American Community Properties Trust 10-Q Quarterly Report May 2009

ST. CHARLES, MD— American Community Properties Trust (“ACPT” or the “Company”) (NYSE Amex: APO), a diversified real estate organization, today announced results for the quarter ended March 31, 2009.

For the three months ended March 31, 2009, the Company reported net loss attributable to ACPT of $170,000, or $0.03 per basic and diluted share, on revenue of $9,385,000. This compares to a net loss attributable to ACPT of $1,193,000, or $0.23 per basic and diluted share, on revenue of $12,140,000 for the same period in 2008.

Steve Griessel, Chief Executive Officer, noted that the Company continues to be diligent in its efforts to reduce expenses, implement efficiencies and grow revenues related to rental property and land development operations. “We are continuing work to implement our business strategy, initiated in the last quarter of 2008, of creating a leaner company that is focused on generating free cash flow and is well-positioned for future growth opportunities,” said Mr. Griessel.

Matthew M. Martin, Chief Financial Officer, said that the net loss reported for the first quarter of 2009 was largely the result of an asset write-down of $750,000 related to the Baltimore properties offset by suspended depreciation for those assets now presented as held for sale, including the Puerto Rico apartment properties and the Baltimore properties. “During the first quarter 2009, the Company entered into a plan to sell both the Puerto Rico apartment holdings and five apartment properties in Baltimore. The Company has a definitive agreement for the sale of the Puerto Rico apartments and is working with a broker to sell the five Baltimore properties,” said Mr. Martin. “The proceeds from the asset sales are intended to provide the Company with capital to strengthen the balance sheet.” Mr. Martin noted that while the Company is aggressively marketing the five properties, those efforts are impacted by the weak real estate market as potential buyers expect value pricing even for non-troubled assets. “As pricing compressed, the Company re-evaluated the carrying value of each of the Baltimore properties on an individual asset basis and determined that a $750,000 write-down was necessary at March 31, 2009.”

“By selling these properties, the Company expects to better capitalize its major lines of business: United States operating real estate and land development,” said Mr. Griessel. “We have to make the assumption that lines of credit for land development will be difficult to obtain in the foreseeable future and that we may have to use our cash resources to do this.”

During the first quarter of 2009, the Company used $4,440,000 of cash primarily through investing in community development assets and a $2,200,000 repayment on the United States line of credit facility, which the company has used to help finance its land development operations in St. Charles, Maryland. As of March 31, 2009, the Company had total cash of $19,595,000, of which $10,962,000 is located within multifamily apartment entities, and to which the Company does not have direct control.

Mr. Martin noted that, effective January 1, 2009, the Company implemented the provisions of Statement of Financial Accounting Standard No. 160, “Noncontrolling Interests in Consolidated Financial Statements” (“SFAS 160”). SFAS 160 changed the presentation and format of the financial statements in that the Company now presents noncontrolling interests as a separate component of Shareholders’ Equity on the balance sheet and a deduction from Consolidated Net Income on the income statement. Furthermore, the Company is no longer required to report losses and distributions in excess of basis as an expense on the consolidated income statement as part of the new provisions of SFAS 160.

Mr. Martin noted that net operating income1 from continuing rental operations increased $186,000, or 4%, to $4,762,000 for the three months ended March 31, 2009, compared to the same period of 2008. In addition, funds from operations (“FFO”)2 improved in the first quarter, increasing to $3,017,000 in 2009, compared to $2,672,000 a year ago, which represents a 13% improvement.

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1 Net Operating Income (“NOI”) is calculated as real estate rental revenue less real estate operating expense. NOI is a non-GAAP measure. Management believes that NOI is helpful to investors as it captures the performance of our real estate operations in a measure that is comparable with other entities that have different capitalization.

2 Funds From Operations (“FFO”) is a non-GAAP financial measure, that we believe, when considered with the financial statements, prepared in accordance with GAAP, is helpful to investors in understanding our performance because it captures features particular to 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. The Company computes FFO in accordance with the Board of Governors of the National Association of Real Estate Investments Trusts, or NAREIT, which defines FFO as net income (loss) computed in accordance with GAAP, excluding gains or losses from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures.

The following information was filed by American Community Properties Trust on Thursday, May 21, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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CIK: 1065645
Form Type: 10-Q Quarterly Report
Accession Number: 0001065645-09-000031
Submitted to the SEC: Thu May 21 2009 3:49:39 PM EST
Accepted by the SEC: Thu May 21 2009
Period: Tuesday, March 31, 2009
Industry: Land Subdividers And Developers No Cemeteries

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American Community Properties Trust (1065645) SEC Filing 10-Q Quarterly report for the period ending Tuesday, March 31, 2009

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