American Land Lease, Inc. (NYSE: ANL) today released first quarter
2007 results. Summary Financial Results First Quarter Diluted
Earnings Per Share (�Diluted EPS�) were $0.16 for the three-month
period ended March 31, 2007 compared to $0.36 for the same period
one-year ago, a decrease of 55.6% on a per share basis. Funds From
Operations (�FFO�; a non-GAAP financial measure defined on page 9
of this press release and reconciled to net income on page 13 of
this press release) were $2.7 million, or $0.30 per diluted common
share, for the quarter compared to $4.3 million or $0.48 per
diluted common share from the same period one year ago, a decrease
of 37.5% on a per share basis. Home sales volume was $7,665,000
down by 43.2% from the same period one year ago, with 55 new home
closings, including 53 new homes sold on expansion home sites. This
compares with 104 new home closings in first quarter 2006. �Same
Store� results (a non-GAAP financial measure defined on page 9 of
this press release and reconciled on page 14 of this press release)
provided a revenue increase of 7.8%, an expense increase of 4.0%
and an increase of 9.7% in Net Operating Income (�NOI�). �Same
Site� results (a non-GAAP financial measure defined on page 9 of
this press release and reconciled on page 14 of this press release)
provided a revenue increase of 4.5%, an expense increase of 2.6%
and an increase of 5.5% in NOI. Supplemental Information The full
text of this press release is available upon request or through the
Company�s web site at www.americanlandlease.com. Management
Comments Bob Blatz, President of American Land Lease, commented,
�We Continue to build NAV through excellent same site and same
store results. These results reflect the stability and strength of
our core residential land lease business. The continued expansion
of operating margins at the property level speaks to the strength
of our properties and personnel who serve our customers well. We
increased our focus on certain expense areas, especially utilities
and insurance, in this quarter which yielded improved results. We
continue to view our core business as owning and operating land
leases � and in that core business our performance was
outstanding.� �We view the new home sales business as an activity
that complements our residential land lease business by creating
new revenue generating home sites. New home sales activity
continues to decline as our buyers take longer to sell their
current home. We continue to put our emphasis on our lifestyle and
the quality of our communities and homes as we maintain pricing
within our communities. We did not achieve our objective for the
number of new contracts during the quarter as traffic was not as
strong as we anticipated, but saw an increase over fourth quarter
and a decrease in cancellations as compared to the year prior. So
while we are disappointed by unit sales, we are pleased we have
been able to continue to expand our land lease business, albeit at
a slower rate.� �Our core business, owning land lease communities,
is solid. Its returns grow with increased rents and with home
sales. The latter has been affected by the national decline in new
home sales. That said, we have solid locations, attractive homes, a
hardworking sales team, and we are still selling homes at good
prices. I remain upbeat and optimistic about the future of our
company.� Dividend Declaration On May 3, 2007, the Board of
Directors declared a first quarter common stock dividend of $0.25
per share payable on May 31, 2007, to stockholders of record on May
18, 2007. On May 3, 2007, the Board of Directors also declared a
cash dividend of $0.4844 per share of Class A Preferred Stock for
the quarter ended March 31, 2007, payable on May 31, 2007 to
shareholders of record on May 18, 2007. The Board of Directors
reviews the dividend policy quarterly. The Company's dividends are
set quarterly and are subject to change or elimination at any time.
The Company's primary financial objective is to maximize long term,
risk adjusted returns on investment for common shareholders. While
the dividend policy is considered within the context of this
objective, maintenance of past dividend levels is not a primary
investment objective of the Company and is subject to numerous
factors including the Company's profitability, capital expenditure
plans, obligations related to principal payments and capitalized
interest, and the availability of debt and equity capital at terms
deemed attractive by the Company to finance these expenditures.
Further, the Board has and will continue to consider the downturn
in new home sales in the context of its quarterly review and
dividend decision. The Company's net operating loss may be used to
offset all or a portion of its real estate investment trust
(�REIT�) taxable income, which may allow the Company to reduce or
eliminate its dividends and still maintain its REIT status.
Operational Results � First Quarter First Quarter Property
Operations First quarter revenue from property operations was
$9,721,000 as compared to $8,173,000 in the same period one year
ago, a 18.9% increase. First quarter property operating expenses
totaled $3,329,000 as compared to $2,916,000 in the same period one
year ago, a 14.2% increase. The Company realized significant
increases in rental income driven by annual rental rate increases,
the absorption of new home sites through its home sales efforts and
the acquisition of three additional communities in 2006. First
quarter property operating expenses increased primarily due to
increases in utility costs, tenant related legal costs, insurance
premiums and the aforementioned acquisition of three properties. In
a majority of the communities we operate, the Company has
previously implemented contractual terms under its leases to pass
on increases in property taxes through billings to homeowners for
their proportional share of increased taxes. In addition, in 24 of
the 31 communities we operate, the individual homeowner�s energy is
metered and changes in consumption are billed to the homeowner.
First quarter property operating margins before depreciation
expense increased to 63.9% from 62.0% in the prior year�s first
quarter. First Quarter �Same Store� Results First quarter �same
store� results reflect the results of operations for properties and
golf courses owned during the first quarters of both 2007 and 2006.
Same store properties accounted for 89.3% of property operating
revenues for first quarter 2007. Same store results is defined on
page 9 of this press release and reconciled on page 14 of this
press release. We believe that same store information provides an
opportunity to understand changes in profitability for properties
owned during both reporting periods that cannot be obtained from a
review of the consolidated income statement in periods where
properties are acquired. Our presentation of same store 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. The same store % change
results are as follows: 1Q07 Revenue 7.8% Expense 4.0% Net
Operating Income 9.7% Our same store revenues reflect
reimbursements from our tenants for certain expense items,
principally utilities and real estate taxes. When these revenues
are associated with the expenses we incur, the change in revenues
and expenses for the quarter are shown below. 1Q07 Revenues 7.8%
Less: Reimbursements (1.2%) Revenue growth net of reimbursements
6.6% � Expenses 4.0% Less: Reimbursements (2.6%) Expense growth net
of reimbursements 1.4% � Same Store NOI Growth 9.7% While we are
focused on controlling operating expenses, our leases also provide
some insulation from increased expenses. 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. Same site
results is defined on page 9 of this press release and reconciled
on page 14 of this press release. 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 and golf operations
contributions to total same store results for first quarter are as
follows: Same Site Rental Absorption Same Site Golf Same Store
Revenue 4.5% 3.8% (0.5)% 7.8% Expense 2.6% 2.6% (1.2)% 4.0% NOI
5.5% 4.4% (0.2)% 9.7% A reconciliation of same site and same store
operating results used in the above calculations to total property
revenues and property expenses, as determined under GAAP, for the
three months ended March 31, 2007 and 2006 can be found on page 14
of this earnings release. First Quarter Home Sales Operations First
quarter 2007 new home sales were $7,665,000, a 43.2% decrease from
the same period in the prior year. We had 55 closings, a 47.1%
decrease from the 104 closings in the same period in the prior
year. Average selling price per home was $135,000 as compared to
$128,000 in the same period in the prior year, a 5.5% increase.
Twelve communities reported average selling prices in excess of
$100,000 and one of the closings during the quarter exceeded
$200,000 in selling price. The decrease in closings compared to the
same period in the prior year was primarily due to decreased sales
at six of the Company�s expansion communities in Florida. Brokerage
profits were down 59.7% as compared with the same period in the
prior year. Selling gross margins, excluding brokerage activities,
decreased to 26.5% in the quarter as compared to 33.0% in the same
period in the prior year. This decrease was driven primarily by
decreased manufacturer rebates associated with lower purchasing
volumes and increases in costs of homes purchased partially offset
by increases attributable to increased selling prices. Selling
costs as a percentage of sales revenue increased from 20.7% in the
prior year�s period to 30.4% in the first quarter of 2007,
reflecting overhead being allocated against fewer sales, plus an
increase in the relative percentage of advertising and marketing
expenses to home sales as result of fewer sales. Total advertising
and marketing dollars were down 16.9% as compared to the same
period in the prior year. The backlog of contracts for closing
stood at 58, a decrease of 22.7% or 17 from the same period in the
prior year. The Company remains committed to generating revenue
growth through new lease originations in its existing portfolio.
The home sales business continues to provide the Company with
additional earning home sites that have a greater return on
investment than is currently available through the purchase of
occupied communities, though at a slower rate than in 2006. Summary
of home sales activity: Quarter ended March 31, 2007 Quarter ended
March 31, 2006 New home closings � Same Store 49� 104� New home
closings � Acquisitions 6� --� Total new home closings 55� 104� �
New home contracts � Same Store 84� 113� New home contracts �
Acquisitions 12� 4� Total new home contracts 96� 117� � Home
resales 3� --� � Brokered home sales 31� 62� � New home contract
backlog � Same Store 51� 71� New home contract backlog -
Acquisitions 7� 4� Total new home contract backlog 58� 75� Outlook
for 2007 The table below summarizes the Company�s projected
financial outlook for 2007 as of the date of this release and is
based on the estimates and assumptions disclosed in this and
previous press releases: � Full Year 2007 Projected FFO $1.40 to
$1.65 AFFO $1.24 to $1.45 Diluted EPS $0.85 to $1.05 � � Same Store
� Revenue Growth 6.5% to 8.5% Expense Growth 6.0% to 9.0% NOI
Growth 7.0% to 9.0% Contribution from Acquired Properties and
Redevelopment $2.4M to $2.8M Growth in Income from Property
Operations Before Depreciation Expense 9.5% to 12.5% � � Home Sales
Operating Income $1.5M to $4.0M Home Sales Net Contribution $0.65M
to $3.2M � � General and Administrative Expenses $4.2M to $4.7M � �
Capital Replacements (per site) $140 to $170 Depreciation $4.8M to
$5.5M A portion of the Company�s earnings from property operations
is a result of new leases originated on expansion sites within its
same store properties. The number of new leases impacts the rate at
which Net Operating Income grows. New leases are originated through
the sale of a new home on expansion home sites. The number of new
home sales, and in turn new leases on expansion sites, are subject
to volatility. In addition, the Company�s earnings from property
operations will be impacted by the renewal of property and casualty
insurance policies during 2007. 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 land
leases. The Company expects near term home closings at a rate
similar to first quarter of 2007. The Company's earnings estimates
would be impacted positively or negatively by changes in the unit
volume of new home sales or in the gross margins from new home
sales. Home sales volume and gross margins are dependent upon a
number of factors, including consumer confidence, the cost of
homeowners� insurance, and consumers� access to financing sources
for home purchases and the sale of their current homes. The
Company�s projected results are impacted by the amount of interest
capitalized on its development properties. The amount of interest
capitalized is dependent on the rate of completion of home sites,
the timing and amount of capital expenditures and continuing
development activities at each location. Changes in each of the
preceding factors, along with changes in applicable interest rate,
will result in either increases or decreases in the actual amount
of interest capitalized. Changes in the amount of interest
capitalized will increase or decrease the Company�s earnings as
compared to historical financial results. The Company's projected
results for 2007 include a reduction in regulatory compliance
costs. Non-employee director compensation continues to be paid in
stock and all stock based compensation is expensed within the 2007
projections. The Company's earnings estimates would be adversely
impacted by any increased cost of compliance with regulations and
laws applicable to public companies and financial reporting. The
financial and operating projections provided in this release are
the result of management's consideration of past operating
performance, current and anticipated market conditions and other
factors that management considers relevant from its past
experience. However, no assurance can be provided as to the
achievement of these projections and actual results will vary,
perhaps materially. Development Activity The Company ended the
quarter with an inventory of 1,140 home sites that are fully
developed. We sell new homes to be located on these home sites so
that they will become revenue generating. In addition, the company
has an inventory of 1,566 home sites that are partially developed
or undeveloped. All of these sites are fully entitled and zoned for
a land lease community. With the exception of Sebastian Beach and
Tennis Village and the Villages at Country Club, all are contiguous
and a part of a current ANL land lease community where there are
ongoing property operations and a proven customer base. Significant
development activity during the quarter included: At Sebastian
Beach and Tennis Village, construction and site work continued. As
reported in prior quarters, a new municipality was formed in July
of 2006 which impacts the largest part of this site. We are working
with the Town and County to accomplish the platting of the
community under this unique set of circumstances. Pre-sales and
marketing activities for the community have already begun at an off
site sales office opened in January 2006 and we expect to begin
home and Village Centre construction in the second half of 2007. At
the Villages at Country Club project in Mesa, Arizona, site work
neared completion for Phase I. We expect to begin home building and
homes sales activities in Q207 and look towards home closings in
late Q407. At Sun Lake, construction was completed for the
expansion and renovation of the community center complex. The grand
opening event was well attended and this substantial amenity
reopened for resident use during first quarter. American Land
Lease, Inc. is a REIT that held interests in 31 manufactured home
communities with 8,100 operational home sites, 1,140 developed
expansion sites, 1,566 undeveloped expansion sites and 129
recreational vehicle sites as of March 31, 2007. 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, results of operations, dividends and
anticipated returns on real estate investments. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Such
factors include, but are not limited to: general economic and
business conditions; interest rate changes, financing and
refinancing risks; risks inherent in owning real estate; future
development rate of home sites; competition; the availability of
real estate assets at prices which meet the Company�s investment
criteria; the Company�s ability to reduce expense levels, implement
rent increases, use leverage and other risks set forth in the
Company�s Securities and Exchange Commission filings. We assume no
obligation to update or revise any forward-looking statements or to
update the reasons why actual results could differ from those
projected in any forward-looking statements. Management will hold a
teleconference call, Tuesday, May 8, 2007 at 9:00 a.m. Eastern
Daylight Time to discuss first quarter 2007 results. You can
participate in the conference call by dialing, toll-free, (800)
374-5458 approximately five minutes before the conference call is
scheduled to begin and indicating that you wish to join the
American Land Lease first quarter 2007 results conference call. If
you are unable to participate at the scheduled time, this
information will be available for recorded playback from 12:30 p.m.
Eastern Daylight Time, May 8, 2007 until midnight on May 15, 2007.
To access the replay, dial toll free, (800) 642-1687 and request
information from conference ID 8314737. 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 used by American Land Lease management. Such
measurements include Funds from Operations (�FFO�), which is an
industry-accepted measurement based in part on the definition of
the National Association of Real Estate Investment Trusts (NAREIT)
and �same store� and same site� results. 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, dispositions 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 Capital Replacement 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 while also
reflecting that Capital Replacements are necessary to maintain the
associated real estate assets. SAME STORE RESULTS: represent an
operating measure that is used to compare the results of properties
that have been in the portfolio for both accounting periods being
compared. SAME SITE RESULTS: represent an operating measure that is
used to compare the results of home sites that have been in the
portfolio for both accounting periods being compared. Home sites
that are leased or �absorbed� during the accounting periods 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 the greater part of their infrastructure
has been completed. UNDEVELOPED HOME SITE: represent those sites
within our portfolio that have not been fully developed and that
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 revenue source or material feature that
increases overall community value. 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 the third party. AMERICAN LAND
LEASE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in
thousands, except per share data) � As of � As of March 31, 2007
December 31, 2006 September 30, 2006 June 30, 2006 March 31, 2006
(unaudited) (unaudited) (unaudited) (unaudited) � ASSETS Real
Estate $ 303,432� $ 301,392� $ 298,293� $ 264,947� $ 254,690� Less
accumulated depreciation (30,120) (29,068) (28,041) (27,836)
(26,132) Real estate under development 115,798� 110,682� 103,940�
95,195� 87,068� Total Real Estate 390,162� 383,006� 374,192�
332,306� 315,626� Cash and cash equivalents 293� 253� 311� 8,497�
8,384� Inventory 20,705� 22,827� 23,731� 23,588� 20,654� Other
assets 15,662� 15,969� 14,845� 14,488� 12,785� Assets Held for Sale
--� --� 3,874� 3,897� 3,890� � Total Assets $ 426,822� $ 422,055� $
416,953� $ 382,776� $ 361,339� � LIABILITIES AND EQUITY Liabilities
Secured long-term notes payable $ 234,826� $ 235,567� $ 203,428� $
199,746� $ 182,762� Secured short-term financing 25,012� 20,059�
43,783� 19,462� 16,742� Accounts payable and accrued liabilities
13,239� 13,216� 17,359� 12,036� 12,006� Liabilities related to
assets held for sale --� --� 2,261� 2,273� 2,304� � Total
Liabilities 273,077� 268,842� 266,831� 233,517� 213,814� � Minority
Interest in Operating Partnership 16,475� 16,502� 16,333� 16,245�
16,137� � STOCKHOLDERS� EQUITY Preferred Stock, par value $.01 per
share; 3,000 shares authorized, 1,000 shares issued and outstanding
� 25,000� 25,000� 25,000� 25,000� 25,000� Common Stock, par value
$.01 per share; 12,000 shares authorized 95� 94� 92� 92� 92�
Additional paid-in capital 292,757� 291,460� 289,223� 288,581�
287,206� Dividends in excess of accumulated earnings (153,970)
(153,231) (153,914) (154,047) (154,298) Treasury stock at cost
(26,612) (26,612) (26,612) (26,612) (26,612) � Total Stockholders
Equity 137,270� 136,711� 133,789� 133,014� 131,388� � Total
Liabilities and Stockholders� Equity $ 426,822� $ 422,055� $
416,953� $ 382,776� $ 361,339� AMERICAN LAND LEASE INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands,
except per share data) (unaudited) � Three Months Ended March 31,
2007 December 31, 2006 September 30, 2006 June 30, 2006 � RENTAL
PROPERTY OPERATIONS Rental and other property revenues $ 9,721� $
9,347� $ 9,121� $ 8,507� Golf course operating revenues 430� 249�
154� 213� Total property operating revenues 10,151� 9,596� 9,275�
8,720� � Property operating expenses (3,329) (3,193) (3,136)
(3,056) Golf course operating expenses (335) (313) (296) (373)
Total property operating expenses (3,664) (3,506) (3,432) (3,429) �
Depreciation (1,229) (1,199) (1,136) (1,032) � Income from rental
property operations 5,258� 4,891� 4,707� 4,259� � SALES OPERATIONS
Home sales revenue 7,665� 9,493� 12,197� 12,052� Cost of home sales
(5,633) (6,323) (8,244) (7,914) Gross profit on home sales 2,032�
3,170� 3,953� 4,138� � Commissions earned on brokered sales 75� 86�
45� 164� Commissions paid on brokered sales (44) (43) (27) (76)
Gross profit on brokered sales 31� 43� 18� 88� � Selling and
marketing expenses (2,328) (2,416) (2,582) (2,754) Income (loss)
from sales operations (265) 797� 1,389� 1,472� � General and
administrative expenses (964) (1,054) (1,055) (995) Interest and
other income 170� 115� 34� 91� Interest expense (2,243) (2,251)
(2,218) (1,832) � Income before minority interest in Operating
Partnership 1,956� 2,498� 2,857� 2,995� Minority interest in
Operating Partnership (221) (295) (330) (350) Income from
continuing operations 1,735� 2,203� 2,527� 2,645� DISCONTINUED
OPERATIONS Income (loss) from discontinued operations, net of
Minority Interest --� 923� 40� 51� Net Income 1,735� 3,126� 2,567�
2,696� Cumulative preferred stock dividends (484) (485) (485) (484)
Net Income Attributable to common shareholders $ 1,251� $ 2,641� $
2,082� $ 2,212� � Basic earnings from continuing operations (net of
cumulative unpaid preferred dividends) $ 0.16� $ 0.23� $ 0.27� $
0.29� Basic earnings (loss) from discontinued operations --� 0.12�
0.01� 0.01� Basic earnings per common share $ 0.16� $ 0.35� $ 0.28�
$ 0.30� � Diluted earnings from continuing operations $ 0.16� $
0.22� $ 0.26� $ 0.28� Diluted earnings (loss) from discontinued
operations --� 0.11� 0.01� 0.01� Diluted earnings per common share
$ 0.16� $ 0.33� $ 0.27� $ 0.29� � Weighted average common shares
outstanding 7,688� 7,553� 7,507� 7,465� Weighted average common
shares and common share equivalents outstanding 8,054� 7,953�
7,808� 7,836� � Common dividends paid per share $ 0.25� $ 0.25� $
0.25� $ 0.25� AMERICAN LAND LEASE INC. AND SUBSIDIARIES DEBT
ANALYSIS (in thousands) (unaudited) � � � � � As of � � � � March
31, 2007 December 31, 2006 September 30, 2006 June 30, 2006 March
31, 2006 � DEBT OUTSTANDING Mortgage Loans Payable � Fixed $
223,470� $ 224,211� $ 192,072� $ 188,975� $ 178,317� Mortgage Loans
Payable � Floating 11,356� 11,356� 11,356� 10,771� 4,445� Floor
Plan Facility 19,636� 14,754� 23,813� 19,462� 16,642� Acquisition
Bridge Loan --� --� 10,000� --� --� Line of Credit 5,376� 5,305�
9,970� --� 100� � Total Debts $ 259,838� $ 255,626� $ 247,211� $
219,208� $ 199,504� � % FIXED FLOATING Fixed 86.0% 87.7% 77.7%
86.2% 89.5% Floating 14.0% 12.3% 22.3% 13.8% 10.5% Total 100.00%
100.00% 100.00% 100.00% 100.00% � AVERAGE INTEREST RATES Mortgage
Loans Payable � Fixed 6.4% 6.4% 6.4% 6.4% 6.4% Mortgage Loans
Payable � Floating 7.1% 7.1% 6.9% 7.4% 7.2% Floor Plan Facility
8.5% 8.5% 8.6% 8.75% 8.2% Acquisition Bridge Loan --� --� 7.3% --�
--� Line of Credit 6.9% 7.3% 7.0% 7.35% 6.6% Total Weighted Average
6.6% 6.6% 6.7% 6.7% 6.6% � DEBT RATIOS Debt/Total Market Cap(1)
50.8% 49.4% 51.4% 47.6% 42.7% � Debt/Gross Assets 60.9% 60.6% 59.3%
57.3% 55.2% � � � � � � � � � � MATURITIES December 31, 2007
December 31, 2008 December 31, 2009 December 31, 2010 December 31,
2011 Mortgage Loan Scheduled Principal Payments 2,278� 3,175�
3,658� 3,904� 4,057� Mortgage Loans Balloon Maturities 2,665� -� -�
-� 21,740� Total $ 4,943� $ 3,175� $ 3,658� $ 3,904� $ 25,797� �
(1) Computed based upon closing price as reported on NYSE as of the
period ended. AMERICAN LAND LEASE INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO FFO/AFFO AND PAYOUT RATIOS (Amounts
in thousands, except per share/OP unit amounts) (Unaudited) � �
Three Months Ended March 31, 2007� � 2006� � Net Income $1,251�
$2,818� Adjustments Cumulative unpaid preferred stock dividends
484� 484� Minority interest in operating partnership 221� 435� Real
estate depreciation 1,229� 979� Discontinued operations: Real
estate depreciation, net of minority interests --� 18� Minority
interest in operating partnership attributed discontinued
operations --� 6� Funds From Operations (FFO) $3,185� $4,740�
Cumulative unpaid preferred stock dividends (484) (484) Funds From
Operations attributable to common Stockholders 2,701� 4,256�
Capital Replacements (342) (753) Adjusted Funds from Operations
(AFFO) $2,359� $3,503� � Weighted Average Common Shares/OP Units
Outstanding 9,047� 8,872� Per Common Share and OP Unit: FFO: $0.30�
$0.48� AFFO: $0.26� $0.39� � Payout Ratio Per Common Share and OP
Unit: Gross Distribution Payout FFO: 83.3% 52.1% AFFO: 96.2% 64.1%
AMERICAN LAND LEASE INC. AND SUBSIDIARIES RECONCILIATION OF SAME
SITE AND SAME STORE OPERATING RESULTS FOR THE QUARTER ENDED MARCH
31, 2007 AND MARCH 31, 2006 (in thousands) (unaudited) � Three
Months Ended March 31, 2007 Three Months Ended March 31, 2006 � �
Change � � % Change� Contribution to Same Store % Change(1) � Same
site rental revenues $ 8,279� $ 7,900� $ 379� 4.8% 4.5% Absorption
rental revenues 354� 34� 320� 941.2% 3.8% Same store golf revenues
430� 470� (40) (8.5)% (0.5)% Same store revenues A 9,063� 8,404�
659� 7.8% 7.8% Re-development and newly acquired property revenues
1,088� 239� 849� (355.2)% Total property revenues C $ 10,151� $
8,643� $ 1,508� 17.4% � Same site rental expenses $ 2,438� $ 2,368�
$ 70� 3.0% 2.6% Absorption rental expenses 70� -� 70� 100.0% 2.6%
Same store golf expenses 335� 365� (30) (8.2)% (1.2)% Same store
expenses B 2,843� 2,733� 110� 4.0% 4.0% Re-development and newly
acquired property expenses 348� 96� 252� 262.5% Expenses related to
offsite management2 473� 452� 21� 4.6% Total property operating
expenses D $ 3,664� $ 3,281� $ 383� 11.7% � Same store net
operating income A-B $ 6,220� $ 5,671� 549� 9.7% � Total net
operating income C-D $ 6,487� $ 5,362� $ 1,125� 21.0% � (1)
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 2006 period. For example, same site
rental revenues of $379 as compared to the total same store
revenues in 2006 of $8,404 is a 4.5% increase ($379/$8,404=4.5%). �
(2) Expenses related to offsite management reflect portfolio
property management costs not attributable to a specific property.
AMERICAN LAND LEASE, INC. AND SUBSIDIARIES NUMBER OF HOMESITES AND
AVERAGE RENT BY COMMUNITY AS OF MARCH 31, 2007 � � Community �
Location Operational Home Sites (1) � Occupancy Average Monthly
Rent RV Sites Undeveloped Home Sites Developed Home Sites Owned
Communities � � � � � � � Blue Heron Pines Punta Gorda, FL 343�
100% $351� --� --� 46� Brentwood Estates Hudson, FL 139� 99% 279�
--� --� 52� Sebastian Beach & Tennis Club Micco, FL --� 0% --�
--� 533� --� Serendipity Ft. Myers, FL 338� 96% 364� --� --� --�
Stonebrook Homosassa, FL 191� 100% 303� --� --� 11� Sunlake Estates
Grand Island, FL 356� 100% 360� --� --� 44� Sun Valley Tarpon
Springs, FL 261� 97% 406� --� --� --� Forest View Homosassa, FL
271� 100% 328� --� --� 33� Gulfstream Harbor Orlando, FL 382� 99%
422� --� 50� --� Gulfstream Harbor II Orlando, FL 306� 100% 417�
--� 37� 1� Gulfstream Harbor III Orlando, FL 164� 99% 393� --� --�
120� Lakeshore Villas Tampa, FL 281� 98% 437� --� --� --� Park
Place Sebastian, FL 368� 100% 330� --� --� 98� Park Royale Pinellas
Park, FL 296� 94% 441� --� --� 13� Pleasant Living Riverview, FL
245� 96% 364� --� --� --� Riverside GCC Ruskin, FL 452� 100% 529�
--� 311� 177� Royal Palm Village Haines City, FL 281� 97% 355� --�
--� 106� Cypress Greens Lakeland, FL 218� 100% 263� --� --� 40�
Savanna Club Port St Lucie, FL 983� 100% 299� --� --� 84� Woodlands
Groveland, FL 160� 99% 291� --� --� 132� � Subtotal�Florida 6,035�
� � � 931� 957� � � � � � � � � � � � � � � � � Blue Star Apache
Junction AZ 22� 55% 305� 129� --� --� Brentwood West Mesa, AZ 350�
94% 471� --� --� --� Casa Encanta Mesa, AZ --� 0% --� --� 375� --�
Desert Harbor Apache Junction AZ 199� 100% 379� --� --� 7� Fiesta
Village Mesa, AZ 172� 86% 386� --� --� --� La Casa Blanca Apache
Junction AZ 197� 99% 401� --� --� --� Lost Dutchman Apache Junction
AZ 201� 80% 317� --� --� 41� Rancho Mirage Apache Junction AZ 312�
95% 435� --� --� --� Reserve at Fox Creek Bull Head City, AZ 247�
100% 323� --� --� 67� Sun Valley Apache Junction AZ 268� 91% 348�
--� --� --� � Subtotal�Arizona 1,968� � � 129� 375� 115� � � � � �
� � � Foley Grove Foley, AL 97� 100% 291� --� 260� 68� � � � � � �
� � � � � � � � � � Total Communities 31� 8,100� 97% $371� 129�
1,566� 1,140� � (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 84.2% across the entire portfolio. Including sites not
yet developed, occupancy was at 73% at March 31, 2007. Portfolio
Summary � Operational Home sites Developed Home sites Undeveloped
Home sites RV Sites Total � As of January 1, 2007 8,044� 1,192�
1,566� 129� 10,931� � New lots purchased --� 4� --� --� 4� � New
leases originated 54(1) (54) --� --� --� � Adjust for site plan
changes 2� (2) --� � --� 158� � As of March 31, 2007 8,100(2)
1,140� 1,566� � 129� 10,935� � (1) During the quarter ended
December 31, 2006, a new lease was originated for a used home at
one community. The company inadvertently reported the home site as
non-operational. � (2) As of March 31, 2007, 7,890 of these
operational home sites were occupied. � Occupancy Roll Forward �
Occupied Home sites Operational Home sites Occupancy � As of
January 1, 2007 7,833� 8,044� 97.4% � New home sales 55� 53� � Used
home sales 3� 2� � Used homes acquired (2) --� � Homes constructed
by others 3(1) 1� � Homes removed from previously leased sites (2)
--� � As of March 31, 2007 7,890� 8,100� 97.4% � (1)At December 31,
2006, the occupancy at one community was under reported by 2
occupied lots, which is adjusted here. AMERICAN LAND LEASE, INC.
AND SUBSIDIARIES RETURN ON INVESTMENT FROM HOME SALES (unaudited) �
Three Months Ended March 31, 2007 Three Months Ended March 31, 2006
� Expansion sites leased during the period 53� 85� Estimated first
year annualized profit on leases originated during the period A
$174� $332� Costs, including development costs of sites leased
$3,284� $4,922� Home sales (loss) income attributable to sites
leased (381) 1,652� Total costs incurred to originate ground leases
B $3,665� $3,270� Estimated first year returns from the leases
originated on expansion home sites during the period A/B 4.7% 10.2%
For the three months ended March 31, 2007 and 2006, we estimate our
profit or loss attributable to the sale of homes situated on
expansion home sites as follows (in thousands): � Three Months
EndedMarch 31, 2007 Three Months EndedMarch 31, 2006 � Reported
(loss)/income from sales operations $ (294) $1,729� Brokerage
business income (31) (77) Used home sales (56) --� Adjusted income
for projection analysis $ (381) $1,652� The reconciliation of our
estimated first year return on investment in expansion home sites
to our return on investment in operational home sites for the year
ended December 31, 2006 in accordance with GAAP is shown below (in
thousands): � Total Portfolio for Year Ended December 31, 2006 �
Property income before depreciation A $ 22,847� � Total investment
in operating home sites B $ 294,394� � Return on investment from
earning home sites(1) A/B 7.8% (1) Our return on investment in
operational sites reflects our income from and investment in sites
that were leased for the first time during the year ended December
31, 2006. For these leases, the income reported above includes less
than a full twelve months of operating results. Consequently, when
compared to the investment we have made in these home sites, the
return on investment during the year ended December 31, 2006 is
less than the return when measured using a full twelve months of
operating results. AMERICAN LAND LEASE INC. AND SUBSIDIARIES KEY
HOME SALES STATISTICS � March 31, 2006 June 30, 2006 September 30,
2006 December 31, 2006 March 31, 2007 1Q07 over 4Q06 Increase/
Decrease 1Q07 over 4Q06 % Change 1Q07 over 1Q06 Increase/ Decrease
1Q07 over 1Q06 % Change New home contracts 117� 125� 81� 73� 96�
23� 31.5% -21� -17.9% New home closings 104� 95� 92� 71� 55� -16�
-22.5% -49� -47.1% Home resales --� 3� 2� 1� 3� 2� 200.0% 3� 100%
Brokered home sales 62� 54� 20� 27� 31� 4� 14.8% -31� -50.0% New
home contract backlog 75� 86� 51� 34� 58� 24� 70.6% -17� -22.7% �
Average Selling Price $128,000� $124,000� $129,000� $131,000�
$135,000� $4,000� 3.1% $7,000� 5.5% � Average Gross Margin
Percentage 33.0% 34.3% 32.4% 33.4% 26.5% � � � �
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