loans
shall be due on a day which is not a Euro-Dollar Business Day, the date for
payment thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar month, in
which case the date for payment thereof shall be the next preceding Euro-Dollar
Business Day.
(c) All payments of principal, interest and fees and all other amounts to
be made by the Borrower pursuant to this Agreement with respect to any Loan or
fee relating thereto shall be paid without deduction for, and free from, any
taxes, imposts, levies, deductions, or withholdings now or hereafter imposed by
any governmental authority or by any taxing authority thereof or therein,
excluding in the case of each Bank, (1) any taxes imposed by the United States
or any political subdivision thereof on the effectively connected net income of
any Bank or any Bank's Lending Office or any franchise taxes imposed by such
jurisdiction, (2) taxes imposed on the net income of, or franchise taxes
imposed upon, any Bank by the jurisdiction under the laws of which such Bank is
organized or by any political subdivision thereof, (3) taxes imposed on the net
income of such Bank's Lending Office, and franchise taxes imposed on it, by the
jurisdiction of such Bank's Lending Office, or any political subdivision
thereof, (4) any taxes imposed on any Bank by Section 884(a) of the Internal
Revenue Code of 1986, as amended (and any successor statute to Section 884(a)),
and (5) any United States withholding tax payable with respect to any payments
to such Bank under the laws (including, without limitation, any treaty, ruling,
judicial or administrative determination or regulation) in effect on the
"Initial Date" (as hereinafter defined) or as a result of the Bank having
voluntarily changed the jurisdiction of its Lending Office from a jurisdiction
in which payments made to such Bank are exempt from United States withholding
tax to a jurisdiction in which such payments are not so exempt, but not
excluding any United States withholding tax payable or increased as a result of
any change in any law, treaty, ruling, judicial or administrative determination
or regulation, or interpretation thereof occurring after the Initial Date (all
such non-excluded taxes, levies, imposts, deductions, and withholdings
hereinafter referred to as "Taxes"). For purposes hereof, the term "Initial
Date" shall mean, in the case of each Bank party hereto on the date hereof, the
Closing Date, and in the case of
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each other Bank, the effective date of the Assignment and Acceptance pursuant
to which it became a Bank hereunder.
In the event that the Borrower is required by applicable law to make any
such withholding or deduction of Taxes with respect to any Loan or fee or other
amount, the Borrower shall pay such deduction or withholding to the applicable
taxing authority, shall promptly furnish to any Bank in respect of which such
deduction or withholding is made all receipts and other documents evidencing
such payment, and shall pay to such Bank additional amounts as may be necessary
in order that the amount received by such Bank after the required withholding
or other payment shall equal the amount such Bank would have received had no
such withholding or other payment been made. If no withholding or deduction of
Taxes are payable in respect to any Loan or fee relating thereto, the Borrower
shall furnish any Bank, at such Bank's written request, a certificate from each
applicable taxing authority or an opinion of counsel reasonably acceptable to
such Bank, in either case stating that such payments are exempt from or not
subject to withholding or deduction of Taxes. If the Borrower fails to provide
such original or certified copy of a receipt evidencing payment of Taxes or
certificate(s) or opinion of counsel described in the preceding sentence, the
Borrower hereby agrees to compensate such Bank for, and indemnify it with
respect to, the tax consequences of the Borrower's failure to provide evidence
of tax payments or tax exemption; provided, however, that the Borrower shall
not be obligated to indemnify any party for penalties, additions to tax,
interest or expenses associated with the payment of Taxes if the Bank's
liability for such Taxes has arisen as a result of the fault of such Bank; and
provided, further, that the Borrower shall not be obligated to indemnify any
Bank for Taxes, penalties, additions to tax, interest or expenses incurred as a
result of such Bank having voluntarily changed its Lending Office from a
jurisdiction in which payments made to such Bank are exempt from United States
withholding tax to a jurisdiction in which such payments are not so exempt.
Such compensation or indemnification payment shall be made within 30 days from
the date such Bank makes written request therefor. Any such request shall be
made within 90 days after the date on which such payment of Taxes was made.
Each such request shall be accompanied by a copy of the statement from the
taxing authority demanding payment by such Bank of such Taxes or by a
certificate from such Bank which certificate shall set forth in reasonable
detail the basis for any additional amount payable to such party under this
Section 2.12 (together with reasonable evidence of payment of such Taxes).
Any Bank entitled to claim any additional amounts payable pursuant to this
Section 2.12 shall use its best efforts (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction of its
Lending Office if the making of such change would avoid the need for, or reduce
the amount of, any such additional amounts which may thereafter
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accrue and the making of such a change would not, in the reasonable judgment of
such Bank, be otherwise materially disadvantageous to such Bank.
Each Bank which is not organized under the laws of the United States or
any state thereof agrees, as soon as practicable after receipt by it of a
request by the Borrower to do so, to file all appropriate forms and take other
appropriate action to obtain a certificate or other appropriate document from
the appropriate governmental authority in the jurisdiction imposing the
relevant Taxes, establishing that it is entitled to receive payments of
principal and interest under this Agreement and the Notes without deduction and
free from withholding of any Taxes imposed by such jurisdiction; provided, that
if it is unable, for any reason, to establish such exemption, or to file such
forms and, in any event, during such period of time as such request for
exemption is pending, the Borrower shall nonetheless remain obligated under the
terms of the immediately preceding paragraph.
In the event any Bank receives a refund of any Taxes paid by the Borrower
pursuant to this Section 2.12(c), it will pay to the Borrower the amount of
such refund promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower and the Banks
contained in this Section 2.12(c) shall be applicable with respect to any
Transferee, subject to Section 9.08(e) as to any Participant, and any
calculations required by such provisions (i) shall be made based upon the
circumstances of such Transferee, and (ii) constitute a continuing agreement
and shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
SECTION 2.13. Computation of Interest and Fees. Interest on Base Rate
Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on Euro-Dollar Loans and Money Market Loans shall be computed on
the basis of a year of 360 days and paid for the actual number of days elapsed,
calculated as to each Interest Period from and including the first day thereof
to but excluding the last day thereof. Commitment fees and any other fees
payable hereunder shall be computed on the basis of a year of 365 days and paid
for the actual number of days elapsed (including the first day but excluding
the last day).
SECTION 2.14 Changes to Commitments. So long as the Borrower has not
reduced the Commitments, the Borrower may request that the Commitments be
increased to $350,000,000 (the "Maximum Commitment"). If the Borrower requests
that the total
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Commitments from the Banks then parties to this Agreement be increased, the
Administrative Agent shall promptly give notice of such request (the
"Commitment Increase Notice") to each Bank. Within five Business Days of its
receipt of a Commitment Increase Notice from the Administrative Agent, each
Bank that desires to increase its Commitment in response to such request (each
such Bank, a "Consenting Bank") shall deliver notice to the Administrative
Agent of its election to increase its Commitment and the maximum amount of such
increase to its Commitment (for each Consenting Bank, its "Additional
Commitment"), which may not be larger than the excess of (a) the Maximum
Commitment, over (b) the Commitments then in effect. The failure of any Bank to
so notify the Administrative Agent of its election and its Additional
Commitment, if any, shall be deemed to be a refusal to increase its Commitment.
If the sum of the Commitments then in effect plus the aggregate Additional
Commitments does not exceed the Maximum Commitment, the Commitment of each
Consenting Bank shall be increased by its Additional Commitment. If the sum of
the Commitments then in effect plus the aggregate Additional Commitments
exceeds the Maximum Commitment, the Commitment of each Consenting Bank shall be
increased by an amount equal to the product of (i) such Consenting Bank's
Additional Commitment multiplied by (ii) the quotient of (a) the excess of (A)
the Maximum Commitment, over (B) the Commitments then in effect, divided by (b)
the aggregate Additional Commitments of all Consenting Banks. Any increase in
the Commitments shall be effective as of the tenth Business Day after the
delivery of the Commitment Increase Notice; provided, that the Commitments may
not at any time exceed the Maximum Commitment.
SECTION 2.15 Additional Banks and Commitments. Upon (i) the execution of a
signature page to this Agreement by a new bank or financial institution (a "New
Bank") and acceptance thereof by the Administrative Agent,(ii) execution and
delivery by the Borrower of a Syndicated Loan Note and a Money Market Loan Note
in favor of the New Bank, and (iii) delivery of notice to the Banks by the
Administrative Agent setting forth the effective date of the addition of the
New Bank hereunder and the amount of such New Bank's Commitment, such New Bank
shall be for all purposes a Bank party to this Agreement to the same extent as
if it were an original party hereto with a Commitment as set forth on the
signature page executed by the New Bank; provided, however, (i) the total
Commitments of all Banks (including any New Banks) shall not exceed in the
aggregate the Maximum Commitment, and (ii) the Commitments and obligations of
all Banks party hereto prior to the addition of any New Bank shall not be
affected by the addition of such New Bank.
ARTICLE III
CONDITIONS TO BORROWINGS
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SECTION 3.01. Conditions to First Borrowing. The obligation of each Bank
to make a Loan on the occasion of the first Borrowing is subject to the
satisfaction of the conditions set forth in Section 3.02 and receipt by the
Administrative Agent of the following (as to the documents described in
paragraphs (a), (c), (d) and (e) below, in sufficient number of counterparts
for delivery of a counterpart to each Bank and retention of one counterpart by
the Administrative Agent):
(a) from each of the parties hereto of either (i) a duly executed
counterpart of this Agreement signed by such party or (ii) a facsimile
transmission stating that such party has duly executed a counterpart of this
Agreement and sent such counterpart to the Administrative Agent;
(b) a duly executed Syndicated Loan Note for the account of each Bank, a
duly executed Swing Loan Note for the account of Wachovia and a duly executed
Money Market Note for the account of each Bank, complying with the provisions
of Section 2.04, and from each Bank which holds any of the Original Notes, such
Original Notes, and a duly executed Guaranty and Contribution Agreement;
(c) an opinion letter of King & Spalding, counsel for the Borrower and the
Guarantors, dated as of the Closing Date, substantially in the form of Exhibit
B and covering such additional matters relating to the transactions
contemplated hereby as the Administrative Agent or any Bank may reasonably
request;
(d) an opinion of Jones, Day, Reavis & Pogue, special counsel for the
Administrative Agent, dated as of the Closing Date, substantially in the form
of Exhibit C and covering such additional matters relating to the transactions
contemplated hereby as the Administrative Agent may reasonably request;
(e) a certificate (the "Closing Certificate") substantially in the form of
Exhibit G, dated as of the Closing Date, signed by an Executive Officer (other
than the Secretary) to the effect that (i) no Default has occurred and is
continuing on the date of the first Borrowing and (ii) the representations and
warranties of the Borrower contained in Article IV are true on and as of the
date of the first Borrowing hereunder;
(f) all documents which the Administrative Agent or any Bank may
reasonably request relating to the existence of the Borrower, the corporate
authority for and the validity of this Agreement, the Notes, the Guaranty and
the Contribution Agreement, and any other matters relevant hereto, all in form
and substance satisfactory to the Administrative Agent, including, without
limitation, certificates of incumbency of the General Partner and of the
Guarantors, signed by the Secretary or an Assistant Secretary of the General
Partner and the Guarantors, certifying as to the names, true signatures and
incumbency of the
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officer or officers of the General Partner and the Guarantors authorized to
execute and deliver the Loan Documents on behalf of the Borrower or the
Guarantors, and certified copies of the following items: (i) the Borrower's
Certificate of Limited Partnership; (ii) the Borrower's Partnership Agreement,
(iii) for the General Partner and the Guarantors, its Certificate of
Incorporation, (iv) for the General Partner and the Guarantors, its Bylaws, (v)
for the Borrower, the General Partner and the Guarantors, a certificate of the
Secretary of State of Georgia as to the valid existence of the Borrower, the
General Partner or the Guarantors as a Georgia limited partnership or
corporation, as the case may be, and certificates of good standing or valid
existence of the Borrower, the General Partner and the Guarantors as a foreign
limited partnership or corporation, as the case may be, in each other
jurisdiction in which it is required to be qualified and (vi) the action taken
by the Board of Directors of the General Partner and the Guarantors authorizing
(A) on behalf of the Borrower, the execution, delivery and performance of this
Agreement, the Notes, the Contribution Agreement and the other Loan Documents
to which the Borrower is a party, and (B) on behalf of the Guarantors, the
execution, delivery and performance of the Guaranty and the Contribution
Agreement;
(g) a Notice of Borrowing or notification pursuant to Section 2.03(e) of
acceptance of one or more Money Market Quotes, as applicable; and
(h) receipt of the fees then due and payable to the Administrative Agent
pursuant to the Administrative Agent's Letter Agreement.
In addition, if the Borrower desires funding of a Euro-Dollar Loan on the
Closing Date, the Administrative Agent shall have received, the requisite
number of days prior to the Closing Date, a funding indemnification letter
satisfactory to it, pursuant to which (i) the Administrative Agent and the
Borrower shall have agreed upon the interest rate, amount of Borrowing and
Interest Period for such Euro-Dollar Loan, and (ii) the Borrower shall
indemnify the Banks from any loss or expense arising from the failure to close
on the anticipated Closing Date identified in such letter or the failure to
borrow such Euro-Dollar Loan on such date.
SECTION 3.02. Conditions to All Borrowings. The obligation of each Bank to
make a Syndicated Loan or of Wachovia to make a Swing Loan on the occasion of
each Borrowing (other than a Borrowing which consists solely of a Refunding
Loan) is subject to the satisfaction of the following conditions, except as
expressly provided in the last sentence of this Section 3.02:
(a) receipt by the Administrative Agent of a Notice of Borrowing,
acceptance of a Transaction Rate Quote or notification pursuant to Section
2.03(e) of acceptance of one or more Money Market Quotes, as applicable;
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(b) the fact that, immediately before and after such Borrowing, no Default
shall have occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower
contained in Article IV of this Agreement shall be true on and as of the date
of such Borrowing; and
(d) the fact that, immediately after such Borrowing, the conditions set
forth in clauses (i) and (ii) of Section 2.01 shall have been satisfied.
Each Borrowing (Syndicated, Swing and Money Market) hereunder (other than a
Borrowing which consists solely of a Refunding Loan) shall be deemed to be a
representation and warranty by the Borrower on the date of such Borrowing as to
the truth and accuracy of the facts specified in paragraphs (b), (c) and (d) of
this Section, except to the extent otherwise disclosed pursuant to Section
5.01(c) or (d).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and (by incorporation by reference in the Guaranty) the
Guarantors, as expressly stated, each represent and warrant that:
SECTION 4.01. Partnership or Corporate Existence and Power. The Borrower
is a limited partnership, and PPI and each Subsidiary is a corporation, duly
organized, validly existing and in good standing under the laws of Georgia, is
duly qualified to transact business in every jurisdiction where, by the nature
of its business, such qualification is necessary, and has all partnership
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except where any such
failure does not have and is not reasonably expected to cause a Material
Adverse Effect.
SECTION 4.02. Partnership or Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of this
Agreement, the Notes and the other Loan Documents and by the Guarantors of the
Guaranty (i) are within the Borrower's partnership powers and the Guarantors'
respective corporate powers, (ii) have been duly authorized by all necessary
partnership or corporate action, (iii) require no action by or in respect of or
filing with, any governmental body, agency or official, other than filings
required by federal or state securities laws with respect to this Agreement
(iv) do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of limited partnership or
partnership agreement of the Borrower or the articles of incorporation or
by-laws of the
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Guarantors or of any material agreement, judgment, injunction, order, decree or
other instrument binding upon the Borrower, the Guarantors or any Subsidiaries,
and (v) do not result in the creation or imposition of any Lien on any asset of
the Borrower, the Guarantors or any Subsidiaries.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes, the Guaranty and the other Loan Documents, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower and the Guarantors parties thereto, enforceable in
accordance with their respective terms, provided that the enforceability hereof
and thereof is subject in each case to general principles of equity and to
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights generally.
SECTION 4.04. Financial and Property Information. (a) The balance sheet of
PPI and the consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries as of December 31, 1998 and the related consolidated statements of
income, shareholders' equity and cash flows for the Fiscal Year then ended, in
the case of PPI reported on by PriceWaterhouseCoopers LLP, copies of which have
been delivered to each of the Banks, fairly present, in all material respects,
in conformity with GAAP, the consolidated financial position of PPI and the
Borrower and its Consolidated Subsidiaries, respectively, as of such date and
their consolidated results of operations and cash flows for such periods
stated.
(b) Since December 31, 1998, there has been no event, act, condition or
occurrence having a Material Adverse Effect.
(c) All material information concerning the Properties which has been
furnished to the Banks is true and correct in all material respects.
SECTION 4.05. No Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Executive Officers, threatened, against or
affecting the Borrower, the Guarantors or any Subsidiaries before any court or
arbitrator or any governmental body, agency or official which has or is
reasonably expected to cause a Material Adverse Effect or which in any manner
draws into question the validity of or is reasonably expected to impair the
ability of the Borrower or the Guarantors to perform its obligations under,
this Agreement, the Notes, the Guaranty or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) The Borrower and each member of
the Controlled Group have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are in compliance
in all material respects with the presently applicable provisions of ERISA and
the Code, and have not incurred any liability to the
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PBGC or a Plan under Title IV of ERISA, except where any such failure does not
involve an aggregate amount in excess of $2,500,000.
(b) Neither the Borrower nor any member of the Controlled Group is or ever
has been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Compliance with Laws; Payment of Taxes. The Borrower, the
Guarantors and the Subsidiaries are in compliance with all applicable laws,
regulations and similar requirements of governmental authorities, except where
(i) such compliance is being contested in good faith through appropriate
proceedings or (ii) any failure to comply does not have and is not reasonably
expected to cause a Material Adverse Effect. There have been filed on behalf of
the Borrower, the Guarantors and the Subsidiaries all Federal, state and local
income, excise, property and other tax returns which are required to be filed
by them and all taxes due pursuant to such returns or pursuant to any
assessment received by or on behalf of the Borrower, the Guarantors or any
Subsidiary have been paid, except: (A) ad valorem taxes not in excess of an
aggregate amount of $500,000; and (B) other liabilities, if (1) they are being
contested in good faith and against which the Borrower, the Guarantors or
Subsidiary has set up reserves in accordance with GAAP, or (2) the aggregate
amount involved is not in excess of $2,500,000. The charges, accruals and
reserves on the books of the Borrower, the Guarantors and the Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower and the Guarantors, adequate. United States income tax returns of PPI
have been examined for the 1996 and 1997 Fiscal Years and the examination
reports with respect thereto have been accepted by the District Director of the
Internal Revenue Service.
SECTION 4.08. Subsidiaries. The Borrower has no Subsidiaries except for
those Subsidiaries listed on Schedule 4.08, as supplemented from time to time,
which accurately sets forth each such Subsidiary's complete name and
jurisdiction of incorporation.
SECTION 4.09. Investment Company Act. Neither the Borrower, the Guarantors
nor any Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
SECTION 4.10. Public Utility Holding Company Act. Neither the Borrower,
PPI nor any Subsidiary is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property. Each of the Borrower, PPI and the
Subsidiaries has title to its properties
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sufficient for the conduct of its business, except where any such failure does
not have and is not reasonably expected to cause a Material Adverse Effect.
SECTION 4.12. No Default. Neither the Borrower, PPI nor any of the
Subsidiaries is in default under or with respect to any agreement, instrument
or undertaking to which it is a party or by which it or any of its property is
bound which has or is reasonably expected to cause a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
SECTION 4.13. Full Disclosure. All information heretofore furnished by the
Borrower or the Guarantors to the Administrative Agent or any Bank for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Borrower to the
Administrative Agent or any Bank will be, true, accurate and complete in all
material respects or based on reasonable estimates on the date as of which such
information is stated or certified. The Borrower and the Guarantors have
disclosed to the Banks in writing any and all facts which have had or are
reasonably expected to cause a Material Adverse Effect.
SECTION 4.14. Environmental Matters. (a) Neither the Borrower, the
Guarantors nor any other Subsidiary is, to the knowledge of the Executive
Officers, subject to any Environmental Liability which has had or is reasonably
expected to cause a Material Adverse Effect and neither the Borrower, the
Guarantors nor any Subsidiary has been designated as a potentially responsible
party under CERCLA or under any state statute similar to CERCLA, except as
disclosed in writing to the Administrative Agent (and the Administrative Agent
shall promptly furnish a copy of any such disclosure to the Banks). None of the
Properties has been identified on any current or proposed (i) National
Priorities List under 40 C.F.R. ss. 300, (ii) CERCLIS list or (iii) any list
arising from a state statute similar to CERCLA, except as disclosed in writing
to the Administrative Agent.
(b) No Hazardous Materials have been permitted or are being permitted to
be used, produced, manufactured, processed, treated, recycled, generated,
stored, disposed of, managed or otherwise handled at, or shipped or transported
to or from the Properties or are otherwise present at, on, in or under the
Properties, or, to the best of the knowledge of the Executive Officers, at or
from any adjacent site or facility, except for Hazardous Materials, such as
cleaning solvents, pesticides and other materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, managed, or
otherwise handled in all material respects in compliance with all applicable
Environmental Requirements and except as disclosed in writing to the
Administrative Agent.
(c) The Borrower, the Guarantors and each of the Subsidiaries, has
procured all Environmental Authorizations
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necessary for the conduct of its business, and is in compliance with all
Environmental Requirements (including, to the best knowledge of the Executive
Officers, with respect to any Environmental Releases) in connection with the
operation of the Properties and the Borrower's, the Guarantors' and each other
Subsidiary's respective businesses, except where any such failure to comply
does not have and is not reasonably expected to cause a Material Adverse
Effect.
SECTION 4.15. Partner Interests and Capital Stock. All Partner Interests
and Capital Stock, debentures, bonds, notes and all other securities of the
Borrower, the Guarantors and each of the Subsidiaries presently issued and
outstanding are validly and properly issued in accordance with all applicable
laws, including, but not limited to, the "Blue Sky" laws of all applicable
states and the federal securities laws, except where any such failure to comply
does not and is not reasonably expected to cause a Material Adverse Effect. The
issued shares of Capital Stock of the Borrower's Wholly Owned Subsidiaries are
owned by the Borrower free and clear of any Lien or adverse claim. At least a
majority of the issued shares of non-voting Capital Stock of each of the
Borrower's Subsidiaries is owned by the Borrower free and clear of any Lien or
adverse claim.
SECTION 4.16. Margin Stock. Neither the Borrower, the Guarantors nor any
of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of purchasing or carrying any Margin Stock, and no
part of the proceeds of any Loan will be used to purchase or carry any Margin
Stock or to extend credit to others for the purpose of purchasing or carrying
any Margin Stock, or be used for any purpose which violates, or which is
inconsistent with, the provisions of Regulation X.
SECTION 4.17. Insolvency. After giving effect to the execution and
delivery of the Loan Documents and the making of the Loans under this
Agreement: (i) neither the Borrower nor the Significant Subsidiary will (x) be
"insolvent," within the meaning of such term as used in O.C.G.A. ss. 18-2-22 or
as defined in ss. 101 of the "Bankruptcy Code", or Section 2 of either the
"UFTA" or the "UFCA", or as defined or used in any "Other Applicable Law" (as
those terms are defined below), or (y) be unable to pay its debts generally as
such debts become due within the meaning of Section 548 of the Bankruptcy Code,
Section 4 of the UFTA or Section 6 of the UFCA, or (z) have an unreasonably
small capital to engage in any business or transaction, whether current or
contemplated, within the meaning of Section 548 of the Bankruptcy Code, Section
4 of the UFTA or Section 5 of the UFCA; and (ii) the obligations of the
Borrower under the Loan Documents and with respect to the Loans will not be
rendered avoidable under any Other Applicable Law. For purposes of this Section
4.17, "Bankruptcy Code" means Title 11 of the United States Code, "UFTA" means
the Uniform Fraudulent Transfer Act, "UFCA" means the Uniform Fraudulent
Conveyance Act, and "Other Applicable Law" means any other applicable state law
pertaining
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to fraudulent transfers or acts voidable by creditors, in each case as such
law may be amended from time to time.
SECTION 4.18. Insurance. The Borrower, the Guarantors and each of the
Subsidiaries has (either in the name of the Borrower, the Guarantors or in such
other Subsidiary's own name), with financially sound and reputable insurance
companies having an A.M. Best rating of B+ or better, insurance on all its
property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies of established
repute engaged in the same or similar business.
SECTION 4.19. Real Estate Investment Trust. PPI is qualified under the
Code as a real estate investment trust.
SECTION 4.20. Year 2000 Compliance. The Borrower (i) has developed a
program to evaluate the ability of its computer hardware and software systems
and programs to handle effectively data that includes dates after December 31,
1999 ("Year 2000 Compliant"), (ii) has taken corrective action in respect of
its main accounting system to make it Year 2000 Compliant, (iii) has taken
corrective action, or is in the process of implementing a plan to take
corrective action prior to January 1, 2000, in respect of all other of its core
computer hardware and software systems and programs so that such core systems
and programs become Year 2000 Compliant prior to January 1, 2000, and (iv) has
begun a program to review its peripheral computer hardware and software systems
and programs so as to identify any corrective action that may need to be taken
in order for such peripheral systems and programs to become Year 2000 Compliant
prior to January 1, 2000. Based on the foregoing, the Borrower does not expect
that any Material Adverse Effect will exist or occur on or after January 1,
2000 as a result of any of its computer hardware or software systems or
programs failing to be Year 2000 Compliant.
ARTICLE V
COVENANTS
The Borrower and (by incorporation by reference in the Guaranty) the
Guarantors agree that, so long as any Bank has any Commitment hereunder or any
amount payable hereunder or under any Note remains unpaid:
SECTION 5.01. Information. PPI and the Borrower will deliver to each of
the Banks:
(a) as soon as available and in any event within 90 days after the end of
each Fiscal Year, (i) a consolidated balance sheet of PPI as of the end of its
Fiscal Year and the related consolidated statements of income, shareholders'
equity and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, all
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certified by PricewaterhouseCoopers LLP or other independent public accountants
of nationally recognized standing, with such certification to be free of
exceptions and qualifications as to the scope of the audit or as to the going
concern nature of the business, and (ii) a consolidated balance sheet of
Borrower and its Consolidated Subsidiaries as of the end of its Fiscal Year and
the related consolidated statements of income, shareholders' equity and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous fiscal year, all certified (subject to normal year-end
adjustments) as to fairness of presentation, GAAP and consistency by an
Executive Officer;
(b) as soon as available and in any event within 60 days after the end of
each of the first 3 Fiscal Quarters of each Fiscal Year, consolidated balance
sheets of each of PPI and of the Borrower and its Consolidated Subsidiaries as
of the end of such Fiscal Quarter and the related statement of income and
statement of cash flows for such Fiscal Quarter and for the portion of the
Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each case
in comparative form the figures for the corresponding Fiscal Quarter and the
corresponding portion of the previous Fiscal Year, all certified (subject to
normal year-end adjustments) as to fairness of presentation, GAAP and
consistency by an Executive Officer;
(c) simultaneously with the delivery of each set of financial statements
referred to in paragraphs (a) and (b) above, a certificate, substantially in
the form of Exhibit F (a "Compliance Certificate"), of an Executive Officer (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections 5.03
through 5.09, inclusive, and Sections 5.11 and 5.24 on the date of such
financial statements and (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the details
thereof and the action which the Borrower is taking or proposes to take with
respect thereto;
(d) within 5 Domestic Business Days after any Executive Officer becomes
aware of the occurrence of any Default, a certificate of an Executive Officer
setting forth the details thereof and the action which the Borrower is taking
or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of PPI
generally, copies of all financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and annual, quarterly or monthly reports (excluding
Form 4, Statement of Changes in Beneficial Ownership, or its equivalent, unless
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they reflect a Change in Control) which PPI shall have filed with the
Securities and Exchange Commission;
(g) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii)
receives notice from the PBGC under Title IV of ERISA of an intent to terminate
or appoint a trustee to administer any Plan, a copy of such notice;
(h) within 60 days after the end of each Fiscal Quarter, a Borrowing Base
Certificate as of the last day of the Fiscal Quarter just ended; provided,
however, that at the Borrower's election, Borrower may, and or at the
Administrative Agent's election on not less than 10 Domestic Business Days
notice, Borrower shall, submit a Borrowing Base Certificate to the
Administrative Agent on or before the fifteenth Domestic Business Day after the
end of the first or second month in any Fiscal Quarter, as of the last day of
such month;
(i) by April 1 of each year, a report as of the end of such
Fiscal Year containing the following information: (i) a schedule of
all outstanding Debt, showing for each component of Debt, the lender,
the total commitment, the total Debt outstanding, the interest rate,
if fixed, or a statement that the interest rate floats, the term, the
required amortization (if any) and the security (if any); (ii) a
schedule of all interest rate protection agreements, showing for each
such agreement, the total dollar amount, the type of agreement (i.e.
cap, collar, swap, etc.) and the term thereof; and (iii) a
development schedule of the announced development pipeline, including
for each announced development project, the project name and
location, the number of units, the expected construction start date,
the expected date of delivery of the first units, the expected
stabilization date, and the total anticipated cost.
(j) from time to time such additional information
regarding the financial position or business of the Borrower and its
Subsidiaries as the Administrative Agent, at the request of any
Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. The Borrower and
the Guarantors will (i) keep, and cause each other Consolidated Subsidiary to
keep, proper books of record and account in which full, true and correct
entries in conformity with GAAP shall be made of all dealings and
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transactions in relation to its business and activities; and (ii) permit, and
cause each other Consolidated Subsidiary to permit, representatives of any Bank
at such Bank's expense prior to the occurrence of a Default and at the
Borrower's or the Guarantors' expense after the occurrence and during the
continuance of a Default to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books
and records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants. The
Borrower and the Guarantors agree to cooperate and assist in such visits and
inspections, in each case at such reasonable times, upon reasonable prior
notice to the Borrower or the Guarantors and as often as may reasonably be
desired.
SECTION 5.03. Consolidated Total Secured Debt. The amount of Consolidated
Total Secured Debt will not at any time exceed the greater of (x) 40% of
Consolidated Total Assets or (y) the lesser of (i) 50% of Consolidated Total
Assets or (ii) $375,000,000.
SECTION 5.04. Ratio of Consolidated Total Debt to Consolidated Total
Assets. The ratio of Consolidated Total Debt to Consolidated Total Assets will
not at any time exceed 0.60 to 1.00.
SECTION 5.05. Interest Coverage. The ratio of (x) Consolidated Income
Available for Debt Service to (y) interest expense shall at all times exceed
2.00 to 1.0, calculated at the end of each Fiscal Quarter, based on the Fiscal
Quarter just ended and the immediately preceding three Fiscal Quarters.
SECTION 5.06. Restricted Payments. The Borrower's Restricted Payments in
any calendar year shall not exceed 95% of Consolidated Income Available for
Distribution for such period, unless (i) the Borrower must pay out an amount in
excess of 95% of Consolidated Income Available for Distribution to permit PPI
to preserve its status as a real estate investment trust under the applicable
provision of the Code, or (ii) PPI declares one or more capital gains dividends
within such calendar year (in which event the amount of additional Restricted
Payments that may be made as a result of such declaration as provided in this
clause (ii) shall not exceed $30,000,000). In the event that the Borrower or
PPI receives a public debt rating of BBB- or better from Standard & Poors or
Baa3 or better from Moody's Investor's Service and so long as that rating is
affirmed during each year, the Borrower's Restricted Payments in any calendar
year will be limited to 100% of Consolidated Income Available for Distribution
for such calendar year with the same exceptions contained in clauses (i) and
(ii) of this Section 5.06.
SECTION 5.07. Loans or Advances. Neither the Borrower nor any Guarantor or
Subsidiary shall make loans or advances to any Person except: (i) deposits
required by government agencies
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or public utilities; (ii) without duplication, loans and advances made to the
Borrower, any Guarantor or any Subsidiary; provided, that loans and advances
from the Borrower and the Guarantors to Subsidiaries that are not Guarantors
may not exceed an aggregate amount outstanding at any time equal to 10% of
Consolidated Total Assets; (iii) loans or advances to directors, officers and
employees in the ordinary course of business in the aggregate outstanding at
any time not exceeding $2,500,000.00; and (iv) without duplication, other loans
or advances made in the ordinary course of business in the aggregate
outstanding at any time not exceeding $20,000,000 minus all amounts outstanding
under clause (iii) of this Section 5.07 and minus Investments made and
permitted pursuant to Section 5.09(D); provided that after giving effect to the
making of any loans, advances or deposits permitted by clauses (i), (ii), (iii)
or (iv), the Borrower will be in full compliance with all the provisions of
this Agreement.
SECTION 5.08. Purchases of Stock by the Significant Subsidiaries. Except
for purchases or acquisitions of shares of PPI's Capital Stock made for
purposes of having such shares available for purchase by PPI shareholders
pursuant to the Post Properties, Inc. Dividend Reinvestment and Stock Purchase
Plan, as amended as of the Closing Date, and, subject to the approval of the
Required Banks (not to be unreasonably withheld), as it may thereafter be
amended, the Significant Subsidiaries shall not purchase or acquire any shares
of PPI's Capital Stock during any 12 month period in excess of the lesser of
(i) 2.25% of all PPI's Capital Stock outstanding on the first day of such
period, or (ii) an aggregate purchase price of $30,000,000.
SECTION 5.09. Investments. Neither the Borrower nor any Guarantor shall
make Investments in any Person except: (A) Investments in (i) direct
obligations of the United States Government maturing within one year, (ii)
certificates of deposit issued by a commercial bank whose credit is
satisfactory to the Administrative Agent, (iii) commercial paper rated A1 or
the equivalent thereof by Standard & Poor's Corporation or P1 or the equivalent
thereof by Moody's Investors Service, Inc. and in either case maturing within 9
months after the date of acquisition, (iv) tender bonds the payment of the
principal of and interest on which is fully supported by a letter of credit
issued by a United States bank whose long-term certificates of deposit are
rated at least AA or the equivalent thereof by Standard & Poor's Corporation
and Aa or the equivalent thereof by Moody's Investors Service, Inc. and/or (v)
Investments in debt or equity securities rated at least BBB+ or the equivalent
thereof by Standard & Poor's Corporation or at least Baa1 or the equivalent
thereof by Moody's Investors Service not exceeding an aggregate amount
outstanding at any time of $5,000,000; (B) Investments permitted by clauses
(i), (ii) and (iii) of Section 5.07 or by Section 5.08; (C) without
duplication, Investments (exclusive of loans and advances permitted under
Section 5.07(ii)) from the Borrower in Subsidiaries that are not Guarantors in
an aggregate amount outstanding at any time not in
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excess of 10% of Consolidated Total Assets; and (D) without duplication, other
Investments in an aggregate amount outstanding at any time not exceeding
$20,000,000 minus all amounts outstanding under clauses (iii) and (iv) of
Section 5.07.
SECTION 5.10. Dissolution. Neither the Borrower, any Guarantor nor any of
the Subsidiaries shall suffer or permit dissolution or liquidation either in
whole or in part or redeem or retire any shares of its own stock or that of any
Subsidiary, except to the extent permitted by Section 5.11 and except for
purchases by PPI of its own Capital Stock to the extent permitted by Section
5.08, and subject to the rights of limited partners of the Borrower to convert
or exchange their Partner Interests in the Borrower to stock in PPI.
SECTION 5.11. Consolidations, Mergers and Sales of Assets. The Borrower
and the Guarantors will not, nor will the Borrower permit any other Subsidiary
to, consolidate or merge with or into, or sell, lease or otherwise transfer all
or any substantial part of its assets to, any other Person, or discontinue or
eliminate any business line or segment, provided that
(a) the Borrower, any Guarantor and any Subsidiary may merge with another
Person if (i) such Person was organized under the laws of the United States of
America or one of its states, (ii) the Borrower or such Guarantor or other
Subsidiary is the corporation surviving such merger and (iii) immediately after
giving effect to such merger, no Default shall have occurred and be continuing,
(b) any Guarantor may merge with or transfer assets to the Borrower (with
the Borrower as the survivor of any such merger), and any Subsidiary may merge
with or transfer assets to the Borrower, any Guarantor, or another Subsidiary
(with the Borrower or such Guarantor, as the case may be, as the survivor in
any such merger in which the Borrower or any Guarantor is involved), and
(c) the foregoing limitation on the sale, lease or other transfer of
assets and on the discontinuation or elimination of a business line or segment
shall not prohibit, during any Fiscal Quarter, a transfer of assets or the
discontinuance or elimination of a business line or segment (in a single
transaction or in a series of related transactions) unless the aggregate assets
to be so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred, and all other
assets utilized in all other business lines or segments discontinued, during
such Fiscal Quarter and the immediately preceding three (3) Fiscal Quarters,
either (x) constituted more than five percent (5%) of Consolidated Total Assets
at the end of the Fiscal Quarter immediately preceding such Fiscal Quarter, or
(y) contributed more than five percent (5%) of Consolidated Income Available
for
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Debt Service during the four (4) Fiscal Quarters immediately preceding such
Fiscal Quarter.
In the case of any Subsidiary which transfers all or a substantial part of
its assets pursuant to clause (c) of the preceding sentence, and in the case of
any Subsidiary the stock or other ownership interests in which are being sold
and with respect to which clause (c) would have been satisfied if the
transaction had been a sale of assets of such Subsidiary, such Subsidiary shall
be released from its obligations under the Guaranty (if it has become a party
thereto) and, in the case of a transaction involving a sale of assets, such
Subsidiary may dissolve.
SECTION 5.12. Use of Proceeds. The proceeds of the Loans may be used for
general corporate and partnership purposes of the Borrower and the Guarantors,
and the Subsidiaries. No portion of the proceeds of the Loans will be used by
the Borrower or the Guarantors (i) in connection with, whether directly or
indirectly, any tender offer for, or other acquisition of, stock of any
corporation with a view towards obtaining control of such other corporation,
unless such tender offer or other acquisition is to be made on a negotiated
basis with the approval of the Board of Directors of the Person to be acquired
or (ii) for any purpose in violation of any applicable law or regulation.
SECTION 5.13. Compliance with Laws; Payment of Taxes. (a) The Borrower and
the Guarantors will, and will cause each of the Subsidiaries and each member of
the Controlled Group to, comply with applicable laws (including but not limited
to ERISA), regulations and similar requirements of governmental authorities
(including but not limited to PBGC), except where (i) the necessity of such
compliance is being contested in good faith through appropriate proceedings, or
(ii) any failure to comply which does not have and is not reasonably expected
to cause a Material Adverse Effect. The Borrower and the Guarantors will, and
will cause each of the Subsidiaries to, pay promptly when due all taxes,
assessments, governmental charges, claims for labor, supplies, rent and other
obligations which, if unpaid, might become a Lien against the Property of the
Borrower, the Guarantors or any other Subsidiary, except (A) liabilities being
contested in good faith and against which, if requested by the Administrative
Agent, the Borrower, the Guarantors or Subsidiary will set up reserves in
accordance with GAAP, and (B) liabilities in an aggregate amount not in excess
of $2,500,000.
(b) If the Borrower or any other member of the Controlled Group shall
enter into a Multiemployer Plan, the Borrower and the Guarantors shall not
permit the aggregate complete or partial withdrawal liability under Title IV of
ERISA with respect to Multiemployer Plans incurred by the Borrower, the
Guarantors and members of the Controlled Group to exceed $5,000,000 at any
time. For purposes of this Section 5.13(b), the amount of withdrawal liability
of the Borrower and members of
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the Controlled Group at any date shall be the aggregate present value of the
amount claimed to have been incurred less any portion thereof which the
Borrower, the Guarantors and members of the Controlled Group have paid or as to
which the Borrower and the Guarantors reasonably believe, after appropriate
consideration of possible adjustments arising under Sections 4219 and 4221 of
ERISA, it and members of the Controlled Group will have no liability, provided
that the Borrower and the Guarantors shall obtain prompt written advice from
independent actuarial consultants supporting such determination. The Borrower
and the Guarantors agree (i) once in each year, beginning with the first year
in which the Borrower or any other member of the Controlled Group enters into a
Multiemployer Plan, to request and use its best efforts to obtain a current
statement (addressed to the Borrower and the Administrative Agent) of the
withdrawal liability of the Borrower and the Guarantors and members of the
Controlled Group from each Multiemployer Plan, if any, and (ii) to transmit a
copy of such statement to the Administrative Agent and the Banks within 15 days
after the Borrower receives the same.
SECTION 5.14. Insurance. The Borrower and the Guarantors will maintain,
and will cause each of the Subsidiaries to maintain (either in the name of the
Borrower or the Guarantors' or such other Subsidiary's own name), with
financially sound and reputable insurance companies having an A.M. Best rating
of B+ or better, insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies of established repute engaged in the same or similar
business.
SECTION 5.15. Change in Fiscal Year. The Borrower and the Guarantors will
not, and will cause the Subsidiaries to not, change its Fiscal Year without the
consent of the Required Banks.
SECTION 5.16. Maintenance of Property; Principal Business. The Borrower
and the Guarantors shall, and shall cause each other Subsidiary to, maintain
all of its properties and assets in good condition, repair and working order,
ordinary wear and tear excepted, and maintain all Property consisting of
apartment communities (other than Property consisting of land acquired with
existing improvements which are to be substantially demolished) in a first
class manner. The principal business operations of the Borrower and the
Subsidiaries, taken as a whole, will be directly or indirectly related to
multi-family residential Properties.
SECTION 5.17. Environmental Notices. Promptly upon any Executive Officer's
becoming aware thereof, the Borrower and the Guarantors shall furnish to the
Banks and the Administrative Agent prompt written notice of all Environmental
Liabilities, pending, threatened or anticipated Environmental Proceedings,
Environmental Notices, Environmental Judgments and Orders, and Environmental
Releases at, on, in, under or in any way affecting
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the Properties or any adjacent property, which has had or is reasonably
expected to cause a Material Adverse Effect.
SECTION 5.18. Environmental Matters. The Borrower and the Guarantors will
not, and will cause the Subsidiaries to not, and will not permit any Third
Party to, use, produce, manufacture, process, treat, recycle, generate, store,
dispose of, manage at, or otherwise handle, or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous Materials such as
cleaning solvents, pesticides and other materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed, managed, or
otherwise handled in compliance in all material respects with all applicable
Environmental Requirements.
SECTION 5.19. Environmental Release. The Borrower and the Guarantors agree
that upon any Executive Officer's becoming aware of the occurrence of an
Environmental Release at or on any of the Properties the Borrower will act
immediately to investigate the extent of, and to take appropriate action to
remediate such Environmental Release, whether or not ordered or otherwise
directed to do so by any Environmental Authority.
SECTION 5.20. Transactions with Affiliates. Neither the Borrower, any
Guarantor nor any of the Subsidiaries shall enter into, or be a party to, any
transaction with any Affiliate of the Borrower, any Guarantor or such other
Subsidiary (which Affiliate is not PPI, the Borrower, the Guarantors or a
Wholly Owned Subsidiary), except as permitted by law and in the ordinary course
of business and pursuant to reasonable terms which are no less favorable to
Borrower or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person which is not an Affiliate.
SECTION 5.21. Qualification as a Real Estate Investment Trust; General
Partner. PPI shall at all times (i) remain qualified under the Code as a real
estate investment trust and (ii) be the General Partner. The Borrower will not
agree to amend or waive the requirements of Section 7.5A of the limited
partnership agreement of the Borrower, as in effect on the date of this
Agreement, as such requirements are applicable to the General Partner, without
the prior written consent of the Required Banks (which consent the Banks hereby
agree not to unreasonably withhold or delay).
SECTION 5.22. Certain Covenants Concerning Subsidiaries. The Borrower and
the Guarantors shall:
(a) not permit the Subsidiary Consolidated Total Assets at any time to
exceed twenty percent (20%) of Consolidated Total Assets;
(b) not permit any of the Subsidiaries to Guarantee the Debt of another
Person; provided, that any Subsidiary can
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Guarantee the Debt of another Subsidiary, so long as the aggregate amount of
Debt of Subsidiaries which is Guaranteed by Subsidiaries does not exceed
$500,000;
(c) not permit any Significant Subsidiary to (x) be "insolvent," within
the meaning of such term as used in O.C.G.A. ss. 18-2-22 or as defined in ss.
101 of the "Bankruptcy Code", or Section 2 of either the "UFTA" or the "UFCA",
or as defined or used in any "Other Applicable Law" (as those terms are defined
below), or (y) be unable to pay its debts generally as such debts become due
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA
or Section 6 of the UFCA, or (z) have an unreasonably small capital to engage
in any business or transaction in which it is engaged or about to be engaged,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA
or Section 5 of the UFCA. For purposes of this Section 5.22(c), "Bankruptcy
Code" means Title 11 of the United States Code, "UFTA" means the Uniform
Fraudulent Transfer Act, "UFCA" means the Uniform Fraudulent Conveyance Act,
and "Other Applicable Law" means any other applicable state law pertaining to
fraudulent transfers or acts voidable by creditors, in each case as such law
may be amended from time to time; and
(d) cause each Subsidiary which is or which becomes a Significant
Subsidiary to deliver to the Administrative Agent within 20 Business Days after
such event occurs (x) an executed counterpart of the Guarantee of the Loans
(substantially in the form set forth in Exhibit H) in favor of the Agent and
the Banks; (y) an executed counterpart of the Contribution Agreement
(substantially in the form set forth in Exhibit L); and (z) documents
pertaining to the Subsidiary reasonably requested by the Administrative Agent
of the types described in paragraph (f) of Section 3.01.
Section 5.23. Year 2000 Compliance Reports. The Borrower will deliver to
the Agent:
(a) Simultaneously with the delivery of each set of annual and semiannual
financial statements referred to in Sections 5.01(a) and (b), through the year
ending December 31, 1999, a statement of an authorized officer of the General
Partner of the Borrower to the effect that nothing has come to the Borrower's
attention to cause it to believe that its computer hardware and software
systems and programs will fail to be Year 2000 Compliant such that there will
exist or occur a Material Adverse Effect on or after January 1, 2000 as a
result of such failure;
(b) Within 5 Business Days after the Borrower becomes aware that its
program to have its computer hardware and software systems and programs become
Year 2000 Compliant prior to January 1, 2000 has been delayed in any material
respect so that the Borrower reasonably expects that as a consequence thereof
there
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will exist or occur a Material Adverse Effect on or after January 1,
2000, a statement of such officer setting forth the details thereof and the
actions being taken by the Borrower in respect thereof; and
(c) promptly upon the receipt thereof, a copy of any material third party
assessment of the Borrower's program to have its core computer hardware and
software systems and programs to become Year 2000 Compliant, together with any
recommendations made by such third party in respect of such program.
SECTION 5.24. Consolidated Fixed Charges Coverage Ratio. At the end of
each Fiscal Quarter, the Consolidated Fixed Charges Coverage Ratio shall not
have been less than 1.75 to 1.0.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or
shall fail to pay any interest on any Loan within 5 Domestic Business Days
after such interest shall become due, or shall fail to pay any fee or other
amount payable hereunder within 5 Domestic Business Days after such fee or
other amount becomes due; or
(b) the Borrower or any Guarantor shall fail to observe or perform any
covenant contained in Sections 5.01(d), 5.02(ii), 5.03 to 5.06, inclusive,
5.08, 5.10 to 5.12, inclusive, 5.15 or 5.21; or
(c) the Borrower or any Guarantor shall fail to observe or perform any
covenant or agreement contained in this Agreement (other than those covered by
paragraph (a) or (b) above) and such failure shall not have been cured within
30 days after the earlier to occur of (i) written notice thereof has been given
to the Borrower or the Guarantors by the Administrative Agent at the request of
any Bank or (ii) an Executive Officer otherwise becomes aware of any such
failure; or
(d) any representation, warranty, certification or statement made by the
Borrower or a Guarantor in Article IV of this Agreement or in any certificate,
financial statement or other document delivered pursuant to this Agreement
shall prove to have been incorrect or misleading in any material respect when
made (or deemed made); or
(e) the Borrower or any Guarantor shall fail to make any payment in
respect of Debt in an aggregate amount in excess
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of $2,500,000 outstanding (other than the Notes) when due or within any
applicable grace period; or
(f) any event or condition shall occur which results in the acceleration
of the maturity of Debt outstanding of the Borrower or a Guarantor in an
aggregate amount in excess of $2,500,000 (including, without limitation, any
required mandatory prepayment or "put" of such Debt to the Borrower or a
Guarantor) or enables (with any condition for the giving of notice or the lapse
of time, or both, having been satisfied) the holders of such Debt or any Person
acting on such holders' behalf to accelerate the maturity thereof (including,
without limitation, any required mandatory prepayment or "put" of such Debt to
the Borrower or a Guarantor); or
(g) the Borrower or any Guarantor shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the appointment of
or taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or a Guarantor seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or a Guarantor under the federal
bankruptcy laws as now or hereafter in effect; or
(i) the Borrower or any member of the Controlled Group shall fail to pay
when due any material amount which it shall have become liable to pay to the
PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a
Plan or Plans shall be filed under Title IV of ERISA by the Borrower, any
member of the Controlled Group, any plan administrator or any combination of
the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate or to cause a trustee to be appointed to administer any such Plan
or Plans or a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within 30 days thereafter; or a condition shall exist
by reason of which the PBGC would be
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entitled to obtain a decree adjudicating that any such Plan or Plans must be
terminated; in each of the foregoing cases, where the aggregate amount not so
paid or the resulting withdrawal liability of the Borrower, PPI or any
Subsidiary is in excess of $2,500,000; or
(j) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $2,500,000 shall be rendered against the Borrower
or a Guarantor and such judgment or order shall continue unsatisfied and
unstayed for a period of 30 days; or
(k) a federal tax lien shall be filed against any Property of the Borrower
or any Subsidiary under Section 6323 of the Code or a lien of the PBGC shall be
filed against any Property of the Borrower or a Guarantor under Section 4068 of
ERISA and in either case such lien shall remain undischarged for a period of 25
days after the date of filing, except where in either such case (i) the
aggregate amount involved is not in excess of $2,500,000, or (ii) such lien did
not arise in connection with a capital gains transaction and is being contested
in good faith and against which the Borrower or Subsidiary has set up reserves
in accordance with GAAP.
then, and in every such event, the Administrative Agent shall (i) if requested
by the Required Banks, by notice to the Borrower terminate the Commitments and
the obligation to make Swing Loans and they shall thereupon terminate, (ii) any
Bank may terminate its obligation to fund a Money Market Loan in connection
with any relevant Money Market Quote, and (iii) if requested by the Required
Banks (but not otherwise), by notice to the Borrower declare the Syndicated
Loan Notes, the Swing Loan Note and the Money Market Loan Notes (together with
accrued interest thereon) to be, and the Syndicated Loan Notes, together with
the Swing Loan Note and the Money Market Loan Notes, shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower together
with interest at the Default Rate accruing on the principal amount thereof from
and after the date of such Event of Default; provided that if any Event of
Default specified in paragraph (g) or (h) above occurs with respect to the
Borrower, without any notice to the Borrower or any other act by the
Administrative Agent or the Banks, the Commitments and the obligation to make
Swing Loans shall thereupon terminate and the Syndicated Loan Notes, the Swing
Loan Note and the Money Market Loan Notes (together with accrued interest
thereon) shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower together with interest thereon at the Default Rate accruing on the
principal amount thereof from and after the date of such Event of Default.
Notwithstanding the foregoing, the Administrative Agent shall have available to
it all other remedies at law or equity, and shall exercise any one or all of
them at the request of the Required Banks.
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SECTION 6.02. Notice of Default. The Administrative Agent shall give
notice to the Borrower of any Default under Section 6.01(c) promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
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ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Appointment; Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Administrative Agent to act as its
agent hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms hereof and
thereof, together with such other powers as are reasonably incidental thereto.
The Administrative Agent: (a) shall have no duties or responsibilities except
as expressly set forth in this Agreement and the other Loan Documents, and
shall not by reason of this Agreement or any other Loan Document be a trustee
for any Bank; (b) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or in any certificate or other document referred to or
provided for in, or received by any Bank under, this Agreement or any other
Loan Document, or for the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or any other
document referred to or provided for herein or therein or for any failure by
the Borrower to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Loan Document except to the extent
requested by the Required Banks, and then only on terms and conditions
satisfactory to the Administrative Agent, and (d) shall not be responsible for
any action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
negligence or wilful misconduct. The Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
The provisions of this Article VII are solely for the benefit of the
Administrative Agent and the Banks, and the Borrower shall not have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and under the other Loan Documents,
the Administrative Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Borrower. The duties of the
Administrative Agent shall be ministerial and administrative in nature, and the
Administrative Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any Bank, except that it
will hold in trust for the account of each Bank any monies received by it which
are payable to such Bank hereunder.
SECTION 7.02. Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely upon any
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certification, notice or other communication (including any thereof by
telephone, telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Administrative Agent. As to any
matters not expressly provided for by this Agreement or any other Loan
Document, the Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder and thereunder in accordance
with instructions signed by the Required Banks, and such instructions of the
Required Banks in any action taken or failure to act pursuant thereto shall be
binding on all of the Banks.
SECTION 7.03. Defaults. The Administrative Agent shall not be deemed to
have knowledge of the occurrence of a Default or an Event of Default (other
than the nonpayment of principal of or interest on the Loans) unless the
Administrative Agent has received notice from a Bank or the Borrower specifying
such Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default or an Event of Default, or actually becomes aware
of the existence of an Event of Default, the Administrative Agent shall give
prompt notice thereof to the Banks. The Administrative Agent shall give each
Bank prompt notice of each nonpayment of principal of or interest on the
Syndicated Loans or the Swing Loan, whether or not it has received any notice
of the occurrence of such nonpayment. The Administrative Agent shall (subject
to Section 9.06) take such action hereunder with respect to such Default or
Event of Default as shall be directed by the Required Banks, provided that,
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Banks.
SECTION 7.04. Rights of Administrative Agent as a Bank. With respect to
the Loans made by it, Wachovia in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not acting as the Administrative Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include
Wachovia in its individual capacity. The Administrative Agent may (without
having to account therefor to any Bank) accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with PPI or
Borrower (and any of its Subsidiaries and Affiliates) as if it were not acting
as the Administrative Agent, and the Administrative Agent may accept fees and
other consideration from the Borrower (in addition to any agency fees and
arrangement fees heretofore agreed to between the Borrower and the
Administrative Agent) for services in connection with this Agreement or any
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other Loan Document or otherwise without having to account for the same to the
Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to indemnify the
Administrative Agent, to the extent the Administrative Agent shall not have
been reimbursed by the Borrower, ratably in accordance with its Commitment, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including, without limitation, counsel fees
and disbursements, but not including fees payable pursuant to the
Administrative Agent's Letter Agreement), or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby
(excluding, unless an Event of Default has occurred and is continuing, the
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or any such other documents; provided that (i) no Bank shall be liable
for any of the foregoing to the extent they arise from the negligence or wilful
misconduct of the Administrative Agent and (ii) no Designated Bank shall be
liable for any payment under this Section 7.05 so long as, and to the extent
that, its Designating Bank makes such payments. If any indemnity furnished to
the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
SECTION 7.06. Consequential Damages. THE ADMINISTRATIVE AGENT SHALL NOT BE
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
hereof unless and until a written notice of the assignment or transfer thereof
shall have been filed with the Administrative Agent and the provisions of
Section 9.08(c) have been satisfied. Any requests, authority or consent of any
Person who at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of that Note or of any Note or Notes
issued in exchange therefor or replacement thereof.
SECTION 7.08. Nonreliance on Administrative Agent and Other Banks. Each
Bank agrees that it has, independently and
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without reliance on the Administrative Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into this Agreement and
that it will, independently and without reliance upon the Administrative Agent
or any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Borrower of this Agreement
or any of the other Loan Documents or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Borrower or any other Person. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by the
Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower or any other Person (or any of their
Affiliates) which may come into the possession of the Administrative Agent.
SECTION 7.09. Failure to Act. Except for action expressly required of the
Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Banks of their indemnification
obligations under Section 7.05 against any and all liability and expense which
may be incurred by the Administrative Agent by reason of taking, continuing to
take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of Administrative Agent. Subject to
the appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Banks and the Borrower and the Administrative Agent may be removed at
any time with or without cause by the Required Banks. Upon any such resignation
or removal, the Required Banks shall have the right to appoint a successor
Administrative Agent, subject to the right of the Borrower, so long as no Event
of Default is in existence, to approve any such successor Administrative Agent
which is not then a Bank or an Affiliate thereof, which approval shall not be
unreasonably withheld or delayed. If no successor Administrative Agent shall
have been so appointed by the Required Banks and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's notice of
resignation or the Required Banks' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Banks,
appoint a successor Administrative Agent. Any successor Administrative Agent
shall be a bank which has a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor
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Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article VII shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Administrative Agent hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period:
(a) the Administrative Agent determines that deposits in Dollars (in the
applicable amounts) are not being offered in the relevant market for such
Interest Period, or
(b) the Required Banks advise the Administrative Agent that the London
Interbank Offered Rate, as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding the relevant
type of Euro-Dollar Loans for such Interest Period, the Administrative Agent
shall forthwith give notice thereof to the Borrower and the Banks, whereupon
until the Administrative Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks to
make the type of Euro-Dollar Loans specified in such notice shall be suspended.
Unless the Borrower notifies the Administrative Agent at least 2 Domestic
Business Days before the date of any Borrowing of such type of Euro-Dollar
Loans for which a Notice of Borrowing has previously been given that it elects
not to borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof (any such agency being referred to as an "Authority" and any such event
being referred to as a "Change of Law"), or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any Authority shall make it unlawful or impossible for any Bank (or
its Lending Office) to make, maintain or fund its Euro-Dollar Loans and such
Bank shall so notify the Administrative Agent, the Administrative Agent shall
forthwith give notice thereof to the other Banks and the Borrower,
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whereupon until such Bank notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before
giving any notice to the Administrative Agent pursuant to this Section, such
Bank shall designate a different Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank. If such Bank shall determine that it
may not lawfully continue to maintain and fund any of its outstanding
Euro-Dollar Loans to maturity and shall so specify in such notice, the Borrower
shall immediately prepay in full the then outstanding principal amount of each
Euro-Dollar Loan of such Bank, together with accrued interest thereon.
Concurrently with prepaying each such Euro-Dollar Loan, the Borrower shall
borrow a Base Rate Loan in an equal principal amount from such Bank (on which
interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks), and such Bank shall make such a Base
Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the date
hereof, a Change of Law or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority:
(i) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding with respect to any
Euro-Dollar Loan any such requirement which is compensated by the
payment of additional interest pursuant to the last paragraph of
this Section 8.03(a)) against assets of, deposits with or for the
account of, or credit extended by, any Bank (or its Lending Office);
or
(ii) shall impose on any Bank (or its Lending Office) or
the London interbank market any other condition affecting its Fixed
Rate Loans, its Syndicated Loan Notes or its Money Market Loan Notes
or its obligation to make Fixed Rate Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Syndicated Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Syndicated Loan Notes or Money Market
Loan Notes with respect thereto, by an amount deemed by such Bank to be
material, then, within 15 days after demand by such Bank (with a copy to the
Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction, but in no event shall the Borrower be liable for amounts incurred
more than 90 days prior to receipt of such demand.
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In addition, if at any time a Euro-Dollar Reserve Percentage greater than
0% is imposed on any Bank, the Borrower shall pay to such Bank additional
interest on the unpaid principal amount of the Euro-Dollar Loans of such Bank
until such principal amount is paid in full at an interest rate per annum equal
at all times to the quotient obtained (rounded upwards, if necessary, to the
next higher 1/100th of 1%) by dividing (i) the applicable London Interbank
Offered Rate for such Euro-Dollar Loan for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage, payable on each date on which
interest is payable on such Euro-Dollar Loan. Such additional interest, if any,
shall be determined by such Bank and notified to the Borrower through the
Administrative Agent.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any Authority, has or would have the effect of reducing the rate of return
on such Bank's capital as a consequence of its obligations hereunder to a level
below that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank, the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank for
such reduction, but in no event shall the Borrower be liable for amounts
incurred more than 90 days prior to receipt of such demand.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment
of such Bank, be otherwise disadvantageous to such Bank. A certificate of any
Bank claiming compensation under this Section and setting forth in reasonable
detail the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
(d) Notwithstanding the foregoing, in the event the Borrower is required
to pay any Bank amounts pursuant to Section 2.12(c) or this Section 8.03 and
the designation of a different Lending Office pursuant to Section 2.12(c) or
Section 8.03(c) will not avoid the need for compensation to such Bank (an
"Affected Bank"), the Borrower may give notice to such Affected
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Bank (with copies to the Administrative Agent) that it wishes to seek one or
more assignees (which may be one or more of the Banks) to assume the Commitment
of such Affected Bank and to purchase its outstanding Loans and Notes;
provided, that if there is more than one Affected Bank which has requested
substantially and proportionally equal compensation hereunder, the Borrower
shall elect to seek an assignee to assume the Commitments of all such Affected
Banks. Each Affected Bank agrees to sell its Commitment, Loans, Notes and
interest in this Agreement in accordance with Section 9.08(c) to any such
assignee for an amount equal to the sum of the outstanding unpaid principal of
and accrued interest on such Loans and Notes, plus all other fees and amounts
(including, without limitation, any compensation due to such Affected Banks
under Section 2.12(c) or this Section 8.03) due to such Affected Bank hereunder
calculated, in each case, to the date such Loans, Notes and interest are
purchased. Upon such sale or prepayment, each such Affected Bank shall have no
further commitment or other obligation to the Borrower hereunder or under any
Note.
(e) The provisions of this Section 8.03 shall be applicable with respect
to any Transferee, subject to Section 9.08(e) as to any Participant, and any
calculations required by such provisions shall be made based upon the
circumstances of such Transferee.
SECTION 8.04. Base Rate Loans or Other Euro-Dollar Loans Substituted for
Affected Euro-Dollar Loans. If (i) the obligation of any Bank to make or
maintain any type of Euro-Dollar Loans has been suspended pursuant to Section
8.02 or (ii) any Bank has demanded compensation under Section 8.03, and the
Borrower shall, by at least 5 Euro-Dollar Business Days' prior notice to such
Bank through the Administrative Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Syndicated Loans which would otherwise be made by such Bank as
Euro-Dollar Loans shall be made instead as Base Rate Loans and interest and
principal on such Syndicated Loans shall be payable contemporaneously with the
related Euro-Dollar Loans of the other Banks, and
(b) after each of its Euro-Dollar Loans has been repaid, all payments of
principal which would otherwise be applied to repay such Euro-Dollar Loans
shall be applied to repay its Base Rate Loans instead.
SECTION 8.05. Compensation. Upon the request of any Bank, delivered to the
Borrower and the Administrative Agent, the Borrower shall pay to such Bank such
amount or amounts as shall compensate such Bank for any loss, cost or expense
(not including lost profits) reasonably and actually incurred by such Bank
(except solely such as result from such Bank's breach of its
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obligations under the Loan Documents or gross negligence or wilful misconduct)
as a result of:
(a) any payment or prepayment (pursuant to Section 2.08, 2.09, 2.10, 2.11,
6.01, 8.02 or otherwise) of a Euro-Dollar Loan on a date other than the last
day of an Interest Period for such Loan; or
(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the date
for such prepayment specified in the relevant notice of prepayment hereunder;
or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan or Money
Market Loan on the date for the Euro-Dollar Borrowing or Money Market Borrowing
of which such Euro-Dollar Loan or Money Market Borrowing is a part specified in
the applicable Notice of Borrowing delivered pursuant to Section 2.02 or
notification of acceptance of Money Market Quotes pursuant to Section 2.03(e).
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telecopier or
similar writing) and shall be given to such party at its address or telecopier
number set forth on the signature pages hereof or such other address or
telecopier number as such party may hereafter specify for the purpose by notice
to each other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the appropriate confirmation is
received, (ii) if given by mail, 3 Domestic Business Days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the
Administrative Agent under Article II or Article VIII shall not be effective
until received.
SECTION 9.02. No Waivers. No failure or delay by the Administrative Agent
or any Bank in exercising any right, power or privilege hereunder or under any
Note or other Loan Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.03. Expenses; Documentary Taxes. The Borrower shall pay (i) all
reasonable out-of-pocket expenses actually incurred by the Administrative
Agent, including
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reasonable fees and disbursements of special counsel for the Banks and the
Administrative Agent, in connection with the preparation of this Agreement and
the other Loan Documents, any waiver or consent hereunder or thereunder or any
amendment hereof or thereof or any Default hereunder or thereunder and (ii) if
a Default occurs, all reasonable out-of-pocket expenses actually incurred by
the Administrative Agent and the Banks, including reasonable fees and
disbursements of counsel, in connection with such Default and collection and
other enforcement proceedings resulting therefrom, including reasonable
out-of-pocket expenses actually incurred in enforcing this Agreement and the
other Loan Documents. The Borrower shall indemnify the Administrative Agent and
each Bank against any transfer taxes, documentary taxes, assessments or charges
made by any Authority by reason of the execution and delivery of this Agreement
or the other Loan Documents.
SECTION 9.04. Indemnification. The Borrower shall indemnify the
Administrative Agent, the Banks and each Affiliate thereof and their respective
directors, officers, employees and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages to which any of
them may become subject, insofar as such losses, liabilities, claims or damages
arise out of or result from any actual or proposed use by the Borrower of the
proceeds of any extension of credit by any Bank hereunder or breach by the
Borrower of this Agreement or any other Loan Document or from any
investigation, litigation (including, without limitation, any actions taken by
the Administrative Agent or any of the Banks to enforce this Agreement or any
of the other Loan Documents) or other proceeding (including, without
limitation, any threatened investigation or proceeding) relating to the
foregoing, and the Borrower shall reimburse the Administrative Agent and each
Bank, and each Affiliate thereof and their respective directors, officers,
employees and agents, upon demand for any out-of-pocket expenses (including,
without limitation, reasonable legal fees) actually incurred in connection with
any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred solely by reason of the
breach of obligations under the Loan Documents or gross negligence or wilful
misconduct of the Person to be indemnified.
SECTION 9.05. Setoff; Sharing of Setoffs. (a) The Borrower agrees that the
Administrative Agent and each Bank (and Wachovia, as to the Swing Loans) shall
have a right of setoff for all indebtedness and obligations owing to them from
the Borrower upon all deposits or deposit accounts, of any kind, or any
interest in any deposits or deposit accounts thereof, now or hereafter pledged,
mortgaged, transferred or assigned to the Administrative Agent or any such Bank
or otherwise in the possession or control of the Administrative Agent or any
such Bank for any purpose for the account or benefit of the Borrower and
including any balance of any deposit account or of any credit of the Borrower
with the Administrative Agent or any such Bank,
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whether now existing or hereafter established, and the Borrower hereby
authorizes the Administrative Agent and each Bank at any time or times with or
without prior notice to apply such balances or any part thereof to any
indebtedness and obligations owing by the Borrower to the Banks and/or the
Administrative Agent during the existence of an Event of Default and in such
amounts as they may elect, and whether or not the collateral, if any, or the
responsibility of other Persons primarily, secondarily or otherwise liable may
be deemed adequate; provided, however, nothing herein contained shall authorize
or entitle the Administrative Agent or any Bank to exercise any right of setoff
against any accounts, monies, government securities, or other Investments held
by such Person under any escrow, trust, special purpose account, or other
similar arrangement established with such Person by the Borrower or the
Guarantors or Subsidiary for the purpose of (i) implementing a defeasance or
"in substance" defeasance of Debt of the Borrower or the Guarantors or
Subsidiary, or (ii) maintaining security deposits of tenants of any of the
Properties. For the purposes of this paragraph, all remittances and property
shall be deemed to be in the possession of the Administrative Agent or any such
Bank as soon as the same may be put in transit to it by mail or carrier or by
other bailee.
(b) Each Bank agrees that if it shall, by exercising any right of setoff
or counterclaim or otherwise (including, without limitation, from any
collateral hereafter obtained), receive payment of a proportion of the
aggregate amount of principal and interest owing with respect to the Syndicated
Loan Note held by it which is greater than the proportion received by any other
Bank in respect of the aggregate amount of all principal and interest owing
with respect to the Syndicated Loan Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Syndicated Loan Notes held by the other Banks owing to
such other Banks, and such other adjustments shall be made, as may be required
so that all such payments of principal and interest with respect to the
Syndicated Loan Notes held by the Banks owing to such other Banks shall be
shared by the Banks pro rata; provided that (i) nothing in this Section shall
impair the right of any Bank to exercise any right of setoff or counterclaim it
may have and to apply the amount subject to such exercise to the payment of
indebtedness of the Borrower other than its indebtedness under the Syndicated
Loan Notes, and (ii) if all or any portion of such payment received by the
purchasing Bank is thereafter recovered from such purchasing Bank, such
purchase from each other Bank shall be rescinded and such other Bank shall
repay to the purchasing Bank the purchase price of such participation to the
extent of such recovery together with an amount equal to such other Bank's
ratable share (according to the proportion of (x) the amount of such other
Bank's required repayment to (y) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the
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<PAGE> 78
total amount so recovered. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Syndicated Loan Note or Money Market Loan Note, whether or not acquired
pursuant to the foregoing arrangements, may exercise rights of setoff or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
SECTION 9.06. Amendments and Waivers. (a) Any provision of this Agreement,
the Notes or any other Loan Documents, may be amended or waived if, but only
if, such amendment or waiver is in writing and is signed by the Borrower and
the Required Banks (and, if the rights or duties of the Administrative Agent
are affected thereby, by the Administrative Agent); provided that, no such
amendment or waiver shall:
(1) unless signed by Banks having at least 75% of the aggregate amount of
the Commitments or, if the Commitments are no longer in effect, Banks holding
at least 75% of the aggregate outstanding principal amount of the sum of the
Syndicated Loans, change the definition of "Borrowing Base"; or
(2) unless signed by all Banks, (i) change the Commitment of any Bank or
subject any Bank to any additional obligation, (ii) change the principal of or
rate of interest on any Loan or any fees (other than fees payable to the
Administrative Agent) hereunder, (iii) change the date fixed for any payment of
principal of or interest on any Loan or any fees hereunder, (iv) change the
amount of principal, interest or fees due on any date fixed for the payment
thereof, (v) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the percentage of Banks, which shall
be required for the Banks or any of them to take any action under this Section
or any other provision of this Agreement, (vi) change the manner of application
of any payments made under this Agreement or the Notes, (vii) release or
substitute all or any substantial part of the collateral (if any) held as
security for the Loans, or (viii) release any Guarantee given to support
payment of the Loans, except as expressly provided in the last sentence of
Section 5.11.
(b) The Borrower will not obtain from any Bank its written agreement to
waive or amend any of the provisions of this Agreement except through the
Administrative Agent, and the Administrative Agent shall be supplied by the
Borrower with sufficient information to enable the Banks to make an informed
decision with respect thereto. Executed or true and correct copies of any
waiver or consent effected pursuant to the provisions of this Agreement shall
be delivered by the Borrower to the Administrative Agent for redelivery to each
Bank forthwith following the date on which the same shall have been executed
and delivered by the requisite percentage of Banks. The Borrower will not,
directly or indirectly, pay or cause to be paid any remuneration, whether by
way of supplemental or additional
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<PAGE> 79
interest, fee or otherwise, to any Bank (in its capacity as such) as
consideration for or as an inducement to the entering into by such Bank of any
waiver or amendment of any of the terms and provisions of this Agreement unless
such remuneration is concurrently paid, on the same terms, ratably to all such
Banks.
(c) Each Designated Bank hereby appoints its Designating Bank as such
Designated Bank's agent and attorney in fact and grants to its Designating Bank
an irrevocable power of attorney, coupled with an interest, to receive payments
made for the benefit of such Designated Bank under this Agreement, to deliver
and receive all communications and notices under this Agreement and other Loan
Documents and to exercise on such Designated Bank's behalf all rights to vote
and to grant and make approvals, waivers, consents, releases and amendments to
or under this Agreement or the other Loan Documents. Any document executed by
such agent on such Designated Bank's behalf in connection with this Agreement
or the other Loan Documents shall be binding on such Designated Bank. The
Borrower, the Administrative Agent, the Syndication Agent, the Documentation
Agent and each of the Banks may rely on and are beneficiaries of the preceding
provisions.
SECTION 9.07. No Margin Stock Collateral. Each of the Banks represents to
the Administrative Agent and each of the other Banks that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.08. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. In no event shall a Bank
that sells a participation be obligated to the Participant to take or refrain
from taking any action hereunder except that such Bank may agree that it will
not (except as provided below), without the consent of the Participant, agree
to (i) the change of any date fixed for the payment of principal of or interest
on the related Loan or Loans,
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(ii) the change of the amount of any principal, interest or fees due on any
date fixed for the payment thereof with respect to the related Loan or Loans,
(iii) the change of the principal of the related Loan or Loans, (iv) any change
in the rate at which either interest is payable thereon or (if the Participant
is entitled to any part thereof) fee is payable hereunder from the rate at
which the Participant is entitled to receive interest or fee (as the case may
be) in respect of such participation, (v) the release or substitution of all or
any substantial part of the collateral (if any) held as security for the Loans,
or (vi) the release of any Guarantee given to support payment of the Loans,
except as expressly provided in the last sentence of Section 5.11. Each Bank
selling a participating interest in any Loan, Note, Commitment or other
interest under this Agreement, other than a Money Market Loan or Money Market
Note or participating interest therein, shall, within 10 Domestic Business Days
of such sale, provide the Borrower and the Administrative Agent with written
notification stating that such sale has occurred and identifying the
Participant and the interest purchased by such Participant. The Borrower agrees
that each Participant shall be entitled to the benefits of Sections 8.03 and
8.05, subject to the provisions of Section 9.08(e), with respect to its
participation in Loans outstanding from time to time.
(c) Any Bank may at any time assign to one or more banks or
financial institutions (each an "Assignee") all, or in the case of its Loans
and Commitments, a proportionate part of all its Loans and Commitments, of its
rights and obligations under this Agreement, the Notes and the other Loan
Documents, and such Assignee shall assume all such rights and obligations,
pursuant to an Assignment and Acceptance, executed by such Assignee, such
transferor Bank and the Administrative Agent (and, in the case of an Assignee
that is not then a Bank (or an Affiliate of a Bank), subject to clause (iii)
below, by the Borrower); provided that (i) no interest may be sold by a Bank
pursuant to this paragraph (c) unless the Assignee shall agree to assume
ratably equivalent portions of the transferor Bank's Commitment, (ii) if a Bank
is assigning only a portion of its Commitment, then, the amount of the
Commitment being assigned (determined as of the effective date of the
assignment) shall be in an amount not less than $10,000,000, (iii) except
during the continuance of an Event of Default, no interest may be sold by a
Bank pursuant to this paragraph (c) to any Assignee that is not then a Bank (or
an Affiliate of a Bank) without the consent of the Borrower and the
Administrative Agent, which consent shall not be unreasonably withheld, and
(iv) except during the existence of an Event of Default, each Bank may make
only two assignments to a Person which, prior to the assignment, was not a Bank
(or an Affiliate of such Bank), unless the Borrower has consented thereto in
its sole discretion. Upon (A) execution of the Assignment and Acceptance by
such transferor Bank, such Assignee, the Administrative Agent and (if
applicable) the Borrower, (B) delivery of an executed copy of the Assignment
and Acceptance to the Borrower and the Administrative Agent, (C)
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<PAGE> 81
payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, and (D)
payment by such Assignee of a processing and recordation fee of $2,500 to the
Administrative Agent, such Assignee shall for all purposes be a Bank party to
this Agreement and shall have all the rights and obligations of a Bank under
this Agreement to the same extent as if it were an original party hereto with a
Commitment as set forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by the Borrower, the Banks or the
Administrative Agent shall be required. Upon the consummation of any transfer
to an Assignee pursuant to this paragraph (c), the transferor Bank, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that, if required, a new Note is issued to such Assignee.
(d) Subject to the provisions of Section 9.09, the Borrower
authorizes each Bank to disclose to any Participant or Assignee (each a
"Transferee") and any prospective Transferee any and all financial information
in such Bank's possession concerning the Borrower which has been delivered to
such Bank by the Borrower pursuant to this Agreement or which has been
delivered to such Bank by the Borrower in connection with such Bank's credit
evaluation prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 8.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 8.02
or 8.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 9.08 to the contrary notwithstanding,
any Bank may assign and pledge all or any portion of the Loans and/or
obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank, provided that any payment in respect of such
assigned Loans and/or obligations made by the Borrower to the assigning and/or
pledging Bank in accordance with the terms of this Agreement shall satisfy the
Borrower's obligations hereunder in respect of such assigned Loans and/or
obligations to the extent of such payment. No such assignment shall release the
assigning and/or pledging Bank from its obligations hereunder.
(g) Any Bank may at any time designate not more than one Designated
Bank to fund Money Market Loans on behalf of such Designating Bank subject to
the terms of this Section 9.08(g), and the provisions of Section 9.08(c) shall
not apply to such designation. No Bank may have more than one Designated Bank
at any time. Such designation may occur either by the execution of
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<PAGE> 82
the signature pages of this Agreement by such Bank and Designated Bank next to
the appropriate "Designating Bank" and "Designated Bank" captions, or by
execution by such parties of a Designation Agreement subsequent to the date of
this Agreement; provided, that any Bank and its Designated Bank executing the
signatures pages of this Agreement as "Designating Bank" and "Designated Bank",
respectively, on the date hereof shall be deemed to have executed a Designation
Agreement, and shall be bound by the respective representations, warranties and
covenants contained therein, and such designation shall be conclusively deemed
to be acknowledged by the Borrower and the Administrative Agent. The parties to
each such designation occurring subsequent to the execution date hereof shall
execute and deliver to the Administrative Agent and the Borrower for their
acknowledgment a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Bank and a designee
representing that it is a Designated Bank and acknowledged by the Borrower, the
Administrative Agent will acknowledge such Designation Agreement and will give
prompt notice thereof to the Borrower and the other Banks, whereupon, (i) the
Borrower shall execute and deliver to the Designating Bank a Designated Bank
Note payable to the order of the Designated Bank, (ii) from and after the
effective date specified in the Designation Agreement, the Designated Bank
shall become a party to this Agreement with a right to make Money Market Loans
on behalf of its Designating Bank pursuant to Section 2.03(g), and (iii) the
Designated Bank shall not be required to make payments with respect to any
obligations in this Agreement except to the extent of excess cash flow of such
Designated Bank which is not otherwise required to repay obligations of such
Designated Bank which are then due and payable; provided, however, that
regardless of such designation and assumption by the Designated Bank, the
Designating Bank shall be and remain obligated to the Borrower, the
Administrative Agent, the Syndication Agent, the Documentation Agent and the
Banks for each and every obligation of the Designating Bank and its related
Designated Bank with respect to this Agreement, including, without limitation,
any indemnification obligations under Section 7.05 and any sums otherwise
payable to the Borrower by the Designated Bank. Each Designating Bank shall
serve as the administrative agent of its Designated Bank and shall on behalf of
its Designated Bank: (i) receive any and all payments made for the benefit of
such Designated Bank and (ii) give and receive all communications and notices
and take all actions hereunder, including, without limitation, votes,
approvals, waivers, releases, consents and amendments under or relating to this
Agreement and the other Loan Documents. Any such notice, communication, vote,
approval, waiver, consent or amendment shall be signed by a Designating Bank as
administrative agent for its Designated Bank and need not be signed by such
Designated Bank on its own behalf. The Borrower, the Administrative Agent, the
Syndication Agent, the Documentation Agent and the Banks may rely thereon
without any requirement that the Designated Bank sign or acknowledge the same.
No Designated Bank may assign or transfer all or any
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<PAGE> 83
portion of its interest hereunder or under any other Loan Document, other than
via an assignment to its Designating Bank or Liquidity Bank (but any assignment
to a Liquidity Bank shall not curtail or affect the appointment or rights of
the Designating Bank pursuant to Section 9.06(c) or Section 4 of the
Designation Agreement, which appointment and rights are irrevocable), if any,
or otherwise in accordance with the provisions of Section 2.03(g).
SECTION 9.09. Confidentiality. Each Bank agrees to exercise
commercially reasonable efforts to keep any information delivered or made
available by the Borrower to it confidential from anyone other than persons
employed or retained by such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans; provided that
nothing herein shall prevent any Bank from disclosing such information (i) to
any other Bank, (ii) upon the order of any court or administrative agency,
(iii) upon the request or demand of any regulatory agency or authority having
jurisdiction over such Bank, (iv) which has been publicly disclosed without
breach of these or any other applicable confidentiality provisions, (v) to the
extent reasonably required in connection with any litigation to which the
Administrative Agent, any Bank or their respective Affiliates may be a party,
(vi) to the extent reasonably required in connection with the exercise of any
remedy hereunder, (vii) to such Bank's legal counsel and independent auditors
(whom the Bank agrees to advise as to the confidential nature of such
information), (viii) to any actual or proposed Transferee of all or part of its
rights hereunder which has agreed in writing to be bound by the provisions of
this Section 9.09; provided that should disclosure of any such confidential
information be required by virtue of clause (ii) or clause (v) of the
immediately preceding sentence, any relevant Bank shall promptly notify the
Borrower of same so as to allow the Borrower to seek a protective order or to
take any other appropriate action; provided, further, that, no Bank shall be
required to delay compliance with any directive to disclose any such
information so as to allow the Borrower to effect any such action, and (ix) by
any Designated Bank to any rating agency, commercial paper dealer, or provider
of a surety, guaranty or credit or liquidity enhancement to such Designated
Bank which has agreed in writing to be bound by the provisions of this Section
9.09 and to use such information solely for purposes of evaluating the
creditworthiness of the Borrower and the Guarantors and their abilities to
perform their obligations under this Agreement and the other Loan Documents.
SECTION 9.10. Representation by Banks. Each Bank hereby represents
that it is a commercial lender or financial institution which makes Syndicated
Loans and Money Market Loans in the ordinary course of its business and that it
will make its Syndicated Loans and Money Market Loans hereunder for its own
account in the ordinary course of such business; provided that, subject to
Section 9.08, the disposition of the Note or Notes
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held by that Bank shall at all times be within its exclusive control.
SECTION 9.11. Obligations Several. The obligations of each Bank
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional
party in any proceeding for such purpose.
SECTION 9.12. Georgia Law. This Agreement and each Note shall be
construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more of the provisions
contained in this Agreement, the Notes or any of the other Loan Documents
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby and shall be
enforced to the greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest, and
all charges, amounts or fees contracted for, charged or collected pursuant to
this Agreement, the Notes or the other Loan Documents and deemed to be interest
under applicable law (collectively, "Interest") exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by any Bank, then the excess sum (the
"Excess") shall be credited as a payment of principal, unless the Borrower
shall notify such Bank in writing that it elects to have the Excess returned
forthwith. It is the express intent hereof that the Borrower not pay and the
Banks not receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrower under applicable law.
The right to accelerate maturity of any of the Loans does not include the right
to accelerate any interest that has not otherwise accrued on the date of such
acceleration, and the Administrative Agent and the Banks do not intend to
collect any unearned interest in the event of any such acceleration. All monies
paid to the Administrative Agent or the Banks hereunder or under any of the
Notes or the other Loan Documents, whether at maturity or by prepayment, shall
be subject to rebate of unearned interest as and to the extent required by
applicable law. By the execution of this Agreement, the Borrower covenants that
(i) the credit or return of any Excess shall constitute the acceptance by the
Borrower of such Excess, and (ii) the Borrower shall not seek or pursue any
other
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remedy, legal or equitable, against the Administrative Agent or any Bank,
based in whole or in part upon contracting for charging or receiving any
Interest in excess of the Maximum Rate. For the purpose of determining whether
or not any Excess has been contracted for, charged or received by the
Administrative Agent or any Bank, all interest at any time contracted for,
charged or received from the Borrower in connection with this Agreement, the
Notes or any of the other Loan Documents shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Commitments. The Borrower, the Administrative
Agent and each Bank shall, to the maximum extent permitted under applicable
law, (i) characterize any non-principal payment as an expense, fee or premium
rather than as Interest and (ii) exclude voluntary prepayments and the effects
thereof. The provisions of this Section shall be deemed to be incorporated into
each Note and each of the other Loan Documents (whether or not any provision of
this Section is referred to therein). All such Loan Documents and
communications relating to any Interest owed by the Borrower and all figures
set forth therein shall, for the sole purpose of computing the extent of
obligations hereunder and under the Notes and the other Loan Documents be
automatically recomputed by the Borrower, and by any court considering the
same, to give effect to the adjustments or credits required by this Section.
SECTION 9.15. Interpretation. No provision of this Agreement or any
of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction. The
Borrower (a) and each of the Banks and the Administrative Agent irrevocably
waives, to the fullest extent permitted by law, any and all right to trial by
jury in any legal proceeding arising out of this Agreement, any of the other
Loan Documents, or any of the transactions contemplated hereby or thereby, (b)
submits to the nonexclusive personal jurisdiction in the State of Georgia, the
courts thereof and the United States District Courts sitting therein, for the
enforcement of this Agreement, the Notes and the other Loan Documents, (c)
waives any and all personal rights under the law of any jurisdiction to object
on any basis (including, without limitation, inconvenience of forum) to
jurisdiction or venue within the State of Georgia for the purpose of litigation
to enforce this Agreement, the Notes or the other Loan Documents, and (d)
agrees that service of process may be made upon it in the manner prescribed in
Section 9.01 for the giving of notice to the Borrower. Nothing herein
contained, however, shall prevent the Administrative Agent from bringing any
action or exercising any rights against any security and against the Borrower
personally, and against any assets of the Borrower, within any other state or
jurisdiction.
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SECTION 9.17. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 9.18. Source of Funds -- ERISA. Each of the Banks hereby
severally (and not jointly) represents to the Borrower that no part of the
funds to be used by such Bank to fund the Syndicated Loans and Money Market
Loans hereunder from time to time constitutes (i) assets allocated to any
separate account maintained by such Bank in which any employee benefit plan (or
its related trust) has any interest nor (ii) any other assets of any employee
benefit plan. As used in this Section, the terms "employee benefit plan" and
"separate account" shall have the respective meanings assigned to such terms in
Section 3 of ERISA.
SECTION 9.19. No Bankruptcy Proceedings. Each of the Borrower, the
Banks, the Administrative Agent, the Syndication Agent and the Administrative
Agent agrees that it will not institute against any Designated Bank or join any
other Person in instituting against any Designated Bank any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, for one year and one day after the
payment in full of the latest maturing commercial paper note issued by such
Designated Bank.
[Signatures are contained on the following pages.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
POST APARTMENT HOMES, L.P. (SEAL)
By: Post GP Holdings, Inc., its
sole general partner
By:
-------------------------------
R. Byron Carlock, Jr.
Executive Vice President
Post Apartment Homes, L.P.
One Riverside
4401 Northside Parkway
Suite 800
Atlanta, Georgia 30327-3057
Attention: John T. Glover,
President
Telecopier number: 404-951-1825
Confirmation number: 404-850-4400
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COMMITMENTS Wachovia Bank, N.A., (SEAL)
as Administrative Agent and
as a Bank
$70,000,000
By:
-------------------------------------
Title:
Lending Office
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Telecopier number: 404-332-4005
Confirmation number: 404-332-6971
83
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$70,000,000 SUNTRUST BANK, ATLANTA (SEAL)
By:
-----------------------------------
Title:
Lending Office
SunTrust Bank, Atlanta
50 Hurt Plaza-Suite 700
Atlanta, Georgia 30303
Attention: Mr. W. John Neill
Telecopier number: 404-827-6774
Confirmation number: 404-588-8248
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<PAGE> 90
FIRST UNION NATIONAL BANK, (SEAL)
as Syndication Agent and as a Bank
$60,000,000 B:
--------------------------------------
Title:
Lending Office
First Union National Bank
One First Union Center DC6
Charlotte, North Carolina 28288-0166
Attention: Mr. Daniel J. Sullivan
Telecopier number: 704-383-6205
Confirmation number: 704-383-6441
85
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$25,000,000 NATIONSBANK, N.A. (SEAL)
By:
-----------------------------------
Title:
LENDING OFFICE
NationsBank, N.A.
600 Peachtree Street, N.E.
6th Floor
Atlanta, Georgia 30308-3318
Attention: Mr. Frank Chiu
Telecopier No.: 404-607-4144
Confirmation No.: 404-607-4128
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$25,000,000 SOUTHTRUST BANK, N.A. (SEAL)
By:
-----------------------------------
Title:
Lending Office
SouthTrust Bank, N.A.
420 North 20th Street
Birmingham, Alabama 35290
Attention: Ms. Lynn Feuerlein
Telecopier number: 205-254-8270
Confirmation number: 205-254-5870
87
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$20,000,000 COMMERZBANK AG, ATLANTA AGENCY
(SEAL)
By:
------------------------------------
Title:
By:
------------------------------------
Title:
Lending Office
Commerzbank AG, Atlanta Agency
1230 Peachtree Street
35th Floor
Atlanta, GA 30309
Attention: Mr. Harry Yergey
Telecopier number: 404-888-6539
Confirmation number: 404-888-6500
FOUR WINDS FUNDING CORPORATION
(SEAL)
By: Commerzbank AG, New York
Branch, as Administrator and
Attorney-in-Fact
By:
------------------------------------
Title:
By:
------------------------------------
Title:
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<PAGE> 94
$20,000,000 THE FIRST NATIONAL BANK OF
CHICAGO (SEAL)
By:
-----------------------------------
Title:
Lending Office
The First National Bank of Chicago
One First National Plaza
Mail Suite IL1-0315
Chicago, Illinois 60670
Attention: Ms. Patricia Leung
Telecopier number: 312-732-1117
Confirmation number: 312-732-8619
89
<PAGE> 95
$10,000,000 CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION (SEAL)
By:
----------------------------------
Title:
Lending Office
Chase Bank of Texas, National Association
707 Travis, 6th Floor-North-47
Houston, Texas 77252-8047
Telecopier number: 713-216-7713
Confirmation number: 713-216-1511
90
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$10,000,000 PNC BANK, NATIONAL ASSOCIATION (SEAL)
By:
----------------------------------
Title:
Lending Office
PNC Bank, National Association
One PNC Plaza
Mail Stop P1-POPP-19-2
Pittsburgh, Pennsylvania 15222
Attention: Mr. Wayne Robertson
Telecopier number: 412-762-6500
Confirmation number: 412-762-8452
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<PAGE> 1
EXHIBIT 10.34
FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT
AGREEMENT(this "First Amendment") is dated as of the 3rd day of September, 1999
among POST APARTMENT HOMES, L.P.(the "Borrower"), WACHOVIA BANK, N.A., as
Administrative Agent (the "Administrative Agent"), FIRST UNION NATIONAL BANK, as
Syndication Agent, SUNTRUST BANK, ATLANTA, as Documentation Agent, and WACHOVIA
BANK, N.A., SUNTRUST BANK, ATLANTA, FIRST UNION NATIONAL BANK, BANK OF AMERICA,
N.A. (formerly Nationsbank, N.A.), SOUTHTRUST BANK, N.A., COMMERZBANK, AG,
ATLANTA AGENCY, FOUR WINDS FUNDING CORPORATION, THE FIRST NATIONAL BANK OF
CHICAGO, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION and PNC BANK, NATIONAL
ASSOCIATION (collectively, the "Banks");
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent and the Banks executed
and delivered that certain Third Amended and Restated Credit Agreement, dated as
of May 7, 1999 (the "Credit Agreement");
WHEREAS, the Borrower has requested and the Administrative Agent and
the Banks have agreed to certain amendments to the Credit Agreement, subject to
the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrower, the Administrative
Agent and the Banks hereby covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.
2. Amendment to Section 1.01. Section 1.01 of the Credit Agreement
hereby is amended by deleting the definitions of "GP Sub" and "General Partner"
and substituting the following therefor:
"GP Sub" means Post GP Holdings, Inc., a Georgia corporation
which is a direct Subsidiary of PPI, the General Partner and the owner
of a 1% general partner interest in the Borrower as of the Closing
Date.
<PAGE> 2
"General Partner" means the sole general partner of the
Borrower (which, on the Closing Date, is GP Sub) or, if there is more
than one such general partner, the managing general partner of the
Borrower.
3. Amendment to Section 2.06(a). Section 2.06(a) of the Credit
Agreement hereby is amended by deleting the definition of "London Interbank
Offered Rate" and substituting the following therefor:
The "London Interbank Offered Rate" applicable to any
Euro-Dollar Loan means for the Interest Period of such Euro-Dollar
Loan, the rate per annum determined on the basis of the offered rate
for deposits in Dollars of amounts equal or comparable to the
principal amount of such Euro-Dollar Loan offered for a term
comparable to such Interest Period, which rates appear on Telerate
Page 3750 effective as of 11:00 A.M., London time, 2 Euro-Dollar
Business Days prior to the first day of such Interest Period,
provided that if no such offered rates appear on such page, the
"London Interbank Offered Rate" for such Interest Period will be the
arithmetic average (rounded upward, if necessary, to the next higher
1/100th of 1%) of rates quoted by not less than 2 major banks in New
York City, selected by the Administrative Agent, at approximately
10:00 A.M., New York City time, 2 Euro-Dollar Business Days prior to
the first day of such Interest Period, for deposits in Dollars
offered by leading European banks for a period comparable to such
Interest Period in an amount comparable to the principal amount of
such Euro-Dollar Loan.
4. Amendment to Section 5.21. Section 5.21 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
SECTION 5.21. Qualification as a Real Estate Investment Trust;
General Partner. PPI shall at all times remain qualified under the
Code as a real estate investment trust. The Borrower will not agree
to amend or waive the requirements of Section 7.5A of the limited
partnership agreement of the Borrower, as in effect on the date of
this Agreement, as such requirements are applicable to the General
Partner, without the prior written consent of the Required Banks
(which consent the Banks hereby agree not to unreasonably withhold
or delay). The General Partner shall at all times be one of PPI, GP
Sub or another Wholly Owned Subsidiary of PPI which is a Guarantor.
5. Amendment to Section 5.22(b). Section 5.22(b) of the Credit
Agreement hereby is amended by deleting it in its entirety and substituting the
following therefor:
(b) not permit any of the Subsidiaries (other than the
Borrower, the General Partner, or LP Sub) to Guarantee the Debt of
another Person; provided, that any Subsidiary can Guarantee the Debt of
another Subsidiary, so long as the
<PAGE> 3
aggregate amount of Debt of Subsidiaries which is Guaranteed by
Subsidiaries (other than the Borrower, the General Partner, or LP Sub)
does not exceed $500,000;
6. Restatement of Representations and Warranties. The Borrower hereby
restates and renews each and every representation and warranty heretofore made
by it in the Credit Agreement and the other Loan Documents as fully as if made
on the date hereof and with specific reference to this First Amendment and all
other loan documents executed and/or delivered in connection herewith, except to
the extent otherwise disclosed pursuant to Section 5.01(c) or (d) of the Credit
Agreement.
7. Effect of Amendment. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Loan Documents shall be and remain
in full force and effect, and shall constitute the legal, valid, binding and
enforceable obligations of the Borrower. The amendments contained herein shall
be deemed to have prospective application only, unless otherwise specifically
stated herein.
8. Ratification. The Borrower hereby restates, ratifies and reaffirms
each and every term, covenant and condition set forth in the Credit Agreement
and the other Loan Documents effective as of the date hereof.
9. Counterparts. This First Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
10. Section References. Section titles and references used in this
First Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
11. No Default. To induce the Administrative Agent and the Banks to
enter into this First Amendment and to continue to make advances pursuant to the
Credit Agreement, the Borrower hereby acknowledges and agrees that, as of the
date hereof, and after giving effect to the terms hereof, there exists (i) no
Default or Event of Default and (ii) no right of offset, defense, counterclaim,
claim or objection in favor of the Borrower arising out of or with respect to
any of the Loans or other obligations of the Borrower owed to the Banks under
the Credit Agreement.
12. Further Assurances. The Borrower agrees to take such further
actions as the Administrative Agent shall reasonably request in connection
herewith to evidence the amendments herein contained to the Borrower.
13. Governing Law. This First Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of Georgia.
14. Conditions Precedent. This First Amendment shall become effective
only upon execution and delivery (i) of this First
3
<PAGE> 4
Amendment by the Borrower, the Agent and the Required Banks and (ii) of the
Consent and Reaffirmation of Guarantors at the end hereof by each of the
Guarantors.
IN WITNESS WHEREOF, the Borrower, the Administrative Agent and each of
the Banks has caused this First Amendment to be duly executed, under seal, by
its duly authorized officer as of the day and year first above written.
POST APARTMENT HOMES, L.P., (SEAL) WACHOVIA BANK, N.A., (SEAL)
as Borrower as Administrative Agent and a Bank
By: Post GP Holdings, Inc.,
its sole general partner By:
-------------------------------
Title:
By:
R. Byron Carlock, Jr.
Executive Vice President
FIRST UNION NATIONAL BANK, (SEAL) SUNTRUST BANK, ATLANTA, (SEAL)
as Syndication Agent and a Bank as Documentation Agent and a Bank
By: By:
-------------------------
Title: Title:
BANK OF AMERICA, N.A. (formerly SOUTHTRUST BANK, N.A., (SEAL)
Nationsbank, N.A.), (SEAL) as a Bank
as a Bank
By: By:
-------------------------
Title: Title:
COMMERZBANK AG, ATLANTA (SEAL) FOUR WINDS FUNDING
AGENCY, as a Bank CORPORATION, as a Bank (SEAL)
By: By:
-------------------------
Title: Title:
By: By:
-------------------------
Title: Title:
THE FIRST NATIONAL BANK CHASE BANK OF TEXAS,
OF CHICAGO, (SEAL) NATIONAL ASSOCIATION, (SEAL)
as a Bank as a Bank
By: By:
-------------------------
Title: Title:
PNC BANK, NATIONAL
ASSOCIATION, (SEAL)
as a Bank
By:
Title
4
<PAGE> 5
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing First
Amendment to Credit Agreement (the "First Amendment"), (ii) consents to the
execution and delivery of the First Amendment by the parties thereto and (iii)
reaffirms all of its obligations and covenants under the Guaranty Agreement
dated as of May 7, 1999 executed by it, and agrees that none of such obligations
and covenants shall be affected by the execution and delivery of the First
Amendment. This Consent and Reaffirmation may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
POST PROPERTIES, INC. (SEAL)
By:
------------------------
R. Byron Carlock, Jr.
Title:
POST GP HOLDINGS, INC. (SEAL)
By:
-------------------------
R. Byron Carlock, Jr.
Title:
POST LP HOLDINGS, INC. (SEAL)
By:
-------------------------
R. Byron Carlock, Jr.
Title:
5
<PAGE> 1
EXHIBIT 10.35
POST PROPERTIES, INC. DEFERRED COMPENSATION PLAN
FOR DIRECTORS AND EXECUTIVE COMMITTEE MEMBERS
AS AMENDED AND RESTATED
EFFECTIVE AS OF
JANUARY 1, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ss. 1. PURPOSE....................................................................................................1
-------
ss. 2. DEFINITIONS................................................................................................1
-----------
2.1 Account.........................................................................................1
2.2 Base Salary.....................................................................................1
2.3 Beneficiary.....................................................................................2
2.4 Board...........................................................................................2
2.5 Bonus...........................................................................................2
2.6 Change in Control...............................................................................2
2.7 Disability......................................................................................3
2.8 Distribution Subaccount.........................................................................3
2.9 Distribution Election Date......................................................................3
2.10 Director........................................................................................3
2.11 Executive Committee Member......................................................................4
2.12 Meeting Fees....................................................................................4
2.13 MPIP............................................................................................4
2.14 1934 Act........................................................................................4
2.15 Participating Employer..........................................................................4
2.16 Post............................................................................................4
2.17 Post Apartment Homes............................................................................4
2.18 Post Stock......................................................................................5
2.19 Retainer........................................................................................5
ss. 3. DEFERRAL ELECTIONS.........................................................................................5
------------------
3.1 Initial Election................................................................................5
(a) First Term Directors...................................................................5
(b) Executive Committee Members............................................................6
3.2 Annual Deferral Elections.......................................................................8
3.3 Automatic Election Extension....................................................................8
3.4 Account Credits.................................................................................8
(a) Director...............................................................................8
(b) Executive Committee Member.............................................................9
3.5 Participating Employer..........................................................................9
ss. 4. ACCOUNT ADJUSTMENTS.......................................................................................10
-------------------
4.1 Alternatives...................................................................................10
4.2 Elections......................................................................................10
4.3 Adjustments....................................................................................11
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
ss. 5. DISTRIBUTION ELECTION DATE................................................................................11
--------------------------
5.1 General Rule...................................................................................11
5.2 Death or Disability............................................................................12
5.3 Change in Control..............................................................................12
ss. 6. DISTRIBUTIONS.............................................................................................13
-------------
6.1 General........................................................................................13
6.2 Distribution Forms.............................................................................13
(a) Standard Lump Sum.....................................................................13
(b) Five Annual Installments..............................................................14
(c) Ten Annual Installments...............................................................14
6.3 Hardships......................................................................................15
6.4 Beneficiary....................................................................................16
(a) Designation...........................................................................16
(b) Distribution..........................................................................17
6.5 Post Stock.....................................................................................17
6.6 General Assets.................................................................................18
(a) Director..............................................................................18
(b) Executive Committee Member............................................................18
ss. 7. MISCELLANEOUS.............................................................................................18
-------------
7.1 Making and Revoking Elections..................................................................19
7.2 No Liability...................................................................................19
7.3 No Assignment; Binding Effect..................................................................19
7.4 Construction...................................................................................19
7.5 No Contract of Employment......................................................................20
7.6 Amendment and Termination......................................................................20
7.7 Administration.................................................................................20
7.8 Effective Date.................................................................................21
</TABLE>
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<PAGE> 4
ss. 1.
PURPOSE
The purpose of this Plan is to provide a mechanism under which (i) a
Director can elect to defer the payment of all or a portion of his or her
Meeting Fees and Retainer or his or her Meeting Fees or Retainer until his or
her Distribution Election Date, (ii) an Executive Committee Member can elect to
defer the payment of all or a portion of his or her Bonus and Base Salary or
Bonus or Base Salary until his or her Distribution Election Date and (iii) Post
can pay the amounts deferred as adjusted to track the investment performance of
the investment alternative elected by the Director or Executive Committee
Member.
ss. 2.
DEFINITIONS
2.1 Account -- means the bookkeeping account which shall be maintained
by Post for each Director and for each Executive Committee Member as part of
Post's books and records to show as of any date the interest, if any, of each
Director and each Executive Committee Member in this Plan, and each Account
shall consist of one, or more than one, Distribution Subaccount, depending on
whether the Director or Executive Committee Member has elected one, or more
than one, Distribution Election Date.
2.2 Base Salary -- means an Executive Committee Member's base salary
which is payable by Post, Post Apartment Homes or any other Participating
Employer.
<PAGE> 5
2.3 Beneficiary -- means the person or persons designated as such in
accordance with ss. 6.4.
2.4 Board -- means the Board of Directors of Post.
2.5 Bonus -- means an Executive Committee Member's annual bonus which
is payable by Post, Post Apartment Homes or any other Participating Employer
under the MPIP.
2.6 Change in Control -- means (1) a "change in control" of Post of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A for a proxy statement filed under Section 14(a) of the 1934 Act,
(2) a "person" (as that term is used in Section 14(d)(2) of the 1934 Act)
becomes after the effective date of this Plan the beneficial owner (as defined
in Rule 13d-3 under the 1934 Act) directly or indirectly of securities
representing 50% or more of the combined voting power for election of directors
of the then outstanding securities of Post, (3) the individuals who at the
beginning of any period of two consecutive years or less constitute the Board
cease for any reason during such period to constitute at least a majority of
the Board, unless the election or nomination for election of each new member of
the Board was approved by vote of at least two-thirds of the members of the
Board then still in office who were members of the Board at the beginning of
such period, (4) the shareholders of Post approve any dissolution or
liquidation of Post or any sale or disposition of 50% or more of the assets or
business of Post or (5) the shareholders of Post approve a merger or
consolidation to which Post is a party (other than a merger or consolidation
with a wholly-owned subsidiary of Post) or a share exchange in which Post shall
exchange Post shares for shares of another corporation as a result of which the
persons who
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<PAGE> 6
were shareholders of Post immediately before the effective date of such merger,
consolidation or share exchange shall have beneficial ownership of less than
50% of the combined voting power for election of directors of the surviving
corporation following the effective date of such merger, consolidation or share
exchange.
2.7 Disability -- means any condition which qualifies a Director or an
Executive Committee Member for long term disability benefits under any plan
maintained by Post which provides long term disability benefits to participants
or which Post determines would qualify a Director or an Executive Committee
Member for such benefits if he or she was a participant in such plan.
2.8 Distribution Subaccount -- means a subaccount which shall be
maintained as part of each Director's Account and each Executive Committee
Member's Account which shows his or her interest in this Plan which is
scheduled to be distributed as of the same Distribution Election Date.
2.9 Distribution Election Date -- means the distribution date
described in ss. 5 as applicable to each Distribution Subaccount.
2.10 Director -- means any person (other than a person who is an
employee of Post, Post Apartment Homes or any other Participating Employer) who
has been elected a member of the Board and any former member of the Board for
whom an Account is maintained under this Plan.
2.11 Executive Committee Member -- means an employee of Post, Post
Apartment Homes or any other Participating Employer who is a member of Post's
Executive Committee and any former member of Post's Executive Committee for
whom an Account is maintained under this Plan.
-3-
<PAGE> 7
2.12 Meeting Fees -- means the fees which are payable to a Director
exclusively for attending a meeting of the Board or a meeting of a committee of
the Board.
2.13 MPIP -- means the Post Management Performance Incentive Plan as
in effect from time to time and any successor to such plan.
2.14 1934 Act -- means the Securities Exchange Act of 1934, as
amended.
2.15 Participating Employer -- means Post, Post Apartment Homes, and
any organization related to Post or to Post Apartment Homes which pays, or has
an obligation to pay, all or a part of an Executive Committee Member's Bonus or
Base Salary and which effects such payments through, or which has such payments
processed by, Post Apartment Homes.
2.16 Post -- means Post Properties, Inc., a Georgia corporation, and
any successor to such corporation. 2.17 Post Apartment Homes -- means Post
Apartment Homes, L.P., a Georgia limited partnership, and any successor to such
partnership.
2.17 Post Apartment Homes -- means Post Apartment Homes, L.P., a
Georgia limited partnership, and any successor to such partnership.
2.18 Post Stock -- means the common stock of Post, par value $.01 per
share.
2.19 Retainer -- means all fees which are payable to a Director for
services as a member of the Board except Meeting Fees.
-4-
<PAGE> 8
ss. 3.
DEFERRAL ELECTIONS
3.1 Initial Election
(a) First Term Directors.
(1) A person who is nominated for election as a Director
(other than a person who was a Director immediately
before such nomination) shall have the right at any
time before the effective date of his or her
election to the Board to elect on the form provided
for this purpose to defer the payment of all or a
portion of his or her Meeting Fees and Retainer or
Meeting Fees or Retainer which are otherwise payable
during the first calendar year he or she serves as a
Director. Any deferral election which is made by a
person before the effective date of his or her
election to the Board and not revoked before such
effective date shall become irrevocable on the
effective date of the Director's election to the
Board, and an election once irrevocable shall remain
irrevocable through the end of the calendar year
which includes such effective date.
(2) A person who is elected in any calendar year as a
Director (other than a person who was a Director
immediately before such election or who made an
effective election under ss. 3.1(a)(1)) shall have
the right at any time before the end of
-5-
<PAGE> 9
the 60-day period immediately following the
effective date of his or her election to the Board
to elect on the form provided for this purpose to
defer the payment of all or a portion of his or her
Meeting Fees and Retainer or Meeting Fees or
Retainer, if any, which are otherwise payable after
the date his or her deferral election under this ss.
3.1(a)(2) becomes effective. Any such deferral
election which is made and not revoked before the
end of such 60-day period shall become effective and
irrevocable immediately after the end of such 60-day
period, and a deferral election once effective shall
remain irrevocable through the end of the calendar
year which includes the effective date of such
deferral election.
(b) Executive Committee Members
(1) New Executive Committee Member. A person who Post
designates as an Executive Committee Member for the
first time shall have the right at any time before
the end of the 60-day period immediately following
the effective date of such designation to elect on
the form provided for this purpose (A) to defer the
payment of all or a portion of his or her Base
Salary, if any, which is payable after the date his
or her deferral election under this ss. 3.1(b)(1)
becomes effective and (B) to defer a portion of his
or her Bonus which is payable for the calendar year
in which such election
-6-
<PAGE> 10
becomes effective, and such portion of such Bonus
shall not exceed a fraction of such Bonus, the
numerator of which shall be the number of full
calendar months remaining in such calendar year
after such election becomes effective and the
denominator of which shall be 12. Any such deferral
election which is made and not revoked before the
end of such 60-day period shall become effective and
irrevocable immediately after the end of such 60-day
period, and a deferral election once effective shall
remain irrevocable through the end of the calendar
year which includes the effective date of such
deferral election.
(2) Effective Date Start-Up Election. Post shall
provide each person who will be an Executive
Committee Member on January 1, 2000 the opportunity
before January 1, 2000 to elect on the form provided
for this purpose to defer the payment of all or a
portion of his or her Base Salary which is otherwise
payable after December 31, 1999. Any such deferral
election which is made and not revoked before
January 1, 2000 shall be effective and irrevocable
on January 1, 2000, and a deferral election once
effective shall remain irrevocable through the end
of the calendar year which includes the effective
date of such deferral election.
3.2 Annual Deferral Elections. A person who is a Director or an
Executive Committee Member shall have the right before the beginning of any
calendar
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<PAGE> 11
year to elect on the form provided for this purpose to defer the payment of all
or a portion of his or her Bonus and Base Salary or Bonus or Base Salary,
Meeting Fees and Retainer or Meeting Fees or Retainer which are otherwise
payable during such calendar year or, with respect to a Bonus, which is payable
for such calendar year. Any election which is made and which is not revoked
before the beginning of such calendar year shall become irrevocable on the
first day of such calendar year and shall remain irrevocable through the end of
such calendar year.
3.3 Automatic Election Extension. If a Director or an Executive
Committee Member has made a deferral election under either ss. 3.1 or ss. 3.2
for any calendar year and has not revoked such election before the beginning of
any subsequent calendar year, such election automatically shall remain in
effect for such subsequent calendar year and, further, automatically shall be
irrevocable during such subsequent calendar year.
3.4 Account Credits.
(a) Director. The Meeting Fees and Retainer or Meeting Fees or
Retainer which a Director elects to defer under this ss. 3
shall be credited to his or to her Account as of the date
Post determines that such fees otherwise would have been
payable directly to the Director if no election had been made
under this ss. 3.
(b) Executive Committee Member. Any Bonus and Base Salary or
Bonus or Base Salary for any calendar year which an Executive
Committee Member elects to defer under this ss. 3 shall be
credited to his or her Account as of the date Post determines
such Bonus
-8-
<PAGE> 12
and Base Salary or Bonus or Base Salary otherwise would have
been payable directly to the Executive Committee Member if no
election had been made under this ss. 3.
3.5 Participating Employer. If an Executive Committee Member makes a
deferral election under this ss. 3 with respect to his or her Base Salary and
Bonus or Base Salary or Bonus, Post shall direct each Participating Employer
otherwise responsible for the payment of all or a part of such Base Salary or
Bonus to defer the payment of such Base Salary or Bonus (to the extent
otherwise payable by such Participating Employer) in accordance with the terms
of this Plan and any related deferral election made under this ss. 3 by such
Executive Committee Member. Similarly, if an Executive Committee Member amends
or terminates any such election under this ss. 3, Post shall direct each
Participating Employer otherwise responsible for the payment of all or a part
of such Base Salary or Bonus to take whatever action is necessary or
appropriate under this Plan to effect such amended or terminated election.
ss. 4.
ACCOUNT ADJUSTMENTS
4.1 Alternatives. Post from time to time shall select one, or more
than one, benchmark investment alternative, including Post Stock, that a
Director or an Executive Committee Member can elect under ss. 4.2 that Post use
to make adjustments to his or her Account as if the credits to such Account had
been invested in such benchmark investment alternative and there were no
commissions or other changes of any kind incurred with respect to the purchase,
holding or sale of such investment.
-9-
<PAGE> 13
Thus his or her Account shall be adjusted for increases and decreases in the
market value of the benchmark investment alternative and for any dividends or
any other distributions made with respect to the benchmark investment
alternative as if the Account actually had been invested in such benchmark
investment alternative. Post may establish limits on the portion of an Account
that a Director or an Executive Committee Member can elect that Post use with
respect to any single benchmark investment alternative, and Post may change the
benchmark investment alternatives available under this ss. 4 at any time or
from time to time with or without advance notice to a Director or an Executive
Committee Member.
4.2 Elections. Each Director and Executive Committee Member shall have
the right to make and to change a benchmark investment alternative election
under this ss. 4 in accordance with such procedures as established by Post or
Post's delegate from time to time, and Post or Post's delegate shall have the
right to change such procedures at any time with or without notice to any
Director or Executive Committee Member. Furthermore, if a Director or an
Executive Committee Member fails to timely make a benchmark investment
alternative election, Post shall have the right either to disregard his or her
deferral election under ss. 3 until such an election is made or to make such an
election on behalf of the Director or Executive Committee Member.
4.3 Adjustments. Post or Post's delegate shall adjust the credits to
each Distribution Subaccount for any earnings and losses as if such credits
actually had been invested in a benchmark investment alternative in accordance
with the Director's or Executive Committee Member's election under this ss. 4.
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<PAGE> 14
ss. 5.
DISTRIBUTION ELECTION DATE
5.1 General Rule. Each Director and each Executive Committee Member as
part of each deferral election under ss. 3 shall elect the date as of which he
or she desires that the Distribution Subaccount attributable to such deferrals
be distributed, and such date shall be either
(a) a January 1 of a specified calendar year after calendar year
2000,
(b) the date he or she reaches a specified age,
(c) the date as of which his or her status as a Director
terminates or the date he or she is no longer employed by
Post, Post Apartment Homes or any other Participating
Employer,
(d) the fifth anniversary of the date described in ss. 5.1(c),
(e) the later of the dates described in ss. 5(a), ss. 5(b), ss.
5.1(c) or ss. 5(d), or
(f) the earlier of the dates described in ss. 5(a), ss. 5(b), ss.
5.1(c) or ss. 5(d).
Any date described in ss. 5.1(a), ss. 5.1(b), ss. 5.1(c), ss. 5.1(d), ss.
5.1(e) or ss. 5.1(f) shall be referred to in this Plan as a "Distribution
Election Date". No Director or Executive Committee Member shall have the right
to change a Distribution Election Date for any deferrals after the date the
related deferral election becomes irrevocable under ss. 3. If a Director or
Executive Committee Member fails to elect the date as of which any of his or
her Distribution Subaccounts shall be distributed, such Distribution Subaccount
shall be distributed on the date described in ss. 5.1(c).
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<PAGE> 15
5.2 Death or Disability. The date as of which a Director's status as
such terminates as a result of his or her death or Disability or the date an
Executive Committee Member is no longer employed by Post, Post Apartment Homes
or any other Participating Employer as a result of his or her death or
Disability automatically shall be treated as his or her Distribution Election
Date for each Distribution Subaccount in his or her Account without regard to
the Distribution Election Date which the Director or Executive Committee Member
actually had elected under ss. 5.1.
5.3 Change in Control. Each Director and each Executive Committee
Member shall have the right to elect on the form provided for this purpose that
the date of a Change in Control of Post shall be treated as his or her
Distribution Election Date for his or her entire Account. An election under
this ss. 5.3 may be made at any time and may be revoked at any time. If such an
election is in effect on January 1, 2000 or, if later, the date which is one
year before the date of such Change in Control, his or her entire Account shall
be paid in cash in a lump sum to the Director or Executive Committee Member on,
or as soon as practicable after, the date of such Change in Control even if the
Director or Executive Committee Member had subsequently revoked such election.
ss. 6.
DISTRIBUTIONS
6.1 General. The balance credited to a Director's or Executive
Committee Member's Distribution Subaccount shall first become distributable as
of his or her Distribution Election Date for such Distribution Subaccount. A
Director or Executive Committee Member shall (subject to ss. 5.3) have the
right to elect that such
-12-
<PAGE> 16
Distribution Subaccount be distributed in one of the distribution forms
described in ss. 6.2, and such Distribution Subaccount shall be distributed in
accordance with the last election made by the Director or Executive Committee
Member which is in effect on January 1, 2000 or, if later, on the date which is
one year before the Distribution Election Date. If a Director or Executive
Committee Member fails to elect the form in which a Distribution Subaccount
shall be distributed, any such Distribution Subaccount shall be distributed in
the form described in ss. 6.2(a).
6.2 Distribution Forms.
(a) Standard Lump Sum. A Director or Executive Committee Member
shall have the right to elect that his or her Distribution
Subaccount be distributed in cash in a lump sum, and a lump
sum distribution shall be made as soon as practicable after
his or her Distribution Election Date for such Distribution
Subaccount.
(b) Five Annual Installments. A Director or Executive Committee
Member shall have the right to elect that a Distribution
Subaccount be distributed in cash in five annual
installments. If a Director's or Executive Committee Member's
Distribution Subaccount is distributed under this
distribution form, the first annual installment shall be made
as soon as practicable after the Distribution Election Date
for such Distribution Subaccount. The amount distributable
each calendar year shall be determined by multiplying the
balance credited to the Director's or Executive Committee
Member's Distribution Subaccount by a fraction, the numerator
of which shall
-13-
<PAGE> 17
be one and the denominator of which shall be the number of
installments remaining after such installment has been paid
plus one. The second annual installment through the fifth
annual installment shall be distributed on or about the
anniversary of the distribution of the first annual
installment.
(c) Ten Annual Installments. A Director or Executive Committee
Member shall have the right to elect that a Distribution
Subaccount be distributed in cash in ten annual installments.
If a Director's or Executive Committee Member's Account is
distributed under this distribution form, the first annual
installment shall be made as soon as practicable after the
Distribution Election Date for such Distribution Subaccount,
and the amount distributable each calendar year shall be
determined by multiplying the balance credited to the
Director's or Executive Committee Member's Distribution
Subaccount by a fraction, the numerator of which shall be one
and the denominator of which shall be the number of
installments remaining after such installment has been paid
plus one. The second annual installment through the tenth
annual installment shall be distributed on or about the
anniversary of the distribution of the first annual
installment.
6.3 Hardships. If a Director or an Executive Committee Member
experiences a severe financial hardship or rapidly failing health, he or she
shall have the right to request an immediate distribution of the balance
credited to his or her
-14-
<PAGE> 18
Account in cash without regard to any election or elections in effect with
respect to such Account under ss. 5 or ss. 6. Any such request shall be made to
the Board, and the Director or Executive Committee Member making such request
shall provide to the Board such evidence of such severe financial hardship or
rapidly failing health as the Board shall request in addition to whatever
evidence he or she desires that the Board consider in reviewing his or her
request. A request shall be granted if the Board determines (a) (1) that the
Director or Executive Committee Member in fact has a severe economic hardship
which, if not cured, might adversely affect his or her performance as a
Director or Executive Committee Member or (2) that his or her health in fact is
rapidly failing and (b) the requested distributions will not violate the
securities laws to the extent the distribution will be made from a Distribution
Subaccount that is subject to adjustment under ss. 4.3 as if invested in Post
Stock; provided, however, if a Director or Executive Committee Member makes
such a request based on a severe financial hardship, the distribution made
under this ss. 6.3 shall not exceed the amount which the Board determines is
sufficient to cure such severe financial hardship. If a request for a
distribution under this ss. 6.3 is made by a Director, such Director shall take
no part in the Board's deliberations or decisions with respect to such request.
6.4 Beneficiary.
(a) Designation. Each Director and each Executive Committee
Member shall have the right to designate a person, or more
than one person, as his or her Beneficiary to receive the
balance credited to his or her Account in cash in the event
of his or her death. Any such designation shall be made on a
form provided for
-15-
<PAGE> 19
this purpose and shall be effective when such form is
properly completed and delivered (in accordance with the
instructions on such form) by the Director or Executive
Committee Member to Post before his or her death. A Director
or Executive Committee Member may change his or her
Beneficiary designation from time to time and, if a Director
or Executive Committee Member changes his or her Beneficiary
designation at any time, his or her Beneficiary shall be the
person or persons designated on the last form which is
effective on his or her date of death. If no Beneficiary
designation is in effect on the date a Director or Executive
Committee Member dies or if no designated Beneficiary
survives the Director or Executive Committee Member, the
Director's or Executive Committee Member's estate
automatically shall be treated as his or her Beneficiary
under this Plan.
(b) Distribution. If a Director's or Executive Committee Member's
Beneficiary is a natural person, the Director's or Executive
Committee Member's Distribution Subaccount, or each such
subaccount, shall be distributed, or shall continue to be
distributed, to such person in cash in accordance with the
distribution election in effect for the Director or Executive
Committee Member on the date of his or her death. If a
Director's or Executive Committee Member's Beneficiary is a
person other than a natural person, the balance credited to
the Director or Executive Committee Member's
-16-
<PAGE> 20
entire Account shall be distributed to such person in cash in
a lump sum as soon as practicable after the Director's or
Executive Committee Member's death without regard to any
Distribution Election Date or any distribution form which the
Director or Executive Committee Member actually had elected.
6.5 Post Stock. If any deferrals credited to a Distribution Subaccount
are subject to adjustment under ss. 4.3 as if invested in Post Stock, any
distribution attributable to such deferrals shall be based on the closing price
of a share of Post Stock on the Distribution Election Date or, if the
distribution is made under ss. 6.3, on the date the Board grants the request
for such distribution as such closing price is accurately reported in The Wall
Street Journal or, if no closing price is so reported for such date, the last
closing price as so reported before the Distribution Election Date.
6.6 General Assets.
(a) Director. All distributions to, or on behalf of, a Director
under this Plan shall be made from Post's general assets, and
any claim by a Director or by his or her Beneficiary against
Post for any distribution under this Plan shall be treated
the same as a claim of any general and unsecured creditor of
Post.
(b) Executive Committee Member. All distributions to, or on
behalf of, an Executive Committee Member shall be made from
the general assets of Post, Post Apartment Homes or any other
Participating Employer responsible for paying the related
Bonus or Base Salary, and any claim by an Executive Committee
Member or by his or her
-17-
<PAGE> 21
Beneficiary against Post, Post Apartment Homes or any other
Participating Employer for any distribution under this Plan
shall be treated the same as a claim of any general and
unsecured creditor of such person.
ss. 7.
MISCELLANEOUS
7.1 Making and Revoking Elections. An election shall be treated as
made or revoked under this Plan only when the form provided for making such
election or revocation is properly completed and delivered to Post in
accordance with the instructions on such form.
7.2 No Liability. No Director or Executive Committee Member and no
Beneficiary of a Director or Executive Committee Member shall have the right to
look to, or have any claim whatsoever against, any officers, director, employee
or agent of Post, Post Apartment Homes or any other Participating Employer in
his or her individual capacity for the distribution of any Account.
7.3 No Assignment; Binding Effect. No Director, Executive Committee
Member or Beneficiary shall have the right to alienate, assign, commute or
otherwise encumber an Account for any purpose whatsoever, and any attempt to do
so shall be disregarded as completely null and void. The provisions of this
Plan shall be binding on each Director, Executive Committee Member and
Beneficiary and on Post, Post Apartment Homes and any other Participating
Employer.
7.4 Construction. This Plan shall be construed in accordance with the
laws of the State of Georgia except to the extent such laws are preempted by
federal
-18-
<PAGE> 22
law. Headings and subheadings have been added only for convenience of
reference and shall have no substantive effect whatsoever. All references to
sections shall be to sections to this Plan. All references to the singular
shall include the plural and all references to the plural shall include the
singular. All definitions in this Plan shall apply exclusively to this Plan.
7.5 No Contract of Employment. A Director or Executive Committee
Member's participation in this Plan shall not constitute a contract of
employment or a right to continue to serve on the Board for any particular term
or for any particular rate of compensation, and participation in this Plan
shall have no bearing whatsoever on such terms or compensation or on any other
conditions of employment or for membership on the Board.
7.6 Amendment and Termination. The Board shall have the right to amend
this Plan from time to time and to terminate this Plan at any time; provided,
however, the balance credited to each Account immediately after any such
amendment or termination shall be no less than the balance credited to such
Account immediately before such amendment or termination and no amendment or
termination shall adversely affect a Director's or Executive Committee Member's
right to the distribution of his or her Account or his or her Beneficiary's
right to the distribution of such Account. Finally, this Plan shall be
terminated if Post concludes that this Plan is subject to Part 2, Part 3 or
Part 4 of Title I of the Employee Retirement Income Security Act of 1974, as
amended.
7.7 Administration. Post shall administer this Plan and shall have the
power to interpret and make whatever equitable administrative and operational
-19-
<PAGE> 23
decisions Post deems reasonable and appropriate in light of the purpose of this
Plan. Post shall have the right to administer this Plan in whole or in part
using Post's own employees or to administer this Plan in whole or in part
through a delegate retained by Post to provide recordkeeping or other services
in connection with the operation and administration of this Plan.
7.8 Effective Date. The Plan initially shall be effective only for a
Bonus, Base Salary, Meeting Fees and Retainers attributable to periods
beginning after January 1, 2000, and this amended and restated Plan shall be
effective as of January 1, 2000.
POST PROPERTIES, INC.
By:
------------------------------
Title
----------------------------
-20-
<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF POST PROPERTIES, INC.
<TABLE>
<CAPTION>
NAME INCORPORATION
---- -------------
<S> <C> <C>
1. Post Apartment Homes, L.P. Georgia
2. Post Services, Inc. Georgia
3. Post LP Holdings, Inc. Georgia
4. Post GP Holdings, Inc. Georgia
5. Post Travel, Inc. Georgia
6. Post Landscape Group, Inc. Georgia
7. RAM Partners, Inc. Georgia
8. Post Asset Management, Inc. Georgia
9. Rocky Point Management, Inc. Georgia
10. Cumberland Lake, Inc. Georgia
11. Briarcliff Commercial Property, LLC Georgia
12. Armada Homes, Inc. Delaware
13. Post Development Services
Limited Partnership Georgia
14. Addison Circle Access, Inc. Delaware
15. Akard-McKinney Investment Company, LLC Texas
16. Post Uptown, LLC Texas
17. Greenwood Residential, LLC Texas
18. Columbus Management Services, LLC Texas
19. Uptown Denver, LLC Columbus
20. Addison Circle One, Ltd. Texas
21. Addison Circle Two, Ltd. Texas
22. Post Rice Lofts, LLC Texas
23. Rice Lofts, L.P. Texas
24. Post-AmerUs Rice Lofts, L.P. Georgia
25. Post-AmerUs American Beauty Mill, L.P. Georgia
26. Post Aviation, LLC Georgia
27. Villas at Parkway Village, L.P. Georgia
28. Villas GP, LLC Georgia
29. Post-AmerUs Bennie Dillon, L.P. Georgia
30. Post-AmerUs Wilson Building, L.P. Georgia
31. Addison Circle Three, Ltd. Texas
32. Addison Townhomes One, Ltd. Texas
33. Armada Condominiums, L.P. Georgia
34. Armada Phoenix Townhomes, LLC Texas
35. Armada Residences, L.P. Georgia
36. Gateway WW, LLC North Carolina
37. MT Acquisition, LLC Georgia
38. Residential Ventures, Inc. Georgia
39. Riverside Villas, LLC Georgia
40. STS Loan, L.P. Georgia
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-62243) of our report dated March 14, 2000
appearing on page 35 of Post Properties, Inc.'s Annual report on Form 10-K for
the year ended December 31, 1999.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-70689) of our report dated March 14, 2000
appearing on page 35 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1999.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-81772) of
our report dated March 14, 2000 appearing on page 35 of Post Properties, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1999.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-39461) of
our report dated March 14, 2000 appearing on page 35 of Post Properties, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1999.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-36595) of
our reports dated March 14, 2000 appearing on pages 35 and 55 of Post
Properties, Inc.'s and Post Apartment Homes, L.P.'s Annual Report on Form 10-K
for the year ended December 31, 1999, respectively.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<PAGE> 1
EXHIBIT 23.6
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 333-47399)
of our report dated March 14, 2000 appearing on page 35 of Post Properties,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999.
/s/ PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<PAGE> 1
EXHIBIT 23.7
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-00020) of our report dated March 14, 2000
appearing on page 35 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1999.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<PAGE> 1
EXHIBIT 23.8
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 333-94121) of our report dated March 14, 2000
appearing on page 35 of Post Properties, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1999.
PricewaterhouseCoopers LLP
Atlanta, Georgia
March 14, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF POST PROPERTIES, INC. FOR THE PERIOD ENDED DECEMBER 31,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000903127
<NAME> POST PROPERTIES INC
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 7,250,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,582,785,000
<DEPRECIATION> 303,016,000
<TOTAL-ASSETS> 2,350,173,000
<CURRENT-LIABILITIES> 0
<BONDS> 989,583,000
0
50,000
<COMMON> 388,000
<OTHER-SE> 1,058,424,000
<TOTAL-LIABILITY-AND-EQUITY> 2,350,173,000
<SALES> 0
<TOTAL-REVENUES> 345,927,000
<CGS> 0
<TOTAL-COSTS> 179,342,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,192,000
<INCOME-PRETAX> 120,946,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 93,100,000
<DISCONTINUED> 0
<EXTRAORDINARY> 458,000
<CHANGES> 0
<NET-INCOME> 92,642,000
<EPS-BASIC> 2.41
<EPS-DILUTED> 2.38
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF POST APARTMENT HOMES, L.P. FOR THE PERIOD ENDED DECEMBER
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0001012271
<NAME> POST APARTMENT HOMES LP
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 7,250,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,582,785,000
<DEPRECIATION> 303,016,000
<TOTAL-ASSETS> 2,350,173,000
<CURRENT-LIABILITIES> 0
<BONDS> 989,583,000
0
0
<COMMON> 0
<OTHER-SE> 1,251,342,000
<TOTAL-LIABILITY-AND-EQUITY> 2,350,173,000
<SALES> 0
<TOTAL-REVENUES> 345,927,000
<CGS> 0
<TOTAL-COSTS> 179,342,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,192,000
<INCOME-PRETAX> 120,946,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 105,698,000
<DISCONTINUED> 0
<EXTRAORDINARY> 521,000
<CHANGES> 0
<NET-INCOME> 105,177,000
<EPS-BASIC> 2.41
<EPS-DILUTED> 2.38
</TABLE>
