EX-99.2 8 ex_992.txt EXHIBIT 99.2 ------------ AMLI RESIDENTIAL ------------------------------------------------------------ SECOND QUARTER 2002 SUPPLEMENTAL OPERATING AND FINANCIAL DATA ------------------------------------------------------------ [ graphics indicating property / caption reading "AMLI at Bryan Place - Dallas, Texas. Purchased in June 2002." ] AMLI RESIDENTIAL PROPERTIES TRUST 125 South Wacker Drive Suite 3100 Chicago, Illinois 60606 Phone: (312) 443-1477 Fax: (312) 443-0909 www.amli.com ------------ Certain matters discussed in this supplemental package and the conference call held in connection herewith are forward looking statements within the meaning of Federal Securities Law. Although the Company believes expectations reflected in such forward looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward looking statements can be identified by the Company's use of the words "project," "believe," "expect," "anticipate," "intend," "estimate," "assume," and other similar expressions that predict or indicate future events, achievements or trends or that do not relate to historical matters. The Company is making forward looking statements because it believes that investors, analysts, and others, many of whom prepare models and projections of the Company's performance, are interested in the Company's current estimates of future activities. The Company advises such parties to make their own determination of any relevant or material assumption used by them. Many factors may cause the Company's actual performance in any period or periods to differ materially from the anticipated future performance expressed or implied by these forward looking statements. Certain of the factors that could cause the Company's actual performance to differ materially from those expressed or implied by these forward looking statements include, but are not limited to, general economic conditions, local real estate conditions, the timely development and lease-up of communities, other risk detailed from time to time in the Company's SEC reports, including the annual report on Form 10-K for the year ended December 31, 2001. AMLI RESIDENTIAL TABLE OF CONTENTS Page ---- SUMMARY INFORMATION Company Description and Investor Information. . . . . . . . 1 Earnings Release. . . . . . . . . . . . . . . . . . . . . . 2 Selected Financial and Operating Information. . . . . . . . 6 Funds From Operations . . . . . . . . . . . . . . . . . . . 12 Statements of Operations. . . . . . . . . . . . . . . . . . 14 Balance Sheets. . . . . . . . . . . . . . . . . . . . . . . 18 DEBT AND PREFERRED SHARES Debt and Preferred Shares Summary . . . . . . . . . . . . . 20 Debt Maturities . . . . . . . . . . . . . . . . . . . . . . 24 SAME STORE AND NOI DATA Quarterly Comparison of Same Store Communities. . . . . . . 26 Quarterly Comparison of Components of NOI . . . . . . . . . 39 OTHER DATA Co-Investment Compensation. . . . . . . . . . . . . . . . . 45 Service Companies Financial Information . . . . . . . . . . 47 PORTFOLIO Stabilized Communities. . . . . . . . . . . . . . . . . . . 50 Development Summary . . . . . . . . . . . . . . . . . . . . 54 Land Held for Development or Sale . . . . . . . . . . . . . 58 AMLI RESIDENTIAL COMPANY DESCRIPTION INVESTOR INFORMATION AMLI Residential (or AMLI) is an integrated, self-managed real estate operating company, that was formed in February 1994 to continue and expand the multifamily property business previously conducted by AMLI Realty Co., our predecessor company, which has been in business since 1980. AMLI is structured as an UPREIT, or umbrella partnership real estate investment trust, and we own interests in properties and conduct our business through AMLI Residential Properties, L.P., (the Operating Partnership or OP). The sole general partner of the OP is AMLI Residential Properties Trust, a public company whose shares of beneficial interest are traded on the NYSE under the symbol "AML." Our business is the development, acquisition and management of upscale apartment communities in the Southeast, Southwest, Midwest and Mountain regions of the United States. We also serve as an institutional advisor and asset manager for domestic and international, tax-exempt and taxable investors in connection with our joint venture co-investment business. A summary schedule of our investment communities is included in this Supplement. We operate all of our communities under the AMLI brand name, representing our commitment to high quality, exceptional service and superior value. We have corporate offices in Atlanta, Dallas, Indianapolis and Kansas City, in addition to our main office in Chicago. We employ approximately 875 people who are dedicated to our mission ... TO PROVIDE AN OUTSTANDING LIVING ENVIRONMENT FOR OUR RESIDENTS. For additional information on AMLI, please visit our website at www.amli.com. The following information is presented as a supplement to our other public reporting, including our Form 10-Q and Form 10-K, both or which can be found on our website or through the SEC's EDGAR database. We hope that the information contained herein is helpful to you. We encourage your feedback and any suggestions, which you believe will help us provide better disclosure to you. Please contact either of: Robert Chapman Executive Vice President & CFO 312.984.6845 rchapman@amli.com Sue Bersh Vice President - Corporate Communications 312.984.2607 sbersh@amli.com Thank you for your interest in AMLI Residential. AML LISTED NYSE Second Quarter 2002 Page 1 Supplemental Information AMLI Residential Properties Trust AMLI RESIDENTIAL 125 South Wacker Drive Chicago, Illinois 60606 Phone: 312.443.1477 Fax: 312.443.0909 www.amli.com PRESS RELEASE For Immediate Release For More Information, Contact: July 30, 2002 Robert J. Chapman, Chief Financial Officer (312) 984-6845 AMLI RESIDENTIAL ANNOUNCES SECOND QUARTER 2002 OPERATING RESULTS AND DECLARES DIVIDEND (CHICAGO, IL) AMLI RESIDENTIAL PROPERTIES TRUST (NYSE: AML) announces today operating results for the second quarter ended June 30, 2002. EARNINGS -------- Funds From Operations ("FFO") for the second quarter 2002 were $16,105,000, or $0.62 per common share, compared to $16,162,000, or $0.65 per common share, for the second quarter 2001, a per share decrease of 4.6%. FFO is consistent with First Call's current estimate and the Company's recently revised guidance. FFO for the six months ended June 30, 2002 was $31,933,000, or $1.23 per share, compared to $31,393,000, or $1.26 per share, for the six months ended June 30, 2001, a per share decrease of 2.4%. "As noted in our press release last week, results for the quarter were negatively impacted by weaker than expected property operations," commented Allan J. Sweet, AMLI President. "Several of our markets actually performed relatively well for the first six months of this year, compared to either last year's numbers or our current year's expectations; however, rental revenues in Dallas, which is our largest market, and in Austin, for example, dropped dramatically from collections in May. Continuing weakness in Atlanta, our second largest market, has been consistent with our expectations." Net income for the three and six months ended June 30, 2002 was $7,291,000 and $13,951,000, respectively, as compared to $14,225,000 and $20,630,000, respectively, in the year earlier periods. Diluted Earnings Per Share ("EPS") for the quarter ended June 30, 2002 was $0.29, compared to $0.67 for the comparable period of 2001, a decrease of 56.7%, which was primarily attributable to a large gain from the sale of a community last year. Additionally, Operating EPS was $0.26 per diluted share for the quarter ended June 30, 2002, as compared to $0.28 per diluted share for the quarter ended June 30, 2001. For the six months ended June 30, 2002, EPS was $0.54 compared to $0.96 for the comparable period of 2001, a decrease of 43.8%, and Operating EPS was $0.52 compared to $0.54 for the comparable period of 2001, a decrease of 3.7%. "Operating EPS" includes the operating results for properties whose operating results are reported as "Discontinued Operations" under GAAP. SAME COMMUNITY RESULTS ---------------------- On a combined same community basis, which includes both wholly-owned and co-investment communities (at 100%) for the quarter ended June 30, 2002 versus the prior year's quarter, total property revenues decreased 3.3%, operating expenses increased 0.1%, and net operating income ("NOI") decreased 5.4%. Weighted average occupancy, quarter over comparable quarter, decreased from 92.2% to 92.0%, while the weighted average rental rate decreased by 2.7%. Second Quarter 2002 Page 2 Supplemental Information AMLI Residential Properties Trust OTHER OPERATING RESULTS ----------------------- Total property revenues, including both wholly-owned communities and co- investment communities (at 100%) were $69,191,000 and $137,095,000, respectively, for the quarter and six months ended June 30, 2002, as compared with $69,676,000 and $137,195,000 for the comparable period in 2001, a 0.7% and 0.1% decrease, respectively. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the quarter and six months ended June 30, 2002 were $25,910,000 and $51,125,000, respectively, representing decreases of 2.4% and 1.5%, respectively, from the same period last year. SECOND QUARTER ACTIVITIES -------------------------- During the second quarter, AMLI: . Broke ground on AMLI Downtown Austin, a mixed-used development containing 220 apartment homes, a parking garage and retail space, in downtown Austin, Texas. . Purchased AMLI at Bryan Place, a 420-unit luxury apartment community in Dallas, Texas, in a joint venture with an existing institutional partner. . Acquired AMLI Upper West Side, a 194-unit community in Fort Worth, Texas. . Completed the initial lease-up and stabilization of AMLI at Mill Creek in Gwinnett County, Georgia and closed on an $18 million first mortgage permanent loan. . Sold AMLI at Champions Park and AMLI at Champions Centre in Houston, Texas. Both communities were owned in a joint venture. In addition to AMLI's 15% share of the net sale proceeds, AMLI received disposition fees of $239,000. . Increased the mortgage financing on AMLI at Chevy Chase, a 592-unit community in suburban Chicago owned by a joint venture. As a result of the refinancing, AMLI received a promoted interest distribution of approximately $725,000 in excess of its 33% ownership, which has been treated by AMLI as a return of capital and is expected to be recognized as income when the property is ultimately sold. Additionally, AMLI is now entitled to receive 40% of all future cash flow distributions and 50% of any future distributions of sale or refinancing proceeds from this partnership. . Modified mortgages on two wholly-owned communities that reduced the interest rates, extended the maturities, and provided additional proceeds of approximately $12,000,000. SUBSEQUENT EVENT ---------------- AMLI currently expects to close the sale of AMLI at Greenwood Forest, a 316-unit co-investment community, on August 1, 2002. In connection with the sale, AMLI will receive a disposition fee of $403,000. Second Quarter 2002 Page 3 Supplemental Information AMLI Residential Properties Trust ACCOUNTING FOR SHARE OPTIONS ---------------------------- Yesterday, AMLI's Board of Trustees approved management's decision to change AMLI's policy for accounting for share options. In accordance with the rules governing the accounting for such a change, AMLI will commence reporting the value of share options awarded subsequent to January 1, 2002 as a charge against earnings and FFO. The accounting for options issued prior to 2002 is unaffected by this change, and AMLI anticipates that there will be no material effect on its 2002 results of operations. COMMON SHARE REPURCHASE AUTHORIZATIONS -------------------------------------- During the period from July 25, through July 29, 2002, AMLI repurchased on the open market 130,500 of its common shares at an average price of $21.62 per share pursuant to its previously announced 500,000 Common Share Repurchase Program, so that shares repurchased under this authorization now total 350,900. Yesterday, AMLI's Board of Trustees replaced the remaining 149,100 share authorization with a new 1,500,000 share authorization. AMLI anticipates acquiring shares under this new authorization from time to time as market conditions warrant. OUTLOOK ------- As stated in the Company's revised guidance issued last week, AMLI's current expectation for full year 2002 FFO per share is in the range of $2.42 to $2.48 per share. AMLI anticipates that full year Operating EPS for 2002 will be in the range of $1.01 to $1.07. The Company anticipates that previous FFO guidance for 2003 of $2.75 to $2.85 per share is no longer likely and will issue revised guidance at a later date this year. DIVIDEND -------- Yesterday, the Board of Trustees declared a quarterly dividend of $0.48 per common share. This dividend is payable on August 20, 2002 to all common shareholders of record as of August 9, 2002 and is based on an annual dividend rate of $1.92 per common share. CONFERENCE CALL --------------- AMLI will hold a conference call on Wednesday, July 31, 2002 at 3:30 p.m. ET to review these results. The call may be joined by calling 877-601-5719 -- Passcode: AMLI. A live webcast of the conference call will also be available in the 'Company Info' section on AMLI's website (www.amli.com/ comp/) and at www.streetevents.com. SUPPLEMENTAL INFORMATION ------------------------ AMLI produces Quarterly Supplemental Information that provides detailed information regarding the Company's activities during the quarter. The Second Quarter Supplemental Information is available in the 'Company Info' section on our website (www.amli.com/comp/) under 'Shareholder Reports.' Second Quarter 2002 Page 4 Supplemental Information AMLI Residential Properties Trust ABOUT AMLI ---------- The AMLI portfolio currently includes 73 apartment communities containing 28,352 apartment homes, with an additional 2,757 apartment homes under development or in lease-up in eight locations. AMLI is focused on the development, acquisition and management of institutional quality multifamily communities in the Southeast, Southwest, Midwest and Mountain Regions areas of the U.S. AMLI Residential also serves as institutional advisor and asset manager for large pension funds, tax-exempt foundations and other financial institutions through AMLI's co-investment business. AMLI employs approximately 875 people who are dedicated to achieving AMLI's mission -- Provide An Outstanding Living Environment For Our Residents. More information on AMLI is available at www.amli.com. FORWARD LOOKING STATEMENTS -------------------------- Certain matters discussed in this press release are forward looking statements within the meaning of Federal Securities Law. Although the Company believes expectations reflected in such forward looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking statements can be identified by the Company's use of the words "project," "believe," "expect," "anticipate," "intend," "estimate," "assume," and other similar expressions that predict or indicate future events, achievements or trends or that do not relate to historical matters. The Company does not assure the future results or outcome of the matters described in forward-looking statements; rather, these statements merely reflect the Company's current expectations of the approximate outcomes of the matters discussed. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company's control. The reader is cautioned to make his/her own judgment with regard to the statements discussed in this press release and the assumption noted by the Company herein. The Company is making forward-looking statements because it believes investors, analysts and others, many of whom prepare models and projections of the Company's performance, are interested in the Company's current estimates of its future activities. The Company advises such parties to make their own determination of any relevant or material assumption used by them. Many factors may cause the Company's actual performance in any period or periods to differ materially from the anticipated future performance expressed or implied by these forward-looking statements. Certain of the factors that could cause the Company's actual performance to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, general economic conditions, local real estate conditions, the timely development and lease-up of communities, other risks detailed from time to time in the Company's SEC reports, including the annual report on form 10-K for the year ended December 31, 2001. # # # # Second Quarter 2002 Page 5 Supplemental Information AMLI Residential Properties Trust AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION Unaudited (Dollars in thousands, except for share data)
Quarter Ended ------------------------------------------------------------- June 30, March 31, Dec. 31, Sept. 30, June 30, 2002 2002 2001 2001 2001 ---------- ---------- ---------- ---------- ---------- REVENUES -------- TOTAL REVENUES Consolidated (a). . . . . . . . . . . . . $ 31,112 30,124 30,829 33,003 31,148 Combined, including share of partnerships (b). . . . . . . . . . . . 42,853 41,520 41,775 44,848 43,012 TOTAL PROPERTY REVENUES Consolidated. . . . . . . . . . . . . . . 27,537 27,374 27,296 27,824 27,523 Combined, including share of partnerships. . . . . . . . . . . . . . 40,615 40,104 40,199 41,174 40,997 Combined, including partnerships at 100% . . . . . . . . . . . . . . . . 69,191 67,904 68,114 70,003 69,676 EARNINGS -------- EBITDA Consolidated. . . . . . . . . . . . . . 22,347 21,774 20,911 23,826 22,823 Combined, including share of partnerships. . . . . . . . . . . . . 25,910 25,215 24,323 27,378 26,547 FFO . . . . . . . . . . . . . . . . . . . 16,105 15,828 14,901 16,848 16,162 AFFO. . . . . . . . . . . . . . . . . . . 14,646 14,601 13,635 15,452 13,474 Operating earnings. . . . . . . . . . . . 5,820 5,516 4,604 7,158 5,928 Net income. . . . . . . . . . . . . . . . 5,345 4,578 3,815 17,611 12,592 Dividends (c) . . . . . . . . . . . . . . 12,432 12,286 11,985 11,751 11,686 6 AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION - CONTINUED Unaudited (Dollars in thousands, except for share data) Quarter Ended ------------------------------------------------------------- June 30, March 31, Dec. 31, Sept. 30, June 30, 2002 2002 2001 2001 2001 ---------- ---------- ---------- ---------- ---------- PER SHARE DATA - DILUTED ------------------------ FFO . . . . . . . . . . . . . . . . . . . $ 0.62 0.61 0.58 0.67 0.65 AFFO. . . . . . . . . . . . . . . . . . . 0.56 0.56 0.53 0.61 0.54 Operating earnings. . . . . . . . . . . . 0.26 0.25 0.21 0.33 0.28 Net income allocable to common shares . . 0.29 0.25 0.21 0.89 0.67 Common dividends. . . . . . . . . . . . . 0.48 0.48 0.48 0.47 0.47 FFO payout ratio (based on per share amounts). . . . . . . . . . . . . 77.7% 78.8% 82.8% 70.3% 72.8% AFFO payout ratio (based on per share amounts). . . . . . . . . . . . . 85.4% 85.6% 90.6% 76.5% 87.4% NUMBER OF APARTMENT HOMES ------------------------- STABILIZED COMMUNITIES Wholly-owned. . . . . . . . . . . . . . . 12,441 12,247 12,247 12,247 12,079 Partnerships. . . . . . . . . . . . . . . 15,911 15,011 15,011 14,579 15,067 ---------- ---------- ---------- ---------- ---------- 28,352 27,258 27,258 26,826 27,146 ---------- ---------- ---------- ---------- ---------- COMMUNITIES UNDER DEVELOPMENT AND/OR LEASE-UP Wholly-owned. . . . . . . . . . . . . . . 542 322 322 322 -- Partnerships. . . . . . . . . . . . . . . 2,215 2,615 2,615 2,737 2,217 ---------- ---------- ---------- ---------- ---------- 2,757 2,937 2,937 3,059 2,217 ---------- ---------- ---------- ---------- ---------- Total . . . . . . . . . . . . . . . . . . 31,109 30,195 30,195 29,885 29,363 ========== ========== ========== ========== ========== See notes on following pages. 7
AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION Unaudited (Dollars in thousands, except for share data)
Quarter Ended ------------------------------------------------------------ June 30, March 31, Dec. 31, Sept. 30, June 30, 2002 2002 2001 2001 2001 ---------- ---------- ---------- ---------- ---------- CAPITALIZATION -------------- REAL ESTATE AT COST, BEFORE DEPRECIATION Consolidated. . . . . . . . . . . . . . . $ 735,699 745,906 744,411 743,111 696,346 Combined, including share of partnerships. . . . . . . . . . . . . . 1,142,647 1,116,239 1,114,576 1,105,640 1,074,009 Combined, including partnerships at 100% . . . . . . . . . . . . . . . . 1,954,652 1,864,965 1,862,901 1,862,901 1,822,852 TOTAL ASSETS Consolidated. . . . . . . . . . . . . . . 964,800 915,344 919,002 912,987 915,048 Combined, including share of partnerships. . . . . . . . . . . . . . 1,161,962 1,112,731 1,120,158 1,111,033 1,121,990 DEBT Consolidated. . . . . . . . . . . . . . . 450,268 405,126 399,309 408,475 429,489 Combined, including share of partnerships. . . . . . . . . . . . . . 648,965 592,300 586,137 595,174 625,061 SHARE INFORMATION common shares outstanding . . . . . . . . 18,120,296 18,110,659 17,840,368 17,847,398 17,814,037 Preferred shares outstanding (d). . . . . 4,025,000 4,025,000 4,275,000 3,475,000 3,475,000 Operating Partnership units outstanding(e). . . . . . . . . . . . . 3,655,364 3,664,396 3,664,396 3,684,866 3,602,195 ---------- ---------- ----------- ----------- ----------- Total shares and units outstanding. . . . 25,800,660 25,800,055 25,779,764 25,007,264 24,891,232 ========== ========== =========== =========== =========== Weighted average shares and units outstanding . . . . . . . . . . . . . . 25,800,241 25,787,270 25,518,607 24,960,829 24,876,109 Share price, end of period. . . . . . . . $ 26.00 25.22 25.22 23.60 24.60 8 AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION - CONTINUED Unaudited (Dollars in thousands, except for share data) Quarter Ended ------------------------------------------------------------ June 30, March 31, Dec. 31, Sept. 30, June 30, 2002 2002 2001 2001 2001 ---------- ---------- ---------- ---------- ---------- EQUITY MARKET CAPITALIZATION 670,817 650,677 650,166 590,171 612,324 MARKET CAPITALIZATION Consolidated. . . . . . . . . . . . . . . 1,121,085 1,055,803 1,049,475 998,646 1,041,813 Combined, including shares of partnerships. . . . . . . . . . . . . . 1,319,782 1,242,977 1,236,317 1,185,359 1,237,400 Combined,including partnerships at 100% . 2,334,010 2,179,544 2,187,099 2,119,787 2,171,828 DEBT SERVICE (f) ---------------- INTEREST EXPENSE Consolidated. . . . . . . . . . . . . . . 6,084 5,800 5,858 6,824 6,352 Combined, including share of partnerships 9,602 9,197 9,205 10,328 10,027 CAPITALIZED INTEREST Consolidated. . . . . . . . . . . . . . . 962 1,054 981 1,100 1,047 Combined, including share of partnerships . . . . . . . . . . . . 1,003 1,072 1,004 1,145 1,072 SCHEDULED PRINCIPAL PAYMENTS (normal amortization) Consolidated. . . . . . . . . . . . . . . 1,105 1,183 1,166 1,014 753 Combined, including share of partnerships 1,583 1,786 1,704 1,501 1,313 See notes on following pages. 9
AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION Unaudited (Dollars in thousands, except for share data)
Quarter Ended ------------------------------------------------------------ June 30, March 31, Dec. 31, Sept. 30, June 30, 2002 2002 2001 2001 2001 ---------- ---------- ---------- ---------- ---------- OPERATIONAL RATIOS ------------------ EBITDA, AS PERCENT OF TOTAL MARKET CAPITALIZATION Consolidated. . . . . . . . . . . . . . . 8.0% 8.2% 8.0% 9.5% 8.8% Combined, including share of unconsolidated affiliates . . . . . . . 7.9% 8.1% 7.9% 9.2% 8.6% INTEREST COVERAGE Consolidated. . . . . . . . . . . . . . . 3.7 3.8 3.6 3.5 3.6 Combined, including share of partnerships 2.7 2.7 2.6 2.7 2.6 FIXED CHARGE COVERAGE (g) Consolidated. . . . . . . . . . . . . . . 2.8 2.8 2.6 2.8 2.9 Combined, including share of partnerships 2.2 2.2 2.2 2.3 2.3 FINANCIAL RATIOS ---------------- DEBT TO TOTAL MARKET CAPITALIZATION Consolidated. . . . . . . . . . . . . . . 40.2% 38.4% 38.0% 40.9% 41.2% Combined, including share of unconsolidated affiliates . . . . . . . 49.2% 47.7% 47.4% 50.2% 50.5% DEBT TO TOTAL ASSETS, AT COST (before depreciation) Consolidated. . . . . . . . . . . . . . . 41.9% 39.6% 38.9% 40.2% 42.5% Combined, including share of partnerships 49.7% 47.2% 46.7% 48.1% 50.3% 10 AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION - CONTINUED Unaudited (Dollars in thousands, except for share data) Notes: (a) All references to "Consolidated" refer to disclosures that are derived from numbers directly on the Company's consolidated financial statements, which are prepared in accordance with GAAP and reflect the Company's interest in unconsolidated partnerships on the equity method. (b) All references to "Combined", "Combined, including share of partnerships" or the like refer to calculations derived by combining the Company's consolidated financial information with the Company's pro rata share of its partnerships' financial information. (c) Includes dividends paid on all common and preferred shares. (d) Included all preferred shares convertible to common shares. (e) Represents Minority Interest on the Company's Balance Sheets. (f) Excludes amortization of deferred and other financing costs. (g) Includes interest expense and preferred dividends and excludes principal amortization. 11
AMLI RESIDENTIAL FUNDS FROM OPERATIONS Unaudited (Dollars in thousands, except for share data) Three Months Ended June 30 ----------------------- 2002 2001 ---------- ---------- Company's share of communities' EBITDA (a). $ 25,804 26,408 Interest from and share of Services Companies' FFO (b). . . . . . . . . . . . (24) 394 Other interest and Other. . . . . . . . . . 83 466 Co-investment fee income (c). . . . . . . . 1,260 429 General and administrative. . . . . . . . . (1,213) (1,151) ---------- ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) . . 25,910 26,546 ---------- ---------- INTEREST EXPENSE (d) Wholly-owned communities and portfolio debt. . . . . . . . . . . . . . . . . . . (6,242) (6,661) Share of partnership communities. . . . . . (3,563) (3,723) ---------- ---------- (9,805) (10,384) ---------- ---------- FUNDS FROM OPERATIONS (FF0) . . . . . . . . 16,105 16,162 CAPITAL EXPENDITURES PAID FROM FFO Wholly-owned communities. . . . . . . . . . (1,159) (2,438) Share of partnership communities. . . . . . (300) (250) ---------- ---------- (1,459) (2,688) ---------- ---------- ADJUSTED FUNDS FROM OPERATIONS (AFFO) . . . $ 14,646 13,474 ========== ========== Notes: (a) Includes discontinued operations. See pages 40 and 43. (b) Includes share of income before goodwill amortization of $104 for the quarter ended June 30, 2001. See page 47. (c) See page 47. (d) Includes amortization of deferred and other financing costs. 12 AMLI RESIDENTIAL FUNDS FROM OPERATIONS Unaudited (Dollars in thousands, except for share data) Six Months Ended June 30 ----------------------- 2002 2001 ---------- ---------- Company's share of communities' EBITDA (a). . . . . . . . . . . . . . . . $ 51,838 52,468 Interest from and share of Services Companies' FFO (b). . . . . . . . . . . . (254) 95 Other interest and Other. . . . . . . . . . 337 943 Co-investment fee income (c). . . . . . . . 1,957 1,053 General and administrative. . . . . . . . . (2,753) (2,669) ---------- ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) . . 51,125 51,890 ---------- ---------- INTEREST EXPENSE (d) Wholly-owned communities and portfolio debt. . . . . . . . . . . . . . . . . . . (12,188) (13,224) Share of partnership communities. . . . . . (7,004) (7,273) ---------- ---------- (19,192) (20,497) ---------- ---------- FUNDS FROM OPERATIONS (FF0) . . . . . . . . 31,933 31,393 CAPITAL EXPENDITURES PAID FROM FFO Wholly-owned communities. . . . . . . . . . (2,164) (3,437) Share of partnership communities. . . . . . (522) (461) ---------- ---------- (2,686) (3,898) ---------- ---------- ADJUSTED FUNDS FROM OPERATIONS (AFFO) . . . $ 29,247 27,495 ========== ========== Notes: (a) Includes discontinued operations. See pages 40 and 43. (b) Includes share of income before goodwill amortization of $207 for the six months ended June 30, 2001. See page 47. (c) See page 47. (d) Includes amortization of deferred and other financing costs. No interest expense is associated with discontinued operations. 13 AMLI RESIDENTIAL STATEMENTS OF OPERATIONS Three Months Ended June 30 (Unaudited, dollars in thousands)
Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- REVENUES Property revenues . . . . . . . . . . . . . . . . . . $ 27,538 27,523 40,615 40,997 Interest and share of income (loss) from the Service Companies . . . . . . . . . . . . . . . . . (24) 291 (24) 291 Other interest and Other (c). . . . . . . . . . . . . 83 326 1,133 1,153 Income from partnerships. . . . . . . . . . . . . . . 2,255 2,439 -- -- Co-investment fee income. . . . . . . . . . . . . . . 1,260 569 1,129 570 ---------- ---------- ---------- ---------- 31,112 31,148 42,853 43,011 ---------- ---------- ---------- ---------- EXPENSES Property operating expenses . . . . . . . . . . . . . 11,267 11,034 16,451 16,169 Interest and amortization of deferred and other financing costs . . . . . . . . . . . . . . . 6,242 6,661 9,805 10,415 Depreciation. . . . . . . . . . . . . . . . . . . . . 5,248 5,328 8,196 8,215 General and administrative. . . . . . . . . . . . . . 1,213 1,151 1,259 1,237 ---------- ---------- ---------- ---------- 23,970 24,174 35,711 36,037 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE SHARE OF GAINS ON SALES OF PROPERTIES. . . . . . . . 7,142 6,974 7,142 6,974 Gain on sale of residential property including share of gains on sales of partnership's properties. . . . . . . . 605 9,249 605 9,249 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . 7,747 16,223 7,747 16,223 Minority interest . . . . . . . . . . . . . . . . . . 975 2,486 975 2,486 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . 6,772 13,737 6,772 13,737 ---------- ---------- ---------- ---------- Income from discontinued operations, net of minority interest (d). . . . . . . . . . . . 519 488 519 488 Gain on sale of discontinued operations, net of minority interest. . . . . . . . . . . . . . -- -- -- -- ---------- ---------- ---------- ---------- INCOME FROM DISCONTINUED OPERATIONS, NET OF MINORITY INTEREST. . . . . . . . . . . . . . 519 488 519 488 ---------- ---------- ---------- ---------- 14 AMLI RESIDENTIAL STATEMENTS OF OPERATIONS - CONTINUED Three Months Ended June 30 (Unaudited, dollars in thousands) Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- NET INCOME. . . . . . . . . . . . . . . . . . . . . . 7,291 14,225 7,291 14,225 Net income attributable to preferred shares . . . . . 1,946 1,633 1,946 1,633 ---------- ---------- ---------- ---------- Net Income attributable to common shares. . . . . . . $ 5,345 12,592 5,345 12,592 ========== ========== ========== ========== INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . 7,747 16,223 7,747 16,223 Income from discontinued operations before minority interest . . . . . . . . . . . . . . . . . 624 587 624 587 Add: Depreciation Wholly-owned communities including discontinued operations . . . . . . . . . . . . . 5,371 5,554 5,371 5,554 Share of partnership communities. . . . . . . . . . 2,968 2,944 2,968 2,944 Less: Gains on sales of rental properties Wholly-owned communities. . . . . . . . . . . . . . -- -- -- -- Share of partnership communities. . . . . . . . . . (605) (9,249) (605) (9,249) Share of Service Companies' amortization of goodwill. -- 103 -- 103 ---------- ---------- ---------- ---------- FUNDS FROM OPERATIONS . . . . . . . . . . . . . . . . $ 16,106 16,162 16,106 16,162 ========== ========== ========== ========== Notes: (a) All references to "Consolidated" refer to disclosures that are derived from numbers directly on the Company's consolidated financial statements, which are prepared in accordance with GAAP and reflect the Company's interest in unconsolidated partnerships on the equity method. (b) All references to "Combined", "Combined, including share of partnerships" or the like refer to calculations derived by combining the Company's consolidated financial information with the Company's pro rata share of its partnerships' financial information. (c) Combined includes other items of partnership operations such as interest income on invested funds, legal, audit and other costs of partnership administration including asset management fees paid to the Company, compensation received in the form of cash flow preference and share of income in excess of the Company's ownership percentage. (d) No interest expense is associated with discontinued operations. 15
AMLI RESIDENTIAL STATEMENTS OF OPERATIONS Six Months Ended June 30 (Unaudited, dollars in thousands)
Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- REVENUES Property revenues . . . . . . . . . . . . . . . . . . $ 54,912 54,571 80,719 80,871 Interest and share of income (loss) from the Service Companies . . . . . . . . . . . . . . . . . (254) (112) (254) (113) Other interest and Other (c). . . . . . . . . . . . . 447 803 2,060 2,281 Income from partnerships. . . . . . . . . . . . . . . 4,284 4,734 -- -- Co-investment fee income. . . . . . . . . . . . . . . 1,847 1,193 1,847 1,194 ---------- ---------- ---------- ---------- 61,236 61,189 84,373 84,233 ---------- ---------- ---------- ---------- EXPENSES Property operating expenses . . . . . . . . . . . . . 21,698 21,376 31,932 31,435 Interest and amortization of deferred and other financing costs . . . . . . . . . . . . . . . 12,188 13,224 19,192 20,529 Depreciation. . . . . . . . . . . . . . . . . . . . . 10,426 10,221 16,233 15,814 General and administrative. . . . . . . . . . . . . . 2,753 2,669 2,845 2,756 ---------- ---------- ---------- ---------- 47,065 47,490 70,202 70,534 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE SHARE OF GAINS ON SALES OF PROPERTIES. . . . . . . . 14,171 13,699 14,171 13,699 Gains on sale of residential property including share of gains on sales of partnership's properties. . . . . . . . . . . . . . . . . . . . . 605 9,249 605 9,249 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . 14,776 22,948 14,776 22,948 Minority interest . . . . . . . . . . . . . . . . . . 1,816 3,324 1,816 3,324 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . 12,960 19,624 12,960 19,624 ---------- ---------- ---------- ---------- Income from discontinued operations, net of minority interest (d). . . . . . . . . . . . 991 1,006 991 1,006 Gain on sale of discontinued operations, net of minority interest. . . . . . . . . . . . . . -- -- -- -- ---------- ---------- ---------- ---------- INCOME FROM DISCONTINUED OPERATIONS, NET OF MINORITY INTEREST. . . . . . . . . . . . . . 991 1,006 991 1,006 ---------- ---------- ---------- ---------- 16 AMLI RESIDENTIAL STATEMENTS OF OPERATIONS - CONTINUED Six Months Ended June 30 (Unaudited, dollars in thousands) Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- NET INCOME. . . . . . . . . . . . . . . . . . . . . . 13,951 20,630 13,951 20,630 Net income attributable to preferred shares . . . . . 4,028 3,266 4,028 3,266 ---------- ---------- ---------- ---------- Net income attributable to common shares. . . . . . . $ 9,923 17,364 9,923 17,364 ========== ========== ========== ========== INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . 14,776 22,948 14,776 22,948 Income from discontinued operations before minority interest . . . . . . . . . . . . . . . . . 1,193 1,207 1,193 1,207 Add: Depreciation Wholly-owned communities including discontinued operations . . . . . . . . . . . . . 10,733 10,640 10,733 10,640 Share of partnership communities. . . . . . . . . . 5,836 5,640 5,836 5,640 Less: Gains on sales of rental properties Wholly-owned communities. . . . . . . . . . . . . . -- -- -- -- Share of partnership communities. . . . . . . . . . (605) (9,249) (605) (9,249) Share of Service Companies' amortization of goodwill. -- 207 -- 207 ---------- ---------- ---------- ---------- FUNDS FROM OPERATIONS . . . . . . . . . . . . . . . . $ 31,933 31,393 31,933 31,393 ========== ========== ========== ========== Notes: (a) All references to "Consolidated" refer to disclosures that are derived from numbers directly on the Company's consolidated financial statements, which are prepared in accordance with GAAP and reflect the Company's interest in unconsolidated partnerships on the equity method. (b) All references to "Combined", "Combined, including share of partnerships" or the like refer to calculations derived by combining the Company's consolidated financial information with the Company's pro rata share of its partnerships' financial information. (c) Combined includes other items of partnership operations such as interest income on invested funds, legal, audit and other costs of partnership administration including asset management fees paid to the Company, compensation received in the form of cash flow preference and share of income in excess of the Company's ownership percentage. (d) No interest expense is associated with discontinued operations. 17
AMLI RESIDENTIAL BALANCE SHEETS (Unaudited, dollars in thousands)
Consolidated (a) Combined (b) ------------------------- ------------------------- June 30, December 31, June 30, December 31, 2002 2001 2002 2001 ---------- ------------ ---------- ------------ ASSETS Rental apartments Land. . . . . . . . . . . . . . . . . . . . $ 99,013 99,784 155,011 150,187 Depreciable property. . . . . . . . . . . . 636,686 644,627 987,635 964,389 ---------- ---------- ---------- ---------- 735,699 744,411 1,142,647 1,114,576 Less: Accumulated depreciation . . . . . . . (110,733) (107,139) (143,763) (135,052) ---------- ---------- ---------- ---------- 624,966 637,272 998,884 979,524 Rental property held for sale, net of accumulated depreciation. . . . . . . . . . 20,401 -- 20,401 -- Land held for development or sale . . . . . . 24,372 47,611 24,372 47,611 Rental apartments under development . . . . . 25,477 10,392 59,628 41,477 Investment in partnerships (c). . . . . . . . 221,487 184,270 -- -- Cash and cash equivalents . . . . . . . . . . 4,129 5,892 11,394 14,093 Notes and advances to the Service Companies . 26,379 15,161 26,379 14,824 Other assets and deferred expenses, net . . . 17,589 18,404 20,904 22,629 ---------- ---------- ---------- ---------- $ 964,800 919,002 1,161,962 1,120,158 ========== ========== ========== ========== 18 AMLI RESIDENTIAL BALANCE SHEETS - CONTINUED (Unaudited, dollars in thousands) Consolidated (a) Combined (b) ------------------------- ------------------------- June 30, December 31, June 30, December 31, 2002 2001 2002 2001 ---------- ------------ ---------- ------------ LIABILITIES Debt. . . . . . . . . . . . . . . . . . . . . $ 450,268 399,309 648,965 586,137 Distributions in excess of investments in and earnings from partnerships. . . . . . . $ 4,514 -- 4,514 -- Accrued expenses and other liabilities. . . . 25,831 27,943 24,296 42,272 ---------- ---------- ---------- ---------- TOTAL LIABILITIES . . . . . . . . . . . . . . 480,613 427,252 677,775 628,408 ---------- ---------- ---------- ---------- Mandatorily redeemable convertible preferred shares. . . . . . . . . . . . . . 93,247 93,287 93,247 93,287 Minority interest . . . . . . . . . . . . . . 66,433 68,186 66,433 68,186 Total Shareholders' Equity. . . . . . . . . . 324,507 330,277 324,507 330,277 ---------- ---------- ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY. . . . . . . . . . . $ 964,800 919,002 1,161,962 1,120,158 ========== ========== ========== ========== Notes: (a) All references to "Consolidated" refer to disclosures that are derived from numbers directly on the Company's consolidated financial statements, which are prepared in accordance with GAAP and reflect the Company's interest in unconsolidated partnerships on the equity method. (b) All references to "Combined", "Combined, including share of partnerships" or the like refer to calculations derived by combining the Company's consolidated financial information with the Company's pro rata share of its partnerships' financial information. (c) See details in the Company's SEC Form 10-Q. 19
AMLI RESIDENTIAL DEBT AND PREFERRED SHARES SUMMARY June 30, 2002 (Unaudited, dollars in thousands)
CONSOLIDATED DEBT (a) --------------------- Weighted Average Years to Type of Percent Interest Maturity Variable of Indebtedness Balance of Total Rate (c) (d) Secured Unsecured Fixed (e) --------------- -------- -------- -------- -------- -------- --------- -------- -------- Conventional mortgages . . . . . $312,018 69.3% 7.1% 6.9 312,018 -- 312,018 -- Construction financing . . . . . -- -- -- -- -- -- Tax-exempt debt . . . 50,250 11.2% 2.6% 0.3 9,500 40,750 -- 50,250 Credit facilities (f) . . . . . . . . 88,000 19.5% 5.6% 1.4 -- 88,000 -- 88,000 -------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $450,268 100.0% 6.3% 5.1 321,518 128,750 312,018 138,250 ======== ======= ======= ======= ======= ======= ======= ======= Percent of total. . 71.4% 28.6% 69% 31% ======= ======= ======= ======= COMBINED DEBT, INCLUDING SHARE OF PARTNERSHIPS (b) -------------------------------------------------- Weighted Average Years to Type of Percent Interest Maturity Variable of Indebtedness Balance of Total Rate (c) (d) Secured Unsecured Fixed (e) --------------- -------- -------- -------- -------- -------- --------- -------- -------- Conventional mortgages . . . . . $504,205 77.7% 7.2% 7.0 504,205 -- 504,205 -- Construction financing . . . . . 6,510 1.0% 3.8% 1.4 6,510 -- 6,510 Tax-exempt debt . . . 50,250 7.7% 2.6% 0.3 9,500 40,750 -- 50,250 Credit facilities (f) . . . . . . . . 88,000 13.6% 5.6% 1.4 -- 88,000 -- 88,000 -------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $648,965 100.0% 6.6% 5.7 520,215 128,750 504,205 144,760 ======== ======= ======= ======= ======= ======= ======= ======= Percent of total. . 80.2% 19.8% 78% 22% ======= ======= ======= ======= See notes on the following page. 20
AMLI RESIDENTIAL DEBT AND PREFERRED SHARES SUMMARY June 30, 2002 (Unaudited, dollars in thousands)
PREFERRED SHARES ---------------- Number of Out- Current Date Original Shares at standing Dividend Liquidation Security of Issue Issue Issuance Shares Rate Preference ---------------------- --------- -------- --------- -------- -------- ----------- Convertible Preferred Series A 1/30/96 $ 20,000 1,200,000 100,000 (g) 2,022 Convertible Preferred Series B (h) 75,000 3,125,000 3,125,000 (i) 76,500 Convertible Preferred Series D (j) 10/31/01 20,000 800,000 800,000 (k) 20,433 Notes: (a) All references to "Consolidated" refer to disclosures that are derived from numbers directly on the Company's consolidated financial statements, which are prepared in accordance with GAAP and reflect the Company's interest in unconsolidated partnerships on the equity method. (b) All references to "Combined", "Combined, including share of partnerships" or the like refer to calculations derived by combining the Company's consolidated financial information with the Company's pro rata share of its partnerships' financial information. (c) The Weighted Average Interest Rate for variable rate debt reflects (i) the variable rate in effect on the last day of the period (ii) the effective fixed interest rates on swaps and (iii) each financing's respective lender credit spread. (d) Years to Maturity reflects the expiration date of the credit enhancements supporting tax-exempt debt, not the actual maturity dates of the bond, which are in 2024. 21
AMLI RESIDENTIAL DEBT AND PREFERRED SHARES SUMMARY - CONTINUED June 30, 2002 (Unaudited, dollars in thousands) (e) The following summarizes interest rate limitation and swap contracts associated with the Credit Facilities:
Fixed Rate, Excluding Lender Type of Notional Credit Term of Contract Counterparty Amount Spread Contract -------- ------------ -------- ----------- --------------- Swap Merrill Lynch Capital Services, Inc. 10,000 6.216% 11/2/97 - 11/1/02 Swap Merrill Lynch Capital Services, Inc. 10,000 6.029% 11/2/97 - 11/1/02 Swap Merrill Lynch Capital Services, Inc. 20,000 6.145% 2/16/98 - 2/15/03 Swap Wachovia Bank, N.A. 10,000 6.070% 2/19/98 - 2/18/03 Swap Harris Trust & Savings Bank 15,000 6.405% 9/21/99 - 9/20/04 Swap Harris Trust & Savings Bank 10,000 6.438% 10/4/99 - 10/4/04 ------- 75,000 ------- The following summarizes interest rate swap contracts associated with the construction financing of AMLI at Seven Bridges, in which the Company owns a 20% interest: 22
AMLI RESIDENTIAL DEBT AND PREFERRED SHARES SUMMARY - CONTINUED June 30, 2002 (Unaudited, dollars in thousands)
Fixed Rate, Excluding Lender Type of Notional Credit Term of Contract Counterparty Amount Spread Contract -------- ------------ -------- ----------- ---------------- Swap PNC Bank, N.A. $30,000 4.670% 1/10/03 - 7/10/03 Swap PNC Bank, N.A. 50,000 4.670% 7/10/03 - 8/01/04 (f) The Credit Facilities provide for one additional one-year extension option. The Company's unconsolidated subsidiaries have $14,000 borrowed under the Credit Facilities, which is not reflected in the amount above. Such borrowings are guaranteed by the Company and reduce total availability under the line of credit. (g) The dividend per share is equal to the common share dividend. (h) Funded in three installments of $25 million each on 3/9/98, 6/30/98 and 9/30/98. (i) The dividend per share is the greater of an annualized (i) $1.84 per share or (ii) the amount payable on the common shares. (j) 800,000 preferred shares were issued at $25 per share. These shares may be converted to 720,721 common shares, reflecting a conversion price of $27.75 per common share. (k) The dividend per share is the greater of an annualized (i) $2.1625 per share or (ii) the amount payable on the common shares. 23
AMLI RESIDENTIAL DEBT MATURITIES June 30, 2002 (Unaudited, dollars in thousands)
CONSOLIDATED DEBT (a) --------------------- Wtd. Average Interest Rate on Scheduled Due at Percent to Maturing Year Amortization Maturity Total Total Debt ---------- ------------ ----------- ----------- ----------- ------------ 2002 $ 2,169 -- 2,169 0.5% 0.0% 2003 4,076 124,690(c) 128,766 28.6% 6.1% 2004 3,775 6,970 10,745 2.4% 7.7% 2005 4,015 31,006 35,021 7.8% 8.2% 2006 3,130 35,372 38,502 8.6% 7.8% Thereafter 21,643 213,422(d) 235,065 52.2% 5.7% -------- ------- ------- ------ ----- Total $ 38,808 411,460 450,268 100.0% 6.3% ======== ======= ======= ====== ===== Percent to Total 8.6% 91.4% 100.0% ======== ======= ======= COMBINED DEBT, INCLUDING SHARE OF PARTNERSHIPS (b) -------------------------------------------------- Wtd. Average Interest Rate on Scheduled Due at Percent to Maturing Year Amortization Maturity Total Total Debt ---------- ------------ ----------- ----------- ----------- ------------ 2002 $ 3,296 3,543 6,839 1.1% 3.9% 2003 6,441 130,978(c) 137,419 21.2% 6.2% 2004 6,078 14,863 20,941 3.2% 7.6% 2005 6,436 33,973 40,409 6.2% 7.8% 2006 16,533 66,793 83,326 12.8% 7.6% Thereafter 23,077 336,954(d) 360,031 55.5% 6.4% -------- ------- ------- ------ ----- Total $ 61,861 587,104 648,965 100.0% 6.6% ======== ======= ======= ====== ===== Percent to Total 9.5% 90.5% 100.0% ======== ======= ======= 24 AMLI RESIDENTIAL DEBT MATURITIES - CONTINUED June 30, 2002 (Unaudited, dollars in thousands) Notes: (a) All references to "Consolidated" refer to disclosures that are derived from numbers directly on the Company's consolidated financial statements, which are prepared in accordance with GAAP and reflect the Company's interest in unconsolidated partnerships on the equity method. (b) All references to "Combined", "Combined, including share of partnerships" or the like refer to calculations derived by combining the Company's consolidated financial information with the Company's pro rata share of its partnerships' financial information. (c) The Company's primary unsecured line of credit, which has a current maturity of November, 2003, provides for one additional one-year extension option. (d) Includes Bonds which mature in 2024. The credit enhancements on $40,750 and $9,500 expire on October 15, 2002 and on December 18, 2002, respectively. 25
AMLI RESIDENTIAL SAME STORE COMMUNITIES THREE MONTHS ENDED JUNE 30
OCCUPANCY AND RENTAL RATES -------------------------- Weighted Average Occupancy Weighted Average Rental Rate --------------------------------- --------------------------------- Apartment Percent Percent Market Homes 2002 2001 Change 2002 2001 Change ------ --------- -------- -------- -------- -------- -------- -------- Dallas 7,216 92.4% 93.4% -1.0% $ 781 783 -0.2% Atlanta 5,285 91.0% 93.5% -2.7% 841 879 -4.3% Austin 2,797 91.7% 89.2% 2.8% 811 892 -9.1% Houston 1,433 92.1% 93.7% -1.7% 967 915 5.7% Indianapolis 1,752 92.6% 88.7% 4.5% 718 725 -1.0% Kansas City 2,086 93.8% 90.4% 3.8% 795 860 -7.5% Chicago 2,760 92.2% 93.6% -1.5% 1,054 1,066 -1.1% Denver 414 86.6% 86.3% 0.3% 1,092 1,113 -1.9% ------- ------ ------ ------ ------ ------ ------ Total 23,743 92.0% 92.2% -0.2% $ 843 866 -2.7% ======= ====== ====== ====== ====== ====== ====== 26
AMLI RESIDENTIAL SAME STORE COMMUNITIES - CONTINUED THREE MONTHS ENDED JUNE 30
REVENUES, EXPENSES AND NET OPERATING INCOME (dollars in thousands) ------------------------------------------- Revenues Expenses Net Operating Income ---------------------------- ---------------------------- ----------------------------- Percent Percent Percent Market 2002 2001 Change 2002 2001 Change 2002 2001 Change ------ -------- -------- -------- -------- -------- -------- -------- -------- -------- Dallas $ 16,534 16,815 -1.7% 7,108 6,964 2.1% 9,426 9,851 -4.3% Atlanta 12,779 13,916 -8.2% 4,683 4,980 -6.0% 8,096 8,935 -9.4% Austin 6,712 7,049 -4.8% 2,996 3,215 -6.8% 3,716 3,834 -3.1% Houston 4,058 3,855 5.3% 1,735 1,622 7.0% 2,323 2,233 4.0% Indianapolis 3,726 3,687 1.1% 1,505 1,423 5.8% 2,221 2,264 -1.9% Kansas City 4,988 5,049 -1.2% 1,752 1,718 2.0% 3,236 3,332 -2.9% Chicago 8,609 8,964 -4.0% 3,330 3,082 8.0% 5,279 5,882 -10.2% Denver 1,229 1,287 -4.5% 373 465 -19.8% 857 823 4.2% -------- -------- -------- -------- -------- -------- -------- -------- -------- Total $ 58,636 60,623 -3.3% 23,482 23,470 0.1% 35,154 37,155 -5.4% ======== ======== ======== ======== ======== ======== ======== ======== ======== Notes: Information shown is Combined, including share of partnership communities at 100%. 27
AMLI RESIDENTIAL SAME STORE COMMUNITIES SIX MONTHS ENDED JUNE 30
OCCUPANCY AND RENTAL RATES -------------------------- Weighted Average Occupancy Weighted Average Rental Rate -------------------------------- -------------------------------- Apartment Percent Percent Market Homes 2002 2001 Change 2002 2001 Change ------ --------- -------- -------- -------- -------- -------- -------- Dallas 7,216 92.0% 93.2% -1.2% $ 786 780 0.8% Atlanta 5,285 90.9% 93.4% -2.7% 851 875 -2.7% Austin 2,797 91.7% 89.0% 3.1% 825 905 -8.8% Houston 1,433 91.6% 93.2% -1.7% 966 905 6.7% Indianapolis 1,752 91.5% 87.8% 4.3% 725 724 0.2% Kansas City 2,086 91.9% 88.8% 3.5% 803 856 -6.2% Chicago 2,760 89.7% 94.2% -4.8% 1,059 1,065 -0.6% Denver 414 88.0% 86.8% 1.3% 1,100 1,134 -3.0% ------- ------ ------ ------ ------ ------ ------ Total 23,743 91.3% 91.9% -0.7% $ 850 865 -1.8% ======= ====== ====== ====== ====== ====== ====== 28
AMLI RESIDENTIAL SAME STORE COMMUNITIES - CONTINUED SIX MONTHS ENDED JUNE 30
REVENUES, EXPENSES AND NET OPERATING INCOME (dollars in thousands) ------------------------------------------- Revenues Expenses Net Operating Income ---------------------------- ---------------------------- ---------------------------- Percent Percent Percent Market 2002 2001 Change 2002 2001 Change 2002 2001 Change ------ -------- -------- -------- -------- -------- -------- -------- -------- -------- Dallas $ 33,037 33,205 -0.5% 14,042 13,756 2.1% 18,995 19,448 -2.3% Atlanta 25,838 27,593 -6.4% 9,209 9,709 -5.1% 16,629 17,885 -7.0% Austin 13,552 14,218 -4.7% 5,827 6,081 -4.2% 7,725 8,137 -5.1% Houston 8,047 7,598 5.9% 3,407 3,193 6.7% 4,639 4,405 5.3% Indianapolis 7,390 7,225 2.3% 2,867 2,727 5.1% 4,523 4,498 0.6% Kansas City 9,885 9,846 0.4% 3,466 3,431 1.0% 6,419 6,415 0.1% Chicago 16,953 17,821 -4.9% 6,328 6,021 5.1% 10,625 11,801 -10.0% Denver 2,513 2,597 -3.2% 718 844 -14.9% 1,795 1,752 2.4% -------- -------- -------- -------- -------- -------- -------- -------- -------- Total $117,215 120,103 -2.4% 45,866 45,762 0.2% 17,349 74,341 -4.0% ======== ======== ======== ======== ======== ======== ======== ======== ======== (a) Information shown is Combined, including share of partnership communities at 100%. (b) Physical occupancy at the beginning of the month. (c) Collected rent per occupied unit per month. 29
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH The following graphs present monthly rental revenue for the first six months of 2002 in black, compared to monthly rental revenue for the twelve months of 2001 in gray. Note that information shown is Combined, including partnership communities at 100%.
ALL PROPERTIES -------------- FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== Aggregate portfolio rental revenue increased each month during the first quarter. April weakened, followed by an up-tick in May, generating some optimism for the balance of the year. However, June turned down dramatically to a level approximately equaling the results for January, causing concern over the ability to meet budget expectations for the balance of the year. 30
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
DALLAS ------ FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== DALLAS, which represents 29% of total rental revenue for the six months, experienced moderate but increasing rental revenue growth each month during the first quarter. April was essentially flat, and May experienced a modest decline; then June turned sharply and unexpectedly negative. Job layoffs in the DFW area in the second quarter affected traffic and leasing, both of which were down 15% from 2Q/2001. Conversely, the number of residents leaving to buy homes increased. Looking ahead, the biggest issues will be the lingering impact of the telecom slowdown in specific areas, the rebound of the airlines and a general return to positive job growth. 31
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
ATLANTA ------- FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ATLANTA, which represents 22% of total rental revenue for the six months, experienced positive growth during the first quarter. April and May experienced declines with the trend continuing through June. As Atlanta's job growth continued to slip and a large number of new units entered lease-up, pressure on occupancy levels forced effective rents to fall. 32
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
CHICAGO ------- FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== CHICAGO, which represents 14% of total rental revenue for the six months, showed significant improvement in occupancy since the beginning of the year. Although rents have been discounted, concessions have been reducing. Job growth in Chicago was negative for the quarter on the trailing twelve months but turned positive vs. the first quarter. After increasing sharply in the first quarter, traffic slowed sequentially during the second, although year to date ahead of last year. 33
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
AUSTIN ------ FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== AUSTIN, which represents 12% of total rental revenue for the six months, is accepting a high level of new supply as a percentage of its inventory. Although occupancy was up during the second quarter compared to a year earlier, increased concessions reduced its otherwise positive impact on revenue and the trend was negative each month since the upturn in February. 34
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
KANSAS CITY ----------- FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== KANSAS CITY, which represents 8% of total rental revenue for the six months, experienced positive growth each month this year through May, when it experienced a sharp downturn. Occupancy has improved significantly over last year, but the change was obtained with the use of concessions. Kansas City is generated positive job growth, although modest. 35
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
INDIANAPOLIS ------------ FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== INDIANAPOLIS, which represents 6% of total rental revenue for the six months, experienced positive growth in rental revenue each month this year, except in April. Occupancy improved from both the second quarter of last year and first quarter of this year. 36
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
HOUSTON ------- FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== HOUSTON, which represents 7% of total rental revenue for the six months, has continued to perform well and its economy has been stable, although the urban core continued to be impacted by Enron's failure. Rental revenue increased each month this year with strong growth over last year. In general, Houston's supply numbers remain under relative control, which is cushioning the impact of slowing job growth. 37
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED
DENVER ------ FIRST SIX MONTHS OF 2002 ------------------------------------------------- Jan Feb Mar Apr May Jun ----- ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== TWELVE MONTHS OF 2001 ---------------------------------------------------------------------------------------------------- Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Monthly Rental Revenues ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== DENVER, AMLI's newest market, represents 2% of total rental revenue for the six months. Rental revenue showed positive growth during the second quarter; however, this same store universe includes only one community, obviously not representative of the overall market. Denver, like Atlanta, has a large supply of new units, both as a gross number and as a percentage of its inventory. In addition, Denver continues to be impacted by the tech and telecom slowdowns. 38
AMLI RESIDENTIAL COMPONENTS OF NOI THREE MONTHS ENDED JUNE 30 (Dollars in thousands)
Partnership Communities Wholly-Owned Communities Combined (g) at 100% -------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- REVENUES Same store communities (a). . . . 25,457 26,001 -2.1% 35,987 37,016 -2.8% 33,178 34,622 -4.2% New communities (b) . . 0 0 0.0% 752 697 7.9% 2,647 2,430 8.9% Communities under development and lease-up . . . . . . . 0 0 0.0% 550 94 483.5% 2,187 377 480.3% Acquisition communities (c). . . . 3,338 969 244.5% 4,560 1,911 138.6% 2,566 1,455 76.4% Communities sold/ contributed to ventures (d) . . . . . 0 1,854 -100.0% 24 2,592 -99.1% 1,075 3,269 -67.1% -------- -------- -------- -------- -------- -------- -------- -------- -------- 28,796 28,824 -0.1% 41,873 42,310 -1.0% 41,653 42,153 -1.2% ======== ======== ======== ======== ======== ======== ======== ======== ======== EXPENSES Same store communities (a). . . . 10,333 10,392 -0.6% 14,539 14,592 -0.4% 13,149 13,076 0.6% New communities (b) . . 0 0 0.0% 262 205 27.7% 919 756 21.5% Communities under development and lease-up . . . . . . . 0 0 0.0% 302 92 228.1% 1,203 368 226.6% Acquisition communities (c). . . . 1,444 289 399.1% 1,889 635 197.5% 875 534 64.0% Communities sold/ contributed to ventures (d) . . . . . 0 840 -100.0% 30 1,101 -97.3% 622 1,327 -53.2% -------- -------- -------- -------- -------- -------- -------- -------- -------- 11,777 11,521 2.2% 17,023 16,625 2.4% 16,767 16,062 4.4% ======== ======== ======== ======== ======== ======== ======== ======== ======== 39 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED THREE MONTHS ENDED JUNE 30 (Dollars in thousands) Partnership Communities Wholly-Owned Communities Combined (g) at 100% -------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- NET OPERATING INCOME Same store communities (a). . . . 15,125 15,609 -3.1% 21,448 22,425 -4.4% 20,029 21,546 -7.0% New communities (b) . . 0 0 0.0% 490 492 -0.4% 1,728 1,674 3.3% Communities under development and lease-up . . . . . . . 0 0 0.0% 247 2 12035.4% 984 9 11382.2% Acquisition communities (c). . . . 1,894 680 178.7% 2,671 1,276 109.3% 1,691 921 83.6% Communities sold/ contributed to ventures (d) . . . . . 0 1,014 -100.0% -6 1,492 -100.4% 453 1,942 -76.7% -------- -------- -------- -------- -------- -------- -------- -------- -------- 17,019 17,303 -1.6% 24,850 25,686 -3.3% 24,886 26,091 -4.6% ======== ======== ======== ======== ======== ======== ======== Cash flow preference and promote (e). . . . 915 566 -------- -------- COMPANY'S SHARE OF NOI (f). . . . . . 25,766 26,252 COMPANY'S SHARE OF OTHER, NET. . . . . . 39 156 -------- -------- COMPANY'S SHARE OF COMMUNITIES' EBITDA . 25,804 26,408 ======== ======== COMPANY'S PERCENTAGE OF PARTNERSHIPS' NOI: Before cash flow preferences (e). . . . 31.5% 32.1% Including cash flow preferences and other (f). . . . . . . 35.1% 34.3% ======== ======== 40 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED THREE MONTHS ENDED JUNE 30 (Dollars in thousands) Notes: (a) Same store communities are communities that have had stabilized operations and were owned by the Company as of January 1, 2001. (b) New communities are communities that were developed by the Company and began stabilized operations after January 1, 2001. (c) Acquisition communities are communities having stabilized operations that were acquired by the Company after January 1, 2001. (d) Reflects operations through the date of sale. Prior to the date of contribution of the community to a joint venture, the operating results of such communities were disclosed under wholly-owned communities. (e) The terms of certain partnership agreements provide that the Company is entitled to an additional share of such partnership's NOI in addition to the Company's proportionate ownership percentage. See page 45. (f) Based on Company's ownership share of each partnership's NOI. Reflect only property operations. Excludes other items of partnership operations such as interest income on invested funds, legal, accounting, audit and other costs of partnership administration, including asset management fees paid to the Company. See page 45. (g) Company's 100% interest in wholly-owned communities plus the Company's share of partnership communities. 41
AMLI RESIDENTIAL COMPONENTS OF NOI SIX MONTHS ENDED JUNE 30 (Dollars in thousands)
Partnership Communities Wholly-Owned Communities Combined (g) at 100% -------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- REVENUES Same store communities (a). . . . 51,049 51,474 -0.8% 72,064 73,298 -1.7% 66,166 68,629 -3.6% New communities (b) . . 0 0 0.0% 1,498 1,325 13.0% 5,270 4,596 14.7% Communities under development and lease-up . . . . . . . 0 0 0.0% 962 135 614.9% 3,820 538 609.5% Acquisition communities (c). . . . 6,391 1,587 302.8% 8,555 3,138 172.6% 4,020 2,394 67.9% Communities sold/ contributed to ventures (d) . . . . . 0 4,098 -100.0% 168 5,563 -97.0% 2,908 6,466 -55.0% -------- -------- -------- -------- -------- -------- -------- -------- -------- 57,439 57,159 0.5% 83,247 83,459 -0.3% 82,184 82,624 -0.5% ======== ======== ======== ======== ======== ======== ======== ======== ======== EXPENSES Same store communities (a). . . . 20,018 20,132 -0.6% 28,282 28,348 -0.2% 25,848 25,631 0.8% New communities (b) . . 0 0 0.0% 523 469 11.5% 1,833 1,683 8.9% Communities under development and lease-up . . . . . . . 0 0 0.0% 539 155 248.8% 2,144 618 246.9% Acquisition communities (c). . . . 2,707 463 484.4% 3,508 1,008 247.9% 1,424 841 69.3% Communities sold/ contributed to ventures (d) . . . . . 0 1,743 -100.0% 92 2,266 -95.9% 1,423 2,691 -47.1% -------- -------- -------- -------- -------- -------- -------- -------- -------- 22,725 22,338 1.7% 32,945 32,247 2.2% 32,672 31,464 3.8% ======== ======== ======== ======== ======== ======== ======== ======== ======== 42 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED SIX MONTHS ENDED JUNE 30 (Dollars in thousands) Partnership Communities Wholly-Owned Communities Combined (g) at 100% -------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- NET OPERATING INCOME Same store communities (a). . . . 31,030 31,343 0.0% 43,782 44,950 0.0% 40,319 42,998 0.0% New communities (b) . . 0 0 0.0% 975 856 13.9% 3,437 2,913 18.0% Communities under development and lease-up . . . . . . . 0 0 0.0% 423 -20 -2204.4% 1,675 -80 -2198.1% Acquisition communities (c). . . . 3,684 1,123 227.9% 5,047 2,130 137.0% 2,595 1,553 67.1% Communities sold/ contributed to ventures (d) . . . . . 0 2,355 -100.0% 76 3,297 -97.7% 1,485 3,776 -60.7% -------- -------- -------- -------- -------- -------- -------- -------- -------- 34,714 34,821 -0.3% 50,302 51,212 -1.8% 49,511 51,160 -3.2% ======== ======== ======== ======== ======== ======== ======== Cash flow preference and operating promote (e). . . . . . 1,537 1,103 -------- -------- COMPANY'S SHARE OF NOI (f). . . . . . 51,839 52,315 COMPANY'S SHARE OF OTHER, NET. . . . . . -1 153 -------- -------- COMPANY'S SHARE OF COMMUNITIES' EBITDA . 51,838 52,468 ======== ======== COMPANY'S PERCENTAGE OF PARTNERSHIPS' NOI: Before cash flow preferences (e). . . . 31.5% 32.0% Including cash flow preferences and other (f). . . . . . . 34.6% 34.2% ======== ======== 43 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED SIX MONTHS ENDED JUNE 30 (Dollars in thousands) Notes: (a) Same store communities are communities that have had stabilized operations and were owned by the Company as of January 1, 2001. (b) New communities are communities that were developed by the Company and began stabilized operations after January 1, 2001. (c) Acquisition communities are communities having stabilized operations that were acquired by the Company after January 1, 2001. (d) Reflects operations through the date of sale. Prior to the date of contribution of the community to a joint venture, the operating results of such communities were disclosed under wholly-owned communities. (e) The terms of certain partnership agreements provide that the Company is entitled to an additional share of such partnership's NOI in addition to the Company's proportionate ownership percentage. See page 45. (f) Based on Company's ownership share of each partnership's NOI. Reflect only property operations. Excludes other items of partnership operations such as interest income on invested funds, legal, accounting, audit and other costs of partnership administration, including asset management fees paid to the Company. See page 45. (g) Company's 100% interest in wholly-owned communities plus the Company's share of partnership communities. 44
AMLI RESIDENTIAL CO-INVESTMENT COMPENSATION (Dollars in thousands) Three Months Ended June 30, ----------------------- 2002 2001 ---------- ---------- FEE INCOME (a) Acquisition fees (a). . . . . . . . . . . . . $ 401 -- Asset management fees (b) . . . . . . . . . . 118 141 Disposition fees (c). . . . . . . . . . . . . 239 -- Debt/equity placement fees. . . . . . . . . . -- -- Development fees (a). . . . . . . . . . . . . 502 288 Other . . . . . . . . . . . . . . . . . . . . -- -- ---------- ---------- 1,260 429 ---------- ---------- SHARE OF CASH FLOW (d) Promoted interest from operating cash flow. . 170 27 Cash flow preferences (e) . . . . . . . . . . 745 538 ---------- ---------- 915 566 ---------- ---------- TOTAL . . . . . . . . . . . . . . . . . . $ 2,175 995 ========== ========== Six Months Ended June 30, ----------------------- 2002 2001 ---------- ---------- FEE INCOME (a) Acquisition fees (a). . . . . . . . . . . . . $ 401 118 Asset management fees (b) . . . . . . . . . . 247 284 Disposition fees (c). . . . . . . . . . . . . 239 -- Debt/equity placement fees. . . . . . . . . . -- 112 Development fees (a). . . . . . . . . . . . . 960 539 Other . . . . . . . . . . . . . . . . . . . . 110 -- ---------- ---------- 1,957 1,053 ---------- ---------- SHARE OF CASH FLOW (d) Promoted interest from operating cash flow. . 276 53 Cash flow preferences (e) . . . . . . . . . . 1,261 1,050 ---------- ---------- 1,537 1,103 ---------- ---------- TOTAL . . . . . . . . . . . . . . . . . . $ 3,494 2,156 ========== ========== 45 AMLI RESIDENTIAL CO-INVESTMENT COMPENSATION - CONTINUED (Dollars in thousands) Notes: (a) Acquisition, debt/equity placement and development fees are shown net of elimination of Company's share. Property management, construction and certain asset management fees are earned by the Company's subsidiaries. See page 47. (b) Asset management fees are shown at 100%. The Company's share of partnerships' EBITDA is reduced by its share of this fee. (c) Disposition fees are shown at 100% as reported gains on sale have been reduced for this cost. (d) See pages 40 and 43. (e) The Company receives compensation from certain partnerships in the form of a preferential distribution of cash flow. 46 AMLI RESIDENTIAL SERVICE COMPANIES FINANCIAL INFORMATION (Dollars in thousands) COMBINED CONDENSED STATEMENTS OF OPERATIONS ------------------------------------------- Three Months Ended June 30, ----------------------- 2002 2001 ---------- ---------- REVENUES Property management fees (a). . . . . . . . . $ 2,702 2,528 General contractor revenues, net (b). . . . . 603 701 Gross profit - corporate homes (c). . . . . . 399 429 Other income. . . . . . . . . . . . . . . . . 267 (47) ---------- ---------- 3,972 3,612 ---------- ---------- OPERATING EXPENSES Property management . . . . . . . . . . . . . 2,447 2,242 Corporate homes . . . . . . . . . . . . . . . 253 248 General contractor. . . . . . . . . . . . . . 519 511 ---------- ---------- 3,218 3,002 ---------- ---------- EBITDA. . . . . . . . . . . . . . . . . . . . 754 610 Gain (loss) on land sales . . . . . . . . . . (4) (194) Interest expense. . . . . . . . . . . . . . . (463) (277) Depreciation and amortization . . . . . . . . (754) (638) Taxes . . . . . . . . . . . . . . . . . . . . 178 52 ---------- ---------- NET INCOME (LOSS) . . . . . . . . . . . . . . (290) (447) Eliminations, interest and other. . . . . . . (205) 439 ---------- ---------- SHARE OF INCOME (LOSS) FROM SERVICE COMPANIES (D) . . . . . . . . . . . $ (495) (7) ========== ========== Notes: (a) Includes a 3% fee from wholly-owned communities. (b) General contractor revenues are shown net of gross billings and payments to subcontractors. (c) Gross revenues from customers less payments to communities and cost of sales. (d) See Company's Consolidated Statements of Operations. 47 AMLI RESIDENTIAL SERVICE COMPANIES FINANCIAL INFORMATION (Dollars in thousands) COMBINED CONDENSED STATEMENTS OF OPERATIONS ------------------------------------------- Six Months Ended June 30, ----------------------- 2002 2001 ---------- ---------- REVENUES Property management fees (a). . . . . . . . . $ 5,393 5,031 General contractor revenue, net (b) . . . . . 1,237 1,217 Gross profit - corporate homes (c). . . . . . 745 733 Other income. . . . . . . . . . . . . . . . . 388 142 ---------- ---------- 7,763 7,123 ---------- ---------- OPERATING EXPENSES Property management . . . . . . . . . . . . . 4,955 4,656 Corporate homes . . . . . . . . . . . . . . . 495 476 General contractor. . . . . . . . . . . . . . 1,068 1,017 ---------- ---------- 6,518 6,149 ---------- ---------- EBITDA. . . . . . . . . . . . . . . . . . . . 1,245 974 Gain (loss) on land sales . . . . . . . . . . (77) 194 Interest expense. . . . . . . . . . . . . . . (873) (975) Depreciation and amortization . . . . . . . . (1,470) (1,213) Taxes . . . . . . . . . . . . . . . . . . . . 446 397 ---------- ---------- NET INCOME (LOSS) . . . . . . . . . . . . . . (729) (623) Eliminations, interest and other. . . . . . . (98) 34 ---------- ---------- SHARE OF INCOME (LOSS) FROM SERVICE COMPANIES (D) . . . . . . . . . . . $ (827) (589) ========== ========== Notes: (a) Includes a 3% fee from wholly-owned communities. (b) General contractor revenues are shown net of gross billings and payments to subcontractors. (c) Gross revenues from customers less payments to communities and cost of sales. (d) See Company's Consolidated Statements of Operations. 48 AMLI RESIDENTIAL SERVICE COMPANIES FINANCIAL INFORMATION (Dollars in thousands) COMBINED CONDENSED FINANCIAL POSITION ------------------------------------- June 30, December 31, 2002 2001 ---------- ------------ ASSETS: Receivables (a) . . . . . . . . . . . . . $ 9,327 9,136 Land held for sale (b). . . . . . . . . . 15,653 4,951 Building and equipment, net (c) . . . . . 11,258 10,847 Other . . . . . . . . . . . . . . . . . . 9,090 9,911 ---------- ---------- TOTAL ASSETS. . . . . . . . . . . . . $ 45,328 34,845 ========== ========== LIABILITIES Due to the Company. . . . . . . . . . . . $ 29,287 17,311 Bank debt . . . . . . . . . . . . . . . . 14,000 14,000 Other . . . . . . . . . . . . . . . . . . 4,412 5,733 ---------- ---------- TOTAL LIABILITIES . . . . . . . . . . $ 47,699 37,044 ========== ========== EQUITY (DEFICIT). . . . . . . . . . . . . $ (2,371) (2,199) Eliminations and other. . . . . . . . . . (774) 49 Due to Company (above). . . . . . . . . . 29,287 17,311 ---------- ---------- Investment in and receivables from the Service Companies . . . . . . . . . $ 26,141 15,161 ========== ========== Notes: (a) Primarily fee income from affiliates. (b) Represents non-apartment land holdings. (c) Includes $8,384 in capitalized computer hardware and software cost, of which approximately $6,500 (including $800 of internal costs) was incurred in 2001. Amounts are generally amortized over five years. 49 AMLI RESIDENTIAL STABILIZED COMMUNITIES June 30, 2002
Percent AMLI's Number of of Ownership Year Year Apartment Portfolio Components Market/Community Percentage Location Acquired Completed Homes (a) of NOI ---------------- ---------- -------- ---------- --------- --------- --------- ---------- DALLAS/ FT. WORTH, TX ------------- AMLI: at Bent Tree 100% Dallas, TX 1997 1996/2000 500 Same Store at Bishop's Gate 100% Plano, TX 1997 1997 266 Same Store at Breckinridge Point 45% Richardson, TX 2000 1999 440 Same Store at Bryan Place 48% Dallas, TX 2002 1999 420 Acquisition Community at Chase Oaks 100% Plano, TX 1994 1986 250 Same Store at Deerfield 25% Plano, TX Developed 2000 240 Same Store at Fossil Creek 25% Ft. Worth, TX Developed 1998 384 Same Store on Frankford 45% Dallas, TX 2000 1998 582 Same Store at Gleneagles 100% Dallas, TX 1998 1987/97 590 Same Store on the Green 100% Ft. Worth, TX 1994 1990/93 424 Same Store at Nantucket 100% Dallas, TX 1988 1986 312 Same Store of North Dallas 100% Dallas, TX 1989/90 1985/86 1,032 Same Store at Oak Bend 40% Dallas, TX 1999 1997 426 Same Store on the Parkway 25% Dallas, TX Developed 1999 240 Same Store at Prestonwood Hills 45% Dallas, TX 1999 1997 272 Same Store at Shadow Ridge 100% Flower Mound, TX 2001 2000 222 Acquisition Community at Stonebridge Ranch 100% McKinney, TX 2001 2001 250 Acquisition Community on Timberglen 40% Dallas, TX 1990 1985 260 Same Store Upper West Side 100% Ft. Worth, TX 2002 2001 194 Acquisition Community at Valley Ranch 100% Irving, TX 1990 1985 460 Same Store at Verandah 35% Arlington, TX 1997 1986/91 538 Same Store ------ ------ 8,302 29.3% ------ ------ 50 AMLI RESIDENTIAL STABILIZED COMMUNITIES - CONTINUED (Dollars in thousands) Percent AMLI's Number of of Ownership Year Year Apartment Portfolio Components Market/Community Percentage Location Acquired Completed Homes (a) of NOI ---------------- ---------- -------- ---------- --------- --------- --------- ---------- ATLANTA, GA ------------ AMLI: at Barrett Lakes 35% Kennesaw, GA Developed 1997 446 Same Store at Clairmont 100% Atlanta, GA 1988 1988 288 Same Store at Killian Creek 100% Snellville, GA Developed 1999 256 Same Store at Lost Mountain 75% Paulding County, GA Developed 2000 164 Same Store at Mill Creek 25% Gwinnett County, GA Developed 2001 400 New Community at Northwinds 35% Alpharetta, GA Developed 1999 800 Same Store at Park Bridge 25% Alpharetta, GA Developed 2000 352 New Community at Park Creek 100% Gainesville, GA Developed 1998 200 Same Store at Peachtree City 20% Fayette County, GA Developed 1998 312 Same Store at River Park 40% Norcross, GA Developed 1997 222 Same Store at Spring Creek 100% Atlanta, GA Developed 1985/86 /87/89 1,180 Same Store at Towne Creek 100% Gainesville, GA Developed 1989 150 Same Store at Vinings 100% Smyrma, GA 1992/97 1985 360 Same Store at West Paces 100% Atlanta, GA 1993 1992 337 Same Store at Willeo Creek 30% Roswell, GA 1995 1989 242 Same Store at Windward Park 45% Alpharetta, GA 1999 1999 328 Same Store ------ ------ 6,037 21.3% ------ ------ CHICAGO, IL ----------- AMLI: at Chevy Chase 33% Buffalo Grove, IL 1996 1988 592 Same Store at Danada Farms 10% Wheaton, IL 1997 1989/91 600 Same Store at Fox Valley 25% Aurora, IL Developed 1998 272 Same Store at Oakhurst North 25% Aurora, IL Developed 2000 464 Same Store at Osprey Lake 69% Gurnee, IL 2001 1997/99 483 Acquisition Community at Poplar Creek 100% Schaumburg, IL 1997 1985 196 Same Store at St. Charles 25% St. Charles, IL Developed 2000 400 Same Store at Windbrooke 15% Buffalo Grove, IL 1995 1987 236 Same Store ------ ------ 3,243 11.4% ------ ------ 51 AMLI RESIDENTIAL STABILIZED COMMUNITIES - CONTINUED (Dollars in thousands) Percent AMLI's Number of of Ownership Year Year Apartment Portfolio Components Market/Community Percentage Location Acquired Completed Homes (a) of NOI ---------------- ---------- -------- ---------- --------- --------- --------- ---------- AUSTIN, TX ---------- AMLI: in Great Hills 100% Austin, TX 1991 1985 344 Same Store at Lantana Ridge 100% Austin, TX 1997 1997 354 Same Store at Monterey Oaks 25% Austin, TX Developed 2000 430 Same Store at Scofield Ridge 45% Austin, TX 2000 2000 487 Same Store at StoneHollow 100% Austin, TX 2000 1997 606 Same Store at Wells Branch 25% Austin, TX Developed 1999 576 Same Store ------ ------ 2,797 9.9% ------ ------ KANSAS CITY, KS --------------- AMLI: at Centennial Park 100% Overland Park, KS 1998 1997 170 Same Store Creekside 25% Overland Park, KS Developed 2000 224 Same Store at Lexington Farms 100% Overland Park, KS 1998 1998 404 Same Store at Regents Center 100% Overland Park, KS 1994 1991/95 /97 424 Same Store at Regents Crest 25% Overland Park, KS 1997 1997/2000 476 Same Store at Summit Ridge 30% Lees Summit, MO Developed 2001 432 New Community at Town Center 100% Overland Park, KS 1997 1997 156 Same Store at Wynnewood Farms 25% Overland Park, KS Developed 2000 232 Same Store ------ ------ 2,518 8.9% ------ ------ INDIANAPOLIS, IN ---------------- AMLI: at Castle Creek 40% Indianapolis, IN Developed 2000 276 New Community at Conner Farms 100% Fishers, IN 1997 1993 300 Same Store at Eagle Creek 100% Indianapolis, IN 1998 1998 240 Same Store at Lake Clearwater 25% Indianapolis, IN Developed 1999 216 Same Store at Riverbend 100% Indianapolis, IN 1992/93 1983/85 996 Same Store on Spring Mill (residual) 20% Carmel, IN 1999 1999 400 Other ------ ------ 2,428 8.6% ------ ------ 52 AMLI RESIDENTIAL STABILIZED COMMUNITIES - CONTINUED (Dollars in thousands) Percent AMLI's Number of of Ownership Year Year Apartment Portfolio Components Market/Community Percentage Location Acquired Completed Homes (a) of NOI ---------------- ---------- -------- ---------- --------- --------- --------- ---------- HOUSTON, TX ----------- AMLI: at Greenwood Forest 15% Houston, TX 1995 1995 316 Same Store at the Medical Center 100% Houston, TX 2001 2000 334 Acquisition Community Midtown 45% Houston, TX 2000 1998 419 Same Store Towne Square 45% Houston, TX 2000 1999 380 Same Store at Western Ridge 100% Houston, TX 2000 2000 318 Same Store ------ ------ 1,767 6.2% ------ ------ DENVER, CO ---------- AMLI: at Lowry Estates 50% Denver, CO 2000 2000 414 Same Store at Gateway Park 100% Denver, CO 2000 2000 328 Acquisition Community at Park Meadows 25% Littleton, CO 2002 2001 518 Acquisition ------ ------ Community 1,260 4.4% ------ ------ TOTAL 28,352 100.0% ====== ====== Note: (a) Based on number of apartment homes. 53
AMLI RESIDENTIAL DEVELOPMENT SUMMARY June 30, 2002 (Dollars in thousands)
Number Percen- of Con- Anti- Anti- Number of tage of Apart- struc- First pated pated Apartment Percent Percent Owner- ment tion Units Comple- Stabil- Homes Complete Leased Market/Community Submarket ship Homes Started Occupied tion ization Delivered (a) (b) ---------------- --------- ------- ------ ------- -------- ------- ------- --------- -------- ------- ATLANTA, GA ----------- AMLI: at Kedron Village Peachtree City, GA 20% 216 3Q/00 3Q/01 2Q/02 4Q/02 216 100% 77% at Milton Park Alpharetta, GA 25% 461 4Q/00 1Q/02 1Q/03 4Q/03 109 59% 26% at Barrett Walk Kennesaw, GA 25% 310 4Q/01 3Q/02 2Q/03 1Q/04 -- 28% NA HOUSTON, TX ----------- AMLI at Kings Harbor Lake Houston, TX 25% 300 2Q/00 1Q/01 4Q/01 3Q/02 300 100% 87% AUSTIN, TX ---------- AMLI Downtown Austin, Block Austin, TX 100% 220 2Q/02 1Q/04 3Q/04 4Q/04 -- 1% NA KANSAS CITY, KS --------------- AMLI at Cambridge Square Overland Park, KS 30% 408 3Q/00 3Q/01 2Q/02 2Q/03 290 96% 55% INDIANAPOLIS, IN ---------------- AMLI Carmel Center Carmel, IN 100% 322 2Q/01 2Q/02 2Q/03 3Q/03 37 53% 3% 54 AMLI RESIDENTIAL DEVELOPMENT SUMMARY - CONTINUED (Dollars in thousands) Number Percen- of Con- Anti- Anti- Number of tage of Apart- struc- First pated pated Apartment Percent Percent Owner- ment tion Units Comple- Stabil- Homes Complete Leased Market/Community Submarket ship Homes Started Occupied tion ization Delivered (a) (b) ---------------- --------- ------- ------ ------- -------- ------- ------- --------- -------- ------- CHICAGO, IL ----------- AMLI at Seven Bridges Woodridge, IL 20% 520 3Q/01 4Q/02 4Q/03 4Q/04 -- 42% N/A ----- Total 2,757 ===== Notes: (a) Represents costs to date divided by Total Development Costs. (b) Represents number of leased apartments (not necessarily occupied) divided by the Number of Apartment Homes Delivered. 55
AMLI RESIDENTIAL DEVELOPMENT SUMMARY June 30, 2002 (Dollars in thousands)
Joint Venture Company's Share of Required Equity Capital Partners' ---------------------------------------------- Total Fully Equity Development Funded Capital Funded Balance Market/Community Costs (c) Debt (d) (e) Total to Date of 2002 2003 ---------------- ----------- ---------- --------- -------- -------- ---------- -------- ATLANTA, GA ----------- AMLI: at Kedron Village $ 20,200 -- 16,160 4,040 200 3,840(e) -- at Milton Park 35,000 -- 26,250 8,750 5,685 2,400 665 at Barrett Walk 22,500 -- 16,875 5,625 2,056 1,900 1,669 HOUSTON, TX ----------- AMLI at Kings Harbor 19,800 -- 14,850 4,950 4,900 50 AUSTIN, TX ---------- AMLI Downtown Austin 50,900 -- -- 50,900 12,273 5,815 32,812 KANSAS CITY, KS --------------- AMLI at Cambridge Square 32,200 -- (f) 22,540 9,660 9,270 390 INDIANAPOLIS, IN ---------------- AMLI Carmel Center 28,400 -- -- 28,400 17,024 6,597 4,779 CHICAGO, IL AMLI at Seven Bridges 82,200 60,000(g) 17,760 4,440 3,220 -- 2,420 -------- ------- ------- ------- ------- ------- ------- TOTAL $291,200 60,000 114,435 116,765 54,628 20,992 42,345 ======== ======= ======= ======= ======= ======= ======= 56 AMLI RESIDENTIAL DEVELOPMENT SUMMARY - CONTINUED June 30, 2002 (Dollars in thousands) Notes: (a) Based on the percentage of Construction Complete to date. (b) Represents number of leased apartments (not necessarily occupied) divided by the total Number of Apartment Homes. (c) Includes anticipated costs of development and initial lease-up, of which certain amounts may not be capitalized. (d) Represents anticipated fully funded permanent loan, which will encumber the property upon completion and stabilization. (e) Property is currently subject to a construction financing, which is anticipated to be paid off at completion. (f) Upon stabilization, the partnership will obtain a permanent loan for approximately 65% of total costs. (g) The partnership has obtained a commitment to fund a 7.25%, 7-year permanent loan upon completion of development. The following is a "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 and Section 21 E of the Securities Exchange Act of 1934. The projections in this table that are not historical facts are forward-looking statements. Risks associated with the Company's development, construction and lease-up activities, which could impact the forward looking statements may include: development opportunities may be abandoned; construction costs of a community may exceed original estimates, possibly making the community uneconomical; construction and lease-up may not be completed on schedule, resulting in increased debt service and construction costs of improvements to bring an acquired community up to the standards established for the market position intended for that community may prove inaccurate. 57
AMLI RESIDENTIAL LAND HELD FOR DEVELOPMENT OR SALE June 30, 2002 Number of Apartment Market/Community Submarket Homes ---------------- --------- --------- AUSTIN, TX ---------- AMLI at: Anderson Mill Northwest Austin 520 Parmer Park North Austin 480 FORT WORTH, TX -------------- AMLI at Mesa Ridge North Fort Worth 460 DALLAS, TX ---------- AMLI at Vista Ridge Lewisville, TX 340 HOUSTON, TX ----------- AMLI at Champions II Northwest Houston 288 KANSAS CITY, KS --------------- AMLI at: Lexington Farms - Phase II Overland Park 104 Westwood Ridge Overland Park 428 ------ Total 2,620 ====== 58