-----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, Tx8XDnxxdyRgOJ52lwQMYjrmam9hDbvpl5GwFDDMqN3mefykHIwkJ6xn5TVKYV6W 2KMkmOkVDpXfJDu5/qOR8g== 0000892626-00-000115.txt : 20000320 0000892626-00-000115.hdr.sgml : 20000320 ACCESSION NUMBER: 0000892626-00-000115 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000317 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-K405 SEC ACT: SEC FILE NUMBER: 001-12784 FILM NUMBER: 572136 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-K405 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1999 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 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered - ------------------- ------------------------------- Common Shares of Beneficial New York Stock Exchange Interest, $.01 par value Preferred Share Purchase Rights New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $304,693,920 based on the closing price ($20.4375) on the New York Stock Exchange on February 29, 2000. The number of the Registrant's Common Shares of Beneficial Interest, $.01 par value, outstanding as of December 31, 1999 was 16,996,138. Documents Incorporated By Reference Portions of the Proxy Statement for the annual shareholders' meeting to be held on May 1, 2000 are incorporated by reference into Part III. TABLE OF CONTENTS Page ---- PART I Item 1. Business . . . . . . . . . . . . . . . . . . . . 1 Item 2. Communities. . . . . . . . . . . . . . . . . . . 19 Item 3. Legal Proceedings. . . . . . . . . . . . . . . . 29 Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . 29 PART II Item 5. Market for the Registrant's Common Equity and Related Shareholder Matters. . . . . . . . . 30 Item 6. Selected Financial Data. . . . . . . . . . . . . 32 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . 34 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . . . . 46 Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . 49 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . . . . 101 PART III Item 10. Trustees and Executive Officers of the Registrant. . . . . . . . . . . . . . . . 101 Item 11. Executive Compensation . . . . . . . . . . . . . 101 Item 12. Security Ownership of Certain Beneficial Owners and Management . . . . . . . . 101 Item 13. Certain Relationships and Related Transactions . . . . . . . . . . . . . . 101 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. . . . . . . . . . . . . 102 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 106 i PART I ITEM 1. BUSINESS THE COMPANY AMLI Residential Properties Trust ("AMLI" or the "Company") is a self- administered and self-managed real estate investment trust (a "REIT") engaged in the development, acquisition and management of upscale, institutional quality multifamily apartment communities in seven major metropolitan markets in the Southeast, Southwest and Midwest regions of the United States. Founded in 1980, AMLI became a publicly traded company through an initial public offering ("Initial Offering") in February 1994. As part of its core strategy, AMLI differentiates itself through an internal growth strategy focused on branding its product and services, an external growth strategy balanced between both development and acquisition, geographic diversification in three regions and seven core cities, and accessing capital from both the public markets and from co-investment relationships with institutional partners. As of December 31, 1999, AMLI owned or had co-investment interests in 69 multifamily apartment communities (the "Communities") comprised of 25,749 apartment homes. Fifty-five of these Communities, totalling 21,451 apartment homes, were stabilized as of December 31, 1999. An additional twelve Communities and two additional phases to existing Communities were under development or in lease-up at that date. When completed, these development communities will total 4,298 apartment homes. In addition, the Company owns land for the future development of eight additional communities and four additional phases to existing communities totalling approximately 4,798 apartment homes. Of this total, the Company anticipates that 1,100 apartment homes will be developed over a long-term development plan. AMLI is the sole general partner of, and controls a majority of the limited partnership interests in, Amli Residential Properties, L.P., a Delaware limited partnership (the "Operating Partnership") through which it owns its interests in the Communities. As of December 31, 1999, the Company owned 85% of the outstanding partnership interests ("OP Units") in the Operating Partnership. OP Units are convertible into common shares on a one-for-one basis. The Company conducts all its business through the Operating Partnership and its subsidiaries and affiliates. The Company's headquarters offices are located at 125 S. Wacker Drive, Suite 3100, Chicago, Illinois 60606, and its telephone number is (312) 443- 1477. In addition, AMLI maintains regional offices in Atlanta, Dallas, Indianapolis and Kansas City. COMPETITIVE ADVANTAGES The Company seeks to increase cash flow by intensively managing the Communities, selectively developing and acquiring additional high-quality multifamily communities and advising and co-investing with institutional partners. In pursuit of these strategies, the Company benefits from the following competitive advantages: DEVELOPMENT AND ACQUISITION EXPERTISE. AMLI has extensive experience in both the acquisition and development of upscale multifamily communities. AMLI focuses on institutional quality multifamily communities having high- quality construction, amenities, location and market position. The Company believes that over time these communities will realize returns exceeding national averages for multifamily properties due to higher expected annual growth in cash flows, reduced on-going maintenance costs and capital expenditures, and higher relative levels of residual values. The Company applies a long-term ownership perspective to the development process, utilizing high-quality building materials, and designs communities which satisfy the current needs of residents and anticipate their future needs. AMLI acquires assets at times when it believes capitalization rates are attractive and enhanced performance from the target communities is possible through the potential for application of the Company's management expertise. INSTITUTIONAL CO-INVESTMENTS. AMLI actively acquires and develops multifamily communities in co-investment joint ventures with institutional investment partners such as insurance companies, endowments, foundations, and public and private pension funds. The Company believes that co- investment partnerships create an opportunity to leverage the Company's acquisition, development and management expertise and generate higher returns on its invested equity capital. Since its Initial Offering, and through December 31, 1999, AMLI has formed 36 such co-investment joint ventures with thirteen investors, eleven of which are institutional investors, representing total anticipated acquisition and development costs of approximately $950 million, of which $107.2 million are the estimated completion costs of communities under construction at twelve locations at December 31, 1999. The Company's invested capital in these 35 joint ventures totals approximately $147.6 million. Substantially all of AMLI remaining capital commitment which is not yet funded at December 31, 1999, will be funded during the year 2000. In connection with co-investment partnerships, the Company has established strategic alliances with Stichting Bedrijfspensioenfonds voor de Metaal en Technische Bedrijfstakken ("BPMT"), Prudential Insurance Company of America, Western and Southern Life Insurance Company, Allstate Insurance Company, Erie Insurance Group, The New York Common Retirement Fund, The Northwestern Mutual Life Insurance Company, Endowment Realty Investors, The Rockefeller Foundation, and investors represented by Nomura Securities and others. The Company formed ten new co-investment partnerships with seven of these institutional investors during 1999. AMLI BRAND. All of the Communities are operated by the Company under the AMLI brand name. AMLI believes promoting its brand name creates an awareness in the marketplace of quality rental living and extraordinary customer service for both current and prospective residents. To maximize the effectiveness of the AMLI brand name, the Company has a wide range of programs and practices to maintain uniformly high quality service and consistent apartment quality at all of the Communities. RECENT DEVELOPMENTS Since the Initial Offering, the Company has expanded its portfolio of Communities through the acquisition, development and selective expansion of its apartment communities. DEVELOPMENT At the time of the Initial Offering in 1994, the Company and its predecessors had not begun the development of a new multifamily community for five years. Since that time, the development pipeline has grown steadily and extensively. Approximately 78% of the 9,456 apartment homes developed or under development by the Company had been built with a co- investment partner and the other 22% had been developed or are under development solely for the Company. In conjunction with the acquisition of interests in seven apartment communities from Trammell Crow Residential Midwest ("TCR-Midwest"), AMLI and its Service Companies, AMLI Management Company and AMLI Residential Construction, Inc., acquired TCR-Midwest's development and management operations in Indianapolis and Kansas City in December 1997. Through 1997, most of the Company's development activities had been in Atlanta and Dallas. In 1998 and 1999, the Company developed more apartment homes in its three Midwest markets (Chicago, Indianapolis and Kansas City) than in either Atlanta or Dallas. In 2000, the Company anticipates developing apartment homes in its seven markets (Chicago, Indianapolis, Atlanta, Dallas, Austin, Houston and Kansas City). The tables below summarize as of December 31, 1999, information related to the Company development communities and the co-investment development communities. COMPANY DEVELOPMENT COMMUNITY -----------------------------
AMOUNT COMPANY PROJECTED ANTICIPATED EXPENDED DEVELOPMENT NO. OF COMPLETION COMPLETION DEVELOPMENT THROUGH COMMUNITIES LOCATION UNITS PERCENTAGE DATE COST 12/31/99 - ----------- -------- ------ ---------- ---------- ----------- -------- (in thousands) (in thousands) AMLI: at Bent Tree II Dallas, TX 200 74% Jun. 2000 $ 13,900 10,151 ----- -------- -------- 200 $ 13,900 10,151 ===== ======== ========
CO-INVESTMENT DEVELOPMENT OR LEASE UP COMMUNITIES -------------------------------------------------
AMOUNT CO-INVESTMENT COMPANY NO. PROJECTED ANTICIPATED EXPENDED CO-INVEST- DEVELOPMENT PERCENTAGE OF COMPLETION COMPLETION DEVELOPMENT THROUGH MENT COMMUNITIES OWNERSHIP LOCATION UNITS PERCENTAGE DATE COST 12/31/99 PARTNER - ----------- ---------- ---------------- ----- ---------- ---------- ----------- ---------- ---------- (in (in thousands) thousands) AMLI: at Oakhurst North 25% Aurora, IL 464 99% Substan- $ 43,200 43,007 Prudential tially Insurance complete Company of America at Regents Crest II 25% Overland Park, KS 108 89% Mar. 2000 7,800 7,027 ERI Regents Crest, Inc. at Lake Clearwater 25% Indianapolis, IN 216 83% Mar. 2000 16,700 14,149 The N.Y. Common Retirement Fund at St. Charles 25% St. Charles, IL 400 86% Jun. 2000 43,400 37,802 The N.Y. Common Re- tirement Fund Creekside 25% Overland Park, KS 224 88% Jun. 2000 16,200 12,229 ERI Creekside, Inc. at Wynnewood 25% Overland Park, KS 232 70% Jun. 2000 18,200 12,573 The N.Y. Farms Common Retire- ment Fund at Castle Creek 40% Indianapolis, IN 276 84% Jun. 2000 20,700 13,732 ERI Castle Creek, Inc. at Monterey Oaks 25% Austin, TX 430 49% Sep. 2000 30,400 17,607 The N.Y. Common Retire- ment Fund at Lost Mountain 75% Paulding County, GA 164 21% Dec. 2000 11,400 2,904 Individual investor at Park Bridge 25% Atlanta, GA 352 21% Mar. 2001 24,600 7,982 The N.Y. Common Retire- ment Fund at Summit Ridge 25% Summit, MO 432 24% Mar. 2001 29,300 7,198 Western and Southern Life Insurance Company AMOUNT CO-INVESTMENT COMPANY NO. PROJECTED ANTICIPATED EXPENDED CO-INVEST- DEVELOPMENT PERCENTAGE OF COMPLETION COMPLETION DEVELOPMENT THROUGH MENT COMMUNITIES OWNERSHIP LOCATION UNITS PERCENTAGE DATE COST 12/31/99 PARTNER - ----------- ---------- ---------------- ----- ---------- ---------- ----------- ---------- ---------- at Mill Creek 25% Gwinnett County, GA 400 21% Sep. 2001 27,100 5,627 Northwestern Mutual Life ------ -------- -------- 3,698 $289,000 181,837 ====== ======== ========
The Company believes that the operating prospects for the development communities remain favorable based on current economic and other conditions existing in the areas in which the Company's development activities are focused. As with any development project, there are uncertainties and risks associated with development. While the Company has prepared development budgets and has estimated completion and stabilization target dates for each of the development communities based on what it believes are reasonable assumptions, there can be no assurance that actual costs will not exceed current budgets or that the Company will not experience construction delays due to the unavailability of building materials, weather conditions or other events beyond the Company's control. Similarly, adverse market conditions at the time that the development communities become available for leasing could affect the rental rates that may be charged and the period necessary to achieve stabilization at the development communities, which could have a material adverse effect on the financial condition of the affected development communities. CO-INVESTMENT DEVELOPMENT During 1999, the Company formed ten new co-investment partnerships for the development of new communities at six locations and the acquisition of communities in four locations. Prudential Insurance Company of America, Western and Southern Life Insurance Company, The New York Common Retirement Fund, BPMT, Northwestern Mutual Life Insurance Company and two other investors are the venture partners that co-invested with AMLI in 1999. Eleven properties currently under construction in co-investment partnerships will contain 3,590 apartment homes and an additional phase to an existing 368-unit apartment community is under construction and will contain 108 apartment homes. The Company's ownership interests in these co-investment partnerships range from 25% to 75%. The costs of the co- investment development communities total $289 million of which AMLI has a remaining capital commitment of $27.4 million and the co-investors have a remaining capital commitment of $75.3 million. One community secures a $10.3 million first mortgage loan from an unaffiliated third party that is being funded as costs are incurred and another community's construction is being funded in part by a $19 million construction loan from the Company. This loan is expected to be refinanced early in 2000 with permanent first mortgage financing from a third-party lender. ACQUISITIONS The table below summarizes the Company's acquisition activities during 1999. 1999 ACQUISITIONS ----------------- AMLI RESIDENTIAL
Co-investment No. of Acquisition Acquisition Interest Communities Location Units Date Cost Loan Rate - ---------------- -------- ------ ----------- ----------- ---------- ---------- AMLI: at Spring Mill (1) Indianapolis, IN 400 6/30/99 $ 29,475 -- -- at Prestonwood Hills Dallas, TX 272 8/12/99 17,650 11,649 7.17% at Windward Park Atlanta, GA 328 8/26/99 27,485 18,183 7.27% at Oakbend Lewisville, TX 426 10/26/99 25,250 18,834 7.81% ------ ------- ------ Total Company Communities 1,426 $99,860 48,666 ====== ======= ====== (1) The Company paid $1.3 million for the general partnership interest in the partnership, which completed the TCR-Midwest acquisition.
FINANCING In October 1999, the Company increased its unsecured line of credit provided by a group of eight banks to $250 million from $200 million, expandible to $300 million. The company extended the maturity of the line of credit to October 2002 with two one-year renewal options. In addition, the interest rate, which is based in part on the credit rating assigned to unsecured borrowings, was increased to LIBOR plus 1.05% from LIBOR plus .90%. At December 31, 1999, the Company's remaining availability on its $250 million line of credit was $105 million. The line of credit agreement also provides for an annual fee of $0.5 million (20 basis points). THE OPERATING PARTNERSHIP The Company carries on its business through the Operating Partnership and its affiliates, AMLI Management Company ("AMC"), AMLI Residential Construction, Inc. ("Amrescon") and AMLI Institutional Advisors, Inc. ("AIA") (collectively the "Service Companies"). The Company is the sole general partner of the Operating Partnership, through which it owns the Communities, interests in co-investment Communities and interests in the Service Companies. At December 31, 1999, the Company owned an 85% (16.2% represents preferred units) partnership interest in the Operating Partnership, 7.0% was held by Amli Realty Co. and its affiliates ("ARC") and 8.0% was held by certain other third-party investors. The Company's interest in the Operating Partnership entitles it to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to the Company's percentage ownership (apart from tax allocations of profits and losses to take into account pre-contribution property appreciation). In connection with each offering of shares by the Company, the net proceeds from the issuance of any such shares are contributed to the Operating Partnership in exchange for a corresponding number of OP Units. The Company holds one OP Unit in the Operating Partnership for each common share and each preferred share that it has issued. The Operating Partnership, from time to time, has issued OP Units for the acquisition of apartment communities and land parcels for development. The OP Units are convertible into common shares on a one-for- one basis. As the general partner of the Operating Partnership, the Company has the exclusive power under the agreement of limited partnership of the Operating Partnership to manage and conduct the business of the Operating Partnership. The Board of Trustees of the Company manages the affairs of the Company by directing the affairs of the Operating Partnership. The Operating Partnership will terminate in the year 2093 unless terminated earlier in connection with, among other things, a merger or a sale of all or substantially all of the assets of the Operating Partnership or upon a vote of the partners. THE SERVICE COMPANIES The management, institutional advisory and construction management aspects of the Company's business are conducted through AMC, AIA and Amrescon, respectively, because, among other things, the third-party income from their respective businesses might jeopardize the Company's REIT status under Sections 856 through 860 of the Code if such operations were carried on directly by the Operating Partnership. The Operating Partnership holds 100% of the nonvoting preferred stock of each of the Service Companies and also holds certain subordinated notes of AMC, AIA and Amrescon. The nonvoting preferred stock is entitled to dividends equal to 95% of all distributions of the Service Companies. ARC holds 95% of the voting common stock of each of the Service Companies which, in each case, is generally entitled to dividends equal to 4.75% of all distributions. The remaining 5% of the voting common stock of each of the Service Companies, entitled to .25% of all distributions, is owned by the Operating Partnership. The charter of each of the Service Companies requires the quarterly distribution as dividends of the "net operating cash flow" (as defined in each such charter) of each such Service Company, if there are funds legally available for dividends. Such provision of the charter of each of the Service Companies may not be changed without the consent of the holders of the preferred stock. Accordingly, the Operating Partnership is entitled to receive substantially all of the available net cash flow from each of the Service Companies through ownership of the preferred stock thereof and the subordinated notes, and thereby enjoys substantially all of the economic benefit of the businesses carried on by such companies. According to the charter of each of the Service Companies, a majority of the members of the board of directors of the respective Service Company must be individuals who are not officers, directors or employees of ARC, and all contracts for services between a Service Company and ARC must be approved by a majority of the unaffiliated directors of the relevant Service Company. Ownership of 95% of the voting common stock will enable ARC to control the election of the board of directors (including the unaffiliated directors) of the Service Companies. The holders of a majority of the nonvoting preferred stock of each Service Company are entitled to an approval right with respect to certain fundamental corporate actions, including the issuance of any additional shares of preferred stock or other senior securities, or a sale, lease or exchange of all or substantially all of the assets of, or the merger, consolidation or dissolution of, the respective Service Company. In addition, the Company has a right of first refusal (which may be assigned to a third party with the consent of ARC, such consent not to be unreasonably withheld) to acquire on its own behalf or on behalf of any controlled affiliate, the common stock of each of the Service Companies, subject to the consent of third-party clients and to applicable law. Such right of first refusal may only be exercised to the extent that the ownership of such common stock or assets would not disqualify the Company as a REIT. THE BUSINESS OF AMC AMC provides management and leasing services to each of the Communities presently owned by the Company. In addition, AMC provides such services to the co-investment Communities. AMC is expected to manage any additional multifamily communities acquired or developed by the Operating Partnership, as well as any additional co-investment communities acquired through investor relationships of AIA, subject to the consent of the co- investment partners. Management and leasing services are provided to the Communities and the co-investment Communities pursuant to the terms of a management contract which has an initial term of three years and which AMC has agreed not to terminate so long as the Operating Partnership is not in material breach of such contract. Residential property management and leasing services provided by AMC are performed at market rates. AMLI Corporate Homes ("ACH"), a division of AMC, leases apartment homes from the Communities and the co-investment Communities for short-term residents. Such ACH leases are at market rates. THE BUSINESS OF AIA AIA renders investment advice to institutional capital sources, primarily pension plans, endowments, foundations and insurance companies and provides certain asset management services to co-investment partnerships. AIA intends to continue to develop its institutional investment advisory business and will continue to manage and administer existing advisory relationships with institutional investors. The Company actively pursues co-investments through relationships administered by AIA. In this way, the Company seeks to diversify the sources of capital for investments in properties. In addition to generating advisory fee income for AIA, these relationships have the potential to generate fee income for (1) AMC in cases where AMC is engaged to manage the communities acquired by the co-investment ventures; (2) Amrescon, in cases where Amrescon is engaged as general contractor by co-investment development ventures; and (3) the Operating Partnership. THE BUSINESS OF AMRESCON Amrescon, a Delaware corporation, provides general contracting, construction management and landscaping services to the Company and its managed ventures. Amrescon is based in Atlanta, has regional offices in Chicago, Dallas, Indianapolis and Kansas City, and is engaged exclusively in the design, development, construction and landscaping of upscale multifamily properties on behalf of the Company. A division of Amrescon, Amli Landscape Co., performs all landscape installation and maintenance services for the Communities located in Atlanta, Kansas, Indianapolis and Dallas. LEASES AMC uses a standard Company lease modified at each Community to the extent necessary to comply with state and local law or custom. The term of a lease varies with local market conditions, however, six-month and one- year leases are most common. Generally, the leases provide that unless the parties agree in writing to a renewal, the tenancy will convert at the end of the lease term to a month-to-month tenancy, subject to the terms and conditions of the lease, unless either party gives the other at least 30 days prior notice of termination. All leases are terminable by the lessor for nonpayment of rent, violation of property rules and regulations, or other specified defaults. LEASING Employees of AMC are responsible for leasing activities at the Communities. Leasing consultants meet with prospective residents and show models and vacant units. The leasing consultants maintain contact with existing residents to determine the residents' level of satisfaction with their community. All leasing consultants participate in a comprehensive formal training program administered by AMC. AMC, as it deems necessary, may employ the services of, and pay customary fees to, unaffiliated real estate brokers, apartment locator services and existing tenants for locating prospective tenants. COMPETITION All of the Communities are located in developed areas that include other upscale apartment communities. The number of competitive upscale apartment communities in a particular area could have a material effect on AMC's ability to lease apartment units and on the rent charged at the Communities or at any newly developed or acquired communities. The Company may be competing with others that have greater resources than the Company and whose officers and directors have more experience than the Company's officers and Trustees. In addition, other forms of multifamily residential communities, and single-family housing, provide housing alternatives to potential residents of the Communities. INSURANCE The Company believes that each of the Communities is covered by adequate fire, flood and property insurance provided by reputable companies and with commercially reasonable deductibles and limits. The Company maintains comprehensive liability, all-risk property insurance coverage with respect to the Communities and with policy specifications, limits deductibles customarily carried for similar communities. The Company has obtained title insurance insuring fee title to the Communities in an aggregate amount which the Company believes to be adequate. AMERICANS WITH DISABILITIES ACT The Communities and any newly acquired apartment communities must comply with Title III of the Americans with Disabilities Act (the "ADA") to the extent that such properties are public accommodations and/or commercial facilities as defined by the ADA. Compliance with the ADA requirements could require removal of structural barriers to handicapped access in certain public areas of the Communities where such removal is readily achievable. The ADA does not, however, consider residential properties, such as apartment communities, to be public accommodations or commercial facilities, except to the extent portions of such facilities, such as the leasing office, are open to the public. The Company believes that its properties comply with all present requirements under the ADA and applicable state laws. Noncompliance could result in imposition of fines or an award of damages to private litigants. If required to make material additional changes, the Company's results of operations could be adversely affected. ENVIRONMENTAL MATTERS Many jurisdictions have adopted laws and regulations relating to environmental controls and the development of real estate. Such laws and regulations could affect the Communities and any additional communities acquired or developed by the Company in the future and/or operate to reduce the number and attractiveness of investment opportunities available to the Company. The effect upon the Company of the application of such laws and regulations cannot be predicted. Such laws and regulations have not had a material effect on the Company's financial condition and results of operations to date. The Company is not aware of any environmental condition on any of the Communities, or the communities planned to be developed by the Company, which is likely to have a material adverse effect on the Company's financial condition and results of operations. EMPLOYEES The Company, the Operating Partnership and the Service Companies employ a total of approximately 800 persons. AMC employs substantially all of the professional employees that are currently engaged in the residential property management and leasing business on behalf of the Company. PROPERTY OPERATIONS The Company seeks to increase cash flow at the Communities through rent increases while maintaining high occupancy rates and aggressive management of its operating expenses. As of December 31, 1999, the weighted average occupancy rate of the stabilized Communities was 92.6%, and the average monthly rental rate per apartment home was $788, or $.86 per square foot. The Company owns multifamily communities with service, lifestyle and physical amenities that residents value and that support higher rental rates. Typical services that are provided at the Communities, which are customary for similar upscale multifamily properties, include pet care or plant watering for out-of-town residents; on-site overnight delivery drop-off boxes; on-site pick-up of dry cleaning or other items; occasional social events for residents designed to provide a sense of community; frequent maintenance programs; and a policy of guaranteeing attention to any maintenance or repair request from a tenant within 48 hours. By establishing critical mass in each of its markets, the Company expects to achieve economies of scale in its operations, resulting in reduced operating and administrative expenses without reductions in service. In addition, the relatively low average age of the Communities contributes to reduced operating and maintenance expenses. At December 31, 1999, the average age of the stabilized Communities was approximately 7.5 years. The Company also believes that attention to landscaping and physical appearance contributes to reducing resident turnover and enhances the rental rates and occupancy levels of the Communities. Additionally, AMLI has a dedicated team whose function is to evaluate new or enhanced products, features or services that might be incorporated in either the apartment homes or the Communities to produce complementary income from property operations and maximize customer/resident satisfaction within the Communities. Some of the products, features and services either in existence or being considered include the construction of carports and garages, private phone and cable systems, high-speed internet connection services, custom rental insurance, energy efficient lighting programs, water submetering, bulk purchases of utilities and card key systems for laundry facilities. DEVELOPMENT ACTIVITIES The Company has identified certain sub-markets within its seven identified geographic markets where strong multifamily property demand justifies new construction. The Company currently has developments underway in Chicago, Atlanta, Dallas, Austin, Indianapolis and Kansas City. In addition, the Company owns 349 acres of land, on which it expects to develop approximately 4,798 apartment homes, including 3,698 units on 246 acres on which it expects to break ground and commence construction during 2000. The following table summarizes the Company's development activities for the period from the date of its Initial Offering in February 1994 through December 31, 1999: AMLI DEVELOPMENT ACTIVITIES No. of Communities Developed No. of Estimated or Under Apartment Development Year Development (1) Homes Budget (2) - ---- --------------- --------- ------------ 1994 . . . . . . . . . . 2 734 $ 37,600,000 1995 . . . . . . . . . . 5 1,280 75,900,000 1996 . . . . . . . . . . 6 1,672 113,600,000 1997 . . . . . . . . . . 6 2,336 166,300,000 1998 . . . . . . . . . . 8 2,086 167,700,000 1999 . . . . . . . . . . 4 1,348 93,000,000 --- ----- ------------ Total. . . . . . . . 31 9,456 $654,100,000 === ===== ============ - -------------------- (1) Represents the number of communities or additional phases for which development was commenced during the applicable year. Of the thirty-one communities developed or under development, twenty-one are owned by co- investment partnerships. (2) The Company's share of the total estimated development budget is expected to be approximately $242 million, of which $211 million has been expended through December 31, 1999. The Company intends to develop ten land parcels that are currently owned by the Company in partnership with one or more institutional investors. ACQUISITION ACTIVITIES The Company actively pursues the acquisition of new communities. The Company seeks to acquire, directly or through co-investments, multifamily communities that are available at attractive prices, capable of enhanced performance through application of the Company's management expertise and that are in the Company's target markets. The Company follows a strategy of acquiring (directly or through co-investments) institutional quality apartment communities, which typically have high-quality construction, amenities, location and market position, and are therefore attractive investments for institutional investors, such as insurance companies, endowments, foundations and pension funds. The following table summarizes the Company's acquisition activities for the period from the date of the Initial Offering through December 31, 1999: AMLI ACQUISITION ACTIVITIES No. of No. of Total Communities Apartment Acquisition Year Acquired (1) Homes Costs (2) - ---- ------------ ---------- ------------ 1994 . . . . . . . . . . . 8 2,184 $ 99,428,000 1995 . . . . . . . . . . . 3 794 51,763,000 1996 . . . . . . . . . . . 2 1,080 82,152,000 1997 . . . . . . . . . . . 10 3,230 222,050,000 1998 (3) . . . . . . . . . 5 1,362 93,860,000 1999 (4) . . . . . . . . . 4 1,426 99,860,000 --- ------ ------------ Total. . . . . . . . . 32 10,076 $649,113,000 === ====== ============ - -------------------- (1) Of these acquisitions, sixteen Communities were acquired by the Company directly and sixteen through co-investment joint ventures. The Company's ownership interest in these co-investment joint ventures ranges from 10% to 45%. (2) The Company's share of the total acquisition costs was $301 million. (3) Includes AMLI on Timberglen, a 260-unit property contributed by the Company to a 40% owned partnership in December 1998. (4) Includes AMLI on Spring Mill, a 400-unit property, in which AMLI has a general partnership interest. INSTITUTIONAL CO-INVESTMENTS AMLI differentiates itself from other multifamily REITs through its co-investment activities and its established relationships with a number of institutional partners. By co-investing, AMLI is able to (i) diversify access to equity capital; (ii) "leverage" its invested capital to promote the AMLI brand identity and increase market share; (iii) obtain the participation of sophisticated partners in its real estate decisions; and (iv) increase FFO on reduced capital exposure. In addition to the incremental fee income, AMLI receives its pro rata share of the real estate income generated by the on-going operation of each community owned through a co-investment joint venture. All of the co-investment Communities are managed by the Company and operated under the AMLI [registered trademark] brand name. While each co-investment is structured individually, in a typical venture the Company (i) acts as the general partner or managing member of the venture; (ii) handles the administration of the venture; (iii) manages the day-to-day operations of the community held by the venture; (iv) oversees construction and development in the case of a venture with a property under development; and (v) recommends the sale or refinancing of the property. All of AMLI's equity investments are made on a pari passu basis with its co-investment partners and any disputes over major decisions would generally be resolved through the exercise of a buy-sell provision. As of December 31, 1999, the Company had established co-investment relationships with thirteen investors. Since the Initial Offering, the Company has entered into 36 co- investment ventures for the acquisition or development of multifamily apartment communities. The table below summarizes the co-investment activities of the Company since the Initial Offering: AMLI CO-INVESTMENT ACTIVITIES No. of No. of Total No. of Apartment No. of Apartment No. of Communities Homes Communities Homes Apartment Year Acquired Acquired Developed(1) Developed(2) Homes - ---- ----------- --------- ------------ ------------ --------- 1994 . . . . 3 1,026(3) 1 502 1,528 1995 . . . . 3 794 1 446 1,240 1996 . . . . 2 1,080 3 878 1,958 1997 . . . . 3 1,506 1 800 2,306 1998 . . . . 1 260 8 2,576 2,836 1999 . . . . 4 1,426 6 2,178 3,604 -- ----- -- ----- ------ Total. . . 16 6,092 20 7,380 13,472 == ===== == ===== ====== - -------------------- (1) Represents the number of Communities for which development was commenced during the applicable year. Excludes an additional phase to an existing community on which development was started in 1998. (2) Represents the number of apartment homes planned for the Community for which development was commenced in the applicable year. Includes 108 apartment homes in an additional phase to an existing community on which development was started in 1998. (3) Includes a 588-unit Community that was sold in December 1999. The table below sets forth the total expected capital outlays for all 36 of these development and acquisition ventures, the Company's expected share of such capital requirements and the one-time and recurring annual fee income that the Company and the Service Companies have received from these 36 joint venture relationships through December 31, 1999: CO-INVESTMENT ACTIVITIES SINCE THE INITIAL OFFERING (in thousands)
1994 1995 1996 1997 1998 1999 Total -------- -------- -------- -------- -------- -------- -------- Total Expected Project Cost (1). . . . . . . . . . . $ 71,191 $ 79,682 $146,819 $154,252 $203,179 $270,227 $925,350 AMLI Expected Equity Investment. . . . . . . . . . 7,641 7,548 25,165 15,046 47,328 46,877 149,605 Transaction fees: (2) Acquisition fees . . . . . . 270 219 184 193 -- 149 1,015 Development fees . . . . . . -- 206 819 1,451 2,526 2,693 7,695 Construction fees. . . . . . 17 182 918 1,558 2,432 2,798 7,905 Disposition fees . . . . . . -- -- 66 -- -- 740 806 Debt placement fees. . . . . -- -- -- 88 81 95 264 -------- -------- -------- -------- -------- -------- -------- 287 607 1,987 3,290 5,039 6,475 17,685 -------- -------- -------- -------- -------- -------- -------- Recurring fees and other interests: (3) Asset management fees. . . . 167 541 868 1,026 1,209 1,392 5,203 Property management fees . . 120 408 954 1,694 2,454 3,438 9,068 Cash flow preferences. . . . -- -- -- 59 195 381 635 -------- -------- -------- -------- -------- -------- -------- 287 949 1,822 2,779 3,858 5,211 14,906 -------- -------- -------- -------- -------- -------- -------- Value Added: Promoted interest from cash flow. . . . . . . . . -- -- -- 26 33 60 119 Promoted interest from sale . . . . . . . . . . . -- -- -- -- -- 554 554 -------- -------- -------- -------- -------- -------- -------- -- -- -- 26 33 614 673 -------- -------- -------- -------- -------- -------- -------- Total . . . . . . . . . $ 574 1,556 3,809 6,095 8,930 12,300 33,264 ======== ======== ======== ======== ======== ======== ======== - -------------------- (1) Includes $383.8 million which has been or is expected to be debt financed. Total expected costs are included in the year in which a development project begins or an acquisition closes. (2) The transaction fees are shown net of intercompany eliminations to the extent of the Company's percentage interest in its co-investment joint ventures. The amounts shown represent the portion of the fees earned in the applicable year. The transaction fees for 1999 represent amounts earned by the Company for the year ended December 31, 1999. Subsequent to December 31, 1999, additional fees of approximately $5,557 are anticipated to be earned by the Company and the Service Companies in connection with the completion of twelve development communities under construction on behalf of existing co-investment joint ventures. (3) Recurring fees are shown before intercompany eliminations. The Company owns an average of 30% interest in the 35 co-investment partnerships at December 31, 1999. The amounts shown represent the portion of the fees earned in the applicable year. The recurring fees for 1999 represent amounts earned by the Company for the year ended December 31, 1999. Recurring fees will increase as additional co-investment Communities under development are completed.
The Company has received indications of interest and is pursuing other commitments for the acquisition or development of additional co-investment communities. In addition, the Company is continually working to expand the base of its institutional joint venture partners. HISTORY OF THE AMLI RESIDENTIAL PROPERTY BUSINESS The Company was formed in February 1994 to continue and expand the multifamily property business previously conducted by ARC. ARC was founded in 1980 by Gregory T. Mutz and John E. Allen, the Chairman and Vice- Chairman of the Company, respectively. Ronald L. Jensen, Chairman of UICI, served on ARC's Board of Directors from 1980 to 1982. From the date of its inception through the date of the Initial Offering, ARC focused on owning, managing, leasing, acquiring and developing upscale residential apartment communities in the Southwest, Southeast and Midwest areas of the United States. During the period from 1982 to 1989, ARC was actively engaged in both the development and acquisition of multifamily communities. From 1989 through the date of the Initial Offering, ARC exclusively pursued acquisition opportunities due to ARC's belief that this strategy provided a more favorable return relative to the risk taken than did the development of new properties during this period. From the date of the Initial Offering to the present, AMLI has pursued a strategy of selective acquisitions and developments in its target markets. Prior to 1994 all communities shown as wholly-owned were originally acquired as co-investments between ARC and the Original Investors in various Property Partnerships. The table below sets forth ARC's and the Company's history of acquiring and developing apartment communities:
STABILIZED COMMUNITIES AT DECEMBER 31, ------------------------------------------------------------------------------------ 1982- 1999 1998 1997 1996 1995 1994 1993 1992 1991 ------- ------ ------ ------ ------ ------ ------ ------ ------- WHOLLY-OWNED: Units at beginning of year . . . . . . . . 12,792 11,650 9,824 9,600 9,789 8,207 6,793 5,673 -- Units acquired . . . . . -- 1,102 1,724 -- -- 1,582 1,414 1,120 4,030 Units sold/contributed to co-investment. . . . (773) (472) (350) -- (421) -- -- -- -- Units developed (1). . . 496 512 452 224 232 -- -- -- 1,643 Total wholly owned units at end of year . . . . 12,515 12,792 11,650 9,824 9,600 9,789 8,207 6,793 5,673 CO-INVESTMENTS: Units at beginning of year. . . . . . . . 6,767 5,851 3,677 2,245 1,451 425 425 425 -- Units acquired/con- tributed to co-investment. . . . . 1,026 260 1,506 1,080 794 1,026 -- -- 150 Units sold . . . . . . . (713) -- -- (150) -- -- -- -- -- Units developed (1). . . 1,856 656 668 502 -- -- -- -- 275 Total co-investment units at end of year. . . . . . . . 8,936 6,767 5,851 3,677 2,245 1,451 425 425 425 Total stabilized units. . . . . 21,451 19,559 17,501 13,501 11,845 11,240 8,632 7,218 6,098 (1) Units included on this line when community reaches stabilization.
ITEM 2. COMMUNITIES STABILIZED COMMUNITIES The Communities include 55 stabilized multifamily apartment communities containing 21,451 apartment homes operated under the AMLI [registered trademark] brand name. "Stabilized" refers to a Community having achieved substantial (92-95%) occupancy at the conclusion of an initial lease-up period. Thirty-one of the stabilized Communities, containing an aggregate of 12,515 apartment homes, are directly owned by the Company (the "Wholly-Owned Communities") and twenty-four Communities, containing an aggregate of 8,936 apartment homes, are owned through co- investment joint ventures (the "Co-Investment Communities"). The stabilized Communities are located in the markets described in the table below: Wholly-Owned Co-Investment Total Communities Communities ------------- ------------ ------------ Location No. Units No. Units No. Units - -------- ---- ----- ---- ----- ---- ----- Dallas/Ft. Worth, Texas. . . . . . . . . 17 6,920 10 4,560 7 2,360 Atlanta, Georgia . . . . 15 6,318 8 3,628 7 2,690 Chicago, Illinois. . . . 6 2,384 1 196 5 2,188 Austin, Texas. . . . . . 5 1,865 4 1,289 1 576 Indianapolis, Indiana. . 3 1,536 3 1,536 -- -- Eastern Kansas . . . . . 6 1,674 5 1,306 1 368 Houston, Texas . . . . . 3 754 -- -- 3 754 --- ------ --- ------ --- ----- Total. . . . . . . . 55 21,451 31 12,515 24 8,936 === ====== === ====== === ===== As of December 31, 1999, the average age of the stabilized Communities was approximately 7.5 years, the average occupancy rate of the stabilized Communities was 92.6%, and the average monthly rental rate per apartment home was $788. DEVELOPMENT COMMUNITIES The development communities, including communities in lease-up, consist of fourteen multifamily apartment communities or new phases of existing communities which upon completion will contain 4,298 apartment homes. The development communities are under development in the markets described in the table below: Company Co-Investment Development Development Total Communities Communities ------------- ------------ ------------- Location No. Units No. Units No. Units - -------- ---- ----- ---- ----- ----- ----- Atlanta, Georgia . . . . 3 916 -- -- 3 916 Dallas/Ft. Worth, Texas . . . . . . . . . 1 200 1 200 -- -- Chicago, Illinois. . . . 2 864 -- -- 2 864 Austin, Texas. . . . . . 1 430 -- -- 1 430 Indianapolis, Indiana. . 3 892 -- -- 3 892 Kansas City. . . . . . . 4 996 -- -- 4 996 ---- ----- ---- ---- ---- ----- Total. . . . . . . . 14 4,298 1 200 13 4,098 ==== ===== ==== ==== ==== ===== The Wholly-Owned Communities and the Co-Investment Communities are primarily oriented to residents demanding high levels of services and contain numerous tenant amenities, such as fitness centers, swimming pools, tennis courts, basketball and volleyball courts, miles of jogging trails and nature walks. Most of the apartment units have a patio, porch or sunroom, and many offer one or more additional features such as vaulted ceilings, microwave ovens, Palladian windows, fireplaces and washers and dryers or washer/dryer connections. The Wholly-Owned Communities and Co- Investment Communities that were developed by AMLI have won numerous awards for design, landscaping and architecture. The table below summarizes certain information related to the Wholly- Owned Communities and the Co-Investment Communities.
1999 1999 AVERAGE WEIGHTED AVERAGE COLLECTED AVERAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL WHOLLY-OWNED COMMUNITIES LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY - ------------------------ -------- --------- -------- ------------- -------- ---------- DALLAS/FT. WORTH, TX AMLI: at AutumnChase Carrollton 1987/96/99 690 867 $ 739 92% at Bent Tree Dallas 1996 300 943 831 94% at Bishop's Gate West Plano 1997 266 1,098 1,015 93% at Chase Oaks Plano 1986 250 775 686 94% at Gleneagles Dallas 1987/97 590 882 714 94% on the Green Ft. Worth 1990/93 424 846 694 94% at Nantucket Dallas 1986 312 712 571 96% of North Dallas Dallas 1985/86 (1) 1,032 879 679 91% on Rosemeade Dallas 1987 236 870 685 94% at Valley Ranch Irving 1985 (1) 460 848 717 95% ------ ------ ------ ----- 4,560 871 721 93% ------ ------ ------ ----- AUSTIN, TX AMLI: at the Arboretum Austin 1983 231 771 713 95% in Great Hills Austin 1985 344 750 716 95% at Lantana Ridge Austin 1997 354 881 839 94% at Martha's Vineyard Austin 1986 360 723 637 95% ------ ------ ------ ----- 1,289 782 727 94% ------ ------ ------- ----- ATLANTA, GA AMLI: at Clairmont Atlanta 1988 288 796 798 96% at Killian Creek (1) Snellville 1999 256 1,027 731 98% at Park Creek Gainesville 1998 200 976 747 91% at Peachtree City Fayette County 1998 312 980 904 95% at Sope Creek Marietta 1982/83/95 695 910 708 94% at Spring Creek Dunwoody 1985/86/ 87/89 (1) 1,180 916 754 92% at Vinings Atlanta 1985 360 1,040 813 94% at West Paces Atlanta 1992 337 1,050 917 94% ------ ------ ------ ----- 3,628 947 781 94% ------ ------ ------ ----- 1999 1999 WEIGHTED AVERAGE AVERAGE AVERAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL WHOLLY-OWNED COMMUNITIES LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY - ------------------------ -------- --------- -------- ------------- -------- ---------- KANSAS CITY AMLI: at Alvamar Lawrence 1989 152 828 682 94% at Centennial Park Overland Park 1997 170 1,205 969 90% at Lexington Farms Overland Park 1998 404 972 798 90% at Regents Center Overland Park 1991/95/97 424 940 749 95% at Town Center Overland Park 1997 156 1,134 958 91% ------ ------ ------ ----- 1,306 995 810 92% ------ ------ ------ ----- INDIANAPOLIS, IN AMLI: at Conner Farms Indianapolis 1993 300 1,091 815 94% at Riverbend Indianapolis 1983/85 (1) 996 824 603 86% at Eagle Creek Indianapolis 1998 240 973 757 92% ------ ------ ------ ----- 1,536 899 668 88% ------ ------ ------ ----- CHICAGO, IL AMLI: at Poplar Creek Schaumburg 1985 196 906 980 95% ------ ------ ------ ----- TOTAL WHOLLY-OWNED COMMUNITIES AT DECEMBER 31, 1999 12,515 901 $ 746 92.8% ====== ====== ====== ===== (1) These Communities are currently under renovation.
1999 1999 WEIGHTED COMPANY'S AVERAGE AVERAGE AVERAGE CO-INVESTMENT PERCENTAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL COMMUNITIES OWNERSHIP LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY - ---------------- ---------- -------- --------- -------- ------------- -------- ---------- ATLANTA, GA AMLI: at Barrett Lakes 35% Cobb County 1997 446 1,037 $ 863 94% at Pleasant Hill 40% Gwinnett County 1996 502 1,000 803 94% at River Park 40% Norcross 1997 222 1,021 898 95% at Towne Creek 1% Gainesville 1989 150 811 634 92% at Willeo Creek 30% Rosewell 1989 242 1,229 847 94% at Northwinds (1) 35% Alpharetta 1999 800 1,023 880 92% at Windward Park 45% Alpharetta 1999 328 1,082 910 93% ------ ------ ---- ----- 2,690 1,035 851 93% ------ ------ ---- ----- CHICAGO, IL AMLI: at Chevy Chase 33% Buffalo Grove 1988 592 812 1,017 96% at Danada Farms 10% Wheaton 1989/91 600 869 955 95% at Fox Valley 25% Aurora 1998 272 990 978 90% at Willowbrook 40% Willowbrook 1987 488 857 984 94% at Windbrooke 15% Buffalo Grove 1987 236 903 1,021 98% ------ ------ ---- ----- 2,188 870 988 95% ------ ------ ---- ----- KANSAS CITY AMLI: at Regents Crest 25% Overland Park 1997 368 942 766 94% ------ ------ ---- ----- AUSTIN, TX AMLI: at Wells Branch (1) 25% Austin 1999 576 963 809 94% ------ ------ ---- ----- 1999 1999 WEIGHTED COMPANY'S AVERAGE AVERAGE AVERAGE CO-INVESTMENT PERCENTAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL COMMUNITIES OWNERSHIP LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY - ---------------- ---------- -------- --------- -------- ------------- -------- ---------- DALLAS, TX AMLI: at Deerfield (1) 25% Plano 1999 240 996 836 90% at Fossil Creek 25% Ft. Worth 1998 384 1,001 813 94% at Oak Bend 40% Lewisville 1997 426 898 772 94% on the Parkway 25% Dallas 1999 240 940 873 93% at Prestonwood Hills 45% Dallas 1997 272 903 824 93% at Timberglen 40% Dallas 1985 260 774 622 94% at Verandah 35% Arlington 1986/91 538 733 670 95% ------ ------ ---- ----- 2,360 878 762 94% ------ ------ ---- ----- HOUSTON, TX AMLI: at Champions Centre 15% Houston 1994 192 857 747 92% at Champions Park 15% Houston 1991 246 902 732 92% at Greenwood Forest 15% Houston 1995 316 984 775 93% ------ ------ ---- ----- 754 925 754 92% ------ ------ ---- ----- TOTAL CO-INVESTMENT COMMUNITIES AT DECEMBER 31, 1999 8,936 935 $847 93.6% ====== ====== ==== ===== TOTAL 21,451 915 $788 93.2% ====== ====== ==== ===== (1) Fourth quarter average occupancy; in lease-up prior to the fourth quarter.
OCCUPANCY The following is a listing of approximate physical occupancy levels by quarter for the Company's Wholly-Owned Communities and Co-Investment Communities:
1999 1998 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. . . . . . . 690 92% 91% 91% 91% 92% 93% 90% 97% at Bent Tree. . . . . . . . 300 92% 92% 93% 93% 97% 91% 93% 93% at Bishop's Gate. . . . . . 266 93% 96% 93% 94% 91% 92% 97% 100% at Chase Oaks . . . . . . . 250 97% 93% 92% 92% 92% 93% 93% 98% at Gleneagles . . . . . . . 590 94% 95% 95% 94% 92% 93% 98% 97% on the Green. . . . . . . . 424 94% 95% 94% 93% 88% 93% 92% 96% at Nantucket. . . . . . . . 312 97% 95% 95% 94% 91% 93% 97% 98% of North Dallas . . . . . . 1,032 90% 91% 90% 92% 91% 93% 93% 96% on Rosemeade. . . . . . . . 236 95% 97% 95% 95% 94% 94% 95% 96% at Valley Ranch . . . . . . 460 95% 96% 96% 91% 90% 92% 97% 98% ------ ----- ----- ----- ----- ----- ----- ----- ----- 4,560 93% 93% 93% 93% 92% 93% 94% 97% ------ ----- ----- ----- ----- ----- ----- ----- ----- AUSTIN, TEXAS AMLI: at the Arboretum. . . . . . 231 96% 91% 96% 97% 94% 97% 96% 97% in Great Hills. . . . . . . 344 97% 94% 97% 93% 89% 99% 97% 98% at Lantana Ridge. . . . . . 354 94% 97% 92% 92% 90% 92% 92% 94% at Martha's Vineyard. . . . 360 96% 96% 98% 96% 93% 96% 97% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1,289 96% 95% 96% 94% 91% 95% 96% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- ATLANTA, GEORGIA AMLI: at Clairmont . . . . . . . . 288 96% 96% 95% 94% 96% 95% 96% 96% lease lease lease at Killian Creek . . . . . . 256 98% 96% up up up N/A N/A N/A lease lease at Park Creek. . . . . . . . 200 88% 90% 95% 88% 97% up up N/A at Peachtree City. . . . . . 312 94% 93% 97% 94% 90% 96% 99% N/A at Sope Creek. . . . . . . . 695 96% 95% 92% 93% 94% 97% 95% 94% at Spring Creek. . . . . . . 1,180 92% 93% 91% 91% 92% 94% 93% 94% at Vinings . . . . . . . . . 360 94% 92% 96% 96% 92% 94% 96% 95% at West Paces. . . . . . . . 337 91% 94% 95% 94% 95% 97% 99% 98% ------ ----- ----- ----- ----- ----- ----- ----- ----- 3,628 94% 94% 93% 93% 93% 95% 95% 95% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1999 1998 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 - ------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------ KANSAS CITY AMLI: at Alvamar. . . . . . . . . 152 86% 99% 95% 93% 90% 94% 94% 95% at Centennial Park. . . . . 170 85% 92% 94% 89% 89% N/A N/A N/A at Crown Colony . . . . . . N/A N/A 87% 92% 91% 88% 91% 89% 96% at Lexington Farms. . . . . 404 84% 89% 94% 91% 85% N/A N/A N/A at Regents Center . . . . . 424 89% 94% 97% 97% 95% 93% 95% 90% at Sherwood . . . . . . . . N/A N/A 93% 92% 91% 93% 89% 93% 92% at Town Center. . . . . . . 156 83% 88% 92% 96% 91% 96% 94% 93% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1,306 86% 92% 94% 93% 90% 92% 93% 93% ------ ----- ----- ----- ----- ----- ----- ----- ----- INDIANAPOLIS, INDIANA AMLI: at Conner Farms . . . . . . 300 95% 94% 95% 96% 89% 93% 86% 90% at Eagle Creek. . . . . . . 240 91% 91% 91% 94% 87% N/A N/A N/A at Riverbend. . . . . . . . 996 77% 79% 91% 87% 88% 92% 93% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1,536 83% 84% 92% 90% 88% 92% 92% 95% ------ ----- ----- ----- ----- ----- ----- ----- ----- CHICAGO, ILLINOIS AMLI: at Park Sheridan. . . . . . N/A N/A 96% 96% 93% 93% 98% 97% 100% at Poplar Creek . . . . . . 196 92% 93% 96% 90% 93% 94% 95% 98% ------ ----- ----- ----- ----- ----- ----- ----- ----- 196 92% 94% 96% 92% 93% 96% 96% 99% ------ ----- ----- ----- ----- ----- ----- ----- ----- 12,515 91.5% 92.2% 93.3% 92.4% 91.4% 93.6% 94.2% 95.1% ====== ===== ===== ===== ===== ===== ===== ===== ===== CO-INVESTMENT COMMUNITIES: - -------------------------- ATLANTA, GA AMLI: at Barrett Lakes. . . . . . 35% 446 95% 95% 94% 94% 88% 93% 93% 96% lease lease lease lease lease lease lease at Northwinds . . . . . . . 35% 800 93% up up up up up up up at Pleasant Hill. . . . . . 40% 502 98% 95% 93% 90% 91% 94% 95% 93% at River Park . . . . . . . 40% 222 96% 95% 95% 93% 91% 96% 95% 98% at Towne Creek. . . . . . . 1% 150 95% 96% 96% 86% 83% 89% 92% 95% at Willeo Creek . . . . . . 30% 242 93% 96% 99% 91% 86% 96% 94% 98% at Windward Park. . . . . . 45% 328 95% 95% N/A N/A N/A N/A N/A N/A ------ ----- ----- ----- ----- ----- ----- ----- ----- 2,690 95% 95% 95% 91% 89% 94% 94% 96% ------ ----- ----- ----- ----- ----- ----- ----- ----- 1999 1998 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 92% 96% 97% 96% 95% 97% 98% 97% at Danada Farms . . . . . . 10% 600 96% 93% 94% 96% 94% 94% 96% 98% lease at Fox Valley . . . . . . . 25% 272 91% 88% 92% 94% 86% 89% 87% up at Prairie Court. . . . . . N/A N/A N/A N/A 97% 95% 94% 96% 93% 96% at Willowbrook. . . . . . . 40% 488 90% 91% 96% 95% 96% 95% 98% 98% at Windbrooke . . . . . . . 15% 236 99% 98% 97% 99% 98% 99% 95% 100% ------- ----- ----- ----- ----- ----- ----- ----- ----- 2,188 93% 93% 96% 96% 94% 95% 95% 98% ------- ----- ----- ----- ----- ----- ----- ----- ----- KANSAS CITY AMLI: at Regents Crest. . . . . . 25% 368 87% 92% 93% 93% 96% 96% 94% 92% ------- ----- ----- ----- ----- ----- ----- ----- ----- DALLAS, TX AMLI: lease lease lease at Deerfield. . . . . . . . 25% 240 98% up up up N/A N/A N/A N/A lease lease lease at Fossil Creek . . . . . . 25% 384 95% 95% 96% 91% 90% up up up at Oak Bend . . . . . . . . 40% 426 93% N/A N/A N/A N/A N/A N/A N/A lease lease lease lease on the Parkway. . . . . . . 25% 240 93% 89% 92% 95% up up up up at Prestonwood Hills. . . . 45% 272 92% 93% N/A N/A N/A N/A N/A N/A on Timberglen . . . . . . . 40% 260 94% 97% 95% 92% 92% N/A N/A N/A at Verandah . . . . . . . . 35% 538 97% 95% 93% 95% 94% 93% 96% 97% ------- ----- ----- ----- ----- ----- ----- ----- ----- 2,360 95% 94% 94% 94% 92% 93% 96% 97% ------- ----- ----- ----- ----- ----- ----- ----- ----- AUSTIN, TX AMLI: at Park Place . . . . . . . N/A N/A N/A 95% 96% 96% 92% 95% 95% 95% lease at Wells Branch . . . . . . 25% 576 92% 93% 89% up N/A N/A N/A N/A ------- ----- ----- ----- ----- ----- ----- ----- ----- 576 92% 94% 92% 96% 92% 95% 95% 95% ------- ----- ----- ----- ----- ----- ----- ----- ----- 1999 1998 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 - ------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------ HOUSTON, TX AMLI: at Champions Centre . . . . 15% 192 93% 93% 92% 92% 93% 95% 97% 98% at Champions Park . . . . . 15% 246 94% 91% 95% 85% 91% 98% 95% 95% at Greenwood Forest . . . . 15% 316 95% 92% 96% 93% 92% 98% 96% 97% ------- ----- ----- ----- ----- ----- ----- ----- ----- 754 94% 92% 94% 90% 92% 97% 96% 97% ------- ----- ----- ----- ----- ----- ----- ----- ----- Total Co-Investment Communities. . . . . . . . . 8,936 93.8% 93.8% 94.4% 93.6% 92.1% 94.8% 94.8% 96.4% ------- ----- ----- ----- ----- ----- ----- ----- ----- TOTAL. . . . . . . . . . . . . 21,451 92.4% 92.8% 93.7% 92.8% 91.6% 94.1% 94.4% 95.9% ======= ===== ===== ===== ===== ===== ===== ===== =====
ITEM 3. LEGAL PROCEEDINGS None of the Company, the Operating Partnership, the Service Companies or the co-investment partnerships is presently subject to any material litigation nor, to the Company's knowledge, has any material litigation been threatened. The Company is party to routine litigation and administrative proceedings arising in the ordinary course of business, most of which are expected to be covered by liability insurance and none of which individually or in the aggregate are expected to have a material effect on the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote of the Company's shareholders during the fourth quarter of the year ended December 31, 1999. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS The Company's common shares began trading on the NYSE on February 9, 1994, under the symbol "AML." The following table sets forth the quarterly high and low sales prices per share as reported on the New York Stock Exchange Composite Tape by CompuServe and the dividends paid by the Company with respect to the periods noted.
1999 1998 ----------------------------- ----------------------------- DIVIDENDS DIVIDENDS PER SHARE PER SHARE HIGH LOW (1) HIGH LOW (1) ------ ----- --------- ------ ----- --------- First Quarter . . . . . . . . . . . . $22.69 $19.06 $0.45 $24.38 $22.00 $0.44 Second Quarter . . . . . . . . . . . . 22.88 20.06 0.45 23.94 19.31 0.44 Third Quarter. . . . . . . . . . . . . 22.00 20.75 0.46 23.13 19.56 0.44 Fourth Quarter . . . . . . . . . . . . 21.88 19.44 0.46 23.25 18.44 0.45 (1) The Company paid dividends with respect to these quarters in the quarter immediately following the quarter for which they are paid.
Dividends are declared and paid in the second month following the end of the calendar quarter in which the related cash flow from operations is generated. On February 29, 2000, the last reported sale price of the common shares on the NYSE was $20.4375 per share. On the same date, the Company had 17,032,346 common shares outstanding held by 350 shareholders of record. The Company's current dividend payment level equals an annual rate of $1.84 per common share. The Company anticipates that it will continue to make regular quarterly dividend payments. In 1999, the Company distributed approximately 90% of its taxable income and will designate a portion of its dividends being paid during 2000 as a throw back dividend to 1999. Accordingly, no provision has been made for Federal income taxes for the Company. Dividends paid in 1999 were fully taxable (54% as capital gain and 46% as ordinary income). The Company estimates that dividends to be paid in 2000 will also be fully taxable. Future distributions by the Company will be at the discretion of the Board of Trustees and will depend on the actual cash available for distribution and funds from operations of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code and such other factors as the Board of Trustees deems relevant. The annual dividend payments for calendar year 1999 (including the capital gain dividend) and the throw back dividend from calendar year 2000 necessary for the company to maintain its status as a REIT are approximately $2.07 per share. ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth selected financial data relating to the historical financial condition and results of operations of the Company. Such selected financial data is qualified in its entirety by, and should be read in conjunction with, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and notes thereto included in this report. HISTORICAL (in thousands, except per share data) ----------------------------------------------------------------------- 1999 1998 1997 1996 1995 ----------- ----------- ---------- ----------- ----------- OPERATING DATA: Revenues . . . . . . . . . . $129,108 117,353 90,073 78,271 73,877 Income before minority interest and extra- ordinary item. . . . . . . 61,071 34,697 28,926 19,949 17,006 Net income . . . . . . . . . 51,738 29,700 24,352 15,250 13,719 Net income per common share - basic. . . . . . . 2.63 1.49 1.43 1.11 1.18 Net income per common share - diluted. . . . . . 2.46 1.49 1.43 1.11 1.18 BALANCE SHEET DATA: Residential real estate, before accumulated depreciation. . . . . . . . 729,325 739,764 653,947 495,519 442,865 Total assets . . . . . . . . 804,618 785,592 679,978 504,357 433,227 Total debt . . . . . . . . . 369,541 367,370 333,250 202,013 215,255 Minority interest. . . . . . 57,813 54,574 51,463 44,871 39,077 Shareholders' equity . . . . 357,041 342,854 270,439 242,022 166,163 OTHER DATA: Funds from operations (A). . . . . . . . . . . . 63,579 53,232 42,172 32,593 26,724 Cash dividends paid per common share . . . . . . . 1.81 1.76 1.73 1.72 1.71 Net cash flow from operating activities . . . 54,905 47,175 39,129 31,934 28,334 Net cash flow for investing activities . . . (14,416) (121,935) (170,900) (66,864) (2,551) Net cash flow from (for) financing activities . . . (42,717) 73,630 127,156 42,942 (26,964) (A) The Company believes that funds from operations ("FFO") is useful as a measure of the performance of an equity REIT. FFO is defined as net income (computed in accordance with generally accepted accounting principles ("GAAP")), excluding extraordinary gains (losses) from debt restructurings and gains (losses) from sales of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures, and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. FFO does not represent cash flows from operations, as defined by GAAP; is not indicative that cash flows are adequate to fund all cash needs; and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or the Company's cash flows or liquidity as defined by GAAP. In accordance with additional guidance issued by NAREIT in October 1999, the Company's FFO for 1996 and 1995 were restated to include items of FFO previously excluded.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except share data and rental rates per unit) The following discussion is based primarily on the consolidated financial statements of AMLI Residential Properties Trust (the "Company") as of December 31, 1999 and 1998 and for the years ended December 31, 1999, 1998 and 1997. This information should be read in conjunction with the accompanying consolidated financial statements and notes thereto. The Company commenced operations upon completion of its Initial Public Offering in February 1994. On January 30, 1996, the Company issued 1,200,000 Series A convertible preferred shares for $20 per share, or $24,000, directly to four institutional investors and Amli Realty Co. ("ARC") in a registered offering. Through December 31, 1999, 350,000 Series A convertible preferred shares have been converted into common shares. In November 1996, the Company completed a public offering of 2,976,900 common shares. In July 1997, the Company closed on the public offering of 1,694,700 common shares. In February 1998, the Company placed 3,125,000 Series B convertible preferred shares for $24 per share. 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 December 31, 1999, the Company owned an 85% general partnership interest in AMLI Residential Properties, L.P. (the "Operating Partnership"), which holds the 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 December 31, 1999, the Company owned 20,971,138 OP Units and the limited partners owned 3,567,516 OP Units. At December 31, 1999, the Company owned, or owned interests in, 21,451 apartment homes and an additional 4,298 apartment homes under development or in lease-up. RESULTS OF OPERATIONS During the period from January 1, 1998 through December 31, 1999, growth from property revenues and property operating expenses resulted from increases at communities owned as of January 1, 1998, from communities acquired and from the communities constructed since January 1, 1998, net of sales. Since January 1, 1998, the Company has acquired a total of 1,102 units at four stabilized communities (AMLI at Clairmont, AMLI at Centennial Park, AMLI at Lexington Farms and AMLI at Eagle Creek) and developed and begun rental operations on 456 apartment homes at two new communities (AMLI at Park Creek and AMLI at Killian Creek). During the same period, the Company has sold a total of 985 units at four communities (AMLI at Reflections, AMLI at Park Sheridan, AMLI at Crown Colony and AMLI at Sherwood). Property operations for wholly-owned communities for the twelve months ended December 31, 1999 and 1998 are summarized as follows: Increase 1999 1998 (Decrease) -------- -------- ---------- Total Property Revenues - ----------------------- Same Communities . . . . . . . . . . $ 89,697 87,904 1,793 New Communities. . . . . . . . . . . 7,393 4,951 2,442 Development and/or Lease-up Communities . . . . . . . . . . . . 1,705 340 1,365 Acquisition Communities. . . . . . . 10,540 3,815 6,725 Communities Contributed to Ventures/Sold. . . . . . . . . . 5,619 10,819 (5,200) -------- -------- -------- Total. . . . . . . . . . . . . . $114,954 107,829 7,125 ======== ======== ======== Increase 1999 1998 (Decrease) -------- -------- ---------- Total Property Operating Expenses - --------------------------------- Same Communities . . . . . . . . . . $ 35,327 35,062 265 New Communities. . . . . . . . . . . 2,217 1,662 555 Development and/or Lease-up Communities . . . . . . . . . . . . 809 244 565 Acquisition Communities. . . . . . . 3,676 1,291 2,385 Communities Contributed to Ventures/Sold. . . . . . . . . . 2,318 5,334 (3,016) -------- -------- -------- Total. . . . . . . . . . . . . . $ 44,347 43,593 754 ======== ======== ======== Total Property Net Operating Income - ----------------------------------- Same Communities . . . . . . . . . . $ 54,370 52,842 1,528 New Communities. . . . . . . . . . . 5,176 3,289 1,887 Development and/or Lease-up Communities . . . . . . . . . . . . 896 96 800 Acquisition Communities. . . . . . . 6,864 2,524 4,340 Communities Contributed to Ventures/Sold. . . . . . . . . . 3,301 5,485 (2,184) -------- -------- -------- Total. . . . . . . . . . . . . . $ 70,607 64,236 6,371 ======== ======== ======== The term "New Communities" refers to completed properties owned since the beginning of the earliest period for which comparative financial information is presented. Property Net Operating Income is computed before interest, taxes, depreciation and amortization. This performance measure is not intended as a replacement for net income determined in accordance with generally accepted accounting principles ("GAAP"). In December 1998, the Company contributed AMLI on Timberglen, a 260- unit property, to a 40% owned partnership. In August 1999, the Company invested in two 45% owned co-investment partnerships which acquired two stabilized communities: AMLI at Prestonwood Hills, a 272-unit community, and AMLI at Windward Park, a 328-unit community. In October 1999, the Company invested in another 40% owned co-investment partnership which acquired one stabilized community, AMLI at Oak Bend, a 426-unit community. In addition, the Company, through joint ventures with institutional investors, completed the development or has under development and begun rental operations of nine new communities and one additional phase to an existing stabilized community, that contain a total of 2,976 apartment homes (AMLI at Wells Branch, AMLI at Oakhurst North, AMLI on the Parkway, AMLI at Deerfield, AMLI at St. Charles, AMLI at Lake Clearwater, AMLI at Castle Creek, AMLI at Regents Crest II, AMLI Creekside and AMLI at Wynnewood Farms). Property operations for co-investment communities for the twelve months ended December 31, 1999 and 1998 are summarized as follows: Increase 1999 1998 (Decrease) -------- -------- ---------- Total Co-investment Property Revenues - ------------------------------------- Same Communities . . . . . . . . . . $ 53,170 51,159 2,011 New Communities. . . . . . . . . . . 6,919 5,362 1,557 Development and/or Lease-up Communities . . . . . . . . . . . . 19,409 5,472 13,937 Acquisition Communities. . . . . . . 5,335 -- 5,335 Communities Contributed to Ventures/Sold. . . . . . . . . . 7,250 6,018 1,232 -------- -------- -------- Total. . . . . . . . . . . . . . $ 92,083 68,011 24,072 ======== ======== ======== Increase 1999 1998 (Decrease) -------- -------- ---------- Company's share of co-invest- ment total revenues . . . . . . . . $ 24,910 17,987 6,923 ======== ======== ======== Total Co-investment Property Operating Expenses - --------------------------- Same Communities . . . . . . . . . . $ 19,269 19,442 (173) New Communities. . . . . . . . . . . 2,581 2,700 (119) Development and/or Lease-up Communities . . . . . . . . . . . . 8,349 2,352 5,997 Acquisition Communities. . . . . . . 2,187 -- 2,187 Communities Contributed to Ventures/Sold. . . . . . . . . . 3,358 2,834 524 -------- -------- -------- Total. . . . . . . . . . . . . . $ 35,744 27,328 8,416 ======== ======== ======== Company's share of co-invest- ment total expenses . . . . . . . . $ 9,375 7,068 2,307 ======== ======== ======== Total Co-investment Property Net Operating Income - ---------------------------- Same Communities . . . . . . . . . . $ 33,901 31,717 2,184 New Communities. . . . . . . . . . . 4,338 2,662 1,676 Development and/or Lease-up Communities . . . . . . . . . . . . 11,060 3,120 7,940 Acquisition Communities. . . . . . . 3,148 -- 3,148 Communities Contributed to Ventures/Sold. . . . . . . . . . 3,892 3,184 708 -------- -------- -------- Total. . . . . . . . . . . . . . $ 56,339 40,683 15,656 ======== ======== ======== Company's share of co-invest- ment total net operating income and cash flow in excess of ownership interest . . . . . . . $ 15,976 11,147 4,829 ======== ======== ======== For the year ended December 31, 1999, net income attributable to common shares was $44,457 (including a $19,495 non-recurring gain on sales of three residential properties and a $1,663 share of gain on sale of a residential property owned by a co-investment partnership in which the Company owned a 25% interest), or $2.63 per share, on total revenues of $129,108. For the year ended December 31, 1998, net income attributable to common shares was $24,825 (including a $3,621 non-recurring gain on sale of a residential property), or $1.49 per share, on total revenues of $117,353. On a "same community" basis, weighted average occupancy of the wholly- owned apartment homes decreased slightly to 92.8% for the year ended December 31, 1999 from 93.7% in the prior year. Weighted average collected rental rates increased by 2.7% to $733 from $714 per unit per month for the years ended December 31, 1999 and 1998, respectively. Including co- investment communities, weighted average occupancy of the apartment homes decreased to 93.3% for the year ended December 31, 1999 from 94.0% in the prior year, and weighted average collected rental rates increased by 2.8% to $774 from $752 per unit per month for the years ended December 31, 1999 and 1998, respectively. COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO YEAR ENDED DECEMBER 31, 1998 Income before minority interest increased to $61,071 for the year ended December 31, 1999 from $34,697 for the year ended December 31, 1998. This increase was primarily attributable to a $19,495 gain on sale of three rental properties, a $1,663 share of gain on sale of rental property by a co-investment partnership, and an $11,755 increase in total revenues, reduced by a $755 increase in property operating expenses, a $1,938 increase in interest expense and a $231 increase in depreciation. Net income for the years ended December 31, 1999 and 1998 was $51,738 and $29,700, respectively. Total property revenues increased by $7,125, or 6.6%. This increase in property revenues was primarily from the 1,102 apartment homes acquired during 1998. In addition, leasing commenced on 456 apartment homes developed by the Company during the period from January 1, 1998 through December 31, 1999. Furthermore, moderate increases in rental rates were achieved while managing and maintaining just below 95% average occupancy at the stabilized communities. Other property revenues include increases in revenues from telephone and cable systems ($79) and other fees ($663) charged to residents. On a same community basis, total property revenues increased by $1,794, or 2.0%. Interest and share of income from Service Companies increased 10.9% to $3,062 from $2,760 as a result of increased interest income, increased construction fees earned from co-investment partnerships and a $171 gain on sale of land. Income from partnerships increased to $4,283 from $2,169, or 97.5%. This increase was a result of the acquisition of 1,286 apartment homes in 1998 and 1999 through five new co-investment partnerships. In addition, nine new co-investment partnerships have invested in nine development communities and a second phase to an existing stabilized community, which have a total of 2,976 apartment homes that began rental operations in 1998 and 1999, and of which 1,056 units were stabilized in 1999. Other income increased to $5,126 from $3,323, or 54.3%, as a result of development fees charged to newly formed co-investment partnerships that own properties under development, $554 share of net proceeds from the sale of a property in which the Company owned a 1% interest and $740 disposition fee for the sale of two co-investment properties. This increase in other income includes a $166 increase in development fees and a $163 increase in financing, acquisition and other fees. Other interest income increased by $411. This increase was from additional employee notes for purchase of the Company's shares, from increased short-term advances to co-investment partnerships, and gap loans to three co-investment partnerships that totaled $49,158 of which $30,204 was repaid in November and December 1999. Property operating expenses increased by $755, or 1.7%. This increase is principally due to the increase in the number of apartment homes through acquisition or development. On a same community basis, property operating expenses increased by $265, or 0.8%. The increase in operating expenses is largely due to a $727 increase in real estate taxes, an $854 increase in personnel costs and a $175 increase in landscaping. This increase was offset in part by a $629 reduction of utilities expense resulting from the implementation of billings to residents and the installation of water and energy conservation equipment. Interest expense, net of the amounts capitalized, increased to $22,201 from $20,263, or 9.6%, primarily due to increased indebtedness incurred in conjunction with developments and investments in joint ventures. General and administrative expenses increased to $4,042 for the year ended December 31, 1999 from $3,993, or 1.2%, for the year ended December 31, 1998. The increase is primarily attributable to increased compensation offset in part by a $64 reduction in dead deal costs and a $40 reduction in insurance expenses. COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997 Income before minority interest increased to $34,697 for the year ended December 31, 1998 from $28,926 for the year ended December 31, 1997. This increase was primarily attributable to a $27,280 increase in total revenues, reduced by an $8,650 increase in property operating expenses, an $8,268 increase in interest expense and a $4,743 increase in depreciation. Net income for the years ended December 31, 1998 and 1997 was $29,700 and $24,352, respectively. Total property revenues increased by $23,011, or 27.1%. This increase in property revenues was primarily from the 2,670 apartment homes acquired during 1997 and 1998. In addition, leasing commenced on 1,228 apartment homes developed by the Company during the period from January 1, 1997 through December 31, 1998. Furthermore, moderate increases in rental rates were achieved while managing and maintaining just below 95% average occupancy at the stabilized communities. Other property revenues include increases in revenues from garages and carports ($211), telephone and cable systems ($111) and other fees ($1,260) charged to residents. On a same community basis, total property revenues increased by $2,197, or 2.9%. Interest and share of income from Service Companies increased 139.8% to $2,760 from $1,151 as a result of increased construction fees earned from co-investment partnerships. Income from partnerships increased to $2,169 from $925, or 134.5%. This increase was a result of the acquisition of 1,766 apartment homes in 1997 and 1998 through four new co-investment partnerships. In addition, eight new co-investment partnerships have invested in eight development communities, which have a total of 3,404 apartment homes that began rental operations in 1997 and 1998, and of which 1,324 units were stabilized in 1998. Other income increased to $3,323 from $2,658, or 25%, as a result of fees charged to newly formed co-investment partnerships that own properties under development. This increase includes a $1,074 increase in development fees, reduced by a $200 decrease in financing, acquisition and other fees. Other interest income increased by $751. This increase was from additional employee notes for purchase of the Company's shares, from increased short-term advances to co-investment partnerships, and from a gap loan to one co-investment partnership that was repaid in December 1998. Property operating expenses increased by $8,650, or 24.8%. This increase is principally due to the increase in the number of apartment homes through acquisition or development. On a same community basis, property operating expenses increased by $1,143, or 3.7%. The increase in operating expenses is largely due to a $435 increase in real estate taxes, a $508 increase in personnel costs and a $307 increase in repairs and maintenance. This increase was offset in part by a $245 reduction of utilities expense resulting from the implementation of billings to residents and the installation of water and energy conservation equipment. Interest expense, net of the amounts capitalized, increased to $20,263 from $11,995, or 68.9%, primarily due to increased indebtedness incurred in conjunction with property acquisition, development and investments in joint ventures. General and administrative expenses increased to $3,993 for the year ended December 31, 1998 from $2,850, or 40.1%, for the year ended December 31, 1997. The increase is primarily attributable to increased compensation and compensation-related costs attributable to both additional employees, increased rates of compensation and $422 of dead deal costs. LIQUIDITY AND CAPITAL RESOURCES At December 31, 1999, the Company had $2,318 in cash and cash equivalents and $105,000 in availability under its $250,000 unsecured line of credit. Borrowings under the line of credit bear interest at a rate of LIBOR plus 1.05%. During 1999, twelve of the Company's wholly-owned stabilized communities are unencumbered. There are no fixed rate loans on wholly- owned communities with maturity dates prior to July 2003. Net cash flows provided by operating activities for the year ended December 31, 1999 increased to $54,305 from $47,175 for the year ended December 31, 1998. The increase is primarily due to an increase in property net operating income and an increase in other revenues. Cash flows used in investing activities for the year ended December 31, 1999 decreased to $14,416 from $121,935 for the year ended December 31, 1998. The decrease consisted primarily of fewer acquisitions, less development costs, increased proceeds from sale of residential properties, increased distributions from partnerships reduced by investments in partnerships and increased capital expenditures. Net cash flows used in financing activities for the year ended December 31, 1999 were $42,717. In 1999, cash flows include borrowings of $265,234, repayments of borrowings of $263,064, and distributions and dividends paid to shareholders of $37,906. In 1999, the Company and its affiliates commenced information technology initiatives including improving infrastructure, business processes, disaster recovery and software. In 1999, the Company and its affiliates incurred and expensed $285 in third-party consulting fees for these undertakings and anticipates future such expenditures in 2000 in excess of $1,000, of which an anticipated $600 will be charged to expense in 2000. These expenses are included in share of loss from Service Companies. The share prices of most REITs are generally depressed relative to share price levels of one or two years ago. Although the Company's share value held up better than many of its peers in 1998, it has declined in 1999. The Company does not anticipate raising any significant public equity capital in the near term and expects to fund its construction and development activities by raising additional equity from its co-investment partners and by selectively selling properties, in addition to operating cash flows in excess of dividends and additional borrowings on the Company's $250,000 unsecured line of credit. The Company's unsecured line of credit is expandible to $300,000. During 1999, the Company formed ten co-investment partnerships having capital requirements totalling $180,882, of which AMLI's co-investment partners will contribute a total of $144,233. At December 31, 1999, AMLI's co-investment partners have contributed $68,961, and the balance of $75,272 is anticipated to be contributed in 2000. In addition, during 1999, the Company sold five communities, including two in co-investment partnerships, for $89,000, which generated net proceeds to the Company of $48,860. Funds from operations ("FFO") is defined as net income (computed in accordance with GAAP), excluding extraordinary gains (losses) from debt restructurings and gains (losses) from sales of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. FFO does not represent cash flows from operations, as defined by GAAP; is not indicative that cash flows are adequate to fund all cash needs; and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or the Company's cash flows or liquidity as defined by GAAP. In accordance with additional guidance issued by NAREIT in October 1999, the Company's FFO for 1996 and 1995 were restated to include items previously excluded. FFO is widely accepted in measuring the performance of equity REITs. An understanding of the Company's FFO 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. FFO for the years ended December 31, 1999 and 1998 is summarized as follows: 1999 1998 ------- ------- Net income before minority interest and extraordinary item $61,071 34,697 Depreciation 18,194 17,963 Share of co-investment partnerships' depreciation 5,057 3,793 Share of Service Company's goodwill amortization 415 400 Gains on sales of residential properties (21,158) (3,621) ------- ------- FFO $63,579 53,232 ======= ======= Weighted average diluted shares and units 24,551 22,760 ======= ======= The Company expects to pay quarterly dividends from funds 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. FFO as shown above is net of startup losses at newly-constructed communities. At some communities, the initial lease-up was rapid enough that there were no startup losses. In the typical situation, startup losses will be recorded between the time the first apartment building is delivered from construction until occupancy levels are adequate to recover all costs and expenses (including interest but excluding depreciation). FFO, as shown above for 1999 and 1998, is shown net of startup losses of $682 and $1,387, respectively. The startup losses for 1999 are attributable to the initial lease-up of AMLI at Bent Tree II, AMLI at Killian Creek, AMLI at Oakhurst North, AMLI at Wells Branch, AMLI at Deerfield, AMLI at Lake Clearwater, AMLI at Castle Creek, AMLI Creekside, AMLI at Regents Crest II, AMLI at Wynnewood Farms and AMLI at St. Charles. The startup losses for 1998 are attributable to the initial lease-up of AMLI at AutumnChase III, AMLI at Killian Creek, AMLI at Park Creek, AMLI at Wells Branch, AMLI at Oakhurst North, AMLI on the Parkway, AMLI at Fox Valley, AMLI at Fossil Creek and AMLI at Northwinds. Additional amounts will be recorded in 2000 as initial lease-up is completed at these and other communities which will enter the lease-up period during 2000. 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 1999, the Company elected to distribute its entire 1999 net capital gain of $20,320. Further, in order to qualify as a REIT, the Company is required to distribute 95% of its REIT taxable income (excluding any net capital gain). The company's 1999 REIT taxable income (excluding net capital gain) was $23,274 which would require the Company to pay dividends of approximately $22,110 in addition to the capital gain dividend. For the year ended December 31, 1999, the Company paid dividends to its shareholders of $37,905 of which approximately 46% represents ordinary taxable income and 54% is capital gain. Pursuant to Section 858 of the Internal Revenue Code, the Company is designating an additional $5,689 of year 2000 dividends as throw back dividends for 1999 in order to meet the distribution requirements. The Company expects to meet certain long-term liquidity requirements such as scheduled debt maturities and 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 covers up to an aggregate of $200,000 of preferred shares, common shares and warrants to purchase, which the Company may issue from time to time. Through December 31, 1999, the Company has issued common and preferred shares that total approximately $128,467, leaving a balance of $71,533 that the Company may issue in the future. COMPANY INDEBTEDNESS The Company's debt as of December 31, 1999 includes $168,541 (45.6% of the total) which is secured by first mortgages on 12 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 7.6% $168,541 45.6% Tax-Exempt Tax-Exempt Rate + 1.23% 40,750 11.0% Bonds (1) Tax-Exempt Rate + 1.15% 9,500 2.6% Type of Weighted Average Outstanding Percent Indebtedness Interest Rate Balance of Total - ------------ ---------------- ----------- -------- Lines of Credit (2) LIBOR + 1.05% 145,000 39.2% Notes payable to Service Companies Various 5,750 1.6% -------- ------ Total $369,541 100.0% ======== ====== - -------------------- (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 (3.95% for AMLI at Spring Creek and AMLI at Poplar Creek at February 23, 2000). The AMLI at Spring Creek bonds mature on October 1, 2024 and the related credit enhancement expires on October 15, 2002. The AMLI at 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 2002. The interest rate on $75,000 has been fixed pursuant to interest rate swap contracts. DEVELOPMENT ACTIVITIES At December 31, 1999, the Company had made capital contributions totalling $110,884 to its existing co-investment partnerships and anticipates funding substantially all of its remaining commitment of $27,425 during 2000 to complete the 3,698 apartment homes being developed by co-investment partnerships. The Company expects to incur $3,749 in 2000 to complete the 200 apartment homes in the wholly-owned community under development. The Company owns land for the development of an additional 4,798 apartment homes in Ft. Worth, Austin and Houston, Texas; Indianapolis, Indiana; Atlanta, Georgia; and Kansas City, Kansas. The Company has earnest money deposits of $1,837 for nine land parcels anticipated to be acquired in 2000 for future development. 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 communities, 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 communities acquired competitive with comparable newly-constructed communities. In some cases, the Company will provide in its acquisition budget additional funds to upgrade or otherwise improve new acquisitions. During 1999 and 1998, a total of $6,335 and $6,378, respectively, was spent on building repairs and maintenance (including contract services) and $2,473 and $2,298, respectively, was spent on landscaping and grounds maintenance as follows: 1999 1998 ------ ------ BUILDING REPAIRS AND MAINTENANCE Painting (exterior and interior) $1,482 1,691 Carpet and vinyl 855 810 Carpentry 108 87 Heating and air-conditioning 182 183 Plumbing 338 250 Appliances 140 155 Electrical 161 185 Parking lots/resurfacing 218 138 Other repairs and maintenance 1,065 1,090 CONTRACT SERVICES Property monitoring services 417 496 Rubbish collection services 593 601 Cleaning services 441 395 Pest control services 189 192 Other services 146 105 ------ ----- $6,335 6,378 ====== ===== LANDSCAPING AND GROUNDS MAINTENANCE Lawn maintenance $2,278 2,116 Seasonal color 32 48 All other 163 134 ------ ----- $2,473 2,298 ====== ===== During 1999 and 1998, a total of $4,366 and $3,991, respectively, in expenditures was capitalized in accordance with the Company's policy, as follows: 1999 1998 ------ ------ Carpet replacements $1,838 1,902 Carports and entry gates 79 55 Energy saving lighting fixtures -- 145 Major appliances 447 267 Clubhouse, amenities and business centers 1,173 764 Roof replacements 239 311 HVAC and plumbing 239 228 Landscaping improvements 73 47 All other 278 272 ------ ----- $4,366 3,991 ====== ===== The Company's accounting treatment of various capital and maintenance costs is detailed in the following table. CAPITALIZE/ DEPRECIABLE EXPENDITURES EXPENSE LIFE IN YEARS ------------ ----------- ------------- Improvements, upgrades, additions (not replacements - includes additional garages, additional amenities, etc.) * capitalize 15 or 40 Costs budgeted as a part of an "Approved Acquisition Budget" (must be spent within one year of acquisition) * capitalize 5, 15 or 40 Replacement of carpet for entire unit capitalize 5 Replacement of major appliances (refrigerators, stoves, dishwashers, washers/dryers) capitalize 15 Replacement of kitchen cabinets capitalize 15 New landscaping construction or installation capitalize 15 Roof replacements capitalize 15 Exercise/amenity equipment capitalize 5 Maintenance equipment capitalize 5 New model or clubhouse furniture and fixtures capitalize 5 Roof repairs expense n/a Exterior painting expense n/a Parking lot repairs/resurfacing expense n/a Repairs to amenity areas, including swimming pools expense n/a Vinyl expense n/a All expenditures for acquiring or replacing ceiling fans, mini-blinds, air-conditioning compressors, garbage disposals, etc. expense n/a Landscaping replacements expense n/a Replacement signage expense n/a Repairs to or refinishing of kitchen cabinetry expense n/a Equipment repairs (all types) expense n/a All interior painting expense n/a In general, the Company expenses any disbursement totalling less than $2.5 * The current policy provides that most capitalizable additions will have a life of 15 years, except for the items of personal property which have estimated lives of 5 years. Included in an acquisition budget may be some costs which would otherwise be expensed, such as exterior painting; such items are being depreciated over 15 years. REHAB EXPENDITURES The average age of AMLI's communities was a little more than eight years at the time of its Initial Offering in 1994, approximately the same as today. AMLI intends to maintain the average effective age of its portfolio in this same approximate range by continuing to: 1. develop new communities; 2. acquire newly-constructed communities; 3. sell selected older communities; 4. co-invest selected older communities; and 5. rehab desirable, well-located older communities after they become 15-20 years old. AMLI has sold five older communities in the five years it has been a public company. AMLI's oldest community is now 18 years old. In September 1998, AMLI initiated its first community rehab since its Initial Offering by commencing the rehab of AMLI at Riverbend in Indianapolis. In 1999, the Company commenced the rehab of three additional communities, AMLI at Spring Creek, Atlanta; AMLI of North Dallas and AMLI at Valley Ranch, Dallas. The table below shows rehab expenditures to date. Community 1998 1999 Total --------- ------ ------ ------ AMLI: at Riverbend. . . . . . . . . . . $ 472 3,363 3,835 at Spring Creek . . . . . . . . . -- 957 957 of North Dallas . . . . . . . . . -- 1,750 1,750 at Valley Ranch . . . . . . . . . -- 709 709 ------ ------ ------ $ 472 6,779 7,251 ====== ====== ====== Rehab is a capital improvement program undertaken to repair or replace, among other things, the items described previously in the Capital Expenditures Policy at an aggregate cost of at least the greater of $3.0 per apartment home or 5% of the value of the entire apartment community. All costs (except costs to routinely paint the interiors of units at turnover) associated with a rehab will be capitalized and depreciated over their policy lives. To the extent a cost would have been expensed had it not been incurred pursuant to a rehab (pavement resurfacing, exterior painting, vinyl replacement are the primary such costs), such costs will be depreciated over fifteen years. Rehab expenditures are distinguished from recurring capital expenditures in that they: 1. are made on behalf of older properties; 2. are anticipated to be started and completed within a 24 month period; 3. cost a minimum of $3.0 per apartment home or 5% of the value of the property being rehabbed; and 4. are generally undertaken only once or twice during the useful life of a given property. AMLI's larger properties were built in phases, and the rehabs of these larger properties are anticipated to be done in phases, each extending over consecutive periods not exceeding 24 months. INFLATION Virtually all apartment leases at the wholly-owned 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 38.6% of rental and other revenues, 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. At December 31, 1999, the Company's exposure (including the Company's proportionate share of its co- investment partnerships' expense) to rising interest rates was mitigated by the existing debt level of approximately 43% of the Company's total market capitalization (49%, including the Company's share of co-investment partnerships' debt), the high percentage of intermediate-term fixed rate debt (47% of total debt), and the use of interest rate swaps to effectively fix the interest rate on $75,000 of floating rate debt ($20,000 of floating rate debt through November 2002, $30,000 through February 2003, $15,000 through September 2004 and $10,000 through October 2004). 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. YEAR 2000 The Company has previously disclosed activities undertaken in preparation for potential malfunction of computers and other equipment after December 31, 1999. These preparations included identifying and testing such equipment and software and preparing contingency plans which detailed procedures to be followed in the event of a Year 2000 induced casualty. The Company's preparations were completed during 1999. In addition to time spent by Company employees, the Company incurred approximately $60 in third-party costs (primarily costs of consultants employed to test equipment), which costs were charged to expense in 1999. Early in January 2000, the Company checked all of its significant systems which are dependent upon microprocessors. Through the first two months of 2000, there have been no Year 2000 related casualties and no disruption to the Company's operations or accounting reporting systems, except for one set of reports generated from the Company's on-site accounting system. This problem, which was rectified in early January, required an expenditure of approximately $1. The Company expects that no further actions will be required or further costs incurred as a result of Year 2000. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK MARKET RISK The Company is exposed to interest rate changes primarily as a result of its line of credit and long-term debt used to maintain liquidity and fund capital expenditures and expansion of the Company's real estate investment portfolio and operations. The Company's interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives, the Company borrows primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The Company does not enter into derivative or interest rate transactions for speculative purposes. The Company's interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts, weighted average interest rates, fair values and other terms required by year of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes. Esti- mated There- Fair 2000 2001 2002 2003 2004 after Total Value ------- ------- ------- ------- ------- ------- ------- ------ Fixed rate debt . . $ 750 -- -- 67,436 7,573 98,532 174,291 174,291 Average interest rate at December 31, 1999. . . 4.0% -- -- 7.5% 7.7% 7.8% 7.7% 7.7% Variable rate LIBOR debt. . . -- -- 145,000 -- -- -- 145,000 145,000 Average interest rate at December 31, 1999. . . -- -- 6.2% -- -- -- 6.2% 6.2% Variable rate TENR debt. . . -- -- 50,250 -- -- -- 50,250 50,250 Average interest rate at December 31, 1999. . . -- -- 5.7% -- -- -- 5.7% 5.7% ------- ------- ------- ------- ------- ------- ------- ------- $ 750 -- 195,250 67,436 7,573 98,532 369,541 369,541 ======= ======= ======= ======= ======= ======= ======= ======= The table incorporates only those exposures that exist as of December 31, 1999; it does not consider those exposures or positions which could arise after that date. Moreover, because firm commitments are not presented in the table above, the information presented therein has limited predictive value. As a result, the Company's ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, the Company's hedging strategies at that time, and interest rates. The following summarizes certain information pursuant to interest rate limitation and swap contracts at December 31, 1999. Cumula- Approximate Approximate Fixed Remaining tive Value at Value at Notional Rate Term of Contract Cash December 31, January 31, Amount (1) Contract Maturity Paid 1999 (2) 2000 (2) - -------- ------ -------- --------- ------- ------------ ----------- $10,000 6.216% 5 years 11/01/02 $171 118 201 10,000 6.029% 5 years 11/01/02 131 168 250 20,000 6.145% 5 years 02/15/03 293 313 500 10,000 6.070% 5 years 02/18/03 133 178 272 15,000 6.405% 5 years 09/20/04 36 236 441 10,000 6.438% 5 years 10/04/04 18 145 282 - ------- ---- ----- ----- $75,000 $782 1,158 1,946 ======= ==== ===== ===== (1) 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). (2) Represents the approximate amount which would be received as of December 31, 1999 and January 31, 2000 to terminate these contracts. This amount is not recorded as an asset in the accompanying balance sheet as of December 31, 1999. (3) Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," becomes effective for all fiscal quarters for fiscal years beginning after June 15, 2000 and is not expected to have a material impact on the Company's financial statements. 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 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA AMLI RESIDENTIAL PROPERTIES TRUST INDEX PAGE ---- Independent Auditors' Report . . . . . . . . . . . . . . . . . 50 Consolidated Balance Sheets, December 31, 1999 and 1998. . . . 51 Consolidated Statements of Operations, years ended December 31, 1999, 1998 and 1997 . . . . . . . . . . . . . . 53 Consolidated Statements of Shareholders' Equity, years ended December 31, 1999, 1998 and 1997 . . . . . . . . 55 Consolidated Statements of Cash Flows, years ended December 31, 1999, 1998 and 1997 . . . . . . . . . . . . . . 57 Notes to Consolidated Financial Statements . . . . . . . . . . 59 SCHEDULE -------- Consolidated Real Estate and Accumulated Depreciation. . . . . III SCHEDULES NOT FILED: All schedules other than those indicated in the above index have been omitted as the required information is inapplicable. INDEPENDENT AUDITORS' REPORT The Board of Trustees and Shareholders AMLI Residential Properties Trust: We have audited the accompanying consolidated balance sheets of AMLI Residential Properties Trust (the "Company") as of December 31, 1999 and 1998, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1999. In connection with our audits of the consolidated financial statements, we have also audited the related financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the management of the Company. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 1999 and 1998, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1999, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG LLP Chicago, Illinois February 25, 2000 AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1999 AND 1998 (Dollars in thousands, except share data)
1999 1998 ---------- --------- ASSETS: Rental apartments: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 87,903 91,459 Depreciable property . . . . . . . . . . . . . . . . . . . . . . . . . . 566,509 586,507 -------- --------- 654,412 677,966 Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . (82,626) (78,143) -------- --------- 571,786 599,823 Rental property held for sale, net of accumulated depreciation . . . . . . 19,784 -- Properties under development . . . . . . . . . . . . . . . . . . . . . . . 47,314 61,798 Investments in partnerships. . . . . . . . . . . . . . . . . . . . . . . . 107,518 72,150 Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . 2,318 4,546 Deferred expenses, net . . . . . . . . . . . . . . . . . . . . . . . . . . 3,377 2,942 Security deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,541 1,684 Notes receivable from and advances to Service Companies. . . . . . . . . . 35,717 31,277 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,263 11,372 -------- --------- Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . $804,618 785,592 ======== ========= AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS - CONTINUED 1999 1998 ---------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY: LIABILITIES: Debt (note 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $369,541 367,370 Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . 1,743 2,170 Accrued real estate taxes payable. . . . . . . . . . . . . . . . . . . . . 9,999 10,141 Construction costs payable . . . . . . . . . . . . . . . . . . . . . . . . 2,068 1,967 Security deposits and prepaid rents. . . . . . . . . . . . . . . . . . . . 2,807 3,420 Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,606 3,096 -------- --------- Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 389,764 388,164 -------- --------- Commitments and contingencies (note 8) Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,813 54,574 -------- --------- SHAREHOLDERS' EQUITY: Series A Cumulative Convertible Preferred shares of beneficial interest, $0.01 par value, 1,500,000 authorized, 1,200,000 issued and 850,000 and 1,100,000 outstanding, respectively (aggregate liquidation preference of $17,162 and $22,200, respectively) . . . . . . 9 11 Series B Cumulative Convertible Preferred shares of beneficial interest, $0.01 par value, 3,125,000 authorized, issued and outstanding (aggregate liquidation preference of $76,438 and $76,406, respectively). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 31 Shares of beneficial interest, $0.01 par value, 145,375,000 authorized, 16,996,138 and 16,655,155 common shares issued and outstanding, respectively . . . . . . . . . . . . . . . . . . 170 167 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . 421,989 420,303 Employees' and trustees' notes . . . . . . . . . . . . . . . . . . . . . . (12,000) (10,668) Dividends paid in excess of earnings . . . . . . . . . . . . . . . . . . . (53,158) (66,990) -------- --------- Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . 357,041 342,854 -------- --------- Total liabilities and shareholders' equity . . . . . . . . . . . . . . $804,618 785,592 ======== ========= See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Dollars in thousands, except share data)
1999 1998 1997 ---------- --------- --------- Revenues: Property: Rental . . . . . . . . . . . . . . . . . . . . . . $108,268 101,892 80,479 Other. . . . . . . . . . . . . . . . . . . . . . . 6,686 5,937 4,339 Interest and share of income from Service Companies. 3,062 2,760 1,151 Other interest . . . . . . . . . . . . . . . . . . . 1,683 1,272 521 Income from partnerships . . . . . . . . . . . . . . 4,283 2,169 925 Other. . . . . . . . . . . . . . . . . . . . . . . . 5,126 3,323 2,658 --------- -------- -------- Total revenues . . . . . . . . . . . . . . . 129,108 117,353 90,073 --------- -------- -------- Expenses: Property: Personnel. . . . . . . . . . . . . . . . . . . . 10,927 10,073 7,648 Advertising and promotion. . . . . . . . . . . . 2,597 2,982 2,147 Utilities. . . . . . . . . . . . . . . . . . . . 3,643 4,272 4,087 Building repairs and maintenance and services. . 6,335 6,378 5,592 Landscaping and grounds maintenance. . . . . . . 2,473 2,298 1,796 Real estate taxes. . . . . . . . . . . . . . . . 13,266 12,539 9,476 Insurance. . . . . . . . . . . . . . . . . . . . 816 841 858 Property management fees . . . . . . . . . . . . 2,875 2,698 2,147 Other operating expenses . . . . . . . . . . . . 1,416 1,512 1,192 Interest . . . . . . . . . . . . . . . . . . . . . 22,201 20,263 11,995 Amortization of deferred costs . . . . . . . . . . 410 465 596 Depreciation . . . . . . . . . . . . . . . . . . . 18,194 17,963 13,220 General and administrative . . . . . . . . . . . . 4,042 3,993 2,850 --------- -------- -------- Total expenses . . . . . . . . . . . . . . . 89,195 86,277 63,604 --------- -------- -------- Income before nonrecurring gain on sales, minority interest and extraordinary item . . . . . . 39,913 31,076 26,469 Gains on sales of residential properties, including share of gain on sale of partnership property . . . . . . . . . . . . . . . . 21,158 3,621 2,457 --------- -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED 1999 1998 1997 ---------- --------- --------- Income before minority interest and extraordinary item . . . . . . . . . . . . . . . . . 61,071 34,697 28,926 Minority interest. . . . . . . . . . . . . . . . . . . 9,333 4,997 4,378 --------- -------- -------- Income before extraordinary item . . . . . . . . . . . 51,738 29,700 24,548 Extraordinary item - loss on early extinguishment of debt (net of minority interest) . . . . . . . . . . . . . -- -- (196) --------- -------- -------- Net income . . . . . . . . . . . . . . . . . 51,738 29,700 24,352 Less income attributable to preferred shares . . . . . 7,281 4,875 1,903 --------- -------- -------- Net income attributable to common shares. . . . . . . . . . . . . . . $ 44,457 24,825 22,449 ========= ======== ======== Income per common share - basic: Before extraordinary item. . . . . . . . . . . . . . $ 2.63 1.49 1.44 Extraordinary item . . . . . . . . . . . . . . . . . -- -- (.01) Net income . . . . . . . . . . . . . . . . . . . . . 2.63 1.49 1.43 Income per common share - diluted: Before extraordinary item. . . . . . . . . . . . . . 2.46 1.49 1.44 Extraordinary item . . . . . . . . . . . . . . . . . -- -- (.01) Net income . . . . . . . . . . . . . . . . . . . . . 2.46 1.49 1.43 Dividends declared and paid per common share . . . . . 1.81 1.77 1.73 See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Dollars in thousands)
SHARES OF EMPLOYEES' DIVIDENDS BENEFICIAL INTEREST ADDITIONAL AND PAID IN --------------------- PAID-IN TRUSTEES' EXCESS OF SHARES AMOUNT CAPITAL NOTES EARNINGS TOTAL ------- ------ ---------- --------- --------- --------- Balance at December 31, 1996 . . . . . . 15,912,035 $159 301,585 (487) (59,235) 242,022 Shares issued in connection with: Common shares offering. . . . . . . 1,694,700 17 37,430 -- -- 37,447 Executive Share Purchase Plan . . . 36,310 -- 840 -- -- 840 Employees' and Trustees' notes, net of repayments. . . . . . . . . . -- -- -- (6,437) -- (6,437) Units converted to shares. . . . . . . 34,535 1 543 -- -- 544 Reallocation of minority interest. . . -- -- 750 -- -- 750 Dividends paid in excess of earnings . . . . . . . . . . . . . . -- -- -- -- (4,727) (4,727) ---------- ---- ------- ------- ------- ------- Balance at December 31, 1997 . . . . . . 17,677,580 177 341,148 (6,924) (63,962) 270,439 Shares issued in connection with: Class B Preferred shares offering . 3,125,000 31 74,125 -- -- 74,156 Executive Share Purchase Plan . . . 43,153 1 971 -- -- 972 Options exercised . . . . . . . . . 1,666 -- 34 -- -- 34 Employees' and Trustees' notes, net of repayments. . . . . . . . . . -- -- -- (3,744) -- (3,744) Units converted to shares. . . . . . . 32,756 -- 671 -- -- 671 Reallocation of minority interest. . . -- -- 3,354 -- -- 3,354 Dividends paid in excess of earnings. . . . . . . . . . . . . -- -- -- -- (3,028) (3,028) ---------- ---- ------- ------- ------- ------- Balance at December 31, 1998 . . . . . . 20,880,155 209 420,303 (10,668) (66,990) 342,854 AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - CONTINUED SHARES OF EMPLOYEES' DIVIDENDS BENEFICIAL INTEREST ADDITIONAL AND PAID IN --------------------- PAID-IN TRUSTEES' EXCESS OF SHARES AMOUNT CAPITAL NOTES EARNINGS TOTAL ------- ------ ---------- --------- --------- --------- Shares issued in connection with: Executive Share Purchase Plan . . . 37,271 -- 779 -- -- 779 Employees' and Trustees' notes, net of repayments. . . . . . . . . . -- -- -- (1,332) -- (1,332) Units converted to shares. . . . . . . 53,712 1 821 -- -- 822 Reallocation of minority interest. . . -- -- 86 -- -- 86 Earnings in excess of dividends paid . -- -- -- -- 13,832 13,832 ---------- ---- ------- ------- ------- ------- Balance at December 31, 1999 . . . . . . 20,971,138 $210 421,989 (12,000) (53,158) 357,041 ========== ==== ======= ======= ======= ======= See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997 (Dollars in thousands)
1999 1998 1997 --------- --------- --------- Cash flows from operating activities: Net income . . . . . . . . . . . . . . . . . . . . . . $ 51,738 29,700 24,352 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization . . . . . . . . . . . 18,604 18,428 13,816 Income from partnerships. . . . . . . . . . . . . . (4,283) (2,169) (915) Loss (income) from Service Companies. . . . . . . . 1,254 134 (104) Loss on early extinguishment of debt. . . . . . . . -- -- 211 Gains on sales of residential properties including share of gain on sale of partnership property . . (21,158) (3,621) (2,457) Gain on sale of land. . . . . . . . . . . . . . . . (281) -- -- Minority interest . . . . . . . . . . . . . . . . . 9,333 4,997 4,341 Other . . . . . . . . . . . . . . . . . . . . . . . 129 -- -- Changes in assets and liabilities: Increase in deferred expenses. . . . . . . . . . . . (966) (113) (586) Decrease (increase) in security deposits . . . . . . 143 137 (84) Decrease (increase) in other assets. . . . . . . . . 955 (2,382) (711) (Decrease) increase in accrued real estate taxes . . (33) 467 387 (Decrease) increase in accrued interest payable. . . (427) 781 228 (Decrease) increase in tenant security deposits and prepaid rents. . . . . . . . . . . . . . . . . (613) 698 (35) Increase in other liabilities. . . . . . . . . . . . 510 118 686 --------- --------- --------- Net cash provided by operating activities. . . 54,905 47,175 39,129 --------- --------- --------- Cash flows from investing activities: Net cash proceeds from sale of residential property. . 50,565 10,263 13,394 Investments in partnerships. . . . . . . . . . . . . . (30,800) (4,526) (14,440) Cash distributions from partnerships . . . . . . . . . 10,848 4,551 2,888 Advances to Service Companies and partnerships . . . . (7,161) (10,440) (10,351) Earnest money deposits . . . . . . . . . . . . . . . . (696) (447) (1,660) Acquisition properties . . . . . . . . . . . . . . . . (762) (74,069) (104,493) Capital expenditures - rehab properties. . . . . . . . (6,779) (472) -- Capital expenditures - other properties. . . . . . . . (4,366) (3,991) (3,323) Properties under development, net of co-investors' share of costs . . . . . . . . . . . . . . . . . . . (25,365) (36,368) (59,055) Increase (decrease) in construction costs payable. . . 100 (6,436) 6,140 --------- --------- --------- Net cash used in investing activities. . . . . (14,416) (121,935) (170,900) --------- --------- --------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED 1999 1998 1997 --------- --------- --------- Cash flows from financing activities: Debt proceeds, net of financing costs. . . . . . . . . 265,234 402,355 249,088 Debt repayments, including prepayment penalties in 1997. . . . . . . . . . . . . . . . . . (263,064) (361,599) (119,528) Proceeds from preferred shares offering, net of issuance costs. . . . . . . . . . . . . . . . -- 74,160 -- Proceeds from common shares offerings, net of issuance costs. . . . . . . . . . . . . . . . -- -- 37,447 Employees' and Trustees' notes, net of proceeds from issuance of Executive Share Purchase Plan and Option Plan shares . . . . . . . . (547) (2,664) (5,597) Distributions to partners. . . . . . . . . . . . . . . (6,434) (5,894) (5,175) Dividends paid . . . . . . . . . . . . . . . . . . . . (37,906) (32,728) (29,079) --------- --------- --------- Net cash (used in) provided by financing activities . . . . . . . . . . . . (42,717) 73,630 127,156 --------- --------- --------- Net decrease in cash and cash equivalents. . . . . . . . (2,228) (1,130) (4,615) Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . 4,546 5,676 10,291 --------- --------- --------- Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . $ 2,318 4,546 5,676 ========= ========= ========= Supplemental disclosure of cash flow information: Cash paid for mortgage and other interest, net of amount capitalized. . . . . . . . . . . . . . $ 22,628 19,482 11,767 ========= ========= ========= See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 1999, 1998 and 1997 (Dollars in thousands, except share data) 1. ORGANIZATION AND BASIS OF PRESENTATION ORGANIZATION AMLI Residential Properties Trust ("AMLI" or the "Company"), a self- administered and self-managed real estate investment trust ("REIT"), was formed on February 15, 1994 to continue and expand the multifamily property business previously conducted by Amli Realty Co. ("ARC") and its affiliates. The Company is the sole general partner of AMLI Residential Properties, L.P. (the "Operating Partnership") in which it holds an 85% interest. All the properties and property interests are owned and operated through the Operating Partnership. The Company and its affiliates develop, acquire, lease, manage and hold for investment upscale residential apartment communities. The Company commenced operations effective with the completion of its initial public offering ("Initial Offering") on February 15, 1994. The Company qualifies as a REIT for Federal income tax purposes. BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of the Company and the Operating Partnership. Limited partnership interests in the Operating Partnership ("OP Units") are convertible into common shares of the Company on a one-for-one basis, subject to certain limitations (see note 7). AMLI Management Company ("AMC"), AMLI Corporate Homes ("ACH"), a division of AMC, AMLI Institutional Advisors, Inc. ("AIA"), AMLI Residential Construction, Inc. ("Amrescon") and AMLI Landscape Co., a division of Amrescon, (the "Service Companies") provide services to the Company's wholly-owned properties as well as to properties owned by or joint ventured with third parties. AMLI's investments in the Service Companies are accounted for using the equity method. All significant inter-entity balances and transactions have been eliminated in consolidation. The Company's management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REAL ESTATE ASSETS AND DEPRECIATION Real estate assets are stated at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred; replacements having an estimated useful life of at least one year and betterments are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over useful lives of the properties (buildings and related land improvements -- 40 years; furniture, fixtures and equipment -- 5 - 15 years). Twelve apartment communities having an original undepreciated cost of $275,330 are pledged to secure debt (see note 5). AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED In September 1998, AMLI initiated its first community rehab since its Initial Offering by commencing the rehab of AMLI at Riverbend in Indianapolis. During 1999, three additional communities, AMLI at Spring Creek, Atlanta, AMLI of North Dallas and AMLI at Valley Ranch, Dallas, were under rehab. Through December 31, 1999, the Company has spent $7,251 on rehab of those four communities. Rehab is a capital improvement program involving significant repairs, replacements and improvements at an aggregate cost of at least the greater of $3.0 per apartment home or 5% of the value of the entire apartment community. All costs (except costs to routinely paint the interiors of units at turnover) associated with a rehab will be capitalized and depreciated over their policy lives. To the extent a cost would have been expensed had it not been incurred pursuant to a rehab (pavement re-surfacing, exterior painting, vinyl replacement are the primary such costs), such costs will be depreciated over fifteen years. 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. All such costs are capitalized when subsequently incurred as costs of acquisition properties. On October 27, 1998, the Company closed on the acquisition of two TCR- Midwest communities, AMLI at Eagle Creek in Indiana and AMLI at Lexington Farms in Kansas. The two communities have a total of 644 apartment homes, and the acquisition price of $48,150 was paid in cash of $41,108 and OP Units valued at $7,042. In addition, the acquisition of a third TCR- Midwest community, AMLI at Centennial Park in Kansas, a 170-unit apartment community, closed on October 28, 1998. The acquisition price of $16,250 was paid in cash of $15,337 and the balance in OP Units. Losses in carrying values of investment assets are provided by management when the losses become apparent and the investment asset is considered impaired in accordance with Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Management evaluates its investment properties at least quarterly to assess whether any impairment indications are present, comparing current net operating income as a percentage of cost to income capitalization rates. If any investment asset is considered impaired, a loss is provided to reduce the carrying value of the property to its estimated fair value. No such losses have been required or provided in the accompanying financial statements. RENTAL PROPERTIES HELD FOR SALE At December 31, 1999, AMLI at Sope Creek, a 695-unit community located in Marietta, Georgia, was being held for sale. During 1999, 1998 and 1997, this community generated total revenues of $5,919, $5,816 and $5,705, respectively and operating income of $3,986, $3,772 and $3,636, respectively. On February 3, 2000, this property was sold for $42,500 and the net proceeds from the sale were invested in two other properties pursuant to Section 1031 of the Internal Revenue Code (see note 9). AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED PROPERTIES UNDER DEVELOPMENT Land being planned for development and all apartment homes in a new community or new phase are reported as "Properties 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. During 1998, the Company acquired thirteen land parcels for development for a total cost of $33,650. The sites are located in Atlanta, Indianapolis, Kansas City, Metropolitan Chicago, Dallas, Austin and Houston. Construction has commenced on nine of these sites in 1998 and 1999. The Company anticipates starting construction on the remaining sites in 2000. During 1999, the Company acquired six land parcels for development for a total cost of $16,985. The sites are located in Georgia, Texas and Kansas. The Company will commence construction on these sites in 2000. At December 31, 1999, the Company's properties under development include parcels of land in the development planning stage as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
NUMBER NUMBER TOTAL OF OF EXPENDED COMMUNITY LOCATION ACRES UNITS THRU 12/31/99 - --------- -------- ------ ------ ------------- Wholly-Owned: Development Communities: AMLI: at Bent Tree II Dallas, TX 10 200 $ 10,151 --- ----- -------- Total Development Communities 10 200 10,151 --- ----- -------- Land held for future development: AMLI: at Champions II (1) Houston, TX 14 288 2,641 at Kings Harbor (1) Houston, TX 15 300 2,475 at Mesa Ridge (1) Ft. Worth, TX 27 500 4,144 at Fossil Lake (1) Ft. Worth, TX 19 324 3,087 at Fossil Lake II (1) Ft. Worth, TX 15 240 2,187 at Prairie Lakes I Noblesville, IN 17 228 950 at Prairie Lakes II-IV Noblesville, IN 103 1,100 5,009 at Peachtree City II (1) Fayette County, GA 21 216 3,153 at Anderson Mill (1) Austin, TX 39 480 4,009 at Vista Ridge (1) Lewisville, TX 15 300 2,847 at Cambridge Square (1) Overland Park, KS 34 402 3,694 at Westwood Ridge (1) Overland Park, KS 30 420 2,967 --- ----- -------- Total land held for future development 349 4,798 37,163 --- ----- -------- Total Wholly-Owned 359 4,998 47,314 --- ----- -------- AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED NUMBER NUMBER TOTAL OF OF EXPENDED COMMUNITY LOCATION ACRES UNITS THRU 12/31/99 - --------- -------- ------ ------ ------------- Co-Investment Development Communities (Company Ownership Percentage): AMLI: at Mill Creek (25%) Gwinnett County, GA 33 400 5,627 at Lost Mountain (75%) Paulding County, GA 17 164 2,904 at Park Bridge (25%) Atlanta, GA 35 352 7,982 at Oakhurst North (25%) Aurora, IL 29 464 43,007 at Monterey Oaks (25%) Austin, TX 26 430 17,607 at St. Charles (25%) St. Charles, IL 25 400 37,802 Creekside (25%) Overland Park, KS 12 224 12,229 at Wynnewood Farms (25%) Overland Park, KS 20 232 12,573 at Regents Crest II (25%) Overland Park, KS 6 108 7,027 at Castle Creek (40%) Indianapolis, IN 16 276 13,732 at Lake Clearwater (25%) Indianapolis, IN 11 216 14,149 at Summit Ridge (25%) Lees Summit, MO 24 432 7,198 --- ----- -------- Total Co-Investment Development Communities (2) 254 3,698 181,837 --- ----- -------- Total 613 8,696 $229,151 === ===== ======== (1) It is the Company's intention to develop these land parcels in partnership with one or more institutional investors. (2) Excludes AMLI on Spring Mill, a 400-unit community located in Hamilton County, Indiana, in which a 20% residual interest was acquired for $1,243 on June 16, 1999. Completed at a cost of $29,477, this property is 84% leased at December 31, 1999.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED INTEREST AND REAL ESTATE TAX CAPITALIZATION Interest and real estate taxes incurred during the construction period are capitalized and depreciated over the lives of the constructed assets. During the years ended December 31, 1999, 1998 and 1997, total interest capitalized was $4,749, $5,695 and $4,721, respectively. Net of amounts capitalized, total interest incurred during the years ended December 31, 1999, 1998 and 1997 aggregated $22,201, $20,263 and $11,995, respectively. ACQUISITION The Company's policy is and has been to expense internal costs (i.e., salaries and overhead of acquisition personnel) of acquiring operating properties. This policy is consistent with EITF 97-11, "Accounting for Internal Costs Relating to Real Estate Property Acquisitions" and thus the issuance of EITF 97-11 had no impact on the Company's results of operations. DISPOSITION In 1997, the Company began selectively selling properties and reinvesting the proceeds in new communities to continually improve the quality of its portfolio and increase growth potential in net operating income. The gains on sale of residential communities, including the Company's share of gain on sale of a co-investment community and gain on sale of land are reported separately in the accompanying Statements of Operations and neither the properties' selling prices nor related gains are included in revenues in the accompanying Statements of Operations. The table below summarizes the properties sold by the Company during 1997-1999: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Net Operating Income in Twelve Months Immedia- Costs tely Company Number Date Before Prior to Ownership of Acquired/ Date Depre- Sale Net Date of Community Percentage Units Developed Sold ciation Price Proceeds Gain of Sale - ---------------- ---------- ------ --------- -------- ------- ------ -------- ------ -------- WHOLLY-OWNED - ------------ AMLI: at Bear Creek Euless, Texas 100% 350 02/15/94 12/10/97 11,995 13,775 13,395 2,457 1,142 at Reflections Irving, Texas 100% 212 02/15/94 12/30/98 7,737 10,400 10,263 3,621 811 at Park Sheridan Chicago, Illinois 100% 253 02/15/94 10/12/99 11,186 23,500 23,088 15,102 1,586 at Crown Colony Topeka, Kansas 100% 220 10/18/94- 10/14/99 10,239 11,288 11,194 1,959 1,027 06/30/97 at Sherwood Topeka, Kansas 100% 300 10/18/94 10/14/99 14,130 14,962 14,832 2,434 1,560 CO-INVESTMENTS - -------------- AMLI: at Prairie Court Chicago, Illinois 1% 125 09/01/87 08/16/99 9,129 13,500 12,850 6,717 911 at Park Place Austin, Texas 25% 588 05/16/94 12/15/99 21,419 25,750 24,832 6,001 2,396
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED In addition, on April 28, 1999, the Company completed the sale of a 19.7 acre land parcel for cash of $1,477, resulting in a gain on sale of $281. The Company had originally planned to build an additional phase to an existing apartment community on this land. The Company subsequently determined that value would be maximized through the sale of the vacant land. REVENUE RECOGNITION Rental revenues -- the Company leases its residential properties pursuant to operating leases with terms generally of six or twelve months. Rental income is recognized when earned; this method approximates recognition using the straight-line method over the related lease term. At December 31, 1999, apartment leases in effect provide for annual rentals aggregating approximately $114,754. Income from partnerships -- the Operating Partnership is entitled to shares of cash flow or liquidation proceeds in excess of its stated ownership percentages based on returns to its partners in excess of specified rates. The Company receives a share of income equal to its cash flow in excess of its ownership interest. This income is included in share of income from co-investment partnerships in the accompanying Statements of Operations. In addition, one of the GP properties, AMLI at Prairie Court, was sold in August 1999, for which the Company received a $554 share of net sale proceeds in excess of its GP interest. Such income attributable to the Company's "promoted interest" (its share that exceed its pro-rata share based on its invested capital) is reported in total revenues as other income in the accompanying Statements of Operations. Development fees -- the Company receives development fees from co- investment partnerships during the development period. These fees, net of related personnel costs, are recognized over the development period using the percentage of completion method. Such fees, net of intercompany eliminations to the extent of the Company's ownership interest in the co- investment partnerships, totaled $2,693, $2,526 and $1,452 and were included in other income in the accompanying Consolidated Statements of Operations for the years ended December 31, 1999, 1998 and 1997, respectively. FAIR VALUES The estimated fair values of the Company's financial instruments presented in these Notes to Consolidated Financial Statements have been determined by management based on pertinent information available as of December 31, 1999 and 1998, using appropriate methodologies. These estimates are not necessarily indicative of the amounts the Company could ultimately realize. The Company's financial instruments consist primarily of its cash equivalents, interest-bearing notes receivable, operating payables, debt and interest rate limitation contracts. The carrying amounts of the Company's cash equivalents, interest-bearing notes from the Service Companies and partnerships, and operating payables are considered to be a reasonable estimate of fair value due to the short-term nature of these instruments. At December 31, 1999, the Company's fixed rate debt that has a carrying amount of $174,291 has an estimated fair value of $174,291. The Company's interest rate limitation contracts with no carrying value in the accompanying balance sheets have a total approximate fair value of $1,158 at December 31, 1999. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED CASH AND CASH EQUIVALENTS For purposes of the statements of cash flows, the Company considers all investments purchased with an original maturity of three months or less to be cash equivalents. DEFERRED EXPENSES AND INTEREST RATE LIMITATION CONTRACTS Deferred expenses consist primarily of financing costs which are amortized using the straight-line method over the terms of the related debt. During the construction period, amortization of deferred costs relating to properties under development is capitalized and depreciated over the lives of the constructed assets. During the years ended December 31, 1999, 1998 and 1997, capitalized amortization of deferred costs was $115, $107 and $246, respectively. The Company uses 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. The interest rate swaps the Company has entered into are off-balance sheet derivatives which are accounted for as "synthetic alterations," in that the borrowings on the Company's line of credit to which they relate have floating rate risk and the swaps have been designated and have been effective synthetic alterations of these borrowings. Under synthetic alteration accounting, periodic contractual payments or receipts are accounted for as adjustments to interest expense. Any derivative which cannot be accounted for as a synthetic alteration (of which the Company has none at December 31, 1999) would be carried at market value in the Company's balance sheet with changes in market value recognized in non-interest income. At December 31, 1999, 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 cost on the fixed rate basis differs from the interest payments it makes on certain floating rate debt. The Company is exposed to credit losses in the event of nonperformance by the counterparties to its interest rate swaps. The Company does not obtain collateral or other security to support financial instruments subject to credit risk but monitors the credit standing of counterparties. The Company anticipates, however, that the counterparties will be able to fully satisfy their obligations under the contracts. The following summarizes certain information pursuant to interest rate limitation and swap contracts at December 31, 1999. Cumula- Approximate Approximate Fixed Remaining tive Value at Value at Notional Rate Term of Contract Cash December 31, January 31, Amount (1) Contract Maturity Paid 1999 (2) 2000 (2) - -------- ------ -------- --------- ------- ------------ ----------- $10,000 6.216% 5 years 11/01/02 $171 118 201 10,000 6.029% 5 years 11/01/02 131 168 250 20,000 6.145% 5 years 02/15/03 293 313 500 10,000 6.070% 5 years 02/18/03 133 178 272 15,000 6.405% 5 years 09/20/04 36 236 441 10,000 6.438% 5 years 10/04/04 18 145 282 - ------- ---- ----- ----- $75,000 $782 1,158 1,946 ======= ==== ===== ===== (1) 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 (2) Represents the approximate amount which the Company would have received as of December 31, 1999 and January 31, 2000 if these contracts were terminated. This amount is not recorded as an asset in the accompanying balance sheet as of December 31, 1999. (3) Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," becomes effective for all fiscal quarters for fiscal years beginning after June 15, 2000 and is not expected to have a material impact on the Company's financial statements. OTHER ASSETS At December 31, 1999, other assets consisted primarily of a $6,233 note receivable from a joint venture in connection with the development of a 432-unit community, $3,043 in development fees receivable, $229 in restricted cash, $698 in tax escrow deposits and $1,837 in earnest money deposits. In addition, the Company holds a $2,500 note receivable from a third party in connection with the acquisition by the Company of a 606-unit apartment community located in Austin, Texas (see note 10). The Company believes that the carrying amounts of its notes receivable reasonably approximate their fair values. POST-RETIREMENT BENEFITS The Company offers no post-retirement benefits to any of its employees and has no current intention to implement any such plan. PER SHARE DATA In accordance with Statement of Financial Accounting Standards No. 128, "Earnings Per Share," basic EPS is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. A reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation is as follows: Years Ended December 31, ------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Income before extraordinary items. . . . . . . . . . . . $ 51,738 29,700 24,548 Less income attributable to preferred shares . . . . . . (7,281) (4,875) (1,903) ---------- ---------- ---------- Income before extraordinary items attributable to common shares - Basic. . . . $ 44,457 24,825 22,645 ========== ========== ========== Income before extraordinary items - Diluted. . . . . . . $ 51,738 24,825 22,645 ========== ========== ========== AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years Ended December 31, ------------------------------------- 1999 1998 1997 ---------- ---------- ---------- Weighted average common shares - Basic . . . . . . . 16,922,922 16,624,513 15,660,225 Dilutive Options and Other Plan shares. . . . . . . . . 55,211 65,022 84,051 Convertible Preferred Shares . . . . . . . . . . . 4,020,890 -- -- ---------- ---------- ---------- Weighted average common shares - Dilutive. . . . . . 20,999,023 16,689,535 15,744,276 ========== ========== ========== Earnings per share before extraordinary items: Basic. . . . . . . . . . . $ 2.63 1.49 1.44 Diluted. . . . . . . . . . $ 2.46 1.49 1.44 ========== ========== ========== RECLASSIFICATIONS Certain amounts in the consolidated 1998 and 1997 financial statements of the Company have been reclassified to conform with the current presentation. 3. INVESTMENTS IN PARTNERSHIPS AND SERVICE COMPANIES INVESTMENTS IN PARTNERSHIPS At December 31, 1999, the Operating Partnership was a general partner in various co-investment partnerships and in one GP Property (AMLI at Towne Creek in Gainesville, Georgia) which is accounted for using the equity method. Another GP Property, AMLI at Prairie Court, was sold in August 1999, for which the Company received a $554 share of net sale proceeds in excess of its GP interest. The Operating Partnership and the Service Companies receive various fees for services provided to these co-investment partnerships, including development fees, construction fees, acquisition fees, property management fees, asset management fees, financing fees, administrative fees and disposition fees. The Operating Partnership is entitled to shares of cash flow or liquidation proceeds in excess of its stated ownership percentages based on returns to its partners in excess of specified rates. During 1999, the Operating Partnership received $441 of cash flow in excess of its ownership percentages. Investments in partnerships at December 31, 1999 and the Company's 1999 share of income or loss from each are summarized as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Equity Total Company's Company's Company's ------------------- Company's Net Share of Share of Percentage Total Company's Investment Income Net Income Deprecia- Community Ownership Assets Total Share (1) (1) (Loss) (Loss) tion - ----------- --------- ------ ----- --------- ---------- ----- ---------- --------- AMLI: at Greenwood Forest 15% $16,447 4,384 658 640 56 8 72 at Champions Park 15% 12,108 2,930 440 440 112 17 52 at Champions Centre 15% 9,281 2,307 346 346 (39) (6) 43 at Windbrooke 15% 16,515 4,621 693 693 234 35 77 at Willeo Creek 30% 14,166 4,417 1,325 1,325 294 88 154 at Pleasant Hill 40% 24,732 9,416 3,553 3,314 884 370 343 at Barrett Lakes 35% 25,441 8,723 3,053 3,161 656 230 319 at Chevy Chase 33% 42,950 13,208 4,349 4,349 1,539 508 422 at Willowbrook 40% 35,828 10,964 4,386 4,301 944 377 461 at River Park 40% 14,354 5,279 2,112 2,067 607 243 175 at Fox Valley 25% 23,637 23,100 5,775 5,963 1,390 347 186 at Fossil Creek 25% 21,019 20,248 5,062 5,154 1,489 372 180 at Danada Farms 10% 46,139 20,442 2,044 2,035 1,455 146 135 at Verandah 35% 23,649 5,905 2,099 2,157 (112) 36 387 at Northwinds 35% 52,463 20,179 7,077 6,876 1,127 394 522 at Regents Crest 25% 31,571 14,740 3,685 3,746 549 234 172 at Oakhurst North 25% 43,450 42,097 10,524 10,526 583 145 285 at Wells Branch 25% 34,461 33,335 8,334 7,771 1,623 406 268 on the Parkway 25% 15,568 4,441 1,108 802 93 30 157 on Timberglen 40% 10,974 3,987 1,606 209 (6) 41 186 at Castle Creek 40% 13,793 12,974 5,190 5,290 (103) (41) 12 at Lake Clearwater 25% 14,073 12,347 3,087 3,147 (180) (45) 29 Creekside 25% 12,225 10,936 2,734 2,805 (98) (25) 2 at Deerfield 25% 17,452 4,708 1,174 983 (94) (15) 81 at Wynnewood Farms 25% 12,601 10,836 2,709 2,715 (89) (22) 1 AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Equity Total Company's Company's Company's ------------------- Company's Net Share of Share of Percentage Total Company's Investment Income Net Income Deprecia- Community Ownership Assets Total Share (1) (1) (Loss) (Loss) tion - ----------- --------- ------ ----- --------- ---------- ----- ---------- --------- at Monterey Oaks 25% 17,607 14,452 3,613 3,611 (18) (4) -- at St. Charles 25% 39,965 33,561 8,390 8,354 33 8 35 at Park Bridge 25% 7,988 6,921 1,730 1,755 (1) -- -- at Mill Creek 25% 5,707 5,541 1,385 1,409 -- -- -- at Lost Mountain 75% 3,705 365 365 421 (1) (1) -- on Spring Mill 20% (Residual) 29,989 29,320 -- 1,316 631 -- -- at Prestonwood Hills 45% 18,407 6,273 2,851 2,844 75 53 79 at Windward Park 45% 28,235 9,714 4,414 4,404 152 99 123 at Summit Ridge 25% 7,198 -- -- (72) -- -- -- at Oak Bend 40% 25,784 6,552 2,626 2,626 59 29 65 -------- ------- ------- ------- ------- ------- ------- 769,482 419,223 108,497 107,483 13,844 4,057 5,023 GP Properties and Other 189 152 35 35 6,949 226(2) 34 -------- ------- ------- ------- ------- ------- ------- $769,671 419,375 108,532 107,518 20,793 4,283 5,057 ======== ======= ======= ======= ======= ======= ======= (1) The Company's investments in partnerships differ from the Company's share of co-investment partnerships' equity primarily due to capitalized interest on its investments in properties under development, purchase price basis differences, and the elimination of the Company's share of development fee income. (2) Excludes the Company's share of gain on sale of AMLI at Park Place of $1,663 reported as share of gain on sale of residential property.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED The fixed-rate debt financing which has been obtained from various financial institutions on behalf of these co-investment partnerships is summarized below: Total Outstanding Interest Community Commitment at 12/31/99 Rate Maturity - --------- ---------- ----------- -------- -------- AMLI: at Summit Ridge $18,940 6,279 L+1.5% December 2001 at Champions Centre 6,700 6,521 8.93% January 2002 at Champions Park 9,500 8,703 7.49% January 2002 at Windbrooke 11,500 11,308 9.24% February 2002 at Greenwood Forest 11,625 11,451 8.95% May 2002 at Chevy Chase 29,767 28,416 6.67% April 2003 at Willeo Creek 10,000 9,568 6.77% May 2003 at Willowbrook 24,500 23,587 7.785% May 2003 at Regents Crest 16,500 15,749 7.50% December 2003 at Verandah 16,940 16,783 7.55% April 2004 on Timberglen 6,770 6,628 7.70% June 2004 at Prestonwood Hills 11,649 11,621 7.17% August 2006 at Windward Park 18,183 18,139 7.27% August 2006 at Oak Bend 18,834 18,834 7.81% December 2006 at Deerfield 12,600 12,600 7.56% January 2007 at Danada Farms 24,500 24,326 7.33% March 2007 at Pleasant Hill 15,500 14,978 9.15% March 2007 at River Park 9,100 8,881 7.75% June 2008 on the Parkway 10,800 10,642 6.75% January 2009 at Barrett Lakes 16,680 16,478 8.50% December 2009 at Northwinds 33,800 30,977 8.25% October 2010 at Lost Mountain 10,252 2,887 6.84% November 2040 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. Some loans provide for payments of interest only for an initial period, with principal amortization commencing generally within two years. At December 31, 1998, the Operating Partnership was 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. The Operating Partnership and the Service Companies receive various fees for services provided to these co-investment partnerships, including development fees, construction fees, acquisition fees, property management fees, asset management fees, financing fees, administrative fees and disposition fees. The Operating Partnership is entitled to shares of cash flow or liquidation proceeds in excess of its stated ownership percentages based on returns to its partners in excess of specified rates. During 1998, the Operating Partnership received $228 of cash flow in excess of its ownership percentages. Investments in partnerships at December 31, 1998 and the Company's 1998 share of income or loss from each are summarized as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Equity Total Company's Company's Company's ------------------- Company's Net Share of Share of Percentage Total Company's Investment Income Net Income Deprecia- Community Ownership Assets Total Share (1) (1) (Loss) (Loss) tion - ----------- --------- ------ ----- --------- ---------- ----- ---------- --------- AMLI: at Park Place 25% $ 19,388 6,203 1,551 1,516 384 96 140 at Greenwood Forest 15% 16,771 4,628 694 676 141 21 71 at Champions Park 15% 12,385 3,081 462 462 110 17 54 at Champions Centre 15% 9,461 2,446 367 367 56 8 43 at Windbrooke 15% 16,637 4,613 692 692 60 9 75 at Willeo Creek 30% 14,509 4,472 1,342 1,342 84 25 151 at Pleasant Hill 40% 25,806 10,314 4,357 3,886 850 340 336 at Barrett Lakes 35% 26,483 9,480 3,318 3,429 631 209 324 at Chevy Chase 33% 43,406 13,170 4,336 4,336 815 273 414 at Willowbrook 40% 36,183 11,120 4,448 4,359 527 211 449 at River Park 40% 14,811 5,672 2,269 2,223 515 206 176 at Fox Valley 25% 24,199 23,731 5,933 6,129 589 147 184 at Fossil Creek 25% 21,428 20,460 5,115 5,212 598 149 169 at Danada Farms 10% 47,472 21,615 2,161 2,152 1,124 113 133 at Verandah 35% 24,646 6,820 2,406 2,468 (426) (73) 481 at Northwinds 35% 44,092 21,276 7,461 7,332 533 187 241 at Regents Crest 25% 26,917 10,535 2,634 2,650 178 131 166 at Oakhurst North 25% 39,674 36,495 9,124 9,032 (103) (26) 61 at Wells Branch 25% 33,794 32,685 8,171 7,595 492 123 77 on the Parkway 25% 16,639 5,544 1,386 1,062 (40) (10) 40 on Timberglen 40% 11,437 4,341 1,736 266 5 2 8 at Castle Creek 40% 3,458 3,347 1,339 1,298 -- -- -- at Lake Clearwater 25% 4,137 3,869 967 941 -- -- -- Creekside 25% 3,195 3,076 769 747 -- -- -- at Deerfield 25% 8,609 6,080 1,520 1,371 -- -- -- at Wynnewood Farms 25% 2,893 2,687 672 607 -- -- -- -------- -------- ------- ------- ------ ------ ------ Total $548,430 277,760 75,230 72,150 7,123 2,158 3,793 ======== ======== ======= ======= ====== ====== GP Properties and Other 11 ------ $2,169 ====== AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (1) The Company's investments in partnerships differ from the Company's share of co-investment partnerships' equity primarily due to capitalized interest on its investments in properties under development and the elimination of the Company's share of development fee income. These items are amortized over 40 years using the straight-line method.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED INVESTMENTS IN SERVICE COMPANIES The Company owns 5% of the voting common stock and 100% of the nonvoting preferred stock in the Service Companies, which provide property management, corporate homes administration, construction, landscaping, investment advisory and asset management services to the Company and to certain other parties. The nonvoting preferred stock entitles the Company to approximately 95% of all cash distributions from the Service Companies. No dividends have been paid by the Service Companies for any of the three years ended December 31, 1999. Summarized combined financial information of the various Service Companies at and for the years ended December 31, 1999, 1998 and 1997 follows: 1999 1998 1997 ------- ------- ------- Income (1) $16,479 12,323 8,402 General and administrative expenses (11,782) (7,700) (6,441) ------- ------- ------- 4,697 4,623 1,961 Interest (3,748) (2,352) (1,049) Depreciation (2) (1,616) (1,297) (381) Income taxes 79 (362) (312) ------- ------- ------- Net income (loss) $ (588) 612 219 ======= ======= ======= Total assets $50,055 44,759 26,410 ======= ======= ======= (1) Net of construction and landscaping costs. (2) Includes $668 annual amortization of goodwill in 1999 and 1998. 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%. Interest and share of income from Service Companies as included in the accompanying Consolidated Statements of Operations is reconciled below: 1999 1998 1997 -------- -------- -------- Intercompany interest expensed . $ 3,748 2,352 1,049 Intercompany interest capitalized. . . . . . . . . . 569 542 -- Net income (loss). . . . . . . . (588) 612 219 Intercompany eliminations and other owner's share. . . . . . (667) (746) (117) -------- -------- -------- $ 3,062 2,760 1,151 ======== ======== ======== AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED 4. RELATED PARTY TRANSACTIONS During 1999, 1998 and 1997, the Company accrued or paid to the Service Companies and partnerships other costs and expenses as follows: 1999 1998 1997 ------ ------ ------ Management fees $2,875 2,698 2,147 General contractor fees 433 1,167 857 Interest expense 561 561 36 Landscaping and grounds maintenance 2,116 786 629 ====== ====== ====== In addition, at December 31, 1999, 1998 and 1997, the Company owed Amrescon $2,068, $1,967 and $8,403, respectively, for construction costs of communities under development. During 1999, 1998 and 1997, the Company earned or received from the Service Companies and partnerships other income as follows: 1999 1998 1997 ------ ------ ------ Development fees $2,693 2,526 1,452 Acquisition fees 149 -- 281 Asset management fees 600 603 606 Debt placement fee 95 81 -- Disposition fees (1) (2) 740 -- -- Accounting and administrative fees 14 12 11 Interest on advances to partnerships 708 451 -- Interest on notes and advances to Service Companies 4,317 2,894 1,047 ====== ====== ===== ----------- (1) On August 16, 1999, AMLI at Prairie Court, a 125-unit co-investment property in which the Company had a 1% GP interest, was sold for $13,500. The Company was paid a disposition fee of $354. In addition, the Company received $554 of net sale proceeds representing its promoted interest in the co-investment partnership. (2) On December 15, 1999, AMLI at Park Place, a 588-unit co-investment property in which the Company had a 25% ownership interest, was sold for $25,750. The Company was paid a 2% disposition fee of $386, net of intercompany elimination. The Company leases apartment homes through ACH for short-term residents. Leases are at market rates. Rents and other charges are collected by ACH and payments are remitted to the Company on a periodic basis. During 1999, 1998 and 1997, total revenues of $2,050, $2,129 and $1,362, respectively, were generated from ACH leases of which $0, $22 and $624 were due from ACH at December 31, 1999, 1998 and 1997, respectively. 5. DEBT The table below sets forth certain information relating to the indebtedness of the Company. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Balance Balance Original at Interest Maturity at Encumbered Communities Amount 12/31/99 Rate Date 12/31/98 - ---------------------- -------- -------- -------- -------- -------- BOND FINANCING: Tax-Exempt Unsecured (1) $ 40,750 40,750 Rate+1.23% 10/1/24 40,750 Tax-Exempt AMLI at Poplar Creek (1) 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 Conner Farms 13,275 12,498 7.00% 6/15/03 12,739 AMLI at Sherwood (2) 7,320 -- 7.75% 7/1/03 6,621 AMLI at Riverbend 31,000 29,307 7.30% 7/1/03 29,847 AMLI in Great Hills 11,000 10,402 7.34% 7/1/03 10,593 AMLI at Valley Ranch 11,500 10,229 7.625% 7/10/03 10,470 AMLI at Nantucket 7,735 7,573 7.70% 6/1/04 7,683 AMLI at Bishop's Gate 15,380 14,803 (3) 8/1/05 15,072 AMLI at Regents Center 20,100 19,463 (4) 9/1/05 19,649 AMLI on the Green/AMLI of North Dallas (5) 43,234 41,120 7.789% 5/1/06 41,778 AMLI at Clairmont 12,880 12,880 6.95% 2/15/08 12,880 -------- ------- -------- Total Mortgage Notes Payable 173,424 158,275 (6) 167,332 -------- ------- -------- AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Balance Balance Original at Interest Maturity at Encumbered Properties Amount 12/31/99 Rate Date 12/31/98 - --------------------- -------- -------- -------- -------- -------- OTHER NOTES PAYABLE: AMLI at Park Creek 10,322 10,266 7.875% 12/1/38 9,038 Unsecured line of credit (7)(8) 250,000 145,000 L+1.05% 10/11/02 135,000 Note payable to Service Company 5,000 5,000 10.00% 1/1/03 5,000 Unsecured note payable to Service Company 750 750 4.00% Demand 750 -------- ------- --------- ------- ------- Total Other Notes Payable 266,072 161,016 149,788 -------- ------- ------- Total $489,746 369,541 367,370 ======== ======= ======= (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 (3.95% for AMLI at Spring Creek and AMLI at Poplar Creek at February 23, 2000). The credit enhancement for the AMLI at Spring Creek bonds was provided by a $41,297 letter of credit from Wachovia Bank that expires on October 15, 2002 and the credit enhancement for the AMLI at Poplar Creek bonds was provided by a $9,617 letter of credit from LaSalle National Bank that expires December 18, 2002. (2) This loan was repaid without penalty on September 15, 1999. (3) This original $14,000 mortgage bears interest at 9.1%. 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) $13,800 at 8.73% and $6,300 at 9.23%. (5) These two properties secure the FNMA loan that was sold at a discount of $673. At December 31, 1999, the unamortized discount amount is $426. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (6) All but $20,963 of the total is non-recourse to the partners of the Operating Partnership. (7) The Company has used interest rate swaps on $75,000 of the outstanding amount to fix its base interest rate (before current lender's spread) at an average of 6.22%. (8) The Company's unsecured line of credit has been provided by a group of eight banks led by Wachovia Bank, N.A. and Bank One, N.A. In October 1999, the Company increased the line of credit by $50,000 to $250,000, expandible to $300,000, and extended the maturity of the line of credit by one year to October 2002 with two one- year renewal options. In addition, the interest rate, which is based in part on the credit rating assigned to unsecured borrowings, increased to LIBOR plus 1.05% from LIBOR plus 0.90%. 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.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED As of December 31, 1999, 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 ---------- ------------- --------- ----------- -------- 2000 . . . . . . . . . . . . . . . . . . $ -- 2,808 -- 750 3,558 2001 . . . . . . . . . . . . . . . . . . -- 3,038 -- -- 3,038 2002 . . . . . . . . . . . . . . . . . . 50,250 3,271 145,000 -- 198,521 2003 . . . . . . . . . . . . . . . . . . -- 60,105 -- 5,000 65,105 2004 . . . . . . . . . . . . . . . . . . -- 8,931 -- -- 8,931 Thereafter . . . . . . . . . . . . . . . -- 90,388 -- -- 90,388 ------- ------- ------- ------- ------- $50,250 168,541 145,000 5,750 369,541 ======= ======= ======= ======= =======
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED At December 31, 1999 and 1998, the carrying value and fair value of the Company's long-term debt are not considered to be significantly different. The Company considers the interest rates on its long-term debt as market rates, based on interest rates, payment terms and maturities available to the Company as of December 31, 1999 and 1998, for these types of loans, and estimates that the fair value of its long-term debt approximates the carrying value at December 31, 1999 and exceeds the carrying value by approximately $3,100 at December 31, 1998. 6. INCOME TAXES The Company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. A REIT will generally not be subject to Federal income taxation on that portion of its income that qualifies as REIT taxable income to the extent that it distributes at least 95% of its taxable income to its shareholders and complies with certain other requirements. In 1999, the Company distributed approximately 90% of its taxable income and will designate a portion of its dividends being paid during 2000 as a throw back dividend to 1999. Accordingly, no provision has been made for Federal income taxes for the Company. Dividends paid in 1999 were fully taxable (54% as capital gain and 46% as ordinary income). Approximately 6.9% of dividends paid during 1998 represented a return of capital. 7. SHAREHOLDERS' EQUITY Upon the closing of the Company's Initial Offering on February 15, 1994, a total of 11,530,370 of the Company's common shares were issued and outstanding. At that time, the Company owned a like number of OP Units, which represented approximately 81% of the total 14,426,710 OP Units outstanding at that time. During 1999, 1998 and 1997, a total of 55,556, 317,485 and 365,381 OP Units were issued, respectively, to third parties as partial consideration for the acquisition of certain communities and land parcels. A total of 53,712, 32,756 and 34,535 OP Units were converted to common shares during 1999, 1998 and 1997, respectively. Pursuant to the authority vested to the Board of Trustees in the Declaration of Trust dated January 31, 1994, the Trustees classified and designated 1,500,000 unissued shares of beneficial interest of the Company as Series A cumulative convertible preferred shares of beneficial interest. On January 30, 1996, the Company completed the sale of 1,200,000 newly issued Series A convertible preferred shares, $0.01 par value, for $24,000 in a registered offering. The price per share of $20 was the price of the Company's common shares on January 15, 1996. The Company sold the Series A preferred shares directly to four institutional investors and ARC without the use of a placement agent or underwriter. The proceeds from the sale of these Series A preferred shares, less $82 of transaction costs, were used to reduce the Company's debt, fund development costs and for general corporate purposes. The Series A preferred shares will pay an annual dividend equal to $1.72 per share or the dividend amount paid on common shares, whichever is higher. The Company's Board of Trustees authorized the payment of dividends at this annual rate for the period from January 30, 1996 to February 20, 1996, the dividend payment date. The Series A preferred shares are perpetual and generally have no voting rights except in certain limited circumstances. The Series A preferred shares may be converted on a share-for-share basis into common shares at any time at a conversion price that shall be adjusted from time to time. After January 25, 2001, the Company may redeem the Series A preferred shares at its option for cash or AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED common shares. The Company may redeem the Series A preferred shares for common shares only when the price of the common shares equals or exceeds the conversion price for 20 of the 30 days preceding the date of redemption notice. The Series A preferred shares and the common shares into which the Series A preferred shares may be converted have been registered under the Company's existing shelf registration. On February 29, 1996, ARC elected to convert its 100,000 Series A convertible preferred shares into common shares. During 1999, 1998 and 1997, a total of 37,271, 43,153 and 36,310 new common shares, respectively, were issued pursuant to the Company's Executive Share Purchase Plan (see note 8). On November 27, 1996, the Company closed a 2,750,000 share secondary offering of its common shares. The offering was priced at $21.75 per share. On December 30, 1996, 226,900 additional common shares were issued pursuant to the underwriters' over-allotment option. Net of approximately 5.75% in commissions and selling expenses, proceeds of the 2,976,900 common share offering totaled approximately $61,000. The net proceeds were used to pay down $46,035 of floating rate debt, to prepay a $4,774 first mortgage note payable, and to provide approximately $10,000 of working capital to fund future acquisition and development activities. On July 11, 1997, the Company completed a public offering of 1,500,000 common shares at a price of $23.4375 per share. In addition, the underwriters exercised their over-allotment option for 194,700 shares. The net proceeds of $37,500 were used principally to pay down the balance outstanding on the Company's line of credit and to fund acquisition and development activities. On February 20, 1998, the Company privately placed $75,000 of Series B convertible preferred shares with an institutional investor. The Series B preferred shares, which were issued at $24 per share and carried an initial annual dividend of $1.80 per share, are non-callable for nine years and not subject to mandatory redemption. The Series B preferred shares are convertible into common shares on a one-to-one basis. The minimum $1.80 per share annual dividend will increase to match the dividend rate on AMLI's common shares (currently $1.84 per share annually) if the annual dividend rate on common shares is increased to more than $1.80 per share. Funding of $25,000 each occurred on March 9, June 30, and September 30, 1998. Total proceeds, net of 1.12% in offering costs, were $74,160. On November 2, 1998, the Company's Board of Trustees adopted a shareholder rights plan. In connection with the adoption of the rights plan, the Board declared a dividend distribution of one right for each common share outstanding on November 13, 1998, and created a series of preferred shares, consisting of 150,000 shares, designated the Series C Junior Participating Preferred Shares (the "Series C Preferred Shares"). The rights will not become exercisable unless someone acquires 15% or more of the Company's common shares or commences a tender offer for 15% or more of the common shares. Once exercisable, each right would entitle the holder, other than holders who caused the rights to become exercisable, to purchase one one-thousandth of a Series C Preferred Share. Each Series C Preferred Share, when and if issued, would entitle the holder to receive quarterly dividends on a cumulative basis, to exercise 1,000 votes per share on all matters submitted to shareholders and to receive a preference in the event of a liquidation. Under certain circumstances, each right would also entitle the holder, other than holders who caused the rights to become exercisable, to purchase common shares of the Company or of an acquiring person at a 50% discount to the market price. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED At December 31, 1999, the Company owned 20,971,138 OP Units, which were approximately 85% of the total 24,538,654 OP Units outstanding. At December 31, 1998, the Company owned 20,880,155 OP Units, which were approximately 85% of the total 24,445,827 OP Units outstanding. 8. COMMITMENTS AND CONTINGENCIES LEASES OF OFFICE SPACE The Company shares office space with the Service Companies and with ARC at its Chicago headquarters. Amrescon and AMC share space at regional corporate offices in Atlanta, Dallas, Kansas City and Indianapolis. The Company is party to these leases, which have terms expiring through the year 2008 and which provide for minimum rent and additional rent based on increases in operating expenses. The Company's share of lease payments for noncancellable office leases (including amounts allocated to the Service Companies) was $796, $811 and $485 in 1999, 1998 and 1997, respectively. The 1997 expense includes the entire $223 rent for the Atlanta and Dallas offices and rent in Chicago based on actual space occupied at a rate not in excess of the current market rate. As of August 1, 1997, an ARC subsidiary occupying a portion of the Chicago offices relocated to provide additional space for the Company. Concurrently, the Company leased additional space in Chicago and extended its Chicago lease through October 31, 2008. The Company's estimated shares of future minimum rent payments under the operating leases are as follows: 2000 . . . . . . . . . . . . . . . . . . $ 827 2001 . . . . . . . . . . . . . . . . . . 838 2002 . . . . . . . . . . . . . . . . . . 817 2003 . . . . . . . . . . . . . . . . . . 726 2004 . . . . . . . . . . . . . . . . . . 683 Thereafter . . . . . . . . . . . . . . . 2,390 ------ $6,281 ====== RETIREMENT SAVINGS PLAN The AMLI Residential Properties Retirement Savings Plan (the "Retirement Plan"), is a qualified plan under Section 401(k) of the Internal Revenue Code. The provisions of the Retirement Plan obligate the Company to contribute up to 50% of the amounts contributed to the Retirement Plan by its employees (such contribution not to exceed $0.500 per employee per year). Employees vest in Company contributions as follows: Less than three years' service . . . . . . . . . . . 0% Three or more years' service . . . . . . . . . . . . 100% === As of January 1, 1995, the Retirement Plan was amended to provide for an additional contribution by Participating Employers, as defined, equal to a percentage (3% for 1999, 1998 and 1997) of each eligible employee's compensation. An employee is eligible who has completed one year of service by, and is an employee as of, either June 30 or December 31 of the year for which the contribution is made. Those semi-annual additional contributions together with the Company's annual 50% matching contribution are to be invested in open market purchases of the Company's common shares and other investments. Such contributions, by and on behalf of affiliates of the Company, were $573, $487 and $314 in 1999, 1998 and 1997, respectively, all of which were invested in Company shares. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED BONUS INCENTIVE COMPENSATION A bonus incentive compensation plan has been established for executive and key officers. This program awards both a cash and a common share or OP Unit bonus to executive officers and certain key officers covered under the plan based on the achievement of specified targets and goals for the Company and the individual officer. The primary targets are the desired annual Funds From Operations ("FFO") per share and how the Company performs relative to its competitors. The amount of cash bonus and number of common shares or OP Units will be based on a formula determined for each officer up to 50% of base compensation. PERFORMANCE INCENTIVE PLAN In 1995, the Company established a Performance Incentive Plan (the "Incentive Plan") whereby executive and key officers and employees may receive OP Units or cash if a target growth in FFO is achieved for a period of five years (or as many as ten years if the target is not reached sooner) starting from the year the rights under this Incentive Plan are granted. If the target growth in FFO is achieved, OP Units actually issued under this Incentive Plan will include both the original award plus additional OP Units based on assumed re-investment of dividends from the date of the award to the date of issuance. Expense is recognized for financial reporting purposes over the five-year determination period for each year's award based upon the estimated value at December 31, 1999 of the OP Units to be issued. In 1999, 1998 and 1997, a total of $385, $533 and $249, respectively, was charged to expense by the Company and the Service Companies pursuant to this Incentive Plan. At December 31, 1999, there are 127,458 OP Units (net of cancellations) that may be issued in conjunction with the Incentive Plan, as follows: At December 31, 1999 After Original Dividend Award Re-investment -------- --------------- January 1995 Award (1). . 17,700 25,600 January 1996 Award. . . . 13,350 17,685 February 1997 Award . . . 15,700 19,201 December 1997 Award . . . 24,700 30,145 November 1998 Award . . . 24,300 25,777 November 1999 Award (2) . 9,050 9,050 ------- ------- 104,800 127,458 ======= ======= (1) The Board of Trustees has determined that the target FFO growth for the five year period from January 1995 through December 31, 1999 was achieved and accordingly approved payment to individuals who had fully vested Incentive Plan Awards. The amount paid (equal to the value of the Company's stock at January 31, 2000 times the number of fully vested January 1995 awards) totaled $573, and has been fully accrued by the Company and its Service Company subsidiaries. (2) In lieu of the November 1999 award, certain officers were awarded forgivable loans (see Shareholder Loans to Officers/Trustees). AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED OPTION PLAN The Company has adopted the AMLI Residential Properties Trust Option Plan (the "Option Plan") to provide incentives to attract and retain Trustees, officers and key employees and service providers. The Option Plan provides for options to purchase a specified number of common shares or OP Units ("Options"). Under the Option Plan, the total number of common shares available for grant and available to be issued upon exchange of OP Units issued under the Option Plan equals 2,000,000. Upon certain extraordinary events, the Executive Compensation Committee may make such adjustments in the aggregate number of common shares or OP Units reserved for issuance, the number of common shares or OP Units covered by outstanding awards and the exercise prices specified therein as they determine to be appropriate. On January 1, 1996, the Company adopted SFAS No. 123, "Accounting for Stock-Based Compensation." Pursuant to its provisions, the Company may either record additional compensation expense each year based on the fair value of the Options granted in that year, or, as the Company has elected under APB No. 25, record no such additional compensation costs in its consolidated financial statements and disclose the pro forma effects as if SFAS No. 123 had been applied. Disclosure of pro forma effects are required only for Options granted after December 31, 1994. Therefore, the full impact of calculating compensation cost for stock options under SFAS No. 123 is not included because compensation cost is reflected over the vesting period of five years and compensation cost for Options granted prior to January 1, 1995 is not considered. Had the Company determined compensation cost based upon the fair value at the grant date for these Options under SFAS No. 123, the charge against the Company's net income would have been $227, $200 and $113 for the years ended December 31, 1999, 1998 and 1997, respectively, or less than $0.01 per share in each of these years. The Trustees who are not members of management hold 21,925 Options. At December 31, 1999, there were 487,833 vested Options held by employees at a weighted average exercise price of $20.50 per share. Through December 31, 1999, 1,666 Options have been exercised and none have expired. At December 31, 1999, Options have been issued for all but 400,075 of the 2,000,000 shares reserved for issuance under the Option Plan. The per share weighted average fair value of Options granted during 1999, 1998 and 1997 was $1.42, $1.39 and $1.61, respectively, on the date of grant using the Black Scholes Option-pricing model with the following weighted average assumptions: 1999 - expected dividend yield 7.83%, risk-free interest rate of 6.23%, expected life of 5.0 years and expected volatility rate of 16.14%; 1998 - expected dividend yield 7.91%, risk-free interest rate of 5.11%, expected life of 4.06 years and expected volatility rate of 17.16%; and 1997 - expected dividend yield 7.76%, risk-free interest rate of 6.03%, expected life of 4.24 years and expected volatility rate of 16.53%. The Options granted under this plan have a contractual term of ten years (except that the Options granted in 1995 have a contractual term of seven years). AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Stock Option activity for employees during the years ended December 31, 1999, 1998 and 1997 is as follows: WEIGHTED AVERAGE NUMBER OF EXERCISE SHARES PRICE --------- --------- Balance at December 31, 1996 602,100 $20.21 Granted 310,000 22.96 Cancelled (10,434) 20.80 --------- ------ Balance at December 31, 1997 901,666 21.23 Granted 312,000 21.80 Cancelled (40,500) 21.33 Exercised (1,666) 20.50 --------- ------ Balance at December 31, 1998 1,171,500 21.36 Granted 412,500 20.82 Cancelled (6,000) 21.98 Exercised -- -- --------- ------ Balance at December 31, 1999 1,578,000 $21.26 ========= ====== At December 31, 1999, the range of exercise prices was $18.25-$23.50 and the weighted average remaining contractual life of the outstanding Options was 7.4 years. EXECUTIVE SHARE PURCHASE PLAN At their 1996 Annual Meeting, the Company's shareholders approved the AMLI Residential Properties Trust Executive Share Purchase Plan (the "Purchase Plan"). Individuals eligible to participate in the Purchase Plan included all nine Trustees (who may each in any one year acquire newly- issued common shares having a value as of the acquisition date of up to $100) and 31 members of management (who may in any one year acquire newly- issued common shares having a value as of the acquisition date of up to the lower of $100 or 50% of their annual base compensation). Starting in 2000, the only Trustees eligible to increase their participation in the Purchase Plan are Messrs. Sweet and Tague. The common shares may be acquired at 85% of their then current value, and the participants may elect to receive financing for up to 80% of their acquisition cost. The 15% discount is taxable income to the participants and expense for the Company's financial reporting purposes in the year in which the common shares are issued. During 1999, 1998 and 1997, Trustees and employees acquired a total of 37,271, 43,153 and 36,310 common shares, respectively, pursuant to the Purchase Plan. Related shareholder loans ($445 in 1999, $636 in 1998 and $526 in 1997) bear interest at rates ranging from 6.42% to 8.23% and are partially amortizing over a ten-year term. At December 31, 1999 and 1998, the outstanding balances of these loans were $1,546 and $1,278, respectively, and are included in the accompanying balance sheets as a reduction of shareholders' equity. Total expense recorded in 1999, 1998 and 1997 for the 15% discount, including the Service Companies' share, was $117, $146 and $126, respectively. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED SHAREHOLDER LOANS TO OFFICERS/TRUSTEES During 1999, 1998 and 1997, the Board of Trustees approved up to $0, $3,550 and $5,980, respectively, in recourse loans to the four Officers/Trustees and eleven other officers to enable them to acquire on the open market approximately 430,559 of the Company's common shares of beneficial interest. These loans bear interest at rates ranging from 4.45% to 6.23% and have terms of nine years. At December 31, 1999, 1998 and 1997, the balances of these loans totaled $9,156, $9,390 and $5,959, respectively, and are included in the accompanying balance sheets as a reduction of shareholders' equity. During 1999, the Board of Trustees approved a new loan program ("New Loan Program") for certain officers as a substitute for the Incentive Plan. In December 1999, the Company loaned $1,297 to certain officers to purchase 62,100 Company shares on the open market. The loans bear interest at 6.06%. Interest only is payable during the five-year loan term. The New Loan Program provides for forgiveness of the loan over a five-year period, starting in the third year of the loan. The Company will expense the loan amount over the five-year loan term using the straight-line method and will include such amount in compensation expense. PURCHASE OBLIGATION The limited partnership agreements of AMLI at Verandah L.P. and AMLI on Timberglen, L.P. provide for the redemption (at an amount determined by formula) by the partnerships of the limited partners' entire interests, in the limited partners' sole discretion, at any time after March 25, 2002 and December 16, 2003, respectively, or at any time that there is a designated event of default on related indebtedness of the partnerships, 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 common shares of beneficial interest, or any combination thereof, in the sole discretion of the Company. LETTERS OF CREDIT At December 31, 1999, the Company is contingently liable on $4,897 in bank letters of credit issued to secure commitments made in the ordinary course of business by the Company and its co-investment partnerships. LEGAL ACTIONS The Company is a party to several legal actions which arose in the normal course of business. In the opinion of management, there will be no adverse consequences from these actions which would be material to the Company's financial position or results of operations. 9. SUBSEQUENT EVENTS On January 13, 2000, the Company, through a co-investment partnership, acquired AMLI Midtown, a 419-unit apartment community located in Houston, Texas for the purchase price of $33,250. Concurrent with the closing of the acquisition, the Company contributed $5,439 and the co-investors contributed $6,540 for a total contribution of $11,979. Northwestern Mutual Life Insurance Company provided the first mortgage loan that bears interest at 7.52% with a term of seven years amortizable over a 30-year period. AMLI Midtown contains 368,818 rentable square feet in nineteen three-story buildings that were built in 1998 on a seven-acre site. The Company owns a 45% interest in this partnership. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED On February 3, 2000, the Company completed the sale of AMLI at Sope Creek, a 695-unit apartment community located in Marietta, Georgia. AMLI at Sope Creek was developed by the Company in phases in 1982, 1983 and 1995, and its depreciated cost of $19,784 is shown separately in the accompanying balance sheet at December 31, 1999. The sale price of $42,500 was received in cash. On the same date, a portion of the proceeds of the sale were used to acquire, in a transaction accounted for as a deferred third party exchange for Federal income tax purposes, AMLI at StoneHollow, a 606-unit apartment community located in Austin, Texas. AMLI at StoneHollow contains 524,660 rentable square feet in 28 three-story buildings constructed in 1997 on a 36-acre site. In addition, the Company acquired the 99% ownership interest in AMLI at Towne Creek that it did not already own, to complete the deferred third party exchange. AMLI at Towne Creek is a 150-unit apartment community located in Gainesville, Georgia, which the Company developed in 1989. In February 2000, Amrescon merged with and into AMC. 10. SEGMENT REPORTING During 1998, the Company adopted SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," which establishes standards for the way that public business enterprises report information about operating segments in financial statements, as well as related disclosures about products and services, geographic areas and major customers. The accounting policies of the segments are the same as those described in Note 2. The Company defines each of its multifamily communities as an individual operating segment. It has also determined that all communities have similar economic characteristics and also meet the other criteria which permit the communities to be aggregated into one reportable segment, that being the development, acquisition, operation and ownership of multifamily communities in its target markets throughout the Southeast, Southwest, and Midwest. The Company's chief operating decision-maker assesses and measures segment operating results based on a performance measure referred to as net operating income at the individual operating segment and FFO at the aggregated segment level. The National Association of Real Estate Investment Trusts defines FFO as net income (computed in accordance with generally accepted accounting principles ("GAAP")), excluding extraordinary gains (losses) from debt restructurings and gains (losses) from sales of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships, joint ventures, and other affiliates. Adjustments for unconsolidated partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. FFO does not represent cash flows from operations, as defined by GAAP; is not indicative that cash flows are adequate to fund all cash needs; and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or the Company's cash flows or liquidity as defined by GAAP. In accordance with additional guidance issued by NAREIT in October 1999, the Company's FFO for 1996 and 1995 were restated to include items previously excluded. The revenues, net operating income, FFO, assets, investments in partnerships and total expenditures for property additions for the Company's reportable segment for the years ended December 31, 1999, 1998, and 1997 are summarized as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED 1999 1998 1997 ---------- ---------- ---------- Multifamily segment revenues (1) . . $ 204,071 172,582 130,135 Reconciling items: Reduce co-investment revenues to Company's share (2) . . . . . (84,834) (62,584) (44,392) Interest income and share of income (loss) from Service Companies. . . . . . . . . . . . 3,062 2,760 1,151 Other interest income. . . . . . . 1,683 1,272 521 Other revenues . . . . . . . . . . 5,126 3,323 2,658 ---------- ---------- ---------- Consolidated revenues. . . . . . . . $ 129,108 117,353 90,073 ========== ========== ========== Multifamily segment net operating income (1). . . . . . . . . . . . . $ 114,668 103,043 76,633 Reconciling items to FFO: Reduce co-investment net operating income to Company's share (3) . . . . . . . . . . . . (34,722) (32,845) (23,350) Interest income and share of income (loss) from Service Companies. . . . . . . . . . . . 3,477 3,160 1,151 Other interest income. . . . . . . 1,683 1,272 521 Other revenues . . . . . . . . . . 5,126 3,323 2,658 General and administrative expenses . . . . . . . . . . . . (4,042) (3,993) (2,850) Interest expense and loan cost amortization . . . . . . . . . . (22,611) (20,728) (12,591) ---------- ---------- ---------- Consolidated FFO before minority interest . . . . . . . . . . . . . 63,579 53,232 42,172 ---------- ---------- ---------- Reconciling items to net income: Depreciation - wholly owned properties . . . . . . . . . . . (18,194) (17,963) (13,220) Depreciation - share of co-investment properties . . . . (5,057) (3,793) (2,483) Share of Service Company's goodwill amortization. . . . . . (415) (400) -- Gains on sales of residential properties . . . . . . . . . . . 21,158 3,621 2,457 ---------- ---------- ---------- Income before minority interest and extraordinary items. . . . . . 61,071 34,697 28,926 Minority interest. . . . . . . . . . 9,333 4,997 4,378 ---------- ---------- ---------- Income before extraordinary items. . . . . . . . . . . . . . . $ 51,738 29,700 24,548 ========== ========== ========== AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED 1999 1998 1997 ---------- ---------- ---------- Segment assets (1) (4) . . . . . . . $1,462,051 1,281,291 1,061,378 Reconciling items: Subsequent capital expenditures (1) . . . . . . . . . . . . . . . 79,089 21,239 13,154 Reduce co-investment properties to Company's share (5) . . . . . (704,297) (490,616) (369,856) Accumulated depreciation . . . . . (90,441) (78,143) (62,641) Other assets (6) . . . . . . . . . 58,216 51,821 37,943 ---------- ---------- ---------- Total assets . . . . . . . . . . . . $ 804,168 785,592 679,978 ========== ========== ========== Investments in partnerships. . . . . $ 107,518 72,150 50,729 ========== ========== ========== Total expenditures for property additions (1) . . . . . . . . . . . $ 157,547 201,058 285,058 ========== ========== ========== - ---------- (1) Represents all properties in which the Company has an ownership interest, except AMLI at Prairie Court and AMLI at Towne Creek, in which the Company has a 1% GP interest. (2) Represents amount required to reduce co-investment properties' revenues to the Company's share of net income from partnerships. (3) Represents amount required to reduce co-investment properties' net operating income to the Company's share of net operating income from partnerships. (4) Represents original acquisition costs of properties in which the Company has an ownership interest. (5) Represents amount required to reduce co-investment properties' assets to the Company's investments in partnerships. (6) Non segment assets consist primarily of cash and cash equivalents, deferred expenses, security deposits, notes receivable from and advances to Service Companies and other assets. The Company does not derive any of its consolidated revenues from foreign countries and does not have any major customers that individually account for 10% or more of the Company's consolidated revenues. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED 11. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
YEAR ENDED DECEMBER 31, 1999 ------------------------------------- FIRST SECOND THIRD FOURTH ----- ------ ----- ------ Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $30,453 32,961 33,851 31,843 Income before minority interest and extraordinary item . . . . . . . . . . . . . . . . . . . . . 8,428 10,602 10,504 31,537 Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . 1,148 1,513 1,514 5,158 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,407 7,300 7,201 24,549 Earnings per common share - basic: Income before extraordinary item . . . . . . . . . . . . . . . . 0.32 0.43 0.42 1.44 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.32 0.43 0.42 1.44 Earnings per common share - diluted: Income before extraordinary item . . . . . . . . . . . . . . . . 0.32 0.43 0.42 1.26 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.32 0.43 0.42 1.26 YEAR ENDED DECEMBER 31, 1998 ------------------------------------- FIRST SECOND THIRD FOURTH ----- ------ ----- ------ Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26,662 29,309 30,155 31,227 Income before minority interest and extraordinary item . . . . . . . . . . . . . . . . . . . . . 6,259 7,690 8,302 12,446 Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . 933 1,109 1,129 1,826 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,722 5,623 5,750 8,730 Earnings per common share - basic: Income before extraordinary item . . . . . . . . . . . . . . . . 0.28 0.34 0.35 0.52 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 0.34 0.35 0.52 Earnings per common share - diluted: Income before extraordinary item . . . . . . . . . . . . . . . . 0.28 0.34 0.35 0.52 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 0.34 0.34 0.52
SCHEDULE III AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1999 (Dollars in thousands)
GROSS AMOUNT AT WHICH INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B) -------------------------------------- ------------------------------------- COSTS RELATED BUILDINGS CAPITALIZED BUILDINGS ENCUM- AND SUBSEQUENT TO AND PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---------- --------- ------------ ------------- ---------- ------------ ---------- DALLAS/FT. WORTH TX AMLI: at AutumnChase. . . . .$ -- 4,313 29,502 590 4,447 29,958 34,405 at Bent Tree. . . . . . -- 2,854 16,173 532 2,856 16,703 19,559 at Bishop's Gate. . . . 14,803 3,659 20,708 (41) 3,616 20,710 24,326 at Chase Oaks . . . . . -- 1,003 9,513 476 1,003 9,989 10,992 at Gleneagles . . . . . -- 3,178 22,723 535 3,182 23,254 26,436 on the Green. . . . . . 11,694 1,693 17,007 535 1,693 17,542 19,235 at Nantucket. . . . . . 7,573 1,931 6,817 405 1,931 7,222 9,153 of North Dallas . . . . 29,426 7,278 37,204 3,922 7,278 41,126 48,404 on Rosemeade. . . . . . -- 1,534 9,182 471 1,534 9,653 11,187 at Valley Ranch . . . . 10,229 3,139 16,199 1,759 3,139 17,958 21,097 ------- ------ ------- ----- ------ ------- ------- Subtotal - Dallas/ Ft. Worth, TX. . . . . 73,725 30,582 185,028 9,184 30,679 194,115 224,794 ------- ------ ------- ----- ------ ------- ------- AUSTIN, TX AMLI: at the Arboretum. . . . -- 1,664 9,480 508 1,664 9,988 11,652 in Great Hills. . . . . 10,402 3,228 14,304 1,129 3,228 15,433 18,661 at Martha's Vineyard. . . . . . . -- 2,154 13,216 832 2,154 14,048 16,202 at Lantana Ridge. . . . -- 3,582 20,299 220 3,585 20,516 24,101 ------- ------ ------- ----- ------ ------- ------- Subtotal - Austin, TX. . 10,402 10,628 57,299 2,689 10,631 59,985 70,616 ------- ------ ------- ----- ------ ------- -------
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DATE DEPRECIABLE ACCUMULATED COMPLETED/ LIVES PROPERTIES DEPRECIATION ACQUIRED YEARS - ---------- ------------ ---------- ----------- DALLAS/FT. WORTH TX AMLI: at AutumnChase. . . . . . . 3,511 7/91-9/98 5 - 40 years at Bent Tree. . . . . . . . 1,122 10/15/97 5 - 40 years at Bishop's Gate. . . . . . 1,418 10/17/97 5 - 40 years at Chase Oaks . . . . . . . 1,815 06/02/94 5 - 40 years at Gleneagles . . . . . . . 5,244 7/88-11/96 5 - 40 years on the Green. . . . . . . . 3,251 02/16/94 5 - 40 years at Nantucket. . . . . . . . 2,745 12/16/88 5 - 40 years of North Dallas . . . . . . 6,774 7/89-7/90 5 - 40 years on Rosemeade. . . . . . . . 1,720 12/28/90 5 - 40 years at Valley Ranch . . . . . . 3,090 05/25/90 5 - 40 years ------ Subtotal - Dallas/ Ft. Worth, TX. . . . . . 30,690 ------ AUSTIN, TX AMLI: at the Arboretum. . . . . . 2,818 06/04/86 5 - 40 years in Great Hills. . . . . . . 2,665 01/18/91 5 - 40 years at Martha's Vineyard. . . . . . . . . 2,389 10/09/92 5 - 40 years at Lantana Ridge. . . . . . 1,463 09/30/97 5 - 40 years ------ Subtotal - Austin, TX . . . . . . . 9,335 ------
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
GROSS AMOUNT AT WHICH INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B) -------------------------------------- ---------------------------------- COSTS RELATED BUILDINGS CAPITALIZED BUILDINGS ENCUM- AND SUBSEQUENT TO AND PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---------- --------- ------------ ------------- ---------- ------------ ---------- ATLANTA, GA AMLI: at Killian Creek. . . . . . -- 2,046 13,677 259 2,046 13,936 15,982 at Spring Creek . . . . . . -- 8,579 45,971 2,789 8,579 48,760 57,339 at Vinings. . . . . . . . . -- 2,405 17,595 693 2,406 18,287 20,693 at West Paces . . . . . . . -- 2,160 20,595 377 2,160 20,972 23,132 at Park Creek . . . . . . . 10,266 1,207 10,052 63 1,208 10,114 11,322 at Peachtree City . . . . . -- 2,870 16,955 240 3,001 17,064 20,065 at Clairmont. . . . . . . . 12,880 2,791 15,640 591 2,791 16,231 19,022 ------- ------ ------- ------ ------ ------- ------- Subtotal - Atlanta, GA . . . 23,146 22,058 140,485 5,012 22,191 145,364 167,555 ------- ------ ------- ------ ------ ------- ------- KANSAS CITY AMLI: at Alvamar. . . . . . . . . -- 727 6,983 354 727 7,337 8,064 at Regents Center . . . . . 19,463 2,260 22,397 923 2,265 23,315 25,580 at Town Center. . . . . . . -- 1,231 11,837 488 1,350 12,206 13,556 at Centennial Park. . . . . -- 2,445 13,855 423 2,447 14,276 16,723 at Lexington Farms. . . . . -- 4,776 27,060 178 4,776 27,238 32,014 ------- ------ ------- ------ ------ ------- ------- Subtotal - Overland, KS. . . 19,463 11,439 82,132 2,366 11,565 84,372 95,937 ------- ------ ------- ------ ------ ------- ------- INDIANAPOLIS, IN AMLI: at Riverbend. . . . . . . . 29,307 5,184 33,209 4,856 5,184 38,065 43,249 at Conner Farms . . . . . . 12,498 3,262 18,484 466 3,262 18,950 22,212 at Eagle Creek. . . . . . . -- 2,477 14,038 109 2,478 14,146 16,624 ------- ------ ------- ------ ------ ------- ------- Subtotal - Indianapolis, IN. 41,805 10,923 65,731 5,431 10,924 71,161 82,085 ------- ------ ------- ------ ------ ------- ------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B) -------------------------------------- ---------------------------------- COSTS RELATED BUILDINGS CAPITALIZED BUILDINGS ENCUM- AND SUBSEQUENT TO AND PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL - ---------- ---------- --------- ------------ ------------- ---------- ------------ ---------- CHICAGO, IL AMLI: at Poplar Creek . . . . . . 9,500 1,878 10,643 548 1,885 11,184 13,069 ------- ------ ------- ------ ------ ------- ------- Subtotal - Chicago, IL . . . 9,500 1,878 10,643 548 1,885 11,184 13,069 ------- ------ ------- ------ ------ ------- ------- TOTAL PROPERTIES. . . . . 178,041 87,508 541,318 25,230 87,875 566,181 654,056 ------- ------ ------- ------ ------ ------- ------- Other. . . . . . . . . . . . -- 28 248 80 28 328 356 ------- ------ ------- ------ ------ ------- ------- TOTAL . . . . . . . . . . 178,041 87,536 541,566 25,310 87,903 566,509 654,412 ======= ====== ======= ====== ====== ======= =======
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DATE DEPRECIABLE ACCUMULATED COMPLETED/ LIVES PROPERTIES DEPRECIATION ACQUIRED YEARS - ---------- ------------ ---------- ----------- ATLANTA, GA AMLI: at Killian Creek. . . . . . . 595 03/13/97 5 - 40 years at Spring Creek . . . . . . . 16,479 5/85 - 5/89 5 - 40 years at Vinings. . . . . . . . . . 2,570 06/19/92 5 - 40 years at West Paces . . . . . . . . 3,500 11/15/93 5 - 40 years at Park Creek . . . . . . . . 642 07/31/98 5 - 40 years at Peachtree City . . . . . . 1,350 04/30/98 5 - 40 years at Clairmont. . . . . . . . . 1,002 01/21/98 5 - 40 years ------- Subtotal - Atlanta, GA . . . 26,138 ------- KANSAS CITY AMLI: at Alvamar. . . . . . . . . . 1,159 10/18/94 5 - 40 years at Regents Center . . . . . . 3,613 10/94-12/96 5 - 40 years at Town Center. . . . . . . . 1,220 12/22/97 5 - 40 years at Centennial Park. . . . . . 521 12/28/98 5 - 40 years at Lexington Farms. . . . . . 1,000 10/27/98 5 - 40 years ------- Subtotal - Overland, KS. . . 7,513 ------- INDIANAPOLIS, IN AMLI: at Riverbend. . . . . . . . . 6,378 12/12/92 5 - 40 years at Conner Farms . . . . . . . 1,217 12/22/97 5 - 40 years at Eagle Creek. . . . . . . . 513 12/27/98 5 - 40 years ------- Subtotal - Indianapolis, IN. . 8,108 ------ SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED DATE DEPRECIABLE ACCUMULATED COMPLETED/ LIVES PROPERTIES DEPRECIATION ACQUIRED YEARS - ---------- ------------ ---------- ----------- CHICAGO, IL AMLI: at Poplar Creek . . . . . . . 720 12/18/97 5 - 40 years ------- Subtotal - Chicago, IL . . . . 720 ------- TOTAL PROPERTIES. . . . . . 82,504 ------- Other. . . . . . . . . . . . . 113 ------- TOTAL . . . . . . . . . . . 82,617 =======
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
GROSS AMOUNT AT WHICH INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B) ------------------------- ------------------------------------- COSTS RELATED BUILDINGS CAPITALIZED BUILDINGS ENCUM- AND SUBSEQUENT TO AND DESCRIPTION BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL - ----------- ---------- --------- ------------ ------------- ---------- ------------ ---------- PROPERTY HELD FOR SALE AMLI: at Sope Creek . . . . . -- 3,347 22,817 1,435 3,378 24,221 27,599 -------- -------- -------- -------- -------- -------- -------- TOTAL STABILIZED PROPERTIES. . . . . . . 178,041 90,883 564,383 26,745 91,281 590,730 682,011 -------- -------- -------- -------- -------- -------- -------- LAND PARCELS AND OTHER AMLI: at Mesa Ridge . . . . . -- 3,070 -- 1,074 3,121 1,023 4,144 at Bent Tree II . . . . -- 1,600 -- 8,551 1,615 8,536 10,151 at Kings Harbor . . . . -- 1,765 -- 710 1,823 652 2,475 at Fossil Lake. . . . . -- 2,439 -- 648 2,722 365 3,087 at Prairie Lakes I. . . -- 730 -- 220 753 197 950 at Prairie Lakes II-IV -- 3,595 -- 1,414 3,706 1,303 5,009 at Champions II . . . . -- 2,343 -- 298 2,352 289 2,641 at Cambridge Square . . -- 3,200 -- 494 3,232 462 3,694 at Vista Ridge. . . . . -- 2,617 -- 230 2,649 198 2,847 at Anderson Mill. . . . -- 3,744 -- 265 3,835 174 4,009 at Peachtree City II. . -- 2,973 -- 180 3,034 119 3,153 at Westwood Ridge . . . -- 2,807 -- 160 2,855 112 2,967 at Fossil Lake II . . . -- 1,716 -- 471 2,184 3 2,187 -------- -------- -------- -------- -------- -------- -------- TOTAL LAND PARCELS AND OTHER. . . . . . -- 32,599 -- 14,715 33,881 13,433 47,314 -------- -------- -------- -------- -------- -------- -------- TOTAL. . . . . . . . .$178,041 123,482 564,383 41,460 125,162 604,163 729,325 ======== ======== ======== ======== ======== ======== ========
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DATE DEPRECIABLE ACCUMULATED COMPLETED/ LIVES PROPERTIES DEPRECIATION ACQUIRED YEARS - ---------- ------------ ---------- ----------- PROPERTY HELD FOR SALE AMLI: at Sope Creek . . . . . . . 7,815 7/82-12/95 5 - 40 years -------- TOTAL STABILIZED PROPERTIES. . . . . . . . . 90,432 -------- LAND PARCELS AND OTHER AMLI: at Mesa Ridge . . . . . . . -- 12/23/96 at Bent Tree II . . . . . . 9 12/08/97 5 - 40 years at Kings Harbor . . . . . . -- 03/03/98 at Fossil Lake. . . . . . . -- 06/26/98 at Prairie Lakes I. . . . . -- 07/22/98 at Prairie Lakes II-IV. . . -- 07/22/98 at Champions II . . . . . . -- 12/01/98 at Cambridge Square . . . . -- 05/03/99 at Vista Ridge. . . . . . . -- 05/03/99 at Anderson Mill. . . . . . -- 07/08/99 at Peachtree City II. . . . -- 08/27/99 at Westwood Ridge . . . . . -- 09/09/99 at Fossil Lake II . . . . . -- 12/27/99 -------- TOTAL LAND PARCELS AND OTHER. . . . . . . . 9 -------- TOTAL. . . . . . . . . . . $ 90,441 ======== NOTES: (A) The initial costs represents the original development costs or original purchase price of the properties to the Company, including closing costs. (B) The aggregate cost of real estate owned at December 31, 1999 for Federal income tax purposes was $691,701. (C) Amounts disclosed exclude current accrued interest and debt not secured by properties.
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
(D) Reconciliation of real estate owned: 1999 1998 1997 ---------- ---------- ---------- Balance at beginning of period . . . . . . . . . . . $739,764 653,947 495,519 Additions during period. . . . . . . . . . . . . . . 59,726 190,810 189,939 Contributions to Joint Venture . . . . . . . . . . . (34,661) (96,095) (19,516) Sale of property . . . . . . . . . . . . . . . . . . (35,504) (7,737) (11,995) Other. . . . . . . . . . . . . . . . . . . . . . . . -- (1,161) -- -------- -------- -------- $729,325 739,764 653,947 ======== ======== ======== (E) Reconciliation of accumulated depreciation: Balance at beginning of period . . . . . . . . . . . $ 78,143 62,641 50,478 Additions during period. . . . . . . . . . . . . . . 18,194 17,963 13,220 Sale of property . . . . . . . . . . . . . . . . . . (5,935) (2,461) (1,057) Other. . . . . . . . . . . . . . . . . . . . . . . . 39 -- -- -------- -------- -------- Balance at end of period . . . . . . . . . . . . . . $ 90,441 78,143 62,641 ======== ======== ========
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no changes or disagreements with the accountants on accounting and financial disclosures. PART III ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this item is hereby incorporated by reference to the materials appearing in the Company's Proxy Statement for the annual meeting of shareholders to be held on May 1, 2000 (the "Proxy Statement"), under the captions "Election of Trustees," "Management - Trustees and Executive Officers" and "Section 16(A) Beneficial Ownership Reporting Compliance." ITEM 11. EXECUTIVE COMPENSATION The information required by this item is hereby incorporated by reference to the materials appearing in the Proxy Statement under the captions "Election of Trustees" and "Executive Compensation." ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this item is hereby incorporated by reference to the materials appearing in the Proxy Statement under the caption "Security Ownership." ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is hereby incorporated by reference to the materials appearing in the Proxy Statement under the caption "Certain Relationships and Related Transactions." PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K (a) The following documents are filed as part of this report: (1) Independent Auditors' Report. . . . . . . . . . . . . . Consolidated Balance Sheets, December 31, 1999 and 1998. . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Operations, years ended December 31, 1999, 1998 and 1997. . . . . Consolidated Statements of Shareholders' Equity, years ended December 31, 1999, 1998 and 1997. . . . . Consolidated Statements of Cash Flows, years ended December 31, 1999, 1998 and 1997. . . . . Notes to Consolidated Financial Statements. . . . . . . (2) Financial Statement Schedule and Independent Auditors' Report TITLE SCHEDULE Consolidated Real Estate and Accumulated Depreciation. . . . . . . . . . . . . . III The independent auditors' report with respect to the financial statement schedule is on page 50. (3) Exhibits 3.1 Amended and Restated Declaration of Trust of the Registrant (Incorporated by reference to exhibit 3.1 to Registration Statement No. 33-71566). 3.2 Amended and Restated By-laws of the Registrant (Incorporated by reference to exhibit 3.2 to Registration Statement No. 33- 71566). 4.1 Form of Share Certificate for Common Shares of Beneficial Interest (Incorporated by reference to exhibit 4.1 to the Registration Statement No. 33-71566). 4.2 Form of Share Certificate for Series A Cumulative Convertible Preferred Shares of Beneficial Interest (Incorporated by reference to exhibit 4.5 to the Registrant's Form 8-K dated January 18, 1996). 4.3 Articles Supplementary Classifying and Designating a Series of Preferred Shares as Series A Cumulative Convertible Preferred Shares of Beneficial Interest (Incorporated by reference to exhibit 4.9 to the Registrant's Form 8-K dated January 30, 1996). 4.4 Articles Supplementary Classifying and Designating a Series of Preferred Shares as Series B Cumulative Convertible Preferred Shares of Beneficial Interest (Incorporated by reference to exhibit 4 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998). 4.5 Rights Agreement, dated as of November 2, 1998, between AMLI Residential Properties Trust and Harris Trust and Savings Bank, as Rights Agent, including Exhibit A thereto (Form of Articles Supplementary relating to the Series C Junior Participating Preferred Shares) and Exhibit B thereto (Form of Right Certificate) (Incorporated by reference to exhibit 4 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998). 10.1 Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.1(a) First Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1(a) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995). 10.1(b) Second Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995). 10.1(c) Third Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1(c) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996). 10.1(d) Fourth Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998). 10.2 Registration Rights and Lock-Up Agreement between the Company and certain Original Investors (Incorporated by reference to exhibit 10.8 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.3 Corporate Services Agreement among the Registrant, AMLI Residential Properties L.P., AMLI Management Company and AMLI Institutional Advisors, Inc. (Incorporated by reference to exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.4 Administrative Services Agreement between AMLI Management Company and AMLI Realty Co. (Incorporated by reference to exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.5 Non-Competition Agreement between the Registrant and Amli Realty Co. (Incorporated by reference to exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.6 Non-Competition Agreement between the Registrant and Gregory T. Mutz (Incorporated by reference to exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.7 Non-Competition Agreement between the Registrant and John E. Allen (Incorporated by reference to exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.8 Non-Competition Agreement between the Registrant and Allan J. Sweet (Incorporated by reference to exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.9 Management Agreement between AMLI Residential Properties, L.P. and Amli Management Company (Incorporated by reference to exhibit 10.10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994). 10.10 Performance Incentive Plan (Incorporated by reference to exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995). 10.11 Amli Residential Properties Trust Option Plan (Incorporated by reference to exhibit 10.8 to the Registration Statement No. 33-71566). 10.11(a) First Amendment to AMLI Residential Properties Option Plan (Incorporated by reference to exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995). 10.11(b) Second Amendment to AMLI Residential Properties Option Plan (Incorporated by reference to exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998). 10.12 AMLI Residential Properties Trust Executive Share Purchase Plan (Incorporated by reference to exhibit 10.1 to the Registration Statement No. 333-8813). 10.13 Registration Rights Agreement dated March 9, 1998 between AMLI Residential Properties Trust and Security Capital Preferred Growth Incorporated (Incorporated by reference to exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998). 10.14 Employment Agreement between the Registrant and Gregory T. Mutz (Incorporated by reference to exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). 10.15 Employment Agreement between the Registrant and John E. Allen (Incorporated by reference to exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). 10.16 Employment Agreement between the Registrant and Allan J. Sweet (Incorporated by reference to exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). 10.17 Employment Agreement between the Registrant and Philip N. Tague (Incorporated by reference to exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). 10.18 Employment Agreement between the Registrant and Robert S. Aisner (Incorporated by reference to exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). 10.19 Employment Agreement between the Registrant and Robert J. Chapman (Incorporated by reference to exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). 10.20 $200,000 Amended and Restated Credit Agreement dated as of July 27, 1998 among AMLI Residential Properties, L.P., the banks listed herein, Wachovia Bank, N.A., as Agent and The First National Bank of Chicago, as Documentation Agent and Dresdner Bank, A.G., New York and Grand Cayman Branches, as Co-Agent (Incorporated by reference to exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998). 10.21 $250,000 (expandable to $300,000) Credit Agreement dated as of October 12, 1999 among AMLI Residential Properties, L.P., the banks listed herein, Wachovia Bank, N.A., as Administrative Agent and Bank One, N.A., as Syndication Agent and PNC Bank, National Association, as Documentation Agent and Harris Trust and Savings Bank, as Senior Managing Agent and Commerzbank AG, New York Branch, as Managing Agent and Wachovia Securities, Inc. and Banc One Capital Markets, Inc., as Co-Lead Arrangers and Joint Book Managers (Incorporated by reference to exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 1999). 21.1 Subsidiaries of the Registrant. 23.1 Consent of KPMG LLP. 27 Financial Data Schedule. 99.1 Financial and Operating Data furnished to Shareholders and Analysts. (b) Reports on Form 8-K No reports on Form 8-K have been filed for the year ended December 31, 1999. 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: March 17, 2000 By: /S/ ALLAN J. SWEET Allan J. Sweet President and Trustee 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: March 17, 2000 By: /S/ GREGORY T. MUTZ Gregory T. Mutz Chairman of the Board of Trustees Date: March 17, 2000 By: /S/ JOHN E. ALLEN John E. Allen Vice-Chairman of the Board of Trustees Date: March 17, 2000 By: /S/ ALLAN J. SWEET Allan J. Sweet President and Trustee Date: March 17, 2000 By: /S/ PHILIP N. TAGUE Philip N. Tague Executive Vice President and Trustee Date: March 17, 2000 By: /S/ LAURA D. GATES Laura D. Gates Trustee Date: March 17, 2000 By: /S/ MARC S. HEILWEIL Marc S. Heilweil Trustee Date: March 17, 2000 By: /S/ STEPHEN G. MCCONAHEY Stephen G. McConahey Trustee Date: March 17, 2000 By: /S/ QUINTIN E. PRIMO III Quintin E. Primo III Trustee Date: March 17, 2000 By: /S/ JOHN G. SCHREIBER John G. Schreiber Trustee Date: March 17, 2000 By: /S/ ROBERT J. CHAPMAN Robert J. Chapman Chief Financial Officer Date: March 17, 2000 By: /S/ CHARLES C. KRAFT Charles C. Kraft Principal Accounting Officer INDEX TO EXHIBITS Exhibit No. Document Description - ----------- -------------------- 21.1 Subsidiaries of the Registrant 23.1 Consent of KPMG LLP 27 Financial Data Schedule 99.1 Financial and Operating Data furnished to Shareholders and Analysts EX-21.1 2 EXHIBIT 21.1 - ------------ SUBSIDIARIES OF THE COMPANY COMPANY'S JURISDICTION PERCENTAGE NAME OF SUBSIDIARY OF INCORPORATION OWNERSHIP - ------------------ ---------------- ---------- AMLI Residential Properties, L.P.. . . . . . . Delaware 85% A. AMLI Residential Construction, Inc. . . Delaware 95% B. AMLI Institutional Advisors, Inc. . . . Illinois 95% C. AMLI Management Company . . . . . . . . Delaware 95% D. Laurel Park Venture . . . . . . . . . . Georgia 100% E. Pleasant Hill Joint Venture . . . . . . Georgia 40% F. AMLI Foundation Co-Investors, L.P. . . Delaware 25% G. AMLI Foundation Co-Investors-II, L. P. . . . . . . . . . . . . . . . . Delaware 15% H. AMLI at Champions, L.P. . . . . . . . . Texas 15% I. AMLI at Windbrooke, L.P. . . . . . . . Illinois 15% J. AMLI at Willeo Creek, L.P. . . . . . . Georgia 30% K. Barrett Lakes, L.L.C. . . . . . . . . . Delaware 35% L. AMLI at Chevy Chase, L.P. . . . . . . . Illinois 33% M. AMLI at Willowbrook, L.P. . . . . . . . Illinois 40% N. AMLI at River Exchange, L.L.C.. . . . . Delaware 40% O. Acquiport/Aurora Crossing, L.P. . . . . Delaware 25% P. Acquiport/Fossil Creek, L.P.. . . . . . Delaware 25% Q. AMLI at Danada, L.L.C.. . . . . . . . . Illinois 10% R. AMLI at Verandah, L.P.. . . . . . . . . Delaware 35% S. Gardner Drive Limited Liability Company . . . . . . . . . . . . . . . . Delaware 35% T. AMLI at Regents Crest, L.P. . . . . . . Delaware 25% U. Park Creek-Gainsville, L.L.C. . . . . . Georgia 100% V. Timberglen, L.P.. . . . . . . . . . . . Delaware 40% W. AMLI Partners Ltd. 85-IV. . . . . . . . Illinois 1% X. AMLI Towne Creek Crossing L.P.. . . . . Georgia 1% Y. Lantana Apartments, Ltd.. . . . . . . . Texas 100% Z. Windsor Plano Partners, Ltd.. . . . . . Texas 100% AA. AMLI at Conner Farms, L.P.. . . . . . . Delaware 100% AB. Clairmont, L.P. . . . . . . . . . . . . Delaware 100% AC. Wells Oakhurst, L.P.. . . . . . . . . . Delaware 25% AD. AMLI Parkway, L.P.. . . . . . . . . . . Texas 25% AE. AMLI Castle Creek, L.P. . . . . . . . . Delaware 40% AF. Acquiport/Clearwater, L.P.. . . . . . . Delaware 25% AG. AMLI Creekside, L.P.. . . . . . . . . . Delaware 25% AH. AMLI Deerfield, L.P.. . . . . . . . . . Texas 25% AI. Acquiport/Wynnewood, L.P. . . . . . . . Delaware 25% AJ. Landmark on Spring Mill LLC . . . . . . Arizona 20% AK. AMLI at Mill Creek, LLC . . . . . . . . Delaware 35% AL. Park Creek - Old Mill, L.P. . . . . . . Georgia 75% AM. Aquiport/St. Charles, L.P.. . . . . . . Delaware 25% AN. Aquiport/Monterey Oaks, L.P.. . . . . . Delaware 25% AO. Aquiport/Park Bridge, L.P.. . . . . . . Delaware 25% AP. AMLIWS Summit Ridge, LLC. . . . . . . . Missouri 25% AQ. AMLI/BPMT Prestonwood Hills Partnership . . . . . . . . . . . . . . Delaware 45% AR. AMLI/BPMT on the Green Partnership. . . Delaware 45% AS. Prestonwood Hills REIT II . . . . . . . Maryland 44% AT. On the Green REIT II. . . . . . . . . . Maryland 44% AU. AMLI at Oakbend, L.P. . . . . . . . . . Delaware 40% EX-23.1 3 EXHIBIT 23.1 - ------------ CONSENT OF KPMG LLP The Board of Trustees AMLI Residential Properties Trust: We consent to incorporation by reference in the registration statements (Nos. 333-65503 and 33-57327) on Form S-3 of AMLI Residential Properties Trust of our report dated February 25, 2000, relating to the consolidated balance sheets of AMLI Residential Properties Trust as of December 31, 1999 and 1998, and the related consolidated statements of operations, changes in shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1999, and the related schedule, which report appears in the December 31, 1999 annual report on Form 10-K of AMLI Residential Properties Trust. KPMG LLP Chicago, Illinois March 17, 2000 EX-27.1 4
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT. 12-MOS DEC-31-1999 DEC-31-1999 2,318 0 0 0 0 0 729,325 90,441 804,618 0 369,541 170 0 40 356,831 804,618 0 129,108 0 89,195 0 0 22,201 51,738 0 51,738 0 0 0 51,738 2.63 2.49
EX-99.1 5 EXHIBIT 99.1 - ------------ AMLI RESIDENTIAL PROPERTIES TRUST FINANCIAL AND OPERATING DATA December 31, 1999 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 December 31, 1999 and 1998 8. Same Community Comparison - Wholly-Owned - year ended December 31, 1999 and 1998 9. Same Community Comparison - Wholly-Owned & Co-Invest- ments - three months ended December 31, 1999 and 1998 10. Same Community Comparison - Wholly-Owned & Co-Invest- ments - year ended December 31, 1999 and 1998 11. Property Information 12. Property EBITDA 13. Development Activities AMLI RESIDENTIAL PROPERTIES TRUST FUNDS FROM OPERATIONS Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1999 1998 1999 1998 -------- -------- ------- -------- REVENUES - -------- Property revenues: Rental . . . . . . . . . . . . . . . . . . . . . . . $ 26,364 $ 26,877 $108,268 $101,892 Other. . . . . . . . . . . . . . . . . . . . . . . . 1,547 1,583 6,686 5,937 -------- -------- -------- -------- Total Property Revenues. . . . . . . . . . . . . 27,911 28,460 114,954 107,829 -------- -------- -------- -------- Property operating expenses. . . . . . . . . . . . . . (9,909) (10,412) (41,473) (40,895) Property management fees . . . . . . . . . . . . . . . (698) (711) (2,875) (2,698) -------- -------- -------- -------- Property expenses. . . . . . . . . . . . . . . . (10,607) (11,123) (44,348) (43,593) Operating expense ratio. . . . . . . . . . . . . 38.0% 39.1% 38.6% 40.4% -------- -------- -------- -------- Net operating income . . . . . . . . . . . . . . 17,304 17,337 70,606 64,236 -------- -------- -------- -------- OTHER INCOME - ------------ Share of Service Cos. FFO (1) (2). . . . . . . . . . (199) 145 (840) 267 Interest from Service Companies (2). . . . . . . . . 1,095 892 4,317 2,893 Other interest . . . . . . . . . . . . . . . . . . . 581 428 1,683 1,272 Share of partnerships FFO (4). . . . . . . . . . . . 2,882 1,814 9,340 5,962 Fee income - acquisitions, dispositions and financing. . . . . . . . . . . . . . . . . . . . . 481 81 984 81 Fee income - developments. . . . . . . . . . . . . . 464 507 2,692 2,526 Fee income - asset management. . . . . . . . . . . . 148 151 601 603 Other (5). . . . . . . . . . . . . . . . . . . . . . 28 2 849 113 -------- -------- -------- -------- Total other income . . . . . . . . . . . . . . . 5,480 4,020 19,626 13,717 General and administrative . . . . . . . . . . . . . . (823) (1,190) (4,042) (3,993) -------- -------- -------- -------- EBITDA . . . . . . . . . . . . . . . . . . . . . . . . 21,961 20,167 86,190 73,960 -------- -------- -------- -------- Interest expense . . . . . . . . . . . . . . . . . . . (5,439) (5,270) (22,201) (20,263) Amortization of deferred costs . . . . . . . . . . . . (110) (101) (410) (465) -------- -------- -------- -------- Funds from operations (FFO) (5). . . . . . . . . . $ 16,412 $ 14,796 $ 63,579 $ 53,232 -------- -------- -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST FUNDS FROM OPERATIONS - CONTINUED Unaudited - Dollars in thousands except per share data THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1999 1998 1999 1998 -------- -------- ------- -------- Capital expenditures paid from FFO (6) . . . . . . . . (1,017) (962) (4,366) (3,991) Other - share of Co-Investments Cap Exp. . . . . . . . (120) (62) (431) (330) -------- -------- -------- -------- Funds available for distribution (FAD) . . . . . . $ 15,275 $ 13,772 $ 58,782 $ 48,911 ======== ======== ======== ======== FFO per share. . . . . . . . . . . . . . . . . . . . . $ 0.67 $ 0.61 $ 2.59 $ 2.34 FAD per share. . . . . . . . . . . . . . . . . . . . . $ 0.62 $ 0.56 $ 2.39 $ 2.14 Dividend per share . . . . . . . . . . . . . . . . . . $ 0.46 $ 0.45 $ 1.82 $ 1.77 ======== ======== ======== ======== Dividend as a % of FFO . . . . . . . . . . . . . . . . 68.9% 74.2% 70.3% 75.7% Dividend as a % of FAD . . . . . . . . . . . . . . . . 74.0% 79.7% 76.0% 82.4% ======== ======== ======== ======== NOTES: (1) Includes shares of income before goodwill amortization of $414 and $400 for the years ended December 31, 1999 and 1998, respectively. (2) Includes $171 gain on sale of land for the year ended December 31, 1999. (3) Interest on 13% notes receivable and working capital advances. (4) Includes share of depreciation of $5,057 and $3,793 for the years ended December 31, 1999 and 1998, respectively. (5) FFO for the full year ended December 31, 1999 includes $281 gain on sale of land recorded in the second quarter of 1999. This amount had been excluded from FFO in previously issued financial information for the second and third quarters of 1999. (6) Costs of rehabs in progress at four properties (approximately $6,775 and $476 for the years ended December 31, 1999 and 1998) are not reflected in cap ex paid from FFO.
AMLI RESIDENTIAL PROPERTIES TRUST STATEMENTS OF OPERATIONS Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1999 1998 1999 1998 -------- -------- ------- -------- REVENUES: - -------- Property revenues: Rental . . . . . . . . . . . . . . . . . . . . . . $ 26,364 $ 26,877 $108,268 $101,892 Other. . . . . . . . . . . . . . . . . . . . . . . 1,547 1,583 6,686 5,937 Interest and share of income (loss) from Service Companies. . . . . . . . . . . . . . . . . 792 937 3,062 2,760 Other interest . . . . . . . . . . . . . . . . . . . 581 428 1,683 1,272 Share of income from co-investment partnerships. . . 1,438 661 4,283 2,169 Fees from co-investment partnerships and other . . . 1,121 741 5,126 3,323 -------- -------- -------- -------- Total Revenues . . . . . . . . . . . . . . . . . 31,843 31,227 129,108 117,353 -------- -------- -------- -------- EXPENSES: - -------- Personnel. . . . . . . . . . . . . . . . . . . . . . 2,778 2,662 10,927 10,073 Advertising and promotion. . . . . . . . . . . . . . 613 804 2,597 2,982 Utilities. . . . . . . . . . . . . . . . . . . . . . 605 869 3,643 4,272 Building repairs and maintenance . . . . . . . . . . 1,835 1,885 6,335 6,378 Landscaping and grounds maintenance. . . . . . . . . 575 599 2,473 2,298 Real estate taxes. . . . . . . . . . . . . . . . . . 2,846 3,045 13,266 12,539 Insurance. . . . . . . . . . . . . . . . . . . . . . 197 137 816 841 Other operating expenses . . . . . . . . . . . . . . 460 411 1,416 1,512 Property management fees . . . . . . . . . . . . . . 698 711 2,875 2,698 Interest, net of capitalized . . . . . . . . . . . . 5,439 5,270 22,201 20,263 Amortization of deferred costs . . . . . . . . . . . 110 101 410 465 Depreciation of real property. . . . . . . . . . . . 3,216 3,471 13,254 13,132 Depreciation of personal property. . . . . . . . . . 1,269 1,247 4,940 4,831 General and administrative . . . . . . . . . . . . . 823 1,190 4,042 3,993 -------- -------- -------- -------- Total expenses . . . . . . . . . . . . . . . . . 21,464 22,402 89,195 86,277 -------- -------- -------- -------- Non-recurring item - gain on sale of properties (1) . . . . . . . . . . . . . . . . . . . 21,158 3,621 21,158 3,621 -------- -------- -------- -------- Income before taxes, minority interest and extraordinary item . . . . . . . . . . . . . . . 31,537 12,446 61,071 34,697 -------- -------- -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST STATEMENTS OF OPERATIONS - CONTINUED THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1999 1998 1999 1998 -------- -------- ------- -------- Minority interest. . . . . . . . . . . . . . . . . . . 5,158 1,826 9,333 4,997 -------- -------- -------- -------- Income before and extraordinary items. . . . . . . . . 26,379 10,620 51,738 29,700 Extraordinary items, net of minority interest. . . . . -- -- -- -- -------- -------- -------- -------- Net income . . . . . . . . . . . . . . . . . . . . . . 26,379 10,620 51,738 29,700 Net income allocable to preferred shares . . . . . . . 1,830 1,890 7,281 4,875 -------- -------- -------- -------- Net income allocable to common shares. . . . . . . . . $ 24,549 $ 8,730 $ 44,457 $ 24,825 ======== ======== ======== ======== INCOME PER COMMON SHARE - BASIC: - ------------------------------- Before extraordinary items . . . . . . . . . . . . . $ 1.44 $ 0.52 $ 2.63 $ 1.49 Extraordinary item . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00 $ 0.00 $ 0.00 Income per common share. . . . . . . . . . . . . . . $ 1.44 $ 0.52 $ 2.63 $ 1.49 ======== ======== ======== ======== Income per common share - diluted: . . . . . . . . . . $ 1.28 $ 0.52 $ 2.49 $ 1.49 ======== ======== ======== ======== FUNDS FROM OPERATIONS: - --------------------- Income before taxes, minority interest and extraordinary item . . . . . . . . . . . . . . $ 31,537 $ 12,446 $ 61,071 $ 34,697 Depreciation of real property. . . . . . . . . . . . 3,216 3,471 13,254 13,132 Depreciation of personal property. . . . . . . . . . 1,269 1,247 4,940 4,831 Non-recurring items - gain on sale of properties (1) . . . . . . . . . . . . . . . . . . (21,158) (3,621) (21,158) (3,621) Share of Co-investments depreciation . . . . . . . . 1,444 1,153 5,057 3,793 Share of Service Co. goodwill amortization and gain on land sale. . . . . . . . . . . . . . . 104 100 415 400 -------- -------- -------- -------- Funds from operations (FFO). . . . . . . . . . . . $ 16,412 $ 14,796 $ 63,579 $ 53,232 ======== ======== ======== ======== AMLI RESIDENTIAL PROPERTIES TRUST STATEMENTS OF OPERATIONS - CONTINUED THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1999 1998 1999 1998 -------- -------- ------- -------- FFO per share. . . . . . . . . . . . . . . . . . . . . $ 0.67 $ 0.61 $ 2.59 $ 2.34 ======== ======== ======== ======== Capital expenditures paid from FFO . . . . . . . . . . $ (1,017) $ (962) $ (4,366) $ (3,991) Other - Share Co-investments cap exp . . . . . . . . . (120) (62) (431) (330) -------- -------- -------- -------- Funds available for distribution (FAD) . . . . . . . . $ 15,275 $ 13,772 $ 58,782 $ 48,911 ======== ======== ======== ======== FAD per share. . . . . . . . . . . . . . . . . . . . . $ 0.62 $ 0.56 $ 2.39 $ 2.14 ======== ======== ======== ======== Dividends per share. . . . . . . . . . . . . . . . . . $ 0.46 $ 0.45 $ 1.82 $ 1.77 ======== ======== ======== ======== Dividends as a % of FFO. . . . . . . . . . . . . . . . 68.9% 74.2% 70.3% 75.7% Dividends as a % of FAD. . . . . . . . . . . . . . . . 74.0% 79.7% 76.0% 82.4% ======== ======== ======== ======== (1) Includes $1,663 shares of gain on sale of property by an unconsolidated co-investment partnership.
AMLI RESIDENTIAL PROPERTIES TRUST CONDENSED BALANCE SHEETS Unaudited - Dollars in thousands except per share data
DEC. 31, DEC. 31, 1999 1998 -------- -------- ASSETS - ------ Rental apartments Land. . . . . . . . . . . . . . . . . . . $ 87,903 $ 91,459 Depreciable property. . . . . . . . . . . 566,509 586,507 -------- -------- 654,412 677,966 Less accumulated depreciation . . . . . . (82,626) (78,143) -------- -------- 571,786 599,823 Rental apartments held for sale, net of accumulated depreciation. . . . . 19,784 -- Properties under development . . . . . . . 47,314 61,798 Investments in partnerships. . . . . . . . 107,518 72,150 Cash and cash equivalents. . . . . . . . . 2,318 4,546 Security deposits. . . . . . . . . . . . . 1,541 1,684 Deferred costs, net. . . . . . . . . . . . 3,377 2,942 Notes receivable and advances to Service Companies. . . . . . . . . . . . 35,717 31,277 Other assets . . . . . . . . . . . . . . . 15,263 11,372 -------- -------- Total assets . . . . . . . . . . . . . . . $804,618 $785,592 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Debt . . . . . . . . . . . . . . . . . . . $369,541 $367,370 Accrued interest payable . . . . . . . . . 1,743 2,170 Accrued real estate taxes. . . . . . . . . 9,999 10,141 Construction costs payable . . . . . . . . 2,068 1,967 Security deposits and prepaid rents. . . . 2,807 3,420 Other liabilities. . . . . . . . . . . . . 3,606 3,096 -------- -------- Total liabilities. . . . . . . . . . . . . 389,764 388,164 -------- -------- Minority interest. . . . . . . . . . . . . 57,813 54,574 -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST CONDENSED BALANCE SHEETS - CONTINUED DEC. 31, DEC. 31, 1999 1998 -------- -------- Shareholders' equity Preferred shares, $.01 par value. . . . . 40 42 Shares of beneficial interest, $.01 par value. . . . . . . . . . . . . 170 167 Additional paid-in capital. . . . . . . . 421,989 420,303 Employees and trustees notes. . . . . . . (12,000) (10,668) Retained earnings . . . . . . . . . . . . 100,334 48,597 Dividends paid. . . . . . . . . . . . . . (153,492) (115,587) -------- -------- Total shareholders' equity. . . . . . . 357,041 342,854 -------- -------- Total liabilities and shareholders' equity . . . . . . . . . $804,618 $785,592 ======== ========
AMLI RESIDENTIAL PROPERTIES TRUST SELECTED QUARTERLY FINANCIAL INFORMATION December 31, 1999 (dollars in thousands except for share data)
QUARTER ENDING ----------------------------------------------------------------------- DEC. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, 1999 1999 1999 1999 1998 --------- --------- --------- --------- --------- Debt $ 369,541 $ 410,177 $ 382,320 $ 380,475 $ 367,370 Debt including share of Co-investment debt $ 468,609 $ 502,770 $ 458,682 $ 454,348 $ 439,172 Total Shares and Units Outstanding (1) 24,538,654 24,529,449 24,524,849 24,464,805 24,445,827 Value per Common Share - end of quarter $ 20.1875 $ 21.00 $ 22.375 $20.625 $22.25 Total Equity (Market Value) - end of quarter $ 495,374 $ 515,118 $548,743 $ 504,587 $ 543,920 Market Capitalization $ 864,915 $ 925,295 $ 931,063 $ 885,062 $ 911,290 Market Capitalization including share of Co-investment debt $ 963,983 $1,017,888 $1,007,425 $ 958,935 $ 983,092 Market Capitalization including Co-investment at completed cost $1,610,307 $1,679,212 $1,554,018 $1,431,730 $1,455,887 ========== ========== ========== ========== ========== Total Revenues (2) $ 31,843 $ 33,851 $ 32,961 $ 30,453 $ 31,227 EBITDA (3) $ 21,961 $ 22,283 $ 22,044 $ 19,902 $ 20,167 FFO $ 16,412 $ 16,370 $ 16,322 $ 14,475 $ 14,796 FAD $ 15,275 $ 15,232 $ 14,857 $ 13,418 $ 13,772 Dividends Paid $ 11,287 $ 11,038 $ 11,011 $ 11,004 $ 10,323 Debt Service (net of capitalized interest) $ 6,075 $ 6,497 $ 6,280 $ 5,995 $ 5,924 Interest Expense $ 5,439 $ 5,821 $ 5,625 $ 5,316 $ 5,270 G & A Expense $ 823 $ 1,225 $ 948 $ 1,046 $ 1,190 Total Shares and Units Outstanding - Wtd. Avg. 24,534,912 24,527,610 24,467,931 24,455,709 24,355,803 ========== ========== ========== ========== ========== AMLI RESIDENTIAL PROPERTIES TRUST SELECTED QUARTERLY FINANCIAL INFORMATION - CONTINUED December 31, 1999 QUARTER ENDING ----------------------------------------------------------------------- DEC. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, 1999 1999 1999 1999 1998 --------- --------- --------- --------- --------- Interest Coverage Ratio 4.04 3.83 3.92 3.74 3.83 Debt as % of Market Capitalization 42.73% 44.33% 41.06% 42.99% 40.31% Debt (including Share of Co-investment debt) as % of Market Capitalization 48.61% 49.39% 45.53% 47.38% 44.67% EBITDA as % of Total Market Capitalization 10.16% 9.63% 9.47% 8.99% 8.85% FFO as % of Total Market Equity 13.25% 12.71% 11.90% 11.47% 10.88% G&A as % of Total Market Capitalization 0.38% 0.53% 0.41% 0.47% 0.52% G&A as % of Total Revenues 2.58% 3.62% 2.88% 3.43% 3.81% Dividends as % of FFO (4) 68.9% 69.1% 67.7% 76.2% 74.2% Dividends as % of FAD (4) 74.0% 74.3% 74.3% 82.2% 79.7% ========== ========== ========== ========== ========== Apartment Units - In Operation Wholly Owned 12,515 13,288 13,032 13,032 12,792 Co-investments 8,936 8,058 7,583 7,007 6,767 ---------- ---------- ---------- ---------- ---------- 21,451 21,346 20,615 20,039 19,559 ---------- ---------- ---------- ---------- ---------- Apartments Units - Under Development or In Lease Up Wholly Owned 200 200 416 1,246 1,486 Co-investments 4,098 5,138 4,306 3,136 3,376 ---------- ---------- ---------- ---------- ---------- 4,298 5,338 4,722 4,382 4,862 ---------- ---------- ---------- ---------- ---------- Total Units 25,749 26,684 25,337 24,421 24,421 ========== ========== ========== ========== ========== (1) At December 31, 1999, includes 3,975,000 preferred shares convertible to common shares. (2) Excluding non-recurring gain of $19,494 and $3,621 in 1999 and 1998, respectively. (3) Includes other income, net of G & A expenses. (4) Based on per share amounts.
AMLI RESIDENTIAL PROPERTIES TRUST PORTFOLIO INDEBTEDNESS SUMMARY December 31, 1999 (Dollars in thousands)
Weighted Avg. Percent of Interest Years to Type of Indebtedness Balance Total Interest Rate Maturity - -------------------- -------- ----------- ---------- --------- ---------- Conventional Fixed Rate $168,541 45.6% Fixed 7.63% 7.2 Tax-exempt Variable Rate (1) 50,250 13.6% Variable 7.09% 2.8 Credit Facilities (2) 145,000 39.2% Variable 6.22% 2.8 Service Companies 5,750 1.6% Fixed 9.22% 2.6 -------- ------ ----- --- Total $369,541 100.0% 7.03% 4.8 ======== ====== ===== === Balance Weighted including Avg. share of Co- Percent of Interest Years to Type of Indebtedness investment debt (3) Total Interest Rate Maturity - -------------------- ------------------- ---------- ---------- ---------- -------- Conventional Fixed Rate $267,609 57.1% Fixed 7.64% 7.1 Tax-exempt Variable Rate (1) 50,250 10.7% Variable 7.09% 2.8 Credit Facilities (2) 145,000 31.0% Variable 6.22% 2.8 Service Companies 5,750 1.2% Fixed 9.22% 2.6 -------- ------ ----- --- Total $468,609 100.0% 7.16% 5.2 ======== ====== ===== === (1) Maturity Date shown is expiration date of Credit Enhancement. Bonds mature in 2024. (2) In October 1999, this line of credit was increased to $250,000 and extended to October 2002. New LIBOR pricing to LIBOR+ 1.05%. $50,000 has been swapped to a fixed rate ($20,000 maturing in November 2002 and $30,000 maturing in February 2003). An additional $25,000 was swapped to a fixed rate in September maturing in 2004. Effective interest rate includes swap costs. (3) 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 DEBT MATURITIES December 31, 1999 Unaudited - Dollars in thousands
There- % to 2000 2001 2002 2003 2004 after Total Total -------- -------- -------- -------- -------- -------- -------- -------- Fixed Rate Mortgages $ 2,808 $ 3,038 $ 3,271 $ 60,105 $ 8,931 $ 90,388 $168,541 45.6% Tax Exempt Bonds* 50,250 50,250 13.6% Wachovia/First Chicago Line of Credit** 145,000 145,000 39.2% Other 750 5,000 5,750 1.6% -------- -------- -------- -------- -------- -------- -------- -------- Total Loans $ 3,558 $ 3,038 $198,521 $ 65,105 $ 8,931 $ 90,388 $369,541 100.0% ======== ======== ======== ======== ======== ======== ======== ======== Percent to Total 1.0% 0.8% 53.7% 17.6% 2.4% 24.5% 100.0% 78.9% ======== ======== ======== ======== ======== ======== ======== ======== SHARE OF CO-INVESTMENT DEBT - --------------------------- Nationwide Life Ins. - Greenwood Forest (15%) 19 20 1,679 -- -- -- 1,718 1.7% Lincoln National Ins. - Champions Park (15%) 22 24 1,259 -- -- -- 1,305 1.3% Prudential Ins. - Champions Centre (15%) 11 12 955 -- -- -- 978 1.0% Allstate Life Ins. - Windbrooke (15%) 18 20 1,658 -- -- -- 1,696 1.7% CIGNA - Chevy Chase (33%) 189 202 216 8,770 -- -- 9,377 9.5% Northwestern Mutual Life Ins. - Willowbrook (40%) 162 175 189 8,909 -- -- 9,435 9.5% Phoenix Mutual - Willeo Creek (30%) 57 61 65 2,687 -- -- 2,870 2.9% Northwestern Mutual Life Ins. - Pleasant Hill (40%) 88 96 106 116 127 5,458 5,991 6.0% Northwestern Mutual Life Ins. - Barrett Lakes (35%) 76 83 91 99 108 5,310 5,767 5.8% Erie Insurance - River Park (40%) 48 52 56 60 65 3,271 3,552 3.6% Prudential Ins. - Amli at Danada (10%) 25 27 29 31 33 2,288 2,433 2.5% AMLI RESIDENTIAL PROPERTIES TRUST DEBT MATURITIES - Continued There- % to 2000 2001 2002 2003 2004 after Total Total -------- -------- -------- -------- -------- -------- -------- -------- Phoenix Home Life - Amli at Verandah (35%) 88 94 102 110 5,480 -- 5,874 5.9% Northwestern Mutual Life Ins. - Northwinds (35%) 15 95 103 112 122 10,395 10,842 10.9% Northwestern Mutual Life Ins. - Regents Crest (25%) 70 76 82 3,709 -- -- 3,937 4.0% Northwestern Mutual Life Ins. - Parkway (25%) 45 49 52 56 60 2,399 2,661 2.7% Jackson National Life Ins. - Timberglen (40%) 42 45 49 52 2,463 -- 2,651 2.7% Northwestern Mutual Life - Deerfield (25%) 26 30 33 36 38 2,987 3,150 3.2% AMI Capital, Inc. - Lost Mountain (75%) 3 38 41 44 47 1,992 2,165 2.2% Amli Residential - Summit Ridge (25%) 1,570 -- -- -- -- -- 1,570 1.6% Northwestern Mutual Life Ins. - Preston- wood Hills (45.4%) 52 57 61 66 70 4,970 5,276 5.3% Northwestern Mutual Life Ins. - Windward Park (45.4%) 79 87 94 101 108 7,767 8,236 8.3% FNMA - Oakbend (40%) 65 71 76 83 89 7,150 7,534 7.6% Erie Insurance - Towne Creek (1%) 50 -- -- -- -- -- 50 0.1% -------- -------- -------- -------- -------- -------- -------- -------- Total Share of Co-Investment Loans $ 2,820 $ 1,414 $ 6,996 $ 25,041 $ 8,810 $ 53,987 $ 99,068 100.0% ======== ======== ======== ======== ======== ======== ======== ======== Percent to Total 2.8% 1.4% 7.1% 25.3% 8.9% 54.5% 100.0% 21.1% ======== ======== ======== ======== ======== ======== ======== ======== Total Including Share of Co-Investments Debt $ 6,378 $ 4,452 $205,517 $ 90,146 $ 17,741 $144,375 $468,609 100.0% ======== ======== ======== ======== ======== ======== ======== ======== Percent to Total 1.4% 0.9% 43.9% 19.2% 3.8% 30.8% 100.0% 100.0% ======== ======== ======== ======== ======== ======== ======== ======== * The Spring Creek Bonds mature in October 2024, but the credit enhancement expires on October 15, 2002. * The Poplar Creek Bonds mature in February 2024, but the credit enhancement expires December 18, 2002. ** In October, the Unsecured Line of Credit maturity was extended to October 2002 with two one-year extensions.
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) THREE MONTHS ENDED DECEMBER 31, 1999 VERSUS THREE MONTHS ENDED DECEMBER 31, 1998 (Excludes all properties acquired or stabilized after 1/1/98. Reflections and Timberglen)
10/1/99-12/31/99 10/1/98-12/31/98 No. of --------------------------------- % -------------------------------- Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - ----------------------- Dallas 4,320 93.8% 1.4% 92.5% Atlanta 2,572 93.8% -0.8% 94.5% Austin 1,289 93.8% 0.3% 93.6% Indianapolis 1,296 82.0% -10.2% 91.4% Kansas 732 91.2% -3.1% 94.0% Chicago 196 94.6% 0.2% 94.4% ------ ----- ----- ----- Weighted Average 92.1% -1.0% 93.1% ===== ===== ===== Total 10,405 ====== WEIGHTED AVG. RENTAL RATE - ------------------------- Dallas $ 723 1.5% $ 713 Atlanta 782 3.4% 756 Austin 749 4.7% 715 Indianapolis 667 3.0% 648 Kansas 798 4.0% 767 Chicago 1,003 6.2% 944 ------ ---- ------ Weighted Average $ 745 2.8% $ 724 ====== ==== ====== TOTAL PROPERTY REVENUES Per Month Per Month - ----------------------- ---------- ---------- Dallas $ 9,194,069 $ 709 $0.82 1.7% $ 9,042,250 $ 698 $0.81 Atlanta 5,899,121 765 0.82 2.5% 5,756,939 746 0.80 Austin 2,879,425 745 0.96 5.9% 2,718,901 703 0.91 Indianapolis 2,253,178 580 0.66 -7.6% 2,437,283 627 0.71 Kansas 1,682,855 766 0.80 1.1% 1,663,764 758 0.79 Chicago 582,710 991 1.09 8.6% 536,711 913 1.00 ------------ ------ ----- ----- ----------- ------ ----- Total $ 22,491,358 $ 721 $0.82 1.5% $22,155,848 $ 710 $0.81 ============ ====== ===== ===== =========== ====== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED (Excludes all properties acquired or stabilized after 1/1/98. Reflections and Timberglen) 10/1/99-12/31/99 10/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - --------------------------- ------------ ------------ Dallas $ 3,882,380 3,595 $4.16 -0.7% $ 3,911,061 $ 3,621 $4.19 Atlanta 2,034,348 3,164 3.39 -2.0% 2,075,587 3,228 3.46 Austin 1,233,708 3,828 4.93 12.1% 1,100,737 3,416 4.40 Indianapolis 921,618 2,844 3.22 -7.0% 990,947 3,058 3.46 Kansas 568,201 3,105 3.24 -5.9% 604,080 3,301 3.45 Chicago 236,538 4,827 5.30 9.1% 216,888 4,426 4.86 ------------ ------ ----- ----- ----------- ------- ----- Total $ 8,876,793 $3,413 $3.88 -0.3% $ 8,899,301 $ 3,421 $3.89 ============ ====== ===== ===== =========== ======= ===== Operating Efficiency 39.5% 48.2% ============ =========== NOI 1999 % 1998 % PER MONTH PER MONTH - --- ------ ------ --------- ---------- Dallas 57.8% 56.7% $ 5,311,689 $ 410 $0.47 3.5% $ 5,131,189 $ 396 $0.46 Atlanta 65.5% 63.9% 3,864,773 501 0.54 5.0% 3,681,352 477 0.51 Austin 57.2% 59.5% 1,645,717 426 0.55 1.7% 1,618,163 418 0.54 Indianapolis 59.1% 59.3% 1,331,561 342 0.39 -7.9% 1,446,337 372 0.42 Kansas 66.2% 63.7% 1,114,654 508 0.53 5.2% 1,059,684 483 0.50 Chicago 59.4% 59.6% 346,172 589 0.65 8.2% 319,822 544 0.60 ------ ----- ----------- ------ ----- ----- ----------- ------ ----- Total 60.5% 59.8% $13,614,566 $ 436 $0.50 2.7% $13,256,547 $ 425 $0.48 ====== ===== =========== ====== ===== ===== =========== ====== ===== Operating Margin 60.5% 59.8% ============ =========== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - -------------------- ------------ ------------ Dallas $ 489,679 $ 453 $0.52 49.5% $ 327,587 $ 303 $0.35 Atlanta 163,609 254 0.27 -11.9% 185,604 289 0.31 Austin 112,008 348 0.45 -47.0% 211,286 656 0.85 Indianapolis 38,638 119 0.13 -233.2% (29,000) (90) (0.10) Kansas 73,791 403 0.42 44.5% 51,071 279 0.29 Chicago 34,335 701 0.77 306.1% 8,454 173 0.19 ----------- ------ ----- ------ --------- ------ ----- Total $ 912,060 $ 351 $0.40 20.8% $ 755,001 $ 290 $0.33 =========== ====== ===== ====== ========= ====== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED (Excludes all properties acquired or stabilized after 1/1/98. Reflections and Timberglen) 10/1/99-12/31/99 10/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - ----------------------- ------------ ------------ Dallas $ 637,082 $ 590 $0.68 6.3% $ 599,043 $ 555 $0.64 Atlanta 440,162 685 0.73 21.9% 360,976 561 0.60 Austin 246,739 766 0.99 80.0% 137,070 425 0.55 Indianapolis 161,015 497 0.56 -22.7% 208,327 643 0.73 Kansas 57,446 314 0.33 -62.2% 152,011 831 0.87 Chicago 25,077 512 0.56 6.3% 23,594 482 0.53 ---------- ------ ----- ------ ---------- ------ ----- Total $1,567,520 $ 603 $0.68 5.8% $1,481,021 $ 569 $0.65 ========== ====== ===== ====== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - ----------------- ------------ ------------ Dallas $1,277,502 $1,183 $1.37 3.6% $1,233,390 $1,142 $1.32 Atlanta 334,605 520 0.56 -28.0% 464,871 723 0.77 Austin 375,505 1,165 1.50 -10.0% 417,002 1,294 1.67 Indianapolis 248,601 767 0.87 7.9% 230,497 711 0.80 Kansas 156,520 855 0.89 55.1% 100,937 552 0.58 Chicago 110,914 2,264 2.49 -9.3% 122,311 2,496 2.74 ---------- ------ ----- ----- ---------- ------ ----- Total $2,503,648 $ 962 $1.09 -2.5% $2,569,009 $ 988 $1.12 ========== ====== ===== ===== ========== ====== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) YEAR ENDED DECEMBER 31, 1999 VERSUS YEAR ENDED DECEMBER 31, 1998 (Excludes all properties acquired, sold or stabilized after 1/1/98)
1/1/99-12/31/99 1/1/98-12/31/98 No. of --------------------------------- % -------------------------------- Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft ------ -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - ----------------------- Dallas 4,320 93.3% -0.7% 94.0% Atlanta 2,572 93.1% -1.2% 94.2% Austin 1,289 94.4% 0.0% 94.4% Indianapolis 1,296 87.9% -4.6% 92.1% Kansas 732 94.2% 1.8% 92.5% Chicago 196 95.4% 0.9% 94.6% ------ ----- ----- ----- Weighted Average 92.8% -1.0% 93.7% ===== ===== ===== Total 10,405 ====== WEIGHTED AVG. RENTAL RATE - ------------------------- Dallas $ 717 1.6% $ 706 Atlanta 771 3.8% 743 Austin 727 3.8% 700 Indianapolis 653 3.2% 632 Kansas 780 2.6% 761 Chicago 980 2.7% 954 ------ ---- ------ Weighted Average $ 733 2.7% $ 714 ====== ==== ====== TOTAL PROPERTY REVENUES PER MONTH PER MONTH - ----------------------- --------- --------- Dallas $36,540,828 $ 705 $0.82 1.1% $ 36,150,019 $ 697 $0.81 Atlanta 23,324,178 756 1.10 2.9% 22,661,235 734 1.07 Austin 11,304,684 731 0.94 4.9% 10,773,095 696 0.90 Indianapolis 9,449,016 608 0.69 -1.8% 9,621,157 619 0.70 Kansas 6,805,876 775 0.81 4.2% 6,530,891 743 0.78 Chicago 2,272,885 966 1.06 4.9% 2,167,220 921 1.01 ----------- ------ ----- ---- ----------- ------ ----- Total $89,697,467 $ 718 $0.88 2.0% $87,903,617 $ 704 $0.86 =========== ====== ===== ==== =========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED (Excludes all properties acquired, sold or stabilized after 1/1/98) 1/1/99-12/31/99 1/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - --------------------------- ------------ ----------- Dallas $ 15,360,223 $3,556 $4.11 0.0% $15,365,897 $3,557 $4.11 Atlanta 8,155,878 3,171 4.61 0.8% 8,093,259 3,147 4.57 Austin 4,636,971 3,597 4.64 3.4% 4,482,435 3,477 4.48 Indianapolis 3,739,676 2,886 3.27 1.7% 3,678,313 2,838 3.21 Kansas 2,376,814 3,247 3.39 -4.4% 2,485,447 3,395 3.55 Chicago 1,057,986 5,398 5.93 10.6% 956,843 4,882 5.36 ------------ ------ ----- ----- ----------- ------ ----- Total $ 35,327,548 $3,395 $4.14 0.8% $35,062,194 $3,370 $4.11 ============ ====== ===== ===== =========== ==== ===== Operating efficiency 39.4% 39.9% ============ =========== NOI 1999 % 1998 % PER MONTH PER MONTH - --- ------ ------ --------- ---------- Dallas 58.0% 57.5% $21,180,605 $ 409 $0.47 1.9% $20,784,122 $ 401 $0.46 Atlanta 65.0% 64.3% 15,168,300 491 0.71 4.1% 14,567,976 472 0.69 Austin 59.0% 58.4% 6,667,713 431 0.56 6.0% 6,290,659 407 0.52 Indianapolis 60.4% 61.8% 5,709,340 367 0.42 -3.9% 5,942,844 382 0.43 Kansas 65.1% 61.9% 4,429,062 504 0.53 9.5% 4,045,444 461 0.48 Chicago 53.5% 55.8% 1,214,900 517 0.57 0.4% 1,210,377 515 0.57 ----- ----- ----------- ------ ----- ----- ----------- ------ ----- Total 60.6% 60.1% $54,369,919 $ 435 $0.53 2.9% $52,841,423 $ 423 $0.52 ===== ===== =========== ====== ===== ===== =========== ====== ===== Operating Margin 60.6% 60.1% =========== =========== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - -------------------- ------------- ------------ Dallas $1,594,035 $ 369 $0.43 11.4% $1,430,569 $ 331 $0.38 Atlanta 630,262 245 0.36 -22.0% 808,071 314 0.46 Austin 1,159,285 899 1.16 126.1% 512,726 398 0.51 Indianapolis 179,612 139 0.16 -40.6% 302,228 233 0.26 Kansas 208,124 284 0.30 -27.5% 287,146 392 0.41 Chicago 93,745 478 0.53 140.7% 38,946 199 0.22 ---------- ------ ----- ------ ---------- ------ ----- Total $3,865,062 $ 371 $0.45 14.4% $3,379,686 $ 325 $0.40 ========== ==== ===== ====== ========== ====== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED (Excludes all properties acquired, sold or stabilized after 1/1/98) 1/1/99-12/31/99 1/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - ----------------------- ------------ ------------ Dallas $2,054,885 $ 476 $0.55 -3.1% $2,121,192 $ 491 $0.57 Atlanta 1,424,751 554 0.81 13.4% 1,256,602 489 0.71 Austin 673,610 523 0.67 27.5% 528,210 410 0.53 Indianapolis 622,166 480 0.54 -7.8% 675,028 521 0.59 Kansas 266,946 365 0.38 -27.8% 369,661 505 0.53 Chicago 122,263 624 0.68 19.9% 101,932 520 0.57 ---------- ------ ----- ----- ---------- ------ ----- Total $5,164,622 $ 496 $0.61 2.2% $5,052,624 $ 486 $0.59 ========== ====== ===== ===== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - ----------------- ------------ ------------ Dallas $ 5,473,640 $1,267 $1.47 3.9% $ 5,269,426 $1,220 $1.41 Atlanta 1,673,727 651 0.95 -2.4% 1,714,663 667 0.97 Austin 1,562,746 1,212 1.56 -1.8% 1,591,606 1,235 1.59 Indianapolis 944,719 729 0.82 13.2% 834,883 644 0.73 Kansas 612,676 837 0.87 7.5% 569,744 778 0.81 Chicago 535,114 2,730 3.00 18.7% 450,650 2,299 2.52 ----------- ------ ----- ----- ----------- ------ ----- Total $10,802,622 $1,038 $1.27 3.6% $10,430,973 $1,002 $1.22 =========== ====== ===== ===== =========== ====== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) THREE MONTHS ENDED DECEMBER 31, 1999 VERSUS THREE MONTHS ENDED DECEMBER 31, 1998 (Excludes all properties acquired or stabilized after 1/1/98)
10/1/99-12/31/99 10/1/98-12/31/98 No. of --------------------------------- % -------------------------------- Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft ------ -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - ----------------------- Dallas 4,858 94.1% 1.2% 92.9% Atlanta 4,134 94.5% 0.8% 93.7% Austin 1,289 93.8% 0.3% 93.6% Houston 754 92.2% -2.6% 94.7% Indianapolis 1,296 82.0% -10.2% 91.4% Kansas 1,100 91.3% -3.2% 94.2% Chicago 2,112 94.5% -0.9% 95.3% ------ ----- ----- ------ Weighted Average 92.9% -0.7% 93.6% ===== ===== ====== Total 15,543 ====== WEIGHTED AVG. RENTAL RATE - ------------------------- Dallas $ 717 1.3% $ 708 Atlanta 802 3.0% 778 Austin 749 4.7% 715 Houston 744 -3.0% 768 Indianapolis 667 3.0% 648 Kansas 794 3.7% 766 Chicago 1,010 5.2% 960 ------ ----- ------ Weighted Average $ 785 2.8% $ 763 ====== ===== ====== TOTAL PROPERTY REVENUES PER MONTH PER MONTH - ----------------------- ---------- --------- Dallas $10,308,004 $ 707 $0.83 1.8% $10,126,324 $ 695 $0.82 Atlanta 9,897,126 798 0.82 4.1% 9,505,904 766 0.79 Austin 2,879,425 745 0.96 5.9% 2,718,901 703 0.91 Houston 1,667,450 737 0.80 -4.6% 1,747,688 773 0.84 Indianapolis 2,253,178 580 0.66 -7.6% 2,437,283 627 0.71 Kansas 2,528,550 766 0.80 0.9% 2,507,099 760 0.80 Chicago 6,448,349 1,018 1.19 6.0% 6,082,246 960 1.12 ----------- ------ ----- ----- ----------- ---- ----- Total $35,982,083 $ 772 $0.87 2.4% $35,125,444 $753 $0.85 =========== ====== ===== ===== =========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT. (Excludes all properties acquired or stabilized after 1/1/98) 10/1/99-12/31/99 10/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - --------------------------- ------------ ------------ Dallas $ 4,429,432 $3,647 $4.29 0.5% $ 4,409,266 $3,631 $4.27 Atlanta 3,161,934 3,059 3.16 -0.9% 3,191,741 3,088 3.18 Austin 1,233,708 3,828 4.93 12.1% 1,100,737 3,416 4.40 Houston 664,930 3,527 3.81 -16.1% 792,236 4,203 4.54 Indianapolis 921,618 2,844 3.22 -7.0% 990,947 3,058 3.46 Kansas 845,796 3,076 3.23 -6.4% 903,838 3,287 3.45 Chicago 2,186,941 4,142 4.83 -8.9% 2,400,087 4,546 5.30 ----------- ------ ----- ----- ----------- ------ ----- Total $13,444,359 $3,460 $3.89 -2.5% $13,788,853 $3,549 $3.99 =========== ====== ===== ===== =========== ====== ===== Operating Efficiency 37.4% 39.3% =========== =========== NOI 1999 % 1998 % PER MONTH PER MONTH - --- ------ ------ --------- ---------- Dallas 57.0% 56.5% $ 5,878,572 $ 403 $0.47 2.8% $ 5,717,058 $ 392 $0.46 Atlanta 68.1% 66.4% 6,735,193 543 0.56 6.7% 6,314,163 509 0.53 Austin 57.2% 59.5% 1,645,717 426 0.55 1.7% 1,618,163 418 0.54 Houston 60.1% 54.7% 1,002,520 443 0.48 4.9% 955,451 422 0.46 Indianapolis 59.1% 59.3% 1,331,561 342 0.39 -7.9% 1,446,337 372 0.42 Kansas 66.6% 63.9% 1,682,754 510 0.54 5.0% 1,603,261 486 0.51 Chicago 66.1% 60.5% 4,261,408 673 0.78 15.7% 3,682,158 581 0.68 ----- ----- ----------- ------ ----- ----- ----------- ------ ----- Total 62.6% 60.7% $22,537,724 $ 483 $0.54 5.6% $21,336,591 $ 458 $0.51 ===== ===== =========== ====== ===== ===== =========== ====== ===== Operating Margin 62.6% 60.7% =========== =========== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - -------------------- ------------ ------------ Dallas $ 506,380 $ 417 $0.49 43.9% $ 351,878 $ 290 $0.34 Atlanta 222,691 215 0.22 -9.7% 246,739 239 0.25 Austin 112,008 348 0.45 -47.0% 211,286 656 0.85 Houston 58,993 313 0.34 267.6% 16,050 85 0.09 Indianapolis 38,638 119 0.13 -233.2% (29,000) (90) (0.10) Kansas 91,454 333 0.35 24.0% 73,760 268 0.28 Chicago 232,878 441 0.51 64.3% 141,746 268 0.31 ----------- ------ ----- ------ ---------- ------ ----- Total $ 1,263,041 $ 325 $0.37 24.8% $1,012,458 $ 261 $0.29 =========== ====== ===== ====== ========== ====== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT. (Excludes all properties acquired or stabilized after 1/1/98) 10/1/99-12/31/99 10/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - ----------------------- ------------ ------------ Dallas $ 750,580 $ 618 $0.73 10.2% $ 680,909 $ 561 $0.66 Atlanta 615,271 595 0.61 14.4% 537,661 520 0.54 Austin 246,739 766 0.99 80.0% 137,070 425 0.55 Houston 96,532 512 0.55 -12.8% 110,696 587 0.63 Indianapolis 161,015 497 0.56 -22.7% 208,327 643 0.73 Kansas 85,611 311 0.33 -50.3% 172,383 627 0.66 Chicago 341,167 646 0.75 -7.7% 369,679 700 0.82 ----------- ------ ----- ----- ---------- ------ ----- Total $ 2,296,915 $ 591 $0.66 3.6% $2,216,724 $ 570 $0.64 =========== ====== ===== ===== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - ----------------- ------------ ------------ Dallas $ 1,449,237 $1,193 $1.40 5.8% $1,370,200 $1,128 $1.33 Atlanta 391,687 379 0.39 -33.5% 589,078 570 0.59 Austin 375,505 1,165 1.50 -10.0% 417,002 1,294 1.67 Houston 151,194 802 0.87 -46.7% 283,854 1,506 1.63 Indianapolis 248,601 767 0.87 7.9% 230,497 711 0.80 Kansas 225,107 819 0.86 20.6% 186,673 679 0.71 Chicago 800,413 1,516 1.77 -16.7% 960,844 1,820 2.12 ----------- ------ ----- ----- ---------- ------ ----- Total $ 3,641,744 $ 937 $1.05 -9.8% $4,038,148 $1,039 $1.17 =========== ====== ===== ===== ========== ====== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) YEAR ENDED DECEMBER 31, 1999 VERSUS YEAR ENDED DECEMBER 31, 1998 (Excludes all properties acquired or stabilized after 1/1/98)
1/1/99-12/31/99 1/1/98-12/31/98 No. of --------------------------------- % -------------------------------- Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft ------ -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - ----------------------- Dallas 4,858 93.5% -0.6% 94.1% Atlanta 4,134 93.3% -0.5% 93.8% Austin 1,289 94.4% 0.0% 94.4% Houston 754 92.2% -3.3% 95.4% Indianapolis 1,296 87.9% -4.6% 92.1% Kansas 1,100 94.1% 1.1% 93.1% Chicago 2,112 95.3% -0.2% 95.5% ------ ----- ----- ----- Weighted Average 93.3% -0.8% 94.0% ===== ===== ===== Total 15,543 ====== WEIGHTED AVG. RENTAL RATE - ------------------------- Dallas $ 712 1.5% $ 702 Atlanta 791 3.2% 767 Austin 727 3.9% 700 Houston 754 -0.1% 755 Indianapolis 652 3.1% 632 Kansas 775 2.3% 758 Chicago 989 4.9% 943 ------ ---- ------ Weighted Average $ 774 2.8% $ 752 ====== ==== ====== TOTAL PROPERTY REVENUES PER MONTH PER MONTH - ----------------------- --------- --------- Dallas $ 40,936,570 $ 702 $0.83 1.1% $ 40,501,779 $ 695 $0.82 Atlanta 38,820,353 783 0.81 3.4% 37,552,207 757 0.78 Austin 11,304,684 731 0.94 4.9% 10,773,095 696 0.90 Houston 6,689,175 739 0.80 -3.2% 6,910,481 764 0.83 Indianapolis 9,449,016 608 0.69 -1.8% 9,621,157 619 0.70 Kansas 10,212,271 774 0.81 4.9% 9,739,669 738 0.78 Chicago 25,455,519 1,004 1.17 6.2% 23,964,657 946 1.10 ------------ ------ ----- ----- ------------ ---- ----- Total $142,867,588 $ 766 $0.86 2.7% $139,063,046 $746 $0.84 ============ ====== ===== ===== ============ ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT. (Excludes all properties acquired or stabilized after 1/1/98) 1/1/99-12/31/99 1/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - --------------------------- ------------ ------------ Dallas $17,465,892 $3,595 $4.23 0.0% $17,468,667 $3,596 $4.23 Atlanta 13,529,430 3,273 3.38 1.0% 13,400,720 3,242 3.34 Austin 4,636,971 3,597 4.64 3.4% 4,482,435 3,477 4.48 Houston 2,866,545 3,802 4.11 -0.3% 2,875,015 3,813 4.12 Indianapolis 3,739,676 2,886 3.27 1.7% 3,678,313 2,838 3.21 Kansas 3,569,880 3,245 3.41 -2.0% 3,643,372 3,312 3.48 Chicago 8,787,760 4,161 4.85 -1.9% 8,955,518 4,240 4.94 ----------- ------ ----- ------ ----------- ------ ----- Total $54,596,153 $3,513 $3.94 0.2% $54,504,041 $3,507 $3.94 =========== ====== ===== ====== =========== ====== ===== Operating Efficiency 38.2% 39.2% =========== =========== NOI 1999 % 1998 % PER MONTH PER MONTH - --- ------ ------ --------- ---------- Dallas 57.3% 56.9% $23,470,678 $ 403 $0.47 1.9% $23,033,112 $ 395 $0.46 Atlanta 65.1% 64.3% 25,290,923 510 0.53 4.7% 24,151,486 487 0.50 Austin 59.0% 58.4% 6,667,713 431 0.56 6.0% 6,290,659 407 0.52 Houston 57.1% 58.4% 3,822,631 422 0.46 -5.3% 4,035,467 446 0.48 Indianapolis 60.4% 61.8% 5,709,340 367 0.42 -3.9% 5,942,844 382 0.43 Kansas 65.0% 62.6% 6,642,392 503 0.53 9.0% 6,096,297 462 0.49 Chicago 65.5% 62.6% 16,667,760 658 0.77 11.1% 15,009,139 592 0.69 ----- ----- ----------- ------ ----- ----- ----------- ------ ----- Total 61.8% 60.8% $88,271,435 $ 473 $0.53 4.4% $84,559,005 $ 453 $0.51 ===== ===== =========== ====== ===== ===== =========== ====== ===== Operating Margin 61.8% 60.8% =========== =========== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - -------------------- ----------- ------------ Dallas $ 1,787,224 $ 368 $0.43 16.2% $1,538,582 $ 317 $0.37 Atlanta 826,251 200 0.21 -15.8% 980,731 237 0.24 Austin 1,159,285 899 1.16 126.1% 512,726 398 0.51 Houston 168,536 224 0.24 57.2% 107,216 142 0.15 Indianapolis 179,612 139 0.16 -40.6% 302,228 233 0.26 Kansas 242,756 221 0.23 -24.7% 322,593 293 0.31 Chicago 776,380 368 0.43 22.2% 635,328 301 0.35 ----------- ------ ----- ------ ---------- ------ ----- Total $ 5,140,045 $ 331 $0.37 16.8% $4,399,404 $ 283 $0.32 =========== ====== ===== ====== ========== ====== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT. (Excludes all properties acquired or stabilized after 1/1/98) 1/1/99-12/31/99 1/1/98-12/31/98 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - ----------------------- ------------ ------------ Dallas $2,427,613 $ 500 $0.59 -0.5% $2,439,980 $ 502 $0.59 Atlanta 2,100,601 508 0.52 9.0% 1,927,748 466 0.48 Austin 673,610 523 0.67 27.5% 528,210 410 0.53 Houston 226,585 301 0.32 -7.4% 244,816 325 0.35 Indianapolis 622,166 480 0.54 -7.8% 675,028 521 0.59 Kansas 367,245 334 0.35 -23.4% 479,191 436 0.46 Chicago 1,258,935 596 0.69 -1.4% 1,276,205 604 0.70 ---------- ------ ----- ----- ---------- ------ ----- Total $7,676,755 $ 494 $0.55 1.4% $7,571,178 $ 487 $0.55 ========== ====== ===== ===== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - ----------------- ------------ ------------ Dallas $ 6,160,581 $1,268 $1.49 4.3% $ 5,907,734 $1,216 $1.43 Atlanta 2,761,520 668 0.69 -3.3% 2,855,187 691 0.71 Austin 1,562,746 1,212 1.56 -1.8% 1,591,606 1,235 1.59 Houston 1,107,477 1,469 1.59 0.5% 1,101,791 1,461 1.58 Indianapolis 944,719 729 0.82 13.2% 834,883 644 0.73 Kansas 938,537 853 0.90 9.8% 854,727 777 0.82 Chicago 3,182,581 1,507 1.76 -1.4% 3,229,253 1,529 1.78 ----------- ------ ----- ----- ----------- ------ ----- Total $16,658,160 $1,072 $1.20 1.7% $16,375,182 $1,054 $1.18 =========== ====== ===== ===== =========== ====== =====
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION As of December 31, 1999
Approximate Rentable Average Year Year Number Area Unit Size Location Acquired Completed of Units (Sq Ft) (Sq ft) -------- -------- --------- -------- ----------- --------- WHOLLY OWNED PROPERTIES - ------------ DALLAS/FT. WORTH - ---------------- AMLI: at Autumn Chase Carrollton, TX 1991 87/96/99 690 598,128 867 at Bent Tree Dallas, TX 1997 1996 300 282,774 943 at Bishop's Gate West Plano, TX 1997 1997 266 292,094 1,098 at Chase Oaks Plano, TX 1994 1986 250 193,736 775 at Gleneagles Dallas, TX 1988 87/97 590 520,357 882 on the Green Ft. Worth, TX 1994 90/93 424 358,560 846 at Nantucket Dallas, TX 1988 1986 312 222,208 712 of North Dallas Dallas, TX 89/90 85/86 1,032 906,808 879 on Rosemeade Dallas, TX 1990 1987 236 205,334 870 at Valley Ranch Irving, TX 1990 1985 460 389,940 848 ------ --------- ------- Subtotal - Dallas/Ft. Worth, TX 4,560 3,969,939 871 ------ --------- ------- ATLANTA, GA - ----------- AMLI: at Clairmont Atlanta, GA 1998 1988 288 229,335 796 at Killian Farms Snellville, GA 1999 256 262,785 1,027 at Park Creek Gainesville, GA 1998 200 195,146 976 at Peachtree City Fayette County, GA 1998 312 305,756 980 at Spring Creek Dunwoody, GA 85/86/87/89 1,180 1,080,568 916 at Sope Creek Marietta, GA 82/83/95 695 632,425 910 at Vinings Atlanta, GA 92/97 1985 360 374,240 1,040 at West Paces Atlanta, GA 1993 1992 337 353,700 1,050 ------ --------- ------ Subtotal - Atlanta, GA 3,628 3,433,955 947 ------ --------- ------ Approximate Rentable Average Year Year Number Area Unit Size Location Acquired Completed of Units (Sq Ft) (Sq ft) -------- -------- --------- -------- ----------- --------- AUSTIN, TX - ---------- AMLI: at the Arboretum Austin, TX 1986 1983 231 178,116 771 in Great Hills Austin, TX 1991 1985 344 257,984 750 at Lantana Ridge Austin, TX 1997 1997 354 311,857 881 at Martha's Vineyard Austin, TX 1992 1986 360 260,380 723 ------ ---------- ----- Subtotal - Austin, TX 1,289 1,008,337 782 ------ ---------- ----- KANSAS - ------ AMLI: at Alvamar Lawrence, KS 1994 1989 152 125,800 828 at Centennial Overland Park, KS 1998 1998 170 204,858 1,205 at Lexington Farms Overland Park, KS 1998 1998 404 392,693 972 at Regents Center Overland Park, KS 1994 91/95/97 424 398,674 940 at Town Center Overland Park, KS 1997 1997 156 176,914 1,134 ------ ---------- ----- Subtotal - Kansas 1,306 1,298,939 995 ------ ---------- ----- INDIANAPOLIS, IN - ---------------- AMLI: at Conner Farms Indianapolis, IN 1997 1993 300 327,396 1,091 at Eagle Creek Indianapolis, IN 1998 1998 240 233,432 973 at Riverbend Indianapolis, IN 92/93 83/85 996 820,712 824 ------ ---------- ----- Subtotal - Indianapolis, IN 1,536 1,381,540 899 ------ ---------- ----- Approximate Rentable Average Year Year Number Area Unit Size Location Acquired Completed of Units (Sq Ft) (Sq ft) -------- -------- --------- -------- ----------- --------- CHICAGO, IL - ----------- AMLI: at Poplar Creek Schaumburg, IL 1997 1985 196 177,630 906 ------ ---------- ----- Subtotal - Chicago, IL 196 177,630 906 ------ ---------- ----- TOTAL WHOLLY OWNED PROPERTIES 12,515 11,270,340 901 ====== ========== =====
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION - CONTINUED
Quarter Ended Year Ended December 31, 1999 Quarter Ended December 31, 1999 Year Ended Average Rental Rates Dec 31, 1999 Average Rental Rates Dec 31, 1999 ------------------------- Avg. ------------------------ Avg. Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy -------- ----------- ------------ -------- ----------- ------------ WHOLLY OWNED PROPERTIES - ------------ DALLAS/FT. WORTH - ---------------- AMLI: at Autumn Chase 748 0.86 92.7% 739 0.85 92.1% at Bent Tree 831 0.88 94.6% 831 0.88 94.2% at Bishop's Gate 1,013 0.92 93.2% 1,015 0.92 92.8% at Chase Oaks 692 0.89 95.5% 686 0.89 94.1% at Gleneagles 720 0.82 94.5% 714 0.81 94.3% on the Green 697 0.82 95.4% 694 0.82 93.9% at Nantucket 577 0.81 96.5% 571 0.80 95.5% of North Dallas 689 0.78 90.8% 679 0.77 91.3% on Rosemeade 688 0.79 94.2% 685 0.79 93.8% at Valley Ranch 723 0.85 96.6% 717 0.85 94.5% ----- ----- ----- ----- ----- ----- Subtotal - Dallas/Ft. Worth, TX 727 0.83 93.8% 721 0.83 93.2% ----- ----- ----- ----- ----- ----- ATLANTA, GA - ----------- AMLI: at Clairmont 816 1.02 96.6% 798 1.00 95.7% at Killian Farms 789 0.77 98.2% 731 0.71 68.8% at Park Creek 782 0.80 91.0% 747 0.77 91.3% at Peachtree City 923 0.94 94.9% 904 0.92 94.9% at Spring Creek 765 0.84 92.5% 754 0.82 91.9% at Sope Creek 716 0.79 96.4% 708 0.78 94.3% at Vinings 818 0.79 92.9% 813 0.78 93.6% at West Paces 938 0.89 93.6% 917 0.87 94.0% ----- ----- ----- ----- ----- ----- Subtotal - Atlanta, GA 797 0.84 94.2% 781 0.82 91.6% ----- ----- ----- ----- ----- ----- Quarter Ended Year Ended December 31, 1999 Quarter Ended December 31, 1999 Year Ended Average Rental Rates Dec 31, 1999 Average Rental Rates Dec 31, 1999 ------------------------- Avg. ------------------------ Avg. Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy -------- ----------- ------------ -------- ----------- ------------ AUSTIN, TX - ---------- AMLI: at the Arboretum 732 0.95 90.2% 713 0.92 94.7% in Great Hills 733 0.98 95.0% 716 0.96 94.5% at Lantana Ridge 870 0.99 94.5% 839 0.95 93.5% at Martha's Vineyard 656 0.91 94.4% 637 0.88 94.9% ----- ----- ----- ----- ----- ----- Subtotal - Austin, TX 749 0.96 93.8% 727 0.93 94.4% ----- ----- ----- ----- ----- ----- KANSAS - ------ AMLI: at Alvamar 696 0.84 94.5% 682 0.82 94.4% at Centennial 996 0.83 87.3% 969 0.80 90.1% at Lexington Farms 809 0.83 85.6% 798 0.82 89.8% at Regents Center 766 0.81 92.0% 749 0.80 95.3% at Town Center 982 0.87 85.7% 958 0.85 90.9% ----- ----- ----- ----- ----- ----- Subtotal - Kansas 827 0.83 88.9% 810 0.81 92.3% ----- ----- ----- ----- ----- ----- INDIANAPOLIS, IN - ---------------- AMLI: at Conner Farms 827 0.76 94.8% 815 0.75 94.4% at Eagle Creek 773 0.80 92.1% 757 0.78 91.8% at Riverbend 619 0.75 78.2% 603 0.73 85.9% ----- ----- ----- ----- ----- ----- Subtotal - Indianapolis, IN 684 0.76 83.6% 668 0.74 88.5% ----- ----- ----- ----- ----- ----- Quarter Ended Year Ended December 31, 1999 Quarter Ended December 31, 1999 Year Ended Average Rental Rates Dec 31, 1999 Average Rental Rates Dec 31, 1999 ------------------------- Avg. ------------------------ Avg. Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy -------- ----------- ------------ -------- ----------- ------------ CHICAGO, IL - ----------- AMLI: at Poplar Creek 1,003 1.11 94.6% 980 1.08 94.7% ----- ----- ----- ----- ----- ----- Subtotal - Chicago, IL 1,003 1.11 94.6% 980 1.08 94.7% ----- ----- ----- ----- ----- ----- TOTAL WHOLLY OWNED PROPERTIES $ 759 0.84 92.2% 746 0.83 92.2% ===== ===== ===== ===== ===== =====
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION - CONTINUED As of December 31, 1999
Approximate Rentable Average Year Year Number Area Unit Size Location Acquired Completed of Units (Sq Ft) (Sq ft) -------- -------- --------- -------- ----------- --------- CO-INVESTMENT PROPERTIES - ------------ ATLANTA, GA - ----------- AMLI: at Barrett Lakes Cobb County, GA 1997 446 462,368 1,037 at Pleasant Hill Gwinnett County, GA 1996 502 501,816 1,000 at River Park Norcross, GA 1997 222 226,632 1,021 at Towne Creek Gainesville, GA 1989 150 121,722 811 at Willeo Creek Roswell, GA 1995 1989 242 297,302 1,229 at Northwinds Alpharetta, GA 1999 800 818,432 1,023 at Windward Park Alpharetta, GA 1999 1999 328 354,900 1,082 ------ --------- ------ Subtotal - Atlanta, GA 2,690 2,783,172 1,035 ------ --------- ------ CHICAGO, IL - ----------- AMLI: at Chevy Chase Buffalo Grove, IL 1996 1988 592 480,820 812 at Danada Wheaton, IL 1997 89/91 600 521,499 869 at Fox Valley Aurora, IL 1998 272 269,237 990 at Willowbrook Willowbrook, IL 1996 1987 488 418,404 857 at Windbrooke Buffalo Grove, IL 1995 1987 236 213,160 903 ------ --------- ------ Subtotal - Chicago, IL 2,188 1,903,120 870 ------ --------- ------ EASTERN KANSAS - -------------- AMLI: at Regents Crest Overland Park, KS 1997 1997 368 346,632 942 ------ --------- ------ Approximate Rentable Average Year Year Number Area Unit Size Location Acquired Completed of Units (Sq Ft) (Sq ft) -------- -------- --------- -------- ----------- --------- DALLAS/FT. WORTH - ---------------- AMLI: at Deerfield Ft. Worth, TX 1999 240 238,972 996 at Fossil Creek Ft. Worth, TX 1998 384 384,358 1,001 at Oakbend Lewisville, TX 1997 426 382,690 898 on the Parkway Dallas, TX 1999 240 225,568 940 at Prestonwood Hills Dallas, TX 1999 1997 272 245,696 903 on Timberglen Dallas, TX 1990 1985 260 201,198 774 at Verandah Arlington, TX 1997 86/91 538 394,304 733 ------ ---------- ------ Subtotal - Dallas/Ft. Worth 2,360 2,072,786 878 ------ ---------- ------ AUSTIN, TX - ---------- AMLI: at Wells Branch Austin, TX 1999 576 554,582 963 ------ ---------- ------ HOUSTON, TX - ----------- AMLI: at Champions Centre Houston, TX 1994 1994 192 164,480 857 at Champions Park Houston, TX 1994 1991 246 221,986 902 at Greenwood Forest Houston, TX 1995 1995 316 310,844 984 ------ ---------- ------ 754 697,310 925 ------ ---------- ------ TOTAL CO-INVESTMENT PROPERTIES 8,936 8,357,602 935 ====== ========== ====== TOTAL WHOLLY OWNED AND CO-INVESTMENT PROPERTIES 21,451 19,627,942 915 ====== ========== ======
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION - CONTINUED As of December 31, 1999
Quarter Ended Year Ended December 31, 1999 Quarter Ended December 31, 1999 Year Ended Average Rental Rates Dec 31, 1999 Average Rental Rates Dec 31, 1999 ------------------------- Avg. ------------------------ Avg. Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy -------- ----------- ------------ -------- ----------- ------------ CO-INVESTMENT PROPERTIES - ------------ ATLANTA, GA - ----------- AMLI: at Barrett Lakes 872 $0.84 95.7% 863 0.83 93.6% at Pleasant Hill 811 0.81 96.7% 803 0.80 93.5% at River Park 913 0.89 94.9% 898 0.88 94.6% at Towne Creek 650 0.80 96.2% 634 0.78 92.4% at Willeo Creek 853 0.69 95.7% 847 0.69 93.7% at Northwinds (1) 880 0.86 92.3% 880 0.86 92.3% at Windward Park 932 0.86 93.9% 910 0.84 93.1% ------ ----- ------ ------ ----- ------ Subtotal - Atlanta, GA 859 0.83 94.6% 851 0.82 93.2% ------ ----- ------ ------ ----- ------ CHICAGO, IL - ----------- AMLI: at Chevy Chase 1,047 1.29 95.0% 1,017 1.25 95.7% at Danada 970 1.12 94.7% 955 1.10 94.7% at Fox Valley 1,001 1.01 89.8% 978 0.99 90.4% at Willowbrook 1,004 1.17 91.7% 984 1.15 94.4% at Windbrooke 1,044 1.16 98.4% 1,021 1.13 97.8% ------ ----- ------ ------ ----- ------ Subtotal - Chicago, IL 1,010 1.16 93.9% 988 1.14 94.7% ------ ----- ------ ------ ----- ------ EASTERN KANSAS - -------------- AMLI: at Regents Crest 786 0.83 91.5% 766 0.81 93.8% ------ ----- ------ ------ ----- ------ Quarter Ended Year Ended December 31, 1999 Quarter Ended December 31, 1999 Year Ended Average Rental Rates Dec 31, 1999 Average Rental Rates Dec 31, 1999 ------------------------- Avg. ------------------------ Avg. Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy -------- ----------- ------------ -------- ----------- ------------ DALLAS/FT. WORTH - ---------------- AMLI: at Deerfield (1) 836 0.84 90.1% 836 0.84 90.1% at Fossil Creek 812 0.81 96.3% 813 0.81 93.6% at Oakbend 785 0.87 96.3% 772 0.86 93.6% on the Parkway 879 0.93 93.1% 873 0.93 92.8% at Prestonwood Hills 852 0.94 93.0% 824 0.91 92.9% on Timberglen 621 0.80 96.3% 622 0.80 94.3% at Verandah 665 0.91 96.3% 670 0.91 95.0% ------ ----- ------ ------ ----- ------ Subtotal - Dallas/Ft. Worth 766 0.87 94.9% 762 0.87 93.5% ------ ----- ------ ------ ----- ------ AUSTIN, TX - ---------- AMLI: at Wells Branch 852 0.88 94.1% 809 0.84 85.3% ------ ----- ------ ------ ----- ------ HOUSTON, TX - ----------- AMLI: at Champions Centre 731 0.85 91.8% 747 0.87 92.3% at Champions Park 722 0.80 92.3% 732 0.81 91.6% at Greenwood Forest 770 0.78 92.4% 775 0.79 92.6% ------ ----- ------ ------ ----- ------ Subtotal - Houston, TX 744 0.80 92.2% 754 0.82 92.2% ------ ----- ------ ------ ----- ------ TOTAL CO-INVESTMENT PROPERTIES 859 0.92 94.2% 847 0.91 93.1% ====== ===== ====== ====== ===== ====== TOTAL WHOLLY OWNED AND CO-INVESTMENT PROPERTIES 800 0.87 93.0% 788 0.86 92.6% ====== ===== ====== ====== ===== ======
AMLI RESIDENTIAL PROPERTIES TRUST COMPONENTS OF PROPERTY EBITDA Unaudited - Dollars in thousands except per share data
WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100% ----------------------------- ----------------------------- ----------------------------- Year Ended December 31, Year Ended December 31, Year Ended December 31, ----------------------------- ----------------------------- ----------------------------- % % % 1999 1998 Change 1999 1998 Change 1999 1998 Change ------- ------- ------- -------- ------- ------- ------- ------- ------- PROPERTY REVENUES - ----------------- RENTAL INCOME - ------------- Same Store Communities (1) $ 84,863 83,353 1.8% 49,923 48,444 3.1% 134,787 131,797 2.3% New Communities (2) 6,846 4,598 48.9% 6,417 4,919 30.5% 13,263 9,516 39.4% Development and/or Lease-up Communities (3) 1,592 325 389.8% 18,038 5,048 257.3% 19,630 5,373 265.3% Acquisition Communities (4) 9,922 3,662 170.9% 4,964 -- 14,886 3,662 306.4% Communities Sold/ Contributed to Ventures (5) 5,045 9,954 6,795 5,628 11,841 15,582 -------- ------- ------ -------- ------- ------ -------- ------- ------ Total $108,268 101,892 6.3% 86,137 64,039 34.5% 194,406 165,931 17.2% ======== ======= ====== ======== ======== ====== ======== ======= ====== OTHER REVENUES - -------------- Same Store Communities $ 4,834 4,551 6.2% 3,247 2,715 19.6% 8,081 7,266 11.2% New Communities 547 353 54.6% 502 443 13.3% 1,049 797 31.6% Development and/or Lease-up Communities 113 15 651.5% 1,372 424 223.8% 1,485 439 238.5% Acquisition Communities 618 153 304.8% 371 -- 989 153 547.8% Communities Sold/ Contributed to Ventures 574 865 455 390 1,028 1,255 -------- ------- ------ -------- ------- ------ -------- ------- ------ Total $ 6,686 5,937 12.6% 5,947 3,972 49.7% 12,632 9,909 27.5% ======== ======= ====== ======== ======== ====== ======== ======= ====== AMLI RESIDENTIAL PROPERTIES TRUST COMPONENTS OF PROPERTY EBITDA - CONTINUED Unaudited - Dollars in thousands except per share data WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100% ----------------------------- ----------------------------- ----------------------------- Year Ended December 31, Year Ended December 31, Year Ended December 31, ----------------------------- ----------------------------- ----------------------------- % % % 1999 1998 Change 1999 1998 Change 1999 1998 Change ------- ------- ------- -------- ------- ------- ------- ------- ------- TOTAL PROPERTY REVENUES - -------------- Same Store Communities $ 89,697 87,904 2.0% 53,170 51,159 3.9% 142,868 139,063 2.7% New Communities 7,393 4,951 49.3% 6,919 5,362 29.0% 14,312 10,313 38.8% Development and/or Lease-up Communities 1,705 340 401.4% 19,409 5,472 254.7% 21,114 5,812 263.3% Acquisition Communities 10,540 3,815 176.3% 5,335 -- 15,875 3,815 316.1% Communities Sold/ Contributed to Ventures 5,619 10,819 7,250 6,018 12,869 16,837 -------- ------- ------ -------- ------- ------ -------- ------- ------ Total $114,954 107,829 6.6% 92,084 68,011 35.4% 207,038 175,840 17.7% ======== ======= ====== ======== ======== ====== ======== ======= ====== TOTAL OPERATING EXPENSES - --------------- Same Store Communities $ 35,327 35,062 0.8% 19,269 19,442 -0.9% 54,595 54,504 0.2% New Communities 2,217 1,662 33.4% 2,581 2,700 -4.4% 4,797 4,362 10.0% Development and/or Lease-up Communities 809 244 231.1% 8,349 2,352 255.0% 9,158 2,596 252.8% Acquisition Communities 3,676 1,291 184.8% 2,187 -- 5,863 1,291 354.2% Communities Sold/ Contributed to Ventures 2,318 5,334 3,358 2,834 5,675 8,168 -------- ------- ------ -------- ------- ------ -------- ------- ------ Total $ 44,347 43,593 1.7% 35,742 27,328 30.8% 80,088 70,921 12.9% ======== ======= ====== ======== ======== ====== ======== ======= ====== AMLI RESIDENTIAL PROPERTIES TRUST COMPONENTS OF PROPERTY EBITDA - CONTINUED Unaudited - Dollars in thousands except per share data WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100% ----------------------------- ----------------------------- ----------------------------- Year Ended December 31, Year Ended December 31, Year Ended December 31, ----------------------------- ----------------------------- ----------------------------- % % % 1999 1998 Change 1999 1998 Change 1999 1998 Change ------- ------- ------- -------- ------- ------- ------- ------- ------- PROPERTY EBITDA - --------------- Same Store Communities $ 54,370 52,841 2.9% 33,902 31,718 6.9% 88,271 84,559 4.4% New Communities 5,176 3,289 57.4% 4,339 2,662 63.0% 9,514 5,951 59.9% Development and/or Lease-Up Communities 896 96 836.0% 11,061 3,120 254.5% 11,957 3,216 271.8% Acquisition Communities 6,864 2,524 171.9% 3,149 -- 10,012 2,524 296.6% Communities Sold/ Contributed to Ventures 3,301 5,485 3,893 3,184 7,194 8,669 -------- ------- ------ -------- ------- ------ -------- ------- ------ Total $ 70,607 64,236 9.9% 56,342 40,684 38.5% 126,949 104,920 21.0% ======== ======= ====== ======== ======== ====== ======== ======= ====== Company's share of Co-investment EBITDA 15,986 11,138 43.5% 15,986 11,138 43.5% ======== ======== ====== ======== ======= ====== Percent of Co-investment EBITDA 28% 27% 13% 11% ======== ======== ======== ======= (1) Stabilized Communities at 1/1/98. (2) Development Communities stabilized after 1/1/98 but before 1/1/99. (3) Development Communities not yet stabilized. (4) Stabilized Communities acquired after 1/1/98. (5) Communities sold or contributed to co-investment ventures.
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