-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JBzz+3eR2EjwS6SLAfYPBvGQ7xzIo6a7c0omJhr28/nstXBKSn8qBGNNoC0A8D2t XHh/Y08f1i48K3NxgSs/YQ== 0000892626-98-000274.txt : 19980518 0000892626-98-000274.hdr.sgml : 19980518 ACCESSION NUMBER: 0000892626-98-000274 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMLI RESIDENTIAL PROPERTIES TRUST CENTRAL INDEX KEY: 0000914724 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363925916 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12784 FILM NUMBER: 98622279 BUSINESS ADDRESS: STREET 1: 125 S WACKER DR STREET 2: STE 3100 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124431477 FORMER COMPANY: FORMER CONFORMED NAME: AMLI RESIDENTIAL PROPERTIES INC DATE OF NAME CHANGE: 19931112 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 1998 Commission File Number 1-12784 AMLI RESIDENTIAL PROPERTIES TRUST (Exact name of registrant as specified in its charter) Maryland 36-3925916 (State of Organization) (I.R.S. Employer Identification No.) 125 South Wacker Drive, Suite 3100, Chicago, Illinois 60606 (Address of principal executive office) (Zip code) Registrant's telephone number, including area code: (312) 443-1477 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ( X ) No ( ) The number of the Registrant's Common Shares of Beneficial Interest outstanding was 16,609,455 as of March 31, 1998. INDEX PART I: FINANCIAL INFORMATION Item 1: Financial Statements (Unaudited) Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997. . . . . . . 3 Consolidated Statements of Operations for the three months ended March 31, 1998 and 1997 . . . . . . . . . . . . . 5 Consolidated Statements of Shareholders' Equity for the three months ended March 31, 1998 . . . . . . . . . . . . . . . . . . 7 Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997 . . . . . . . . . . . . . 8 Notes to Consolidated Financial Statements. . . . . 10 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . 29 PART II: OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . 33 Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . 33 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 35 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS MARCH 31, 1998 AND DECEMBER 31, 1997 (UNAUDITED) (Dollars in thousands, except share data)
MARCH 31, DECEMBER 31, 1998 1997 ------------- ------------ ASSETS: Rental apartments: Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,461 78,476 Depreciable property. . . . . . . . . . . . . . . . . . . . . . . . . . 514,590 496,747 ---------- ---------- 595,051 575,223 Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . (66,778) (62,641) ---------- ---------- 528,273 512,582 Property under development. . . . . . . . . . . . . . . . . . . . . . . . 113,542 78,724 Investments in partnerships . . . . . . . . . . . . . . . . . . . . . . . 50,245 50,729 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . 3,266 5,676 Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,664 1,821 Deferred expenses, net. . . . . . . . . . . . . . . . . . . . . . . . . . 3,075 3,140 Notes receivable from and advances to Service Companies . . . . . . . . . 19,398 18,356 Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,385 8,950 ---------- ---------- Total Assets $ 727,848 679,978 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY: LIABILITIES: Debt (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 361,305 333,250 Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . . . . 1,487 1,389 Accrued real estate taxes payable . . . . . . . . . . . . . . . . . . . . 5,465 9,334 Construction costs payable. . . . . . . . . . . . . . . . . . . . . . . . 9,931 8,403 Security deposits and prepaid rents . . . . . . . . . . . . . . . . . . . 3,049 2,722 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,599 2,978 ---------- ---------- Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 383,836 358,076 ---------- ---------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS - CONTINUED MARCH 31, DECEMBER 31, 1998 1997 ------------- ------------ Commitments and contingencies (note 6) Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,092 51,463 ---------- ---------- SHAREHOLDERS' EQUITY: Series A Cumulative Convertible Preferred shares of beneficial interest, $.01 par value, 1,500,000 authorized, 1,200,000 issued and 1,100,000 outstanding (aggregate liquidation price of $22,195 and $22,195, respectively) . . . . . . . . . . . . . . . . . . . . . . 11 11 Series B Cumulative Convertible Preferred shares of beneficial interest, $0.01 par value, 3,125,000 authorized, 1,041,666 issued and outstanding (aggregate liquidation price of $25,120 at March 31, 1998) . . . . . . . 10 -- Shares of beneficial interest, $.01 par value, 145,375,000 authorized, 16,609,455 and 16,577,580 common shares issued and outstanding, respectively . . . . . . . . . . . . . . . . . . . . . 166 166 Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . 367,392 341,148 Employees and trustees notes. . . . . . . . . . . . . . . . . . . . . . . (7,243) (6,924) Retained earnings (deficit) . . . . . . . . . . . . . . . . . . . . . . . 24,223 18,897 Dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90,639) (82,859) ---------- ---------- Total shareholders' equity. . . . . . . . . . . . . . . . . . . 293,920 270,439 ---------- ---------- Total Liabilities and Shareholders' Equity. . . . . . . . . . . $ 727,848 679,978 ========== ========== See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) (Dollars in thousands, except share data)
1998 1997 -------- ------- Revenues: Property: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,138 18,680 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,292 975 Interest and share of income from Service Companies . . . . . . . . . . . . . 429 264 Other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 107 Income from partnerships. . . . . . . . . . . . . . . . . . . . . . . . . . . 324 167 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288 657 -------- -------- Total revenues. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,662 20,850 -------- -------- Expenses: Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,317 1,723 Advertising and promotion . . . . . . . . . . . . . . . . . . . . . . . . . . 708 507 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,085 1,025 Building repairs and maintenance and services . . . . . . . . . . . . . . . . 1,255 1,156 Landscaping and grounds maintenance . . . . . . . . . . . . . . . . . . . . . 442 364 Real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,180 2,322 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 198 Property management fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 638 491 Other operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 344 275 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,938 2,646 Amortization of deferred costs. . . . . . . . . . . . . . . . . . . . . . . . 130 243 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,291 3,057 General and administrative. . . . . . . . . . . . . . . . . . . . . . . . . . 854 767 -------- -------- Total expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,403 14,774 -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED 1998 1997 -------- ------- Income before minority interest . . . . . . . . . . . . . . . . . . . . . . . . 6,259 6,076 Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933 953 -------- -------- Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,326 5,123 Less income attributable to preferred shares. . . . . . . . . . . . . . . . . . 604 473 -------- -------- Net income attributable to common shares. . . . . . . . . . . . . . . $ 4,722 4,650 ======== ======== Net income per common share (basic and diluted) . . . . . . . . . . . . . . . . $ .28 .31 Dividends declared and paid per common share. . . . . . . . . . . . . . . . . . $ .44 .43 ======== ======== See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY THREE MONTHS ENDED MARCH 31, 1998 (Dollars in thousands)
SHARES OF EMPLOYEES BENEFICIAL INTEREST ADDITIONAL AND RETAINED -------------------- PAID-IN TRUSTEES EARNINGS DIVIDENDS SHARES AMOUNT CAPITAL NOTES (DEFICIT) PAID TOTAL ------- ------ ---------- --------- -------- --------- --------- Balance at December 31, 1997. . . . . 17,677,580 $177 341,148 (6,924) 18,897 (82,859) 270,439 Shares issued in connection: Preferred shares offering. . . . . . . 1,041,666 10 24,739 -- -- -- 24,749 Executive Share Purchase Plan. . . . 28,491 -- 645 -- -- -- 645 Employees and Trustees notes, net . . -- -- -- (319) -- -- (319) Units converted to shares . . . . . . . 3,384 -- 69 -- -- -- 69 Reallocation of minority interest . . . -- -- 791 -- -- -- 791 Net income. . . . . . . . -- -- -- -- 5,326 -- 5,326 Dividends paid. . . . . . -- -- -- -- -- (7,780) (7,780) ---------- ---- ------- ------- ------- ------- ------- Balance at March 31, 1998. . . . . . 18,751,121 $187 367,392 (7,243) 24,223 (90,639) 293,920 ========== ==== ======= ======= ======= ======= ======= See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) (Dollars in thousands)
1998 1997 -------- -------- Cash flows from operating activities: Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,326 5,123 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . 4,422 3,300 Income from partnerships. . . . . . . . . . . . . . . . . . . . . . . . . . (294) (167) (Income) loss from Service Companies. . . . . . . . . . . . . . . . . . . . 116 (11) Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933 953 Changes in assets and liabilities: Increase in deferred costs. . . . . . . . . . . . . . . . . . . . . . . . . (75) (238) Decrease in security deposits . . . . . . . . . . . . . . . . . . . . . . . 157 5 Increase in other assets. . . . . . . . . . . . . . . . . . . . . . . . . . (980) (586) Increase in accrued interest payable. . . . . . . . . . . . . . . . . . . . 98 43 Decrease in accrued real estate taxes . . . . . . . . . . . . . . . . . . . (3,802) (2,908) Increase (decrease) in tenant security deposits and prepaid rents . . . . . 327 (320) Decrease in other liabilities . . . . . . . . . . . . . . . . . . . . . . . (379) (34) -------- ------- Net cash provided by operating activities . . . . . . . . . . . . . . 5,849 5,160 -------- ------- Cash flows from investing activities: Investments in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . (307) (6,807) Cash distributions from partnerships. . . . . . . . . . . . . . . . . . . . . 1,176 198 Payments from (advances to) affiliates. . . . . . . . . . . . . . . . . . . . (65) 2,079 Earnest money deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 275 Capital expenditures - existing properties. . . . . . . . . . . . . . . . . . (792) (1,163) Acquisition properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,895) (2,132) Properties under development, net of reimbursable costs from co-investors . . . . . . . . . . . . . . . . . . . . (33,494) (11,123) Capitalized interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,397) (1,045) Increase (decrease) in construction costs payable . . . . . . . . . . . . . . 1,528 (293) -------- ------- Net cash used in investing activities . . . . . . . . . . . . . . . . (52,129) (20,011) -------- ------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED 1998 1997 -------- -------- Cash flows from financing activities: Debt proceeds, net of financing costs . . . . . . . . . . . . . . . . . . . . 68,651 21,000 Debt repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40,633) (2,049) Proceeds from preferred shares offering, net of issuance costs. . . . . . . . 24,750 -- Net proceeds from Executive Share Purchase Plan . . . . . . . . . . . . . . . 645 166 Employee notes for stock purchase, net of payments . . . . . . . . . . . . . (319) (2,500) Distributions to partners . . . . . . . . . . . . . . . . . . . . . . . . . . (1,444) (1,269) Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,780) (6,842) -------- ------- Net cash provided by financing activities . . . . . . . . . . . . . . 43,870 8,506 -------- ------- Net decrease in cash and cash equivalents . . . . . . . . . . . . . . . . . . . (2,410) (6,345) Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . . 5,676 10,291 -------- ------- Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . . . $ 3,266 3,946 ======== ======= Supplemental disclosure of cash flow information: Cash paid for mortgage and other interest, net of amounts capitalized . . . . $ 4,840 2,604 ======== ======== See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1998 AND 1997 (Unaudited) (Dollars in thousands, except share data) 1. ORGANIZATION AND BASIS OF PRESENTATION Organization AMLI Residential Properties Trust (the "Company") commenced operations upon the completion of its initial public offering on February 15, 1994. In the opinion of management, all adjustments, which include only normal recurring adjustments necessary to present fairly the financial position at March 31, 1998 and December 31, 1997 and the results of operations and cash flows for the periods presented, have been made. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1997 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The results for the three months ended March 31, 1998 are not necessarily indicative of expected results for the entire year. The consolidated financial statements include the accounts of the Company and AMLI Residential Properties, L. P. (the "Operating Partnership" which holds the operating assets of the Company). The Company is the sole general partner and owns an 85% majority interest in the Operating Partnership. The limited partners hold Operating Partnership units ("OP Units") which are convertible into shares of the Company on a one-for-one basis, subject to certain limitations. The Company's management has made a number of estimates and assumptions relating to the reporting of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses during the report periods to prepare these financial statements in conformity with generally accepted accounting principles. Actual amounts realized or paid could differ from these estimates. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Properties Under Development Land being planned for development and all apartment homes in a new community or new phase are reported as "property under development" until the entire community or new phase is substantially complete and stabilized (generally 95% occupancy). Upon stabilization, all apartment homes in the community or new phase are reported as "rental apartments". Regardless of whether or not 95% occupancy is achieved, a community or new phase will be reported as "rental apartments" no later than six months following substantial completion of construction. At March 31, 1998, the Company's properties under development include parcels of land in the development planning stage on which physical construction will commence later this year or in 1999. Properties under development are as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NUMBER NUMBER TOTAL OF OF EXPENDED COMMUNITY LOCATION ACRES UNITS THRU 3/31/98 - --------- -------- ------ ------ ------------- Wholly-Owned: Development Communities: AMLI on the Parkway (1) Dallas, TX 10 240 $ 7,962 AMLI at Wells Branch (1) Austin, TX 29 576 20,837 AMLI at Deerfield (1) Plano, TX 18 240 2,720 AMLI at AutumnChase III Carrollton, TX 24 240 12,725 AMLI at Peachtree City Atlanta, GA 26 312 19,431 AMLI at Park Creek Gainesville, GA 20 200 8,963 AMLI at Killian Creek Gwinnett County, GA 22 216 2,862 AMLI at Oakhurst (1) Aurora, IL 29 464 20,166 --- ----- -------- Total Development Communities 178 2,488 95,666(2) --- ----- -------- Land Held for Future Development: AMLI at Bent Tree II Dallas, TX 10 200 1,708 AMLI at Mesa Ridge Ft. Worth, TX 27 504 3,473 AMLI at Spring Creek V Atlanta, GA 20 160 1,157 AMLI at Clearwater (1) Indianapolis, IN 11 216 2,588 AMLI at Castle Creek (1) Indianapolis, IN 15 276 2,423 AMLI at Wynnewood (1) Overland Park, KS 20 232 1,868 AMLI at Regents Crest II (1) Overland Park, KS 6 108 893 AMLI at Regents Creek (1) Overland Park, KS 12 224 1,957 AMLI at Lake Houston Houston, TX 15 300 1,809 --- ----- -------- Total Land Held for Future Development 136 2,220 17,876 --- ----- -------- Total Wholly-Owned 314 4,708 113,542 --- ----- -------- Co-Investments (Company Ownership Percentage): AMLI at Fox Valley (25%) Aurora, IL 18 272 24,456 AMLI at Fossil Creek (25%) Ft. Worth, TX 19 384 20,980 AMLI at Northwinds (35%) Atlanta, GA 80 800 31,983 --- ----- -------- Total Co-Investments 117 1,456 77,419(3) --- ----- -------- Total 431 6,164 $190,961 === ===== ======== AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (1) It is the Company's intention to develop these land parcels in partnership with one or more institutional investors. (2) Total development costs for the Development Communities is estimated at approximately $173,900. (3) At March 31, 1998, the estimated completion costs of $26,281 for the Co-investment Development relates primarily to AMLI at Northwinds.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Acquisition The Company's policy is and has been to expense internal property acquisition costs (i.e., salaries and overhead of acquisition personnel). This policy is consistent with the recently-issued EITF 97-11 on this subject. The Company's current adoption of EITF 97-11 thus has no impact on its results of operations. Interest Rate Limitation Contracts The Company has used interest rate caps and swaps to limit its exposure to increases in interest rates on its floating rate debt. The Company does not use them for trading purposes. At March 31, 1998, the Company was a party to various interest rate swap agreements which require the Company to pay to or receive from counterparties on a monthly basis the amounts, if any, by which the Company's interest costs on the fixed rate basis differs from the interest payments required on certain floating rate debt. The following summarizes certain information pursuant to interest rate limitation and swap contracts at March 31, 1998. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Approximate Value of Type Remaining Cumulative Liability Notional Fixed of Contract Original Cash March Amount Rate Contract Maturity Cost Paid 1998 - -------- ------- -------- --------- -------- ---------- ----------- $10,000 6.216% Swap 11/01/02 -- 16 157 10,000 6.029% Swap 11/01/02 -- 9 82 20,000 6.145% Swap 02/15/03 -- 8 264 10,000 6.070% Swap 02/18/03 -- 3 101 ------ ---- ---- $ -- 36 604 ====== ==== ==== The fixed rate for the swaps includes the swap spread (the risk component added to the Treasury yield to determine a fixed rate; excludes lender's spread).
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED PER SHARE DATA The following is reconciliation of net income and weighted average number of shares.
For the three months ended March 31, -------------------------------------------------------------- 1998 1997 ---------------------------- --------------------------- Per Per Share Share Income Shares Amount Income Shares Amount ------ ---------- ------ ------ ---------- ------ Net income. . . . . . . . . . . . . . . . $ 5,326 5,123 Less: Net income allocable to preferred shares . . . . . . . . . . . . (604) (473) ------- ------- BASIC EARNINGS PER SHARE Net income attributable to common shares . . . . . . . . . . . . 4,722 16,591,904 $ .28 4,650 14,819,443 .31 EFFECT OF DILUTIVE SECURITIES Option and other Plan shares. . . . . . 94,194 101,023 Preferred shares (antidilutive) . . . . -- -- -- -- ------- ---------- ----- ------- ---------- ---- DILUTED EARNINGS PER SHARE Net income allocable to common shares outstanding and assumed shares exercised. . . . . . . $ 4,722 16,686,098 $ .28 4,650 14,920,466 .31 ======= ========== ===== ======= ========== ====
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED 3. INVESTMENTS IN PARTNERSHIPS AND SERVICE COMPANIES INVESTMENTS IN PARTNERSHIPS At March 31, 1998, the Company is a general partner in various co-investment partnerships and in the GP Properties (AMLI at Prairie Court in Oak Park, Illinois and AMLI at Towne Creek in Gainesville, Georgia) which are accounted for using the equity method. Investments in partnerships at March 31, 1998 and the Company's 1998 share of income or loss from each are summarized as follows:
Equity Total Company's Company's ------------------- Net Share of Percentage Total Company's Company's Income Net Income Community Ownership Assets Total Share Investment (Loss) (Loss) - ----------- --------- ------ ----- --------- ---------- ----- ---------- AMLI at: Park Place 25% $19,195 6,388 1,597 1,562 109 27 Greenwood Forest 15% 16,793 4,870 730 712 (17) (2) Champions Park 15% 12,276 3,153 473 473 32 5 Champions Centre 15% 9,492 2,697 405 405 7 1 Windbrooke 15% 17,055 4,947 742 742 20 3 Willeo Creek 30% 14,875 4,639 1,392 1,392 (37) (11) Pleasant Hill 40% 26,410 10,667 4,514 4,103 156 62 Barrett Lakes 35% 26,618 10,132 3,546 3,659 157 55 Chevy Chase 33% 44,380 13,566 4,467 4,467 212 70 Willowbrook 40% 36,861 11,409 4,564 4,472 95 38 River Park 40% 14,467 5,671 2,268 2,222 64 26 Fox Valley 25% 24,723 23,704 5,926 6,113 (55) (14) Fossil Creek 25% 20,868 20,424 5,106 5,191 (52) (13) Danada Farms 10% 48,433 22,606 2,261 2,251 216 22 Verandah 35% 25,269 7,910 2,779 2,841 40 32 Northwinds 35% 31,960 20,958 7,349 7,277 (36) (13) Regents Crest 25% 25,808 9,398 2,349 2,363 56 14 ======= ====== ------- ------ === --- $50,468 50,245 302 ======= ====== Other 22 --- 324 ===
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED The fixed-rate debt financing which has been obtained from various insurance companies on behalf of these co-investment partnerships is summarized below: Total Outstanding Interest Community Commitment at 3/31/98 Rate Maturity - --------- ---------- ----------- -------- -------- AMLI at: Park Place $13,000 12,377 8.21% October 1999 Champions Centre 6,700 6,634 8.93% January 2002 Champions Park 9,500 8,936 7.26% January 2002 Windbrooke 11,500 11,492 9.24% February 2002 Greenwood Forest 11,625 11,625 8.95% May 2002 Chevy Chase 29,767 29,330 6.67% April 2003 Willeo Creek 10,000 9,869 6.77% May 2003 Willowbrook 24,500 24,225 7.785% May 2003 Regents Crest 16,500 16,190 7.50% December 2003 Verandah 16,940 16,940 7.55% April 2004 Danada Farms 24,500 24,500 7.33% March 2007 Pleasant Hill 15,500 15,313 9.15% March 2007 River Park 9,100 8,025 7.75% June 2008 Barrett Lakes 16,680 13,326 8.50% December 2009 Northwinds 33,800 7,468 8.25% October 2010 In general, these loans provide for monthly payments of principal and interest based on a 25 or 27 year amortization schedule and a balloon payment at maturity. Loans against newly-completed properties provide for payments of interest only for an initial period, with principal amortization commencing generally within two years of completion of construction and initial lease-up. Investments in Service Companies Summarized combined financial information of the Service Companies at and for the three months ended March 31, 1998 and 1997 follows: 1998 1997 ------- ------- Income (1) $ 2,348 1,867 General and adminis- trative expenses (1,644) (1,456) ------- ------- EBITDA 704 411 Interest (545) (253) Depreciation (2) (298) (58) Income taxes 46 (40) ------- ------- Net income (loss) $ (93) 60 ======= ======= Total assets $25,622 12,873 ======= ======= (1) Net of construction and landscaping costs. (2) In 1998 includes $166 in amortization of goodwill. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Substantially all interest expense of the Service Companies results from notes payable to the Company at interest rates ranging from 9.5% to 13.0%. The Company's share of income (loss) from the Service Companies for the three months ended March 31, 1998 and 1997 was ($116) and $11, respectively, after elimination of intercompany profit on construction activities. The Company's interest income from the Service Companies is combined with the Company's share of income (loss) from the Service Companies in the accompanying consolidated statements of operations. 4. RELATED PARTY TRANSACTIONS During the three months ended March 31, 1998 and 1997, the Company accrued or paid to its affiliates fees and other costs and expenses as follows: 1998 1997 ----- ---- Management fees $ 638 491 General contractor fees 322 88 Interest expense 150 8 Landscaping and grounds maintenance 179 154 ===== ==== In addition, at March 31, 1998 and 1997, the Company owed Amrescon $5,457 and $1,228, respectively, for construction costs of communities under development. During the three months ended March 31, 1998 and 1997, the Company earned or received from its affiliates other income as follows: 1998 1997 ----- ---- Development fees $ 102 330 Acquisition fees -- 49 Asset management fees 151 153 Debt placement fee -- 88 Accounting and administrative fees 2 1 Interest on advances 46 139 Interest on notes receivable 506 114 ==== ==== In addition, total revenues of $447 and $207, respectively, were generated from leases to AMLI Corporate Homes ("ACH"), a division of one of the Service Companies. At March 31, 1998 and 1997, $787 and $359 were due from ACH, respectively. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED 5. DEBT The table below sets forth certain information relating to the indebtedness of the Company.
Balance Balance Original at Interest Maturity at Encumbered Communities Amount 3/31/98 Rate Date 12/31/97 - ---------------------- -------- -------- -------- -------- -------- BOND FINANCING: Tax-Exempt Unsecured (1) $ 40,750 40,750 Rate+1.48% 10/1/24 40,750 Tax-Exempt AMLI at Poplar Creek 9,500 9,500 Rate+1.15% 2/1/24 9,500 -------- ------- ------- Total Bonds 50,250 50,250 50,250 -------- ------- ------- MORTGAGE NOTES PAYABLE TO FINANCIAL INSTITUTIONS: AMLI at Reflections 4,800 4,411 7.05% 6/30/98 4,436 AMLI on Rosemeade 7,050 6,513 7.02% 10/5/98 6,548 AMLI at Sherwood 7,320 6,765 7.75% 7/1/03 6,813 AMLI at Riverbend 31,000 30,226 7.30% 7/1/03 30,349 AMLI in Great Hills 11,000 10,727 7.34% 7/1/03 10,770 AMLI at Valley Ranch 11,500 10,639 7.625% 7/10/03 10,693 AMLI at Conner Farms 13,275 12,910 7.00% 6/15/03 12,965 AMLI at Nantucket 7,735 7,735 7.70% 6/1/04 7,735 AMLI on Timberglen 6,770 6,770 7.70% 6/1/04 6,770 AMLI at Regents Center 20,100 19,778 (2) 9/1/05 19,819 AMLI at Bishop's Gate 15,380 15,266 (3) 8/1/05 15,329 AMLI on the Green (4) AMLI of North Dallas (4) 43,234 42,237 7.789% 5/1/06 42,383 AMLI at Clairmont 12,880 12,880 6.95% 2/15/08 -- -------- ------- -------- Total Mortgage Notes Payable 192,044 186,857(5) 174,610 -------- ------- -------- AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Balance Balance Original at Interest Maturity at Encumbered Properties Amount 3/31/98 Rate Date 12/31/97 - --------------------- -------- -------- -------- -------- -------- OTHER NOTES PAYABLE: AMLI at Park Creek 10,322 5,432 7.875% 12/1/38 2,640 AMLI at Clairmont (6) 4,016 4,016 L+1.50% 4/15/98 -- Unsecured line of credit (7)(8) 150,000 109,000 L+1.30% 6/26/00 100,000 Note payable to Service Company 5,000 5,000 9.50% 1/1/03 5,000 Unsecured note payable to Service Company 750 750 4.00% Demand 750 Unsecured line of credit 8,000 -- L+1.30% 8/30/98 -- -------- ------- --------- ------- ------- Total Other Notes Payable 178,088 124,198 108,390 -------- ------- ------- Total $420,382 361,305 333,250 ======== ======= ======= (1) The terms of these tax-exempt bonds require that a portion of the apartment units be leased to individuals who qualify based on income levels specified by the U.S. Government. The bonds bear interest at a variable rate that is adjusted weekly based upon the remarketing rate for these bonds (4.1% for Spring Creek and Poplar Creek at April 29, 1998). The credit enhancement for the Spring Creek bonds was provided by a $41,297 letter of credit from Wachovia Bank which expires on October 15, 2002 and the credit enhancement for the Poplar Creek bonds was provided by a $9,617 letter of credit from LaSalle National Bank that expires December 18, 2002. (2) $13,800 at 8.73% and $6,300 at 9.23%. (3) This original $14,000 mortgage bears interest at 9.1%. For financial reporting purposes, it was valued at $15,380 to reflect a 7.25% market rate of interest when assumed in connection with the acquisition of AMLI at Bishop's Gate on October 17, 1997. (4) These two properties secure the FNMA loan that was sold at a discount of $673. At March 31, 1998, the unamortized discount amount is $544. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (5) All but $21,278 of the total is non-recourse to the partners of the Operating Partnership. (6) This loan was repaid on its maturity date. (7) The Company has used interest rate swaps on $50,000 of the outstanding amount to fix its base interest rate (before current lender's spread of 1.30%) at an average of 6.12%. (8) The Company's $150,000 unsecured line of credit has been provided by a group of five banks led by Wachovia Bank, N.A. and the First National Bank of Chicago. The credit agreement provides for annual one-year extensions and reductions in the interest rate based on the future credit rating the Company is able to obtain. This unsecured line of credit requires that the Company meet various covenants typical of such an arrangement, including minimum net worth, minimum debt service coverage and maximum debt to equity percentage. The unsecured line of credit is used for acquisition and development activities and working capital needs. The Company intends to negotiate an increase in the line of credit to $200,000 during 1998.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED As of March 31, 1998, the scheduled maturities of the Company's debt are as follows:
FIXED RATE MORTGAGE NOTES NOTES PAYABLE UNSECURED PAYABLE TO BOND TO FINANCIAL LINES SERVICE FINANCINGS INSTITUTIONS OF CREDIT COMPANIES TOTAL ---------- ------------- --------- ----------- ---------- 1998. . . . . . . . . . . . . . . . . . $ -- 12,800 -- 4,766 17,566 1999. . . . . . . . . . . . . . . . . . -- 2,780 -- -- 2,780 2000. . . . . . . . . . . . . . . . . . -- 3,138 109,000 -- 112,138 2001. . . . . . . . . . . . . . . . . . -- 3,394 -- -- 3,394 2002. . . . . . . . . . . . . . . . . . 50,250 3,656 -- -- 53,906 Thereafter. . . . . . . . . . . . . . . -- 166,521 -- 5,000 171,521 ------- ------- ------- ------- ------- $50,250 192,289 109,000 9,766 361,305 ======= ======= ======= ======= =======
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED 6. COMMITMENTS AND CONTINGENCIES The limited partnership agreement of AMLI at Verandah L.P. provides for the redemption (at an amount determined by formula) by the partnership of the limited partner's entire interest, in the limited partner's sole discretion, at any time after March 25, 2002, or at any time that there is a designated event of default on related indebtedness of the partnership, which event of default remains uncured and unwaived to the time of notice of redemption election. The redemption amount may be paid in cash or Company shares of beneficial interest, or any combination thereof, in the sole discretion of the Company. The original capital contribution made by the limited partner was $5,525. On February 20, 1998, the Company placed 3,125,000 Series B cumulative convertible Preferred Shares with Security Capital Preferred Growth Incorporated. At March 31, 1998, 1,041,666 Preferred Shares have been issued. The remaining authorized shares are anticipated to be issued in equal installments during June and September 1998. 7. SUBSEQUENT EVENTS On April 30, 1998, the Company acquired 35.2 acres of land located in Alpharetta, Georgia. The Company intends to develop a 352-unit apartment community on this land and expects to commence construction in the second quarter of this year. In a related transaction, Amrescon concurrently acquired 17.5 adjacent acres which are not zoned for multi-family residential and which Amrescon is holding for re-sale. The total purchase price of the 52.7 acres was approximately $5,600. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) The following discussion is based primarily on the consolidated financial statements of Amli Residential Properties Trust (the "Company") as of March 31, 1998 and December 31, 1997 and for the three months ended March 31, 1998 and 1997. This information should be read in conjunction with the accompanying unaudited consolidated financial statements and notes thereto. These financial statements include all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods presented, and all such adjustments are of a normal recurring nature. On January 30, 1996, the Company issued 1,200,000 convertible preferred shares for $20 per share, or $24,000, directly to four institutional investors and Amli Realty Co. ("ARC") in a registered offering. In November 1996, the Company completed a public offering of 2,976,900 common shares. In July 1997, the Company closed on an offering of 1,694,700 common shares. In February 1998, the Company placed 3,125,000 convertible preferred shares for $24 per share with Security Capital Growth Incorporated. The net proceeds of the issuance of the preferred shares and the public offerings were used to reduce the Company's debt and fund development costs. As of March 31, 1998, the Company owned an 85% general partnership interest in the Operating Partnership, which holds the operating assets of the Company. The limited partners hold Operating Partnership units ("OP Units") that are convertible into common shares of the Company on a one- for-one basis, subject to certain limitations. At March 31, 1998, the Company owned 18,751,121 OP Units and the limited partners owned 3,277,559 OP Units. The Company has qualified, and anticipates continuing to qualify, as a real estate investment trust ("REIT") for Federal income tax purposes. RESULTS OF OPERATIONS During the period from January 1, 1997 through March 31, 1998, growth in property revenues and property operating expenses resulted from increases at communities owned as of January 1, 1997, from communities acquired since January 1, 1997 and from the newly-constructed communities. During the same period, the Company has invested in five co-investment partnerships, which own the 600-unit AMLI at Danada in Wheaton, Illinois, the 538-unit AMLI at Verandah in Arlington, Texas, the 368-unit AMLI at Regents Crest in Overland Park, Kansas, the 592-unit AMLI at Chevy Chase in Buffalo Grove, Illinois, and the 488-unit AMLI at Willowbrook in Willowbrook, Illinois. In addition, in January 1998, the Company acquired the 288-unit AMLI at Clairmont in Atlanta, Georgia. For the three months ended March 31, 1998, net income attributable to common shares was $4,722, or $.28 per share on total revenues of $26,662. For the three months ended March 31, 1997, net income was $4,650 or $.31 per share on total revenues of $20,850. The decrease on a per share basis is primarily due to increased depreciation. On a "same community" basis, weighted average occupancy of the apartment homes owned wholly by the Company increased slightly to 93.9% for the three months ended March 31, 1998 from 93.3% in the prior year. Weighted average collected rental rates increased by 2.3% to $672 from $657 per unit per month for the three months ended March 31, 1998 and 1997, respectively. Including Co-Investment Communities, weighted average occupancy of the Company's apartment homes increased to 94.1% for the three months ended March 31, 1998 from 93.5% in the prior year, and weighted average collected rental rates increased by 1.7% to $707 from $695 per unit per month for the three months ended March 31, 1998 and 1997, respectively. COMPARISON OF THREE MONTHS ENDED MARCH 31, 1998 TO THREE MONTHS ENDED MARCH 31, 1997. Income before minority interest increased to $6,259 for the three months ended March 31, 1998 from $6,076 for the three months ended March 31, 1997. This increase was primarily attributable to a $5,812 increase in total revenues, reduced by a $2,129 increase in property operating expenses, a $2,293 increase in interest expense and an $1,234 increase in depreciation. Net income for the three months ended March 31, 1998 and 1997 was $5,326 and $5,123, respectively. Total property revenues increased by $5,775, or 29.4%. On the same community basis total property revenues increased by $505, or 2.7%. Property operating expenses increased by $2,129, or 26.4%. On the same community basis, property operating expenses decreased by $43 or .6%. Interest expense, net of the amounts capitalized, increased to $4,938 from $2,646, or 86.6%, primarily due to increased indebtedness incurred in conjunction with property acquisition and development. General and administrative expenses increased to $854 for the three months ended March 31, 1998 from $767 for the three months ended March 31, 1997. The increase is primarily attributable to increased compensation and compensation-related costs attributable to both additional employees and increased rates of compensation. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1998, the Company had $3,266 in cash and cash equivalents and $41,000 in availability under its $150,000 unsecured line of credit. The Company is negotiating to increase this line of credit to $200,000 during the second quarter of 1998 and anticipates that a sixth bank will join the existing bank group at that time. On February 20, 1998, the Company privately placed $75,000 of Series B cumulative convertible preferred shares with an institutional investor at $24 per share. The initial funding of $25,000 occurred on March 9, 1998. The Company anticipates funding the remaining two equal installments in June and September 1998. Proceeds from this private placement, net of an estimated 1.05% in offering costs, are anticipated to aggregate approximately $74,200. At March 31, 1998, there were fifteen of the Company's wholly-owned stabilized Communities that are unencumbered. The Company expects to repay two fixed rate loans aggregating $10,924 at their scheduled 1998 maturities from additional borrowings under its unsecured line of credit, whereupon two more Communities will be unencumbered. There are no other fixed rate loans on wholly-owned Communities with maturity dates prior to June 2003. Net cash flows provided by operating activities for the three months ended March 31, 1998 increased to $5,849 from $5,160 for the three months ended March 31, 1997. The increase is primarily due to an increase in property net operating income (before depreciation) and an increase in other revenues. Cash flows used in investing activities for the three months ended March 31, 1998 increased to $52,129 from $20,011 for the three months ended March 31, 1997. The increase consisted primarily of expenditures for the acquisition of land parcels and development costs, contributions to co- investment partnerships and working capital advances to the Service Companies. Net cash flows provided by financing activities for the three months ended March 31, 1998 were $43,870, which reflect net proceeds from the preferred shares issued and net proceeds of additional borrowings. In 1997, cash flows include net proceeds of borrowings and $37,447 net proceeds from the offering of common shares reduced by employees' and trustees' notes. Funds from operations is defined as income (loss) before minority interest of the holders of OP Units and extraordinary items (computed in accordance with generally accepted accounting principles), excluding gains (losses) from debt restructuring and sales of property, plus certain non-cash items, primarily depreciation. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. Funds from operations is widely accepted in measuring the performance of equity REITs. An understanding of the Company's funds from operations will enhance the reader's comprehension of the Company's results of operations and cash flows as presented in the financial statements and data included elsewhere herein. Funds from operations should not be considered an alternative to net income or any other GAAP measurement as a measure of the results of the Company's operations, the Company's cash flows or liquidity. Funds from operations for the three months ended March 31, 1998 and 1997 are summarized as follows: MARCH 31, ------------------------ 1998 1997 ------- ------- Income before minority interest $ 6,259 6,076 Depreciation 4,291 3,057 Other, net (1) 914 500 ------- ------ Funds from operations $11,464 9,633 ======= ====== Weighted average shares and units (including dilutive shares and units) 21,238 18,882 ======= ====== (1) Share of co-investment partnerships' depreciation and, in 1998, share of Service Company amortization of goodwill (net of related income taxes). In the typical situation, start-up losses will be recorded between the time the first apartment homes are delivered from construction until occupancy levels are adequate to recover all costs and expenses (including interest but excluding depreciation). The amounts shown above for the three months ended March 31, 1998 and 1997 are shown net of $419 and $144, respectively, of start-up losses which, for the three months endeyd March 31, 1998 are attributable to the initial lease-up of Phase III of AMLI at Autumn Chase, AMLI at Wells Branch, AMLI at Park Creek, AMLI at Fox Valley, AMLI at Fossil Creek, AMLI at Peachtree City and AMLI at Northwinds. Additional amounts will be recorded in future quarters of 1998 as initial lease-up is completed or continued at these and other communities currently under development. The Company expects to pay quarterly dividends from cash available for distribution. Until distributed, funds available for distribution will be invested in short-term investment-grade securities or used to temporarily reduce outstanding balances on the Company's revolving lines of credit. The Company expects to meet its short-term liquidity requirements by using its working capital and any portion of net cash flow from operations not distributed currently. The Company is of the opinion that its future net cash flows will be adequate to meet operating requirements in both the short and the long term and provide for payment of dividends by the Company in accordance with REIT requirements. In order to qualify as a REIT, the Company is required to make distributions to its shareholders equal to 95% of its REIT taxable income. The Company's 1998 estimated dividend payment level equals an annual rate of $1.76 per share. The Company estimates that approximately 18% of the total dividends to be paid in 1998 will be treated as a return of capital. The Company expects to meet certain long-term liquidity requirements such as scheduled debt maturities, repayment of loans for construction, development, and acquisition activities through the issuance of long-term secured and unsecured debt and additional equity securities of the Company (or OP Units). On July 20, 1995, the Company's shelf registration became effective. The registration statement provided for up to an aggregate of $200,000 of preferred shares, common shares and security warrants which the Company may issue from time to time. Through March 31, 1998, the Company has issued preferred and common shares for an aggregate issuance price of $128,467, leaving a balance of $71,533 in shares that the Company may issue in the future under the shelf registration statement. COMPANY INDEBTEDNESS The Company's debt as of March 31, 1998 includes $201,789 (56% of the total) which is secured by first mortgages on 16 of the Wholly-Owned Communities and is summarized as follows: SUMMARY DEBT TABLE ------------------ Type of Weighted Average Outstanding Percent Indebtedness Interest Rate Balance of Total - ------------ ---------------- ----------- -------- Fixed Rate Mortgages 7.59% $192,289 53% Tax-Exempt Tax-Exempt Rate + 1.48% 50,250 14% Bonds (1) Tax-Exempt Rate + 1.15% Lines of Credit (2) LIBOR + 1.30% 109,000 30% Notes payable to Service Companies Various 5,750 2% Other 4,016 1% -------- ---- Total $361,305 100% ======== ==== - -------------------- (1) The tax-exempt bonds bear interest at a variable tax-exempt rate that is adjusted weekly based on the re-marketing of these bonds (4.10% for AMLI at Spring Creek and AMLI at Poplar Creek at April 29, 1998). The Spring Creek bonds mature on October 1, 2024 and the related credit enhancement expires on October 15, 2002. The Poplar Creek bonds mature on February 1, 2024 and the related credit enhancement expires on December 18, 2002. (2) Amounts borrowed under lines of credit are due in 2000. DEVELOPMENT ACTIVITIES At March 31, 1998, there are eleven communities or additional phases to existing communities including co-investment properties that are under development. When completed, a total of 3,944 apartment homes will be added to the Company's portfolio of rental apartments. The estimated development costs of the eight wholly-owned communities under development total approximately $173,900 of which $95,666 has been incurred at March 31, 1998. The Company's share of the development costs for the three co-investment partnerships is approximately $31,475 of which $19,355 has been funded at March 31, 1998. The remaining costs to complete will be funded from construction. In addition, the Company owns land for the development of an additional 2,220 apartment homes in Ft. Worth, Dallas and Houston Texas, Atlanta, Georgia, Indianapolis, Indiana and Overland Park, Kansas. The total costs incurred to date of $17,876 are primarily land acquisition costs and professional fees. In addition, a 35.2 acre land parcel located in Alpharetta, Georgia was acquired on April 30, 1998. The company intends to develop a 352-unit apartment community on this site. CAPITAL EXPENDITURES Capital expenditures are those made for assets having a useful life in excess of one year and include replacements (including carpeting and appliances) and betterments, such as unit upgrades, enclosed parking facilities and similar items. In conjunction with acquisitions of existing properties, it is the Company's policy to provide in its acquisition budgets adequate funds to complete any deferred maintenance items and to otherwise make the properties acquired competitive with comparable newly-constructed properties. In some cases, the Company will provide in its acquisition budget additional funds to upgrade or otherwise improve new acquisitions. INFLATION Virtually all apartment leases at the communities and co-investment communities are for six or twelve months' duration. This enables the Company to pass along inflationary increases in its operating expenses on a timely basis. Because the Company's property operating expenses (exclusive of depreciation and amortization) are approximately 40% of rental and other revenue, increased inflation typically results in comparable increases in income before interest and general and administrative expenses, so long as rental market conditions allow increases in rental rates while maintaining stable occupancy. An increase in general price levels may immediately precede, or accompany, an increase in interest rates. The Company's exposure to rising interest rates is mitigated by the existing debt level of approximately 46% of the Company's total market capitalization at March 31, 1998, the high percentage (55%) of intermediate term fixed rate debt, and the use of interest rate swaps to effectively fix the interest rate on $50 million of floating rate debt through the year 2002. As a result, for the foreseeable future, increases in interest expense resulting from increasing inflation are anticipated to be less than future increases in income before interest and general and administrative expenses. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements set forth herein or incorporated by reference herein from the Company's filings under the Securities Exchange Act of 1934, as amended, contain forward-looking statements, including, without limitation, statements relating to the timing and anticipated capital expenditures of the Company's development programs. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the actual results may differ materially from that set forth in the forward-looking statements. Certain factors that might cause such differences include general economic conditions, local real estate conditions, construction delays due to the unavailability of construction materials, weather conditions or other delays beyond the control of the Company. Consequently, such forward-looking statements should be regarded solely as reflections of the Company's current operating and development plans and estimates. These plans and estimates are subject to revision from time to time as additional information becomes available, and actual results may differ from those indicated in the referenced statements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. OCCUPANCY The following is a listing of approximate physical occupancy levels by quarter for the Company's Wholly-Owned Communities and Co-Investment Communities:
1998 1997 LOCATION/COMMUNITY COMPANY'S NUMBER -------------------------- -------------------------- - ------------------ PERCENTAGE OF AT AT AT AT AT AT AT AT WHOLLY-OWNED COMMUNITIES OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31 - ------------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------ DALLAS/FT. WORTH, TEXAS AMLI at AutumnChase. . . . 450 97% 96% 97% 95% 97% AMLI at Bent Tree. . . . . 300 93% 93% N/A N/A N/A AMLI at Bishop's Gate. . . 266 100% 90% N/A N/A N/A AMLI at Chase Oaks . . . . 250 98% 94% 96% 97% 96% AMLI at Gleneagles . . . . 590 97% 97% 99% 98% 96% AMLI on the Green. . . . . 424 96% 93% 95% 93% 91% AMLI at Nantucket. . . . . 312 98% 98% 98% 98% 99% AMLI of North Dallas . . . 1,032 96% 95% 96% 97% 94% AMLI at Reflections. . . . 212 98% 98% 98% 98% 96% AMLI on Rosemeade. . . . . 236 96% 92% 95% 97% 97% AMLI on Timberglen . . . . 260 95% 98% 95% 97% 97% AMLI at Valley Ranch . . . 460 98% 99% 97% 97% 95% ------ ----- ----- ----- ----- ----- ----- ----- ----- 4,792 97% 96% 97% 96% 95% ------ ----- ----- ----- ----- ----- ----- ----- ----- AUSTIN, TEXAS AMLI at the Arboretum. . . 231 97% 96% 100% 97% 97% AMLI in Great Hills. . . . 344 98% 97% 98% 97% 95% AMLI at Lantana Ridge. . . 354 94% 81% 83% N/A N/A AMLI at Martha's Vineyard. 360 96% 97% 98% 99% 97% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1,289 96% 92% 94% 98% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- ATLANTA, GEORGIA AMLI at Sope Creek . . . . 695 94% 93% 94% 93% 96% AMLI at Spring Creek . . . 1,180 94% 94% 95% 95% 97% AMLI at Vinings. . . . . . 360 95% 96% 96% 95% 93% AMLI at West Paces . . . . 337 98% 94% 92% 93% 98% AMLI at Clairmont. . . . . 288 96% N/A N/A N/A N/A ------ ----- ----- ----- ----- ----- ----- ----- ----- 2,860 95% 94% 94% 94% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1998 1997 COMPANY'S NUMBER -------------------------- -------------------------- PERCENTAGE OF AT AT AT AT AT AT AT AT LOCATION/COMMUNITY OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31 - ------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------ EASTERN KANSAS AMLI at Alvamar. . . . . . 152 95% 93% 90% 93% 98% AMLI at Crown Colony . . . 220 96% 95% 98% 93% 97% AMLI at Regents Center . . 424 90% 87% 93% 99% 91% AMLI at Town Center. . . . 156 93% 92% N/A N/A N/A AMLI at Sherwood . . . . . 300 92% 97% 98% 95% 98% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1,252 93% 92% 95% 96% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- INDIANAPOLIS, INDIANA AMLI at Conner Farms . . . 300 90% 93% N/A N/A N/A AMLI at Riverbend. . . . . 996 96% 88% 89% 94% 92% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1,296 95% 89% 89% 94% 92% ------ ----- ----- ----- ----- ----- ----- ----- ----- CHICAGO, ILLINOIS AMLI at Park Sheridan. . . 253 100% 98% 99% 92% 93% AMLI at Poplar Creek . . . 196 98% 91% N/A N/A N/A ------ ----- ----- ----- ----- ----- ----- ----- ----- 449 99% 95% 99% 92% 93% ------ ----- ----- ----- ----- ----- ----- ----- ----- 11,938 95.6% 93.6% 95.0% 95.4% 95.1% ====== ===== ===== ===== ===== ===== ===== ===== ===== CO-INVESTMENT COMMUNITIES: - -------------------------- ATLANTA, GA AMLI at: lease lease lease Barrett Lakes . . . . . . 35% 446 96% 95% up up up Pleasant Hill . . . . . . 40% 502 93% 89% 91% 96% 97% lease lease River Park. . . . . . . . 40% 222 98% 95% 97% up up Towne Creek . . . . . . . 1% 150 95% 88% 97% 90% 93% Willeo Creek. . . . . . . 30% 242 98% 91% 91% 95% 98% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1,562 96% 92% 93% 95% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1998 1997 COMPANY'S NUMBER -------------------------- -------------------------- PERCENTAGE OF AT AT AT AT AT AT AT AT LOCATION/COMMUNITY OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31 - ------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------ CHICAGO, IL AMLI at: Chevy Chase . . . . . . . 33% 592 97% 94% 96% 99% 97% Prairie Court . . . . . . 1% 125 96% 98% 98% 100% 97% Willowbrook . . . . . . . 40% 488 98% 94% 98% 94% 96% Windbrooke. . . . . . . . 15% 236 100% 98% 99% 100% 96% Danada Farms. . . . . . . 10% 600 98% 93% 94% 93% 92% ------- ----- ----- ----- ----- ----- ----- ----- ----- 2,041 98% 94% 96% 96% 95% ------- ----- ----- ----- ----- ----- ----- ----- ----- EASTERN KANSAS AMLI at Regents Crest. . . 25% 368 92% 93% N/A N/A N/A ------- ----- ----- ----- ----- ----- ----- ----- ----- DALLAS, TX AMLI at Verandah . . . . . 35% 538 97% 94% 95% 96% 94% ------- ----- ----- ----- ----- ----- ----- ----- ----- AUSTIN, TX AMLI at Park Place . . . . 25% 588 95% 98% 97% 94% 96% ------- ----- ----- ----- ----- ----- ----- ----- ----- HOUSTON, TX AMLI at: Champions Centre. . . . . 15% 192 98% 97% 94% 98% 95% Champions Park. . . . . . 15% 246 95% 98% 99% 99% 97% Greenwood Forest. . . . . 15% 316 97% 95% 96% 96% 96% ------- ----- ----- ----- ----- ----- ----- ----- ----- 754 97% 96% 96% 98% 96% ------- ----- ----- ----- ----- ----- ----- ----- ----- Total Co-Investment Communities . . . . . . . . 5,851 96.4% 94.2% 95.5% 95.8% 95.5% ------- ----- ----- ----- ----- ----- ----- ----- ----- TOTAL . . . . . . . . . . . . 17,789 95.9% 93.8% 95.2% 95.7% 95.3% ======= ===== ===== ===== ===== ===== ===== ===== =====
PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders of AMLI Residential Properties Trust was held on April 28, 1998, for the purpose of electing three members of the Board of Trustees, approving of amendments to Option Plan and ratifying the appointment of independent auditors. Proxies for the meeting were solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934 and there was no solicitation in opposition to management's solicitations. All of the management's nominees for directors as listed in the proxy statement were elected with the following vote: SHARES SHARES VOTED SHARES NOT "FOR" "WITHHELD" VOTED ---------- ---------- ---------- John E. Allen 14,500,654 62,001 1 Philip N. Tague 14,499,604 63,051 1 Quintin E. Primo III 14,499,304 63,351 1 The amendment to the Option Plan was approved by the following votes: SHARES SHARES SHARES VOTED VOTED SHARES NOT "FOR" "AGAINST" "WITHHELD" VOTED ---------- ---------- ------------ ---------- 6,722,207 2,208,117 143,655 5,486,677 The ratification of the appointment of KPMG Peat Marwick LLP as independent auditor was approved by the following vote: SHARES SHARES SHARES VOTED VOTED SHARES NOT "FOR" "AGAINST" "WITHHELD" VOTED ---------- ---------- ------------ ---------- 14,458,137 37,371 64,148 -- ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K have been filed during the quarter ended March 31, 1998. The Exhibits filed as part of this report are listed below. EXHIBIT NO. DOCUMENT DESCRIPTION 4. Articles Supplementary to the Amended and Restated Declaration of Trust of AMLI Residential Properties Trust Classifying Unissued shares of Beneficial Interest in AMLI Residential Properties Trust as Series B Cumulative Convertible Preferred Shares of Beneficial Interest. 10.1. Fourth Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. 10.2 Second Amendment to AMLI Residential Properties Option Plan. 10.3 Registration Rights Agreement dated March 9, 1998 between AMLI Residential Properties Trust and Security Capital Preferred Growth Incorporated. 27. Financial Data Schedule 99. Financial and Operating Data furnished to Shareholders and Analysts SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMLI RESIDENTIAL PROPERTIES TRUST Date: May 14, 1998 By: /s/ CHARLES C. KRAFT ----------------------------------- Charles C. Kraft Principal Accounting Officer Principal Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Date: May 14, 1998 By: /s/ GREGORY T. MUTZ ----------------------------------- Gregory T. Mutz Chairman of the Board of Trustees Date: May 14, 1998 By: /s/ ALLAN J. SWEET ----------------------------------- Allan J. Sweet President and Trustee Date: May 14, 1998 By: /s/ CHARLES C. KRAFT ----------------------------------- Charles C. Kraft Principal Accounting Officer Principal Financial Officer EX-4 2 EXHIBIT 4 - --------- AMLI RESIDENTIAL PROPERTIES TRUST ARTICLES SUPPLEMENTARY SERIES B CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED SHARES OF BENEFICIAL INTEREST (Par Value $.01 Per Share) AMLI Residential Properties Trust, a Maryland real estate investment trust (hereinafter called the "Company"), hereby certifies to the Department of Assessments and Taxation of the State of Maryland that: FIRST: The Board of Trustees of the Company has classified and designated 3,125,000 unissued preferred shares of beneficial interest, par value $.01 per share, of the Company as Series B Cumulative Convertible Redeemable Preferred Shares ("Series B Preferred Shares"), with the preferences, rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption thereof as follows, which upon any restatement of the Company's Declaration of Trust (the "Declaration of Trust") shall be made part of Article 2 thereof, with any necessary or appropriate changes to the enumeration or lettering of sections or subsections hereof: SECTION 1. NUMBER OF SHARES AND DESIGNATION. The Series B Preferred Shares shall be designated as "Series B Cumulative Convertible Redeemable Preferred Shares" and the authorized number of Series B Preferred Shares constituting such series shall be 3,125,000, which number may be decreased from time to time by the Board pursuant to Section 6 upon reacquisition thereof in any manner, or by retirement thereof. SECTION 2. DEFINITIONS. For purposes of the Series B Preferred Shares, the following terms shall have the meanings indicated: "Act" shall mean the Securities Act of 1933, as amended. "Affiliate" shall mean, with respect to any Person, a Person which directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified. "Base Common Share Distribution" shall have the meaning set forth in paragraph (a) of Section 9. "Board" shall mean the Board of Trustees of the Company or any committee authorized by such Board of Trustees to perform any of its responsibilities with respect to the Series B Preferred Shares. "Business Day" shall mean any day other than a Saturday, Sunday or a day on which day state or federally chartered banking institutions in Chicago, Illinois are not required to be open. "Call Date" shall have the meaning set forth in Section 5(b). "Common Shares" shall mean the common shares of beneficial interest, par value $.01 per share, of the Company. "Conversion Price" shall mean the conversion price per Common Share for which each Series B Preferred Share is convertible, as such Conversion Price may be adjusted pursuant to Section 7(d). The initial Conversion Price shall be $24.00 (equivalent to an initial conversion rate of one Common Share for each Series B Preferred Share). "Current Market Price" of publicly traded Common Shares or any other class or series of beneficial interest or other security of the Company or of any similar security of any other issuer for any day shall mean the closing price, regular way on such day, or, if no sale takes place on such day, the average of the reported closing bid and asked prices regular way on such day, in either case as reported on the principal national securities exchange on which such securities are listed or admitted for trading, or, if such security is not quoted on any national securities exchange, on the National Market of the National Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if such security is not quoted on the NASDAQ National Market, the average of the closing bid and asked prices on such day in the over-the-counter market as reported by NASDAQ or, if bid and asked prices for such security on such day are not reported through NASDAQ, the average of the bid and asked prices on such day as furnished by any New York Stock Exchange or National Association of Securities Dealers, Inc. member firm regularly making a market in such security selected for such purpose by the Chief Executive Officer of the Company or the Board or if any class or series of securities is not publicly traded, the fair value of the shares of such class or series as determined reasonably and in good faith by the Board. "Distribution Payment Date" shall mean, with respect to any Distribution Period, (a) the date that cash distributions are made on the Common Shares with respect to such Distribution Period or (b) if such distributions have not been paid on the Common Shares by 9:00 a.m., New York City time, on the 60th day from and including the last day of such Distribution Period, then on such day; provided, further, that if any Distribution Payment Date falls on any day other than a Business Day, the distribution payment payable on such Distribution Payment Date shall be paid on the Business Day immediately following such Distribution Payment Date. "Distribution Periods" shall mean the Initial Distribution Period and each subsequent quarterly distribution period commencing on and including January 1, April 1, July 1 and October 1 of each year and ending on and including the day preceding the first day of the next succeeding Distribution Period, other than the Distribution Period during which any Series B Preferred Share is redeemed pursuant to Section 5, which shall end on and include the Call Date with respect to the Series B Preferred Share being redeemed. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "Fair Market Value" shall mean the average of the daily Current Market Prices of a Common Share during five consecutive Trading Days selected by the Company commencing not more than twenty Trading Days before, and ending not later than, the earlier of the day in question and the day before the "ex" date with respect to the issuance or distribution requiring such computation. The term "ex' date," when used with respect to any issuance or distribution, means the first day on which Common Shares trade regular way, without the right to receive such issuance or distribution, on the exchange or in the market, as the case may be, used to determine that day's Current Market Price. "Initial Distribution Period" shall mean the period commencing on and including the Initial Issue Date and ending on and including March 31, 1998. "Initial Issue Date" shall mean the date on which the first Series B Preferred Shares are issued. "Investor" shall mean Security Capital Preferred Growth Incorporated, a Maryland corporation. "Issue Date" shall mean the date on which the Company shall initially issue any Series B Preferred Share, regardless of the number of times transfer of such Series B Preferred Share shall be made on the stock records maintained by or for the Company and regardless of the number of certificates which may be issued to evidence such Series B Preferred Share (whether by reason of transfer of such Series B Preferred Share or for any other reason). "Junior Shares" shall have the meaning set forth in Section 8(c). "NYSE" shall mean the New York Stock Exchange, Inc. "Parity Shares" shall have the meaning set forth in Section 8(b). "Person" shall mean any individual, firm, partnership, corporation or other entity, including any successor (by merger or otherwise) of such entity. "Property Distribution" shall have the meaning set forth in paragraph (iii) of Section 7(d). "REIT Termination Event" shall mean any event or occurrence which causes the Company to fail to continue to be taxed as a real estate investment trust (a "REIT") pursuant to Sections 856 through 860 of the Internal Revenue Code, as amended. "Senior Shares" shall have the meaning set forth in Section 8(a). "set apart for payment" shall be deemed to include, without any action other than the following, the recording by the Company in its accounting ledgers of any accounting or bookkeeping entry which indicates, pursuant to a declaration of distributions by the Board, the allocation of funds to be so paid on any series or class of beneficial interest of the Company; provided, however, that if any funds for any class or series of Junior Shares or any class or series of Parity Shares are placed in a separate account of the Company or delivered to a disbursing, paying or other similar agent, then "set apart for payment" with respect to the Series B Preferred Shares shall mean placing such funds in a separate account or delivering such funds to a disbursing, paying or other similar agent. "Trading Day" shall mean, with respect to any securities, any day on which such securities are traded on the principal national securities exchange on which such securities are listed or admitted for trading or, if such securities are not listed or admitted for trading on any national securities exchange, the NASDAQ National Market or, if such securities are not listed or admitted for trading on the NASDAQ National Market, any Business Day. "Transaction" shall have the meaning set forth in Section 7(e). "Transfer Agent" means such transfer agent as may be designated by the Board or its designee as the transfer agent for the Series B Preferred Shares; provided that, if the Company has not designated a transfer agent, then the Company shall act as the transfer agent for the Series B Preferred Shares. SECTION 3. DISTRIBUTIONS. (a) The holders of Series B Preferred Shares shall be entitled to receive, when, as and if authorized and declared by the Board out of funds legally available for that purpose, cumulative distributions payable in cash in an amount per share equal to the greater of (i) the base distribution of $0.45 per quarter (the "Base Rate") or (ii) the cash distributions declared on the number of Common Shares, or portion thereof, into which a Series B Preferred Share would then be convertible, without regard to any time restrictions on the convertibility of the Series B Preferred Shares. The amount referred to in clause (ii) of this paragraph (a) with respect to each succeeding Distribution Period shall be determined as of the applicable Distribution Payment Date by multiplying the number of Common Shares, or portion thereof calculated to the fourth decimal point, into which a Series B Preferred Share would then be convertible (without regard to any time restrictions on the convertibility of the Series B Preferred Shares) at the opening of business on such Distribution Payment Date (based on the Conversion Price then in effect) by the aggregate cash distributions payable or paid for such Distribution Period in respect of a Common Share outstanding as of the record date for the distribution payable on the Common Shares for such Distribution Period. If (A) the Company pays a cash distribution on the Common Shares after the Distribution Payment Date for the corresponding Distribution Period and (B) the distribution on the Series B Preferred Shares for such Distribution Period calculated pursuant to clause (ii) of this paragraph (a), taking into account the Common Share distribution referenced in clause (A), exceeds the distribution previously declared on the Series B Preferred Shares for such Distribution Period, the Company shall pay an additional distribution to the holders of the Series B Preferred Shares on the date that the Common Share distribution referenced in clause (A) is paid, in an amount equal to the difference between the distribution calculated pursuant to clause (B) and the distributions previously declared on the Series B Preferred Shares with respect to such Distribution Period. Such distributions shall be cumulative from each Issue Date, whether or not in any Distribution Period or Periods such distributions are declared or there are funds of the Company legally available for the payment of such distributions, and shall be payable quarterly in arrears on the Distribution Payment Dates, commencing on the first Distribution Payment Date after each Issue Date. Each such distribution shall be payable in arrears to the holders of record of the Series B Preferred Shares, as they appear on the share records of the Company at the close of business on such record date as is fixed by the Board which shall be not more than 60 days prior to the corresponding Distribution Payment Date and, within such 60- day period, shall be the same date as the record date for the regular quarterly distribution payable on the Common Shares for such Distribution Period (or, if there is no such record date for the Common Shares, then such date as the Board may fix). Accumulated, accrued and unpaid distributions for any past Distribution Periods may be authorized or declared and paid at any time, without reference to any regular Distribution Payment Date, to holders of record on such record date as may be fixed by the Board which shall be not more than 45 days prior to the corresponding payment date. (b) In the case of any Series B Preferred Share the Issue Date of which is a date other than the first day of a Distribution Period, or any other period shorter than a full Distribution Period, the amount of distributions payable per such Series B Preferred Share shall be computed ratably on the basis of a 360-day year of twelve 30-day months. Holders of Series B Preferred Shares shall not be entitled to any distributions, whether payable in cash, property or shares, in excess of cumulative distributions as herein provided on the Series B Preferred Shares. No interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on the Series B Preferred Shares which may be in arrears. (c) So long as any of the Series B Preferred Shares is outstanding, except as described in the immediately following sentence, no distributions shall be declared or paid or set apart for payment by the Company and no other distribution of cash or other property shall be declared or made directly or indirectly by the Company with respect to any class or series of Parity Shares for any period unless all accumulated, accrued and unpaid distributions have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past Distribution Periods with respect to the Series B Preferred Shares. When distributions are not paid in full or a sum sufficient for such payment is not set apart for payment as provided above, all distributions declared on the Series B Preferred Shares and all distributions declared on any other class or series of Parity Shares shall be declared ratably in proportion to the respective amounts of distributions accumulated, accrued and unpaid on the Series B Preferred Shares and on such Parity Shares. (d) So long as any of the Series B Preferred Shares is outstanding, no distributions (other than distributions paid in, or options, warrants or rights to subscribe for or purchase, Junior Shares) shall be declared or paid or set apart for payment by the Company and no other distribution of cash or other property shall be declared or made directly or indirectly by the Company with respect to any class or series of Junior Shares, nor shall any Junior Shares be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Shares made for purposes of an employee incentive or benefit plan of the Company or any subsidiary) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Junior Shares) directly or indirectly by the Company (except by conversion into or exchange for Junior Shares), nor shall any other cash or other property otherwise be paid or distributed to or for the benefit of any holder of Junior Shares in respect thereof directly or indirectly by the Company unless in each case (i) all distributions (including all accumulated, accrued and unpaid distributions) have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past Distribution Periods with respect to the Series B Preferred Shares and all past distribution periods with respect to any Parity Shares and (ii) a sum sufficient for the payment thereof has been or contemporaneously is paid or set apart for payment of the full distribution for the current Distribution Period with respect to the Series B Preferred Shares and the current distribution period with respect to any Parity Shares. SECTION 4. LIQUIDATION PREFERENCE. (a) Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of Junior Shares, the holders of Series B Preferred Shares shall be entitled to receive $24.00 per Series B Preferred Share (the "Liquidation Preference"), plus an amount equal to all distributions (whether or not earned or declared) accumulated, accrued and unpaid thereon to the date of final distribution to such holders, if any; but such holders shall not be entitled to any further payment. Until the holders of the Series B Preferred Shares have been paid the Liquidation Preference in full, plus an amount equal to all distributions (whether or not earned or declared) accumulated, accrued and unpaid thereon to the date of final distribution to such holders, no payment may be made to any holder of Junior Shares upon any liquidation, dissolution or winding up of the Company. If, upon any liquidation, dissolution or winding up of the Company, the assets of the Company, or the proceeds thereof, distributable among the holders of Series B Preferred Shares are insufficient to pay in full such preferential amount and liquidating payments on any other class or series of Parity Shares, then such assets, or the proceeds thereof, shall be distributed among the holders of Series B Preferred Shares and any such other Parity Shares ratably in proportion to the respective amounts which would be payable on such Series B Preferred Shares and any such other Parity Shares if all amounts payable thereon were paid in full. (b) Upon any liquidation, dissolution or winding up of the Company, after payment has been made in full to the holders of Series B Preferred Shares and any Parity Shares as provided in this Section 4, any other series or class of Junior Shares shall, subject to the respective terms thereof, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series B Preferred Shares and any Parity Shares shall not be entitled to share therein. (c) For purposes of this Section 4, (i) a consolidation or merger of the Company with or into one or more corporations, (ii) a sale or transfer of all or substantially all of the Company's assets or (iii) a statutory share exchange shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the Company. SECTION 5. REDEMPTION AT THE OPTION OF THE COMPANY. (a) Series B Preferred Shares shall not be redeemable by the Company prior to the date which is nine years after the date on which the Company has issued an aggregate 3,125,000 Series B Preferred Shares to the Investor (the "Final Closing"); PROVIDED, HOWEVER, that if at any time fewer than 312,500 of the Series B Preferred Shares remain outstanding, the Company may redeem all, but not less than all of such shares at any time in the manner provided in this Section 5. On and after the date which is nine years after the Final Closing, the Company, at its option, may redeem Series B Preferred Shares, in whole at any time or in part from time to time, at a redemption price payable in cash equal to the Liquidation Preference, plus all accrued and unpaid distributions to the Call Date. (b) Series B Preferred Shares shall be redeemed by the Company on the date specified in the notice to holders required under Section 5(d) (the "Call Date"). The Call Date shall be selected by the Company, shall be specified in the notice of redemption and shall be not less than 30 days nor more than 60 days after the date notice of redemption is sent by the Company. (c) Unless all distributions (including all accumulated, accrued and unpaid distributions) have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past and current Distribution Periods with respect to the Series B Preferred Shares and all past and current distribution periods with respect to any Parity Shares, no Series B Preferred Share may be redeemed unless all outstanding Series B Preferred Shares are simultaneously redeemed and neither the Company nor any affiliate of the Company may purchase or acquire Series B Preferred Shares, except pursuant to a purchase or exchange offer made on the same terms to all holders of Series B Preferred Shares. (d) If the Company redeems Series B Preferred Shares pursuant to Section 5(a), notice of such redemption shall be given to each holder of record of shares to be redeemed. Such notice shall be provided by first class mail, postage prepaid, at such holder's address as it appears on the share records of the Company. Neither the failure to mail any notice required by this paragraph (d), nor any defect therein or in the mailing thereof to any particular holder, shall affect the sufficiency of the notice or the validity of the proceedings for redemption with respect to any other holders. Any notice which was mailed in the manner herein provided shall be conclusively presumed to have been duly given on the date mailed whether or not the holder receives the notice. Each such notice shall state, as appropriate: (i) the Call Date; (ii) the number of Series B Preferred Shares to be redeemed and, if fewer than all shares held by such holder are to redeemed, the number of shares to be redeemed from such holder; (iii) the place or places at which certificates representing such shares are to be surrendered for cash; and (iv) the then-current Conversion Price. If the Company has mailed notice of the redemption of Series B Preferred Shares as provided above, then from and after the Call Date (unless the Company fails to make available the amount of cash necessary to effect such redemption), (A) except as otherwise provided herein, distributions shall cease to accumulate or accrue on the shares called for redemption (except that, in the case of a Call Date which falls after a distribution record date and prior to the related Distribution Payment Date, holders of Series B Preferred Shares on the distribution record date shall be entitled on such Distribution Payment Date to receive the distribution payable on such shares), (B) such shares shall no longer be deemed to be outstanding and (C) all rights of the holders thereof as holders of Series B Preferred Shares shall cease (except the rights to receive the cash payable upon such redemption, without interest thereon, upon surrender and endorsement of their certificates if so required and to receive any distributions payable thereon). The Company's obligation to make available the redemption price in accordance with the preceding sentence shall be deemed fulfilled if, on or before the Call Date, the Company deposits with a bank or trust company that has, or is an affiliate of a bank or trust company that has, capital and surplus of at least $50,000,000, such amount of cash as is necessary for such redemption, in trust, with irrevocable instructions that such cash be applied to the redemption of the shares called for redemption. No interest shall accrue for the benefit of the holders of Series B Preferred Shares to be redeemed on any cash so set aside by the Company. Subject to applicable escheat laws, any such cash unclaimed at the end of two years from the Call Date shall revert to the general funds of the Company, after which reversion the holders of Series B Preferred Shares so called for redemption shall look only to the general funds of the Company for the payment of such cash. As promptly as practicable after the surrender in accordance with such notice of the certificates representing any Series B Preferred Shares to be redeemed (properly endorsed or assigned for transfer, if the Company so requires and the notice so states), such certificates shall be exchanged for cash (without interest thereon) for which such shares have been redeemed in accordance with such notice. If fewer than all outstanding Series B Preferred Shares are to be redeemed, the shares to be redeemed shall be selected by the Company from outstanding Series B Preferred Shares not previously called for redemption by lot or, with respect to the number of Series B Preferred Shares held of record by each holder of such shares, pro rata (as nearly as may be) or by any other method as may be determined by the Board in its discretion to be equitable. If fewer than all Series B Preferred Shares represented by any certificate are redeemed, then a new certificate representing the unredeemed shares shall be issued without cost to the holder thereof. SECTION 6. STATUS OF REACQUIRED SHARES. All Series B Preferred Shares which are issued and reacquired in any manner by the Company (including Series B Preferred Shares which are surrendered for conversion into Common Shares) shall be returned to the status of authorized but unissued shares of beneficial interest of the Company, without designation as to class or series. SECTION 7. CONVERSION. Holders of Series B Preferred Shares shall have the right to convert all or a portion of such shares into Common Shares, as follows: (a) Subject to and upon compliance with the provisions of this Section 7, a holder of Series B Preferred Shares shall have the right, at such holder's option, at any time following the earliest to occur of (i) the sixty first day after such holder provides the Company with written notice of its intent to convert Series B Preferred Shares, provided that such holder may not provide such notice prior to 119 days following the Initial Issue Date, (ii) the first day on which a Change of Control occurs, (iii) the occurrence of a REIT Termination Event, (iv) a default in the payment of distributions on the Series B Preferred Shares, (v) a reduction in the indicated rate of distributions on the Common Shares, or (vi) a material breach by the Company of any representation, warranty, or covenant contained in the Preferred Share Purchase Agreement dated as of February 20, 1998 by and among the Company, Security Capital Preferred Growth Incorporated, a Maryland corporation, and AMLI Residential Properties, L.P., a Delaware limited partnership (such date being referred to herein as the "Conversion Date"), to convert all or any portion of such shares into the number of fully paid and non-assessable shares of Common Shares obtained by dividing the aggregate Liquidation Preference of such shares (excluding any accrued but unpaid distributions) by the Conversion Price (as in effect at the time and on the date provided for in the last paragraph of paragraph (b) of this Section 7 by surrendering such shares to be converted, such surrender to be made in the manner provided in paragraph (b) of this Section 7; PROVIDED, HOWEVER, that the right to convert shares called for redemption pursuant to Section 5 shall terminate at the close of business on the fifth Business Day prior to the Call Date fixed for such redemption, unless the Company shall default in making payment of the cash payable upon such redemption under Section 5. "Change of Control" means each occurrence of any of the following: (i) the acquisition, directly or indirectly, by any individual or entity or group (as such term is used in Section 13(d)(3) of the Exchange Act) (other than the Investor, Gregory T. Mutz, UICI, a Texas corporation, Amli Realty Co., a Delaware corporation, Ronald L. Jensen, or any of their respective Affiliates) of beneficial ownership (as defined in Rule 13d-3 under the Exchange Act, except that such individual or entity shall be deemed to have beneficial ownership of all shares which any such individual or entity has the right to acquire, whether such right is exercisable immediately or only after passage of time) of the Company's outstanding shares of beneficial interest with voting power, under ordinary circumstances, to cast more than 25% of the votes entitled to be cast to elect trustees of the Company; (ii) other than with respect to the election, resignation or replacement of any trustee designated, appointed or elected by the holders of the Series B Preferred Shares (each a "Preferred Trustee"), during any period of two consecutive years, individuals who at the beginning of such period constituted the Board (together with any new trustees whose election by such Board or whose nomination for election by the shareholders of the Company was approved by a vote of two-thirds of the trustees of the Company (excluding Preferred Trustees) then still in office who were either trustees at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board then in office; and (iii) (A) the Company consolidating with or merging into another entity or conveying, transferring or leasing all or substantially all of its assets (including, but not limited to, real property investments) to any individual or entity or (B) any entity consolidating with or merging into the Company, which in either event (A) or (B) is pursuant to a transaction in which the outstanding voting shares of beneficial interest of the Company are reclassified or changed into or exchanged for cash, securities or other property; PROVIDED, HOWEVER, that the events described in clause (iii) shall not be deemed to be a Change of Control (X) if the sole purpose of such event is that the Company is seeking to change its domicile or to change its form of organization from a real estate investment trust to a statutory business trust or corporation or (Y) if the holders of the exchanged securities of the Company immediately after such transaction beneficially own at least a majority of the securities of the surviving entity normally entitled to vote in elections of trustees. (b) In order to exercise the conversion right, the holder of each Series B Preferred Share to be converted shall surrender the certificate representing such share, duly endorsed or assigned to the Company or in blank, at the office of the Transfer Agent, accompanied by written notice to the Company that such holder elects to convert such Series B Preferred Shares. Unless the Common Shares issuable on conversion are to be issued in the same name as the name in which such Series B Preferred Share is registered, each share surrendered for conversion shall be accompanied by instruments of transfer, in form satisfactory to the Company, duly executed by the holder or such holder's duly authorized attorney and an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Company demonstrating that such taxes have been paid). Holders of Series B Preferred Shares at the close of business on a distribution payment record date shall be entitled to receive the distribution payable on such shares on the corresponding Distribution Payment Date notwithstanding the conversion thereof following such distribution payment record date and prior to such Distribution Payment Date. Except as provided above, the Company shall make no payment or allowance for unpaid distributions, whether or not in arrears, on converted shares or for distributions on the Common Shares issued upon such conversion. As promptly as practicable after the surrender of certificates representing Series B Preferred Shares as provided above, the Company shall issue and deliver at such office to such holder, or send on such holder's written order, a certificate or certificates for the number of full Common Shares issuable upon conversion of such Series B Preferred Shares in accordance with the provisions of this Section 7, and any fractional interest in respect of a Common Share arising upon such conversion shall be settled as provided in Section 7(c). Each conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the certificates for Series B Preferred Shares have been surrendered and such notice has been received by the Company as provided above, and the Person or Persons in whose name or names any certificate or certificates for Common Shares are issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby at such time on such date and such conversion shall be at the Conversion Price in effect at such time on such date unless the share transfer books of the Company are closed on such date, in which event such Person or Persons shall be deemed to have become such holder or holders of record at the close of business on the next succeeding day on which such share transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such shares were surrendered and such notice was received by the Company. If the distribution payment record dates for the Series B Preferred Shares and Common Shares do not coincide, and the preceding sentence does not operate to ensure that a holder of Series B Preferred Shares whose shares are converted into Common Shares does not receive distributions on both the Series B Preferred Shares and the Common Shares into which such shares are converted for the same Distribution Period, then notwithstanding anything herein to the contrary, it is the intent, and the Transfer Agent is authorized to ensure, that no conversion after the earlier of such record dates will be accepted until after the later of such record dates. (c) No fractional Common Share or scrip representing fractions of a Common Share shall be issued upon conversion of Series B Preferred Shares. Instead of any fractional interest in a Common Share which would otherwise be deliverable upon conversion of a share of Series B Preferred Shares, the Company shall pay to the holder of such share an amount in cash based upon the Current Market Price of the Common Shares on the Trading Day immediately preceding the date of conversion. If more than one share is surrendered for conversion at one time by the same holder, the number of full Common Shares issuable upon conversion thereof shall be computed on the basis of the aggregate number of Series B Preferred Shares so surrendered. (d) The Conversion Price shall be adjusted from time to time as follows: (i) If the Company after the Initial Issue Date (A) makes a distribution on any of its shares of beneficial interest in Common Shares, (B) subdivides its outstanding Common Shares into a greater number of shares, (C) combines its outstanding Common Shares into a smaller number of shares or (D) issues any shares by reclassification of its outstanding Common Shares, the Conversion Price in effect at the opening of business on the day following the date fixed for the determination of holders of beneficial interest entitled to receive such distribution or at the opening of business on the day following the day on which such subdivision, combination or reclassification becomes effective, as the case may be, shall be adjusted so that the holder of any Series B Preferred Share thereafter surrendered for conversion shall be entitled to receive the number of Common Shares (or fraction of a Common Share) which such holder would have owned or been entitled to receive after the happening of any of the events described above if such Series B Preferred Share had been converted immediately prior to the record date in the case of a distribution or the effective date in the case of a subdivision, combination or reclassification. An adjustment made pursuant to this paragraph (i) shall become effective immediately after the opening of business on the day next following the record date (except as provided in Section 7(h)) in the case of a distribution or distribution and shall become effective immediately after the opening of business on the day next following the effective date in the case of a subdivision, combination or reclassification. (ii) If the Company after the Initial Issue Date issues rights, options or warrants to all holders of Common Shares entitling them (for a period expiring within 45 days after the record date described below) to subscribe for or purchase Common Shares at a price per share less than 94% (100% if a stand-by underwriter is used which charges the Company a commission) of the Fair Market Value per Common Share on the record date for the determination of holders of beneficial interest entitled to receive such rights, options or warrants, then the Conversion Price in effect at the opening of business on the day next following such record date shall be adjusted to equal the price determined by multiplying (A) the Conversion Price in effect immediately prior to the opening of business on the day following such record date by (B) a fraction, the numerator of which shall be the sum of (1) the number of Common Shares outstanding on the close of business on such record date and (2) the number of shares which could be purchased at 94% (100% if a stand-by underwriter is used which charges the Company a commission) of such Fair Market Value from the aggregate proceeds to the Company from the exercise of such rights, options or warrants for Common Shares, and the denominator of which shall be the sum of (3) the number of Common Shares outstanding on the close of business on such record date and (4) the number of additional Common Shares offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided in Section 7(h)). In determining whether any rights, options or warrants entitle the holders of Common Shares to subscribe for or purchase Common Shares at less than 94% (100% if a stand-by underwriter is used which charges the Company a commission) of such Fair Market Value, there shall be taken into account any consideration received by the Company upon issuance and upon exercise of such rights, options or warrants, the value of such consideration, if other than cash, to be determined in good faith by the Board. (iii) If the Company after the Initial Issue Date makes a distribution on its Common Shares other than in cash or Common Shares (including any distribution in securities (other than rights, options or warrants referred to in paragraph (ii) of Section 7(d)) (each of the foregoing being referred to herein as a "property distribution"), then the Conversion Price in effect at the opening of business on the day next following the record date for determination of holders of beneficial interest entitled to receive such property distribution shall be adjusted to equal the price determined by multiplying (A) the Conversion Price in effect immediately prior to the opening of business on the day following the record date by (B) a fraction, the numerator of which shall be the difference between (1) the number of Common Shares outstanding on the close of business on the record date and (2) the number of shares determined by dividing (x) the aggregate value of the property being distributed by (y) the Fair Market Value per Common Share on the record date, and the denominator of which shall be the number of Common Shares outstanding on the close of business on the record date. Such adjustment shall become effective immediately after the opening of business on the day next following such record date (except as provided below). The value of the property being distributed shall be determined in good faith by the Board; provided, however, that, if the property being distributed is a publicly traded security, its value shall be calculated in accordance with the procedure for calculating the Fair Market Value of a Common Share (calculated for a period of five consecutive Trading Days commencing on the twentieth Trading Day after the property distribution). Neither the issuance by the Company of rights, options or warrants to subscribe for or purchase securities of the Company nor the exercise thereof shall be deemed a property distribution under this paragraph (iii). (iv) If the Company after the Initial Issue Date acquires, pursuant to an issuer or self tender offer, all or any portion of the outstanding Common Shares and such tender offer involves the payment of consideration per Common Share having a fair market value (as determined in good faith by the Board), at the last time (the "Expiration Time") tenders may be made pursuant to such offer, which exceeds the Current Market Price per Common Share on the Trading Day next succeeding the Expiration Time, then the Conversion Price in effect on the opening of business on the Trading Day next succeeding the Expiration Time shall be adjusted to equal the price determined by multiplying (A) the Conversion Price in effect immediately prior to the Expiration Time by (B) a fraction, the numerator of which shall be (1) the number of Common Shares outstanding (including the shares acquired in the tender offer (the "Acquired Shares")) immediately prior to the Expiration Time, multiplied by (2) the Current Market Price per Common Share on the Trading Day next succeeding the Expiration Time, and the denominator of which shall be the sum of (3) the fair market value (determined as provided above) of the aggregate consideration paid to acquire the Acquired Shares and (4) the product of (x) the number of Common Shares outstanding (less any Acquired Shares) at the Expiration Time, multiplied by (y) the Current Market Price per Common Share on the Trading Day next succeeding the Expiration Time. (v) No adjustment to the Conversion Price shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in such price; provided, however, that any adjustments which by reason of this paragraph (v) are not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and provided, further, that any adjustment shall be required and made in accordance with the provisions of this Section 7 (other than this paragraph (v)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of Common Shares. Notwithstanding any other provisions of this Section 7, the Company shall not be required to make any adjustment to the Conversion Price for the issuance of (A) any Common Shares pursuant to any plan providing for the reinvestment of distributions or interest payable on securities of the Company and the investment of optional amounts in Common Shares under such plan or (B) any options, rights or Common Shares pursuant to any share option, share purchase or other share-based plan maintained by the Company. All calculations under this Section 7 shall be made to the nearest cent (with $0.005 and above being rounded upward) or to the nearest one-tenth of a share (with 0.05 of a share being rounded upward), as the case may be. Anything in this Section 7(d) to the contrary notwithstanding, the Company shall be entitled, to the extent permitted by law, to make such reductions in the Conversion Price, in addition to those required by this Section 7(d), as it in its discretion determines to be advisable in order that any share distributions, subdivision of shares, reclassification or combination of shares, distribution of rights or warrants to purchase share or securities, or a distribution of other assets (other than cash distributions) hereafter made by the Company to its holders of beneficial interest are not taxable, or if that is not possible, to diminish any income taxes which are otherwise payable because of such event. (e) If the Company is a party to any transaction (including without limitation a merger, consolidation, statutory share exchange, issuer or self tender offer for at least 30% of the Common Shares outstanding, a sale of all or substantially all of the Company's assets or a recapitalization of the Common Shares, but excluding any transaction as to which paragraph (i) of Section 7(d) applies) (each of the foregoing being referred to herein as a "Transaction"), in each case as a result of which Common Shares are converted into the right to receive shares, securities or other property (including cash or any combination thereof), each share of Series B Preferred Shares which is not converted into the right to receive shares, securities or other property in connection with such Transaction shall thereupon be convertible into the kind and amount of shares, securities and other property (including cash or any combination thereof) receivable upon such consummation by a holder of that number of Common Shares into which one share of Series B Preferred Shares was convertible immediately prior to such Transaction (without giving effect to any Conversion Price adjustment pursuant to paragraph (iv) of Section 7(d)). The Company shall not be a party to any Transaction unless the terms of such Transaction are consistent with the provisions of this Section 7(e), and it shall not consent or agree to the occurrence of any Transaction until the Company has entered into an agreement with the successor or purchasing entity, as the case may be, for the benefit of the holders of the Series B Preferred Shares which contains provisions enabling the holders of the Series B Preferred Shares which remain outstanding after such Transaction to convert into the consideration received by holders of Common Shares at the Conversion Price in effect immediately prior to such Transaction. The provisions of this Section 7(e) shall similarly apply to successive Transactions. (f) If: (i) the Company declares a distribution on the Common Shares (other than cash distributions); or (ii) the Company authorizes the granting to all holders of Common Shares of rights or warrants to subscribe for or purchase any shares of any class or series or any other rights or warrants; or (iii) there is any reclassification of the outstanding Common Shares or any consolidation or merger to which the Company is a party and for which approval of any holders of beneficial interest of the Company is required, or a statutory share exchange, or an issuer or self tender offer for at least 30% of the outstanding Common Shares (or an amendment thereto changing the maximum number of shares sought or the amount or type of consideration being offered therefor has been adopted), or the sale or transfer of all or substantially all of the assets of the Company as an entirety; or (iv) there occurs the voluntary or involuntary liquidation, dissolution or winding up of the Company, then the Company shall cause to be filed with the Transfer Agent and shall cause to be mailed to each holder of Series B Preferred Shares at such holder's address as shown on the share records of the Company, as promptly as possible, a notice stating (A) the record date for the payment of such distribution or rights or warrants, or, if a record date is not established, the date as of which the holders of Common Shares of record to be entitled to such distribution or rights or warrants are to be determined or (B) the date on which such reclassification, consolidation, merger, statutory share exchange, sale, transfer, liquidation, dissolution or winding up is expected to become effective, and the date as of which it is expected that holders of Common Shares of record shall be entitled to exchange their Common Shares for securities or other property, if any, deliverable upon such reclassification, consolidation, merger, statutory share exchange, sale, transfer, liquidation, dissolution or winding up or (C) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of any amendment thereto). Failure to give or receive such notice or any defect therein shall not affect the legality or validity of the proceedings described in this Section 7. (g) Whenever the Conversion Price is adjusted as herein provided, the Company shall promptly file with the Transfer Agent an officer's certificate setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment which certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price and the date such adjustment becomes effective and shall mail such notice of such adjustment of the Conversion Price to each holder of Series B Preferred Shares at such holder's last address as shown on the share records of the Company. (h) In any case in which Section 7(d) provides that an adjustment shall become effective on the day next following the record date for an event, the Company may defer until the occurrence of such event (i) issuing to the holder of any Series B Preferred Share converted after such record date and before the occurrence of such event the additional Common Shares issuable upon such conversion by reason of the adjustment required by such event over and above the Common Shares issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holder any amount of cash in lieu of any fraction pursuant to Section 7(c). (i) There shall be no adjustment of the Conversion Price in case of the issuance of any shares of beneficial interest of the Company in a reorganization, acquisition or other similar transaction except as specifically set forth in this Section 7. (j) If the Company takes any action affecting the Common Shares, other than action described in this Section 7, which in the opinion of the Board would materially and adversely affect the conversion rights of the holders of Series B Preferred Shares, the Conversion Price for the Series B Preferred Shares may be adjusted, to the extent permitted by law, in such manner, if any, and at such time as the Board, in its sole discretion, may determine to be equitable under the circumstances. (k) The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Shares solely for the purpose of effecting conversion of the Series B Preferred Shares, the full number of Common Shares deliverable upon conversion of all outstanding Series B Preferred Shares not theretofore converted into Common Shares. For purposes of this Section 7(k), the number of Common Shares which are deliverable upon conversion of all outstanding Series B Preferred Shares shall be computed as if at the time of computation all such outstanding shares were held by a single holder (and without regard to the Ownership Limit set forth in the Declaration of Trust). The Company covenants that any Common Share issued upon conversion of the Series B Preferred Shares shall be validly issued, fully paid and nonassessable. The Company shall use its best efforts to list the Common Shares required to be delivered upon conversion of the Series B Preferred Shares, prior to such delivery, on each national securities exchange, if any, on which the outstanding Common Shares are listed at the time of such delivery. (l) The Company shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issuance or delivery of Common Shares or other securities or property on conversion or redemption of Series B Preferred Shares pursuant hereto; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance or delivery of Common Shares or other securities or property in a name other than that of the holder of the Series B Preferred Shares to be converted or redeemed, and no such issuance or delivery shall be made unless and until the Person requesting such issuance or delivery has paid to the Company the amount of any such tax or established, to the reasonable satisfaction of the Company, that such tax has been paid. (m) In addition to any other adjustment required hereby, to the extent permitted by law, the Company from time to time may decrease the Conversion Price by any amount, permanently or for a period of at least twenty Business Days, if the decrease is irrevocable during the period. (n) Notwithstanding anything to the contrary contained in this Section 7, conversion of Series B Preferred Shares pursuant to this Section 7 shall be permitted only to the extent that such conversion would not result in a violation of the Ownership Limit (as defined in the Declaration of Trust), after taking into account any waiver of such limitation granted to any holder of Series B Preferred Shares. SECTION 8. RANKING. Any class or series of shares of the Company shall be deemed to rank: (a) senior to the Series B Preferred Shares, as to the payment of distributions and as to the distribution of assets upon liquidation, dissolution or winding up, if the holders of such class or series are entitled to the receipt of distributions or amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of Series B Preferred Shares ("Senior Shares"); (b) on a parity with the Series B Preferred Shares, as to the payment of distributions and as to the distribution of assets upon liquidation, dissolution or winding up, whether or not the distribution rates, distribution payment dates or redemption or liquidation prices per share thereof are different from those of the Series B Preferred Shares, if the holders of such class or series and the Series B Preferred Shares are entitled to the receipt of distributions and amounts distributable upon liquidation, dissolution or winding up in proportion to their respective amounts of accrued and unpaid distributions per share or liquidation preferences, without preference or priority one over the other ("Parity Shares"); and (c) junior to the Series B Preferred Shares, as to the payment of distributions or as to the distribution of assets upon liquidation, dissolution or winding up, if such class or series is Common Shares or if the holders of Series B Preferred Shares are entitled to the receipt of distributions or amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of shares of such class or series ("Junior Shares"). Any class or series of preferred shares shall be deemed to be Senior Shares for all purposes of these Articles Supplementary unless such preferred shares expressly provide by their terms that they are Parity Shares or Junior Shares. SECTION 9 VOTING. (a) If and whenever (i) four quarterly distributions (whether or not consecutive) payable on the Series B Preferred Shares are in arrears (which shall, with respect to any such quarterly distribution, mean that any such distribution has not been paid in full), whether or not earned or declared, (ii) for four consecutive quarterly Distribution Periods, the Company fails to pay distributions on the Common Shares in an amount per share at least equal to $0.418 per share per quarter (subject to adjustment consistent with any adjustment of the Conversion Price pursuant to Section 7(d)) (the "Base Common Share Distribution") or (iii) the Company fails to satisfy the test set forth in Section 12(a), then the number of trustees then constituting the Board shall be increased by two (or by three if the number of trustees then constituting the Board is ten or more (without including any trustees elected pursuant to this Section 9(a)) and the holders of Series B Preferred Shares, together with the holders of every other series or class of Parity Shares (with any other such series, the "Voting Preferred Shares"), voting as a single class regardless of series, shall be entitled to elect the additional trustees to serve on the Board at any annual meeting of holders of beneficial interest or a special meeting held in lieu thereof, or at a special meeting of the holders of the Series B Preferred Shares and the Voting Preferred Shares called as hereinafter provided. Whenever (A) in the case of an arrearage in distributions described in clause (i), all distributions in arrears on the Series B Preferred Shares and the Voting Preferred Shares then outstanding have been paid and a sum sufficient for the payment thereof has been set apart for payment of the distribution for the current distribution for two consecutive quarterly Distribution Periods, (B) in the case of an arrearage in distributions described in clause (ii), the Company makes a quarterly distribution payment on the Common Shares in an amount per share equal to or exceeding the Base Common Share Distribution for two consecutive quarterly Distribution Periods, or (C) in the case of a failure described in clause (iii), the Company satisfies the test set forth in Section 12(a) for two consecutive fiscal quarters, then the right of the holders of the Series B Preferred Shares and the Voting Preferred Shares to elect such additional trustees shall cease (but subject always to the same provision for the vesting of such voting rights in the case of any similar future arrearages), and the terms of office of all Persons elected as trustees by the holders of the Series B Preferred Shares and the Voting Preferred Shares shall forthwith terminate and the number of trustees constituting the Board shall be reduced accordingly. At any time after such voting power shall have been so vested in the holders of Series B Preferred Shares and the Voting Preferred Shares, the Secretary of the Company may, and upon the written request of any holder of Series B Preferred Shares (addressed to the Secretary at the principal office of the Company) shall, call a special meeting of the holders of the Series B Preferred Shares and the Voting Preferred Shares for the election of the two (or three if the number of trustees then constituting the Board is ten or more) trustees to be elected by them as herein provided, such call to be made by notice similar to that provided in the Bylaws of the Company for a special meeting of the holders of beneficial interest or as required by law. If any such special meeting required to be called as above provided shall not be called by the Secretary within 20 days after receipt of any such request, then any holder of Series B Preferred Shares may call such meeting, upon the notice above provided, and for that purpose shall have access to the share records of the Company. The trustees elected at such special meeting shall hold office until the next annual meeting of the holders of beneficial interest or special meeting held in lieu thereof if such office has not previously terminated as provided above. If any vacancy occurs among the trustees elected by the holders of the Series B Preferred Shares and the Voting Preferred Shares, a successor shall be elected by the Board, upon the nomination of the then-remaining director elected by the holders of the Series B Preferred Shares and the Voting Preferred Shares or the successor of such remaining director, to serve until the next annual meeting of the holders of beneficial interest or special meeting held in lieu thereof if such office has not previously terminated as provided above. (b) So long as any of the Series B Preferred Shares is outstanding, in addition to any other vote or consent of holders of beneficial interest required by law or by the Declaration of Trust of the Company, the affirmative vote of at least two-thirds of the votes entitled to be cast by the holders of the Series B Preferred Shares, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating: (i) Any amendment, alteration or repeal of any of the provisions of these Articles Supplementary, the Declaration of Trust or the By-Laws of the Company which materially and adversely affects the voting powers, rights or preferences of the holders of the Series B Preferred Shares; provided, however, that the amendment of the provisions of the Declaration of Trust so as to authorize or create, or to increase the authorized amount of, any Junior Shares or any class of Senior Shares or Parity Shares shall not be deemed to materially adversely affect the voting powers, rights or preferences of the holders of Series B Preferred Shares; or (ii) The authorization, reclassification or creation of, the increase in the authorized amount of, or the issuance of, any class of Senior Shares or any security convertible into any class of Senior Shares (whether or not such class of Senior Shares is currently authorized); PROVIDED, HOWEVER, that no such vote of the holders of Series B Preferred Shares shall be required if either: (A) at or prior to the time when such amendment, alteration or repeal is to take effect, or when the issuance of any such Senior Shares or convertible security is to be made, as the case may be, provision is made for the redemption of all Series B Preferred Shares at the time outstanding, if the Series B Preferred Shares are then redeemable at the option of the Company; or (B) after giving effect to the issuance of such Senior Shares proposed to be so authorized, reclassified, created, increased or issued and (if known) the application of the net proceeds therefrom, the Company continues to be in compliance with Section 12 hereof. For purposes of the foregoing provisions and all other voting rights under these Articles Supplementary, each Series B Preferred Share shall have one vote per share, except that when any other class or series of preferred shares of beneficial interest shall have the right to vote with the Series B Preferred Shares as a single class on any matter, then the Series B Preferred Shares and such other class or series shall have with respect to such matters one vote per $100 of stated liquidation preference. Except as otherwise required by applicable law or as set forth herein, the Series B Preferred Shares shall not have any relative, participating, optional or other special voting rights and powers other than as set forth herein, and the consent of the holders thereof shall not be required for the taking of any corporate action. SECTION 10. RECORD HOLDERS. The Company and the Transfer Agent may deem and treat the record holder of any Series B Preferred Shares as the true and lawful owner thereof for all purposes, and neither the Company nor the Transfer Agent shall be affected by any notice to the contrary. SECTION 11. OWNERSHIP RESTRICTIONS. The Series B Preferred Shares shall be subject to the restrictions and limitations set forth in Article 3 of the Declaration of Trust, subject to waiver thereof by the Board. SECTION 12. FIXED CHARGE COVERAGE. (a) So long at least 312,500 Series B Preferred Shares are outstanding, without the written consent of the holders of two-thirds of the outstanding Series B Preferred Shares, neither the Company nor any subsidiary of the Company may issue any preferred securities of such entity or incur any additional indebtedness for borrowed money if immediately following such issuance or incurrence and after giving effect to such issuance or incurrence and the application of the net proceeds therefrom the Company's ratio of aggregate Consolidated EBITDA to aggregate Consolidated Fixed Charges for the four fiscal quarters immediately preceding such issuance would be less than 1.625 to 1. (b) "Consolidated EBITDA" for any period shall mean the consolidated net income of the Company (before minority interest, extraordinary items and other gains and losses) as reported in the Company's financial statements filed with the Securities and Exchange Commission increased by the sum of the following (without duplication): (i) all income and state franchise taxes paid or accrued according to generally accepted accounting principles ("GAAP") for such period (other than income taxes attributable to extraordinary, unusual or non-recurring gains or losses except to the extent that such gains were not included in Consolidated EBITDA); (ii) all interest expense paid or accrued in accordance with GAAP for such period (including financing fees and amortization of deferred financing fees and amortization of original issue discount); (iii) depreciation and depletion reflected in such reported net income; (iv) amortization reflected in such reported net income including, without limitation, amortization of capitalized debt issuance costs (only to the extent that such amounts have not been previously included in the amount of Consolidated EBITDA pursuant to clause (ii) above), goodwill, other intangibles and management fees; (v) any fees (to the extent such fees were treated as expenses in the calculation of the consolidated net income of the Company) with respect to any interest rate protection agreement (including, without limitation, interest rate swaps, caps, floors, collars and similar agreements) and/or other types of interest hedging agreements and any currency protection agreement (including foreign exchange contracts, currency swap agreements and other currency hedging arrangements) (collectively, "Hedging Costs"); and (vi) any other non-cash charges or discretionary prepayment penalties, to the extent deducted from consolidated net income (including, but not limited to, income allocated to minority interests). (c) "Consolidated Fixed Charges" for any period means the sum of: (i) all interest expense paid or accrued in accordance with GAAP for such period (including financing fees and amortization of deferred financing fees and amortization of original issue discount; (ii) preferred share distribution requirements for such period, whether or not declared or paid; and (iii) Hedging Costs. SECTION 13. SINKING FUND. The Series B Preferred Shares shall not be entitled to the benefit of any retirement or sinking fund. SECOND: The Series B Preferred Shares have been classified and designated by the Board under the authority contained in Article 2 of the Declaration of Trust. THIRD: These Articles Supplementary have been approved by the Board in the manner and by the vote required by law. FOURTH: The undersigned President acknowledges these Articles Supplementary to be the act of the Company and, as to all other matters or facts required to be verified under oath, acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury. IN WITNESS WHEREOF, the Company has caused these Articles Supplementary to be signed in its name and on its behalf by its President and attested to by its Secretary on this 23rd day of February, 1998. AMLI RESIDENTIAL PROPERTIES TRUST By:/s/ Allan J. Sweet ---------------------------- Allan J. Sweet, President ATTEST: /s/ Charlotte A. Sparrow - ----------------------------------- Secretary EX-10.1 3 EXHIBIT 10.1 - ------------ FOURTH AMENDMENT TO AMLI RESIDENTIAL PROPERTIES, L.P. AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP This Amendment, dated as of March 9, 1998, amends the Amended and Restated Agreement of Limited Partnership, dated as of February 15, 1994, as amended by the First Amendment thereto, dated as of July 3, 1995, the Second Amendment thereto, dated as of January 30, 1996 and the Third Amendment thereto, dated July 31, 1996 (as so amended the "PARTNERSHIP AGREEMENT"), of Amli Residential Properties, L.P., a Delaware limited partnership (the "PARTNERSHIP"), by and among Amli Residential Properties Trust, a Maryland real estate investment trust, as the general partner (the "GENERAL PARTNER"), and the Persons whose names are set forth on Exhibit A to the Partnership Agreement, as the Limited Partners (the "LIMITED PARTNERS"), together with any other Persons who become Partners in the Partnership as provided in the Partnership Agreement. W I T N E S E T H: WHEREAS, the Partnership is a Delaware limited partnership existing under the Delaware Revised Uniform Limited Partnership Act (the "ACT") pursuant to the Partnership Agreement; WHEREAS, the General Partner is issuing Series B Preferred Shares (as defined below); WHEREAS, the General Partner will contribute the net proceeds of the issuance of Series B Preferred Shares as a Capital Contribution to the Partnership; WHEREAS, SECTION 4.2(b) of the Partnership Agreement provides as follows: "The Partnership also may from time to time issue to the General Partner additional Partnership Units or other Partnership Interests in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to Limited Partnership Interests, all as shall be determined by the General Partner, subject to Delaware law, including, without limitation, with respect to (i) the allocations of items of Partnership income, gain, loss, deduction and credit to each such class or series of Partnership Interests, (ii) the right of each such class or series of Partnership Interests to share in Partnership distributions, and (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; PROVIDED that (x) the additional Partnership Interests are issued in connection with an issuance of shares of the General Partner, which shares have designations, preferences and other rights, all such that the economic interests are substantially similar to the designations, preferences and other rights of the additional Partnership Interests issued to the General Partner in accordance with this SECTION 4.2(b), and (y) the General Partner shall make a Capital Contribution to the Partnership in an amount equal to the net proceeds raised in connection with the issuance of such shares of the General Partner." WHEREAS, SECTION 14.1(b)(3) of the Partnership Agreement provides that the General Partner shall have the power, without the consent of the Limited Partners, to amend the Partnership Agreement "to set forth the rights, powers, duties, and preferences of the holders of any additional Partnership Interests issued pursuant to SECTION 4.2(b)" of the Partnership Agreement; and WHEREAS, the General Partner desires to amend the Partnership Agreement to set forth the rights, powers, duties, and preferences of the General Partner as the holder of certain Partnership Interests, and the Partnership Units corresponding thereto, issued pursuant to SECTION 4.2(b). NOW, THEREFORE, pursuant the authority granted in SECTION 14.1(b)(3) of the Partnership Agreement, the General Partner hereby amends the Partnership Agreement as follows: 1. AMENDMENT. Effective at (and subject to the occurrence of) the Effective Time (as defined in SECTION 2 below), SECTION 4.2 of the Partnership Agreement is hereby amended by adding the following new subsection (g) at the end of such Section: "(g) PARTNERSHIP INTEREST AND UNITS IN CONNECTION WITH SERIES B CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED SHARES. (1) Pursuant to the provisions of, and upon the Capital Contribution called for by, SECTION 4.2(b), there are hereby from time to time issued to the General Partner an additional Partnership Interest and, corresponding thereto, a number of Partnership Units (the "SERIES B PREFERRED UNITS") equal to the number of Series B Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest of the General Partner, as classified and designated by Articles Supplementary (the "ARTICLES SUPPLEMENTARY") filed with the Maryland Department of Assessments and Taxation on February 25, 1998 (the "SERIES B PREFERRED SHARES"), from time to time outstanding. The Series B Preferred Units shall have such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to Limited Partnership Interests, as further provided in SECTION 4.2(g)(2) AND SECTION 4.2(g)(3) below and as shall be determined by the General Partner, subject to Delaware law, including, without limitation, with respect to (i) the allocations of items of Partnership income, gain, loss, deduction and credit, (ii) the right to share in Partnership distributions, and (iii) the rights upon dissolution and liquidation of the Partnership, all such that the economic interests represented by the Series B Preferred Units are substantially similar to the designations, preferences and other rights of the Series B Preferred Shares. To the extent necessary to give effect to the preceding sentence, (i) the Series B Preferred Units shall have preference over other Partnership Units with respect to distributions of Available Cash as provided in SECTION 5.1(i), and (ii) the General Partner shall, with respect to the Series B Preferred Units, have priority over other Partners and Assignees as to profits, losses and distributions as authorized by SECTION 8.4. (2) The General Partner shall be entitled to receive preferential distributions on the Series B Preferred Units corresponding to the distributions to which holders of the Series B Preferred Shares are entitled. As set forth in the Articles Supplementary, the distributions to which holders of Series B Preferred Shares are entitled are as follows (Capitalized terms used in the following subsections (2)(i) through (2)(iv) and not defined in this Amendment shall have the respective meanings assigned such terms in the in the Articles Supplementary.): (i) The holders of Series B Preferred Shares shall be entitled to receive, when, as and if declared by the Board of Trustees out of funds legally available for that purpose, cumulative distributions payable in cash in an amount per share equal to the greater of (A) the base distribution of $0.45 per quarter (the "Base Rate") or (B) the distributions declared on the number of Common Shares, or portion thereof, into which a Series B Preferred Share would then be convertible, without regard to any time restrictions on the convertibility of the Series B Preferred Shares. The amount referred to in clause (B) of this subsection (2)(i) with respect to each succeeding Distribution Period shall be determined as of the applicable Distribution Payment Date by multiplying the number of Common Shares, or portion thereof, calculated to the fourth decimal point, into which a Series B Preferred Share would then be convertible (without regard to any time restrictions on the convertibility of the Series B Preferred Shares) at the opening of business on such Distribution Payment Date (based on the Conversion Price then in effect) by the aggregate cash distributions payable or paid for such Distribution Period in respect of a Common Share outstanding as of the record date for the distribution payable on the Common Shares for such Distribution Period. If (X) the General Partner pays a cash distribution on the Common Shares after the Distribution Payment Date for the corresponding Distribution Period and (Y) the distribution on the Series B Preferred Shares for such Distribution Period calculated pursuant to clause (B) of the subsection (2)(i), taking into account the Common Share distribution referenced in clause (X), exceeds the distribution previously declared on the Series B Preferred Shares for such Distribution Period, the General Partner shall pay an additional distribution to the holders of the Series B Preferred Shares on the date that the Common Share distribution referenced in clause (X) is paid, in an amount equal to the difference between the distribution calculated pursuant to clause (Y) and the distributions previously declared on the Series B Preferred Shares with respect to such Distribution Period. Such distributions shall be cumulative from each Issue Date, whether or not in any Distribution Period or Periods such distributions are declared or there are funds of the General Partner legally available for the payment of such distributions, and shall be payable quarterly in arrears on the Distribution Payment Dates, commencing on the first Distribution Payment Date after each Issue Date. Each such distribution shall be payable in arrears to the holders of record of the Series B Preferred Shares, as they appear on the share records of the General Partner at the close of business on such record date as is fixed by the Board of Trustees which shall be not more than 60 days prior to the corresponding Distribution Payment Date and, within such 60-day period, shall be the same date as the record date for the regular quarterly distribution payable on the Common Shares for such Distribution Period (or, if there is no such record date for the Common Shares, then such date as the Board of Trustees may fix). Accumulated, accrued and unpaid distributions for any past Distribution Periods may be authorized or declared and paid at any time, without reference to any regular Distribution Payment Date, to holders of record on such record date as may be fixed by the Board of Trustees which shall be not more than 45 days prior to the corresponding payment date. (ii) In the case of any Series B Preferred Share the Issue Date of which is a date other than the first day of a Distribution Period, or any other period shorter than a full Distribution Period, the amount of distributions payable per such Series B Preferred Share shall be computed ratably on the basis of a 360-day year of twelve 30-day months. Holders of Series B Preferred Shares shall not be entitled to any distributions, whether payable in cash, property or shares, in excess of cumulative distributions as herein provided on the Series B Preferred Shares. No interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on the Series B Preferred Shares which may be in arrears. (iii) So long as any of the Series B Preferred Shares is outstanding, except as described in the immediately following sentence, no distributions shall be declared or paid or set apart for payment by the General Partner and no other distribution of cash or other property shall be declared or made directly or indirectly by the Company with respect to any class or series of Parity Shares for any period unless all accumulated, accrued and unpaid distributions have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past Distribution Periods with respect to the Series B Preferred Shares. When distributions are not paid in full or a sum sufficient for such payment is not set apart for payment as provided above, all distributions declared on the Series B Preferred Shares and all distributions declared on any other class or series of Parity Shares shall be declared ratably in proportion to the respective amounts of distributions accumulated, accrued and unpaid on the Series B Preferred Shares and on such Parity Shares. (iv) So long as any of the Series B Preferred Shares is outstanding, no distributions (other than distributions paid in, or options, warrants or rights to subscribe for or purchase, Junior Shares) shall be declared or paid or set apart for payment by the General Partner and no other distribution of cash or other property shall be declared or made directly or indirectly by the General Partner with respect to any class or series of Junior Shares, nor shall any Junior Shares be redeemed, purchased or otherwise acquired (other than a redemption, purchase or other acquisition of Common Shares made for purposes of an employee incentive or benefit plan of the General Partner or any subsidiary) for any consideration (or any moneys be paid to or made available for a sinking fund for the redemption of any Junior Shares) directly or indirectly by the General Partner (except by conversion into or exchange for Junior Shares), nor shall any other cash or other property otherwise be paid or distributed to or for the benefit of any holder of Junior Shares in respect thereof directly or indirectly by the General Partner unless in each case (A) all distributions (including all accumulated, accrued and unpaid distributions) have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof set apart for payment for all past Distribution Periods with respect to the Series B Preferred Shares and all past distribution periods with respect to any Parity Shares and (B) a sum sufficient for the payment thereof has been or contemporaneously is paid or set apart for payment of the full distribution for the current Distribution Period with respect to the Series B Preferred Shares and the current distribution period with respect to any Parity Shares. (3) In the event of any liquidation, dissolution or winding up of the Partnership, whether voluntary or involuntary, the General Partner shall be entitled to receive preferential distributions with respect to the Series B Preferred Units corresponding to the liquidation preference to which holders of the Series B Preferred Shares are entitled in the event of the liquidation, dissolution or winding up of the General Partner. As set forth in the Articles Supplementary, the liquidation preference to which holders of Series B Preferred Shares are entitled is as follows (Capitalized terms used in the following subsections (3)(i) through (3)(iii) and not defined in this Amendment shall have the respective meanings assigned such terms in the in the Articles Supplementary.): (i) Upon any liquidation, dissolution or winding up of the General Partner, whether voluntary or involuntary, before any payment or distribution of the assets of the General Partner (whether capital or surplus) shall be made to or set apart for the holders of Junior Shares, the holders of Series B Preferred Shares shall be entitled to receive $24.00 per Series B Preferred Share (the "Liquidation Preference"), plus an amount equal to all distributions (whether or not earned or declared) accumulated, accrued and unpaid thereon to the date of final distribution to such holders, if any; but such holders shall not be entitled to any further payment. Until the holders of the Series B Preferred Shares have been paid the Liquidation Preference in full, plus an amount equal to all distributions (whether or not earned or declared) accumulated, accrued and unpaid thereon to the date of final distribution to such holders, no payment may be made to any holder of Junior Shares upon any liquidation, dissolution or winding up of the General Partner. If, upon any liquidation, dissolution or winding up of the General Partner, the assets of the General Partner, or the proceeds thereof, distributable among the holders of Series B Preferred Shares are insufficient to pay in full such preferential amount and liquidating payments on any other class or series of Parity Shares, then such assets, or the proceeds thereof, shall be distributed among the holders of Series B Preferred Shares and any such other Parity Shares ratably in portion to the respective amounts which would be payable on such Series B Preferred Shares and any such other Parity Shares if all amounts payable thereon were paid in full. (ii) Upon any liquidation, dissolution or winding up of the General Partner, after payment has been made in full to the holders of Series B Preferred Shares and any Parity Shares as provided in this Section 4, any other series or class of Junior Shares shall, subject to the respective terms thereof, be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series B Preferred Shares and any Parity Shares shall not be entitled to share therein. (iii) For purposes of this Section 4.2(g)(3), (A) a consolidation or merger of the General Partner with or into one or more corporations, (B) a sale or transfer of all or substantially all of the General Partner's assets or (C) a statutory share exchange shall not be deemed to be a liquidation, dissolution or winding up, voluntary or involuntary, of the General Partner. (4) Upon conversion of any Series B Preferred Shares into, or redemption of any Series B Preferred Shares for, Common Shares as provided in the Articles Supplementary, a corresponding number of Series B Preferred Units will be converted into Partnership Units having such designations, preferences and relative, participating, optional or other special rights, powers and duties, including, without limitation, with respect to (i) the allocations of items of Partnership income, gain, loss, deduction and credit, (ii) the right to share in Partnership distributions, and (iii) the rights upon dissolution and liquidation of the Partnership, all such that the economic interests represented by such Partnership Units are substantially similar to the designations, preferences and other rights of the Common Shares." 2. EFFECTIVENESS. The amendment set forth in SECTION 1 shall become effective at the time of the first issuance of Series B Preferred Shares (the "EFFECTIVE TIME"). 3. CONTINUING EFFECTIVENESS. As herein amended, the Partnership Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. 4. GOVERNING LAW. This Amendment shall be governed by the internal laws of the State of Delaware. 5. DEFINED TERMS. Except as otherwise specified herein, capitalized terms used and not defined herein shall have the respective meanings assigned such terms in the Partnership Agreement. IN WITNESS WHEREOF, the undersigned, the General Partner of the Partnership, has executed this Amendment to the Partnership Agreement as of the date first above written. AMLI RESIDENTIAL PROPERTIES TRUST By: /s/ ALLAN J. SWEET ---------------------------- Name: Allan J. Sweet Title: President EX-10.2 4 EXHIBIT 10.2 - ------------ SECOND AMENDMENT TO AMLI RESIDENTIAL PROPERTIES OPTION PLAN WHEREAS, Amli Residential Properties Trust, a Maryland real estate investment trust (the "Trust"), has adopted and maintains the Amli Residential Properties Option Plan (the "Option Plan"); and WHEREAS, the Board of Trustees of the Trust has the authority to amend the Option Plan, subject to shareholder approval with respect to amendments that increase the number of Shares or Units (as such terms are defined in the Option Plan) eligible for awards under the Option Plan; and WHEREAS, the members of the Board of Trustees of the Trust now consider it desirable to amend the Option Plan to increase the number of Shares or Units eligible for awards under the Option Plan; NOW, THEREFORE, IT IS RESOLVED, that the Option Plan shall be, and it hereby is, amended, effective as of the date the shareholders of the Trust approve of this amendment, by substituting the following for Section 4.1 of the Option Plan: "4.1. NUMBER OF SHARES AND UNITS SUBJECT TO OPTION. Subject to the adjustment provisions of Section 4.4, the aggregate number of (a) Shares which may be subject to Share Options (whether as Incentive Share Options or Non-qualified Options), and (b) Units which may be subject to Unit Options, shall not exceed 2,000,000 Shares or 2,000,000 Units, or any combination of the foregoing. If, and to the extent, that Options granted under the Plan terminate, expire or are canceled for any reason without having been exercised, the Shares or Units reserved for issuance pursuant to the terminated, expired or canceled Option (and any Shares reserved in connection with the Conversion Rights of the Units) shall again be available for the granting of Options; provided that the granting and terms of such new Options shall in all respects comply with the provisions of the Plan. No Options to purchase fractional Shares or fractional Units shall be granted or issued under the Plan." EX-10.3 5 EXHIBIT 10.3 - ------------ REGISTRATION RIGHTS AGREEMENT This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of the 9th day of March, 1998 by and between AMLI Residential Properties Trust, a Maryland real estate investment trust (the "Company"), and Security Capital Preferred Growth Incorporated, a Maryland corporation (the "Investor"). WHEREAS, pursuant to that certain Preferred Share Purchase Agreement dated as of February 20, 1998 (the "Purchase Agreement"), among the Company, AMLI Residential Properties Trust, L.P., a Delaware limited partnership, and the Investor, the Investor has agreed to purchase 3,125,000 shares of Series B Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest, par value $.01 per share, of the Company (the "Preferred Shares"), all of which Preferred Shares may be converted into the Company's common shares of beneficial interest, par value $.01 per share (the "Common Shares"), pursuant to the terms of such Preferred Shares; and WHEREAS, in connection with the Purchase Agreement, the Company has agreed to register for sale by the Investor and certain transferees, the Common Shares issued or issuable upon conversion of shares of Preferred Shares (collectively, "Conversion Shares" or the "Registrable Shares"); and WHEREAS, the parties hereto desire to enter into this Agreement to evidence the foregoing agreement of the Company and the mutual covenants of the parties relating thereto. NOW, THEREFORE, in consideration of the foregoing and the covenants, agreements and warranties herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: SECTION 1. CERTAIN DEFINITIONS. In this Agreement, the following terms shall have the following respective meanings: "Accredited Investor" shall have the meaning set forth in Rule 501 under the Securities Act. "Affiliate" shall mean, when used with respect to any Person, another Person which directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Person specified. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder, all as the same are in effect at the relevant time. "Holders" shall mean (a) the Investor and (b) each Person holding Registrable Shares as a result of a transfer or assignment to that Person of Registrable Shares other than pursuant to an effective registration statement or Rule 144. "Indemnified Party" shall have the meaning ascribed to it in Section 4(c) of this Agreement. "Indemnifying Party" shall mean the meaning ascribed to it in Section 4(c) of this Agreement. "Person" shall mean an individual, corporation, partnership, limited liability company, estate, trust, association, private foundation, joint stock company or other entity. "Preferred Shares" shall have the meaning ascribed to it in the recitals to this Agreement. "Register," "Registered" and "Registration" refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act providing for the sale by the Holders of Registrable Shares in accordance with the method or methods of distribution designated by the Holders, and the declaration or ordering of the effectiveness of such registration statement by the Commission. "Registrable Shares" shall have the meaning ascribed to it in the recitals to this Agreement. "Registration Expenses" shall mean all out-of-pocket expenses (excluding Selling Expenses) incurred by the Company in complying with Section 2, including, without limitation, the following: (a) all registration, filing and listing fees; (b) fees and expenses of compliance with federal and state securities or real estate syndication laws (including, without limitation, reasonable fees and disbursements of counsel in connection with state securities and real estate syndication qualifications of the Registrable Shares under the laws of such jurisdictions as the Holders may reasonably designate); (c) printing (including, without limitation, expenses of printing or engraving certificates for the Registrable Shares in a form eligible for deposit with The Depository Trust Company and otherwise meeting the requirements of any securities exchange on which they are listed and of printing registration statements and prospectuses), messenger, telephone, shipping and delivery expenses; (d) fees and disbursements of counsel for the Company; (e) fees and disbursements of all independent public accountants of the Company (including, without limitation, the expenses of any annual or special audit and "cold comfort" letters required by the managing underwriter); (f) fees and expenses incurred in connection with the listing of the Registrable Shares on each securities exchange on which securities of the same class are then listed; and (g) fees and expenses associated with any filing with the National Association of Securities Dealers, Inc. required to be made in connection with the registration statement. "Registration Request" shall have the meaning ascribed to it in Section 2(a) of this Agreement. "Rule 144" shall mean Rule 144 under the Securities Act. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder, all as the same are in effect at the relevant time. "Selling Expenses" shall mean all underwriting discounts, selling commissions and stock transfer taxes applicable to any sale of Registrable Shares and, if neither the Company nor any Person not a Holder shall include securities within the subject Registration, shall include all travel and other expenses of members of the management of the Company and its affiliates in connection with the matters described in SECTION 6 (and if the Company or any such Person shall so include securities, Selling Expenses shall include a pro rata portion of such travel and other expenses). SECTION 2. REGISTRATION. (a) Upon receipt of a written request (a "Registration Request") delivered not earlier than nine months from the date of this Agreement from Holders holding at least 50% of the Preferred Shares and Registrable Shares then outstanding, the Company shall, as soon as practicable but not later than 30 days after its receipt of such Registration Request, prepare and file with the Commission a registration statement for the purpose of effecting a Registration of the sale of Registrable Shares by the Holders thereof; shall use its best efforts to effect such Registration as soon as practicable but not later than 90 days after its receipt of such Registration Request (including, without limitation, the execution of an undertaking to file post-effective amendments and appropriate qualification under applicable state securities and real estate syndication laws); and shall keep such Registration continuously effective until the earlier of (i) the third anniversary of the date hereof, (ii) the date on which all Registrable Shares have been sold pursuant to such registration statement or Rule 144 and (iii) the date on which all of the Registrable Shares may be sold in accordance with Rule 144(k); PROVIDED, HOWEVER, that the Company shall not be obligated to take any action to effect any such Registration, qualification or compliance pursuant to this Section 2 in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such Registration, qualification or compliance unless the Company is already subject to service in such jurisdiction. Notwithstanding the foregoing, the Company shall have the right (the "Suspension Right") to defer such filing (or suspend sales under any filed registration statement or defer the updating of any filed registration statement and suspend sales thereunder) for a single period of not more than 90 days each during each calendar year, if the Company furnishes to the Holders a certificate signed by the President or any other executive officer or any trustee of the Company stating that, in the good faith judgment of the Company, it would be detrimental to the Company and its shareholders to file such registration statement or amendment thereto at such time (or to continue sales under a filed registration statement) and therefore the Company has elected to defer the filing of such registration statement (or to suspend sales under a filed registration statement). (b) The Company shall promptly notify the Holders of the occurrence of the following events: (i) when any registration statement relating to the Registrable Shares or post-effective amendment thereto filed with the Commission has become effective; (ii) the issuance by the Commission of any stop order suspending the effectiveness of any registration statement relating to the Registrable Shares; (iii) the suspension of an effective registration statement by the Company in accordance with the last paragraph of Section 2(a); (iv) the Company's receipt of any notification of the suspension of the qualification of any Registrable Shares covered by a registration statement for sale in any jurisdiction; and (v) the existence of any event, fact or circumstance which results in a registration statement or prospectus relating to Registrable Shares or any document incorporated therein by reference containing an untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein not misleading during the distribution of securities. The Company agrees to use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of any such registration statement or any state qualification as promptly as possible. (c) The Company shall provide to the Holders, at no cost to the Holders, a copy of the registration statement and any amendment thereto used to effect the Registration of the Registrable Shares, each prospectus contained in such registration statement or post-effective amendment and any amendment or supplement thereto and such other documents as the requesting Holders may reasonably request in order to facilitate the disposition of the Registrable Shares covered by such registration statement. The Company consents to the use of each such prospectus and any supplement thereto by the Holders in connection with the offering and sale of the Registrable Shares covered by such registration statement or any amendment thereto. The Company shall also file a sufficient number of copies of the prospectus and any post-effective amendment or supplement thereto with the New York Stock Exchange (or, if the Common Shares is no longer listed thereon, with such other securities exchange or market on which the Common Shares is then listed) so as to enable the Holders to have the benefits of the prospectus delivery provisions of Rule 153 under the Securities Act. (d) The Company agrees to use its best efforts to cause the Registrable Shares covered by a registration statement to be registered with or approved by such state securities authorities as may be necessary to enable the Holders to consummate the disposition of such shares pursuant to the plan of distribution set forth in the registration statement. (e) Subject to the Company's Suspension Right, if any event, fact or circumstance exists requiring an amendment to a registration statement relating to the Registrable Shares or supplement to a prospectus relating to the Registrable Shares, immediately upon becoming aware thereof the Company agrees to notify the Holders and prepare and furnish to the Holders a post-effective amendment to the registration statement or supplement to the prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Shares, the prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (f) The Company agrees to use its reasonable best efforts (including the payment of any listing fees) to obtain the listing of all Registrable Shares covered by the registration statement on each securities exchange on which securities of the same class are then listed. (g) The Company agrees to use its best efforts to comply with the Securities Act and the Exchange Act and, as soon as reasonably practicable following the end of any fiscal year during which a registration statement effecting a Registration of the Registrable Shares was effective, to make available to its security holders an earning statement satisfying the provisions of Section 11(a) of the Securities Act. (h) The Company agrees to cooperate with the selling Holders to facilitate the timely preparation and delivery of certificates representing Registrable Shares to be sold pursuant to a Registration and not bearing any Securities Act legend; and enable certificates for such Registrable Shares to be issued for such numbers of shares and registered in such names as the Holders may reasonably request at least two business days prior to any sale of Registrable Shares. SECTION 3. EXPENSES OF REGISTRATION. The Company shall pay all Registration Expenses incurred in connection with the Registration, qualification or compliance pursuant to Section 2. All Selling Expenses incurred in connection with the sale of Registrable Shares by any of the Holders shall be borne by the Holder selling such Registrable Shares. Each Holder shall pay the expenses of its own counsel. SECTION 4. INDEMNIFICATION. (a) The Company shall indemnify each Holder, each Holder's officers and directors, and each person controlling such Holder within the meaning of Section 15 of the Securities Act, against all expenses, claims, losses, damages and liabilities (including reasonable legal expenses), arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement or prospectus relating to the Registrable Shares, or any amendment or supplement thereto, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that the Company shall not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information furnished in writing to the Company by such Holder for inclusion therein. (b) Each Holder shall indemnify the Company, each of its trustees and each of its officers who sign the registration statement, each underwriter, if any, of the Company's securities covered by such registration statement, and each person who controls the Company or such underwriter within the meaning of Section 15 of the Securities Act, each other Holder with Registrable Shares covered by such registration statement, and each officer, director and controlling person of each such other Holder, against all expenses, claims, losses, damages and liabilities (including reasonable legal fees and expenses) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement or prospectus, or any amendment or supplement thereto, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement or prospectus in reliance upon and in conformity with information furnished in writing to the Company or such underwriter by such Holder for inclusion therein. (c) Each party entitled to indemnification under this Section 4 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, but the omission to so notify the Indemnifying Party shall not relieve it from any liability which it may have to the Indemnified Party pursuant to the provisions of this Section 4 except to the extent of the actual damages suffered by such delay in notification. The Indemnifying Party shall assume the defense of such action, including the employment of counsel to be chosen by the Indemnifying Party to be reasonably satisfactory to the Indemnified Party, and payment of expenses. The Indemnified Party shall have the right to employ its own counsel in any such case, but the legal fees and expenses of such counsel shall be at the expense of the Indemnified Party, unless the employment of such counsel was authorized in writing by the Indemnifying Party in connection with the defense of such action, or the Indemnifying Party did not employ counsel to take charge of the defense of such action or the Indemnified Party reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Indemnifying Party (in which case the Indemnifying Party shall not have the right to direct the defense of such action on behalf of the Indemnified Party), in any of which events such fees and expenses shall be borne by the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to the entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation. (d) If the indemnification provided for in this Section 4 is unavailable to a party which would have been an Indemnified Party under this Section 4 in respect of any expenses, claims, losses, damages and liabilities referred to herein, then each party which would have been an Indemnifying Party hereunder shall, in lieu of indemnifying such Indemnified Party, contribute to the amount paid or payable by such Indemnified Party as a result of such expenses, claims, losses, damages and liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and such Indemnified Party on the other in connection with the statement or omission which resulted in such expenses, claims, losses, damages and liabilities, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or such Indemnified Party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and each holder of Registrable Shares agrees that it would not be just and equitable if contribution pursuant to this Section were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4(d). (e) No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) In no event shall any Holder be liable for any expenses, claims, losses, damages or liabilities pursuant to this Section 4 in excess of the net proceeds to such Holder of any Registrable Shares sold by such Holder. SECTION 5. INFORMATION TO BE FURNISHED BY HOLDERS. Each Holder shall furnish to the Company such information as the Company may reasonably request and as is required in connection with the Registration and related proceedings referred to in Section 2. If any Holder fails to provide the Company with such information within three weeks of the Company's request, the Company's obligations under Section 2 with respect to such Holder or the Registrable Shares owned by such Holder shall be suspended until such Holder provides such information. SECTION 6. UNDERTAKING TO PARTICIPATE IN UNDERWRITING. If the Holders of at least $40 million of the Registrable Securities propose to sell Registrable Securities in an underwritten public offering, the Company shall make available members of the management of the Company and its affiliates for reasonable assistance in selling efforts relating to such offering, to the extent customary for a public offering (including, without limitation, to the extent customary, senior management attendance at due diligence meetings with underwriters and their counsel and road shows) and shall enter into underwriting agreements containing usual and customary terms and conditions reasonably acceptable to the Company for such types of offerings. SECTION 7. Rule 144 Sales. (a) The Company covenants that it shall file the reports required to be filed by the Company under the Exchange Act, so as to enable any Holder to sell Registrable Shares pursuant to Rule 144. (b) In connection with any sale, transfer or other disposition by any Holder of any Registrable Shares pursuant to Rule 144, the Company shall cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Shares to be sold and not bearing any Securities Act legend, and enable certificates for such Registrable Shares to be for such number of shares and registered in such names as the selling Holder may reasonably request at least two business days prior to any sale of Registrable Shares. SECTION 8. MISCELLANEOUS. (a) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Maryland, without giving effect to the conflict of law provisions thereof. (b) Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. (c) Amendment. No amendment, supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the party sought to be bound thereby. (d) Notices, etc. Unless otherwise provided herein, any notice required or permitted under this Agreement shall be given in writing, and shall be deemed effectively given (a) upon personal delivery to the party to be notified, (b) on the fifth business day after deposit with the United States Post Office, by registered or certified mail, postage prepaid, (c) on the next business day after dispatch via nationally recognized overnight courier or (d) upon confirmation of transmission by facsimile, all addressed to the party to be notified. Notices shall be addressed as follows: (i) if to the Investor, at the Investor's address or fax number set forth below its signature hereto, or at such other address or fax number as such Investor furnished to the Company in writing, or (ii) if to any assignee or transferee of an Investor, at such address or fax number as such assignee or transferee furnished to the Company in writing, or (iii) if to the Company, at the address of its principal executive offices and addressed to the attention of the President, or at such other address or fax number as the Company furnished to the Investor or any assignee or transferee. Any notice or other communication required to be given hereunder to a Holder in connection with a registration may instead be given to the designated representative of such Holder. (e) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. (f) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms. (g) Titles and Subtitles. The title and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. (h) Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding on the respective successors and assigns of the parties hereto. (i) Remedies. The Company and the Investor acknowledge that there would be no adequate remedy at law if any party fails to perform any of its obligations hereunder, and accordingly agree that the Company and each Holder, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of another party under this Agreement in accordance with the terms and conditions of this Agreement in any court of the United States or any State thereof having jurisdiction. (j) Attorneys' Fees. If the Company or any Holder brings an action to enforce its rights under this Agreement, the prevailing party in the action shall be entitled to recover its costs and expenses, including, without limitation, reasonable attorneys' fees, incurred in connection with such action, including any appeal of such action. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. AMLI RESIDENTIAL PROPERTIES TRUST By: /s/ Allan J. Sweet Name: Allan J. Sweet Title: President SECURITY CAPITAL PREFERRED GROWTH INCORPORATED By: /s/ David Rosenbaum Name: David Rosenbaum Title: Vice President EX-27 6
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT. 3-MOS DEC-31-1998 MAR-31-1998 3,266 0 0 0 0 0 708,593 66,778 727,848 0 361,305 0 21 166 293,733 727,848 0 26,662 0 20,403 0 0 4,938 5,326 0 5,326 0 0 0 5,326 .28 .28
EX-99 7 EXHIBIT 99 - ---------- AMLI RESIDENTIAL PROPERTIES TRUST FINANCIAL AND OPERATING DATA March 31, 1998 1. Funds from Operations 2. Statements of Operations 3. Balance Sheets 4. Selected Financial Information 5. Debt 6. Debt Maturities 7. Same Community Comparison - Wholly-Owned - three months ended March 31, 1998 and 1997 8. Same Community Comparison - Wholly-Owned - three months ended March 31, 1998 and 1997 9. Property Information 10. Property EBITDA 11. Development Activities AMLI RESIDENTIAL PROPERTIES TRUST FUNDS FROM OPERATIONS Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED MARCH 31, ----------------------- 1998 1997 -------- -------- REVENUES - -------- Property revenues: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,138 $ 18,680 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,292 975 -------- -------- Total Property Revenues . . . . . . . . . . . . . . . . . . 25,430 19,655 -------- -------- Property operating expenses . . . . . . . . . . . . . . . . . . . . (9,552) (7,570) Property management fees. . . . . . . . . . . . . . . . . . . . . . (638) (491) -------- -------- Property expenses . . . . . . . . . . . . . . . . . . . . . (10,190) (8,061) Operating expense ratio . . . . . . . . . . . . . . . . . . . . . . 40.1% 41.0% -------- -------- Net operating income. . . . . . . . . . . . . . . . . . . . 15,240 11,594 -------- -------- OTHER INCOME - ------------ Share of Service Cos. FFO (1) . . . . . . . . . . . . . . . . . . (12) 11 Interest from Service Companies (2) . . . . . . . . . . . . . . . 545 253 Other interest. . . . . . . . . . . . . . . . . . . . . . . . . . 191 107 Share of partnerships FFO (3) . . . . . . . . . . . . . . . . . . 1,134 667 Fee income - acquisitions and dispositions. . . . . . . . . . . . -- 137 Fee income - developments . . . . . . . . . . . . . . . . . . . . 101 330 Fee income - asset management . . . . . . . . . . . . . . . . . . 151 153 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 37 -------- -------- Total other income. . . . . . . . . . . . . . . . . . . . . 2,146 1,695 General and administrative. . . . . . . . . . . . . . . . . . . . . (854) (767) -------- -------- EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,532 12,522 -------- -------- Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . (4,938) (2,646) Amortization of deferred costs. . . . . . . . . . . . . . . . . . . (130) (243) -------- -------- FUNDS FROM OPERATIONS (FFO) . . . . . . . . . . . . . . . . . . . . $11,464 $ 9,633 ======== ======== AMLI RESIDENTIAL PROPERTIES TRUST FUNDS FROM OPERATIONS - CONTINUED Unaudited - Dollars in thousands except per share data THREE MONTHS ENDED MARCH 31, ----------------------- 1998 1997 -------- -------- Capital expenditures paid from FFO. . . . . . . . . . . . . . . . . (792) (1,131) Other - share of Co-investments Cap exp . . . . . . . . . . . . . . (44) (34) -------- -------- Funds available for distribution (FAD). . . . . . . . . . . . . . . $ 10,628 $ 8,468 ======== ======== FFO per share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.54 $ 0.51 FAD per share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.50 $ 0.45 Dividend per share. . . . . . . . . . . . . . . . . . . . . . . . . $ 0.44 $ 0.43 Dividend as a % of FFO. . . . . . . . . . . . . . . . . . . . . . . 81.9% 84.3% Dividend as a % of FAD. . . . . . . . . . . . . . . . . . . . . . . 88.3% 95.5% ======== ======== NOTES: (1) Includes share of income and share of goodwill amortization of $104 for the three months ended March 31, 1998. (2) Interest on 13% notes receivable and working capital advances. (3) Includes share of income and share of depreciation of $810 and $500 for the three months ended March 31, 1998 and 1997, respectively.
AMLI RESIDENTIAL PROPERTIES TRUST STATEMENT OF OPERATIONS Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED MARCH 31, ----------------------- 1998 1997 -------- -------- REVENUES - -------- Property revenues: Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,138 $ 18,680 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,292 975 Interest and share of income (loss) from Service Cos. . . . . . . . 429 264 Other interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 191 107 Share of income from co-investment partnerships . . . . . . . . . . 324 167 Fees from co-investment partnerships. . . . . . . . . . . . . . . . 288 657 -------- -------- Total revenues. . . . . . . . . . . . . . . . . . . . . . . 26,662 20,850 -------- -------- EXPENSES - -------- Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,317 1,723 Advertising and promotion . . . . . . . . . . . . . . . . . . . . . 708 507 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,085 1,025 Building repairs and maintenance. . . . . . . . . . . . . . . . . . 1,255 1,156 Landscaping and grounds maintenance . . . . . . . . . . . . . . . . 442 364 Real estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . 3,180 2,322 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 198 Other operating expenses. . . . . . . . . . . . . . . . . . . . . . 344 275 Property management fees. . . . . . . . . . . . . . . . . . . . . . 638 491 Interest, net of capitalized. . . . . . . . . . . . . . . . . . . . 4,938 2,646 Amortization of deferred costs. . . . . . . . . . . . . . . . . . . 130 243 Depreciation of real property . . . . . . . . . . . . . . . . . . . 3,170 2,316 Depreciation of personal property . . . . . . . . . . . . . . . . . 1,121 741 General and administrative. . . . . . . . . . . . . . . . . . . . . 854 767 -------- -------- Total expenses. . . . . . . . . . . . . . . . . . . . . . . 20,403 14,774 -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST STATEMENT OF OPERATIONS - CONTINUED Unaudited - Dollars in thousands except per share data THREE MONTHS ENDED MARCH 31, ----------------------- 1998 1997 -------- -------- Non-recurring item - gain on sale of properties and rate caps . . . -- -- -------- -------- Income before taxes, minority interest and extraordinary item . . . 6,259 6,076 -------- -------- Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . -- -- -------- -------- Income before minority interest/extraordinary items . . . . . . . . 6,259 6,076 Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . 933 953 -------- -------- Income before and extraordinary items . . . . . . . . . . . . . . . 5,326 5,123 Extraordinary items net of minority interest. . . . . . . . . . . . -- -- -------- -------- Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,326 $ 5,123 ======== ======== Net income allocable to preferred shares. . . . . . . . . . . . . . 604 473 -------- -------- Net income allocable to common shares . . . . . . . . . . . . . . . $ 4,722 $ 4,650 ======== ======== INCOME PER COMMON SHARE: - ----------------------- Before extraordinary items. . . . . . . . . . . . . . . . . . . . . $ 0.28 $ 0.31 Extraordinary item. . . . . . . . . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00 Income per common share . . . . . . . . . . . . . . . . . . . . . . $ 0.28 $ 0.31 ======== ======== FUNDS FROM OPERATIONS - --------------------- Income before taxes, minority interest and extraordinary item. . . . . . . . . . . . . . . . . . . . . . . . $ 6,259 $ 6,076 -------- -------- Depreciation of real property . . . . . . . . . . . . . . . . . . . 3,170 2,316 Depreciation of personal property . . . . . . . . . . . . . . . . . 1,121 741 Non-recurring items . . . . . . . . . . . . . . . . . . . . . . . . -- -- Share of Co-investments depreciation. . . . . . . . . . . . . . . . 810 500 Share of Service Company amortization of goodwill . . . . . . . . . 104 -- -------- -------- Funds from operations (FFO) . . . . . . . . . . . . . . . . . . . . $ 11,464 $ 9,633 FFO per share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.54 $ 0.51 ======== ======== AMLI RESIDENTIAL PROPERTIES TRUST STATEMENT OF OPERATIONS - CONTINUED Unaudited - Dollars in thousands except per share data THREE MONTHS ENDED MARCH 31, ----------------------- 1998 1997 -------- -------- Capital expenditures paid from FFO. . . . . . . . . . . . . . . . . (792) (1,131) Other - Share Co-investments Cap exp. . . . . . . . . . . . . . . . (44) (34) -------- -------- Funds available for distribution (FAD). . . . . . . . . . . . . . . $ 10,628 $ 8,468 FAD per share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.50 $ 0.45 ======== ======== Dividends per share . . . . . . . . . . . . . . . . . . . . . . . . $ 0.44 $ 0.43 ======== ======== Dividends as a % of FFO . . . . . . . . . . . . . . . . . . . . . . 81.9% 84.3% Dividends as a % of FAD . . . . . . . . . . . . . . . . . . . . . . 88.3% 95.9%
AMLI RESIDENTIAL PROPERTIES TRUST CONDENSED BALANCE SHEETS Unaudited - Dollars in thousands except per share data
MAR. 31, DEC. 31, 1998 1997 -------- -------- ASSETS - ------ Rental apartments Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,461 $ 78,476 Depreciable property. . . . . . . . . . . . . . . . . . . . . . . 514,590 496,747 -------- -------- 595,051 575,223 Less accumulated depreciation . . . . . . . . . . . . . . . . . . (66,778) (62,641) -------- -------- 528,273 512,582 Properties under development. . . . . . . . . . . . . . . . . . . . 113,542 78,724 Investments in partnerships . . . . . . . . . . . . . . . . . . . . 50,245 50,729 Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . 3,266 5,676 Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . 1,664 1,821 Deferred costs, net . . . . . . . . . . . . . . . . . . . . . . . . 3,075 3,140 Notes receivable and advances to Service Companies. . . . . . . . . 19,640 18,356 Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,143 8,950 -------- -------- Total assets. . . . . . . . . . . . . . . . . . . . . . . . $727,848 $679,978 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $361,305 $333,250 Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . 1,487 1,389 Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 5,465 9,334 Construction costs payable. . . . . . . . . . . . . . . . . . . . . 9,931 8,403 Security deposits and prepaid rents . . . . . . . . . . . . . . . . 3,049 2,722 Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 2,599 2,978 -------- -------- Total liabilities . . . . . . . . . . . . . . . . . . . . . $383,836 $358,076 -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST CONDENSED BALANCE SHEETS - CONTINUED Unaudited - Dollars in thousands except per share data MAR. 31, DEC. 31, 1998 1997 -------- -------- Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,092 $ 51,463 -------- -------- Shareholders' equity Preferred shares, $.01 par value. . . . . . . . . . . . . . . . . 21 11 Shares of beneficial interest, $.01 par value . . . . . . . . . . 166 166 Additional paid-in capital. . . . . . . . . . . . . . . . . . . . 367,392 341,148 Employees and trustees notes. . . . . . . . . . . . . . . . . . . (7,243) (6,924) Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 24,223 18,897 Dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . (90,639) (82,859) -------- -------- Total shareholders' equity. . . . . . . . . . . . . . . . . 293,920 270,439 -------- -------- Total liabilities and shareholders' equity. . . . . . . . . $727,848 $679,978 ======== ========
Amli Residential Properties Trust Selected Quarterly Financial Information March 31, 1998 (dollars in thousands except for share data)
Quarter Ending --------------------------------------------------------------------------------- Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, 1998 1997 1997 1997 1997 1996 -------- -------- -------- -------- -------- -------- Total Debt $361,305 $333,250 $235,692 $238,061 $220,964 $202,013 Total Debt (1) 422,393 392,295 289,097 290,699 271,738 240,593 Total Shares and Units Outstanding (2) 22,028,680 20,958,523 20,675,333 18,976,280 18,968,168 18,862,132 Value per Common Share - end of quarter $ 22,938 $ 22,250 $ 23,250 $ 23,625 $ 23,000 $ 23,375 Total Equity (Market Value) - end of quarter $505,283 $466,327 $480,701 $448,315 $436,268 $440,902 Total Market Capitalization $866,588 $799,577 $716,393 $686,376 $657,232 $642,915 Total Market Capitalization (1) $927,676 $858,622 $769,798 $739,014 $708,006 $681,495 ======== ======== ======== ======== ======== ======== Total Revenues (3) $ 26,662 $ 24,928 $ 22,982 $ 21,313 $ 20,850 $ 20,254 EBITDA (4) $ 16,532 $ 15,420 $ 13,961 $ 12,861 $ 12,522 $ 12,155 EBITDA (4) (5) $ 17,694 $ 16,539 $ 14,993 $ 13,833 $13,267 $ 12,870 FFO $ 11,464 $ 11,414 $ 11,237 $ 9,888 $ 9,633 $ 8,954 FAD $ 10,628 $ 10,752 $ 10,358 $ 9,073 $ 8,468 $ 8,175 Dividends Paid $ 9,224 $ 9,037 $ 8,889 $ 8,158 $ 8,111 $ 6,794 Debt service (net of capitalized interest) $ 5,571 $ 4,340 $ 3,154 $ 3,420 $ 3,195 $ 3,462 Interest Expense $ 4,938 $ 3,844 $ 2,619 $ 2,886 $ 2,646 $ 2,935 G & A Expense $ 854 $ 697 $ 680 $ 706 $ 767 $ 650 Total Shares and Units Outstanding - Wtd. Avg. 21,238,186 20,714,889 20,461,533 18,973,232 18,882,000 16,948,000 ========== ========== ========== ========== ========== ========== Amli Residential Properties Trust Selected Quarterly Financial Information - CONTINUED March 31, 1998 (dollars in thousands except for share data) Quarter Ending --------------------------------------------------------------------------------- Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, 1998 1997 1997 1997 1997 1996 -------- -------- -------- -------- -------- -------- Interest Coverage Ratio 3.35 4.01 5.33 4.46 4.73 4.14 Interest Coverage Ratio (6) 2.91 3.35 4.14 3.60 3.93 3.54 Debt as % of Total Market Capitalization 41.69% 41.68% 32.90% 34.68% 33.62% 31.42% Debt as % of Total Market Capitalization (1) 45.53% 45.69% 37.55% 39.34% 38.38% 35.30% EBITDA as % of Total Market Capitalization 7.63% 7.71% 7.80% 7.50% 7.62% 7.56% FFO as % of Total Market Equity 9.08% 9.79% 9.35% 8.82% 8.83% 8.12% G&A as % of Total Market Capitalization 0.39% 0.35% 0.38% 0.41% 0.47% 0.40% G&A as % of Total Revenues 3.20% 2.80% 2.96% 3.31% 3.68% 3.21% Dividends as % of FFO (7) 81.9% 80.1% 80.4% 82.5% 84.3% 81.4% Dividends as % of FAD (7) 88.3% 85.1% 87.3% 89.9% 95.9% 89.1% ======== ======== ======== ======== ======== ======== Apartment Units - Wholly Owned In Operation 11,938 11,650 10,782 10,364 9,824 9,824 Under Development 2,488 2,488 2,032 2,296 2,444 1,404 Apartment Units - Co-Investments In Operation 5,851 5,851 5,421 4,815 4,815 3,677 Under Development 1,456 1,456 1,370 1,324 1,324 1,324 -------- -------- -------- -------- -------- -------- Total Units 21,733 21,445 19,605 18,799 18,407 16,229 ======== ======== ======== ======== ======== ======== (1) Including proportionate share of debt of Co-investment partnerships accounted for using the equity method. (2) End of the quarter - includes 2,141,666 preferred shares convertible to common shares. (3) Excluding non-recurring gain of $2,457 in 1997 and $751 in the third quarter of 1996. (4) Includes other income, net of G & A expenses. (5) Before share of co-investment interest expense and amortization. (6) Including share of co-investment interest expense. (7) Based on per share amounts.
AMLI RESIDENTIAL PROPERTIES TRUST PORTFOLIO INDEBTEDNESS SUMMARY March 31, 1998 (Dollars in thousands) F = Fixed Rate V = Variable Rate
Maturity Original Outstand- (years) /Max ing Interest Maturity from Borrower Lender Amount Balance Rate Rate Date 03/31/98 - ---------- ---------- -------- --------- --------- ---------- -------- -------- F AMLI: at Reflections Prudential $ 4,800 4,411 7.05% 6/30/98 0.2 on Rosemeade Prudential 7,050 6,513 7.02% 10/5/98 0.5 at Riverbend CIGNA 31,000 30,226 7.30% 7/1/03 5.3 in Great Hills CIGNA 11,000 10,727 7.34% 7/1/03 5.3 at Sherwood Fleet 7,320 6,765 7.75% 7/1/03 5.3 at Valley Ranch Nationwide 11,500 10,639 7.63% 7/10/03 5.3 at Conner Farms Nationwide 13,275 12,910 7.00% 6/15/03 5.2 at Nantucket Jackson National Life Ins. Co. 7,735 7,735 7.70% 6/1/04 6.2 at Timberglen Jackson National Life Ins. Co. 6,770 6,770 7.70% 6/1/04 6.2 at Regents Center TIAA 20,100 19,778 8.90% 9/1/05 7.4 at Bishop's Gate NML 15,380 15,266 7.25% 10/1/05 7.5 on the Green(1) FNMA of North Dallas (1) FNMA 43,907 42,237 7.79% 5/1/06 8.1 at Clairmont Prudential 12,880 12,880 6.95% 2/15/08 9.9 at Park Creek Collateral Mortgage Ltd. 10,322 5,432 7.88% 12/1/38 40.7 - ----------------------------------------------------------------------------------------------------------------- V Unsecured Harris Trust & Savings Bank 8,000 -- 6.98% LIBOR + 1.30% 8/30/98 0.4 V Unsecured (2) Wachovia Bank/ First Chicago 150,000 109,000 6.98% LIBOR + 1.30% 6/27/00 2.2 - ----------------------------------------------------------------------------------------------------------------- AMLI RESIDENTIAL PROPERTIES TRUST PORTFOLIO INDEBTEDNESS SUMMARY - CONTINUED March 31, 1998 (Dollars in thousands) Maturity Original Outstand- (years) /Max ing Interest Maturity from Borrower Lender Amount Balance Rate Rate Date 03/31/98 - ---------- ---------- -------- --------- --------- ---------- -------- -------- V Unsecured (3) Tax-Exempt Bonds 40,750 40,750 5.28% Tax Exempt+1.48% 10/15/02 4.5 V AMLI: at Poplar Creek (3) Tax-Exempt Bonds 9,500 9,500 4.93% Tax Exempt+1.23% 12/18/02 4.7 - ------------------------------------------------------------------------------------------------------------------ F ARP, LP AIA 750 750 4.00% Demand -- F ARP, LP AMC 5,000 5,000 10.00% 1/1/03 4.8 - ------------------------------------------------------------------------------------------------------------------ V AMLI: at Clairmont Nomura Securities International 4,016 4,016 7.18% LIBOR + 1.50% 4/15/98 0.0 - ------------------------------------------------------------------------------------------------------------------ TOTAL $421,055 $361,305 7.10% 5.3 ================================================================================================================== Co-Investments (4) Various $ 71,907 $ 61,088 7.82% Various 6.7 ================================================================================================================== TOTAL including Co-Investment $492,962 $422,393 7.20% 5.5 ==================================================================================================================
AMLI RESIDENTIAL PROPERTIES TRUST PORTFOLIO INDEBTEDNESS SUMMARY - CONTINUED March 31, 1998 (Dollars in thousands)
Weighted Ave. Percent of Interest Years to Type of Indebtedness Balance Total Interest Rate Maturity - -------------------- -------- ----------- ---------- --------- ---------- Conventional Fixed Rate $192,289 53.2% Fixed 7.59% 7.4 Tax-exempt Variable Rate 50,250 13.9% Variable 5.21% 4.6 Credit Facilities 109,000 30.2% Variable 6.98% 2.2 Service Companies 5,750 1.6% Fixed 9.22% 4.1 Other 4,016 1.1% Variable 7.18% 0.0 -------- ------ ----- --- Total $361,305 100.0% 7.10% 5.3 ======== ====== ===== === Weighted Balance including Ave. share of Co- Percent of Interest Years to Type of Indebtedness investment debt Total Interest Rate Maturity - -------------------- ----------------- ----------- ---------- --------- ---------- Conventional Fixed Rate $253,377 60.0% Fixed 7.65% 7.2 Tax-exempt Variable Rate 50,250 11.9% Variable 5.21% 4.6 Credit Facilities 109,000 25.8% Variable 6.98% 2.2 Service Companies 5,750 1.4% Fixed 9.22% 4.1 Other 4,016 0.9% Variable 7.18% 0.0 -------- ------ ----- --- Total $422,393 100.0% 7.20% 5.5 ======== ====== ===== === (1) The outstanding balance is net of $537 representing the unamortized discount from the sale of the FNMA certificates. (2) $5,845 has been capped based on LIBOR = 3.875% through February 15, 1998. All in rate reflects LIBOR + 135. (3) Maturity Date shown is expiration date of Credit Enhancement. Bonds mature in 2024. (4) Co-Investment debt represents Amli Residential's pro rata share of debt. Interest rate and maturity reflect average numbers based on Amli's pro rata share.
AMLI RESIDENTIAL PROPERTIES TRUST PORTFOLIO INDEBTEDNESS SUMMARY March 31, 1998 (Dollars in thousands) CO-INVESTMENT DETAIL
Original/ Outstand- Max ing Interest Maturity Property Lender Amount Balance Rate Date 3/31/98 AMLI % AMLI $ - -------- ------ --------- ---------- -------- -------- -------- ------ ------- AMLI AT: Champions Park Lincoln National 9,500 8,936 7.26% 1/5/02 3.8 15% $ 1,340 Park Place Prudential 13,000 12,377 8.21% 10/5/99 1.5 25% 3,094 Champions Centre Prudential 6,700 6,634 8.93% 1/1/02 3.8 15% 995 Windbrooke Allstate 11,500 11,492 9.24% 2/1/02 3.8 15% 1,724 Greenwood Forest Nationwide 11,625 11,625 8.95% 5/10/02 4.1 15% 1,744 Chevy Chase CIGNA 29,767 29,330 6.67% 4/1/03 5.0 33% 9,680 Willowbrook NML 24,500 24,225 7.79% 5/1/03 5.1 40% 9,689 Willeo Creek Phoenix Home Life 10,000 9,869 6.77% 5/1/03 5.1 30% 2,960 Verandah Phoenix Home Life 16,940 16,940 7.55% 4/1/04 6.0 35% 5,929 Pleasant Hill NML 15,500 15,313 9.15% 3/1/07 8.9 40% 6,124 Danada Prudential 24,500 24,500 7.33% 3/1/07 8.9 10% 2,451 River Exchange Erie Insurance 9,100 8,025 7.75% 6/27/08 10.2 40% 3,210 Barrett Lakes NML 16,680 15,326 8.50% 12/1/09 11.7 35% 5,365 Northwinds NML 33,800 7,468 8.25% 10/1/11 13.5 35% 2,613 Regents Crest NML 16,500 16,190 7.50% 12/15/03 5.7 25% 4,047 Prairie Court Bonds 7,250 7,250 8.00% 12/1/99 1.7 1% 73 Towne Creek Erie Insurance 5,000 5,000 9.50% 11/30/99 1.7 1% 50 ------- ------- ----- ---- ----- ------- 261,862 230,500 7.82% 6.7 26.5% $61,088 ======= ======= ===== ==== ===== =======
AMLI RESIDENTIAL PROPERTIES TRUST DEBT MATURITIES MARCH 31, 1998 Unaudited - dollars in thousands
There- % to 1998 1999 2000 2001 2002 after Total Total -------- -------- -------- -------- -------- -------- -------- ------- Fixed Rate Mortgages $ 12,800 $ 2,780 $ 3,138 $ 3,394 $ 3,656 $166,521 $192,289 53.2% Tax Exempt Bonds* 50,250 50,250 13.9% Wachovia/First Chicago Line of Credit 109,000 109,000 30.2% Other 4,766 5,000 9,766 2.7% -------- -------- -------- -------- -------- -------- -------- ------- Total Loans $ 17,566 $ 2,780 $112,138 $ 3,394 $ 53,906 $171,521 $361,305 100.0% ======== ======== ======== ======== ======== ======== ======== ======= Percent to Total 4.9% 0.8% 31.0% 0.9% 14.9% 47.5% 100.0% 85.5% ======== ======== ======== ======== ======== ======== ======== ======= SHARE OF CO-INVESTMENT DEBT Prudential Ins. - Park Place (25%) 40 3,054 0 0 0 0 3,094 5.1% Nationwide Life Ins. - Greenwood Forest (15%) 3 5 5 6 1,725 0 1,744 2.9% Lincoln National Ins. - Champions Park (15%) 14 21 22 24 1,259 0 1,340 2.2% Prudential Ins. - Champions Centre (15%) 7 10 11 12 955 0 995 1.6% Allstate Life Ins. - Windbrooke (15%) 13 16 18 20 22 1,635 1,724 2.8% CIGNA - Chevy Chase (33%) 125 177 189 202 216 8,771 9,680 15.8% Northwestern Mutual Life Ins. - Willowbrook (40%) 105 150 162 175 189 8,908 9,689 15.9% Phoenix Mutual - Willeo Creek (30%) 37 53 56 60 64 2,690 2,960 4.8% Northwestern Mutual Life Ins. - Pleasant Hill (40%) 59 75 82 90 99 5,719 6,124 10.0% Northwestern Mutual Life Ins. - Barrett Lakes (35%) 0 71 77 84 91 5,042 5,365 8.8% AMLI RESIDENTIAL PROPERTIES TRUST DEBT MATURITIES - CONTINUED There- % to 1998 1999 2000 2001 2002 after Total Total -------- -------- -------- -------- -------- -------- -------- ------- Erie Insurance - River Park (40%) 0 20 51 55 60 3,024 3,210 5.3% Prudential Ins. - Amli at Danada (10%) 0 17 25 27 29 2,353 2,451 4.0% Phoenix Home Life - Amli at Verandah (35%) 0 55 88 94 102 5,590 5,929 9.7% Northwestern Mutual Life Ins. - Northwinds (35%) 0 0 15 95 103 2,400 2,613 4.3% Northwestern Mutual Life Ins. - Regents Creek (25%) 45 65 70 76 82 3,709 4,047 6.6% Central Bank, Trustee - Prairie Court (1%) 0 73 0 0 0 0 73 0.1% Erie Insurance - Towne Creek (1%) 0 50 0 0 0 0 50 0.1% -------- -------- -------- -------- -------- -------- -------- ------- Total Share of Co-Investment Loans $ 448 $ 3,912 $ 871 $ 1,020 $ 4,996 $ 49,841 $ 61,088 100.0% ======== ======== ======== ======== ======== ======== ======== ======= Percent to Total 0.7% 6.4% 1.4% 1.7% 8.2% 81.6% 100.0% 14.5% ======== ======== ======== ======== ======== ======== ======== ======= Total Including Share of Co-Investment Debt $ 18,014 $ 6,692 $113,009 $ 4,414 $ 58,902 $221,362 $422,393 100.0% ======== ======== ======== ======== ======== ======== ======== ======= Percent to Total 4.3% 1.6% 26.8% 1.0% 13.9% 52.4% 100.0% 100.0% ======== ======== ======== ======== ======== ======== ======== ======= * The Bonds mature in October 2024, but the credit enhancement expires on October 15, 2002. * The Poplar Creek Bonds mature in February 2024, but credit enhancement expires December 18, 2002.
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) THREE MONTHS ENDED MARCH 31, 1998 VERSUS THREE MONTHS ENDED MARCH 31, 1997 (Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-3/31/98 1/1/97-3/31/97 No. of --------------------------------- % -------------------------------- Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - ----------------------- Dallas 4,226 94.6% 1.1% 93.6% Atlanta 2,420 93.6% 0.0% 93.6% Austin 935 95.8% 2.4% 93.5% Indianapolis 996 89.8% -2.3% 91.9% Kansas 908 92.5% -0.5% 93.0% Chicago 253 98.2% 7.5% 91.3% ----- ----- ----- ----- Weighted Average 93.9% 0.6% 93.3% ===== ===== ===== Total 9,738 ===== WEIGHTED AVG. RENTAL RATE - ------------------------- Dallas $661 3.1% $641 Atlanta $729 0.3% $727 Austin $643 -0.7% $648 Indianapolis $566 -1.1% $572 Kansas $643 -0.2% $645 Chicago $923 -0.6% $928 ---- ---- ---- Weighted Average $672 2.3% $657 ==== ==== ==== TOTAL PROPERTY REVENUES Per Month Per Month - ----------------------- ---------- ---------- Dallas $ 8,365,918 $ 660 $0.79 5.7% $ 7,916,312 $624 $0.75 Atlanta $ 5,171,571 $ 712 $0.76 -0.1% $ 5,175,813 $713 $0.76 Austin $ 1,802,141 $ 642 $0.87 0.9% $ 1,785,294 $636 $0.86 Indianapolis $ 1,610,702 $ 539 $0.65 -2.6% $ 1,653,208 $553 $0.67 Kansas $ 1,705,993 $ 626 $0.73 0.1% $ 1,704,151 $626 $0.73 Chicago $ 782,146 $1,030 $1.21 11.9% $ 699,050 $921 $1.08 ------------ ------ ----- ----- ----------- ---- ----- Total $ 19,438,470 $ 665 $0.78 2.7% $18,933,827 $648 $0.76 ============ ===== ===== ===== =========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED (Excludes all properties acquired or stabilized after 1/1/97) 1/1/98-3/31/98 1/1/97-3/31/97 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - --------------------------- ------------ ------------ Dallas $ 3,478,771 $3,293 $3.94 4.6% $3,327,191 $3,149 $3.76 Atlanta $ 1,830,250 $3,025 $3.24 -3.9% $1,905,351 $3,149 $3.38 Austin $ 786,933 $3,367 $4.57 -0.5% $ 790,612 $3,382 $4.59 Indianapolis $ 560,629 $2,252 $2.73 -4.4% $ 586,636 $2,356 $2.86 Kansas $ 595,323 $2,623 $3.05 0.5% $ 592,439 $2,610 $3.03 Chicago $ 431,692 $6,825 $7.98 -1.4% $ 437,955 $6,924 $8.10 ------------ ------ ----- ----- ---------- ------ ----- Total $ 7,683,598 $3,156 $3.70 0.6% $7,640,183 $3,138 $3.68 ============ ====== ===== ===== ========== ====== ===== Operating Efficiency 39.5% 40.4% ============ ==========
PER MONTH PER MONTH --------- ---------- NOI 1998% 1997% - --- ----- ----- Dallas 58.4% 58.0% $ 4,887,146 $385 $0.46 6.5% $ 4,589,121 $362 $0.43 Atlanta 64.6% 63.2% $ 3,341,321 $460 $0.49 2.2% $ 3,270,462 $450 $0.48 Austin 56.3% 55.7% $ 1,015,208 $362 $0.49 2.1% $ 994,682 $355 $0.48 Indianapolis 65.2% 64.5% $ 1,050,072 $351 $0.43 -1.5% $ 1,066,571 $357 $0.43 Kansas 65.1% 65.2% $ 1,110,670 $408 $0.47 -0.1% $ 1,111,712 $408 $0.47 Chicago 44.8% 37.3% $ 350,455 $462 $0.54 34.2% $ 261,095 $344 $0.40 ----- ----- ------------ ---- ----- ----- ----------- ---- ----- Total 60.5% 59.6% $ 11,754,873 $402 $0.47 4.1% $11,293,644 $387 $0.45 ===== ===== ============ ==== ===== ===== =========== ==== ===== Operating Margin 60.5% 59.6% ============ ========== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - -------------------- ------------ ------------ Dallas $ 410,444 $388 $0.46 -41.9% $ 706,889 $669 $0.80 Atlanta $ 169,635 $280 $0.30 18.6% $ 143,072 $236 $0.25 Austin $ 53,954 $231 $0.31 -15.8% $ 64,058 $274 $0.37 Indianapolis $ 26,964 $108 $0.13 -37.6% $ 43,185 $173 $0.21 Kansas $ 59,095 $260 $0.30 125.1% $ 26,257 $116 $0.13 Chicago $ 29,446 $466 $0.54 -49.7% $ 58,527 $925 $1.08 ------------ ---- ----- ------ ---------- ---- ----- Total $ 749,537 $308 $0.36 -28.1% $1,041,987 $428 $0.50 ============ ==== ===== ====== ========== ==== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED (Excludes all properties acquired or stabilized after 1/1/97
1/1/98-3/31/98 1/1/97-3/31/97 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - ----------------------- ------------ ------------ Dallas $ 416,861 $ 395 $0.47 -6.6% $ 446,506 $ 423 $0.51 Atlanta $ 256,309 $ 424 $0.45 3.5% $ 247,629 $ 409 $0.44 Austin $ 110,271 $ 472 $0.64 0.2% $ 110,104 $ 471 $0.64 Indianapolis $ 106,699 $ 429 $0.52 -7.7% $ 115,570 $ 464 $0.56 Kansas $ 80,945 $ 357 $0.41 -3.4% $ 83,811 $ 369 $0.43 Chicago $ 76,769 $1,214 $1.42 -6.0% $ 81,665 $1,291 $1.51 ------------ ------ ----- ------ ---------- ------ ----- Total $ 1,047,854 $ 430 $0.50 -3.4% $1,085,285 $ 446 $0.52 ============ ====== ===== ====== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - ----------------- ------------ ------------ Dallas $ 1,223,846 $1,158 $1.38 17.1% $1,045,259 $ 989 $1.18 Atlanta $ 413,256 $ 683 $0.73 -5.7% $ 438,161 $ 724 $0.78 Austin $ 239,898 $1,026 $1.39 11.4% $ 215,406 $ 922 $1.25 Indianapolis $ 110,668 $ 444 $0.54 -35.5% $ 171,447 $ 689 $0.84 Kansas $ 187,653 $ 827 $0.96 -11.8% $ 212,667 $ 937 $1.09 Chicago $ 153,051 $2,420 $2.83 2.5% $ 149,376 $2,362 $2.76 ------------ ------ ----- ----- ---------- ------ ----- Total $ 2,328,371 $ 956 $1.12 4.3% $2,232,316 $ 917 $1.08 ============ ====== ===== ==== ========== ====== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) THREE MONTHS ENDED MARCH 31, 1998 VERSUS THREE MONTHS ENDED MARCH 31, 1997 (Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-3/31/98 1/1/97-3/31/97 No. of --------------------------------- % -------------------------------- Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft ------ -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - ----------------------- Dallas 4,226 94.6% 1.1% 93.6% Atlanta 3,314 92.5% -1.2% 93.7% Austin 1,523 96.3% 1.8% 94.6% Houston 754 95.1% 2.3% 93.0% Indianapolis 996 89.8% -2.3% 91.9% Kansas 908 92.5% -0.5% 93.0% Chicago 1,694 96.8% 4.0% 93.0% ------ ----- ----- ----- Weighted Average 94.1% 0.7% 93.5% Total 13,415 ===== ===== ===== ====== WEIGHTED AVG. RENTAL RATE - ------------------------- Dallas $661 3.1% $641 Atlanta $741 0.4% $738 Austin $618 -1.0% $624 Houston $736 5.4% $699 Indianapolis $566 -1.1% $572 Kansas $643 -0.2% $645 Chicago $935 3.4% $905 ---- ---- ---- Weighted Average $707 1.7% $695 ==== ==== ==== TOTAL PROPERTY REVENUES PER MONTH PER MONTH - ----------------------- --------- --------- Dallas 4,226 $ 8,365,918 $660 $0.79 5.7% $ 7,916,312 $624 $0.74 Atlanta 3,314 $ 7,122,338 $716 $0.75 -1.6% $ 7,236,439 $728 $0.76 Austin 1,523 $ 2,828,760 $619 $0.87 0.9% $ 2,802,903 $613 $0.86 Houston 754 $ 1,657,123 $733 $0.79 6.9% $ 1,550,697 $686 $0.74 Indianapolis 996 $ 1,610,702 $539 $0.65 -2.6% $ 1,653,208 $553 $0.67 Kansas 908 $ 1,705,993 $626 $0.73 0.1% $ 1,704,151 $626 $0.73 Chicago 1,694 $ 4,859,185 $956 $1.13 7.3% $ 4,529,889 $891 $1.05 ------ ----------- ---- ----- ---- ---------- ---- ----- Total $28,150,018 $699 $0.81 2.8% $27,393,599 $681 $0.79 13,415 =========== ==== ===== ==== =========== ==== ===== ====== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) THREE MONTHS ENDED MARCH 31, 1998 VERSUS THREE MONTHS ENDED MARCH 31, 1997 (Excludes all properties acquired or stabilized after 1/1/97) 1/1/98-3/31/98 1/1/97-3/31/97 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - --------------------------- ------------ ----------- Dallas $ 3,478,771 $3,293 $3.92 4.6% $ 3,327,191 $3,149 $3.75 Atlanta $ 2,659,791 $3,210 $3.35 -0.1% $ 2,661,341 $3,212 $3.35 Austin $ 1,252,745 $3,290 $4.61 1.9% $ 1,228,879 $3,228 $4.52 Houston $ 707,026 $3,751 $4.06 2.3% $ 691,334 $3,668 $3.97 Indianapolis $ 560,629 $2,252 $2.73 -4.4% $ 586,636 $2,356 $2.86 Kansas $ 595,323 $2,623 $3.05 0.5% $ 592,439 $2,610 $3.03 Chicago $ 1,936,620 $4,573 $5.40 4.5% $ 1,853,389 $4,376 $5.17 ------------ ------ ----- ----- ----------- ------ ----- Total $ 11,190,904 $3,337 $3.88 2.3% $10,941,210 $3,262 $3.79 ============ ====== ===== ===== =========== ====== ===== Operating Efficiency 39.8% 39.9% ===== =====
PER MONTH PER MONTH 1998 1997 --------- ---------- NOI % % - --- ----- ----- Dallas 58.4% 58.0% $ 4,887,146 $385 $0.46 6.5% $ 4,589,121 $362 $0.43 Atlanta 62.7% 63.2% $ 4,462,547 $449 $0.47 -2.5% $ 4,575,098 $460 $0.48 Austin 55.7% 56.2% $ 1,576,015 $345 $0.48 0.1% $ 1,574,024 $345 $0.48 Houston 57.3% 55.4% $ 950,097 $420 $0.45 10.6% $ 859,363 $380 $0.41 Indianapolis 65.2% 64.5% $ 1,050,072 $351 $0.43 -1.5% $ 1,066,571 $357 $0.43 Kansas 65.1% 65.2% $ 1,110,670 $408 $0.47 -0.1% $ 1,111,712 $408 $0.47 Chicago 60.1% 59.1% $ 2,922,565 $575 $0.68 9.2% $ 2,676,500 $527 $0.62 ----- ----- ------------ ---- ----- ----- ----------- ---- ----- Total 60.2% 60.1% $ 16,959,113 $421 $0.49 3.1% $16,452,389 $409 $0.48 ===== ============ ==== ===== ===== =========== ==== ===== Operating Margin 60.2% 60.1% ===== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) THREE MONTHS ENDED MARCH 31, 1998 VERSUS THREE MONTHS ENDED MARCH 31, 1997 (Excludes all properties acquired or stabilized after 1/1/97) 1/1/98-3/31/98 1/1/97-3/31/97 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - -------------------- ------------- ------------ Dallas $ 410,444 $388 $0.46 -41.9% $ 706,889 $669 $0.80 Atlanta $ 192,047 $232 $0.24 -2.7% $ 197,350 $238 $0.25 Austin $ 69,911 $184 $0.26 -14.4% $ 81,701 $215 $0.30 Houston $ 33,532 $178 $0.19 107.7% $ 16,148 $ 86 $0.09 Indianapolis $ 26,964 $108 $0.13 -37.6% $ 43,185 $173 $0.21 Kansas $ 59,095 $260 $0.30 125.1% $ 26,257 $116 $0.13 Chicago $ 69,348 $164 $0.19 -21.1% $ 87,870 $207 $0.25 ------------ ---- ----- ------ ---------- ---- ----- Total $ 861,341 $257 $0.30 -25.7% $1,159,400 $346 $0.40 ============ ==== ===== ====== ========== ==== ===== REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - ----------------------- ------------ ------------ Dallas $ 416,861 $395 $0.47 -6.6% $ 446,506 $ 423 $0.50 Atlanta $ 372,768 $450 $0.47 10.7% $ 336,593 $ 406 $0.42 Austin $ 178,948 $470 $0.66 4.7% $ 170,884 $ 449 $0.63 Houston $ 43,916 $233 $0.25 7.3% $ 40,915 $ 217 $0.23 Indianapolis $ 106,699 $429 $0.52 -7.7% $ 115,570 $ 464 $0.56 Kansas $ 80,945 $357 $0.41 -3.4% $ 83,811 $ 369 $0.43 Chicago $ 273,844 $647 $0.76 5.3% $ 260,008 $ 614 $0.73 ------------ ---- ----- ----- ---------- ------ ----- Total $ 1,473,982 $440 $0.51 1.4% $1,454,287 $ 434 $0.50 ============ ==== ===== ===== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - ----------------- ------------ ------------ Dallas $ 1,223,846 $1,158 $1.38 17.1% $1,045,259 $ 989 $1.18 Atlanta $ 593,181 $ 716 $0.75 -2.7% $ 609,776 $ 736 $0.77 Austin $ 387,459 $1,018 $1.43 11.1% $ 348,696 $ 916 $1.28 Houston $ 272,580 $1,446 $1.56 -1.0% $ 275,411 $1,461 $1.58 Indianapolis $ 110,668 $ 444 $0.54 -35.5% $ 171,447 $ 689 $0.84 Kansas $ 187,653 $ 827 $0.96 -11.8% $ 212,667 $ 937 $1.09 Chicago $ 666,864 $1,575 $1.86 7.2% $ 621,900 $1,468 $1.73 ------------ ------ ----- ----- ---------- ------ ----- Total $ 3,442,250 $1,026 $1.19 4.8% $3,285,156 $ 980 $1.14 ============ ====== ===== ==== ========== ====== =====
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION As of March 31, 1998
Qtr ended Mar. 31, 1998 Approx- Average Qtr ended imate Rental Rates Mar. 31, Number Rentable Average ------------- 1998 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- DALLAS/FT. WORTH, TX - ---------- Amli: at Autumn Chase Carrollton, TX 1991 1987/96 450 374,288 832 $699 $0.84 95.1% at Bent Tree Dallas, TX 1997 1996 300 282,774 943 833 0.88 93.3% at Bishop's Gate West Plano, TX 1997 1997 266 292,092 1,098 1,043 0.95 90.9% at Chase Oaks Plano, TX 1994 1986 250 193,736 775 667 0.86 93.3% at Gleneagles Dallas, TX 1988 1987/97 590 521,302 884 716 0.81 95.1% on the Green Ft. Worth, TX 1994 1990/93 424 358,560 846 681 0.81 92.1% at Nantucket Dallas, TX 1988 1986 312 222,208 712 548 0.77 96.7% of North Dallas Dallas, TX 1989/90 1985/86 1,032 905,590 878 642 0.73 93.1% at Reflections Irving, TX 1993 1986 212 174,332 822 668 0.81 97.5% on Rosemeade Dallas, TX 1990 1987 236 205,382 870 660 0.76 92.1% on Timberglen Dallas, TX 1990 1985 260 201,198 774 602 0.78 96.7% at Valley Ranch Irving TX 1990 1985 460 389,940 848 686 0.81 97.4% ----- --------- --- ---- ----- ------ Subtotal-Dallas/ Ft. Worth, TX 4,792 4,121,402 860 $693 $0.81 94.3% ----- --------- --- ---- ----- ------ ATLANTA, GA - ----------- Amli: at Sope Creek Marietta, GA 1982/83/ 95 695 632,393 910 $690 $0.76 93.4% at Spring Creek Dunwoody, GA 1985/86/ 87/89 1,180 1,080,560 916 706 0.77 92.9% at Vinings Atlanta, GA 1992 1985 208 229,708 1,104 781 0.71 95.7% at Vinings- Phase II Atlanta, GA 1997 1985 152 144,532 951 733 0.77 96.5% at West Paces Atlanta, GA 1993 1992 337 314,707 934 861 0.92 95.1% at Clairmont Atlanta, GA 1998 1988 288 229,335 796 606 0.76 94.2% ------ --------- ----- ---- ----- ------ Subtotal- Atlanta, GA 2,860 2,631,235 920 $717 $0.78 93.8% ------ --------- ----- ---- ----- ------ Qtr ended Mar. 31, 1998 Approx- Average Qtr ended imate Rental Rates Mar. 31, Number Rentable Average ------------- 1998 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- AUSTIN, TEXAS - ------------- Amli: at the Arboretum Austin, TX 1986 1983 231 178,116 771 $675 $0.88 96.0% in Great Hills Austin, TX 1991 1985 344 256,892 747 670 0.90 96.3% at Lantana Ridge Austin, TX 1997 1997 354 311,808 881 805 0.91 84.6% at Martha's Vineyard Austin, TX 1992 1986 360 253,328 704 597 0.85 95.1% ----- --------- --- ---- ----- ----- Subtotal- Austin, TX 1,289 1,000,144 776 $688 $0.89 92.7% ----- --------- --- ---- ----- ----- EASTERN KANSAS - -------------- Amli: at Alvamar Lawrence, KS 1994 1989 152 125,800 828 $654 $0.79 90.8% at Crown Colony Topeka, KS 1994 1986 156 120,984 776 565 0.73 95.7% at Crown Colony II Topeka, KS 1997 64 51,292 801 631 0.79 90.6% at Regents Center Overland Park, KS 1994 1991-95 300 274,170 914 698 0.76 89.9% at Regents Center II Overland Park, KS 1997 124 123,728 998 751 0.75 87.4% at Sherwood Topeka, KS 1994 1993 300 260,340 868 624 0.72 94.3% at Town Center Overland Park, KS 1997 1997 156 176,994 1,135 1,052 0.93 93.0% ----- --------- ----- ----- ----- ----- Subtotal -Eastern KS 1,252 1,133,308 905 $ 704 $0.78 92.0% ----- --------- ----- ----- ----- ----- INDIANAPOLIS, IN - ---------------- Amli: at Riverbend Indianapolis, IN 1992/93 1983/85 996 820,712 824 $566 $0.69 89.8% at Conner Farms Indianapolis, IN 1997 1993 300 324,636 1,082 781 0.72 94.0% ----- --------- ----- ---- ----- ----- Subtotal -Indianapolis, IN 1,296 1,145,348 884 $616 $0.70 90.8% ----- --------- ----- ---- ----- ----- Qtr ended Mar. 31, 1998 Approx- Average Qtr ended imate Rental Rates Mar. 31, Number Rentable Average ------------- 1998 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- CHICAGO, IL - ------------ Amli: at Park Sheridan Chicago, IL 1989 1986 253 216,315 855 $ 923 $1.08 98.2% at Poplar Creek Chicago, IL 1997 1985 196 178,490 911 1,003 1.10 92.7% ----- ---------- ----- ----- ----- ----- Subtotal -Chicago, IL 449 394,805 879 $ 958 $1.09 95.8% ------ ---------- ----- ----- ----- ----- TOTAL PROPERTIES 11,938 10,426,242 873 $701 $0.80 93.4% ====== ========== ==== ==== ===== ===== Qtr ended Mar. 31, 1998 Approx- Average Qtr ended imate Rental Rates Mar. 31, Number Rentable Average ------------- 1998 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- CO-INVESTMENT PROPERTIES - -------------- ATLANTA, GA Amli: at Pleasant Hill Atlanta, GA 1996 502 501,816 1,000 $804 $0.80 88.4% at Barrett Lakes Atlanta, GA 1997 446 460,150 1,032 824 0.80 94.1% at River Park Atlanta, GA 1997 222 225,892 1,018 832 0.82 93.8% at Towne Creek Gainesville, GA 1989 150 121,722 811 620 0.76 89.8% at Willeo Creek Rosewell, GA 1995 1989 242 297,302 1,229 799 0.65 92.0% ----- --------- ----- ---- ----- ------ Subtotal- Atlanta, GA 1,562 1,606,882 1,029 $795 $0.77 91.5% ----- --------- ----- ---- ----- ------ CHICAGO, IL - ----------- Amli: at Prairie Court Oak Park, IL 1987 125 105,578 845 1,050 1.24 96.5% at Windbrooke Buffalo Grove, IL 1995 1987 236 213,160 903 955 1.06 98.2% at Chevy Chase Buffalo Grove, IL 1996 1988 592 480,676 812 933 1.15 96.1% at Danada Wheaton, IL 1997 1989/1991 600 521,500 869 909 1.05 93.1% at Willowbrook Willowbrook, IL 1996 1987 488 418,404 857 907 1.06 96.2% ----- --------- --- ---- ----- ----- Subtotal- Chicago, IL 2,041 1,739,318 852 $929 $1.09 95.5% ----- --------- --- ---- ----- ----- EASTERN KANSAS - -------------- AMLI at: Regents Crest Overland Park, KS 1997 1997 368 346,488 942 $739 $0.78 94.2% ----- --------- --- ---- ----- ----- DALLAS/FT. WORTH - ---------------- Amli: at Verandah Arlington, TX 1997 1986/91 538 394,504 733 $688 $0.91 94.4% ------ --------- --- ---- ----- ----- Qtr ended Mar. 31, 1998 Approx- Average Qtr ended imate Rental Rates Mar. 31, Number Rentable Average ------------- 1998 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- AUSTIN, TX - ---------- Amli: at Park Place Austin, TX 1994 1985 588 397,968 677 $577 $0.85 97.1% ------ --------- --- ---- ----- ----- HOUSTON, TX Amli at: Champions Centre Houston, TX 1994 1994 192 164,480 857 $732 $0.85 95.7% Champions Park Houston, TX 1994 1991 246 221,646 901 712 0.79 96.2% Greenwood Forest Houston, TX 1995 1995 316 310,844 984 757 0.77 94.0% ---- ------- --- ---- ----- ----- Subtotal- Houston, TX 754 696,970 924 $736 $0.80 95.1% ---- ---------- ---- ---- ----- ----- TOTAL CO-INVESTMENT PROPERTIES 5,851 5,182,130 886 797 0.90 94.4% ====== ========== === ==== ===== ===== TOTAL 17,789 15,608,372 877 $733 $0.84 93.8% ====== ========== === ==== ===== =====
AMLI RESIDENTIAL PROPERTIES TRUST COMPONENTS OF PROPERTY EBITDA
WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100% ---------------------------- ---------------------------- ---------------------------- THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, MARCH 31, MARCH 31, ---------------------------- ---------------------------- ---------------------------- % % % 1998 1997 Change 1998 1997 Change 1998 1997 Change ------- ------- ------ ------- ------- ------ ------- ------- ------- PROPERTY REVENUES - ----------------- Rental Income - ------------- Same Store Communities (1) . . $18,446 17,994 2.5% 8,336 8,054 3.5% 26,782 26,048 2.8% New Communities (2) . . . . . . . . 810 -- 1,553 -- 2,364 -- Development and/ or Lease-up Communities (3) . . . . . . . . 699 131 435.4% 1,063 277 283.5% 1,761 408 Acquisition Communities (4) . . 4,183 15 3,276 566 479.2% 7,459 581 1184.0% ------- ------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $24,138 18,140 33.1% 14,228 8,897 59.9% 38,366 27,037 41.9% ======= ======= ======= ======= ======= ======= ======= ======= ======= Other Revenues - -------------- Same Store Communities . . . . $ 992 940 5.5% 376 406 1,368 1,346 1.6% New Communities. . . 47 -- 64 -- 111 -- Development and/ or Lease-up Communities . . . . 72 10 591.1% 117 38 189 48 Acquisition Communities . . . . 181 -- 193 31 517.5% 374 31 1097.6% ------- ------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $ 1,292 950 35.9% 750 475 57.9% 2,042 1,425 43.3% ======= ======= ======= ======= ======= ======= ======= ======= ======= AMLI RESIDENTIAL PROPERTIES TRUST COMPONENTS OF PROPERTY EBITDA - CONTINUED WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100% ---------------------------- ---------------------------- ---------------------------- THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, MARCH 31, MARCH 31, ---------------------------- ---------------------------- ---------------------------- % % % 1998 1997 Change 1998 1997 Change 1998 1997 Change ------- ------- ------ ------- ------- ------ ------- ------- ------- Total Property Revenues - --------------- Same Store Communities . . . . $19,438 18,934 2.7% 8,712 8,460 3.0% 28,150 27,394 2.8% New Communities. . . 857 -- 1,618 -- 2,475 -- Development and/ or Lease-up Communities . . . . 771 141 446.9% 1,179 315 1,950 456 Acquisition Communities . . . . 4,364 15 3,469 597 481.2% 7,833 612 1179.6% ------- ------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $25,430 19,090 33.2% 14,978 9,372 59.8% 40,408 28,462 42.0% ======= ======= ======= ======= ======= ======= ======= ======= ======= Total Operating Expenses - --------------- Same Store Communities . . . . $ 7,684 7,640 0.6% 3,507 3,301 6.2% 11,191 10,941 2.3% New Communities. . . 265 -- 591 -- 856 -- Development and/ or Lease-up Communities . . . . 478 135 253.2% 778 317 145.5% 1,255 452 177.8% Acquisition Communities . . . . 1,718 4 1,395 149 837.3% 3,113 153 1936.6% ------- ------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $10,145 7,779 30.4% 6,271 3,767 66.5% 16,415 11,546 42.2% ======= ======= ======= ======= ======= ======= ======= ======= ======= AMLI RESIDENTIAL PROPERTIES TRUST COMPONENTS OF PROPERTY EBITDA - CONTINUED WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100% ---------------------------- ---------------------------- ---------------------------- THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, MARCH 31, MARCH 31, ---------------------------- ---------------------------- ---------------------------- % % % 1998 1997 Change 1998 1997 Change 1998 1997 Change ------- ------- ------ ------- ------- ------ ------- ------- ------- Property EBITDA - --------------- Same Store Communities . . . . $11,755 11,294 4.1% 5,204 5,159 0.9% 16,959 16,452 3.1% New Communities. . . 591 -- 1,027 -- 1,618 -- Development and/ or Lease-up Communities . . . . 293 6 402 (2) 695 4 Acquisition Communities . . . . 2,646 11 2,074 449 362.1% 4,720 460 925.8% ------- ------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $15,285 11,311 35.1% 8,707 5,606 55.3% 23,992 16,916 41.8% ======= ======= ======= ======= ======= ======= ======= ======= ======= Company's share of Co-investment EBITDA . . . . . . . 2,318 1,471 57.6% 2,318 1,471 57.6% ======= ======= ======= ======= ======= ======= Percent of Co-investment EBITDA . . . . . . . 27% 26% 10% 9% ======= ======= ======= ======= (1) Stabilized Communities at 1/1/97. (2) Development Communities stabilized after 1/1/97 but before 1/1/98. (3) Development Communities not yet stabilized. (4) Stabilized Communities acquired after 1/1/97.
AMLI RESIDENTIAL PROPERTIES TRUST DEVELOPMENT ACTIVITIES First Quarter 1998
Under Construction And/Or in Lease Up Construc- Percent Percent tion First Comple- Stabili- Construc- Leased Community Number Costs Percent Start Units tion zation tion as of Name of Units (millions) Ownership Date Occupied Date Date Complete 4/27/98 - ---------- -------- ---------- --------- --------- -------- ------- -------- --------- -------- ATLANTA, GEORGIA - -------- AMLI: at Killiam Farms 216 $13.9 100% 4Q/97 2Q/98 1Q/99 2Q/99 58% N/A at Peachtree City 312 $21.5 100% 3Q/96 3Q/97 2Q/98 3Q/98 87% 90% at Northwinds * 800 $55.5 35% 3Q/96 3Q/97 2Q/99 3Q/00 48% 38% at Park Creek 200 $12.5 100% 2Q/97 1Q/98 3Q/98 2Q/99 72% 26% DALLAS/FORT WORTH, TEXAS - ----------------- AMLI: at Deerfield 240 $16.5 100% 4Q/97 4Q/98 2Q/99 4Q/99 4% N/A at Fossil Creek 384 $23.6 25% 3Q/96 2Q/97 1Q/98 3Q/98 98% 77% at Autumn Chase III 240 $14.5 100% 3Q/96 4Q/97 3Q/98 4Q/98 88% 47% on the Parkway 240 $15.7 100% 1Q/97 2Q/98 4Q/98 2Q/99 45% 10% AUSTIN, TEXAS - ------------- AMLI: at Wells Branch 576 $34.5 100% 1Q/97 1Q/98 3Q/99 2Q/00 57% 34% AURORA, ILLINOIS - ---------------- AMLI: at Fox Valley 272 $24.6 25% 2Q/96 1Q/97 1Q/98 4Q/98 98% 90% (formerly Aurora Crossing) Oakhurst North 464 $44.8 100% 1Q/97 2Q/98 3Q/99 2Q/00 36% 2% ----- ------ Total 3,944 $277.6 ===== ====== * Percent leased based on Phase I consisting of 652 units.
AMLI RESIDENTIAL PROPERTIES TRUST DEVELOPMENT ACTIVITIES (continued) First Quarter 1998 PLANNING STAGES Number Community Name of Units - -------------- ---------- INDIANAPOLIS, INDIANA - --------------------- AMLI: at Lake Clearwater 216 at Castle Creek 276 DALLAS/FORTH WORTH, TEXAS - ------------------------- AMLI at Bent Tree Ridge 200 at Mesa Ridge (Fossil Creek II) 504 HOUSTON, TEXAS - -------------- Kings Harbour 300 OVERLAND PARK, KANSAS - --------------------- AMLI at Wynnewood Farms 232 Regents Crest II 108 Regents Creek 224 The following is a "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. The projections contained in the table above that are not historical facts are forward-looking statements. Risks associated with the Company's development, construction and lease-up activities, which could impact the forward-looking statements may include: development opportunities may be abandoned; construction costs of a community may exceed original estimates, possibly making the community uneconomical; construction and lease-up may not be completed on schedule, resulting in increased debt service and construction costs; estimates of the costs of improvements to bring an acquired property up to the standards established for the market position intended for that property may prove inaccurate. -----END PRIVACY-ENHANCED MESSAGE-----