<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 8, 1998
CAMDEN PROPERTY TRUST
(Exact Name of Registrant as Specified in Charter)
TEXAS 1-12110 76-6088377
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
3200 Southwest Freeway, Suite 1500, Houston, Texas 77027
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 964-3555
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 8, 1998, Oasis Residential, Inc. ("Oasis") merged with and
into Camden Subsidiary II, Inc., a Delaware corporation and wholly owned
subsidiary of Camden Property Trust (the "Company"), the Registrant, pursuant to
an Agreement and Plan of Merger, dated as of December 16, 1997, as amended by
Amendment No. 1, dated February 4, 1998, (the "Merger Agreement"), as previously
filed as Annex I to the Joint Proxy Statement/Prospectus of the Company and
Oasis that was made a part of the Registration Statement on Form S-4 (File No.
333-45817) filed with the Securities and Exchange Commission on February 26,
1998. As provided in the Merger Agreement, each share of Oasis common stock
outstanding on April 8, 1998 was converted into 0.759 of a common share of
beneficial interest of Camden and each share of Cumulative Convertible Series A
Preferred Stock of Oasis outstanding on April 8, 1998 was converted into one
share of Cumulative Convertible Series A Preferred Share of beneficial interest
of Camden. The Company issued 12,391,796 common shares and 4,165,000 Cumulative
Convertible Series A Preferred Shares in exchange for the outstanding shares of
Oasis common stock and Cumulative Convertible Series A Preferred Shares. The
closing price of Camden common shares on April 8, 1998 was $30.50.
Oasis, a Nevada corporation, was a fully integrated real estate
investment trust headquartered in Las Vegas, Nevada whose business was the
operation and development of multifamily apartment communities in Las Vegas,
Denver and Southern California. As of December 31, 1997, Oasis owned interests
in 52 completed multifamily properties, with one additional multifamily property
under construction. Prior to the end of the second quarter of 1998, the Company
will spin-off approximately 5,000 of the Las Vegas apartment units into a new
private entity in which Camden will hold a minority interest. Camden will
continue to provide property management services for these assets.
Immediately following the merger, Scott S. Ingraham, the former
President, Chief Executive Officer and Director of Oasis, became a Trust Manager
of the Company, to serve as such in accordance with the Company's Bylaws.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Businesses Acquired.
Filed with this Report as Attachment A are the following
audited financial statements of Oasis Residential, Inc.
("Oasis"):
(1) Report of Independent Accountants
(2) Consolidated Balance Sheets as of December 31, 1997
and 1996
(3) Consolidated Statements of Operations for the years
ended December 31, 1997, 1996 and 1995
(4) Consolidated Statements of Changes in Stockholders'
Equity for the years ended December 31, 1997, 1996
and 1995
(5) Consolidated Statements of Cash Flows for the years
ended December 31, 1997, 1996 and 1995
(6) Notes to Consolidated Financial Statements
<PAGE> 3
(b) Pro Forma Financial Information.
Previously reported in the Registrant's Amendment No. 1 to
Form S-4 filed February 26, 1998.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated December 16, 1997,
among the Registrant, Camden Subsidiary II, Inc. and
Oasis Residential, Inc. (incorporated by reference
from Exhibit 2.1 of the Registrant's Form 8-K filed
December 17, 1997 (File No.
1-12110)).
2.2 Amendment No. 1, dated as of February 4, 1998, to the
Agreement and Plan of Merger, dated December 16,
1997, among the Registrant, Camden Subsidiary II,
Inc. and Oasis Residential, Inc. (incorporated by
reference from Exhibit 2.1 of the Registrant's Form
8-K filed February 5, 1998 (File No. 1-12110)).
23.1 Consent of Coopers & Lybrand L.L.P., Independent
Accountants
<PAGE> 4
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 hereunto duly authorized.
Date: April 21, 1998
CAMDEN PROPERTY TRUST
By: /s/ G. Steven Dawson
-----------------------------------------
G. Steven Dawson
Senior Vice President - Finance,
Chief Financial Officer and Treasurer
<PAGE> 5
ATTACHMENT A
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Stockholders
Oasis Residential, Inc.
We have audited the accompanying consolidated balance sheets and the
financial statement schedule of Oasis Residential, Inc. and its subsidiaries
(the "Company") as of December 31, 1997 and 1996 and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
ended December 31, 1997, 1996 and 1995. These consolidated financial statements
and the 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 the 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 consolidated financial position of
the Company as of December 31, 1997 and 1996 and the results of their operations
and their cash flows for the years ended December 31, 1997, 1996 and 1995 in
conformity with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedule referred to above, when considered in
relation to the basic financial statements taken as a whole, presents fairly, in
all material respects, the information required to be included therein.
Coopers & Lybrand L.L.P.
San Francisco, California
January 23, 1998, except for Note 15
as to which the date is March 6, 1998.
<PAGE> 6
OASIS RESIDENTIAL, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1997 1996
-------- --------
<S> <C> <C>
Real estate assets:
Land................................................................. $126,224 $ 93,484
Buildings and improvements........................................... 674,155 552,500
Furniture and fixtures............................................... 45,163 39,515
-------- --------
845,542 685,499
Less accumulated depreciation........................................ 64,899 53,049
-------- --------
780,643 632,450
Land held for development............................................ 4,083 3,766
Construction in progress............................................. 25,952 109,202
-------- --------
Net real estate assets............................................ 810,678 745,418
Cash and cash equivalents.............................................. 2,530 3,397
Restricted cash........................................................ 2,964 2,976
Investment in and advances to joint venture............................ 8,370 9,574
Notes receivable (Related Party)....................................... 8,216 --
Deposits on real estate assets......................................... 2,654 2,000
Deferred costs and other assets (net of accumulated amortization of
$3,028 and $1,802 at December 31, 1997 and 1996, respectively)....... 11,116 11,408
-------- --------
Total assets...................................................... $846,528 $774,773
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Debt................................................................. $448,774 $394,274
Resident deposits and prepaid rent................................... 3,148 2,066
Accounts payable and accrued expenses................................ 4,730 6,221
-------- --------
Total liabilities................................................. 456,652 402,561
-------- --------
Minority Interest...................................................... 20,600 --
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred stock, $2.25 Series A Cumulative Convertible,
$.01 par value, liquidation preference of $25 per share,
15,000,000 shares authorized, 4,165,000 shares issued and
outstanding at December 31, 1997 and 1996......................... 42 42
Common stock, $.01 par value, 100,000,000 shares authorized,
16,326,477 and 16,237,646 shares issued and outstanding at
December 31, 1997 and 1996, respectively.......................... 163 162
Paid-in capital...................................................... 388,876 386,910
Distributions in excess of accumulated earnings...................... (19,805) (14,902)
-------- --------
Total stockholders' equity........................................ 369,276 372,212
-------- --------
Total liabilities and stockholders' equity........................ $846,528 $774,773
======== ========
</TABLE>
See notes to consolidated financial statements.
F-3
<PAGE> 7
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Revenue:
Rental income........................................ $ 111,591 $ 92,843 $ 73,249
Other income......................................... 4,188 3,156 3,080
Joint venture investment income...................... 64 -- --
Interest income -- related party..................... 142 -- --
----------- ----------- -----------
115,985 95,999 76,329
----------- ----------- -----------
Expenses:
Property operating and maintenance................... 32,482 27,226 21,485
General and administrative........................... 3,692 3,230 2,645
Real estate taxes.................................... 6,246 5,230 4,079
Interest............................................. 26,184 15,216 7,310
Interest (non-cash).................................. 1,214 1,118 1,332
Depreciation and amortization........................ 19,113 15,637 12,062
----------- ----------- -----------
88,931 67,657 48,913
----------- ----------- -----------
Income before minority interest, gain on sale of real
estate assets and extraordinary item................. 27,054 28,342 27,416
Minority interest...................................... 179 -- --
----------- ----------- -----------
Income before gain on sale of real estate assets and
extraordinary item................................... 26,875 28,342 27,416
Gain on sale of real estate assets..................... 6,999 2,444 --
----------- ----------- -----------
Income before extraordinary item....................... 33,874 30,786 27,416
Extraordinary item..................................... -- (1,403) (1,952)
----------- ----------- -----------
Net income............................................. 33,874 29,383 25,464
Less preferred dividend requirement.................... 9,372 9,372 6,534
----------- ----------- -----------
Earnings available for common stockholders............. $ 24,502 $ 20,011 $ 18,930
=========== =========== ===========
Basic and Diluted Earnings Per Share:
Earnings available for common stockholders before
extraordinary item................................ $ 1.51 $ 1.32 $ 1.29
Less extraordinary item.............................. -- 0.09 0.12
----------- ----------- -----------
Earnings available for common stockholders........... $ 1.51 $ 1.23 $ 1.17
=========== =========== ===========
Weighted average number of common shares outstanding... 16,250,118 16,237,646 16,230,429
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
F-4
<PAGE> 8
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DISTRIBUTIONS
----------------------------
PREFERRED STOCK COMMON STOCK IN EXCESS
$.01 PAR VALUE $.01 PAR VALUE OF TOTAL
------------------- -------------------- PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS EQUITY
---------- ------ ----------- ------ --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31,
1994...................... -- -- 16,218,134 $162 $287,755 $ (1,319) $ 286,598
Shares issued for cash
(net of issuance
costs)................. 4,165,000 $42 -- -- 98,655 -- 98,697
Common stock issued to
executive officer...... -- -- 19,512 -- 500 -- 500
Net income................ -- -- -- -- -- 25,464 25,464
Dividends paid:
Preferred stock........ -- -- -- -- -- (4,191) (4,191)
Common stock........... -- -- -- -- -- (26,614) (26,614)
--------- --- ---------- ---- -------- --------- ---------
Balance, December 31,
1995...................... 4,165,000 42 16,237,646 162 386,910 (6,660) 380,454
Net income................ -- -- -- -- -- 29,383 29,383
Dividends paid:
Preferred stock........ -- -- -- -- -- (9,372) (9,372)
Common stock........... -- -- -- -- -- (28,253) (28,253)
--------- --- ---------- ---- -------- --------- ---------
Balance, December 31,
1996...................... 4,165,000 42 16,237,646 162 386,910 (14,902) 372,212
Net income................ -- -- -- -- -- 33,874 33,874
Dividends paid:
Preferred stock........ -- -- -- -- -- (9,372) (9,372)
Common stock........... -- -- -- -- -- (29,405) (29,405)
Common stock issued to
executive officer...... -- -- 32,877 -- 754 -- 754
Dividend Reinvestment Plan
issuance............... -- -- 55,954 1 1,212 -- 1,213
--------- --- ---------- ---- -------- --------- ---------
Balance, December 31,
1997...................... 4,165,000 $42 16,326,477 $163 $388,876 $ (19,805) $ 369,276
========= === ========== ==== ======== ========= =========
</TABLE>
See notes to consolidated financial statements.
F-5
<PAGE> 9
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
1997 1996 1995
-------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................. $ 33,874 $ 29,383 $ 25,464
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization....................... 19,113 15,637 12,062
Amortization of discount on notes payable........... 22 2 --
Gain on sale of real estate assets.................. (6,999) (2,444) --
Extraordinary item (write-off of unamortized loan
fees)............................................. -- 714 1,952
Interest (non-cash)................................. 1,214 1,118 1,332
Increase in deferred costs and other assets......... (934) (2,784) (6,334)
Increase (decrease) in liabilities:
Resident deposits and prepaid rent................ 1,082 378 141
Accounts payable and accrued expenses............. (1,491) (2,748) 6,775
-------- --------- ---------
Net cash provided by operating activities......... 45,881 39,256 41,392
-------- --------- ---------
Cash flows from investing activities:
Purchase of real estate assets......................... (12,455) -- (12,686)
Improvements to real estate assets..................... (7,737) (15,241) (15,954)
Notes receivable (related party)....................... (8,216) -- --
Construction of real estate assets..................... (42,775) (125,656) (126,383)
Deposits on real estate assets......................... (654) (2,000) --
Net proceeds from the sale of real estate assets....... 58,359 5,302 --
Investment in and advances to joint venture............ 1,204 (9,574) --
-------- --------- ---------
Net cash used in investing activities............... (12,274) (147,169) (155,023)
-------- --------- ---------
Cash flows from financing activities:
Proceeds from debt..................................... 66,500 329,284 232,235
Principal payments on debt............................. (63,422) (185,838) (193,503)
(Increase) decrease in restricted cash................. 12 (481) 5,420
Net proceeds from public offerings of stock............ -- -- 99,197
Proceeds from issuance of common stock in connection
with the dividend reinvestment program.............. 1,213 -- --
Cash dividends paid -- preferred stock................. (9,372) (9,372) (4,191)
Cash dividends paid -- common stock.................... (29,405) (28,253) (26,614)
-------- --------- ---------
Net cash provided by financing activities........... (34,474) 105,340 112,544
-------- --------- ---------
Net decrease in cash and cash equivalents........... (867) (2,573) (1,087)
Cash and cash equivalents, beginning of year............. 3,397 5,970 7,057
-------- --------- ---------
Cash and cash equivalents, end of year................... $ 2,530 $ 3,397 $ 5,970
======== ========= =========
Supplemental information:
Cash paid during the year for interest................. $ 30,440 $ 23,274 $ 15,553
======== ========= =========
Supplemental schedule of non-cash investing and
financing activities:
Issuance of common stock to executive officer....... $ 754 $ -- $ 500
======== ========= =========
Note receivable in connection with the sale of real
estate assets..................................... $ -- $ 1,100 $ --
======== ========= =========
Assumption of debt in connection with
acquisitions...................................... $ 51,400 $ -- $ --
======== ========= =========
</TABLE>
See notes to consolidated financial statements.
F-6
<PAGE> 10
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
1. ORGANIZATION AND FORMATION OF THE COMPANY
Oasis Residential, Inc. (the "Company"), which was incorporated in the
State of Nevada on March 23, 1993, is a self-administered and self-managed real
estate investment trust ("REIT"), engaged in the development, acquisition and
operation of predominantly upscale apartment communities in the greater Las
Vegas area, Reno and Denver metropolitan areas and Orange County, California.
The Company commenced operations as a public company on October 22, 1993 with an
initial portfolio of 23 apartment communities comprising 5,215 units and a
30,000 square foot commercial center in Henderson, Nevada in which the Company's
headquarters is located. At December 31, 1997, the Company owned and operated 51
apartment communities containing 14,796 apartment units.
The Company has elected to be taxed as a REIT under the Internal Revenue
Code of 1986, as amended, (the "Code") commencing with the taxable year ended
December 31, 1993. In order for the Company to qualify as a REIT, it must
distribute annually at least 95% of its REIT taxable income, as defined in the
Code, to its stockholders and comply with certain other requirements.
Accordingly, no provision has been made for federal income taxes in the
accompanying consolidated financial statements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Financial Statement Presentation:
The accompanying consolidated financial statements include the accounts of
all subsidiaries and partnerships in which a controlling interest is held,
including at December 31, 1997, Oasis Martinique, L.L.C. The Company uses the
equity method of accounting where its ownership interest is between 20% and 50%.
All significant intercompany balances and transactions have been eliminated
in consolidation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods. Actual results could differ from those estimates.
Real Estate Assets and Depreciation:
Rental property is stated at the lower of cost or fair value. Expenditures
which increase the revenue potential of a property or which extend the useful
life of the asset are generally capitalized. Maintenance and repair expenditures
necessary to maintain a property in operating condition are charged to expense
when incurred. Depreciation is calculated on a straight-line basis over the
estimated useful lives of the depreciable real estate assets, which range from
18 to 40 years for buildings and improvements and 5 to 12 years for furniture
and fixtures.
Costs are capitalized during the development of constructed assets
(including interest, property taxes and other direct and indirect costs)
beginning when active development commences and ending when construction is
substantially complete and the property is ready for occupancy.
Losses in carrying values of investment assets are provided by management
when the losses become apparent and the investment asset is considered impaired.
Management evaluates its investment properties, at least quarterly, to assess
whether any impairment indications are present. If an asset is considered to be
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.
F-7
<PAGE> 11
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Cash and Cash Equivalents:
The Company considers highly liquid short-term investments with initial
maturities of three months or less to be cash equivalents.
Cash and cash equivalents are primarily held in a single financial
institution, and at times, such balances may be in excess of the Federal Deposit
Insurance Corporation insurance limit.
Restricted Cash:
Restricted cash balances at December 31, 1997 and 1996 are required under
certain debt agreements for property tax and insurance expenses and to secure
the payment of certain replacement and capital improvement costs.
Deferred Financing Costs:
Included in deferred costs and other assets are costs associated with
obtaining debt financing and credit enhancements. Such costs are being amortized
over the term of the associated debt or credit enhancement.
Accounting for Stock-Based Compensation:
The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" ("APB 25"), and related interpretations in
accounting for its stock-based compensation plans.
Interest Rate Protection Agreements:
Premiums paid to purchase interest rate protection agreements are
capitalized and amortized over the terms of those agreements using the
straight-line method which approximates the effective interest method.
Unamortized premiums are included in deferred costs and other assets.
Impact of Recently Issued Accounting Standards:
In 1997, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 130 "Reporting Comprehensive Income" and No.
131 "Disclosures about Segments of an Enterprise and Related Information." These
statements shall be effective for financial statements for fiscal years
beginning after December 15, 1997. Management does not believe that the adoption
of Standards No. 130 and 131 will have a material effect on its financial
position or results of operations.
3. INTEREST CAPITALIZED
Interest costs associated with projects under development aggregating
$5,125, $9,350 and $8,499 for the years ended December 31, 1997, 1996 and 1995,
respectively, were capitalized.
4. INVESTMENT IN AND ADVANCES TO JOINT VENTURE
In April 1995, the Company and Stevinson Partnership, Ltd. ("Stevinson")
entered into an operating agreement to form Denver West Apartments, L.L.C., a
limited liability company (the "Joint Venture"). Under the terms of the
agreement, the Company and Stevinson each have a 50% interest in Oasis Denver
West, a 321 unit apartment community located in Denver, Colorado. In November
1996, the Joint Venture finalized the loan agreement with Northwestern Mutual
Life Company for the construction and permanent financing of the community in
the amount of $15,430 which the Company has guaranteed. The loan bears interest
at a rate of 8.30% and matures on August 1, 2007.
F-8
<PAGE> 12
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The Company has contributed capital of $4,171 and $3,955 as of December 31,
1997 and 1996, respectively. In addition, the Company has advanced cash to the
Joint Venture in the form of a loan. The outstanding balance on the loan was
$2,958 and $4,400 as of December 31, 1997 and 1996, respectively. The loan bears
interest at the prime lending rate plus 2% (prime rate at December 31, 1997 was
8.50%) and is being repaid from operations. Additionally, the Company has
incurred $1,219 of additional costs that are not accounted for at the
joint-venture level.
5. OASIS MARTINIQUE, L.L.C.
On October 23, 1997, the Company acquired a managing member interest in a
limited liability company ("LLC") that owns the 714 unit Oasis Martinique
apartment community in Costa Mesa, California. In connection with the
acquisition, the LLC issued operating LLC units, convertible on a 1 for 1 basis
into 886,022 shares of the Company's common stock. The Company assumed existing
tax exempt debt of $51,400 issued by the County of Orange, California. The
Company also contributed approximately $1,500 in cash for the transaction and
LLC formation costs, thus resulting in a total initial investment to the Company
of approximately $73,500. The Company plans to increase its investment in Oasis
Martinique by $2,500 to $3,000 in order to fund a capital refurbishment program
designed to increase net operating income.
The minority interest represents the separate private ownership of Oasis
Martinique, L.L.C.
In connection with the LLC transaction, the Company loaned the other two
members of the LLC $8,216 collateralized by each member's LLC units. The loans
are payable in quarterly installments of interest only and are due December 23,
1998. The interest rate on these loans is set at 9% if the loans are paid in
full on or before March 31, 1998. If the loans are not paid in full by March 31,
1998, the interest rate is increased to 15% and will be made effective back to
the original issuance date of the loans. Interest income recorded in connection
with these loans for the year ended December 31, 1997 was $142.
6. DEFERRED COSTS AND OTHER ASSETS
Deferred financing costs which included deferred loan fees and offering
costs and which are included in deferred costs and other assets aggregated to
$9,360 and $8,327 at December 31, 1997 and 1996, respectively. Accumulated
amortization which related to deferred financing costs aggregated to $2,977 and
$1,763 at December 31, 1997 and 1996, respectively.
7. DEBT
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1997 1996
-------- --------
<S> <C> <C>
Notes Payable.......................................................... $150,000 $150,000
In November 1996, the Company completed a public offering of
$150,000 of unsecured, fixed rate notes payable which priced in three
tranches (the "Notes Payable"). The Company borrowed $50,000 due
November 15, 2001 at a coupon rate of 6.75%, $50,000 due November 15,
2003 at a coupon rate of 7.00% and $50,000 due November 15, 2006 at a
coupon rate of 7.25%. The Notes Payable were sold at a discount, and at
December 31, 1997 and 1996, the unamortized discount was $192 and $214,
respectively.
The Notes Payable may be redeemed at any time at the option of the
Company, in whole or in part, upon payment of certain yield maintenance
penalties.
</TABLE>
F-9
<PAGE> 13
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1997 1996
-------- --------
<S> <C> <C>
The Notes Payable contain certain covenants, the most restrictive
of which, requires that the Company may not at any time own Total
Unencumbered Assets, as defined, equal to less than 150% of the
aggregate outstanding principal amount of the unsecured indebtedness of
the Company on a consolidated basis.
The net proceeds from the offering were used to retire
approximately $53,087 in Mortgage Notes Payable and to reduce the
outstanding balance on the Credit Facility. For the year ended December
31, 1996, the Company recorded an extraordinary charge in the amount of
$1,403 for the remaining unamortized deferred financing costs and
prepayment penalties in connection with the retirement of these
Mortgage Notes Payable.
Mortgage Notes Payable................................................. $133,492 $135,062
Mortgage Notes Payable were comprised of seven loans at December
31, 1997 and 1996, each of which is collateralized by one or more
apartment communities. During 1997, the Company substituted Oasis
Pointe and Oasis Centennial with regards to the Mortgage Notes which
were previously collateralized by Oasis Rose and Oasis Trails. No fees
were incurred as a result of the substitution. The Mortgage Notes
Payable generally require monthly installments of interest and
principal over various terms extending through the year 2008. Interest
rates on the Mortgage Notes Payable are fixed, and ranged from 6.90% to
9.50% (weighted average interest rate was 8.00% at December 31, 1997).
In March 1996, the Company refinanced a $16,000 loan with Allstate
Insurance Company collateralized by the 368 unit Oasis Paradise I
apartment community. The new interest rate is 7.10%, a reduction from
the previous rate of 9.03%. The loan maturity was extended from April
1996 to April 2008.
In November 1996, five Mortgage Notes Payable totaling $53,087
were repaid with proceeds from the issuance of the Notes Payable.
Credit Facility........................................................ 91,456 85,736
In 1995, the Company entered into a $150,000 credit facility
agreement (the "Credit Facility") with various banks led by Wells Fargo
Bank and retired its two lines of credit that were previously
outstanding. In connection with the retirement of the two prior lines
of credit, the Company, for the year ended December 31, 1995, recorded
an extraordinary charge of $1,952 for the remaining unamortized
deferred financing costs and other costs associated with those loans.
Advances under the Credit Facility initially bore an interest rate, at
the Company's election, of either the London Interbank Offered Rate
("LIBOR") plus 1.75% or the prime lending rate. During 1996, the Credit
Facility was amended to increase the facility to $200,000 and reduce
the LIBOR-based interest rate to LIBOR plus 1.25%. The LIBOR-based
interest rate was again reduced to LIBOR plus 1.15% during 1997. At
December 31, 1997, LIBOR ranged from 5.72% to 5.97% for one, three, six
and twelve-month indices, and the prime rate was at 8.50%. At December
31, 1997, the weighted average interest rate on borrowings outstanding
on the Credit Facility was 7.15%. The credit facility agreement
terminates in September 1998.
</TABLE>
F-10
<PAGE> 14
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1997 1996
-------- --------
<S> <C> <C>
The Credit Facility contains certain covenants, the most
restrictive of which limits the borrowing capacity of the Company to
50% of Gross Asset Value, as defined, and restricts distributions to
stockholders to 95% of Funds from Operations, as defined. The Company
does not anticipate that these covenants will affect its ability to pay
dividends in accordance with the Company's current dividend policy.
Tax-Exempt Bonds....................................................... $ 74,018 $ 23,690
In connection with the 1994 acquisition of Oasis Wexford, the
Company assumed tax exempt housing bonds in the principal amount of
$17,800. The bonds were reissued in November 1995, for $16,235. The
bonds are payable in monthly installments of principal and interest.
The interest rate on the tax-exempt bonds is 6.45% and is subject to
"reset" on December 1, 2005 based upon market conditions at that time.
The bonds are due on November 1, 2025.
The Company has $6,660 (Series 1995A) of tax-exempt housing bonds
and $1,090 (Series 1995B) of taxable housing bonds collateralized by
Oasis Park. The bonds are payable in monthly installments of principal
and interest. The interest rate on these bonds is 7.29%. The Series
1995A bonds are due on January 1, 2026 and the Series 1995B bonds are
due on July 1, 2006.
In connection with the 1997 acquisition of Oasis Martinique, the
Company assumed $51,400 of low floater, tax exempt bonds. The bonds are
payable in monthly installments of interest only, along with principal
payments made in December of each year. The interest rate on the bonds
is subject to weekly repricing based upon the seven day tax exempt bond
floating rate index plus 125 basis points. At December 31, 1997, the
seven day tax exempt bond floating rate index was 3.55%. The bonds are
due December 1, 2009.
-------- --------
448,966 394,488
Less unamortized discount on Notes Payable............................. 192 214
-------- --------
Total........................................................ $448,774 $394,274
======== ========
</TABLE>
Scheduled principal payments on debt, are as follows:
<TABLE>
<CAPTION>
NOTES MORTGAGE NOTES CREDIT TAX- EXEMPT
PAYABLE PAYABLE FACILITY BONDS TOTAL
-------- -------------- ------- ---------- --------
<S> <C> <C> <C> <C> <C>
1998............................. $ -- $ 10,551 $91,456 $ 1,095 $103,102
1999............................. -- 1,745 -- 1,220 2,965
2000............................. -- 1,889 -- 1,345 3,234
2001............................. 50,000 20,046 -- 1,455 71,501
2002............................. -- 27,602 -- 1,490 29,092
Thereafter....................... 100,000 71,659 -- 67,413 239,072
-------- -------- ------- -------- --------
$150,000 $133,492 $91,456 $ 74,018 $448,966
======== ======== ======= ======== ========
</TABLE>
F-11
<PAGE> 15
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
At December 31, 1997 and 1996, management estimates that the carrying
amount of debt approximates fair value; however, current estimates of fair value
could differ significantly from amounts realized in market exchanges.
8. STOCKHOLDERS' EQUITY
In October 1993, the Company completed a public offering of 8,970,000
shares of common stock at a price per share of $21.75. The net proceeds from
this offering were approximately $180,000 and were used for the acquisition of
communities, the repayment of first and second lien preexisting mortgage
indebtedness and for working capital purposes.
In July 1994, the Company completed a second public offering of 5,750,000
shares of common stock at a price per share of $24.50. The net proceeds from
this offering were approximately $132,000 and were used for the acquisition of
five multifamily communities containing 2,441 units for approximately $98,800,
including the assumption of $38,800 of mortgage indebtedness, the repayment of
certain adjustable rate debt, the reduction of the balance owing on the
Company's credit facility and for working capital purposes.
In April 1995, the Company issued 4,165,000 shares of Series A Cumulative
Convertible Preferred Stock ("Preferred Stock") at $25.00 per share. The net
proceeds from the offering were approximately $99,200 and were used for the
repayment of certain short-term and construction debt, the reduction of the
balance owing on the credit facility and for working capital purposes. The
shares pay a cumulative dividend quarterly in arrears in an amount per share
equal to the greater of $2.25 per annum or the cash dividends paid or payable on
a number of shares of common stock equal to the number of shares of common stock
into which a share of Preferred Stock is convertible. The shares generally have
no voting rights and have a liquidation preference of $25.00 per share plus
accrued and unpaid distributions. The Preferred Stock is convertible at the
option of the holder at any time into shares of common stock, at a conversion
price of $24.64 per share of common stock (equivalent to a conversion rate of
1.0146 shares of common stock per share of Preferred Stock), subject to
adjustment in certain circumstances. The Preferred Stock is not redeemable by
the Company prior to April 30, 2001.
In 1995, the Company adopted a Dividend Reinvestment and Share Purchase
Plan (the "Plan"). The Company has reserved 1,000,000 shares for issuance under
the Plan. The Plan allows stockholders to acquire additional shares of the
Company by automatically reinvesting dividends and making voluntary cash
payments. For the year ended December 31, 1997, 55,954 shares were issued at an
average price of $21.68 (net of a 2% discount). For the year ended December 31,
1996, the Company issued no new common shares to stockholders who elected to
participate in this Plan; all shares were purchased in the open market.
In 1994, the Company entered into an agreement with an executive officer
that provided for the Company's acquisition from the executive officer of
certain contractual rights to acquire two properties for development in
Colorado, Oasis Deerwood and Oasis Denver West. The agreement provided that when
each of the two Colorado properties was completed and stabilized, and subject to
the properties meeting certain performance criteria, the executive officer would
have the right to receive up to approximately $1,000 in the Company's common
stock, with approximately $750 applicable to Oasis Deerwood and approximately
$250 applicable to Oasis Denver West. During the fourth quarter of 1997, Oasis
Deerwood met the required performance criteria and the executive officer
received 32,877 shares at a price of $22.94 per share totaling $754. If and when
the required performance criteria are met with regards to Oasis Denver West, the
executive officer will have the right to receive up to $250 in the Company's
common stock. In the event that the executive officer's employment is terminated
for cause, the executive officer's rights under the agreement will be forfeited.
F-12
<PAGE> 16
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
As described in Note 1, the Company has elected to be treated, for federal
income tax purposes, as a REIT. As such, the Company is required to distribute
annually, in the form of dividends to its common stockholders, at least 95% of
its taxable income. In reporting periods where taxable income exceeds net
income, stockholders' equity will be reduced by the distributions in excess of
net income and will be increased by the excess of net income over distributions
in periods where net income exceeds taxable income. For tax reporting purposes,
a portion of the common dividends declared during the years ended December 31,
1997 and 1996 represents a return of capital.
For federal income tax purposes, the following tables, on a per share
basis, summarize the taxability of dividends paid in 1997 and 1996:
<TABLE>
<CAPTION>
COMMON SHARES PREFERRED SHARES
--------------------- ---------------------
YEAR ENDED DECEMBER 31, 1997 DIVIDEND PERCENTAGE DIVIDEND PERCENTAGE
- --------------------------------------------------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Ordinary income.......................................... $ 1.14 63% $ 2.25 100%
Capital gain............................................. .20 11% -- --
Return of capital........................................ .47 26% -- --
------ --- ------ ---
$ 1.81 100% $ 2.25 100%
====== === ====== ===
</TABLE>
<TABLE>
<CAPTION>
COMMON SHARES PREFERRED SHARES
--------------------- ---------------------
YEAR ENDED DECEMBER 31, 1996 DIVIDEND PERCENTAGE DIVIDEND PERCENTAGE
- --------------------------------------------------------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Ordinary income.......................................... $ 1.13 65% $ 2.25 100%
Return of capital........................................ 0.61 35% -- --
------ --- ------ ---
$ 1.74 100% $ 2.25 100%
====== === ====== ===
</TABLE>
9. EARNINGS PER SHARE
The Company has adopted Statement of Financial Accounting Standards No.
128, "Earnings per Share" (the "Statement"). In accordance with the provisions
of the Statement, basic earnings per share for the years ended December 31,
1997, 1996 and 1995, is computed by dividing income available to common
stockholders (income from continuing operations less the preferred stock
dividend requirement) by the weighted average number of shares outstanding
during the period.
F-13
<PAGE> 17
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Additionally, other dilutive potential common shares, are considered when
calculating earnings per share on a diluted basis.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
BASIC EPS CALCULATION 1997 1996 1995
- -------------------------------------------------------------- ------- ------- -------
<S> <C> <C> <C>
Income before extraordinary item.............................. $33,874 $30,786 $27,416
Preferred stock dividend requirement.......................... (9,372) (9,372) (6,534)
------- ------- -------
Earnings available for common stockholders before
extraordinary item.......................................... 24,502 21,414 20,882
Extraordinary item.......................................... -- (1,403) (1,952)
------- ------- -------
Earnings available to common stockholders..................... $24,502 $20,011 $18,930
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
WEIGHTED
DATES OUTSTANDING SHARES OUTSTANDING FRACTION OF PERIOD AVERAGE SHARES
- --------------------------------------------- ------------------ ------------------ --------------
<S> <C> <C> <C>
January 1 - May 14, 1995..................... 16,218,134 134/365 5,954,055
Issuance of common stock on May 15, 1995..... 19,512
----------
May 15 - December 31, 1995................... 16,237,646 231/365 10,276,374
----------
Weighted average shares, year ended
December 31, 1995....................... 16,230,429
==========
January 1 - December 31, 1996................ 16,237,646 365/365 16,237,646
----------
Weighted average shares, year ended
December 31, 1996....................... 16,237,646
==========
January 1 - June 3, 1997..................... 16,237,646 154/365 6,850,952
Issuance of common stock on June 4, 1997..... 840
----------
June 4, 1997 - September 18, 1997............ 16,238,486 107/365 4,760,323
Issuance of common stock on September 19,
1997....................................... 721
----------
September 19, 1997 - November 3, 1997........ 16,239,207 46/365 2,046,585
Issuance of common stock on November 4,
1997....................................... 32,877
----------
November 4 - November 17, 1997............... 16,272,084 14/365 624,135
Issuance of common stock on November 18,
1997....................................... 54,393
----------
November 18 - December 31, 1997.............. 16,326,477 44/365 1,968,123
----------
Weighted average shares, year ended
December 31, 1997....................... 16,250,118
==========
</TABLE>
Basic EPS
<TABLE>
<CAPTION>
1997 1996 1995
----- ----- -----
<S> <C> <C> <C>
Earnings available for common stockholders before
extraordinary item................................ $1.51 $1.32 $1.29
Extraordinary item.................................. -- (.09) (.12)
----- ----- -----
Earnings available for common stockholders.......... $1.51 $1.23 $1.17
===== ===== =====
</TABLE>
For the years ended December 31, 1997, 1996 and 1995, there were no
dilutive potential common shares outstanding during the period. Therefore,
diluted earnings per share is the same as basic earnings per share.
10. RELATED PARTY TRANSACTIONS
An affiliated company leased space in one of the commercial properties
through May 1995. Related party rental revenue was $30 for the year ended
December 31, 1995.
F-14
<PAGE> 18
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
11. OPERATING LEASES
The Company owns two commercial properties; a portion of one building
serves as its headquarters. The portion of the commercial properties not used by
the Company is leased to tenants under net operating leases with initial terms
extending to the year 2008. Future minimum rentals under noncancellable
operating leases at both commercial properties, excluding tenant reimbursements
of expenses, as of December 31, 1997, are as follows:
<TABLE>
<S> <C>
1998...................................................... $ 361
1999...................................................... 322
2000...................................................... 186
2001...................................................... 136
2002...................................................... 136
Thereafter................................................ 503
------
Total..................................................... $1,644
======
</TABLE>
12. STOCK-BASED COMPENSATION PLANS
In May 1995, the Company adopted the 1995 Equity Participation Plan (the
"1995 Plan") to supplement the Company's 1993 Stock Option Plan (the "1993
Plan"). The Company also has a Stock Option Plan for Outside Directors (the
"Outside Directors Plan").
The 1995 Plan provides incentives for officers, key employees and
consultants through the grant or issuance of options, restricted stock
performance awards, dividend equivalents, deferred stock, stock payments and
stock appreciation rights ("SARs"). The aggregate number of shares that may be
issued under the 1995 Plan may not exceed 1,135,000, less the number of shares
covered by options outstanding under the 1993 Plan and the Outside Directors
Plan. The 1995 Plan limits the number of shares that any individual may receive
in any year under the plan to 150,000 and limits the dollar value of awards,
other than options and SARs that may be paid to any employee for any year to
$100.
The 1993 Plan provides for the issuance of incentive and non-qualified
stock options under the Code and grants of the Company's common stock contingent
upon the attainment of certain performance goals or subject to other
restrictions. A total of 700,000 shares of the Company's common stock have been
reserved for issuance under the 1993 Plan and the Outside Directors Plan.
Options awarded under both the 1993 and 1995 Plans provide for the options
to be granted at a price equal to the market value of the Company's common stock
at the date of grant, to vest ratably over a four year period and to expire ten
years from the date the options were granted.
Under the Outside Directors Plan, each of the Company's non-employee
directors is granted an option to purchase 3,000 shares of common stock at the
time of appointment/election to the Board of Directors. In addition, following
each annual meeting of stockholders, each of the Company's non-employee
directors, who have served as a member for one year or more, will receive an
option to purchase up to 3,000 shares of common stock at the market price of the
shares on the date of grant. All options granted under the Outside Directors
Plan will vest one year after the date of grant. The Outside Directors Plan is
administered by the Board of Directors.
F-15
<PAGE> 19
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table shows the activity and balances for each stock option
plan:
<TABLE>
<CAPTION>
1993 PLAN OUTSIDE
& OPTION PRICE DIRECTORS OPTION PRICE
1995 PLAN PER SHARE PLAN PER SHARE
--------- ------------------ --------- ------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1994....... 620,000 15,000
Options granted................ 5,000 $22.50 15,000 $22.625 - $22.875
Options cancelled.............. (10,000) (3,000)
--------- -------
Balance, December 31, 1995....... 615,000 27,000
Options granted................ 351,000 $22.375 - $22.625 12,000 $22.50
Options cancelled.............. (20,000) --
--------- -------
Balance, December 31, 1996....... 946,000 39,000
Options granted................ 135,000 $23.25 - $23.375 15,000 $23.125
Options cancelled.............. -- --
--------- -------
Balance, December 31, 1997....... 1,081,000 54,000
========= =======
</TABLE>
There were no shares available for grant as of December 31, 1997. None of
the options granted are contingent upon the attainment of performance goals or
subject to other restrictions. As of December 31, 1997, outstanding options to
purchase 644,750 shares of common stock were exercisable.
Additionally, 46,500 non-qualified stock options were issued to an
executive officer during 1997. These options were not granted in connection with
either the 1993 or 1995 Plan. The options vest ratably over a four year period
and were granted at an option price of $23.375 per share. The option price was
equal to the market value of the stock on the date of grant. Therefore, the
Company did not recognize any compensation expense in connection with the grant
of these options.
The Company applies APB 25 and related interpretations in accounting for
its stock-based compensation plans. Accordingly, no compensation expense has
been recognized for its stock-based compensation plans. Had compensation cost
for the Company's stock option plans been determined based upon the fair value
at the grant date for awards under these plans consistent with the methodology
prescribed under Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation," the Company's net income and earnings
per share would have been reduced by approximately $423 or $.03 per share for
the year ended December 31, 1997, approximately $634 or $0.04 per share for the
year ended December 31, 1996, and approximately $123 or $0.01 per share for the
year ended December 31, 1995. The estimated fair value of the options granted
during 1997 ranged from $1.40 to $2.22 per share on the date of grant using the
Black-Scholes option pricing model with the following assumptions: dividend
yield of 7.3%, volatility of 17.98%, risk free rates of 5.88% to 6.36% and an
expected life of four years. The estimated fair value of the options granted
during 1996 ranged from $1.43 to $1.45 per share on the date of grant using the
Black-Scholes option pricing model with the following assumptions: dividend
yield of 7.26%, volatility of 16.82%, risk free rates of 4.19% to 5.60% and an
expected life of four years. The estimated fair value of the options granted
during 1995 ranged from $1.63 to $1.78 per share on the date of grant using the
Black-Scholes option pricing model with the following assumptions: dividend
yield of 7.26%, volatility of 16.82%, risk free rates of 4.72% to 5.60% and an
expected life of four years.
13. EMPLOYEE BENEFITS
Effective February 1995, the Company adopted an employee investment plan
(the "Plan"), under Section 401(k) of the Internal Revenue Code. Employees who
are at least 21 years old and who have completed one year of eligibility service
may become participants in the Plan. Each participant may make
F-16
<PAGE> 20
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
contributions to the Plan through salary deferrals in amounts of at least 1% to
a maximum of 15% of the participant's compensation, subject to certain
limitations imposed by the Internal Revenue Code. The Company contributes an
amount equal to 50% of the first 6% of the participant's compensation
contributed. A participant's contribution to the Plan is 100% vested and
nonforfeitable. A participant will become vested in 20% of the Company's
contributions after one year of service while enrolled in the Plan and
increasing by 20% for each additional year of service while enrolled in the
Plan.
14. GAIN ON SALE OF REAL ESTATE ASSETS
During 1997, the Company sold, in separate transactions, Oasis Villas, an
84 unit apartment community, Oasis Orchid, a 280 unit apartment community, Oasis
Terrace, a 336 unit apartment community and Oasis Trails, a 360 unit apartment
community, all located in Las Vegas, for an aggregate consideration of
approximately $60,000 , resulting in a combined gain of $6,999.
15. SUBSEQUENT EVENTS
On January 20, 1998, the Company declared a quarterly dividend for its
Series A Cumulative Convertible Preferred Stock of $0.5625 per share payable on
February 16, 1998 to stockholders of record on February 2, 1998. In addition, on
January 26, 1998, the Company declared a quarterly dividend of $0.4525 per
common share to stockholders of record on February 3, 1998, payable on February
17, 1998.
On February 27, 1998, the Company sold Oasis StarII, a 24 unit apartment
community, for $1,300, with no material gain or loss resulting from the
transaction.
On March 6, 1998, the Company purchased a 421 apartment community in
Fullerton, California named Parkside Apartments. The purchase price of
approximately $29,000 was funded with cash drawn from the Company's Credit
Facility. The Company renamed the community Oasis Parkside.
16. COMMITMENTS AND CONTINGENCIES
On December 16, 1997, the Company announced the execution of a definitive
merger agreement ("the Agreement") between the Company and Camden Property Trust
("Camden"). Under the terms of the agreement, the Company would be merged with
and into a wholly-owned subsidiary of Camden, with each share of the Company's
common stock being exchanged for 0.759 shares of Camden. The merger is subject
to approval by the shareholders of the Company and Camden, which is expected to
occur in April 1998. At this time, there can be no assurance given that such
approval will be obtained.
The Company is presently in the development stage on three additional
communities (Oasis Bluffs II, Oasis Harbor II and Oasis Interlocken) totaling
1,002 units in its three markets, Las Vegas, Reno and Denver. The estimated
total investment for these units will be finalized prior to the commencement of
construction.
In November 1996, the Company entered into an agreement to purchase a 19.8
acre parcel in Mission Viejo, California, subject to the satisfaction of certain
entitlement conditions. If the conditions are satisfied and the purchase is
completed, the Company intends to build a 380 unit apartment community slated to
begin construction in 1998. In accordance with the terms of the agreement, the
Company made a deposit in the amount of $2,000 into an escrow account. The
payment is fully refundable until the seller completes certain obligations under
the agreement and thereafter, is considered nonrefundable but may be applied to
reduce the amounts due to the seller at the close of escrow.
In October 1997, the Company entered into a contract to purchase a 421 unit
apartment community in Fullerton, California for approximately $29,000, subject
to the satisfaction of certain conditions. In accordance with the terms of the
agreement, the Company made a deposit in the amount of $300 in an escrow
account. In January 1998, the Company made an additional deposit in the amount
of $200 for a total deposit of $500.
The Company has been contacted by certain regulatory agencies with regards
to alleged failures to comply with the "Fair Housing Act" (the "Act") as it
pertains to properties constructed for first occupancy after March 31, 1991 (the
"Properties"). Currently, the Company is inspecting the Properties to determine
the extent of noncompliance and the changes that will be necessitated. It is the
Company's intention to make any and all changes and modifications necessary in
order to meet the compliance standards of the Act. At this
F-17
<PAGE> 21
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
time, the Company is unable to provide an estimate of costs and expenses
associated with this matter as the scope and extent of required work has yet to
be determined.
The Company is also party to various legal actions which are incidental to
its business. Management believes that these actions will not have a material
adverse affect on the financial position or the results of operations of the
Company.
17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Quarterly financial information for the years ended 1997 and 1996 are as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-----------------------------------------------------------
FIRST SECOND THIRD FOURTH
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue............................... $ 26,824 $ 28,071 $ 29,619 $ 31,471
Income before gain on sale of real
assets.............................. 7,125 7,099 6,163 6,488
Gain on sale of real estate assets.... -- -- -- 6,999
Net income............................ 7,125 7,099 6,163 13,487
Preferred dividend requirement........ 2,343 2,343 2,343 2,343
Earnings available for common
stockholders........................ 4,782 4,756 3,820 11,144
Per share data:
Income before gain on sale of real
estate assets and (net of
preferred dividend
requirement)..................... $ 0.29 $ 0.29 $ 0.24 $ 0.26
Gain on sale of real estate
assets......................... -- -- -- 0.43
Earnings available for common
stockholders................... 0.29 0.29 0.24 0.69
Weighted average number of common
shares outstanding.................. 16,237,646 16,237,904 16,238,556 16,286,017
</TABLE>
F-18
<PAGE> 22
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------------------------------
FIRST SECOND THIRD FOURTH
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue............................... $ 21,752 $ 23,207 $ 24,875 $ 26,165
Income before gain on sale of real
estate assets and extraordinary
item................................ 6,955 7,057 7,104 7,226
Gain on sale of real estate assets.... -- -- -- 2,444
Extraordinary item.................... -- -- -- (1,403)
Net income............................ 6,955 7,057 7,104 8,267
Preferred dividend requirement........ 2,343 2,343 2,343 2,343
Earnings available for common
stockholders........................ 4,612 4,714 4,761 5,924
Per share data:
Income before gain on real estate
assets and extraordinary item
(net of preferred dividend
requirement)..................... $ 0.28 $ 0.29 $ 0.29 $ 0.60
Gain on sale of real estate
assets........................... -- -- -- (0.15)
Extraordinary item.................. -- -- -- (0.09)
Earnings available for common
stockholders..................... 0.28 0.29 0.29 0.36
Weighted average number of common
shares outstanding.................. 16,237,646 16,237,646 16,237,646 16,237,646
</TABLE>
F-19
<PAGE> 23
SCHEDULE III
OASIS RESIDENTIAL, INC.
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
TOTAL
INITIAL COST COST(A)
----------------------------------- COST ------------
BUILDINGS FURNITURE SUBSEQUENT TO BUILDINGS
12/31/97 AND AND CONSTRUCTION/ AND
PROPERTY NAME ENCUMBRANCES LAND IMPROVEMENT FIXTURES ACQUISITION LAND IMPROVEMENTS
- ------------------------- ------------ -------- ------------ --------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Oasis Bay................ $ 1,321 $ 3,342 $ 283 $ 283 $ 1,321 $ 3,423
Oasis Bel Air............ $ 11,435(C) 2,206 16,118 549 144 2,206 16,201
Oasis Bluffs............. 1,294 35,191 1,185 -- 1,294 35,191
Oasis Breeze............. 2,340 11,538 226 995 2,340 12,066
Oasis Canyon............. 7,886(C) 1,724 10,706 359 73 1,724 10,738
Oasis Centennial......... 10,647(C) 2,592 9,803 276 571 2,592 10,177
Oasis Centre............. 423 1,159 19 327 425 1,471
Oasis Cliffs............. 1,619 9,730 1,630 1,668 1,619 10,757
Oasis Club............... 8,940 3,177 10,462 751 1,156 3,177 11,262
Oasis Cove(B)............ 1,003 4,068 386 206 1,022 4,108
Oasis Crossings.......... 673 4,426 153 4 673 4,425
Oasis Deerwood........... 1,868 26,245 472 810 1,868 27,010
Oasis Del Mar............ 21,449 4,073 31,439 1,032 157 4,073 31,519
Oasis Emerald............ 579 3,335 533 509 580 3,674
Oasis Gateway............ 2,819 22,874 941 -- 2,819 22,874
Oasis Glen............... 1,120 4,939 112 166 1,120 5,019
Oasis Greens............. 12,000 709 17,077 295 1,858 709 18,012
Oasis Harbor I........... 2,446 19,137 724 71 2,446 19,202
Oasis Heights............ 1,485 8,761 245 995 1,486 9,236
Oasis Heritage........... 3,628 26,162 540 5,134 3,628 27,927
Oasis Hills.............. 2,599 550 4,469 300 272 550 4,615
Oasis Island............. 760 4,095 196 186 761 4,069
Oasis Lakeway............ 3,944 32,686 1,253 -- 3,944 32,686
Oasis Landing............ 3,920 505 5,937 104 392 505 6,108
Oasis Martinique......... 50,600 26,377 45,821 1,862 -- 26,377 45,821
Oasis Meadows............ 2,216 21,447 795 151 2,216 21,589
Oasis Mini Storage....... 304 976 2 157 304 1,089
Oasis Morning............ 42 1,468 135 459 49 1,627
Oasis Nellis
Commercial............. 288 576 -- -- 288 576
Oasis Palms.............. 1,021 6,586 799 695 1,022 6,840
<CAPTION>
FURNITURE DATE OF
AND ACCUMULATED CONSTRUCTION/ DEPRECIABLE
PROPERTY NAME FIXTURES TOTAL DEPRECIATION ACQUISITION LIFE
- ------------------------- --------- -------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Oasis Bay................ 485 5,229 $ 1,126 8/90 5-40 Years
Oasis Bel Air............ 610 19,017 882 12/95 5-40 Years
Oasis Bluffs............. 1,185 37,670 242 9/97 5-40 Years
Oasis Breeze............. 693 15,099 1,388 10/93 5-40 Years
Oasis Canyon............. 400 12,862 759 7/95 5-40 Years
Oasis Centennial......... 473 13,242 647 9/95 5-40 Years
Oasis Centre............. 32 1,928 512 10/89 5-40 Years
Oasis Cliffs............. 2,271 14,647 5,084 7/88 5-40 Years
Oasis Club............... 1,107 15,546 2,998 12/89 5-40 Years
Oasis Cove(B)............ 533 5,663 1,119 5/90 & 4/96 5-40 Years
Oasis Crossings.......... 158 5,256 140 9/96 5-40 Years
Oasis Deerwood........... 517 29,395 978 9/96 5-40 Years
Oasis Del Mar............ 1,109 36,701 1,855 10/95 5-40 Years
Oasis Emerald............ 702 4,956 1,643 11/88 5-40 Years
Oasis Gateway............ 941 26,634 210 6/97 5-40 Years
Oasis Glen............... 198 6,337 539 7/94 5-40 Years
Oasis Greens............. 1,218 19,939 2,143 10/93 5-40 Years
Oasis Harbor I........... 730 22,378 620 11/96 5-40 Years
Oasis Heights............ 764 11,486 1,055 2/94 5-40 Years
Oasis Heritage........... 3,909 35,464 3,098 7/94 5-40 Years
Oasis Hills.............. 426 5,591 1,368 6/91 5-40 Years
Oasis Island............. 407 5,237 1,061 6/90 5-40 Years
Oasis Lakeway............ 1,253 37,883 1 12/97 5-40 Years
Oasis Landing............ 325 6,938 715 10/93 5-40 Years
Oasis Martinique......... 1,862 74,060 329 10/97 5-40 Years
Oasis Meadows............ 804 24,609 876 4/96 5-40 Years
Oasis Mini Storage....... 46 1,439 97 7/94 5-40 Years
Oasis Morning............ 428 2,104 1,221 1978 5-40 Years
Oasis Nellis
Commercial............. -- 864 51 7/94 5-40 Years
Oasis Palms.............. 1,239 9,101 2,660 9/94 5-40 Years
</TABLE>
F-20
<PAGE> 24
<TABLE>
<CAPTION>
TOTAL
INITIAL COST COST(A)
----------------------------------- COST ------------
BUILDINGS FURNITURE SUBSEQUENT TO BUILDINGS
12/31/97 AND AND CONSTRUCTION/ AND
PROPERTY NAME ENCUMBRANCES LAND IMPROVEMENT FIXTURES ACQUISITION LAND IMPROVEMENTS
- ------------------------- ------------ -------- ------------ --------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Oasis Paradise........... 15,573 7,640 27,280 624 1,391 7,843 27,606
Oasis Park............... 7,591 1,217 8,087 224 753 1,217 8,611
Oasis Pearl.............. 585 1,581 224 242 587 1,696
Oasis Pines.............. 2,648 20,437 823 -- 2,648 20,437
Oasis Place.............. 2,189 5,950 196 217 2,195 6,024
Oasis Plaza.............. 6,000 2,541 6,677 151 2,290 2,541 8,190
Oasis Pointe............. 9,464(C) 2,056 14,273 554 35 2,056 14,305
Oasis Rainbow............ 6,309 714 6,245 962 769 714 6,610
Oasis Ridge.............. 1,899 9,869 219 828 1,899 10,074
Oasis Rose............... 1,943 9,926 453 195 1,964 10,054
Oasis Sands.............. 601 2,417 56 77 601 2,474
Oasis Sea Palms.......... 3,500 7,475 405 -- 3,500 7,475
Oasis Springs............ 1,638 11,547 231 919 1,638 11,953
Oasis Star(D)............ 211 312 39 100 212 361
Oasis Suite.............. 1,464 8,470 306 781 1,464 8,637
Oasis Summit............. 2,275 17,537 479 367 2,352 17,669
Oasis Tiara.............. 4,129 22,086 782 219 4,129 22,259
Oasis Topaz.............. 6,451 2,377 6,353 143 3,070 2,377 8,678
Oasis View............... 341 3,908 316 1,242 341 4,109
Oasis Vinings............ 1,857 11,624 365 415 1,857 11,940
Oasis Vintage............ 10,819 2,942 14,237 1,019 280 2,943 14,423
Oasis Vista.............. 2,856 12,930 50 1,048 2,856 13,509
Oasis Wexford............ 15,827 2,843 16,111 358 845 2,843 16,616
Oasis Winds.............. 2,309 9,425 152 2,805 2,309 11,133
-------- -------- -------- ------- ------- -------- --------
207,510 125,881 655,330 25,288 36,327 126,224 674,155
Land held for
development............ 4,083
-------- -------- -------- ------- ------- -------- --------
207,510 125,881 655,330 25,288 36,327 130,307 674,155
Construction in
progress...............
-------- -------- -------- ------- ------- -------- --------
$207,510 $125,881 $655,330 $25,288 $36,327 $130,307 $674,155
======== ======== ======== ======= ======= ======== ========
<CAPTION>
FURNITURE DATE OF
AND ACCUMULATED CONSTRUCTION/ DEPRECIABLE
PROPERTY NAME FIXTURES TOTAL DEPRECIATION ACQUISITION LIFE
- ------------------------- --------- -------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Oasis Paradise........... 1,486 36,935 2,966 3/94 5-40 Years
Oasis Park............... 453 10,281 771 9/94 5-40 Years
Oasis Pearl.............. 349 2,632 739 7/87 5-40 Years
Oasis Pines.............. 823 23,908 190 6/97 5-40 Years
Oasis Place.............. 333 8,552 612 7/94 5-40 Years
Oasis Plaza.............. 928 11,659 1,069 10/93 5-40 Years
Oasis Pointe............. 557 16,918 722 3/96 5-40 Years
Oasis Rainbow............ 1,366 8,690 3,094 11/88 5-40 Years
Oasis Ridge.............. 842 12,815 1,270 10/93 5-40 Years
Oasis Rose............... 499 12,517 987 10/94 5-40 Years
Oasis Sands.............. 76 3,151 225 9/94 5-40 Years
Oasis Sea Palms.......... 405 11,380 119 6/97 5-40 Years
Oasis Springs............ 744 14,335 1,181 7/94 5-40 Years
Oasis Star(D)............ 89 662 155 6/91 5-40 Years
Oasis Suite.............. 920 11,021 944 7/94 5-40 Years
Oasis Summit............. 637 20,658 1,484 7/94 & 7/95 5-40 Years
Oasis Tiara.............. 828 27,216 810 9/96 5-40 Years
Oasis Topaz.............. 888 11,943 1,092 5/93 5-40 Years
Oasis View............... 1,357 5,807 3,515 1983 5-40 Years
Oasis Vinings............ 464 14,261 1,209 12/93 5-40 Years
Oasis Vintage............ 1,112 18,478 2,270 1/93 5-40 Years
Oasis Vista.............. 519 16,884 1,270 7/94 5-40 Years
Oasis Wexford............ 698 20,157 1,384 12/94 5-40 Years
Oasis Winds.............. 1,249 14,691 1,274 10/93 5-40 Years
------- -------- -------
42,447 842,826 64,769
Land held for
development............ 4,083
------- -------- -------
42,447 846,909 64,769
Construction in
progress............... 25,952
------- -------- -------
$42,447 $872,861 $64,769
======= ======== =======
</TABLE>
- ---------------
(A) The aggregate cost for federal income tax purposes at December 31, 1997 is
$864,650.
(B) Initial cost includes the expansion of Oasis Cove totaling 20 units.
(C) Encumbrance represents a portion of the $39,432 Teachers Insurance and
Annuity Association loan allocated to the property based upon relative size.
(D) Initial cost was reduced to reflect the sale of 44 units at Oasis Star I.
F-21
<PAGE> 25
NOTE TO SCHEDULE III
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
1. RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Real estate investments:
Balance at beginning of year............................. $687,174 $547,181 $433,450
Additions................................................ 218,664 144,312 113,731
Dispositions............................................. (58,929) (4,319) --
-------- -------- --------
Balance at end of year................................... $846,909 $687,174 $547,181
======== ======== ========
Accumulated depreciation:
Balance at beginning of year............................. $ 52,924 $ 38,499 $ 26,605
Additions................................................ 18,778 15,438 11,894
Dispositions............................................. (6,933) (1,013) --
-------- -------- --------
Balance at end of year................................... $ 64,769 $ 52,924 $ 38,499
======== ======== ========
</TABLE>
F-22
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
2.1 Agreement and Plan of Merger dated December 16, 1997, among the
Registrant, Camden Subsidiary II, Inc. and Oasis Residential, Inc.
(incorporated by reference from Exhibit 2.1 of the Registrant's Form
8-K filed December 17, 1997 (File No. 1-12110)).
2.2 Amendment No. 1, dated as of February 4, 1998, to the Agreement and
Plan of Merger, dated December 16, 1997, among the Registrant, Camden
Subsidiary II, Inc. and Oasis Residential, Inc. (incorporated by
reference from Exhibit 2.1 of the Registrant's Form 8-K filed February
5, 1998 (File No. 1-12110)).
23.1 Consent of Coopers & Lybrand L.L.P., Independent Accountants
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements of
Camden Property Trust on Form S-8 (File No. 33-80230), Form S-8 (File No.
333-32569), Form S-3 (File No. 33-84658), Form S-3 (File No. 33-84536), Form S-3
(File No. 333-24637), and Form S-3 (File No. 333-25637) of our report dated
January 23, 1998, except for Note 15, as to which the date is March 6, 1998, on
our audits of the consolidated financial statements and financial statement
schedule of Oasis Residential, Inc. as of December 31, 1997 and 1996, and for
each of the three years in the period ended December 31, 1997, which report is
included in this Current Report on Form 8-K.
COOPERS & LYBRAND L.L.P.
San Francisco, California
April 21, 1998
