American Land Lease Announces First Quarter 2005 Financial Results,
7.3% Increase in Funds From Operations per share over 2004
CLEARWATER, Fla., May 10 /PRNewswire-FirstCall/ -- American Land
Lease, Inc. (NYSE:ANL) today released results for first quarter
2005. Summary Financial Results First Quarter * Diluted Earnings
Per Common Share ("Diluted EPS") were $0.36 for the three-month
period ended March 31, 2005 as compared to $0.33 from the same
period one year ago, an increase of 9.1% on a per common share
basis. * Funds from Operations attributable to common stockholders
("FFO"; a non- GAAP financial measure) were $3.7 million, or $0.44
per diluted common share, for the quarter compared to $3.4 million,
or $0.41 per diluted common share from the same period one year
ago, an increase of 7.3% on a per share basis. * Diluted EPS and
FFO for 2005 as compared to 2004 were negatively impacted by a
decrease in the unit volume of closings, higher inventory levels
and lower gross margins realized from home sales in the quarter. As
a result of the Company's preferred stock offering, earnings for
the 2005 quarter were diluted $0.02 per share by cumulative unpaid
preferred dividends. In addition, the Company realized a $0.03 per
common share reduction in other income compared to the 2004 quarter
as a bond residual position matured in 2004 and did not provide a
contribution in the 2005 quarter. * Diluted EPS and FFO for 2005 as
compared to 2004 were positively impacted by a correction in the
Company's accounting for restricted stock awards under Statement of
Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, or SFAS 123. The Company had previously valued
certain performance-based restricted stock based upon the market
price of the Company's common stock at the date of issuance and
recognized the dividends paid on the awards as compensation expense
until the awards vested. In accordance with SFAS 123, these awards
have now been recorded at their fair value on the date of issuance
and dividends paid on non-vested restricted stock have been
recognized as a charge to retained earnings. This correction
resulted in an increase of $0.08 and $0.07 per share in FFO and
Diluted EPS, respectively, as a result of lower compensation
expense in the first quarter of 2005 for amounts related to prior
periods. * Unit volume in home sales was 77 new home closings,
including 65 new homes sold on expansion home sites. This compares
with 91 new home closings in fourth quarter 2004. * "Same Store"
results provided a revenue increase of 9.5%, an expense increase of
4.9% and an increase of 11.8% in Net Operating Income ("NOI"). *
"Same Site" results provided a revenue increase of 3.9%, an expense
increase of 2.1% and an increase of 4.8% in NOI. Supplemental
Information The full text of this press release is available upon
request or through the Company's web site at
http://www.americanlandlease.com/ . Management Comments Bob Blatz,
President of American Land Lease, commented, "While we are
reporting FFO of $0.44, we evaluate our performance in terms of the
$0.36 in FFO earned before the accounting adjustment. The first
quarter reflects the lingering impact of the 2005 hurricanes in our
business through lower home sales closings. We are pleased to
report strong results from our core property operating business for
the first quarter. The operating results reflect the positive
impact that absorption from home sales is having on our property
operations." Mr. Blatz added, "The first quarter underscores the
strength of our property operating business and provides the
challenge to return to higher levels of home sales results. Within
our home sales business, we continue to be pleased with the
increasing average home selling price that reached $112,000 for the
first quarter. This represents a 12% increase in average new home
selling price over the first quarter of 2005 of $100,000. As we
look toward the balance of 2005, we forecast continued success in
our core property ownership business and a return to higher levels
of homes closings." Dividend Declaration On April 27, 2005, the
Board of Directors declared a regular first quarter common stock
dividend of $0.25 per share payable on May 26, 2005, to
stockholders of record on May 12, 2005. On April 27, 2005, the
Board of Directors declared dividends on preferred shares. Dividend
information on Preferred Stock follows: Per Share Beginning of End
of Dividend Dividend Dividend Period Period Declared February 23,
2005 May 12, 2005 $0.5167 Dividends on shares of Preferred Stock
are payable on May 31, 2005 to shareholders of record on May 12,
2005. The initial dividend payment on Preferred Stock issued
reflects dividends accrued from the issuance date through the end
of the dividend period indicated above. Future quarterly dividend
payments on all Preferred shares will be $0.4844 per share. The
Board of Directors reviews the dividend policy quarterly. The
Company's dividend is set quarterly and is subject to change or
elimination at any time. The Company's primary financial objective
is to maximize long term, risk adjusted returns on investment for
common shareholders. While the dividend policy is considered within
the context of this objective, maintenance of past dividend levels
is not a primary investment objective of the Company and is subject
to numerous factors including the Company's profitability, capital
expenditure plans, obligations related to principal payments and
capitalized interest, and the availability of debt and equity
capital at terms deemed attractive by the Company to finance these
expenditures. The Company's net operating loss may be used to
offset all or a portion of its real estate investment trust
("REIT") taxable income, which may allow the Company to reduce or
eliminate its dividends and still maintain its REIT status.
Operational Results First Quarter Property Operations First quarter
revenue from property operations was $8,036,000 as compared to
$7,371,000 in the same period one year ago, a 9.0% increase. First
quarter property operating expenses totaled $2,779,000 as compared
to $2,818,000 in the same period one year ago, a 1.4% decrease. The
Company realized significant increases in rental income driven by
annual rental rate increases and the absorption of new home sites
through its home sales efforts. Property operating expenses
decreased in the first quarter 2005 as compared to the same period
in the prior year driven primarily by insurance proceeds of
approximately $140,000 related to the recovery of expense incurred
in prior periods as a result of clean up costs from the hurricanes
that traversed Florida in August and September of 2004 offset by
increases in labor and benefit costs and increases in property
taxes. The property operating margins before depreciation expense
increased from 61.8% in the prior year's first quarter to 65.4%.
Excluding the insurance recovery property operating margins before
depreciation, expense would have been 63.7%. First Quarter "Same
Store" Results First quarter "same store" results reflect the
results of operations for properties and golf courses owned for
both the first quarter of 2005 and the prior year periods. The same
store properties account for 96% of the property operating revenues
for the first quarter of 2004. We believe that same store
information provides the ability to understand the changes in
profitability for properties owned during both reporting periods
that could not be obtained from a review of the consolidated income
statement in periods where properties are acquired. A
reconciliation of "same store" operating results reported below to
total property revenues and property expenses, as determined under
GAAP, can be found on page 14 of this press release. The same store
% change results are as follows: 1Q05 Revenue 9.5 % Expense 4.9 %
Net Operating Income 11.8 % We derive our increase in property
revenue (i) from increases in rental rates and other charges at our
properties and (ii) through the origination of leases on expansion
home sites ("absorption"). "Same site" results reflect the results
of operations excluding those sites leased subsequent to the
beginning of the prior year period. We believe that "same site"
information provides the ability to understand the changes in
profitability without the growth related to the newly leased sites.
Our presentation of same site results is a non-GAAP measure and
should not be considered in isolation from and is not intended to
represent an alternative measure to operating income or cash flow
or any other measure of performance as determined in accordance
with GAAP. We calculate absorption revenues as the rental revenue
recognized on sites leased subsequent to the beginning of the prior
year period. We estimate that 50% of the increase in expenses over
the prior year period is attributable to newly leased sites in our
calculation of same site results. We believe that the allocation of
expenses between same site and absorption is an appropriate
allocation between fixed and variable costs of operating our
properties. Our same site, absorption, golf operations and total
same store results for first quarter are as follows: Same Site
Rental Absorption Same Site Golf Same Store Revenue 3.9 % 5.7 %
(0.1)% 9.5 % Expense 2.1 % 2.0 % 0.8 % 4.9 % NOI 4.8 % 7.5 % (0.5)%
11.8 % A reconciliation of same site and same store operating
results used in the above calculations to total property revenues
and property expenses, as determined under GAAP, for the three
months ended March 31, 2005 and 2004 can be found on page 14 of
this press release. First Quarter Home Sales Operations First
quarter 2005 new home sales volume was 77 closings, a 15.4%
decrease from the 91 closings in the same period in the prior year.
Average selling price per home was $112,000 as compared to $100,000
in the same period in the prior year, a 12.0% increase. Brokerage
profits were down 10.6% as compared with the same period in the
prior year. Selling gross margins, excluding brokerage activities,
decreased to 31.8% in the quarter as compared to 33.1% in the same
period in the prior year. This decrease was attributable to product
mix and increased cost of our product as purchase prices for
materials and labor have increased due to the 2004 hurricanes.
Selling costs as a percentage of sales revenue increased from 25.2%
in the prior year's period to 25.9% in the first quarter of 2005,
reflecting decreased operating leverage at lower volume levels and
increased marketing costs for newly constructed subdivisions within
existing communities, offset by lower commission costs from a lower
number of closings. The backlog of contracts for closing stood at
105 home sales, a decrease of 56 contracts from the same period in
the prior year. The backlog excludes 19 lot reservations originated
for new homes in subdivisions under construction. The Company
remains committed to its program of generating continued revenue
growth through new lease originations in its existing portfolio.
The home sales business continues to provide the Company with
additional earning home sites that have a greater return on
investment than is currently available through the purchase of
occupied communities. Summary of home sales activity: Quarter ended
Quarter ended March 31, 2005 March 31, 2004 New home closings 77 91
New home contracts 91 148 Home resales 2 12 Brokered home sales 61
79 New home contract backlog 105 161 Outlook for 2005 The table
below summarizes the Company's projected financial outlook for 2005
as of the date of this release and is based on the estimates and
assumptions disclosed in this and previous press releases: Full
Year 2005 Projected FFO $1.45 to $1.75 AFFO $1.32 to $1.61 Diluted
EPS $1.06 to $1.35 Same Store Sales Revenue Growth 5.0% to 9.0%
Expense Growth 5.5% to 8.0% NOI Growth 6.0% to 9.5% $2,800,000 to
Home Sales Operating Income $4,600,000 $2,500,000 to General and
Administrative Expenses $3,200,000 $50,000 to Other Income $150,000
Preferred Stock Dividends $1,775,000 Capital Replacements (per
site) $125 to $145 $3,200,000 to Depreciation $3,700,000 A portion
of the Company's earnings is from the sale of new homes on
expansion home sites in its developing communities. The earnings
from the new home sales are subject to greater volatility than the
earnings from rental property activities. The Company's earnings
estimates would be impacted positively by increases in the unit
volume of new home sales or increases in the gross margins from new
home sales. Conversely, decreases in the unit volume of new home
sales or decreases in the gross margins from new home sales would
negatively impact the Company's earnings estimates. Home sales
volume is dependent upon a number of factors, including consumer
confidence and consumer access to financing sources for home
purchases and the sale of their current home. The Company's
projected results for 2005 include a reduction in corporate
governance costs based upon current estimates of the cost of
compliance. Non- employee director compensation continues to be
paid in stock, and all stock based compensation is expensed within
the 2005 projections. In addition, the projected results include
the expense for performance-based restricted stock. The Company's
earnings estimates would be adversely impacted by the increased
cost of compliance with regulations and laws applicable to public
companies and financial reporting. The financial and operating
projections provided in this release are the result of management's
consideration of past operating performance, current and
anticipated market conditions and other factors that management
considers relevant from its past experience. However, no assurance
can be provided as to the achievement of these projections and
actual results will vary, perhaps materially. Stock-based
Compensation Correction During the course of the Company's review
of its application of SFAS 123, it determined that the accounting
for certain aspects of its stock-based compensation was in error.
The Company had previously valued certain awards of
performance-based restricted stock at the market value of the
Company's common stock at the date of issuance. These awards have
been determined to be target stock price awards that should have
been recorded at fair value on the date of issuance. In accordance
with SFAS 123, the Company has estimated the value of HPS Share
awards using a valuation model which considers the applicable
risk-free interest rate, expected dividend yield, the volatility
factor of the expected market price of the Company's common stock
and the term over which the performance conditions must be met to
result in vesting of the awards. In addition, the Company had
previously treated dividends paid on non-vested restricted stock as
additional compensation expense until the vesting condition was
satisfied. Under SFAS 123, only the dividends paid on non-vested
awards that are not expected to vest should be accounted for as
additional compensation expense. Following this review and in
consultation with its external auditors, the Company corrected
these errors to conform with the provisions of SFAS 123 for valuing
target stock price awards and to reverse previously recorded
compensation expense related to the target stock price awards and
dividends paid on unvested awards that are expected to vest. The
correction relates solely to accounting treatment. It does not
affect the Company's historical or future cash flows and the impact
on the Company's current or prior years' earnings per share, cash
from operations and shareholders' equity is immaterial. Casualty
Event Several of the Company's properties were impacted by the
hurricanes that challenged the state of Florida during the 2004
season. At December 31, 2004, the Company had additional claims
with its insurer related to recoveries of damages caused during the
hurricanes. During the first quarter 2005, the Company received
$524,000 related to damages that occurred in 2004. The Company
recognized additional casualty gain of approximately $237,000. In
addition, the Company recognized recoveries of previously expensed
damages of $140,000. The Company has additional claims with its
insurer related to recoveries and will record additional casualty
gain in the period that the insurance proceeds are realized.
Preferred Stock As previously released, in February and March 2005,
the Company sold 900,000 and 100,000 shares, respectively, of newly
created 7.75% Class A Cumulative Redeemable Preferred Stock, par
value $0.01 per share, or the Class A Preferred Stock, in a
registered public offering generating net proceeds of approximately
$23,907,000. The net proceeds were used to repay indebtedness
including amounts outstanding under a promissory note in connection
with the acquisition of property in Micco, Florida and the
Company's revolving line of credit. Financing Activity The Company
originated a term loan with a bank secured by the property acquired
in Micco, Florida with a total commitment of $11,000,000. The loan
matures in August 2005 and bears interest at thirty-day LIBOR plus
200 basis points. Development Activity Construction continued at
the Company's Blue Heron community on a new subdivision of 65 home
sites. New home construction in this new subdivision is scheduled
to begin in May 2005. Construction continued on the last phase of
the Company's Savanna Club project that will provide an additional
192 home sites. Planning and permitting for subdivisions at three
additional communities continued during the quarter. American Land
Lease, Inc. is a REIT that holds interests in 29 manufactured home
communities with 6,993 operational home sites, 1,038 developed
expansion sites, 1,492 undeveloped expansion sites and 129
recreational vehicle sites as of March 31, 2005. Some of the
statements in this press release, as well as oral statements made
by the Company's officials to analysts and stockholders in the
course of presentations about the Company and conference calls
following quarterly earnings releases, constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements may include projections of the
Company's cash flow, dividends and anticipated returns on real
estate investments. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of the Company to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include, but are not limited to: general
economic and business conditions; interest rate changes, financing
and refinancing risks; risks inherent in owning real estate; future
development rate of home sites; competition; the availability of
real estate assets at prices which meet the Company's investment
criteria; the Company's ability to reduce expense levels, implement
rent increases, use leverage and other risks set forth in the
Company's Securities and Exchange Commission filings. We assume no
obligation to update or revise any forward-looking statements or to
update the reasons why actual results could differ from those
projected in any forward-looking statements. Management will hold a
teleconference call, Wednesday, May 11 at 4:00 p.m. EDT for first
quarter 2005 results. You can participate in the conference call by
dialing, toll-free, (800) 374-5458 approximately five minutes
before the conference call is scheduled to begin and indicating
that you wish to join the American Land Lease first quarter 2005
results conference call. If you are unable to participate at the
scheduled time, this information will be available for recorded
playback from 5:30 p.m. EDT, May 11, 2005 until midnight on May 18,
2005. To access the replay, dial toll- free, (800) 642-1687 and
request information from conference ID 6161541. GLOSSARY GLOSSARY
OF NON-GAAP FINANCIAL AND OPERATING MEASUREMENTS Financial and
operational measurements found in the Earnings Release and
Supplemental Information include certain non-GAAP financial
measurements standardly used by American Land Lease management.
Measurements include Funds from Operations ("FFO"), which is an
industry-accepted measurement as based on the definition of the
National Association of Real Estate Investment Trusts (NAREIT).
These terms are defined below and, where appropriate, reconciled to
the most comparable Generally Accepted Accounting Principles (GAAP)
measurements on the accompanying supplement schedules. FUNDS FROM
OPERATIONS ("FFO"): is a commonly used term defined by NAREIT as
net income (loss), computed in accordance with GAAP, excluding
gains and losses from extraordinary items, dispositions of
depreciable real estate property, disposals of discontinued
operations, net of related income taxes, plus real estate related
depreciation and amortization (excluding amortization of financing
costs), including depreciation for unconsolidated real estate
partnerships, joint ventures and discontinued operations. American
Land Lease calculates FFO based on the NAREIT definition, as
further adjusted for the minority interest in the American Land
Leases's operating partnership (Asset Investors Operating
Partnership). This supplemental measure captures real estate
performance by recognizing that real estate generally appreciates
over time or maintains residual value to a much greater extent than
do other depreciable assets such as machinery, computers or other
personal property. There can be no assurance that American Land
Lease's method for computing FFO is comparable with that of other
real estate investments trusts. ADJUSTED FUNDS FROM OPERATIONS
("AFFO"): is FFO less both Capital Replacement expenditures and
Capital Enhancement expenditures. Similar to FFO, AFFO captures
real estate performance by recognizing that real estate generally
appreciates over time or maintains residual value to a much greater
extent than do other depreciating assets such as machinery,
computers or other personal property, and AFFO also reflects that
Capital Replacements are necessary to maintain the associated real
estate assets. SAME STORE RESULTS: represent an operating measure
that is used commonly to describe properties that have been in the
portfolio for a period of time and therefore serve as a good basis
upon which to review comparative performance data. American Land
Lease's definition of Same Store communities are communities that
are owned during both the current and comparable prior year period.
SAME SITE RESULTS: represent an operating measure that is used to
describe homesites that have been in the portfolio for a period of
time and therefore serve as a good basis upon which to review
comparative performance data. American Land Lease's definition of
Same Site is individual homesites that were operational during both
the current and comparable prior year period. Absorbed incremental
homesites are not included in this calculation. OPERATIONAL HOME
SITE: represents those sites within our portfolio that are/or have
been leased to a tenant. Operational Home Sites and their relative
occupancy provide a measure of stabilized portfolio status.
DEVELOPED HOME SITE: represents those sites within our portfolio
that have not been occupied, but for which a majority of the
infrastructure has been completed. UNDEVELOPED HOME SITE: represent
those sites within our portfolio that have not been fully developed
and require construction of substantial lateral improvements such
as roads. CAPITAL REPLACEMENT: represents capitalized spending
which maintains a property. American Land Lease generally
capitalizes spending for items that cost more than $250 and have a
useful life of more than one year. A common example is street
repaving. This spending is better considered a recurring cost of
preserving an asset rather than as an additional investment. It is
a cash proxy for depreciation. CAPITAL ENHANCEMENT: represents
capitalized spending which adds a material feature increases
overall community value or revenue source. An example is the
addition of a marina facility to an existing community. USED HOME
SALE: represents the sale of a home previously owned by a third
party and where American Land Lease has acquired title through an
eviction proceeding or through purchase from a third party.
AMERICAN LAND LEASE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE
SHEETS (in thousands) As of March 31, December 31, 2005 2004
(unaudited) ASSETS Real Estate $227,073 $222,311 Less accumulated
depreciation (23,574) (22,803) Real estate under development 67,966
49,360 Total Real Estate 271,465 248,868 Cash and cash equivalents
870 820 Inventory 19,721 16,788 Other Assets 8,856 9,480 Assets
held for sale -- -- Total Assets $300,912 $275,956 LIABILITIES AND
EQUITY Liabilities Secured long-term notes payable $126,529
$127,338 Secured short-term financing 25,836 24,644 Accounts
payable and accrued liabilities 8,904 9,795 Liabilities related to
assets held for sale -- -- Total Liabilities 161,269 161,777
Minority Interest in Operating Partnership 15,168 14,746
STOCKHOLDERS' EQUITY Preferred Stock, par value $.01 per share;
1,000 shares authorized, 1,000 and 0 shares issued and outstanding,
respectively 25,000 -- Common Stock, par value $.01 per share;
12,000 shares authorized 92 91 Additional paid-in-capital 286,014
286,649 Notes receivable from officers re common stock purchases
(437) (748) Deferred compensation re restricted stock (2,573)
(2,250) Dividends in excess of accumulated earnings (157,009)
(157,697) Treasury stock at cost (26,612) (26,612) Total
Stockholders' Equity 124,475 99,433 Total Liabilities and
Stockholders' Equity $300,912 $275,956 As of September 30, June 30,
March 31, 2004 2004 2004 (unaudited) (unaudited) (unaudited) ASSETS
Real Estate $217,310 $215,155 $209,849 Less accumulated
depreciation (22,116) (21,474) (20,779) Real estate under
development 47,662 44,636 42,223 Total Real Estate 242,856 238,317
231,293 Cash and cash equivalents 987 1,207 776 Inventory 14,987
13,073 11,330 Other Assets 10,425 9,729 8,566 Assets held for sale
-- 313 361 Total Assets $269,255 $262,639 $252,326 LIABILITIES AND
EQUITY Liabilities Secured long-term notes payable $128,130
$119,876 $118,478 Secured short-term financing 18,622 20,142 13,495
Accounts payable and accrued liabilities 9,523 10,982 9,883
Liabilities related to assets held for sale 8 6 4 Total Liabilities
156,283 151,006 141,860 Minority Interest in Operating Partnership
14,552 14,497 14,319 STOCKHOLDERS' EQUITY Preferred Stock, par
value $.01 per share; 1,000 shares authorized, 1,000 and 0 shares
issued and outstanding, respectively -- -- -- Common Stock, par
value $.01 per share; 12,000 shares authorized 91 90 90 Additional
paid-in-capital 286,611 285,517 285,207 Notes receivable from
officers re common stock purchases (766) (775) (785) Deferred
compensation re restricted stock (2,472) (2,719) (3,049) Dividends
in excess of accumulated earnings (158,432) (158,365) (158,704)
Treasury stock at cost (26,612) (26,612) (26,612) Total
Stockholders' Equity 98,420 97,136 96,147 Total Liabilities and
Stockholders' Equity $269,255 $262,639 $252,326 AMERICAN LAND LEASE
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in
thousands, except per share data) (unaudited) Three Months Ended
March December September June 31, 31, 30, 30, 2005 2004 2004 2004
RENTAL PROPERTY OPERATIONS Rental and other property revenues
$7,637 $7,188 $7,146 $7,001 Golf course operating revenues 399 225
114 176 Total property operating revenues 8,036 7,413 7,260 7,177
Property operating expenses (2,592) (2,790) (2,463) (2,422)
Recoveries of casualty expenses related to hurricanes 140 Golf
course operating expenses (327) (329) (283) (305) Total property
operating expenses (2,779) (3,119) (2,746) (2,727) Depreciation
(841) (766) (746) (737) Income from rental property operations
4,416 3,528 3,768 3,713 SALES OPERATIONS Home sales revenue 8,821
12,871 8,495 9,714 Cost of home sales (6,014) (8,665) (5,843)
(6,474) Gross profit on home sales 2,807 4,206 2,652 3,240
Commissions earned on brokered sales 163 124 115 227 Commissions
paid on brokered sales (87) (69) (64) (122) Gross profit on
brokered sales 76 55 51 105 Selling and marketing expenses (2,285)
(2,616) (2,236) (2,455) Income (loss) from sales operations 598
1,645 467 890 General and administrative expenses (429) (1,221)
(959) (904) Interest and other income 12 16 51 27 Casualty gain 237
-- -- -- Gain (loss) on sale of real estate -- 438 -- -- Interest
expense (1,533) (1,555) (1,426) (1,374) Income before minority
interest in Operating Partnership 3,301 2,851 1,901 2,352 Minority
interest in Operating Partnership (398) (342) (223) (285) Income
from continuing operations 2,903 2,509 1,678 2,067 DISCONTINUED
OPERATIONS: (Loss) Income from discontinued operations -- -- 26 20
Net income 2,903 2,509 1,704 2,087 Net Income attributable to
preferred stockholders 194 -- -- -- NET INCOME ATTRIBUTABLE TO
COMMON STOCKHOLDERS $2,709 $2,509 $1,704 $2,087 Earnings per common
share - basic: Income from continuing operations (net of cumulative
unpaid preferred dividends) $0.38 $0.35 $0.24 $0.30 Net income
attributable to common stockholders $0.38 $0.35 $0.24 $0.30
Earnings per common share - diluted: Income from continuing
operations (net of cumulative unpaid preferred dividends) $0.36
$0.34 $0.23 $0.29 Net income attributable to common stockholders
$0.36 $0.34 $0.23 $0.29 Weighted average common shares outstanding
7,122 7,089 7,050 6,971 Weighted average common shares and common
share equivalents outstanding 7,548 7,402 7,297 7,236 Common
dividends paid per share $0.25 $0.25 $0.25 $0.25 AMERICAN LAND
LEASE INC. AND SUBSIDIARIES DEBT ANALYSIS (in thousands)
(unaudited) As of March December September June March 31, 31, 30,
30, 31, 2005 2004 2004 2004 2004 DEBT OUTSTANDING Mortgage Loans
Payable - Fixed $100,901 $101,710 $102,502 $93,377 $94,107 Mortgage
Loans Payable - Floating 25,628 25,628 25,628 26,499 24,371 Floor
Plan Facility 20,461 17,679 12,907 10,762 9,077 Line of Credit
5,375 6,965 5,715 9,380 4,418 Total Debt $152,365 $151,982 $146,752
$140,018 $131,973 % FIXED/FLOATING Fixed 66.2% 66.9% 69.8% 66.7%
71.3% Floating 33.8% 33.1% 30.2% 33.3% 28.7% Total 100.00% 100.00%
100.00% 100.00% 100.00% AVERAGE INTEREST RATES Mortgage Loans
Payable - Fixed 7.0% 7.0% 7.0% 7.1% 7.1% Mortgage Loans Payable -
Floating 4.9% 4.7% 4.7% 4.9% 4.8% Floor Plan Facility 7.3% 6.8%
5.9% 6.5% 6.1% Line of Credit 4.6% 4.6% 3.6% 3.2% 3.1% Total
Weighted Average 6.6% 6.5% 6.4% 6.4% 6.5% DEBT RATIOS Debt/Total
Market Cap (1) 40.9% 44.6% 47.4% 47.5% 45.2% Debt/Gross Assets
50.7% 55.1% 54.5% 53.3% 52.3% December December December December
December 31, 31, 31, 31, 31, MATURITIES 2005 2006 2007 2008 2009
Mortgage Loans Maturities - Scheduled 2,459 3,552 3,809 4,042 4,291
Mortgage Loans Maturities - Balloon -- -- 13,278 -- 2,069 Floor
Plan Facility (2) -- -- -- -- -- Total $2,459 $3,552 $17,087 $4,042
$6,360 (1) Computed based upon closing price as reported on NYSE as
of the period ended. (2) Discretionary, non-committed facility
whose individual advances mature at different dates between 360 and
540 days from advance date. AMERICAN LAND LEASE INC. AND
SUBSIDIARIES RECONCILIATION OF NET INCOME TO FFO AND AFFO (Amounts
in thousands, except per share/OP unit amounts) (Unaudited) Three
Months Ended March 31, 2005 2004 Net Income $2,709 $2,374
Adjustments: Cumulative unpaid preferred stock dividends 194 --
Minority interest in operating partnership 398 323 Casualty gain
(237) -- Real estate depreciation 841 705 Discontinued Operations
Real estate depreciation -- 4 Minority interest in operating
partnership attributed to discontinued operations -- 1 Funds From
Operations (FFO) 3,905 3,407 Cumulative unpaid preferred stock
dividends (194) -- Funds From Operations attributable to common
stockholders 3,711 3,407 Capital Replacements (216) (357) Adjusted
Funds from Operations (AFFO) $3,495 $3,050 Weighted Average Common
Shares/OP Units Outstanding: 8,524 8,246 Per Common Share and OP
Unit: FFO: $0.44 $0.41 AFFO: $0.41 $0.37 Payout Ratio Per Common
Share and OP Unit: Gross Distribution Payout FFO: 56.8 % 61.0 %
AFFO: 61.0 % 67.6 % AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS FOR
THE QUARTER ENDED MARCH 31, 2005 (in thousands) Three Three Months
Months Ended Ended Contribution March March to Same 31, 31, % Store
% 2005 2004 Change Change Change(1) Same site rental revenues
$6,921 $6,644 $277 4.2% 3.9% Absorption rental revenues 434 32 402
1256.3% 5.7% Same site golf revenues 399 403 (4) -1.0% -0.1% Same
store revenues A 7,754 7,079 675 9.5% 9.5% Redevelopment property
rental revenues 275 286 (11) -3.8% Other Income 7 6 1 16.7% Total
property revenues C 8,036 7,371 665 9.0% Same site rental expenses
$2,071 $2,023 48 2.4% 2.1% Absorption rental expenses 48 -- 48
100.0% 2.0% Same site golf expenses 327 308 19 6.2% 0.8% Same store
expenses B 2,446 2,331 115 4.9% 4.9% Recoveries of casualty
expenses related to hurricanes (140) -- (140) 100.0% Redevelopment
property expenses 88 91 (3) -3.3% Expenses related to offsite
management(2) 385 396 (11) -2.8% Total property operating expenses
D $2,779 $2,818 $(39) -1.4% Same Store net operating A- income B
$5,308 $4,748 $560 11.8% -- C- Total net operating income D $5,257
$4,553 $704 15.5% (1) Contribution to Same Store % change is
computed as the change in the individual component of same store
revenue or expense divided by the total applicable same store base
(revenue or expense) for the 2005 period. For example, same site
rental revenue of $277 as compared to the total same store revenues
in 2004 of $7,079 is a 3.9% increase ($277/$7,079=3.9%). (2)
Expenses related to offsite management reflect portfolio property
management costs not attributable to a specific property. AMERICAN
LAND LEASE, INC. AND SUBSIDIARIES NUMBER OF HOMESITES AND AVERAGE
RENT BY COMMUNITY AS OF MARCH 31, 2005 Undevel- Devel- Average oped
oped Operational Monthly RV Home Home Community Location Home Sites
Occupancy Rent Sites Sites Sites Owned Communities Blue Heron Punta
Gorda, Pines FL 309 98 % $367 -- 65 17 Brentwood Hudson, FL 120 98
% 250 -- 0 71 Crystal Bay Micco, FL -- 0 % -- -- 533 -- Serendipity
Ft. Myers, FL 338 95 % 332 -- -- -- Stonebrook Homosassa, FL 168
100 % 284 -- -- 43 Sun Lake Grand Island, FL 329 100 % 337 -- -- 65
Sun Valley Tarpon Springs, FL 261 98 % 369 -- -- -- Caribbean Cove
Orlando, FL 272 71 % 385 -- -- 13 Forest View Homosassa, FL 252 100
% 297 -- -- 52 Gulfstream Harbor Orlando, FL 382 97 % 387 -- 50 --
Gulfstream Harbor II Orlando, FL 306 99 % 382 -- 37 1 Lakeshore
Villas Tampa, FL 281 100 % 402 -- -- -- Park Royale Pinellas Park,
FL 285 95 % 414 -- -- 24 Pleasant Living Riverview, FL 245 96 % 335
-- -- -- Riverside GCC Ruskin, FL 372 100 % 530 -- 420 145 Royal
Palm Haines City, FL 264 96 % 332 -- 0 121 Cypress Greens Lakeland,
FL 159 100 % 246 -- -- 99 Savanna Port St. Club Lucie, FL 786 100 %
274 -- 192 84 Woodlands Groveland, FL 133 96 % 248 -- -- 159
Sub-total Florida 5,262 1,297 894 Apache Blue Star Junction, AZ 22
73 % 284 129 -- -- Brentwood West Mesa, AZ 350 92 % 428 -- -- --
Casa Mesa, Encanta Mesa, AZ -- 0 % -- -- 195 -- Desert Apache
Harbor Junction, AZ 145 97 % 367 -- -- 61 Fiesta Village Mesa, AZ
170 75 % 353 -- -- -- La Casa Apache Blanca Junction, AZ 198 90 %
373 -- -- -- Lost Apache Dutchman Junction, AZ 176 90 % 308 -- --
83 Rancho Apache Mirage Junction, AZ 312 89 % 409 -- -- -- Apache
Sun Valley Junction, AZ 268 94 % 317 -- -- -- Sub-total Arizona
1,641 195 144 Mullica Egg Harbor Woods City, NJ 90 100 % 480 -- --
-- Total Communities 29 6,993 95 % $351 129 1,492 1,038 (1) We
define opertional home sites as those sites within our portfolio
that have been leased to a tenant during our ownership of the
community. Since our porfolio contains a large inventory of
developed home sites that have not been occupied during our
ownership, we have expressed occupancy as the number of occupied
sites as a percentage of operational home sites. We believe this
measure most accurately describes the performance of an individual
property relative to prior periods and other properties within our
portfolio. The occupancy of all developed sites was 81.5% across
the entire portfolio. Including sites not yet developed, occupancy
was at 69.9% March 31, 2005. Portfolio Summary Operational
Developed Undeveloped Home Home Home RV site sites sites Sites
Total As of December 31, 2004 6,931 1,101 960 129 9,121 Properties
developed -- -- -- -- -- New lots purchased -- 2 533 -- 535 Lots
sold -- -- -- -- -- New leases originated 65 (65) -- -- -- Adjust
for site plan changes (3) -- (1) -- (4) As of March 31, 2005 6,9931
(1) 1,038 1,492 129 9,652 (1) As of March 31, 2005, 6,657 of these
operational home sites were occupied. Occupancy Roll Forward
Occupied Operational Home sites Home sites Occupancy As of December
31, 2004 6,617 6,931 96.5 % New home sales 77 65 Used home sales 2
-- Used homes acquired (19) -- Lots Sold -- -- Homes constructed by
others 2 -- Site plan changes -- (3) Homes removed from previously
leased sites (22) -- As of March 31, 2005 6,657 6,993 95.2 %
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES RETURN ON INVESTMENT
FROM HOME SALES (unaudited) Three Months Ended Three Months Ended
March 31, 2005 March 31, 2004 Expansion sites leased during the
year 65 89 Estimated first year annualized profit on leases
originated during the year A $260 $340 Costs, including development
costs of sites leased $3,236 $4,348 Home sales income (loss)
attributable to sites leased 522 733 Total costs incurred to
originate ground leases B $2,714 $3,615 Estimated first year
annualized return on investment for leases originated during the
year A/B 9.6 % 9.4 % For the three months ended March 31, 2005 and
2004, we estimate our profit or loss attributable to the sale of
homes situated on expansion home sites as follows (in thousands):
Three Months Ended Three Months Ended March 31, 2005 March 31, 2004
Reported income from sales operations $598 $818 Used home sales and
brokerage business income (76) (85) Adjusted income for pro forma
analysis $522 $733 The reconciliation of our estimated first year
return on investment in expansion home sites, a non-GAAP financial
measure, to our return on investment in operational home sites in
accordance with GAAP is shown below (in thousands): Total Portfolio
for Year Ended December 31, 2004 Property income before
depreciation A $18 Total investment in operating home sites B $221
Return on investment from earning home sites A/B 8.1% AMERICAN LAND
LEASE INC. AND SUBSIDIARIES KEY HOME SALES STATISTICS Qtr Qtr over
over Qtr Qtr March 31, June 30, Sept. 30, Dec 31, March 31,
Increase/ % 2004 2004 2004 2004 2005 Decrease Change New home
closings 91 103 77 121 77 -44 -36.4% New home contracts 168 144 69
65 91 26 40.0% Home resales 12 5 3 3 2 -1 -33.3% Brokered home
sales 79 83 48 55 61 6 10.9% New home contract backlog 164 189 175
88 105 17 9.3% Average Selling Price $100,000 $92,000 $108,000
$105,000 $112,000 7,000 6.7% Average Gross Margin Percentage 33.2%
33.7% 33.10% 32.7% 31.8% DATASOURCE: American Land Lease, Inc.
CONTACT: Robert G. Blatz, President, or Shannon E. Smith, Chief
Financial Officer, both of American Land Lease, Inc.,
+1-727-726-8868 Web site: http://www.americanlandlease.com/
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