- 13.3% Increase in Funds From Operations Per Share Over Full Year
2004 - CLEARWATER, Fla., Feb. 7 /PRNewswire-FirstCall/ -- American
Land Lease, Inc. (NYSE:ANL) today released results for fourth
quarter and full year 2005 and expectations for full year 2006.
Summary Financial Results Fourth Quarter * Diluted Earnings Per
Share ("Diluted EPS") were $0.40 for the three- month period ended
December 31, 2005 as compared to $0.34 from the same period one
year ago, an increase of 17.6% on a per share basis. Earnings per
share were positively impacted by a $600,000 tax benefit
attributable to the reversal of potential tax liabilities recorded
in conjunction with the Company's constructive sale of properties
in 2001. * Funds from Operations ("FFO"; a non-GAAP financial
measure defined in the financial tables following the text of this
press release) were $3.9 million, or $0.45 per diluted common
share, for the quarter compared to $3.2 million, or $0.38 per
diluted common share from the same period one year ago, an increase
of 18.4% on a per share basis. FFO excludes the tax benefit
recorded in the period that was related to gains on a constructive
sale of properties in 2001. * Unit volume in home sales was 133 new
home closings, including 104 new homes sold on expansion home
sites. This compares with 121 new home closings in fourth quarter
2004. * "Same Store" results provided a revenue increase of 9.5%,
an expense increase of 10.5% and an increase of 9.0% in Net
Operating Income ("NOI"). * "Same Site" results provided a revenue
increase of 4.2%, an expense increase of 4.9% and an increase of
3.8% in NOI. 2005 Year * Diluted EPS were $1.35 for the year ended
December 31, 2005 as compared to $1.19 for the year ended December
31, 2004, an increase of 13.4% on a per share basis. Earnings per
share were positively impacted by a $600,000 tax benefit
attributable to the reversal of potential tax liabilities recorded
in conjunction with the Company's constructive sale of properties
in 2001. * FFO were $14.6 million, or $1.70 per diluted common
share, for the year compared to $12.4 million, or $1.50 per diluted
common share from the same period one year ago, an increase of
13.3% on a per share basis. FFO excludes the tax benefit recorded
in the period that was related to gains on a constructive sale of
properties in 2001. * Unit volume in home sales was 435 new home
closings, including 352 new homes sold on expansion home sites, for
2005 as compared to 392 new home closings in 2004. * "Same Store"
results provided a revenue increase of 10.0%, an expense increase
of 9.8% and an increase of 10.1% in NOI. * "Same Site" results
provided a revenue increase of 5.3%, an expense increase of 4.3%
and an increase of 5.7% in NOI. * Physical occupancy at December
31, 2005 was 6,947 sites or 95.4%, as compared to 6,617 sites or
95.5% as of December 31, 2004, an absolute increase of 330 sites or
5%. 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, "We are pleased to
report strong results for the fourth quarter and full year of 2005.
These results reflect continuing better than projected performance
of our home sales division, and the resulting positive effect that
absorption from home sales is having on our property operations.
The strength and stability of our focus in the senior community
sector has been demonstrated by the outstanding performance of our
core portfolio." Mr. Blatz added, "2005 demonstrated the resiliency
of our home sales business as we broadened our success into our
Arizona communities. Fourth quarter established a new record for
closings. New home prices averaged $125,000 for the quarter and our
full year results reflect an average new home price of $117,000, a
16% increase in average new home price over the 2004 average price
of $101,000. As we look at 2006, we forecast continued success in
our core property ownership business and continued improvement in
our home sales/development business. We continue to view our future
organic growth as a positive as we seek other opportunities to
expand the success of our team." Dividend Declaration On February
2, 2006, the Board of Directors declared a regular fourth quarter
common stock dividend of $0.25 per share payable on February 28,
2006, to stockholders of record on February 16, 2006. On February
2, 2006, the Board of Directors declared a cash dividend of $0.4844
per share of Class A Preferred Stock for the quarter ended December
31, 2005, payable on February 28, 2006 to shareholders of record on
February 16, 2006. The Board of Directors reviews the dividend
policy quarterly. The Company's dividends are set quarterly and are
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 - Fourth Quarter Fourth Quarter
Property Operations Fourth quarter revenue from property operations
was $8,052,000 as compared to $7,413,000 in the same period one
year ago, an 8.6% increase. Fourth quarter property operating
expenses totaled $3,218,000 as compared to $3,118,000 in the same
period one year ago, a 3.2% increase. 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 increased in the fourth
quarter 2005 as compared to the same period in the prior year that
were driven primarily by increases in labor and benefit costs,
tenant related legal costs and utility costs and waste water
treatment and partially offset by hurricane expenses in the 2004
period that did not recur in 2005. The property operating margins
before depreciation expense increased from 57.9% in the prior
year's fourth quarter to 60.0%, driven primarily by hurricane
expenses in the 2004 period that did not recur in 2005. Excluding
the impact of hurricane expenses, operating margins decreased from
60.8% to 60.1%. Fourth Quarter "Same Store" Results Fourth quarter
"same store" results reflect the results of operations for
properties and golf courses owned for both the fourth quarter of
2005 and the prior year periods. The same store properties account
for 95% of the property operating revenues for the fourth quarter
of 2005. 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 in the financial
tables following the text of this press release. The same store %
change results are as follows: 4Q05 Revenue 9.5 % Expense 10.5 %
Net Operating Income 9.0 % 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 fourth quarter are as follows: Same Site
Rental Absorption Same Site Golf Same Store Revenue 4.2 % 5.2 % 0.1
% 9.5 % Expense 4.9 % 4.9 % 0.7 % 10.5 % NOI 3.8 % 5.4 % (0.2)% 9.0
% 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 December 31, 2005 and 2004 can be found in the financial
tables following the text of this earnings release. Fourth Quarter
Home Sales Operations Fourth quarter 2005 new home sales volume was
133 closings, a 9.9% increase from the 121 closings in the same
period in the prior year, and setting a new record for quarterly
closings. Average selling price per home was $125,000 as compared
to $104,000 in the same period in the prior year, a 20.2% increase.
The increase in closings compared to the same period in the prior
year was the result of two of the Company's expansion communities
in Florida. Brokerage profits were up 16.7% 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 32.7% in the same period in the prior year. This decrease was
driven primarily by increases in cost of homes purchased offset by
increased selling prices and increased manufacturer rebates
associated with higher purchasing volumes, and the sale of higher
margin finishes and features. Selling costs as a percentage of
sales revenue decreased from 20.3% in the prior year's period to
18.8% in the fourth quarter of 2005, reflecting greater operating
leverage with higher business volumes. The backlog of contracts for
closing stood at 93 home sales, an increase of 5 contracts from the
same period in the prior year. Backlog improvement at many
locations in the portfolio were offset by a reduction of 38
contracts in backlog at Savannah Club, which was most impacted by
the hurricanes. We do not expect the contract carry forward to
impair our expectations for 2006 on an annualized basis. 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 December 31, 2005 December 31, 2004 New home closings
133 121 New home contracts 105 65 Home resales 1 3 Brokered home
sales 51 55 New home contract backlog 93 88 Operational Results -
2005 Year 2005 Property Operations 2005 revenue from property
operations was $31,914,000 as compared to $29,221,000 in 2004, a
9.2% increase. 2005 property operating expenses totaled $12,095,000
as compared to $11,410,000 in 2004, a 6.0% increase. 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 increased in
2005 as compared to 2004 driven primarily by increases in labor and
benefit costs, property tax expense, utility costs including water
and waste water treatment, and tenant legal costs, offset by
decreases in property management overhead. The property operating
margins before depreciation expense increased from 61.0% in the
prior year to 62.1% in 2005. Excluding the impact of hurricane
expenses, property operating margins decreased from 61.7% to 61.6%.
2005 "Same Store" Results 2005 "same store" results reflect the
results of operations for properties and golf courses owned for
both 2005 and 2004. The same store properties account for 95% of
the property operating revenues for 2005. 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 in the financial tables following the text of
this earnings release. The same store % change results are as
follows: 2005 Revenue 10.0 % Expense 9.8 % Net Operating Income
10.1 % 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"). We believe that "same site" information provides
the ability to understand the changes in profitability related to
the newly leased sites. "Same site" results reflect the results of
operations excluding those sites leased subsequent to the beginning
of the prior year period. 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. We estimate that 50%
of the increase in expenses over the prior year 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 2005 are as follows:
Same Site Rental Absorption Same Site Golf Same Store Revenue 5.3 %
4.6 % 0.1 % 10.0 % Expense 4.3 % 4.3 % 1.2 % 9.8 % NOI 5.7 % 4.7 %
(0.4)% 10.1 % 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
years ended December 31, 2005 and 2004 can be found in the
financial tables following the text of this earnings release. 2005
Home Sales Operations 2005 new home sales volume was 435 closings,
an 11% increase from the 392 closings in the prior year. Average
selling price per home in 2005 was $117,000 as compared to $101,000
in the prior year, a 16% increase. The increase in closings
compared to the prior year was the result of two of the Company's
expansion communities in Arizona and our new expansion community
acquired in fourth quarter 2003. Brokerage profits were down 1.7%
as compared with the prior year's results. Selling gross margins,
excluding brokerage activities, decreased to 31.0% for 2005 as
compared to 32.6% for 2004. This decrease was a result of increases
in costs of homes purchased offset by increased selling prices,
increased manufacturer rebates associated with higher purchasing
volumes, the initial impact of cost savings efforts in home
construction and the sale of higher margin finishes and features.
Selling costs as a percentage of sales revenue decreased from 23.9%
in the prior year to 20.6% in 2005, reflecting reduced marketing
costs. The backlog of contracts for closing stood at 93 home sales,
an increase of 5 contracts from the same period in the prior year.
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:
Year ended Year ended December 31, 2005 December 31, 2004 New home
closings 435 392 Home resales 12 23 Brokered home sales 247 265 New
home contract backlog 93 88 Outlook for 2006 The table below
summarizes the Company's projected financial outlook for 2006 as of
the date of this release and is based on the estimates and
assumptions disclosed in this and previous press releases: Full
Year 2006 Projected FFO $1.70 to $1.90 AFFO $1.57 to $1.82 Diluted
EPS $1.27 to $1.52 Same Store Sales Revenue Growth 7% to 10%
Expense Growth 6% to 9% NOI Growth 8% to 10% Home Sales Operating
Income $5.5M to $7.3M General and Administrative Expenses $3.8M to
$4.2M Capital Replacements (per site) $145 to $165 Depreciation
$3.8M to $4.1M 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 and home owners' insurance for home purchases and the sale
of their current home. The Company's projected results for 2006
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 2006 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. Financing Activity On December 20, 2005, the
Company issued a $14.2 million eight-year term, non-recourse
mortgage note payable with a fixed rate of 5.56%. The proceeds will
be used to repay existing debt and to continue development of our
residential land lease communities. On December 1, 2005, the
Company amended three mortgage notes payable totaling $10.6
million. The original notes were to mature in 2007 and had variable
interest rates before the amendment ranging from 6.86% to 7.36%.
The amended notes have a ten-year term with a fixed rate of 5.48%.
On December 1, 2005, the Company issued three ten-year term,
non-recourse mortgage notes payable with a fixed rate of 5.48%
totaling $11.2 million. The proceeds will be used to repay existing
debt and to continue development of our residential land lease
communities. Development Activity The Company completed significant
development activities at a number of locations during the quarter.
* at Savanna Club, "The Fairways," that provides an additional 216
developed home sites available for immediate occupancy. * at
Riverside Club, a 48 slip marina was completed and opened. The
current community slips have been occupied, with over half being
held back for future resident leasing/use. * at Woodlands, the
reconstruction and expansion of the community's clubhouse from
5,000 to 10,000+ square feet was completed which will give a new
focus to new home sales. * at Blue Heron Pines, an additional 48
developed home sites available for immediate occupancy, with an
additional 16 expected to be completed in first quarter.
Additionally, ongoing significant development activity also
continued: * at Blue Heron Pines, construction on the expansion of
the clubhouse continued -- expected completion in Q106. * at
Savanna Club, construction on a 11,000+ square foot auditorium that
will seat 780 for lectures/show and 480 for dinners and a Fitness
Center continued -- expected completion in Q206. * at the Villages
at Country Club project in Mesa, Arizona construction plans and
permitting were completed -- initial site work began in January
2006. * at Sebastian Beach and Tennis Village (SBTV), construction
and site work continued on schedule for opening of the community in
early 2007. * at Riverside Club, permitting was completed for the
community's second clubhouse of over 22,000 square feet and
construction activities began in January 2006. American Land Lease,
Inc. is a REIT that holds interests in 29 manufactured home
communities with 7,283 operational home sites, 976 developed
expansion sites, 1,268 undeveloped expansion sites and 129
recreational vehicle sites as of December 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, Tuesday, February 7, 2006 at 4:00 p.m. Eastern
Standard Time to discuss fourth 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 fourth 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.
Eastern Standard Time, February 7, 2006 until midnight on February
14, 2006. To access the replay, dial toll free, (800) 642-1687 and
request information from conference ID 5154591. Contact: Robert G.
Blatz, President (727) 726-8868 Shannon E. Smith, Chief Financial
Officer (727) 726-8868 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 standard 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 Lease'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
December September June March December 31, 30, 30, 31, 31, 2005
2005 2005 2005 2004 (un- (un- (un- audited) audited) audited)
ASSETS Real Estate $249,173 $236,588 $232,035 $227,073 $222,311
Less accumulated depreciation (26,014) (25,172) (24,358) (23,574)
(22,803) Real estate under development 74,416 74,818 70,841 67,966
49,360 Total Real Estate 297,575 286,234 278,518 271,465 248,868
Cash and cash equivalents 1,845 828 1,313 870 820 Inventory 18,759
19,431 19,478 19,721 16,788 Other assets 11,285 10,074 9,494 8,856
9,480 Total Assets $329,464 $316,567 $308,803 $300,912 $275,956
LIABILITIES AND EQUITY Liabilities Secured long-term notes payable
$151,657 $127,045 $125,712 $126,529 $127,338 Secured short-term
financing 19,668 33,777 30,123 25,836 24,644 Accounts payable and
accrued liabilities 12,285 11,850 10,237 8,904 9,795 Total
Liabilities 183,610 172,672 166,072 161,269 161,777 Minority
Interest in Operating Partnership 15,945 15,511 15,312 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 25,000 25,000 25,000 -- Common
Stock, par value $.01 per share; 12,000 shares authorized 93 93 93
92 91 Additional paid-in capital 288,224 288,188 288,064 286,014
286,649 Notes receivable from officers re common stock purchases --
-- -- (437) (748) Deferred compensation re restricted stock (1,651)
(1,959) (2,258) (2,573) (2,250) Dividends in excess of accumulated
earnings (155,145) (156,326) (156,868) (157,009) (157,697) Treasury
stock at cost (26,612) (26,612) (26,612) (26,612) (26,612) Total
Stockholders Equity 129,909 128,384 127,419 124,475 99,433 Total
Liabilities and Stockholders' Equity $329,464 $316,567 $308,803
$300,912 $275,956 AMERICAN LAND LEASE INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share
data) (unaudited) Three Months Ended December September June March
31, 30, 30, 31, 2005 2005 2005 2005 RENTAL PROPERTY OPERATIONS
Rental and other property revenues $7,820 $7,876 $7,626 $7,637 Golf
course operating revenues 232 131 194 399 Total property operating
revenues 8,052 8,007 7,820 8,036 Property operating expenses
(2,866) (2,794) (2,651) (2,592) Recoveries of casualty expenses
related to hurricanes (6) (21) 36 140 Golf course operating
expenses (346) (329) (339) (327) Total property operating expenses
(3,218) (3,144) (2,954) (2,779) Depreciation (971) (886) (858)
(841) Income from rental property operations 3,863 3,977 4,008
4,416 SALES OPERATIONS Home sales revenue 16,781 13,676 12,171
8,821 Cost of home sales (11,444) (9,562) (8,487) (6,014) Gross
profit on home sales 5,337 4,114 3,684 2,807 Commissions earned on
brokered sales 139 112 240 163 Commissions paid on brokered sales
(74) (64) (138) (87) Gross profit on brokered sales 65 48 102 76
Selling and marketing expenses (3,162) (2,550) (2,596) (2,285)
Income (loss) from sales operations 2,240 1,612 1,190 598 General
and administrative expenses (1,113) (946) (864) (429) Gain on sale
of property -- -- -- 237 Interest and other income 1 2 8 12 Tax
benefit 600 -- -- -- Interest expense (1,546) (1,330) (1,436)
(1,533) Income before minority interest in Operating Partnership
4,045 3,315 2,906 3,301 Minority interest in Operating Partnership
(483) (395) (340) (398) Income from continuing operations 3,562
2,920 2,566 2,903 Cumulative preferred stock dividends (484) (484)
484 194 NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $3,078
$2,436 $2,082 $2,709 Earnings per common share - basic: Income from
continuing operations (net of cumulative unpaid preferred
dividends) $0.42 $0.33 $0.29 $0.38 Net income attributable to
common stockholders $0.42 $0.33 $0.29 $0.38 Earnings per common
share - diluted: Income from continuing operations $0.40 $0.32
$0.27 $0.36 Net income attributable to common stockholders $0.40
$0.32 $0.27 $0.36 Weighted average common shares outstanding 7,341
7,331 7,256 7,122 Weighted average common shares and common share
equivalents outstanding 7,722 7,706 7,598 7,548 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
December September June March December 31, 30, 30, 31, 31, 2005
2005 2005 2005 2004 DEBT OUTSTANDING Mortgage Loans Payable - Fixed
$136,642 $101,417 $100,084 $100,901 $101,710 Mortgage Loans Payable
- Floating 15,015 25,628 25,628 25,628 25,628 Floor Plan Facility
14,968 19,147 18,929 20,461 17,679 Line of Credit 4,700 14,630
11,194 5,375 6,965 Total Debts $171,325 $160,822 $155,835 $152,365
$151,982 % FIXED FLOATING Fixed 79.8 % 63.1 % 64.2 % 66.2 % 66.9 %
Floating 20.2 % 36.9 % 35.8 % 33.8 % 33.1 % Total 100.00 % 100.00 %
100.00 % 100.0 % 100.0 % AVERAGE INTEREST RATES Mortgage Loans
Payable - Fixed 6.6 % 7.0 % 7.0 % 7.0 % 7.0 % Mortgage Loans
Payable - Floating 6.7 % 6.5 % 5.9 % 4.9 % 4.7 % Floor Plan
Facility 7.6 % 7.1 % 7.7 % 7.3 % 6.8 % Line of Credit 6.4 % 5.8 %
4.5 % 4.6 % 4.6 % Total Weighted Average 6.7 % 6.8 % 6.7 % 6.6 %
6.5 % DEBT RATIOS Debt/Total Market Cap(1) 41.0 % 41.2 % 43.1 %
40.9 % 44.6 % Debt/Gross Assets 48.8 % 50.8 % 50.5 % 50.7 % 55.1 %
December December December December December 31, 31, 31, 31, 31,
MATURITIES 2006 2007 2008 2009 2010 Mortgage Loan Maturities -
Scheduled 4,022 4,350 4,611 4,892 5,222 Mortgage Loans Maturities -
Balloon -- 2,665 -- 2,069 -- Floor Plan Facility -- -- -- -- --
Total $4,022 $7,015 $4,611 $6,961 $5,222 (1) Computed based upon
closing price as reported on NYSE as of the period ended. FFO/AFFO
and Payout Ratios 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
December 31, 2005 2004 Net Income $3,078 $2,510 Adjustments
Cumulative unpaid preferred stock dividends 484 -- Minority
interest in operating partnership 483 342 Gain on sale of property
-- (438) Real estate depreciation 971 766 Tax Benefit related to
constructive sale of properties (600) -- Funds From Operations
(FFO) 4,416 3,180 Cumulative unpaid preferred stock dividends (484)
-- Funds From Operations attributable to common Stockholders 3,932
3,180 Capital Replacements (369) (241) Adjusted Funds from
Operations (AFFO) $3,563 $2,939 Weighted Average Common Shares/OP
Units Outstanding 8,712 8,366 Per Common Share and OP Unit: FFO:
$0.45 $0.38 AFFO: $0.41 $0.35 Payout Ratio Per Common Share and OP
Unit: Gross Distribution Payout FFO: 55.6 % 65.8 % AFFO: 61.0 %
71.4 % AMERICAN LAND LEASE INC. AND SUBSIDIARIES RECONCILIATION OF
SAME SITE AND SAME STORE OPERATING RESULTS FOR THE QUARTER ENDED
DECEMBER 31, 2005 (in thousands) (unaudited) Three Three Contribu-
Months Months tion Ended Ended to Same December December Store 31,
31, % 2005 2004 Change % Change Change(1) Same site rental revenues
$6,972 $6,673 $299 4.5 % 4.2 % Absorption rental revenues 629 257
372 144.7 % 5.2 % Same site golf revenues 232 224 8 3.6 % 0.1 %
Same store revenues A 7,833 7,154 679 9.5 % 9.5 % Re-development
property revenues 211 259 (48) -18.5 % Other Income 7 -- 7 100.0 %
Total property revenues C $8,051 $7,413 $638 8.6 % Same site rental
expenses $2,198 $2,080 $118 5.7 % 4.9 % Absorption rental expenses
117 -- 117 100.0 % 4.9 % Same site golf expenses 346 328 18 5.5 %
0.7 % Same store expenses B 2,661 2,408 253 10.5 % 10.5 %
Recoveries of casualty expenses related to hurricanes 6 210 (204)
-97.1 % Re-development property expenses 82 91 (9) -9.9 % Expenses
related to offsite management(2) 469 409 60 14.7 % Total property
operating expenses D $3,218 $3,118 $100 3.2 % Same Store net
operating income A-B $5,172 $4,746 $426 9.0 % Total net operating
income C-D $4,833 $4,295 $538 12.5 % (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 2004 period. For example,
same site rental revenues of $299 as compared to the total same
store revenues in 2004 of $7,154 is a 4.2% increase
($299/$7,154=4.2%). (2) Expenses related to offsite management
reflect portfolio property management costs not attributable to a
specific property. AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS FOR
TWELVE MONTHS ENDED DECEMBER 31, 2005 (in thousands) (unaudited)
Twelve Twelve Contribu- Months Months tion Ended Ended to Same
December December Store 31, 31, % 2005 2004 Change % Change
Change(1) Same site rental revenues $28,098 $26,618 $1,480 5.6 %
5.3 % Absorption rental revenues 1,861 569 1,292 227.1 % 4.6 % Same
site golf revenues 956 918 38 4.1 % 0.1 % Same store revenues A
30,915 28,105 2,810 10.0 % 10.0 % Re-development property revenues
980 1,099 (119) -10.8 % Other Income 19 17 2 11.8 % Total property
revenues C $31,914 $29,221 $2,693 9.2 % Same site rental expenses
$8,454 $8,056 $398 4.9 % 4.3 % Absorption rental expenses 398 --
398 100.0 % 4.3 % Same site golf expenses 1,341 1,225 116 9.5 % 1.2
% Same store expenses B 10,193 9,281 912 9.8 % 9.8 % Recoveries of
casualty expenses related to hurricanes (150) 221 (371) -167.9 %
Re-development property expenses 336 352 (16) 4.5 % Expenses
related to offsite management(2) 1,716 1,556 160 10.3 % Total
property operating expenses D $12,095 $11,410 $685 6.0 % Same Store
net operating income A-B $20,722 $18,824 $1,898 10.1 % Total net
operating income C-D $19,819 $17,811 $2,008 11.3 % (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 2004
period. For example, same site rental revenues of $1,480 as
compared to the total same store revenues in 2004 of $28,105 is a
5.3% increase ($1,480/$28,1054=5.3%). (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 DECEMBER 31, 2005 Operational Un- Home Average developed
Developed Sites Occu- Monthly RV Home Home Community Location (1)
pancy Rent Sites Sites Sites Owned Communities Blue Heron Punda
Gorda, Pines FL 327 99 % $337 -- 16 42 Brentwood Estates Hudson, FL
127 98 % 266 -- -- 64 Sebastian Beach & Tennis Club Micco, FL
-- 0 % -- -- 533 -- Serendipity Ft. Myers, FL 338 96 % 347 -- -- --
Stonebrook Homosassa, FL 181 100 % 295 -- -- 30 Sunlake Grand
Estates Island, FL 339 100 % 348 -- -- 56 Sun Valley Tarpon
Springs, FL 261 97 % 383 -- -- -- Caribbean Cove Orlando, FL 272 59
% 393 -- -- 13 Forest View Homosassa, FL 264 100 % 311 -- -- 40
Gulfstream Harbor Orlando, FL 382 97 % 402 -- 50 -- Gulfstream
Harbor II Orlando, FL 306 99 % 394 -- 37 1 Lakeshore Villas Tampa,
FL 281 99 % 417 -- -- -- Park Royale Pinellas Park, FL 289 95 % 428
-- -- 20 Pleasant Riverview, Living FL 245 96 % 347 -- -- --
Riverside GCC Ruskin, FL 409 100 % 514 -- 420 108 Royal Palm Haines
City, Village FL 268 97 % 341 -- -- 119 Cypress Greens Lakeland, FL
186 100 % 252 -- -- 72 Savanna Club Port St Lucie, FL 895 100 % 289
-- -- 172 Woodlands Groveland, FL 146 99 % 270 -- -- 146 Subtotal-
Florida 5,516 1,056 883 Blue Star Apache Junction AZ 22 73 % 289
129 -- -- Brentwood West Mesa, AZ 350 93 % 448 -- -- -- Casa
Encanta Mesa, AZ -- 0 % -- -- 212 -- Desert Apache Harbor Junction
AZ 169 99 % 373 -- -- 37 Fiesta Village Mesa, AZ 172 78 % 366 -- --
-- La Casa Apache Blanca Junction AZ 198 94 % 387 -- -- -- Lost
Apache Dutchman Junction AZ 186 88 % 310 -- -- 56 Rancho Apache
Mirage Junction AZ 312 92 % 419 -- -- -- Sun Valley Apache Junction
AZ 268 93 % 330 -- -- -- Subtotal- Arizona 1,677 212 93 Mullica Egg
Harbor Woods City, NJ 90 100 % 496 -- -- -- Total Communities 29
7,283 95 % $361 129 1,268 976 (1) We define operational home sites
as those sites within our portfolio that have been leased to a
tenant during our ownership of the community. Since our portfolio
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 without our portfolio. The occupancy of all
developed sites was 81.8% across the entire portfolio. Including
sites not yet developed, occupancy was at 71.7% at December 31,
2005. Portfolio Summary Operational Developed Undeveloped RV Home
sites Home sites Home sites Sites Total As of December 31, 2004
6,931 1,101 960 129 9,121 Properties developed -- 241 (241) -- --
New lots purchased -- 2 533 -- 535 New leases originated 352 (352)
-- -- -- Adjust for site plan changes -- (16) 16 -- -- As of
December 31, 2005 7,283(1) 976 1,268 129 9,656 (1) As of December
31, 2005, 6,947 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 95.4 % New home sales
430 352 Used home sales 12 -- Used homes acquired (54) -- Homes
constructed by others 9 -- Homes removed from previously leased
sites(2) (67) -- As of December 31, 2005 6,947 7,283 95.4 % (2) Of
this total, approximately 48% are due to resident relocation and
52% are due to Company initiated vacation of the leased site in
anticipation of future redevelopment. AMERICAN LAND LEASE, INC. AND
SUBSIDIARIES RETURN ON INVESTMENT FROM HOME SALES (unaudited) Three
Months Ended Three Months Ended December 31, 2005 December 31, 2004
Expansion sites leased during the period 107 117 Estimated first
year annualized profit on leases originated during the period A
$418 $438 Costs, including development costs of sites leased $5,930
$5,499 Home sales income (loss) attributable to sites leased 2,175
1,590 Total costs incurred to originate ground leases B $3,755
$3,909 Estimated first year returns from the leases originated on
expansion home sites during the period A/B 11.1 % 11.2 % For the
three months ended December 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 December 31, 2005 December 31, 2004 Reported
income from sales operations $2,240 $1,646 Used home sales and
brokerage business income (65) (56) Adjusted income for projection
analysis $2,175 $1,590 The reconciliation of our estimated first
year return on investment in expansion home sites to our return on
investment in operational home sites for the year ended December
31, 2004 in accordance with GAAP is shown below (in thousands):
Total Portfolio for Year Ended December 31, 2004 Property income
before depreciation(1) A $17,811 Total investment in operating home
sites(1) B $220,918 Return on investment from earning home sites(1)
A/B 8.1 % AMERICAN LAND LEASE INC. AND SUBSIDIARIES KEY HOME SALES
STATISTICS Qtr Qtr over over Sept. Dec. Mar. June Sept. Dec. Qtr
Qtr 30, 31, 31, 30, 30, 31, Inc./ % 2004 2004 2005 2005 2005 2005
Dec. Change New home contracts 81 65 91 145 145 105 -40 -27.6 % New
home closings 77 121 77 110 115 133 18 15.7 % Home resales 3 3 2 5
4 1 -3 -75.0 % Brokered home sales 48 55 61 90 45 51 6 13.3 % New
home contract backlog 175 88 105 139 157 93 -64 -40.8 % Average
Selling Price $108,000 $104,000 $112,000 $109,000 $117,000 $125,000
$8,000 6.8 % Average Gross Margin Per- centage 33.1 % 32.7 % 31.8 %
30.3 % 30.1 % 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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