Gables Residential (the "Company"), today reported earnings for the second quarter that exceeded consensus estimates. Net income available to common shareholders was $0.18 per diluted share and funds from operations ("FFO") was $0.61 per diluted share, compared to a consensus First Call estimate of $0.60. "Our performance exceeded expectations primarily due to achieving property operating results at the high end of our range. We are also pleased to be achieving our strategic objective of producing total returns that exceed the NAREIT Apartment Index. Our total return for the year-to-date period, trailing 12 months, three years and five years all exceed this benchmark," noted Chris Wheeler, CEO.
Net income available to common shareholders for the quarter was $4.4 million, or $0.18 per diluted share, compared to $4.9 million, or $0.19 per diluted share, for the comparable period of 2002. For the first six months of 2003, net income available to common shareholders was $13.6 million, or $0.55 per diluted share, compared to $30.6 million, or $1.24 per diluted share, for the comparable period of 2002. During 2002, a significant amount of asset sales occurred during the first quarter. The Company expects that sales volume in 2003 will be generally similar to volume in 2002, but that the timing of asset sales will vary. Net income per share for the first six months of 2003 included gains from asset sales, net of minority interest, of $4.1 million, or $0.17 per diluted share, compared to $19.0 million, or $0.77 per diluted share, for the comparable period of 2002.
FFO for the quarter was $18.5 million, or $0.61 per diluted share, compared to $18.6 million, or $0.60 per diluted share, for the comparable period of 2002. FFO for the first six months of 2003 was $38.3 million, or $1.26 per diluted share, compared to $41.2 million, or $1.34 per diluted share, for the comparable period of 2002. The FFO metric excludes gain on sale of previously depreciated operating real estate assets and real estate asset depreciation and amortization. A reconciliation of net income to FFO is included on page 12.
This earnings release is available on Gables Residential's website at http://www.gables.com/ . On the Gables Quicklink pull-down menu, please select "Investor/Company Info/Earnings Releases" or go directly to this web address: http://www.gables.com/q203earningsrelease .
The Company will host a conference call on Thursday, August 7, 2003 at 11:00 a.m. Eastern Time. Gables executives will discuss second-quarter earnings, current activity and the local multifamily markets.
The conference call will be open to the public and will also be broadcast live on the Internet via Gables Residential's website at http://www.gables.com/ . On the Gables Quicklink pull-down menu, please select "Investor/Company Info/Conference Calls" or go directly to this web address: http://www.gables.com/conferencecalls . Those listening by phone should call in 5-10 minutes before conference time to (800) 884-5695 and use the passcode 33475186. International callers or those in the 617 area code should call (617) 786-2960.
A playback will be available from 3:00 p.m. Eastern Time on Thursday, August 7, 2003 until midnight on Friday, August 15, 2003. US/Canada participants should call (888) 286-8010. International callers or those in the 617 area code should call (617) 801-6888. The Gables playback code is 76408966. The playback can also be accessed for 12 months following the conference call via Gables Residential's website at http://www.gables.com/webcasts .
Operating Results for the Second Quarter 2003 Compared to the Second Quarter 2002
The Company's markets and portfolio continue to feel the residual impact of the national economy's job-growth contraction and related renter demand. On a same-store basis, total revenues declined 1.9% and property operating and maintenance expense growth was 0.6%, resulting in a 3.2% reduction in property net operating income ("NOI"). These results were at the high end of the Company's expectations for the quarter. A detail of the same-store results by market is presented on page 13.
Investment and Disposition Activity
During the quarter, the Company acquired Gables Knoxbridge, 334 apartment homes in the Dallas Established Premium Neighborhood(TM) (EPN) of Highland Park, for $34 million and completed lease-up of three development communities: Gables Metropolitan II, 274 apartment homes in the Dunwoody EPN(TM) of Atlanta; Gables Paces, 80 apartment homes in the Buckhead EPN(TM) of Atlanta; and Gables North Village, 315 apartment homes in Celebration, Florida.
In July 2003, the Company acquired Gables Woodley Park, 211 apartment homes in the Northwest Washington, D.C. EPN(TM), for $53 million. Year to date, the Company has acquired 784 apartment homes, completed the lease-up of 989 apartment homes, sold 300 apartment homes and commenced development on 1,247 apartment homes which are expected to deliver stabilized earnings in late 2004 and in 2005. "Our research indicates that the national economy is in the early phase of a slow recovery. Our plans to deliver new assets in late 2004 and 2005 should allow us to capitalize on projected improving fundamentals," said Mr. Wheeler.
In May 2003, Gables acquired Archstone Management Services' business, which consisted of management contracts for 10,684 apartment homes in 32 communities. The management and accounting services rendered under the acquired contracts are transitioning to Gables over a 3-month period. The $6.5 million purchase price will be paid in three installments based on the retention of the acquired contracts. The incremental contribution to net income from the acquired contracts will be largely offset by the amortization of the purchase price for the first five years. "Property operations is a core competency for Gables, and our continued ability to outperform the markets shows how committed we are to our operations focus. The fee management business is an excellent avenue to leverage our operations, and the Archstone-Smith business fits nicely with our platform," noted Mr. Wheeler.
Preferred Share Offering
The Company closed a $75 million offering of its 7.5% Series D Cumulative Redeemable Preferred Shares on May 8, 2003. The shares are redeemable at the discretion of the Company on or after May 8, 2008. Proceeds of the offering were used to pay down borrowings under the Company's unsecured lines of credit that are being utilized for its acquisition and development activities discussed above.
Industry Recognition
During the quarter, the Company announced that its corporate-housing division, Gables Corporate Accomodations ("GCA"), was the recipient of the 2002 "Tower of Excellence Company of the Year" Award. During June and July, the 2002 Gables Residential annual report ("We Think Inside the Box") was recognized for several awards. NAREIT selected Gables as the Mid Cap winner of a Gold Award for Management's Discussion and Analysis for the second year in a row and a Silver Award in the Presentation and Design category. The League of American Communication Professionals selected Gables for its highest distinction, a Platinum Award in the REIT/Real Estate category, and the Company also received a Silver Award for Interior Design in the acclaimed International ARC Award competition.
Unusual Items
In May 2002, the Company expensed approximately $1.7 million of early debt extinguishment costs. Under accounting rules in effect at that time, these costs were classified as an extraordinary item and, as such, did not reduce FFO. In April 2002, SFAS No. 145 was issued. The Company adopted this standard on its January 1, 2003 effective date and, pursuant to the new rules, reclassified the $1.7 million of early debt extinguishment costs from extraordinary items to unusual items. In the computation of FFO pursuant to the NAREIT definition outlined on page 6, net income is adjusted for extraordinary items but is not adjusted for unusual items. As such, previously reported FFO for the three and six months ended June 30, 2002 has been reduced by $1.7 million. The adoption of this standard had no impact on previously reported net income.
Earnings Guidance
The Company's guidance for the third quarter of 2003 and the full year 2003 for net income and FFO on a diluted per share basis is disclosed and reconciled below:
Third Quarter 2003: Range Low-End High-End Expected net income $0.14 $0.59 Add: Expected real estate asset depreciation and amortization 0.45 0.44 Less: Expected gain on sale of previously depreciated operating real estate assets 0.00 -0.42 Expected funds from operations (FFO) $0.59 $0.61 Same-Store Operating Assumptions to the Company's Guidance (1): Total property revenues -2.50 % -1.75 % Property operating and maintenance expenses 0.75 % 0.00 % Property net operating income (NOI) -4.50 % -2.75 % (1) Represents the projected change from the third quarter 2002 to the third quarter 2003. Full Year 2003: Range Low-End High-End Expected net income $0.84 $2.65 Add: Expected real estate asset depreciation and amortization 1.78 1.76 Less: Expected gain on sale of previously depreciated operating real estate assets -0.17 -1.89 Expected funds from operations (FFO) $2.45 $2.52 Same-Store Operating Assumptions to the Company's Guidance (2): Total property revenues -1.75 % -1.25 % Property operating and maintenance expenses 1.00 % 0.50 % Property net operating income (NOI) -3.25 % -2.25 % (2) Represents the projected change from 2002 to 2003. Discontinued Operations
The Company adopted SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," effective January 1, 2002. This standard requires, among other things, that operating results of real estate assets sold subsequent to January 1, 2002 that the Company has no continuing involvement with, be reflected as discontinued operations in the statements of operations for all periods presented. The Company evaluates, in the ordinary course of its business, the continued ownership of its assets relative to available opportunities to acquire and develop new assets and relative to available equity and debt capital financing. The Company sells assets if it determines that such sales are the most attractive sources of capital for redeployment in its business, for repayment of debt, for repurchases of stock, and for other uses. The Company expects to reclassify historical operating results whenever necessary in order to comply with the requirements of SFAS No. 144.
Earnings Release Supplements
The Company produces Earnings Release Supplements ("the Supplements") that provide detailed information regarding the financial position and operating results of the Company. These Supplements are available via the Company's website and through e-mail distribution. Access to the Supplements through the Company's website is available at http://www.gables.com/financialreports . If you would like to receive future press releases via e-mail, please register through the Company's website at http://www.gables.com/mailalerts . Some items referenced in the earnings release may require the Adobe Acrobat 4.0 Reader. If you do not have Adobe Acrobat 4.0 Reader, you may download it at the following website: http://www.adobe.com/products/acrobat/readstep.html .
Non-GAAP Financial Measures and Other Terms
This release, including the Supplements, contains certain non-GAAP financial measures and other terms. The Company's definition and calculation of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. The non-GAAP financial measures referred to below should not be considered as alternatives to net income or other GAAP measures as indicators of our performance. Additional information regarding these items and other non-GAAP financial measures and other terms used in this release, including the Supplements, can be found elsewhere herein.
Funds from Operations (FFO) is used by industry analysts and investors as a supplemental operating performance measure of an equity real estate investment trust ("REIT"). The Company calculates FFO in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). FFO, as defined by NAREIT, represents net income (loss) determined in accordance with generally accepted accounting principles ("GAAP"), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated operating real estate assets, plus certain non-cash items, such as real estate asset depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.
Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The use of FFO, combined with the required primary GAAP presentations, has improved the understanding of operating results of REITs among the investing public and made comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing the comparative operating and financial performance of the Company (although it should be reviewed in conjunction with net income which remains the primary measure of performance) because by excluding gains or losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization, FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies.
Adjusted Funds From Operations (AFFO) represents FFO less recurring value retention capital expenditures. Because FFO excludes real estate asset depreciation and amortization, AFFO represents a useful supplemental operating performance measure because it takes into consideration recurring value retention capital expenditures.
Recurring Value Retention Capital Expenditures represent costs typically incurred every year during the life of a community, such as expenditures for carpet, vinyl flooring, appliances, mechanical equipment and fixtures. To the extent such costs are incurred in connection with a major renovation of a community they are excluded from this item.
Non-recurring Capital Expenditures represent costs that are generally incurred in connection with a major project impacting an entire community, such as roof replacement, parking lot resurfacing, exterior painting and siding replacement. These costs are not incurred on a regular basis and may not occur or re-occur during the anticipated hold period of an asset. To the extent such costs are incurred in connection with a major renovation of a community they are excluded from this item.
Value Enhancing Capital Expenditures represent costs for which an incremental value is expected to be achieved from increasing the NOI potential for a community or recharacterizing the quality of the income stream with an anticipated reduction in potential sales cap rate for items such as replacement of wood siding with a masonry based hardi-board product, amenity upgrades and additions, installation of security gates and additions of covered parking. To the extent such costs are incurred in connection with a major renovation of a community they are excluded from this item.
Property Net Operating Income (NOI) is used by industry analysts, investors and Company management to measure operating performance of the Company's properties. NOI represents total property revenues less property operating and maintenance expenses (as reflected in the accompanying statements of operations). Accordingly, NOI excludes certain expenses included in the determination of net income such as property management and other indirect operating expenses, interest expense and depreciation and amortization expense. These items are excluded from NOI in order to provide results that are more closely related to a property's results of operations. Certain items, such as interest expense, while included in FFO and net income, do not affect the operating performance of a real estate asset and are often incurred at the corporate level as opposed to the property level. As a result, management uses only those income and expense items that are incurred at the property level to evaluate a property's performance. Real estate asset depreciation and amortization is excluded from NOI for the same reasons that it is excluded from FFO pursuant to NAREIT's definition.
Stabilized Occupancy is defined as the earlier to occur of (i) 93% physical occupancy or (ii) one year after completion of construction. For purposes of evaluating comparative operating performance, the Company categorizes its operating communities based on the period each community reaches stabilized occupancy. For purposes of the period-end community charts, once a community has reached a stabilized occupancy level it is reclassified from the Development/Lease-up Communities chart to the Stabilized Communities chart.
Physical Occupancy represents gross potential rent less physical vacancy loss as a percentage of gross potential rent.
Economic Occupancy represents actual rent revenue collected divided by gross potential rent. Thus, economic occupancy differs from physical occupancy in that it takes into account concessions, non-revenue producing apartment homes and delinquencies.
Gross Potential Rent is determined by valuing occupied apartment homes at contract rates and vacant units at market rates.
Income Available for Debt Service and Preferred Dividends represents net income available to common shareholders before interest expense and credit enhancement fees, preferred dividends, income taxes, depreciation, amortization, minority interest, gain on sale of real estate assets, long-term compensation expense, extraordinary items and unusual items, all from both continuing and discontinued operations, as applicable. Management generally considers income available for debt service and preferred dividends to be an appropriate supplemental measure to net income of the operating performance of the Company because it helps investors to understand the ability of the Company to incur and service its debt and preferred stock obligations.
Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release, including the supplements, contains forward-looking statements within the meaning of federal securities laws. These forward- looking statements reflect the Company's current views with respect to the future events or financial performance discussed in this release, based on management's beliefs and assumptions and information currently available. When used, the words "believe", "anticipate", "estimate", "project", "should", "expect" and similar expressions that do not relate solely to historical matters identify forward-looking statements. Forward-looking statements in this release include, without limitation, statements relating to the Company's ability to produce total returns through monthly dividends and share price changes that exceed the NAREIT apartment sector index and the Company's ability to achieve its expectations for third quarter 2003 and full year 2003 earnings. Forward-looking statements are subject to risks, uncertainties and assumptions and are not guarantees of future events or performance, which may be affected by known and unknown risks, trends and uncertainties. Should one or more of these risks or uncertainties materialize, or should our assumptions prove incorrect, actual results may vary materially from those anticipated, projected or implied. Factors that may cause such a variance include, among others: local and national economic and market conditions, including changes in occupancy rates, rental rates, and job growth; the demand for apartment homes in the Company's current and proposed markets; the uncertainties associated with the Company's current real estate development, including actual costs exceeding the Company's budgets; changes in construction costs; construction delays due to the unavailability of materials or weather conditions; the failure to sell communities on favorable terms, in a timely manner or at all; the failure of acquisitions to yield anticipated results; the cost and availability of financing; changes in interest rates; competition; the effects of the Company's accounting and other policies; and additional factors discussed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any responsibility to update forward-looking statements.
About Gables
With a mission of Taking Care of the Way People Live(R), Gables Residential has received national recognition for excellence in the management, development, acquisition and construction of luxury multifamily communities in high job growth markets. The Company's strategic objective is to produce total returns through monthly dividends and share price changes that exceed the NAREIT apartment sector index.
The Company has a research-driven strategy focused on markets characterized by high job growth and resiliency to national economic downturns. Within these markets, the Company targets Established Premium Neighborhoods(TM) ("EPN's"), generally defined as areas with high per square foot prices for single-family homes. By investing in resilient, demand-driven markets and EPN(TM) locations with barriers to entry, the Company expects to achieve its strategic objective.
The Company is one of the largest apartment operators in the nation and currently manages 50,783 apartment homes in 183 communities, owns 86 communities with 23,979 stabilized apartment homes primarily in Atlanta, Houston, South Florida, Austin, Dallas, Tampa and Washington, DC and has an additional 9 communities with 2,388 apartment homes under development or lease-up. For further information, please contact Gables Investor Relations at (800) 371-2819 or access Gables Residential's website at http://www.gables.com/.
GABLES RESIDENTIAL Consolidated Statements of Operations June 30, 2003 (Unaudited and amounts in thousands, except for per share data) Three months ended Six months ended June 30, June 30, 2003 2002 2003 2002 Revenues: Rental revenues $53,778 $51,054 $107,409 $103,514 Other property revenues 3,289 3,101 6,125 6,000 Total property revenues 57,067 54,155 113,534 109,514 Property management revenues 1,951 1,857 3,800 3,672 Ancillary services revenues 1,453 2,110 3,326 4,655 Interest income 88 120 161 181 Other revenues 74 42 120 85 Total other revenues 3,566 4,129 7,407 8,593 Total revenues 60,633 58,284 120,941 118,107 Expenses: Property operating and maintenance (exclusive of items shown below) 20,439 19,245 40,208 37,875 Real estate asset depreciation and amortization 12,763 11,881 25,779 23,534 Property management - owned 1,697 1,489 3,357 3,398 Property management - third party 1,947 1,619 3,773 3,344 Ancillary services 1,085 1,308 2,310 2,779 Interest expense and credit enhancement fees 11,410 10,029 22,889 20,148 Amortization of deferred financing costs 482 275 906 532 General and administrative 2,272 1,753 4,605 3,675 Corporate asset depreciation and amortization 482 428 824 881 Unusual items --- 1,687 --- 1,687 Total expenses 52,577 49,714 104,651 97,853 Income from continuing operations before equity in income of joint ventures, gain on sale and minority interest 8,056 8,570 16,290 20,254 Equity in income of joint ventures 100 40 195 1,928 Gain on sale of previously depreciated operating real estate assets --- --- --- 17,906 Gain on sale of land and development rights --- 462 --- 1,801 Minority interest of common unitholders in Operating Partnership (1,021) (1,068) (2,247) (6,817) Minority interest of preferred unitholders in Operating Partnership (1,078) (1,078) (2,156) (2,156) Income from continuing operations 6,057 6,926 12,082 32,916 Operating income (loss) from discontinued operations, net of minority interest --- 376 (8) 819 Gain on disposition of discontinued operations, net of minority interest --- --- 4,075 1,763 Income from discontinued operations, net of minority interest --- 376 4,067 2,582 Net income 6,057 7,302 16,149 35,498 Dividends to preferred shareholders (1,672) (2,442) (2,516) (4,885) Net income available to common shareholders $4,385 $4,860 $13,633 $30,613 Weighted average number of common shares outstanding - basic 24,679 24,802 24,588 24,662 Weighted average number of common shares outstanding - diluted 30,520 30,931 30,429 30,802 Per Common Share Information-Basic: Income from continuing operations (net of preferred dividends) $0.18 $0.18 $0.39 $1.14 Income from discontinued operations, net of minority interest $--- $0.02 $0.17 $0.10 Net income available to common shareholders $0.18 $0.20 $0.55 $1.24 Per Common Share Information- Diluted: Income from continuing operations (net of preferred dividends) $0.18 $0.18 $0.39 $1.13 Income from discontinued operations $--- $0.02 $0.17 $0.10 Net income available to common shareholders $0.18 $0.19 $0.55 $1.24 GABLES RESIDENTIAL Funds From Operations and Adjusted Funds From Operations June 30, 2003 (Unaudited and amounts in thousands, except for per share data) Three months ended Six months ended June 30, June 30, 2003 2002 2003 2002 Net income available to common shareholders $4,385 $4,860 $13,633 $30,613 Minority interest of common unitholders in Operating Partnership: Continuing operations 1,021 1,068 2,247 6,817 Discontinued operations --- 91 965 634 Total 1,021 1,159 3,212 7,451 Real estate asset depreciation and amortization: Wholly-owned real estate assets - continuing operations 12,763 11,881 25,779 23,534 Wholly-owned real estate assets - discontinued operations --- 324 49 709 Joint venture real estate assets 349 342 689 744 Total 13,112 12,547 26,517 24,987 Gain on sale of previously depreciated operating real estate assets: Wholly-owned real estate assets - continuing operations --- --- --- (17,906) Wholly-owned real estate assets - discontinued operations --- --- (5,042) (2,198) Joint venture real estate assets --- --- --- (1,754) Total --- --- (5,042) (21,858) Funds from operations $18,518 $18,566 $38,320 $41,193 Recurring value retention capital expenditures: Carpet and flooring 1,215 1,630 2,374 2,842 Appliances 163 199 330 351 Other additions and improvements 1,378 1,701 2,521 3,171 Total 2,756 3,530 5,225 6,364 Adjusted funds from operations $15,762 $15,036 $33,095 $34,829 Average common shares and units outstanding - basic 30,416 30,762 30,359 30,634 Average common shares and units outstanding - diluted 30,520 30,931 30,429 30,802 Per common share data - basic: Funds from operations $0.61 $0.60 $1.26 $1.34 Adjusted funds from operations $0.52 $0.49 $1.09 $1.14 Per common share data - diluted: Funds from operations $0.61 $0.60 $1.26 $1.34 Adjusted funds from operations $0.52 $0.49 $1.09 $1.13 Common shares and units outstanding reconciliation: Average common shares and units outstanding - basic 30,416 30,762 30,359 30,634 Incremental shares from assumed conversions of: Stock options 95 163 61 162 Other 9 6 9 6 Average common shares and units outstanding - diluted 30,520 30,931 30,429 30,802 GABLES RESIDENTIAL Results of Property Operations - Second Quarter Comparisons June 30, 2003 (Unaudited and amounts in thousands, except for property data) The combined operating performance for all of the Company's wholly-owned communities that are included in continuing operations for the quarters ended June 30, 2003 ("2Q 2003") and June 30, 2002 ("2Q 2002") is as follows: 2Q 2003 2Q 2002 $ Change% Change Rental and other property revenues: Same-store communities (1) $45,437 $46,294 $(857) -1.9% (A) Triple net master lease communities 1,646 1,646 --- 0.0% Communities stabilized in 2Q 2003, but not in 2Q 2002 2,459 1,383 1,076 77.8% Development and lease-up communities 2,074 761 1,313 172.5% Communities under renovation or not fully operational (2) 4,198 4,071 127 3.1% Acquired communities (2) 1,253 --- 1,253 --- Sold communities (2) --- --- --- --- Total property revenues $57,067 $54,155 $2,912 5.4% Property operating and maintenance expenses (3): Same-store communities (1) $16,389 $16,293 $96 0.6% (A) Triple net master lease communities --- --- --- --- Communities stabilized in 2Q 2003, but not in 2Q 2002 968 702 266 37.9% Development and lease-up communities 833 497 336 67.6% Communities under renovation or not fully operational (2) 1,763 1,753 10 0.6% Acquired communities (2) 486 --- 486 --- Sold communities (2) --- --- --- --- Total property operating and maintenance expenses $20,439 $19,245 $1,194 6.2% Property net operating income (NOI) (4): Same-store communities (1) $29,048 $30,001 $(953) -3.2% (A) Triple net master lease communities 1,646 1,646 --- 0.0% Communities stabilized in 2Q 2003, but not in 2Q 2002 1,491 681 810 118.9% Development and lease-up communities 1,241 264 977 370.1% Communities under renovation or not fully operational (2) 2,435 2,318 117 5.0% Acquired communities (2) 767 --- 767 --- Sold communities (2) --- --- --- --- Total property net operating income (NOI) $36,628 $34,910 $1,718 4.9% Total property NOI as a percentage of total property revenues 64.2% 64.5% --- -0.3% (1) Communities that were owned and fully stabilized throughout both 2Q 2003 and 2Q 2002 ("same-store"). (2) Communities that were in renovation or not fully operational, acquired, or sold subsequent to April 1, 2002, as applicable. (3) Represents direct property operating and maintenance expenses as reflected in the Company's consolidated statements of operations and excludes certain expenses included in the determination of net income such as property management and other indirect operating expenses, interest expense and depreciation and amortization expense. (4) Calculated as total property revenues less property operating and maintenance expenses as reflected above. (A) Additional information for the 62 same-store communities by market is as follows: Number of % of Physical Economic Apartment 2Q 2003 Occupancy Occupancy Market Homes NOI in 2Q 2003 in 2Q 2003 South Florida 4,377 29.7% 94.1% 92.4% Houston 4,934 27.4% 94.2% 92.9% Atlanta 3,431 17.7% 94.3% 92.1% Austin 1,677 10.8% 90.4% 89.4% Dallas 1,123 8.1% 95.5% 94.2% Washington, D.C. 82 1.6% 94.1% 93.7% Other 1,243 4.7% 90.1% 84.2% Totals 16,867 100.0% 93.6% 91.8% % Change from 2Q 2002 to 2Q 2003 in Economic Market Occupancy Revenues Expenses NOI South Florida 2.2% 0.9% 2.5% 0.1% Houston 2.1% -0.2% 1.0% -0.8% Atlanta 3.7% -5.8% -3.2% -7.2% Austin -2.2% -7.4% -2.1% -10.5% Dallas -0.1% -2.3% 0.2% -3.6% Washington, D.C. 5.6% 7.9% -6.8% 13.9% Other -0.6% -0.4% 8.5% -6.7% Totals 1.6% -1.9% 0.6% -3.2% CONTACT: Investor Relations of Gables Residential, 1-800-371-2819
Web site: http://www.gables.com/
