Colonial Properties Trust Reports Results for First Quarter 2008

Colonial Properties Trust (NYSE: CLP), a multifamily real estate investment trust (REIT) with commercial development and management capabilities, today reports results for the quarter ended March 31, 2008. For the first quarter of 2008, the company reported net income of $14.2 million or $0.30 per diluted share, compared with $31.9 million, or $0.69 per diluted share, for the same period in 2007. Funds from Operations (FFO), a widely accepted measure of REIT performance, for the first quarter of 2008 were $33.1 million, or $0.58 per diluted share, compared with $43.9 million or $0.78 per diluted share in the same period a year ago. The decrease in net income and FFO from the first quarter of 2007 is primarily related to the office and retail joint venture transactions that occurred in 2007, the sale of certain non-core retail assets, and a reduction in gains recognized from for-sale residential activities, partially offset by gains resulting from the repurchase of $50 million of outstanding unsecured senior notes of our operating partnership, Colonial Realty Limited Partnership. A reconciliation of net income available to common shareholders to FFO is included in the financial tables accompanying this press release. Highlights for the First Quarter of 2008 Achieved multifamily same-property net operating income (NOI) growth of 3.7 percent compared to the first quarter of 2007 Ended the quarter with same-property physical occupancy of 96.3 percent Completed development of four multifamily properties consisting of 824 apartment homes Improved liquidity position by increasing revolving line of credit to $675 million Repurchased $50 million of unsecured bonds at an average 12% discount of par value, and recognized gains of $0.10 per diluted share in net income and FFO "Our multifamily portfolio continued to produce solid operating results with physical occupancy of 96 percent at the end of the quarter and posting same-property NOI growth of 3.7 percent,” stated Reynolds Thompson, Chief Executive Officer of Colonial Properties Trust. "While we are pleased with the first quarter operating results, we remain cautious due to the current economic environment, particularly the negative job growth reported over the past two months. We continue to maintain a strong liquidity position to give us the financial flexibility to take advantage of future opportunities that might be available in this market.” Multifamily Operating Performance NOI for the first quarter of 2008 increased 3.7 percent over the first quarter of 2007, for the 28,418 apartment homes included in the consolidated same-property results. This increase represents the 18th consecutive quarter of year-over-year same-property NOI growth for the company’s multifamily operations. Multifamily same-property revenues increased 3.3 percent and expenses increased 2.5 percent compared with the first quarter of 2007. These NOI results were driven by continued growth in Austin of 12.7 percent, Raleigh 10.4 percent, Dallas/Ft. Worth 7.6 percent, and Richmond at 7.5 percent compared with the first quarter of 2007. Multifamily Development Activity Including joint venture development activity, the company had 2,539 apartment homes under construction at the end of the first quarter of 2008, with a total expected investment by the company of approximately $241.1 million. The company’s current multifamily development pipeline includes seven wholly-owned communities comprising 1,998 units and one joint venture community comprising 541 units. During the first quarter, we completed four multifamily developments representing 824 apartment homes. Developments in the pipeline are primarily located in high-growth Sunbelt markets such as Charlotte, NC and Austin, TX. Commercial Development Activity The company has two office and five retail projects under construction at the end of the first quarter, with a total expected investment by the company of approximately $223.8 million. The two office development projects comprise 338,000 square feet of class A office space, and the five retail projects comprise an aggregate of approximately 1.1 million square feet. We anticipate the commercial developments will generally be sold into joint ventures upon completion with the capital expected to be recycled into additional development opportunities. For-Sale Residential Development The company had two active for-sale residential development projects at the end of the first quarter of 2008, with total expected project costs of $62.0 million, totaling 124 units. Additionally, the company has two residential lot developments. The company has completed construction of three condominium/townhouse projects comprised of 285 units, of which 158 units have been sold and 12 units are currently under contract. The net book value of the remaining condominium/townhouse units is $28.2 million, which is classified as held for sale on the company’s balance sheet. Joint Venture Activity In January 2008, the company acquired its partner’s 75 percent interest in Colonial Village at Matthews, a 270-unit apartment community located in Charlotte, NC. The company acquired the partner’s interest for a total of $18.4 million, which included the assumption of $11.0 million of secured financing. Additionally in January 2008, the company, through its wholly-owned subsidiary Colonial Properties Services, Inc., and its joint venture partner sold their interest in Colonial Grand at Canyon Creek, a 336-unit newly developed apartment community located in Austin, TX for a total transaction value of $38.0 million to a new joint venture, which included the assumption of $27.4 million of secured financing. As a result of this transaction, the company recognized a promote fee of $0.01 per diluted share in net income and FFO in the first quarter of 2008. The company, through Colonial Realty Limited Partnership, retained a 25 percent interest in the new joint venture and continues to manage and lease the property. In February 2008, the company disposed of its 10 percent joint venture interest with GPT, which consisted of 6 regional malls comprising 3.1 million square feet for a sales price of $38.3 million. The net proceeds to the company were approximately $6.0 million. Repurchase of debt and preferred securities During the first quarter of 2008, the company repurchased $50 million of outstanding unsecured bonds at an average 12% discount to par value, which represents an 8.2% yield to maturity. As a result of the repurchases, the company recognized an aggregate gain of $5.5 million, or $0.10 per diluted share in EPS and FFO. On April 23, 2008, the company’s Board of Trustees authorized a repurchase program which allows the company to repurchase up to an additional $200 million of outstanding unsecured senior notes of Colonial Realty Limited Partnership. The senior notes may be repurchased from time to time in open market transactions or privately negotiated transactions, subject to applicable legal requirements, market conditions and other factors. The repurchase program does not obligate the company to repurchase any specific amounts of senior notes, and repurchases pursuant to the program may be suspended or resumed at any time from time to time without further notice or announcement. The company will continue to monitor the debt markets and repurchase certain senior notes that meet the company’s required criteria, as funds are available. Additionally, during the first quarter 2008, the company repurchased 306,750 shares of its outstanding 8 1/8% Series D preferred depositary shares in privately negotiated transactions for an aggregate purchase price of $7.7 million, at an average price of $24.86 per share. Increase of Revolving Line of Credit to $675 million In January 2008, the company added $175 million of additional borrowing capacity through the accordion feature in its existing unsecured revolving credit facility, thereby increasing the company’s revolving borrowing capacity to $675 million. The expanded credit facility, which matures in June 2012, will provide additional liquidity to be used to fund the company’s development pipeline and for general corporate purposes. Quarterly Dividend on Common Shares On April 23, 2008, the company’s Board of Trustees approved a dividend of $0.50 per common share, payable on May 12, 2008 to shareholders of record as of May 5, 2008, representing an ex-dividend date of May 1, 2008. 2008 EPS and FFO per Share Guidance The company affirmed its previously-issued guidance for the full-year 2008 for diluted EPS and FFO per share. That guidance is set forth and reconciled below:     Full-Year 2008 Range Low - High Diluted EPS $1.20 - $1.50 Plus: Real Estate Depreciation & Amortization 1.80 - 1.80 Less: Gain on Sale of Assets (0.85) - (1.05) Diluted FFO per share (1) $2.15 - $2.25     (1) The company has the option to redeem its outstanding $125 million 8 1/8 percent Series D preferred shares beginning in late April 2008. If the company redeems all of the outstanding Series D preferred shares in 2008, the company would expect to record a non-cash charge of $0.08 per diluted share related to the write-off of Series D preferred issuance costs. The 2008 FFO per share guidance range does not include the impact the non-cash charge related to such redemption. Following are updated assumptions included in the company’s full-year 2008 guidance: Multifamily same-property growth in net operating income: 3.5 to 4.5 percent Development spending of $250 million to $300 million Dispositions of $450 million to $500 million Corporate G&A expenses of $21 million to $23 million For-sale income from the company’s development activities: $0.15 to $0.25 per diluted share (EPS and FFO) Land/out-parcel sales: $0.06 to $0.08 per diluted share (EPS and FFO) The company’s revised assumptions reflect a reduction in development spending as a result of the uncertain economic conditions. In conjunction with the slowing of the development spending in 2008, the company wrote-off approximately $0.8 million, or $0.01 per diluted share (EPS and FFO) related to abandoned pursuit costs in the first quarter of 2008. The company’s guidance is based on a number of assumptions, many of which are outside the company’s control and all of which are subject to change. The company’s guidance may change if actual results vary from these assumptions. For additional details regarding the company’s disposition and investment activities, see the company’s Supplemental Financial Highlights available on the company’s website at www.colonialprop.com. Conference Call and Supplemental Materials The company will hold its quarterly conference call Thursday, April 24th at 1:00 p.m. Central Time. The call will include a review of the company’s first quarter performance and a discussion of the company’s strategy and expectations for the future. To participate, please dial 1-866-454-3510. As with previous calls, a replay will be available for seven days by dialing 1-800-642-1687; the conference ID is 39950189. Access to the live call and a replay will also be available through the company's website at www.colonialprop.com under "Investor Services: General Information: Presentations.” Colonial Properties Trust produces a supplemental information package that provides detailed information regarding operating performance, investing activities and the company's overall financial position. For a copy of Colonial Properties’ detailed Supplemental Financial Highlights, please visit the company's website at www.colonialprop.com under the "Investor Services: Financial Information and Filings” tab, or contact Jerry Brewer in Investor Relations at 1-800-645-3917. Colonial Properties Trust is a multifamily real estate investment trust (REIT) that creates additional value for its shareholders by managing commercial assets through joint venture partnerships and pursuing development opportunities. As of March 31, 2008, the company owned or managed 38,822 apartment units, 16.2 million square feet of office space and 8.1 million square feet of retail shopping space located in key Sunbelt states from Virginia to Nevada. Headquartered in Birmingham, Ala., Colonial Properties is listed on the New York Stock Exchange under the symbol CLP and is included in the S&P SmallCap 600 Index. For more information, please visit the company’s website at www.colonialprop.com. Safe Harbor Statement "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Estimates of future earnings are, by definition, and certain other statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause the company's actual results, performance, achievements or transactions to be materially different from the results, performance, achievements or transactions expressed or implied by the forward looking statements. Factors that impact such forward looking statements include, among others, real estate conditions and markets; increased exposure, as a multifamily focused REIT, to risks inherent in investments in a single industry; performance of affiliates or companies in which we have made investments; changes in operating costs; higher than expected construction costs; risks of development or conversion of for-sale projects; legislative or regulatory decisions; our ability to continue to maintain our status as a REIT for federal income tax purposes; the effect of any rating agency action on the cost and availability of new debt financings; level and volatility of interest rates or capital market conditions; effect of any terrorist activity or other heightened geopolitical crisis; or other factors affecting the real estate industry generally. Except as otherwise required by the federal securities laws, the company assumes no responsibility to update the information in this press release. The company refers you to the documents filed by the company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the company's Annual Report on Form 10-K for the year ended December 31, 2007, as may be updated or supplemented in the company's Form 10-Q filings, which discuss these and other factors that could adversely affect the company's results. COLONIAL PROPERTIES TRUST Financial Statements First Quarter 2008                 BALANCE SHEET         ($ in 000s) As of As of 3/31/2008 12/31/2007 ASSETS Real Estate Assets Operating Properties $ 2,565,375 $ 2,431,082 Undeveloped Land & Construction in Progress   505,515     531,410   Total Real Estate, before Depreciation 3,070,890 2,962,492   Less: Accumulated Depreciation (319,143 ) (290,134 ) Real Estate Assets Held for Sale, net   250,512     253,641     Net Real Estate Assets 3,002,259 2,925,999   Cash and Equivalents 32,301 93,033 Restricted Cash 10,165 10,005 Accounts Receivable, net 18,206 25,534 Notes Receivable 29,759 30,756 Prepaid Expenses 11,678 8,845 Deferred Debt and Lease Costs 18,003 15,636 Investment in Unconsolidated Subsidiaries 61,841 69,682 Other Assets   48,504     50,340     Total Assets $ 3,232,716   $ 3,229,830     LIABILITIES Long-Term Liabilities Unsecured Credit Facility $ 82,000 $ 39,316 Notes and Mortgages Payable 1,581,729 1,575,921 Mortgages Payable Related to Real Estate Assets Held for Sale   14,309     26,602   Total Long-Term Liabilities 1,678,038 1,641,839   Other Liabilities   114,132     127,663   Total Liabilities   1,792,170     1,769,502     MINORITY INTEREST & EQUITY   Limited Partners' Interest in Consolidated Partnership 2,120 2,439   Preferred Shares and Units, at Liquidation Value Series B 7 1/4%, Preferred Units 100,000 100,000 Series D 8 1/8%, Preferred Shares   117,331     125,000   Total Preferred Shares and Units, at Liquidation Value 217,331 225,000   Common Equity, including Minority Interest in Operating Partnership   1,221,095     1,232,889   Total Equity, including Minority Interest   1,440,546     1,460,328     Total Liabilities and Equity $ 3,232,716   $ 3,229,830       SHARES & UNITS OUTSTANDING, END OF PERIOD         (shares and units in 000s) As of As of 3/31/2008 12/31/2007 Basic Shares 47,224 47,216 Operating Partnership Units (OP Units)   9,993     10,053   Total Shares & OP Units 57,217 57,269 COLONIAL PROPERTIES TRUST Financial Statements First Quarter 2008                 CONSOLIDATED STATEMENTS OF INCOME         ($ in 000s, except per share data) Three Months Ended 3/31/2008 3/31/2007 Revenue Minimum Rent $ 64,872 $ 93,865 Tenant Recoveries 867 5,233 Other Property Related Revenue 7,761 7,642 Construction Revenues 7,879 12,785 Other Non-Property Related Revenue   5,299     3,243   Total Revenue 86,678 122,768   Operating Expenses Operating Expenses: Property Operating Expenses 19,111 25,435 Taxes, Licenses and Insurance   9,488     12,804   Total Property Operating Expenses 28,599 38,239   Construction Expenses 7,266 12,371 Property Management Expenses 2,241 3,490 General and Administrative Expenses 5,780 5,978 Management Fee and Other Expenses 3,685 2,943 Investment and Development (1) 769 138 Depreciation 23,691 32,109 Amortization   771     5,725   Total Operating Expenses   72,802     100,993   Income from Operations 13,876 21,775   Other Income (Expense) Interest Expense & Debt Cost Amortization (18,440 ) (27,534 ) Gain (Loss) on Retirement of Debt 5,471 (64 ) Interest Income 791 2,131 Income from Partially-Owned Investments 10,269 6,814 Gain on Sale of Property, net of income taxes of $406 in 2008 and $747 in 2007 1,931 1,325 Income Taxes and Other   874     (233 ) Total Other Income (Expense)   896     (17,561 )   Income before Minority Interest & Discontinued Operations 14,772 4,214   Minority Interest Minority Interest of Limited Partners 5 143 Minority Interest in CRLP - Preferred (1,827 ) (1,812 ) Minority Interest in CRLP - Common   (1,785 )   362   Total Minority Interest   (3,607 )   (1,307 )   Income from Continuing Operations 11,165 2,907   Discontinued Operations Income from Discontinued Operations 4,126 6,322 Gain on Disposal of Discontinued Operations, net of income taxes (benefit) of ($14) in 2008 and $1,528 in 2007 2,913 34,801 Minority Interest in CRLP - Common (1,231 ) (7,641 ) Minority Interest of Limited Partners   13     (42 ) Income from Discontinued Operations   5,821     33,440     Net Income   16,986     36,347     Dividends to Preferred Shareholders (2,488 ) (4,491 ) Preferred Share Issuance Costs   (271 )   -     Net Income Available to Common Shareholders $ 14,227   $ 31,856     Earnings (Loss) per Share - Basic Continuing Operations $ 0.18 $ (0.03 ) Discontinued Operations   0.12     0.72   EPS - Basic $ 0.30   $ 0.69     Earnings (Loss) per Share - Diluted Continuing Operations $ 0.18 $ (0.03 ) Discontinued Operations   0.12     0.72   EPS - Diluted $ 0.30   $ 0.69     (1) Reflects costs incurred related to abandoned pursuits. Abandoned pursuits are volatile and therefore may vary between periods. COLONIAL PROPERTIES TRUST Financial Statements First Quarter 2008     FIRST QUARTER FUNDS FROM OPERATIONS (FFO) RECONCILIATION         ($ in 000s, except per share data) Three Months Ended 3/31/2008 3/31/2007 Net Income Available to Common Shareholders $ 14,227 $ 31,856 Minority Interest in CRLP (Operating Ptr Unitholders) 3,016 7,279 Minority Interest in Gain/(Loss) on Sale of Undepreciated Property   -     (142 ) Total 17,243 38,993   Adjustments - Consolidated Properties Depreciation - Real Estate 23,218 34,400 Amortization - Real Estate 366 5,699 Remove: Gain/(Loss) on Sale of Property, net of Income Tax and Minority Interest (4,844 ) (36,126 ) Include: Gain/(Loss) on Sale of Undepreciated Property, net of Income Tax and Minority Interest (1)   1,925     4,248   Total Adjustments - Consolidated 20,665 8,221   Adjustments - Unconsolidated Properties Depreciation - Real Estate 5,150 3,682 Amortization - Real Estate 2,358 1,467 Remove: Gain/(Loss) on Sale of Property   (12,298 )   (8,481 ) Total Adjustments - Unconsolidated   (4,790 )   (3,332 )   Funds from Operations $ 33,118   $ 43,882     FFO per Share Basic $ 0.58 $ 0.78 Diluted $ 0.58 $ 0.78   (1) Amounts recorded during the three months ended March 31, 2008, relate to cost estimates and contingencies resolved for sales transactions recorded during previous periods.   Pursuant to the definition of Funds from Operations ("FFO") adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"), FFO is calculated by adjusting net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciated property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis.   The Company believes that FFO is useful to investors because it provides an additional indicator of the Company's financial and operating performance. This is because, by excluding the effect of real estate depreciation and gains (or losses) from sales of properties (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO can facilitate comparison of operating performance among equity REITs. FFO is a widely recognized measure in the Company's industry. FFO does not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to net cash flows from operating activities (determined in accordance with GAAP), as a measure of our liquidity, or as an indicator of our ability to make cash distributions.   FIRST QUARTER SHARES AND UNITS OUTSTANDING, WEIGHTED         (shares and units in 000s) Three Months Ended 3/31/2008 3/31/2007   Basic Shares 46,853 45,964 Operating Partnership Units (OP Units)   10,015     10,579   Total Shares & OP Units 56,868 56,543   Dilutive Common Share Equivalents 161 -   Diluted (1) Shares 47,014 45,964 Total Shares & OP Units 57,029 56,543   Notes: (1) For periods where the Company reported a net loss from continuing operations (after preferred dividends), the effect of dilutive shares has been excluded from per share computations as including such shares would be anti-dilutive. COLONIAL PROPERTIES TRUST Corporate Reconciliations ($ in 000s, except per share data)         RECONCILIATION OF REVENUES         Three Months Ended 1Q08 1Q07 Divisional Total Revenues Multifamily - Same-Property $ 69,656 $ 67,462 Multifamily - Non Same-Property 8,639 9,027 Office 14,614 38,026 Retail   8,710     25,301   Total Divisional Revenues 101,619 139,816   Less: Unconsolidated Revenues - Mfam (2,218 ) (2,572 ) Less: Unconsolidated Revenues - Off (13,147 ) (7,827 ) Less: Unconsolidated Revenues - Rtl (5,338 ) (3,669 ) Discontinued Operations (7,416 ) (19,008 ) Construction Revenues 7,879 12,785 Unallocated Corporate Revenues   5,299     3,243   Cons. Rev, adj -'08 Disc Ops   86,678     122,768     Add: Add'l Disc Ops Rev, post filing   -     8,479   Total Consol. Rev, per 10-Q / K $ 86,678   $ 131,247     RECONCILIATION OF EXPENSES         1Q08 1Q07 Divisional Total Expenses Multifamily - Same-Property $ 26,763 $ 26,115 Multifamily - Non Same-Property 4,268 5,228 Office 4,962 12,832 Retail   2,757     7,442   Total Divisional Expenses 38,750 51,617   Less: Unconsolidated Expenses - Mfam (1,087 ) (1,505 ) Less: Unconsolidated Expenses - Off (4,626 ) (2,988 ) Less: Unconsolidated Expenses - Rtl (1,552 ) (1,143 ) Discontinued Operations (3,063 ) (7,863 ) Other Expense   177     121   Total Property Operating Expenses 28,599 38,239 Construction Expenses 7,266 12,371 Property Management Expenses 2,241 3,490 General & Administrative Expenses 5,780 5,978 Management Fee and Other Expenses 3,685 2,943 Investment and Development (1) 769 138 Depreciation 23,691 32,109 Amortization   771     5,725   Cons. Exp, adj -'08 Disc Ops   72,802     100,993     Add: Add'l Disc Ops Exp, post filing   -     5,694   Total Consol. Exp, per 10-Q / K $ 72,802   $ 106,687     RECONCILIATION OF NOI         1Q08 1Q07 Divisional Total NOI   Multifamily - Same-Property $ 42,893 $ 41,347 Multifamily - Non Same-Property 4,371 3,799 Office 9,652 25,194 Retail   5,953     17,859   Total Divisional NOI 62,869 88,199   Less: Unconsolidated NOI - Mfam (1,131 ) (1,067 ) Less: Unconsolidated NOI - Off (8,521 ) (4,839 ) Less: Unconsolidated NOI - Rtl (3,786 ) (2,526 ) Discontinued Operations (4,353 ) (11,145 ) Unallocated Corporate Revenues 5,299 3,243 Other Expenses (177 ) (121 ) Construction NOI 613 414 Property Management Expenses (2,241 ) (3,490 ) General & Administrative Expenses (5,780 ) (5,978 ) Management Fee and Other Expenses (3,685 ) (2,943 ) Investment and Development (1) (769 ) (138 ) Depreciation (23,691 ) (32,109 ) Amortization   (771 )   (5,725 ) Income from Operations 13,876 21,775 Total Other Income (Expense)   896     (17,561 ) Income from Contin'g Ops (2)   14,772     4,214     Disc Ops - 2,785 07 & 08 Disc Ops Other Inc(Exp)   -     (1,142 ) Inc from Cont (2), per 10-Q / K $ 14,772   $ 5,857     Notes: (1) Reflects costs incurred related to abandoned pursuits. Abandoned pursuits are volatile and therefore may vary between periods. (2) Income from Continuing Operations before extraordinary items, minority interest and discontinued operations. Adjustments for additional discontinued operations have restated prior periods in accordance with FAS 144.