EX-99.2 5 ex_992.txt EXHIBIT 99.2 ------------ AMLI RESIDENTIAL ------------------------------------------------------------ THIRD QUARTER 2002 SUPPLEMENTAL OPERATING AND FINANCIAL DATA ------------------------------------------------------------ [ graphics indicating property / caption reading "AMLI at Kedron Village - Peachtree City, Georgia Joint venture development - stabilized in October 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. . . . . . . . 2 Earnings Release. . . . . . . . . . . . . . . . . . . . . . 3 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 . . . . . . . . . 34 OTHER DATA Co-Investment Compensation. . . . . . . . . . . . . . . . . 40 Service Companies Financial Information . . . . . . . . . . 42 PORTFOLIO Stabilized Communities. . . . . . . . . . . . . . . . . . . 45 Development Summary . . . . . . . . . . . . . . . . . . . . 49 Land Held for Development or Sale . . . . . . . . . . . . . 53 Third Quarter 2002 Page 1 Supplemental Information AMLI Residential Properties Trust 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 conduced 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 upscale apartment communities 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 Supplemental. We operate all of our communities under the AMLI [registered trademark] 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 of 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 Third Quarter 2002 Page 2 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 --------------------- November 4, 2002 For More Information, Contact: Robert J. Chapman, Chief Financial Officer (312) 984-6845 AMLI RESIDENTIAL ANNOUNCES THIRD QUARTER 2002 OPERATING RESULTS AND DECLARES DIVIDEND --------------------------------------------- (CHICAGO, IL) AMLI RESIDENTIAL PROPERTIES TRUST (NYSE: AML) announces today operating results for the third quarter ended September 30, 2002. EARNINGS -------- Funds from Operations ("FFO") for the third quarter 2002 were $14,306,000, or $0.56 per common share, compared to $16,848,000, or $0.67 per common share, for the third quarter 2001, a per share decrease of 16.4%. FFO is consistent with First Call's current estimate and the Company's recently revised guidance, which was issued on October 21, 2002. FFO for the nine months ended September 30, 2002 was $46,239,000, or $1.79 per share, compared to $48,241,000, or $1.93 per share, for the nine months ended September 30, 2001, a per share decrease of 7.3%. "As noted in our press release two weeks ago, the weak conditions in the apartment markets continue to negatively impact our earnings, both on an absolute basis and compared to last year," commented Allan J. Sweet, AMLI President. "Our FFO for the third quarter of 2001 also included significant fee income from the sale of one of our co-investment communities, which did not occur in this year's third quarter." Net income for the three and nine months ended September 30, 2002 was $17,652,000 and $31,603,000, respectively, as compared to $19,244,000 and $39,874,000, respectively, in the year earlier periods. Diluted Earnings Per Share ("EPS") for the quarter ended September 30, 2002 was $0.87, compared to $0.89 for the comparable period of 2001, a decrease of 2.2%. Additionally, Operating EPS was $0.18 per diluted share for the quarter ended September 30, 2002, as compared to $0.33 per diluted share for the quarter ended September 30, 2001. For the nine months ended September 30, 2002, EPS was $1.40 compared to $1.86 for the comparable period of 2001, a decrease of 24.7%, and Operating EPS was $0.70 compared to $0.87 for the comparable period of 2001, a decrease of 19.5%. "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 September 30, 2002 versus the prior year's quarter, total property revenues decreased 5.7%, operating expenses decreased 0.7%, and net operating income ("NOI") decreased 9.1%. Weighted average occupancy, quarter over comparable quarter, decreased to 91.3% from 92.8%, or 1.6%, while the weighted average collected revenues per occupied unit decreased by 4.2%. 3 OTHER OPERATING RESULTS ----------------------- Total property revenues (excluding Discontinued Operations), including both wholly-owned communities and co-investment communities (at 100%), were $70,187,000 and $207,282,000, respectively, for the quarter and nine months ended September 30, 2002, as compared with $70,003,000 and $207,198,000 for the comparable period in 2001, a 0.3% and 0.04% increase, respectively. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the quarter and nine months ended September 30, 2002 were $24,437,000 and $75,562,000, respectively, representing decreases of 10.7% and 4.7%, respectively, from the same period last year. THIRD QUARTER ACTIVITIES ------------------------ During the third quarter, AMLI sold AMLI at Greenwood Forest, a 316-unit joint venture community and received a disposition fee of $403,000 in addition to its 15% proportionate share of net sale proceeds. AMLI also sold AMLI at Gleneagles, a wholly-owned community containing 590 apartment homes, and realized net proceeds from the sale of approximately $34.7 million. SUBSEQUENT EVENTS ----------------- In October, AMLI entered into a joint venture with Capri Select Income, a private investment fund sponsored by Capri Capital Advisors LLC, a privately-held institutional real estate advisory firm, to develop and own AMLI Downtown in Austin, Texas. AMLI Downtown will be comprised of a seven-story building containing 220 apartment homes, 45,000 square feet of ground floor retail and restaurant space, and 336 underground parking spaces. Also in October, AMLI purchased the 189-unit AMLI 7th Street Station (formerly the Gates of 7th Street Station) in Forth Worth, Texas. COMMON SHARE REPURCHASE AUTHORIZATIONS -------------------------------------- During the third quarter and in the month of October, AMLI repurchased on the open market 924,200 of its Common Shares at prices ranging from $19.52 to $22.97 pursuant to its previously announced 1,500,000 Common Share Repurchase Program. AMLI anticipates that it will continue buying its common shares in the fourth quarter. OUTLOOK ------- As stated in the Company's revised guidance issued on October 21, 2002, AMLI's current expectation for full year 2002 FFO per share is in the range of $2.36 to $2.38 per share. Additionally, the Company anticipates that 2003 FFO per share will be in the range of $2.25 to $2.40 per share. DIVIDEND -------- Today, the Board of Trustees declared a quarterly dividend of $0.48 per common share. This dividend is payable on November 26, 2002 to all common shareholders of record as of November 15, 2002 and is based on an annual dividend rate of $1.92 per common share. CONFERENCE CALL --------------- AMLI will hold a conference call on Tuesday, November 5, 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. 4 SUPPLEMENTAL INFORMATION ------------------------ AMLI produces Quarterly Supplemental Information that provides detailed information regarding the Company's activities during the quarter. The Third Quarter Supplemental Information is available in the 'Company Info' section on our website (www.amli.com/comp/) under 'Shareholder Reports.' ABOUT AMLI ---------- The AMLI[registered trademark] portfolio currently includes 73 apartment communities containing 27,851 apartment homes, with an additional 2,541 apartment homes under development or in lease-up in seven locations. AMLI is focused on the development, acquisition and management of institutional quality multifamily communities in the Southeast, Southwest, Midwest and Mountain regions 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 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 form time to time in the Company's SEC reports, including the annual report on form 10-K for the year ended December 31, 2001. # # # # 5 AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION Unaudited (Dollars in thousands, except for share data)
Quarter Ended ------------------------------------------------------------- Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2002 2002 2002 2001 2001 ---------- ---------- ---------- ---------- ---------- REVENUES -------- TOTAL REVENUES Consolidated (a). . . . . . . . . . . . . $ 30,365 31,112 30,124 30,829 33,003 Combined, including share of partnerships (b). . . . . . . . . . . . 43,248 42,853 41,520 41,775 44,848 TOTAL PROPERTY REVENUES Consolidated. . . . . . . . . . . . . . . 27,380 27,537 27,374 27,296 27,824 Combined, including share of partnerships. . . . . . . . . . . . . . 40,984 40,615 40,104 40,199 41,174 Combined, including partnerships at 100% . . . . . . . . . . . . . . . . 70,187 69,191 67,904 68,114 70,003 EARNINGS -------- EBITDA Consolidated. . . . . . . . . . . . . . 20,541 22,347 21,774 20,911 23,826 Combined. . . . . . . . . . . . . . . . 24,437 25,910 25,215 24,323 27,378 FFO . . . . . . . . . . . . . . . . . . . 14,306 16,105 15,828 14,901 16,848 AFFO. . . . . . . . . . . . . . . . . . . 12,926 14,646 14,601 13,635 15,452 Operating earnings. . . . . . . . . . . . 3,953 5,820 5,516 4,604 7,158 Net income. . . . . . . . . . . . . . . . 17,652 7,291 6,660 5,871 19,244 Dividends (c) . . . . . . . . . . . . . . 12,316 12,432 12,286 11,985 11,751 6 AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION - CONTINUED Unaudited (Dollars in thousands, except for share data) Quarter Ended ------------------------------------------------------------- Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2002 2002 2002 2001 2001 ---------- ---------- ---------- ---------- ---------- PER SHARE DATA - DILUTED ------------------------ FFO . . . . . . . . . . . . . . . . . . . $ 0.56 0.62 0.61 0.58 0.67 AFFO. . . . . . . . . . . . . . . . . . . 0.51 0.56 0.56 0.53 0.61 Operating earnings. . . . . . . . . . . . 0.18 0.26 0.25 0.21 0.33 Net income allocable to common shares . . 0.87 0.29 0.25 0.21 0.89 Common dividends. . . . . . . . . . . . . 0.48 0.48 0.48 0.48 0.47 FFO payout ratio (based on per share amounts). . . . . . . . . . . . . 85.9% 77.7% 78.8% 82.8% 70.3% AFFO payout ratio (based on per share amounts). . . . . . . . . . . . . 95.1% 85.4% 85.4% 90.6% 76.5% NUMBER OF APARTMENT HOMES ------------------------- STABILIZED COMMUNITIES Wholly-owned. . . . . . . . . . . . . . . 11,851 12,441 12,247 12,247 12,247 Partnerships. . . . . . . . . . . . . . . 15,595 15,911 15,011 15,011 14,579 ---------- ---------- ---------- ---------- ---------- 27,446 28,352 27,258 27,258 26,826 ---------- ---------- ---------- ---------- ---------- COMMUNITIES UNDER DEVELOPMENT AND/OR LEASE-UP Wholly-owned. . . . . . . . . . . . . . . 542 542 322 322 322 Partnerships. . . . . . . . . . . . . . . 2,215 2,215 2,615 2,615 2,737 ---------- ---------- ---------- ---------- ---------- 2,757 2,757 2,937 2,937 3,059 ---------- ---------- ---------- ---------- ---------- Total . . . . . . . . . . . . . . . . . . 30,203 31,109 30,195 30,195 29,885 ========== ========== ========== ========== ========== See notes on following pages. 7
AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION Unaudited (Dollars in thousands, except for share data)
Quarter Ended ------------------------------------------------------------ Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2002 2002 2002 2001 2001 ---------- ---------- ---------- ---------- ---------- CAPITALIZATION -------------- REAL ESTATE AT COST, BEFORE DEPRECIATION Consolidated. . . . . . . . . . . . . . . $ 734,991 735,699 745,906 744,411 743,111 Combined, including share of partnerships. . . . . . . . . . . . . . 1,139,522 1,152,130 1,116,239 1,114,576 1,105,640 Combined, including partnerships at 100% . . . . . . . . . . . . . . . . 1,936,713 1,954,652 1,864,965 1,862,901 1,832,040 TOTAL ASSETS Consolidated. . . . . . . . . . . . . . . 919,849 964,800 915,344 919,002 912,987 Combined, including share of partnerships. . . . . . . . . . . . . . 1,146,244 1,170,959 1,112,731 1,120,158 1,111,033 DEBT Consolidated. . . . . . . . . . . . . . . 403,193 450,268 405,126 399,309 408,475 Combined, including share of partnerships. . . . . . . . . . . . . . 620,184 648,965 592,300 586,137 595,174 SHARE INFORMATION Common shares outstanding . . . . . . . . 17,557,178 18,120,296 18,110,659 17,840,368 17,847,398 Preferred shares outstanding (d). . . . . 4,025,000 4,025,000 4,025,000 4,275,000 3,475,000 Operating Partnership units outstanding(e). . . . . . . . . . . . . 3,652,165 3,655,364 3,664,396 3,664,396 3,684,866 ---------- ---------- ----------- ----------- ----------- Total shares and units outstanding. . . . 25,234,343 25,800,660 25,800,055 25,779,764 25,007,264 ========== ========== =========== =========== =========== Weighted average shares and units outstanding . . . . . . . . . . . . . . 25,542,933 25,800,241 25,787,270 25,518,607 24,960,829 Share price, end of period. . . . . . . . $ 22.08 26.00 25.22 25.22 23.60 8 AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION - CONTINUED Unaudited (Dollars in thousands, except for share data) Quarter Ended ------------------------------------------------------------ Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2002 2002 2002 2001 2001 ---------- ---------- ---------- ---------- ---------- EQUITY MARKET CAPITALIZATION 557,174 670,817 650,677 650,166 590,171 MARKET CAPITALIZATION Consolidated. . . . . . . . . . . . . . . 960,367 1,121,085 1,055,803 1,049,475 998,646 Combined, including shares of partnerships. . . . . . . . . . . . . . 1,177,358 1,319,782 1,242,977 1,236,317 1,185,359 Combined,including partnerships at 100% . 2,113,925 2,334,010 2,179,544 2,187,099 2,119,787 DEBT SERVICE (f) ---------------- INTEREST EXPENSE Consolidated. . . . . . . . . . . . . . . 6,065 6,084 5,800 5,858 6,824 Combined, including share of partnerships 9,907 9,602 9,197 9,205 10,328 CAPITALIZED INTEREST Consolidated. . . . . . . . . . . . . . . 1,013 962 1,054 981 1,100 Combined, including share of partnerships . . . . . . . . . . . . 1,051 985 1,072 1,004 1,145 SCHEDULED PRINCIPAL PAYMENTS (normal amortization) Consolidated. . . . . . . . . . . . . . . 1,075 1,105 1,183 1,166 1,014 Combined, including share of partnerships 1,603 1,634 1,735 1,704 1,501 See notes on following pages. 9
AMLI RESIDENTIAL SELECTED FINANCIAL AND OPERATING INFORMATION Unaudited (Dollars in thousands, except for share data)
Quarter Ended ------------------------------------------------------------ Sept. 30, June 30, March 31, Dec. 31, Sept. 30, 2002 2002 2002 2001 2001 ---------- ---------- ---------- ---------- ---------- OPERATIONAL RATIOS ------------------ EBITDA, AS PERCENT OF TOTAL MARKET CAPITALIZATION Consolidated. . . . . . . . . . . . . . . 8.6% 8.0% 8.2% 8.0% 9.5% Combined, including share of unconsolidated affiliates . . . . . . . 8.3% 7.9% 8.1% 7.9% 9.2% INTEREST COVERAGE Consolidated. . . . . . . . . . . . . . . 3.4 3.7 3.8 3.6 3.5 Combined, including share of partnerships 2.5 2.7 2.7 2.6 2.7 FIXED CHARGE COVERAGE (g) Consolidated. . . . . . . . . . . . . . . 2.6 2.8 2.8 2.6 2.8 Combined, including share of partnerships 2.1 2.2 2.2 2.2 2.3 FINANCIAL RATIOS ---------------- DEBT TO TOTAL MARKET CAPITALIZATION Consolidated. . . . . . . . . . . . . . . 42.0% 40.2% 38.4% 38.0% 40.9% Combined, including share of unconsolidated affiliates . . . . . . . 52.7% 49.2% 47.7% 47.4% 50.2% DEBT TO TOTAL ASSETS, AT COST (before depreciation) Consolidated. . . . . . . . . . . . . . . 38.9% 41.9% 39.6% 38.9% 40.2% Combined, including share of partnerships 47.8% 49.4% 47.2% 46.7% 48.1% 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 September 30, ----------------------- 2002 2001 ---------- ---------- Company's share of communities' EBITDA (a). $ 24,159 25,489 Interest from and share of Service Companies' FFO (b). . . . . . . . . . . . 80 (65) Other interest and Other. . . . . . . . . . 242 356 Co-investment fee income (c). . . . . . . . 1,094 2,819 General and administrative. . . . . . . . . (1,138) (1,221) ---------- ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) . . 24,437 27,378 ---------- ---------- INTEREST EXPENSE (d) Wholly-owned communities and portfolio debt. . . . . . . . . . . . . . . . . . . (6,235) (6,978) Share of partnership communities. . . . . . (3,895) (3,552) ---------- ---------- (10,131) (10,530) ---------- ---------- FUNDS FROM OPERATIONS (FF0) . . . . . . . . 14,306 16,848 CAPITAL EXPENDITURES PAID FROM FFO (e) Wholly-owned communities. . . . . . . . . . (1,093) (1,147) Share of partnership communities. . . . . . (287) (249) ---------- ---------- (1,380) (1,396) ---------- ---------- ADJUSTED FUNDS FROM OPERATIONS (AFFO) . . . $ 12,926 15,452 ========== ========== Notes: (a) Includes discontinued operations. See pages 34 and 37. (b) Includes share of income before goodwill amortization of $104 for the quarter ended September 30, 2001. (c) See page 40. (d) Includes amortization of deferred and other financing costs. (e) For details, refer to the Company's Management Discussion and Analysis in the Form 10-Q filed with the SEC for this reporting period. 12 AMLI RESIDENTIAL FUNDS FROM OPERATIONS Unaudited (Dollars in thousands, except for share data) Nine Months Ended September 30, ----------------------- 2002 2001 ---------- ---------- Company's share of communities' EBITDA (a). . . . . . . . . . . . . . . . $ 75,997 77,957 Interest from and share of Services Companies' FFO (b). . . . . . . . . . . . (174) 30 Other interest and Other. . . . . . . . . . 579 1,299 Co-investment fee income (c). . . . . . . . 3,051 3,872 General and administrative. . . . . . . . . (3,891) (3,890) ---------- ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) . . 75,562 79,268 ---------- ---------- INTEREST EXPENSE (d) Wholly-owned communities and portfolio debt. . . . . . . . . . . . . . . . . . . (18,423) (20,202) Share of partnership communities. . . . . . (10,900) (10,825) ---------- ---------- (29,323) (31,027) ---------- ---------- FUNDS FROM OPERATIONS (FF0) . . . . . . . . 46,239 48,241 CAPITAL EXPENDITURES PAID FROM FFO Wholly-owned communities. . . . . . . . . . (3,257) (4,584) Share of partnership communities. . . . . . (809) (710) ---------- ---------- (4,066) (5,294) ---------- ---------- ADJUSTED FUNDS FROM OPERATIONS (AFFO) . . . $ 42,173 42,947 ========== ========== Notes: (a) Includes discontinued operations. See pages 34 and 37. (b) Includes share of income before goodwill amortization of $311 for the nine months ended September 30, 2001. (c) See page 40. (d) Includes amortization of deferred and other financing costs. No interest expense is associated with discontinued operations. (e) For details, refer to the Company's Management Discussion and Analysis in the Form 10-Q filed with the SEC for this reporting period. 13 AMLI RESIDENTIAL STATEMENTS OF OPERATIONS Three Months Ended September 30 (Unaudited, dollars in thousands)
Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- REVENUES Property revenues . . . . . . . . . . . . . . . . . . $ 27,380 27,824 40,984 41,174 Interest and share of income (loss) from the Service Companies . . . . . . . . . . . . . . . . . 80 (169) 80 (169) Other interest and Other (c). . . . . . . . . . . . . 242 349 947 1,017 Income from partnerships. . . . . . . . . . . . . . . 1,569 2,173 -- -- Co-investment fee income. . . . . . . . . . . . . . . 1,094 2,826 1,237 2,826 ---------- ---------- ---------- ---------- 30,365 33,003 43,248 44,848 ---------- ---------- ---------- ---------- EXPENSES Property operating expenses . . . . . . . . . . . . . 12,028 11,628 17,898 17,012 Interest and amortization of deferred and other financing costs . . . . . . . . . . . . . . . 6,235 6,978 10,130 10,530 Depreciation. . . . . . . . . . . . . . . . . . . . . 5,307 4,960 8,362 7,746 General and administrative. . . . . . . . . . . . . . 1,138 1,221 1,199 1,344 ---------- ---------- ---------- ---------- 24,708 24,787 37,589 36,632 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE SHARE OF GAINS ON SALES OF PROPERTIES. . . . . . . . 5,657 8,216 5,657 8,216 Gain on sale of residential property including share of gains on sales of partnership's properties. . . . . . . . 678 14,047 678 14,047 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . 6,335 22,263 6,335 22,263 Minority interest . . . . . . . . . . . . . . . . . . 739 3,498 739 3,498 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . 5,596 18,765 5,596 18,765 ---------- ---------- ---------- ---------- Income from discontinued operations, net of minority interest (d). . . . . . . . . . . . 229 479 229 479 Gain on disposition of discontinued operations, net of minority interest. . . . . . . . . . . . . . 11,827 -- 11,827 -- ---------- ---------- ---------- ---------- INCOME FROM DISCONTINUED OPERATIONS, NET OF MINORITY INTEREST. . . . . . . . . . . . . . 12,056 479 12,056 479 ---------- ---------- ---------- ---------- 14 AMLI RESIDENTIAL STATEMENTS OF OPERATIONS - CONTINUED Three Months Ended September 30 (Unaudited, dollars in thousands) Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- NET INCOME. . . . . . . . . . . . . . . . . . . . . . 17,652 19,244 17,652 19,244 Net income attributable to preferred shares . . . . . 1,980 1,633 1,980 1,633 ---------- ---------- ---------- ---------- Net Income attributable to common shares. . . . . . . $ 15,672 17,611 15,672 17,611 ========== ========== ========== ========== INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . $ 6,335 22,263 6,335 22,263 Income from discontinued operations before minority interest . . . . . . . . . . . . . . . . . 14,523 576 14,523 576 Add: Depreciation Wholly-owned communities. . . . . . . . . . . . . . 5,307 5,158 5,307 5,158 Share of partnership communities. . . . . . . . . . 3,066 2,794 3,066 2,794 Less: Gains on sales of rental properties Wholly-owned communities. . . . . . . . . . . . . . (14,247) -- (14,247) -- Share of partnership communities. . . . . . . . . . (678) (14,047) (678) (14,047) Share of Service Companies' amortization of goodwill. -- 104 -- 104 ---------- ---------- ---------- ---------- FUNDS FROM OPERATIONS . . . . . . . . . . . . . . . . $ 14,306 16,848 14,306 16,848 ========== ========== ========== ========== 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 Nine Months Ended September 30 (Unaudited, dollars in thousands)
Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- REVENUES Property revenues . . . . . . . . . . . . . . . . . . $ 82,292 82,395 121,703 122,045 Interest and share of income (loss) from the Service Companies . . . . . . . . . . . . . . . . . (174) (281) (174) (281) Other interest and Other (c). . . . . . . . . . . . . 579 1,299 3,040 3,445 Income from partnerships. . . . . . . . . . . . . . . 5,853 6,907 -- -- Co-investment fee income. . . . . . . . . . . . . . . 3,051 3,872 3,051 3,872 ---------- ---------- ---------- ---------- 91,601 94,192 127,620 129,081 ---------- ---------- ---------- ---------- EXPENSES Property operating expenses . . . . . . . . . . . . . 33,726 33,004 49,829 48,445 Interest and amortization of deferred and other financing costs . . . . . . . . . . . . . . . 18,423 20,202 29,324 31,027 Depreciation. . . . . . . . . . . . . . . . . . . . . 15,733 15,181 24,595 23,592 General and administrative. . . . . . . . . . . . . . 3,891 3,890 4,044 4,102 ---------- ---------- ---------- ---------- 71,773 72,277 107,792 107,166 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE SHARE OF GAINS ON SALES OF PROPERTIES . . . . . . . . . . 19,828 21,915 19,828 21,915 Gain on sale of residential property including share of gains on sales of partnership's properties 1,283 23,296 1,283 23,296 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . . . . . . . . . 21,111 45,211 21,111 45,211 Minority interest . . . . . . . . . . . . . . . . . . 2,555 6,822 2,555 6,822 ---------- ---------- ---------- ---------- INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . 18,556 38,389 18,556 38,389 ---------- ---------- ---------- ---------- Income from discontinued operations, net of minority interest (d) . . . . . . . . . . . . . . . 1,220 1,485 1,220 1,485 Gain on sale of discontinued operations, net of minority interest . . . . . . . . . . . . . . . . . 11,827 -- 11,827 -- ---------- ---------- ---------- ---------- TOTAL INCOME FROM DISCONTINUED OPERATIONS, NET OF MINORITY INTEREST . . . . . . . . . . . . . . . . . 13,047 1,485 13,047 1,485 ---------- ---------- ---------- ---------- 16 AMLI RESIDENTIAL STATEMENTS OF OPERATIONS - CONTINUED Nine Months Ended September 30 (Unaudited, dollars in thousands) Consolidated (a) Combined (b) ----------------------- ----------------------- 2002 2001 2002 2001 ---------- ---------- ---------- ---------- NET INCOME. . . . . . . . . . . . . . . . . . . . . . 31,603 39,874 31,603 39,874 Net income attributable to preferred shares . . . . . 6,008 4,899 6,008 4,899 ---------- ---------- ---------- ---------- Net income attributable to common shares. . . . . . . $ 25,595 34,975 25,595 34,975 ========== ========== ========== ========== INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST. . . . . . . . . . . . . . 21,111 45,211 21,111 45,211 Income from discontinued operations before minority interest . . . . . . . . . . . . . . . . . 15,716 1,783 15,716 1,783 Add: Depreciation Wholly-owned communities. . . . . . . . . . . . . . 16,040 15,798 16,040 15,798 Share of partnership communities. . . . . . . . . . 8,902 8,434 8,902 8,434 Less: Gains on sales of rental properties Wholly-owned communities. . . . . . . . . . . . . . (14,247) -- (14,247) -- Share of partnership communities. . . . . . . . . . (1,283) (23,296) (1,283) (23,296) Share of Service Companies' amortization of goodwill. -- 311 -- 311 ---------- ---------- ---------- ---------- FUNDS FROM OPERATIONS . . . . . . . . . . . . . . . . $ 46,239 48,241 46,239 48,241 ========== ========== ========== ========== 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) ------------------------- ------------------------- Sept. 30, December 31, Sept. 30, December 31, 2002 2001 2002 2001 ---------- ------------ ---------- ------------ ASSETS Rental apartments Land. . . . . . . . . . . . . . . . . . . . $ 98,641 99,784 154,160 150,187 Depreciable property. . . . . . . . . . . . 636,350 644,627 985,362 964,389 ---------- ---------- ---------- ---------- 734,991 744,411 1,139,522 1,114,576 Less: Accumulated depreciation . . . . . . . (116,039) (107,139) (151,636) (135,052) ---------- ---------- ---------- ---------- 618,952 637,272 987,886 979,524 Rental property held for sale, net of accumulated depreciation. . . . . . . . . . -- -- -- -- Land held for development or sale . . . . . . 24,036 47,611 24,036 47,611 Rental apartments under development . . . . . 34,532 10,392 73,797 41,477 Investment in partnerships (c). . . . . . . . 192,734 184,270 -- -- Cash and cash equivalents . . . . . . . . . . 3,639 5,892 11,593 14,093 Notes and advances to the Service Companies . 26,719 15,161 26,718 14,824 Other assets and deferred expenses, net . . . 19,237 18,404 22,214 22,629 ---------- ---------- ---------- ---------- Total assets. . . . . . . . . . . . . . . $ 919,849 919,002 1,146,244 1,220,158 ========== ========== ========== ========== 18 AMLI RESIDENTIAL BALANCE SHEETS - CONTINUED (Unaudited, dollars in thousands) Consolidated (a) Combined (b) ------------------------- ------------------------- Sept. 30, December 31, Sept. 30, December 31, 2002 2001 2002 2001 ---------- ------------ ---------- ------------ LIABILITIES Debt. . . . . . . . . . . . . . . . . . . . . $ 403,193 399,309 620,184 586,137 Distributions in excess of investments in and earnings from partnerships. . . . . . . $ 4,685 -- -- -- Accrued expenses and other liabilities. . . . 28,464 27,943 42,553 42,272 ---------- ---------- ---------- ---------- TOTAL LIABILITIES . . . . . . . . . . . . 436,342 427,252 662,737 628,408 ---------- ---------- ---------- ---------- Mandatorily redeemable convertible preferred shares. . . . . . . . . . . . . . 93,247 93,287 93,247 93,287 Minority interest . . . . . . . . . . . . . . 67,428 68,186 67,428 68,186 TOTAL SHAREHOLDERS' EQUITY. . . . . . . . 322,832 330,277 322,832 330,277 ---------- ---------- ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY. . . . . . . . . . $ 919,849 919,002 1,146,244 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 September 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 . . . . . $310,943 77.1% 7.1% 6.7 310,943 -- 310,943 -- Construction financing . . . . . -- -- -- -- -- -- Tax-exempt debt . . . 50,250 12.5% 2.6% 1.0 9,500 40,750 -- 50,250 Credit facilities (f) . . . . . . . . 42,000 10.4% 6.9% 1.1 -- 42,000 -- 42,000 -------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $403,193 100.0% 6.5% 5.4 320,443 82,750 310,943 92,250 ======== ======= ======= ======= ======= ======= ======= ======= Percent of total. . 79.5% 20.5% 77.1% 22.9% ======= ======= ======= ======= 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 . . . . . $522,286 84.2% 7.2% 6.8 522,286 -- 522,286 -- Construction financing . . . . . 5,648 0.9% 3.6% 2.3 5,648 -- 5,648 Tax-exempt debt . . . 50,250 8.1% 2.6% 1.0 9,500 40,750 -- 50,250 Credit facilities (f) . . . . . . . . 42,000 6.8% 6.9% 1.1 -- 42,000 -- 42,000 -------- ------- ------- ------- ------- ------- ------- ------- Total . . . . . . $620,184 100.0% 6.7% 5.9 537,434 82,750 522,286 97,898 ======== ======= ======= ======= ======= ======= ======= ======= Percent of total. . 86.7% 13.3% 84.2% 15.8% ======= ======= ======= ======= See notes on the following page. 20
AMLI RESIDENTIAL DEBT AND PREFERRED SHARES SUMMARY September 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 September 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 September 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 -12/10/03 (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 September 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 $ 1,094 -- 1,094 0.3% 0.0% 2003 4,076 78,690(c) 82,766 20.5% 7.1% 2004 3,775 6,970 10,745 2.7% 7.7% 2005 3,997 31,024 35,021 8.7% 8.2% 2006 3,130 35,372 38,502 9.5% 7.8% Thereafter 21,384 213,681(d) 235,065 58.3% 5.8% -------- ------- ------- ------ ----- Total $ 37,456 365,737 403,193 100.0% 6.5% ======== ======= ======= ====== ===== Percent to Total 9.3% 90.7% 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 $ 1,672 -- 1,672 0.3% 0.0% 2003 6,433 84,986(c) 91,419 14.7% 7.1% 2004 6,072 14,863 20,935 3.4% 7.6% 2005 6,417 36,672 43,089 6.9% 7.5% 2006 5,623 66,794 72,417 11.7% 7.6% Thereafter 33,735 356,917(d) 390,652 63.0% 7.0% -------- ------- ------- ------ ----- Total $ 59,952 560,232 620,184 100.0% 6.7% ======== ======= ======= ====== ===== Percent to Total 9.7% 90.3% 100.0% ======== ======= ======= 24 AMLI RESIDENTIAL DEBT MATURITIES - CONTINUED September 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, 2003 and on December 18, 2003, respectively. 25
AMLI RESIDENTIAL SAME STORE COMMUNITIES THREE MONTHS ENDED SEPTEMBER 30
PHYSICAL OCCUPANCY AND COLLECTED REVENUES PER OCCUPIED UNIT (a) -------------------------------- Weighted Average Weighted Average Occupancy (b) Collected Revenues (c) --------------------------------- --------------------------------- Apartment Percent Percent Market Homes 2002 2001 Change 2002 2001 Change ------ --------- -------- -------- -------- -------- -------- -------- Dallas 6,626 90.8% 93.5% -2.9% $ 830 850 -2.2% Atlanta 5,285 89.8% 93.0% -3.4% 884 945 -6.4% Austin 2,797 92.9% 90.6% 2.5% 857 942 -9.0% Houston 1,117 92.9% 95.5% -2.7% 1,069 1,048 2.0% Indianapolis 1,752 93.4% 92.0% 1.4% 780 786 -0.8% Kansas City 2,086 91.9% 92.6% -0.8% 846 879 -3.7% Chicago 2,760 92.5% 92.9% -0.5% 1,136 1,195 -5.0% Denver 414 83.8% 89.2% -6.1% 1,168 1,183 -1.2% ------- ------ ------ ------ ------ ------ ------ Total 22,837 91.3% 92.8% -1.6% $ 898 938 -4.2% ======= ====== ====== ====== ====== ====== ====== 26
AMLI RESIDENTIAL SAME STORE COMMUNITIES - CONTINUED THREE MONTHS ENDED SEPTEMBER 30
REVENUES, EXPENSES AND NET OPERATING INCOME (a) (dollars in thousands) ----------------------------------------------- Revenues Expenses Net Operating Income ---------------------------- ---------------------------- ----------------------------- Percent Percent Percent Market 2002 2001 Change 2002 2001 Change 2002 2001 Change ------ -------- -------- -------- -------- -------- -------- -------- -------- -------- Dallas $ 15,004 15,785 -4.9% 6,920 6,832 1.3% 8,084 8,953 -9.7% Atlanta 12,595 13,931 -9.6% 4,973 4,933 0.8% 7,622 8,998 -15.3% Austin 6,680 7,159 -6.7% 3,146 3,627 -13.3% 3,534 3,532 0.1% Houston 3,327 3,353 -0.8% 1,415 1,408 0.5% 1,912 1,946 -1.7% Indianapolis 3,823 3,805 0.5% 1,596 1,493 6.9% 2,227 2,311 -3.7% Kansas City 4,866 5,094 -4.5% 1,799 1,877 -4.2% 3,068 3,217 -4.6% Chicago 8,541 9,024 -5.3% 3,397 3,246 4.7% 5,144 5,778 -11.0% Denver 1,215 1,310 -7.3% 491 479 2.6% 723 831 -12.9% -------- -------- -------- -------- -------- -------- -------- -------- -------- Total $ 56,051 59,460 -5.7% 23,737 23,894 -0.7% 32,314 35,566 -9.1% ======== ======== ======== ======== ======== ======== ======== ======== ======== Notes: (a) Information shown is Combined, including share of partnership communities at 100%. (b) Represents average daily physical occupancy, which was changed from beginning of the month physical occupancy. (c) Represents amounts collected for rent and other income. Previously reported average rental rate per occupied unit. 27
AMLI RESIDENTIAL SAME STORE COMMUNITIES NINE MONTHS ENDED SEPTEMBER 30
PHYSICAL OCCUPANCY AND COLLECTED REVENUES PER OCCUPIED UNIT (a) -------------------------------- Weighted Average Weighted Average Occupancy (b) Collected Revenues (c) --------------------------------- --------------------------------- Apartment Percent Percent Market Homes 2002 2001 Change 2002 2001 Change ------ --------- -------- -------- -------- -------- -------- -------- Dallas 6,626 91.3% 92.6% -1.3% $ 836 841 -0.7% Atlanta 5,285 90.0% 92.9% -3.1% 897 940 -4.5% Austin 2,797 92.0% 88.4% 4.0% 874 961 -9.0% Houston 1,117 91.9% 94.4% -2.7% 1,072 1,013 5.8% Indianapolis 1,752 91.7% 88.8% 3.3% 777 785 -1.0% Kansas City 2,086 91.5% 89.6% 2.2% 858 889 -3.5% Chicago 2,760 90.7% 93.6% -3.1% 1,154 1,177 -2.0% Denver 414 85.9% 87.0% -1.2% 1,165 1,206 -3.4% ------- ------ ------ ------ ------ ------ ------ Total 22,837 91.0% 91.7% -0.7% $ 908 934 -2.8% ======= ====== ====== ====== ====== ====== ====== 28
AMLI RESIDENTIAL SAME STORE COMMUNITIES - CONTINUED NINE MONTHS ENDED SEPTEMBER 30
REVENUES, EXPENSES AND NET OPERATING INCOME (a) (dollars in thousands) ----------------------------------------------- Revenues Expenses Net Operating Income ---------------------------- ---------------------------- ---------------------------- Percent Percent Percent Market 2002 2001 Change 2002 2001 Change 2002 2001 Change ------ -------- -------- -------- -------- -------- -------- -------- -------- -------- Dallas $ 45,513 46,402 -1.9% 19,934 19,627 1.6% 25,579 26,775 -4.5% Atlanta 38,433 41,524 -7.4% 14,183 14,641 -3.1% 24,251 26,883 -9.8% Austin 20,232 21,377 -5.4% 8,973 9,708 -7.6% 11,259 11,669 -3.5% Houston 9,890 9,628 2.7% 4,231 3,995 5.9% 5,658 5,633 0.4% Indianapolis 11,212 11,030 1.7% 4,463 4,221 5.7% 6,749 6,809 -0.9% Kansas City 14,751 14,940 -1.3% 5,265 5,308 -0.8% 9,487 9,632 -1.5% Chicago 25,494 26,845 -5.0% 9,725 9,266 5.0% 15,769 17,579 -10.3% Denver 3,728 3,906 -4.6% 1,210 1,323 -8.6% 2,518 2,583 -2.5% -------- -------- -------- -------- -------- -------- -------- -------- -------- Total $169,254 175,652 -3.6% 67,984 68,090 -0.2% 101,270 107,563 -5.9% ======== ======== ======== ======== ======== ======== ======== ======== ======== (a) Information shown is Combined, including share of partnership communities at 100%. (b) Represents average daily physical occupancy, which was changed from beginning of the month physical occupancy. (c) Represents amounts collected for rent and other income. Previously reported average rental rate per occupied unit. 29
AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH The following graphs present monthly rental revenue for the first nine 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 -------------- ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- The Company experienced a reduction in rental revenue during the third quarter by 1.6% and in total revenue by 1% versus the second quarter of 2002. Neither sequential decline was unexpected given the disequilibrium of supply/demand factors being experienced in the multifamily sector. Both total and rental revenue have remained essentially flat through the first three quarters of 2002, although substantially below levels of a year ago. The third quarter has historically been the strongest quarter for leasing activity and thus rental revenue growth; unfortunately, during the past quarter this normal trend did not materialize. DALLAS ------ ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Dallas, which represented 27% of total revenue in the third quarter, showed deteriorating fundamentals as new supply and reduced demand impacted operations. Traffic was essentially flat quarter to quarter and year over year, but rental revenue declined by 2.3% for the nine months ended September 30, 2002 compared to a year ago, as concessions increased by 15%. Market-wide absorption was negative for the quarter and occupancy dropped by 2.9% from a year earlier. Ft. Worth held up better than Dallas due to less supply. The DFW economy continued to be battered by telecom and high- tech layoffs as well as problems at American Airlines. Unemployment as of August 30, 2002 stood at 7%, down slightly from a peak of 7.5% in June. With 13,000 new units under construction, Dallas will struggle until the economic rebound starts to produce jobs. 30 AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED ATLANTA ------- ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Atlanta, which represented 22% of total revenue in the third quarter, experienced a continued decline in revenue over the second quarter but at a slower pace. Revenue, after dropping steadily since March, showed a slight pick up in September. Market wide, occupancies seem to have stabilized and the growth in the magnitude of concessions has also slowed. Unfortunately, with 13,000 new units still in the pipeline, the Atlanta market will continue to be under pressure, especially those stabilized communities that compete with new lease-ups. Given that Atlanta experienced some job growth during the first nine months, there is reason to believe that even if the market has not hit bottom, its fall has slowed. CHICAGO ------- ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Chicago, which represented 15% of total revenue for the quarter, slipped slightly (0.8%) versus the second quarter after showing increased revenue in the first two quarters. Two factors continue to impact Chicago - the highest level of move-outs due to home purchases (33% during the quarter) and a very weak economy. Traffic has fallen every month since March, dropping 14.8% from this year's second quarter. With continuing job layoffs creating a fear of a long delayed recovery or double dip recession in Chicago, future occupancy gains will be made only at the expense of effective rent. AUSTIN ------ ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Austin, which represented 12% of total revenue for the quarter, continued to experience revenue deterioration, albeit at a slower pace. Total revenue declined by 0.5% from the second quarter after a 1.9% decline from the first to the second quarter. This improvement was created by a 1.6% occupancy increase and deceleration in the growth of concessions. After increasing 17.6% in the second quarter, concessions increased only 2.7%. Austin also experienced its first positive job growth (1,600 jobs on a trailing twelve month non-seasonally adjusted basis). During the third quarter, Austin experienced positive absorption of new units, but with 11,000 units still under construction, future improvements in collected revenue will depend on a continued improvement in the economy. 31 AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED KANSAS CITY ----------- ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Kansas City, which represented 9% of total revenue during the third quarter, experienced a 2.7% decrease in rental revenue from the second quarter, after a 2.3% increase from the first to the second quarter. The economy in Kansas City has slowed, reversing job growth over the past ten months. September's BLS numbers showed a year over year loss of 5,400 jobs and a continued increase in the unemployment rate. At the same time, the market is still trying to absorb a large amount of new supply introduced in the past 9-12 months. Occupancy declined to 91.9% in the quarter from 93.2% in the second quarter and 92.6% a year ago. Going forward, while multifamily permits have flattened and are down from a year ago, without job growth, absorption of new units will be a challenge. INDIANAPOLIS ------------ ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Indianapolis, which represented 7% of total revenue during the quarter, showed a sequential increase of 2.6% in total revenue. Occupancy for competing properties in the Indianapolis area was 90.4% versus the Company's 93.4%. Concessions were reduced by 18% versus the second quarter, a positive sign. Although annualized permits have trended up over the past nine months, a little job growth should keep this market in balance. HOUSTON ------- ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Houston, which represented 6% of total revenue during the third quarter, continued to experience revenue growth, albeit at a slowing pace. After maintaining strong job growth through most of 2001, Houston began to lose jobs during the first two quarters of 2002 while staying relatively flat in the third quarter when measured on a year over year basis. Additionally, new construction is heavily concentrated within the 610 Loop submarket, which contains three of our four Same Store communities. Market wide, Houston metro experienced negative absorption during the quarter. Relatively moderate new supply (7,000+ units) over the next twelve months may be the saving grace for this market if job growth remains flat. However, if job losses begin to persist, this market could follow the same decline in revenue experienced in some of our other markets. 32 AMLI RESIDENTIAL SAME COMMUNITY RENTAL REVENUE GROWTH - CONTINUED DENVER ------ ACT JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC -------------------------------------------------------------------------- 2001 2002 -------------------------------------------------------------------------- Denver, which represented 2% of total revenue during the third quarter, continued to be much challenged due to the combination of weak job growth and too much supply. Average occupancies in "A" (1990+) product in the Company's three submarkets averaged below 90% for the quarter. With 5,000- 7,000 new units still in the pipeline, over 3% of stabilized inventory, continued weak job growth and a reasonably high amount of home purchases, Denver will be challenged to merely maintain current levels of revenues. 33 AMLI RESIDENTIAL COMPONENTS OF NOI THREE MONTHS ENDED SEPTEMBER 30 (Dollars in thousands)
Partnership Communities Wholly-Owned Communities (a) Combined (g)(h) at 100% ---------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- REVENUES Same store communities (a). . . . 23,797 25,172 -5.5% 34,168 36,190 -5.6% 32,255 34,288 -5.9% New communities (b) . . 0 0 0.0% 749 737 1.7% 2,641 2,584 2.2% Communities under development and lease-up . . . . . . . 55 0 0.0% 787 202 289.9% 2,922 806 262.6% Acquisition communities (c). . . . 3,529 2,266 55.7% 5,243 3,218 62.9% 3,825 1,469 160.5% Communities sold/ contributed to ventures (d) . . . . . 570 1,682 -66.1% 607 2,123 -71.4% 1,165 3,032 -61.6% -------- -------- -------- -------- -------- -------- -------- -------- -------- 27,950 29,120 -4.0% 41,554 42,469 -2.2% 42,807 42,178 1.5% ======== ======== ======== ======== ======== ======== ======== ======== ======== EXPENSES Same store communities (a). . . . 10,418 10,483 -0.6% 14,716 14,808 -0.6% 13,319 13,411 -0.7% New communities (b) . . 0 0 0.0% 274 260 5.3% 954 907 5.2% Communities under development and lease-up . . . . . . . 124 0 0.0% 532 159 235.0% 1,632 625 161.2% Acquisition communities (c). . . . 1,488 924 61.0% 2,170 1,262 71.9% 1,525 522 192.2% Communities sold/ contributed to ventures (d) . . . . . 294 744 -60.4% 305 970 -68.5% 543 1,532 -64.6% -------- -------- -------- -------- -------- -------- -------- -------- -------- 12,325 12,150 1.4% 17,997 17,459 3.1% 17,973 16,997 5.7% ======== ======== ======== ======== ======== ======== ======== ======== ======== 34 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED THREE MONTHS ENDED SEPTEMBER 30 (Dollars in thousands) Partnership Communities Wholly-Owned Communities (a) Combined (g) (h) at 100% ---------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- NET OPERATING INCOME Same store communities (a). . . . 13,378 14,689 -8.9% 19,452 21,382 -9.0% 18,936 20,877 -9.3% New communities (b) . . 0 0 0.0% 475 477 -0.3% 1,687 1,677 0.6% Communities under development and lease-up . . . . . . . -70 0 0.0% 255 43 492.4% 1,289 181 612.4% Acquisition communities (c). . . . 2,041 1,342 52.1% 3,072 1,956 57.1% 2,300 947 143.0% Communities sold/ contributed to ventures (d) . . . . . 276 938 -70.6% 302 1,153 -73.8% 622 1,500 -58.5% -------- -------- -------- -------- -------- -------- -------- -------- -------- 15,626 16,970 -7.9% 23,556 25,011 -5.8% 24,834 25,182 -1.4% ======== ======== ======== ======== ======== ======== ======== Cash flow preference and operating promote (e). . . . . . 720 563 -------- -------- COMPANY'S SHARE OF NOI (f). . . . . . 24,277 25,573 COMPANY'S SHARE OF OTHER, NET. . . . . . -118 -84 -------- -------- COMPANY'S SHARE OF COMMUNITIES' EBITDA . 24,159 25,489 ======== ======== COMPANY'S PERCENTAGE OF PARTNERSHIPS' NOI: Before cash flow preferences (e). . . . 31.9% 31.9% Including cash flow preferences and other (f). . . . . . . 34.8% 34.2% ======== ======== 35 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED THREE MONTHS ENDED SEPTEMBER 30 (Dollars in thousands) Notes: (a) Includes communities that were sold and reported as Discontinued Operations in the Company's Statements of Operations. (b) Same store communities are communities that have had stabilized operations and were owned by the Company as of January 1, 2001. (c) New communities are communities that were developed by the Company and began stabilized operations after January 1, 2001. (d) Acquisition communities are communities having stabilized operations that were acquired by the Company after January 1, 2001. (e) 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. (f) 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 40. (g) 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 40. (h) Company's 100% interest in wholly-owned communities plus the Company's share of partnership communities. 36
AMLI RESIDENTIAL COMPONENTS OF NOI NINE MONTHS ENDED SEPTEMBER 30 (Dollars in thousands)
Partnership Communities Wholly-Owned Communities (a) Combined (g) (h) at 100% ---------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- REVENUES Same store communities (a). . . . 72,317 74,058 -2.4% 103,481 106,701 -3.0% 96,937 101,594 -4.6% New communities (b) . . 0 0 0.0% 2,247 2,062 9.0% 7,911 7,180 10.2% Communities under development and lease-up . . . . . . . 56 0 0.0% 1,751 336 420.3% 6,741 1,344 401.5% Acquisition communities (c). . . . 9,919 3,853 157.4% 13,796 6,356 117.1% 7,845 3,863 103.1% Communities sold/ contributed to ventures (d) . . . . . 3,098 8,367 -63.0% 3,526 10,472 -66.3% 5,557 10,822 -48.6% -------- -------- -------- -------- -------- -------- -------- -------- -------- 85,390 86,278 -1.0% 124,801 125,929 -0.9% 124,991 124,803 0.2% ======== ======== ======== ======== ======== ======== ======== ======== ======== EXPENSES Same store communities (a). . . . 29,408 29,653 -0.8% 41,882 42,104 -0.5% 38,576 38,437 0.4% New communities (b) . . 0 0 0.0% 797 729 9.3% 2,787 2,590 7.6% Communities under development and lease-up . . . . . . . 189 0 0.0% 1,139 313 263.2% 3,787 1,243 204.7% Acquisition communities (c). . . . 4,131 1,387 197.8% 5,614 2,271 147.3% 2,949 1,363 116.3% Communities sold/ contributed to ventures (d) . . . . . 1,322 3,447 -61.6% 1,515 4,288 -64.7% 2,561 4,830 -47.0% -------- -------- -------- -------- -------- -------- -------- -------- -------- 35,050 34,487 1.6% 50,947 49,706 2.5% 50,660 48,463 4.5% ======== ======== ======== ======== ======== ======== ======== ======== ======== 37 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED NINE MONTHS ENDED SEPTEMBER 30 (Dollars in thousands) Partnership Communities Wholly-Owned Communities (a) Combined (g) (h) at 100% ---------------------------- -------------------------- -------------------------- Percent Percent Percent 2002 2001 Change 2002 2001 Change 2002 2001 Change -------- -------- -------- -------- -------- -------- -------- -------- -------- NET OPERATING INCOME Same store communities (a). . . . 42,909 44,405 -3.4% 61,599 64,597 -4.6% 58,361 63,157 -7.6% New communities (b) . . 0 0 0.0% 1,450 1,333 8.8% 5,124 4,590 11.6% Communities under development and lease-up . . . . . . . -133 0 0.0% 612 23 2563.6% 2,954 101 2821.3% Acquisition communities (c). . . . 5,788 2,466 134.7% 8,182 4,085 100.3% 4,896 2,500 95.9% Communities sold/ contributed to ventures (d) . . . . . 1,776 4,920 -63.9% 2,011 6,185 -67.5% 2,996 5,992 -50.0% -------- -------- -------- -------- -------- -------- -------- -------- -------- 50,340 51,791 -2.8% 73,854 76,223 -3.1% 74,331 76,340 -2.6% ======== ======== ======== ======== ======== ======== ======== Cash flow preference and operating promote (e). . . . . . 2,257 1,665 -------- -------- COMPANY'S SHARE OF NOI (f). . . . . . 76,111 77,888 COMPANY'S SHARE OF OTHER, NET. . . . . . -114 69 -------- -------- COMPANY'S SHARE OF COMMUNITIES' EBITDA . 75,997 77,957 ======== ======== COMPANY'S PERCENTAGE OF PARTNERSHIPS' NOI: Before cash flow preferences (e). . . . 31.6% 32.0% Including cash flow preferences and other (f). . . . . . . 34.7% 34.2% ======== ======== 38 AMLI RESIDENTIAL COMPONENTS OF NOI - CONTINUED NINE MONTHS ENDED SEPTEMBER 30 (Dollars in thousands) Notes: (a) Includes communities that were sold and reported as Discontinued Operations in the Company's Statements of Operations. (b) Same store communities are communities that have had stabilized operations and were owned by the Company as of January 1, 2001. (c) New communities are communities that were developed by the Company and began stabilized operations after January 1, 2001. (d) Acquisition communities are communities having stabilized operations that were acquired by the Company after January 1, 2001. (e) 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. (f) 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 40. (g) 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 40. (h) Company's 100% interest in wholly-owned communities plus the Company's share of partnership communities. 39
AMLI RESIDENTIAL CO-INVESTMENT COMPENSATION (Dollars in thousands) Three Months Ended September 30, ----------------------- 2002 2001 ---------- ---------- FEE INCOME (a) Acquisition fees (a). . . . . . . . . . . . . $ -- -- Asset management fees (b) . . . . . . . . . . 112 132 Disposition fees (c). . . . . . . . . . . . . 403 234 Debt/equity placement fees. . . . . . . . . . -- -- Development fees (a). . . . . . . . . . . . . 579 657 Promoted interest from sales and other. . . . -- 1,796 ---------- ---------- 1,094 2,819 ---------- ---------- SHARE OF CASH FLOW (d) Promoted interest from operating cash flow. . 185 29 Cash flow preferences (e) . . . . . . . . . . 535 534 ---------- ---------- 720 563 ---------- ---------- TOTAL . . . . . . . . . . . . . . . . . . $ 1,814 3,381 ========== ========== Nine Months Ended September 30, ----------------------- 2002 2001 ---------- ---------- FEE INCOME (a) Acquisition fees (a). . . . . . . . . . . . . $ 401 118 Asset management fees (b) . . . . . . . . . . 359 416 Disposition fees (c). . . . . . . . . . . . . 642 234 Debt/equity placement fees. . . . . . . . . . -- 112 Development fees (a). . . . . . . . . . . . . 1,539 1,196 Promoted interest from sales and other. . . . 110 1,796 ---------- ---------- 3,051 3,872 ---------- ---------- SHARE OF CASH FLOW (d) Promoted interest from operating cash flow. . 461 82 Cash flow preferences (e) . . . . . . . . . . 1,796 1,583 ---------- ---------- 2,257 1,665 ---------- ---------- TOTAL . . . . . . . . . . . . . . . . . . $ 5,308 5,537 ========== ========== 40 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 42. (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 34 and 37. (e) The Company receives compensation from certain partnerships in the form of a preferential distribution of cash flow. 41 AMLI RESIDENTIAL SERVICE COMPANIES FINANCIAL INFORMATION (Dollars in thousands) COMBINED CONDENSED STATEMENTS OF OPERATIONS ------------------------------------------- Three Months Ended September 30, ----------------------- 2002 2001 ---------- ---------- REVENUES Property management fees (a). . . . . . . . . $ 2,716 2,665 General contractor revenues, net (b). . . . . 570 912 Gross profit - corporate homes (c). . . . . . 522 534 Other income. . . . . . . . . . . . . . . . . 136 181 ---------- ---------- 3,944 4,292 ---------- ---------- OPERATING EXPENSES Property management . . . . . . . . . . . . . 2,318 2,750 Corporate homes . . . . . . . . . . . . . . . 246 260 General contractor. . . . . . . . . . . . . . 517 563 Other expenses. . . . . . . . . . . . . . . . -- -- ---------- ---------- 3,081 3,573 ---------- ---------- EBITDA. . . . . . . . . . . . . . . . . . . . 863 719 Gain (loss) on land sales . . . . . . . . . . (165) -- Interest expense. . . . . . . . . . . . . . . (478) (508) Depreciation and amortization . . . . . . . . (663) (765) Taxes . . . . . . . . . . . . . . . . . . . . 169 202 ---------- ---------- NET INCOME (LOSS) . . . . . . . . . . . . . . (274) (352) Eliminations, interest and other. . . . . . . 10 (80) ---------- ---------- SHARE OF INCOME (LOSS) FROM THE SERVICE COMPANIES (d) . . . . . . . . . . . $ (264) (433) ========== ========== 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. 42 AMLI RESIDENTIAL SERVICE COMPANIES FINANCIAL INFORMATION (Dollars in thousands) COMBINED CONDENSED STATEMENTS OF OPERATIONS ------------------------------------------- Nine Months Ended September 30, ----------------------- 2002 2001 ---------- ---------- REVENUES Property management fees (a). . . . . . . . . $ 8,109 7,696 General contractor revenue, net (b) . . . . . 1,807 2,129 Gross profit - corporate homes (c). . . . . . 1,267 1,267 Other income. . . . . . . . . . . . . . . . . 524 323 ---------- ---------- 11,707 11,415 ---------- ---------- OPERATING EXPENSES Property management . . . . . . . . . . . . . 7,273 7,406 Corporate homes . . . . . . . . . . . . . . . 741 736 General contractor. . . . . . . . . . . . . . 1,584 1,580 Other expenses. . . . . . . . . . . . . . . . -- -- ---------- ---------- 9,598 9,722 ---------- ---------- EBITDA. . . . . . . . . . . . . . . . . . . . 2,109 1,693 Gain (loss) on land sales . . . . . . . . . . (242) 194 Interest expense. . . . . . . . . . . . . . . (1,351) (1,486) Depreciation and amortization . . . . . . . . (2,133) (1,978) Taxes . . . . . . . . . . . . . . . . . . . . 614 599 ---------- ---------- NET INCOME (LOSS) . . . . . . . . . . . . . . (1,003) (978) Eliminations, interest and other. . . . . . . (87) (44) ---------- ---------- SHARE OF INCOME (LOSS) FROM SERVICE COMPANIES (d) . . . . . . . . . . . $ (1,090) (1,022) ========== ========== 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. 43 AMLI RESIDENTIAL SERVICE COMPANIES FINANCIAL INFORMATION (Dollars in thousands) COMBINED CONDENSED FINANCIAL POSITION ------------------------------------- Sept. 30, December 31, 2002 2001 ---------- ------------ ASSETS: Receivables (a) . . . . . . . . . . . . . $ 11,621 9,136 Land held for sale (b). . . . . . . . . . 14,004 4,951 Building and equipment, net (c) . . . . . 11,116 10,847 Other (d) . . . . . . . . . . . . . . . . 10,289 9,911 ---------- ---------- TOTAL ASSETS. . . . . . . . . . . . . $ 47,030 34,845 ========== ========== LIABILITIES Due to the Company. . . . . . . . . . . . $ 29,928 17,311 Bank debt . . . . . . . . . . . . . . . . 14,000 14,000 Other . . . . . . . . . . . . . . . . . . 5,621 5,733 ---------- ---------- TOTAL LIABILITIES . . . . . . . . . . $ 49,549 37,044 ========== ========== EQUITY (DEFICIT). . . . . . . . . . . . . $ (2,519) (2,199) Eliminations and other. . . . . . . . . . (690) 49 Due to Company (above). . . . . . . . . . 29,928 17,311 ---------- ---------- Investment in and receivables from the Service Companies . . . . . . . . . $ 26,719 15,161 ========== ========== Notes: (a) Primarily fee income from affiliates. (b) Represents non-apartment land holdings: Number of Carrying Acres Value --------- --------- Prairie Lakes, Carmel, IN . . 120 $ 7,641 Fossil Lakes, Fort Worth, TX. 34 5,170 Park Bridge, Atlanta, GA. . . 3 1,193 --- ------- 157 $14,004 === ======= (c) Includes $8,251 in net capitalized computer hardware and software costs, of which approximately $6,500 (including $800 of internal costs) were incurred in 2001. Amounts are generally amortized over five years. (d) Represented by: Cash. . . . . . . . . . . . . . . . . . . . $ 3,874 Investments in partnerships . . . . . . . . 2,988 Land held for development . . . . . . . . . 966 Deferred income tax . . . . . . . . . . . . 1,298 Unamortized goodwill. . . . . . . . . . . . 668 Other . . . . . . . . . . . . . . . . . . . 495 ------- $10,289 ======= 44 AMLI RESIDENTIAL STABILIZED COMMUNITIES September 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 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 ------ ------ 7,712 28.1% ------ ------ 45 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 22.0% ------ ------ 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 11.8% ------ ------ 46 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 10.2% ------ ------ 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 9.2% ------ ------ 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 8.8% ------ ------ 47 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 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 ------ ------ 1,451 5.3% ------ ------ 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 4.6% ------ ------ TOTAL 27,446 100.0% ====== ====== Note: (a) Based on number of apartment homes. 48
AMLI RESIDENTIAL DEVELOPMENT SUMMARY September 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% 90% at Milton Park Alpharetta, GA 25% 461 4Q/00 1Q/02 1Q/03 4Q/03 241 75% 42% at Barrett Walk Kennesaw, GA 25% 310 4Q/01 3Q/02 2Q/03 1Q/04 34 53% 15% HOUSTON, TX ----------- AMLI at Kings Harbor Lake Houston, TX 25% 300 2Q/00 1Q/01 4Q/01 4Q/02 300 100% 86% AUSTIN, TX ---------- AMLI Downtown Austin, Block, Block 20 Austin, TX 100% 220 2Q/02 1Q/04 3Q/04 4Q/04 -- 12% NA KANSAS CITY, KS --------------- AMLI at Cambridge Square Overland Park, KS 30% 408 3Q/00 3Q/01 2Q/02 2Q/03 408 100% 69% INDIANAPOLIS, IN ---------------- AMLI Carmel Center Carmel, IN 100% 322 2Q/01 2Q/02 2Q/03 4Q/03 138 74% 18% 49 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 3Q/02 4Q/03 4Q/04 29 55% 9% ----- 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 total Number of Apartment Homes. 50
AMLI RESIDENTIAL DEVELOPMENT SUMMARY September 30, 2002 (Dollars in thousands)
Joint Venture Company's Share of Required Equity Capital Partners' ---------------------------------------------- Total Equity Development Capital Funded Balance 2003/ Market/Community Costs (c) Debt (d) (e) Total to Date of 2002 2004 ---------------- ----------- ---------- --------- -------- -------- ---------- -------- ATLANTA, GA ----------- AMLI: at Kedron Village $ 20,200 -- 16,160 4,040 3,900 140 -- at Milton Park 35,000 -- (e) 26,250 8,750 7,334 1,025 391 at Barrett Walk 22,500 -- (e) 16,875 5,625 3,400 975 1,250 HOUSTON, TX ----------- AMLI at Kings Harbor 19,800 -- 14,850 4,950 4,900 50 AUSTIN, TX ---------- AMLI Downtown Austin (f) 50,920 30,920(f) 14,000 6,000 12,407 (6,407) -- KANSAS CITY, KS --------------- AMLI at Cambridge Square 32,200 -- (e) 22,540 9,660 9,660 -- INDIANAPOLIS, IN ---------------- AMLI Carmel Center 28,400 -- -- 28,400 22,126 3,300 2,974 CHICAGO, IL AMLI at Seven Bridges 82,200 60,000(g) 17,760 4,440 3,220 -- 1,220 -------- ------- ------- ------- ------- ------- ------- TOTAL $291,220 90,920 128,435 71,865 66,947 (917) 5,835 ======== ======= ======= ======= ======= ======= ======= 51 AMLI RESIDENTIAL DEVELOPMENT SUMMARY - CONTINUED September 30, 2002 (Dollars in thousands) Notes: (a) Based on the percentage of Construction Completed 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 existing fully funded loan commitment. (e) Upon stabilization, the partnership is expected to seek a permanent loan for approximately 65% of total costs. (f) Subsequent to the end of the quarter, AMLI formed a joint venture partnership with an institutional investor for the purpose of developing and owning this asset, and has obtained a commitment for a $30,920 construction loan from a bank. (g) Currently, the project is subject to a $50,000 construction loan. The partnership has obtained a commitment to fund a $60,000, 7.25%, 7-year permanent loan upon completion of development. 52
AMLI RESIDENTIAL LAND HELD FOR DEVELOPMENT OR SALE September 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 ====== 53