8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 4, 2003

Post Properties, Inc.
Post Apartment Homes, L.P.

(Exact name of registrant as specified in its charter)

Georgia
Georgia
(State or other jurisdiction of incorporation)

1-12080
0-28226
(Commission File Number)

58-1550675
58-2053632
(IRS Employer Identification Number)

4401 Northside Parkway, Suite 800, Atlanta, Georgia 30327
(Address of principal executive offices)

Registrant’s telephone number, including area code     (404) 846-5000

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

TABLE OF CONTENTS

EX-99.1 EARNING RELEASE

EX-99.2 SUPPLEMENTAL FINANCIAL DATA

Item 7.     Financial Statements, Pro Forma Financial Information and Exhibits

      (c)       Exhibits

Exhibit
Number	Description
99.1	Earnings Release
99.2	Supplemental Financial Data

Item 12.     Disclosure of Financial Results and Financial Condition.

      On August 4, 2003, Post Properties, Inc. (the “Company” and together with Post Apartment Homes, L.P., the “Registrants”) issued an Earnings Release and Supplemental Financial Data announcing its financial results for the quarterly period ended June 30, 2003. The Earnings Release and Supplemental Financial Data contain information about the Registrants’ financial condition and results of operations for the quarterly and year to date period ended June 30, 2003. A copy of the Earnings Release is attached hereto as Exhibit 99.1. A copy of the Supplemental Financial Data is attached hereto as Exhibit 99.2.

      The Company uses certain non-GAAP financial measures in the Earnings Release and Supplemental Financial Data. The Registrants believe that these measures are helpful to investors in measuring performance and/or liquidity and comparing such performance and/or liquidity to other real estate investment trusts (“REITs”). A description of these measures and the reasons why the Registrants believe such measures are useful are set forth below.

Funds from operations (“FFO”)

      The Registrants use FFO as an operating measure. The Registrants use the National Association for Real Estate Investment Trusts (“NAREIT”) definition of Funds From Operations (“FFO”). FFO is defined by NAREIT to mean net income (loss) available to common shareholders determined in accordance with GAAP, excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures all determined on a consistent basis in accordance with GAAP. FFO is a supplemental non-GAAP financial measure. FFO presented in the Company’s Earnings Release and Supplemental Financial Data is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Registrants’ FFO is comparable to the FFO of real estate companies that use the current NAREIT definition. Accounting for real estate assets using historical cost accounting under GAAP assumes that the value of real estate assets diminishes predictably over time. NAREIT stated in its April 2002 White Paper on Funds from Operations “since real estate asset values have

historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” As a result, the concept of FFO was created by NAREIT for the REIT industry to provide an alternate measure. Since the Registrants agree with the concept of FFO and appreciate the reasons surrounding its creation, they believe that FFO is an important supplemental measure of operating performance. In addition, since most equity REITs provide FFO information to the investment community, the Registrants believe FFO is a useful supplemental measure for comparing the Registrants’ results to those of other equity REITs. The Registrants believe that the line on the Registrants’ consolidated statement of operations entitled “net income available to common shareholders” is the most directly comparable GAAP measure to FFO. The Registrants also compute a dividend payout ratio using dividends declared during the quarter divided by FFO per diluted share in order to provide investors with one alternate earnings measure to compare the relationship of FFO to the Registrants’ quarterly dividends and distributions.

Funds Available for Distribution (“FAD”)

      The Registrants use Funds Available for Distribution (“FAD”) as an operating measure. FAD is defined as FFO less capital expenditures funded by operations. FAD is a supplemental non-GAAP financial measure. The Registrants believe that FAD is an important supplemental measure of operating performance for an equity REIT because it provides investors with an indication of the REIT’s ability to fund its cash needs through earnings, including debt service requirements, construction and development expenditures and dividends and distributions. In addition, since most equity REITs provide FAD information to the investment community, the Registrants believe FAD is a useful supplemental measure for comparing the Registrants to other equity REITs. The Registrants believe that the line on the Registrants’ consolidated statement of operations entitled “net income available to common shareholders” is the most directly comparable GAAP measure to FAD. The Registrants also compute a dividend payout ratio using dividends declared during the quarter divided by FAD per diluted share in order to provide investors with one alternate earnings measure to compare the relationship of FAD to the Registrants’ quarterly dividends and distributions.

Net Operating Income

      The Registrants use Net Operating Income (“NOI”), including Same Store NOI and Same Store NOI by market, as an operating measure. Net Operating Income is defined as rental and other revenues from real estate operations less total property and maintenance expenses from real estate operations (exclusive of depreciation and amortization). Net Operating Income is a supplemental non-GAAP financial measure. The Registrants believe that Net Operating Income is an important supplemental measure of operating performance for a REIT’s operating real estate because it provides a measure of the core operations, rather than factoring in depreciation and amortization, financing costs and

general and administrative expenses. This measure is particularly useful, in the opinion of the Registrants, in evaluating the performance of geographic operations, Same Store groupings and individual properties. Additionally, the Registrants believe that Net Operating Income, as defined, is a widely accepted measure of comparative operating performance in the real estate investment community. The Registrants believe that the line on the Registrants’ consolidated statement of operations entitled “income (loss) from continuing operations before equity in losses of unconsolidated entities, gains on property sales and minority interest” is the most directly comparable GAAP measure to Net Operating Income.

Same Store Capital Expenditures

      The Registrants use Same Store Recurring and Non-Recurring Capital Expenditures as cash flow measures. Same Store Recurring and Non-Recurring Capital Expenditures are supplemental non-GAAP financial measures. The Registrants believe that Same Store Recurring and Non-Recurring Capital Expenditures are important indicators of the costs incurred by the Registrants in maintaining Same Store communities. The corresponding GAAP measures include information with respect to the Registrants’ other operating segments consisting of communities stabilized in the prior year, lease-up communities, and sold communities in addition to Same Store information. Therefore, the Registrants believe that the Registrants’ presentation of Same Store Recurring and Non-Recurring Capital Expenditures is necessary to demonstrate Same Store replacement costs over time. The Registrants believe that the most directly comparable GAAP measure to Same Store Recurring and Non-Recurring Capital Expenditures are the lines on the Registrants’ consolidated statements of cash flows entitled “recurring capital expenditures” and “non-recurring capital expenditures.”

Net Income, FFO and FAD Excluding Certain Charges

      The Registrants use Net Income, FFO and FAD excluding one-time severance, proxy and impairment charges as operating measures. Net Income, FFO and FAD excluding one-time severance, proxy and impairment charges, are supplemental non-GAAP financial measures. The Registrants report Net Income, FFO and FAD excluding certain one-time, non-cash charges as alternative financial measures of core operating performance. The Registrants believe Net Income, FFO and FAD before one-time, non-cash charges are informative measures for comparing operating performance between periods and for comparing operating performance to other companies that have not incurred such charges. The Registrants further believe that one-time, non-cash charges of the nature incurred in the first and second quarter of 2003 are not necessarily repetitive in nature and that it is therefore meaningful to compare operating performance using alternative, non-GAAP measures. In addition, the Registrants believe the investment and analyst communities desire to understand the meaningful components of the Registrants’ performance and that these non-GAAP measures assist in providing such supplemental measures. The Registrants believe that the most directly comparable GAAP financial

measures to each of Net Income, FFO and FAD, excluding certain one-time, non-cash charges, is the line on the Registrants’ consolidated statements of operations entitled “net income available to common shareholders.” The Registrants compute dividend payout ratios using dividends declared during the quarter divided by FFO and FAD per diluted share, excluding certain one-time, non-cash charges in order to provide investors with alternate earnings measures to compare the relationship of FFO and FAD, excluding certain one-time, non-cash charges, to the Registrants’ quarterly dividends and distributions.

Debt Statistics and Debt Ratios

      The Registrants use a number of debt statistics and ratios as supplemental measures of liquidity. The numerator and/or the denominator of certain of these statistics and/or ratios include non-GAAP financial measures that have been reconciled to the most directly comparable GAAP financial measure. These debt statistics and ratios include: (1) an interest coverage ratio; (2) a fixed charge coverage ratio; (3) total debt as a percentage of undepreciated real estate (unadjusted and adjusted for joint venture partner’s share of debt); (4) a ratio of consolidated debt to total assets; (5) a ratio of secured debt to total assets; (6) a ratio of total unencumbered assets to unsecured debt; and (7) a ratio of consolidated income available to debt service to annual debt service charge. A number of these debt statistics and ratios are derived from covenants found in the Registrants’ debt agreements, including, among others, the Registrants’ revolving line of credit and the Registrants’ senior unsecured notes. In addition, the Registrants present these measures because their degree of leverage could affect their ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. The Registrants use these measures internally as an indicator of liquidity and the Registrants believe that these measures are also utilized by the investment and analyst communities to better understand the Registrants’ liquidity.

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

      Dated: August 5, 2003.

POST PROPERTIES, INC
By:	/s/	David P. Stockert
		David P. Stockert President and Chief Executive Officer

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

      Dated: August 5, 2003.

POST APARTMENT HOMES, L.P.
By:	POST GP HOLDINGS, INC., as General Partner
By:	/s/	David P. Stockert
		David P. Stockert President and Chief Executive Officer

EXHIBIT INDEX

Earnings	Description
99.1	Earnings Release
99.2	Supplemental Financial Data

EX-99.1 3 g84209exv99w1.htm EX-99.1 EARNING RELEASE

Exhibit 99.1

Contact:	Janie Maddox
	Post Properties, Inc.
	(404) 846-5056

Post Properties Announces Second Quarter Earnings
Investor/Analyst Conference Call Scheduled for August 5, 2003 at 10:00 a.m. EDT

ATLANTA, August 4, 2003 – Post Properties, Inc. (NYSE: PPS) announced today that its net income available to common shareholders was $24.8 million for the second quarter of 2003, compared to net income available to common shareholders of $22.2 million for the second quarter of 2002. On a diluted per share basis, net income available to common shareholders was $0.66 for the second quarter of 2003, compared to $0.60 for the second quarter of 2002. Included in the company’s second quarter 2003 results were severance charges of $1.8 million related to the previously announced departures of two executive officers. In addition, second quarter 2003 results included a charge of approximately $5.2 million reflecting the legal, advisory and other costs associated with the recently concluded proxy contest. This $5.2 million charge also includes the estimated costs to settle two derivative and purported class action lawsuits that were initiated during the proxy contest.

For the six months ended June 30, 2003, net income available to common shareholders was $1.4 million, compared to net income available to common shareholders of $36.4 million for the six months ended June 30, 2002. On a diluted per share basis, net income available to common shareholders was $0.04 for the first six months of 2003, compared to $0.98 for the same period of 2002.

Funds from operations (FFO) for the second quarter of 2003 totaled $14.7 million, or $0.35 per diluted share, compared to $27.3 million, or $0.65 per diluted share, for the second quarter of 2002. Excluding the severance and proxy contest related charges discussed above, FFO for the second quarter of 2003 totaled $21.7 million, or $0.52 per diluted share, consistent with management’s previously issued estimates.

Funds from operations for the six months ended June 30, 2003 totaled $17.6 million, or $0.42 per diluted share, compared to $57.5 million, or $1.37 per diluted share, for the six months ended June 30, 2002. FFO is a supplemental non-GAAP financial measure used by real estate investment trusts to measure and compare operating performance. A reconciliation of FFO to GAAP net income is included in the financial data (Table 2) accompanying this press release.

Total revenues from continuing operations were $82.7 million for the second quarter of 2003, compared to $81.0 million for the second quarter of 2002. For the six months ended June 30, 2003, total revenues from continuing operations were $164.7 million, compared to $163.2 million for the same period in 2002.

Mature Community Data

For the second quarter of 2003, average economic occupancy at the company’s 67 mature (same store) communities, containing 24,347 apartment units, was 91.1%, compared to 89.5% for the second quarter of 2002. For the six months ended June 30, 2003, average economic occupancy for these mature communities was 90.6%, compared to 89.8% for the same period in 2002.

Total revenues for the mature communities decreased 3.6% during the second quarter of 2003, compared to the second quarter of 2002, and operating expenses increased 1.9%, resulting in a 6.6% decline in same store net operating income (NOI), or $2.9 million ($0.07 per diluted share). For the six months ended June 30, 2003, total revenues for the mature communities decreased 4.1% compared to the same period in 2002, while operating expenses increased 0.8%, resulting in a 6.7% decline in same store NOI, or $6.0 million ($0.14 per diluted share). NOI is defined as property rental and other revenues less direct property operating expenses. NOI excludes interest, depreciation and corporate general and administrative expenses. Same store NOI is a supplemental non-GAAP financial measure. A reconciliation of same store NOI to the comparable GAAP financial measure is included in the financial data (Table 3) accompanying this press release.

Asset Sales

During the quarter, the company sold one wholly-owned community consisting of 770 apartment units in Atlanta, GA. The sale produced over $58 million of net proceeds and was part of a continuing program to lower Post’s asset concentration in Atlanta, GA by selling certain of the company’s older assets.

In addition during the second quarter, the company, along with its joint venture partner, sold Post Paseo Colorado for gross proceeds of $98 million. Post Paseo Colorado consisted of 391 apartment units and was the company’s sole investment in California. The company’s share of the net proceeds, including the repayment of the company’s construction loan to the joint venture, was approximately $75 million.

The company’s year-to-date net proceeds from asset sales total approximately $170 million (including the Post Paseo Colorado joint venture loan repayment). Since launching its self-funding strategy in 2000, the company has raised more than $700 million in net proceeds from asset sales.

Outlook

The estimates presented below are forward-looking and are based on current apartment market and general economic conditions and other risks outlined below. Management believes that the company’s net loss per diluted share for the third quarter of 2003 will be in a range of $0.04 to $0.05. Management is not currently expecting to close any significant asset sales in the third quarter of 2003. Management believes that the company’s FFO per share for the third quarter of 2003 will be in a range of $0.48 to $0.49. Management’s estimates of per share FFO for the third quarter of 2003 are based on the following assumptions: flat to slightly improving same store NOI, as compared to same store NOI for the second quarter of 2003; dilution from asset sales completed in the second quarter of 2003, the proceeds of which were used primarily to pay down short-term floating rate debt; the impact of reducing the amount of interest expense and internal personnel costs capitalized to development projects as those properties are completed and placed in service; and increased general and administrative expenses. A reconciliation of projected net income per diluted share to projected FFO per diluted share for the third quarter of 2003 is included in the financial data (Table 5) accompanying this press release.

Supplemental Financial Data

The company also produces Supplemental Financial Data that includes detailed information regarding the company’s operating results and balance sheet. The Supplemental Financial Data is available through the company’s web site at “http://www.postproperties.com/posthome.nsf/ExtList/2003-2QFinancials”.

The ability to access the attachments on the company’s web site requires the Adobe Acrobat 4.0 Reader, which may be downloaded at http://www.adobe.com/products/acrobat/readstep.html.

Conference Call Information

The company will hold its quarterly conference call on Tuesday, August 5, 2003, at 10 a.m. EDT. The telephone numbers are 1-800-810-0924 for domestic calls and 1-913-981-4900 for international callers. Callers should reference “Post Properties’ Second Quarter 2003 Earnings Call.” The passcode is 729142. The conference call will be open to the public and can be listened to live on Post’s web site at www.postproperties.com under Corporate Information/Investor Info. The replay will begin two hours after the completion of the call and will be available until Monday, August 11, at 11:59 p.m. EDT. The telephone numbers for the replay are 1-888-203-1112 for domestic callers and 1-719-457-0820 for international callers. The passcode for the replay is 729142. A replay of the call also will be available through Tuesday, September 30, on Post’s web site. The financial and statistical information that will be discussed on the call is contained in this press release and the Supplemental Financial Data, both available on the company’s website at “http://www.postproperties.com/posthome.nsf/ExtList/2003-2QFinancials” prior to the quarterly conference call.

Post Properties, Inc., a leading developer and operator of upscale apartment communities in the United States, pioneered building and branding resort-style garden apartments for more than 30 years. Post now also focuses on the creation of high-quality, high-density, live-work-walk neighborhoods in infill locations in major urban markets. The company has been recognized locally, nationally and internationally for building better neighborhoods and the preservation of historic buildings. Operating as a self-administered and self-managed equity real estate investment trust (REIT), the company’s primary business consists of developing and managing Post® brand-name apartment communities.

Nationwide, Post Properties owns approximately 28,917 apartment homes in 78 communities, including 468 units currently under development and lease-up.

Forward Looking Statement:

Certain statements made in this press release and other written or oral statements made by or on behalf of the company, may constitute “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the company’s future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. Examples of such statements in this press release include the company’s projected net income (loss) per diluted share and

projected FFO per diluted share for the third quarter of 2003. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. The company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.

The following are some of the factors that could cause the company’s actual results to differ materially from the expected results described in the company’s forward-looking statements: future local and national economic conditions, including changes in job growth, interest rates, the availability of financing and other factors; demand for apartments in the company’s markets and the effect on occupancy and rental rates; the impact of competition on the company’s business, including competition for tenants and development locations; the company’s ability to obtain financing or self-fund the development or acquisition of additional apartment communities; the uncertainties associated with the company’s current real estate development, including actual costs exceeding the company’s budgets or development periods exceeding expectations; uncertainties associated with the timing and amount of asset sales and the resulting gains/losses associated with such asset sales; conditions affecting ownership of residential real estate and general conditions in the multi-family residential real estate market; the effects of changes in accounting policies and other regulatory matters detailed in the company’s filings with the Securities and Exchange Commission and uncertainties of litigation; and the company’s ability to continue to qualify as a real estate investment trust under the Internal Revenue Code. Other important risk factors regarding the company are included under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended December 31, 2002 and may be discussed in subsequent filings with the SEC. The risk factors discussed in such Form 10-K under the caption “Risk Factors” are specifically incorporated by reference into this press release.

Financial Highlights
(Unaudited; in thousands, except per share amounts)

	Three months ended				Six months ended
	June 30,				June 30,
	2003		2002		2003		2002
OPERATING DATA
Revenues	$	82,718	$	80,966	$	164,728	$	163,152
Net income available to common shareholders		24,826		22,200		1,377		36,357
Net income available to common shareholders, excluding severance, proxy and asset impairment charges (Table 1)		31,083		22,200		37,668		36,357
Funds from operations (Table 2)		14,690		27,320		17,553		57,516
Funds from operations, excluding severance and proxy charges (Table 2)		21,716		27,320		44,290		57,516
Weighted average shares outstanding – diluted		37,467		36,981		37,362		36,975
Weighted average shares and units outstanding – diluted		42,074		42,100		42,058		42,094
PER COMMON SHARE DATA – DILUTED
Net income available to common shareholders	$	0.66	$	0.60	$	0.04	$	0.98
Net income available to common shareholders, excluding severance, proxy and asset impairment charges (Table 1)		0.83		0.60		1.01		0.98
Funds from operations (Table 2)		0.35		0.65		0.42		1.37
Funds from operations, excluding severance and proxy charges (Table 2)		0.52		0.65		1.05		1.37
Dividends declared		0.45		0.78		0.90		1.56

Table 1
Reconciliation of Net Income Available to Common Shareholders to Net Income Available to Common Shareholders, Excluding Severance, Proxy and Asset Impairment Charges
(Unaudited; in thousands, except per share amounts)

	Three months ended					Six months ended
	June 30,					June 30,
	2003			2002		2003			2002
Net income available to common shareholders	$	24,826		$	22,200	$	1,377		$	36,357
Severance charges		1,795			—		21,506			—
Proxy and related costs		5,231			—		5,231			—
Asset impairment charge		—			—		14,118			—
Minority interest impact of charges (1)		(769	)		—		(4,564	)		—
Net income available to common shareholders, excluding severance, proxy and asset impairment charges	$	31,083		$	22,200	$	37,668		$	36,357
Weighted average shares outstanding – diluted		37,467			36,981		37,362			36,975
Net income available to common shareholders, excluding severance, proxy and asset impairment charges – per diluted share	$	0.83		$	0.60	$	1.01		$	0.98

(1) Computed at 10.95% and 11.17% for the three and six months ended June 30, 2003, respectively.

Table 2

Reconciliation of Net Income Available to Common Shareholders to Funds From Operations

(Unaudited; in thousands, except per share amounts)

	Three months ended						Six months ended
	June 30,						June 30,
	2003			2002			2003			2002
Net income available to common shareholders	$	24,826		$	22,200		$	1,377		$	36,357
Minority interest of common unitholders – continuing operations		146			713			(3,729	)		3,261
Minority interest in discontinued operations		23			146			99			467
Gains on property sales – continuing operations		—			—			—			(13,275	)
Gains on property sales – unconsolidated entities		(8,395	)		—			(8,395	)		—
Gains on properties held for sale and sold, net of minority interest – discontinued operations		(23,714	)		(16,146	)		(29,805	)		(9,425	)
Asset impairment charge		—			—			14,118			—
Depreciation on wholly-owned real estate assets, net		21,361			20,147			42,979			39,732
Depreciation on real estate assets held in unconsolidated entities		443			260			909			399
Funds from operations (1)(2)		14,690			27,320			17,553			57,516
Severance charges		1,795			—			21,506			—
Proxy and related costs		5,231			—			5,231			—
Funds from operations, excluding severance and proxy charges	$	21,716		$	27,320		$	44,290		$	57,516
Weighted average shares and units outstanding – diluted		42,074			42,100			42,058			42,094
Funds from operations – per diluted share	$	0.35		$	0.65		$	0.42		$	1.37
Funds from operations, excluding severance and proxy charges – per diluted share	$	0.52		$	0.65		$	1.05		$	1.37

(1)

The Company uses the National Association of Real Estate Investment Trusts (“NAREIT”) definition of Funds from Operations (“FFO”). FFO is defined to mean net income available to common shareholders determined in accordance with GAAP, excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures all determined on a consistent basis in accordance with GAAP. FFO presented herein is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Company’s FFO is comparable to the FFO of real estate companies that use the current NAREIT definition. FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs or ability to service indebtedness or make distributions.

(2)

For the three and six month periods ended June 30, 2002, FFO has been restated from the prior year presentation to reflect a reduction of $136 for early debt extinguishment costs reclassified from extraordinary items to operating expenses under SFAS No. 145.

Table 3
Reconciliation of Same Store Net Operating Income (NOI) to Income from Continuing Operations before Equity in Income (Losses) of Unconsolidated Entities, Gains on Property Sales and Minority Interest
(Dollars in thousands)

		Three months ended						Six months ended
		June 30,						June 30,
		2003			2002			2003			2002
Total same store NOI		$	40,578		$	43,439		$	82,370		$	88,330
Property NOI from other operating segments			7,278			5,215			13,637			9,254
Consolidated property NOI			47,856			48,654			96,007			97,584
Add:
	Interest income		251			281			485			686
	Minority interest in consolidated property partnerships		348			460			682			943
Less:
	Depreciation		(22,476	)		(20,794	)		(45,204	)		(40,696	)
	Interest		(17,396	)		(13,700	)		(33,957	)		(26,844	)
	Amortization of deferred loan costs		(968	)		(569	)		(1,756	)		(1,123	)
	General and administrative		(3,342	)		(3,720	)		(6,967	)		(7,486	)
	Other expenses		—			(136	)		(567	)		(136	)
	Severance charges		(1,795	)		—			(21,506	)		—
	Proxy and related charges		(5,231	)		—			(5,231	)		—
	Asset impairment charge		—			—			(14,118	)		—
Income (loss) from continuing operations before equity in income (losses) of unconsolidated entities, gains on property sales and minority interest		$	(2,753	)	$	10,476		$	(32,132	)	$	22,928

Table 4
Same Store Net Operating Income (NOI) Summary by Market
(Dollars in thousands)

			Three months ended							Six months ended
			June 30,							June 30,
			2003		2002		% Change			2003		2002		% Change
Rental and other revenues
	Atlanta		$	37,544	$	39,317		(4.5	)%	$	75,585	$	79,478		(4.9	)%
	Dallas			13,902		14,302		(2.8	)%		27,726		28,746		(3.5	)%
	Tampa			4,342		4,565		(4.9	)%		8,650		9,252		(6.5	)%
	Other			8,753		8,761		(0.1	)%		17,525		17,574		(0.3	)%
		Total rental and other revenues	$	64,541	$	66,945		(3.6	)%	$	129,486	$	135,050		(4.1	)%
Property operating and maintenance expenses (excluding depreciation and amortization)
	Atlanta		$	13,442	$	13,273		1.3	%	$	26,157	$	25,677		1.9	%
	Dallas			5,674		5,318		6.7	%		11,301		11,333		(0.3	)%
	Tampa			1,712		1,757		(2.6	)%		3,392		3,479		(2.5	)%
	Other			3,135		3,158		(0.7	)%		6,266		6,231		0.6	%
		Total	$	23,963	$	23,506		1.9	%	$	47,116	$	46,720		0.8	%
Net operating income
	Atlanta		$	24,102	$	26,044		(7.5	)%	$	49,428	$	53,801		(8.1	)%
	Dallas			8,228		8,984		(8.4	)%		16,425		17,413		(5.7	)%
	Tampa			2,630		2,808		(6.3	)%		5,258		5,773		(8.9	)%
	Other			5,618		5,603		0.3	%		11,259		11,343		(0.7	)%
		Total same store NOI	$	40,578	$	43,439		(6.6	)%	$	82,370	$	88,330		(6.7	)%

Table 5
Reconciliation of Forecasted Net Loss Per Share to Forecasted Funds From Operations Per Share

	Three months ended
	September 30, 2003
	Low Range			High Range
Forecasted net loss, per share	$	(0.04	)	$	(0.05	)
Forecasted real estate depreciation, per share		0.52			0.54
Forecasted funds from operations, per share	$	0.48		$	0.49

#  #  #

EX-99.2 4 g84209exv99w2.htm EX-99.2 SUPPLEMENTAL FINANCIAL DATA

Exhibit 99.2

Second Quarter 2003
Supplemental Financial Data

Post Properties, Inc., is a leading developer and operator of upscale apartment communities in the United States. Post has pioneered building and branding resort-style garden apartments for more than 30 years. Post now also focuses on the creation of high-quality, high-density, live-work-walk neighborhoods in infill locations in major urban markets.

Second Quarter 2003
Supplemental Financial Data

Table of Contents

	Page
Consolidated Statements of Operations		3
Calculation of Funds from Operations and Funds Available for Distribution		6
Same Store Operating Results		8
Consolidated Balance Sheets		10
Consolidated Debt Summary		11
Summary of Construction and Initial Lease-Up Communities		14
Asset Sales Summary		15
Capitalized Costs Summary		16
Investments in Unconsolidated Real Estate Entities		17
Reconciliation of Supplemental Non-GAAP Financial Measures		19

The projections and estimates given in this document and other written or oral statements made by or on behalf of the Company, may constitute “forward-looking statements” within the meaning of the federal securities laws. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. The following are some of the factors that could cause the Company’s actual results to differ materially from the expected results described in the Company’s forward-looking statements: future local and national economic conditions, including changes in job growth, interest rates, the availability of financing and other factors; demand for apartments in the Company’s markets and the effect on occupancy and rental rates; the impact of competition on the Company’s business, including competition for tenants and development locations; the Company’s ability to obtain financing or self-fund the development or acquisition of additional apartment communities; the uncertainties associated with the Company’s current real estate development, including actual costs exceeding the Company’s budgets or development periods exceeding expectations; uncertainties associated with the timing and amount of asset sales and the resulting gains/losses associated with such asset sales; conditions affecting ownership of residential real estate and general conditions in the multi-family residential real estate market; the effects of changes in accounting policies and other regulatory matters detailed in the Company’s filings with the Securities and Exchange Commission and uncertainties of litigation; and the Company’s ability to continue to qualify as a real estate investment trust under the Internal Revenue Code. Other important risk factors regarding the Company are included under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002 and may be discussed in subsequent filings with the SEC. The risk factors discussed in such Form 10-K under the caption “Risk Factors” are specifically incorporated by reference into this document.

2

Post Properties, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share or unit data)
(Unaudited)

			Three months ended						Six months ended
			June 30,						June 30,
			2003			2002			2003			2002
Revenues
	Rental		$	79,312		$	77,221		$	158,178		$	156,009
	Other			3,155			3,464			6,065			6,457
	Interest			251			281			485			686
		Total revenues		82,718			80,966			164,728			163,152
Expenses
	Property operating and maintenance (exclusive of items shown separately below)			34,611			32,031			68,236			64,882
	Depreciation			22,476			20,794			45,204			40,696
	Interest			17,396			13,700			33,957			26,844
	Amortization of deferred financing costs			968			569			1,756			1,123
	General and administrative			3,342			3,720			6,967			7,486
	Minority interest in consolidated property partnerships			(348	)		(460	)		(682	)		(943	)
	Other(1)			—			136			567			136
	Severance charges(2)			1,795			—			21,506			—
	Proxy and related costs(3)			5,231			—			5,231			—
	Asset impairment charge(4)			—			—			14,118			—
		Total expenses		85,471			70,490			196,860			140,224
Income (loss) from continuing operations before equity in income (losses) of unconsolidated entities, gains on property sales and minority interest				(2,753	)		10,476			(32,132	)		22,928
	Equity in income (losses) of unconsolidated real estate entities			8,101			(500	)		7,708			(843	)
	Gains on property sales(4)			—			—			—			13,275
	Minority interest of preferred unitholders			(1,400	)		(1,400	)		(2,800	)		(2,800	)
	Minority interest of common unitholders			(146	)		(713	)		3,729			(3,261	)
		Income (loss) from continuing operations		3,802			7,863			(23,495	)		29,299
Discontinued operations(4)
	Income from discontinued operations, net of minority interest			173			1,054			792			3,358
	Gains on properties held for sale and sold, net of minority interest			23,714			16,146			29,805			9,425
		Income from discontinued operations		23,887			17,200			30,597			12,783
Net income				27,689			25,063			7,102			42,082
	Dividends to preferred shareholders			(2,863	)		(2,863	)		(5,725	)		(5,725	)
Net income available to common shareholders			$	24,826		$	22,200		$	1,377		$	36,357
Per common share data — Basic(5)
	Income (loss) from continuing operations (net of preferred dividends)		$	0.02		$	0.13		$	(0.78	)	$	0.64
	Income from discontinued operations			0.64			0.47			0.82			0.35
	Net income available to common shareholders		$	0.66		$	0.60		$	0.04		$	0.99
	Dividends declared		$	0.45		$	0.78		$	0.90		$	1.56
	Weighted average common shares outstanding — basic			37,459,530			36,904,954			37,361,132			36,890,139
	Weighted average common shares and units outstanding — basic			42,066,025			42,023,842			42,057,716			42,009,027
Per common share data — Diluted(5)
	Income (loss) from continuing operations (net of preferred dividends)		$	0.02		$	0.13		$	(0.78	)	$	0.63
	Income from discontinued operations			0.64			0.47			0.82			0.35
	Net income available to common shareholders		$	0.66		$	0.60		$	0.04		$	0.98
	Dividends declared		$	0.45		$	0.78		$	0.90		$	1.56
	Weighted average common shares outstanding — diluted			37,467,388			36,981,334			37,361,902			36,975,168
	Weighted average common shares and units outstanding — diluted			42,073,883			42,100,222			42,058,486			42,094,056

3

Post Properties, Inc.
Notes to Consolidated
Statements of Operations

(1)	Other expenses for the six months ended June 30, 2003 include legal expenses relating to board of directors governance and transition matters, the settlement cost relating to the bankruptcy of a former technology investment and the estimated loss on the disposal of the Company’s partial ownership interest in a corporate aircraft. Other expenses for the three months ended June 30, 2002 represent costs associated with the early extinguishment of indebtedness. This $136 amount was reclassified from its prior year presentation as an extraordinary item as a result of the current year adoption of SFAS No. 145.
(2)	For the three months ended June 30, 2003, the severance charges represent the previously announced departures of two executive officers. For the six months ended June 30, 2003, the charges also included the first quarter non-cash charge of $19,712 relating to the change in roles from executive to non-executive status of the Company’s former chairman and vice-chairman of the board of directors. This amount consisted of a $13,994 charge representing the discounted present value of the estimated payments to be made to these individuals under their existing employment contracts and a $5,718 charge representing the discounted present value of estimated net costs that may be incurred by the Company as a result of the settlement of split-dollar life insurance obligations to the individuals under their employment contracts. The estimated charge for the settlement of the split-dollar life insurance obligations may change based upon a final legal determination regarding these insurance contracts and a final settlement among the parties.
(3)	Proxy and related costs for the three and six months ended June 30, 2003 represent the actual and estimated legal, advisory and other expenses associated with the recently concluded proxy contest. In addition, the amount includes the estimated legal and settlement costs associated with the settlement of two derivative and purported class action lawsuits filed against the Company during the proxy contest. These lawsuits are expected to be settled subsequent to June 30, 2003.
(4)	On January 1, 2002, the Company adopted SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” In accordance with the provisions of SFAS No. 144, the operating results of real estate assets designated as held for sale subsequent to January 1, 2002 are included in discontinued operations in the consolidated statement of operations. Also under the provisions of SFAS No. 144, the reserves, if any, to write down the carrying value of real estate assets designated and classified as held for sale after January 1, 2002 are included in discontinued operations. All subsequent gains or additional losses on the sale of these assets are also included in discontinued operations. Additionally under SFAS No. 144, any impairment losses on assets held for continuing use are included in continuing operations. The gains or losses on the sale of real estate assets held for sale at December 31, 2001 are included in continuing operations. As a result, income from continuing operations may not be comparable between the periods presented.
	For the three months ended June 30, 2003, income from discontinued operations included the results of operations, through the earlier of community sale date (if the community was sold between April 1, 2003 and June 30, 2003) or June 30, 2003, of one apartment community containing 770 units that was classified as held for sale at December 31, 2002. For the six months ended June 30, 2003, income from discontinued operations included the results of operations, through the earlier of the community sale date (if the community was sold between January 1, 2003 and June 30, 2003) or June 30, 2003 of two apartment communities containing 1,009 units that were classified as held for sale at December 31, 2002. For the three and six months ended June 30, 2002, income from discontinued operations included the results of operations of eight apartment communities containing 3,134 units and one commercial property.
	The revenues and expenses of these communities for the three and six months ended June 30, 2003 and 2002 were as follows:

			Three months ended				Six months ended
			June 30,				June 30,
			2003		2002		2003		2002
Revenues
	Rental		$	917	$	4,580	$	3,087	$	12,242
	Other			18		212		89		476
		Total revenues		935		4,792		3,176		12,718
Expenses
	Property operating and maintenance (exclusive of items shown separately below)			345		2,188		1,150		5,242
	Depreciation			—		591		—		1,455
	Interest			396		813		1,135		2,196
		Total expenses		741		3,592		2,285		8,893
Income from discontinued operations (before minority interest)			$	194	$	1,200	$	891	$	3,825

For the three months ended June 30, 2003, the Company recognized net gains from discontinued operations of $26,936 ($23,987 net of minority interest), on the sale of one community, containing 770 apartment units, reduced by losses of $306 ($273 net of minority interest) resulting from losses on the sale of certain land parcels and additional reserves to write-down to fair value certain other land parcels classified as held for sale. For the six months ended June 30, 2003, the Company recognized net gains from discontinued operations of $34,917 ($31,059 net of minority interest) on the sale of two communities containing 1,009 units, reduced by losses of $1,413 ($1,254 net of minority interest) resulting from losses on the sale of certain land parcels and additional reserves to write-down to fair value certain other land parcels classified as held for sale.

4

In the first quarter of 2003, the Company recorded an impairment loss of $14,118, under the provisions of SFAS No. 144, to write down the cost of an apartment community, located in Phoenix, Arizona, to its estimated fair value, based upon a revised determination that it was more probable that this community would be marketed for sale in the near term instead of held for long-term investment. This community has not been classified as held for sale at June 30, 2003 as the Company’s internal investment committee had not approved the sale of the community and no program was initiated to actively sell the community. Subsequent to June 30, 2003, this community has been classified as held for sale as the Company’s investment committee approved the sale and the Company began actively marketing it for sale.

(5)

Post Properties, Inc. is structured as an UPREIT, or Umbrella Partnership Real Estate Investment Trust. Post GP Holdings, Inc., a wholly owned subsidiary of the Company, is the sole general partner and, together with Post LP Holdings, Inc. owns the controlling interest in Post Apartment Homes, L.P., the Operating Partnership, through which the Company conducts its operations. As of June 30, 2003, there were 42,087,106 units of the Operating Partnership outstanding, of which 37,656,778, or 89.5% were owned by the Company. The diluted weighted average shares and units outstanding for the three and six months ended June 30, 2003 were 42,073,883 and 42,058,486, respectively. The diluted weighted average shares and units outstanding for the three and six months ended June 30, 2002 were 42,100,222 and 42,094,056, respectively.

5

Post Properties, Inc.
Calculation of Funds from Operations
and Funds Available for Distribution
(Dollars in thousands, except per share or unit data)
(Unaudited)

The Company uses the National Association for Real Estate Investment Trusts (“NAREIT”) definition of funds from operations (“FFO”). FFO is defined by NAREIT to mean net income available to common shareholders determined in accordance with GAAP, excluding gains (or losses) from debt restructuring and sales of property, plus depreciation of real estate assets, and after adjustment for unconsolidated partnerships and joint ventures all determined on a consistent basis in accordance with GAAP. FFO is a supplemental non-GAAP financial measure. FFO presented herein is not necessarily comparable to FFO presented by other real estate companies because not all real estate companies use the same definition. The Company’s FFO is comparable to the FFO of real estate companies that use the current NAREIT definition. FFO and funds available for distribution (“FAD”) should not be considered as an alternative to net income (determined in accordance with GAAP) as an indicator of the Company’s financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor is it necessarily indicative of sufficient cash flow to fund all of the Company’s needs or ability to service indebtedness or make distributions. FAD is defined as FFO less capital expenditures funded by operations. FAD is a supplemental non-GAAP financial measure. The Company believes that net income available to common shareholders is the most directly comparable GAAP measure to FFO and FAD. A reconciliation of net income available to common shareholders to FFO and FAD is provided below.

			Three months ended						Six months ended
			June 30,						June 30,
			2003			2002 (1)			2003			2002 (1)
Net income available to common shareholders			$	24,826		$	22,200		$	1,377		$	36,357
	Minority interest of common unitholders — continuing operations			146			713			(3,729	)		3,261
	Minority interest in discontinued operations (2)			23			146			99			467
	Gains on property sales — continuing operations			—			—			—			(13,275	)
	Gains on property sales – unconsolidated entities			(8,395	)		—			(8,395	)		—
	Gains on properties held for sale and sold, net of minority interest - discontinued operations			(23,714	)		(16,146	)		(29,805	)		(9,425	)
	Asset impairment charge			—			—			14,118			—
	Depreciation on wholly-owned real estate assets, net (3)			21,364			20,147			42,982			39,732
	Depreciation on real estate assets held in unconsolidated entities			440			260			906			399
Funds from operations, as defined(A)				14,690			27,320			17,553			57,516
	Severance charges			1,795			—			21,506			—
	Proxy and related costs			5,231			—			5,231			—
Funds from operations, excluding severance and proxy charges (B)			$	21,716		$	27,320		$	44,290		$	57,516
Funds from operations, as defined			$	14,690		$	27,320		$	17,553		$	57,516
		Recurring capital expenditures		(2,524	)		(2,852	)		(3,986	)		(4,731	)
		Non-recurring capital expenditures		(1,218	)		(717	)		(2,176	)		(1,264	)
Funds available for distribution(4)(C)				10,948			23,751			11,391			51,521
	Severance charges			1,795			—			21,506			—
	Proxy and related costs			5,231			—			5,231			—
Funds available for distribution, excluding severance and proxy charges(4)(D)			$	17,974		$	23,751		$	38,128		$	51,521
Per Common Share Data — Basic
Funds from operations per share or unit, as defined (A÷F)			$	0.35		$	0.65		$	0.42		$	1.37
Funds available for distribution per share or unit, as defined (4) (C÷F)			$	0.26		$	0.57		$	0.27		$	1.23
Funds from operations per share or unit, excluding severance and proxy charges (B÷F)			$	0.52		$	0.65		$	1.05		$	1.37
Funds available for distribution per share or unit, excluding severance and proxy charges (4) (D÷F)			$	0.43		$	0.57		$	0.91		$	1.23
Dividends declared (E)			$	0.45		$	0.78		$	0.90		$	1.56
Weighted average shares outstanding				37,459,530			36,904,954			37,361,132			36,890,139
Weighted average shares and units outstanding (F)				42,066,025			42,023,842			42,057,716			42,009,027
Per Common Share Data — Diluted
Funds from operations per share or unit (A÷G=W)			$	0.35		$	0.65		$	0.42		$	1.37
Funds from operations per share or unit (C÷G=X)			$	0.26		$	0.56		$	0.27		$	1.22
Funds from operations per share or unit, excluding severance and proxy charges (B÷G=Y)			$	0.52		$	0.65		$	1.05		$	1.37
Funds available for distribution per share or unit, excluding severance and proxy charges (4) (D÷G=Z)			$	0.43		$	0.56		$	0.91		$	1.22
Dividends declared (E)			$	0.45		$	0.78		$	0.90		$	1.56
Weighted average shares outstanding				37,467,388			36,981,334			37,361,902			36,975,168
Weighted average shares and units outstanding (G)				42,073,883			42,100,222			42,058,486			42,094,056

6

Dividend Payout Ratio
Payout ratio — funds from operations, as defined (E÷W)	128.6	%	120.0	%	214.3	%	113.9	%
Payout ratio — funds available for distribution, as defined (E÷X)	173.1	%	139.3	%	333.3	%	127.9	%
Payout ratio — funds from operations, excluding severance and proxy charges (E÷Y)	86.5	%	120.0	%	85.7	%	113.9	%
Payout ratio — funds available for distribution, excluding severance and proxy charges (E÷Z)	104.7	%	139.3	%	98.9	%	127.9	%

(1)	For the three and six month periods ended June 30, 2002, FFO has been restated from the prior year presentation to reflect a reduction of $136 for early debt extinguishment costs reclassified from extraordinary items to operating expenses under SFAS No. 145.
(2)	Represents the minority interest in earnings of discontinued operations for the periods presented.
(3)	Depreciation on wholly-owned real estate assets is net of the minority interest portion of depreciation in consolidated entities.
(4)	Since the Company does not add back the depreciation of non-real estate assets in its calculation of funds from operations, non-real estate related capital expenditures of $131 and $269 for the three months ended June 30, 2003 and 2002, respectively, and $339 and $548 for the six months ended June 30, 2003 and 2002, respectively, are excluded from the calculation of funds available for distribution.

7

Post Properties, Inc.
Same Store Operating Results
(Dollars in thousands, except per share or unit data)
(Unaudited)

Same Store Operating Results

The Company defines fully stabilized or same store communities as those which have reached stabilization prior to the beginning of the previous calendar year, adjusted by communities sold and classified as held for sale. Same store net operating income is a supplemental non-GAAP financial measure. See Table 1 on page 19 for a reconciliation of same store net operating income to GAAP income from continuing operations before equity in losses of unconsolidated entities, gains on sales of property and minority interest. The operating performance of the 67 communities containing 24,347 apartment units which were fully stabilized as of January 1, 2002, is summarized as follows:

			Three months ended							Six months ended
			June 30,							June 30,
			2003		2002		% Change			2003		2002		% Change
Rental and other revenues			$	64,541	$	66,945		(3.6	)%	$	129,486	$	135,050		(4.1	)%
Property operating and maintenance expenses (excluding depreciation and amortization)				23,963		23,506		1.9	%		47,116		46,720		0.8	%
Same store net operating income			$	40,578	$	43,439		(6.6	)%	$	82,370	$	88,330		(6.7	)%
Capital expenditures(1)
	Recurring
	Carpet		$	746	$	602		23.9	%	$	1,310	$	1,101		19.0	%
	Other			1,642		1,962		(16.3	)%		2,386		2,913		(18.1	)%
		Total recurring		2,388		2,564		(6.9	)%		3,696		4,014		(7.9	)%
	Non-recurring			972		596		63.0	%		1,571		1,074		46.2	%
		Total capital expenditures (A)	$	3,360	$	3,160		6.3	%	$	5,267	$	5,088		3.5	%
	Total capital expenditures per unit (A÷24,347 units)		$	138	$	130		6.2	%	$	216	$	209		3.3	%
Average monthly rental rate per unit (2)			$	941	$	1,000		(5.9	)%	$	949	$	1,004		(5.5	)%

(1)	See Table 3 on page 21 for a reconciliation of these segment components of property capital expenditures to total recurring capital expenditures and total non-recurring capital expenditures as presented on the consolidated cash flow statements prepared under GAAP.
(2)	Average monthly rental rate is defined as the average of the gross actual rates for occupied units and the anticipated rental rates for unoccupied units divided by total units.

Same Store Operating Results by Market –
Comparison of 2003 to 2002
(Increase (decrease) from same period in prior year)

		Three months ended												Six months ended
		June 30,												June 30,
											Average Economic												Average Economic
Market		Revenues(1)			Expenses(1)			NOI(1)			Occupancy			Revenues(1)			Expenses(1)			NOI(1)			Occupancy
Atlanta			(4.5	)%		1.3	%		(7.5	)%		1.9	%		(4.9	)%		1.9	%		(8.1	)%		1.1	%
Dallas			(2.8	)%		6.7	%		(8.4	)%		1.5	%		(3.5	)%		(0.3	)%		(5.7	)%		0.6	%
Tampa			(4.9	)%		(2.6	)%		(6.3	)%		(0.6	)%		(6.5	)%		(2.5	)%		(8.9	)%		(3.1	)%
Other(2)			(0.1	)%		(0.7	)%		0.3	%		1.6	%		(0.3	)%		0.6	%		(0.7	)%		1.8	%
	Total		(3.6	)%		1.9	%		(6.6	)%		1.6	%		(4.1	)%		0.8	%		(6.7	)%		0.8	%

(1)	See Table 2 on page 20 for a reconciliation of these components of same store net operating income and Table 1 on page 19 for a reconciliation of same store net operating income to GAAP income from continuing operations before equity in losses of unconsolidated entities, gain on sales of property and minority interest.
(2)	Includes communities located in Orlando, FL; Washington, DC; Houston, TX; Charlotte, NC; Nashville, TN and Phoenix, AZ.

8

Same Store Occupancy by Market

						Average Economic						Average Economic
						Occupancy(1)						Occupancy(1)
						Three months ended						Six months ended
						June 30,						June 30,						Physical
	Apartment		% of															Occupancy(2)
Market	Units		Units			2003			2002			2003			2002			June 30, 2003
Atlanta		14,614		60.0	%		90.9	%		89.0	%		90.6	%		89.5	%		94.5	%
Dallas		5,183		21.3	%		91.0	%		89.5	%		89.9	%		89.3	%		94.4	%
Tampa		1,439		5.9	%		92.8	%		93.4	%		91.5	%		94.6	%		96.4	%
Other		3,111		12.8	%		91.5	%		89.9	%		91.4	%		89.6	%		93.5	%
Total		24,347		100.0	%		91.1	%		89.5	%		90.6	%		89.8	%		94.5	%

(1)

Average economic occupancy is defined as gross potential rent less vacancy losses, model expenses and bad debt expenses divided by gross potential rent for the period, expressed as a percentage. The calculation of average economic occupancy does not include a deduction for concessions and employee discounts. Average economic occupancy, including these amounts would have been 89.5% and 86.9% for the three months ended June 30, 2003 and 2002, respectively, and 89.1% and 87.6% for the six months ended June 30, 2003 and 2002, respectively. For the three months ended June 30, 2003 and 2002, concessions were $1,015 and $1,688, respectively, and employee discounts were $134 and $190, respectively. For the six months ended June 30, 2003 and 2002, concessions were $1,749 and $2,780, respectively, and employee discounts were $270 and $395, respectively.

(2)

Physical occupancy is defined as the number of units occupied divided by total apartment units, expressed as a percentage.

Same Store Sequential Comparison

	Three months ended			Three months ended
	June 30, 2003			March 31, 2003			% Change
Rental and other revenues	$	64,541		$	64,945			(0.6	)%
Property operating and maintenance expenses (excluding depreciation and amortization)		23,963			23,154			3.5	%
Same store net operating income(1)	$	40,578		$	41,791			(2.9	)%
Average economic occupancy		91.1	%		90.1	%		1.0	%
Average monthly rental rate per unit	$	941		$	956			(1.6	)%

Sequential Same Store Operating Results by Market –
Comparison of Second Quarter of 2003 to First Quarter 2003
(Increase (decrease) between periods)

											Average Economic
Market		Revenues(1)			Expenses(1)			NOI(1)			Occupancy
Atlanta			(1.3	)%		5.7	%		(4.8	)%		0.6	%
Dallas			0.6	%		0.8	%		0.4	%		2.2	%
Tampa			0.8	%		1.8	%		0.1	%		2.6	%
Other(2)			(0.2	)%		0.2	%		(0.4	)%		0.3	%
	Total		(0.6	)%		3.5	%		(2.9	)%		1.0	%

(1)	See Table 2 on page 20 for a reconciliation of these components of same store net operating income and Table 1 on page 19 for a reconciliation of same store net operating income to GAAP income from continuing operations before equity in loses of unconsolidated entities, gains on sale of property and minority interest.
(2)	Includes communities located in Orlando, FL; Washington, DC; Houston, TX; Charlotte, NC; Nashville, TN and Phoenix, AZ.

9

Post Properties, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share or unit data)

					June 30,			December 31,
					2003			2002
Assets
	Real estate assets
		Land			$	286,757		$	273,058
		Building and improvements				2,033,983			1,976,809
		Furniture, fixtures and equipment				244,985			246,634
		Construction in progress				33,784			92,945
		Investments in and advances to unconsolidated real estate entities				100,356			182,285
		Land held for future development				24,299			24,879
						2,724,164			2,796,610
		Less: accumulated depreciation				(470,307	)		(426,136	)
		Assets held for sale				10,705			73,061
			Total real estate assets			2,264,562			2,443,535
		Cash and cash equivalents				4,302			6,390
		Restricted cash				1,707			1,369
		Deferred charges, net				14,235			15,584
		Other assets				40,126			41,273
			Total assets		$	2,324,932		$	2,508,151
Liabilities and shareholders’ equity
		Notes payable			$	1,259,926		$	1,414,555
		Accrued interest payable				8,874			8,994
		Dividend and distribution payable				19,406			33,252
		Accounts payable and accrued expenses				73,504			49,124
		Security deposits and prepaid rents				8,073			8,250
			Total liabilities			1,369,783			1,514,175
		Minority interest of preferred unitholders in Operating Partnership				70,000			70,000
		Minority interest of common unitholders in Operating Partnership				78,646			90,277
		Commitments and contingencies				—			—
		Shareholders’ equity
			Preferred stock, $.01 par value, 20,000,000 authorized:
				8 1/2% Series A Cumulative Redeemable Shares, liquidation preference $50 per share, 900,000 shares issued and outstanding		9			9
				7 5/8% Series B Cumulative Redeemable Shares, liquidation preference $25 per share, 2,000,000 shares issued and outstanding		20			20
				7 5/8% Series C Cumulative Redeemable Shares, liquidation preference $25 per share, 2,000,000 shares issued and outstanding		20			20
			Common stock, $.01 par value, 100,000,000 authorized:
				39,676,204 and 39,676,204 shares issued, 37,656,778 and 37,202,290 shares outstanding at June 30, 2003 and December 31, 2002, respectively		396			396
			Additional paid-in capital			899,635			940,122
			Accumulated earnings			—			—
			Accumulated other comprehensive income			(17,594	)		(14,822	)
			Deferred compensation			(1,418	)		(639	)
						881,068			925,106
			Less common stock in treasury, at cost, 2,019,426 shares and 2,473,914 shares at June 30, 2003 and December 31, 2002, respectively			(74,565	)		(91,407	)
				Total shareholders’ equity		806,503			833,699
				Total liabilities and shareholders’ equity	$	2,324,932		$	2,508,151

10

Post Properties, Inc.
Consolidated Debt Summary
(Dollars in thousands, except per share or unit data)
(Unaudited)

Summary of Outstanding Debt at June 30, 2003

						Weighted Average Rate (1)
						Three months ended June 30,
			Percentage
Type of Indebtedness	Balance		of Total			2003			2002
Unsecured fixed rate senior notes	$	708,000		56.19	%		7.40	%		7.40	%
Secured tax exempt variable rate notes(2)		214,380		17.02	%		1.81	%		2.10	%
Secured conventional fixed rate notes		294,529		23.38	%		6.77	%		7.08	%
Lines of credit		43,017		3.41	%		2.11	%		2.71	%
	$	1,259,926		100.00	%		6.12	%		5.87	%

				Percentage
		Balance		of Total Debt
Total fixed rate debt		$	1,002,529		79.57	%
Total variable rate debt			257,397		20.43	%
	Total debt	$	1,259,926		100.00	%

Debt Maturities

				Weighted Average Rate
Aggregate debt maturities by year (3)		Amount		on Debt Maturities (1)
Remainder of 2003		$	102,531		7.24	%
	2004		27,094		7.04	%
	2005		204,402		7.83	%
	2006		79,732		6.98	%
	2007		112,178		7.16	%
2008 and thereafter			690,972		5.36	%
		$	1,216,909

Debt Statistics

	Six months ended
	June 30,
	2003			2002
Interest coverage ratio (4)(5)		2.6x			3.4x
Fixed charge coverage ratio (4)(6)		2.1x			2.6x
Total debt as a % of undepreciated real estate (7)		46.1	%		47.1	%
Total debt as a % of undepreciated real estate (adjusted for joint venture partner’s share of debt) (7)		45.0	%		45.4	%

(1)	Weighted average rate includes credit enhancements and other fees, where applicable. The weighted average rates for the three months ended June 30, 2002 are based on the debt outstanding for that period.
(2)	The Company has purchased interest rate cap arrangements that limit the Company’s exposure to increases in the base rate to 5.00 percent.
(3)	Excludes outstanding balances on lines of credit of $43,017 maturing in 2004.
(4)	Calculated for the six months ended June 30, 2003 and 2002.
(5)	Interest coverage ratio is defined as net income available for debt service divided by interest expense. For purposes of this calculation, net income available for debt service represents income from continuing operations, before preferred or common minority interest, gains on property sales, severance, proxy and asset impairment charges, interest expense, depreciation and amortization. Net income available for debt service was also adjusted for the Company’s share of depreciation and interest expense from unconsolidated entities and interest expense used in the calculation was adjusted to include the Company’s share of interest expense from unconsolidated entities. The calculation of the interest coverage ratio is a non-GAAP financial measure. A reconciliation of net income available for debt service to income from continuing operations and interest expense to consolidated interest expense is included in Table 4 on page 21.
(6)	Fixed charge coverage ratio is defined as net income available for debt service divided by interest expense plus dividends to preferred shareholders and distributions to preferred unitholders. For purposes of this calculation, net income available for debt service represents earnings from continuing operations, before preferred or common minority interest, gains on property sales, severance, proxy and asset impairment charges, interest expense, depreciation and amortization. Net income available for debt service was also adjusted for the Company’s share of depreciation and interest expense from unconsolidated entities and interest expense used in the calculation was adjusted to include the Company’s share of interest expense from unconsolidated entities. The calculation of the fixed coverage ratio is a non-GAAP financial measure. A reconciliation of net income available for debt service to income from continuing operations and fixed charges to consolidated interest expense plus preferred dividends to shareholders and preferred distributions to unitholders is included in Table 4 on page 21.
(7)	At June 30, 2003, the Company has provided construction financing to two unconsolidated development joint ventures with the New York State Common Retirement Fund. 100% of this financing is included in the Company’s debt and its real estate assets. At June 30, 2003 and 2002, the venture partner’s share of the construction loans was $54,051 and $88,317, respectively. A computation of the debt ratios is included in Table 5 on page 22.

11

Post Properties, Inc.
Consolidated Debt Summary (cont.)
(Dollars in thousands, except per share or unit data)
(Unaudited)

Financial Debt Covenants — Senior Unsecured Public Notes

	Actual ratio as of
Covenant requirement(1)	June 30, 2003
Consolidated Debt to Total Assets cannot exceed 60%		45	%
Secured Debt to Total Assets cannot exceed 40%		18	%
Consolidated Income Available for Debt Service Charge must be at least 1.50/1		2.65/1
Total Unencumbered Assets to Unsecured Debt must be at least 1.50/1		2.70/1

(1) A summary of the public debt covenant calculations and reconciliations of the financial components used in the public debt covenant calculations to the most comparable GAAP financial measures are detailed below.

Ratio of Consolidated Debt to Total Assets

		As of
		June 30, 2003
	Consolidated debt, per balance sheet (A)	$	1,259,926
	Total assets, as defined (B) (Table A)	$	2,780,697
	Computed ratio (A÷B)		45	%
	Required ratio (cannot exceed)		60	%
Ratio of Secured Debt to Total Assets
	Secured conventional fixed rate notes	$	294,529
	Secured tax exempt variable rate notes		214,380
	Total secured debt (C)	$	508,909
	Computed ratio (C÷B)		18	%
	Required ratio (cannot exceed)		40	%
Ratio of Total Unencumbered Assets to Unsecured Debt
	Consolidated debt, per balance sheet (A)	$	1,259,926
	Total secured debt (C)		(508,909	)
	Total unsecured debt (D)	$	751,017
	Total unencumbered assets, as defined (E) (Table A)	$	2,029,553
	Computed ratio (E÷D)		2.70x
	Required minimum ratio		1.50x
Ratio of Consolidated Income Available for Debt Service to Annual Debt Service Charge
	Consolidated Income Available for Debt Service, as defined (F) (Table B)	$	179,688
	Annual Debt Service Charge, as defined (G) (Table B)	$	67,914
	Computed ratio (F÷G)		2.65x
	Required minimum ratio		1.50x

12

Post Properties, Inc.
Consolidated Debt Summary (cont.)
(Dollars in thousands, except per share or unit data)
(Unaudited)

Table A

Calculation of Total Assets and Total Unencumbered Assets for Public Debt Covenant Computations

		As of
		June 30, 2003
Total real estate assets		$	2,264,562
Add:
	Accumulated depreciation		470,307
	Accumulated depreciation — assets held for sale		—
	Other tangible assets (cash, restricted cash, other assets, exclusive of receivables)		45,825
Total assets for public debt covenant computations			2,780,694
Less:
	Encumbered real estate assets		(751,451	)
Total unencumbered assets for public debt covenant computations		$	2,029,243

Table B

Calculation of Consolidated Income Available for Debt Service and Annual Debt Service Charge for Public Debt Covenant
      Computations (a)

			Six months ended
Consolidated income available for debt service			June 30, 2003
Net income			$	7,102
Add:
		Minority interests		2,869
Income before minority interest				9,971
Add:
	Depreciation			45,204
	Amortization of deferred financing costs			1,756
	Severance charges			21,506
	Proxy and related costs			5,231
	Asset impairment charge			14,118
	Interest expense			33,957
Less:
	Gains on property sales (before minority interest)			(33,504	)
	Gains on property sales – unconsolidated entities			(8,395	)
Consolidated income available for debt service			$	89,844
Consolidated income available for debt service (annualized)			$	179,688
Annual debt service charge
Consolidated interest expense			$	33,957
Annual debt service charge (interest expense annualized)			$	67,914

(a) The actual calculation of these ratios requires the use of annual trailing financial data. These computations reflect annualized year-to-date 2003 results for comparison and presentation purposes. The computations using annual trailing financial data also reflect compliance with the debt covenants.

13

Post Properties, Inc.
Summary of Construction and
Initial Lease-Up Communities

			Estimated			Amount							Estimated
			Construction			Spent			Quarter of		Quarter of		Quarter of		%			%
	Number of		Cost			As of			Construction		First Units		Stabilized		Leased			Occupied
Metropolitan Area	Units		($ in millions)			6/30/2003			Start		Available		Occupancy(1)		8/4/2003			8/4/2003
Wholly Owned Construction/Lease-up Communities
New York City, NY
Post ToscanaTM		199	$	92		$	89			1Q’02		1Q’03		2Q’04		60.8	%		45.2	%
Subtotal Wholly-Owned Construction/Lease-up Communities		199	$	92		$	89
Co-Investment Construction/Lease-up Communities
Washington D.C.
Post Massachusetts AvenueTM(2)		269	$	72		$	71			2Q’01		4Q’02		4Q’03		70.6	%		61.0	%
Subtotal Co-Investment Construction/Lease-up Communities		269	$	72		$	71
Construction Totals		468	$	164		$	160
less Partners’ Portion			$	(47	)	$	(46	)
Post Properties’ Funding Commitment			$	117		$	114
Weighted average projected property net operating income as a % of total estimated construction cost(3)				7.5	%

(1)	The Company defines stabilized occupancy as the earlier to occur of (i) the attainment of 95% physical occupancy on the first day of any month or (ii) one year after completion of construction.
(2)	This community is being developed as a joint venture (Post equity ownership is 35%).
(3)	The calculation represents the aggregate projected unlevered property net operating income to be earned by each community in its first year of stabilized operations divided by aggregate estimated construction costs of the communities. The Company uses property net operating income as a management tool to measure the operating performance of its communities.

14

Post Properties, Inc.
Asset Sales Summary

				Gross Proceeds		Gross
Property Name/Period	Location	Year Built		Per Unit		Proceeds
Q1 2002
Post Bay® Post Court® (FL) Post & Paddock (Industrial)	Tampa, FL Clearwater, FL Grand Prairie, TX	1988 1991 1986	$	58,013 70,175 (1)	$	41,900,000
Q2 2002
Post Village® (FL) Post CommonsTM Post ResidencesTM(2) Post Parkwood® (TX) Towne Crossing (Retail)	Tampa, FL Dallas, TX Dallas, TX Dallas, TX Mesquite, TX	1989-1991 1985 1986 1962-1970 1985	$	59,175 58,228 91,327 73,958 (1)	$	100,725,000
Q3 2002
Post Ascension®	Arlington, TX	1985-1995	$	59,880	$	10,000,000
Q4 2002
Post FountainsTM	Orlando, FL	1988	$	59,843	$	30,400,000
2002 YTD Total					$	183,025,000
Q1 2003
Post West Avenue(3)	Austin, TX	2000	$	126,360	$	30,200,000	(4)
Q2 2003
Post Park® Post Paseo Colorado	Atlanta, GA Pasadena, CA		$	78,156 250,639	$	158,180,000	(5)(6)
					$	188,380,000
Weighted Average Cap Rate — Apartment Assets						7.10	%(7)

(1)	Commercial property acquired in the Columbus Realty Trust merger.
(2)	Includes approximately 14,000 square feet of retail space.
(3)	Includes approximately 7,400 square feet of retail space.
(4)	Excludes approximately $8.6 million in gross proceeds from the sale of land in Tampa, FL and Austin, TX.
(5)	Includes gross proceeds of $98.0 million from the sale of a property held in joint venture. The company’s share of the sale proceeds, including repayment of the company’s construction loan to the joint venture, was approximately $75.0 million.
(6)	Excludes approximately $2.6 million of gross proceeds from the sale of land in Dallas, TX.
(7)	Based on prior calendar year’s net operating income after adjustments for management fee (3.0%) and capital reserves ($300/unit), except for Post Paseo Colorado, a recently completed development, which is based on projected stabilized net operating income.

15

Post Properties, Inc.
Capitalized Costs Summary
(Dollars in thousands, except per share or unit data)
(Unaudited)

The Company has a policy of capitalizing those expenditures relating to the acquisition of new assets and the development and construction of new apartment communities. In addition, the Company capitalizes expenditures that enhance the value of existing assets and expenditures that substantially extend the life of existing assets. All other expenditures necessary to maintain a community in ordinary operating condition are expensed as incurred. Additionally, for new development communities, carpet, vinyl and blind replacements are expensed as incurred during the first five years (which corresponds to the estimated depreciable life of these assets) after construction completion. Thereafter, these replacements are capitalized. Further, the Company expenses as incurred all interior and exterior painting of communities.

The Company capitalizes interest, real estate taxes, and certain internal personnel and associated costs related to apartment communities under development and construction. The internal personnel and associated costs are capitalized to the projects under development based upon the effort identifiable with such projects. The Company treats each unit in an apartment community separately for cost accumulation, capitalization and expense recognition purposes. Prior to the commencement of leasing activities, interest and other construction costs are capitalized and are reflected on the balance sheet as construction in progress. The Company ceases the capitalization of such costs as the residential units in a community become substantially complete and available for occupancy. This results in a proration of these costs between amounts that are capitalized and expensed as the residential units in a development community become available for occupancy. In addition, prior to the completion of units, the Company expenses as incurred substantially all operating expenses (including pre-opening marketing as well as property management and leasing personnel expenses) of such communities.

A summary of community development improvements and other capitalized expenditures for the three and six months ended June 30, 2003 and 2002 is detailed below.

		Three months ended					Six months ended
		June 30,					June 30,
			2003		2002			2003		2002
New community development and acquisition activity			$	5,720	$	44,612		$	19,832	$	92,760
Non-recurring capital expenditures
	Revenue generating additions and improvements (1)			643		639			732		966
	Other community additions and improvements (2)			1,218		717			2,176		1,264
Recurring capital expenditures
	Carpet replacements and other community additions and improvements (3)			2,524		2,852			3,986		4,731
	Corporate additions and improvements			131		269			339		548
			$	10,236	$	49,089		$	27,065	$	100,269
Other Data
	Capitalized interest		$	1,244	$	4,107		$	3,113	$	8,540
	Capitalized personnel and associated costs (4)		$	579	$	1,346		$	1,179	$	2,729

(1)	Represents expenditures for major renovations of communities, water sub-metering equipment and other unit upgrade costs that enhance the rental value of such units.
(2)	Represents property improvement expenditures that generally occur less frequently than on an annual basis.
(3)	Represents property improvement expenditures of a type that are expected to be incurred on an annual basis.
(4)	Reflects personnel and associated costs capitalized to construction and development activities.

16

Post Properties, Inc.
Investments in Unconsolidated Real Estate Entities
(Dollars in thousands, except per share or unit data)
(Unaudited)

At June 30, 2003, the Company holds investments in three individual limited liability companies (the “Property LLCs”) with an institutional investor. Each Property LLC owns a newly developed apartment community. At June 30, 2003, two of the apartment communities had achieved stabilized occupancy and one apartment community was in initial lease-up. The Company holds a 35% equity interest in the Property LLCs. The initial development costs of the apartment communities were funded through member equity contributions proportionate to the members’ ownership interests and through construction financing provided by the Company. In June 2003, the underlying apartment community held by a fourth Property LLC was sold. The financial information below reflects the gain on property sale and the operating results of this Property LLC through the sale date. The Company recognized its allocable share of the gain from the property sale of approximately $8,395 in its second quarter operating results. The Company’s share of this gain is included in the Company’s share of net income (loss) shown in the table below.

The Company accounts for its investments in these Property LLCs using the equity method of accounting. The excess of the Company’s investment over its equity in the underlying net assets of the Property LLCs was approximately $6,727 at June 30, 2003. This excess investment is being amortized as a reduction to earnings on a straight-line basis over the lives of the related assets. The Company provides real estate services (development, construction and property management) to the Property LLCs.

The operating results of the Company include its proportionate share of net income (loss) from the investments in the Property LLCs. A summary of financial information for the Property LLCs in the aggregate is as follows:

	June 30,		December 31,
	2003		2002
Real estate assets, net	$	128,924	$	198,854
Cash and other		3,324		2,330
Total assets		132,248		201,184
Mortgage notes payable	$	16,906	$	—
Construction notes payable to Company(1)		83,155		160,294
Other liabilities		2,335		3,975
Total liabilities		102,396		164,269
Members’ equity		29,852		36,915
Total liabilities and members’ equity	$	132,248	$	201,184
Company’s equity investment	$	17,201	$	21,991
Company’s share of notes payable	$	35,022	$	56,103

		Three months ended					Six months ended
		June 30,					June 30,
		2003		2002			2003		2002
Revenue
Rental		$	3,360	$	850		$	6,606	$	1,181
	Other		149		89			288		161
	Total revenues		3,509		939			6,894		1,342
Expenses
Property operating and maintenance			1,970		1,050			3,989		1,778
	Depreciation		1,257		745			2,590		1,141
	Interest		1,121		574			2,278		833
	Total expenses		4,348		2,369			8,857		3,752
Gain on property sale			26,179		—			26,179		—
Net income (loss)		$	25,340	$	(1,430	)	$	24,216	$	(2,410	)
Company’s share of net income (loss)		$	8,101	$	(500	)	$	7,708	$	(843	)

(1) All of the Company’s construction financing to these unconsolidated real estate entities is included in the Company’s outstanding debt and real estate assets. At June 30, 2003 and December 31, 2002, the venture partner’s share of the construction loans was $54,051 and $88,317, respectively.

17

The Company has committed construction financing to two of the Property LLCs totaling $85,491 ($83,155 funded at June 30, 2003). These loans earn interest at LIBOR plus 1.75% and are secured by the apartment communities. The loans mature on dates ranging from September 2003 to November 2004 and are expected to be repaid from the proceeds of permanent project financings. In the first quarter of 2003, one of the Property LLCs repaid its outstanding construction note payable to the Company of $24,071 through the proceeds from a third-party non-recourse permanent mortgage note totaling $17,000 and from member equity contributions. The mortgage note bears interest at 4.28%, requires monthly principal and interest payments based on a 30-year amortization schedule and matures in March 2008.

As part of the development and construction services agreements entered into between the Company and the Property LLCs, the Company guaranteed the maximum total amount for certain construction cost categories subject to aggregate limits. The Company’s remaining maximum exposure for the fourth Property LLC totals approximately $5,200. The Company does not currently expect to be required to fund any guarantees relating to this Property LLC. Additionally, under these agreements, the Company was subject to project completion requirements, as defined. At June 30, 2003, the Company had met its remaining completion date requirement and will not be subject to any additional costs.

18

Post Properties, Inc.
Reconciliation of Supplemental
Non-GAAP Financial Measures
(Dollars in thousands, except per share or unit data)
(Unaudited)

Table 1

Reconciliation of Same Store Net Operating Income (NOI) to Income (Loss) from Continuing Operations before Equity in Losses of Unconsolidated Entities, Gains on Property Sales and Minority Interest

(Dollars in thousands)

		Three months ended									Six months ended
		June 30,			June 30,			March 31			June 30,			June 30,
		2003			2002			2003			2003			2002
Total same store NOI		$	40,578		$	43,439		$	41,791		$	82,370		$	88,330
Property NOI from other operating segments			7,278			5,215			6,356			13,637			9,254
Consolidated property NOI			47,856			48,654			48,147			96,007			97,584
Add:
	Interest income		251			281			234			485			686
	Minority interest in consolidated property partnerships		348			460			334			682			943
Less:
	Depreciation		(22,476	)		(20,794	)		(22,728	)		(45,204	)		(40,696	)
	Interest		(17,396	)		(13,700	)		(16,561	)		(33,957	)		(26,844	)
	Amortization of deferred loan costs		(968	)		(569	)		(788	)		(1,756	)		(1,123	)
	General and administrative		(3,342	)		(3,720	)		(3,624	)		(6,967	)		(7,486	)
	Other expenses		—			(136	)		(567	)		(567	)		(136	)
	Severance charges		(1,795	)		—			(19,712	)		(21,506	)		—
	Proxy and related costs		(5,231	)		—			—			(5,231	)		—
	Asset impairment charge		—			—			(14,118	)		(14,118	)		—
Income (loss) from continuing operations before equity in losses of unconsolidated entities, gains on property sales and minority interest		$	(2,753	)	$	10,476		$	(29,383	)	$	(32,132	)	$	22,928

19

Table 2

Same Store Net Operating Income (NOI) Summary by Market

(Dollars in thousands)

			Three months ended
									2Q’03 vs			2Q’03 vs
			June 30,		June 30,		March 31,		2Q'02			1Q'03
			2003		2002		2003		% Change			% Change
Rental and other revenues
	Atlanta		$	37,544	$	39,317	$	38,040		(4.5	)%		(1.3	)%
	Dallas			13,902		14,302		13,824		(2.8	)%		0.6	%
	Tampa			4,342		4,565		4,308		(4.9	)%		0.8	%
	Other			8,753		8,761		8,773		(0.1	)%		(0.2	)%
		Total rental and other revenues	$	64,541	$	66,945	$	64,945		(3.6	)%		(0.6	)%
Property operating and maintenance expenses (exclusive of depreciation and amortization)
	Atlanta		$	13,442	$	13,273	$	12,716		1.3	%		5.7	%
	Dallas			5,674		5,318		5,627		6.7	%		0.8	%
	Tampa			1,712		1,757		1,681		(2.6	)%		1.8	%
	Other			3,135		3,158		3,130		(0.7	)%		0.2	%
		Total	$	23,963	$	23,506	$	23,154		1.9	%		3.5	%
Net operating income
	Atlanta		$	24,102	$	26,044	$	25,324		(7.5	)%		(4.8	)%
	Dallas			8,228		8,984		8,197		(8.4	)%		0.4	%
	Tampa			2,630		2,808		2,627		(6.3	)%		0.1	%
	Other			5,618		5,603		5,643		0.3	%		(0.4	)%
		Total same store NOI	$	40,578	$	43,439	$	41,791		(6.6	)%		(2.9	)%

			Six months ended
			June 30,
			2003		2002		% Change
Rental and other revenues
	Atlanta		$	75,585	$	79,478		(4.9	)%
	Dallas			27,726		28,746		(3.5	)%
	Tampa			8,650		9,252		(6.5	)%
	Other			17,525		17,574		(0.3	)%
		Total rental and other revenues	$	129,486	$	135,050		(4.1	)%
Property operating and maintenance expenses (exclusive of depreciation and amortization)
	Atlanta		$	26,157	$	25,677		1.9	%
	Dallas			11,301		11,333		(0.3	)%
	Tampa			3,392		3,479		(2.5	)%
	Other			6,266		6,231		0.6	%
		Total	$	47,116	$	46,720		0.8	%
Net operating income
	Atlanta		$	49,428	$	53,801		(8.1	)%
	Dallas			16,425		17,413		(5.7	)%
	Tampa			5,258		5,773		(8.9	)%
	Other			11,259		11,343		(0.7	)%
		Total same store NOI	$	82,370	$	88,330		(6.7	)%

20

Table 3

Reconciliation of Segment Cash Flow Data to Statements of Cash Flows

(Dollars in thousands)

	Three months ended				Six months ended
	June 30,				June 30,
	2003		2002		2003		2002
Recurring capital expenditures by operating segment
Same store	$	2,388	$	2,564	$	3,696	$	4,014
Partially stabilized		77		18		123		21
Construction and lease-up		17		16		26		21
Other segments		42		254		141		675
Total recurring capital expenditures per statements of cash flows	$	2,524	$	2,852	$	3,986	$	4,731
Non-recurring capital expenditures by operating segment
Same store	$	972	$	596	$	1,571		1,074
Partially stabilized		1		5		41		8
Construction and lease-up		3		7		7		9
Other segments		242		109		557		173
Total non-recurring capital expenditures per statements of cash flows	$	1,218	$	717	$	2,176	$	1,264

Table 4

Computation of Interest and Fixed Charge Coverage Ratios

(Dollars in thousands)

	Six months ended
	June 30,
	2003			2002
Income (loss) from continuing operations	$	(23,495	)	$	29,299
Minority interest of common unitholders		(3,729	)		3,261
Minority interest of preferred unitholders		2,800			2,800
Gain on property sales		—			(13,275	)
Gains on property sales – unconsolidated entities		(8,395	)		—
Asset impairment charges		14,118			—
Depreciation expense		45,204			40,696
Depreciation (company share) of assets held in unconsolidated entities		909			398
Interest expense		33,957			26,844
Interest expense (company share) of assets held in unconsolidated entities		797			292
Amortization of deferred financing costs		1,756			1,123
Severance charges		21,506			—
Proxy and related costs		5,231			—
Income available for debt service (A)	$	90,659		$	91,438
Interest expense	$	33,957		$	26,844
Interest expense (company share) of assets held in unconsolidated entities		797			292
Interest expense for purposes of computation (B)		34,754			27,136
Dividends and distributions to preferred shareholders and unitholders		8,525			8,525
Fixed charges for purposes of computation (C)	$	43,279		$	35,661
Interest coverage ratio (A÷B)		2.6			3.4
Fixed charge coverage ratio (A÷C)		2.1			2.6

21

Table 5

Computation of Debt Ratios

(Dollars in thousands)

	As of			As of
	June 30, 2003			June 30, 2002
Total real estate assets per balance sheet	$	2,264,562		$	2,428,637
Plus:
Accumulated depreciation per balance sheet		470,307			399,386
Accumulated depreciation on assets held for sale		—			10,802
Total undepreciated real estate assets (A)		2,734,869			2,838,825
Less:
Advances to unconsolidated joint ventures equal to joint venture partner’s share of joint venture construction debt		(54,051	)		(88,317	)
Total undepreciated real estate assets (adjusted for joint venture partner’s share of debt) (B)	$	2,680,818		$	2,750,508
Total debt per balance sheet (C)	$	1,259,926		$	1,338,317
Less:
Joint venture partner’s share of joint venture construction debt		(54,051	)		(88,317	)
Total debt adjusted for joint venture partner’s share (D)	$	1,205,875		$	1,250,000
Total debt as a % of undepreciated real estate assets (C÷A)		46.1	%		47.1	%
Total debt as a % of undepreciated real estate assets (adjusted for joint venture partner’s share of debt) (D÷B)		45.0	%		45.4	%

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EX-99.1

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EX-99.2

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