参考文稿讲稿reit balance sheet projections

REITBalanceSheetProjections

Inthislesson,you'regoingtolearnhowtoprojectthelineitemsonthebalancesheetthatcanactuallybeprojectedindependently,now,basedonwhatwe'vecompletedaboveforour estatementandsomeofoursupportingschedules.Thiswillbeoneoftheshortestlessonsinthisentireprogram,because,asyou'llsee,manyoftheseitemsonthebalancesheetaregoingtodependonthecashflowstatementandtheotherschedulesthatwe'llcomeupwithlateron,likethedebtschedulesorthedividendschedule.Orthestockrepurchaseandstockissuingschedule,forexample.

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So,rightnowwearenotgoingtobeabletocomeupwithtoomuchconcreteinformationhere.Wecanprojectafewoftheseitemsthatarestillblankrightnow,butoverall,whenwefinishthisbalancesheet,it'snotgoingtolooktoomuchdifferentfromwhatwehaverightnow.And,unfortuna y,there'snogoodwayaroundthat.Really,theonlysolutionherewouldbetodothecashflowstatementfirstandthengobackhere,butthereareafewitemsonherethatdonotdependonthecashflowstatementandcanbeprojectedindependentlybasedonwhatwe'vedonesofar.SoIjustwanttoaddressthosenowhereinthis ,andthenlateroninthecoursewhenwegobackandlinkthestatements,we'llcomebacktothebalancesheet,linkineverythingfromthecashflowstatement,andmakesureitbalancesproperly.

Let'sstartfromthetophere.ThefirstmajorcategoryonourREITbalancesheetisofcourseGrossRealEstateOperatingAssets.Wealreadyhavethese,fromoursegmentbysegmentbuild-­‐up.Remember,we'rejusttakingtheoldnumberandthenwe'readding,inbasedonthesegmentsoverhere,weareaddinginthechangetothegrossrealestateassetsbyland,buildingsandimprovements,andFF&Ehereatthebottom.Wesplititout.Welookatthetotaladditions,minusthedispositions,andthenwearesplittingitoutaccordingtothepercentagesfortheseassetsontheirbalancesheet.

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Sowehavethat.ThenthenextitemonourREITbalancesheetisforaccumulateddepreciation.Thisone,wearenotgoingtobeabletofillin.Yes,wedohaveourdepreciationonthe estatementrighthere-­‐-­‐righthere,rather-­‐-­‐forcontinuingoperations,andweactuallydohaveitforthedis operationsaswell.Soweactuallyhaveboththenumbers.ButIprefertomakethisflowinfromthecashflowstatementinstead.Sowe'regoingtowaitonthisone,andinsteadlinkthesenumberstowhatwehaveonthecashflowstatement.Thatjustmakesiteasiertotracewhat'sgoingoninyourmodel,andtomakesurethateachitemonthebalancesheetmatchesupwithexactlyoneitemonthecashflowstatementandviceversa.

Constructioninprogress,landheldfordevelopment,realestateassetsheldforsale,wecannotprojectanyoftheserightnow.Theseareallgoingtodependonthecashflowstatements,specificallysomeoftheitemshereundercashflowfrominvesting.Sowehaveacoupleadjustingitemstheretotakeintoaccounttheseothernon-­‐operatingrealestateassetsontheirbalancesheet.But,longstoryshort,wecannotprojectthoseeither.

NextuponourREITbalancesheetis’cashandcashequivalents’.Forthisone,justtohavesomethinghere,I'mgoingtolinkthistothebottomofthecashflowstatement.Toourendingcash,whichis$0rightnow,butjustsowecanhavesomethingince.

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Cashinescrow.Thisone,again,it'sgoingtodependonthecashflowstatement.Ifyoulookcarefullyatthestatement,you'llseethatwehaveescrowcashchangesinoperatingassetsandliabilities,thechangeinoperatingassetsinliabilities,andthenwehaveadecreaseintheconstructionescrowcashrighthere.Sobothofthosearegoingtofactorin.Wehaven'tprojectedthoseyet,sowecannotreallysaytoomuchhereforourcashinescrowamount.

Thenresidentsecuritydepositsanddeferredfinancingfees.Theonesthatwecanactuallyprojecthere,justbasedonthebalancesheetand estatement,areresidentsecuritydepositsandthendeferreddevelopmentcostsandprepaidexpensesandother.Deferredfinancingfeesaregoingtocomefromthecashflowstatement,asyoumightexpect.We're

goingtotaketheamountwepayincashandthensubtractwhateverweamortizeinthatyear.

Andthenthereisinvestmentsinequityinterest.Wecouldactuallytrytoprojectthisbasedonwhatwehavenow,butthisone,again,onthecashflowstatement,ifyoulook,thereisalineitemherefortheincreaseordecreaseinequityinterest.Sowearegoingtolinkindirectlyfromthereandjusttakeathree-­‐yearaverage,onceagain.Sowecan'treallydomuchthere.

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So,we'regoingtofocusonresidentsecuritydeposits,thedeferreddevelopmentcosts,andprepaidexpensesandother.Ontheliabilityside,allwecanreallyprojectrightnow...debtisbeyondourcontrol,becausethat'sgoingtocomefromthedebtschedules.Dividendspayable,constructionspayable,accruedexpenses,andaccruedinterest:thesearemoreviable,butofthese,actually,constructionspayableisalsogoingtoflowfromthecashflowstatement,whichreallyleavesuswithdividendspayable,accruedexpenses,accruedinterest,andresidentsecuritydeposits.Liabilitiesheldforsalewillalsodependoncashflowstatement.

Andthen,asyoumightexpect,foralltheshareholderequityandnon-­‐controllinginteresttypeitems,again,wecouldfillinthesepartiallyrightnow,basedonwhatwehave,butitiseasierandlessconfusingtowaituntilwehavethecashflowstatementandtherestoftheschedulesfilledoutandthencomebackhere,linkeverythingtogether,andverifyitbymakingsurethatourbalancesheetbalances.

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So,let'stakealookattheitemsthatwecanactuallyprojectrightnow.Godowntobalancesheetprojections,belowthecashflowstatement.Forthisone,fortherentalsecuritydepositsonboththeassetsandtheliabilityside,we'regoingtomakethesebothapercentageoftherental erevenuecategoryfromthe estatementforthe

.Theassumptionbehindthisisthatasyoucollectmoreinrental e,you'realsogoingtogetmoreinresidentsecuritydeposits,aspeoplemoveintotheirapartmentsorcondominiumsandsoon,andthat'sgoingtoaffectyouonboththeassetsandliabilityside,whetheryouclassifyitasaliabilitybecauseithastobepaidbacksoon,orwhetheryouclassifyitasanassetbecauseit'ssomethingthatyoucouldbepotentiallyearningintereston.

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Soforbothofthese,we'regoingtomakethemapercentageoftherental efromourestatement.Taketheassetsidefirst,andgouprighthere.Thendividethatbyour

rentalandother e,allthewayatthetop.Copyth ross.Andthen,fortheliabilityside,I'mgoingtodothesamething.SoIwillactuallyjusttakethisformula,keeptheE8partince,andthenI'lljustchangearoundthefirstparthere.Gouptothebalancesheetandtakeresidentsecuritydepositsfromunderliabilities.Andcopyth ross.

Now,fortheseotheritems.Deferreddevelopmentcostasapercentageofdevelopmentandredevelopment,righthere.So,thelogicbehindthisone,whichisnotimmedia yobvious,butthisoneissortoflikethedeferredfinancingfe ghthere,inthatwe'repayingsomethingupfront,butthenwe'regoingtoamortizeitandreallyrecognizetheexpenseforthisoneovertime.Sothatistheexnationforhowthisoneworks.

Now,sincethesearedevelopmentcosts-­‐-­‐asyoumightexpect-­‐-­‐whataretheygoingtobelinkedto?Well,mostlikelythey'regoingtobelinkedtothedevelopmentandredevelopmentexpenserighthere.Sowe'regoingtolookattheseasapercentageofthedevelopmentandredevelopmentspendingonthecashflowstatement.Ifyoulookatthis,thisisgoingdownsharply,andifyoulookatthedeferreddevelopmentcosts,theseareactuallynotreallygoingdownhere.

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Sothisoneisalittlebitquestionable.Youcouldargueeithercaseonthisone.Butit'sreallynotclearwhatitfallsatall.Sincethere'snospecialitem-­‐-­‐nospecificitem-­‐-­‐forthisoneonthecashflowstatement,whatwe'regoingtosayinsteadis,we'rejustgoingtolinkittodevelopmentandredevelopmentspendingrighthere.Forthisone,we'regoingtotakealookatthecosts.I'mgoingtoputanegativesigninfrontbecausewehaveanegativefurtherdown.So,wehaveanegativeinfrontofthisone,thedeferreddevelopmentcost,dividedbythespending.That'swhyI'musingthenegativesignhere,becausethespendingisanegativecashoutflowonthecashflowstatement,sowewantthisnumbertobeapositivepercentage.Thenwewillcopythatformulaacross.

Asyoucansee,thenumbersarealmostnonsensicalthere,goingfrom6%to65%.Sothismaynotbeactuallythebestwaytoprojectthisone.But,again,wedon'tknowwha sewillreallygointoit.It'sasmallitemtobeginwith.Sothisisjustthewaywe'regoingto there,andassumethatgenerally,thedeferreddevelopmentcostwillinfactfollowhowmuchwe'reactuallyspendingondevelopment.

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Partofthiscouldalsobethatwe'vemodifiedthecashflowstatement.Ifyourecall,backhere,wemodifiedthisandtookouttheacquisitionsspendingandlookedatthatsepara y,sothatmightbepartofitaswell.Maybeitfollowstheacquisitionsspendinginsomeway.That'salsoapossibility.Butthisoneisprobablynotthebestwayto t,butunfortuna ywejustdon'thaveanybetterinformation,sowe'regoingtogowiththelogicalconclusionandsaythatthesearegoingtobelinkedtodevelopmentandredevelopmentspending.

Forprepaidexpenses,typicallyyouassumethatthesearelinkedtooperatingexpenses,orSG&Aforanormal ,andyoucandomuchthesamethinghere.Ifwegoupandlookatthe estatementtotrytofigureoutwhattheseshouldbelinkedto,firstlet'staketheprepaidexpensesonourbalancesheet.Now,goinguptothe estatement,orderofmagnitude-­‐wise,here,mostoftheseexpenses,exceptforinterestexpenseanddepreciation,arewellunder$100millionperyear.Theonlyonethat'sanexceptionisthepropertyexpens ghthere.Specifically,thepropertyoperatingexpensesinparticular.

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Sothatisreallytheonlyonethatisatanelevatedlevel.Ifwetookanyoftheseothers,we'dhaveprepaidexpensesbein er100%ofthose,whichreallydoesn'tmakeanysense.Youwouldn'tmakeprepaidexpensesapercentageofimpairmentloss,orthegainorlossondebtextinguishment,orinterestexpense,ordepreciation,oranythinglikethatasthetwoarenotcorrelated/linkedtogetherinactivity.Really,theonlyoptionhereistomakeitapercentoftheOPEX,propertyOPEX,ortotakeoutexpenseslikeinterestexpense,depreciation,andtheimpairmentlossandjustmakeitapercentageofeverythingelseonthere,ormaybeapercentageofthetotalexpenses.Ofthose,IamjustgoingtomakethisoneapercentageofthepropertyOPEX.

Yes,thereisprobablysomeprepaidexpensesthatshowupintheothercategories.So,G&A,non-­‐propertyOPEX,investmentmanagement,developmentpursuit,andsoon.Soyeah,someofthoseprobablydocorrespondtoprepaidexpenses.Butingeneral,itdoesn'tmakeahugedifferencehere.Andifyouthinkaboutit,allthesearebasicallyfollowingrevenueanyway,soitisnotgoingtomakeatremendousdifferenceinourmodel.

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Takethisoneandcopythisoneacross,aswell.Sothisoneisalsofluctuating,butatleaststayingintheroughly40%to60%range.Thisnextitemonourbalancesheettoproject:dividendspayableasapercentageofdividends.So,forthisone,wearegoingtouseanegativesignonceagain,becausedividendsonthecashflowstatementareanegative.We'regoingtotakedividendspayablefromthebalancesheetandthendividebydividendsonthecashflowstatement.Thisoneisprettyself-­‐exnatory.The hastopayoutacertainamountofdividends,especiallya likeaREIT,whereyouknowthey'regoingtohavetopayover90%oftheirtaxable eindividendstomaintaintheirfavourableREITstatus.At oftheyear,theymaysetasideacertainportionandsay,"OK,thisisatleastwhatweknowwehavetopayoutoverthenextquarter,oroverthenexttwoquarters,"orsomethinglikethat.Andso,generally,thisisgoingtofollowdividends.

Youcanseeherethatthisisjumaroundquiteabit.Soforthisone,takingathree-­‐yearaverageisprobablynotthebestapproach.Weprobablywanttolookatthe2009and2010numbersinsteadofthe2008number,whichismuchhigher.

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ForaccruedexpensesasapercentageofOPEX,similarideatowhatwehadforprepaidexpenses.Thisone,youcanmakeanargumentformaybelinkingthistoalltheexpensesexceptforinterestexpense,depreciation,theimpairmentloss,thegainorlossondebtextinguishment.Sothatwouldbeagoodargumenthere.We'renotgoingtodothat,though.Wearegoingtojustkeepitsimpleandlinkittooneitem.Theproblemwithlinkingittomanyitemslikethatisthatitjustmakesyourmodelmu oreconfusing.Soifwetriedtolinkittofiveorsixdifferentitemshere,wecouldtrytomakeasepara ineitemforallthoseandsay"normalpropertylevel"and"operatingexpensesandcorporateoverhead."Butagain,it'sjustmoreworktodothat,andanitemlikethisdoesnotmakeatremendousamountofdifferenceinthismodelanyway,especiallyforREITs.Theyderiveverylittlevaluefromtheirworkingcapitalandtheiroperatingassetsandliabilities.Really,it'sallcomingfromtherealestateassetsandfromthefactthattheseareincreasin ertime,andthey'regettingmore efromthemovertime.So,thatiswhywearenotbeingparticularlyscientificherewithhowwe'reprojectingthese,becauseworkingcapitalisreallyjustmoreofanafterthoughtforarealestateinvestmenttrust.

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So,takethis,dividebythepropertyoperatingexpenses,andcopythisacross.Andthenaccruedinterestwewillalsotakeasapercentageofnetinterest.Again,similartoaccruedexpenses,andevenmoresimilartodividendspayable,sortof.Withaccruedinterest,the

isrecordinginterestonits estatement,buthasnotactuallypaidthatinterestoutincashyet.So,verysimilartoaccruedexpenses.Whatweneedto stiethistothemostlogicallineitem,whichinthiscaseisnetinterest.Soforthisone,we'regoingtotaketheaccruedinterestlineitemrighthere.Thisaccruedinterestpayableonthebalancesheet.Andthendividethatbyinterestexpensenet,righthereonthe estatement.

Takethat,copyth ross.Sothisisactuallystayinginafairlydecentrange.Around15%to30%here.Sothisisnotwildlyoff,itlookslike.

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Sothen,fortheprojectionsforthesegoingforward,mostofthetimeit'sjustgoingtobeasimplethree-­‐yearaverage,whichI'lldorightnow.Dothesamefordevelopment/redevelopment,prepaidexpenses.Thendothesameforaccruedexpenses,accruedinterest,andresidentsecuritydeposits.Dividendspayable,wearenotgoingtodothathere.Wearegoingtostickmorecloselytothe'09and2010numbers,andwe'rejustgoingtohardcodethisat25%(i.e.since’08seemstobeanoutlierwhichwouldcomple yskewour3yearaveragehadwechosentodosointhisparticularcase).Andtheneverythinghere,wearegoingtocopytheseacross.Sowehavethesa mberineachyear,similartowhatwealwaysdowithworkingcapitalschedulesfornormalcompaniesaswell.Andsowehaveallournumbersince.

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Now,togobacktothebalancesheetandfillthesein,now.Solet'sstartwiththeresidentsecuritydeposits.Thisone,we'regoingtogouptoourrentalandother eonour

estatement.We'llanchortherowrightthere,andthenmultiplythisbythepercentagerighthere.Copythisacross.Investmentsinequityinterest,we'releavingblank.Deferredfinancingfeesisblankfornow.Deferreddevelopmentcosts.Soforthisone,whatwecandofornowisjustgobacktooursegment-­‐by-­‐segmentbuild-­‐uppageandlinktoourdevelopment/redevelopmentspending.Andthenmultiplythatbythepercentagethatwe'veassumedrighthere.Now,thisisnotthebestmethodgoingforward.Goingforward,whatweprobablywantto slinkthistothecashflowstatementinstead,butfornow,justtogetnumbersince,wecandothat.

Prepaidexpenses,onceagain,we'regoingtogoupandtakeourOPEX,propertylevelOPEX,andthenmultiplythatbytheprepaidexpensepercentagedownhere.Andsowehavethatince.I'mnotevengoingtobothertoaddupthetotalassetshere,becauseit'sgoingtobesofaroffanywaythere'sjustnopointin ngthat.Instead,we'llmovetotheotherside.

Fordividendspayable,thisone,eventhoughtit'sgoingtobezerofornow,I'mstillgoingtolinktoourdividendsdownhereinthecashflowstatementandthenmultiplybythepercentagethatwe'veassumed.Putanegativesigninfront,becausethisshouldbeapositivenumber.

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Thenwehaveouraccruedexpensesandotherliabilities.Onceagain,we'regoingtolinktoourproperty-­‐leveloperatingexpenseshere,andwe'regoingtomultiplythisbytheaccruedexpensesasapercentageofOPEXhere.Copyth ross.

Andthenwehaveaccruedinterestpayable.Thisisalsogoingtobezero,butwe'lllinkupheretoourinterestexpense.Andthenmultiplythatbytheaccruedinterestasapercentageofnetinterest,righthere.

Then,forresidentsecuritydeposits.Forthisone,we'regoingtotaketherental efromthe