<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission file number 1-12428
OASIS RESIDENTIAL, INC.
(Exact name of Registrant as specified in its Charter)
NEVADA 88-0297457
(State or other jurisdiction (I.R.S. Employer
of Incorporation or organization) identification Number)
4041 East Sunset Road, Henderson, Nevada 89014
(Address of Principal Executive Offices)
(702) 435-9800
(Registrant's Telephone Number, Including Area Code)
Indicate by a check mark whether the registrant: (1) has filed all reports 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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
<TABLE>
<CAPTION>
Class Shares Outstanding Date
- ----------------------------------- ------------------ --------------
<S> <C> <C>
Common, $0.01 par value 16,237,646 August 9, 1996
$2.25 Series A Cumulative Convertible
Preferred, $.01 par value 4,165,000 August 9, 1996
</TABLE>
<PAGE> 2
OASIS RESIDENTIAL, INC.
QUARTERLY REPORT ON FORM 10-Q
CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I - FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995 2
Consolidated Statements of Operations for the Three and Six
Months Ended June 30, 1996 and 1995 3
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1996 and 1995 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-12
PART II - OTHER INFORMATION 13
Signatures 14
</TABLE>
<PAGE> 3
PART 1. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
- -------------------------------------------
OASIS RESIDENTIAL, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------------------------
(Unaudited)
<S> <C> <C>
Real estate assets:
Land $ 82,094 $ 79,860
Buildings and improvements 495,139 434,341
Furniture and fixtures 34,568 28,132
------------------------
611,801 542,333
Less accumulated depreciation 45,998 38,743
------------------------
565,803 503,590
Land held for development 3,525 6,064
Construction in progress 129,480 113,525
------------------------
Net real estate assets 698,808 623,179
Cash and cash equivalents 3,116 5,970
Restricted cash 2,968 2,495
Deferred costs and other assets, net 9,122 10,292
------------------------
Total assets $714,014 $641,936
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Notes payable $326,872 $250,825
Resident deposits and prepaid rent 2,029 1,688
Accounts payable and accrued expenses 9,459 8,969
------------------------
Total liabilities 338,360 261,482
------------------------
Commitments (Footnote 2)
Stockholders' equity:
Preferred stock, $2.25 Series A Cumulative 42 42
Convertible, $.01 par value, liquidation preference
$25 per share, 15,000,000 shares authorized,
4,165,000 shares issued and outstanding at
June 30, 1996 and December 31, 1995
Common stock, $.01 par value, 100,000,000 162 162
shares authorized, 16,237,646 and 16,218,134
shares issued and outstanding at June 30,
1996 and December 31, 1995, respectively
Paid-in capital 386,910 386,910
Distributions in excess of net income (11,460) (6,660)
------------------------
Total stockholders' equity 375,654 380,454
------------------------
Total liabilities and stockholders' equity $714,014 $641,936
========================
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE> 4
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
----------------------- ------------------------
1996 1995 1996 1995
----------------------- ------------------------
<S> <C> <C> <C> <C>
Revenue:
Rental income $22,424 $17,589 $43,483 $34,552
Other income 783 781 1,476 1,577
----------------------- ------------------------
Total revenue 23,207 18,370 44,959 36,129
----------------------- ------------------------
Expenses:
Property operating and maintenance 6,647 5,122 12,776 9,970
General and administrative 801 749 1,633 1,447
Real estate taxes 1,235 936 2,385 1,870
Interest 3,450 1,231 6,322 3,806
Interest, non-cash (loan fees and costs) 276 310 570 640
Depreciation and amortization 3,741 2,907 7,261 5,676
----------------------- ------------------------
Total expenses 16,150 11,255 30,947 23,409
----------------------- ------------------------
Net income 7,057 7,115 14,012 12,720
Preferred dividend requirement 2,343 1,848 4,686 1,848
----------------------- ------------------------
Earnings available for common stock $4,714 $5,267 $9,326 $10,872
======================= ========================
Per Share Data:
Net income $0.29 $0.32 $0.57 $0.67
======================= ========================
Dividends per Common Share $0.435 $0.41 $0.87 $0.82
======================= ========================
Weighted average shares outstanding 16,237,646 16,228,212 16,237,646 16,223,201
----------------------- ------------------------
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 5
OASIS RESIDENTIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30,
--------------------------
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 14,012 $ 12,720
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 7,261 5,676
Interest, non-cash (loan fees and costs) 570 640
Changes in assets and liabilities:
Restricted cash (473) (291)
Deferred costs and other assets 594 (1,826)
Resident deposits and prepaid rent 341 213
Accounts payable and accrued expenses 490 399
-------- --------
Net cash provided by operating activities 22,795 17,531
-------- --------
Cash flows from investing activities:
Purchase of real estate assets (8,670) (7,660)
Construction of real estate assets (74,214) (57,766)
-------- --------
Net cash used in investing activities (82,884) (65,426)
-------- --------
Cash flows from financing activities:
Proceeds from notes payable 77,000 71,393
Proceeds from sale of preferred stock - 99,228
Principal payments on mortgage notes payable (953) (115,012)
Dividends paid (18,812) (13,299)
-------- --------
Net cash provided by financing activities 57,235 42,310
-------- --------
Net decrease in cash and cash equivalents (2,854) (5,585)
Cash and cash equivalents, beginning 5,970 7,057
-------- --------
Cash and cash equivalents, ending $ 3,116 $ 1,472
======== ========
Supplemental information:
Cash paid for interest $ 10,955 $ 3,947
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 6
OASIS RESIDENTIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(Unaudited)
1. Basis of Presentation:
The accompanying consolidated financial statements have been prepared
in accordance with generally accepted accounting principles applicable to
interim financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. However, in the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation have been included. The Company presumes that
users of the interim financial information herein have read or have access to
the audited financial statements for the preceding fiscal year and that the
adequacy of additional disclosure needed for a fair presentation may be
determined in that context. Accordingly, footnote disclosure which would
substantially duplicate the disclosure contained in the Company's 1995 Annual
Report on Form 10-K has been omitted.
The Company capitalizes all direct costs of developing its properties.
Interest is capitalized during development and construction until a property is
completed and ready for occupancy. In computing the amount of interest to be
capitalized for each period, the Company computes the average amount of
development and construction costs incurred on each project and then, allocates
interest costs associated with loans incurred for the purpose of furthering the
Company's development and construction activities. To the extent that the total
development and construction costs exceed the amount of the construction
related loans, the Company applies its average borrowing rate on other than
construction-related loans to such excess construction costs to derive the
amount of additional capitalized interest. General and administrative costs are
expensed, except for the costs incurred in support of the Company's
construction-focused executives.
2. Commitments:
As of June 30, 1996, the Company had ten multifamily apartment
communities totaling 2,960 units in various stages of development. The total
aggregate cost of these developments is estimated to be $210,381 including land
acquisition costs of approximately $23,323. As of June 30, 1996, the Company
had expended approximately $131,139 in land acquisition and development costs
on these projects.
3. Subsequent Events
On July 29, 1996, the Company declared a quarterly dividend for its
common stock of $.435 per share. The dividend is to be paid on August 20,
1996 to stockholders of record on August 9, 1996. The Company also announced
on July 19, 1996, the declaration of its quarterly dividend on its $2.25
Series A Cumulative Convertible Preferred Stock of $.5625 per share. This
preferred dividend is to be paid on August 15, 1996 to stockholders of record
on August 1, 1996.
5
<PAGE> 7
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF
THE PRIVATE LITIGATION REFORM ACT OF 1995. Statements contained or incorporated
by reference in this document that are not based on historical fact are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements may be identified by
the use of forward-looking terminology such as "may," "will," "expect,"
"estimate," "anticipate," "continue" or similar terms, variations of those
terms or the negative of those terms. The "Risk Factors" set forth in the
Company's Annual Report on Form 10-K constitute cautionary statements
identifying important factors that could cause actual results to differ
materially from those in the forward-looking statements.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
Form 10-Q.
RESULTS OF OPERATIONS
Changes in the operating results for the periods discussed below are
primarily the result of increases from period to period in the number of
properties owned and operated. Where applicable, comparisons have been made on
a per weighted average unit basis in order to adjust for such changes in the
number of units owned. In computing the per weighted average unit amounts,
income and expenses of the commercial properties have been eliminated.
Comparison of the three and six months ended June 30, 1996 to the three and
six months ended June 30, 1995
The weighted average number of apartment units increased by 2,065 and
1,977 units for the three and six months ended June 30, 1996, as compared to
the same periods in 1995. This increase was the result of acquiring 276 units
in September 1995 and the development of 1,683 units since the end of June
1995. The total number of units operated as of June 30, 1996 and 1995 were
12,469 and 10,510, respectively. The weighted average number of apartment
units for each of the periods was as follows:
Three months ended June 30, 1996 12,384
Three months ended June 30, 1995 10,319
Six months ended June 30, 1996 12,133
Six months ended June 30, 1995 10,156
For the three months ended June 30, 1996, net income decreased by
$58,000 over the three months ended June 30, 1995. This decrease was primarily
due to increases in expenses of $4,895,000, and was offset by increased revenues
of $4,837,000. The net decrease is primarily a result of increased interest
expense associated with higher borrowings which were used to fund capital
improvements at the mature multifamily apartment communities.
For the six months ended June 30, 1996, net income increased by
$1,292,000 over the six months ended June 30, 1995. This increase was primarily
due to increased revenues of $8,830,000, and was offset by increases in expenses
of $7,538,000. The net increase is primarily the result of operating additional
units during the six months ended June 30, 1996.
6
<PAGE> 8
Property operations: The following table presents the Company's
results of operations for its multifamily apartment communities (excluding
commercial properties and corporate general and administrative expenses) for the
three and six months ended June 30, 1996 and 1995:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------------------------------------------------
1996 1995 % CHANGE 1996 1995 % CHANGE
--------------------------------------------------------------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C> <C> <C>
Rental income $22,266 $17,419 27.8% $43,168 $34,215 26.2%
Other income 726 616 17.9% 1,348 1,233 9.3%
--------------------------------------------------------------------
Total income 22,992 18,035 27.5% 44,516 35,448 25.6%
--------------------------------------------------------------------
Property operating and maintenance 6,599 5,087 29.7% 12,692 9,907 28.1%
Real estate taxes 1,227 925 32.6% 2,364 1,849 27.9%
Depreciation and amortization 3,663 2,854 28.3% 7,114 5,567 27.8%
--------------------------------------------------------------------
Total expenses, excluding interest 11,489 8,866 29.6% 22,170 17,323 28.0%
--------------------------------------------------------------------
Property net income, before interest $11,503 $ 9,169 25.5% $22,346 $18,125 23.3%
====================================================================
</TABLE>
Rental income for the three months ended June 30, 1996 increased over
the same period of 1995 by approximately $4,847,000 primarily due to the
acquisition and development of additional apartment communities. The weighted
average monthly rental income per apartment unit was approximately $599 and
$593 for the three and six months ended June 30, 1996 as compared to $563 and
$561 for the three and six months periods in 1995, respectively.
Other income increased by $110,000 and $115,000 for the three and six
months ended June 30, 1996, as compared to the same periods in 1995. These
increases are a result of the operation of additional properties in 1996.
Increases in property operating and maintenance expenses were
primarily the result of operating additional units in 1996 as compared to 1995.
On a weighted average per unit, per month basis, these expenses increased by
$14 and $11 for the three and six months ended June 30, 1996, respectively, as
compared to the same periods in 1995. These increases are primarily attributable
to additional costs associated with the Company's marketing strategy for its
"brand name" identity, as well as a result of general increases in utility
rates during 1996.
Real estate taxes increased in 1996, primarily due to the acquisition
and development of additional properties. On a weighted average per unit basis,
real estate taxes increased by $9 and $13 for the three and six months ended
June 30, 1996, respectively, as compared to the same periods in 1995. These
increases are due to increases in property taxes at certain properties for the
tax year commencing July 1, 1995. In Nevada, properties are assessed at their
value as of July 1 of each year and, therefore, properties that are under
development as of that date are not assessed on their full value until July 1
of the following year.
Depreciation and amortization increased by $809,000 and $1,547,000 for
the three and six months ended June 30, 1996, as compared to the same periods
in 1995. These increases are due to additional properties acquired and
developed subsequent to June 30, 1995.
7
<PAGE> 9
"Same store" portfolio: The following table presents a comparison of the
operating results for the three and six months ended June 30, 1996 as compared
to the three and six months ended June 30, 1995 for the properties that the
Company owned as of December 31, 1994, consisting of 38 apartment communities,
containing 9,819 apartment units:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------------------------------------------
1996 1995 % CHANGE 1996 1995 % CHANGE
----------------------------------------------------------------
(In thousands) (In thousands)
<S> <C> <C> <C> <C> <C> <C>
Total income $17,401 $17,113 1.7% $34,692 $34,260 1.3%
----------------------------------------------------------------
Real estate taxes 974 921 5.8% 1,946 1,843 5.6%
Marketing 205 177 15.8% 392 409 (4.2%)
Salaries and related costs 1,717 1,806 (4.9%) 3,620 3,493 3.6%
Utilities 1,288 1,122 14.8% 2,344 2,145 9.3%
Repairs and maintenance 1,113 1,168 (4.7%) 2,267 2,287 (0.9%)
Other operating expenses 662 593 11.6% 1,323 1,210 9.3%
----------------------------------------------------------------
Total operating and maintenance expenses 5,959 5,787 3.0% 11,892 11,387 4.4%
----------------------------------------------------------------
Property operating income $11,442 $11,326 1.0% $22,800 $22,873 (0.3%)
================================================================
</TABLE>
Development communities: The following table presents the operating results of
the communities that have been developed by the Company since December 31,
1994.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1996 1995 1996 1995
---------------------- ----------------------
(Dollars in thousands) (Dollars in thousands)
<S> <C> <C> <C> <C>
Total income $5,101 $922 $8,854 $1,188
---------------------- ----------------------
Real estate taxes 217 4 346 6
Marketing 134 10 250 33
Salaries and related costs 633 79 1,041 136
Utilities 305 53 480 90
Repairs and maintenance 213 45 364 60
Other operating expenses 170 34 315 44
---------------------- ----------------------
Total operating and maintenance expenses 1,672 225 2,796 369
---------------------- ----------------------
Property operating income $3,429 $697 $6,058 $819
====================== ======================
Weighted average number of apartment units 2,289 500 2,038 337
====================== ======================
</TABLE>
8
<PAGE> 10
Acquisition communities: The following table presents the operating results of
the one community that was acquired by the Company in September 1995, Oasis
Centennial, containing 276 apartment units.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------------------------------------
1996 1995 1996 1995
-------------------------------------------------------
(Dollars in thousands) (Dollars in thousands)
<S> <C> <C> <C> <C>
Total income $490 - $970 -
-------------------------------------------------------
Real estate taxes 36 - 72 -
Marketing 15 - 25 -
Salaries and related costs 58 - 114 -
Utilities 33 - 65 -
Repairs and maintenance 25 - 37 -
Other operating expenses 28 - 55 -
-------------------------------------------------------
Total operating and maintenance expenses 195 - 368 -
-------------------------------------------------------
Property operating income $295 - $602 -
=======================================================
Number of apartment units 276 - 276 -
=======================================================
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities increased by $5,264,000 from
$17,531,000 in 1995 to $22,795,000 in 1996, primarily due to increases in the
rental income from additional properties acquired and developed subsequent to
June 30, 1995, and as a result of a reduction in deferred costs and other
assets.
Net cash used in investing activities increased by $17,458,000 from
$65,426,000 in 1995 to $82,884,000 in 1996. During the six months ended June
30, 1996, the Company had 13 properties under construction, containing 3,766
apartment units, of which 806 units were completed. The estimated total
investment in the remaining 2,960 units is approximately $210,381,000.
The Company funds its development activities through a combination of
working capital, construction loans and credit facility debt. At June 30, 1996,
the Company had available or had secured a commitment for $31,321,000 in
construction loans and had available borrowing capacity under the credit
facility of $35,914,000.
Net cash provided by financing activities increased by $14,925,000,
primarily as a result of lower debt retirement in 1996 as compared to 1995,
partially offset by the issuance of convertible preferred stock in April 1995
and an increase in dividends paid during 1996 as compared to 1995 as a result
of the preferred stock issuance.
The Company anticipates meeting its short term liquidity requirements
through a combination of cash flow retained for investment purposes, cash
available from its credit facility and construction loans plus additional
long-term borrowings. The Company believes that its net cash provided by
operations will be adequate to meet its operating requirements and to pay
dividends in accordance with Real Estate Investment Trust ("REIT")
requirements.
The Company expects to meet its long-term liquidity requirements, such
as property acquisitions and development and mortgage debt maturities, through
new long-term borrowings, the issuance of debt securities or additional equity
securities of the Company.
9
<PAGE> 11
INFLATION
The Company leases apartments to its residents under lease terms
generally ranging from six to twelve months. Management believes that short-
term lease contracts lessen the impact of inflation by giving the Company the
ability to adjust rental rates to market levels as leases expire. The impact of
recent low rates of inflation have not been significant to the Company's
operations, except for the positive effects that low inflation has had on
reducing the Company's interest cost. Inflation, inflationary expectations and
their effects on interest rates may affect the Company in the future by
changing the underlying value of the Company's real estate or by affecting the
Company's cost of financing its operations.
IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In 1995, the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards No. 121 "Accounting for Long Lived Assets" and
No. 123 "Accounting for Stock-Based Compensation." These statements are
effective for financial statements for fiscal years beginning after December
15, 1995. Management believes that adoption of Standard No. 121 will not have a
material effect on its financial position or results of operations. Management
has adopted the disclosure method of Standard No. 123 and, accordingly, there
is no impact on the Company's financial position or results of operations.
10
<PAGE> 12
The following table sets forth certain information with respect to notes payable
at June 30, 1996. In connection therewith, as of June 30, 1996, the Company had
5,453 apartment units plus its commercial property unencumbered:
<TABLE>
<CAPTION>
NUMBER INTEREST BALANCE
LENDER PROPERTIES OF UNITS MATURITY RATE 6/30/96
---------------------------------------------------------------------------------------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CREDIT FACILITY DEBT
- --------------------
Wells Fargo Bank Unsecured - 09/98 (1) LIBOR + 1.75% (2) $114,086
------------
ENCUMBERED
FIXED RATE MORTGAGES PROPERTIES
- -------------------- ----------
Lutheran Brotherhood Oasis Club 320 10/98 6.90% $9,116
FNMA-MBS Oasis Greens 432 08/01 8.63% 12,000
FNMA Oasis Hills 184 10/03 7.50% 2,645
FNMA Oasis Landing 144 10/03 7.50% 3,989
Allstate Oasis Paradise I 368 04/08 7.10% 15,940
Allstate Oasis Paradise II 256 07/97 7.55% 9,228
Bankers Trust Oasis Pearl III 16 04/98 9.75% 592
FNMA-MBS Oasis Plaza 300 08/01 8.63% 6,000
FNMA Oasis Rainbow 232 10/03 7.50% 6,420
Bankers Trust Oasis Reef 60 04/98 9.75% 2,680
FNMA Oasis Springs 304 04/99 9.00% 8,653
Bankers Trust Oasis Star I 44 04/98 9.75% 2,003
FNMA Oasis Topaz 270 12/01 9.50% 6,583
FNMA Oasis Vintage I 336 10/03 7.50% 11,008
Teachers Insurance Oasis Del Mar 560 12/02 8.46% 21,866
Teachers Insurance Various (3) 1,068 01/06 8.13% 40,240
----- -----------
4,894 $158,963
----- -----------
MORTGAGES WITH FIXED RATE CEILING
- ---------------------------------
PNC Bank Oasis Place 240 07/99 LIBOR + 1% (4) $5,000
PNC Bank Oasis Heritage 1,129 07/99 LIBOR + 1% (4) 25,000
----- -----------
1,369 $30,000
----- -----------
FIXED RATE TAX EXEMPT
- ---------------------
Bonds Oasis Park 224 01/26 7.29% (5) $7,707
Bonds Oasis Wexford 358 11/05 6.45% 16,113
----- -----------
582 $23,820
----- -----------
CONSTRUCTION LOANS
- ------------------
Bank One Oasis Deerwood 342 06/00 LIBOR + 1.65% $3
----- -----------
Totals 7,187 $326,872
===== ===========
</TABLE>
(1) The Company has the option to extend the maturity of the credit facility
debt for one additional year.
(2) Beginning July 26, 1996 the rate on the credit facility debt will be
reduced to LIBOR + 1.50%.
(3) Communities collateralized are Oasis Bel Air, Oasis Canyon, Oasis Rose,
and Oasis Trails.
(4) The maximum interest rate on these mortgages is 7.75%.
(5) $1,090 of the outstanding balance is taxable.
11
<PAGE> 13
Calculation of Funds from Operations and Funds Available for Distribution:
Funds from operations ("FFO") represents the revised definition of funds from
operations as adopted by the National Association of Real Estate Investment
Trusts ("NAREIT") and recommended to be effective on January 1, 1996. FFO is
defined as income before gains and losses on investments and extraordinary items
(computed in accordance with generally accepted accounting principles) plus real
estate depreciation and after adjustments for significant non-recurring items,
if any.
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED ENDED
JUNE 30,1996 JUNE 30,1996
--------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Net income (1) $ 7,057 $14,012
Depreciation:
Real estate assets 3,694 7,170
------- -------
FUNDS FROM OPERATIONS $10,751 $21,182
Add:
Amortization of deferred financing costs (2) 276 570
Depreciation of non-real estate assets 44 85
Other amortization (3) 3 323 6 661
---------------------------------------
11,074 21,843
Less:
Non-revenue producing capital expenditures (4) (5) (457) (687)
Mortgage principal amortization (506) (963) (953) (1,640)
---------------------------------------
FUNDS AVAILABLE FOR DISTRIBUTION $10,111 $20,203
======= =======
</TABLE>
NOTES TO CALCULATION OF FUNDS FROM OPERATIONS AND FUNDS AVAILABLE FOR
DISTRIBUTION
(1) The Company expenses all recurring non-revenue generating property
expenditures, including carpet and appliance replacements, except for
certain expenditures on acquisition properties where major improvements are
required to bring the property up to the operating standards of the Oasis
portfolio.
(2) Deferred financing costs consists primarily of fees and costs
incurred in connection with the Company's indebtedness.
(3) Other amortization consists of amortization of corporate organization
expenses.
(4) Non-revenue producing expenditures at the properties consist of improvements
and equipment additions that do not enhance the revenue producing
capabilities of the property.
(5) Non-revenue producing expenditures at the corporate office consist primarily
of computer and office equipment acquisitions.
12
<PAGE> 14
PART II OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
An annual meeting of shareholders of the Company was held on May 6,
1996. Proxies for such meeting were solicited by the Company pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended. There was no
solicitation in opposition of management's nominees as listed in the proxy
statement. Each of the nominees was elected for a three year term expiring in
1999.
A plurality of those present and entitled to vote together with those
voting by proxy voted in favor of the election of Allan O. Hunter, Jr., Edward
R. Muller and John M. Galvin as Directors.
An affirmative vote of a majority of the votes cast were cast in favor
of the selection of Coopers & Lybrand, L.L.P. to serve as the independent
accountants for the Company for the calendar year ending December 31, 1996.
Robert V. Jones, Peter L. Rhein and Robert H. Smith are continuing as
Directors with their terms expiring in 1997. Scott S. Ingraham, Kenny C. Guinn
and Walter B. Eeds are continuing Directors with their terms expiring in 1998.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
13
<PAGE> 15
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.
OASIS RESIDENTIAL, INC.
Scott S. Ingraham 8-9-96
- ---------------------------------------------------------- ------
Scott S. Ingraham
President and Chief Operating Officer
John M. Clayton 8-9-96
- ---------------------------------------------------------- ------
John M. Clayton
Senior Vice President and Chief Financial Officer
14
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