<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-12252
EQUITY RESIDENTIAL PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)
MARYLAND 13-3675988
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
TWO NORTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
(Address of Principal Executive Offices) (Zip Code)
(312) 474-1300
(Registrant's Telephone Number, Including Area Code)
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 (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
APPLICABLE ONLY TO CORPORATE USERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
At August 9, 2000, 131,240,880 of the Registrant's Common Shares of Beneficial
Interest were outstanding.
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS EXCEPT FOR SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
------------ ------------
<S> <C> <C>
ASSETS
Investment in real estate
Land $ 1,534,812 $ 1,550,378
Depreciable property 10,462,309 10,670,550
Construction in progress 28,755 18,035
------------ ------------
12,025,876 12,238,963
Accumulated depreciation (1,208,331) (1,070,487)
------------ ------------
Investment in real estate, net of accumulated depreciation 10,817,545 11,168,476
Real estate held for disposition 55,997 12,868
Cash and cash equivalents 237,066 29,117
Investment in mortgage notes, net 81,777 84,977
Rents receivable 1,408 1,731
Deposits - restricted 150,579 111,270
Escrow deposits - mortgage 73,008 75,328
Deferred financing costs, net 31,784 33,968
Other assets 297,579 197,954
------------ ------------
TOTAL ASSETS $ 11,746,743 $ 11,715,689
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $ 2,987,921 $ 2,883,583
Notes, net 2,289,680 2,290,285
Line of credit -- 300,000
Accounts payable and accrued expenses 119,214 102,955
Accrued interest payable 47,182 44,257
Rents received in advance and other liabilities 71,509 74,196
Security deposits 39,077 39,687
Distributions payable 127,594 18,813
------------ ------------
TOTAL LIABILITIES 5,682,177 5,753,776
------------ ------------
COMMITMENTS AND CONTINGENCIES
Minority Interests:
Operating Partnership 533,990 456,979
Partially Owned Properties 2,891 --
------------ ------------
Total Minority Interests 536,881 456,979
------------ ------------
Shareholders' equity:
Preferred Shares of beneficial interest, $.01 par value; 100,000,000
shares authorized; 20,397,124 shares issued and
outstanding as of June 30, 2000 and 25,085,652 shares
issued and outstanding as of December 31, 1999 1,193,053 1,310,266
Common Shares of beneficial interest, $.01 par value;
350,000,000 shares authorized; 131,180,186 shares issued and
outstanding as of June 30, 2000 and 127,450,798 shares
issued and outstanding as of December 31, 1999 1,312 1,275
Paid in capital 4,662,432 4,523,919
Employee notes (4,551) (4,670)
Distributions in excess of accumulated earnings (324,561) (325,856)
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 5,527,685 5,504,934
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 11,746,743 $ 11,715,689
============ ============
</TABLE>
SEE ACCOMPANYING NOTES
2
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED QUARTER ENDED
JUNE 30, JUNE 30,
----------------------------- -----------------------------
2000 1999 2000 1999
----------------------------- -----------------------------
<S> <C> <C> <C> <C>
REVENUES
Rental income $ 952,740 $ 819,178 $ 479,193 $ 413,116
Fee and asset management 2,632 2,414 1,334 1,180
Interest income - investment in mortgage notes 5,499 5,644 2,737 2,749
Interest and other income 17,652 11,123 9,849 5,177
------------ ------------ ------------ ------------
Total revenues 978,523 838,359 493,113 422,222
------------ ------------ ------------ ------------
EXPENSES
Property and maintenance 227,845 196,865 113,977 99,818
Real estate taxes and insurance 95,001 84,515 46,667 42,467
Property management 37,760 27,973 18,846 13,772
Fee and asset management 2,102 1,624 1,036 757
Depreciation 224,512 197,134 112,626 100,233
Interest:
Expense incurred 190,263 158,499 95,152 79,302
Amortization of deferred financing costs 2,703 1,661 1,362 816
General and administrative 13,216 10,714 6,518 4,947
------------ ------------ ------------ ------------
Total expenses 793,402 678,985 396,184 342,112
------------ ------------ ------------ ------------
Income before gain on disposition of properties, net,
extraordinary item and allocation to
Minority Interests 185,121 159,374 96,929 80,110
Gain on disposition of properties, net 87,652 45,807 67,654 24,391
Loss on early extinguishment of debt -- (451) -- (451)
Allocation to Minority Interests:
Operating Partnership (19,132) (14,514) (12,036) (7,388)
Partially Owned Properties 157 -- 112 --
------------ ------------ ------------ ------------
Net income 253,798 190,216 152,659 96,662
Preferred distributions (55,654) (57,111) (27,266) (27,734)
------------ ------------ ------------ ------------
Net income available to Common Shares $ 198,144 $ 133,105 $ 125,393 $ 68,928
============ ============ ============ ============
Weighted average Common Shares outstanding - basic 128,435 119,762 129,072 120,558
============ ============ ============ ============
Net income per share - basic $ 1.54 $ 1.11 $ 0.97 $ 0.57
============ ============ ============ ============
Net income per share - diluted $ 1.54 $ 1.11 $ 0.96 $ 0.57
============ ============ ============ ============
Distributions declared per Common Share outstanding $ 1.52 $ 1.42 $ 0.76 $ 0.71
============ ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES
3
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------
2000 1999
--------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 253,798 $ 190,216
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Allocation to Minority Interests - Operating Partnership 19,132 14,514
Allocation to Minority Interests - Partially Owned Properties (157) --
Depreciation 224,512 197,134
Amortization of deferred financing costs 2,703 1,661
Amortization of discounts and premiums on debt (1,153) (1,172)
Amortization of deferred settlements on interest rate protection agreements 246 513
Gain on disposition of properties, net (87,652) (45,807)
Compensation paid with Company Common Shares 2,845 --
CHANGES IN ASSETS AND LIABILITIES:
Decrease in rents receivable 535 3,428
(Increase) in deposits - restricted (3,510) (4,342)
(Increase) decrease in other assets (1,808) 51,052
Increase in accounts payable and accrued expenses 16,769 6,936
Increase (decrease) in accrued interest payable 818 (1,176)
(Decrease) increase in rents received in advance and other liabilities (5,378) 6,411
(Decrease) in security deposits (803) (1,577)
------------ ------------
Net cash provided by operating activities 420,897 417,791
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate, net (143,680) (200,613)
Improvements to real estate (58,360) (55,783)
Additions to non-real estate property (2,399) (3,640)
Interest capitalized for real estate under construction (480) (943)
Proceeds from disposition of real estate, net 219,409 125,150
Principal receipts on investment in mortgage notes 3,200 2,159
(Increase) decrease in deposits on real estate acquisitions, net (35,854) 2,961
Decrease in mortgage deposits 2,461 131
Investment in joint ventures, net (84,875) (44,314)
Investment in limited partnerships and other, net (449) --
Proceeds from disposition of Unconsolidated Properties, net 4,400 --
Purchase of management contract rights (779) (285)
Costs related to Mergers (4,261) (4,002)
Other investing activities, net (11,827) 603
------------ ------------
Net cash (used for) investing activities (113,494) (178,576)
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES
4
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-----------------------------
2000 1999
-----------------------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan and bond acquisition costs $ (2,005) $ (2,055)
MORTGAGE NOTES PAYABLE:
Proceeds, net 378,318 62,885
Lump sum payoffs (104,484) (54,231)
Scheduled principal payments (14,126) (8,400)
NOTES, NET:
Proceeds -- 298,014
Payoffs -- (125,000)
LINES OF CREDIT:
Proceeds 162,000 689,000
Repayments (462,000) (894,000)
Loss on early extinguishment of debt -- 451
Proceeds from settlement of interest rate protection agreements 7,055 --
Proceeds from sale of Common Shares 4,575 5,661
Proceeds from sale of Preferred Shares/Units, net 84,825 --
Proceeds from exercise of options 9,473 24,254
Payment of offering costs (65) (296)
DISTRIBUTIONS:
Common Shares (97,486) (84,672)
Preferred Shares/Units (55,444) (57,111)
Minority Interests - Operating Partnership (9,592) (9,654)
Minority Interests - Partially Owned Properties (617) --
Principal receipts on employee notes, net 119 95
Principal receipts on other notes receivable, net -- 7,375
------------ ------------
Net cash (used for) financing activities (99,454) (147,684)
------------ ------------
Net increase in cash and cash equivalents 207,949 91,531
Cash and cash equivalents, beginning of period 29,117 3,965
------------ ------------
Cash and cash equivalents, end of period $ 237,066 $ 95,496
============ ============
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest $ 190,854 $ 161,277
============ ============
Transfers to real estate held for disposition $ 55,997 $ 32,844
============ ============
Net real estate contributed in exchange for OP Units or Preference Units $ 636 $ 14,183
============ ============
Mortgage loans assumed and/or entered into through acquisitions of real estate $ -- $ 58,320
============ ============
Mortgage loans assumed by purchaser in real estate dispositions $ (220,000) $ --
============ ============
Refinancing of mortgage notes payable in favor of notes, net $ -- $ 75,790
============ ============
Mortgage loans assumed through consolidation of Partially Owned Properties $ 65,095 $ --
============ ============
Net liabilities assumed through consolidation of
Partially Owned Properties $ 792 $ --
============ ============
</TABLE>
SEE ACCOMPANYING NOTES
5
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
DEFINITION OF SPECIAL TERMS:
Capitalized terms used but not defined in this Quarterly Report on
Form 10-Q are as defined in the Company's Annual Report on Form 10-K for the
year ended December 31, 1999 ("Form 10-K").
1. BUSINESS
Equity Residential Properties Trust, formed in March 1993 ("EQR"),
is a self-administered and self-managed equity real estate investment trust
("REIT"). As used herein, the term "Company" means EQR, and its subsidiaries,
as the survivor of the mergers between EQR and each of Wellsford Residential
Property Trust ("Wellsford") (the "Wellsford Merger"), Evans Withycombe
Residential, Inc. ("EWR") (the "EWR Merger"), Merry Land & Investment
Company, Inc. ("MRY") (the "MRY Merger") and Lexford Residential Trust
("LFT") ("the LFT Merger"). The Company has elected to be taxed as a REIT
under Section 856(c) of the Internal Revenue Code of 1986, as amended (the
"Code").
The Company is engaged in the acquisition, disposition, ownership,
management and operation of multifamily properties. As of June 30, 2000, the
Company owned or had interests in a portfolio of 1,053 multifamily properties
containing 224,383 apartment units (individually a "Property" and
collectively the "Properties") consisting of the following:
<TABLE>
<CAPTION>
Number of Number of
Properties Units
------------------------------------------------------------
<S> <C> <C>
Wholly Owned Properties 951 206,783
Partially Owned Properties 14 2,995
Unconsolidated Properties 88 14,605
----------------------------------
Total Properties 1,053 224,383
==================================
</TABLE>
The "Partially Owned Properties" are controlled and partially owned
by the Company but have partners with minority interests (see further
discussion in Notes 3 and 4). The "Unconsolidated Properties" are partially
owned but not controlled by the Company and consist of investments in
partnership interests and/or subordinated mortgages. The Properties are
located in 35 states throughout the United States.
2. BASIS OF PRESENTATION
The balance sheet and statements of operations and cash flows as of
and for the six months and quarter ended June 30, 2000 represent the
consolidated financial information of the Company and its subsidiaries.
Due to the Company's ability as general partner to control either
through ownership or by contract the Operating Partnership, a series of
management limited partnerships and companies (collectively, the "Management
Partnerships" or the "Management Companies"), the Financing Partnerships, the
LLC's, and certain other entities, each such entity has been consolidated
with the Company for financial reporting purposes. In regard to the
Management Companies, the Company does not have legal control; however, these
entities are consolidated for financial reporting purposes, the effects of
which are immaterial. Certain reclassifications have been made to the prior
year's financial statements in order to conform to the current year
presentation.
These unaudited Consolidated Financial Statements of the Company
have been prepared pursuant to the Securities and Exchange Commission ("SEC")
rules and regulations and should be read in conjunction with the Financial
Statements and Notes thereto included in the Company's Annual Report on
6
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Form 10-K. The following Notes to Consolidated Financial Statements highlight
significant changes to the notes included in the Form 10-K and present
interim disclosures as required by the SEC. The accompanying Consolidated
Financial Statements reflect, in the opinion of management, all adjustments
necessary for a fair presentation of the interim financial statements. All
such adjustments are of a normal and recurring nature.
3. SHAREHOLDERS' EQUITY AND MINORITY INTERESTS
The following table presents the changes in the Company's issued and
outstanding Common Shares for the six months ended June 30, 2000:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------
2000
-----------------------------------------------------------------------
<S> <C>
Common Shares outstanding at January 1, 127,450,798
COMMON SHARES ISSUED:
Conversion of Series E Preferred Shares 2,333
Conversion of Series H Preferred Shares 61,628
Conversion of Series J Preferred Shares 2,822,012
Employee Share Purchase Plan 110,373
Dividend Reinvestment - DRIP Plan 9,917
Share Purchase - DRIP Plan 7,778
Exercise of options 240,886
Restricted share grants, net 232,161
Conversion of OP Units 242,300
-----------------------------------------------------------------------
Common Shares outstanding at June 30, 131,180,186
=======================================================================
</TABLE>
The equity positions of various individuals and entities that
contributed their properties to the Operating Partnership in exchange for a
partnership interest are collectively referred to as the "Minority Interests
-Operating Partnership". As of June 30, 2000, the Minority Interests -
Operating Partnership held 12,258,530 OP Units. As a result, the Minority
Interests - Operating Partnership had an 8.55% interest in the Operating
Partnership at June 30, 2000. Assuming conversion of all OP Units into Common
Shares, total Common Shares outstanding at June 30, 2000 would have been
143,438,716.
Net proceeds from the Company's Common Share and Preferred Share
offerings are contributed by the Company to the Operating Partnership in
return for an increased ownership percentage and are treated as capital
transactions in the Company's Consolidated Financial Statements. As a result,
the net offering proceeds from Common Shares are allocated between
shareholders' equity and Minority Interests - Operating Partnership to
account for the change in their respective percentage ownership of the
underlying equity of the Operating Partnership.
The Guilford portfolio properties (see further discussion in Note 4)
are controlled and partially owned by the Company but have partners with
minority interests. Effective January 1, 2000, the Company has included 100%
of the financial condition and results of operations of these Partially Owned
Properties in the Consolidated Financial Statements due to an increased
ownership interest in these properties. The equity interests of the
unaffiliated partners are reflected as Minority Interests - Partially Owned
Properties.
On March 3, 2000, Lexford Properties, L.P., a subsidiary of the
Operating Partnership, issued 1.1 million units of 8.50% Series B Cumulative
Convertible Redeemable Preference Units (collectively known as "Preference
Interests") with an equity value of $55.0 million. Lexford Properties, L.P.
received $53.6
7
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
million in net proceeds from this transaction. The liquidation value of these
units is $50 per unit. The 1.1 million units are exchangeable into 1.1
million shares of 8.50% Series M-1 Cumulative Redeemable Preferred Shares of
Beneficial Interest of the Company. Dividends for the Series B Preference
Interests or the Series M-1 Preferred Shares are payable quarterly at the
rate of $4.25 per unit/share per year.
On March 23, 2000, Lexford Properties, L.P., a subsidiary of the
Operating Partnership, issued 220,000 units of 8.50% Series C Cumulative
Convertible Redeemable Preference Units with an equity value of $11.0
million. Lexford Properties, L.P. received $10.7 million in net proceeds from
this transaction. The liquidation value of these units is $50 per unit. The
220,000 units are exchangeable into 220,000 shares of 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company.
Dividends for the Series C Preference Interests or the Series M-1 Preferred
Shares are payable quarterly at the rate of $4.25 per unit/share per year.
On May 1, 2000, Lexford Properties, L.P., a subsidiary of the
Operating Partnership, issued 420,000 units of 8.375% Series D Cumulative
Convertible Redeemable Preference Units with an equity value of $21.0
million. Lexford Properties, L.P. received $20.5 million in net proceeds from
this transaction. The liquidation value of these units is $50 per unit. The
420,000 units are exchangeable into 420,000 shares of 8.375% Series M-2
Cumulative Redeemable Preferred Shares of Beneficial Interest of the Company.
Dividends for the Series D Preference Interests or the Series M-2 Preferred
Shares are payable quarterly at the rate of $4.1875 per unit/share per year.
The value of these Preference Interests are included in Minority
Interests - Operating Partnership in the Consolidated Balance Sheets and the
distributions incurred are included in preferred distributions in the
Consolidated Statements of Operations. The Series M-1 and M-2 Preferred
Shares are not convertible into EQR Common Shares.
The following table presents the Company's issued and outstanding
Preferred Shares as of June 30, 2000 and December 31, 1999:
8
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
AMOUNTS ARE IN THOUSANDS
-----------------------------
ANNUAL
DIVIDEND
RATE PER JUNE DECEMBER
SHARE (1) 30, 2000 31, 1999
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred Shares of beneficial interest, $.01 par value;
100,000,000 shares authorized:
9 3/8% Series A Cumulative Redeemable Preferred; liquidation $2.34375 $ 153,000 $ 153,000
value $25 per share; 6,120,000 shares issued and outstanding
at June 30, 2000 and December 31, 1999
9 1/8% Series B Cumulative Redeemable Preferred; liquidation $22.81252 125,000 125,000
value $250 per share; 500,000 shares issued and outstanding
at June 30, 2000 and December 31, 1999
9 1/8% Series C Cumulative Redeemable Preferred; liquidation $22.81252 115,000 115,000
value $250 per share; 460,000 shares issued and outstanding
at June 30, 2000 and December 31, 1999
8.60% Series D Cumulative Redeemable Preferred; liquidation $21.50000 175,000 175,000
value $250 per share; 700,000 shares issued and outstanding
at June 30, 2000 and December 31, 1999
Series E Cumulative Convertible Preferred; liquidation value $1.75000 99,745 99,850
$25 per share; 3,989,800 and 3,994,000 shares issued
and outstanding at June 30, 2000 and December 31, 1999,
respectively
9.65% Series F Cumulative Redeemable Preferred; liquidation $2.41250 57,500 57,500
value $25 per share; 2,300,000 shares issued and outstanding
at June 30, 2000 and December 31, 1999
7 1/4% Series G Convertible Cumulative Preferred; liquidation $18.12500 316,250 316,250
value $250 per share; 1,265,000 shares issued and
outstanding at June 30, 2000 and December 31, 1999
7.00% Series H Cumulative Convertible Preferred; liquidation $1.75000 1,558 3,686
value $25 per share; 62,324 and 147,452 shares issued
and outstanding at June 30, 2000 and December 31, 1999,
respectively
8.60% Series J Cumulative Convertible Preferred; liquidation $2.15000 - 114,980
value $25 per share; 0 and 4,599,200 shares issued and
outstanding at June 30, 2000 and December 31, 1999,
respectively (2)
8.29% Series K Cumulative Redeemable Preferred; liquidation $4.14500 50,000 50,000
value $50 per share; 1,000,000 shares issued and outstanding
at June 30, 2000 and December 31, 1999
7.625% Series L Cumulative Redeemable Preferred; liquidation $1.90625 100,000 100,000
value $25 per share; 4,000,000 shares issued and outstanding
at June 30, 2000 and December 31, 1999
-----------------------------------------------------------------------------------------------------------------
$1,193,053 $1,310,266
-----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Dividends on all series of Preferred Shares are payable quarterly
at various pay dates. Dividend rates listed for Series B, C, D
and G are Preferred Share rates and the equivalent Depositary
Share annual dividend rates are $2.281252, $2.281252, $2.15 and
$1.8125, respectively.
9
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(2) On June 2, 2000, the Company redeemed all of its remaining
issued and outstanding Series J Cumulative Convertible Preferred
Shares of Beneficial Interest. The preferred shares were redeemed
for such number of common shares that were issuable at a
conversion rate of 0.6136 of a common share of EQR for each
Series J Preferred Share.
4. Real Estate Acquisitions
During the six months ended June 30, 2000, the Company acquired the
three Properties listed below from unaffiliated parties. The cash portion of
these transactions was funded from proceeds received from the disposition of
properties and working capital.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
PURCHASE
DATE NUMBER OF PRICE
ACQUIRED PROPERTY LOCATION UNITS (IN THOUSANDS)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
01/19/00 Windmont Atlanta, GA 178 $ 10,310
04/05/00 Alborada Fremont, CA 442 83,500
06/30/00 Jefferson at Wyndham Lakes Coral Springs, FL 332 33,340
------------------------------------------------------------------------------------------------------------------
952 $127,150
==================================================================================================================
</TABLE>
On January 19, 2000, the Company paid $1.25 million to acquire an
additional ownership interest in LFT's Guilford portfolio (14 properties
containing 2,995 units located in four states). The transaction was effective
on January 1, 2000. Prior to January 1, 2000, the Company accounted for this
portfolio under the equity method of accounting. As a result of this
additional ownership acquisition, the Company acquired a controlling
interest, and as such, now consolidates these properties for financial
reporting purposes. The Company recorded additional investments in real
estate totaling $69.4 million in connection with this transaction.
5. REAL ESTATE DISPOSITIONS
During the six months ended June 30, 2000, the Company disposed of
the fourteen properties listed below to unaffiliated parties. The Company
recognized a net gain for financial reporting purposes of approximately $38.1
million.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
DISPOSITION
DATE NUMBER PRICE
DISPOSED PROPERTY LOCATION OF UNITS (IN THOUSANDS)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
02/04/00 Lakeridge at the Moors Miami, FL 175 $ 10,000
02/09/00 Sonnet Cove I & II Lexington, KY 331 12,300
02/25/00 Yuma Court Colorado Springs, CO 40 2,350
02/25/00 Indigo Plantation Daytona Beach, FL 304 14,200
02/25/00 The Oaks of Lakebridge Ormond Beach, FL 170 7,800
03/23/00 Tanglewood Lake Oswego, OR 158 10,750
03/30/00 Preston Lake Tucker, GA 320 17,325
03/31/00 Cypress Cove Melbourne, FL 326 18,800
04/20/00 Village of Sycamore Ridge Memphis, TN 114 5,200
04/28/00 Towne Centre III & IV Laurel, MD 562 29,244
05/11/00 3000 Grand Des Moines, IA 186 9,625
06/14/00 Villa Madeira Scottsdale, AZ 332 17,500
------------------------------------------------------------------------------------------------------
3,108 $155,094
======================================================================================================
</TABLE>
10
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Also, on June 30, 2000, the Company entered into two separate joint
ventures with an unaffiliated party. At closing, the Company sold and/or
contributed twenty-one wholly owned properties containing 5,211 units in
eight states valued at $303.4 million to the joint ventures encumbered with
$220 million in mortgage loans obtained on June 26, 2000 (see further
discussion in Note 8). The unaffiliated party acquired a 75% interest in the
joint ventures while the Company retained a 25% interest along with the right
to manage the properties. The Company will account for its 25% interest in
the joint ventures under the equity method of accounting. The Company
recognized a net gain for financial reporting purposes of approximately $49.6
million.
In addition, during the six months ended June 30, 2000, the Company
sold its entire interest in two Unconsolidated Properties containing 338
units for approximately $4.4 million.
6. COMMITMENTS TO ACQUIRE/DISPOSE OF REAL ESTATE
As of June 30, 2000, in addition to the Properties that were
subsequently acquired as discussed in Note 14 of the Notes to Consolidated
Financial Statements, the Company entered into separate agreements to acquire
two multifamily properties containing 560 units from unaffiliated parties.
The Company expects a combined purchase price of approximately $35.3 million,
including the assumption of mortgage indebtedness of approximately $27.1
million.
As of June 30, 2000, in addition to the Properties that were
subsequently disposed of as discussed in Note 14 of the Notes to Consolidated
Financial Statements, the Company entered into separate agreements to dispose
of eighteen multifamily properties containing 4,414 units to unaffiliated
parties. The Company expects a combined disposition price of approximately
$222.5 million.
The closings of these pending transactions are subject to certain
contingencies and conditions; therefore, there can be no assurance that these
transactions will be consummated or that the final terms thereof will not
differ in material respects from those summarized in the preceding paragraphs.
7. DEPOSITS - RESTRICTED
Deposits-restricted as of June 30, 2000 primarily included the
following:
- deposits in the amount of $29.5 million held in third party
escrow accounts to provide collateral for third party
construction financing in connection with two separate joint
venture agreements;
- approximately $76.0 million held in third party escrow
accounts, representing proceeds received in connection with
the Company's disposition of sixteen properties and earnest
money deposits made for nine additional acquisitions;
- approximately $32.9 million for tenant security, utility
deposits, and other deposits for certain of the Company's
Properties; and
- approximately $12.2 million of other deposits.
8. MORTGAGE NOTES PAYABLE
As of June 30, 2000, the Company had outstanding mortgage
indebtedness of approximately $3.0 billion encumbering 514 of the Properties.
The carrying value of such Properties (net of accumulated depreciation of
$525.9 million) was approximately $4.7 billion. The mortgage notes payables
are generally due in monthly installments of principal and interest.
11
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
During the six months ended June 30, 2000 the Company:
- recorded additional third-party mortgage debt totaling $65.1
million in connection with the consolidation of the Guilford
portfolio on January 1, 2000 (see Note 4);
- repaid the outstanding mortgage balances on fifty-six
Properties in the aggregate amount of $104.5 million;
- obtained new mortgage financing on eleven previously
unencumbered properties in the amount of $148.3 million on
March 20, 2000;
- settled on a $100 million forward starting swap and received
$7.1 million. This amount is being amortized over the life of
the financing for the eleven previously unencumbered
Properties that occurred in March 2000; and
- obtained new mortgage financings on twenty-one previously
unencumbered properties in the amount of $220 million on June
26, 2000. These mortgage loans were assumed by the joint
ventures that closed on June 30, 2000 (see Note 5).
As of June 30, 2000, scheduled maturities for the Company's
outstanding mortgage indebtedness are at various dates through October 1,
2033. The interest rate range on the Company's mortgage debt was 4.00% to
10.67% at June 30, 2000. During the six months ended June 30, 2000, the
weighted average interest rate on the Company's mortgage debt was 7.33%.
9. NOTES
The following tables summarize the Company's unsecured note balances
and certain interest rate and maturity date information as of and for the six
months ended June 30, 2000:
<TABLE>
<CAPTION>
Weighted
June 30, 2000 Net Principal Interest Rate Average Maturity
(AMOUNTS ARE IN THOUSANDS) Balance Ranges Interest Rate Date Ranges
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Rate Public Notes $ 2,062,118 6.150% - 9.375% 7.07% 2000 - 2026
Floating Rate Public Notes 99,782 (1) 7.09% 2003
Fixed Rate Tax-Exempt Bonds 127,780 4.750% - 5.200% 5.10% 2024 - 2029
------------ ------------
Totals $ 2,289,680 6.97%
============ ============
</TABLE>
(1) As of June 30, 2000, floating rate public notes consisted of
one note. The interest rate on this note was LIBOR (reset
quarterly) plus a spread equal to 0.75% at June 30, 2000
(reset annually in August).
As of June 30, 2000, the Company had outstanding unsecured notes of
approximately $2.3 billion net of a $4.1 million discount and including a
$6.0 million premium.
As of June 30, 2000, the remaining unamortized balance of deferred
settlement receipts and payments from treasury locks and interest rate
protection agreements was $9.1 million and $2.9 million, respectively.
10. LINE OF CREDIT
The Company has a revolving credit facility with Bank of America
Securities LLC and Chase Securities Inc. acting as joint lead arrangers to
provide the Operating Partnership with potential borrowings of up to $700
million. As of June 30, 2000 no amounts were outstanding under this facility
12
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
and $51.4 million was restricted on the line of credit. During the six months
ended June 30, 2000, the weighted average interest rate on the Company's line
of credit was 6.58%.
11. CALCULATION OF NET INCOME PER WEIGHTED AVERAGE COMMON SHARE
The following tables set forth the computation of net income per
share - basic and net income per share - diluted.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, QUARTER ENDED JUNE 30,
----------------------------- -----------------------------
2000 1999 2000 1999
----------------------------- -----------------------------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Numerator:
Income before gain on disposition of properties, net,
extraordinary item, allocation to Minority
Interests and preferred distributions $ 185,121 $ 159,374 $ 96,929 $ 80,110
Allocation to Minority Interests:
Operating Partnership (19,132) (14,514) (12,036) (7,388)
Partially Owned Properties 157 -- 112 --
Distributions to preferred shareholders (55,654) (57,111) (27,266) (27,734)
----------------------------- -----------------------------
Income before gain on disposition of properties, net
and extraordinary item 110,492 87,749 57,739 44,988
Gain on disposition of properties, net 87,652 45,807 67,654 24,391
Loss on early extinguishment of debt -- (451) -- (451)
----------------------------- -----------------------------
Numerator for net income per share - basic 198,144 133,105 125,393 68,928
Effect of dilutive securities:
Allocation to Minority Interests -
Operating Partnership 19,132 14,514 12,036 7,388
Distributions to convertible preferred shareholders 267 -- 3,526 --
----------------------------- -----------------------------
Numerator for net income per share - diluted $ 217,543 $ 147,619 $ 140,955 $ 76,316
============================= =============================
Denominator:
Denominator for net income per share - basic 128,435 119,762 129,072 120,558
Effect of dilutive securities:
Dilution for assumed exercise of stock options 579 742 770 908
OP Units 12,415 13,064 12,364 12,920
Convertible preferred shares 204 -- 4,304 --
----------------------------- -----------------------------
Denominator for net income per share - diluted 141,633 133,568 146,510 134,386
============================= =============================
Net income per share - basic $ 1.54 $ 1.11 $ 0.97 $ 0.57
============================= =============================
Net income per share - diluted $ 1.54 $ 1.11 $ 0.96 $ 0.57
============================= =============================
</TABLE>
13
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, QUARTER ENDED JUNE 30,
---------------------------- ----------------------------
2000 1999 2000 1999
-------------- ------------- -------------- -------------
(AMOUNTS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net income per share - basic:
Income before gain on disposition of properties, net
and extraordinary item per share - basic $ 0.92 $ 0.77 $ 0.49 $ 0.39
Gain on disposition of properties, net 0.62 0.34 0.48 0.18
Loss on early extinguishment of debt -- -- -- --
-------------- ------------- -------------- -------------
Net income per share - basic $ 1.54 $ 1.11 $ 0.97 $ 0.57
============== ============= ============== =============
Net income per share - diluted:
Income before gain on disposition of properties, net
and extraordinary item per share - diluted $ 0.92 $ 0.77 $ 0.50 $ 0.39
Gain on disposition of properties, net 0.62 0.34 0.46 0.18
Loss on early extinguishment of debt -- -- -- --
-------------- ------------- -------------- -------------
Net income per share - diluted $ 1.54 $ 1.11 $ 0.96 $ 0.57
============== ============= ============== =============
</TABLE>
CONVERTIBLE PREFERRED SHARES AND JUNIOR CONVERTIBLE PREFERENCE UNITS THAT
COULD BE CONVERTED INTO 9,970,878 AND 12,761,757 WEIGHTED COMMON SHARES FOR
THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999, RESPECTIVELY, AND 5,402,779 AND
12,404,422 WEIGHTED COMMON SHARES FOR THE QUARTERS ENDED JUNE 30, 2000 AND
1999, RESPECTIVELY, WERE OUTSTANDING BUT WERE NOT INCLUDED IN THE COMPUTATION
OF DILUTED EARNINGS PER SHARE BECAUSE THE EFFECTS WOULD BE ANTI-DILUTIVE.
12. COMMITMENTS AND CONTINGENCIES
The Company, as an owner of real estate, is subject to various
environmental laws of Federal and local governments. Compliance by the
Company with existing laws has not had a material adverse effect on the
Company's financial condition and results of operations. However, the Company
cannot predict the impact of new or changed laws or regulations on its
current Properties or on properties that it may acquire in the future.
The Company does not believe there is any litigation threatened
against the Company other than routine litigation arising out of the ordinary
course of business, some of which is expected to be covered by liability
insurance, none of which is expected to have a material adverse effect on the
consolidated financial statements of the Company.
In regards to the funding of Properties in the development and/or
earnout stage and the joint venture agreements with two multifamily
residential real estate developers, the Company funded a total of $91.7
million during the six months ended June 30, 2000. During the remainder of
2000, the Company expects to fund approximately $63.8 million in connection
with these Properties. In connection with one joint venture agreement, the
Company has an obligation to fund up to an additional $17.5 million to
guarantee third party construction financing.
Pursuant to the terms of a Stock Purchase Agreement with Wellsford
Real Properties, Inc. ("WRP Newco"), the Company had agreed to purchase up to
1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a
standby basis over a three-year period ending on May 30, 2000. This
14
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
agreement was terminated on May 5, 2000, and, as such, the Company has no
further obligations under this agreement.
In connection with the Wellsford Merger, the Company provided a
$14.8 million credit enhancement with respect to certain tax-exempt bonds
issued to finance certain public improvements at a multifamily development
project. As of June 30, 2000, this enhancement was still in effect.
13. REPORTABLE SEGMENTS
The following tables set forth the reconciliation of net income and
total assets for the Company's reportable segments for the six months and
quarter ended June 30, 2000 and net income for the six months and quarter
ended June 30, 1999.
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 2000 RENTAL REAL CORPORATE/
(AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 952,740 $ -- $ 952,740
Property and maintenance expense (227,845) -- (227,845)
Real estate tax and insurance expense (95,001) -- (95,001)
Property management expense (37,760) -- (37,760)
----------------------------------------------
Net operating income 592,134 -- 592,134
Fee and asset management income -- 2,632 2,632
Interest income - investment in mortgage notes -- 5,499 5,499
Interest and other income -- 17,652 17,652
Fee and asset management expense -- (2,102) (2,102)
Depreciation expense on non-real estate assets -- (3,157) (3,157)
Interest expense:
Expense incurred -- (190,263) (190,263)
Amortization of deferred financing costs -- (2,703) (2,703)
General and administrative expense -- (13,216) (13,216)
Preferred distributions -- (55,654) (55,654)
Allocation to Minority Interests - Partially Owned Properties -- 157 157
Adjustment for depreciation expense related to
Unconsolidated and Partially Owned Properties -- (491) (491)
----------------------------------------------
Funds from operations available to Common Shares
and OP Units 592,134 (241,646) 350,488
Depreciation expense on real estate assets (221,355) -- (221,355)
Gain on disposition of properties, net 87,652 -- 87,652
Allocation to Minority Interests - Operating Partnership -- (19,132) (19,132)
Adjustment for depreciation expense related to
Unconsolidated and Partially Owned Properties -- 491 491
----------------------------------------------
Net income available to Common Shares $ 458,431 $ (260,287) $ 198,144
==============================================
Investment in real estate, net of accumulated
depreciation $ 10,801,004 $ 16,541 $ 10,817,545
==============================================
Total assets $ 10,857,001 $ 889,742 $ 11,746,743
==============================================
</TABLE>
15
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1999 RENTAL REAL CORPORATE/
(AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 819,178 $ -- $ 819,178
Property and maintenance expense (196,865) (196,865)
Real estate tax and insurance expense (84,515) (84,515)
Property management expense (27,973) (27,973)
----------------------------------------------
Net operating income 509,825 -- 509,825
Fee and asset management income -- 2,414 2,414
Interest income - investment in mortgage notes -- 5,644 5,644
Interest and other income -- 11,123 11,123
Fee and asset management expense -- (1,624) (1,624)
Depreciation expense on non-real estate assets -- (3,423) (3,423)
Interest expense:
Expense incurred -- (158,499) (158,499)
Amortization of deferred financing costs -- (1,661) (1,661)
General and administrative expense -- (10,714) (10,714)
Preferred distributions -- (57,111) (57,111)
Adjustment for depreciation expense related to
Unconsolidated Properties -- 551 551
----------------------------------------------
Funds from operations available to Common Shares
and OP Units 509,825 (213,300) 296,525
Depreciation expense on real estate assets (193,711) -- (193,711)
Gain on disposition of properties, net 45,807 -- 45,807
Loss on early extinguishment of debt -- (451) (451)
Allocation to Minority Interests - Operating Partnership -- (14,514) (14,514)
Adjustment for depreciation expense related to
Unconsolidated Properties -- (551) (551)
----------------------------------------------
Net income available to Common Shares $ 361,921 $ (228,816) $ 133,105
==============================================
</TABLE>
16
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, 2000 RENTAL REAL CORPORATE/
(AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 479,193 $ -- $ 479,193
Property and maintenance expense (113,977) -- (113,977)
Real estate tax and insurance expense (46,667) -- (46,667)
Property management expense (18,846) -- (18,846)
----------------------------------------------
Net operating income 299,703 -- 299,703
Fee and asset management income -- 1,334 1,334
Interest income - investment in mortgage notes -- 2,737 2,737
Interest and other income -- 9,849 9,849
Fee and asset management expense -- (1,036) (1,036)
Depreciation expense on non-real estate assets -- (1,590) (1,590)
Interest expense:
Expense incurred -- (95,152) (95,152)
Amortization of deferred financing costs -- (1,362) (1,362)
General and administrative expense -- (6,518) (6,518)
Preferred distributions -- (27,266) (27,266)
Allocation to Minority Interests - Partially Owned
Properties -- 112 112
Adjustment for depreciation expense related to
Unconsolidated and Partially Owned Properties -- (253) (253)
----------------------------------------------
Funds from operations available to Common Shares and
OP Units 299,703 (119,145) 180,558
Depreciation expense on real estate assets (111,036) -- (111,036)
Gain on disposition of properties, net 67,654 -- 67,654
Allocation to Minority Interests - Operating
Partnership -- (12,036) (12,036)
Adjustment for depreciation expense related to
Unconsolidated and Partially Owned Properties -- 253 253
----------------------------------------------
Net income available to Common Shares $ 256,321 $ (130,928) $ 125,393
==============================================
</TABLE>
17
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
QUARTER ENDED JUNE 30, 1999 RENTAL REAL CORPORATE/
(AMOUNTS IN THOUSANDS) ESTATE (1) OTHER (2) CONSOLIDATED
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rental income $ 413,116 $ -- $ 413,116
Property and maintenance expense (99,818) -- (99,818)
Real estate tax and insurance expense (42,467) -- (42,467)
Property management expense (13,772) -- (13,772)
----------------------------------------------
Net operating income 257,059 -- 257,059
Fee and asset management income -- 1,180 1,180
Interest income - investment in mortgage notes -- 2,749 2,749
Interest and other income -- 5,177 5,177
Fee and asset management expense -- (757) (757)
Depreciation expense on non-real estate assets -- (1,719) (1,719)
Interest expense:
Expense incurred -- (79,302) (79,302)
Amortization of deferred financing costs -- (816) (816)
General and administrative expense -- (4,947) (4,947)
Preferred distributions -- (27,734) (27,734)
Adjustment for depreciation expense related to
Unconsolidated Properties -- 276 276
----------------------------------------------
Funds from operations available to Common Shares
and OP Units 257,059 (105,893) 151,166
Depreciation expense on real estate assets (98,514) -- (98,514)
Gain on disposition of properties, net 24,391 -- 24,391
Loss on early extinguishment of debt -- (451) (451)
Allocation to Minority Interests - Operating Partnership -- (7,388) (7,388)
Adjustment for depreciation expense related to
Unconsolidated Properties -- (276) (276)
----------------------------------------------
Net income available to Common Shares $ 182,936 $ (114,008) $ 68,928
==============================================
</TABLE>
(1) The Company has one primary reportable business segment, which consists
of investment in rental real estate. The Company's primary business is
owning, managing, and operating multifamily residential properties which
includes the generation of rental and other related income through the
leasing of apartment units to tenants.
(2) The Company has a segment for corporate level activity including such
items as interest income earned on short-term investments, interest
income earned on investment in mortgage notes, general and administrative
expenses, and interest expense on mortgage notes payable and unsecured
note issuances. In addition, the Company has a segment for third party
management activity that is immaterial and does not meet the threshold
requirements of a reportable segment as provided for in Statement No.
131. Interest expense on debt is not allocated to individual Properties,
even if the Properties secure such debt. Further, income allocated to
Minority Interests is not allocated to the Properties.
18
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
14. SUBSEQUENT EVENTS
On July 11, 2000, the Company closed on its acquisition, in an all
cash and debt transaction, of Globe Business Resources, Inc. ("Globe"), one
of the nation's largest providers of temporary corporate housing and
furniture rental. Shareholders of Globe received $13.00 per share, which
approximated $58.7 million in cash based on the Globe shares outstanding. In
addition, the Company assumed approximately $70.8 million in debt.
On July 6, 2000, the Company disposed of Idlewood Apartments, a
320-unit multifamily property located in Indianapolis, IN, to an unaffiliated
party for a total sales price of $15.6 million.
On July 11, 2000, the Company repaid the outstanding mortgage
balance on one Property totaling $5.9 million.
On July 12, 2000, the Company acquired Ambergate Villas Apartments,
a 72-unit multifamily property located in West Palm Beach, FL, from an
unaffiliated party for a total purchase price of approximately $2.4 million,
which included the issuance of approximately $0.4 million of OP Units.
On July 12, 2000, the Company acquired Greengate Villas Apartments,
a 120-unit multifamily property located in West Palm Beach, FL, from an
unaffiliated party for a total purchase price of approximately $4.0 million,
which included the assumption of mortgage indebtedness of approximately $2.7
million and the issuance of approximately $1.2 million of OP Units.
On July 12, 2000, the Company acquired Jupiter Sound Villas
Apartments, a 61-unit multifamily property located in Juno Beach, FL, from an
unaffiliated party for a total purchase price of approximately $1.7 million,
which included the assumption of mortgage indebtedness of approximately $1.6
million and the issuance of approximately $10,000 of OP Units.
On July 12, 2000, the Company acquired Oakland Hills Apartments, a
189-unit multifamily property located in Margate, FL, from an unaffiliated
party for a total purchase price of approximately $7.8 million, which
included the assumption of mortgage indebtedness of approximately $5.0
million and the issuance of approximately $2.4 million of OP Units.
On July 12, 2000, the Company acquired Summit Center Apartments, a
87-unit multifamily property located in West Palm Beach, FL, from an
unaffiliated party for a total purchase price of approximately $2.4 million,
which included the assumption of mortgage indebtedness of approximately $2.3
million and the issuance of approximately $10,000 of OP Units.
On July 12, 2000, the Company acquired Whispering Pines Apartments,
a 64-unit multifamily property located in Fort Pierce, FL, from an
unaffiliated party for a total purchase price of approximately $1.0 million,
which included the issuance of approximately $0.1 million of OP Units.
On July 17, 2000, the Company announced that it has entered into a
definitive agreement and plan of merger with Grove Property Trust ("Grove").
Grove's portfolio of 60 properties contains 7,296 units located in three New
England states. The transaction values Grove at approximately $461 million,
including the assumption of approximately $244 million in debt. This merger
is expected to close during the fourth quarter of 2000 and does not require
EQR shareholder approval.
19
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
On July 25, 2000, the Company acquired Harbour Town Apartments, a
392-unit multifamily property located in Boca Raton, FL, from an unaffiliated
party for a total purchase price of approximately $31.9 million.
On July 25, 2000, the Company disposed of Sabal Palms Apartments, a
416-unit multifamily property located in Pompano Beach, FL, to an
unaffiliated party for a total sales price of $27.2 million.
On July 27, 2000, the Company disposed of Lake in the Woods
Apartments, a 1,028-unit multifamily property located in Ypsilanti, MI, to an
unaffiliated party for a total sales price of $57.0 million.
On July 28, 2000, the Company disposed of Lamplight Court
Apartments, a 53-unit multifamily property located in London, OH, to an
unaffiliated party for a total sales price of $0.7 million.
On July 28, 2000, the Company disposed of Cheyenne Crest Apartments,
a 208-unit multifamily property located in Colorado Springs, CO, to an
unaffiliated party for a total sales price of $12.3 million.
On July 28, 2000, the Company disposed of Windmill Apartments, a
304-unit multifamily property located in Colorado Springs, CO, to an
unaffiliated party for a total sales price of $12.4 million.
On July 28, 2000, the Company sold its entire interest in an
Unconsolidated Property containing 39 units for approximately $0.2 million.
20
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following discussion and analysis of the results of operations
and financial condition of the Company should be read in connection with the
Consolidated Financial Statements and Notes thereto. Due to the Company's
ability to control the Operating Partnership, the Management Partnerships and
Management Companies, the Financing Partnerships, the LLC's and certain other
entities, each entity has been consolidated with the Company for financial
reporting purposes. Capitalized terms used herein and not defined, are as
defined in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.
Forward-looking statements in this report are intended to be made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The words "believes", "expects" and "anticipates" and
other similar expressions which are predictions of or indicate future events
and trends and which do not relate solely to historical matters identify
forward-looking statements. Such forward-looking statements are subject to
risks and uncertainties, which could cause actual results, performance, or
achievements of the Company to differ materially from anticipated future
results, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause such differences
include, but are not limited to, the following:
- alternative sources of capital to the Company are higher than
anticipated;
- occupancy levels and market rents may be adversely affected by
local economic and market conditions, which are beyond the
Company's control; and
- additional factors as discussed in Part I of the Annual Report
on Form 10-K.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release any revisions to these
forward-looking statements, which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
RESULTS OF OPERATIONS
The acquired properties are presented in the Consolidated Financial
Statements of the Company from the date of each acquisition or the closing dates
of the Mergers. The following table summarizes the number of Wholly Owned
Acquired and Disposed Properties and related units for the periods presented:
<TABLE>
<CAPTION>
ACQUISITIONS DISPOSITIONS
------------------------------------------------------------------
Number of Number of Number of Number of
YEAR Properties Units Properties Units
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999 366 35,450 36 7,886
2000 3 952 35 8,229
</TABLE>
In addition, during the six months ended June 30, 2000, the Company
sold its entire interest in two Unconsolidated Properties containing 338
units for approximately $4.4 million.
21
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
The Company's overall results of operations for the six months ended
June 30, 2000 and 1999 have been significantly impacted by the Company's
acquisition and disposition activity. The significant changes in rental
revenues, property and maintenance expenses, real estate taxes and insurance,
depreciation expense, property management and interest expense can all
primarily be attributed to the acquisition of the 1999 Acquired Properties
and the 2000 Acquired Properties, partially offset by the disposition of the
1999 Disposed Properties and the 2000 Disposed Properties. The impact of the
1999 Acquired Properties and the 2000 Acquired Properties, the 1999 Disposed
Properties and the 2000 Disposed Properties are discussed in greater detail
in the following paragraphs.
Properties that the Company owned for all of both the six-month
periods ended June 30, 2000 and June 30, 1999 (the "Six-Month 2000 Same Store
Properties"), which represented 167,210 units, also impacted the Company's
results of operations. Properties that the Company owned for all of both the
quarters ended June 30, 2000 and June 30, 1999 (the "Second-Quarter 2000 Same
Store Properties"), which represented 168,634 units, also impacted the
Company's results of operations. Both the Six-Month 2000 Same Store
Properties and Second-Quarter 2000 Same Store Properties are discussed in the
following paragraphs.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 TO SIX MONTHS ENDED JUNE 30, 1999
For the six months ended June 30, 2000, income before gain on
disposition of properties, net, extraordinary item and allocation to Minority
Interests increased by approximately $25.7 million when compared to the six
months ended June 30, 1999. This increase was primarily due to the
acquisition of the 1999 Acquired Properties as well as increases in rental
revenues net of increases in property and maintenance expenses, real estate
taxes and insurance, property management expenses, depreciation expense,
interest expense and general and administrative expenses.
In regard to the Six-Month 2000 Same Store Properties, total
revenues increased by approximately $29.0 million to $770.5 million or 3.92%
primarily as a result of higher rental rates charged to new tenants and
tenant renewals and an increase in income from billing tenants for their
share of utility costs as well as other ancillary services provided to
tenants. Overall, property operating expenses, which include property and
maintenance, real estate taxes and insurance and an allocation of property
management expenses, increased approximately $5.3 million or 1.96%. This
increase was primarily the result of higher expenses for on-site compensation
costs and an increase in real estate taxes on certain properties, but was
partially offset by lower leasing and advertising, administrative,
maintenance, building and insurance costs.
Property management represents expenses associated with the
self-management of the Company's Properties. These expenses increased by
approximately $9.8 million primarily due to the operations of the property
management business obtained through the LFT Merger and a current year
compensation charge associated with the issuance of restricted shares to our
property management personnel.
Fee and asset management revenues and fee and asset management
expenses are associated with the management of properties not owned by the
Company that are managed for affiliates. These revenues and expenses
increased slightly.
Interest expense, including amortization of deferred financing
costs, increased by approximately $32.8 million. This increase was primarily
the result of a $719.2 million increase in the Company's average indebtedness
outstanding. The effective interest cost on all of the Company's indebtedness
for the six months ending June 30, 2000 was 7.26% as compared to 6.98% for
the six months ended June 30, 1999.
22
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
General and administrative expenses, which include corporate
operating expenses, increased approximately $2.5 million between the periods
under comparison. This increase was primarily due to recording higher
compensation expense associated with the issuance of restricted shares. These
expenses as a percentage of total revenues were 1.35% for the six months
ended June 30, 2000 compared to 1.28% of total revenues for the six months
ended June 30, 1999.
COMPARISON OF QUARTER ENDED JUNE 30, 2000 TO QUARTER ENDED JUNE 30, 1999
For the quarter ended June 30, 2000, income before gain on
disposition of properties, net, extraordinary item and allocation to Minority
Interests increased by approximately $16.8 million when compared to the
quarter ended June 30, 1999. This increase was primarily due to the
acquisition of the 1999 Acquired Properties as well as increases in rental
revenues net of increases in property and maintenance expenses, real estate
taxes and insurance, property management expenses, depreciation expense,
interest expense and general and administrative expenses.
In regard to the Second-Quarter 2000 Same Store Properties, total
revenues increased by approximately $15.3 million or 4.08% primarily as a
result of higher rental rates charged to new tenants and tenant renewals and
an increase in income from billing tenants for their share of utility costs
as well as other ancillary services provided to tenants. Overall, property
operating expenses, which include property and maintenance, real estate taxes
and insurance and an allocation of property management expenses, increased
approximately $3.1 million or 2.24%. This increase was primarily the result
of higher expenses for on-site compensation costs and an increase in real
estate taxes on certain properties, but was partially offset by lower
administrative, building and insurance costs.
Property management represents expenses associated with the
self-management of the Company's Properties. These expenses increased by
approximately $5.1 million primarily due to the operations of the property
management business obtained through the LFT Merger and a current year
compensation charge associated with the issuance of restricted shares to our
property management personnel.
Fee and asset management revenues and fee and asset management
expenses are associated with the management of properties not owned by the
Company that are managed for affiliates. These revenues and expenses
increased slightly.
Interest expense, including amortization of deferred financing
costs, increased by approximately $16.4 million. This increase was primarily
the result of a $625.0 million increase in the Company's average indebtedness
outstanding. The effective interest cost on all of the Company's indebtedness
for the quarter ending June 30, 2000 was 7.37% as compared to 6.92% for the
quarter ended June 30, 1999.
General and administrative expenses, which include corporate
operating expenses, increased approximately $1.6 million between the periods
under comparison. This increase was primarily due to recording higher
compensation expense associated with the issuance of restricted shares. These
expenses as a percentage of total revenues were 1.32% for the quarter ended
June 30, 2000 compared to 1.17% of total revenues for the quarter ended June
30, 1999.
LIQUIDITY AND CAPITAL RESOURCES
As of January 1, 2000, the Company had approximately $29.1 million
of cash and cash equivalents and the amount available on the Company's line
of credit was $400 million, of which $65.8 million was restricted. After
taking into effect the various transactions discussed in the following
23
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
paragraphs, the Company's cash and cash equivalents balance at June 30, 2000
was approximately $237.1 million and the amount available on the Company's
line of credit was $700 million, of which $51.4 million was restricted. The
following discussion also explains the changes in net cash provided by
operating activities, net cash (used for) investing activities and net cash
(used for) financing activities, all of which are presented in the Company's
Statements of Cash Flows.
Part of the Company's strategy in funding the purchase of
multifamily properties, funding its Properties in the development and/or
earnout stage and the funding of the Company's investment in two joint
ventures with multifamily real estate developers is to utilize its line of
credit and to subsequently repay the line of credit from the disposition of
Properties or the issuance of additional equity or debt securities. Utilizing
this strategy during the first six months of 2000, the Company:
- obtained new mortgage financing on eleven previously
unencumbered properties and received net proceeds of $147.7
million;
- disposed of sixteen properties (including the sale of the
Company's entire interest in two Unconsolidated Properties)
and received net proceeds of $159.5 million;
- sold and/or contributed twenty-one properties to two separate
joint ventures and received net proceeds of $60.5 million;
- issued approximately 0.4 million Common Shares and received
net proceeds of $14.1 million;
- issued the Series B, C and D Cumulative Convertible Redeemable
Preference Units and received net proceeds of $84.8 million;
and
- obtained new mortgage financing on twenty-one previously
unencumbered properties and received net proceeds of $217.2
million.
All of these proceeds were utilized to either:
- repay the line of credit;
- repay mortgage indebtedness on certain Properties;
- provide funding for properties in the development and/or
earnout stage including the joint venture agreements; and/or
- purchase additional properties.
During the six months ended June 30, 2000, the Company:
- repaid approximately $104.5 million of mortgage indebtedness
on fifty-six Properties;
- settled on a $100 million interest rate protection agreement
and received approximately $7.1 million in connection
therewith. This amount is being amortized over the life of the
financing for the eleven previously unencumbered Properties
that occurred in March 2000;
- funded $91.7 million related to the development, earnout and
joint venture agreements;
- purchased three Properties for a total purchase price of
approximately $127.2 million;
- funded $1.25 million to acquire an additional ownership
interest in LFT's Guilford portfolio; and
- acquired $25.0 million of 8.25% preferred securities of WRP
Convertible Trust I, an affiliate of WRP Newco.
As of June 30, 2000, the Company had total indebtedness of
approximately $5.3 billion, which included mortgage indebtedness of $3.0
billion (including premiums of $2.9 million), of which $837.1 million
represented tax-exempt bond indebtedness, and unsecured debt of $2.3 billion
(including net discounts and premiums in the amount of $1.9 million), of
which $127.8 million represented tax-exempt bond indebtedness.
24
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
Subsequent to June 30, 2000 and through August 9, 2000, the Company:
- repaid the outstanding mortgage balance on one Property
totaling approximately $5.9 million;
- disposed of seven properties (including the sale of the
Company's entire interest in one Unconsolidated Property) for
a total sales price of $125.4 million;
- acquired seven properties containing 985 units for a total
purchase price of approximately $51.1 million, including the
assumption of mortgage indebtedness of approximately $11.5
million and the issuance of OP Units with a value of
approximately $4.1 million; and
- acquired Globe Business Resources, Inc. ("Globe") for cash of
approximately $58.7 million, plus the assumption of mortgage
indebtedness of approximately $70.8 million.
During the remainder of 2000, the Company expects to fund $63.8
million related to the development, earnout and joint venture agreements. In
connection with one joint venture agreement, the Company has an obligation to
fund up to an additional $17.5 million to guarantee third party construction
financing.
In addition, during the remainder of 2000, the Company expects to fund the:
- repayment of total indebtedness related to scheduled
unsecured note and mortgage note maturities in the amount
of approximately $215.0 million; and
- acquisition of Grove Property Trust for cash of
approximately $210.0 million.
The Company has a policy of capitalizing expenditures made for new
assets, including newly acquired properties and the costs associated with
placing these assets into service. Expenditures for improvements and
renovations that significantly enhance the value of existing assets or
substantially extend the useful life of an asset are also capitalized.
Expenditures for in-the-unit replacement-type items such as appliances,
draperies, carpeting and floor coverings, mechanical equipment and certain
furniture and fixtures are also capitalized. Expenditures for ordinary
maintenance and repairs are expensed to operations as incurred. With respect
to acquired properties, the Company has determined that it generally spends
$1,000 per unit during its first three years of ownership to fully improve
and enhance these properties to meet the Company's standards. In regard to
replacement-type items described above, the Company generally expects to
spend $250 per unit on an annual recurring basis.
During the six months ended June 30, 2000, total capital
expenditures for the Company approximated $60.7 million. Of this amount,
approximately $12.5 million, or $137 per unit, related to capital
improvements and major repairs for the 1998, 1999 and 2000 Acquired
Properties. Capital improvements and major repairs for all of the Company's
pre-EQR IPO properties and 1993, 1994, 1995, 1996 and 1997 Acquired
Properties approximated $14.7 million, or $122 per unit. Capital spent for
replacement-type items approximated $25.4 million, or $119 per unit. In
addition, approximately $4.4 million was spent on nine specific assets
related to major renovations and repositioning of these assets. Also included
in total capital expenditures was approximately $2.4 million expended for
non-real estate additions such as computer software, computer equipment, and
furniture and fixtures and leasehold improvements for the Company's property
management offices and its corporate headquarters, $0.4 million spent on
commercial/other assets, $0.8 million spent on the Partially Owned Properties
and $0.1 million was spent on properties that were sold prior to 2000. Such
capital expenditures were primarily funded from working capital reserves and
from net cash provided by operating activities. Total capital expenditures
for the remaining portion of 2000 are estimated to be approximately $61.3
million.
Minority Interests as of June 30, 2000 increased by $79.9 million
when compared to December 31, 1999. The primary factors that impacted this
account during the six months were:
- distributions declared to Minority Interests, which amounted
to $18.8 million for the six months (excluding preference
unit/interest distributions);
- the allocation of income from operations in the amount of
$19.1 million;
- the allocation of Minority Interests from Partially Owned
Properties in the amount of $2.9 million;
25
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
- the conversion of OP Units into Common Shares; and
- the issuance of Common Shares, OP Units and Preference
Interests during the six months ended June 30, 2000.
Total distributions paid in July 2000 amounted to approximately
$130.4 million, which included distributions declared for the quarter ended
June 30, 2000.
The Company expects to meet its short-term liquidity requirements,
including capital expenditures related to maintaining its existing Properties
and certain scheduled unsecured note and mortgage note repayments, generally
through its working capital, net cash provided by operating activities and
borrowings under its line of credit. The Company considers its cash provided
by operating activities to be adequate to meet operating requirements and
payments of distributions. The Company also expects to meet its long-term
liquidity requirements, such as scheduled unsecured note and mortgage debt
maturities, property acquisitions, financing of construction and development
activities and capital improvements, through undistributed FFO and proceeds
received from the disposition of certain Properties and/or through the
issuance of unsecured notes and equity securities including additional OP
Units. In addition, the Company has certain uncollateralized Properties
available for additional mortgage borrowings in the event that the public
capital markets are unavailable to the Company or the cost of alternative
sources of capital to the Company is too high.
The Company has a revolving credit facility with Bank of America
Securities LLC and Chase Securities Inc. acting as joint lead arrangers to
provide the Operating Partnership with potential borrowings of up to $700
million. As of August 9, 2000, no amounts were outstanding under this
facility.
In connection with the Globe merger, the Company assumed a revolving
credit facility with Fifth Third Bank with potential borrowings of up to
$55.0 million. This line of credit matures on May 31, 2003. As of August 9,
2000, $40.3 million was outstanding under this facility.
In connection with the Wellsford Merger, the Company provided a
$14.8 million credit enhancement with respect to certain tax-exempt bonds
issued to finance certain public improvements at a multifamily development
project. As of August 9, 2000, this enhancement was still in effect.
Pursuant to the terms of a Stock Purchase Agreement with Wellsford
Real Properties, Inc. ("WRP Newco"), the Company had agreed to purchase up to
1,000,000 shares of WRP Newco Series A Preferred at $25.00 per share on a
standby basis over a three-year period ending on May 30, 2000. This agreement
was terminated on May 5, 2000, and, as such, the Company has no further
obligations under this agreement.
On May 5, 2000, the Company acquired $25.0 million of 8.25%
preferred securities of WRP Convertible Trust I, an affiliate of WRP Newco.
These preferred securities are indirectly convertible into WRP Newco common
shares under certain circumstances.
FUNDS FROM OPERATIONS
Funds from Operations ("FFO") represents net income (loss) (computed
in accordance with accounting principles generally accepted in the United
States ("GAAP")), excluding gains or losses from sales of property, plus
depreciation and amortization, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated partnerships
and joint ventures will be calculated to reflect funds from operations on the
same basis. This definition of FFO is in accordance with the National
Association of Real Estate Investment Trust's ("NAREIT") recommended
definition. NAREIT modified this definition effective January 1, 2000. However,
as a result of this modification, no changes were
26
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
required to the Company's calculation of FFO for either the current or prior
periods presented.
The Company believes that FFO is helpful to investors as a
supplemental measure of the operating performance of a real estate company
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 may differ
from the methodology for calculating FFO utilized by other real estate
companies and may differ as a result of differences between the Company's and
other real estate company's accounting policies for replacement type items
and, accordingly, may not be comparable to such other real estate companies.
FFO per share and OP Unit is presented giving affect to the
Statement of Financial Accounting Standards No. 128 "Earnings Per Share".
For the six months ended June 30, 2000, FFO available to Common
Shares and OP Units increased by $54.0 million, or 18.2%, and FFO per share
and OP Unit - diluted increased by $0.25, or 11.4%, when compared to the six
months ended June 30, 1999.
For the quarter ended June 30, 2000, FFO available to Common Shares
and OP Units increased by $29.4 million, or 19.4%, and FFO per share and OP
Unit -diluted increased by $0.14, or 12.6%, when compared to the quarter
ended June 30, 1999.
The following is a reconciliation of net income to FFO available to
Common Shares and OP Units for the six months and quarters ended June 30,
2000 and 1999:
27
<PAGE>
EQUITY RESIDENTIAL PROPERTIES TRUST
PART I
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, QUARTER ENDED JUNE 30,
----------------------------- -----------------------------
2000 1999 2000 1999
----------------------------- -----------------------------
(Amounts in thousands, except per share and OP Unit amounts)
<S> <C> <C> <C> <C>
STATEMENTS OF FUNDS FROM OPERATIONS
Net income $ 253,798 $ 190,216 $ 152,659 $ 96,662
Adjustments:
Allocation to Minority Interests - Operating Partnership 19,132 14,514 12,036 7,388
Depreciation on real estate assets* 220,864 194,262 110,783 98,790
Loss on early extinguishment of debt -- 451 -- 451
Gain on disposition of properties, net (87,652) (45,807) (67,654) (24,391)
------------ ------------ ------------ ------------
FFO 406,142 353,636 207,824 178,900
Preferred distributions (55,654) (57,111) (27,266) (27,734)
------------ ------------ ------------ ------------
FFO available to Common Shares and OP Units $ 350,488 $ 296,525 $ 180,558 $ 151,166
============ ============ ============ ============
Weighted average Common Shares and
OP Units outstanding - basic 140,850 132,825 141,436 133,478
============ ============ ============ ============
FFO per share and OP Unit - basic $ 2.49 $ 2.23 $ 1.28 $ 1.13
============ ============ ============ ============
FFO per share and OP Unit - diluted $ 2.44 $ 2.19 $ 1.25 $ 1.11
============ ============ ============ ============
</TABLE>
* INCLUDES $210,000 AND $551,000 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND
1999, RESPECTIVELY, AND $105,000 AND $276,000 FOR THE QUARTERS ENDED JUNE 30,
2000 AND 1999, RESPECTIVELY, RELATED TO THE COMPANY'S SHARE OF DEPRECIATION
FROM UNCONSOLIDATED PROPERTIES. EXCLUDES $701,000 FOR THE SIX MONTHS ENDED
JUNE 30, 2000 AND $358,000 FOR THE QUARTER ENDED JUNE 30, 2000 RELATED TO THE
MINORITY INTERESTS' SHARE OF DEPRECIATION FROM PARTIALLY OWNED PROPERTIES.
28
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no new or significant developments related to the
legal proceedings that were discussed in Part I, Item III of the Company's
Form 10-K for the year ended December 31, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits:
12 Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
(B) Reports on Form 8-K:
None.
29
<PAGE>
SIGNATURES
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
Date: AUGUST 10, 2000 By: /s/ BRUCE C. STROHM
--------------- ----------------------------------------------
Bruce C. Strohm
Executive Vice President, General Counsel
and Secretary
Date: AUGUST 10, 2000 By: /s/ MICHAEL J. McHUGH
--------------- ---------------------------------------------
Michael J. McHugh
Executive Vice President, Chief Accounting
Officer and Treasurer
30
