<PAGE>
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K/A
AMENDMENT TO APPLICATION OR REPORT
Filed Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Equity Residential Properties Trust
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(Exact Name of Registrant as Specified In Its Charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K as set
forth in the pages attached hereto:
Filing of amended information in Part II, Item 7 of Form 10-K for the year ended
December 31, 1996.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
Equity Residential Properties Trust
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(Exact Name of Registrant as Specified In Its Charter)
Equity Residential Properties Trust
Date: April 3, 1997
By: /s/ Michael J. McHugh
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Michael J. McHugh
Senior Vice President, Chief
Accounting Officer and Treasurer
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Part II Item 7. The subsection entitled "Funds From Operations" in Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Annual Report on Form 10-K for the year ended December 31, 1996
is hereby amended and restated as follows.
Funds from Operations
Commencing in 1996, the Company implemented the new definition of FFO
adopted by the Board of Governors of NAREIT in March 1995. The new definition
primarily eliminates the amortization of deferring financing costs and
depreciation of non-real estate assets as items added back to net income when
calculating FFO.
The Company generally considers FFO to be one measure of the
performance of real estate companies including an equity REIT. The resolution
adopted by the Board of Governors of NAREIT defines FFO as net income (loss)
(computed in accordance with GAAP), excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation on real estate assets,
and after adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures are calculated to
reflect FFO on the same basis. The Company believes that FFO is helpful to
investors as a measure of the performance of an equity REIT because, along with
cash flows from operating activities, financing activities and investing
activities it provides investors an understanding of the ability of the Company
to incur and service debt and to make capital expenditures. FFO in and of
itself does not represent cash generated from operating activities in accordance
with GAAP and therefore should not be considered an alternative to net income as
an indication of the Company's performance or to net cash flows from operating
activities as determined by GAAP as a measure of liquidity and is not
necessarily indicative of cash available to fund cash needs. The Company's
calculation of FFO represents net income available to Common Shares, excluding
gains on dispositions of properties, gains on early extinguishment of debt, and
write-off of unamortized costs on refinanced debt, plus depreciation on real
estate assets, income allocated to Minority Interests and amortization of
deferred financing costs related to the Predecessor Business. The calculation
of FFO is affected by capital expenditures only to the extent of the amount
spent for non-real estate additions and the related depreciation charge for such
non-real estate additions. The Company's calculation of FFO may differ from the
methodology for calculating FFO utilized by other REITs and, accordingly, may
not be comparable to such other REITs.
2
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The following is a reconciliation of net income available to Common Shares
to FFO for the years ended December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
1996 1995 1994
--------- -------- --------
<S> <C> <C> <C>
Net income available to Common Shares $ 72,609 $ 57,610 $ 34,418
Adjustments:
Income allocated to Minority Interests 14,299 15,636 11,570
Depreciation on real estate assets 91,174 70,581 36,899
Amortization of deferred financing costs
related to Predecessor Business 1,075 755 999
Gain on disposition of properties (22,402) (21,617) -
Write-off of unamortized costs on refinanced debt 3,512 - -
Gain on early extinguishment of debt - (2,000) -
-------- -------- -------
FFO $160,267 $120,965 $83,886
======== ======== =======
</TABLE>
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SIGNATURE
Pursuant to the requirements 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.
EQUITY RESIDENTIAL PROPERTIES TRUST
April 3, 1997 By: /s/ Michael J. McHugh
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(Date) Michael J. McHugh
Senior Vice President, Chief Accounting Officer
and Treasurer
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-3 No. 333-12211 and Form S-8 No. 333-06867 and No. 333-06869) of Equity
Residential Properties Trust and in the related Prospectuses of our report dated
February 12, 1997, except for Note 19, as to which the date is March 20, 1997,
with respect to the consolidated financial statements and schedule of Equity
Residential Properties Trust included in this Annual Report (Form 10-K/A), which
amends the previously filed Form 10-K, for the year ended December 31, 1996.
Ernst & Young LLP
Chicago, Illinois
April 3, 1997
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