Home Properties Inc. (HME, Financial) filed Quarterly Report for the period ended 2010-03-31.
Home Properties Inc. has a market cap of $1.68 billion; its shares were traded at around $47.92 with a P/E ratio of 14.6 and P/S ratio of 3.3. The dividend yield of Home Properties Inc. stocks is 4.8%.HME is in the portfolios of Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC.
Net cash used in financing activities totaled $9 million in 2010. Cash flows from net proceeds of the ATM common stock offering of $59 million, proceeds from stock option exercises of $1 million and net proceeds from mortgage financing of $1 million were more than offset by distributions paid to shareholders and UPREIT unitholders of $27 million, and a net paydown of $43 million on the line of credit. Net cash used in financing activities totaled $69 million for 2009, primarily as a result of net borrowing under our line of credit of $5 million and proceeds from stock option exercises of $1 million being more than offset by paydown on mortgage notes of $44 million, distributions paid to shareholders and UPREIT unitholders of $30 million, and common stock repurchases of $1 million.
As of March 31, 2010, the Company had a $175 million unsecured line of credit agreement with M&T Bank, as administrative agent and lead bank, which expires August 31, 2011, with a one-year extension, at the Companys option. The Company had $11.0 million outstanding under the credit facility on March 31, 2010. The line of credit agreement provides the ability to issue up to $20 million in letters of credit. While the issuance of letters of credit does not increase the borrowings outstanding under the line of credit, it does reduce the amount available. At March 31, 2010, the Company had outstanding letters of credit of $5.2 million. As of March 31, 2010, the amount available on the credit facility was $158.8 million. Borrowings under the line of credit bear interest at rates ranging from 2.50% to 3.25% over the one-month LIBOR rate, increasing at higher levels of outstanding indebtedness, with a LIBOR floor of 1.50%. The one-month LIBOR was 0.25% at March 31, 2010, resulting in an effective rate of 4.50% for the Company.
In October 2006, the Company issued $200 million of exchangeable senior notes with a coupon rate of 4.125%, which generated net proceeds of $195.8 million. The net proceeds were used to repurchase 933,000 shares of common stock for a total of $58 million, pay down $70 million on the line of credit, with the balance used for redemption of the Series F Preferred Shares and property acquisitions. During the fourth quarter of 2008, the Company repurchased $60 million of the exchangeable senior notes for $45.4 million. The exchange terms and conditions are more fully described under Contractual Obligations and Other Commitments, below.
On December 3, 2009, the Company initiated an At-the-Market (ATM) equity offering program through which it may sell up to 3.7 million shares of common stock (not to exceed $150 million of gross proceeds), from time to time in ATM offerings or negotiated transactions. During December 2009, the Company issued 871,600 shares of common stock at an average price per share of $45.70, for aggregate gross proceeds of $39.8 million. Aggregate net proceeds from such issuances, after deducting commissions and other transaction costs of $0.8 million were $39.0 million. During the three months ended March 31, 2010, the Company issued 1,285,700 shares of common stock at an average price per share of $46.74, for aggregate gross proceeds of $60.1 million. Aggregate net proceeds from such issuances, after deducting commissions and other transaction costs of $1.2 million were $58.9 million. In addition, the Company issued an additional 155,900 shares of common stock at an average price per share of $46.92, for aggregate proceeds of $7.3 million with a trade date in March 2010 and a settlement date in April 2010. Aggregate net proceeds from such issuances, after deducting commissions and other transaction costs of $0.1 million were $7.2 million. As of April 30, 2010, the Company has $43 million remaining common stock to be issued under the ATM program.
In October 2006, the Company issued $200 million of Senior Notes with a coupon rate of 4.125%. During 2008, the Company repurchased and retired $60 million principal amount of its Senior Notes and $140 million remain outstanding at March 31, 2010. The notes are exchangeable into cash equal to the principal amount of the notes and, at the Companys option, cash or common stock for the exchange value, to the extent that the market price of common stock exceeds the initial exchange price of $73.34 per share, subject to adjustment. The exchange price is adjusted for payments of dividends in excess of the reference dividend set in the indenture of $0.64 per share. The adjusted exchange price at March 31, 2010 was $72.87 per share. Upon an exchange of the notes, the Company will settle any amounts up to the principal amount of the notes in cash and the remaining exchange value, if any, will be settled, at the Companys option, in cash, common stock or a combination of both. The notes are not redeemable at the option of the Company for five years, except to preserve the status of the Company as a REIT. Holders of the notes may require the Company to repurchase the notes upon the occurrence of certain designated events. In addition, prior to November 1, 2026, the holders may require the Company to repurchase the notes on November 1, 2011, 2016 and 2021. The notes will mature on November 1, 2026, unless previously redeemed, repurchased or exchanged in accordance with their terms prior to that date.
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Home Properties Inc. has a market cap of $1.68 billion; its shares were traded at around $47.92 with a P/E ratio of 14.6 and P/S ratio of 3.3. The dividend yield of Home Properties Inc. stocks is 4.8%.HME is in the portfolios of Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Cash used in investing activities was $29 million during 2010 compared to cash provided by investing activities of $35 million in 2009. The $64 million swing between periods is primarily due to the 2009 period receiving the benefit of $67 million proceeds from the sale of properties, while the 2010 period realized no property sales. There were no cash outflows for the purchase of properties and land for development in either period. Cash outflows for capital improvements were $16 million during 2010 as compared to $20 million for 2009. The $4 million lower outflow in 2010 reflects managements conscious efforts to conserve cash and focus only on selective rehabilitation in markets that are able to support rent increases. Cash outflows for additions to construction in progress were $14 million in 2010 as compared to $11 million in 2009. The higher spending on development in 2010 reflects the ongoing construction of two communities which will be placed into service in 2010.Net cash used in financing activities totaled $9 million in 2010. Cash flows from net proceeds of the ATM common stock offering of $59 million, proceeds from stock option exercises of $1 million and net proceeds from mortgage financing of $1 million were more than offset by distributions paid to shareholders and UPREIT unitholders of $27 million, and a net paydown of $43 million on the line of credit. Net cash used in financing activities totaled $69 million for 2009, primarily as a result of net borrowing under our line of credit of $5 million and proceeds from stock option exercises of $1 million being more than offset by paydown on mortgage notes of $44 million, distributions paid to shareholders and UPREIT unitholders of $30 million, and common stock repurchases of $1 million.
As of March 31, 2010, the Company had a $175 million unsecured line of credit agreement with M&T Bank, as administrative agent and lead bank, which expires August 31, 2011, with a one-year extension, at the Companys option. The Company had $11.0 million outstanding under the credit facility on March 31, 2010. The line of credit agreement provides the ability to issue up to $20 million in letters of credit. While the issuance of letters of credit does not increase the borrowings outstanding under the line of credit, it does reduce the amount available. At March 31, 2010, the Company had outstanding letters of credit of $5.2 million. As of March 31, 2010, the amount available on the credit facility was $158.8 million. Borrowings under the line of credit bear interest at rates ranging from 2.50% to 3.25% over the one-month LIBOR rate, increasing at higher levels of outstanding indebtedness, with a LIBOR floor of 1.50%. The one-month LIBOR was 0.25% at March 31, 2010, resulting in an effective rate of 4.50% for the Company.
In October 2006, the Company issued $200 million of exchangeable senior notes with a coupon rate of 4.125%, which generated net proceeds of $195.8 million. The net proceeds were used to repurchase 933,000 shares of common stock for a total of $58 million, pay down $70 million on the line of credit, with the balance used for redemption of the Series F Preferred Shares and property acquisitions. During the fourth quarter of 2008, the Company repurchased $60 million of the exchangeable senior notes for $45.4 million. The exchange terms and conditions are more fully described under Contractual Obligations and Other Commitments, below.
On December 3, 2009, the Company initiated an At-the-Market (ATM) equity offering program through which it may sell up to 3.7 million shares of common stock (not to exceed $150 million of gross proceeds), from time to time in ATM offerings or negotiated transactions. During December 2009, the Company issued 871,600 shares of common stock at an average price per share of $45.70, for aggregate gross proceeds of $39.8 million. Aggregate net proceeds from such issuances, after deducting commissions and other transaction costs of $0.8 million were $39.0 million. During the three months ended March 31, 2010, the Company issued 1,285,700 shares of common stock at an average price per share of $46.74, for aggregate gross proceeds of $60.1 million. Aggregate net proceeds from such issuances, after deducting commissions and other transaction costs of $1.2 million were $58.9 million. In addition, the Company issued an additional 155,900 shares of common stock at an average price per share of $46.92, for aggregate proceeds of $7.3 million with a trade date in March 2010 and a settlement date in April 2010. Aggregate net proceeds from such issuances, after deducting commissions and other transaction costs of $0.1 million were $7.2 million. As of April 30, 2010, the Company has $43 million remaining common stock to be issued under the ATM program.
In October 2006, the Company issued $200 million of Senior Notes with a coupon rate of 4.125%. During 2008, the Company repurchased and retired $60 million principal amount of its Senior Notes and $140 million remain outstanding at March 31, 2010. The notes are exchangeable into cash equal to the principal amount of the notes and, at the Companys option, cash or common stock for the exchange value, to the extent that the market price of common stock exceeds the initial exchange price of $73.34 per share, subject to adjustment. The exchange price is adjusted for payments of dividends in excess of the reference dividend set in the indenture of $0.64 per share. The adjusted exchange price at March 31, 2010 was $72.87 per share. Upon an exchange of the notes, the Company will settle any amounts up to the principal amount of the notes in cash and the remaining exchange value, if any, will be settled, at the Companys option, in cash, common stock or a combination of both. The notes are not redeemable at the option of the Company for five years, except to preserve the status of the Company as a REIT. Holders of the notes may require the Company to repurchase the notes upon the occurrence of certain designated events. In addition, prior to November 1, 2026, the holders may require the Company to repurchase the notes on November 1, 2011, 2016 and 2021. The notes will mature on November 1, 2026, unless previously redeemed, repurchased or exchanged in accordance with their terms prior to that date.
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