CLEARWATER, Fla., Aug. 8 /PRNewswire-FirstCall/ -- American Land
Lease, Inc. (NYSE:ANL) today released results for second quarter
2005. Summary Financial Results Second Quarter * Diluted Earnings
Per Common Share ("Diluted EPS") were $0.27 for the three-month
period ended June 30, 2005, as compared to $0.29 from the same
period one year ago, a decrease of 6.9% on a per common share
basis. * Funds from Operations attributable to common stockholders
("FFO"; a non-GAAP financial measure) were $3.3 million, or $0.38
per diluted common share, for the quarter compared to $3.1 million,
or $0.38 per diluted common share from the same period one year
ago, remaining equal on a per share basis. * Diluted EPS and FFO
for 2005 as compared to 2004 were negatively affected by higher
inventory levels, lower gross margins realized from home sales in
the quarter, and an increase in selling and marketing costs offset
by higher property operating margins and higher unit volume of
closings. * Unit volume in home sales was 110 new home closings,
including 94 new homes sold on expansion home sites. This compares
with 77 new home closings in first quarter 2005 and 103 in second
quarter 2004. * Contracts written for sale of new homes were 145 in
the quarter as compared to 144 in second quarter 2004 and 91 in
first quarter 2005. * "Same Store" results provided a revenue
increase of 9.8%, an expense increase of 10.6% and an increase of
9.4% in Net Operating Income ("NOI"). * "Same Site" results
provided a revenue increase of 4.2%, an expense increase of 4.5%
and an increase of 4.0% in NOI. Supplemental Information The full
text of this press release is available upon request or through the
Company's web site at http://www.americanlandlease.com/.
Operational Results Second Quarter Property Operations Second
quarter revenue from property operations was $7,820,000 as compared
to $7,177,000 in the same period one year ago, a 9.0% increase.
Second quarter property operating expenses totaled $2,954,000 as
compared to $2,727,000 in the same period one year ago, an 8.3%
increase. The Company realized significant increases in rental
income driven by annual rental rate increases and the absorption of
new home sites through its home sales efforts. Property operating
expenses increased in the second quarter 2005 as compared to the
same period in the prior year driven primarily by increases in
labor and benefit costs and increases in repairs and maintenance
costs. The property operating margins before depreciation expense
increased from 62.0% in the prior year's first quarter to 62.2%.
Second Quarter "Same Store" Results Second quarter "same store"
results reflect the results of operations for properties and golf
courses owned for both the second quarter of 2005 and the prior
year periods. The same store properties account for 97% of the
property operating revenues for the second quarter of 2005. We
believe that same store information provides the ability to
understand the changes in profitability for properties owned during
both reporting periods that could not be obtained from a review of
the consolidated income statement in periods where properties are
acquired. A reconciliation of "same store" operating results
reported below to total property revenues and property expenses, as
determined under GAAP, can be found on page 13 of this press
release. The same store % change results are as follows: 2Q05
Revenue 9.8 % Expense 10.6 % Net Operating Income 9.4 % We derive
our increase in property revenue (i) from increases in rental rates
and other charges at our properties and (ii) through the
origination of leases on expansion home sites ("absorption"). "Same
site" results reflect the results of operations excluding those
sites leased subsequent to the beginning of the prior year period.
We believe that "same site" information provides the ability to
understand the changes in profitability without the growth related
to the newly leased sites. Our presentation of same site results is
a non-GAAP measure and should not be considered in isolation from
and is not intended to represent an alternative measure to
operating income or cash flow or any other measure of performance
as determined in accordance with GAAP. We calculate absorption
revenues as the rental revenue recognized on sites leased
subsequent to the beginning of the prior year period. We estimate
that 50% of the increase in expenses over the prior year period is
attributable to newly leased sites in our calculation of same site
results. We believe that the allocation of expenses between same
site and absorption is an appropriate allocation between fixed and
variable costs of operating our properties. Our same site,
absorption, golf operations and total same store results for second
quarter are as follows: Same Site Rental Absorption Same Site Golf
Same Store Revenue 4.2 % 5.3 % 0.3 % 9.8 % Expense 4.5 % 4.5 % 1.6
% 10.6 % NOI 4.0 % 5.7 % (0.3)% 9.4 % A reconciliation of same site
and same store operating results used in the above calculations to
total property revenues and property expenses, as determined under
GAAP, for the three months ended June 30, 2005 and 2004 can be
found on page 13 of this press release. Second Quarter Home Sales
Operations Second quarter 2005 new home sales volume was 110
closings, a 6.8% increase from the 103 closings in the same period
in the prior year. Average selling price per home was $109,000 as
compared to $92,000 in the same period in the prior year, an 18.5%
increase. Brokerage profits were down 10.6% as compared with the
same period in the prior year. Selling gross margins, excluding
brokerage activities, decreased to 30.3% in the quarter as compared
to 33.3% in the same period in the prior year. This decrease was
attributable to product mix and increased cost of our product as
the supply of materials and labor has been restricted due to
statewide clean up activities following the 2004 hurricanes.
Selling costs as a percentage of sales revenue decreased from 25.3%
in the prior year's period to 21.3% in the second quarter of 2005,
reflecting the benefit of higher sales volumes. Total selling costs
increased as a result of additional marketing costs for newly
constructed subdivisions within existing communities, increased
commissions associated with increased volume of home sales, and
increased staff levels. The backlog of contracts for closing stood
at 139 home sales, a decrease of 50 contracts from the same period
in the prior year. In 2Q 2004, a new phase at Savanna Club had
opened - significantly increasing the number of contracts written.
The next phase at Savanna will open in the current quarter. The
year over year comparison in contracts, net of Savanna Club, was a
decrease of 11. This backlog excludes 15 lot reservations
originated for new homes in subdivisions under construction. The
company's Arizona sales operation generated 24 new home closings in
the quarter, up from 13 in 2Q04, and 38 in the first half of the
year as compared to 15 in the first half of 2004. The Company
generates revenue growth through new lease originations in its
existing portfolio. The home sales business provides the Company
with additional leased home sites that have a greater return on
investment than is currently available through the purchase of
occupied communities. Summary of home sales activity: Quarter ended
Quarter ended June 30, 2005 June 30, 2004 New home closings 110 103
New home contracts 145 144 Home resales 5 5 Brokered home sales 90
83 New home contract backlog 139 189 Casualty Event Several of the
Company's properties were impacted by the hurricanes that
challenged the state of Florida during 2004. At March 30, 2005, the
Company had filed additional claims with its insurer to recover
damages caused by the hurricanes. During the second quarter, 2005,
the Company received $158,000 in insurance proceeds related to
damages that occurred in 2004. The Company recognized recoveries of
previously expensed damages of $36,000, or $32,000 net of minority
interest in the Operating Partnership. The Company has filed
additional claims with its insurer to recover hurricane related
damages and will record additional casualty gain in the period when
any such insurance proceeds are received. Development Activity
Construction of the first phase at the Company's newly acquired
Sebastian Beach and Tennis Club ("SBTC") (f/k/a Crystal Bay) began
during the quarter. This community is currently projected to have
more than 500 home sites, with high value homes and a high level
amenity package. The Company estimates that land development of the
first subdivision will be completed in 2006, and new homes sales
closings will begin early in 2007. The Company acquired the land
for this community in February 2005 in order to meet customer
demand for homes in the US 1 Highway corridor in the
Melbourne/Sebastian area which enjoys close proximity to the
Atlantic Ocean and one of the state's highest growth rates for home
sales. Significant other development activities continued
throughout the quarter: * Construction of the next phase at the
Company's Blue Heron community was completed providing 65 home
sites. Expansion work was begun on the community clubhouse. *
Construction of the final phase of the Savanna Club reached
substantial completion and provided an additional 192 home sites. *
Planning and permitting for subdivisions at three additional
communities continued during the quarter. Management Comments Year
over year flat FFO per share is primarily attributable to the
issuance of preferred stock and the increased cycle time in the
home sales business. * A portion of proceeds from the Company's
March Preferred Stock offering was used to purchase land for a new
development. The remaining proceeds were used to pay down the
company's line of credit pending future use to fund redevelopment
activities. The dividend rate on the Preferred Stock is higher than
the interest rate on the on the line of credit and this increased
expense, combined with higher interest rates on variable rate
loans, had a negative impact on FFO. * Cycle time -- the time it
takes to complete a home after its delivery to make it ready for
occupancy and purchase by the customer -- increased significantly
in the past nine months. This was due, in part, to increased
statewide demand for building trades to clean up damages caused by
the 2004 hurricanes and, in part, to the increase in customized
options chosen by customers. The extended cycle time increased
inventory levels, in turn increasing carrying costs. This, together
with increased use of rent concessions as a sales incentive had a
negative impact on FFO. * We have recently learned that some
companies selling homeowner's insurance have limited the number of
new customers in Florida that they are willing to add during the
Florida "hurricane season". If some potential home buyers are
unable to purchase homeowner's insurance during this period,
closings may be delayed resulting in lower third quarter revenues
from our home sales business in Florida. Currently, we estimate
that this could impact up to 20% of projected third quarter
closings -- adversely impacting sales at Riverside Club and Savanna
Club, where the higher home prices has resulted in a smaller pool
of insurers. Sales operations at both locations are significant
contributors to the Company's home sales business' profitability,
and the inability to close the homes currently scheduled for
closing would disproportionately affect third quarter results,
including FFO, Adjusted Funds From Operations ("AFFO"; a non-GAAP
financial measure) and net income. Management believes that homes
not closed in third quarter will be closed in fourth quarter but
there can be no assurance that this problem will not persist. Bob
Blatz, President of American Land Lease, commented, "We are less
than satisfied with our year over year FFO growth. While the
company saw growth in net operating income from property operations
and in home sales revenues, rent concessions used to draw new home
buyers immediately following last fall's hurricanes and increased
financing costs from higher inventory levels diluted the impact of
these positive results. As a result, while our core business
remains sound, work on home sales and home product cycle time are
required to reestablish FFO growth. We are evaluating our sales
training and our home construction process to upgrade our staff and
systems to a higher level of productivity and profitability." Mr.
Blatz added, "Management is focused on expense control throughout
the second half of the year and into 2006. We have work to do to
achieve our benchmark of limiting expense growth, net of
reimbursable expenses, to the increase in the Consumer Price Index
("CPI"). Within our home sales business, we are pleased that the
average home selling price was above $100,000 for the quarter, even
though lower than in the first quarter. This quarter saw increasing
sales activity in Arizona and at certain Florida locations that
have lower sales prices. We welcome the increased sales at these
locations even though their sales have brought us a slightly lower
average sales price for this quarter. While our new contract
generation is flat, our contract cancellations are also down, and
we believe that the opening of the next (and last) phase at Savanna
Club will bring a significant increase in contract activity during
the third quarter. As we look to the third quarter, we are focused
on the availability to our Florida customers of reasonably priced
homeowners' insurance. The cost of homeowner's insurance to our
customers, and, in some instances, the availability of homeowner's
insurance at any price, are risks to our earnings projections for
the third quarter." Dividend Declaration On July 27, 2005, the
Board of Directors declared a regular second quarter common stock
dividend of $0.25 per share payable on August 26, 2005, to
stockholders of record on August 12, 2005. On July 27, 2005, the
Board of Directors declared a cash dividend of $0.4844 per share of
Class A Preferred Stock for the quarter ended June 30, 2005,
payable on August 31, 2005 to shareholders of record on August 12,
2005. The Board of Directors reviews the dividend policy quarterly.
The Company's dividend is set quarterly and is subject to change or
elimination at any time. The Company's primary financial objective
is to maximize long term, risk adjusted returns on investment for
common shareholders. While the dividend policy is considered within
the context of this objective, maintenance of past dividend levels
is not a primary investment objective of the Company and is subject
to numerous factors including the Company's profitability, capital
expenditure plans, obligations related to principal payments and
capitalized interest, and the availability of debt and equity
capital at terms deemed attractive by the Company to finance these
expenditures. The Company's net operating loss may be used to
offset all or a portion of its real estate investment trust
("REIT") taxable income, which may allow the Company to reduce or
eliminate its dividends and still maintain its REIT status. Outlook
for 2005 The table below summarizes the Company's projected
financial outlook for 2005 as of the date of this release and is
based on the estimates and assumptions disclosed in this and
previous press releases: Full Year 2005 Projected FFO $1.45 to
$1.75 AFFO $1.32 to $1.61 Diluted EPS $1.06 to $1.35 Same Store
Sales Revenue Growth 5.0% to 9.0% Expense Growth 5.5% to 8.0% NOI
Growth 6.0% to 9.5% Home Sales Operating Income $2,800,000 to
$4,600,000 General and Administrative Expenses $2,500,000 to
$3,200,000 Other Income $30,000 to $50,000 Preferred Stock
Dividends $1,775,000 Capital Replacements (per site) $145 to $165
Depreciation $3,200,000 to $3,700,000 Changes to annual guidance
are: * Other Income has been lowered from "$50,000 to $150,000" to
"$30,000 to $50,000." Two loans made to officers to purchase Common
Stock were repaid in full, eliminating the related interest income
earned by the Company. * Capital Replacements have been raised from
"$125 to $145" to "$145 to $165" to reflect additional investments
in community infrastructure and amenities. * All other guidance
remains consistent with previously announced projections. A portion
of the Company's earnings is from the sale of new homes on
expansion home sites in its developing communities. The earnings
from new home sales are subject to greater volatility than are the
earnings from rental property activities. The Company's earnings
estimates would be impacted positively by increases in the unit
volume of new home sales or increases in the gross margins from new
home sales. Conversely, decreases in the unit volume of new home
sales or decreases in the gross margins from new home sales would
negatively impact the Company's earnings estimates. Home sales
volume is dependent upon a number of factors, including consumer
confidence, consumer access to sources of financing for home
purchases, the sale of customers' current homes and the supply of
homeowner's insurance. The Company's projected results for 2005
include a reduction in corporate governance costs based upon
current estimates of the cost of compliance with Sarbanes Oxley and
other recent increases in regulation. The Company's earnings
estimates would be adversely impacted by further regulations and
laws applicable to public companies and financial reporting.
Non-employee director compensation is paid in stock and all stock
based compensation is expensed within the 2005 projections
including the estimated expense for performance based stock. The
financial and operating projections provided in this release are
the result of management's consideration of past operating
performance, current and anticipated market conditions and other
factors that management considers relevant from its past
experience. However, no assurance can be provided as to the
achievement of these projections and actual results may vary,
perhaps materially. American Land Lease, Inc. is a REIT that holds
interests in 29 manufactured home communities with 7,087
operational home sites, 1,125 developed expansion sites, 1,315
undeveloped expansion sites and 129 recreational vehicle sites as
of June 30, 2005. Some of the statements in this press release, as
well as oral statements made by the Company's officials to analysts
and stockholders in the course of presentations about the Company
and conference calls following quarterly earnings releases,
constitute "forward looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements
may include projections of the Company's cash flow, dividends and
anticipated returns on real estate investments. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such
factors include, but not limited to: general economic and business
conditions; supply of homeowners' insurance; interest rate changes,
financing and refinancing risks; risks inherent in owning real
estate; future development rate of home sites; competition; the
availability of real estate assets at prices which meet the
Company's investment criteria; the Company's ability to reduce
expense levels, implement rent increases, use leverage and other
risks set forth in the Company's Securities and Exchange Commission
filings. We assume no obligation to update or revise any
forward-looking statements or to update the reasons why actual
results could differ from those projected in any forward-looking
statements. Management will hold a teleconference call, Monday,
August 8, 2005 at 4:00 p.m. EDT for second quarter 2005 results.
You can participate in the conference call by dialing, toll-free,
(800) 374-5458 approximately five minutes before the conference
call is scheduled to begin and indicating that you wish to join the
American Land Lease second quarter 2005 results conference call. If
you are unable to participate at the scheduled time, this
information will be available for recorded playback from 5:30 p.m.
EDT, August 8, 2005 until midnight on August 15, 2005. To access
the replay, dial toll free, (800) 642-1687 and request information
from conference ID 7767826. Contact: Robert G. Blatz, President
(727) 726-8868 Shannon E. Smith, Chief Financial Officer (727)
726-8868 GLOSSARY GLOSSARY OF NON-GAAP FINANCIAL AND OPERATING
MEASUREMENTS Financial and operational measurements found in the
Earnings Release and Supplemental Information include certain
non-GAAP financial measurements standard used by American Land
Lease management. Measurements include Funds from Operations
("FFO"), which is an industry-accepted measurement as based on the
definition of the National Association of Real Estate Investment
Trusts (NAREIT). These terms are defined below and, where
appropriate, reconciled to the most comparable Generally Accepted
Accounting Principles (GAAP) measurements on the accompanying
supplement schedules. FUNDS FROM OPERATIONS ("FFO"): is a commonly
used term defined by NAREIT as net income (loss), computed in
accordance with GAAP, excluding gains and losses from extraordinary
items, dispositions of depreciable real estate property, disposals
of discontinued operations, net of related income taxes, plus real
estate related depreciation and amortization (excluding
amortization of financing costs), including depreciation for
unconsolidated real estate partnerships, joint ventures and
discontinued operations. American Land Lease calculates FFO based
on the NAREIT definition, as further adjusted for the minority
interest in the American Land Lease's operating partnership (Asset
Investors Operating Partnership). This supplemental measure
captures real estate performance by recognizing that real estate
generally appreciates over time or maintains residual value to a
much greater extent than do other depreciable assets such as
machinery, computers or other personal property. There can be no
assurance that American Land Lease's method for computing FFO is
comparable with that of other real estate investments trusts.
ADJUSTED FUNDS FROM OPERATIONS ("AFFO"): is FFO less both Capital
Replacement expenditures and Capital Enhancement expenditures.
Similar to FFO, AFFO captures real estate performance by
recognizing that real estate generally appreciates over time or
maintains residual value to a much greater extent than do other
depreciating assets such as machinery, computers or other personal
property, and AFFO also reflects that Capital Replacements are
necessary to maintain the associated real estate assets. SAME STORE
RESULTS: represent an operating measure that is used commonly to
describe properties that have been in the portfolio for a period of
time and therefore serve as a good basis upon which to review
comparative performance data. American Land Lease's definition of
Same Store communities are communities that are owned during both
the current and comparable prior year period. SAME SITE RESULTS:
represent an operating measure that is used to describe homesites
that have been in the portfolio for a period of time and therefore
serve as a good basis upon which to review comparative performance
data. American Land Lease's definition of Same Site is individual
homesites that were operational during both the current and
comparable prior year period. Absorbed incremental homesites are
not included in this calculation. OPERATIONAL HOME SITE: represents
those sites within our portfolio that are/or have been leased to a
tenant. Operational Home Sites and their relative occupancy provide
a measure of stabilized portfolio status. DEVELOPED HOME SITE:
represents those sites within our portfolio that have not been
occupied, but for which a majority of the infrastructure has been
completed. UNDEVELOPED HOME SITE: represent those sites within our
portfolio that have not been fully developed and require
construction of substantial lateral improvements such as roads.
CAPITAL REPLACEMENT: represents capitalized spending which
maintains a property. American Land Lease generally capitalizes
spending for items that cost more than $250 and have a useful life
of more than one year. A common example is street repaving. This
spending is better considered a recurring cost of preserving an
asset rather than as an additional investment. It is a cash proxy
for depreciation. CAPITAL ENHANCEMENT: represents capitalized
spending which adds a material feature increases overall community
value or revenue source. An example is the addition of a marina
facility to an existing community. USED HOME SALE: represents the
sale of a home previously owned by a third party and where American
Land Lease has acquired title through an eviction proceeding or
through purchase from a third party. AMERICAN LAND LEASE INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) As of June
30, March 31, December 31, September 30, June 30, 2005 2005 2004
2004 2004 (unaudited)(unaudited) (unaudited) (unaudited) ASSETS
Real Estate $232,035 $227,074 $222,311 $217,310 $215,155 Less
accumulated depreciation (24,358) (23,574) (22,803) (22,116)
(21,474) Real estate under development 70,841 67,966 49,360 47,662
44,636 Total Real Estate 278,518 271,466 248,868 242,856 238,317
Cash and cash equivalents 1,313 870 820 987 1,207 Inventory 19,478
19,721 16,788 14,987 13,073 Other Assets 9,494 8,856 9,480 10,425
9,729 Assets held for sale - - - - 313 Total Assets $308,803
$300,913 $275,956 $269,255 $262,639 LIABILITIES AND EQUITY
Liabilities Secured long- term notes payable $125,712 $126,529
$127,338 $128,130 $119,876 Secured short-term financing 30,123
25,836 24,644 18,622 20,142 Accounts payable and accrued
liabilities 10,237 8,714 9,795 9,523 10,982 Liabilities related to
assets held for sale - - - 8 6 Total Liabilities $166,072 $161,079
$161,777 $156,283 $151,006 Minority Interest in Operating
Partnership 15,312 15,087 14,746 14,552 14,497 STOCKHOLDERS' EQUITY
Preferred Stock, par value $.01 per share; 1,000 shares authorized,
1,000 and 0 shares issued and outstanding, respectively 25,000
25,000 - - - Common Stock, par value $.01 per share; 12,000 shares
authorized 93 92 91 91 90 Additional paid-in capital 288,064
287,814 286,649 286,611 285,517 Notes receivable from officers re
common stock purchases - (437) (748) (766) (775) Deferred
compensation re restricted stock (2,258) (3,941) (2,250) (2,472)
(2,719) Dividends in excess of accumulated earnings (156,868)
(157,169) (157,697) (158,432) (158,365) Treasury stock at cost
(26,612) (26,612) (26,612) (26,612) (26,612) Total Stockholders
Equity 127,419 124,747 99,433 98,420 97,136 Total Liabilities and
Stockholders' Equity $308,803 $300,913 $275,956 $269,255 $262,639
AMERICAN LAND LEASE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF INCOME (in thousands, except per share data) (unaudited) Three
Months Ended June March December September 30, 2005 31, 2005 31,
2004 30, 2004 RENTAL PROPERTY OPERATIONS Rental and other property
revenues 7,626 7,637 7,188 7,146 Golf course operating revenues 194
399 225 114 Total property operating revenues 7,820 8,036 7,413
7,260 Property operating expenses (2,651) (2,592) (2,790) (2,463)
Recoveries of casualty expenses related to hurricanes 36 140 - -
Golf course operating expenses (339) (327) (329) (283) Total
property operating expenses (2,954) (2,779) (3,119) (2,746)
Depreciation (858) (841) (766) (746) Income from rental property
operations 4,008 4,416 3,528 3,768 SALES OPERATIONS Home sales
revenue 12,171 8,821 12,871 8,495 Cost of home sales (8,487)
(6,014) (8,665) (5,843) Gross profit on home sales 3,684 2,807
4,206 2,652 Commissions earned on brokered sales 240 163 124 115
Commissions paid on brokered sales (138) (87) (69) (64) Gross
profit on brokered sales 102 76 55 51 Selling and marketing
expenses (2,596) (2,285) (2,616) (2,236) Income (loss) from sales
operations 1,190 598 1,645 467 General and administrative expenses
(864) (429) (1,221) (959) Interest and other income 8 12 16 51
Casualty gain - 237 - - Gain (loss) on sale of real estate - - 438
- Interest expense (1,436) (1,533) (1,555) (1,426) Income before
minority interest in Operating Partnership 2,906 3,301 2,851 1,901
Minority interest in Operating Partnership (340) (398) (342) (223)
Income from continuing operations 2,566 2,903 2,509 1,678
DISCONTINUED OPERATIONS (Loss) income from discontinued operations
- - - 26 Net Income 2,566 2,903 2,509 1,704 Cumulative preferred
stock dividends 484 194 - - NET INCOME ATTRIBUTABLE TO COMMON
STOCKHOLDERS $2,082 $2,709 $2,509 $1,704 Earnings per common share
- basic: Income from continuing operations (net of cumulative
unpaid preferred dividends $ 0.29 $ 0.38 $ 0.35 $ 0.24 Net income
attributable to common stockholders $ 0.29 $ 0.38 $ 0.35 $ 0.24
Earnings per common share - diluted: Income from continuing
operations $ 0.27 $ 0.36 $ 0.34 $ 0.23 Net income attributable to
common stockholders $ 0.27 $ 0.36 $ 0.34 $ 0.23 Weighted average
common shares outstanding 7,256 7,122 7,089 7,050 Weighted average
common shares and common share equivalents outstanding 7,598 7,548
7,402 7,297 Common dividends paid per share $ 0.25 $ 0.25 $ 0.25 $
0.25 AMERICAN LAND LEASE INC. AND SUBSIDIARIES DEBT ANALYSIS (in
thousands) (unaudited) As of June March December September June 30,
2005 31, 2005 31, 2004 30, 2004 30, 2004 DEBT OUTSTANDING Mortgage
Loans Payable - Fixed $100,084 $100,901 $101,710 $102,502 $93,377
Mortgage Loans Payable - Floating 25,628 25,628 25,628 25,628
26,499 Floor Plan Facility 18,929 20,461 17,679 12,907 10,762 Line
of Credit 11,194 5,375 6,965 5,715 9,380 Total Assets 155,835
152,365 151,982 146,752 140,018 % FIXED FLOATING Fixed 64.2% 66.2%
66.9% 69.8% 66.7% Floating 35.8% 33.8% 33.1% 30.2% 33.3% Total
100.0% 100.0% 100.0% 100.0% 100.0% AVERAGE INTEREST RATES Mortgage
Loans Payable - Fixed 7.0% 7.0% 7.0% 7.0% 7.1% Mortgage Loans
Payable - Floating 5.9% 4.9% 4.7% 4.7% 4.9% Floor Plan Facility
7.7% 7.3% 6.8% 5.9% 6.5% Line of Credit 4.5% 4.6% 4.6% 3.5% 3.2%
Total Weighted Average 6.7% 6.6% 6.5% 6.4% 6.4% DEBT RATIOS
Debt/Total Market Cap(1) 43.1% 40.9% 44.6% 47.4% 47.5% Debt/Gross
Assets 50.5% 50.7% 55.1% 54.5% 53.3% December December December
December December MATURITIES 31, 2005 31, 2006 31, 2007 31, 2008
31, 2009 Mortgage Loan Maturities - 2,459 3,552 3,809 4,042 4,291
Scheduled Mortgage Loans Maturities - Balloon - - 13,278 - 2,069
Floor Plan Facility(2) - - - - - Total $ 2,459 $ 3,552 $17,087 $
4,042 $ 6,360 (1) Computed based upon closing price as reported on
NYSE as of the period ended. (2) Discretionary, non-committed
facility whose individual advances mature at different dates
between 360 and 540 days from advance date. FFO/AFFO and Payout
Ratios AMERICAN LAND LEASE INC. AND SUBSIDIARIES RECONCILIATION OF
NET INCOME TO FFO AND AFFO (Amounts in thousands, except per
share/OP unit amounts) (Unaudited) Three Months Ended June 30, 2005
2004 Net Income $ 2,082 $ 2,087 Adjustments Cumulative unpaid
preferred stock dividends 484 - Minority interest in operating
partnership 340 283 Casualty gain Real estate depreciation 858 737
Discontinued Operations Real estate depreciation - 4 Minority
interest in operating partnership attributed to discontinued
operations - 3 Funds From Operations (FFO) 3,764 3,114 Cumulative
unpaid preferred stock dividends (484) - Funds From Operations
attributable to common Stockholders 3,280 3,114 Capital
Replacements (300) (203) Adjusted Funds from Operations (AFFO) $
2,980 $ 2,911 Weighted Average Common Shares/OP Units Outstanding $
8,578 $ 8,190 Per Common Share and OP Unit: FFO: $ 0.38 $ 0.38
AFFO: $ 0.35 $ 0.36 Payout Ratio Per Common Share and OP Unit:
Gross Distribution Payout FFO: 65.8% 65.8% AFFO: 71.4% 69.4%
AMERICAN LAND LEASE INC. AND SUBSIDIARIES RECONCILIATION OF SAME
SITE AND SAME STORE OPERATING RESULTS FOR THE QUARTER ENDED JUNE
30, 2005 (in thousands) (unaudited) Three Months Three Months
Contribution Ended Ended to Same Store June 30, June 30, Change %
Change % Change(1) 2005 2004 Same site rental revenues $6,903
$6,614 $ 289 4.4% 4.2% Absorption rental revenues 465 98 367 374.5%
5.3% Same site golf revenues 194 176 18 10.2% 0.3% Same store
revenues 7,562 6,888 674 9.8% 9.8% Re-development property revenues
257 282 (25) -8.9% Other Income 1 7 (6) -85.7% Total property
revenues 7,820 7,177 $643 9.0% Same site rental expenses $2,050
$1,948 $102 5.2% 4.5% Absorption rental expenses 102 - 102 100.0%
4.5% Same site golf expenses 339 305 34 11.1% 1.6% Same store
expenses 2,491 2,253 238 10.6% 10.6% Re-development property
expenses 85 84 1 1.2% Recoveries of casualty expenses- hurricanes
(36) - (36) -100.0% Expenses related to offsite management(2) 414
390 24 6.2% Total property operating expenses D $2,954 $2,727 $227
8.3% Same Store net operating income A-B $5,071 $4,635 $436 9.4%
Total net operating income C-D $4,886 $4,450 $416 9.3% (1)
Contribution to Same Store % change is computed as the change in
the individual component of same store revenue or expense divided
by the total applicable same store base (revenue or expense) for
the 2004 period. For example, same site rental revenues of $289 as
compared to the total same store revenues in 2004 of $6,888 is a
4.2% increase ($289/$6,888=4.2%). AMERICAN LAND LEASE, INC. AND
SUBSIDIARIES NUMBER OF HOMESITES AND AVERAGE RENT BY COMMUNITY AS
OF JUNE 30, 2005 Undevel- Devel- Operational Average oped oped Home
Sites Monthly RV Home Home Community Location (1) Occupancy Rent
Sites Sites Sites Owned Communities Blue Heron Punda Gorda Pines FL
312 98% $366 -- 65 14 Brentwood Estates Hudson, FL 124 98% 250 -- 0
67 Crystal Bay Micco, FL -- 0% -- -- 533 -- Serendipity Ft. Myers,
FL 338 95% 331 -- -- -- Stonebrook Homosassa, FL 171 100% 280 -- --
40 Sunlake Grand Estates Island, FL 332 100% 339 -- -- 63 Sun
Valley Tarpon Springs, FL 261 98% 369 -- -- -- Caribbean Orlando,
Cove FL 272 65% 390 -- -- 13 Forest Homosassa, View FL 257 100% 294
-- -- 47 Gulfstream Orlando, Harbor FL 382 97% 389 -- 50 --
Gulfstream Orlando, Harbor II FL 306 99% 385 -- 37 1 Lakeshore
Villas Tampa, FL 281 100% 401 -- -- -- Park Pinellas Royale Park,
FL 288 94% 415 -- -- 21 Pleasant Riverview, Living FL 245 96% 333
-- -- -- Riverside GCC Ruskin, FL 377 100% 531 -- 420 140 Royal
Palm Haines Village City, FL 266 95% 357 -- 0 120 Cypress Lakeland,
Greens FL 168 100% 241 -- -- 90 Savanna Port St Club Lucie, FL 820
100% 284 -- -- 244 Woodlands Groveland, FL 140 99% 263 -- -- 152
Subtotal- Florida 5,340 1,105 1,012 Blue Star Apache Junction AZ 22
73% 323 129 -- -- Brentwood West Mesa, AZ 350 92% 433 -- -- -- Casa
Encanta Mesa, AZ -- 0% -- -- 210 -- Desert Harbor Apache Junction
AZ 153 98% 365 -- -- 53 Fiesta Village Mesa, AZ 172 76% 360 -- --
-- La Casa Apache Blanca Junction AZ 198 92% 372 -- -- -- Lost
Apache Dutchman Junction AZ 182 90% 307 -- -- 60 Rancho Apache
Mirage Junction AZ 312 90% 407 -- -- -- Sun Valley Apache Junction
AZ 268 93% 328 -- -- -- Subtotal- Arizona 1,657 210 113 Mullica Egg
Harbor Woods City, NJ 90 100% 480 -- -- -- Total Communities 29
7,087 95% $355 129 1,315 1,125 (1) We define operational home sites
as those sites within our portfolio that have been leased to a
tenant during our ownership of the community. Since our portfolio
contains a large inventory of developed home sites that have not
been occupied during our ownership, we have expressed occupancy as
the number of occupied sites as a percentage of operational home
sites. We believe this measure most accurately describes the
performance of an individual property relative to prior periods and
other properties without our portfolio. The occupancy of all
developed sites was 82.7% across the entire portfolio. Including
sites not yet developed, occupancy was at 70.9% at June 30, 2005.
Portfolio Summary Operational Developed Undeveloped RV Home sites
Home sites Home sites Sites Total As of December 31, 2004 6,931
1,101 960 129 9,121 Properties developed -- 192 (192) -- -- New
lots purchased -- 2 533 -- 535 Lots sold -- -- -- -- -- New leases
originated 156 (156) -- -- -- Adjust for site plan changes -- (14)
14 -- -- As of June 30, 2005 7,087(1) 1,125 1,315 129 9,656 (1) As
of June 30, 2005, 6,743 of these operational home sites were
occupied. Occupancy Roll Forward Occupied Operational Home sites
Home sites Occupancy As of December 31, 2004 6,617 6,931 95.5 % New
home sales 184 156 Used home sales 7 -- Used homes acquired (26) --
Lots Sold -- -- Homes constructed by others 6 -- Site plan changes
2 -- Homes removed from previously leased sites (47) -- As of June
30, 2005 6,743 7,087 95.1 % AMERICAN LAND LEASE, INC. AND
SUBSIDIARIES RETURN ON INVESTMENT FROM HOME SALES (unaudited) Three
Months Ended Three Months Ended June 30, 2005 June 30, 2004
Expansion sites leased during the year 94 94 Estimated first year
annualized profit on leases originated during the year A $340 $337
Costs, including development costs of sites leased $4,240 $4,153
Home sales income(loss) attributable to sites leased 1,054 785
Total costs incurred to originate ground leases B $3,186 $3,368
Estimated first year annualized return on investment for leases
originated during the year A/B 10.7 % 10.0 % For the three months
ended June 30, 2005 and 2004, we estimate our profit or loss
attributable to the sale of homes situated on expansion home sites
as follows (in thousands): Three Months Ended Three Months Ended
June 30, 2005 June 30, 2004 Reported income from sales operations
$1,190 $890 Used home sales and brokerage business income (136)
(105) Adjusted income for pro forma analysis $1,054 $785 The
reconciliation of our estimated first year return on investment in
expansion home sites, a non-GAAP financial measure, to our return
on investment in operational home sites in accordance with GAAP is
shown below (in thousands): Total Portfolio for Year Ended December
31, 2004 Property income before depreciation(1) A $ 18 Total
investment in operating home sites(1) B $221 Return on investment
from earning home sites(1) A/B 8.1% AMERICAN LAND LEASE INC. AND
SUBSIDIARIES KEY HOME SALES STATISTICS March 31, June 30, September
30, December 31, 2004 2004 2004 2004 New home contracts 148 144 69
65 New home closings 91 103 77 121 Home resales 12 5 3 3 Brokered
home sales 79 83 48 55 New home contract backlog 161 189 175 88
Average Selling Price $100,000 $92,000 $108,000 $105,000 Average
Gross Margin Percentage 33.2% 33.7% 33.1% 32.7% March 31, June 30,
Qtr over Qtr Qtr over Qtr 2005 2005 Increase/ Decrease % Change New
home contracts 91 145 54 59.3% New home closings 77 110 33 42.9%
Home resales 2 5 3 150.0% Brokered home sales 61 90 29 47.5% New
home contract backlog 105 139 34 32.4% Average Selling Price
$112,000 $109,000 ($3,000) -2.7% Average Gross Margin Percentage
31.8% 30.3% DATASOURCE: American Land Lease, Inc. CONTACT: Robert
G. Blatz, President, +1-727-726-8868, or Shannon E. Smith, Chief
Financial Officer, +1-727-726-8868, both of American Land Lease,
Inc. Web site: http://www.americanlandlease.com/
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