ANL Amer Land Lease

CLEARWATER, Fla., May 9 /PRNewswire-FirstCall/ -- American Land Lease, Inc. (NYSE:ANL) today released results for first quarter 2006. Summary Financial Results First Quarter * Diluted Earnings Per Share ("Diluted EPS") were $0.36 for the three- month period ended March 31, 2006 equaling the $0.36 from the same period one- year ago. * Funds from Operations ("FFO"; a non-GAAP financial measure defined on page 8 of this press release) were $4.3 million, or $0.48 per diluted common share, for the quarter compared to $3.7 million or $0.44 per diluted common share from the same period one year ago, an increase of 9.1% on a per share basis. * Unit volume in home sales was 104 new home closings, including 85 new homes sold on expansion home sites. This compares with 77 new home closings in first quarter 2005. * "Same Store" results provided a revenue increase of 10.1%, an expense increase of 12.8% and an increase of 8.9% in Net Operating Income ("NOI"). * "Same Site" results provided a revenue increase of 4.5%, an expense increase of 5.6% and an increase of 4.1% 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, "We are pleased by our results for the first quarter of 2006. Our land lease portfolio posted record income. New homes sales were strong and we achieved a new high for home closings in the first quarter. At a time of apparent slowing in home building, we are gratified by strength of the active senior segment that we have targeted. The March purchase of The Reserve at Fox Creek gives us an opportunity to use our home sales and property operating skills to add another high quality senior community to our portfolio. We continue to look for other such opportunities." Mr. Blatz added, "We are concerned that operating expenses are growing faster than inflation. While property tax and energy cost increases are largely passed through to our homeowners, we plan to increase our efforts to control costs." Dividend Declaration On May 3, 2006, the Board of Directors declared a first quarter common stock dividend of $0.25 per share payable on May 31, 2006, to stockholders of record on May 15, 2006. On May 3, 2006, the Board of Directors also declared a cash dividend of $0.4844 per share of Class A Preferred Stock for the quarter ended March 31, 2006, payable on May 31, 2006 to shareholders of record on May 15, 2006. The Board of Directors reviews the dividend policy quarterly. The Company's dividends are set quarterly and are subject to change or elimination at any time. The Company's primary financial objective is to maximize for common shareholders long term, risk adjusted returns on investment. 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 First Quarter Property Operations First quarter revenue from property operations was $8,311,000 as compared to $7,637,000 in the same period one year ago, an 8.8% increase. First quarter property operating expenses totaled $2,943,000 as compared to $2,592,000 in the same period one year ago, a 13.5% increase. 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 increased in first quarter 2006, as compared to the same period in the prior year, primarily due to increases in payroll and benefit costs, tenant related legal costs, and costs for utilities including waste water treatment. Property operating margins before depreciation expense decreased from 65.4% in the prior year's first quarter to 62.3% in the current quarter. 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 quarters of 2006 and 2005. The same store properties account for 97% of property operating revenues for the first quarter of 2006. We believe that same store information provides an opportunity to understand changes in profitability for properties owned during both reporting periods that cannot be obtained from a review of the consolidated income statement in periods where properties are acquired. The same store % change results are as follows: 1Q06 Revenue 10.1% Expense 12.8% Net Operating Income 8.9% 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 4.5% 4.7% 0.9% 10.1% Expense 5.6% 5.6% 1.6% 12.8% NOI 4.1% 4.2% 0.6% 8.9% 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, 2006 and 2005 can be found on page 14 of this earnings release. First Quarter Home Sales Operations First quarter 2006 new home sales produced 104 closings, a 35.1% increase from the 77 closings in the same period in the prior year. Average selling price per home was $128,000 as compared to $112,000 in the same period in the prior year, a 14.3% increase. The increase in closings compared to the same period in the prior year was primarily due to increased sales at two of the Company's expansion communities in Florida. Brokerage profits were up 0.8% as compared with the same period in the prior year. Selling gross margins, excluding brokerage activities, increased to 33.0% in the quarter as compared to 31.8% in the same period in the prior year. This increase was driven primarily by increased selling prices and increased manufacturer rebates associated with higher purchasing volumes partially offset by increases in costs of homes purchased. Selling costs as a percentage of sales revenue decreased from 25.9% in the prior year's period to 20.7% in the first quarter of 2006, reflecting greater operating leverage with higher sales volumes. The backlog of contracts for closing stood at 75 home sales, a decrease of 30 contracts from the same period in the prior year. The Company remains committed to its program of generating 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, 2006 March 31, 2005 New home closings 104 77 New home contracts 117 91 Home resales -- 2 Brokered home sales 62 61 New home contract backlog 75 105 Outlook for 2006 The table below summarizes the Company's projected financial outlook for 2006 as of the date of this release and is based on the estimates and assumptions disclosed in this and previous press releases: Full Year 2006 Projected FFO $1.70 to $1.90 AFFO $1.57 to $1.82 Diluted EPS $1.27 to $1.52 Same Store Sales Revenue Growth 7% to 10% Expense Growth 6% to 9% NOI Growth 8% to 10% Home Sales Operating Income $5.5M to $7.3M General and Administrative Expenses $3.8M to $4.2M Capital Replacements (per site) $145 to $165 Depreciation $3.8M to $4.1M 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 new home sales are subject to greater volatility than are the earnings from land leases. The Company's earnings estimates would be impacted positively or negatively by changes in the unit volume of new home sales or in the gross margins from new home sales. Home sales volume and gross margins are dependent upon a number of factors, including consumer confidence, the cost of homeowners' insurance, and consumers' access to financing sources for home purchases and the sale of their current home. The Company's projected results for 2006 include a reduction in regulatory compliance costs. Non-employee director compensation continues to be paid in stock and all stock based compensation is expensed within the 2006 projections. In addition, projected results include the expense for performance based restricted stock. The Company's earnings estimates would be adversely impacted by any 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. Financing Activity On January 10, 2006, the Company issued an $11,500,000 non-recourse mortgage note payable and modified an existing $4,500,000 note payable, resulting in a restated $16,000,000 note payable with a fixed interest rate of 6.02% maturing on February 1, 2016. The proceeds will be used to continue development of our residential land lease communities and for general corporate purposes. On January 17, 2006, the Company extended the maturity of the term loan with a total commitment of $11,000,000 to April 30, 2006. The balance under the loan at March 31, 2006 was $100,000. No other terms or conditions were modified. On February 27, 2006, the Company issued a $4,489,000 thirteen-year, non- recourse mortgage note payable with a fixed rate of 6.05% and modified an existing $4,036,000 note, resulting in a restated $8,525,000 note payable with a blended interest rate of 6.32% maturing on February 28, 2019. The proceeds will be used to continue the development of our residential land lease communities and for general corporate purposes. On February 27, 2006, the Company issued a $3,093,000 fourteen-year, non- recourse mortgage note payable with a fixed interest rate of 5.92% and modified an existing $6,177,000 note, resulting in a restated $9,270,000 note payable with a blended fixed interest rate of 6.76% maturing on February 29, 2020. The proceeds will be used to continue the development of our residential land lease communities and for general corporate purposes. Development Activity The Company completed significant development activities at a number of locations during the quarter. * At Savanna Club, a 11,000+ square foot auditorium was completed. This auditorium, seating 780 for lectures/shows and 480 for sit down dinners, will be used to host community activities including music performances, shows, and dinner dances. * At Blue Heron Pines, the new Lakeview Recreation Center was completed and opened. This expansion of the old clubhouse almost doubles its size to 10,000+ square feet and incorporates a fitness center, computer center, and pool and game rooms as we expand our amenities to respond to changes in customer choices and tastes. * At Blue Heron Pines, an additional 16 home sites were developed and available for immediate occupancy as the result of the conversion of land previously used for the community's waste water treatment plant and available for development now that the community has converted to municipal water and sewer. Additionally, other ongoing significant development activity included: * At Savanna Club, construction continued on a 5,000+ square foot Fitness Center with expected completion in 2Q06. * At the Villages at Country Club project in Mesa, Arizona, site work began with home building expected to commence in 2Q06. * At Sebastian Beach and Tennis Village, construction and site work continued on schedule for the opening of the community in early 2007. Pre- sales and marketing activities for the community have already begun at an off site sales office opened in January. * At Riverside Club, construction activities began in January for the community's second clubhouse, this one including more than 22,000 square feet. Annual Meeting At the Company's 2006 Annual Meeting held May 3, 2006, Shareholders approved the following: 1. Re-election of Todd Sheets as a Director for a three year term; 2. Engagement of Ernst and Young as the Company's Auditors; 3. Removal of the Company's 15% limitation on outstanding options while maintaining the 3 million share limit on shares issued under the stock incentive plan; and 4. Continuation of the Company's High Performance Stock Plan for the next three years. The performance objectives for vesting of the Class I awards under the program will be 48.2% to 68.1% total return or if expressed in annual compounded returns of 14.81% to 19.81% for the three year period ending December 31, 2008. American Land Lease, Inc. is a REIT that held interests in 30 manufactured home communities with 7,572 operational home sites, 998 developed expansion sites, 1,274 undeveloped expansion sites and 129 recreational vehicle sites as of March 31, 2006. 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, Tuesday, May 9, 2006 at 4:00 p.m. Eastern Daylight Time to discuss first quarter 2006 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 2006 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. Eastern Daylight Time, May 9, 2006 until midnight on May 16, 2006. To access the replay, dial toll free, (800) 642-1687 and request information from conference ID 8670859. 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 standard 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, dispositions 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 Lease'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 Capital Replacement 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 while also reflecting that Capital Replacements are necessary to maintain the associated real estate assets. SAME STORE RESULTS: represent an operating measure that is used to compare the results of properties that have been in the portfolio for both accounting periods being compared. SAME SITE RESULTS: represent an operating measure that is used to compare the results of home sites that have been in the portfolio for both accounting periods being compared. Home sites that are leased or "absorbed" during the accounting periods 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 the greater part of their infrastructure has been completed. UNDEVELOPED HOME SITE: represent those sites within our portfolio that have not been fully developed and that 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 revenue source or material feature that increases overall community value. 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 the third party. AMERICAN LAND LEASE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) As of March December September June March 31, 2006 31, 2005 30, 2005 30,2005 31, 2005 (un- (un- (un- (un- audited) audited) audited) audited) ASSETS Real Estate $259,237 $249,398 $236,588 $232,035 $227,073 Less accumulated depreciation (26,887) (26,014) (25,172) (24,358) (23,574) Real estate under development 87,068 74,416 74,818 70,841 67,966 Total Real Estate 319,418 297,800 286,234 278,518 271,465 Cash and cash equivalents 8,384 1,795 828 1,313 870 Inventory 20,654 18,759 19,431 19,478 19,721 Other assets 12,883 11,335 10,074 9,494 8,856 Total Assets $361,339 $329,689 $316,567 $308,803 $300,912 LIABILITIES AND EQUITY Liabilities Secured long- term notes payable $185,015 $151,656 $127,045 $125,712 $126,529 Secured short-term financing 16,742 19,669 33,777 30,123 25,836 Accounts payable and accrued liabilities 12,057 12,510 11,850 10,237 8,904 Total Liabilities 213,814 183,835 172,672 166,072 161,269 Minority Interest in Operating Partnership 16,137 15,945 15,511 15,312 15,168 STOCKHOLDERS' EQUITY Preferred Stock, par value $.01 per share; 1,000 shares authorized, 1,000 and 0 shares issued and outstanding, respectively 25,000 25,000 25,000 25,000 25,000 Common Stock, par value $.01 per share; 12,000 shares authorized 92 93 93 93 92 Additional paid-in capital 287,206 288,224 288,188 288,064 286,014 Notes receivable from officers re common stock purchases -- -- -- -- (437) Deferred compensation re restricted stock -- (1,651) (1,959) (2,258) (2,573) Dividends in excess of accumulated earnings (154,298) (155,145) (156,326) (156,868) (157,009) Treasury stock at cost (26,612) (26,612) (26,612) (26,612) (26,612) Total Stockholders Equity 131,388 129,909 128,384 127,419 124,475 Total Liabilities and Stockholders' Equity $361,339 $329,689 $316,567 $308,803 $300,912 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, 2006 31, 2005 30, 2005 30, 2005 RENTAL PROPERTY OPERATIONS Rental and other property revenues $8,311 $7,820 $7,876 $7,626 Golf course operating revenues 470 232 131 194 Total property operating revenues 8,781 8,052 8,007 7,820 Property operating expenses (2,943) (2,866) (2,794) (2,651) Recoveries of casualty expenses related to hurricanes -- (6) (21) 36 Golf course operating expenses (365) (346) (329) (339) Total property operating expenses (3,308) (3,218) (3,144) (2,954) Depreciation (997) (971) (886) (858) Income from rental property operations 4,476 3,863 3,977 4,008 SALES OPERATIONS Home sales revenue 13,496 16,781 13,676 12,171 Cost of home sales (9,044) (11,444) (9,562) (8,487) Gross profit on home sales 4,452 5,337 4,114 3,684 Commissions earned on brokered sales 159 139 112 240 Commissions paid on brokered sales (82) (74) (64) (138) Gross profit on brokered sales 77 65 48 102 Selling and marketing expenses (2,800) (3,162) (2,550) (2,596) Income (loss) from sales operations 1,729 2,240 1,612 1,190 General and administrative expenses (891) (1,113) (946) (864) Gain on sale of property -- -- -- -- Interest and other income 53 1 2 8 Tax benefit -- 600 -- -- Interest expense (1,624) (1,546) (1,330) (1,436) Income before minority interest in Operating Partnership 3,743 4,045 3,315 2,906 Minority interest in Operating Partnership (441) (483) (395) (340) Income from continuing operations 3,302 3,562 2,920 2,566 Cumulative preferred stock dividends (484) (484) (484) (484) NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $2,818 $3,078 $2,436 $2,082 Earnings per common share - basic: Income from continuing operations (net of cumulative unpaid preferred dividends) $0.38 $0.42 $0.33 $0.29 Net income attributable to common stockholders $0.38 $0.42 $0.33 $0.29 Earnings per common share - diluted: Income from continuing operations $0.36 $0.40 $0.32 $0.27 Net income attributable to common stockholders $0.36 $0.40 $0.32 $0.27 Weighted average common shares outstanding 7,423 7,341 7,331 7,256 Weighted average common shares and common share equivalents outstanding 7,880 7,722 7,706 7,598 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, 2006 2005 2005 2005 2005 DEBT OUTSTANDING Mortgage Loans Payable - Fixed $180,570 $136,641 $101,417 $100,084 $100,901 Mortgage Loans Payable - Floating 4,445 15,015 25,628 25,628 25,628 Floor Plan Facility 16,642 14,969 19,147 18,929 20,461 Line of Credit 100 4,700 14,630 11,194 5,375 Total Debts $201,757 $171,325 $160,822 $155,835 $152,365 % FIXED FLOATING Fixed 89.5 % 79.8 % 63.1 % 64.2 % 66.2 % Floating 10.5 % 20.2 % 36.9 % 35.8 % 33.8 % Total 100.00 % 100.00 % 100.00 % 100.00 % 100.0 % AVERAGE INTEREST RATES Mortgage Loans Payable - Fixed 6.4 % 6.6 % 7.0 % 7.0 % 7.0 % Mortgage Loans Payable - Floating 7.2 % 6.7 % 6.5 % 5.9 % 4.9 % Floor Plan Facility 8.2 % 7.6 % 7.1 % 7.7 % 7.3 % Line of Credit 6.6 % 6.4 % 5.8 % 4.5 % 4.6 % Total Weighted Average 6.6 % 6.7 % 6.8 % 6.7 % 6.6 % DEBT RATIOS Debt/Total Market Cap(1) 43.0 % 42.1 % 41.2 % 43.1 % 40.9 % Debt/Gross Assets 55.8 % 52.0 % 50.8 % 50.5 % 50.7 % December December December December December 31, 31, 31, 31, 31, MATURITIES 2006 2007 2008 2009 2010 Mortgage Loan Scheduled Principal 2,402 3,460 3,652 3,856 4,105 Payments Mortgage Loans Balloon Maturities -- 2,665 -- 2,069 -- Floor Plan Facility -- -- -- -- -- Total $2,402 $6,125 $3,652 $5,925 $4,105 (1) Computed based upon closing price as reported on NYSE as of the period ended. FFO/AFFO and Payout Ratios 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, 2006 2005 Net Income $2,818 $2,709 Adjustments Cumulative unpaid preferred stock dividends 484 194 Minority interest in operating partnership 441 398 Casualty gain -- (237) Real estate depreciation 997 841 Funds From Operations (FFO) $4,740 $3,905 Cumulative unpaid preferred stock dividends (484) (194) Funds From Operations attributable to common Stockholders 4,256 3,711 Capital Replacements (753) (216) Adjusted Funds from Operations (AFFO) $3,503 $3,495 Weighted Average Common Shares/OP Units Outstanding Per Common Share and OP Unit: 8,872 8,524 FFO: $0.48 $0.44 AFFO: $0.41 $0.41 Payout Ratio Per Common Share and OP Unit: Gross Distribution Payout FFO: 52.1% 56.8% AFFO: 61.0% 61.0% AMERICAN LAND LEASE INC. AND SUBSIDIARIES RECONCILIATION OF SAME SITE AND SAME STORE OPERATING RESULTS FOR THE QUARTER ENDED MARCH 31, 2006 AND MARCH 31, 2005 (in thousands) (unaudited) Three Three Months Months Contribution Ended Ended to Same March 31, March 31, Store 2006 2005 Change % Change % Change(1) Same site rental revenues $7,679 $7,327 $352 4.8% 4.5% Absorption rental revenues 393 31 362 1167.7% 4.7% Same site golf revenues 470 399 71 17.8% 0.9% Same store revenues A 8,542 7,757 785 10.1% 10.1% Re-development property revenues 231 275 (44) -16.0% Other Income 8 4 4 100.0% Total property revenues C $8,781 $8,036 $745 9.3% Same site rental expenses $2,256 $2,119 $137 6.5% 5.6% Absorption rental expenses 138 -- 138 100.0% 5.6% Same site golf expenses 365 327 38 11.6% 1.6% Same store expenses B 2,759 2,446 313 12.8% 12.8% Recoveries of casualty expenses related to hurricanes -- (140) 140 100.0% Re-development property expenses 90 88 2 2.3% Expenses related to offsite management(2) 458 385 73 19.0% Total property operating expenses D $3,307 $2,779 $528 19.0% Same Store net operating income A-B $5,783 $5,311 472 8.9% Total net operating income C-D $5,474 $5,257 $217 4.1% (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 2004 period. For example, same site rental revenues of $352 as compared to the total same store revenues in 2005 of $7,757 is a 4.5% increase ($352/$7,757=4.5%). (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, 2006 Undeve Operational Average -loped Developed Community Location Home Occu Monthly RV Home Home Sites (1) -pancy Rent Sites Sites Sites Owned Communities Blue Heron Punta Gorda, Pines FL 335 99% $339 -- 16 34 Brentwood Estates Hudson, FL 129 98% 266 -- -- 62 Sebastian Beach & Tennis Club Micco, FL -- 0% -- -- 533 -- Serendipity Ft. Myers, FL 338 96% 347 -- -- -- Stonebrook Homosassa, FL 185 100% 293 -- -- 22 Sunlake Grand Estates Island, FL 342 100% 349 -- -- 54 Sun Valley Tarpon Springs, FL 261 97% 383 -- -- -- Forest View Homosassa, FL 266 100% 312 -- -- 38 Gulfstream Orlando, FL Harbor 382 98% 403 -- 50 -- Gulfstream Orlando, FL Harbor II 306 100% 398 -- 37 1 Gulfstream Orlando, FL Harbor III 272 58% 387 -- -- 13 Lakeshore Tampa, FL Villas 281 99% 417 -- -- -- Park Royale Pinellas Park, FL 290 95% 427 -- -- 19 Pleasant Riverview, Living FL 245 96% 347 -- -- -- Riverside GCC Ruskin, FL 418 100% 514 -- 420 99 Royal Palm Haines City, Village FL 269 97% 342 -- -- 118 Cypress Lakeland, FL Greens 195 100% 253 -- -- 63 Savanna Club Port St Lucie, FL 925 100% 294 -- -- 142 Woodlands Groveland, FL 147 99% 272 -- -- 145 Subtotal- Florida 5,586 1,056 810 Blue Star Apache Junction, AZ 22 68% 289 129 -- -- Brentwood Mesa, AZ West 350 93% 448 -- -- -- Casa Encanta Mesa, AZ -- 0% -- -- 218 -- Desert Harbor Apache Junction, AZ 176 99% 373 -- -- 30 Fiesta Mesa, AZ Village 172 82% 366 -- -- -- La Casa Apache Blanca Junction, AZ 198 94% 386 -- -- -- Lost Dutchman Apache Junction, AZ 190 86% 308 -- -- 52 Rancho Mirage Apache Junction, AZ 312 93% 419 -- -- -- Reserve at Bull Head Fox Creek City, AZ 208 100% 304 -- -- 106 Sun Valley Apache Junction AZ 268 93% 329 -- -- -- Subtotal- Arizona 1,896 129 218 188 Mullica Woods Egg Harbor City, NJ 90 100% 496 -- -- -- Total Communities 30 7,572 96% $346 129 1,274 998 (1) We define operational home sites as those sites within our portfolio that have been leased to a tenant during our ownership of the community. Since our portfolio 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 without our portfolio. The occupancy of all developed sites was 83.2% across the entire portfolio. Including sites not yet developed, occupancy was at 73.6% at March 31, 2006. Portfolio Summary Operational Developed Undeveloped RV Home sites Home sites Home sites Sites Total As of December 31, 2005 7,283 976 1,270 129 9,658 Properties developed 208 106 -- -- 314 New lots purchased -- 1 -- -- 1 New leases originated 81 (81) -- -- -- Adjust for site plan changes -- (4) 4 -- -- As of March 31, 2006 7,572(1) 998 1,274 129 9,973 (1) As of March 31, 2006, 7,245 of these operational home sites were occupied. Occupancy Roll Forward Occupied Operational Home sites Home sites Occupancy As of December 31, 2005 6,947 7,283 95.4% New home sales 105 81 Used home sales -- -- Used homes acquired (10) -- Homes constructed by others 215 208 Homes removed from previously leased sites (12) -- As of March 31, 2006 7,245 7,572 95.7% AMERICAN LAND LEASE, INC. AND SUBSIDIARIES RETURN ON INVESTMENT FROM HOME SALES (unaudited) Three Months Ended Three Months Ended March 31, 2006 March 31, 2005 Expansion sites leased during the period 85 65 Estimated first year annualized profit on leases originated during the period A $332 $260 Costs, including development costs of sites leased $5,005 $3,236 Home sales income (loss) attributable to sites leased 1,652 510 Total costs incurred to originate ground leases B $3,270 $2,726 Estimated first year returns from the leases originated on expansion home sites during the period A/B 10.2% 9.5% For the three months ended March 31, 2006 and 2005, 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, 2006 March 31, 2005 Reported income from sales operations $1,729 $598 Used home sales and brokerage business income (77) (76) Used home sales -- (12) Adjusted income for projection analysis $1,652 $510 The reconciliation of our estimated first year return on investment in expansion home sites to our return on investment in operational home sites for the year ended December 31, 2005 in accordance with GAAP is shown below (in thousands): Total Portfolio for Year Ended December 31, 2005 Property income before depreciation A $19,819 Total investment in operating home sites B $242,304 Return on investment from earning home sites A/B 8.2% AMERICAN LAND LEASE INC. AND SUBSIDIARIES KEY HOME SALES STATISTICS Mar. 31, June. 30, Sept. 30, Dec. 31, Mar. 31, 2005 2005 2005 2005 2006 New home 91 145 145 105 117 contracts New home 77 110 115 133 104 closings Home resales 2 5 4 1 -- Brokered sales 61 90 45 51 62 New home contract backlog 105 139 157 93 75 Average Selling Price $112,000 $109,000 $117,000 $125,000 $128,000 Average Gross Margin Percentage 31.8% 30.3% 30.1% 31.8% 33.0% 1Q06 over 1Q06 over 4Q05 1Q06 over 1Q05 1Q06 over Increase/ 4Q05 % Increase/ 1Q05 % Decrease Change Decrease Change New home 12 10.3% 26 28.6% contracts New home -29 -21.8% 27 35.1% closings Home resales -1 -100.0% -2 -100.0% Brokered sales 11 17.7% 1 1.6% New home backlog contract -18 -19.4% -30 -28.6% Average $3,000 2.3% $16,000 14.3% Selling Price DATASOURCE: American Land Lease, Inc. CONTACT: Robert G. Blatz, President, +1-727-726-8868, or Shannon E. Smith, Chief Financial Officer, +1-727-726-8868, both of American Land Lease, Inc. Web site: http://www.americanlandlease.com/

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