ANL Amer Land Lease

American Land Lease Announces First Quarter 2005 Financial Results, 7.3% Increase in Funds From Operations per share over 2004 CLEARWATER, Fla., May 10 /PRNewswire-FirstCall/ -- American Land Lease, Inc. (NYSE:ANL) today released results for first quarter 2005. Summary Financial Results First Quarter * Diluted Earnings Per Common Share ("Diluted EPS") were $0.36 for the three-month period ended March 31, 2005 as compared to $0.33 from the same period one year ago, an increase of 9.1% on a per common share basis. * Funds from Operations attributable to common stockholders ("FFO"; a non- GAAP financial measure) were $3.7 million, or $0.44 per diluted common share, for the quarter compared to $3.4 million, or $0.41 per diluted common share from the same period one year ago, an increase of 7.3% on a per share basis. * Diluted EPS and FFO for 2005 as compared to 2004 were negatively impacted by a decrease in the unit volume of closings, higher inventory levels and lower gross margins realized from home sales in the quarter. As a result of the Company's preferred stock offering, earnings for the 2005 quarter were diluted $0.02 per share by cumulative unpaid preferred dividends. In addition, the Company realized a $0.03 per common share reduction in other income compared to the 2004 quarter as a bond residual position matured in 2004 and did not provide a contribution in the 2005 quarter. * Diluted EPS and FFO for 2005 as compared to 2004 were positively impacted by a correction in the Company's accounting for restricted stock awards under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, or SFAS 123. The Company had previously valued certain performance-based restricted stock based upon the market price of the Company's common stock at the date of issuance and recognized the dividends paid on the awards as compensation expense until the awards vested. In accordance with SFAS 123, these awards have now been recorded at their fair value on the date of issuance and dividends paid on non-vested restricted stock have been recognized as a charge to retained earnings. This correction resulted in an increase of $0.08 and $0.07 per share in FFO and Diluted EPS, respectively, as a result of lower compensation expense in the first quarter of 2005 for amounts related to prior periods. * Unit volume in home sales was 77 new home closings, including 65 new homes sold on expansion home sites. This compares with 91 new home closings in fourth quarter 2004. * "Same Store" results provided a revenue increase of 9.5%, an expense increase of 4.9% and an increase of 11.8% in Net Operating Income ("NOI"). * "Same Site" results provided a revenue increase of 3.9%, an expense increase of 2.1% and an increase of 4.8% in NOI. Supplemental Information The full text of this press release is available upon request or through the Company's web site at http://www.americanlandlease.com/ . Management Comments Bob Blatz, President of American Land Lease, commented, "While we are reporting FFO of $0.44, we evaluate our performance in terms of the $0.36 in FFO earned before the accounting adjustment. The first quarter reflects the lingering impact of the 2005 hurricanes in our business through lower home sales closings. We are pleased to report strong results from our core property operating business for the first quarter. The operating results reflect the positive impact that absorption from home sales is having on our property operations." Mr. Blatz added, "The first quarter underscores the strength of our property operating business and provides the challenge to return to higher levels of home sales results. Within our home sales business, we continue to be pleased with the increasing average home selling price that reached $112,000 for the first quarter. This represents a 12% increase in average new home selling price over the first quarter of 2005 of $100,000. As we look toward the balance of 2005, we forecast continued success in our core property ownership business and a return to higher levels of homes closings." Dividend Declaration On April 27, 2005, the Board of Directors declared a regular first quarter common stock dividend of $0.25 per share payable on May 26, 2005, to stockholders of record on May 12, 2005. On April 27, 2005, the Board of Directors declared dividends on preferred shares. Dividend information on Preferred Stock follows: Per Share Beginning of End of Dividend Dividend Dividend Period Period Declared February 23, 2005 May 12, 2005 $0.5167 Dividends on shares of Preferred Stock are payable on May 31, 2005 to shareholders of record on May 12, 2005. The initial dividend payment on Preferred Stock issued reflects dividends accrued from the issuance date through the end of the dividend period indicated above. Future quarterly dividend payments on all Preferred shares will be $0.4844 per share. The Board of Directors reviews the dividend policy quarterly. The Company's dividend is set quarterly and is 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. 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 Property Operations First quarter revenue from property operations was $8,036,000 as compared to $7,371,000 in the same period one year ago, a 9.0% increase. First quarter property operating expenses totaled $2,779,000 as compared to $2,818,000 in the same period one year ago, a 1.4% decrease. The Company realized significant increases in rental income driven by annual rental rate increases and the absorption of new home sites through its home sales efforts. Property operating expenses decreased in the first quarter 2005 as compared to the same period in the prior year driven primarily by insurance proceeds of approximately $140,000 related to the recovery of expense incurred in prior periods as a result of clean up costs from the hurricanes that traversed Florida in August and September of 2004 offset by increases in labor and benefit costs and increases in property taxes. The property operating margins before depreciation expense increased from 61.8% in the prior year's first quarter to 65.4%. Excluding the insurance recovery property operating margins before depreciation, expense would have been 63.7%. First Quarter "Same Store" Results First quarter "same store" results reflect the results of operations for properties and golf courses owned for both the first quarter of 2005 and the prior year periods. The same store properties account for 96% of the property operating revenues for the first quarter of 2004. We believe that same store information provides the ability to understand the changes in profitability for properties owned during both reporting periods that could not be obtained from a review of the consolidated income statement in periods where properties are acquired. A reconciliation of "same store" operating results reported below to total property revenues and property expenses, as determined under GAAP, can be found on page 14 of this press release. The same store % change results are as follows: 1Q05 Revenue 9.5 % Expense 4.9 % Net Operating Income 11.8 % 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. 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, golf operations and total same store results for first quarter are as follows: Same Site Rental Absorption Same Site Golf Same Store Revenue 3.9 % 5.7 % (0.1)% 9.5 % Expense 2.1 % 2.0 % 0.8 % 4.9 % NOI 4.8 % 7.5 % (0.5)% 11.8 % 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, 2005 and 2004 can be found on page 14 of this press release. First Quarter Home Sales Operations First quarter 2005 new home sales volume was 77 closings, a 15.4% decrease from the 91 closings in the same period in the prior year. Average selling price per home was $112,000 as compared to $100,000 in the same period in the prior year, a 12.0% increase. Brokerage profits were down 10.6% as compared with the same period in the prior year. Selling gross margins, excluding brokerage activities, decreased to 31.8% in the quarter as compared to 33.1% in the same period in the prior year. This decrease was attributable to product mix and increased cost of our product as purchase prices for materials and labor have increased due to the 2004 hurricanes. Selling costs as a percentage of sales revenue increased from 25.2% in the prior year's period to 25.9% in the first quarter of 2005, reflecting decreased operating leverage at lower volume levels and increased marketing costs for newly constructed subdivisions within existing communities, offset by lower commission costs from a lower number of closings. The backlog of contracts for closing stood at 105 home sales, a decrease of 56 contracts from the same period in the prior year. The backlog excludes 19 lot reservations originated for new homes in subdivisions under construction. The Company remains committed to its program of generating continued 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. Summary of home sales activity: Quarter ended Quarter ended March 31, 2005 March 31, 2004 New home closings 77 91 New home contracts 91 148 Home resales 2 12 Brokered home sales 61 79 New home contract backlog 105 161 Outlook for 2005 The table below summarizes the Company's projected financial outlook for 2005 as of the date of this release and is based on the estimates and assumptions disclosed in this and previous press releases: Full Year 2005 Projected FFO $1.45 to $1.75 AFFO $1.32 to $1.61 Diluted EPS $1.06 to $1.35 Same Store Sales Revenue Growth 5.0% to 9.0% Expense Growth 5.5% to 8.0% NOI Growth 6.0% to 9.5% $2,800,000 to Home Sales Operating Income $4,600,000 $2,500,000 to General and Administrative Expenses $3,200,000 $50,000 to Other Income $150,000 Preferred Stock Dividends $1,775,000 Capital Replacements (per site) $125 to $145 $3,200,000 to Depreciation $3,700,000 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 the new home sales are subject to greater volatility than the earnings from rental property activities. The Company's earnings estimates would be impacted positively by increases in the unit volume of new home sales or increases in the gross margins from new home sales. Conversely, decreases in the unit volume of new home sales or decreases in the gross margins from new home sales would negatively impact the Company's earnings estimates. Home sales volume is dependent upon a number of factors, including consumer confidence and consumer access to financing sources for home purchases and the sale of their current home. The Company's projected results for 2005 include a reduction in corporate governance costs based upon current estimates of the cost of compliance. Non- employee director compensation continues to be paid in stock, and all stock based compensation is expensed within the 2005 projections. In addition, the projected results include the expense for performance-based restricted stock. The Company's earnings estimates would be adversely impacted by the 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. Stock-based Compensation Correction During the course of the Company's review of its application of SFAS 123, it determined that the accounting for certain aspects of its stock-based compensation was in error. The Company had previously valued certain awards of performance-based restricted stock at the market value of the Company's common stock at the date of issuance. These awards have been determined to be target stock price awards that should have been recorded at fair value on the date of issuance. In accordance with SFAS 123, the Company has estimated the value of HPS Share awards using a valuation model which considers the applicable risk-free interest rate, expected dividend yield, the volatility factor of the expected market price of the Company's common stock and the term over which the performance conditions must be met to result in vesting of the awards. In addition, the Company had previously treated dividends paid on non-vested restricted stock as additional compensation expense until the vesting condition was satisfied. Under SFAS 123, only the dividends paid on non-vested awards that are not expected to vest should be accounted for as additional compensation expense. Following this review and in consultation with its external auditors, the Company corrected these errors to conform with the provisions of SFAS 123 for valuing target stock price awards and to reverse previously recorded compensation expense related to the target stock price awards and dividends paid on unvested awards that are expected to vest. The correction relates solely to accounting treatment. It does not affect the Company's historical or future cash flows and the impact on the Company's current or prior years' earnings per share, cash from operations and shareholders' equity is immaterial. Casualty Event Several of the Company's properties were impacted by the hurricanes that challenged the state of Florida during the 2004 season. At December 31, 2004, the Company had additional claims with its insurer related to recoveries of damages caused during the hurricanes. During the first quarter 2005, the Company received $524,000 related to damages that occurred in 2004. The Company recognized additional casualty gain of approximately $237,000. In addition, the Company recognized recoveries of previously expensed damages of $140,000. The Company has additional claims with its insurer related to recoveries and will record additional casualty gain in the period that the insurance proceeds are realized. Preferred Stock As previously released, in February and March 2005, the Company sold 900,000 and 100,000 shares, respectively, of newly created 7.75% Class A Cumulative Redeemable Preferred Stock, par value $0.01 per share, or the Class A Preferred Stock, in a registered public offering generating net proceeds of approximately $23,907,000. The net proceeds were used to repay indebtedness including amounts outstanding under a promissory note in connection with the acquisition of property in Micco, Florida and the Company's revolving line of credit. Financing Activity The Company originated a term loan with a bank secured by the property acquired in Micco, Florida with a total commitment of $11,000,000. The loan matures in August 2005 and bears interest at thirty-day LIBOR plus 200 basis points. Development Activity Construction continued at the Company's Blue Heron community on a new subdivision of 65 home sites. New home construction in this new subdivision is scheduled to begin in May 2005. Construction continued on the last phase of the Company's Savanna Club project that will provide an additional 192 home sites. Planning and permitting for subdivisions at three additional communities continued during the quarter. American Land Lease, Inc. is a REIT that holds interests in 29 manufactured home communities with 6,993 operational home sites, 1,038 developed expansion sites, 1,492 undeveloped expansion sites and 129 recreational vehicle sites as of March 31, 2005. 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, 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, Wednesday, May 11 at 4:00 p.m. EDT for first quarter 2005 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 2005 results conference call. If you are unable to participate at the scheduled time, this information will be available for recorded playback from 5:30 p.m. EDT, May 11, 2005 until midnight on May 18, 2005. To access the replay, dial toll- free, (800) 642-1687 and request information from conference ID 6161541. 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 standardly used by American Land Lease management. Measurements include Funds from Operations ("FFO"), which is an industry-accepted measurement as based on the definition of the National Association of Real Estate Investment Trusts (NAREIT). 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, disposals 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 Leases'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 both Capital Replacement expenditures and Capital Enhancement 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, and AFFO also reflects that Capital Replacements are necessary to maintain the associated real estate assets. SAME STORE RESULTS: represent an operating measure that is used commonly to describe properties that have been in the portfolio for a period of time and therefore serve as a good basis upon which to review comparative performance data. American Land Lease's definition of Same Store communities are communities that are owned during both the current and comparable prior year period. SAME SITE RESULTS: represent an operating measure that is used to describe homesites that have been in the portfolio for a period of time and therefore serve as a good basis upon which to review comparative performance data. American Land Lease's definition of Same Site is individual homesites that were operational during both the current and comparable prior year period. Absorbed incremental homesites 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 a majority of the infrastructure has been completed. UNDEVELOPED HOME SITE: represent those sites within our portfolio that have not been fully developed and 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 material feature increases overall community value or revenue source. 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 a third party. AMERICAN LAND LEASE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) As of March 31, December 31, 2005 2004 (unaudited) ASSETS Real Estate $227,073 $222,311 Less accumulated depreciation (23,574) (22,803) Real estate under development 67,966 49,360 Total Real Estate 271,465 248,868 Cash and cash equivalents 870 820 Inventory 19,721 16,788 Other Assets 8,856 9,480 Assets held for sale -- -- Total Assets $300,912 $275,956 LIABILITIES AND EQUITY Liabilities Secured long-term notes payable $126,529 $127,338 Secured short-term financing 25,836 24,644 Accounts payable and accrued liabilities 8,904 9,795 Liabilities related to assets held for sale -- -- Total Liabilities 161,269 161,777 Minority Interest in Operating Partnership 15,168 14,746 STOCKHOLDERS' EQUITY Preferred Stock, par value $.01 per share; 1,000 shares authorized, 1,000 and 0 shares issued and outstanding, respectively 25,000 -- Common Stock, par value $.01 per share; 12,000 shares authorized 92 91 Additional paid-in-capital 286,014 286,649 Notes receivable from officers re common stock purchases (437) (748) Deferred compensation re restricted stock (2,573) (2,250) Dividends in excess of accumulated earnings (157,009) (157,697) Treasury stock at cost (26,612) (26,612) Total Stockholders' Equity 124,475 99,433 Total Liabilities and Stockholders' Equity $300,912 $275,956 As of September 30, June 30, March 31, 2004 2004 2004 (unaudited) (unaudited) (unaudited) ASSETS Real Estate $217,310 $215,155 $209,849 Less accumulated depreciation (22,116) (21,474) (20,779) Real estate under development 47,662 44,636 42,223 Total Real Estate 242,856 238,317 231,293 Cash and cash equivalents 987 1,207 776 Inventory 14,987 13,073 11,330 Other Assets 10,425 9,729 8,566 Assets held for sale -- 313 361 Total Assets $269,255 $262,639 $252,326 LIABILITIES AND EQUITY Liabilities Secured long-term notes payable $128,130 $119,876 $118,478 Secured short-term financing 18,622 20,142 13,495 Accounts payable and accrued liabilities 9,523 10,982 9,883 Liabilities related to assets held for sale 8 6 4 Total Liabilities 156,283 151,006 141,860 Minority Interest in Operating Partnership 14,552 14,497 14,319 STOCKHOLDERS' EQUITY Preferred Stock, par value $.01 per share; 1,000 shares authorized, 1,000 and 0 shares issued and outstanding, respectively -- -- -- Common Stock, par value $.01 per share; 12,000 shares authorized 91 90 90 Additional paid-in-capital 286,611 285,517 285,207 Notes receivable from officers re common stock purchases (766) (775) (785) Deferred compensation re restricted stock (2,472) (2,719) (3,049) Dividends in excess of accumulated earnings (158,432) (158,365) (158,704) Treasury stock at cost (26,612) (26,612) (26,612) Total Stockholders' Equity 98,420 97,136 96,147 Total Liabilities and Stockholders' Equity $269,255 $262,639 $252,326 AMERICAN LAND LEASE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) Three Months Ended March December September June 31, 31, 30, 30, 2005 2004 2004 2004 RENTAL PROPERTY OPERATIONS Rental and other property revenues $7,637 $7,188 $7,146 $7,001 Golf course operating revenues 399 225 114 176 Total property operating revenues 8,036 7,413 7,260 7,177 Property operating expenses (2,592) (2,790) (2,463) (2,422) Recoveries of casualty expenses related to hurricanes 140 Golf course operating expenses (327) (329) (283) (305) Total property operating expenses (2,779) (3,119) (2,746) (2,727) Depreciation (841) (766) (746) (737) Income from rental property operations 4,416 3,528 3,768 3,713 SALES OPERATIONS Home sales revenue 8,821 12,871 8,495 9,714 Cost of home sales (6,014) (8,665) (5,843) (6,474) Gross profit on home sales 2,807 4,206 2,652 3,240 Commissions earned on brokered sales 163 124 115 227 Commissions paid on brokered sales (87) (69) (64) (122) Gross profit on brokered sales 76 55 51 105 Selling and marketing expenses (2,285) (2,616) (2,236) (2,455) Income (loss) from sales operations 598 1,645 467 890 General and administrative expenses (429) (1,221) (959) (904) Interest and other income 12 16 51 27 Casualty gain 237 -- -- -- Gain (loss) on sale of real estate -- 438 -- -- Interest expense (1,533) (1,555) (1,426) (1,374) Income before minority interest in Operating Partnership 3,301 2,851 1,901 2,352 Minority interest in Operating Partnership (398) (342) (223) (285) Income from continuing operations 2,903 2,509 1,678 2,067 DISCONTINUED OPERATIONS: (Loss) Income from discontinued operations -- -- 26 20 Net income 2,903 2,509 1,704 2,087 Net Income attributable to preferred stockholders 194 -- -- -- NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $2,709 $2,509 $1,704 $2,087 Earnings per common share - basic: Income from continuing operations (net of cumulative unpaid preferred dividends) $0.38 $0.35 $0.24 $0.30 Net income attributable to common stockholders $0.38 $0.35 $0.24 $0.30 Earnings per common share - diluted: Income from continuing operations (net of cumulative unpaid preferred dividends) $0.36 $0.34 $0.23 $0.29 Net income attributable to common stockholders $0.36 $0.34 $0.23 $0.29 Weighted average common shares outstanding 7,122 7,089 7,050 6,971 Weighted average common shares and common share equivalents outstanding 7,548 7,402 7,297 7,236 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 December September June March 31, 31, 30, 30, 31, 2005 2004 2004 2004 2004 DEBT OUTSTANDING Mortgage Loans Payable - Fixed $100,901 $101,710 $102,502 $93,377 $94,107 Mortgage Loans Payable - Floating 25,628 25,628 25,628 26,499 24,371 Floor Plan Facility 20,461 17,679 12,907 10,762 9,077 Line of Credit 5,375 6,965 5,715 9,380 4,418 Total Debt $152,365 $151,982 $146,752 $140,018 $131,973 % FIXED/FLOATING Fixed 66.2% 66.9% 69.8% 66.7% 71.3% Floating 33.8% 33.1% 30.2% 33.3% 28.7% Total 100.00% 100.00% 100.00% 100.00% 100.00% AVERAGE INTEREST RATES Mortgage Loans Payable - Fixed 7.0% 7.0% 7.0% 7.1% 7.1% Mortgage Loans Payable - Floating 4.9% 4.7% 4.7% 4.9% 4.8% Floor Plan Facility 7.3% 6.8% 5.9% 6.5% 6.1% Line of Credit 4.6% 4.6% 3.6% 3.2% 3.1% Total Weighted Average 6.6% 6.5% 6.4% 6.4% 6.5% DEBT RATIOS Debt/Total Market Cap (1) 40.9% 44.6% 47.4% 47.5% 45.2% Debt/Gross Assets 50.7% 55.1% 54.5% 53.3% 52.3% December December December December December 31, 31, 31, 31, 31, MATURITIES 2005 2006 2007 2008 2009 Mortgage Loans Maturities - Scheduled 2,459 3,552 3,809 4,042 4,291 Mortgage Loans Maturities - Balloon -- -- 13,278 -- 2,069 Floor Plan Facility (2) -- -- -- -- -- Total $2,459 $3,552 $17,087 $4,042 $6,360 (1) Computed based upon closing price as reported on NYSE as of the period ended. (2) Discretionary, non-committed facility whose individual advances mature at different dates between 360 and 540 days from advance date. AMERICAN LAND LEASE INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME TO FFO AND AFFO (Amounts in thousands, except per share/OP unit amounts) (Unaudited) Three Months Ended March 31, 2005 2004 Net Income $2,709 $2,374 Adjustments: Cumulative unpaid preferred stock dividends 194 -- Minority interest in operating partnership 398 323 Casualty gain (237) -- Real estate depreciation 841 705 Discontinued Operations Real estate depreciation -- 4 Minority interest in operating partnership attributed to discontinued operations -- 1 Funds From Operations (FFO) 3,905 3,407 Cumulative unpaid preferred stock dividends (194) -- Funds From Operations attributable to common stockholders 3,711 3,407 Capital Replacements (216) (357) Adjusted Funds from Operations (AFFO) $3,495 $3,050 Weighted Average Common Shares/OP Units Outstanding: 8,524 8,246 Per Common Share and OP Unit: FFO: $0.44 $0.41 AFFO: $0.41 $0.37 Payout Ratio Per Common Share and OP Unit: Gross Distribution Payout FFO: 56.8 % 61.0 % AFFO: 61.0 % 67.6 % AMERICAN LAND LEASE INC. AND SUBSIDIARIES RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS FOR THE QUARTER ENDED MARCH 31, 2005 (in thousands) Three Three Months Months Ended Ended Contribution March March to Same 31, 31, % Store % 2005 2004 Change Change Change(1) Same site rental revenues $6,921 $6,644 $277 4.2% 3.9% Absorption rental revenues 434 32 402 1256.3% 5.7% Same site golf revenues 399 403 (4) -1.0% -0.1% Same store revenues A 7,754 7,079 675 9.5% 9.5% Redevelopment property rental revenues 275 286 (11) -3.8% Other Income 7 6 1 16.7% Total property revenues C 8,036 7,371 665 9.0% Same site rental expenses $2,071 $2,023 48 2.4% 2.1% Absorption rental expenses 48 -- 48 100.0% 2.0% Same site golf expenses 327 308 19 6.2% 0.8% Same store expenses B 2,446 2,331 115 4.9% 4.9% Recoveries of casualty expenses related to hurricanes (140) -- (140) 100.0% Redevelopment property expenses 88 91 (3) -3.3% Expenses related to offsite management(2) 385 396 (11) -2.8% Total property operating expenses D $2,779 $2,818 $(39) -1.4% Same Store net operating A- income B $5,308 $4,748 $560 11.8% -- C- Total net operating income D $5,257 $4,553 $704 15.5% (1) Contribution to Same Store % change is 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 2005 period. For example, same site rental revenue of $277 as compared to the total same store revenues in 2004 of $7,079 is a 3.9% increase ($277/$7,079=3.9%). (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, 2005 Undevel- Devel- Average oped oped Operational Monthly RV Home Home Community Location Home Sites Occupancy Rent Sites Sites Sites Owned Communities Blue Heron Punta Gorda, Pines FL 309 98 % $367 -- 65 17 Brentwood Hudson, FL 120 98 % 250 -- 0 71 Crystal Bay Micco, FL -- 0 % -- -- 533 -- Serendipity Ft. Myers, FL 338 95 % 332 -- -- -- Stonebrook Homosassa, FL 168 100 % 284 -- -- 43 Sun Lake Grand Island, FL 329 100 % 337 -- -- 65 Sun Valley Tarpon Springs, FL 261 98 % 369 -- -- -- Caribbean Cove Orlando, FL 272 71 % 385 -- -- 13 Forest View Homosassa, FL 252 100 % 297 -- -- 52 Gulfstream Harbor Orlando, FL 382 97 % 387 -- 50 -- Gulfstream Harbor II Orlando, FL 306 99 % 382 -- 37 1 Lakeshore Villas Tampa, FL 281 100 % 402 -- -- -- Park Royale Pinellas Park, FL 285 95 % 414 -- -- 24 Pleasant Living Riverview, FL 245 96 % 335 -- -- -- Riverside GCC Ruskin, FL 372 100 % 530 -- 420 145 Royal Palm Haines City, FL 264 96 % 332 -- 0 121 Cypress Greens Lakeland, FL 159 100 % 246 -- -- 99 Savanna Port St. Club Lucie, FL 786 100 % 274 -- 192 84 Woodlands Groveland, FL 133 96 % 248 -- -- 159 Sub-total Florida 5,262 1,297 894 Apache Blue Star Junction, AZ 22 73 % 284 129 -- -- Brentwood West Mesa, AZ 350 92 % 428 -- -- -- Casa Mesa, Encanta Mesa, AZ -- 0 % -- -- 195 -- Desert Apache Harbor Junction, AZ 145 97 % 367 -- -- 61 Fiesta Village Mesa, AZ 170 75 % 353 -- -- -- La Casa Apache Blanca Junction, AZ 198 90 % 373 -- -- -- Lost Apache Dutchman Junction, AZ 176 90 % 308 -- -- 83 Rancho Apache Mirage Junction, AZ 312 89 % 409 -- -- -- Apache Sun Valley Junction, AZ 268 94 % 317 -- -- -- Sub-total Arizona 1,641 195 144 Mullica Egg Harbor Woods City, NJ 90 100 % 480 -- -- -- Total Communities 29 6,993 95 % $351 129 1,492 1,038 (1) We define opertional home sites as those sites within our portfolio that have been leased to a tenant during our ownership of the community. Since our porfolio 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 within our portfolio. The occupancy of all developed sites was 81.5% across the entire portfolio. Including sites not yet developed, occupancy was at 69.9% March 31, 2005. Portfolio Summary Operational Developed Undeveloped Home Home Home RV site sites sites Sites Total As of December 31, 2004 6,931 1,101 960 129 9,121 Properties developed -- -- -- -- -- New lots purchased -- 2 533 -- 535 Lots sold -- -- -- -- -- New leases originated 65 (65) -- -- -- Adjust for site plan changes (3) -- (1) -- (4) As of March 31, 2005 6,9931 (1) 1,038 1,492 129 9,652 (1) As of March 31, 2005, 6,657 of these operational home sites were occupied. Occupancy Roll Forward Occupied Operational Home sites Home sites Occupancy As of December 31, 2004 6,617 6,931 96.5 % New home sales 77 65 Used home sales 2 -- Used homes acquired (19) -- Lots Sold -- -- Homes constructed by others 2 -- Site plan changes -- (3) Homes removed from previously leased sites (22) -- As of March 31, 2005 6,657 6,993 95.2 % AMERICAN LAND LEASE, INC. AND SUBSIDIARIES RETURN ON INVESTMENT FROM HOME SALES (unaudited) Three Months Ended Three Months Ended March 31, 2005 March 31, 2004 Expansion sites leased during the year 65 89 Estimated first year annualized profit on leases originated during the year A $260 $340 Costs, including development costs of sites leased $3,236 $4,348 Home sales income (loss) attributable to sites leased 522 733 Total costs incurred to originate ground leases B $2,714 $3,615 Estimated first year annualized return on investment for leases originated during the year A/B 9.6 % 9.4 % For the three months ended March 31, 2005 and 2004, we estimate our profit or loss attributable to the sale of homes situated on expansion home sites as follows (in thousands): Three Months Ended Three Months Ended March 31, 2005 March 31, 2004 Reported income from sales operations $598 $818 Used home sales and brokerage business income (76) (85) Adjusted income for pro forma analysis $522 $733 The reconciliation of our estimated first year return on investment in expansion home sites, a non-GAAP financial measure, to our return on investment in operational home sites in accordance with GAAP is shown below (in thousands): Total Portfolio for Year Ended December 31, 2004 Property income before depreciation A $18 Total investment in operating home sites B $221 Return on investment from earning home sites A/B 8.1% AMERICAN LAND LEASE INC. AND SUBSIDIARIES KEY HOME SALES STATISTICS Qtr Qtr over over Qtr Qtr March 31, June 30, Sept. 30, Dec 31, March 31, Increase/ % 2004 2004 2004 2004 2005 Decrease Change New home closings 91 103 77 121 77 -44 -36.4% New home contracts 168 144 69 65 91 26 40.0% Home resales 12 5 3 3 2 -1 -33.3% Brokered home sales 79 83 48 55 61 6 10.9% New home contract backlog 164 189 175 88 105 17 9.3% Average Selling Price $100,000 $92,000 $108,000 $105,000 $112,000 7,000 6.7% Average Gross Margin Percentage 33.2% 33.7% 33.10% 32.7% 31.8% DATASOURCE: American Land Lease, Inc. CONTACT: Robert G. Blatz, President, or Shannon E. Smith, Chief Financial Officer, both of American Land Lease, Inc., +1-727-726-8868 Web site: http://www.americanlandlease.com/

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