-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WuryzMZ9wxOJgT1d7dYCIKPvibQORGv8o35jfE+UT0GgjEHiSL4iBXY5OcjCQyu9 gOdTN/R+q2qFd9BhGT3Zyw== 0000892626-97-000021.txt : 19970430 0000892626-97-000021.hdr.sgml : 19970430 ACCESSION NUMBER: 0000892626-97-000021 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970320 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMLI RESIDENTIAL PROPERTIES TRUST CENTRAL INDEX KEY: 0000914724 STANDARD INDUSTRIAL CLASSIFICATION: 6798 IRS NUMBER: 363925916 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 001-12784 FILM NUMBER: 97560118 BUSINESS ADDRESS: STREET 1: 125 S WACKER DR STREET 2: STE 3100 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129845037 FORMER COMPANY: FORMER CONFORMED NAME: AMLI RESIDENTIAL PROPERTIES INC DATE OF NAME CHANGE: 19931112 10-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1996 Commission File Number 1-12784 AMLI RESIDENTIAL PROPERTIES TRUST (Exact name of registrant as specified in its charter) Maryland 36-3925916 (State of Organization) (I.R.S. Employer Identification No.) 125 South Wacker Drive, Suite 3100, Chicago, Illinois 60606 (Address of principal executive office) (Zip code) Registrant's telephone number, including area code: (312) 443-1477 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered - - ------------------- ------------------------------- Common Shares of Beneficial New York Stock Exchange Interest, $.01 par value Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $324,486,038 based on the closing price ($23.75) on the New York Stock Exchange for such shares on February 28, 1997. The number of the Registrant's Common Shares of Beneficial Interest, $.01 par value, outstanding as of December 31, 1996 was 14,812,035. Documents Incorporated By Reference Portions of the Proxy Statement for the annual shareholders' meeting to be held on April 28, 1997 are incorporated by reference into Parts I and III. TABLE OF CONTENTS Page ---- PART I Item 1. Business. . . . . . . . . . . . . . . . . . . . 1 Item 2. Communities . . . . . . . . . . . . . . . . . . 18 Item 3. Legal Proceedings . . . . . . . . . . . . . . . 25 Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . 25 PART II Item 5. Market for Registrant's Common Equity and Shareholder Matters . . . . . . . . . . . . 26 Item 6. Selected Financial Data . . . . . . . . . . . . 28 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . 30 Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . . . . 39 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. . . . . . . . . . . . . . 83 PART III Item 10. Trustees and Executive Officers of the Registrant . . . . . . . . . . . . . . . 83 Item 11. Executive Compensation. . . . . . . . . . . . . 83 Item 12. Security Ownership of Certain Beneficial Owners and Management. . . . . . . . 83 Item 13. Certain Relationships and Related Transactions. . . . . . . . . . . . . . 83 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . . . . . . . . . . 84 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 87 i PART I ITEM 1. BUSINESS THE COMPANY AMLI Residential Properties Trust ("AMLI" or the "Company") is a self- administered and self-managed real estate investment trust (a "REIT") engaged in the development, acquisition and management of upscale, institutional quality multifamily apartment communities in seven major metropolitan markets in the Southeast, Southwest and Midwest regions of the United States. Founded in 1980, AMLI became a publicly traded company through an initial public offering ("Initial Offering") in February, 1994. As part of its core strategy, AMLI differentiates itself through an internal growth strategy focused on branding its product and services, an external growth strategy balanced between both development and acquisition, geographic diversification in three regions and seven core cities, and accessing capital from both the public markets and from co-investment relationships with institutional partners. Since its initial public offering, the Company has formed strategic alliances with five institutional investors in 13 separate institutional joint ventures representing a total anticipated investment of approximately $300 million. At December 31, 1996, properties owned by four of these joint ventures were under development; completion costs for these properties totalled approximately $44 million. As of December 31, 1996, AMLI owned or had co-investment interests in 45 multifamily apartment communities (the "Communities") comprised of 16,229 apartment homes. Thirty-five of these communities, totalling 13,501 apartment homes, were stabilized as of December 31, 1996. An additional 10 locations were under development or in lease-up at that date (the "Development Communities"). When completed, these Development Communities will total 2,728 apartment homes. In addition, the Company owns land for the future development of six additional communities totalling approximately 2,418 apartment homes. AMLI is the sole general partner of, and controls a majority of the limited partnership interests in, Amli Residential Properties, L.P., a Delaware limited partnership (the "Operating Partnership") through which it owns its interests in the Communities. As of December 31, 1996, the Company owned 84% of the outstanding partnership interests ("OP Units") in the Operating Partnership. OP Units are convertible into Common Shares on a one-for-one basis. The Company conducts all its business through the Operating Partnership and its subsidiaries and affiliates. The Company's headquarters offices are located at 125 S. Wacker Drive, Suite 3100, Chicago, Illinois 60606, and its telephone number is (312) 443- 1477. In addition, AMLI has regional offices in both Dallas and Atlanta. COMPETITIVE ADVANTAGES The Company seeks to increase cash flow by intensively managing the Communities, selectively developing and acquiring additional high-quality multifamily communities and advising and co-investing with institutional partners. In pursuit of these strategies, the Company benefits from the following competitive advantages: DEVELOPMENT AND ACQUISITION EXPERTISE. AMLI has extensive experience in both the acquisition and development of upscale multifamily communities. AMLI focuses on institutional quality multifamily communities having high- quality construction, amenities, location and market position. The Company believes that over time these communities will realize returns exceeding national averages for multifamily properties due to higher expected annual growth in cash flows, reduced on-going maintenance costs and capital expenditures, and higher relative levels of residual values. The Company applies a long-term ownership perspective to the development process, utilizing high-quality building materials and designs communities which satisfy the current needs of residents and anticipate their future needs. AMLI acquires assets at times when capitalization rates are attractive and enhanced performance from the target communities is possible through application of the Company's management expertise. INSTITUTIONAL CO-INVESTMENTS. AMLI actively acquires and develops multifamily communities in co-investment joint ventures with institutional investment partners such as insurance companies, endowments, foundations, and public and private pension funds. The Company believes that co- investment partnerships create an opportunity to leverage the Company's acquisition, development and management expertise and generate higher returns on its invested equity capital. Since its initial public offering, and through December 31, 1996, AMLI has formed 13 such co-investment joint ventures, several of which involve new development, representing a total anticipated project cost of approximately $300 million. The Company's invested capital in these 13 joint ventures is expected to total approximately $40.6 million. In connection with its co-investment business, the Company has established strategic alliances with Allstate Insurance Company, Erie Insurance Group, The New York Common Retirement Fund, Northwestern Mutual Life Insurance Company and The Rockefeller Foundation. AMLI BRAND. All of the Communities are operated by the Company under the AMLI brand name. AMLI believes promoting its brand name creates an awareness in the marketplace of quality rental living and extraordinary customer service for both current and prospective residents. To maximize the effectiveness of the AMLI brand name, the Company has a wide range of programs and practices to maintain uniformly high quality service and consistent apartment quality at all of the Communities. RECENT DEVELOPMENTS Since the Initial Offering, the Company has expanded its portfolio of Communities through the acquisition, development and selective expansion of its apartment communities. DEVELOPMENT At the time of the Initial Offering, the Company and its predecessors had not begun the development of a new multifamily community for five years. Since that time, the development pipeline has grown extensively. Approximately 50% of the 3,686 apartment homes developed or under development by the Company have been built with a co-investment partner and the other 50% have been developed or are under development solely for the Company. As used herein, the "Company Development Communities" means Communities under development by the Company for its own account and the "Co-Investment Communities" refers to Communities under development on behalf of the Company's co-investment joint ventures. The tables set forth below, summarize the following information related to the Company Development Communities and the Co-Investment Development Communities: (i) the name and location of the community; (ii) the number of apartment homes to be constructed at each community; (iii) the percentage completion of the community as of December 31, 1996 and the projected completion date of each community; (iv) the anticipated development cost of each community and the amount thereof expended as of December 31, 1996; and (v) with respect to each Co-Investment Development Community, the Company's percentage ownership interest therein and the name of the joint venture partner. The Company Development Communities and Co- Investment Development Communities exclude AMLI at Sope Creek Crossing IV, a 232 apartment home community, which was completed as of December 31, 1995, AMLI at AutumnChase II, a 224 apartment home community, which was completed in June 1996 and AMLI at Pleasant Hill, a 502 apartment home community, which was completed in August 1996. COMPANY DEVELOPMENT COMMUNITIES -------------------------------
AMOUNT COMPANY PROJECTED ANTICIPATED EXPENDED DEVELOPMENT NO. OF COMPLETION COMPLETION DEVELOPMENT THROUGH COMMUNITIES LOCATION UNITS PERCENTAGE DATE COST 12/31/96 - - ----------- -------- ------ ---------- ---------- ----------- -------- (in thousands) (in thousands) AMLI at: Gleneagles II . . Dallas, Texas 264 98% Jan. 1997 $13,500 $13,198 Regents Center III. . . . . . . Overland Park, Kansas 124 94% Jan. 1997 7,700 7,253 Crown Colony II . . . . . . . Topeka, Kansas 64 59% Feb. 1997 3,600 2,129 AutumnChase III. . . . . . . Carrollton, Texas 240 16% Nov. 1997 14,100 2,238 Peachtree City. . Atlanta, Georgia 312 27% Nov. 1997 21,900 5,805 Northwinds I. . . . . . . . Atlanta, Georgia 400 23% Feb. 1998 26,800 6,203 ----- ------- ------- TOTAL . . . . . 1,404 $87,600 $36,826 ===== ======= =======
CO-INVESTMENT DEVELOPMENT COMMUNITIES -------------------------------------
AMOUNT CO-INVESTMENT COMPANY NO. PROJECTED ANTICIPATED EXPENDED CO-INVEST- DEVELOPMENT PERCENTAGE OF COMPLETION COMPLETION DEVELOPMENT THROUGH MENT COMMUNITIES OWNERSHIP LOCATION UNITS PERCENTAGE DATE COST 12/31/96 PARTNER - - ----------- ---------- ---------------- ----- ---------- ---------- ----------- ---------- ---------- (in (in thousands) thousands) AMLI at: River Park 40% Atlanta, Georgia 222 70% June 1997 $ 15,400 $ 10,786 Erie Insurance Group Aurora Crossing 25% Aurora, Illinois 272 61% Aug. 1997 24,500 14,930 The N.Y. Common Retirement Fund Barrett Lakes 35% Atlanta, Georgia 446 55% Nov. 1997 27,800 15,331 North- western Mutual Life Fossil Creek 25% Ft. Worth, Texas 384 27% Feb. 1998 23,700 6,374 The N.Y. Common Retirement Fund ----- -------- -------- 1,324 $ 91,400 $ 47,421 ===== ======== ========
The Company believes that the operating prospects for the Communities under development remain favorable based on current economic and other conditions existing in the areas in which the Company's development activities are focused. As with any development project, there are uncertainties and risks associated with development. While the Company has prepared development budgets and has estimated completion and stabilization target dates for each of the Development Communities based on what it believes are reasonable assumptions, there can be no assurance that actual costs will not exceed current budgets or that the Company will not experience construction delays due to the inability of building materials, weather conditions or other events beyond the Company's control. Similarly, adverse market conditions at the time that the Development Communities become available for leasing could affect the rental rates that may be charged and the period necessary to achieve stabilization at the Development Communities, which could have a material adverse effect on the financial condition of the affected Development Communities. CO-INVESTMENT VENTURES In November 1995, the Company, through a co-investment joint venture, began construction of the 446 apartment home community AMLI at Barrett Lakes on 54 acres of land located in Atlanta, Georgia. Of the total estimated development costs of $27.8 million, the co-venturer has provided $16.7 million of construction and permanent financing for this development, and the remaining costs are being funded from the Company's and the co- investor's equity contributions. In December 1995, the Company began construction of AMLI at River Park, a 222 apartment home community in Atlanta, Georgia. In June 1996, this community was contributed to a co-investment joint venture. Of the $15.4 million estimated development costs, the co-venturer provided $9.1 million in the form of a loan and the remaining costs are being funded from equity contributions from the Company and its co-investment partner. In September 1996, AMLI closed on two separate joint ventures with The New York Common Retirement Fund ("NYCRF") for the development of two multi- family residential communities. Through these ventures, the Company is currently developing a 272 apartment home community in metropolitan Chicago, Illinois and a 384 apartment home community in Ft. Worth, Texas. Construction of each of these Development Communities had been commenced earlier in the year by AMLI. Construction of AMLI at Aurora Crossing, the Development Community located in metropolitan Chicago, is projected to be completed in August of 1997, with stabilization expected in the first quarter of 1998. The development budget for this Development Community is approximately $24.5 million. Construction of AMLI at Fossil Creek, the Development Community located in Ft. Worth, is expected to be completed during the first quarter of 1998, with stabilization expected in early 1999. The development budget for this Development Community is approximately $23.7 million. The Company owns a 25% interest in the joint ventures that own these Development Communities and The New York Common Retirement Fund owns a 75% interest. ACQUISITIONS In March 1996, the Company, through a co-investment joint venture with Erie Insurance Group, acquired AMLI at Chevy Chase (formerly known as The Lincoln Club Apartments), a 592 unit luxury apartment community located in Buffalo Grove, Illinois, for a purchase price of approximately $45 million. Approximately $30 million of the purchase price was financed through 6.67% per annum, seven year mortgage debt. The AMLI at Chevy Chase Community was constructed in 1988 and contains 480,688 square feet in 19 two-story and 17 three-story buildings. This Community is set on 43.2 acres of land and has a clubhouse, two heated swimming pools, four tennis courts and a state-of- the-art fitness center. The Company owns a 33% interest and Erie Insurance Group owns a 67% interest in the joint venture that owns this Community. In April 1996, AMLI further expanded its presence in metropolitan Chicago through the acquisition of AMLI at Willowbrook (formerly Stewart's Glen Apartments) through a joint venture with Allstate Insurance Company for approximately $36 million. Approximately $24.5 million of the purchase price was financed through 7.79% per annum, seven year mortgage debt. AMLI at Willowbrook is a 488 unit luxury garden apartment community located in Willowbrook, Illinois. This Community was constructed in three phases, with Phase I having been completed in 1985 and Phases II and III in 1987. AMLI at Willowbrook contains 418,384 square feet in 59 two-story buildings. This Community is set on 36.5 acres of land and has two clubhouses, two start-of-the-art fitness centers, an aerobics room, two swimming pools, a tennis court, a volleyball court and laundry facilities in each building. The Company owns a 40% interest in the joint venture which owns this Community and Allstate Insurance Company owns a 60% interest. On February 28, 1997, AMLI, through a co-investment venture with the State Teachers Retirement Board of Ohio ("OTR"), acquired a 600 apartment home community in Wheaton, Illinois for approximately $48.8 million. The seller provided a ten-year $24.5 million loan with interest at 7.33%. AMLI owns a 10% interest and OTR owns a 90% interest in AMLI at Danada, L.L.C., the co-investment company that acquired this community. FINANCING ACTIVITIES During 1996, the Company continued to improve its balance sheet, capital structure and financing flexibility. In the first quarter, AMLI directly issued to four institutions and Amli Realty Co. ("ARC") 1,200,000 Series A Cumulative Convertible Preferred Shares of Beneficial Interest for $20 per share, or $24 million. The proceeds of the offering, less $82,500 of transaction costs, were used to reduce the Company's debt and to fund development and working capital requirements. The preferred shares are entitled to a preference upon liquidation of the Company and cumulative quarterly dividends equal to the greater of $0.43 per share or the current quarterly per share dividend on Common Shares. In March of 1996, ARC converted the 100,000 preferred shares acquired by it into Common Shares. During the fourth quarter, the Company completed a public offering of 2,976,900 common shares priced at $21.75 per share. The total shares issued included the underwriters' exercise of their over-allotment option. Proceeds totalled approximately $61 million (net of 5.75% in commissions and expenses) and were used to repay approximately $46 million of floating rate debt, to prepay a $4.8 million fixed rate mortgage loan, and to provide approximately $10 million of working capital for future development and acquisition activities. Upon completion of the offering, the Company's floating rate debt consisted of $7.5 million outstanding on its $97.5 million lines of credit with Wachovia Bank, First National Bank of Chicago ("First Chicago") and Harris Trust and Savings Bank, and $40.75 million in tax-exempt bonds. During the second quarter, three long-term fixed-rate loans were closed and two medium-term loans were simultaneously repaid. The Company closed two seven year fixed rate loans with CIGNA Investments, Inc. ("CIGNA") in the aggregate principal amount of $42 million that carry an average interest rate of 7.31% per annum. In April, AMLI obtained a ten year loan with the Federal National Mortgage Association ("FNMA") in an aggregate principal amount of approximately $44 million. This loan carries a fixed-rate of interest of 7.79% per annum. In connection with these fixed rate financings, two medium term loans with an aggregate outstanding balance of approximately $65 million were prepaid. As a result of these transactions, as of December 31, 1996, the weighted average maturity of the Company's outstanding indebtedness is approximately 5.5 years, the weighted average interest rate is 6.99% and four previously mortgaged wholly-owned Communities are unencumbered at December 31, 1996. During June 1996, AMLI renegotiated its line of credit with Wachovia Bank (the "Wachovia Line"). The line is used for general working capital needs and to fund construction of development properties. The line was increased in size from $50 million to $60 million and the interest rate on the facility was reduced to LIBOR plus 1.65% for borrowings secured by communities under development and to LIBOR plus 1.35% for borrowings secured by stabilized communities. As of December 31, 1996, a total of $7.5 million was outstanding under this facility. During 1996, the Company transferred a bank line of credit to First Chicago from another financial institution and subsequently expanded it from $27.5 million to $29.5 million. At this time, First Chicago is in the process of amending the line of credit to expand the line by approximately $11.5 to $41 million. The interest rate on this amended line of credit will be the same as the interest rate on the Wachovia Bank line of credit. UICI INVESTMENT On November 6, 1996, UICI, a NASDAQ National Market traded holding company with interests in insurance, financial services and technology and total assets of approximately $1.2 billion, acquired, through a stock for stock exchange, all the outstanding capital stock of ARC, a predecessor of the Company and the Company's largest shareholder. Separately, on November 4, 1996, UICI, through one of its affiliates, acquired 500,000 Common Shares from an existing shareholder of the Company. As a result of these transactions, UICI beneficially owns approximately 14.5% of the Company. The Chairman of UICI and its largest shareholder, Ronald L. Jensen, has had an association with members of AMLI's senior management for over 20 years, was one of ARC's original founders, and served on its Board of Directors from 1980 through 1982. ARC has informed the Company that it agreed to effect the exchange with UICI in order to provide liquidity to its shareholders, approximately 60% of whom are not Trustees, officers or employees of the Company, and to once again involve Mr. Jensen in the ownership and strategic direction of ARC. At a meeting of the Board of Trustees of the Company held on October 28, 1996, the Company exempted UICI and its affiliates from the ownership limitations in the Company's Declaration of Trust. As a result of this action, UICI and Gregory T. Mutz, the Chairman of the Company's Board of Trustees, may collectively own up to 34.9% of the outstanding shares of beneficial interest of the Company and UICI and Mr. Mutz may individually own 29.9% and 24.9%, respectively, of the outstanding shares of beneficial interest of the Company, subject to the group restrictions. Further, UICI, as an affiliate of ARC, is exempt from the "business combinations" and "control share acquisition" restrictions of the Maryland General Corporation Law. THE OPERATING PARTNERSHIP The Company carries on its business through the Operating Partnership and its affiliates, Amli Management Company ("AMC"), Amli Residential Construction, Inc. ("Amrescon") and Amli Institutional Advisors, Inc. ("AIA") (collectively the "Service Companies"). The Company is the sole general partner of the Operating Partnership, a Delaware limited partnership, through which it owns the Properties, interests in co- investment properties and interests in the Service Companies. At December 31, 1996, the Company owned an 84% partnership interest in the Operating Partnership, 10% was held by ARC and 6% was held by certain other third party investors. The Company's interest in the Operating Partnership entitles it to share in cash distributions from, and in the profits and losses of, the Operating Partnership in proportion to the Company's percentage ownership (apart from tax allocations of profits and losses to take into account pre-contribution property appreciation). In connection with each offering of the Company's Common Shares by the Company, the net proceeds from the issuance of any such common shares of the Company are contributed to the Operating Partnership in exchange for a corresponding number of OP Units. The Company holds one unit in the Operating Partnership for each common share that it has issued. The OP Units issued to Amli and certain Original Investors are convertible into common shares on a one-for-one basis. As the general partner of the Operating Partnership, the Company has the exclusive power under the agreement of limited partnership of the Operating Partnership to manage and conduct the business of the Operating Partnership. The Board of Trustees of the Company manages the affairs of the Company by directing the affairs of the Operating Partnership. The Operating Partnership will terminate in the year 2093 unless terminated earlier in connection with, among other things, a merger or a sale of all or substantially all of the assets of the Operating Partnership or upon a vote of the partners. THE SERVICE COMPANIES The management, institutional advisory and construction management businesses of the Company are conducted through AMC, AIA and Amrescon, respectively, because, among other things, the third-party income from their respective businesses might jeopardize the Company's REIT status under Sections 856 through 860 of the Code if such operations were carried on directly by the Operating Partnership. The Operating Partnership holds 100% of the nonvoting preferred stock of each of the Service Companies and also holds certain subordinated notes of AMC and AIA. The nonvoting preferred stock is entitled to dividends equal to 95% of all distributions of the Service Companies. ARC holds 95% of the voting common stock of each of the Service Companies which, in each case, is generally entitled to dividends equal to 4.75% of all distributions. The remaining 5% of the voting common stock of each of the Service Companies, entitled to .25% of all distributions, is owned by the Operating Partnership. The charter of each of the Service Companies requires the quarterly distribution as dividends of the "net operating cash flow" (as defined in each such charter) of each such Service Company, if there are funds legally available for dividends. Such provision of the charter of each of the Service Companies may not be changed without the consent of the holders of the preferred stock. Accordingly, the Operating Partnership is entitled to receive substantially all of the available net cash flow from each of the Service Companies through ownership of the preferred stock thereof and the subordinated notes, and thereby enjoys substantially all of the economic benefit of the businesses carried on by such companies. According to the charter of each of the Service Companies, a majority of the members of the board of directors of the respective Service Company must be individuals who are not officers, directors or employees of AMLI, and all contracts for services between a Service Company and AMLI must be approved by a majority of the unaffiliated directors of the relevant Service Company. Ownership of 95% of the voting common stock will enable ARC to control the election of the board of directors (including the unaffiliated directors) of the Service Companies. The holders of a majority of the nonvoting preferred stock of each Service Company are entitled to an approval right with respect to certain fundamental corporate actions, including the issuance of any additional shares of preferred stock or other senior securities, or a sale, lease or exchange of all or substantially all of the assets of, or the merger, consolidation or dissolution of, the respective Service Company. In addition, the Company has a right of first refusal (which may be assigned to a third party with the consent of ARC, such consent not to be unreasonably withheld) to acquire on its own behalf or on behalf of any controlled affiliate, the common stock of each of the Service Companies, subject to the consent of third-party clients and to applicable law. Such right of first refusal may only be exercised to the extent that the ownership of such common stock or assets would not disqualify the Company as a REIT. THE BUSINESS OF AMC AMC, a Delaware corporation, provides management and leasing services to each of the communities presently owned by the Company. In addition, AMC provides such services to the co-investment communities. AMC is expected to manage any additional multifamily communities acquired or developed by the Operating Partnership, as well as any additional co- investment communities acquired through separate account relationships of AIA, subject to the consent of the co-investment partners. Management and leasing services are provided to the Communities and the co-investment properties pursuant to the terms of a management contract which has an initial term of three years and which AMC has agreed not to terminate so long as the Operating Partnership is not in material breach of such contract. Residential property management and leasing services provided by AMC are performed at market rates. THE BUSINESS OF AIA AIA, an Illinois corporation, renders investment advice to institutional capital sources, primarily pension plans, endowments, foundations and insurance companies. AIA intends to continue to develop its institutional investment advisory business and will continue to manage and administer existing advisory relationships with institutional investors. The Company actively pursues co-investments through relationships administered by AIA. In this way, the Company seeks to diversify the sources of capital for investments in properties. In addition to generating advisory fee income for AIA, these separate account relationships have the potential to generate fee income for (1) AMC in cases where AMC is engaged to manage the properties acquired by the co- investment ventures and (2) Amrescon, in cases where Amrescon is engaged as general contractor with respect to co-investment development ventures. THE BUSINESS OF AMRESCON Amrescon, a Delaware corporation, provides general contracting, construction management and landscaping services to the Company and its managed ventures. Amrescon is based in Atlanta, Georgia, has a regional office in Dallas, Texas, and is engaged exclusively in the design, development, construction and landscaping of upscale multifamily properties on behalf of the Company. A division of Amrescon, Amli Landscape Co. performs all landscape installation and maintenance services for the Communities located in Atlanta. LEASES AMC uses a standard Company lease modified at each Community to the extent necessary to comply with state and local law or custom. The term of a lease varies with local market conditions, however, six-month and one- year leases are most common. Generally, the leases provide that unless the parties agree in writing to a renewal, the tenancy will convert at the end of the lease term to a month-to-month tenancy, subject to the terms and conditions of the lease, unless either party gives the other at least 30 days prior notice of termination. All leases are terminable by the Operating Partnership for nonpayment of rent, violation of property rules and regulations or other specified defaults. LEASING Employees of AMC are responsible for leasing activities at the Communities. Leasing consultants meet with prospective residents and show models and vacant units. The leasing consultants maintain contact with existing residents to determine the residents' level of satisfaction with their community. All leasing consultants participate in a comprehensive formal training program administered by AMC. AMC, as it deems necessary, may employ the services of, and pay customary fees to, unaffiliated real estate brokers, apartment locator services and existing tenants for locating prospective tenants. COMPETITION All of the Communities are located in developed areas that include other upscale apartment communities. The number of competitive upscale apartment communities in a particular area could have a material effect on AMC's ability to lease apartment units and on the rent charged at the Communities or at any newly developed or acquired communities. The Company may be competing with others that have greater resources than the Company and whose officers and directors have more experience than the Company's officers and Trustees. In addition, other forms of multifamily residential communities, and single-family housing, provide housing alternatives to potential residents of the communities. INSURANCE The Company believes that each of the Communities is covered by adequate fire, flood and property insurance provided by reputable companies and with commercially reasonable deductibles and limits. The Company maintains comprehensive liability, all-risk property insurance coverage with respect to the Communities and with policy specifications, limits deductibles customarily carried for similar communities. The Company has obtained title insurance insuring fee title to the Communities in an aggregate amount which the Company believes to be adequate. ENVIRONMENTAL MATTERS Many jurisdictions have adopted laws and regulations relating to environmental controls and the development of real estate. Such laws and regulations could affect the Communities and any additional communities acquired or developed by the Company in the future and/or operate to reduce the number and attractiveness of investment opportunities available to the Company. The effect upon the Company of the application of such laws and regulations cannot be predicted. Such laws and regulations have not had a material effect on the Company's financial condition and results of operations to date. The Company is not aware of any environmental condition on any of the Communities, or the communities planned to be developed by the Company which is likely to have a material adverse effect on the Company's financial condition and results of operations. EMPLOYEES The Company, the Operating Partnership and the Service Companies employ a total of approximately 450 persons. AMC employs substantially all of the professional employees that are currently engaged in the residential property management and leasing business on behalf of the Company. GROWTH STRATEGIES The Company seeks to increase cash flow by intensively managing the Communities, selectively developing and acquiring additional high-quality multifamily communities, and advising and co-investing with institutional partners. The Company believes that, over time, a portfolio consisting of high-quality properties, which the Company believes is typical of its portfolio, will realize returns exceeding national averages for multifamily properties due to expected higher annual growth in cash flows, reduced on- going maintenance costs and capital expenditures, and higher relative levels of residual market values. GROWTH FROM PROPERTY OPERATIONS The Company seeks to increase cash flow at the Communities through rent increases while maintaining high occupancy rates and aggressive management of its operating expenses. As of December 31, 1996, the weighted average occupancy rate of the stabilized Communities was 94%, and the average monthly rental rate per apartment home was $686, or $0.80 per square foot. The Company owns multifamily communities with service, lifestyle and physical amenities that residents value and that support higher rental rates. Typical services that are provided at the Communities, which are customary for similar upscale multifamily properties, include pet care or plant watering for out-of-town tenants; on- site overnight delivery drop-off boxes; on-site pick-up of dry cleaning or other items; occasional social events for residents designed to provide a sense of community; frequent maintenance programs; and a policy of guaranteeing attention to any maintenance or repair request form a tenant within 48 hours. AMLI believes that a key element of its continued success is its ability to create brand loyalty in the mind of the resident customer. All communities owned and operated by the Company use the AMLI [registered trademark] brand name as part of the strategy to promote brand identity for quality living, as well as to create franchise value. The Company believes that the AMLI [registered trademark] brand name creates an awareness in the marketplace such that customers of the Company equate the AMLI [registered trademark] brand with quality multifamily communities and exceptional customer service. The Company believes the expertise and experience of its on-site personnel are essential to the success of its brand strategy and cash flow growth from the Communities. A wide range of programs and practices are in place to ensure that the Company's on-site personnel provide uniformly high-quality service. These programs and practices include the following: (i) incentive-based compensation that rewards employees who achieve superior results; (ii) extensive training programs focusing on marketing, selling skills and negotiating techniques; (iii) requiring leasing agents to have a strong knowledge of the Communities and competing properties; (iv) periodic unit inspections designed to ensure that vacant apartments are rent-ready and attractive to show; (v) a newsletter that creates a sense of a team and gives special recognition to employees who have made outstanding contributions or who have experienced a significant personal event; (vi) manager training programs that focus on the financial analysis applicable to apartment communities; (vii) development training for all maintenance staff to further skills and knowledge of industry practices; (viii) annual incentive group trips for managers, leasing personnel and maintenance employees; and (ix) written manuals describing various policies and procedures that are to be observed by employees. In addition, the Company has training facilities in Dallas and Atlanta that are used for training programs and seminars for management, leasing and maintenance employees. By establishing critical mass in each of its markets, the Company expects to achieve economies of scale in its operations, resulting in reduced operating and administrative expenses without reductions in service. In addition, the relatively low average age of the Communities contributes to reduced operating and maintenance expenses. At December 31, 1996, the average age of the stabilized Communities was 8.2 years. The Company also believes that attention to landscaping and physical appearance contributes to reducing resident turnover and enhances the rental rates and occupancy levels of the Communities. Additionally, AMLI has a dedicated team whose function is to evaluate new or enhanced products, features or services that might be incorporated in either the apartment homes or the Communities to produce complementary income from property operations and maximize customer/resident satisfaction within the Communities. some of the products, features and services either in existence or being considered include the construction of carports and garages, private phone and cable systems, custom rental insurance, energy efficient lighting programs, water submetering, bulk purchases of utilities and card key systems for laundry facilities. DEVELOPMENT STRATEGIES The Company actively pursues the development of new properties. The Company seeks to develop multifamily properties that meet an identified market demand, are well-located in markets the Company believes will experience above-average growth rates and produce first-year stabilized cash on cash returns of 100 to 200 basis points higher than capitalization rates available on acquisitions in these markets. The Company's management has significant experience in the development of multifamily properties and believes that this expertise will permit it to successfully capitalize on new development opportunities. The Company has identified certain sub-markets within its seven identified cities where strong multifamily property demand exceeds the level of new construction. The Company currently has development underway in Chicago, Atlanta, Dallas and Kansas City. In addition, the Company owns a land parcel in each of Chicago, Atlanta, Austin and Dallas, which in the aggregate are comprised of 106 acres, on which it expects to develop approximately 1,674 apartment homes. The following table summarizes the Company's development activities for the period from the date of its initial public offering in February 1994 (the "Initial Offering") through December 31, 1996: AMLI DEVELOPMENT ACTIVITIES No. of Communities Developed No. of Estimated or Under Apartment Development Year Development (1) Homes Budget (2) - - ---- --------------- --------- ------------ 1994 . . . . . . . . . . 2 734 $ 37,600,000 1995 . . . . . . . . . . 5 1,280 75,900,000 1996 . . . . . . . . . . 6 1,672 114,600,000 --- ----- ------------ Total. . . . . . . . 13 3,686 $228,100,000 === ===== ============ - - -------------------- (1) Represents the number of Communities for which development was commenced during the applicable year. Of the Communities developed by the Company since the Initial Offering, eight Communities were developed by the Company for its own account and five for co-investment joint ventures. The Company's ownership interest in these co-investment joint ventures ranges from 25% to 40%. (2) The Company's share of the total estimated development budget is expected to be $148.7 million. AMLI's development philosophy is to design communities and apartment homes that meet the needs of both current and prospective residents. The Company builds to hold and manage for long-term investment and, as such, utilizes high quality, long-lasting building products for exterior and interior construction. The Communities are extensively landscaped to enhance curb appeal and to create an attractive living environment for the residents. The apartment homes are designed and appointed with features in select units such as more closet space, larger kitchens with mirrored backsplashes and upgraded appliance packages, nine foot ceilings, crown molding, built-in work spaces, additional wiring to accommodate private phone and cable systems, garden-style tubs and double vanities. ACQUISITION STRATEGIES The Company actively pursues the acquisition of new properties. The Company seeks to acquire, directly or through co-investments, multifamily communities that are available at attractive prices, capable of enhanced performance through application of the Company's management expertise and that are in the Company's target markets. The Company follows a strategy of acquiring (directly or through co-investments) institutional quality apartment communities, which typically have high-quality construction, amenities, location and market position, and are therefore attractive investments for institutional investors, such as insurance companies, endowments, foundations and pension funds. The following table summarizes the Company's acquisition activities for the period from the date of the Initial Offering through December 31, 1996: AMLI ACQUISITION ACTIVITIES No. of No of Total Communities Apartment Acquisition Year Acquired (1) Homes Costs (2) - - ---- ------------ ---------- ------------ 1994 . . . . . . . . . . . 8 2,184 $ 99,428,000 1995 . . . . . . . . . . . 3 794 51,763,000 1996 . . . . . . . . . . . 2 1,080 82,152,000 --- ----- ------------ Total. . . . . . . . . 13 4,058 $233,343,000 === ===== ============ - - -------------------- (1) Of these acquisitions, five Communities were acquired by the Company directly and eight through co-investment joint ventures. The Company's ownership interest in these co-investment joint ventures ranges from 15% to 40%. (2) The Company's share of the total acquisition costs was $104.5 million. The Company currently focuses on acquiring properties in selected markets in the Southwest, Southeast and Midwest regions of the united States. The Company's acquisition teams consist of experienced finance, development and asset management professionals working together to identify opportunities, evaluate property information, negotiate and successfully execute favorable transactions for the Company. The Company's acquisition process is driven by thorough market research. Successful acquisitions are based upon a knowledge and careful analysis of employment, population and income trends, quality of infrastructure, retail and commercial services, transportation and utility systems, schools and property tax policies. The Company's acquisition teams review and monitor economic data and economic development information and maintain close contact with real estate owners, developers, brokers, lenders, insurance companies, government agencies and other institutions to identify potential properties for acquisition by the Company. INSTITUTIONAL CO-INVESTMENTS AMLI actively acquires and develops multifamily communities in co- investment joint ventures with institutional investment partners such as insurance companies, endowments, foundations, and public and private pension funds. The Company believes that these co-investment partnerships create an opportunity to leverage the Company's acquisition, development and management experience and generate higher returns on its invested capital. AMLI differentiates itself from other multifamily REITs through its co-investment business and its established relationships with a number of institutional partners. By co-investing, AMLI is able to (i) generate higher returns on its equity investment (as compared to wholly-owned communities) through the receipt of supplemental acquisition, development, construction and other fee income; (ii) build market share and thereby benefit from economies of scale; (iii) expand the AMLI {registered trademark] brand identity; and (iv) diversify its sources of capital for its acquisition and development activities. In addition to the incremental fee income, AMLI receives its pro rata share of the real estate income generated by the on-going operation of each community owned through a co- investment joint venture. All of the Co-Investment Communities are managed by the Company and operated under the AMLI [registered trademark] brand name. While each co-investment is structured individually, in a typical venture the Company (i) acts as the general partner or managing member of the venture; (ii) handles the administration of the venture; (iii) manages the day-to-day operations of the community held by the venture; (iv) in the case of a venture with a property under development, oversees construction and development; and (v) recommended the sale or refinancing of the property. All of AMLI's co-investments are made on a pari passu basis with its co-investment partners and any disputes over sale or refinancing decisions are generally resolved through the exercise of a buy-sell provision. As of December 31, 1996, the Company had established co- investment relationships with Allstate Insurance Company, Erie Insurance Group, The New York Common Retirement Fund, Northwestern Mutual Life Insurance Company and The Rockefeller Foundation. Since the Initial Offering, the Company has entered into 13 co- investment relationships for the acquisition or development of multifamily apartment communities. The table below summarizes the co-investment activities of the Company since the Initial Offering: AMLI CO-INVESTMENT ACTIVITIES No. of No. of Total No. of Apartment No. of Apartment No. of Communities Homes Communities Homes Apartment Year Acquired Acquired Developed(1) Developed(2) Homes - - ---- ----------- --------- ------------ ------------ --------- 1994 . . . . 3 1,026 1 502 1,528 1995 . . . . 3 794 1 446 1,240 1996 . . . . 2 1,080 3 878 1,958 --- ------ --- ------ ------ Total. . . 8 2,900 5 1,826 4,726 === ====== === ====== ====== - - -------------------- (1) Represents the number of Communities for which development was commenced during the applicable year. (2) Represents the number of apartment homes planned for the Community for which development was commenced in the applicable year. The table below sets forth the total expected capital outlays for all 13 of these development and acquisition ventures, the Company's expected share of such capital requirements and the one-time and recurring annual fee income that the Company and the Service Companies have received from these 13 joint venture relationships through December 31, 1996: CO-INVESTMENT ACTIVITIES SINCE THE INITIAL OFFERING 1994 1995 1996 Total (4) ----------- ----------- ------------ ------------ Total Expected Project Cost (1). . . . .$71,191,000$79,682,000 $147,819,000 $298,692,000 AMLI Expected Equity Investment . . . .7,641,000 7,548,000 25,415,000 40,604,000 Actual Fee Income to AMLI and the Service Companies Initial or One-Time Fees (2). . . . . . . . 287,000 607,000 1,778,000 2,672,000 Annual Fee Income (3). . 221,000 769,000 1,363,000 2,353,000 - - -------------------- (1) Includes $157.9 million which has been or will be debt financed. Total expected costs are included in the year in which a development project begins or an acquisition closes. (2) The one-time fee income is shown net of intercompany eliminations to the extent of the Company's percentage interest in its co-investment joint ventures. One time fees include general contractor fees, development and redevelopment fees and property acquisition fees. The amounts shown represent the portion of the fees earned in the applicable year. The initial and one-time fee income for 1996 represents amounts earned by the Company for the year ended December 31, 1996. Subsequent to December 31, 1996, additional one time fees of approximately $2,136,000 are anticipated to be earned by the Company and the Service Companies in connection with the completion of four Communities under development on behalf of existing co-investment joint ventures. (3) Annual fee income includes property management fees, asset management fees and partnership administration fees. The amounts shown represent the portion of the fees earned in the applicable year. The annual fee income for 1996 represents amounts earned by the Company for the year ended December 31, 1996. Annual fee income will increase as additional co- investment communities under development are completed. The Company has received indications of interest and is pursuing other commitments for the acquisition or development of additional co-investment communities. In addition, the Company is continually working to expand the base of its institutional joint venture partners. HISTORY OF THE AMLI RESIDENTIAL PROPERTY BUSINESS The Company was formed in February 1994 to continue and expand the multifamily property business previously conducted by ARC. ARC was founded in 1980 by Gregory T. Mutz and John E. Allen, the Chairman and Vice- Chairman of the Company, respectively. Ronald L. Jensen, Chairman of UICI, served on ARC's Board of Directors from 1980 to 1982. From the date of its inception through the date of the Offering, ARC focused on owning, managing, leasing, acquiring and developing upscale residential apartment communities in the Southwest, Southeast and Midwest areas of the United States. During the period from 1982 to 1989, ARC was actively engaged in both the development and acquisition of multifamily communities. From 1989 through the date of the Offering, ARC exclusively pursued acquisition opportunities due to ARC's belief that this strategy provided a more favorable return relative to the risk taken than did the development of new properties during this period. From the date of the Initial Offering to the present, AMLI has pursued a strategy of selective acquisitions and developments in its primary markets. Prior to 1994 all communities currently wholly-owned were originally acquired as co-investments between ARC and the Original Investors in various Property Partnerships. The table below sets forth ARC's and the Company's history of acquiring and developing apartment projects:
AT DECEMBER 31, ------------------------------------------------------------------- 1982- 1996 1995 1994 1993 1992 1991 1990 ------- ------- ------- ------- ------- ------- ------- WHOLLY-OWNED: Units at beginning of year . . . 9,600 9,789 8,207 6,793 5,673 5,103 -- Units Acquired . . . . . . . . . -- -- 1,582 1,414 1,120 570 3,460 Units Sold . . . . . . . . . . . -- (421) -- -- -- -- -- Units Developed. . . . . . . . . 224 232 -- -- -- -- 1,643 Total wholly owned units at end of year. . . . . . . . 9,824 9,600 9,789 8,207 6,793 5,673 5,103 CO-INVESTMENTS: Units at beginning of year . . . 2,245 1,451 425 425 425 425 -- Units Acquired . . . . . . . . . 1,080 794 1,026 -- -- -- 150 Units sold . . . . . . . . . . . (150) -- -- -- -- -- -- Units Developed. . . . . . . . . 502 -- -- -- -- -- 275 Total co-investment units at end of year . . . . . . . . 3,677 2,245 1,451 425 425 425 425 Total units. . . . . . . 13,501 11,845 11,240 8,632 7,218 6,098 5,528
ITEM 2. COMMUNITIES STABILIZED COMMUNITIES The Communities include 35 stabilized multifamily apartment communities containing 13,501 apartment homes operated under the AMLI [registered trademark] brand name. Twenty-four of the stabilized Communities, containing an aggregate of 9,824 apartment homes, are directly owned by the Company (the "Wholly-Owned Communities") and eleven Communities, containing an aggregate of 3,677 apartment homes, are owned through co-investment joint ventures (the "Co-Investment Communities"). The stabilized Communities are located in the markets described in the table below: Wholly-Owned Co-Investment Total Communities Communities ------------- ------------ ------------ Location No. Units No. Units No. Units - - -------- ---- ----- ---- ----- ---- ----- Dallas/Ft. Worth, Texas. . . . . . . . . 11 4,312 11 4,312 -- -- Atlanta, Georgia . . . . 7 3,314 4 2,420 3 894 Chicago, Illinois. . . . 5 1,694 1 253 4 1,441 Austin, Texas. . . . . . 4 1,523 3 935 1 588 Indianapolis, Indiana. . 1 996 1 996 -- -- Eastern Kansas . . . . . 4 908 4 908 -- -- Houston, Texas . . . . . 3 754 -- -- 3 754 --- ------ --- ----- --- ----- Total. . . . . . . . 35 13,501 24 9,824 11 3,677 === ====== === ===== === ===== As of December 31, 1996, the average age of the stabilized Communities was approximately 8.2 years, the average occupancy rate of the stabilized Communities was 94%, and the average monthly rental rate per apartment home was $686. DEVELOPMENT COMMUNITIES The Development Communities consist of ten multifamily apartment communities or new phases of existing Communities which upon completion will contain 2,728 apartment homes. See "Growth Strategies-Development Strategy" for a discussion of the Company's development activities. The Development Communities are under development in the markets described in the table below: Company Co-Investment Development Development Total Communities Communities ------------- ------------ ------------- Location No. Units No. Units No. Units - - -------- ---- ----- ---- ----- ----- ----- Atlanta, Georgia . . . . 4 1,380 2 712 2 668 Dallas/Ft. Worth, Texas . . . . . . . . . 3 888 2 504 1 384 Chicago, Illinois. . . . 1 272 -- -- 1 272 Eastern Kansas . . . . . 2 188 2 188 -- -- ---- ----- ---- ----- ---- ----- Total. . . . . . . . 10 2,728 6 1,404 4 1,324 ==== ===== ==== ===== ==== ===== The Wholly-Owned Communities and the Co-Investment Communities are primarily oriented to residents demanding high levels of services and contain numerous tenant amenities, such as fitness centers, swimming pools, tennis courts, basketball and volleyball courts, miles of jogging trails and nature walks. Most of the apartment units have a patio, porch or sunroom, and many offer one or more additional features such as vaulted ceilings, microwave ovens, Palladian windows, fireplaces and washers and dryers or washer/dryer connections. The Communities and Co-Investment Communities that were developed by AMLI have won numerous awards for design, landscaping and architecture. The table set forth below summarizes the following information related to the Communities and the Co-Investment Communities: (i) the name and location of the communities; (ii) the year each property was completed; (iii) the number of units at, and average unit size of each property; (iv) the average rent per unit; (v) the weighted average physical occupancy of each property from January 1, 1996 through December 31, 1996; and (vi) with respect to the Co-Investment Communities, the Company's percentage ownership thereof.
1996 1996 AVERAGE WEIGHTED AVERAGE COLLECTED AVERAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL WHOLLY-OWNED COMMUNITIES LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY - - ------------------------ -------- --------- -------- ------------- -------- ---------- DALLAS/FT. WORTH, TX AMLI at AutumnChase Carrollton 1987 450 832 $659 94.5% AMLI at Bear Creek Euless 1986 350 786 563 93.7% AMLI at Chase Oaks Plano 1986 250 775 657 95.6% AMLI at Gleneagles Dallas 1987 326 841 614 96.5% AMLI on the Green Ft. Worth 1990/1993 424 846 675 94.5% AMLI at Nantucket Dallas 1986 312 712 521 95.5% AMLI of North Dallas Dallas 1985/1986 1,032 878 621 95.2% AMLI at Reflections Irving 1986 212 822 647 93.4% AMLI on Rosemeade Dallas 1987 236 869 634 96.2% AMLI on Timberglen Dallas 1985 260 774 567 95.5% AMLI at Valley Ranch Irving 1985 460 848 652 93.6% ----- ------ ---- ----- 4,312 829 623 94.9% ----- ------ ---- ----- AUSTIN, TX AMLI at the Arboretum Austin 1983 231 771 684 93.9% AMLI in Great Hills Austin 1985 344 747 666 94.3% AMLI at Martha's Vineyard Austin 1986 360 704 625 91.3% ----- ------ ---- ----- 935 736 654 93.1% ----- ------ ---- ----- ATLANTA, GA AMLI at Sope Creek Marietta 1982/1983 695 910 682 92.6% AMLI at Spring Creek Dunwoody 1985-1989 1,180 916 697 94.6% AMLI at Vinings Atlanta 1985 208 1,104 776 94.9% AMLI at West Paces Atlanta 1992 337 933 854 93.9% ----- ------ ---- ----- 2,420 933 721 94.0% ----- ------ ---- ----- 1996 1996 WEIGHTED AVERAGE AVERAGE AVERAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL WHOLLY-OWNED COMMUNITIES LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY - - ------------------------ -------- --------- -------- ------------- -------- ---------- EASTERN KANSAS AMLI at Alvamar Lawrence 1989 152 828 645 94.7% AMLI at Crown Colony Topeka 1986 156 776 554 90.2% AMLI at Regents Center Overland Park 1991-1995 300 914 730 92.8% AMLI at Sherwood Topeka 1993 300 868 604 91.1% ----- ------ ---- ----- 908 860 644 92.1% ----- ------ ---- ----- INDIANAPOLIS, IN AMLI at Riverbend Indianapolis 1983/1985 996 824 569 93.8% ----- ------ ---- ----- CHICAGO, IL AMLI at Park Sheridan Chicago 1986 253 855 889 93.2% ----- ------ ---- ----- TOTAL WHOLLY-OWNED COMMUNITIES AT DECEMBER 31, 1996 9,824 849 $654 94.0% ===== ====== ==== =====
1996 1996 WEIGHTED AVERAGE AVERAGE AVERAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL CO-INVESTMENT COMMUNITIES LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY - - ------------------------- -------- --------- -------- ------------- -------- ---------- ATLANTA, GA AMLI at Pleasant Hill (40%) (1) Gwinnett County 1996 502 1,000 $791 95.8% AMLI at Towne Creek (1%) Gainesville 1989 150 811 624 94.1% AMLI at Willeo Creek (30%) Roswell 1989 242 1,229 770 94.5% ----- ------ ---- ----- 894 1,030 714 94.4% ----- ------ ---- ----- CHICAGO, IL AMLI at Chevy Chase (33%) Buffalo Grove 1988 592 812 872 93.2% AMLI at Prairie Court (1%) Oak Park 1987 125 845 1,041 94.1% AMLI at Willowbrook (40%) Willowbrook 1987 488 857 864 92.6% AMLI at Windbrooke (15%) Buffalo Grove 1987 236 903 906 95.1% ----- ------ ---- ----- 1,441 845 890 93.4% ----- ------ ---- ----- AUSTIN, TX AMLI at Park Place (25%) Austin 1985 588 677 598 96.7% ----- ------ ---- ----- HOUSTON, TX AMLI at Champions Centre (15%) Houston 1994 192 857 711 94.1% AMLI at Champions Park (15%) Houston 1991 246 902 679 90.8% AMLI at Greenwood Forest (15%) Houston 1995 316 984 731 88.7% ----- ------ ---- ----- 754 924 709 90.7% ----- ------ ---- ----- TOTAL CO-INVESTMENT COMMUNITIES AT DECEMBER 31, 1996 3,677 879 $771 93.6% ===== ====== ==== ===== TOTAL 13,501 857 $683 93.9% ===== ====== ==== ===== (1) Fourth quarter average occupancy; in lease-up prior to the fourth quarter.
OCCUPANCY The following is a listing of approximate physical occupancy levels by quarter for the Company's wholly-owned communities:
1996 1995 ------------------------- ------------------------- NUMBER OF AT AT AT AT AT AT AT AT LOCATION/PROPERTY UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31 - - ------------------ ---------- ----- ----- ----- ------ ------ ----- ------ ------ DALLAS/FT. WORTH, TEXAS AMLI at AutumnChase. . . . 450 95% 95% 96% 94% 93% 98% 96% 100% AMLI at Bear Creek . . . . 350 92% 93% 95% 95% 93% 97% 94% 99% AMLI at Chase Oaks . . . . 250 96% 96% 95% 98% 96% 97% 99% 96% AMLI at Gleneagles . . . . 326 95% 98% 97% 95% 96% 97% 100% 98% AMLI on the Green. . . . . 424 89% 96% 98% 97% 92% 95% 97% 98% AMLI at Nantucket. . . . . 312 98% 97% 95% 98% 96% 97% 99% 97% AMLI of North Dallas . . . 1,032 94% 95% 97% 97% 95% 98% 98% 97% AMLI at Reflections. . . . 212 99% 97% 88% 95% 93% 98% 98% 93% AMLI on Rosemeade. . . . . 236 98% 97% 98% 98% 95% 99% 98% 98% AMLI on Timberglen . . . . 260 99% 97% 96% 97% 92% 99% 98% 94% AMLI at Valley Ranch . . . 460 92% 93% 95% 95% 94% 96% 98% 91% ----- ----- ----- ----- ----- ----- ----- ----- ----- 4,312 94% 96% 96% 96% 94% 97% 98% 96% ----- ----- ----- ----- ----- ----- ----- ----- ----- AUSTIN, TEXAS AMLI at the Arboretum. . . 231 95% 96% 97% 96% 95% 98% 99% 93% AMLI in Great Hills. . . . 344 94% 97% 97% 96% 91% 94% 95% 98% AMLI at Martha's Vineyard. 360 95% 95% 95% 95% 94% 96% 94% 96% ----- ----- ----- ----- ----- ----- ----- ----- ----- 935 95% 96% 96% 96% 93% 96% 96% 96% ----- ----- ----- ----- ----- ----- ----- ----- ----- ATLANTA, GEORGIA AMLI at Sope Creek . . . . 695 93% 92% 96% 95% 95% 97% 95% 98% AMLI at Spring Creek . . . 1,180 93% 97% 96% 96% 94% 96% 96% 96% AMLI at Vinings. . . . . . 208 95% 95% 99% 99% 98% 100% 99% 97% AMLI at West Paces . . . . 337 98% 95% 97% 92% 96% 99% 97% 98% ----- ----- ----- ----- ----- ----- ----- ----- ----- 2,420 94% 95% 96% 95% 95% 97% 96% 97% ----- ----- ----- ----- ----- ----- ----- ----- ----- 1996 1995 ------------------------- ------------------------- NUMBER OF AT AT AT AT AT AT AT AT LOCATION/PROPERTY UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31 - - ------------------ ---------- ----- ----- ----- ------ ----- ----- ------ ------ EASTERN KANSAS AMLI at Alvamar. . . . . . 152 99% 98% 96% 95% 96% 96% 94% 94% AMLI at Crown Colony . . . 156 95% 96% 96% 86% 86% 96% 94% 96% AMLI at Regents Center . . 300 90% 95% 94% 98% 94% 92% 98% 96% AMLI at Sherwood . . . . . 300 96% 97% 97% 89% 91% 98% 92% 91% ----- ----- ----- ----- ----- ----- ----- ----- ----- 908 94% 97% 96% 93% 92% 95% 95% 94% ----- ----- ----- ----- ----- ----- ----- ----- ----- INDIANAPOLIS, INDIANA AMLI at Riverbend. . . . . 996 93% 96% 94% 94% 93% 95% 95% 93% ----- ----- ----- ----- ----- ----- ----- ----- ----- ORANGE COUNTY, CALIFORNIA Club Laguna. . . . . . . . N/A N/A N/A N/A N/A N/A N/A 91% 95% ----- ----- ----- ----- ----- ----- ----- ----- ----- CHICAGO, ILLINOIS AMLI at Park Sheridan. . . 253 90% 92% 97% 96% 92% 99% 94% 96% ----- ----- ----- ----- ----- ----- ----- ----- ----- 9,824 94.0% 95.6% 95.8% 95.4% 93.9% 96.7% 96.2% 95.8% ===== ===== ===== ===== ===== ===== ===== ===== =====
ITEM 3. LEGAL PROCEEDINGS None of the Company, the Operating Partnership, the Service Companies or the co-investment partnerships are presently subject to any material litigation nor, to the Company's knowledge, has any material litigation been threatened. The Company is party to routine litigation and administrative proceedings arising in the ordinary course of business, most of which are expected to be covered by liability insurance and none of which individually or in the aggregate are expected to have a material effect on the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters submitted to a vote to the Company's shareholders during the fourth quarter of the year ended December 31, 1996. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND SHAREHOLDER MATTERS The Company's common shares began trading on the NYSE on February 9, 1994, under the symbol "AML." The following table sets forth the quarterly high and low sales prices per share as reported on the New York Stock Exchange Composite Tape by CompuServe and the dividends paid by the Company with respect to the period noted.
1996 1995 ----------------------------- ----------------------------- DIVIDENDS DIVIDENDS PER SHARE PER SHARE HIGH LOW (1) HIGH LOW (1) ------ ----- --------- ------ ----- --------- First Quarter . . . . . . . . . . . . $21.38 $19.38 $.43 $19.75 $17.00 $.43 Second Quarter . . . . . . . . . . . . 21.00 18.88 .43 20.50 17.63 .43 Third Quarter. . . . . . . . . . . . . 20.88 19.75 .43 20.13 18.25 .43 Fourth Quarter . . . . . . . . . . . . 23.50 20.25 .43 20.38 18.38 .43 (1) The Company paid dividends with respect to these quarters in the quarter immediately following the quarter for which they are paid.
Dividends are declared and paid in the second month following the end of the calendar quarter in which the related cash flow from operations is generated. On February 28, 1997, the last reported sale price of the common shares on the NYSE was $23.75 per share. On the same date, the Company had 14,812,035 common shares outstanding held by 227 shareholders of record. The Company's current dividend payment level equals an annual rate of $1.72 per common share. The Company anticipates that it will continue to make regular quarterly dividend payments. Approximately 33% of dividends paid during 1996 represented a return of capital, and the Company estimates that approximately 20% of the total dividends to be paid in 1997 will be treated as a return of capital. Future distributions by the Company will be at the discretion of the Board of Trustees and will depend on the actual cash available for distribution and funds from operations of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as the Board of Trustees deems relevant. The annual dividend payments for calendar year 1996 necessary for the Company to maintain its status as a REIT was approximately $.72 per share. ITEM 6. SELECTED FINANCIAL DATA
HISTORICAL (in thousands) ----------------------------------------------------------------------- 1996 1995 1994 1993 1992 ----------- ----------- ---------- ----------- ----------- OPERATING DATA: Revenue. . . . . . . . . . $ 78,271 73,877 65,215 48,534 39,280 Income (loss) before minority interest and extraordinary item . . . . . . . . . . 19,949 17,006 13,398 (1,695) (3,304) Net income (loss). . . . . 15,250 13,719 8,710 (1,695) (1,534) Net income per common share. . . . . . . . . . 1.11 1.18 .75(A) N/A N/A BALANCE SHEET DATA: Residential real estate, before accumulated depreciation. . . . . . . $ 495,519 442,865 451,762 338,895 263,877 Total assets . . . . . . . 504,357 433,227 442,619 311,236 242,680 Total debt . . . . . . . . 202,013 215,255 217,687 263,021 202,360 Minority interest. . . . . 44,871 39,077 42,743 -- -- Shareholders'/ partners' equity. . . . . 242,022 166,163 170,161 39,157 33,340 OTHER DATA: Funds from operations (B). . . . . . . . . . . 32,009 27,404 22,033(A) 8,021 4,744 Funds from operations per common share . . . . 2.01 1.90 1.53(A) N/A N/A Cash dividends paid per common share . . . . . . 1.72 1.71 1.05(A) N/A N/A Net cash flow from operating activities . . 31,934 28,334 26,269 10,594 5,195 Net cash flow for investing activities . . (66,864) (2,551) (143,308) (71,796) (29,838) Net cash flow from (for) financing activities . . 42,942 (26,964) 110,326 64,951 26,902 (A) The information presented is for the ten and one-half month period ended December 31, 1994 based on shares and units outstanding during the period. (B) Industry analysts generally consider funds from operations to be an appropriate measure of the performance of an equity REIT. Funds from operations is defined as net income (computed in accordance with generally accepted accounting principles), excluding gains (losses) from debt restructuring and sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. Funds from operations does not represent cash flows from operations as defined by generally accepted accounting principles ("GAAP"), is not indicative that cash flows are adequate to fund all cash needs and is not to be considered an alternative to net income or any other GAAP measure as a measurement of the results of the Company's operations or the Company's cash flows or liquidity as defined by GAAP. As of December 31, 1994, the Company adopted NAREIT's new definition of funds from operations, which definition does not provide for adding back depreciation on non-property related personal property or the amortization of deferred financing costs to net income.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Dollars in thousands, except per share data and rental rates per unit) The following discussion is based primarily on the consolidated financial statements of AMLI Residential Properties Trust (the "Company") as of December 31, 1996 and 1995 and for the year ended December 31, 1996 and 1995. This information should be read in conjunction with the accompanying consolidated financial statements and notes thereto. On January 30, 1996, the Company issued 1,200,000 convertible preferred shares for $20 per share, or $24,000, directly to four institutional investors and Amli Realty Co. ("ARC") in a registered offering. During the fourth quarter, the Company completed a public offering (the "Second Offering") of 2,976,900 common shares. The net proceeds of the issuance of the preferred shares and the public offering were used to reduce the Company's debt and fund development costs. As of December 31, 1996, the Company owned an 84% general partnership interest in the Operating Partnership, which holds the assets of the Company. The limited partners hold Operating Partnership units ("OP Units") that are convertible into shares of the Company on a one-for-one basis, subject to certain limitations. At December 31, 1996, the Company owned 15,912,035 OP Units and the limited partners owned 2,950,097 OP Units. RESULTS OF OPERATIONS During 1996, growth in property revenues and property operating expenses resulted both from increases at communities owned as of January 1, 1995 and from the newly constructed additional phases to existing communities. During the same period, the Company has invested in five co-investment partnerships, which own the 236-unit AMLI at Windbrooke in Buffalo Grove, Illinois, the 242-unit AMLI at Willeo Creek in Roswell, Georgia, the 316- unit AMLI at Greenwood Forest in Houston, Texas, the 592-unit AMLI at Chevy Chase in Buffalo Grove, Illinois, and the 488-unit AMLI at Willowbrook in Willowbrook, Illinois. For the year ended December 31, 1996, net income attributable to common shares was $13,504 or $1.11 per share, on total revenues of $78,271. For the year ended December 31, 1995, net income was $13,719, or $1.18 per share, on total revenues of $73,877. In 1996, net income includes an extraordinary loss of $1,118 on early extinguishment of debt and a nonrecurring gain resulting from interest rate cap contracts of $584. On a "same community" basis, weighted average occupancy of the apartment homes decreased slightly to 94.1% for the year ended December 31, 1996 from 96% in the prior year. Weighted average collected rental rates increased by 4.5% to $650 from $623 per unit per month for the years ended December 31, 1996 and 1995, respectively. Including Co-Investment Communities, weighted average occupancy of the apartment homes decreased to 94.2% for the year ended December 31, 1996 from 95.6% in the prior year, and weighted average collected rental rates increased by 4.2% to $653 from $627 per unit per month for the years ended December 31, 1996 and 1995, respectively. COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995 Income before nonrecurring items, minority interest, and extraordinary items increased to $19,365 for the year ended December 31, 1996 from $15,508 for the year ended December 31, 1995. The increase was primarily attributable to a $1,010 decrease in interest expense and a $4,394 increase in total revenues, reduced by a $1,302 increase in property operating expenses. For the year ended December 31, 1996 and 1995, net income was $15,250 and $13,719, respectively. Total property revenues increased by $2,994, or 4.2%. On a same community basis, total property revenues increased by $2,477, or 3.6%. The $1,409 increase in other revenue includes a $535 increase in share of income from co-investment ventures, a $612 increase in development fees and a $284 increase in asset management fees. Property operating expenses increased by $1,302, or 3.1%. On a same community basis, property operating expenses increased by $1,088, or 3.7%. Interest expense, net of the amounts capitalized, decreased to $11,916 from $12,926, or 7.8%. General and administrative expenses increased to $2,353 for the year ended December 31, 1996 from $1,932 for the year ended December 31, 1995. The increase is primarily attributable to increased compensation and compensation-related costs. COMPARISON OF YEAR ENDED DECEMBER 31, 1995 TO YEAR ENDED DECEMBER 31, 1994 Income before income taxes, nonrecurring gains, minority interest and extraordinary item increased to $15,508 for the year ended December 31, 1995 from $12,500 for the year ended December 31, 1994. For the year ended December 31, 1995 net income increased to $13,719 from $8,710 for the year ended December 31, 1994. This increase in net income was primarily attributable to a $8,662 increase in total revenues, a $1,498 gain on the sale of a residential property recognized in 1995 and a $2,007 loss on early extinguishment of debt recognized in 1994, reduced by a $3,998 increase in property operating expenses, a $680 expense relating to the AMLI brand name in 1995 and a $960 gain resulting from interest rate cap contracts recognized in 1994. Rental revenues increased by $8,218, or 13.4%. The increase in rental revenues for the year ended December 31, 1995 attributable to properties acquired after January 1, 1994 (net of property sold) was $5,355 and accounted for 65.2% of the increase. Rental revenues from properties owned at January 1, 1994 increased by $2,863, or 5.5%, and accounted for 34.8% of the increase. Property operating expenses increased by $3,998, or 15.2%. The increase in property operating expenses for the year ended December 31, 1995 from properties acquired after January 1, 1994 (net of property sold) accounted for $2,468, or 61.7% of the increase. Property operating expenses from properties owned at January 1, 1994 increased $1,530, or 6.7%, and accounted for 38.3% of the increase. Interest expense, net of the amounts capitalized, for the year ended December 31, 1995, increased to $12,926 from $11,557 for the prior year, or 11.8%. The increase was primarily due to increased borrowings to fund acquisition and development activities, reduced in part, as a result of the decline in floating interest rates in 1995 after rising in 1994. General and administrative expenses increased to $1,932 for the year ended December 31, 1995 from $1,616 for the year ended December 31, 1994, or 19.6%. The increase was attributable to recurring costs incurred in 1995 for the first time, including costs relating to the Company's Annual Report to shareholders and the annual shareholders' meeting, and increases in professional fees. LIQUIDITY AND CAPITAL RESOURCES At December 31, 1996, the Company had $10,291 in cash and cash equivalents and $82,000 in availability under its two primary bank lines of credit, the Wachovia Line, a $60,000 line of credit, and the First Chicago Line, a $29,500 line of credit which the company anticipates will increase by $11,747 to $41,247 during the first quarter of 1997. At December 31, 1996, the Company had outstanding borrowings of $7,500 on the Wachovia Line which is secured by mortgages on two wholly-owned communities in Georgia. The rate on the total amount outstanding has been fixed at 6.32% until February 15, 1997. The remaining credit availability of $52,500 is anticipated to be used to fund future working capital needs and acquisition and development activities. At December 31, 1996, the entire First Chicago Line of $29,500 and the expected increased availability of $11,747 is anticipated to be used to fund the construction of AMLI at AutumnChase III, acquisition and other development activities and future working capital needs. On April 29, 1996, the Company closed on a $43,907 ten-year, 7.79% loan provided by FNMA. This loan is secured by mortgages on two properties in Dallas, Texas. The loan proceeds, net of a .75% financing fee and original issue discount of $673, were used to retire the Company's then existing balance on its line of credit with Lehman Brothers Holdings, Inc. ("Lehman") and to reduce the balance on the First Chicago Line. On June 11, 1996, the Company closed with CIGNA on two seven-year loans aggregating $42,000 with an average interest rate of 7.31% per annum. Concurrently, the Company repaid the then existing balance on the Company's $54,835 whole loan with Lehman, which beginning in August 1997 would have carried interest at a fixed rate of 8.35%. As a result of the refinancings completed by the Company in April and June as described above, the Company improved its balance sheet, financing structure and capability as follows: . the Company increased the weighted average annual interest rate by 0.4% to 6.9% through August 1, 1997 and decreased the weighted average annual interest rate by 0.2% during the four years thereafter; . the Company increased the weighted average term of its outstanding indebtedness to 5.3 years; . the Company increased the percentage of debt that is fixed-rate debt to 66% from 54%; . the Company wrote off expenses previously deferred in conjunction with the repaid loans, thereby decreasing its deferred expenses and amortization, particularly for the period through August 1, 1997; . the Company increased the number of unencumbered wholly-owned communities from one to five; . the Company incurred net extraordinary or otherwise nonrecurring charges of $781, which is primarily attributable to the non-cash write-off of deferred expenses relating to the Lehman loans. At December 31, 1996, the Company had a $19,975 outstanding balance on its $20,100 loan provided by Teachers Insurance and Annuity Association. This loan is secured by AMLI at Regents Center in Overland Park, Kansas. The remaining commitment of $6,300 was funded in November 1996 when the construction of the additional 124-unit Phase III was completed. Net cash flows provided by operating activities for the year ended December 31, 1996 increased to $31,934 from $28,334 for the year ended December 31, 1995. The increase is primarily due to an increase in property net operating income and a decrease in interest expense offset by an increase in escrow deposits resulting from the 1996 financings. Cash flows used in investing activities for the year ended December 31, 1996 increased to $66,864 from $2,551. The increase consisted primarily of expenditures for the acquisition of land parcels and development costs, contributions to co-investment partnerships and working capital advances to the Service Companies, and 1995 being net of cash proceeds from the sale of a residential property in California. Net cash flows provided by financing activities for the year ended December 31, 1996 were $42,942. Net cash used in financing activities for the year ended December 31, 1995 were $26,964. In 1996, cash flows reflected the $23,918 proceeds from issuance of preferred shares and the $61,169 proceeds from the Second Offering, reduced by net repayments of loans. Funds from operations is defined as net income (computed in accordance with generally accepted accounting principles), excluding gains (losses) from debt restructuring and sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. Funds from operations is widely accepted in measuring the performance of equity REITs. An understanding of the Company's funds from operations will enhance the reader's comprehension of the Company's results of operations and cash flows as presented in the financial statements and data included elsewhere herein. Funds from operations should not be considered an alternative to net income or any other GAAP measurement as a measure of the results of the Company's operations, the Company's cash flows or liquidity. Funds from operations for the year ended December 31, 1996 and 1995 are summarized as follows: 1996 1995 -------- -------- Net income before minority interest and extraordinary item $19,949 17,006 Depreciation 11,321 10,785 Other, net 739 (1) (387)(2) ------- ------ Funds from operations $32,009 27,404 ======= ====== Weighted average shares and units 15,938 14,427 ======= ====== (1) Includes share of co-investment partnerships' depreciation and gain from sale of interest rate caps. (2) Includes share of co-investment partnerships' depreciation and gain on sale of residential property net of nonrecurring expenses associated with the AMLI brand name. The Company expects to pay quarterly dividends from cash available for distribution. Until distributed, funds available for distribution will be invested in short-term investment grade securities or used to temporarily reduce outstanding balances on the Company's revolving lines of credit. The Company expects to meet its short-term liquidity requirements by using its working capital and any portion of net cash flow from operations not distributed currently. The Company is of the opinion that its future net cash flows will be adequate to meet operating requirements in both the short and the long term and provide for payment of dividends by the Company in accordance with REIT requirements. In order to qualify as a REIT, the Company is required to distribute dividends to its shareholders equal to 95% of its REIT taxable income. The Company's REIT taxable income for the year 1996 is $9,224 which would require the Company to distribute approximately $8,763. For the year ended December 31, 1996, the Company has distributed $26,638, or $1.72 per share to its shareholders, of which approximately 33% represents a return of capital. The Company expects to meet certain long-term liquidity requirements such as scheduled debt maturities, repayment of loans for construction, development, and acquisition activities through the issuance of long-term secured and unsecured debt and additional equity securities of the Company (or OP Units). On July 20, 1995, the Company's shelf registration became effective. The registration covers up to an aggregate of $200,000 of preferred shares, common shares and security warrants which the Company may issue from time to time. During 1996, the Company issued preferred shares, common shares and OP Units that total approximately $91,617, leaving a balance of $108,383 that the Company may issue in the future. On January 30, 1996, the Company issued 1,200,000 Series A cumulative convertible preferred shares of beneficial interest for $20 per share, or $24,000, directly to four institutional investors and ARC in a registered offering, without the use of a placement agent or underwriter. The proceeds of the offering, less $82 of transaction costs, were used to reduce the Company's debt, fund development costs and for working capital requirements. ARC elected to convert its 100,000 preferred shares to 100,000 common shares on February 29, 1996. COMPANY INDEBTEDNESS The Company's debt as of December 31, 1996, substantially all of which is secured by first mortgages on 19 of the wholly-owned communities, is summarized as follows: SUMMARY DEBT TABLE ------------------ Type of Weighted Average Outstanding Percent Indebtedness Interest Rate Balance of Total - - ------------ ---------------- ----------- -------- Fixed Rate Mortgages 7.8% $153,013 76% Tax-Exempt Bonds (1) Tax-Exempt Rate + 1.23% 40,750 20% Lines of LIBOR + 1.35% to Credit (2) LIBOR + 1.65% 7,500 4% Other Various 750 -- -------- ---- Total $202,013 100% ======== ==== - - -------------------- (1) The tax-exempt bonds bear interest at a variable tax-exempt rate; however, $31,250 of the total $40,750 has an interest rate cap contract in place against increases in a tax-exempt index rate ("TENR") above 3% through February 15, 1997. The TENR for the week beginning February 19, 1997 was 3.35% making the Company's effective rate 4.58%. The bonds mature on October 1, 2024 and the related credit enhancement expires in 1999. (2) Amounts borrowed under lines of credit are due in 1998. DEVELOPMENT ACTIVITIES AMLI at Gleneagles II, a 264 apartment home development located in Dallas, Texas is substantially complete and currently in lease-up. The approximate development costs of this community (including land cost) are $13,500. The Company has also commenced development activities on additional sites in Atlanta, Chicago, Dallas, Topeka and Overland Park, Kansas. Furthermore, the Company has started planning and pre-development activities on four additional sites in Atlanta, Austin, Chicago and Dallas. The costs of these development activities are expected to be funded from existing credit availability and/or in partnership with institutional investors. In February 1996, the Company acquired two land parcels in Atlanta, Georgia and Aurora, Illinois for a total price of $11,023. The Atlanta parcel was acquired for cash and a note that was paid off in May 1996. The consideration for the Aurora land parcel was satisfied in part by the issuance of 26,182 OP Units, with the remaining purchase price paid in cash. A 272 apartment home community is under development on the Aurora site in a co-investment partnership with an institutional investor. The Company has begun development of a 400 apartment home community on the Atlanta site and expects to commence development of a second 400 apartment home community in one or more additional phases on adjacent land either for its own account or in partnership with an institutional investor. At December 31, 1996, the construction of AMLI at Pleasant Hill, a 502-unit apartment home community developed through a co-investment partnership, was complete. Total development costs of approximately $26,600 were funded first from the venturers' capital contributions and thereafter are being funded from the $15,500 fixed rate construction and permanent loan provided by the co-venturer. During the fourth quarter of 1996, AMLI at Barrett Lakes, a 446-unit apartment community in Atlanta, Georgia, being developed through a co- investment partnership, began rental operations. Of the total estimated development costs of $27,800, the co-venturer has provided $16,680 of construction and permanent financing for this development, and the remaining costs are being funded from the Company's and the co-investor's equity contributions. In December 1995, the Company began construction of AMLI at River Park, a 222 apartment home community in Atlanta, Georgia. In June 1996, this community was contributed to a co-investment joint venture. Of the $15,400 estimated development costs, the co-venturer provided $9,100 in the form of a loan and the remaining costs are being funded from equity contributions from the Company and its co-investment partner. On February 27, 1996, the Company committed to make a $12,955 construction loan to a third party to fund the development of a 156 apartment home community in Overland Park, Kansas. This community was approximately 66% complete at December 31, 1996 and is anticipated to be completed in May 1997. The construction and development of this community is accounted for as an acquisition, development and construction loan. At September 30, 1996, the Company entered into a joint venture with a large public pension fund and formed Acquiport/Aurora Crossing, L.P. Concurrent with the formation of the partnership, AMLI contributed the 18 acre Aurora land parcel and all the improvements in place for a 272 apartment home development. The total development cost of approximately $24,500 will be funded by equity contributions of which $7,400 was funded on September 30, 1996. The Company owns a 25% general partnership interest in this joint venture and received $5,545 as reimbursement of costs incurred by the Company prior to contributing the land to the joint venture. On September 30, 1996, the Company, as general partner, and for a 25% partnership interest, entered into a co-investment partnership with a large public pension plan and formed Acquiport/Fossil Creek, L.P. Upon formation of the Partnership, the Company contributed its 19 acre land parcel in Forth Worth, Texas. The development of a 384 apartment home community on this site is currently in progress. The total development costs of approximately $23,700 will be funded from capital contributions from the partners. At September 30, 1996, total costs incurred of $2,670 were funded. The Company received $1,998 as reimbursement of costs incurred by the Company prior to contributing the land to the partnership. On October 9, 1996, the Company acquired 28.6 acres of land located in Aurora, Illinois. The $5,014 purchase price of this parcel was paid partially in cash ($3,429 of which has been paid by the Company and $485 of which is payable when construction is completed) and through the issuance of 53,140 OP Units. The Company intends to develop a 464 apartment home community on this site in partnership with an institutional investor. Total development costs are projected to be approximately $45,000 and construction is contemplated to commence in the Spring of 1997. CAPITAL EXPENDITURES Capital expenditures are those made for assets having a useful life in excess of one year and include replacements (including carpeting and appliances) and betterments, such as unit upgrades, enclosed parking facilities and similar items. In conjunction with acquisitions of existing properties, it is the Company's policy to provide in its acquisition budgets adequate funds to complete any deferred maintenance items and to otherwise make the properties acquired competitive with comparable newly-constructed properties. In some cases, the Company will provide in its acquisition budget additional funds to upgrade or otherwise improve new acquisitions. During 1996 and 1995, a total of $4,933 and $4,554 was spent on building repairs and maintenance (including contract services), respectively, and $1,736 and $1,811 was spent on landscaping and grounds maintenance, respectively, as follows: 1996 1995 ------ ------ BUILDING REPAIRS AND MAINTENANCE Painting (exterior and interior) $1,246 1,033 Carpet and Vinyl 390 571 Carpentry 152 208 Heating and air conditioning 187 192 Plumbing 195 176 Appliances 159 160 Electrical systems 110 108 Parking lots/resurfacing 117 103 Other repairs and maintenance 725 393 CONTRACT SERVICES Security services 654 626 Rubbish collection services 463 476 Cleaning services 262 263 Pest control services 171 183 Other services 102 62 ------ ----- $4,933 4,554 ====== ===== LANDSCAPING AND GROUNDS MAINTENANCE Lawn maintenance $1,522 1,559 Seasonal color 107 190 All other 107 62 ------ ----- $1,736 1,811 ====== ===== During 1996 and 1995, a total of $1,936 and $1,714, respectively, in expenditures were capitalized in accordance with the Company's policy, as follows: Carpet replacements $1,191 1,263 Carports and security entry gates 310 -- Energy saving lighting fixtures 86 -- Water saving devices 84 -- Washers and dryers 67 -- Landscaping improvements 24 273 All other 174 178 ------ ----- $1,936 1,714 ====== ===== The Company's accounting treatment of various capital and maintenance costs is detailed in the following table. CAPITALIZE/ DEPRECIABLE EXPENDITURES EXPENSE LIFE IN YEARS ------------ ----------- ------------- Improvements, upgrades, additions (not replacements - includes additional garages, additional amenities, etc.) * capitalize 15 or 40 Costs budgeted as a part of an "Approved Acquisition Budget" (must be spent within one year of acquisition) * capitalize 5, 15 or 40 Replacement of carpet for entire unit capitalize 5 Replacement of major appliances (refrigerators, stoves, dishwashers, washers/dryers) capitalize 15 Replacement of kitchen cabinets capitalize 15 New landscaping construction or installation capitalize 15 Roof replacements capitalize 15 Exercise/amenity equipment capitalize 5 Maintenance equipment capitalize 5 New model or clubhouse furniture and fixtures capitalize 5 New computer systems (entire systems) capitalize 5 Roof repairs expense n/a Exterior painting expense n/a Parking lot repairs/resurfacing expense n/a Repairs to amenity areas, including swimming pools expense n/a Vinyl expense n/a All expenditures for acquiring or replacing ceiling fans, mini-blinds, air conditioning compressors, garbage disposals, etc. expense n/a Landscaping replacements expense n/a CAPITALIZE/ DEPRECIABLE EXPENDITURES EXPENSE LIFE IN YEARS ------------ ----------- ------------- Computer expenditures (anything less than a full system) expense n/a Replacement signage expense n/a Repairs to or refinishing of kitchen cabinetry expense n/a Equipment repairs (all types) expense n/a All interior painting expense n/a In general, the Company expenses any disbursement totalling less than $2,500 * The current policy provides that most capitalizable additions will have a life of 15 years, except for the items of personal property which have estimated lives of 5 years. Included in an acquisition budget may be some costs which would otherwise be expensed, such as exterior painting; such items are being depreciated over 15 years. INFLATION Virtually all apartment leases at the Communities and Co-Investment Communities are for six or twelve months' duration. This enables the Company to pass along inflationary increases in its operating expenses on a timely basis. Because the Company's property operating expenses (exclusive of depreciation and amortization) are approximately 42.5% of rental and other revenue, increased inflation typically results in comparable increases in income before interest and general and administrative expenses, so long as rental market conditions allow increases in rental rates while maintaining stable occupancy. An increase in general price levels may immediately precede, or accompany, an increase in interest rates. The Company's exposure to rising interest rates is mitigated by the existing debt level of approximately 31% of the Company's current market capitalization (35% including the Company's share of co-investment partnerships' debt) and by utilizing intermediate term fixed rate debt (76% of total debt). As a result, for the foreseeable future, increases in interest expense resulting from increasing inflation are anticipated to be less than future increases in income before interest and general and administrative expenses. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements set forth herein or incorporated by reference herein from the Company's filings under the Securities Exchange Act of 1934, as amended, contain forward-looking statements, including, without limitation, statements relating to the timing and anticipated capital expenditures of the Company's development programs. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the actual results may differ materially from that set forth in the forward-looking statements. Certain factors that might cause such differences include general economic conditions, local real estate conditions, construction delays due to the unavailability of construction materials, weather conditions or other delays beyond the control of the Company. Consequently, such forward- looking statements should be regarded solely as reflections of the Company's current operating and development plans and estimates. These plans and estimates are subject to revision from time to time as additional information becomes available, and actual results may differ from those indicated in the referenced statements. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA AMLI RESIDENTIAL PROPERTIES TRUST INDEX PAGE ---- Independent Auditors' Report . . . . . . . . . . . . . . . . 40 Consolidated Balance Sheets, December 31, 1996 and 1995. . . 41 Consolidated Statements of Operations, years ended December 31, 1996, 1995 and 1994 . . . . . . . . . . . . . 43 Consolidated Statements of Shareholders' Equity, years ended December 31, 1996, 1995 and 1994 . . . . . . . 45 Consolidated Statements of Cash Flows, years ended December 31, 1996, 1995 and 1994 . . . . . . . . . . . . . 47 Notes to Consolidated Financial Statements . . . . . . . . . 49 SCHEDULE -------- Consolidated Real Estate and Accumulated Depreciation. . . . III SCHEDULES NOT FILED: All schedules other than those indicated in the above index have been omitted as the required information is inapplicable. INDEPENDENT AUDITORS' REPORT The Board of Trustees and Shareholders AMLI Residential Properties Trust: We have audited the accompanying consolidated balance sheets of AMLI Residential Properties Trust (the "Company") as of December 31, 1996 and 1995, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1996. In connection with our audits of the consolidated financial statements, we have also audited the related financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the management of the Company. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 1996 and 1995, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 1996, in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK LLP Chicago, Illinois February 28, 1997 AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1996 AND 1995 (Dollars in thousands, except share data)
1996 1995 ---------- --------- ASSETS: Rental apartments: Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 59,854 58,643 Depreciable property . . . . . . . . . . . . . . . . . . . . . . . . . 373,140 361,011 -------- --------- 432,994 419,654 Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . (50,478) (39,157) -------- --------- 382,516 380,497 Property under development . . . . . . . . . . . . . . . . . . . . . . . 62,525 23,211 Investment in partnerships . . . . . . . . . . . . . . . . . . . . . . . 30,669 12,255 Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . 10,291 2,279 Deferred expenses, net . . . . . . . . . . . . . . . . . . . . . . . . . 2,139 5,415 Security deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,737 1,880 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,480 7,690 -------- --------- Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . $504,357 433,227 ======== ========= AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED BALANCE SHEETS - CONTINUED 1996 1995 ---------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY: LIABILITIES: Debt (note 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 202,013 215,255 Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . 1,161 1,230 Accrued real estate taxes payable. . . . . . . . . . . . . . . . . . . . 6,978 6,471 Construction costs payable . . . . . . . . . . . . . . . . . . . . . . . 2,263 1,369 Security deposits and prepaid rents. . . . . . . . . . . . . . . . . . . 2,757 2,439 Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,292 1,223 --------- --------- Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 217,464 227,987 --------- --------- Commitments and contingencies (note 8) Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,871 39,077 --------- --------- SHAREHOLDERS' EQUITY: Preferred shares of beneficial interest, $.01 par value 1,500,000 authorized, 1,200,000 issued and 1,100,000 outstanding at December 31, 1996 . . . . . . . . . . . . . . 11 -- Shares of beneficial interest, $.01 par value, 150,000,000 authorized, 14,812,035 and 11,681,659 common shares issued and outstanding, respectively . . . . . . . . . . . . . . . . . 148 117 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . 301,098 218,752 Retained earnings (deficit). . . . . . . . . . . . . . . . . . . . . . . (5,455) (20,705) Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,780) (32,001) --------- --------- Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . 242,022 166,163 --------- --------- Total Liabilities and shareholders' equity . . . . . . . . . . . . . $ 504,357 433,227 ========= ========= See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS OF THE COMPANY AND COMBINED STATEMENT OF OPERATIONS OF ARPG YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (Dollars in thousands, except share data)
1996 1995 1994 ---------- --------- --------- Revenues: Property: Rental . . . . . . . . . . . . . . . . . . . . . . $ 71,863 69,341 61,123 Other. . . . . . . . . . . . . . . . . . . . . . . 3,269 2,797 2,338 Interest and share of income (loss) from Service Companies . . . . . . . . . . . . . . . 217 458 498 Other interest . . . . . . . . . . . . . . . . . . . . 639 407 491 Income from partnerships . . . . . . . . . . . . . . . 569 34 77 Other. . . . . . . . . . . . . . . . . . . . . . . . . 1,714 840 688 ---------- -------- -------- Total revenues . . . . . . . . . . . . . . . 78,271 73,877 65,215 ---------- -------- -------- Expenses: Personnel. . . . . . . . . . . . . . . . . . . . . . 6,714 6,287 5,290 Advertising and promotion. . . . . . . . . . . . . . 1,917 1,702 1,465 Utilities. . . . . . . . . . . . . . . . . . . . . . 4,161 4,125 3,782 Building repairs and maintenance and services. . . . 4,933 4,554 3,999 Landscaping and grounds maintenance. . . . . . . . . 1,736 1,811 1,405 Real estate taxes. . . . . . . . . . . . . . . . . . 8,465 7,947 7,169 Insurance. . . . . . . . . . . . . . . . . . . . . . 977 914 843 Property management fees . . . . . . . . . . . . . . 1,878 1,803 1,422 Other operating expenses . . . . . . . . . . . . . . 1,165 1,111 881 Interest . . . . . . . . . . . . . . . . . . . . . . 11,916 12,926 11,557 Amortization of deferred costs . . . . . . . . . . . 1,370 1,792 2,659 Depreciation . . . . . . . . . . . . . . . . . . . . 11,321 10,785 10,627 General and administrative . . . . . . . . . . . . . 2,353 1,932 1,616 Expenses associated with the AMLI brand name. . . . . . . . . . . . . . . -- 680 -- ---------- -------- -------- Total expenses . . . . . . . . . . . . . . . 58,906 58,369 52,715 ---------- -------- -------- Income before income taxes, nonrecurring gains, minority interest and extraordinary item . . . . . . 19,365 15,508 12,500 Gain on sale of residential property . . . . . . . . . -- 1,498 -- Gain resulting from interest rate cap contracts. . . . 584 -- 960 Income taxes . . . . . . . . . . . . . . . . . . . . . -- -- (62) ---------- -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF OPERATIONS OF THE COMPANY AND COMBINED STATEMENT OF OPERATIONS OF ARPG - CONTINUED 1996 1995 1994 ---------- --------- --------- Income before minority interest and extraordinary item . . . . . . . . . . . . . . . . . 19,949 17,006 13,398 Minority interest. . . . . . . . . . . . . . . . . . . 3,581 3,287 2,681 ---------- -------- -------- Income before extraordinary item . . . . . . . . . . . 16,368 13,719 10,717 Extraordinary item - loss on early extinguishment of debt (net of minority interest) . . . . . . . . . . . . . (1,118) -- (2,007) ---------- -------- -------- Net income . . . . . . . . . . . . . . . . . 15,250 13,719 8,710 Less income attributable to Series A preferred shares . . . . . . . . . . . . . . . . . . 1,746 -- -- ---------- -------- -------- Net income attributable to common shares. . . . . . . . . . . . . . . $ 13,504 13,719 8,710 ========== ======== ======== Income per common share: Before extraordinary item. . . . . . . . . . . . . . $ 1.20 1.18 .92 * Extraordinary item . . . . . . . . . . . . . . . . . (.09) -- (.17)* Net income per common share. . . . . . . . . . . . . 1.11 1.18 .75 * Dividends declared and paid per common share . . . . . 1.72 1.71 1.05 * * For the ten and one-half months subsequent to closing of the Initial Offering on February 15, 1994. See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY OF THE COMPANY AND COMBINED STATEMENT OF PARTNERS' CAPITAL OF ARPG YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (Dollars in thousands)
SHARES OF BENEFICIAL INTEREST ADDITIONAL RETAINED -------------------- PAID-IN EARNINGS DIVIDENDS SHARES AMOUNT CAPITAL (DEFICIT) PAID TOTAL ------- ------ ---------- -------- ---------- ---------- Balance at December 31, 1993 . . . . $ 39,157 39,157 Distributions, net . . . . . . . . (1,457) (1,457) Net income (through February 14, 1994). . . . . . . . . . . . 44 44 -------- ------- 37,744 37,744 Effect of the reorganization . . . 1,172,870 $ 12 21,474 (37,227) (15,741) Net proceeds from the Offering . . 10,357,500 103 195,103 -- -- 195,206 Minority interest. . . . . . . . . -- -- -- (43,607) -- (43,607) ---------- ---- -------- -------- -------- ------- Balance after the reorganization and offering . . . . . . . . . . . 11,530,370 115 216,577 (43,090) -- 173,602 Net income . . . . . . . . . . . . -- -- -- 8,666 -- 8,666 Dividends paid . . . . . . . . . . -- -- -- -- (12,107) (12,107) ---------- ---- -------- -------- -------- ------- Balance at December 31, 1994 . . . . 11,530,370 115 216,577 (34,424) (12,107) 170,161 Units converted to shares. . . . . 151,289 2 2,150 -- -- 2,152 Reallocation of minority interest. . . . . . . . . . . . . -- -- 25 -- -- 25 Net income . . . . . . . . . . . . -- -- -- 13,719 -- 13,719 Dividends paid . . . . . . . . . . -- -- -- -- (19,894) (19,894) ---------- ---- -------- -------- -------- ------- Balance at December 31, 1995 . . . . 11,681,659 117 218,752 (20,705) (32,001) 166,163 Shares issued in connection with: Preferred shares . . . . . . . . 1,200,000 12 23,906 23,918 Second offering. . . . . . . . . 2,976,900 30 60,957 60,987 Executive Share Purchase Plan. . 35,700 -- 292 292 AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY OF THE COMPANY AND COMBINED STATEMENT OF PARTNERS' CAPITAL OF ARPG - CONTINUED SHARES OF BENEFICIAL INTEREST ADDITIONAL RETAINED -------------------- PAID-IN EARNINGS DIVIDENDS SHARES AMOUNT CAPITAL (DEFICIT) PAID TOTAL ------- ------ ---------- -------- ---------- ---------- Units converted to shares. . . . . 17,776 -- 270 -- -- 270 Reallocation of minority interest . . . . . . . . . . . . -- -- (3,079) -- -- (3,079) Net income . . . . . . . . . . . . -- -- -- 15,250 -- 15,250 Dividends paid . . . . . . . . . . -- -- -- -- (21,779) (21,779) ---------- ---- -------- -------- -------- ------- Balance at December 31, 1996 . . . . 15,912,035 $159 301,098 (5,455) (53,780) 242,022 ========== ==== ======== ======== ======== ======= See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS OF THE COMPANY AND COMBINED STATEMENT OF CASH FLOWS OF ARPG YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 (Dollars in thousands)
1996 1995 1994 --------- --------- --------- Cash flows from operating activities: Net income . . . . . . . . . . . . . . . . . . . . . $ 15,250 13,719 8,710 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation . . . . . . . . . . . . . . . . . . . 11,321 10,785 10,627 Amortization of deferred costs . . . . . . . . . . 1,370 1,792 2,659 Income from partnerships . . . . . . . . . . . . . (569) (34) (77) Loss (income) from service companies . . . . . . . 238 (40) (100) Gain resulting from interest rate cap contracts. . (584) -- (960) Loss on early extinguishment of debt . . . . . . . 1,365 -- 2,511 Gain on sale of residential property . . . . . . . -- (1,498) -- Minority interest. . . . . . . . . . . . . . . . . 3,334 3,287 2,177 Changes in assets and liabilities: Decrease (increase) in deferred expenses . . . . . 35 (245) (173) Decrease (increase) in security deposits . . . . . 143 168 (505) (Increase) decrease in other assets. . . . . . . . (1,568) 474 (1,216) (Decrease) increase in accrued interest payable. . (69) 93 (215) Increase in accrued real estate taxes. . . . . . . 508 259 1,339 Increase (decrease) in tenant security deposits and prepaid rents. . . . . . . . . . . . . . . . 318 (260) 817 Increase (decrease) in other liabilities . . . . . 842 (166) 675 --------- --------- --------- Net cash provided by operating activities. . 31,934 28,334 26,269 --------- --------- --------- Cash flows for investing activities: Purchase of partnership interests. . . . . . . . . . -- -- (64,282) Net cash proceeds from sale of residential property. -- 29,583 -- Investments in partnerships. . . . . . . . . . . . . (17,935) (5,960) (3,016) Cash distributions from partnerships . . . . . . . . 1,618 370 145 Dividends from service companies . . . . . . . . . . -- 40 100 Advances to affiliates . . . . . . . . . . . . . . . (5,285) (3,050) (530) Earnest money deposits . . . . . . . . . . . . . . . (175) (350) (150) Capital expenditures - existing properties . . . . . (1,937) (1,714) (2,887) Acquisition properties . . . . . . . . . . . . . . . -- (8,847) (61,757) Properties under development, net of reimbursable co-investor's costs. . . . . . . . . . . . . . . . (44,100) (13,401) (11,522) Increase in construction costs payable . . . . . . . 950 778 591 --------- --------- --------- Net cash used in investing activities. . . . (66,864) (2,551) (143,308) --------- --------- --------- AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS OF THE COMPANY AND COMBINED STATEMENT OF CASH FLOWS OF ARPG - CONTINUED 1996 1995 1994 --------- --------- --------- Cash flows from financing activities: Debt proceeds, net of financing costs. . . . . . . . 165,589 71,800 273,979 Debt repayments, including prepayment penalties in 1996 and 1994 . . . . . . . . . . . . (184,122) (74,094) (344,664) Net proceeds from the sale of interest rate cap contracts . . . . . . . . . . . . . . . . 1,310 -- 2,410 Net proceeds from treasury lock contracts. . . . . . 1,424 -- -- Proceeds from preferred shares offering, net of issuance costs. . . . . . . . . . . . . . . 23,918 -- -- Proceeds from the second offering, net of issuance costs . . . . . . . . . . . . . . . . . . 61,169 -- 195,206 Proceeds from issuance of Executive Share Purchase Plan shares . . . . . . . . . . . . . . . 292 -- -- Contributions. . . . . . . . . . . . . . . . . . . . -- -- 448 Distributions. . . . . . . . . . . . . . . . . . . . (4,859) (4,776) (4,946) Dividends paid . . . . . . . . . . . . . . . . . . . (21,779) (19,894) (12,107) --------- --------- --------- Net cash provided by (used in) financing activities . . . . . . . . . . . 42,942 (26,964) 110,326 --------- --------- --------- Net increase (decrease) in cash and cash equivalents. . . . . . . . . . . . . . 8,012 (1,181) (6,713) Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . 2,279 3,460 10,173 --------- --------- --------- Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . $ 10,291 2,279 3,460 ========= ========= ========= Supplemental disclosure of noncash investing and financing activities: Residential real estate acquired pursuant to existing debt. . . . . . . . . . . . . $ -- -- 12,192 Supplemental disclosure of cash flow information: Cash paid for mortgage and other interest, net of amount capitalized. . . . . . . . . . . . . $ 11,985 12,833 11,772 ========= ========= ========= See accompanying notes to consolidated financial statements.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) 1. ORGANIZATION AND BASIS OF PRESENTATION ORGANIZATION AMLI Residential Properties Trust (the "Company"), a self-administered and self-managed real estate investment trust ("REIT"), was formed on February 15, 1994 to continue and expand the multifamily property business previously conducted by Amli Realty Co. ("ARC") and its affiliates. The Company is the successor to the operations of Amli Residential Properties Group ("ARPG" or the "Predecessor"). The Company is the sole general partner of AMLI Residential Properties, L.P. (the "Operating Partnership") in which it holds an 84% interest. All the properties (the "Properties") and property interests are owned and operated through the Operating Partnership. The Company and its affiliates develop, acquire, lease, manage and hold for investment upscale residential apartment communities. The Company commenced operations effective with the completion of its initial public offering ("Initial Offering") on February 15, 1994. The Company qualifies as a real estate investment trust for Federal income tax purposes. During 1995, the Company created a brand name utilizing the AMLI name. The process required changing property signage (which includes the AMLI name), stationery and marketing materials to include products that will identify the Company's residential communities. The Company completed the implementation of this brand name strategy in the fall of 1995, and incurred a total cost of $680. BASIS OF PRESENTATION For the periods after the Initial Offering, the accompanying consolidated financial statements include the accounts of the Company and the Operating Partnership. For the periods before the Initial Offering, the accompanying combined financial statements reflect the combined accounts of ARPG. ARPG consisted of various limited partnerships ("Original Investors") sponsored by ARC which previously owned 20 residential properties, general partner interests in three additional limited partnerships sponsored by ARC ("GP Properties"), and certain property management, landscaping, investment advisory and asset management subsidiaries and divisions of ARC which were contributed to the Company. The accounts are presented on a combined basis because of the common ownership interest and management. The Company raised capital through the Initial Offering and structured the business combination so that the partners and owners of each of the Original Investors in ARPG received cash, limited partnership interests ("OP Units") in the Operating Partnership, common shares of the Company, or a combination thereof. The OP Units are convertible into shares of the Company on a one-for-one basis, subject to certain limitations (see note 7). AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) AMLI Management Company ("AMC"), AMLI Institutional Advisors, Inc. ("AIA"), AMLI Residential Construction, Inc. ("Amrescon") and AMLI Landscape Co., a division of Amrescon, (the "Service Companies") provide services to the Company's wholly-owned properties as well as to properties owned by or joint ventured with third parties. AMLI's investments in the Service Companies are accounted for using the equity method. The GP Properties (AMLI at Prairie Court in Oak Park, Illinois and AMLI at Towne Creek in Gainesville, Georgia) are accounted for using the equity method. These interests are not material to the accompanying consolidated financial statements. The accompanying consolidated and combined financial statements use the historical basis of accounting. All significant inter-entity balances and transactions have been eliminated in consolidation. The Company's management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual amounts realized or paid could differ from these estimates. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES REAL ESTATE ASSETS AND DEPRECIATION Real estate assets are stated at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred; replacements having an estimated useful life of at least one year and betterments are capitalized and depreciated over their estimated useful lives. Depreciation is computed on a straight-line basis over useful lives of the properties (buildings and related land improvements -- 40 years; furniture, fixtures and equipment -- 5 - 15 years). Substantially all real estate assets are pledged to secure debt (see note 5). In conjunction with acquisitions of existing properties, it is the Company's policy to provide in its acquisition budgets adequate funds to complete any deferred maintenance items and to otherwise make the properties acquired competitive with comparable newly-constructed properties. In some cases the Company will provide in its acquisition budget additional funds to upgrade or otherwise improve new acquisitions. On August 11, 1995, the Company closed the sale of the 421-unit Club Laguna apartments located in Orange County, California. The sale price of $29,908 was paid in cash, and the net proceeds of the sale were used in part to pay down the Lehman Line of Credit ($16,720 of which was secured by this property). The rental apartments in the accompanying balance sheet at December 31, 1995 have been reduced by $28,084 of cost and related accumulated depreciation reflecting the sale of Club Laguna. Losses in carrying values of investment assets are provided by management when the losses become apparent and the investment asset is considered impaired in accordance with Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS 121") . Management evaluates its investment properties at least quarterly to assess whether any impairment indications are present, comparing current net operating AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) income as a percentage of cost to income capitalization rates. If any investment asset is considered impaired, a loss is provided to reduce the carrying value of the property to its estimated fair value. No such losses have been required or provided in the accompanying financial statements. PROPERTIES UNDER DEVELOPMENT During 1996 the Company acquired six additional sites located in Fort Worth and Dallas, Texas, Atlanta, Georgia and Aurora, Illinois for a total cost of $22,330. Physical construction of new communities will commence or continue at these sites in 1997. During 1996, the Company contributed one land parcel each at cost to three co-investment partnerships, namely AMLI at River Exchange, L.P., Acquiport/Aurora Crossing, L.P. and Acquiport/Fossil Creek, L.P. (see note 3). During 1995 the Company acquired five land parcels located in Fort Worth, Texas, Atlanta, Georgia and Eastern Kansas for a total cost of $7,502. One of the land parcels in Atlanta, which was purchased for $1,965, was conveyed at cost to Barrett Lakes Limited Liability Company in November 1995. The table below shows all land parcels that are currently under development or will be under development in 1997. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data)
NUMBER NUMBER TOTAL OF OF EXPENDED COMMUNITY LOCATION ACRES UNITS THRU 12/31/96 - - --------- -------- ------ ------ ------------- Wholly-Owned: Development Communities: AMLI at Gleneagles II Dallas, TX 12 264 $ 13,198 AMLI at Regents Center III Overland Park, KS 16 124 7,253 AMLI at Crown Colony II Topeka, KS 4 64 2,129 AMLI at AutumnChase III Carrollton, TX 24 240 2,238 AMLI at Peachtree City Atlanta, GA 26 312 5,805 AMLI at Northwinds I (1) Atlanta, GA 40 400 6,203 --- ----- -------- Total Development Communities 122 1,404 36,826 --- ----- -------- Land held for future development and Other: AMLI on the Parkway (1) Dallas, TX 10 240 1,440 AMLI at Fossil Creek II Ft. Worth, TX 27 582 3,077 AMLI at Wells Branch Austin, TX 29 576 3,858 AMLI at Northwinds II (1) Atlanta, GA 40 400 3,774 AMLI at Oakhurst (1) Aurora, IL 29 464 5,893 AMLI at Vinings Square(2) Overland Park, KS 14 156 7,657 --- ----- -------- Total land held for future development and Other 149 2,418 25,699 --- ----- -------- Total Wholly-Owned 271 3,822 62,525 --- ----- -------- Co-Investments (Company Ownership Percentage): AMLI at Aurora Crossing (25%) (3) Aurora, IL 18 272 14,930 AMLI at Barrett Lakes (35%) (4) Cobb County, GA 54 446 15,331 AMLI at Fossil Creek (25%) (3) Ft. Worth, TX 19 384 6,374 AMLI at River Park (40%) (5) Fulton County, GA 23 222 10,786 --- ----- -------- Total Co-Investments 114 1,324 47,421 --- ----- -------- Total 385 5,146 $109,946 === ===== ======== AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (1) It is the Company's intention to develop these land parcels in partnership with one or more institutional investors. (2) The construction and development of this property is financed entirely by the Company. The loan is accounted for as an acquisition, development and construction loan and all costs are included in the Company's financial statements. (3) AMLI at Aurora Crossing and AMLI at Fossil Creek were contributed to 25% owned co-investment partnerships in September 1996. (4) AMLI at Barrett Lakes was conveyed at cost to a 35%-owned co-investment venture in November 1995. (5) AMLI at River Park was contributed at cost to a 40% owned co-investment limited liability company in June 1996.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) INTEREST AND REAL ESTATE TAX CAPITALIZATION Interest and real estate taxes incurred during the construction period are capitalized and depreciated over the lives of the constructed assets. During the years ended December 31, 1996, 1995 and 1994 total interest capitalized was $3,242, $1,638 and $498, respectively. Net of amounts capitalized, total interest incurred during the years ended December 31, 1996, 1995 and 1994 aggregated $11,916, $12,926 and $11,557, respectively. REVENUE RECOGNITION Rental revenues -- the Company leases its residential properties under operating leases with terms generally of six or twelve months. Rental income is recognized when earned; this method approximates recognition using the straight-line method over the related lease term. At December 31, 1996 apartment leases in effect provide for annual rentals aggregating approximately $75,132. Prior to the Initial Offering, certain fees for property management, landscape services and asset management were eliminated in the combination. FAIR VALUES The estimated fair values of the Company's financial instruments presented in these Notes to Consolidated Financial Statements have been determined by management based on pertinent information available as of December 31, 1996 and 1995, using appropriate methodologies. These estimates are not necessarily indicative of the amounts the Company could ultimately realize. The Company's financial instruments consist primarily of its cash equivalents, interest-bearing notes receivable from the Service Companies, operating payables, debt and interest rate limitation contracts. The carrying amounts of the Company's cash equivalents and operating payables are considered to be a reasonable estimate of fair value due to the short- term nature of these instruments. CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all investments purchased with an original maturity of three months or less to be cash equivalents. DEFERRED EXPENSES Deferred costs consist primarily of financing costs which are amortized using the straight-line method over the terms of the related debt. During the construction period, amortization of deferred costs relating to properties under development are capitalized and depreciated over the lives of the constructed assets. During the years ended December 31, 1996, 1995 and 1994, capitalized amortization of deferred costs was $63, $214 and $10, respectively. Deferred expenses at December 31, 1996 and 1995 include $114 and $1,341, respectively, in unamortized cost of interest rate cap contracts which limit the Company's exposure to increasing rates through various dates in 1997 and 1998. Amounts paid for purchased interest rate cap agreements are amortized over the terms of the related cap contracts. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) In December 1995, the Company initiated a program of buying and rolling Treasury Locks as a means of limiting its exposure to rising interest rates in anticipation of funding a new $43,907 loan through FNMA. Through May 6, 1996 (the date on which the FNMA certificates were sold), the Company received net cash of $1,424 from the above described activities. These net proceeds are included as a reduction of deferred costs and are being amortized over the ten-year term of the FNMA loan. The FNMA certificates were sold at a discount of $673; this discount was netted against the liability and is being amortized over the ten-year loan term. At December 31, 1996, the unamortized balance of the net proceeds of these Treasury Lock activities is $1,339. On June 11, 1996, the Company replaced the Lehman Whole Loan with new fixed rate loans. Concurrently, the Company sold the $54,835 interest rate cap contract which pertained to the Lehman Whole Loan. The sale was completed on June 13, 1996 and the Company received net proceeds of $1,310. The unamortized deferred costs related to the LIBOR cap were written off and a nonrecurring net gain of $584 was recognized. On August 9, 1994, the Company completed refinancing $74,793 of its debt under two new loans from Lehman Brothers Holdings Inc., referred to as the $54,835 Lehman Whole Loan and the $56,348 Lehman Line of Credit. Generally accepted accounting principles require that the interest rate cap contracts be "marked to market" and that the Company record a gain on the excess of value over unamortized cost as of the date of refinancing. Because a portion of one interest rate cap contract had become redundant and another was now associated with the Lehman Line of Credit, the Company elected to sell these interest cap contracts while keeping in place interest rate caps on substantially all of its floating rate debt. The Company realized a total gain (including the gain recognized at the August 9, 1994 refinancing from marking the interest rate cap contract to market) of $960 resulting from the above-mentioned LIBOR interest rate cap contract activities. INTEREST RATE LIMITATION CONTRACTS The Company uses interest rate caps and swaps to limit its exposure to increases in interest rates on its floating rate debt. The Company does not use them for trading purposes. At December 31, 1996, the Company was a party to various interest rate cap agreements which entitle the Company to receive from counterparties on a monthly basis the amounts, if any, by which the Company's interest payments on certain floating rate debt exceed capped amounts. The Company is exposed to credit losses in the event of nonperformance by the counterparties to its interest rate caps. The Company does not obtain collateral or other security to support financial instruments subject to credit risk but monitors the credit standing of counterparties. The Company anticipates, however, that the counterparties will be able to fully satisfy their obligations under the contracts. The following summarizes payments received pursuant to interest rate limitation and swap contracts and the estimated remaining value of such contracts at December 31, 1996. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data)
Unamortized Cumulative Approximate Type Remaining Cost Cash Fair Value Notional Maximum of Contract Original December Payments December Amount Rate Contract Maturity Cost 1996 Received 1996 - - -------- ------- -------- --------- -------- ----------- ---------- ----------- $54,835 3.875% LIBOR Cap (1) $2,949 -- 4,216 -- 15,000 3.875% LIBOR Cap (2) 806 -- 1,473 -- 15,000 7.5% LIBOR Cap 04/01/97 160 -- -- -- 5,845 3.875% LIBOR Cap 02/15/98 314 88 255 112 31,250 3.0% Tax-Exempt Cap 02/15/97 621 26 461 32 12,400 6.47% (all-in) Swap 02/15/97 -- -- 203 7 14,000 6.65% (all-in) Swap 02/24/97 -- -- 31 10 ------ ----- ----- ---- $4,850 114 6,639 161 ====== ===== ===== ==== (1) Sold in June 1996 for net proceeds of $1,310. (2) Sold in August 1994 for net proceeds of $1,450.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) OTHER ASSETS At December 31, 1996, other assets consist primarily of $3,500 in 13% interest-only notes receivable from the Service Companies due in 2004, $6,293 in other current receivables from the Service Companies and affiliates, $1,139 in development fees receivable, $1,137 in restricted cash, $1,033 in tax escrow deposits and $675 in earnest money deposits. The Company believes that the carrying amounts of its notes receivable from the Service Companies reasonably approximate their fair values. PER SHARE DATA Net income per common share is computed based upon 12,141,877 weighted average common shares outstanding in 1996, 11,634,776 weighted average common shares outstanding in 1995 and 11,488,651 weighted average common shares outstanding during the period from February 15, 1994 through December 31, 1994. At December 31, 1996 there were 14,812,035 common shares and 1,100,000 preferred shares outstanding (see note 7). Fully diluted earnings per share is not presented as the impact is not material. RECLASSIFICATIONS Certain amounts in the consolidated 1995 financial statements of the Company and combined 1994 financial statements of ARPG have been reclassified to conform with the current presentation. 3. INVESTMENTS IN PARTNERSHIPS AND SERVICE COMPANIES INVESTMENTS IN PARTNERSHIPS At December 31, 1996, the Company, as general partner, owned co- investment partnership interests in AMLI Foundation Co-Investors, L.P. ("Foundation"); AMLI Foundation Co-Investors-II, L.P. ("Foundation II"); AMLI at Champions, L.P. ("Champions"); AMLI at Windbrooke, L.P. ("Windbrooke"); AMLI at Willeo Creek, L.P. ("Willeo Creek"); Pleasant Hill Joint Venture ("Pleasant Hill"); Barrett Lakes Limited Liability Company ("Barrett Lakes"); AMLI at Chevy Chase, L.P. ("Chevy Chase"); AMLI at Willowbrook, L.P. ("Willowbrook"); AMLI at River Exchange, L.P. ("River Exchange"); Acquiport/Aurora Crossing, L.P. ("Aurora Crossing"); Acquiport/Fossil Creek, L.P. ("Fossil Creek"); and a nominal interest in the GP Properties. These co-investment partnerships are accounted for using the equity method. Investments in partnerships at December 31, 1996 and the Company's 1996 share of income or loss from each (excluding the GP Properties from which the Company received distributions and recorded income of $30) are summarized as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data)
Equity Total Company's ---------------- Net Share of Community (Company's Total Company's Company's Income Net Income Partnership Ownership Percentage) Assets Total Share Investment (Loss) (Loss) - - ----------- --------------------- ------ ----- --------- ---------- ----- ---------- Foundation AMLI at Park Place (25%) $20,142 6,724 1,681 1,645 568 143 Foundation II AMLI at Greenwood Forest 17,731 5,525 829 809 (181) (27) (15%) Champions AMLI at Champions Park 12,695 3,172 477 477 (183) (27) (15%) Champions AMLI at Champions Centre (15%) 10,020 2,908 436 436 (101) (15) Windbrooke AMLI at Windbrooke (15%) 17,600 5,574 836 836 (116) (17) Willeo Creek AMLI at Willeo Creek (30%) 15,556 5,197 1,559 1,562 66 20 Pleasant Hill AMLI at Pleasant Hill (40%) 27,128 11,987 5,091 4,709 824 320 Barrett Lakes AMLI at Barrett Lakes (35%) 15,454 11,098 3,884 4,007 (22) (8) Chevy Chase AMLI at Chevy Chase (33%) 45,928 15,017 4,955 4,955 170 56 Willowbrook AMLI at Willowbrook (40%) 38,125 12,382 4,953 4,876 262 105 River Exchange AMLI at River Park (40%) 10,877 6,224 2,489 2,479 51 (21) Aurora Crossing AMLI at Aurora Crossing (25%) 15,032 11,559 2,890 2,868 -- -- Fossil Creek AMLI at Fossil Creek (25%) 6,394 3,995 999 1,010 -- -- ======= ====== ------- ------ === --- $31,079 30,669 529 ======= ====== ===
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) The fixed-rate debt financing which has been obtained from various insurance companies on behalf of these co-investment partnerships is summarized below: Total Outstanding Interest Community Commitment at 12/31/96 Rate Maturity - - --------- ---------- ----------- -------- -------- AMLI at: Park Place $13,000 12,626 8.21% October 1999 Greenwood Forest 11,625 11,625 8.95% May 2002 Champions Park 9,500 9,089 7.26% December 1997 Champions Centre 6,700 6,700 8.93% January 2002 Windbrooke 11,500 11,500 9.24% February 2002 Willeo Creek 10,000 10,000 6.77% May 2003 Chevy Chase 29,767 29,767 6.67% April 2003 Willowbrook 24,500 24,500 7.785% May 2003 River Park 9,100 3,150 7.75% June 2008 Pleasant Hill 15,500 12,820 9.15% March 2007 Barrett Lakes 16,680 1,290 8.50% December 2009 In general, these loans provide for monthly payments of principal and interest based on a 25 or 27 year amortization schedule and a balloon payment at maturity. Loans against newly-completed properties provide for payments of interest only for an initial period, with principal amortization commencing generally within two years of completion of construction and initial lease-up. At December 31, 1995, the Company, as general partner, owned co- investment partnership interests in Foundation; Foundation II; Champions; Windbrooke; Willeo Creek; Pleasant Hill; and Barrett Lakes; and a nominal interest in the GP Properties. These co-investment partnerships are accounted for using the equity method. Investments in partnerships at December 31, 1995 and the Company's 1995 share of income or loss from each (excluding the GP Properties from which the Company received distributions and recorded income of $2) are summarized as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data)
Equity (Deficit) Total Company's -------------------------- Net Share of Community (Company's Total Company's Company's Income Net Income Partnership Ownership Percentage) Assets Total Share Investment (Loss) (Loss) - - ----------- --------------------- ------ ----- --------- ---------- ----- ---------- Foundation AMLI at Park Place (25%) $20,658 7,116 1,780 1,742 354 90 Foundation II AMLI at Greenwood Forest 18,086 5,946 892 872 (226) (33) (15%) Champions AMLI at Champions Park 13,032 3,355 503 503 (273) (41) (15%) Champions AMLI at Champions Centre 10,158 3,009 451 443 (398) (60) (15%) Windbrooke AMLI at Windbrooke (15%) 18,174 6,190 928 928 (38) (6) Willeo Creek AMLI at Willeo Creek (30%) 15,829 5,630 1,689 1,692 (7) -- Pleasant Hill (1) AMLI at Pleasant Hill (40%) 21,215 112,012 5,122 4,869 207 82 Barrett Lakes AMLI at Barrett Lakes (35%) 4,013 3,406 1,192 1,206 -- -- ======= ===== ------- ------ === --- $12,557 12,255 32 ======= ====== === (1) At December 31, 1994, this partnership was wholly-owned by the Company and its accounts (including land and development costs of $5,608, of which $1,925 was reimbursable) were included in the consolidated financial statements of the Company. On February 1, 1995, the Company admitted The Northwestern Mutual Life Insurance Company as a joint venture partner, and the accounts of this partnership are now accounted for using the equity method as described above.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) INVESTMENTS IN SERVICE COMPANIES In connection with the reorganization (June 1994 in the case of Amrescon), the Company obtained 5% of the voting common stock and 100% of the nonvoting preferred stock in the Service Companies, which provide property management, construction, landscaping, investment advisory and asset management services to the Company and to certain other parties. The nonvoting preferred stock entitles the Company to approximately 95% of all cash distributions from the Service Companies. For the years ended December 31, 1996, 1995 and 1994, the Company received dividends of $0, $40 and $100, respectively, from the management company. Summarized combined financial information of the various Service Companies at and for the years ended December 31, 1996 and 1995 and for the period from February 15, 1994 through December 31, 1994 follows: 1996 1995 1994 -------- -------- -------- Income (1) $ 7,204 4,085 2,698 General and administrative expenses (5,981) (3,335) (2,018) ------- ------- ------- 1,223 750 680 Interest (871) (588) (407) Depreciation (188) (86) (52) Income tax (90) (29) (85) ------- ------- ------- Net income $ 74 47 136 ======= ======= ======= Total assets $14,226 5,820 3,141 ======= ======= ======= (1) Net of construction and landscaping costs. Interest expense of the Service Companies includes interest on the 13% $3,500 notes payable by AMC and AIA to the Company. The Company's share of income (loss) from the Service Companies in 1996, 1995 and 1994 was ($238), $3 and $100, respectively, after elimination of intercompany profit on construction activities. This interest income is combined with the Company's share of income (loss) from Service Companies in the accompanying Consolidated Statements of Operations. Additional interest expense ($416, $133 and $9 in 1996, 1995 and 1994, respectively) was paid to the Company by the Service Companies as interest on working capital advances. 4. RELATED PARTY TRANSACTIONS General and administrative expenses as included in the accompanying consolidated statements of operations include allocations of costs to the Company from ARC and its affiliates. Such allocations are not in excess of ARC's cost of providing services to the Company, including personnel, occupancy and other corporate overhead. Following the Initial Offering, AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) the majority of these costs are borne directly by the Company. Approximately $335, $335 and $512 was allocated to the Company and the Service Companies from ARC's Service Bureau Division in the years ended December 31, 1996 and 1995 and in the period from February 15 through December 31, 1994, respectively, to reimburse ARC for the Company's allocated share of costs incurred on its behalf. The management of the Company is of the opinion that the costs allocated from ARC's Service Bureau Division reasonably approximate or are less than the costs the Company would incur by contracting for such services with an unaffiliated entity. The Company and the Service Companies have agreed to pay for a share of ARC's total occupancy cost. The Company's total occupancy cost was approximately $310, $150 and $131 for the years ended December 31, 1996 and 1995 and the period from February 15 through December 31, 1994, respectively, including $255, $122 and $107 allocable to the Service Companies. During 1996, 1995 and 1994, the Company accrued or paid to its affiliates fees and other costs and expenses as follows: 1996 1995 1994 ------- ------ ------ Management fees $1,878 1,803 1,411 General contractor fees 525 285 17 Interest expense 31 30 26 Landscaping and ground maintenance 613 585 655 ====== ====== ====== During 1996, 1995 and 1994, the Company earned or received from its affiliates other income as follows: 1996 1995 1994 ------- ------ ------ Development fees $ 826 338 -- Acquisition fees 184 240 307 Asset management fees 507 223 38 Disposition fee 66 -- -- Accounting and administrative fees 6 29 173 Interest on advances 381 167 3 Interest on notes receivable 455 455 398 ====== ====== ===== During 1994, Amrescon purchased a total of 38 lumber futures contracts in order to protect against increases in the cost of lumber to be used in constructing new apartments. At December 31, 1995, Amrescon had reduced its position to 6 contracts following acquisition of the lumber for several of its construction projects. The remaining contracts were sold in February 1996. Cumulative losses on these contracts totalled $68, which amount is treated as an additional cost of properties developed in 1995. Amrescon may resume using lumber futures in the future to protect against increases in the cost of lumber as additional properties are developed. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) During 1996, Amrescon paid $165 for the assets of Regents Management Corporation, whereupon a principal of that corporation became an employee of Amrescon and an executive officer of the Company. The assets acquired consist of furniture and equipment and the contracts for the construction of AMLI at Regents Center III and AMLI at Crown Colony II. An additional amount, not to exceed $30, will be paid in 1997 in conjunction with this transaction. 5. DEBT BOND FINANCING AMLI at Spring Creek, an 1,180-unit apartment community in Atlanta, Georgia secures a total of $40,750 of tax-exempt bonds. The terms of the bonds require that a portion of the apartment homes be leased to individuals who qualify based on income levels specified by the U.S. Government. The bonds bear interest at a variable rate; however, $31,250 of the total $40,750 has an interest rate cap contract in place against increases in a tax-exempt index rate ("TENR") above 3% through February 15, 1997. The variable rate is adjusted weekly based upon the remarketing rate for these bonds (3.35% at February 26, 1997; 3.50% average for the year ended December 31, 1996). The credit enhancement for the bonds was provided by a $41,297 five-year letter of credit from Wachovia Bank which expires on October 15, 1999. MORTGAGE NOTES PAYABLE TO FINANCIAL INSTITUTIONS At December 31, 1996, the Company owes a total of $153,013 pursuant to eleven fixed rate mortgage notes payable to eight financial institutions. Each loan is secured by a first mortgage on the respective residential apartment community and is non-recourse to the partners, except for a $1,500 portion of one of the mortgage notes payable and $19,975 of another of the mortgage notes payable. The loans bear interest at fixed rates between 7% and 9.9%, with maturities extending through May 1, 2006. On April 29, 1996, the Company closed on a $43,907 ten-year, 7.79% loan provided by FNMA. The loan is secured by mortgages on three properties in Dallas, Texas. On June 11, 1996, two seven-year loans provided by CIGNA in the aggregate amount of $42,000 at an average interest rate of 7.31% were funded. The net proceeds of these loans were used primarily to repay the Lehman Whole Loan and the Lehman Line of Credit. The Company incurred an extraordinary charge of $1,365 which consists of the related unamortized deferred costs on these repaid loans plus prepayment penalties. OTHER NOTES PAYABLE Other notes payable are comprised of three floating rate loans due to financial institutions aggregating $7,500 and $750 in another note payable. These loans bear interest at rates of 135 to 185 basis points over LIBOR (7.06% at December 31, 1996). The total amount outstanding is the subject of an interest rate swap fixing the interest rate at 6.32% through February 15, 1997. On June 16, 1996, the Wachovia Line of credit was modified to increase the commitment amount to $60,000 and to lower the interest rate to LIBOR plus 1.35% (LIBOR plus 1.65% on construction loans until stabilized operations are achieved). AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) In April 1996, First Chicago purchased the $27,000 revolving credit and loan facility with Citicorp Real Estate Inc. The loan was modified to increase the commitment amount to $29,500 and to reduce the interest rate to LIBOR plus 1.65%. The Company is negotiating an agreement with First Chicago to increase the line of credit to $41,247 and reduce the interest rate to LIBOR plus 1.35%. Of the aggregate $98,250 of other notes payable, $7,500 is outstanding on the $60,000 Wachovia Line of credit; the entire $29,500 First Chicago facility is available and $6,835 in letters of credit are outstanding on an $8,000 line of credit from Harris. The total $83,165 (net of $6,835 letters of credit) of unused credit is available to fund future development, acquisition and working capital needs. The line of credit agreements provide for customary borrower covenants, including among other things, minimum debt service coverage ratios and maximum loan to value ratios. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) The table below sets forth certain information relating to the indebtedness of the Company.
Balance Balance Original at Interest Maturity at Encumbered Communities Amount 12/31/96 Rate Date 12/31/95 - - ---------------------- -------- -------- -------- -------- -------- BOND FINANCING: Tax-Exempt AMLI at Spring Creek $ 40,750 40,750 Rate+1.23% 10/1/24 40,750 -------- ------- ------- MORTGAGE NOTES PAYABLE TO FINANCIAL INSTITUTIONS: AMLI at Alvamar (1) -- -- 9.38% 3/1/97 4,819 AMLI at the Arboretum 4,800 4,427 9.90% 9/28/97 4,504 AMLI at Gleneagles 8,500 8,152 7.70% 10/31/97 8,248 AMLI at Martha's Vineyard 7,060 6,669 7.42% 11/1/97 6,776 AMLI at Reflections 4,800 4,528 7.50% 6/30/98 4,615 AMLI on Rosemeade 7,050 6,682 7.02% 10/5/98 6,807 AMLI at Sherwood 7,320 6,992 7.75% 7/1/03 7,155 AMLI at Riverbend 31,000 30,815 7.30% 7/1/03 -- AMLI in Great Hills 11,000 10,935 7.34% 7/1/03 -- AMLI at Valley Ranch 11,500 10,900 7.625% 7/10/03 11,092 AMLI at Regents Center 20,100 19,975 (2) 9/1/05 13,776 AMLI on the Green (3) AMLI of North Dallas (3) 43,234 42,938 7.789% 5/1/06 -- -------- ------- -------- Total Mortgage Notes Payable 156,364 153,013 67,792 -------- ------- -------- OTHER NOTES PAYABLE: AMLI at Vinings AMLI at Sope Creek 60,000 7,500 L+1.35%(4) 5/31/98 32,535 ------- ------- --------- ------- ------- AMLI at AutumnChase I & II AMLI at Chase Oaks AMLI at Gleneagles II 29,500 -- L+1.65% 2/28/98 2,343 ------- ------- --------- ------- ------- AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) Balance Balance Original at Interest Maturity at Encumbered Properties Amount 12/31/96 Rate Date 12/31/95 - - --------------------- -------- -------- -------- -------- -------- AMLI in Great Hills (6) AMLI at Bear Creek (5) AMLI at Nantucket (5) AMLI at Riverbend (6) AMLI at West Paces (5) 54,835 -- 5.76% 8/9/01 54,835 -------- ------- --------- ------- ------- AMLI of North Dallas (6) AMLI on Timberglen (5) AMLI on the Green (6) -- -- L+1.85% 2/9/99 16,000 -------- ------- --------- ------- ------- AMLI at Park Sheridan 8,000 -- L+1.65% 8/30/98 250 Unsecured 750 750 4.00% Demand 750 -------- ------- ------- Total Other Notes Payable 153,085 8,250 106,713 -------- ------- ------- Total $350,199 202,013 215,255 ======== ======= ======= (1) Unencumbered as of December 2, 1996; loan was repaid in full. (2) $13,800 at 8.73% and $6,300 at 9.23%. (3) Sold at a discount of $673. At December 31, 1996, the unamortized discount amount is $628. (4) The Company has used interest rate limitation contracts to fix the interest rate at 6.32% through February 15, 1997 on $12,400, to fix the interest rate at 6.50% through February 24, 1997 on $14,000 and to limit the interest rate to 5.38% through February 15, 1998 on $5,845. The rate is LIBOR + 1.65% on construction loans until stabilized occupancy. (5) Unencumbered as of June 30, 1996; loans were repaid in full in April and June 1996. (6) These properties now secure new fixed rate mortgages.
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) As of December 31, 1996, the scheduled maturities of the Company's debt are as follows:
FIXED RATE MORTGAGE NOTES PAYABLE OTHER BOND TO INSURANCE NOTES FINANCINGS COMPANIES PAYABLE TOTAL ---------- ------------- --------- ---------- 1997 . . . . . . . . . . . . . . . . . . . . . . . . . $ 0 21,209 750 21,959 1998 . . . . . . . . . . . . . . . . . . . . . . . . . 0 12,855 7,500 20,355 1999 . . . . . . . . . . . . . . . . . . . . . . . . . 0 2,026 -- 2,026 2000 . . . . . . . . . . . . . . . . . . . . . . . . . 0 2,178 -- 2,178 2001 . . . . . . . . . . . . . . . . . . . . . . . . . 0 2,373 -- 2,373 Thereafter . . . . . . . . . . . . . . . . . . . . . . 40,750 112,372 -- 153,122 ------- ------- ------ ------- $40,750 153,013 8,250 202,013 ======= ======= ====== =======
AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) At December 31, 1996 and 1995, the carrying value and fair value of the Company's long-term debt are not considered to be significantly different. The Company considers the interest rates on its long-term debt as market rates, based on interest rates, payment terms and maturities available to the Company as of December 31, 1996 and 1995, for these types of loans. Current estimates of fair value may differ from the amount presented herein. 6. INCOME TAXES The Company qualifies as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. A REIT will generally not be subject to Federal income taxation on that portion of its income that qualifies as REIT taxable income to the extent that it distributes at least 95 percent of its taxable income to its shareholders and complies with certain other requirements. Accordingly, no provision has been made for Federal income taxes for the Company. Approximately 33% of dividends paid during 1996 represented a return of capital. ARPG's combined financial statements include the accounts of the Service Companies, which had been wholly-owned subsidiaries of ARC. The accounts of these entities were included in the consolidated Federal income tax return of ARC and its consolidated subsidiaries during the years from inception through February 15, 1994. Income taxes were allocated to the Service Companies on a stand-alone basis since 1988. The Service Companies' combined income (loss) before income taxes includes $168 for the one and one-half months ended February 14, 1994 subject to corporate income tax. 7. SHAREHOLDERS' EQUITY Upon the closing of the Company's Initial Offering on February 15, 1994, a total of 11,530,370 of the Company's common shares were issued and outstanding. At that time, the Company owned a like number of OP Units, which represented approximately 81% of the total 14,426,710 OP Units outstanding at that time. During 1995, a total of 151,289 OP Units were converted to shares. During 1996, a total of 17,776 OP Units were converted to shares and 222,822 new OP Units were issued to third parties upon their contribution of three parcels of land to the Operating Partnership. These land parcels are currently being developed into new communities in Atlanta, Georgia and Aurora, Illinois. Pursuant to the authority vested to the Board of Trustees in the Declaration of Trust dated January 31, 1994, the Trustees classified and designated 1,500,000 unissued shares of beneficial interest of the Company as Series A cumulative convertible preferred shares of beneficial interest. On January 30, 1996, the Company completed the sale of 1,200,000 newly issued Series A convertible preferred shares, $.01 par value, for $24,000 in a registered offering. The price per share of $20 was the price of the Company's common shares on January 15, 1996. The Company sold the preferred shares directly to four institutional investors and ARC without the use of a placement agent or underwriter. The proceeds from the sale of these preferred shares, less $82 of transaction costs, were used to reduce the Company's debt, fund development costs and for general corporate purposes. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) The preferred shares will pay a dividend equal to $1.72 per share on an annual basis or the dividend amount paid on common shares, whichever is higher. The Company's Board of Trustees has authorized the payment of dividends at this annual rate for the period from January 30, 1996 to February 20, 1996, the dividend payment date. The preferred shares are perpetual and generally have no voting rights except in certain limited circumstances. The preferred shares may be converted on a share-for-share basis into common shares at any time at a conversion price that shall be adjusted from time to time. After January 30, 2001, the Company may redeem the preferred shares at its option for cash or common shares. The Company may redeem the preferred shares for common shares only when the price of the common shares equals or exceeds the conversion price for 20 of the 30 days preceding the date of redemption notice. The preferred shares and the common shares into which the preferred shares may be converted have been registered under the Company's existing shelf registration. On February 29, 1996, ARC elected to convert its 100,000 Series A convertible preferred shares into common shares. During 1996, a total of 35,700 new common shares were issued pursuant to the Company's Executive Share Purchase Plan (see note 8). On November 27, 1996, the Company closed a 2,750,000 secondary offering of its common shares. The offering was priced at $21.75 per share. On December 30, 1996, 226,900 additional common shares were issued pursuant to the Underwriters' over-allotment option. Net of approximately 5.75% in commissions and selling expenses, proceeds of the 2,976,900 common share offering totalled approximately $61,000. The net proceeds were used to pay down $46,035 of floating rate debt, to prepay a $4,774 first mortgage note payable, and to provide approximately $10,000 of working capital to fund future acquisition and development activities. As a result of these transactions, there are at December 31, 1996, a total of 14,812,035 common shares and 1,100,000 preferred shares issued and outstanding. At December 31, 1996, the Company owns 15,912,035 OP Units, which is approximately 84% of the total 18,862,132 OP Units outstanding. 8. COMMITMENTS AND CONTINGENCIES LEASES OF OFFICE SPACE The Company shares office space with its service company subsidiaries and with ARC at its Chicago headquarters. Amrescon and AMC share space at regional corporate offices in Atlanta and Dallas. The Company is party to these leases, which have terms expiring through the year 2001 and which provide for minimum rent and additional rent based on increases in operating expenses. The Company's share of lease payments for noncancellable office leases (including amounts allocated to the Service Companies) was $310, $150, and $122 in 1996, 1995 and 1994, respectively. The 1996 expense includes the entire $154 rent for the Atlanta and Dallas offices and rent in Chicago based on actual space occupied at a rate not in excess of the current market rate. The Company's estimated share of future minimum rent payments under the operating leases are as follows: 1997 . . . . . . . . . . . . . . . . . . $425 1998 . . . . . . . . . . . . . . . . . . 370 1999 . . . . . . . . . . . . . . . . . . 49 ---- $844 ==== AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) RETIREMENT SAVINGS PLAN During 1985, ARPG established the Amli Realty Co. Retirement Savings Plan (the "Retirement Plan"), a qualified plan under Section 401(k) of the Internal Revenue Code. The provisions of the Retirement Plan obligate the Company to contribute up to 50% of the amounts contributed to the Retirement Plan by its employees (such contribution not to exceed $0.50 per employee per year). Employees vest in Company contributions as follows: Less than three years' service . . . . . . . . . . 0% Three or more years' service . . . . . . . . . . . 100% === As of January 1, 1995, the Retirement Plan was amended to provide for an additional contribution by Participating Employers, as defined, equal to a percentage (3% for 1996 and 1995) of each eligible employee's compensation. An employee is eligible who has completed one year of service by and is an employee as of either June 30 or December 31 of the year for which the contribution is made. Those additional contributions together with the Company's annual 50% matching contribution are to be invested (semi-annually each February and August) in open market purchases of the Company's common stock. Such contributions, by and on behalf of affiliates of the Company, were $228, $230 and $45 in 1996, 1995 and 1994, respectively. BONUS INCENTIVE COMPENSATION A bonus incentive compensation plan has been established for executive and key officers. This program awards both a cash and a common share or OP Unit bonus to executive officers and certain key officers covered under the plan based on the achievement of specified targets and goals for the Company and the individual officer. The primary targets are the desired annual funds from operations ("FFO") per share and how the Company performs relative to its competitors. The amount of cash bonus and number of common shares or OP Units will be based on a formula determined for each officer up to 50% of base compensation. PERFORMANCE INCENTIVE PLAN In 1995, the Company established a Performance Incentive Plan whereby executive and key officers and employees may receive OP Units (or cash, under certain circumstances) if a target growth in FFO is achieved for a period of five years starting from the year the rights under this incentive plan are granted. If the target growth in FFO is achieved, OP Units actually issued under this Plan will include both the original award plus additional units based on assumed re-investment of dividends from the date of the award to the date of issuance. Expense is recognized for financial reporting purposes over the five year determination period for each year's award based upon the estimated value at December 31, 1996 of the OP Units to be issued. At December 31, 1996, there are 21,082 OP Units that may be issued in conjunction with the January 1995 award and 14,416 OP Units that may be issued in conjunction with the January 1996 award. An additional 16,600 OP Units were issued in February 1997. In 1996 and 1995, a total of $181 and $76, respectively, was charged to expense by the Company and the Service Companies pursuant to this incentive plan. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) OPTION PLAN The Company has adopted the AMLI Residential Properties Trust Option Plan (the "Option Plan") to provide incentives to attract and retain Trustees, officers and key employees and service providers. The Option Plan provides for the grants of options to purchase a specified number of common shares or OP Units ("Options"). Under the Option Plan, the total number of common shares available for grant and available to be issued upon exchange of OP Units issued under the Option Plan equals 1,000,000. Upon certain extraordinary events, the Executive Compensation Committee may make such adjustments in the aggregate number of common shares or OP Units reserved for issuance, the number of common shares or OP Units covered by outstanding awards and the exercise prices specified therein as they determine to be appropriate. At December 31, 1996, there were 382,710 additional shares available for grant under the Option Plan. The per share weighted average fair value of options granted during 1996 and 1995 was $1.52 and $1.96, respectively, on the date of grant using the Black Scholes Option-pricing model with the following weighted average assumptions: 1996 - expected dividend yield 7.5%, risk-free interest rate of 5.6%, expected life of five years and expected volatility rate of 17.3%; 1995 - expected dividend yield 7.5%, risk-free interest rate of 7.5%, expected life of 6.8 years and expected volatility rate of 17.3%. The options granted in 1996 and 1995 have a contractual term of ten years. On January 1, 1996, the Company adopted SFAS No. 123 "Accounting for Stock-Based Compensation". Pursuant to its provisions, the Company may either record additional compensation expense each year based on the fair value of the options granted in that year, or, as the Company has elected under APB No. 25, record no such additional compensation costs in its consolidated financial statements and disclose the pro forma effects as if SFAS No. 123 had been applied. Disclosure of pro forma effects are required only for options granted in 1996 and 1995. Therefore, the full impact of calculating compensation cost for stock options under SFAS No. 123 is not included because compensation cost is reflected over the vesting period of five years and compensation cost for options granted prior to January 1, 1995 is not considered. Had the Company determined compensation cost, based upon the fair value at the grant date for these options under SFAS 123, the effects on the Company's net income and net income per share would not have been material. The Trustees who are not members of management hold 15,190 vested options. No other outstanding options vested prior to February 15, 1997. Through December 31, 1996, no options have been exercised nor have any expired. Stock option activity for employees during the years ended December 31, 1996 and 1995 is as follows: AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) WEIGHTED AVERAGE NUMBER OF EXERCISE SHARES PRICE -------- --------- Granted at Initial Offering 456,500 $20.50 ------- ------ Balances at December 31, 1994 456,500 20.50 Granted 47,500 18.25 Cancelled (4,500) 20.50 ------- ------ Balances at December 31, 1995 499,500 20.25 Granted 125,600 20.19 Cancelled (23,000) 20.46 ------- ------ Balances at December 31, 1996 602,100 $20.21 ======= ====== At December 31, 1996, the range of exercise prices was $18.00-$20.50 and the weighted-average remaining contractual life of the outstanding options was eight years. On February 3, 1997, the Board of Trustees awarded an additional 137,000 options to acquire shares at an exercise price of $23.50 per share. EXECUTIVE SHARE PURCHASE PLAN At their 1996 Annual Meeting, the Company's shareholders approved the AMLI Residential Properties Trust Executive Share Purchase Plan (the "Purchase Plan"). Participants in the Purchase Plan currently include all nine Trustees (who may in any one year acquire newly-issued shares having a value as of the acquisition date of up to $100) and eighteen members of management (who may in any one year acquire newly-issued shares having a value as of the acquisition date of up to 50% of their annual base compensation). The shares may be acquired at 85% of their then current value, and the participants may elect to receive financing for up to 80% of their acquisition cost. The 15% discount is taxable income to the participants and expense for the Company's financial reporting purposes in the year in which the shares are issued. During 1996, fourteen Trustees and employees acquired a total of 35,700 shares pursuant to the Purchase Plan. Related shareholder loans bear interest at 7.66% and are fully amortizing over a ten year term. Of the $487 in loans made in 1996 pursuant to the Purchase Plan, the Company's share of the outstanding balance of such loans at December 31, 1996 is $433 and is included in the accompanying balance sheet as a reduction of shareholders' equity. Total expense recorded in 1996 for the 15% discount, including the Service Companies' share, was $117. SHAREHOLDER LOANS TO OFFICERS/TRUSTEES At their February meeting, the Board of Trustees approved $2,500 in recourse loans to the four Officers/Trustees to enable them to acquire on the open market 105,000 of the Company's common shares of beneficial interest. These loans will bear interest at 6.23% and have a term of nine years from February 28, 1997. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) LEGAL ACTIONS The Company is a party to several legal actions which arose in the normal course of business. In the opinion of management, there will be no adverse consequences from these actions which would be material to the Company's financial position or results of operations. 9. SUBSEQUENT EVENTS On January 8, 1997, the Company acquired approximately 20.2 acres of land located in Gainesville, Georgia for $960. The Company anticipates commencing the development of this land later in 1997. On February 14, 1997, the Company acquired approximately 18 acres of land located in Dallas, Texas for $1,750. The development of this land is expected to commence in 1997. On February 28, 1997, AMLI, through a co-investment venture with the State Teacher's Retirement Board of Ohio ("OTR"), acquired a 600 apartment home community in Wheaton, Illinois for approximately $48,800. The seller provided a ten-year $24,500 loan with interest at 7.33%. AMLI owns a 10% interest and OTR owns a 90% interest in AMLI at Danada, L.L.C., the co- investment venture that acquired this community. AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) 10. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
YEAR ENDED DECEMBER 31, 1996 ------------------------------------- FIRST SECOND THIRD FOURTH ----- ------ ----- ------ Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,698 19,247 20,072 20,254 Income before minority interest and extraordinary item . . . . . . . . . . . . . . . . . . . . 4,473 5,079 4,782 5,615 Minority interest. . . . . . . . . . . . . . . . . . . . . . . . 807 920 878 976 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,339 2,568 3,431 4,166 Earnings per common share: Income before extraordinary item . . . . . . . . . . . . . . . .29 .31 .28 .32 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .29 .22 .28 .32 YEAR ENDED DECEMBER 31, 1995 ------------------------------------- FIRST SECOND THIRD FOURTH ------ ------ ----- ------ Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $18,213 18,539 18,661 18,464 Income before minority interest and extraordinary item . . . . . . . . . . . . . . . . . . . . 3,815 3,466 5,498 4,227 Minority interest. . . . . . . . . . . . . . . . . . . . . . . . 761 669 1,051 806 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,054 2,797 4,447 3,421 Earnings per common share: Income before extraordinary item . . . . . . . . . . . . . . . .26 .24 .38 .30 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . .26 .24 .38 .30 AMLI RESIDENTIAL PROPERTIES TRUST NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED Years ended December 31, 1996, 1995 and 1994 (Dollars in thousands, except share data) YEAR ENDED DECEMBER 31, 1994 -------------------------------------- FIRST SECOND THIRD FOURTH ------ ------ ----- ------ Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,017 15,984 16,563 17,651 Income before minority interest and extraordinary item . . . . . . . . . . . . . . . . . . . . 1,625 3,329 4,816 3,628 Minority interest. . . . . . . . . . . . . . . . . . . . . . . . 317 668 967 729 Extraordinary item (net of minority interest). . . . . . . . . . (2,102) -- 21 74 Net income (loss). . . . . . . . . . . . . . . . . . . . . . . . (794) 2,661 3,870 2,973 Earnings per common share: Income before extraordinary item . . . . . . . . . . . . . . . .11 * .23 .33 .25 Net income (loss). . . . . . . . . . . . . . . . . . . . . . . (.07)* .23 .33 .26 * One and one-half months subsequent to closing of the Initial Offering.
SCHEDULE III AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1996 (Dollars in thousands)
GROSS AMOUNT AT WHICH INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B) -------------------------------------- ------------------------------------- COSTS RELATED BUILDINGS CAPITALIZED BUILDINGS ENCUM- AND SUBSEQUENT TO AND PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL - - ---------- ---------- --------- ------------ ------------- ---------- ------------ ---------- DALLAS/FT. WORTH TX AMLI: at AutumnChase. . $ -- 2,991 16,884 123 2,992 17,006 19,998 at Bear Creek . . -- 2,601 8,979 258 2,601 9,237 11,838 at Chase Oaks . . -- 1,003 9,513 278 1,003 9,791 10,794 at Gleneagles . . 8,152 1,578 10,954 250 1,578 11,204 12,782 on the Green. . . 12,678 1,693 17,007 205 1,693 17,212 18,905 at Nantucket. . . -- 1,931 6,817 142 1,931 6,959 8,890 of North Dallas . 30,260 7,278 37,204 643 7,278 37,847 45,125 at Reflections. . 4,528 947 6,492 163 947 6,655 7,602 on Rosemeade. . . 6,682 1,534 9,182 215 1,534 9,397 10,931 on Timberglen . . -- 1,932 8,094 148 1,932 8,242 10,174 at Valley Ranch . 10,900 3,139 16,199 391 3,139 16,590 19,729 ------- ------ ------- ----- ------ ------- ------- Subtotal - Dallas/ Ft. Worth, TX. 73,200 26,627 147,325 2,816 26,628 150,140 176,768 ------- ------ ------- ----- ------ ------- ------- AUSTIN, TX AMLI: at the Arboretum. 4,427 1,664 9,480 108 1,664 9,588 11,252 in Great Hills. . 10,935 3,228 14,304 264 3,228 14,568 17,796 at Martha's Vineyard. . . . 6,669 2,154 13,216 162 2,154 13,378 15,532 ------- ------ ------- ----- ------ ------- ------- Subtotal - Austin, TX . . 22,031 7,046 37,000 534 7,046 37,534 44,580 ------- ------ ------- ----- ------ ------- -------
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DATE DEPRECIABLE ACCUMULATED COMPLETED/ LIVES PROPERTIES DEPRECIATION ACQUIRED YEARS - - ---------- ------------ ---------- ----------- DALLAS/FT. WORTH TX AMLI: at AutumnChase. . . . . . 1,014 7/91-6/96 5 - 40 years at Bear Creek . . . . . . 825 12/05/89 5 - 40 years at Chase Oaks . . . . . . 811 06/02/94 5 - 40 years at Gleneagles . . . . . . 2,852 07/01/88 5 - 40 years on the Green. . . . . . . 1,579 02/16/94 5 - 40 years at Nantucket. . . . . . . 2,175 12/16/88 5 - 40 years of North Dallas . . . . . 3,186 7/89-7/90 5 - 40 years at Reflections. . . . . . 650 03/02/93 5 - 40 years on Rosemeade. . . . . . . 828 12/28/90 5 - 40 years on Timberglen . . . . . . 739 07/09/90 5 - 40 years at Valley Ranch . . . . . 1,432 05/25/90 5 - 40 years ------ Subtotal - Dallas/ Ft. Worth, TX. . . . . 16,091 ------ AUSTIN, TX AMLI: at the Arboretum. . . . . 1,952 06/04/86 5 - 40 years in Great Hills. . . . . . 1,288 01/18/91 5 - 40 years at Martha's Vineyard. . . . . . . . 1,129 10/09/92 5 - 40 years ------ Subtotal - Austin, TX . . . . . . 4,369 ------
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
GROSS AMOUNT AT WHICH INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B) --------------------------------------- ------------------------------------- COSTS RELATED BUILDINGS CAPITALIZED BUILDINGS ENCUM- AND SUBSEQUENT TO AND PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL - - ---------- ---------- --------- ------------ ------------- ---------- ------------ ---------- ATLANTA, GA AMLI: at Sope Creek . . 7,500 3,347 22,816 759 3,379 23,543 26,922 at Spring Creek . 40,750 8,579 45,971 804 8,579 46,775 55,354 at Vinings. . . . -- 1,490 9,576 100 1,490 9,676 11,166 at West Paces . . -- 2,160 20,595 152 2,160 20,747 22,907 ------- ------ ------- ------ ------ ------- ------- Subtotal - Atlanta, GA. . 48,250 15,576 98,958 1,815 15,608 100,741 116,349 ------- ------ ------- ------ ------ ------- ------- EASTERN KANSAS AMLI: at Alvamar. . . . -- 727 6,983 157 727 7,140 7,867 at Crown Colony . -- 652 5,370 191 652 5,561 6,213 at Regents Center 13,675 1,599 15,213 498 1,599 15,711 17,310 at Sherwood . . . 6,992 1,281 12,430 196 1,281 12,626 13,907 ------- ------ ------- ------ ------ ------- ------- Subtotal - Overland, KS . 20,667 4,259 39,996 1,042 4,259 41,038 45,297 ------- ------ ------- ------ ------ ------- ------- INDIANAPOLIS, IN AMLI: at Riverbend. . . 30,815 5,184 33,209 416 5,184 33,625 38,809 ------- ------ ------- ------ ------ ------- ------- CHICAGO, IL AMLI: at Park Sheridan. -- 1,101 9,458 281 1,101 9,739 10,840 ------- ------ ------- ------ ------ ------- ------- TOTAL PROPERTIES 194,963 59,793 365,946 6,904 59,826 372,817 432,643 ------- ------ ------- ------ ------ ------- -------
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DATE DEPRECIABLE ACCUMULATED COMPLETED/ LIVES PROPERTIES DEPRECIATION ACQUIRED YEARS - - ---------- ------------ ---------- ----------- ATLANTA, GA AMLI: at Sope Creek . . . . . . 6,108 7/82 -12/95 5 - 40 years at Spring Creek . . . . . 12,677 5/85 - 5/89 5 - 40 years at Vinings. . . . . . . . 974 06/19/92 5 - 40 years at West Paces . . . . . . 1,708 11/15/93 5 - 40 years ------ Subtotal - Atlanta, GA. . . . . . 21,467 ------- EASTERN KANSAS AMLI: at Alvamar. . . . . . . . 463 10/18/94 5 - 40 years at Crown Colony . . . . . 363 10/18/94 5 - 40 years at Regents Center . . . . 1,138 10/18/94 5 - 40 years at Sherwood . . . . . . . 829 10/18/94 5 - 40 years ------- Subtotal - Overland, KS . . . . . 2,793 ------- INDIANAPOLIS, IN AMLI: at Riverbend. . . . . . . 3,116 12/12/92 5 - 40 years ------- CHICAGO, IL AMLI: at Park Sheridan. . . . . 2,451 08/31/89 5 - 40 years ------- TOTAL PROPERTIES. . . . 50,287 -------
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
GROSS AMOUNT AT WHICH INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B) ------------------------- ------------------------------------- COSTS RELATED BUILDINGS CAPITALIZED BUILDINGS ENCUM- AND SUBSEQUENT TO AND DESCRIPTION BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL - - ----------- ---------- --------- ------------ ------------- ---------- ------------ ---------- LAND PARCELS AND OTHER AMLI: at AutumnChase III . . . . . . 1,323 915 1,323 915 2,238 at Crown Colony II. . . . . . . 325 1,804 325 1,804 2,129 at Wells Branch . 2,400 1,458 2,400 1,458 3,858 at Gleneagles II. . . . . . . 1,600 11,598 1,604 11,594 13,198 at Regents Center III . . . . . . 6,300 661 6,592 661 6,592 7,253 on the Parkway. . 1,166 274 1,166 274 1,440 at Fossil Creek II. . . . . . . 3,070 7 3,070 7 3,077 at Northwinds . . 2,974 3,229 2,974 3,229 6,203 at Northwinds II. 2,974 800 2,974 800 3,774 at Peachtree City 2,870 2,935 2,870 2,935 5,805 at Oakhurst . . . 5,014 879 5,014 879 5,893 at Vinings Square 1,231 6,426 1,231 614 717 Other . . . . . . 28 248 75 28 323 351 --------- -------- -------- -------- -------- -------- -------- TOTAL LAND PARCELS AND OTHER. . . 6,300 25,636 248 36,992 25,640 37,236 62,876 --------- -------- -------- -------- -------- -------- -------- TOTAL. . . . . . $ 201,263 85,429 366,194 43,896 85,466 410,053 495,519 ========= ======== ======== ======== ======== ======== ========
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DATE DEPRECIABLE ACCUMULATED COMPLETED/ LIVES PROPERTIES DEPRECIATION ACQUIRED YEARS - - ---------- ------------ ---------- ----------- LAND PARCELS AND OTHER AMLI: at AutumnChase III. . . . at Crown Colony II. . . . at Wells Branch . . . . . 05/12/94 at Gleneagles II. . . . . 122 05/31/94 5 - 40 years at Regents Center III . . 15 10/18/94 5 - 40 years on the Parkway. . . . . . 11/30/94 at Fossil Creek . . . . . at River Park . . . . . . Other . . . . . . . . . . 54 5 - 40 years -------- TOTAL LAND PARCELS AND OTHER. . . . . . . 191 --------- TOTAL. . . . . . . . . . $ 50,478 ========= NOTES: (A) The initial costs represents the original development costs or original purchase price of the properties to the Company, including closing costs. (B) The aggregate cost of real estate owned at December 31, 1996 for Federal income tax purposes was $460,553. (C) Amounts disclosed exclude current accrued interest and debt not secured by properties.
SCHEDULE III - CONTINUED AMLI RESIDENTIAL PROPERTIES TRUST CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
(D) Reconciliation of real estate owned: 1996 1995 1994 ------------- ------------- ------------- Balance at beginning of period . . . . . . . . . . $442,865 451,762 338,895 Additions during period. . . . . . . . . . . . . . 66,700 25,997 88,358 Effect of reorganization . . . . . . . . . . . . . -- -- 24,509 Contribution to Joint Venture. . . . . . . . . . . (14,046) (5,608) -- Sale of property . . . . . . . . . . . . . . . . . -- (29,286) -- -------- -------- -------- $495,519 442,865 451,762 ======== ======== ======== (E) Reconciliation of accumulated depreciation: Balance at beginning of period . . . . . . . . . . $ 39,157 29,574 41,376 Additions during period. . . . . . . . . . . . . . 11,321 10,785 10,627 Effect of reorganization . . . . . . . . . . . . . -- -- (22,429) Sale of property . . . . . . . . . . . . . . . . . -- (1,202) -- -------- -------- -------- Balance at end of period . . . . . . . . . . . . . $ 50,478 39,157 29,574 ======== ======== ========
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT The information required by this item is hereby incorporated by reference to the materials appearing in the Company's proxy statement for the annual meeting of shareholders to be held on April 28, 1997 (the "Proxy Statement"), under the captions "Election of Trustees", "Management - Trustees and Executive Officers" and "Compliance with Section 16(A) of the Exchange Act." ITEM 11. EXECUTIVE COMPENSATION The information required by this item is hereby incorporated by reference to the materials appearing in the Proxy Statement under the caption "Executive Compensation." ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this item is hereby incorporated by reference to the materials appearing in the Proxy Statement under the caption "Security Ownership." ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item is hereby incorporated by reference to the materials appearing on of the Proxy Statement under the caption "Certain Relationships and Related Transactions." PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K (a) The following documents are filed as part of this report: (1) Independent Auditors' Report . . . . . . . . . . . . . Consolidated Balance Sheets, December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . Consolidated Statements of Operations, years ended December 31, 1996, 1995 and 1994 . . . . Consolidated Statements of Shareholders' Equity, years ended December 31, 1996, 1995 and 1994 . . . . Consolidated Statements of Cash Flows, years ended December 31, 1996, 1995 and 1994 . . . . Notes to Consolidated Financial Statements . . . . . . (2) Financial Statement Schedule and Independent Auditors' Report TITLE SCHEDULE Consolidated Real Estate and Accumulated Depreciation . . . . . . . . . . . . . III The independent auditors' report with respect to the financial statement schedule is on page 40. (3) Exhibits 3.1 Amended and Restated Declaration of Trust of the Registrant (Incorporated by reference to exhibit 3.1 to Registration Statement No. 33-71566) 3.2 Amended and Restated By-laws of the Registrant (Incorporated by reference to exhibit 3.2 to Registration Statement No. 33- 71566) 4.1 Form of Share Certificate for Common Shares of Beneficial Interest (Incorporated by reference to exhibit 4.1 to the Registration Statement No. 33-71566) 4.2 Form of Share Certificate for Series A Cumulative Convertible Preferred Shares of Beneficial Interest (Incorporated by reference to exhibit 4.5 to the Registrant's Form 8-K dated January 18, 1996) 4.3 Articles Supplementary Classifying and Designating a Series of Preferred Shares as Series A Cumulative Convertible Preferred Shares of Beneficial Interest (Incorporated by reference to exhibit 4.9 to the Registrant's Form 8-K dated January 30, 1996) 10.1 Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.1(a) First Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1(a) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995). 10.1(b) Second Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated by reference to exhibit 10.1(b) to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1995). 10.1(c) Third Amendment to Amended and Restated Agreement of Limited Partnership of AMLI Residential Properties, L.P. 10.2 Registration Rights and Lock-Up Agreement between the Company and certain Original Investors (Incorporated by reference to exhibit 10.8 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.3 Corporate Services Agreement among the Registrant, AMLI Residential Properties L.P., AMLI Management Company and AMLI Institutional Advisors, Inc. (Incorporated by reference to exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.4 Administrative Services Agreement between AMLI Management Company and AMLI Realty Co. (Incorporated by reference to exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.5 Non-Competition Agreement between the Registrant and Amli Realty Co. (Incorporated by reference to exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.6 Non-Competition Agreement between the Registrant and Gregory T. Mutz (Incorporated by reference to exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.7 Non-Competition Agreement between the Registrant and John E. Allen (Incorporated by reference to exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.8 Non-Competition Agreement between the Registrant and Allan J. Sweet (Incorporated by reference to exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.9 Management Agreement between AMLI Residential Properties, L.P. and Amli Management Company (Incorporated by reference to exhibit 10.10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1994) 10.10 Performance Incentive Plan (Incorporated by reference to exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1995) 10.11 Amli Residential Properties Trust Option Plan (Incorporated by reference to exhibit 10.8 to the Registration Statement No. 33-71566) 10.11(a) First Amendment to AMLI Residential Properties Option Plan (Incorporated by reference to exhibit 10 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995) 10.12 AMLI Residential Properties Trust Executive Share Purchase Plan (Incorporated by reference to exhibit 10.1 to the Registration Statement No. 333-8813). 10.13 (i) Side Agreement, dated as of May 3, 1996, between the Registrant, AMLI Residential Properties, L.P. and Peachtree City Multifamily Partners, L.P., (ii) Two Letter Agreements, dated May 3, 1996, between the Registrant and Peachtree City Multifamily Partners, L.P. (iii) Letter Agreement, dated May 3, 1996 between AMLI Residential Properties, L.P. and Peachtree City Multifamily Partners, L.P. (Incorporated by reference to exhibit 99.1 to the Registration Statement No. 333-8819. 21.1 Subsidiaries of the Registrant 23.1 Consent of KPMG Peat Marwick LLP 27 Financial Data Schedule. 99.1 Operating and Financial Data furnished to Shareholders and Analysts (b) Reports on Form 8-K A report on Form 8-K was filed on November 21, 1996 to report a purchase agreement with respect to Common Shares of Beneficial Interest of AMLI Residential Properties Trust and a list of subsidiaries of the Registrant. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. AMLI RESIDENTIAL PROPERTIES TRUST Date: March 21, 1997 By: /S/ ALLAN J. SWEET Allan J. Sweet President and Trustee Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Date: March 21, 1997 By: /S/ GREGORY T. MUTZ Gregory T. Mutz Chairman of the Board of Trustees Date: March 21, 1997 By: /S/ JOHN E. ALLEN John E. Allen Vice-Chairman of the Board of Trustees Date: March 21, 1997 By: /S/ ALLAN J. SWEET Allan J. Sweet President and Trustee Date: March 21, 1997 By: /S/ PHILIP N. TAGUE Philip N. Tague Executive Vice President and Trustee Date: March 21, 1997 By: /S/ LAURA D. GATES Laura D. Gates Trustee Date: March 21, 1997 By: /S/ MARC S. HEILWEIL Marc S. Heilweil Trustee Date: March 21, 1997 By: /S/ STEPHEN G. MCCONAHEY Stephen G. McConahey Trustee Date: March 21, 1997 By: /S/ QUINTIN E. PRIMO III Quintin E. Primo III Trustee Date: March 21, 1997 By: /S/ JOHN G. SCHREIBER John G. Schreiber Trustee Date: March 21, 1997 By: /S/ CHARLES C. KRAFT Charles C. Kraft Principal Financial Officer and Principal Accounting Officer INDEX TO EXHIBITS Exhibit No. Document Description - - ----------- -------------------- 10.1(c) Third Amendment to Amended and Restated Agreement of Limited Partnership of Amli Residential Properties, L.P. 21.1 Subsidiaries of the Registrant 23.1 Consent of KPMG Peat Marwick LLP 27 Financial Data Schedule 99.1 Operating and Financial Data furnished to Shareholders and Analysts EX-10.1(C) 2 EXHIBIT 10.1(C) THIRD AMENDMENT TO AMLI RESIDENTIAL PROPERTIES, L.P. AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP ----------------------------------- This Amendment, dated as of July 31, 1996, amends the Amended and Restated Agreement of Limited Partnership, dated as of February 15, 1994, as previously amended (the "PARTNERSHIP AGREEMENT"), of Amli Residential Properties, L.P., a Delaware limited partnership (the "PARTNERSHIP"), by and among Amli Residential Properties Trust, a Maryland real estate investment trust, as the General Partner (the "GENERAL PARTNER"), and the Persons whose names are set forth on Exhibit A to the Partnership Agreement, as the Limited Partners (the "LIMITED PARTNERS"), together with any other Persons who become Partners in the Partnership as provided in the Partnership Agreement. W I T N E S E T H: ----------------- WHEREAS, the Partnership is a Delaware limited partnership existing under the Delaware Revised Uniform Limited Partnership Act (the "ACT") pursuant to the Partnership Agreement; WHEREAS, pursuant SECTION 14.1(b)(4), the General Partner has the power, without the consent of the Limited Partners, to amend the Partnership Agreement in order to cure any ambiguity; WHEREAS, the General Partner has determined that SECTION 11.7(a) of the Partnership Agreement contains an ambiguity regarding which Limited Partners are bound by the Registration Rights and Lock-up Agreement and with respect to which Units such Limited Partners are so bound; and WHEREAS, the General Partner desires to amend the Partnership Agreement to cure such ambiguity. NOW, THEREFORE, pursuant to the authority granted in SECTION 14.1(b) (4) of the Partnership Agreement, the General Partner hereby amends the Partnership Agreement as follows: 1. AMENDMENT. Effective as of the date hereof, SECTION 11.7(a) of the Partnership Agreement is hereby amended (i) by adding the phrase "who is a Limited Partner as of February 15, 1994" immediately following the words "Each Limited Partner" in the last sentence of such SECTION 11.7(a) and (ii) by adding the phrase," with respect to Units owned by such Limited Partner as of February 15, 1994," immediately following the words "to be bound" in the last sentence of such SECTION 11.7(a). 2. CONTINUING EFFECTIVENESS. As herein amended, the Partnership Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. 3. GOVERNING LAW. This Amendment shall be governed by the internal laws of the State of Delaware. 4. DEFINED TERMS. Capitalized terms used and not defined herein shall have the respective meanings assigned such terms in the Partnership Agreement. IN WITNESS WHEREOF, the undersigned, the General Partner of the Partnership, has executed this Amendment to the Partnership Agreement as of the date first above written. AMLI RESIDENTIAL PROPERTIES TRUST By: /S/ ALLAN J. SWEET Name: Allan J. Sweet Title: President EX-21.1 3 EXHIBIT 21.1 SUBSIDIARIES OF THE COMPANY COMPANY'S JURISDICTION PERCENTAGE NAME OF SUBSIDIARY OF INCORPORATION OWNERSHIP - - ------------------ ---------------- ---------- Amli Residential Properties, L.P.. . . . . . Delaware 84% A. Amrescon, Inc. . . . . . . . . . . . . Georgia 95% B. Amli Institutional Advisors, Inc.. . . Illinois 95% C. Amli Management Company. . . . . . . . Delaware 95% D. Laurel Park Venture. . . . . . . . . . Georgia 100% E. Pleasant Hill Joint Venture. . . . . . Georgia 40% F. Amli Foundation Co-Investors, L. P. . Delaware 25% G. Amli Foundation Co-Investors-II, L. P. .. . . . . . . . . . . . . . . Delaware 15% H. Amli at Champions, L. P. . . . . . . . Texas 15% I. Amli at Windbrooke, L. P. . . . . . . Illinois 15% J. Amli at Willeo Creek, L. P. . . . . . Georgia 30% K. Barrett Lakes, L.L.C.. . . . . . . . . Georgia 35% L. Amli at Chevy Chase, L.P.. . . . . . . Illinois 33% M. Amli at Willowbrook, L.P.. . . . . . . Illinois 40% N. Amli at River Exchange, L.L.C. . . . . Delaware 40% O. Acquiport/Aurora Crossing, L.P.. . . . Delaware 25% P. Acquiport/Fossil Creek, L.P. . . . . . Delaware 25% EX-23.1 4 EXHIBIT 23.1 CONSENT OF KPMG PEAT MARWICK LLP The Board of Trustees Amli Residential Properties Trust: We consent to incorporation by reference in the registration statements (Nos. 333-8819, 33-89508 and 33-93120) on Form S-3 and the registration statements (Nos. 333-8813 and 333-8815) on form S-8 of Amli Residential Properties Trust of our report dated February 28, 1997, relating to the consolidated balance sheets of Amli Residential Properties Trust as of December 31, 1996 and 1995, and the related consolidated statements of operations, changes in shareholders' equity and cash flows for each of the years in the three-year period ended December 31, 1996, and the related schedule, which report appears in the December 31, 1996 annual report on Form 10-K of Amli Residential Properties Trust. KPMG PEAT MARWICK LLP Chicago, Illinois March 19, 1997 EX-27 5
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT. 12-MOS DEC-31-1996 DEC-31-1996 10,291 0 0 0 0 0 495,519 50,478 504,357 0 202,013 148 0 11 241,863 504,357 0 78,271 0 58,906 0 0 11,916 16,368 0 16,368 0 1,118 0 15,250 1.11 1.11
EX-99.1 6 EXHIBIT 99.1 - - ------------ AMLI RESIDENTIAL PROPERTIES TRUST FINANCIAL AND OPERATING DATA December 31, 1996 1. Funds from Operations 2. Statements of Operations 3. Balance Sheets 4. Selected Financial Information 5. Debt 6. Debt Maturities 7. Same Community Comparison - Wholly-Owned - three months ended December 31, 1996 and 1995 8. Same Community Comparison - Wholly-Owned - year ended December 31, 1996 and 1995 9. Same Community Comparison - Wholly-Owned & Co- Investments - three months ended December 31, 1996 and 1995 10. Same Community Comparison - Wholly-Owned & Co- Investments - year ended December 31, 1996 and 1995 11. Property Information 12. Development Activities AMLI RESIDENTIAL PROPERTIES TRUST FUNDS FROM OPERATIONS Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1996 1995 1996 1995 -------- -------- ------- -------- REVENUES - - -------- Property revenues: Rental . . . . . . . . . . . . . . . . . . . . . . $ 18,443 $ 17,284 $ 71,863 $ 69,341 Other. . . . . . . . . . . . . . . . . . . . . . . 842 703 3,269 2,797 -------- -------- -------- -------- Total property revenues. . . . . . . . . . . . 19,285 17,987 75,132 72,138 -------- -------- -------- -------- Property operating expenses. . . . . . . . . . . . . (7,339) (7,186) (30,068) (28,451) Property management fees . . . . . . . . . . . . . . (482) (450) (1,878) (1,803) -------- -------- -------- -------- Property expenses. . . . . . . . . . . . . . . (7,821) (7,636) (31.946) (30,254) Operating expense ratio. . . . . . . . . . . . 40.6% 42.5% 42.5% 41.9% Net operating income . . . . . . . . . . . . . 11,464 10,351 43,186 41,884 -------- -------- -------- -------- OTHER INCOME - - ------------ Share of Service Companies' income (loss). . . . . (79) (37) (238) 3 Interest from Service Companies. . . . . . . . . . 114 113 455 455 Other interest . . . . . . . . . . . . . . . . . . 247 99 639 407 Share of partnerships cash flow. . . . . . . . . . 557 196 1,892 466 Fee income - acquisitions and dispositions . . . . -- 66 250 220 Fee income - developments. . . . . . . . . . . . . 325 70 819 206 Fee income - asset management. . . . . . . . . . . 144 57 507 224 Other. . . . . . . . . . . . . . . . . . . . . . . 33 68 138 189 -------- -------- -------- -------- Total other income . . . . . . . . . . . . . . 1,341 632 4,462 2,170 General and administrative . . . . . . . . . . . . . (650) (486) (2,353) (1,932) -------- -------- -------- -------- EBITDA . . . . . . . . . . . . . . . . . . . . . . . 12,155 10,497 45,295 42,122 -------- -------- -------- -------- Interest expense . . . . . . . . . . . . . . . . . . (2,935) (3,082) (11,916) (12,926) Amortization of deferred costs . . . . . . . . . . . (266) (450) (1,370) (1,792) -------- -------- -------- -------- Funds from operations (FFO). . . . . . . . . . . 8,954 6,965 32,009 27,404 -------- -------- -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST FUNDS FROM OPERATIONS - CONTINUED Unaudited - Dollars in thousands except per share data THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1996 1995 1996 1995 -------- -------- ------- -------- Capital expenditures paid from FFO . . . . . . . . . (755) (425) (1,936) (1,714) Other (Co-Investments Cap Exp) . . . . . . . . . . . (24) (9) (57) (29) -------- -------- -------- -------- Funds available for distribution (FAD) . . . . . $ 8,175 $ 6,531 $ 30,016 $ 25,661 ======== ======== ======== ======== FFO per share. . . . . . . . . . . . . . . . . . . . $ 0.53 $ 0.48 $ 2.01 $ 1.90 FAD per share. . . . . . . . . . . . . . . . . . . . $ 0.48 $ 0.45 $ 1.88 $ 1.78 Dividend per share . . . . . . . . . . . . . . . . . $ 0.43 $ 0.43 $ 1.72 $ 1.72 ======== ======== ======== ======== Dividend as a % of FFO . . . . . . . . . . . . . . . 81.4% 89.1% 85.6% 90.5% Dividend as a % of FAD . . . . . . . . . . . . . . . 89.1% 95.0% 91.3% 96.7% ======== ======== ======== ========
AMLI RESIDENTIAL PROPERTIES TRUST STATEMENTS OF OPERATIONS Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1996 1995 1996 1995 -------- -------- ------- -------- REVENUES: - - -------- Property revenues: Rental . . . . . . . . . . . . . . . . . . . . . $ 18,443 $ 17,284 $ 71,863 $ 69,341 Other. . . . . . . . . . . . . . . . . . . . . . 842 703 3,269 2,797 Interest and share of Service Companies' income (loss) . . . . . . . . . . . . . . . . . . 35 76 217 458 Other interest . . . . . . . . . . . . . . . . . . 247 99 639 407 Other. . . . . . . . . . . . . . . . . . . . . . . 687 302 2,283 874 -------- -------- -------- -------- Total revenues . . . . . . . . . . . . . . . . 20,254 18,464 78,271 73,877 -------- -------- -------- -------- EXPENSES: - - -------- Personnel. . . . . . . . . . . . . . . . . . . . . 1,689 1,589 6,714 6,287 Advertising and promotion. . . . . . . . . . . . . 448 421 1,917 1,702 Utilities. . . . . . . . . . . . . . . . . . . . . 929 1,046 4,161 4,125 Building repairs and maintenance . . . . . . . . . 1,292 1,223 4,933 4,554 Landscaping and grounds maintenance. . . . . . . . 445 409 1,736 1,811 Real estate taxes. . . . . . . . . . . . . . . . . 2,036 1,989 8,465 7,947 Insurance. . . . . . . . . . . . . . . . . . . . . 239 218 977 914 Other operating expenses . . . . . . . . . . . . . 261 291 1,165 1,111 Property management fees . . . . . . . . . . . . . 482 450 1,878 1,803 Interest, net of capitalized . . . . . . . . . . . 2,935 3,082 11,916 12,926 Amortization of deferred costs . . . . . . . . . . 266 450 1,370 1,792 Depreciation of real property. . . . . . . . . . . 2,280 2,102 8,793 8,704 Depreciation of personal property. . . . . . . . . 687 465 2,528 2,081 General and administrative . . . . . . . . . . . . 650 486 2,353 1,932 -------- -------- -------- -------- Total expenses . . . . . . . . . . . . . . . . 14,639 14,221 58,906 57,689 -------- -------- -------- -------- Nonrecurring item income (expense) . . . . . . . . . -- (16) 584 818 -------- -------- -------- -------- Income before taxes, minority interest and extraordinary item . . . . . . . . . . . . . . 5,615 4,227 19,949 17,006 -------- -------- -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST STATEMENTS OF OPERATIONS - CONTINUED THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1996 1995 1996 1995 -------- -------- ------- -------- Income taxes . . . . . . . . . . . . . . . . . . . . -- -- -- -- Income before minority interest/extraordinary items. . . . . . . . . . . . . . . . . . . . . . . 5,615 4,227 19,949 17,006 Minority interest. . . . . . . . . . . . . . . . . . 976 806 3,581 3,287 -------- -------- -------- -------- Income before and extraordinary items. . . . . . . . 4,639 3,421 16,368 13,719 Extraordinary items, net of minority interest. . . . -- -- (1,118) -- -------- -------- -------- -------- Net income . . . . . . . . . . . . . . . . . . . . . 4,639 3,421 15,250 13,719 Net income allocable to preferred shares . . . . . . 473 -- 1,746 -- -------- -------- -------- -------- Net income allocable to common shares. . . . . . . . $ 4,166 $ 3,421 $ 13,504 $ 13,719 ======== ======== ======== ======== INCOME PER COMMON SHARE: - - ----------------------- Before extraordinary items . . . . . . . . . . . . $ 0.32 $ 0.30 $ 1.20 $ 1.18 Extraordinary item . . . . . . . . . . . . . . . . $ 0.00 $ 0.00 $ (0.09) $ 0.00 Income per common share. . . . . . . . . . . . . . $ 0.32 $ 0.30 $ 1.11 $ 1.18 ======== ======== ======== ======== FUNDS FROM OPERATIONS: - - --------------------- Income before taxes, minority interest and extraordinary item . . . . . . . . . . . . . $ 5,615 $ 4,227 $ 19,949 $ 17,006 Depreciation of real property. . . . . . . . . . . 2,280 2,102 8,793 8,704 Depreciation of personal property. . . . . . . . . 687 465 2,528 2,081 Nonrecurring items . . . . . . . . . . . . . . . . -- 16 (584) (818) Other. . . . . . . . . . . . . . . . . . . . . . . 372 155 1,323 431 -------- -------- -------- -------- Funds from operations (FFO). . . . . . . . . . . $ 8,954 $ 6,965 $ 32,009 $ 27,404 ======== ======== ======== ======== AMLI RESIDENTIAL PROPERTIES TRUST STATEMENTS OF OPERATIONS - CONTINUED THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------- ----------------------- 1996 1995 1996 1995 -------- -------- ------- -------- FFO per share. . . . . . . . . . . . . . . . . . . . $ 0.53 $ 0.48 $ 2.01 $ 1.90 ======== ======== ======== ======== Capital expenditures paid from FFO . . . . . . . . . $ (755) $ (425) $ (1,936) $ (1,714) Other (Co-investments Cap exp) . . . . . . . . . . . (24) (9) (57) (29) -------- -------- -------- -------- Funds available for distribution (FAD) . . . . . . . $ 8,175 $ 6,531 $ 30,016 $ 25,661 ======== ======== ======== ======== FAD per share. . . . . . . . . . . . . . . . . . . . $ 0.48 $ 0.45 $ 1.88 $ 1.78 ======== ======== ======== ======== Dividends per share. . . . . . . . . . . . . . . . . $ 0.43 $ 0.43 $ 1.72 $ 1.72 ======== ======== ======== ======== Dividends as a % of FFO. . . . . . . . . . . . . . . 81.4% 89.1% 85.6% 90.5% Dividends as a % of FAD. . . . . . . . . . . . . . . 89.1% 95.0% 91.3% 96.7% ======== ======== ======== ========
AMLI RESIDENTIAL PROPERTIES TRUST CONDENSED BALANCE SHEETS Unaudited - Dollars in thousands except per share data
DEC. 31, SEP. 30, JUN. 30, MAR. 31, DEC. 31, 1996 1996 1996 1996 1996 -------- -------- -------- -------- -------- ASSETS - - ------ Rental apartments Land $ 59,854 $ 59,854 $ 58,643 $ 58,643 $ 58,643 Depreciable property 373,140 372,317 361,879 361,330 361,011 -------- -------- -------- -------- -------- 432,994 432,171 420,522 419,973 419,654 Less accumulated depreciation (50,478) (47,511) (44,552) (41,826) (39,157) -------- -------- -------- -------- -------- 382,516 384,660 375,970 378,147 380,497 Properties under development 62,525 43,344 50,597 42,763 23,211 Investments in partnerships 30,669 28,438 24,351 17,758 12,255 Cash and cash equivalents 10,878 3,643 4,459 2,080 2,829 Security deposits 1,737 1,775 1,881 1,874 1,880 Deferred costs, net 2,139 2,339 2,509 4,922 5,415 Other assets 13,893 9,949 10,573 9,419 7,140 -------- -------- -------- -------- -------- Total assets $504,357 $474,148 $470,340 $456,963 $433,227 ======== ======== ======== ======== ======== LIABILITIES AND SHAREHOLDERS EQUITY - - ----------------------------------- Debt $202,013 $233,567 $230,888 $218,267 $215,255 Accrued interest payable 1,161 1,273 992 1,127 1,230 Accrued real estate taxes 6,978 6,974 5,057 3,577 6,471 Construction costs payable 2,263 2,432 1,821 2,213 1,369 Security deposits and prepaid rents 2,757 2,369 2,191 2,185 2,439 Other liabilities 2,292 1,836 1,701 1,741 1,223 -------- -------- -------- -------- -------- Total liabilities 217,464 248,451 242,650 229,110 227,987 -------- -------- -------- -------- -------- Minority interest 44,871 41,409 41,814 40,249 39,077 -------- -------- -------- -------- -------- AMLI RESIDENTIAL PROPERTIES TRUST CONDENSED BALANCE SHEETS - CONTINUED DEC. 31, SEP. 30, JUN. 30, MAR. 31, DEC. 31, 1996 1996 1996 1996 1996 -------- -------- -------- -------- -------- Shareholders' equity Preferred shares, $.01 par value 11 11 11 11 Shares of beneficial interest, $.01 par value 148 118 118 118 117 Additional paid-in capital 301,098 242,487 242,433 241,657 218,752 Retained earnings (5,455) (10,094) (13,998) (17,039) (20,705) Dividends paid (53,780) (48,234) (42,688) (37,143) (32,001) -------- -------- -------- -------- -------- Total shareholders' equity 242,022 184,288 185,876 187,604 166,163 -------- -------- -------- -------- -------- Total liabilities and shareholders' equity $504,357 $474,148 $470,340 $456,963 $433,227 ======== ======== ======== ======== ========
AMLI RESIDENTIAL PROPERTIES TRUST SELECTED QUARTERLY FINANCIAL INFORMATION December 31, 1996 (dollars in thousands except for per share data)
DEC. 31, SEPT. 30, JUNE 30, MAR. 31, DEC. 31, 1996 1996 1996 1996 1995 -------- -------- -------- -------- -------- Total Debt $202,013 $233,567 $230,888 $218,267 $215,255 Total Debt (1) 240,593 270,374 267,348 244,149 227,204 Total Shares and Units Outstanding (2) 18,862 15,799 15,796 15,653 14,427 Value per Common Share - end of quarter $ 23.375 $ 20.875 $ 20.750 $ 20.125 $ 20.00 Total Equity (Market Value) - end of quarter 440,902 329,802 327,775 315,014 288,534 Total Market Capitalization 642,915 563,369 558,663 533,281 503,789 Total Market Capitalization (1) 681,495 600,176 595,123 559,163 515,738 ======== ======== ======== ======== ======== Total Revenues (3) 20,254 20,072 19,247 18,698 18,464 EBITDA (4) 12,155 11,580 10,974 10,586 10,497 FFO 8,954 8,160 7,578 7,317 6,965 FAD 8,175 7,694 7,172 6,975 6,531 Dividends Paid 6,794 6,792 6,731 6,322 6,203 Debt service (net of capitalized interest) 3,462 3,645 3,279 3,060 3,320 Interest Expense 2,935 3,167 2,996 2,818 3,082 G & A Expense 650 575 532 596 486 Total Shares and Units Outstanding - Wtd. Avg. 16,948 15,798 15,746 15,254 14,427 ======== ======== ======== ======== ======== AMLI RESIDENTIAL PROPERTIES TRUST SELECTED QUARTERLY FINANCIAL INFORMATION - CONTINUED December 31, 1996 DEC. 31, SEPT. 30, JUNE 30, MAR. 31, DEC. 31, 1996 1996 1996 1996 1995 -------- -------- -------- -------- -------- Debt Service Coverage Ratio 3.51 3.18 3.35 3.46 3.16 Interest Coverage Ratio 4.14 3.66 3.66 3.76 3.41 Debt as % of Total Market Capitalization 31.42% 41.46% 41.33% 40.93% 42.73% Debt as % of Total Market Capitalization (1) 35.30% 45.05% 44.92% 43.66% 44.05% EBITDA as % of Total Market Capitalization 7.56% 8.22% 7.86% 7.94% 8.33% FFO as % of Total Market Equity 8.12% 9.90% 9.25% 9.29% 9.66% G&A as % of Total Market Capitalization 0.40% 0.41% 0.38% 0.45% 0.39% G&A as % of Total Revenues 3.21% 2.86% 2.76% 3.19% 2.63% Dividends as % of FFO (5) 81.4% 83.2% 89.3% 89.6% 89.1% Dividends as % of FAD (5) 89.1% 88.3% 94.4% 94.0% 95.0% ======== ======== ======== ======== ======== Apartment Units - Wholly Owned In Operation 9,824 9,824 9,600 9,600 9,600 Under Development 1,404 1,404 884 612 612 Apartment Units - Co-Investments In Operation 3,677 3,677 3,175 2,687 2,245 Under Development 1,324 1,324 1,170 948 948 -------- -------- -------- -------- -------- Total Units 16,229 16,229 14,829 13,847 13,405 ======== ======== ======== ======== ======== (1) Including proportionate share of debt of Co-investment partnerships accounted for using the equity method. (2) Including 1,100,000 preferred shares convertible to common shares. (3) Excluding nonrecurring gain of $960 in the third quarter of 1994, $1,564 in the third quarter of 1995 and $751 in the second quarter of 1996. (4) Includes other income, net of G & A expenses. (5) Based on per share amounts.
AMLI RESIDENTIAL PROPERTIES TRUST PORTFOLIO INDEBTEDNESS SUMMARY December 31, 1996 (Dollars in thousands)
RATE ASSUMPTIONS LIBOR 5.56% LIBOR Cap 3.88% Tax Exempt 3.35% F = Fixed Rate Tax Exempt Cap 3.00% V = Variable Rate
Original Outstand- Maturity /Max ing Interest Maturity (years) Borrower Lender Amount Balance Rate Rate Date 12/31/96 - - ---------- ---------- -------- --------- --------- ---------- -------- -------- F ARP, L.P. Lincoln National $ 4,800 4,427 9.90% 9/28/97 0.7 F ARP, L.P. Prudential 8,500 8,152 7.70% 10/31/97 0.8 F ARP, L.P. Allstate 7,060 6,669 7.42% 11/1/97 0.8 F ARP, L.P. Prudential 4,800 4,527 7.05% 6/30/98 1.5 F ARP, L.P. Prudential 7,050 6,682 7.02% 10/5/98 1.8 F ARP, L.P. CIGNA 31,000 30,815 7.30% 7/1/03 6.5 F ARP, L.P. CIGNA 11,000 10,935 7.34% 7/1/03 6.5 F ARP, L.P. Fleet 7,320 6,992 7.75% 7/1/03 6.5 F ARP, L.P. Nationwide 11,500 10,900 7.63% 7/10/03 6.5 F ARP, L.P. TIAA 20,100 19,975 8.73% 9/1/05 8.7 F ARP, L.P. (1) FNMA 43,907 42,938 7.79% 5/1/06 9.3 - - ------------------------------------------------------------------------------------------------------------------ V ARP, L.P. First Chicago NBD 29,500 7.21% LIBOR + 1.65% 2/28/98 1.2 V ARP, L.P. (2) Wachovia Bank 60,000 7,500 6.47% LIBOR + 1.35% 5/31/98 1.4 - - ------------------------------------------------------------------------------------------------------------------ V ARP, L.P. (3) Tax-Exempt Bonds 31,250 31,250 4.23% Tax Ex + 1.23% 9/30/99 2.7 V ARP, L.P. Tax-Exempt Bonds 9,500 9,500 4.58% Tax Ex + 1.23% 9/30/99 2.7 - - ------------------------------------------------------------------------------------------------------------------ F ARP, L.P. AIA 750 750 4.00% Demand - - - ------------------------------------------------------------------------------------------------------------------ TOTAL 288,038 202,013 6.99% 5.5 ================================================================================================================== Co-Investments (4) Various 47,572 38,580 7.78% Various 6.5 - - ------------------------------------------------------------------------------------------------------------------ TOTAL including Co-Investment $335,610 $240,593 7.12% 5.7 ==================================================================================================================
Weighted Avg. Percent of Interest Years to Type of Indebtedness Balance Total Interest Rate Maturity - - -------------------- -------- ----------- ---------- --------- ---------- Conventional Fixed Rate $153,013 75.7% Fixed 7.80% 6.6 Tax-exempt Variable Rate 40,750 20.2% Variable 4.31% 2.7 Credit Facilities 7,500 3.7% Variable 6.32% 0.3 Other 750 0.4% Fixed 4.00% - -------- ------ ----- --- Total $202,013 100.0% 6.99% 5.5 ======== ====== ===== ===
Avg. Avg. Rate Maturity Outstanding Percent (Weighted (Weighted Averages Balance of Total by $) by $) - - ------------ ----------- -------- -------- -------- Variable 48,250 23.88% 4.62% 2.5 Fixed 153,763 76.12% 7.73% 6.5 ------- ------- ----- --- Total 202,013 100.00% 6.99% 5.5 ======= ======= ===== === (1) The outstanding balance is net of $628 representing the unamortized discount from the sale of the FNMA certificates. (2) $12,400 swapped to 6.32% fixed rate through February 15, 1997 and $14,000 swapped to 6.5% fixed rate through February 24, 1997. $5,845 has been capped based on LIBOR = 3.875% through February 15, 1998. All in rate reflects LIBOR + 135. (3) Tax-Exempt Bonds: $31,250 has been capped with the tax-exempt rate = 3.0% through February 15, 1997. All in rate reflects maximum effective rate including Housing Authority, Trustee and Credit Enhancement Costs. Maturity Date shown is expiration date of Credit Enhancement. Bonds mature in 2024. (4) Co-Investment debt represents Amli Residential's pro rata share of debt. Interest rate and maturity reflect average numbers based on Amli's pro rata share.
AMLI RESIDENTIAL PROPERTIES TRUST PORTFOLIO INDEBTEDNESS SUMMARY December 31, 1996 (Dollars in thousands) CO-INVESTMENT DETAIL
Maturity Original/ Outstand- (years) Max ing Interest Maturity from Property Lender Amount Balance Rate Date 12/31/96 AMLI % AMLI $ - - -------- ------ --------- ---------- -------- -------- -------- ------ ------ AMLI AT: Champions Park Lincoln National 9,500 9,089 7.26% 12/05/97 0.9 15% 1,363 Prairie Court Bonds 7,250 7,250 8.00% 12/01/99 2.9 1% 73 Park Place Prudential 13,000 12,626 8.21% 10/05/99 3.0 25% 3,156 Champions Centre Prudential 6,700 6,700 8.93% 01/01/02 5.0 15% 1,005 Windbrooke Allstate 11,500 11,500 9.24% 02/01/02 5.1 15% 1,725 Greenwood Forest Nationwide 11,625 11,625 8.95% 05/10/02 5.4 15% 1,744 Chevy Chase CIGNA 29,767 29,767 6.67% 04/01/03 6.3 33% 9,823 Willowbrook NML 24,500 24,500 7.79% 05/01/03 6.3 40% 9,800 Willeo Creek Phoenix Home Life 10,000 10,000 6.77% 05/01/03 6.3 30% 3,000 Pleasant Hill NML 15,500 12,820 9.15% 03/01/07 10.2 40% 5,128 River Exchange Erie Insurance 9,100 3,155 7.75% 06/27/08 11.5 40% 1,262 Barrett Lakes NML 16,680 1,290 8.50% 12/01/09 12.9 35% 451 ------- ------- ----- ---- ----- ------ 170,122 145,322 7.78% 6.5 26.5% 38,580 ======= ======= ===== ==== ===== ======
AMLI RESIDENTIAL PROPERTIES TRUST DEBT MATURITIES December 31, 1996 Unaudited - dollars in thousands
There- % to 1997 1998 1999 2000 2001 after Total Total ------- ------- ------- ------- ------- -------- -------- ------ Fixed Rate Mortgages $21,209 $12,855 $ 2,026 $ 2,178 $ 2,373 $112,372 $153,013 75.7% Tax Exempt Bonds* 40,750 40,750 20.2% Wachovia Line of Credit 7,500 7,500 3.7% First Chicago/NBD Line of Credit -- -- % Harris Line of Credit -- -- % Other 750 750 0.4% ------- ------- ------- ------- ------- -------- -------- ------ Total Loans $21,959 $12,855 $ 9,526 $2,178 $2,373 $153,122 $202,013 100.0% ======= ======= ======= ====== ====== ======== ======== ====== Percent to Total 10.9% 6.4% 4.7% 1.1% 1.2% 75.8% 100.0% 84.0% ======= ======= ======= ====== ====== ======== ======== ====== SHARE OF CO-INVESTMENT DEBT Prudential Ins. - Park Place (25%) 49 53 3,054 3,156 8.2% Nationwide Life Ins. - Greenwood Forest (15%) 3 5 5 6 1,725 1,744 4.5% Lincoln National Ins. - Champions Park (15%) 1,363 1,363 3.5% Prudential Ins. - Champions Centre (15%) 8 9 10 11 12 955 1,005 2.6% Allstate Life Ins. - Windbrooke (15%) 14 16 18 20 1,657 1,725 4.5% CIGNA - Chevy Chase (33%) 104 165 177 189 202 8,986 9,823 25.5% Northwestern Mutual Life Ins. - Willowbrook (40%) 76 139 150 162 175 9,098 9,800 25.4% Phoenix Mutual - Willeo Creek (30%) 23 49 53 56 60 2,759 3,000 7.8% AMLI RESIDENTIAL PROPERTIES TRUST DEBT MATURITIES - CONTINUED There- % to 1997 1998 1999 2000 2001 after Total Total ----- ------- ------- ------- ------- -------- -------- ------ Northwestern Mutual Life Ins. - Pleasant Hill (40%) 38 44 49 54 53 4,890 5,128 13.3% Northwestern Mutual Life Ins. - Barrett Lakes (35%) 71 77 84 219 451 1.2% Erie Insurance - River Park (40%) 20 51 55 1,136 1,262 3.3% Central Bank, Trustee - Prairie Court (1%) 73 73 0.2% Erie Insurance - Towne Creek (1%) 50 50 0.1% ------- ------- ------- ------- ------- -------- -------- ------ Total Share of Co-Investment Loans $ 1,661 $ 476 $ 3,728 $ 623 $ 667 $ 31,425 $ 38,580 100.0% ======= ======= ======= ====== ====== ======== ======== ====== Percent to Total 4.3% 1.2% 9.7% 1.6% 1.7% 81.5% 100.0% 16.0% ======= ======= ======= ====== ====== ======== ======== ====== Total Including Share of Co-Investments Debt $23,620 $13,331 $13,254 $2,801 $3,040 $184,547 $240,593 100.0% ======= ======= ======= ====== ====== ======== ======== ====== Percent to Total 9.8% 5.5% 5.5% 1.2% 1.3% 76.7% 100.0% 100.0% ======= ======= ======= ====== ====== ======== ======== ====== * The Bonds mature in October 2024, but the credit enhancement expires on October 15, 1999.
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) THREE MONTHS ENDED DECEMBER 31, 1996 VERSUS THREE MONTHS ENDED DECEMBER 31, 1995 Excluding Sope IV, AutumnChase II, Gleneagles II and Regents III
10/1/96-12/31/96 10/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - - ----------------------- Dallas 94.5% -1.7% 96.1% Atlanta 93.0% -3.4% 96.3% Austin 92.2% -2.6% 94.7% Indianapolis 94.1% -0.7% 94.7% Eastern Kansas 93.6% -1.6% 95.1% Chicago 89.9% -7.6% 97.2% ----- ----- ----- Weighted Average 93.7% -2.2% 95.8% ===== ===== ===== WEIGHTED AVG. RENTAL RATE - - ------------------------- Dallas $625 2.8% $608 Atlanta $731 4.7% $698 Austin $659 2.8% $641 Indianapolis $580 3.1% $562 Eastern Kansas $647 3.8% $623 Chicago $916 4.8% $874 ---- ---- ---- Weighted Average $659 3.5% $636 ==== ==== ==== TOTAL PROPERTY REVENUES Per Month Per Month - - ----------------------- ---------- ---------- Dallas $ 7,532,577 $614 $0.74 2.5% $ 7,351,082 $599 $0.72 Atlanta $ 4,601,714 $701 $0.75 2.3% $ 4,497,048 $685 $0.73 Austin $ 1,743,738 $622 $0.84 1.7% $ 1,714,501 $611 $0.83 Indianapolis $ 1,725,585 $578 $0.70 3.4% $ 1,668,397 $558 $0.68 Eastern Kansas $ 1,691,244 $621 $0.72 2.3% $ 1,653,213 $607 $0.71 Chicago $ 689,300 $908 $1.06 -2.9% $ 709,542 $935 $1.09 ------------ ---- ----- ----- ----------- ---- ----- Total $ 17,984,158 $640 $0.76 2.2% $17,593,783 $626 $0.74 ============ ==== ===== ===== =========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Gleneagles II and Regents III 10/1/96-12/31/96 10/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - - --------------------------- ------------ ------------ Dallas $ 3,204,848 $3,136 $3.79 -7.9% $3,479,592 $3,405 $4.12 Atlanta $ 1,800,923 $3,292 $3.51 5.9% $1,700,907 $3,110 $3.32 Austin $ 749,050 $3,204 $4.35 -1.2% $ 757,934 $3,242 $4.40 Indianapolis $ 541,859 $2,176 $2.64 -3.6% $ 561,881 $2,257 $2.74 Eastern Kansas $ 529,282 $2,332 $2.71 -15.7% $ 628,071 $2,767 $3.22 Chicago $ 442,587 $6,997 $8.18 7.7% $ 410,815 $6,495 $7.60 ------------ ------ ----- ----- ---------- ------ ----- Total $ 7,268,550 $3,104 $3.66 -3.6% $7,539,199 $3,219 $3.80 ============ ====== ===== ===== ========== ====== ===== Operating Efficiency 40.4% 42.9% ============ ========== NET OPERATING INCOME PER MONTH PER MONTH - - -------------------- --------- ---------- Dallas $ 4,327,729 $353 $0.43 11.8% $ 3,871,491 $316 $0.38 Atlanta $ 2,800,791 $427 $0.46 0.2% $ 2,796,140 $426 $0.45 Austin $ 994,688 $355 $0.48 4.0% $ 956,567 $341 $0.46 Indianapolis $ 1,183,726 $396 $0.48 7.0% $ 1,106,516 $370 $0.45 Eastern Kansas $ 1,161,962 $427 $0.50 13.3% $ 1,025,142 $376 $0.44 Chicago $ 246,713 $325 $0.38 -17.4% $ 298,727 $394 $0.46 ------------ ---- ----- ----- ----------- ---- ----- Total $ 10,715,609 $381 $0.45 6.6% $10,054,584 $358 $0.42 ============ ==== ===== ===== =========== ==== ===== Operating Margin 59.6% 57.1% ============ ========== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - - -------------------- ------------ ------------ Dallas $ 474,746 $465 $0.56 123.2% $ 212,682 $208 $0.25 Atlanta $ 105,788 $193 $0.21 28.8% $ 82,165 $150 $0.16 Austin $ 48,302 $207 $0.28 -14.6% $ 56,535 $242 $0.33 Indianapolis $ 34,323 $138 $0.17 54.8% $ 22,176 $ 89 $0.11 Eastern Kansas $ 56,124 $247 $0.29 198.6% $ 18,796 $ 83 $0.10 Chicago $ 32,451 $513 $0.60 26.3% $ 25,701 $406 $0.48 ------------ ---- ----- ------ --------- ---- ----- Total $ 751,734 $321 $0.38 79.8% $ 418,055 $179 $0.21 ============ ==== ===== ====== ========= ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Gleneagles II and Regents III 10/1/96-12/31/96 10/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - - ----------------------- ------------ ------------ Dallas $ 549,240 $ 537 $0.65 -3.1% $ 566,551 $ 554 $0.67 Atlanta $ 246,114 $ 450 $0.48 -3.0% $ 253,782 $ 464 $0.50 Austin $ 116,637 $ 499 $0.68 -4.7% $ 122,451 $ 524 $0.71 Indianapolis $ 143,762 $ 577 $0.70 29.5% $ 111,025 $ 446 $0.54 Eastern Kansas $ 74,679 $ 329 $0.38 6.1% $ 70,371 $ 310 $0.36 Chicago $ 101,685 $1,608 $1.88 11.6% $ 91,082 $1,440 $1.68 ------------ ------ ----- ------ ---------- ------ ----- Total $ 1,232,116 $ 526 $0.62 1.4% $1,215,263 $ 519 $0.61 ============ ====== ===== ====== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - - ----------------- ------------ ------------ Dallas $ 898,723 $ 879 $1.06 -11.1% $1,010,635 $ 989 $1.20 Atlanta $ 470,375 $ 860 $0.92 48.0% $ 317,719 $ 581 $0.62 Austin $ 202,118 $ 865 $1.17 10.5% $ 182,858 $ 782 $1.06 Indianapolis $ 105,426 $ 423 $0.51 -29.0% $ 148,516 $ 596 $0.72 Eastern Kansas $ 123,401 $ 544 $0.63 -37.7% $ 198,221 $ 873 $1.01 Chicago $ 144,375 $2,283 $2.67 15.6% $ 124,926 $1,975 $2.31 ------------ ------ ----- ----- ---------- ------ ----- Total $ 1,944,418 $ 830 $0.98 -1.9% $1,982,877 $ 847 $1.00 ============ ====== ===== ==== ========== ====== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) YEAR ENDED DECEMBER 30, 1996 VERSUS YEAR ENDED DECEMBER 31, 1995 Excluding Sope IV, AutumnChase II, Gleneagles II and Regents III
1/1/96-12/31/96 1/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - - ----------------------- Dallas 94.9% -1.6% 96.4% Atlanta 94.1% -2.3% 96.3% Austin 93.0% -3.2% 96.1% Indianapolis 93.8% -0.6% 94.4% Eastern Kansas 92.1% -2.7% 94.7% Chicago 93.1% -2.8% 95.9% ----- ----- ----- Weighted Average 94.1% -2.0% 96.0% ===== ===== ===== WEIGHTED AVG. RENTAL RATE - - ------------------------- Dallas $619 3.9% $596 Atlanta $720 5.6% $681 Austin $654 4.6% $626 Indianapolis $569 3.5% $550 Eastern Kansas $644 4.6% $616 Chicago $890 4.6% $850 ---- ---- ---- Weighted Average $650 4.5% $623 ==== ==== ==== TOTAL PROPERTY REVENUES PER MONTH PER MONTH - - ----------------------- --------- --------- Dallas $ 29,933,017 $610 $0.74 3.3% $28,973,641 $591 $0.71 Atlanta $ 18,393,336 $701 $0.75 4.7% $17,566,359 $669 $0.71 Austin $ 7,054,970 $629 $0.85 3.0% $ 6,850,500 $611 $0.83 Indianapolis $ 6,725,867 $563 $0.68 3.5% $ 6,500,285 $544 $0.66 Eastern Kansas $ 6,744,113 $619 $0.72 2.5% $ 6,578,375 $604 $0.70 Chicago $ 2,784,303 $917 $1.07 3.5% $ 2,689,220 $886 $1.04 ------------ ---- ----- ---- ---------- ---- ----- Total $ 71,635,605 $637 $0.75 3.6% $69,158,379 $615 $0.73 ============ ==== ===== ==== =========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Gleneagles II and Regents III 1/1/96-12/31/96 1/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - - --------------------------- ------------ ----------- Dallas $ 13,750,583 $3,364 $4.07 2.6% $13,401,120 $3,278 $3.96 Atlanta $ 6,807,630 $3,111 $3.32 4.4% $ 6,520,997 $2,980 $3.18 Austin $ 3,111,029 $3,327 $4.52 5.6% $ 2,944,911 $3,150 $4.28 Indianapolis $ 2,444,228 $2,454 $2.98 4.5% $ 2,338,644 $2,348 $2.85 Eastern Kansas $ 2,507,350 $2,761 $3.21 3.8% $ 2,415,593 $2,660 $3.09 Chicago $ 1,765,173 $6,977 $8.16 5.2% $ 1,677,195 $6,629 $7.75 ------------ ------ ----- ----- ----------- ------ ----- Total $ 30,385,993 $3,244 $3.83 3.7% $29,298,459 $3,128 $3.69 ============ ====== ===== ===== =========== ====== ===== Operating Efficiency 42.4% 42.4% ===== ===== NET OPERATING INCOME PER MONTH PER MONTH - - -------------------- --------- --------- Dallas $ 16,182,434 $330 $0.40 3.9% $15,572,521 $317 $0.38 Atlanta $ 11,585,706 $441 $0.47 4.9% $11,045,362 $421 $0.45 Austin $ 3,943,941 $352 $0.48 1.0% $ 3,905,589 $348 $0.47 Indianapolis $ 4,281,639 $358 $0.43 2.9% $ 4,161,641 $348 $0.42 Eastern Kansas $ 4,236,763 $389 $0.45 1.8% $ 4,162,783 $382 $0.44 Chicago $ 1,019,130 $336 $0.39 0.7% $ 1,012,025 $333 $0.39 ------------ ---- ----- ----- ----------- ---- ----- Total $ 41,249,612 $367 $0.43 3.5% $39,859,921 $355 $0.42 ============ ==== ===== ===== =========== ==== ===== Operating Margin 57.6% 57.6% ===== ===== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - - -------------------- ------------- ------------ Dallas $ 1,033,909 $253 $0.31 13.2% $ 913,228 $223 $0.27 Atlanta $ 337,145 $154 $0.16 22.9% $ 274,277 $125 $0.13 Austin $ 188,939 $202 $0.27 9.3% $ 172,940 $185 $0.25 Indianapolis $ 125,423 $126 $0.15 36.1% $ 92,122 $ 92 $0.11 Eastern Kansas $ 136,745 $151 $0.18 85.9% $ 73,577 $ 81 $0.09 Chicago $ 100,155 $396 $0.46 -17.8% $ 121,857 $482 $0.56 ------------ ---- ----- ------ ---------- ---- ----- Total $ 1,922,317 $205 $0.24 16.6% $1,648,001 $176 $0.21 ============ ==== ===== ====== ========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Gleneagles II and Regents III 1/1/96-12/31/96 1/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - - ----------------------- ------------ ------------ Dallas $ 2,253,012 $ 551 $0.67 14.1% $1,974,701 $ 483 $0.58 Atlanta $ 891,875 $ 408 $0.44 -1.0% $ 900,739 $ 412 $0.44 Austin $ 441,348 $ 472 $0.64 -2.7% $ 453,393 $ 485 $0.66 Indianapolis $ 505,098 $ 507 $0.62 18.7% $ 425,450 $ 427 $0.52 Eastern Kansas $ 334,305 $ 368 $0.43 13.9% $ 293,433 $ 323 $0.38 Chicago $ 381,601 $1,508 $1.76 2.9% $ 370,769 $1,465 $1.71 ------------ ------ ----- ----- ---------- ------ ----- Total $ 4,807,240 $ 513 $0.61 8.8% $4,418,484 $ 472 $0.56 ============ ====== ===== ===== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - - ----------------- ------------ ------------ Dallas $ 3,907,401 $ 956 $1.16 1.7% $3,843,102 $ 940 $1.14 Atlanta $ 1,547,305 $ 707 $0.75 19.5% $1,294,777 $ 592 $0.63 Austin $ 824,009 $ 881 $1.20 1.8% $ 809,681 $ 866 $1.18 Indianapolis $ 642,501 $ 645 $0.78 -5.8% $ 682,000 $ 685 $0.83 Eastern Kansas $ 691,690 $ 762 $0.89 -5.0% $ 727,871 $ 802 $0.93 Chicago $ 561,308 $2,219 $2.59 2.1% $ 550,000 $2,174 $2.54 ------------ ------ ----- ----- ---------- ------ ----- Total $ 8,174,214 $ 873 $1.03 3.4% $7,907,432 $ 844 $1.00 ============ ====== ===== ==== ========== ====== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) THREE MONTHS ENDED DECEMBER 31, 1996 VERSUS THREE MONTHS ENDED DECEMBER 31, 1995 Excluding Sope IV, AutumnChase II, Greenwood Forest, Pleasant Hill, Willeo Creek, Windbrooke and Chevy Chase
10/1/96-12/31/96 10/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - - ----------------------- Dallas 94.5% -3.3% 97.8% Atlanta 92.8% -3.6% 96.3% Austin 94.0% -2.6% 96.5% Houston 93.8% 4.9% 89.4% Indianapolis 94.1% -2.0% 96.1% Eastern Kansas 93.6% -2.0% 95.5% Chicago 90.9% -7.1% 97.9% ----- ----- ------ Weighted Average 93.8% -2.9% 96.6% ===== ===== ====== WEIGHTED AVG. RENTAL RATE - - ------------------------- Dallas $625 4.2% $600 Atlanta $725 6.6% $680 Austin $635 4.0% $611 Houston $679 -1.6% $690 Indianapolis $580 4.7% $553 Eastern Kansas $647 4.0% $622 Chicago $964 5.1% $917 ---- ----- ---- Weighted Average $660 4.5% $632 ==== ===== ==== TOTAL PROPERTY REVENUES PER MONTH PER MONTH - - ----------------------- ---------- --------- Dallas $ 7,532,577 $614 $0.74 1.5% $ 7,420,212 $605 $0.73 Atlanta $ 4,884,477 $696 $0.80 3.6% $ 4,716,833 $672 $0.78 Austin $ 2,797,377 $612 $0.86 0.8% $ 2,774,033 $607 $0.85 Houston $ 863,101 $657 $0.74 2.5% $ 841,726 $641 $0.73 Indianapolis $ 1,725,585 $578 $0.70 3.7% $ 1,663,792 $557 $0.68 Eastern Kansas $ 1,691,244 $621 $0.72 -0.1% $ 1,692,888 $621 $0.72 Chicago $ 1,103,476 $973 $1.14 -0.9% $ 1,113,333 $982 $1.15 ------------ ---- ----- ----- ----------- ---- ----- Total $ 20,597,838 $644 $0.78 1.9% $20,222,816 $632 $0.77 ============ ==== ===== ===== =========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Greenwood Forest, Pleasant Hill, Willeo Creek, Windbrooke and Chevy Chase 10/1/96-12/31/96 10/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - - --------------------------- ------------ ------------ Dallas $ 3,204,848 $3,136 $3.79 -7.3% $3,458,253 $3,384 $4.09 Atlanta $ 1,918,130 $3,282 $3.78 5.8% $1,813,590 $3,103 $3.58 Austin $ 1,197,136 $3,144 $4.41 -5.0% $1,259,484 $3,308 $4.64 Houston $ 370,731 $3,386 $3.84 -20.7% $ 467,474 $4,269 $4.84 Indianapolis $ 541,859 $2,176 $2.64 -13.8% $ 628,554 $2,524 $3.06 Eastern Kansas $ 529,282 $2,332 $2.71 -20.8% $ 668,280 $2,944 $3.42 Chicago $ 644,980 $6,825 $8.01 2.7% $ 627,733 $6,643 $7.80 ------------ ------ ----- ----- ---------- ------ ----- Total $ 8,406,966 $3,152 $3.82 -5.8% $8,923,368 $3,346 $4.05 ============ ====== ===== ===== ========== ====== ===== Operating Efficiency 40.8% 44.1% ===== ===== NET OPERATING INCOME PER MONTH PER MONTH - - -------------------- --------- --------- Dallas $ 4,327,729 $353 $0.43 9.2% $ 3,961,959 $323 $0.39 Atlanta $ 2,966,347 $423 $0.49 2.2% $ 2,903,243 $414 $0.48 Austin $ 1,600,241 $350 $0.49 5.7% $ 1,514,550 $331 $0.46 Houston $ 492,370 $375 $0.42 31.6% $ 374,251 $285 $0.32 Indianapolis $ 1,183,726 $396 $0.48 14.3% $ 1,035,238 $346 $0.42 Eastern Kansas $ 1,161,962 $427 $0.50 13.4% $ 1,024,608 $376 $0.44 Chicago $ 458,497 $404 $0.47 -5.6% $ 485,599 $428 $0.50 ------------ ---- ----- ----- ----------- ---- ----- Total $ 12,190,872 $381 $0.46 7.9% $11,299,447 $353 $0.43 ============ ==== ===== ===== =========== ==== ===== Operating Margin 59.2% 55.9% ===== ===== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - - -------------------- ------------ ------------ Dallas $ 474,746 $465 $0.56 46.8% $323,467 $317 $0.38 Atlanta $ 110,228 $189 $0.22 43.8% $ 76,659 $131 $0.15 Austin $ 61,387 $161 $0.23 -8.5% $ 67,061 $176 $0.25 Houston $ 10,292 $ 94 $0.11 -53.6% $ 22,201 $203 $0.23 Indianapolis $ 34,323 $138 $0.17 1.9% $ 33,683 $135 $0.16 Eastern Kansas $ 56,124 $247 $0.29 151.1% $ 22,351 $ 98 $0.11 Chicago $ 40,575 $429 $0.50 -21.9% $ 51,956 $550 $0.65 ------------ ---- ----- ------ -------- ---- ----- Total $ 787,675 $295 $0.36 31.9% $597,378 $224 $0.27 ============ ==== ===== ====== ======== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Greenwood Forest, Pleasant Hill, Willeo Creek, Windbrooke and Chevy Chase 10/1/96-12/31/96 10/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - - ----------------------- ------------ ------------ Dallas $ 549,240 $ 537 $0.65 7.3% $ 511,703 $ 501 $0.61 Atlanta $ 259,491 $ 444 $0.51 -5.1% $ 273,529 $ 468 $0.54 Austin $ 190,955 $ 502 $0.70 -17.4% $ 231,155 $ 607 $0.85 Houston $ 16,035 $ 146 $0.17 -65.0% $ 45,838 $ 419 $0.47 Indianapolis $ 143,762 $ 577 $0.70 16.1% $ 123,867 $ 497 $0.60 Eastern Kansas $ 74,679 $ 329 $0.38 -18.6% $ 91,773 $ 404 $0.47 Chicago $ 123,867 $1,311 $1.54 -16.9% $ 148,981 $1,577 $1.85 ------------ ------ ----- ----- ---------- ------ ----- Total $ 1,358,029 $ 509 $0.62 -4.8% $1,426,847 $ 535 $0.65 ============ ====== ===== ===== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - - ----------------- ------------ ------------ Dallas $ 898,723 $ 879 $1.06 -5.2% $ 948,165 $ 928 $1.12 Atlanta $ 477,289 $ 817 $0.94 40.3% $ 340,080 $ 582 $0.67 Austin $ 343,504 $ 902 $1.26 3.9% $ 330,666 $ 868 $1.22 Houston $ 138,288 $1,263 $1.43 -19.1% $ 170,832 $1,560 $1.77 Indianapolis $ 105,426 $ 423 $0.51 -40.7% $ 177,828 $ 714 $0.87 Eastern Kansas $ 123,401 $ 544 $0.63 -30.1% $ 176,550 $ 778 $0.90 Chicago $ 213,118 $2,255 $2.65 9.7% $ 194,337 $2,056 $2.41 ------------ ------ ----- ----- ---------- ------ ----- Total $ 2,299,750 $ 862 $1.04 -1.7% $2,338,458 $ 877 $1.06 ============ ====== ===== ==== ========== ====== =====
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) YEAR ENDED DECEMBER 31, 1996 VERSUS YEAR ENDED DECEMBER 31, 1995 Excluding Sope IV, AutumnChase II, Greenwood Forest, Pleasant Hill, Willeo Creek, Windbrooke and Chevy Chase
1/1/96-12/31/96 1/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- WEIGHTED AVG. OCCUPANCY - - ----------------------- Dallas 94.9% -1.6% 96.4% Atlanta 94.1% -2.4% 96.4% Austin 94.5% -1.7% 96.1% Houston 92.2% 5.1% 87.7% Indianapolis 93.8% -0.6% 94.4% Eastern Kansas 92.1% -2.7% 94.7% Chicago 93.6% -2.2% 95.6% ----- ----- ----- Weighted Average 94.2% -1.5% 95.6% ===== ===== ===== WEIGHTED AVG. RENTAL RATE - - ------------------------- Dallas $619 3.8% $596 Atlanta $714 5.5% $677 Austin $633 4.5% $606 Houston $692 1.4% $683 Indianapolis $569 3.5% $550 Eastern Kansas $644 4.6% $616 Chicago $939 3.7% $906 ---- ---- ---- Weighted Average $653 4.2% $627 ==== ==== ==== TOTAL PROPERTY REVENUES PER MONTH PER MONTH - - ----------------------- --------- --------- Dallas $29,933,017 $610 $0.74 3.3% $28,973,641 $591 $0.71 Atlanta $19,545,507 $697 $0.80 4.6% $18,689,695 $666 $0.77 Austin $11,239,477 $615 $0.86 3.8% $10,828,536 $593 $0.83 Houston $ 3,467,017 $660 $0.75 8.2% $ 3,203,084 $609 $0.69 Indianapolis $ 6,725,867 $563 $0.68 3.5% $ 6,500,285 $544 $0.66 Eastern Kansas $ 6,744,113 $619 $0.72 2.5% $ 6,578,375 $604 $0.70 Chicago $ 4,447,034 $980 $1.15 3.7% $ 4,290,096 $946 $1.11 ------------ ---- ----- ----- ----------- ---- ----- Total $82,102,032 $641 $0.78 3.8% $79,063,712 $618 $0.75 =========== ==== ===== ===== =========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Greenwood Forest, Pleasant Hill, Willeo Creek, Windbrooke and Chevy Chase 1/1/96-12/31/96 1/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED) - - --------------------------- ------------ ------------ Dallas $ 13,750,583 $3,364 $4.07 2.6% $13,401,120 $3,278 $3.96 Atlanta $ 7,339,366 $3,139 $3.62 4.9% $ 6,998,642 $2,993 $3.45 Austin $ 4,925,224 $3,234 $4.53 4.3% $ 4,720,728 $3,100 $4.35 Houston $ 1,739,372 $3,971 $4.50 -4.1% $ 1,813,268 $4,140 $4.69 Indianapolis $ 2,444,228 $2,454 $2.98 4.5% $ 2,338,644 $2,348 $2.85 Eastern Kansas $ 2,507,350 $2,761 $3.21 3.8% $ 2,415,593 $2,660 $3.09 Chicago $ 2,613,886 $6,915 $8.12 5.7% $ 2,473,679 $6,544 $7.68 ------------ ------ ----- ------ ----------- ------ ----- Total $ 35,320,008 $3,311 $4.01 3.4% $34,161,673 $3,202 $3.88 ============ ====== ===== ====== =========== ====== ===== Operating Efficiency 43.0% 43.2% ===== ===== NET OPERATING INCOME PER MONTH PER MONTH - - -------------------- --------- --------- Dallas $16,182,434 $330 $0.40 3.9% $15,572,521 $317 $0.38 Atlanta $12,206,142 $435 $0.50 4.4% $11,691,053 $417 $0.48 Austin $ 6,314,253 $345 $0.48 3.4% $ 6,107,808 $334 $0.47 Houston $ 1,727,645 $329 $0.37 24.3% $ 1,389,816 $264 $0.30 Indianapolis $ 4,281,639 $358 $0.43 2.9% $ 4,161,641 $348 $0.42 Eastern Kansas $ 4,236,763 $389 $0.45 1.8% $ 4,162,783 $382 $0.44 Chicago $ 1,833,148 $404 $0.47 0.9% $ 1,816,417 $400 $0.47 ----------- ---- ----- ----- ----------- ---- ----- Total $46,782,023 $365 $0.44 4.2% $44,902,038 $351 $0.42 =========== ==== ===== ===== =========== ==== ===== Operating Margin 57.0% 56.8% ===== ===== CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED) - - -------------------- ----------- ------------ Dallas $ 1,033,909 $253 $0.31 13.2% $ 913,228 $223 $0.27 Atlanta $ 359,500 $154 $0.18 27.1% $ 282,807 $121 $0.14 Austin $ 249,102 $164 $0.23 7.2% $ 232,471 $153 $0.21 Houston $ 75,308 $172 $0.19 9.1% $ 69,014 $158 $0.18 Indianapolis $ 125,423 $126 $0.15 36.1% $ 92,122 $ 92 $0.11 Eastern Kansas $ 136,745 $151 $0.18 85.9% $ 73,577 $ 81 $0.09 Chicago $ 127,223 $337 $0.40 -28.6% $ 178,175 $471 $0.55 ------------ ---- ----- ------ ---------- ---- ----- Total $ 2,107,211 $198 $0.24 14.4% $1,841,394 $173 $0.21 ============ ==== ===== ====== ========== ==== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Greenwood Forest, Pleasant Hill, Willeo Creek, Windbrooke and Chevy Chase 1/1/96-12/31/96 1/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED) - - ----------------------- ------------ ------------ Dallas $ 2,253,012 $ 551 $0.67 14.1% $1,974,701 $ 483 $0.58 Atlanta $ 984,992 $ 421 $0.49 3.5% $ 951,452 $ 407 $0.47 Austin $ 728,355 $ 478 $0.67 -7.2% $ 784,765 $ 515 $0.72 Houston $ 115,073 $ 263 $0.30 -15.8% $ 136,611 $ 312 $0.35 Indianapolis $ 505,098 $ 507 $0.62 18.7% $ 425,450 $ 427 $0.52 Eastern Kansas $ 334,305 $ 368 $0.43 13.9% $ 293,433 $ 323 $0.38 Chicago $ 470,528 $1,245 $1.46 0.8% $ 466,859 $1,235 $1.45 ------------ ------ ----- ----- ---------- ------ ----- Total $ 5,391,363 $ 505 $0.61 7.1% $5,033,271 $ 472 $0.57 ============ ====== ===== ===== ========== ====== ===== REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED) - - ----------------- ------------ ------------ Dallas $ 3,907,401 $ 956 $1.16 1.7% $3,843,102 $ 940 $1.14 Atlanta $ 1,599,562 $ 684 $0.79 18.7% $1,347,343 $ 576 $0.66 Austin $ 1,341,650 $ 881 $1.24 4.9% $1,279,060 $ 840 $1.18 Houston $ 657,273 $1,501 $1.70 -4.8% $ 690,580 $1,577 $1.79 Indianapolis $ 642,501 $ 645 $0.78 -5.8% $ 682,000 $ 685 $0.83 Eastern Kansas $ 691,690 $ 762 $0.89 -5.0% $ 727,871 $ 802 $0.93 Chicago $ 860,143 $2,276 $2.67 6.2% $ 809,967 $2,143 $2.52 ------------ ------ ----- ----- ---------- ------ ----- Total $ 9,700,219 $ 909 $1.10 3.4% $9,379,923 $ 879 $1.07 ============ ====== ===== ===== ========== ====== ===== AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONTINUED Excluding Sope IV, AutumnChase II, Greenwood Forest, Pleasant Hill, Willeo Creek, Windbrooke and Chevy Chase 1/1/96-12/31/96 1/1/95-12/31/95 --------------------------------- % -------------------------------- Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft -------- -------- ---------- ------ ---------- -------- --------- NET OPERATING INCOME AFTER CAP EX (ANNUALIZED) (ANNUALIZED) - - -------------------------- ------------ ------------ Dallas $ 15,148,525 $ 309 $0.37 3.3% $14,659,293 $ 299 $0.36 Atlanta $ 11,846,642 $ 422 $0.49 3.8% $11,408,247 $ 407 $0.47 Austin $ 6,065,151 $ 332 $0.47 3.2% $ 5,875,337 $ 321 $0.45 Houston $ 1,652,337 $ 314 $0.36 25.1% $ 1,320,802 $ 251 $0.28 Indianapolis $ 4,156,215 $ 348 $0.42 2.1% $ 4,069,518 $ 340 $0.41 Eastern Kansas $ 4,100,018 $ 376 $0.44 0.3% $ 4,089,206 $ 375 $0.44 Chicago $ 1,705,925 $ 376 $1.44 4.1% $ 1,638,242 $ 361 $2.42 ------------ ------ ----- ----- ----------- ------ ----- Total $ 44,674,813 $ 349 $0.42 3.7% $43,060,644 $ 336 $0.41 ============ ====== ===== ===== =========== ====== =====
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION As of December 31, 1996
Qtr ended Dec. 31, 1996 Approx- Average Qtr ended imate Rental Rate Dec.31, Number Rentable Average ------------- 1996 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq ft) Unit Sq Ft Occupancy - - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- DALLAS/FT. WORTH, TX - - ---------- Amli: at AutumnChase Carrollton, TX 1991 1987 226 180,868 800 $644 $0.81 96.8% at AutumnChase II Carrollton, TX 1996 224 193,420 863 729 0.84 94.5% at Bear Creek Euless, TX 1989 1986 350 275,010 786 565 0.72 93.1% at Chase Oaks Plano, TX 1994 1986 250 193,736 775 660 0.85 95.6% at Gleneagles Dallas, TX 1988 1987 326 274,300 841 619 0.74 96.9% on the Green Ft. Worth, TX 1994 1990/93 424 358,560 846 684 0.81 91.7% at Nantucket Dallas, TX 1988 1986 312 222,208 712 527 0.74 94.4% of North Dallas Dallas, TX 1989/90 1985/86 1,032 905,590 878 627 0.71 93.6% at Reflections Irving, TX 1993 1986 212 174,332 822 654 0.79 96.2% on Rosemeade Dallas, TX 1990 1987 236 205,382 870 642 0.74 96.6% on Timberglen Dallas, TX 1990 1985 260 201,198 774 579 0.75 96.7% at Valley Ranch Irving TX 1990 1985 460 389,940 848 662 0.78 93.8% ----- --------- --- ---- ----- ------ Subtotal-Dallas/ Ft. Worth, TX 4,312 3,574,544 829 $631 $0.76 94.5% ----- --------- --- ---- ----- ------ ATLANTA, GA - - ----------- Amli: at Sope Creek Marietta, GA 1982/83 463 424,837 918 $672 $0.73 92.2% at Sope Creek IV Marietta, GA 1995 232 207,556 895 748 0.84 89.4% at Spring Creek Dunwoody, GA 1985/86/ 1,180 1,080,560 916 707 0.77 93.8% 87/89 at Vinings Atlanta, GA 1992 1985 208 229,708 1,104 784 0.71 91.7% at West Paces Atlanta, GA 1993 1992 337 314,707 934 865 0.93 92.1% ------ --------- ----- ---- ----- ------ Subtotal- Atlanta, GA 2,420 2,257,368 933 $733 $0.79 92.7% ------ --------- ----- ---- ----- ------ Qtr ended Dec. 31, 1996 Approx- Average Qtr ended imate Rental Rate Dec. 31, Number Rentable Average ------------- 1996 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq ft) Unit Sq Ft Occupancy - - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- AUSTIN, TEXAS - - ------------- Amli: at the Arboretum Austin, TX 1986 1983 231 178,116 771 $684 $0.89 92.8% in Great Hills Austin, TX 1991 1985 344 256,892 747 675 0.90 94.6% at Martha's Vineyard Austin, TX 1992 1986 360 253,328 704 627 0.89 89.6% ----- ------- --- ---- ----- ----- Subtotal- Austin, TX 935 688,336 736 $659 $0.90 92.2% ----- ------- --- ---- ----- ----- EASTERN KANSAS - - -------------- Amli: at Alvamar Lawrence, KS 1994 1989 152 125,800 828 $658 $0.79 98.5% at Crown Colony Topeka, KS 1994 1986 156 120,984 776 557 0.72 92.7% at Regents Center Overland Park, KS 1994 1991-95 300 274,170 914 727 0.80 91.0% at Sherwood Topeka, KS 1994 1993 300 260,340 868 609 0.70 94.1% ---- ------- --- --- ----- ----- Subtotal -Eastern KS 908 781,294 860 $647 $0.75 93.6% ---- ------- --- ---- ----- ----- INDIANAPOLIS, IN - - ---------------- Amli: at Riverbend Indianapolis, IN 1992/93 1983/85 996 820,712 824 $580 $0.70 94.1% ---- ------- --- ---- ----- ----- CHICAGO, IL - - ------------ Amli: at Park Sheridan Chicago, IL 1989 1986 253 216,315 855 $916 $1.07 89.9% ---- ------- --- ---- ----- ----- TOTAL PROPERTIES 9,824 8,338,569 849 $662 $0.78 93.6% ===== ========= === ==== ===== ===== Qtr ended Dec. 31, 1996 Approx- Average Qtr ended imate Rental Rate Dec. 31, Number Rentable Average ------------- 1996 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq ft) Unit Sq Ft Occupancy - - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- CO-INVESTMENT PROPERTIES - - -------------- ATLANTA, GA Amli: at Pleasant Hill Atlanta 1996 502 501,816 1,000 $792 $0.79 95.8% at Towne Creek Gainesville, GA 1989 150 121,722 811 637 0.78 89.6% at Willeo Creek Roswell, GA 1995 1989 242 297,302 1,229 788 0.64 94.8% ---- ------- ----- ---- ----- ------ Subtotal- Atlanta, GA 894 920,840 1,030 $765 $0.74 94.5% ---- ------- ----- ---- ----- ------ CHICAGO, IL - - ----------- Amli: at Prairie Court Chicago, IL 1987 125 105,578 845 $1,060 $1.26 93.1% at Windbrooke Chicago, IL 1995 1987 236 213,160 903 926 1.03 92.6% at Chevy Chase Chicago, IL 1996 1988 592 480,676 812 893 1.01 92.3% at Willowbrook Chicago, IL 1996 1987 488 418,404 857 876 1.02 90.5% ---- ------- --- ------ ----- ----- Subtotal- Chicago, IL 1,441 1,217,818 845 $907 $1.07 91.8% ----- --------- --- ---- ----- ----- AUSTIN, TX - - ---------- Amli: at Park Place Austin, TX 1994 1985 588 397,968 677 $597 $0.88 96.8% ------ --------- --- ---- ----- ----- Qtr ended Dec. 31, 1996 Approx- Average Qtr ended imate Rental Rate Dec. 31, Number Rentable Average ------------- 1996 Year Year of Area Unit Size Per Per Average PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq ft) Unit Sq Ft Occupancy - - ---------- -------- -------- --------- ------ --------- --------- ---- ----- ----------- HOUSTON, TX Amli at: Champions Centre Houston, TX 1994 1994 192 164,480 857 $689 $0.80 95.0% Champions Park Houston, TX 1994 1991 246 221,646 901 671 0.74 92.8% Greenwood Forest Houston, TX 1995 1995 316 310,844 984 726 0.74 91.9% ---- ------- --- ---- ----- ----- Subtotal- Houston, TX 754 696,970 924 $699 $0.76 93.0% ---- --------- ---- ---- ----- ----- TOTAL CO-INVESTMENT PROPERTIES 3,677 3,233,596 879 $780 $0.89 93.5% ====== ========== === ==== ===== ===== TOTAL 13,501 11,572,165 857 $694 $0.81 93.6% ====== ========== === ==== ===== =====
AMLI RESIDENTIAL PROPERTIES TRUST DEVELOPMENT ACTIVITY FOURTH QUARTER 1996
Total Construc- Percent Number Cost Esti- Percent tion First Comple- Stabili- Construc- of (mil- mated Owner- Start Units tion zation tion Percent Community Name Units lions) Yield ship Date Occupied Date Date Complete Leased - - -------------- ------ ------ ----- ------- --------- -------- ------- -------- --------- ------- FINAL LEASE-UP ATLANTA, GEORGIA - - ------- AMLI at: Pleasant Hill 502 $26.6 12.1% 40% 3Q/94 2Q/95 3Q/96 4Q/96 100% 97% DALLAS, TEXAS - - ------- AMLI at: AutumnChase II 224 $11.2 11.0% 100% 1Q/95 4Q/95 3Q/96 4Q/96 100% 98% UNDER CONSTRUCTION - - ------------ ATLANTA, GEORGIA - - ------- Amli at: Barrett Lakes 446 $27.8 10.2% 35% 3Q/95 4Q/96 4Q/97 2Q/98 54% 24% River Park 222 $15.4 9.6% 40% 4Q/95 4Q/96 2Q/97 4Q/97 71% 31% Peachtree City 312 $21.9 10.0% 100% 3Q/96 3Q/97 2Q/98 3Q/98 15% N/A Northwinds I 400 $26.8 10.0% 100% 3Q/96 3Q/97 3Q/98 1Q/99 2% N/A DALLAS, TEXAS - - ------------- Amli at: Gleneagles II 264 $13.5 11.1% 100% 3Q/95 2Q/96 4Q/96 1Q/97 100% 80% Fossil Creek 384 $23.7 10.1% 25% 3Q/96 2Q/97 1Q/98 1Q/99 21% N/A AutumnChase III 240 $14.1 10.5% 100% 3Q/96 3Q/97 1Q/98 3Q/98 4% N/A Total Construc- Percent Number Cost Esti- Percent tion First Comple- Stabili- Construc- of (mil- mated Owner- Start Units tion zation tion Percent Community Name Units lions) Yield ship Date Occupied Date Date Complete Leased - - -------------- ------ ------ ----- ------- --------- -------- ------- -------- --------- ------- AURORA, ILLINOIS - - ---------------- Amli at: Aurora Crossing 272 $24.5 9.8% 25% 2Q/96 1Q/97 3Q/97 1Q/98 62% 1% OVERLAND PARK, KANSAS - - -------------- Amli at: Regents Center III 124 $7.7 10.3% 100% 3Q/95 3Q/96 4Q/96 2Q/97 96% 57% Crown Colony II 64 $3.6 8.0% 100% 2Q/96 1Q/97 2Q/97 3Q/97 80% 17% ----- ------ ----- ---- ----- ----- ----- ----- --- ---- Total/Average 2,728 $179.0 10.1% ===== ====== ===== Total Construc- Percent Number Cost Esti- Percent tion First Comple- Stabili- Construc- of (mil- mated Owner- Start Units tion zation tions Percent Community Name Units lions) Yield ship Date Occupied Date Date Complete Leased - - -------------- ------ ------ ----- ------- --------- -------- ------- -------- --------- ------- PLANNING STAGE - - -------------- ATLANTA, GEORGIA - - ---------------- Amli at: Northwinds II & III 400 DALLAS, TEXAS - - ------- Amli on: the Parkway (Rosemeade II) 240 AUSTIN, TEXAS - - ------------- Amli at: Wells Branch 576 AURORA, ILLINOIS - - -------- Amli at: Oakhurst North 464 The following is a "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934. The projections contained in the table above that are not historical facts are forward-looking statements. Risks associated with the Company's development, construction and lease-up activities, which could impact the forward-looking statements made include: development opportunities may be abandoned; construction costs of a community may exceed original estimates, possibly making the community uneconomical; construction and lease-up may not be completed on schedule, resulting in increased debt service and construction costs; estimates of the costs of improvements to bring an acquired property up to the standards established for the market position intended for that property may prove inaccurate.
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