UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended
December 31, 1998 Commission File Number 1-12784
AMLI RESIDENTIAL PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 36-3925916
(State of Organization) (I.R.S. Employer Identification No.)
125 South Wacker Drive, Suite 3100,
Chicago, Illinois 60606
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (312) 443-1477
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- -------------------------------
Common Shares of Beneficial New York Stock Exchange
Interest, $.01 par value
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant was approximately $293,685,396 based on the closing price
($19.9375) on the New York Stock Exchange on March 1, 1999.
The number of the Registrant's Common Shares of Beneficial Interest, $.01
par value, outstanding as of December 31, 1998 was 16,655,155.
Documents Incorporated By Reference
Portions of the Proxy Statement for the annual shareholders' meeting to be
held on May 3, 1999 are incorporated by reference into Part III.
<PAGE>
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . 1
Item 2. Communities. . . . . . . . . . . . . . . . . . . 18
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . 27
Item 4. Submission of Matters to a Vote
of Security Holders. . . . . . . . . . . . . . . 27
PART II
Item 5. Market for the Registrant's Common Equity
and Related Shareholder Matters. . . . . . . . . 28
Item 6. Selected Financial Data. . . . . . . . . . . . . 30
Item 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . 32
Item 7A. Quantitative and Qualitative Disclosures
About Market Risk. . . . . . . . . . . . . . . . 43
Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . . . 45
Item 9. Changes in and Disagreements
with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . 93
PART III
Item 10. Trustees and Executive Officers
of the Registrant. . . . . . . . . . . . . . . . 93
Item 11. Executive Compensation . . . . . . . . . . . . . 93
Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . 93
Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . . . 93
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . . . 94
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 98
i
<PAGE>
PART I
ITEM 1. BUSINESS
THE COMPANY
AMLI Residential Properties Trust ("AMLI" or the "Company") is a self-
administered and self-managed real estate investment trust (a "REIT")
engaged in the development, acquisition and management of upscale,
institutional quality multifamily apartment communities in seven major
metropolitan markets in the Southeast, Southwest and Midwest regions of the
United States. Founded in 1980, AMLI became a publicly traded company
through an initial public offering ("Initial Offering") in February 1994.
As part of its core strategy, AMLI differentiates itself through an
internal growth strategy focused on branding its product and services, an
external growth strategy balanced between both development and acquisition,
geographic diversification in three regions and seven core cities, and
accessing capital from both the public markets and from co-investment
relationships with institutional partners.
As of December 31, 1998, AMLI owned or had co-investment interests in
64 multifamily apartment communities (the "Communities") comprised of
24,421 apartment homes. Fifty-two of these Communities, totalling 19,559
apartment homes, were stabilized as of December 31, 1998. An additional
twelve Communities and three additional phases to existing Communities were
under development or in lease-up at that date. When completed, these
development communities will total 4,862 apartment homes. In addition, the
Company owns land for the future development of six additional communities
and six additional phases to existing communities totalling approximately
3,522 apartment homes. Of this total, the Company anticipates that 1,100
apartment homes will be developed over a long-term development plan.
AMLI is the sole general partner of, and controls a majority of the
limited partnership interests in, Amli Residential Properties, L.P., a
Delaware limited partnership (the "Operating Partnership") through which it
owns its interests in the Communities. As of December 31, 1998, the
Company owned 85% of the outstanding partnership interests ("OP Units") in
the Operating Partnership. OP Units are convertible into common shares on
a one-for-one basis. The Company conducts all its business through the
Operating Partnership and its subsidiaries and affiliates.
The Company's headquarters offices are located at 125 S. Wacker Drive,
Suite 3100, Chicago, Illinois 60606, and its telephone number is (312) 443-
1477. In addition, AMLI maintains regional offices in Atlanta, Dallas,
Indianapolis and Kansas City.
COMPETITIVE ADVANTAGES
The Company seeks to increase cash flow by intensively managing the
Communities, selectively developing and acquiring additional high-quality
multifamily communities and advising and co-investing with institutional
partners. In pursuit of these strategies, the Company benefits from the
following competitive advantages:
DEVELOPMENT AND ACQUISITION EXPERTISE. AMLI has extensive experience
in both the acquisition and development of upscale multifamily communities.
AMLI focuses on institutional quality multifamily communities having high-
quality construction, amenities, location and market position. The Company
believes that over time these communities will realize returns exceeding
national averages for multifamily properties due to higher expected annual
growth in cash flows, reduced on-going maintenance costs and capital
expenditures, and higher relative levels of residual values. The Company
applies a long-term ownership perspective to the development process,
utilizing high-quality building materials, and designs communities which
satisfy the current needs of residents and anticipate their future needs.
AMLI acquires assets at times when it believes capitalization rates are
attractive and enhanced performance from the target communities is possible
<PAGE>
through the potential for application of the Company's management
expertise.
INSTITUTIONAL CO-INVESTMENTS. AMLI actively acquires and develops
multifamily communities in co-investment joint ventures with institutional
investment partners such as insurance companies, endowments, foundations,
and public and private pension funds. The Company believes that co-
investment partnerships create an opportunity to leverage the Company's
acquisition, development and management expertise and generate higher
returns on its invested equity capital. Since its Initial Offering, and
through December 31, 1998, AMLI has formed 26 such co-investment joint
ventures with ten institutional investors, representing total anticipated
acquisition and development costs of approximately $656 million, of which
$91.5 million are the estimated completion costs of communities under
construction at ten locations at December 31, 1998. The Company's invested
capital in these 26 joint ventures totals approximately $103 million of
which $21.4 million will be funded in 1999. In connection with co-
investment partnerships, the Company has established strategic alliances
with Prudential Insurance Company of America, Western and Southern Life
Insurance Company, Allstate Insurance Company, Erie Insurance Group, The
New York Common Retirement Fund, Northwestern Mutual Life Insurance
Company, Endowment Realty Investors, The Rockefeller Foundation, and
investors represented by Nomura Securities and others. The Company formed
seven new co-investment partnerships with five of these institutional
investors during 1998.
AMLI <registered trademark> BRAND. All of the Communities are
operated by the Company under the AMLI <registered trademark> brand name.
AMLI believes promoting its brand name creates an awareness in the
marketplace of quality rental living and extraordinary customer service for
both current and prospective residents. To maximize the effectiveness of
the AMLI <registered trademark> brand name, the Company has a wide range of
programs and practices to maintain uniformly high quality service and
consistent apartment quality at all of the Communities.
RECENT DEVELOPMENTS
Since the Initial Offering, the Company has expanded its portfolio of
Communities through the acquisition, development and selective expansion of
its apartment communities.
DEVELOPMENT
At the time of the Initial Offering in 1994, the Company and its
predecessors had not begun the development of a new multifamily community
for five years. Since that time, the development pipeline has grown
steadily and extensively. Approximately 64% of the 8,108 apartment homes
developed or under development by the Company had been built with a co-
investment partner and the other 36% had been developed or are under
development solely for the Company.
In conjunction with the acquisition of interests in seven apartment
communities from Trammell Crow Residential Midwest ("TCR-Midwest"), AMLI
and its Service Companies acquired TCR-Midwest's Development and Management
Operations in Indianapolis and Kansas City in December 1997. Through 1997,
most of the Company's development activities had been in Atlanta and
Dallas. In 1998 and 1999, the Company anticipates developing more
apartment homes in its three Midwest markets (Chicago, Indianapolis and
Kansas City) than in either Atlanta or Dallas.
The tables below summarize as of December 31, 1998, certain
information related to the Company development communities and the co-
investment development communities.
<PAGE>
<TABLE>
COMPANY DEVELOPMENT COMMUNITIES
-------------------------------
<CAPTION>
AMOUNT
COMPANY PROJECTED ANTICIPATED EXPENDED
DEVELOPMENT NO. OF COMPLETION COMPLETION DEVELOPMENT THROUGH
COMMUNITIES LOCATION UNITS PERCENTAGE DATE COST 12/31/98
- ----------- -------- ------ ---------- ---------- ----------- --------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C>
AMLI:
at AutumnChase III Carrollton, Texas 240 99% Jan. 1999 $ 14,200 $ 13,941
at Killian Creek Gwinnett County,
Georgia 216 74% Jun. 1999 13,900 10,484
at St. Charles St. Charles,
Illinois 400 6% Jun. 2000 41,900 8,713
at Bent Tree II Dallas, Texas 200 1% Mar. 2000 14,200 2,069
at Monterey Oaks Austin, Texas 430 1% Sep. 2000 30,900 4,992
----- -------- --------
1,486 $115,100 $ 40,199
===== ======== ========
</TABLE>
<PAGE>
<TABLE>
CO-INVESTMENT DEVELOPMENT COMMUNITIES
-------------------------------------
<CAPTION>
AMOUNT
CO-INVESTMENT COMPANY NO. PROJECTED ANTICIPATED EXPENDED CO-INVEST-
DEVELOPMENT PERCENTAGE OF COMPLETION COMPLETION DEVELOPMENT THROUGH MENT
COMMUNITIES OWNERSHIP LOCATION UNITS PERCENTAGE DATE COST 12/31/98 PARTNER
- ----------- ---------- ---------------- ----- ---------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(in (in
thousands) thousands)
AMLI:
at Deerfield 25% Plano, Texas 240 42% Sep. 1999 $ 17,500 $ 8,609 Western and
Southern Life
Insurance
Company
on the Parkway 25% Dallas, Texas 240 99% Jan. 1999 16,200 15,519 Western and
Southern Life
Insurance
Company
at Northwinds 35% Atlanta, Georgia 800 81% Sep. 1999 54,400 44,432 Northwestern
Mutual Life
at Oakhurst
North 25% Aurora, Illinois 464 91% Sep. 1999 44,300 38,092 Prudential
Insurance
Company of
America
at Wells Branch 25% Austin, Texas 576 95% Mar. 1999 35,100 33,030 Prudential
Insurance
Company of
America
Creekside 25% Overhand Park, 224 3% Jun. 2000 16,200 3,195 ERI Creekside,
Kansas Inc.
at Wynnewood 25% Overland Park, 232 4% Mar. 2000 17,600 2,858 The N.Y.
Farms Kansas Common Retire-
ment Fund
at Regents
Crest II 25% Overland Park, 108 8% Dec. 1999 7,800 1,638 ERI Regents
Kansas Crest, Inc.
at Castle Creek 40% Indianapolis, 276 3% Jun. 2000 20,700 3,458 ERI Castle
Indiana Creek, Inc.
at Lake
Clearwater 25% Indianapolis, 216 9% Mar. 2000 16,700 4,137 The N.Y.
Indiana Common
Retirement
Fund
------ -------- --------
3,376 $246,500 $154,968
====== ======== ========
</TABLE>
<PAGE>
The Company believes that the operating prospects for the development
communities remain favorable based on current economic and other conditions
existing in the areas in which the Company's development activities are
focused. As with any development project, there are uncertainties and
risks associated with development. While the Company has prepared
development budgets and has estimated completion and stabilization target
dates for each of the development communities based on what it believes are
reasonable assumptions, there can be no assurance that actual costs will
not exceed current budgets or that the Company will not experience
construction delays due to the unavailability of building materials,
weather conditions or other events beyond the Company's control.
Similarly, adverse market conditions at the time that the development
communities become available for leasing could affect the rental rates that
may be charged and the period necessary to achieve stabilization at the
development communities, which could have a material adverse effect on the
financial condition of the affected development communities.
CO-INVESTMENT DEVELOPMENT
During 1997, the Company and Northwestern Mutual Life Insurance formed
a partnership to develop an 800-unit apartment community, which was the
Company's only development co-investment that year. During 1998, the
Company formed seven new co-investment partnerships for the development of
new communities at eight locations. Prudential Insurance Company of
America, Western and Southern Life Insurance Company, The New York Common
Retirement Fund and Endowment Realty Investors, Inc. are each co-owners
with AMLI of two new development communities. Seven properties currently
under construction in co-investment partnerships will contain 2,468
apartment homes and an additional phase to an existing 368-unit apartment
community is under construction and will contain 108 apartment homes. The
Company's ownership interests in these co-investment partnerships range
from 25% to 40%. The costs of the co-investment development communities
total $246.5 million of which AMLI has a remaining capital commitment of
$52.9 million and the co-investors have a total capital commitment of $138
million. One community secures a $10.8 million first mortgage loan that
was funded in December 1998 and another community's construction is being
funded in part by a $11.7 million construction loan from the Company. This
loan is expected to be refinanced late in 1999 with permanent first
mortgage financing from a third party lender.
ACQUISITIONS
The table set forth below summarizes the Company's acquisition
activities during 1998.
<PAGE>
<TABLE>
1998 ACQUISITIONS
-----------------
AMLI RESIDENTIAL
<CAPTION>
Company No. of Acquisition Acquisition Interest
Communities Location Units Date Cost Loan Rate
- ---------- -------- ------ ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
AMLI:
at Clairmont Atlanta, Georgia 288 1/21/98 $18,400 12,880 6.95%
at Lexington
Farms Overland Park, 404 10/27/98 31,700 --
Kansas
at Centennial
Park Overland Park, 170 10/28/98 16,250 --
Kansas
at Eagle Creek Indianapolis,
Indiana 240 10/27/98 16,450 --
------ ------- ------
Total Company
Communities 1,102 $82,800 12,880
====== ======= ======
</TABLE>
<PAGE>
On January 21, 1998, the Company acquired a 288 apartment home
community in Atlanta, Georgia for $18.4 million financed in part by a $12.9
million, 6.95% fixed rate, ten-year loan from an insurance company.
On December 22, 1997, the Company closed the first part of its
acquisition of apartment home communities from TCR-Midwest. The initial
closing included rights to four development sites in Indianapolis and
Kansas City and included the hiring of key development and management
personnel. The Company acquired AMLI at Conner Farms, a 300 apartment home
community in Indianapolis for an allocated cost of $21.7 million, financed
in part by a $13.0 million, 7.0% fixed rate insurance company loan with a
maturity date of June 15, 2003; and AMLI at Town Center, a newly-
constructed 156 apartment home community in Overland Park, Kansas whose
development had been financed by a $13.0 ADC (Acquisition, Development,
Construction) loan from the Company. A co-investment venture in which the
Company has a 25% interest concurrently acquired AMLI at Regents Crest, a
368 apartment home community in Overland Park, Kansas, for $25.3 million,
including the assumption of a $16.3 million, 7.5% fixed rate mortgage loan
due December 15, 2003.
As part of the total $132 million purchase price payable to TCR-
Midwest in 1997, 1998 and 1999, the Company's general contractor affiliate
paid in 1997 $3.4 million for the construction organization and personnel.
The Company anticipates paying $1.5 million for the general partnership
interest in another 400 apartment home community in 1999 to complete TCR-
Midwest acquisition.
In October 1998, the Company acquired three additional TCR-Midwest
communities, AMLI at Lexington Farms, a 404-unit property located in
Overland Park, Kansas, AMLI at Centennial Park, a 170-unit property located
in Overland Park, Kansas and AMLI at Eagle Creek, a 240-unit property
located in Indianapolis, Indiana. The acquisition price of these three
communities totalled $64.4 million which was paid in part by cash of $56.4
million and OP Units that were valued at $8.0 million.
FINANCING
In July 1998, the Company increased its unsecured line of credit to
$200 million from $150 million and a sixth bank was added to the bank
group. In June 1998, the Company extended the maturity of the line of
credit to June 2001. In July 1998, Moody's assigned an investment grade
rating of Baa3 to borrowings under this credit facility and the interest
rate decreased to LIBOR plus 90 basis points from LIBOR plus 130 basis
points. At December 31, 1998, the Company's remaining availability on its
$200 million line of credit was $65 million. The line of credit agreement
also provides for an annual fee of $0.4 million (20 basis points).
On February 20, 1998, the Company privately placed $75 million of
Series B convertible preferred shares with an institutional investor. The
shares were issued at $24 per share and carried an initial annual dividend
of $1.80 per share, are non-callable for nine years and not subject to
mandatory redemption. The preferred shares are convertible into common
shares on a one-to-one basis. The minimum $1.80 per share annual dividend
will increase to match the dividend rate on AMLI's common shares (currently
$1.80 per share annually) if the annual dividend rate on common shares is
increased to more than $1.80 per share. Funding occurred in three equal
installments in March, June and September 1998. Total proceeds, net of
1.12% in offering costs, were approximately $74.2 million.
<PAGE>
THE OPERATING PARTNERSHIP
The Company carries on its business through the Operating Partnership
and its affiliates, AMLI Management Company ("AMC"), AMLI Residential
Construction, Inc. ("Amrescon") and AMLI Institutional Advisors, Inc.
("AIA") (collectively the "Service Companies"). The Company is the sole
general partner of the Operating Partnership, the Delaware limited
partnership, through which it owns the Communities, interests in co-
investment Communities and interests in the Service Companies. At
December 31, 1998, the Company owned an 85% (17.3% represents preferred
units) partnership interest in the Operating Partnership, 7.4% was held by
Amli Realty Co. and its affiliates ("ARC") and 7.6% was held by certain
other third party investors. The Company's interest in the Operating
Partnership entitles it to share in cash distributions from, and in the
profits and losses of, the Operating Partnership in proportion to the
Company's percentage ownership (apart from tax allocations of profits and
losses to take into account pre-contribution property appreciation). In
connection with each offering of shares by the Company, the net proceeds
from the issuance of any such shares are contributed to the Operating
Partnership in exchange for a corresponding number of OP Units. The
Company holds one OP Unit in the Operating Partnership for each common
share and each preferred share that it has issued. The Operating
Partnership, from time to time, has issued OP Units for the acquisition of
apartment communities and land parcels for development. The OP Units are
convertible into common shares on a one-for-one basis.
As the general partner of the Operating Partnership, the Company has
the exclusive power under the agreement of limited partnership of the
Operating Partnership to manage and conduct the business of the Operating
Partnership. The Board of Trustees of the Company manages the affairs of
the Company by directing the affairs of the Operating Partnership. The
Operating Partnership will terminate in the year 2093 unless terminated
earlier in connection with, among other things, a merger or a sale of all
or substantially all of the assets of the Operating Partnership or upon a
vote of the partners.
THE SERVICE COMPANIES
The management, institutional advisory and construction management
aspects of the Company's business are conducted through AMC, AIA and
Amrescon, respectively, because, among other things, the third-party income
from their respective businesses might jeopardize the Company's REIT status
under Sections 856 through 860 of the Code if such operations were carried
on directly by the Operating Partnership. The Operating Partnership holds
100% of the nonvoting preferred stock of each of the Service Companies and
also holds certain subordinated notes of AMC, AIA and Amrescon. The
nonvoting preferred stock is entitled to dividends equal to 95% of all
distributions of the Service Companies. ARC holds 95% of the voting common
stock of each of the Service Companies which, in each case, is generally
entitled to dividends equal to 4.75% of all distributions. The remaining
5% of the voting common stock of each of the Service Companies, entitled to
.25% of all distributions, is owned by the Operating Partnership. The
charter of each of the Service Companies requires the quarterly
distribution as dividends of the "net operating cash flow" (as defined in
each such charter) of each such Service Company, if there are funds legally
available for dividends. Such provision of the charter of each of the
Service Companies may not be changed without the consent of the holders of
the preferred stock. Accordingly, the Operating Partnership is entitled to
receive substantially all of the available net cash flow from each of the
Service Companies through ownership of the preferred stock thereof and the
subordinated notes, and thereby enjoys substantially all of the economic
benefit of the businesses carried on by such companies.
<PAGE>
According to the charter of each of the Service Companies, a majority
of the members of the board of directors of the respective Service Company
must be individuals who are not officers, directors or employees of ARC,
and all contracts for services between a Service Company and ARC must be
approved by a majority of the unaffiliated directors of the relevant
Service Company. Ownership of 95% of the voting common stock will enable
ARC to control the election of the board of directors (including the
unaffiliated directors) of the Service Companies. The holders of a
majority of the nonvoting preferred stock of each Service Company are
entitled to an approval right with respect to certain fundamental corporate
actions, including the issuance of any additional shares of preferred stock
or other senior securities, or a sale, lease or exchange of all or
substantially all of the assets of, or the merger, consolidation or
dissolution of, the respective Service Company. In addition, the Company
has a right of first refusal (which may be assigned to a third party with
the consent of ARC, such consent not to be unreasonably withheld) to
acquire on its own behalf or on behalf of any controlled affiliate, the
common stock of each of the Service Companies, subject to the consent of
third-party clients and to applicable law. Such right of first refusal may
only be exercised to the extent that the ownership of such common stock or
assets would not disqualify the Company as a REIT.
THE BUSINESS OF AMC
AMC, a Delaware corporation, provides management and leasing services
to each of the Communities presently owned by the Company. In addition,
AMC provides such services to the co-investment Communities. AMC is
expected to manage any additional multifamily communities acquired or
developed by the Operating Partnership, as well as any additional co-
investment communities acquired through investor relationships of AIA,
subject to the consent of the co-investment partners. Management and
leasing services are provided to the Communities and the co-investment
Communities pursuant to the terms of a management contract which has an
initial term of three years and which AMC has agreed not to terminate so
long as the Operating Partnership is not in material breach of such
contract. Residential property management and leasing services provided by
AMC are performed at market rates. AMLI Corporate Homes ("ACH"), a
division of AMC, leases apartment homes from the Communities and the co-
investment Communities for short-term residents. Such ACH leases are at
market rates.
THE BUSINESS OF AIA
AIA, an Illinois corporation, renders investment advice to
institutional capital sources, primarily pension plans, endowments,
foundations and insurance companies and provides certain asset management
services to co-investment partnerships. AIA intends to continue to develop
its institutional investment advisory business and will continue to manage
and administer existing advisory relationships with institutional
investors. The Company actively pursues co-investments through
relationships administered by AIA. In this way, the Company seeks to
diversify the sources of capital for investments in properties. In
addition to generating advisory fee income for AIA, these relationships
have the potential to generate fee income for (1) AMC in cases where AMC is
engaged to manage the communities acquired by the co-investment ventures;
(2) Amrescon, in cases where Amrescon is engaged as general contractor by
co-investment development ventures; and (3) the Operating Partnership.
THE BUSINESS OF AMRESCON
Amrescon, a Delaware corporation, provides general contracting,
construction management and landscaping services to the Company and its
managed ventures. Amrescon is based in Atlanta, has regional offices in
Chicago, Dallas Indianapolis and Kansas City, and is engaged exclusively in
the design, development, construction and landscaping of upscale
multifamily properties on behalf of the Company. A division of Amrescon,
Amli Landscape Co., performs all landscape installation and maintenance
services for the Communities located in Atlanta and Dallas.
<PAGE>
LEASES
AMC uses a standard Company lease modified at each Community to the
extent necessary to comply with state and local law or custom. The term of
a lease varies with local market conditions, however, six-month and one-
year leases are most common. Generally, the leases provide that unless the
parties agree in writing to a renewal, the tenancy will convert at the end
of the lease term to a month-to-month tenancy, subject to the terms and
conditions of the lease, unless either party gives the other at least 30
days prior notice of termination. All leases are terminable by the lessor
for nonpayment of rent, violation of property rules and regulations, or
other specified defaults.
LEASING
Employees of AMC are responsible for leasing activities at the
Communities. Leasing consultants meet with prospective residents and show
models and vacant units. The leasing consultants maintain contact with
existing residents to determine the residents' level of satisfaction with
their community. All leasing consultants participate in a comprehensive
formal training program administered by AMC. AMC, as it deems necessary,
may employ the services of, and pay customary fees to, unaffiliated real
estate brokers, apartment locator services and existing tenants for
locating prospective tenants.
COMPETITION
All of the Communities are located in developed areas that include
other upscale apartment communities. The number of competitive upscale
apartment communities in a particular area could have a material effect on
AMC's ability to lease apartment units and on the rent charged at the
Communities or at any newly developed or acquired communities. The Company
may be competing with others that have greater resources than the Company
and whose officers and directors have more experience than the Company's
officers and Trustees. In addition, other forms of multifamily residential
communities, and single-family housing, provide housing alternatives to
potential residents of the Communities.
INSURANCE
The Company believes that each of the Communities is covered by
adequate fire, flood and property insurance provided by reputable companies
and with commercially reasonable deductibles and limits. The Company
maintains comprehensive liability, all-risk property insurance coverage
with respect to the Communities and with policy specifications, limits
deductibles customarily carried for similar communities. The Company has
obtained title insurance insuring fee title to the Communities in an
aggregate amount which the Company believes to be adequate.
AMERICANS WITH DISABILITIES ACT
The Communities and any newly acquired apartment communities must
comply with Title III of the Americans with Disabilities Act (the "ADA") to
the extent that such properties are public accommodations and/or commercial
facilities as defined by the ADA. Compliance with the ADA requirements
could require removal of structural barriers to handicapped access in
certain public areas of the Company's Communities where such removal is
readily achievable. The ADA does not, however, consider residential
properties, such as apartment communities, to be public accommodations or
commercial facilities, except to the extent portions of such facilities,
such as the leasing office, are open to the public. The Company believes
that its properties comply with all present requirements under the ADA and
applicable state laws. Noncompliance could result in imposition of fines
or an award of damages to private litigants. If required to make material
additional changes, the Company's results of operations could be adversely
affected.
<PAGE>
ENVIRONMENTAL MATTERS
Many jurisdictions have adopted laws and regulations relating to
environmental controls and the development of real estate. Such laws and
regulations could affect the Communities and any additional communities
acquired or developed by the Company in the future and/or operate to reduce
the number and attractiveness of investment opportunities available to the
Company. The effect upon the Company of the application of such laws and
regulations cannot be predicted. Such laws and regulations have not had a
material effect on the Company's financial condition and results of
operations to date. The Company is not aware of any environmental
condition on any of the Communities, or the communities planned to be
developed by the Company, which is likely to have a material adverse effect
on the Company's financial condition and results of operations.
EMPLOYEES
The Company, the Operating Partnership and the Service Companies
employ a total of approximately 800 persons. AMC employs substantially all
of the professional employees that are currently engaged in the residential
property management and leasing business on behalf of the Company.
PROPERTY OPERATIONS
The Company seeks to increase cash flow at the Communities through
rent increases while maintaining high occupancy rates and aggressive
management of its operating expenses. As of December 31, 1998, the
weighted average occupancy rate of the stabilized Communities was 92%, and
the average monthly rental rate per apartment home was $768, or $.88 per
square foot. The Company owns multifamily communities with service,
lifestyle and physical amenities that residents value and that support
higher rental rates. Typical services that are provided at the
Communities, which are customary for similar upscale multifamily
properties, include pet care or plant watering for out-of-town residents;
on-site overnight delivery drop-off boxes; on-site pick-up of dry cleaning
or other items; occasional social events for residents designed to provide
a sense of community; frequent maintenance programs; and a policy of
guaranteeing attention to any maintenance or repair request from a tenant
within 48 hours.
By establishing critical mass in each of its markets, the Company
expects to achieve economies of scale in its operations, resulting in
reduced operating and administrative expenses without reductions in
service. In addition, the relatively low average age of the Communities
contributes to reduced operating and maintenance expenses. At December 31,
1998, the average age of the stabilized Communities was approximately eight
years. The Company also believes that attention to landscaping and
physical appearance contributes to reducing resident turnover and enhances
the rental rates and occupancy levels of the Communities.
Additionally, AMLI has a dedicated team whose function is to evaluate
new or enhanced products, features or services that might be incorporated
in either the apartment homes or the Communities to produce complementary
income from property operations and maximize customer/resident satisfaction
within the Communities. Some of the products, features and services either
in existence or being considered include the construction of carports and
garages, private phone and cable systems, high-speed internet connection
services, custom rental insurance, energy efficient lighting programs,
water submetering, bulk purchases of utilities and card key systems for
laundry facilities.
<PAGE>
DEVELOPMENT ACTIVITIES
The Company has identified certain sub-markets within its seven
identified geographic markets where strong multifamily property demand
justifies new construction. The Company currently has developments
underway in Chicago, Atlanta, Dallas, Austin, Indianapolis and Kansas City.
In addition, the Company owns 254 acres of land, on which it expects to
develop approximately 3,522 apartment homes, including 2,422 units on 150
acres on which it expects to break ground and commence construction during
1999.
The following table summarizes the Company's development activities
for the period from the date of its Initial Offering in February 1994
through December 31, 1998:
AMLI DEVELOPMENT ACTIVITIES
No. of
Communities
Developed No. of Estimated
or Under Apartment Development
Year Development (1) Homes Budget (2)
- ---- --------------- --------- ------------
1994 . . . . . . . . . . 2 734 $ 37,600,000
1995 . . . . . . . . . . 5 1,280 75,900,000
1996 . . . . . . . . . . 6 1,672 113,600,000
1997 . . . . . . . . . . 6 2,336 166,300,000
1998 . . . . . . . . . . 8 2,086 167,700,000
--- ----- ------------
Total. . . . . . . . 27 8,108 $561,100,000
=== ===== ============
- --------------------
(1) Represents the number of communities or additional phases for which
development was commenced during the applicable year. Of the twenty-seven
communities developed or under development, fourteen are owned by co-
investment partnerships, and two others are anticipated to be owned by co-
investment partnerships.
(2) The Company's share of the total estimated development budget is
expected to be approximately $231 million, of which $135 million has been
expended through December 31, 1998. The Company anticipates that the
remaining commitment of $96 million will be reduced in 1999 upon the
formation of additional co-investment partnerships.
ACQUISITION ACTIVITIES
The Company actively pursues the acquisition of new communities. The
Company seeks to acquire, directly or through co-investments, multifamily
communities that are available at attractive prices, capable of enhanced
performance through application of the Company's management expertise and
that are in the Company's target markets. The Company follows a strategy
of acquiring (directly or through co-investments) institutional quality
apartment communities, which typically have high-quality construction,
amenities, location and market position, and are therefore attractive
investments for institutional investors, such as insurance companies,
endowments, foundations and pension funds.
<PAGE>
The following table summarizes the Company's acquisition activities
for the period from the date of the Initial Offering through December 31,
1998:
AMLI ACQUISITION ACTIVITIES
No. of No of Total
Communities Apartment Acquisition
Year Acquired (1) Homes Costs (2)
- ---- ------------ ---------- ------------
1994 . . . . . . . . . . . . 8 2,184 $ 99,428,000
1995 . . . . . . . . . . . . 3 794 51,763,000
1996 . . . . . . . . . . . . 2 1,080 82,152,000
1997 . . . . . . . . . . . . 10 3,230 222,050,000
1998 (3) . . . . . . . . . . 5 1,362 93,860,000
--- ----- ------------
Total. . . . . . . . . . 28 8,650 $549,253,000
=== ===== ============
- --------------------
(1) Of these acquisitions, sixteen Communities were acquired by the
Company directly and twelve through co-investment joint ventures. The
Company's ownership interest in these co-investment joint ventures ranges
from 10% to 40%.
(2) The Company's share of the total acquisition costs was $202.4
million.
(3) Includes AMLI on Timberglen, a 260-unit property contributed by the
Company to a 40% owned partnership in December 1998.
INSTITUTIONAL CO-INVESTMENTS
AMLI differentiates itself from other multifamily REITs through its
co-investment activities and its established relationships with a number of
institutional partners. By co-investing, AMLI is able to (i) diversify
access to equity capital; (ii) "leverage" its invested capital to promote
the AMLI<registered trademark> brand identify and increase market share;
(iii) obtain the participation of sophisticated partners in its real estate
decisions; (iv) increase FFO returns on reduced capital exposure. In
addition to the incremental fee income, AMLI receives its pro rata share of
the real estate income generated by the on-going operation of each
community owned through a co-investment joint venture. All of the co-
investment Communities are managed by the Company and operated under the
AMLI [registered trademark] brand name.
While each co-investment is structured individually, in a typical
venture the Company (i) acts as the general partner or managing member of
the venture; (ii) handles the administration of the venture; (iii) manages
the day-to-day operations of the community held by the venture;
(iv) oversees construction and development in the case of a venture with a
property under development; and (v) recommends the sale or refinancing of
the property. All of AMLI's equity investments are made on a pari passu
basis with its co-investment partners and any disputes over major decisions
are generally resolved through the exercise of a buy-sell provision. As of
December 31, 1998, the Company had established co-investment relationships
with ten institutional investors.
<PAGE>
Since the Initial Offering, the Company has entered into 26 co-
investment ventures for the acquisition or development of multifamily
apartment communities. The table below summarizes the co-investment
activities of the Company since the Initial Offering:
AMLI CO-INVESTMENT ACTIVITIES
No. of No. of Total
No. of Apartment No. of Apartment No. of
Communities Homes Communities Homes Apartment
Year Acquired Acquired Developed(1) Developed(2) Homes
- ---- ----------- --------- ------------ ------------ ---------
1994 . . . . 3 1,026 1 502 1,528
1995 . . . . 3 794 1 446 1,240
1996 . . . . 2 1,080 3 878 1,958
1997 . . . . 3 1,506 1 800 2,306
1998 . . . . 1 260 8 2,576 2,836
--- ------ --- ------ ------
Total. . . 12 4,666 14 5,202 9,868
=== ====== === ====== ======
- --------------------
(1) Represents the number of Communities for which development was
commenced during the applicable year. Excludes an additional phase to an
existing community on which development was started in 1998.
(2) Represents the number of apartment homes planned for the Community
for which development was commenced in the applicable year. Includes 108
apartment homes in an additional phase to an existing community on which
development was started in 1998.
The table below sets forth the total expected capital outlays for all
26 of these development and acquisition ventures, the Company's expected
share of such capital requirements and the one-time and recurring annual
fee income that the Company and the Service Companies have received from
these 26 joint venture relationships through December 31, 1998:
<PAGE>
<TABLE>
CO-INVESTMENT ACTIVITIES SINCE THE INITIAL OFFERING
<CAPTION>
1994 1995 1996 1997 1998 Total (4)
----------- ----------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Total Expected
Project Cost (1). . . . $71,191,000 $79,682,000 $146,819,000 $154,252,000 $203,179,000 $655,123,000
AMLI Expected
Equity Investment . . . 7,641,000 7,548,000 25,165,000 15,046,000 47,328,000 102,728,000
Actual Fee Income
to AMLI and the
Service Companies
Initial or One-Time
Fees (2). . . . . . . 287,000 607,000 1,921,000 3,290,000 5,414,000 11,519,000
Annual Fee Income
(3) . . . . . . . . . 287,000 949,000 1,822,000 2,720,000 3,690,000 9,468,000
<FN>
- --------------------
(1) Includes $278.3 million which has been or is expected to be debt financed. Total expected costs are
included in the year in which a development project begins or an acquisition closes.
(2) The one-time fee income is shown net of intercompany eliminations to the extent of the Company's percentage
interest in its co-investment joint ventures. One time fees include general contractor fees, development and
redevelopment fees, property acquisition fees, financing fees and disposition fees. The amounts shown represent
the portion of the fees earned in the applicable year. The initial and one-time fee income for 1998 represents
amounts earned by the Company for the year ended December 31, 1998. Subsequent to December 31, 1998, additional
one-time fees of approximately $3,471,000 are anticipated to be earned by the Company and the Service Companies in
connection with the completion of nine development communities under construction on behalf of existing co-
investment joint ventures.
(3) Annual fee income before intercompany eliminations includes property management fees, asset management fees
and partnership administration fees. The Company owns an average of 27% interest in the 26 co-investment
partnerships at December 31, 1998. The amounts shown represent the portion of the fees earned in the applicable
year. The annual fee income for 1998 represents amounts earned by the Company for the year ended December 31,
1998. Annual fee income will increase as additional co-investment Communities under development are completed.
</TABLE>
<PAGE>
The Company has received indications of interest and is pursuing other
commitments for the acquisition or development of additional co-investment
communities. In addition, the Company is continually working to expand the
base of its institutional joint venture partners.
HISTORY OF THE AMLI RESIDENTIAL PROPERTY BUSINESS
The Company was formed in February 1994 to continue and expand the
multifamily property business previously conducted by ARC. ARC was founded
in 1980 by Gregory T. Mutz and John E. Allen, the Chairman and Vice-
Chairman of the Company, respectively. Ronald L. Jensen, Chairman of UICI,
served on ARC's Board of Directors from 1980 to 1982. From the date of its
inception through the date of the Initial Offering, ARC focused on owning,
managing, leasing, acquiring and developing upscale residential apartment
communities in the Southwest, Southeast and Midwest areas of the United
States. During the period from 1982 to 1989, ARC was actively engaged in
both the development and acquisition of multifamily communities. From 1989
through the date of the Initial Offering, ARC exclusively pursued
acquisition opportunities due to ARC's belief that this strategy provided a
more favorable return relative to the risk taken than did the development
of new properties during this period. From the date of the Initial
Offering to the present, AMLI has pursued a strategy of selective
acquisitions and developments in its target markets.
<PAGE>
<TABLE>
Prior to 1994 all communities currently wholly-owned were originally acquired as co-investments between ARC
and the Original Investors in various Property Partnerships. The table below sets forth ARC's and the Company's
history of acquiring and developing apartment communities:
<CAPTION>
AT DECEMBER 31,
------------------------------------------------------------------------------------
1982-
1998 1997 1996 1995 1994 1993 1992 1991 1990
------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WHOLLY-OWNED:
Units at beginning
of year . . . . . . . . . 11,650 9,824 9,600 9,789 8,207 6,793 5,673 5,103 --
Units acquired . . . . . . 1,102 1,724 -- -- 1,582 1,414 1,120 570 3,460
Units sold/contributed
to co-investment. . . . . (472) (350) -- (421) -- -- -- -- --
Units developed. . . . . . 512 452 224 232 -- -- -- -- 1,643
Total wholly
owned units
at end of year . . . . . 12,792 11,650 9,824 9,600 9,789 8,207 6,793 5,673 5,103
CO-INVESTMENTS:
Units at beginning
of year. . . . . . . . . 5,851 3,677 2,245 1,451 425 425 425 425 --
Units acquired/con-
tributed to
co-investment. . . . . . 260 1,506 1,080 794 1,026 -- -- -- 150
Units sold . . . . . . . . -- -- (150) -- -- -- -- -- --
Units developed. . . . . . 656 668 502 -- -- -- -- -- 275
Total co-investment
units at end
of year. . . . . . . . . 6,767 5,851 3,677 2,245 1,451 425 425 425 425
Total stabilized
units. . . . . . 19,559 17,501 13,501 11,845 11,240 8,632 7,218 6,098 5,528
</TABLE>
<PAGE>
ITEM 2. COMMUNITIES
STABILIZED COMMUNITIES
The Communities include 52 stabilized (generally 95% occupied)
multifamily apartment communities containing 19,559 apartment homes
operated under the AMLI [registered trademark] brand name. Thirty-three of
the stabilized Communities, containing an aggregate of 12,792 apartment
homes, are directly owned by the Company (the "Wholly-Owned Communities")
and nineteen Communities, containing an aggregate of 6,767 apartment homes,
are owned through co-investment joint ventures (the "Co-Investment
Communities"). The stabilized Communities are located in the markets
described in the table below:
Wholly-Owned Co-Investment
Total Communities Communities
------------- ------------ ------------
Location No. Units No. Units No. Units
- -------- ---- ----- ---- ----- ---- -----
Dallas/Ft. Worth,
Texas. . . . . . . . . . 13 5,502 10 4,320 3 1,182
Atlanta, Georgia . . . . . 12 4,934 7 3,372 5 1,562
Chicago, Illinois. . . . . 8 2,762 2 449 6 2,313
Austin, Texas. . . . . . . 5 1,877 4 1,289 1 588
Indianapolis, Indiana. . . 3 1,536 3 1,536 -- --
Eastern Kansas . . . . . . 8 2,194 7 1,826 1 368
Houston, Texas . . . . . . 3 754 -- -- 3 754
--- ------ --- ------ --- -----
Total. . . . . . . . . 52 19,559 33 12,792 19 6,767
=== ====== === ====== === =====
As of December 31, 1998, the average age of the stabilized Communities
was approximately eight years, the average occupancy rate of the stabilized
Communities was 92%, and the average monthly rental rate per apartment home
was $768.
DEVELOPMENT COMMUNITIES
The development communities consist of fifteen multifamily apartment
communities or new phases of existing communities which upon completion
will contain 4,862 apartment homes. The development communities are under
development in the markets described in the table below:
Company Co-Investment
Development Development
Total Communities Communities
------------- ------------ -------------
Location No. Units No. Units No. Units
- -------- ---- ----- ---- ----- ----- -----
Atlanta, Georgia . . . . . 2 1,016 1 216 1 800
Dallas/Ft. Worth,
Texas . . . . . . . . . . 4 920 2 440 2 480
Chicago, Illinois. . . . . 2 864 1 400 1 464
Austin, Texas. . . . . . . 2 1,006 1 430 1 576
Indianapolis, Indiana. . . 2 492 -- -- 2 492
Eastern Kansas . . . . . . 3 564 -- -- 3 564
---- ----- ---- ----- ---- -----
Total. . . . . . . . . 15 4,862 5 1,486 10 3,376
==== ===== ==== ===== ==== =====
<PAGE>
The Wholly-Owned Communities and the Co-Investment Communities are
primarily oriented to residents demanding high levels of services and
contain numerous tenant amenities, such as fitness centers, swimming pools,
tennis courts, basketball and volleyball courts, miles of jogging trails
and nature walks. Most of the apartment units have a patio, porch or
sunroom, and many offer one or more additional features such as vaulted
ceilings, microwave ovens, Palladian windows, fireplaces and washers and
dryers or washer/dryer connections. The Wholly-Owned Communities and Co-
Investment Communities that were developed by AMLI have won numerous awards
for design, landscaping and architecture.
The table set forth below summarizes certain information related to
the Wholly-Owned Communities and the Co-Investment Communities.
<PAGE>
<TABLE>
<CAPTION>
1998 1998
AVERAGE WEIGHTED
AVERAGE COLLECTED AVERAGE
YEAR NUMBER UNIT SIZE RENT PHYSICAL
WHOLLY-OWNED COMMUNITIES LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY
- ------------------------ -------- --------- -------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
DALLAS/FT. WORTH, TX
AMLI:
at AutumnChase Carrollton 1987/96 450 832 $ 695 94%
at Bent Tree Dallas 1996 300 943 832 93%
at Bishop's Gate West Plano 1997 266 1,098 1,040 94%
at Chase Oaks Plano 1986 250 775 679 94%
at Gleneagles Dallas 1987/97 590 882 719 95%
on the Green Ft. Worth 1990/93 424 846 682 93%
at Nantucket Dallas 1986 312 712 556 96%
of North Dallas Dallas 1985/86 1,032 878 652 93%
on Rosemeade Dallas 1987 236 870 665 95%
at Valley Ranch Irving 1985 460 848 703 95%
------ ------ ------ -----
4,320 867 706 94%
------ ------ ------ -----
AUSTIN, TX
AMLI:
at the Arboretum Austin 1983 231 771 688 95%
in Great Hills Austin 1985 344 750 690 96%
at Lantana Ridge Austin 1997 354 881 809 91%
at Martha's Vineyard Austin 1986 360 723 611 96%
------ ------ ------ -----
1,289 782 700 94%
------ ------ ------- -----
ATLANTA, GA
AMLI:
at Clairmont Atlanta 1988 288 796 779 95%
at Park Creek (1) Gainesville 1998 200 976 664 93%
at Peachtree City Fayette County 1998 312 980 846 94%
at Sope Creek Marietta 1982/83/95 695 910 691 95%
at Spring Creek Dunwoody 1985/86/87/89 1,180 916 723 93%
at Vinings Atlanta 1985 360 1,041 779 94%
at West Paces Atlanta 1992 337 934 882 96%
------ ------ ------ -----
3,372 929 751 94%
------ ------ ------ -----
<PAGE>
1998
1998 WEIGHTED
AVERAGE AVERAGE AVERAGE
YEAR NUMBER UNIT SIZE RENT PHYSICAL
WHOLLY-OWNED COMMUNITIES LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY
- ------------------------ -------- --------- -------- ------------- -------- ----------
EASTERN KANSAS
AMLI:
at Alvamar Lawrence 1989 152 828 664 92%
at Centennial Park Overland Park 1997 170 1,205 974 90%
at Crown Colony Topeka 1986/97 220 783 597 92%
at Lexington Farms (1) Overland Park 1998 404 972 782 79%
at Regents Center Overland Park 1991/95/97 424 940 729 92%
at Sherwood Topeka 1993 300 868 626 92%
at Town Center Overland Park 1997 156 1,134 973 93%
------ ------ ------ -----
1,826 948 746 89%
------ ------ ------ -----
INDIANAPOLIS, IN
AMLI:
at Conner Farms Indianapolis 1993 300 1,082 782 91%
at Riverbend Indianapolis 1983/85 996 824 587 93%
at Eagle Creek (1) Indianapolis 1998 240 973 753 86%
------ ------ ------ -----
1,536 898 651 91%
------ ------ ------ -----
CHICAGO, IL
AMLI:
at Park Sheridan Chicago 1986 253 855 945 97%
at Poplar Creek Schaumburg 1985 196 911 954 95%
------ ------ ------ -----
449 879 949 96%
------ ------ ------ -----
TOTAL WHOLLY-OWNED
COMMUNITIES AT
DECEMBER 31, 1998 12,792 890 $ 725 93.1%
====== ====== ====== =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1998
1998 WEIGHTED
COMPANY'S AVERAGE AVERAGE AVERAGE
CO-INVESTMENT PERCENTAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL
COMMUNITIES OWNERSHIP LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY
- ---------------- ---------- -------- --------- -------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ATLANTA, GA
AMLI:
at Barrett Lakes 35% Atlanta 1997 446 1,037 $ 842 93%
at Pleasant Hill 40% Gwinnett County 1996 502 1,000 797 93%
at River Park 40% Atlanta 1997 222 1,021 855 95%
at Towne Creek 1% Gainesville 1989 150 811 617 90%
at Willeo Creek 30% Rosewell 1989 242 1,229 821 93%
------ ------ ---- -----
1,562 1,031 805 93%
------ ------ ---- -----
CHICAGO, IL
AMLI:
at Chevy Chase 33% Buffalo Grove 1988 592 812 956 96%
at Danada Farms 10% Wheaton 1989/91 600 869 920 95%
at Fox Valley (1) 25% Aurora 1998 272 986 934 88%
at Prairie Court 1% Oak Park 1987 125 845 1,080 96%
at Willowbrook 40% Willowbrook 1987 488 857 934 95%
at Windbrooke 15% Buffalo Grove 1987 236 903 975 98%
------ ------ ---- -----
2,313 868 948 95%
------ ------ ---- -----
EASTERN KANSAS
AMLI:
at Regents Crest 25% Overland Park 1997 368 942 738 94%
------ ------ ---- -----
AUSTIN, TX
AMLI:
at Park Place 25% Austin 1985 588 677 588 95%
------ ------ ---- -----
<PAGE>
1998
1998 WEIGHTED
COMPANY'S AVERAGE AVERAGE AVERAGE
CO-INVESTMENT PERCENTAGE YEAR NUMBER UNIT SIZE RENT PHYSICAL
COMMUNITIES OWNERSHIP LOCATION COMPLETED OF UNITS (SQUARE FEET) PER UNIT OCCUPANCY
- ---------------- ---------- -------- --------- -------- ------------- -------- ----------
DALLAS, TX
AMLI:
at Fossil Creek (1) 25% Ft. Worth 1998 384 1,001 788 89%
at Timberglen 40% Dallas 1985 260 774 636 95%
at Verandah 35% Arlington 1986/91 538 733 670 95%
------ ------ ---- -----
1,182 829 701 93%
------ ------ ---- -----
HOUSTON, TX
AMLI:
at Champions Centre 15% Houston 1994 192 857 747 95%
at Champions Park 15% Houston 1991 246 902 728 96%
at Greenwood Forest 15% Houston 1995 316 984 780 95%
------ ------ ---- -----
754 925 755 95%
------ ------ ---- -----
TOTAL CO-INVESTMENT COMMUNITIES
AT DECEMBER 31, 1998 6,767 892 $808 94.1%
====== ====== ==== =====
TOTAL 19,559 891 $754 93.5%
====== ====== ==== =====
<FN>
(1) Fourth quarter average occupancy; in lease-up prior to the fourth quarter.
</TABLE>
<PAGE>
<TABLE>
OCCUPANCY
The following is a listing of approximate physical occupancy levels by quarter for the Company's Wholly-Owned
Communities and Co-Investment Communities:
<CAPTION>
1998 1997
LOCATION/COMMUNITY COMPANY'S NUMBER -------------------------- --------------------------
- ------------------ PERCENTAGE OF AT AT AT AT AT AT AT AT
WHOLLY-OWNED COMMUNITIES OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
- ------------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DALLAS/FT. WORTH, TEXAS
AMLI:
at AutumnChase. . . . . . . . 450 92% 93% 90% 97% 96% 97% 95% 97%
at Bent Tree. . . . . . . . . 300 97% 91% 93% 93% 93% N/A N/A N/A
at Bishop's Gate. . . . . . . 266 91% 92% 97% 100% 90% N/A N/A N/A
at Chase Oaks . . . . . . . . 250 92% 93% 93% 98% 94% 96% 97% 96%
at Gleneagles . . . . . . . . 590 92% 93% 98% 97% 97% 99% 98% 96%
on the Green. . . . . . . . . 424 88% 93% 92% 96% 93% 95% 93% 91%
at Nantucket. . . . . . . . . 312 91% 93% 97% 98% 98% 98% 98% 99%
of North Dallas . . . . . . . 1,032 91% 93% 93% 96% 95% 96% 97% 94%
on Rosemeade. . . . . . . . . 236 94% 94% 95% 96% 92% 95% 97% 97%
at Valley Ranch . . . . . . . 460 90% 92% 97% 98% 99% 97% 97% 95%
------ ----- ----- ----- ----- ----- ----- ----- -----
4,320 92% 93% 94% 97% 96% 97% 96% 95%
------ ----- ----- ----- ----- ----- ----- ----- -----
AUSTIN, TEXAS
AMLI:
at the Arboretum. . . . . . . 231 94% 97% 96% 97% 96% 100% 97% 97%
in Great Hills. . . . . . . . 344 89% 99% 97% 98% 97% 98% 97% 95%
at Lantana Ridge. . . . . . . 354 90% 92% 92% 94% 81% 83% N/A N/A
at Martha's Vineyard. . . . . 360 93% 96% 97% 96% 97% 98% 99% 97%
------ ----- ----- ----- ----- ----- ----- ----- -----
1,289 91% 95% 96% 96% 92% 94% 98% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
ATLANTA, GEORGIA
AMLI:
at Clairmont. . . . . . . . . 288 96% 95% 96% 96% N/A N/A N/A N/A
at Peachtree City . . . . . . 312 90% 96% 99% N/A N/A N/A N/A N/A
lease lease
at Park Creek . . . . . . . . 200 97% up up N/A N/A N/A N/A N/A
at Sope Creek . . . . . . . . 695 94% 97% 95% 94% 93% 94% 93% 96%
at Spring Creek . . . . . . . 1,180 92% 94% 93% 94% 94% 95% 95% 97%
at Vinings. . . . . . . . . . 360 92% 94% 96% 95% 96% 96% 95% 93%
at West Paces . . . . . . . . 337 95% 97% 99% 98% 94% 92% 93% 98%
------ ----- ----- ----- ----- ----- ----- ----- -----
3,372 93% 95% 95% 95% 94% 94% 94% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
<PAGE>
1998 1997
COMPANY'S NUMBER -------------------------- --------------------------
PERCENTAGE OF AT AT AT AT AT AT AT AT
LOCATION/COMMUNITY OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
- ------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------
EASTERN KANSAS
AMLI:
at Alvamar. . . . . . . . . . 152 90% 94% 94% 95% 93% 90% 93% 98%
at Centennial Park. . . . . . 170 89% N/A N/A N/A N/A N/A N/A N/A
at Crown Colony . . . . . . . 220 88% 91% 89% 96% 95% 98% 93% 97%
at Lexington Farms. . . . . . 404 85% N/A N/A N/A N/A N/A N/A N/A
at Regents Center . . . . . . 424 95% 93% 95% 90% 87% 93% 99% 91%
at Sherwood . . . . . . . . . 300 93% 89% 93% 92% 97% 98% 95% 98%
at Town Center. . . . . . . . 156 91% 96% 94% 93% 92% N/A N/A N/A
------ ----- ----- ----- ----- ----- ----- ----- -----
1,826 90% 92% 93% 93% 92% 95% 96% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
INDIANAPOLIS, INDIANA
AMLI:
at Conner Farms . . . . . . . 300 89% 93% 86% 90% 93% N/A N/A N/A
at Eagle Creek. . . . . . . . 240 87% N/A N/A N/A N/A N/A N/A N/A
at Riverbend. . . . . . . . . 996 88% 92% 93% 96% 88% 89% 94% 92%
------ ----- ----- ----- ----- ----- ----- ----- -----
1,536 88% 92% 92% 95% 89% 89% 94% 92%
------ ----- ----- ----- ----- ----- ----- ----- -----
CHICAGO, ILLINOIS
AMLI:
at Park Sheridan. . . . . . . 253 93% 98% 97% 100% 98% 99% 92% 93%
at Poplar Creek . . . . . . . 196 93% 94% 95% 98% 91% N/A N/A N/A
------ ----- ----- ----- ----- ----- ----- ----- -----
449 93% 96% 96% 99% 95% 99% 92% 93%
------ ----- ----- ----- ----- ----- ----- ----- -----
12,792 91.4% 93.6% 94.2% 95.1% 93.6% 95.0% 95.4% 95.1%
====== ===== ===== ===== ===== ===== ===== ===== =====
CO-INVESTMENT COMMUNITIES:
- --------------------------
ATLANTA, GA
AMLI: lease lease lease
at Barrett Lakes. . . . . . . 35% 446 88% 93% 93% 96% 95% up up up
at Pleasant Hill. . . . . . . 40% 502 91% 94% 95% 93% 89% 91% 96% 97%
lease lease
at River Park . . . . . . . . 40% 222 91% 96% 95% 98% 95% 97% up up
at Towne Creek. . . . . . . . 1% 150 83% 89% 92% 95% 88% 97% 90% 93%
at Willeo Creek . . . . . . . 30% 242 86% 96% 94% 98% 91% 91% 95% 98%
------ ----- ----- ----- ----- ----- ----- ----- -----
1,562 89% 94% 94% 96% 92% 93% 95% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
<PAGE>
1998 1997
COMPANY'S NUMBER -------------------------- --------------------------
PERCENTAGE OF AT AT AT AT AT AT AT AT
LOCATION/COMMUNITY OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
- ------------------ ---------- ------- ----- ----- ----- ----- ----- ----- ------ ------
CHICAGO, IL
AMLI:
at Chevy Chase. . . . . . . . 33% 592 95% 97% 98% 97% 94% 96% 99% 97%
at Danada Farms . . . . . . . 10% 600 94% 94% 96% 98% 93% 94% 93% 92%
lease lease lease
at Fox Valley . . . . . . . . 25% 272 86% 89% 87% up up up N/A N/A
at Prairie Court. . . . . . . 1% 125 94% 96% 93% 96% 98% 98% 100% 97%
at Willowbrook. . . . . . . . 40% 488 96% 95% 98% 98% 94% 98% 94% 96%
at Windbrooke . . . . . . . . 15% 236 98% 99% 95% 100% 98% 99% 100% 96%
------- ----- ----- ----- ----- ----- ----- ----- -----
2,313 94% 95% 95% 98% 94% 96% 96% 95%
------- ----- ----- ----- ----- ----- ----- ----- -----
EASTERN KANSAS
AMLI:
at Regents Crest. . . . . . . 25% 368 96% 96% 94% 92% 93% N/A N/A N/A
------- ----- ----- ----- ----- ----- ----- ----- -----
DALLAS, TX
AMLI: lease lease lease
at Fossil Creek . . . . . . . 25% 384 90% up up up N/A N/A N/A N/A
on Timberglen . . . . . . . . 40% 260 92% N/A N/A N/A N/A N/A N/A N/A
at Verandah . . . . . . . . . 35% 538 94% 93% 96% 97% 94% 95% 96% 94%
------- ----- ----- ----- ----- ----- ----- ----- -----
1,182 92% 93% 96% 97% 94% 95% 96% 94%
------- ----- ----- ----- ----- ----- ----- ----- -----
AUSTIN, TX
AMLI:
at Park Place . . . . . . . . 25% 588 92% 95% 95% 95% 98% 97% 94% 96%
------- ----- ----- ----- ----- ----- ----- ----- -----
HOUSTON, TX
AMLI:
at Champions Centre . . . . . 15% 192 93% 95% 97% 98% 97% 94% 98% 95%
at Champions Park . . . . . . 15% 246 91% 98% 95% 95% 98% 99% 99% 97%
at Greenwood Forest . . . . . 15% 316 92% 98% 96% 97% 95% 96% 96% 96%
------- ----- ----- ----- ----- ----- ----- ----- -----
754 92% 97% 96% 97% 96% 96% 98% 96%
------- ----- ----- ----- ----- ----- ----- ----- -----
Total Co-Investment
Communities. . . . . . . . . . 6,767 92.1% 94.8% 94.8% 96.4% 94.2% 95.5% 95.8% 95.5%
------- ----- ----- ----- ----- ----- ----- ----- -----
Total Stabilized Communities . . 19,559 91.6% 94.1% 94.4% 95.9% 93.8% 95.2% 95.7% 95.3%
======= ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
None of the Company, the Operating Partnership, the Service Companies
or the co-investment partnerships is presently subject to any material
litigation nor, to the Company's knowledge, has any material litigation
been threatened. The Company is party to routine litigation and
administrative proceedings arising in the ordinary course of business, most
of which are expected to be covered by liability insurance and none of
which individually or in the aggregate are expected to have a material
effect on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the Company's
shareholders during the fourth quarter of the year ended December 31, 1998.
<PAGE>
<TABLE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
The Company's common shares began trading on the NYSE on February 9, 1994, under the symbol "AML." The
following table sets forth the quarterly high and low sales prices per share as reported on the New York Stock
Exchange Composite Tape by CompuServe and the dividends paid by the Company with respect to the periods noted.
<CAPTION>
1998 1997
----------------------------- -----------------------------
DIVIDENDS DIVIDENDS
PER SHARE PER SHARE
HIGH LOW (1) HIGH LOW (1)
------ ----- --------- ------ ----- ---------
<S> <C> <C> <C> <C> <C> <C>
First Quarter . . . . . . . . . . . . $24.38 $22.00 $0.44 $24.75 $22.50 $.43
Second Quarter . . . . . . . . . . . . 23.94 19.31 0.44 23.63 21.50 .43
Third Quarter. . . . . . . . . . . . . 23.13 19.56 0.44 23.75 21.75 .44
Fourth Quarter . . . . . . . . . . . . 23.25 18.44 0.45 24.19 21.75 .44
<FN>
(1) The Company paid dividends with respect to these quarters in the quarter immediately following the
quarter for which they are paid.
</TABLE>
<PAGE>
Dividends are declared and paid in the second month following the end
of the calendar quarter in which the related cash flow from operations is
generated. On March 1, 1999, the last reported sale price of the common
shares on the NYSE was $19.9375 per share. On the same date, the Company
had 16,675,832 common shares outstanding held by 338 shareholders of
record.
The Company's current dividend payment level equals an annual rate of
$1.80 per common share. The Company anticipates that it will continue to
make regular quarterly dividend payments. Approximately 6.9% of dividends
paid during 1998 represented a return of capital, and the Company estimates
that a similar percentage of the total dividends to be paid in 1999 will be
treated as a return of capital.
Future distributions by the Company will be at the discretion of the
Board of Trustees and will depend on the actual cash available for
distribution and funds from operations of the Company, its financial
condition, capital requirements, the annual distribution requirements under
the REIT provisions of the Internal Revenue Code and such other factors as
the Board of Trustees deems relevant. The annual dividend payments for
calendar year 1998 necessary for the Company to maintain its status as a
REIT were approximately $1.05 per share.
<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
<CAPTION>
The following table sets forth selected financial data relating to the historical financial condition and
results of operations of the Company. Such selected financial data is qualified in its entirety by, and should be
read in conjunction with, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the financial statements and notes thereto included in this report.
HISTORICAL
(in thousands, except per share data)
-----------------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues . . . . . . . . . . $ 117,353 90,073 78,271 73,877 65,215
Income before minority
interest and extra-
ordinary item. . . . . . . 34,697 28,926 19,949 17,006 13,398
Net income . . . . . . . . . 29,700 24,352 15,250 13,719 8,710
Net income per common
share (basic and
diluted) . . . . . . . . . 1.49 1.43 1.11 1.18 .75(A)
BALANCE SHEET DATA:
Residential real estate,
before accumulated
depreciation. . . . . . . . $ 739,764 653,947 495,519 442,865 451,762
Total assets . . . . . . . . 785,592 679,978 504,357 433,227 442,619
Total debt . . . . . . . . . 367,370 333,250 202,013 215,255 217,687
Minority interest. . . . . . 54,574 51,463 44,871 39,077 42,743
Shareholders' equity . . . . 342,854 270,439 242,022 166,163 170,161
OTHER DATA:
Funds from operations
(B). . . . . . . . . . . . 53,232 42,172 32,009 27,404 22,033(A)
Funds from operations
per common share
(diluted). . . . . . . . . 2.34 2.13 2.01 1.90 1.53(A)
Cash dividends paid per
common share . . . . . . . 1.76 1.73 1.72 1.71 1.05(A)
Net cash flow from
operating activities . . . 47,175 39,129 31,934 28,334 26,269
Net cash flow for
investing activities . . . (121,935) (170,900) (66,864) (2,551) (143,308)
Net cash flow from (for)
financing activities . . . 73,630 127,156 42,942 (26,964) 110,326
<PAGE>
<FN>
(A) The information presented is for the ten and one-half month
period ended December 31, 1994 based on shares and units outstanding during
the period.
(B) The Company believes that funds from operations is useful as a
measure of the performance of an equity REIT. Funds from operations is
defined as net income (computed in accordance with generally accepted
accounting principles), excluding gains (losses) from debt restructuring
and sales of property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships, joint ventures, and other
affiliates. Adjustments for unconsolidated partnerships, joint ventures,
and other affiliates are calculated to reflect funds from operations on the
same basis. Funds from operations does not represent cash flows from
operations as defined by generally accepted accounting principles ("GAAP"),
is not indicative that cash flows are adequate to fund all cash needs and
is not to be considered an alternative to net income or any other GAAP
measure as a measurement of the results of the Company's operations or the
Company's cash flows or liquidity as defined by GAAP.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Dollars in thousands,
except share data and rental rates per unit)
The following discussion is based primarily on the consolidated
financial statements of AMLI Residential Properties Trust (the "Company")
as of December 31, 1998 and 1997 for the years ended December 31, 1998,
1997 and 1996. This information should be read in conjunction with the
accompanying consolidated financial statements and notes thereto.
The Company commenced operations upon completion of its Initial Public
Offering in February 1994. On January 30, 1996, the Company issued
1,200,000 Series A convertible preferred shares for $20 per share, or
$24,000, directly to four institutional investors and Amli Realty Co.
("ARC") in a registered offering. In November 1996, the Company completed
a public offering of 2,976,900 common shares. In July 1997, the Company
closed on the public offering of 1,694,700 common shares. In February
1998, the Company placed 3,125,000 Series B convertible preferred shares
for $24 per share. The net proceeds of the issuance of the preferred
shares and the public offerings were used to reduce the Company's debt and
fund development costs.
As of December 31, 1998, the Company owned an 85% general partnership
interest in AMLI Residential Properties, L.P. (the "Operating
Partnership"), which holds the assets of the Company. The limited partners
hold Operating Partnership units ("OP Units") that are convertible into
common shares of the Company on a one-for-one basis, subject to certain
limitations. At December 31, 1998, the Company owned 20,880,155 OP Units
and the limited partners owned 3,565,672 OP Units.
At December 31, 1998, the Company owns, or owns interests, in 19,559
apartment homes and an additional 4,862 apartment homes under development.
RESULTS OF OPERATIONS
During the period from January 1, 1997 through December 31, 1998,
growth from property revenues and property operating expenses resulted from
increases at communities owned as of January 1, 1997, from communities
acquired and from the newly-constructed communities since January 1, 1997.
Since January 1, 1997, the Company has acquired a total of ten
stabilized communities that contributed to increases in property revenues
and property operating expenses as follows:
Number of
Community Location Units Date Acquired
- --------- -------- --------- -------------
AMLI:
at Paces North Atlanta, GA 152 Jun. 97
at Lantana Ridge Austin, TX 354 Sep. 97
at Bent Tree Dallas, TX 300 Oct. 97
at Bishop's Gate West Plano, TX 266 Oct. 97
at Poplar Creek Schaumburg, IL 196 Dec. 97
at Conner Farms Indianapolis, IN 300 Dec. 97
at Clairmont Atlanta, GA 288 Jan. 98
at Centennial Park Overland Park, KS 170 Oct. 98
at Lexington Farms Overland Park, KS 404 Oct. 98
at Eagle Creek Indianapolis, IN 240 Oct. 98
-----
2,670
=====
<PAGE>
In addition, the Company has developed and begun rental operations of
four new communities and three additional phases to existing stabilized
communities as follows:
Date of
Number of Initial Rental
Community Location Units Operations
- --------- -------- --------- --------------
AMLI:
at Regents Center III Overland Park, KS 124 Nov. 96
at Town Center Overland Park, KS 156 Jan. 97
at Crown Colony II Topeka, KS 64 Apr. 97
at Peachtree City Fayette County, GA 312 Aug. 97
at AutumnChase III Dallas, TX 240 Nov. 97
at Park Creek Gainesville, GA 200 Feb. 98
at Killian Creek Gwinnett County, GA 256 Nov. 98
-----
1,352
=====
During the same period, the Company has contributed AMLI on Timberglen
to a co-investment partnership and has invested in co-investment
partnerships which acquired the following stabilized communities:
Number of Date Company
Community Location Units Acquired Ownership
- --------- -------- --------- -------- ---------
AMLI:
at Danada Farms Wheaton, IL 600 Feb. 97 10%
at Verandah Arlington, TX 538 Mar. 97 35%
at Regents Crest Overland Park, KS 368 Dec. 97 25%
on Timberglen Dallas, TX 260 Dec. 98 40%
-----
1,766
=====
In addition, the Company in joint venture with institutional
investors, completed the development or has under development and begun
rental operations of eight new communities as follows:
Date of
Initial
Number of Rental Company
Community Location Units Operations Ownership
- --------- -------- --------- ---------- ---------
AMLI:
at Barrett Lakes Cobb County, GA 446 Nov. 96 35%
at River Park Norcross, GA 222 Nov. 96 40%
at Fox Valley Aurora, IL 272 Feb. 97 25%
at Fossil Creek Ft. Worth, TX 384 Apr. 97 25%
at Northwinds Fulton County, GA 800 Sep. 97 35%
at Wells Branch Austin, TX 576 Jan. 98 25%
at Oakhurst North Aurora, IL 464 May 98 25%
on the Parkway Dallas, TX 240 May 98 25%
-----
3,404
=====
For the year ended December 31, 1998, net income attributable to
common shares was $24,825, or $1.49 per share, on total revenues of
$117,353 (including a $3,621 non-recurring gain on sale of a residential
property). For the year ended December 31, 1997, net income attributable
to common shares was $22,449, or $1.43 per share, on total revenues of
$90,073 (including a $2,457 non-recurring gain on sale of a residential
property). In 1997, net income included an extraordinary loss of $196 on
early extinguishment of debt.
<PAGE>
On a "same community" basis, weighted average occupancy of the wholly-
owned apartment homes increased slightly to 93.9% for the year ended
December 31, 1998 from 93.7% in the prior year. Weighted average collected
rental rates increased by 1.5% to $681 from $671 per unit per month for the
years ended December 31, 1998 and 1997, respectively. Including co-
investment communities, weighted average occupancy of the apartment homes
increased to 94.3% for the year ended December 31, 1998 from 93.8% in the
prior year, and weighted average collected rental rates increased by 2.6%
to $720 from $702 per unit per month for the years ended December 31, 1998
and 1997, respectively.
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO YEAR ENDED DECEMBER 31, 1997
Income before minority interest increased to $34,697 for the year
ended December 31, 1998 from $28,926 for the year ended December 31, 1997.
This increase was primarily attributable to a $27,280 increase in total
revenues, reduced by an $8,650 increase in property operating expenses, a
$8,268 increase in interest expense and a $4,743 increase in depreciation.
Net income for the years ended December 31, 1998 and 1997 was $29,700 and
$24,352, respectively.
Total property revenues increased by $23,011, or 27.1%. This increase
in property revenues was primarily from the 2,670 apartment homes acquired
during 1997 and 1998. In addition, leasing commenced on 1,228 apartment
homes developed by the Company during the period from January 1, 1997
through December 31, 1998. Furthermore, moderate increases in rental rates
were achieved while managing and maintaining just below 95% average
occupancy at the stabilized communities. Other property revenues include
increases in revenues from garages and carports ($211), telephone and cable
systems ($111) and other fees ($1,260) charged to residents. On a same
community basis, total property revenues increased by $2,197, or 2.9%.
Interest and share of income from Service Companies increased 139.8%
to $2,760 from $1,151 as a result of increased construction fees earned
from co-investment partnerships.
Income from partnerships increased to $2,169 from $925, or 134.5%.
This increase was a result of the acquisition of 1,766 apartment homes in
1997 and 1998 through four new co-investment partnerships. In addition,
eight new co-investment partnerships have invested in eight development
communities, which have a total of 3,404 apartment homes that began rental
operations in 1997 and 1998, and of which 1,324 units were stabilized in
1998.
Other income increased to $3,323 from $2,658, or 25%, as a result of
fees charged to newly formed co-investment partnerships that own properties
under development. This increase includes a $1,074 increase in development
fees, reduced by a $200 decrease in financing, acquisition and other fees.
Other interest income increased by $751. This increase was from
additional employee notes for purchase of the Company's shares, from
increased short-term advances to co-investment partnerships, and from a gap
loan to one co-investment partnership that was repaid in December 1998.
Property operating expenses increased by $8,650, or 24.8%. This
increase is principally due to the increase in the number of apartment
homes through acquisition or development. On a same community basis,
property operating expenses increased by $1,143, or 3.7%. The increase in
operating expense is largely due to a $435 increase in real estate taxes, a
$508 increase in personnel costs and a $307 increase in repairs and
maintenance. This increase was offset in part by a $245 reduction of
utilities expense resulting from the implementation of billings to
residents and the installation of water and energy conservation equipment.
Interest expense, net of the amounts capitalized, increased to $20,263
from $11,995, or 68.9%, primarily due to increased indebtedness incurred in
conjunction with property acquisition, development and investments in joint
ventures.
<PAGE>
General and administrative expenses increased to $3,993 for the year
ended December 31, 1998 from $2,850, or 40.1%, for the year ended
December 31, 1997. The increase is primarily attributable to increased
compensation and compensation-related costs attributable to both additional
employees, increased rates of compensation and $422 of dead deal costs.
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996
Income before nonrecurring items, minority interest and extraordinary
items increased to $26,469 for the year ended December 31, 1997 from
$19,365 for the year ended December 31, 1996. The increase was primarily
attributable to an $11,802 increase in total revenues, less a $2,997
increase in property operating expenses. For the years ended December 31,
1997 and 1996, net income was $24,352 and $15,250, respectively.
Total property revenues increased by $9,686, or 12.7%. On a same
community basis, total property revenues increased by $1,507, or 2.1%.
Other property revenues increased by $1,070, or 32.7%, including
increases in revenues from garages and carports ($216), from phone and
cable systems ($175), and from various fees charged to residents ($679).
The $2,116 increase in other revenue includes a $356 increase in share
of income from co-investment ventures, a $1,451 increase in development
fees and a $606 increase in asset management fees.
Property operating expenses increased by $2,997, or 9.3%. On a same
community basis, property operating expenses increased by $119, or 0.4%.
The increase in individual community operating expenses was generally
proportionate to the increase in total operating expenses, except that
utilities expense decreased by $74, or 1.8%, as the Company continued
implementation of its Resident Utility Billing System and installation of
water and energy conservation equipment, and insurance expense decreased by
$119, or 12.2%.
Interest expense, net of the amounts capitalized, increased to $11,995
from $11,916.
General and administrative expenses increased to $2,850 for the year
ended December 31, 1997 from $2,353 for the year ended December 31, 1996.
The increase is primarily attributable to increased compensation and
compensation-related costs.
The extraordinary charge of $196, net of minority interest, for the
year ended December 31, 1997 was $922 less than the comparable $1,118
extraordinary charge for the year ended December 31, 1996, as only two
loans were repaid shortly ahead of their scheduled maturities in 1997.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1998, the Company had $4,546 in cash and cash
equivalents and $65,000 in availability under its $200,000 unsecured line
of credit.
On February 20, 1998, the Company privately placed $75,000 of Series B
preferred shares with an institutional investor. The shares were issued at
$24 per share. Funding occurred in three equal installments in March, June
and September 1998. Proceeds from this private placement, net of 1.12% in
offering costs, were $74,160.
During 1998, nineteen of the Company's wholly-owned stabilized
communities are unencumbered. There are no fixed rate loans on wholly-
owned communities with maturity dates prior to June 2003.
<PAGE>
Net cash flows provided by operating activities for the year ended
December 31, 1998 increased to $47,175 from $39,129 for the year ended
December 31, 1997. The increase is primarily due to an increase in
property net operating income and an increase in other revenues.
Cash flows used in investing activities for the year ended
December 31, 1998 decreased to $121,935 from $170,900 for the year ended
December 31, 1997. The decrease consisted primarily of fewer acquisitions
and repayments from affiliates of the Company's advances for development
costs.
Net cash flows provided by financing activities for the year ended
December 31, 1998 were $73,630. In 1998, cash flows include repayments of
borrowings of $361,599 and $74,160 net proceeds from the private placement
of convertible preferred shares reduced by employees' and trustees' notes.
The share prices of most REITs are generally depressed relative to
share price levels of one or two years ago. Although the Company's share
value held up better than its peers in 1998 (it was the same as it was at
the end of 1997), it has declined in 1999. The Company does not anticipate
raising any significant public equity capital in the near-term and will
fund its construction and development activities primarily by raising
additional Co-investment equity and through additional borrowings under its
line of credit.
Funds from operations ("FFO") is defined as net income (computed in
accordance with generally accepted accounting principles("GAAP")),
excluding gains (losses) from debt restructuring and sales of property,
plus depreciation and amortization, and after adjustments for
unconsolidated partnerships, joint ventures and other affiliates.
Adjustments for unconsolidated partnerships, joint ventures and other
affiliates are calculated to reflect FFO on the same basis.
FFO is widely accepted in measuring the performance of equity REITs.
An understanding of the Company's FFO will enhance the reader's
comprehension of the Company's results of operations and cash flows as
presented in the financial statements and data included elsewhere herein.
FFO should not be considered an alternative to net income or any other GAAP
measurement as a measure of the results of the Company's operations, the
Company's cash flows or liquidity.
FFO for the years ended December 31, 1998 and 1997 is summarized as
follows:
1998 1997
------- -------
Net income before minority
interest and
extraordinary item $34,697 28,926
Depreciation 17,963 13,220
Share of co-investment
partnerships' depreciation 3,793 2,483
Share of Service Company's
goodwill amortization 400 --
Gains on sales of residential
properties (3,621) (2,457)
------- -------
FFO $53,232 42,172
======= =======
Weighted average
diluted shares
and units 22,760 19,848
======= =======
<PAGE>
The Company expects to pay quarterly dividends from cash available for
distribution. Until distributed, funds available for distribution will be
invested in short-term investment grade securities or used to temporarily
reduce outstanding balances on the Company's revolving lines of credit.
FFO as shown above is net of startup losses at newly-constructed
communities. At some communities, the initial lease-up was so rapid that
there were no startup losses.
In the typical situation, startup losses will be recorded between the
time the first apartment building is delivered from construction until
occupancy levels are adequate to recover all costs and expenses (including
interest but excluding depreciation). FFO, as shown above for 1998 and
1997, is shown net of startup losses of $1,387 and $1,096, respectively.
The startup losses for 1998 are attributable to the initial lease-up of
AMLI at AutumnChase III, AMLI at Killian Creek, AMLI at Park Creek, AMLI at
Wells Branch, AMLI at Oakhurst North, AMLI on the Parkway, AMLI at Fox
Valley, AMLI at Fossil Creek and AMLI at Northwinds. The startup losses
for 1997 are attributable to the initial lease-up of AMLI at AutumnChase
III, AMLI at Town Center, AMLI at Crown Colony II, AMLI at River Park, AMLI
at Barrett Lakes, AMLI at Fox Valley, AMLI at Fossil Creek, AMLI at
Peachtree City, and AMLI at Northwinds. Additional amounts will be
recorded in 1999 as initial lease-up is completed at these and other
communities which will enter the lease-up period during 1999.
The Company expects to meet its short-term liquidity requirements by
using its working capital and any portion of net cash flow from operations
not distributed currently. The Company is of the opinion that its future
net cash flows will be adequate to meet operating requirements in both the
short and the long term and provide for payment of dividends by the Company
in accordance with REIT requirements. In order to qualify as a REIT, the
Company is required to distribute dividends to its shareholders equal to
95% of its REIT taxable income. The Company's REIT taxable income for the
year 1998 was $23,215 which would require the Company to pay dividends of
approximately $22,054. For the year ended December 31, 1998, the Company
paid dividends to its shareholders of $32,728 (141% of REIT taxable
income), of which approximately 6.9% represents a return of capital and
20.6% is capital gain.
The Company expects to meet certain long-term liquidity requirements
such as scheduled debt maturities and repayment of loans for construction,
development, and acquisition activities through the issuance of long-term
secured and unsecured debt and additional equity securities of the Company
(or OP Units). On July 20, 1995, the Company's shelf registration became
effective. The registration covers up to an aggregate of $200,000 of
preferred shares, common shares and warrants to purchase which the Company
may issue from time to time. Through December 31, 1998, the Company has
issued common and preferred shares that total approximately $128,467,
leaving a balance of $71,533 that the Company may issue in the future.
<PAGE>
COMPANY INDEBTEDNESS
The Company's debt as of December 31, 1998 includes $176,370 (48% of
the total) which is secured by first mortgages on 12 of the wholly-owned
communities and is summarized as follows:
SUMMARY DEBT TABLE
------------------
Type of Weighted Average Outstanding Percent
Indebtedness Interest Rate Balance of Total
- ------------ ---------------- ----------- --------
Fixed Rate
Mortgages 7.6% $176,370 48.0%
Tax-Exempt Tax-Exempt Rate + 1.23% 40,750 11.1%
Bonds (1) Tax-Exempt Rate + 1.15% 9,500 2.6%
Lines of
Credit (2) LIBOR + .90% 135,000 36.7%
Notes payable
to Service
Companies Various 5,750 1.6%
-------- ------
Total $367,370 100.0%
======== ======
- --------------------
(1) The tax-exempt bonds bear interest at a variable tax-exempt rate that
is adjusted weekly based on the re-marketing of these bonds (3.0% for AMLI
at Spring Creek and 2.92% for AMLI at Poplar Creek at March 1, 1999). The
AMLI at Spring Creek bonds mature on October 1, 2024 and the related credit
enhancement expires on October 15, 2002. The AMLI at Poplar Creek bonds
mature on February 1, 2024 and the related credit enhancement expires on
December 18, 2002.
(2) Amounts borrowed under lines of credit are due in 2001. The interest
rate on $50,000 has been fixed pursuant to interest rate swap contracts.
DEVELOPMENT ACTIVITIES
At December 31, 1998, the Company has made capital contributions
totalling $81,047 to its existing co-investment partnerships and
anticipates funding substantially all of its remaining commitment of
$21,339 during 1999 to complete the 3,376 apartment homes being developed
by co-investment partnerships.
Two of the five wholly-owned communities currently under development,
AMLI at St. Charles and AMLI at Monterey Oaks, are anticipated to be
contributed to co-investment partnerships in 1999. These 830 apartment
homes under construction have estimated costs to complete of $59,095, will
be funded in 1999 and 2000. The Company expects to incur $15,806 in 1999
to complete the 656 apartment homes in the remaining three wholly-owned
communities under development.
The Company owns land for the development of an additional 3,522
apartment homes in Ft. Worth and Houston, Texas; Noblesville, Indiana;
Summit, Missouri and Atlanta, Georgia. The Company has earnest money
deposits of $1,141 for six land parcels anticipated to be acquired in 1999
for future development.
<PAGE>
CAPITAL EXPENDITURES
Capital expenditures are those made for assets having a useful life in
excess of one year and include replacements (including carpeting and
appliances) and betterments, such as unit upgrades, enclosed parking
facilities and similar items.
In conjunction with acquisitions of existing communities, it is the
Company's policy to provide in its acquisition budgets adequate funds to
complete any deferred maintenance items and to otherwise make the
communities acquired competitive with comparable newly-constructed
communities. In some cases, the Company will provide in its acquisition
budget additional funds to upgrade or otherwise improve new acquisitions.
During 1998 and 1997, a total of $6,378 and $5,592 was spent on
building repairs and maintenance (including contract services),
respectively, and $2,298 and $1,796 was spent on landscaping and grounds
maintenance, respectively, as follows:
1998 1997
------ ------
BUILDING REPAIRS AND MAINTENANCE
Painting (exterior and interior) $1,691 1,293
Carpet and vinyl 810 675
Carpentry 87 76
Heating and air-conditioning 183 190
Plumbing 250 223
Appliances 155 181
Electrical systems 185 120
Parking lots/resurfacing 138 326
Other repairs and maintenance 1,090 810
CONTRACT SERVICES
Property monitoring services 496 621
Rubbish collection services 601 504
Cleaning services 395 277
Pest control services 192 179
Other services 105 117
------ -----
$6,378 5,592
====== =====
LANDSCAPING AND GROUNDS MAINTENANCE
Lawn maintenance $2,116 1,683
Seasonal color 48 43
All other 134 70
------ -----
$2,298 1,796
====== =====
During 1998 and 1997, a total of $3,991 and $3,323, respectively, in
expenditures was capitalized in accordance with the Company's policy, as
follows:
1998 1997
------ ------
Carpet replacements $1,902 1,485
Carports and entry gates 55 398
Energy saving lighting fixtures 145 96
Water saving devices 11 185
Major appliances 267 274
Clubhouse, amenities and
business centers 764 438
Roof replacements 311 127
Landscaping improvements 47 54
All other 489 266
------ -----
$3,991 3,323
====== =====
<PAGE>
The Company's accounting treatment of various capital and maintenance
costs is detailed in the following table.
CAPITALIZE/ DEPRECIABLE
EXPENDITURES EXPENSE LIFE IN YEARS
------------ ----------- -------------
Improvements, upgrades, additions
(not replacements - includes additional
garages, additional amenities, etc.) * capitalize 15 or 40
Costs budgeted as a part of an
"Approved Acquisition Budget"
(must be spent within one year
of acquisition) * capitalize 5, 15 or 40
Replacement of carpet for entire unit capitalize 5
Replacement of major appliances
(refrigerators, stoves,
dishwashers, washers/dryers) capitalize 15
Replacement of kitchen cabinets capitalize 15
New landscaping construction or
installation capitalize 15
Roof replacements capitalize 15
Exercise/amenity equipment capitalize 5
Maintenance equipment capitalize 5
New model or clubhouse
furniture and fixtures capitalize 5
New computer systems (entire systems) capitalize 5
Roof repairs expense n/a
Exterior painting expense n/a
Parking lot repairs/resurfacing expense n/a
Repairs to amenity areas,
including swimming pools expense n/a
Vinyl expense n/a
All expenditures for acquiring
or replacing ceiling fans,
mini-blinds, air-conditioning
compressors, garbage disposals, etc. expense n/a
Landscaping replacements expense n/a
Computer expenditures (anything
less than a full system) expense n/a
Replacement signage expense n/a
Repairs to or refinishing of
kitchen cabinetry expense n/a
Equipment repairs (all types) expense n/a
All interior painting expense n/a
In general, the Company expenses any
disbursement totalling less than $2,500
<PAGE>
* The current policy provides that most capitalizable additions will
have a life of 15 years, except for the items of personal property which
have estimated lives of 5 years. Included in an acquisition budget may be
some costs which would otherwise be expensed, such as exterior painting;
such items are being depreciated over 15 years.
REHAB EXPENDITURES
The average age of AMLI's communities was a little more than eight
years at the time of its Initial Offering in 1994, the same as today. AMLI
intends to maintain the average effective age of its portfolio in this same
approximate range by continuing to:
1. develop new communities;
2. acquire newly-constructed communities;
3. sell selected older properties;
4. co-invest selected older properties;
5. rehab desirable, well-located older properties after they become
15-20 years old.
AMLI has sold three older properties in the five years it has been a
public company. AMLI's oldest property is now 18 years old. In September
1998, AMLI initiated its first community rehab since its Initial Offering
by commencing the rehab of AMLI at Riverbend in Indianapolis.
Rehab is a capital improvement program undertaken to repair or
replace, among other things, the items described previously in the Capital
Expenditures Policy at an aggregate cost of at least the greater of $3,000
per apartment home or 5% of the value of the entire apartment community.
All costs (except costs to routinely paint the interiors of units at
turnover) associated with a rehab will be capitalized and depreciated over
their policy lives. To the extent a cost would have been expensed had it
not been incurred pursuant to a rehab (pavement resurfacing, exterior
painting, vinyl replacement are the primary such costs), such costs will be
depreciated over fifteen years.
Rehab expenditures are distinguished from recurring capital
expenditures in that they:
1. are made on behalf of older properties;
2. are started and completed within a 24 month period;
3. cost a minimum of $3,000 per apartment home or 5% of the value of
the property being rehabbed; and
4. are generally undertaken only once or twice during the useful
life of a given property.
AMLI's larger properties were built in phases, and the rehabs of these
larger properties are anticipated to be done in phases, each extending over
consecutive periods not exceeding 24 months.
INFLATION
Virtually all apartment leases at the wholly-owned communities and co-
investment communities are for six or twelve months' duration. This
enables the Company to pass along inflationary increases in its operating
expenses on a timely basis. Because the Company's property operating
expenses (exclusive of depreciation and amortization) are approximately
40.4% of rental and other revenue, increased inflation typically results in
comparable increases in income before interest and general and
administrative expenses, so long as rental market conditions allow
increases in rental rates while maintaining stable occupancy.
<PAGE>
An increase in general price levels may immediately precede, or
accompany, an increase in interest rates. At December 31, 1998, the
Company's exposure (including the Company's proportionate share of its co-
investment partnerships' expense) to rising interest rates is mitigated by
the existing debt level of approximately 40% of the Company's total market
capitalization at December 31, 1998 (45% including the Company's share of
co-investment partnerships' debt), the high percentage of intermediate-term
fixed rate debt (48% of total debt), and the use of interest rate swaps to
effectively fix the interest rate on $20,000 of floating rate debt through
November 2002 and $30,000 through February 2003 (14% of total debt) of the
Company's floating rate debt. As a result, for the foreseeable future,
increases in interest expense resulting from increasing inflation are
anticipated to be less than future increases in income before interest and
general and administrative expenses.
YEAR 2000
The Chairman of the Securities and Exchange Commission has asked all
public companies to provide thorough, meaningful disclosure regarding their
Year 2000 readiness. This topic is getting increasing attention as
January 1, 2000 gets closer. As is now widely understood, there is real
potential for malfunction by computers and other equipment whose
performance is dependent in part on microprocessors.
The Company and the Service Companies have replaced all primary data
processing systems within the last thirty months and believe the new
systems are Year 2000 compliant. The Company has commenced testing of its
data processing systems; some testing will be complete by March 31, 1999,
and all testing is now anticipated to be complete by September 30, 1999.
Little remedial action is anticipated. Some external consultants are being
engaged by the Service Companies to assist these testing efforts and
remedial action, if any is required. Total costs for using outside
consultants in this effort is estimated at less than $100,000, most of
which has yet to be incurred.
The Company has undertaken a review of other aspects of its operations
that may be affected by the Year 2000 problem. In the currently expected
worst case scenarios, either a computer program or software could
malfunction, or mechanical operations, such as elevators, electronic
locking or entry systems and HVAC systems, could malfunction. AMLI
believes that each of these problems can be temporarily corrected manually,
and repaired permanently in a short period of time. The Company has
contacted all its significant vendors, including banks and companies
providing outsourcing services for payroll and benefits administration, to
ensure that these vendors are satisfactorily addressing the problem. The
Company continues to be of the opinion that there will be no direct
material effect on its operating performance or results of operations from
the Year 2000 problem. Although the Company intends to diligently continue
preparations for Year 2000, it is not possible to quantify potential
indirect effects resulting from the lack of readiness on the part of others
with whom the Company conducts its business.
Contingency plans have been prepared for use by all community
locations and for all departments at AMLI's corporate offices. In general,
these plans provide for ensuring that hard copy of all significant reports
is made at the end of 1999; they describe the manual procedures that will
have to be performed during any period of disruption of services or
communication; and they provide for inventorying a larger than usual
quantity of supplies including computer supplies and fax machines, in case
replacements are required as a result of any Year 2000 casualty.
<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
MARKET RISK
The Company is exposed to interest rate changes primarily as a result
of its line of credit and long-term debt used to maintain liquidity and
fund capital expenditures and expansion of the Company's real estate
investment portfolio and operations. The Company's interest rate risk
management objective is to limit the impact of interest rate changes on
earnings and cash flows and to lower its overall borrowing costs. To
achieve its objectives, the Company borrows primarily at fixed rates and
may enter into derivative financial instruments such as interest rate
swaps, caps and treasury locks in order to mitigate its interest rate risk
on a related financial instrument. The Company does not enter into
derivative or interest rate transactions for speculative purposes.
The Company's interest rate risk is monitored using a variety of
techniques. The table below presents the principal amounts, weighted
average interest rates, fair values and other terms required by year of
expected maturity to evaluate the expected cash flows and sensitivity to
interest rate changes.
Esti-
mated
There- Fair
1999 2000 2001 2002 2003 after Total Value
---- ---- ---- ---- ---- ------- ------- -----
Fixed rate
debt . . . $750 75,270 106,100 182,120 185,220
Average
interest
rate. . . . 4.0% 7.5% 7.8% 7.7% 7.5%
Variable
rate LIBOR
debt. . . . 135,000 135,000 135,000
Average
interest
rate. . . . 6.5% 6.5% 6.5%
Variable
rate TENR
debt. . . . 50,250 50,250 50,250
Average
interest
rate. . . . 5.4% 5.4% 5.4%
---- ------ ------- ------ ------ ------- ------- -------
$750 -- 135,000 -- 75,270 156,350 367,370 370,470
==== ====== ======= ====== ====== ======= ======= =======
The table incorporates only those exposures that exist as of
December 31, 1998; it does not consider those exposures or positions which
could arise after that date. Moreover, because firm commitments are not
presented in the table above, the information presented therein has limited
predictive value. As a result, the Company's ultimate realized gain or
loss with respect to interest rate fluctuations will depend on the
exposures that arise during the period, the Company's hedging strategies at
that time, and interest rates.
<PAGE>
The following summarizes certain information pursuant to interest rate
limitation and swap contracts at December 31, 1998.
Approximate
Value of
Remaining Cumulative Liability at
Notional Fixed Type of Contract Cash December 31,
Amount Rate (1) Contract Maturity Paid 1998 (2)
- -------- -------- -------- --------- ---------- ------------
$10,000 6.216% Swap 11/01/02 $ 64 405
10,000 6.029% Swap 11/01/02 44 340
20,000 6.145% Swap 02/15/03 94 801
10,000 6.070% Swap 02/18/03 40 373
- ------- ---- -----
$50,000 $242 1,919
======= ==== =====
(1) The fixed rate for the swaps includes the swap spread (the risk
component added to the Treasury yield to determine a fixed rate; excludes
lender's spread).
(2) "Value of Liability" represents the approximate amount which would
have to be paid as of December 31, 1998 to terminate these contracts. This
amount is not recorded as a liability in the accompanying balance sheet as
of December 31, 1998.
(3) Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities," becomes effective for all
fiscal quarters for fiscal years beginning after June 15, 1999 and is not
expected to have a material impact on the Company's financial statements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
Certain statements set forth herein or incorporated by reference
herein from the Company's filings under the Securities Exchange Act of
1934, as amended, contain forward-looking statements, including, without
limitation, statements relating to the timing and anticipated capital
expenditures of the Company's development programs. Although the Company
believes that the expectations reflected in such forward-looking statements
are based on reasonable assumptions, the actual results may differ
materially from that set forth in the forward-looking statements. Certain
factors that might cause such differences include general economic
conditions, local real estate conditions, construction delays due to the
unavailability of construction materials, weather conditions or other
delays beyond the control of the Company. Consequently, such forward-
looking statements should be regarded solely as reflections of the
Company's current operating and development plans and estimates. These
plans and estimates are subject to revision from time to time as additional
information becomes available, and actual results may differ from those
indicated in the referenced statements.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
AMLI RESIDENTIAL PROPERTIES TRUST
INDEX
PAGE
----
Independent Auditors' Report . . . . . . . . . . . . . . . . . 46
Consolidated Balance Sheets, December 31, 1998 and 1997. . . . 47
Consolidated Statements of Operations, years ended
December 31, 1998, 1997 and 1996 . . . . . . . . . . . . . . 49
Consolidated Statements of Shareholders' Equity,
years ended December 31, 1998, 1997 and 1996 . . . . . . . . 51
Consolidated Statements of Cash Flows, years ended
December 31, 1998, 1997 and 1996 . . . . . . . . . . . . . . 53
Notes to Consolidated Financial Statements . . . . . . . . . . 55
SCHEDULE
--------
Consolidated Real Estate and Accumulated Depreciation. . . . . III
SCHEDULES NOT FILED:
All schedules other than those indicated in the above index have been
omitted as the required information is inapplicable.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
AMLI Residential Properties Trust:
We have audited the accompanying consolidated balance sheets of AMLI
Residential Properties Trust (the "Company") as of December 31, 1998 and
1997, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the years in the three-year period ended
December 31, 1998. In connection with our audits of the consolidated
financial statements, we have also audited the related financial statement
schedule. These consolidated financial statements and financial statement
schedule are the responsibility of the management of the Company. Our
responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the
Company as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for each of the years in the three-year period ended
December 31, 1998, in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement schedule,
when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the
information set forth therein.
KPMG LLP
Chicago, Illinois
February 23, 1999
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
(Dollars in thousands, except share data)
<CAPTION>
1998 1997
---------- ---------
<S> <C> <C>
ASSETS:
Rental apartments:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 91,459 78,476
Depreciable property . . . . . . . . . . . . . . . . . . . . . . . . . . 586,507 496,747
-------- ---------
677,966 575,223
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . . . (78,143) (62,641)
-------- ---------
599,823 512,582
Property under development . . . . . . . . . . . . . . . . . . . . . . . . 61,798 78,724
Investments in partnerships. . . . . . . . . . . . . . . . . . . . . . . . 72,150 50,729
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . 4,546 5,676
Deferred expenses, net . . . . . . . . . . . . . . . . . . . . . . . . . . 2,942 3,140
Security deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,684 1,821
Notes receivable from and advances to Service Companies. . . . . . . . . . 31,277 18,356
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,372 8,950
-------- ---------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . $785,592 679,978
======== =========
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS - CONTINUED
1998 1997
---------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
Debt (note 5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $367,370 333,250
Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . 2,170 1,389
Accrued real estate taxes payable. . . . . . . . . . . . . . . . . . . . . 10,141 9,334
Construction costs payable . . . . . . . . . . . . . . . . . . . . . . . . 1,967 8,403
Security deposits and prepaid rents. . . . . . . . . . . . . . . . . . . . 3,420 2,722
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,096 2,978
-------- ---------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 388,164 358,076
-------- ---------
Commitments and contingencies (note 8)
Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,574 51,463
-------- ---------
SHAREHOLDERS' EQUITY:
Series A Cumulative Convertible Preferred shares of beneficial
interest, $0.01 par value 1,500,000 authorized, 1,200,000 issued
and 1,100,000 outstanding (aggregate liquidation preference
of $22,200 and $22,195, respectively). . . . . . . . . . . . . . . . . . 11 11
Series B Cumulative Convertible Preferred shares of beneficial
interest, $0.01 par value, 3,125,000 authorized, issued and
outstanding (aggregate liquidation price of $76,406 at
December 31, 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 --
Shares of beneficial interest, $0.01 par value, 145,375,000
authorized, 16,655,155 and 16,577,580 common shares
issued and outstanding, respectively . . . . . . . . . . . . . . . . . . 167 166
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . 420,303 341,148
Employees' and trustees' notes . . . . . . . . . . . . . . . . . . . . . . (10,668) (6,924)
Dividends paid in excess of earnings . . . . . . . . . . . . . . . . . . . (66,990) (63,962)
-------- ---------
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . 342,854 270,439
-------- ---------
Total liabilities and shareholders' equity . . . . . . . . . . . . . . $785,592 679,978
======== =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in thousands, except share data)
<CAPTION>
1998 1997 1996
---------- --------- ---------
<S> <C> <C> <C>
Revenues:
Property:
Rental . . . . . . . . . . . . . . . . . . . . . . . $101,892 80,479 71,863
Other. . . . . . . . . . . . . . . . . . . . . . . . 5,937 4,339 3,269
Interest and share of income from Service Companies. . . 2,760 1,151 632
Other interest . . . . . . . . . . . . . . . . . . . . . 1,272 521 224
Income from partnerships . . . . . . . . . . . . . . . . 2,169 925 569
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 3,323 2,658 1,714
--------- -------- --------
Total revenues . . . . . . . . . . . . . . . . 117,353 90,073 78,271
--------- -------- --------
Expenses:
Personnel. . . . . . . . . . . . . . . . . . . . . . . 10,073 7,648 6,714
Advertising and promotion. . . . . . . . . . . . . . . 2,982 2,147 1,917
Utilities. . . . . . . . . . . . . . . . . . . . . . . 4,272 4,087 4,161
Building repairs and maintenance and services. . . . . 6,378 5,592 4,933
Landscaping and grounds maintenance. . . . . . . . . . 2,298 1,796 1,736
Real estate taxes. . . . . . . . . . . . . . . . . . . 12,539 9,476 8,465
Insurance. . . . . . . . . . . . . . . . . . . . . . . 841 858 977
Property management fees . . . . . . . . . . . . . . . 2,698 2,147 1,878
Other operating expenses . . . . . . . . . . . . . . . 1,512 1,192 1,165
Interest . . . . . . . . . . . . . . . . . . . . . . . 20,263 11,995 11,916
Amortization of deferred costs . . . . . . . . . . . . 465 596 1,370
Depreciation . . . . . . . . . . . . . . . . . . . . . 17,963 13,220 11,321
General and administrative . . . . . . . . . . . . . . 3,993 2,850 2,353
--------- -------- --------
Total expenses . . . . . . . . . . . . . . . . 86,277 63,604 58,906
--------- -------- --------
Income before nonrecurring gains,
minority interest and extraordinary item . . . . . . . 31,076 26,469 19,365
Gain on sales of residential properties. . . . . . . . . 3,621 2,457 --
Gain resulting from interest rate cap contracts. . . . . -- -- 584
--------- -------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1998 1997 1996
---------- --------- ---------
Income before minority interest and
extraordinary item . . . . . . . . . . . . . . . . . . 34,697 28,926 19,949
Minority interest. . . . . . . . . . . . . . . . . . . . 4,997 4,378 3,581
--------- -------- --------
Income before extraordinary item . . . . . . . . . . . . 29,700 24,548 16,368
Extraordinary item -
loss on early extinguishment of debt
(net of minority interest) . . . . . . . . . . . . . . -- (196) (1,118)
--------- -------- --------
Net income . . . . . . . . . . . . . . . . . . 29,700 24,352 15,250
Less income attributable to preferred shares . . . . . . 4,875 1,903 1,746
--------- -------- --------
Net income attributable to
common shares. . . . . . . . . . . . . . . . $ 24,825 22,449 13,504
========= ======== ========
Income per common share (basic and diluted):
Before extraordinary item. . . . . . . . . . . . . . . $ 1.49 1.44 1.20
Extraordinary item . . . . . . . . . . . . . . . . . . -- (.01) (.09)
Net income . . . . . . . . . . . . . . . . . . . . . . 1.49 1.43 1.11
Dividends declared and paid per common share . . . . . . 1.76 1.73 1.72
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in thousands)
<CAPTION>
SHARES OF EMPLOYEES' DIVIDENDS
BENEFICIAL INTEREST ADDITIONAL AND PAID IN
--------------------- PAID-IN TRUSTEES' EXCESS OF
SHARES AMOUNT CAPITAL NOTES EARNINGS TOTAL
------- ------ ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 . . . . . . 11,681,659 $117 218,752 -- (52,706) 166,163
Shares issued in connection with:
Class A Preferred shares
offering. . . . . . . . . . . . . 1,200,000 12 23,906 -- -- 23,918
Common shares offering. . . . . . . 2,976,900 30 60,957 -- -- 60,987
Executive Share Purchase Plan . . . 35,700 -- 779 -- -- 779
Employees' and Trustees' notes . . . . -- -- -- (487) -- (487)
Units converted to shares. . . . . . . 17,776 -- 270 -- -- 270
Reallocation of minority interest. . . -- -- (3,079) -- -- (3,079)
Dividends paid in excess of
earnings . . . . . . . . . . . . . . -- -- -- -- (6,529) (6,529)
---------- ---- -------- ------- -------- -------
Balance at December 31, 1996 . . . . . . 15,912,035 159 301,585 (487) (59,235) 242,022
Shares issued in connection with:
Common shares offering. . . . . . . 1,694,700 17 37,430 -- -- 37,447
Executive Share Purchase Plan . . . 36,310 -- 840 -- -- 840
Employees' and Trustees' notes,
net of repayments. . . . . . . . . . -- -- -- (6,437) -- (6,437)
Units converted to shares. . . . . . . 34,535 1 543 -- -- 544
Reallocation of minority interest. . . -- -- 750 -- -- 750
Dividends paid in excess of
earnings . . . . . . . . . . . . . . -- -- -- -- (4,727) (4,727)
---------- ---- ------- ------- ------- -------
Balance at December 31, 1997 . . . . . . 17,677,580 177 341,148 (6,924) (63,962) 270,439
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - CONTINUED
SHARES OF EMPLOYEES' DIVIDENDS
BENEFICIAL INTEREST ADDITIONAL AND PAID IN
--------------------- PAID-IN TRUSTEES' EXCESS OF
SHARES AMOUNT CAPITAL NOTES EARNINGS TOTAL
------- ------ ---------- --------- --------- ---------
Shares issued in connection with:
Class B Preferred shares offering . 3,125,000 31 74,125 -- -- 74,156
Executive Share Purchase Plan . . . 43,153 1 971 -- -- 972
Options exercised . . . . . . . . . 1,666 -- 34 -- -- 34
Employees' and Trustees' notes,
net of repayments. . . . . . . . . . -- -- -- (3,744) -- (3,744)
Units converted to shares. . . . . . . 32,756 -- 671 -- -- 671
Reallocation of minority interest. . . -- -- 3,354 -- -- 3,354
Dividends paid in excess
of earnings. . . . . . . . . . . . . -- -- -- -- (3,028) (3,028)
---------- ---- ------- ------- ------- -------
Balance at December 31, 1998 . . . . . . 20,880,155 $209 420,303 (10,668) (66,990) 342,854
========== ==== ======= ======= ======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(Dollars in thousands)
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . $ 29,700 24,352 15,250
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization . . . . . . . . . . . 18,428 13,816 12,691
Income from partnerships. . . . . . . . . . . . . . (2,169) (915) (569)
(Income) loss from Service Companies. . . . . . . . 134 (104) 238
Gain resulting from interest rate cap contracts . . -- -- (584)
Loss on early extinguishment of debt. . . . . . . . -- 211 1,365
Gain on sale of residential property. . . . . . . . (3,621) (2,457) --
Minority interest . . . . . . . . . . . . . . . . . 4,997 4,341 3,334
Changes in assets and liabilities:
(Increase) decrease in deferred expenses . . . . . . (113) (586) 35
Decrease (increase) in security deposits . . . . . . 137 (84) 143
Increase in other assets . . . . . . . . . . . . . . (2,382) (711) (1,568)
Increase in accrued real estate taxes
and interest payable . . . . . . . . . . . . . . . 1,248 615 439
Increase (decrease) in tenant security deposits
and prepaid rents. . . . . . . . . . . . . . . . . 698 (35) 318
Increase in other liabilities. . . . . . . . . . . . 118 686 842
--------- --------- ---------
Net cash provided by operating activities. . . 47,175 39,129 31,934
--------- --------- ---------
Cash flows from investing activities:
Net cash proceeds from sale of residential property. . 10,263 13,394 --
Investments in partnerships, net of
cash distributions . . . . . . . . . . . . . . . . . 25 (11,552) (16,317)
Advances to affiliates . . . . . . . . . . . . . . . . (10,440) (10,351) (5,285)
Earnest money deposits . . . . . . . . . . . . . . . . (447) (1,660) (175)
Capital expenditures - existing properties . . . . . . (3,991) (3,323) (1,937)
Acquisition properties . . . . . . . . . . . . . . . . (74,541) (104,493) --
Properties under development, net of co-investors'
share of costs . . . . . . . . . . . . . . . . . . . (36,368) (59,055) (44,100)
(Decrease) increase in construction costs payable. . . (6,436) 6,140 950
--------- --------- ---------
Net cash used in investing activities. . . . . (121,935) (170,900) (66,864)
--------- --------- ---------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1998 1997 1996
--------- --------- ---------
Cash flows from financing activities:
Debt proceeds, net of financing costs. . . . . . . . . 402,355 249,088 165,589
Debt repayments, including prepayment
penalties in 1997 and 1996 . . . . . . . . . . . . . (361,599) (119,528) (184,122)
Net proceeds from the sale of interest
rate cap contracts . . . . . . . . . . . . . . . . . -- -- 1,310
Net proceeds from treasury lock contracts. . . . . . . -- -- 1,424
Proceeds from preferred shares offering,
net of issuance costs. . . . . . . . . . . . . . . . 74,160 -- 23,918
Proceeds from common shares offerings,
net of issuance costs. . . . . . . . . . . . . . . . -- 37,447 61,169
Employees' and Trustees' notes, net of proceeds
from issuance of Executive Share
Purchase Plan and Option Plan shares . . . . . . . . (2,664) (5,597) 292
Distributions to partners. . . . . . . . . . . . . . . (5,894) (5,175) (4,859)
Dividends paid . . . . . . . . . . . . . . . . . . . . (32,728) (29,079) (21,779)
--------- --------- ---------
Net cash provided by
financing activities . . . . . . . . . . . . 73,630 127,156 42,942
--------- --------- ---------
Net (decrease) increase in
cash and cash equivalents. . . . . . . . . . . . . . . (1,130) (4,615) 8,012
Cash and cash equivalents
at beginning of year . . . . . . . . . . . . . . . . . 5,676 10,291 2,279
--------- --------- ---------
Cash and cash equivalents
at end of year . . . . . . . . . . . . . . . . . . . . $ 4,546 5,676 10,291
========= ========= =========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest,
net of amount capitalized. . . . . . . . . . . . . . $ 19,482 11,767 11,985
========= ========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 1998, 1997 and 1996
(Dollars in thousands, except share data)
1. ORGANIZATION AND BASIS OF PRESENTATION
ORGANIZATION
AMLI Residential Properties Trust ("AMLI" or the "Company"), a self-
administered and self-managed real estate investment trust ("REIT"), was
formed on February 15, 1994 to continue and expand the multifamily property
business previously conducted by Amli Realty Co. ("ARC") and its
affiliates. The Company is the sole general partner of AMLI Residential
Properties, L.P. (the "Operating Partnership") in which it holds an 85%
interest. All the properties and property interests are owned and operated
through the Operating Partnership. The Company and its affiliates develop,
acquire, lease, manage and hold for investment upscale residential
apartment communities.
The Company commenced operations effective with the completion of its
initial public offering ("Initial Offering") on February 15, 1994. The
Company qualifies as a REIT for Federal income tax purposes.
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of the Company and the Operating Partnership. Limited partnership
interests in the Operating Partnership ("OP Units") are convertible into
common shares of the Company on a one-for-one basis, subject to certain
limitations (see note 7).
AMLI Management Company ("AMC"), AMLI Corporate Homes ("ACH"), a
division of AMC, AMLI Institutional Advisors, Inc. ("AIA"), AMLI
Residential Construction, Inc. ("Amrescon") and AMLI Landscape Co., a
division of Amrescon, (the "Service Companies") provide services to the
Company's wholly-owned properties as well as to properties owned by or
joint ventured with third parties. AMLI's investments in the Service
Companies are accounted for using the equity method.
All significant inter-entity balances and transactions have been
eliminated in consolidation.
The Company's management has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REAL ESTATE ASSETS AND DEPRECIATION
Real estate assets are stated at cost less accumulated depreciation.
Ordinary repairs and maintenance are expensed as incurred; replacements
having an estimated useful life of at least one year and betterments are
capitalized and depreciated over their estimated useful lives.
Depreciation is computed on a straight-line basis over useful lives of the
properties (buildings and related land improvements -- 40 years; furniture,
fixtures and equipment -- 5 - 15 years). Thirteen apartment communities
having an original undepreciated cost of $281,565 are pledged to secure
debt (see note 5).
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
In September 1998, AMLI initiated its first community rehab since its
Initial Offering by commencing the rehab of AMLI at Riverbend in
Indianapolis. Rehab is a capital improvement program involving significant
repairs, replacements and improvements at an aggregate cost of at least the
greater of $3,000 per apartment home or 5% of the value of the entire
apartment community. All costs (except costs to routinely paint the
interiors of units at turnover) associated with a rehab will be capitalized
and depreciated over their policy lives. To the extent a cost would have
been expensed had it not been incurred pursuant to a rehab (pavement re-
surfacing, exterior painting, vinyl replacement are the primary such
costs), such costs will be depreciated over fifteen years.
In conjunction with acquisitions of existing properties, it is the
Company's policy to provide in its acquisition budgets adequate funds to
complete any deferred maintenance items and to otherwise make the
properties acquired competitive with comparable newly-constructed
properties. In some cases the Company will provide in its acquisition
budget additional funds to upgrade or otherwise improve new acquisitions.
All such costs are capitalized when subsequently incurred as costs of
acquisition properties.
On October 27, 1998, the Company closed on the acquisition of two TCR-
Midwest communities, AMLI at Eagle Creek in Indiana and AMLI at Lexington
Farms in Kansas. The two communities have a total of 644 apartment homes,
and the acquisition price of $48,150 was paid in cash of $41,108 and OP
Units valued at $7,042. In addition, the acquisition of a third TCR-
Midwest community, AMLI at Centennial Park in Kansas, a 170-unit apartment
community, closed on October 28, 1998. The acquisition price of $16,250
was paid in cash of $15,337 and the balance in OP Units.
On December 30, 1998, the Company closed the sale of the 212-unit AMLI
at Reflections apartments located in Irving, Texas. The sale price of
$10,400 was paid in cash, resulting in a gain of $3,621.
On December 10, 1997, the Company completed the sale of the 350-unit
AMLI at Bear Creek apartments located in Euless, Texas. The sale price of
$13,775 was paid in cash, resulting in a gain of $2,457.
Losses in carrying values of investment assets are provided by
management when the losses become apparent and the investment asset is
considered impaired in accordance with Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of." Management evaluates its
investment properties at least quarterly to assess whether any impairment
indications are present, comparing current net operating income as a
percentage of cost to income capitalization rates. If any investment asset
is considered impaired, a loss is provided to reduce the carrying value of
the property to its estimated fair value. No such losses have been
required or provided in the accompanying financial statements.
PROPERTIES UNDER DEVELOPMENT
Land being planned for development and all apartment homes in a new
community or new phase are reported as "property under development" until
the entire community or new phase is substantially complete and stabilized
(generally 95% occupancy). Upon stabilization, all apartment homes in the
community or new phase are reported as "Rental apartments."
Regardless of whether or not 95% occupancy is achieved, a community or
new phase will be reported as "Rental apartments" no later than six months
following substantial completion of construction.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
During 1997, the Company acquired five land parcels located in Ft.
Worth, Texas and Atlanta, Georgia for a total cost of $9,110. A 200-unit
apartment community known as AMLI at Park Creek was developed on one land
parcel located in Atlanta, which achieved stabilized operations in the
fourth quarter of 1998. The development of three land parcels is well
underway and one is currently in lease-up. The remaining land parcel is
currently held for sale.
During 1998, the Company acquired thirteen land parcels for
development for a total cost of $33,650. The sites are located in Atlanta,
Indianapolis, Eastern Kansas, Metropolitan Chicago, Dallas, Austin and
Houston. Construction has commenced on six of these sites in 1998 and will
commence on the remaining sites in 1999. At December 31, 1998, the
Company's properties under development include parcels of land in the
development planning stage as follows:
<PAGE>
<TABLE> AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
NUMBER NUMBER TOTAL
OF OF EXPENDED
COMMUNITY LOCATION ACRES UNITS THRU 12/31/98
- --------- -------- ------ ------ -------------
<S> <C> <C> <C> <C>
Wholly-Owned:
Development Communities:
AMLI:
at AutumnChase III Carrollton, TX 24 240 $ 13,941
at Bent Tree II Dallas, TX 10 200 2,069
at Monterey Oaks (1) Austin, TX 26 430 4,992
at Killian Creek Gwinnett County, GA 22 216 10,484
at St. Charles (1) St. Charles, IL 25 400 8,713
--- ----- --------
Total Development Communities 107 1,486 40,199
--- ----- --------
Land held for future development:
AMLI:
at Champions II (1) Houston, TX 14 288 2,364
at Kings Harbor (1) Houston, TX 15 300 2,087
at Mesa Ridge (1) Ft. Worth, TX 27 520 3,709
at Fossil Lake Ft. Worth, TX 19 324 2,844
at Park Bridge (1) Atlanta, GA 35 352 3,993
at Prairie Lakes I Noblesville, IN 17 228 835
at Prairie Lakes II-IV Noblesville, IN 103 1,100 4,021
at Summit Ridge (1) Summit, MO 24 410 1,746
--- ----- --------
Total land held for future development 254 3,522 21,599
--- ----- --------
Total Wholly-Owned 361 5,008 61,798
--- ----- --------
Co-Investments (Company Ownership Percentage):
AMLI:
at Northwinds (35%) (2) Atlanta, GA 80 800 44,432
at Deerfield (25%) (3) Plano, TX 18 240 8,609
on the Parkway (25%) (4) Dallas, TX 10 240 15,519
at Oakhurst North (25%) (5) Aurora, IL 29 464 38,092
at Wells Branch (25%) (5) Austin, TX 29 576 33,030
Creekside (25%) (3) Overland Park, KS 12 224 3,195
at Wynnewood Farms (25%) (3) Overland Park, KS 20 232 2,858
at Regents Crest II (25%) (3) Overland Park, KS 6 108 1,638
at Castle Creek (40%) (6) Indianapolis, IN 16 276 3,458
at Lake Clearwater (25%) (3) Indianapolis, IN 11 216 4,137
--- ----- --------
Total Co-Investments 231 3,376 154,968
--- ----- --------
Total 592 8,384 $216,766
=== ===== ========
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<FN>
(1) It is the Company's intention to develop these land parcels in partnership with one or more institutional
investors.
(2) AMLI at Northwinds was conveyed at cost to a 35% owned co-investment limited liability company in
September 1997.
(3) In December 1998, these land parcels under development were conveyed at cost to five co-investment
partnerships in which the Company has a 25% ownership interest.
(4) In July 1998, AMLI on the Parkway was conveyed at cost to a 25% owned co-investment partnership.
(5) In June 1998, AMLI at Oakhurst North and AMLI at Wells Branch were contributed at cost to a 25% owned co-
investment partnership.
(6) In December 1998, AMLI at Castle Creek was contributed at cost to a 40% owned co-investment partnership.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
INTEREST AND REAL ESTATE TAX CAPITALIZATION
Interest and real estate taxes incurred during the construction period
are capitalized and depreciated over the lives of the constructed assets.
During the years ended December 31, 1998, 1997 and 1996, total interest
capitalized was $5,695, $4,721 and $3,242, respectively. Net of amounts
capitalized, total interest incurred during the years ended December 31,
1998, 1997 and 1996 aggregated $20,263, $11,995 and $11,916, respectively.
ACQUISITION
The Company's policy is and has been to expense internal costs (i.e.,
salaries and overhead of acquisition personnel) of acquiring operating
properties. This policy is consistent with the recently-issued EITF 97-11,
"Accounting for Internal Costs Relating to Real Estate Property
Acquisitions" and thus the issuance of EITF 97-11 had no impact on the
Company's results of operations.
REVENUE RECOGNITION
Rental revenues -- the Company leases its residential properties
pursuant to operating leases with terms generally of six or twelve months.
Rental income is recognized when earned; this method approximates
recognition using the straight-line method over the related lease term. At
December 31, 1998, apartment leases in effect provide for annual rentals
aggregating approximately $111,958.
FAIR VALUES
The estimated fair values of the Company's financial instruments
presented in these Notes to Consolidated Financial Statements have been
determined by management based on pertinent information available as of
December 31, 1998 and 1997, using appropriate methodologies. These
estimates are not necessarily indicative of the amounts the Company could
ultimately realize.
The Company's financial instruments consist primarily of its cash
equivalents, interest-bearing notes receivable, operating payables, debt
and interest rate limitation contracts. The carrying amounts of the
Company's cash equivalents, interest-bearing notes from the Service
Companies and operating payables are considered to be a reasonable estimate
of fair value due to the short-term nature of these instruments.
At December 31, 1998, the Company's fixed rate debt that has a
carrying amount of $182,120 has an estimated fair value of $185,220. The
Company's liability on its interest rate limitation contracts has a total
approximate fair value of $1,919 at December 31, 1998.
CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, the Company considers
all investments purchased with an original maturity of three months or less
to be cash equivalents.
DEFERRED EXPENSES AND INTEREST RATE LIMITATION CONTRACTS
Deferred expenses consist primarily of financing costs which are
amortized using the straight-line method over the terms of the related
debt. During the construction period, amortization of deferred costs
relating to properties under development is capitalized and depreciated
over the lives of the constructed assets. During the years ended
December 31, 1998, 1997 and 1996, capitalized amortization of deferred
costs was $107, $246 and $63, respectively.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Company uses interest rate caps and swaps to limit its exposure to
increases in interest rates on its floating rate debt. The Company does
not use them for trading purposes. The interest rate swaps the Company has
entered into are off-balance sheet derivatives which are accounted for as
"synthetic alterations," in that the borrowings on the Company's line of
credit to which they relate have floating rate risk and the swaps have been
designated and have been effective synthetic alterations of these
borrowings. Under synthetic alteration accounting, periodic contractual
payments or receipts are accounted for as adjustments to interest expense.
Any derivative which cannot be accounted for as a synthetic alteration (of
which the Company has none at December 31, 1998) would be carried at market
value in the Company's balance sheet with changes in market value
recognized in non-interest income.
At December 31, 1998, the Company was a party to various interest rate
swap agreements which require the Company to pay to counterparties on a
monthly basis the amounts, if any, by which the Company's interest cost on
the fixed rate basis exceeds the interest payments it makes on certain
floating rate debt.
The Company is exposed to credit losses in the event of nonperformance
by the counterparties to its interest rate swaps. The Company does not
obtain collateral or other security to support financial instruments
subject to credit risk but monitors the credit standing of counterparties.
The Company anticipates, however, that the counterparties will be able to
fully satisfy their obligations under the contracts.
The following summarizes certain information pursuant to interest rate
limitation and swap contracts at December 31, 1998.
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
Approximate
Value of
Type Remaining Cumulative Liability
Notional Fixed of Contract Cash December
Amount Rate (1) Contract Maturity Paid 1998 (2)
- -------- ------- -------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
$10,000 6.216% Swap 11/01/02 $ 64 405
10,000 6.029% Swap 11/01/02 44 340
20,000 6.145% Swap 02/15/03 94 801
10,000 6.070% Swap 02/18/03 40 373
- ------- ---- -----
$50,000 $242 1,919
======= ==== =====
<FN>
(1) The fixed rate for the swaps includes the swap spread (the risk component added to the Treasury yield
to determine a fixed rate; excludes lender's spread).
(2) "Value of Liability" represents the approximate amount which would have to be paid as of December 31,
1998 to terminate these contracts. This amount is not recorded as a liability in the accompanying balance sheet
as of December 31, 1998.
(3) Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities," becomes effective for all fiscal quarters for fiscal years beginning after June 15, 1999 and
is not expected to have a material impact on the Company's financial statements.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
OTHER ASSETS
At December 31, 1998, other assets consist primarily of $5,686 in
current receivables from affiliates, $528 in development fees receivable,
$1,135 in restricted cash, $611 in tax escrow deposits and $1,141 in
earnest money deposits. The Company believes that the carrying amounts of
its notes receivable reasonably approximate their fair values.
PER SHARE DATA
In accordance with Statement of Financial Accounting Standards No.
128, "Earnings Per Share," basic EPS is computed by dividing income
available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity. A
reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation
is as follows:
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Years Ended December 31,
-------------------------------------
1998 1997 1996
---------- ---------- ----------
Income before extraordinary
items. . . . . . . . . . . . . $ 29,700 24,548 16,368
Less income attributable to
preferred shares . . . . . . . (4,875) (1,903) (1,746)
---------- ---------- ----------
Income before extraordinary
item attributable to
common shares. . . . . . . . . $ 24,825 22,645 14,622
========== ========== ==========
Weighted average common
shares - Basic . . . . . . . . 16,624,513 15,660,225 12,141,877
Dilutive Options and Other
Plan shares. . . . . . . . . . 65,022 84,051 21,039
Weighted average common
shares - Dilutive. . . . . . . 16,689,535 15,744,276 12,162,916
========== ========== ==========
Earnings per share before
extraordinary item:
Basic. . . . . . . . . . . . $ 1.49 1.44 1.20
Diluted. . . . . . . . . . . $ 1.49 1.44 1.20
========== ========== ==========
RECLASSIFICATIONS
Certain amounts in the consolidated 1998 and 1997 financial statements
of the Company have been reclassified to conform with the current
presentation.
3. INVESTMENTS IN PARTNERSHIPS AND SERVICE COMPANIES
INVESTMENTS IN PARTNERSHIPS
At December 31, 1998, the Operating Partnership is a general partner
in various co-investment partnerships and in the GP Properties (AMLI at
Prairie Court in Oak Park, Illinois and AMLI at Towne Creek in Gainesville,
Georgia) which are accounted for using the equity method. The Operating
Partnership and the Service Companies receive various fees for services
provided to these co-investment partnerships, including development fees,
construction fees, acquisition fees, property management fees, asset
management fees, financing fees, administrative fees and disposition fees.
The Operating Partnership is entitled to shares of cash flow or liquidation
proceeds in excess of its stated ownership percentages based on returns to
its partners in excess of specified rates. Through December 31, 1998, the
Operating Partnership has received $370 of cash flow in excess of its
ownership percentages ($270 for the year ended December 31, 1998).
Investments in partnerships at December 31, 1998 and the Company's 1998
share of income or loss from each are summarized as follows:
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
Equity Total Company's Company's
Company's ------------------- Company's Net Share of Share of
Percentage Total Company's Investment Income Net Income Deprecia-
Community Ownership Assets Total Share (1) (1) (Loss) (Loss) tion
- ----------- --------- ------ ----- --------- ---------- ----- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AMLI:
at Park Place 25% $ 19,388 6,203 1,551 1,516 384 96 140
at Greenwood
Forest 15% 16,771 4,628 694 676 141 21 71
at Champions Park 15% 12,385 3,081 462 462 110 17 54
at Champions
Centre 15% 9,461 2,446 367 367 56 8 43
at Windbrooke 15% 16,637 4,613 692 692 60 9 75
at Willeo Creek 30% 14,509 4,472 1,342 1,342 84 25 151
at Pleasant Hill 40% 25,806 10,314 4,357 3,886 850 340 336
at Barrett Lakes 35% 26,483 9,480 3,318 3,429 631 209 324
at Chevy Chase 33% 43,406 13,170 4,336 4,336 815 273 414
at Willowbrook 40% 36,183 11,120 4,448 4,359 527 211 449
at River Park 40% 14,811 5,672 2,269 2,223 515 206 176
at Fox Valley 25% 24,199 23,731 5,933 6,129 589 147 184
at Fossil Creek 25% 21,428 20,460 5,115 5,212 598 149 169
at Danada Farms 10% 47,472 21,615 2,161 2,152 1,124 113 133
at Verandah 35% 24,646 6,820 2,406 2,468 (426) (73) 481
at Northwinds 35% 44,092 21,276 7,461 7,332 533 187 241
at Regents Crest 25% 26,917 10,535 2,634 2,650 178 131 166
at Oakhurst North 25% 39,674 36,495 9,124 9,032 (103) (26) 61
at Wells Branch 25% 33,794 32,685 8,171 7,595 492 123 77
on the Parkway 25% 16,639 5,544 1,386 1,062 (40) (10) 40
on Timberglen 40% 11,437 4,341 1,736 266 5 2 8
at Castlecreek 40% 3,458 3,347 1,339 1,298 -- -- --
at Lake
Clearwater 25% 4,137 3,869 967 941 -- -- --
Creekside 25% 3,195 3,076 769 747 -- -- --
at Deerfield 25% 8,609 6,080 1,520 1,371 -- -- --
at Wynnewood
Farms 25% 2,893 2,687 672 607 -- -- --
-------- -------- ------- ------- ------ ------ ------
Total $548,430 277,760 75,230 72,150 7,123 2,158 3,793
======== ======== ======= ======= ====== ======
GP Properties and Other 11
------
$2,169
======
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(1) The Company's investment in partnerships differ from the
Company's share of co-investment partnerships' equity primarily due to
capitalized interest on its investments in properties under development and
the elimination of the Company's share of development fee income. These
items are amortized over 40 years using the straight-line method.
The fixed-rate debt financing which has been obtained from various
insurance companies on behalf of these co-investment partnerships is
summarized below:
Total Outstanding Interest
Community Commitment at 12/31/98 Rate Maturity
- --------- ---------- ----------- -------- --------
AMLI:
at Park Place $13,000 12,216 8.21% October 1999
at Deerfield 11,370 2,185 7.13% December 1999
at Champions Centre 6,700 6,587 8.93% January 2002
at Champions Park 9,500 8,840 7.26% January 2002
at Windbrooke 11,500 11,417 9.24% February 2002
at Greenwood Forest 11,625 11,564 8.95% May 2002
at Chevy Chase 29,767 28,951 6.67% April 2003
at Willeo Creek 10,000 9,744 6.77% May 2003
at Willowbrook 24,500 23,962 7.785% May 2003
at Regents Crest 16,500 16,010 7.50% December 2003
at Verandah 16,940 16,940 7.55% April 2004
on Timberglen 6,770 6,724 7.70% June 2004
at Danada Farms 24,500 24,500 7.33% March 2007
at Pleasant Hill 15,500 15,179 9.15% March 2007
at River Park 9,100 8,663 7.75% June 2008
on the Parkway 10,800 10,800 6.75% January 2009
at Barrett Lakes 16,680 16,680 8.50% December 2009
at Northwinds 33,800 20,308 8.25% October 2010
In general, these loans provide for monthly payments of principal and
interest based on a 25 or 27 year amortization schedule and a balloon
payment at maturity. Loans against newly-completed properties provide for
payments of interest only for an initial period, with principal
amortization commencing generally within two years of completion of
construction and initial lease-up.
At December 31, 1997, the Company was a general partner in various co-
investment partnerships and in the GP Properties which are accounted for
using the equity method. Investments in partnerships at December 31, 1997
and the Company's 1997 share of income or loss from each (excluding the GP
Properties) are summarized as follows:
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
Equity Total Company's Company's
Company's ------------------- Company's Net Share of Share of
Percentage Total Company's Investment Income Net Income Deprecia-
Community Ownership Assets Total Share (1) (1) (Loss) (Loss) tion
- ----------- --------- ------ ----- --------- ---------- ----- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AMLI:
at Park Place 25% $19,562 6,359 1,590 1,554 354 90 133
at Greenwood
Forest 15% 17,222 5,007 751 732 (38) (5) 70
at Champions Park 15% 12,558 3,170 476 476 148 21 53
at Champions
Centre 15% 9,828 2,766 415 415 7 1 42
at Windbrooke 15% 17,112 5,052 758 758 (21) (3) 75
at Willeo Creek 30% 14,982 4,789 1,437 1,437 42 9 151
at Pleasant Hill 40% 26,764 11,287 4,811 4,389 877 341 340
at Barrett Lakes 35% 26,423 10,854 3,799 3,925 114 50 194
at Chevy Chase 33% 44,487 13,754 4,529 4,546 550 182 406
at Willowbrook 40% 36,973 11,553 4,621 4,528 292 121 424
at River Park 40% 14,510 5,756 2,302 2,256 (67) (26) 148
at Fox Valley 25% 24,845 22,903 5,726 5,901 (248) (63) 70
at Fossil Creek 25% 21,125 19,621 4,905 4,989 (62) (16) 63
at Danada Farms 10% 48,808 23,151 2,315 2,305 967 97 112
at Verandah 35% 25,976 8,085 2,830 2,902 197 132 180
at Northwinds 35% 27,106 20,995 7,362 7,267 (27) (9) 12
at Regents Crest 25% 25,727 9,342 2,336 2,349 (2) (1) 10
-------- -------- ------- ------- ------ ---- ------
Total $414,008 184,444 50,963 50,729 3,083 921 2,483
======== ======== ======= ======= ====== ======
4
GP Properties and Other ----
$925
====
<FN>
(1) The Company's investment in partnerships differ from the Company's share of co-investment partnerships'
equity primarily due to capitalized interest on its investments in properties under development and the
elimination of the Company's share of development fee income. These items are amortized over 40 years using the
straight-line method.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
INVESTMENTS IN SERVICE COMPANIES
The Company owns 5% of the voting common stock and 100% of the
nonvoting preferred stock in the Service Companies, which provide property
management, corporate homes administration, construction, landscaping,
investment advisory and asset management services to the Company and to
certain other parties. The nonvoting preferred stock entitles the Company
to approximately 95% of all cash distributions from the Service Companies.
No dividends have been paid by the Service Companies for each of the three
years ended December 31, 1998.
Summarized combined financial information of the various Service
Companies at and for the years ended December 31, 1998, 1997 and 1996
follows:
1998 1997 1996
-------- ------- -------
Income (1) $12,323 8,402 7,204
General and administrative
expenses (7,700) (6,441) (5,981)
------- ------- -------
4,623 1,961 1,223
Interest (2,352) (1,049) (871)
Depreciation (2) (1,297) (381) (188)
Income tax (362) (312) (90)
------- ------- -------
Net income $ 612 219 74
======= ======= =======
Total assets $44,759 26,410 14,226
======= ======= =======
(1) Net of construction and landscaping costs.
(2) Includes $668 in amortization of goodwill in 1998.
Substantially all interest expense of the Service Companies results
from notes payable to the Company at interest rates ranging from 9.5% to
13.0%. Interest and share of income from Service Companies as included in
the accompanying Consolidated Statements of Operations is reconciled below:
1998 1997 1996
-------- -------- --------
Intercompany interest expensed . $ 2,352 1,049 871
Intercompany interest
capitalized. . . . . . . . . . 542 -- --
Net income . . . . . . . . . . . 612 219 74
Intercompany eliminations and
minority interests . . . . . . (746) (117) (313)
-------- -------- --------
$ 2,760 1,151 632
======== ======== ========
4. RELATED PARTY TRANSACTIONS
General and administrative expenses as included in the accompanying
consolidated statements of operations include allocations of costs to the
Company from ARC and its affiliates. Such allocations are not in excess of
ARC's cost of providing services to the Company, including personnel,
occupancy and other corporate overhead. Following the Initial Offering,
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
the majority of these costs have been borne directly by the Company.
Approximately $335 was allocated to the Company and the Service Companies
from ARC's Service Bureau Division for the year ended December 31, 1996 to
reimburse ARC for the Company's allocated share of costs incurred on its
behalf. Since January 1, 1997, all former employees of the Service Bureau
are full-time employees of the Company. The management of the Company is
of the opinion that the costs allocated from ARC's Service Bureau Division
reasonably approximate or are less than the costs the Company would incur
by contracting for such services with an unaffiliated entity. The Company
and the Service Companies have agreed to pay for a share of ARC's total
occupancy cost. The Company's total occupancy cost was approximately $811,
$485 and $310 for the years ended December 31, 1998, 1997 and 1996,
respectively, including $400 and $255 for the years ended December 31, 1997
and 1996, respectively, allocable to the Service Companies. In 1998, the
Company leased all of its office space at both the Corporate and regional
locations. The Company's 1998 occupancy cost includes $662 which has been
allocated to the Service Companies.
During 1998, 1997 and 1996, the Company accrued or paid to its
affiliates fees and other costs and expenses as follows:
1998 1997 1996
------ ------ ------
Management fees $2,698 2,147 1,878
General contractor fees 1,167 857 525
Interest expense 561 36 31
Landscaping and
grounds maintenance 786 629 613
====== ====== ======
In addition, at December 31, 1998 and 1997, the Company owed Amrescon
$1,967 and $8,403, respectively, for construction costs of communities
under development.
During 1998, 1997 and 1996, the Company earned or received from its
affiliates other income as follows:
1998 1997 1996
------ ------ ------
Development fees $2,526 1,452 826
Acquisition fees -- 281 184
Asset management fees 603 606 507
Debt placement fee 81 -- --
Disposition fee -- -- 66
Accounting and administrative
fees 12 11 6
Interest on advances to other
affiliates 451 -- --
Interest on notes and advances
to Service Companies 2,894 1,047 836
====== ====== =====
During 1997, the Company began a program of leasing apartment homes to
ACH for short-term residents. Leases are at market rates. Rents and other
charges are collected by ACH and payments are remitted to the Company on a
periodic basis. During 1998 and 1997, total revenues of $2,129 and $1,362,
respectively, were generated from ACH leases of which $22 and $624 were due
from ACH at December 31, 1998 and 1997, respectively.
5. DEBT
The table below sets forth certain information relating to the
indebtedness of the Company.
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
Balance Balance
Original at Interest Maturity at
Encumbered Communities Amount 12/31/98 Rate Date 12/31/97
- ---------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BOND FINANCING:
Tax-Exempt
(1)(2) $ 40,750 40,750 Rate+1.23% 10/1/24 40,750
Tax-Exempt
AMLI at Poplar Creek (2) 9,500 9,500 Rate+1.15% 2/1/24 9,500
-------- ------ -------
Total Bonds 50,250 50,250 50,250
-------- ------ -------
MORTGAGE NOTES PAYABLE TO FINANCIAL INSTITUTIONS:
AMLI at Reflections (3) 4,800 -- 7.05% 6/30/98 4,436
AMLI on Rosemeade (3) 7,050 -- 7.02% 10/5/98 6,548
AMLI at Sherwood 7,320 6,621 7.75% 7/1/03 6,813
AMLI at Riverbend 31,000 29,847 7.30% 7/1/03 30,349
AMLI in Great Hills 11,000 10,593 7.34% 7/1/03 10,770
AMLI at Valley Ranch 11,500 10,470 7.625% 7/10/03 10,693
AMLI at Conner Farms 13,275 12,739 7.00% 6/15/03 12,965
AMLI at Nantucket 7,735 7,683 7.70% 6/1/04 7,735
AMLI on Timberglen 6,770 -- 7.70%(4) 6/1/04 6,770
AMLI at Regents Center 20,100 19,649 (5) 9/1/05 19,819
AMLI at Bishop's Gate 15,380 15,072 (6) 8/1/05 15,329
AMLI on the Green (7)
AMLI of North Dallas (7) 43,234 41,778 7.789% 5/1/06 42,383
AMLI at Clairmont 12,880 12,880 6.95% 2/15/08 --
-------- ------- --------
Total Mortgage Notes Payable 192,044 167,332 (8) 174,610
-------- ------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Balance Balance
Original at Interest Maturity at
Encumbered Properties Amount 12/31/98 Rate Date 12/31/97
- --------------------- -------- -------- -------- -------- --------
OTHER NOTES PAYABLE:
AMLI at Park Creek 10,322 9,038 7.875% 12/1/38 2,640
Unsecured line of credit (9)(10) 200,000 135,000 L+.90% 6/27/01 100,000
Note payable to Service Company 5,000 5,000 10.00% 1/1/03 5,000
Unsecured note payable to Service Company 750 750 4.00% Demand 750
Unsecured line of credit 7,000 -- L+.90% 8/30/01 --
-------- ------- --------- ------- -------
Total Other Notes Payable 223,072 149,788 108,390
-------- ------- -------
Total $465,366 367,370 333,250
======== ======= =======
<FN>
(1) This bond issue financed the original development of AMLI at Spring Creek; as of October 1997, this property
no longer secures the bond indebtedness or the credit enhancement.
(2) The terms of these tax-exempt bonds require that a portion of the apartment units be leased to individuals
who qualify based on income levels specified by the U.S. Government. The bonds bear interest at a variable rate
that is adjusted weekly based upon the remarketing rate for these bonds (3.0% for AMLI at Spring Creek and 2.92%
for AMLI at Poplar Creek at March 1, 1999). The credit enhancement for the AMLI at Spring Creek bonds was
provided by a $41,297 letter of credit from Wachovia Bank that expires on October 15, 2002 and the credit
enhancement for the AMLI at Poplar Creek bonds was provided by a $9,617 letter of credit from LaSalle National
Bank that expires December 18, 2002.
(3) This loan was repaid on its maturity.
(4) This property was contributed and the mortgage was transferred to a 40% owned co-investment partnership on
December 16, 1998.
(5) $13,800 at 8.73% and $6,300 at 9.23%.
(6) This original $14,000 mortgage bears interest at 9.1%. It was valued at $15,380 to reflect a 7.25% market
rate of interest when assumed in connection with the acquisition of AMLI at Bishop's Gate on October 17, 1997.
(7) These two properties secure the FNMA loan that was sold at a discount of $673. At December 31, 1998, the
unamortized discount amount is $494.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(8) All but $21,319 of the total is non-recourse to the partners of the Operating Partnership.
(9) The Company has used interest rate swaps on $50,000 of the outstanding amount to fix its base interest rate
(before current lender's spread of .90%) at an average of 6.12%.
(10) The Company's $200,000 unsecured line of credit has been provided by a group of six banks led by Wachovia
Bank, N.A. and the First National Bank of Chicago. The credit agreement provides for annual one-year extensions
and reductions in the interest rate based on the future credit rating the Company is able to obtain. In June
1998, the Company extended the maturity of the line of credit by one year to June 2001. In July 1998, Moody's
rated the borrowing under this facility Baa3; this reduced the interest rate from LIBOR plus 130 basis points to
LIBOR plus 90 basis points. Concurrently, the annual 15 basis points non-use fee was replaced by an annual 20
basis points facility fee based on the entire commitment. The commitment under the line of credit was increased
to $200,000 from $150,000 in July 1998, and a sixth bank was added to the bank lending group. This unsecured line
of credit requires that the Company meet various covenants typical of such an arrangement, including minimum net
worth, minimum debt service coverage and maximum debt to equity percentage. The unsecured line of credit is used
for acquisition and development activities and working capital needs.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
As of December 31, 1998, the scheduled maturities of the Company's debt are as follows:
<CAPTION>
FIXED RATE
MORTGAGE NOTES
NOTES PAYABLE UNSECURED PAYABLE TO
BOND TO FINANCIAL LINES SERVICE
FINANCINGS INSTITUTIONS OF CREDIT COMPANIES TOTAL
---------- ------------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1999 . . . . . . . . . . . . . . . . . . $ -- 2,683 -- 750 3,433
2000 . . . . . . . . . . . . . . . . . . -- 3,033 -- -- 3,033
2001 . . . . . . . . . . . . . . . . . . -- 3,282 135,000 -- 138,282
2002 . . . . . . . . . . . . . . . . . . 50,250 3,534 -- -- 53,784
2003 . . . . . . . . . . . . . . . . . . -- 65,785 -- 5,000 70,785
Thereafter . . . . . . . . . . . . . . . -- 98,053 -- -- 98,053
------- ------- ------- ------- -------
$50,250 176,370 135,000 5,750 367,370
======= ======= ======= ======= =======
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
At December 31, 1998, 1997 and 1996, the carrying value and fair value
of the Company's long-term debt are not considered to be significantly
different. The Company considers the interest rates on its long-term debt
as market rates, based on interest rates, payment terms and maturities
available to the Company as of December 31, 1998, 1997 and 1996, for these
types of loans, and estimates that the fair value of its long-term debt
exceeds the carrying value by approximately $3,100 at December 31, 1998.
Current estimates of fair value may differ from the amount presented
herein.
6. INCOME TAXES
The Company qualifies as a REIT under Sections 856 through 860 of the
Internal Revenue Code of 1986, as amended. A REIT will generally not be
subject to Federal income taxation on that portion of its income that
qualifies as REIT taxable income to the extent that it distributes at least
95% of its taxable income to its shareholders and complies with certain
other requirements. In 1998, the Company distributed approximately 141% of
its taxable income. Accordingly, no provision has been made for Federal
income taxes for the Company. Approximately 6.9% of dividends paid during
1998 represented a return of capital.
7. SHAREHOLDERS' EQUITY
Upon the closing of the Company's Initial Offering on February 15,
1994, a total of 11,530,370 of the Company's common shares were issued and
outstanding. At that time, the Company owned a like number of OP Units,
which represented approximately 81% of the total 14,426,710 OP Units
outstanding at that time.
During 1998 and 1997, a total of 317,485 and 365,381 OP Units were
issued, respectively, to third parties as partial consideration for the
acquisition of certain communities and land parcels. A total of 32,756 and
34,535 OP Units were converted to common shares during 1998 and 1997,
respectively.
Pursuant to the authority vested to the Board of Trustees in the
Declaration of Trust dated January 31, 1994, the Trustees classified and
designated 1,500,000 unissued shares of beneficial interest of the Company
as Series A cumulative convertible preferred shares of beneficial interest.
On January 30, 1996, the Company completed the sale of 1,200,000 newly
issued Series A convertible preferred shares, $.01 par value, for $24,000
in a registered offering. The price per share of $20 was the price of the
Company's common shares on January 15, 1996. The Company sold the
preferred shares directly to four institutional investors and ARC without
the use of a placement agent or underwriter. The proceeds from the sale of
these preferred shares, less $82 of transaction costs, were used to reduce
the Company's debt, fund development costs and for general corporate
purposes.
The Series A preferred shares will pay an annual dividend equal to
$1.72 per share or the dividend amount paid on common shares, whichever is
higher. The Company's Board of Trustees authorized the payment of
dividends at this annual rate for the period from January 30, 1996 to
February 20, 1996, the dividend payment date. The preferred shares are
perpetual and generally have no voting rights except in certain limited
circumstances. The preferred shares may be converted on a share-for-share
basis into common shares at any time at a conversion price that shall be
adjusted from time to time. After January 25, 2001, the Company may redeem
the preferred shares at its option for cash or common shares. The Company
may redeem the preferred shares for common shares only when the price of
the common shares equals or exceeds the conversion price for 20 of the 30
days preceding the date of redemption notice. The preferred shares and the
common shares into which the preferred shares may be converted have been
registered under the Company's existing shelf registration.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
On February 29, 1996, ARC elected to convert its 100,000 Series A
convertible preferred shares into common shares.
During 1998 and 1997, a total of 43,153 and 36,310 new common shares,
respectively, were issued pursuant to the Company's Executive Share
Purchase Plan (see note 8).
On November 27, 1996, the Company closed a 2,750,000 share secondary
offering of its common shares. The offering was priced at $21.75 per
share. On December 30, 1996, 226,900 additional common shares were issued
pursuant to the underwriters' over-allotment option. Net of approximately
5.75% in commissions and selling expenses, proceeds of the 2,976,900 common
share offering totalled approximately $61,000. The net proceeds were used
to pay down $46,035 of floating rate debt, to prepay a $4,774 first
mortgage note payable, and to provide approximately $10,000 of working
capital to fund future acquisition and development activities.
On July 11, 1997, the Company completed an offering of 1,500,000
common shares at a price of $23.4375 per share. In addition, the
underwriters exercised their over-allotment option for 194,700 shares. The
net proceeds of $37,500 were used principally to pay down the balance
outstanding on the Company's line of credit and to fund acquisition and
development activities.
On February 20, 1998, the Company privately placed $75,000 of Series B
convertible preferred shares with an institutional investor. The preferred
shares which were issued at $24 per share and carried an initial annual
dividend of $1.80 per share, are non-callable for nine years and not
subject to mandatory redemption. The preferred shares are convertible into
common shares on a one-to-one basis. The minimum $1.80 per share annual
dividend will increase to match the dividend rate on AMLI's common shares
(currently $1.80 per share annually) if the annual dividend rate on common
shares is increased to more than $1.80 per share. Funding of $25,000 each
occurred on March 9, June 30, and September 30, 1998. Total proceeds, net
of 1.12% in offering costs, were $74,160.
On November 2, 1998, the Company's Board of Trustees adopted a
shareholder rights plan. In connection with the adoption of the rights
plan, the Board declared a dividend distribution of one right for each
common share outstanding on November 13, 1998, and created a series of
preferred shares, consisting of 150,000 shares, designated the Series C
Junior Participating Preferred Shares (the "Series C Preferred Shares").
The rights will not become exercisable unless someone acquires 15% or more
of the Company's common shares or commences a tender offer for 15% or more
of the common shares. Once exercisable, each right would entitle the
holder, other than holders who caused the rights to become exercisable, to
purchase one one-thousandth of a Series C Preferred Share. Each Series C
Preferred Share, when and if issued, would entitle the holder to receive
quarterly dividends on a cumulative basis, to exercise 1,000 votes per
share on all matters submitted to shareholders and to receive a preference
in the event of a liquidation. Under certain circumstances, each right
would also entitle the holder, other than holders who caused the rights to
become exercisable, to purchase common shares of the Company or of an
acquiring person at a 50% discount to the market price.
At December 31, 1998, the Company owned 20,880,155 OP Units, which
were approximately 85% of the total 24,445,827 OP Units outstanding. At
December 31, 1997, the Company owned 17,677,580 OP Units, which were
approximately 84% of the total 20,958,523 OP Units outstanding.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
8. COMMITMENTS AND CONTINGENCIES
LEASES OF OFFICE SPACE
The Company shares office space with the Service Companies and with
ARC at its Chicago headquarters. Amrescon and AMC share space at regional
corporate offices in Atlanta and Dallas. The Company is party to these
leases, which have terms expiring through the year 2008 and which provide
for minimum rent and additional rent based on increases in operating
expenses.
The Company's share of lease payments for noncancellable office leases
(including amounts allocated to the Service Companies) was $811, $485 and
$310 in 1998, 1997 and 1996, respectively. The 1997 expense includes the
entire $223 rent for the Atlanta and Dallas offices and rent in Chicago
based on actual space occupied at a rate not in excess of the current
market rate. As of August 1, 1997, an ARC subsidiary occupying a portion
of the Chicago offices relocated to provide additional space for the
Company. Concurrently, the Company leased additional space in Chicago and
extended its Chicago lease through October 31, 2008. The Company's
estimated share of future minimum rent payments under the operating leases
are as follows:
1999 . . . . . . . . . . . . . . . . . . $ 782
2000 . . . . . . . . . . . . . . . . . . 734
2001 . . . . . . . . . . . . . . . . . . 748
2002 . . . . . . . . . . . . . . . . . . 763
2003 . . . . . . . . . . . . . . . . . . 680
Thereafter . . . . . . . . . . . . . . . 3,339
------
$7,046
======
GROUND LEASE
In May 1998, the Company, as lessee, entered into a 60-year ground
lease on a property in Austin, Texas. Rent is scheduled to commence July
1, 1999 at the initial annual base rent of $150. In addition to scheduled
2% annual increases in base rent, the lease provides for percentage rent
based on a share of "Excess Cash Flow", as defined. The Company intends to
contribute this leasehold interest to a new co-investment partnership which
will develop and operate a Class A apartment community on this site, with
construction commencing late in 1999.
RETIREMENT SAVINGS PLAN
The AMLI Residential Properties Retirement Savings Plan (the
"Retirement Plan"), is a qualified plan under Section 401(k) of the
Internal Revenue Code. The provisions of the Retirement Plan obligate the
Company to contribute up to 50% of the amounts contributed to the
Retirement Plan by its employees (such contribution not to exceed $0.500
per employee per year). Employees vest in Company contributions as
follows:
Less than three years' service . . . . . . . . . . . 0%
Three or more years' service . . . . . . . . . . . . 100%
===
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
As of January 1, 1995, the Retirement Plan was amended to provide for
an additional contribution by Participating Employers, as defined, equal to
a percentage (3% for 1998, 1997 and 1996) of each eligible employee's
compensation. An employee is eligible who has completed one year of
service by, and is an employee as of, either June 30 or December 31 of the
year for which the contribution is made. Those semi-annual additional
contributions together with the Company's annual 50% matching contribution
are to be invested in open market purchases of the Company's common shares
and other investments. Such contributions, by and on behalf of affiliates
of the Company, were $487, $314 and $228 in 1998, 1997 and 1996,
respectively, all of which were invested in Company shares.
BONUS INCENTIVE COMPENSATION
A bonus incentive compensation plan has been established for executive
and key officers. This program awards both a cash and a common share or OP
Unit bonus to executive officers and certain key officers covered under the
plan based on the achievement of specified targets and goals for the
Company and the individual officer. The primary targets are the desired
annual Funds From Operations ("FFO") per share and how the Company performs
relative to its competitors. The amount of cash bonus and number of common
shares or OP Units will be based on a formula determined for each officer
up to 50% of base compensation.
PERFORMANCE INCENTIVE PLAN
In 1995, the Company established a Performance Incentive Plan (the
"Incentive Plan") whereby executive and key officers and employees may
receive OP Units or cash if a target growth in FFO is achieved for a period
of five years starting from the year the rights under this Incentive Plan
are granted. If the target growth in FFO is achieved, OP Units actually
issued under this Incentive Plan will include both the original award plus
additional units based on assumed re-investment of dividends from the date
of the award to the date of issuance. Expense is recognized for financial
reporting purposes over the five-year determination period for each year's
award based upon the estimated value at December 31, 1998 of the OP Units
to be issued. In 1998, 1997 and 1996, a total of $533, $249 and $181,
respectively, was charged to expense by the Company and the Service
Companies pursuant to this Incentive Plan. At December 31, 1998, there are
110,697 OP Units (net of cancellations) that may be issued in conjunction
with the Incentive Plan, as follows:
At December 31,
1998 After
Original Dividend
Award Re-investment
-------- ---------------
January 1995 Award. . . . . 17,700 24,586
January 1996 Award. . . . . 13,350 16,813
February 1997 Award . . . . 15,800 18,784
December 1997 Award . . . . 23,450 26,014
November 1998 Award . . . . 24,500 24,500
------ -------
94,800 110,697
====== =======
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
OPTION PLAN
The Company has adopted the AMLI Residential Properties Trust Option
Plan (the "Option Plan") to provide incentives to attract and retain
Trustees, officers and key employees and service providers. The Option
Plan provides for options to purchase a specified number of common shares
or OP Units ("Options"). Under the Option Plan, the total number of common
shares available for grant and available to be issued upon exchange of OP
Units issued under the Option Plan equals 2,000,000. Upon certain
extraordinary events, the Executive Compensation Committee may make such
adjustments in the aggregate number of common shares or OP Units reserved
for issuance, the number of common shares or OP Units covered by
outstanding awards and the exercise prices specified therein as they
determine to be appropriate.
At December 31, 1998, there were 828,500 remaining common shares
available for grant under the Option Plan. The per share weighted average
fair value of Options granted during 1998, 1997 and 1996 was $1.39, $1.61
and $1.52, respectively, on the date of grant using the Black Scholes
Option-pricing model with the following weighted average assumptions: 1998
- - expected dividend yield 7.91%, risk-free interest rate of 5.11%, expected
life of 4.06 years and expected volatility rate of 17.16%; 1997 - expected
dividend yield 7.76%, risk-free interest rate of 6.03%, expected life of
4.24 years and expected volatility rate of 16.53%; and 1996 - expected
dividend yield 7.5%, risk-free interest rate of 5.6%, expected life of five
years and expected volatility rate of 17.3%. The Options granted under
this plan have a contractual term of ten years (except that the Options
granted in 1995 have a contractual term of seven years).
On January 1, 1996, the Company adopted SFAS No. 123, "Accounting for
Stock-Based Compensation." Pursuant to its provisions, the Company may
either record additional compensation expense each year based on the fair
value of the Options granted in that year, or, as the Company has elected
under APB No. 25, record no such additional compensation costs in its
consolidated financial statements and disclose the pro forma effects as if
SFAS No. 123 had been applied. Disclosure of pro forma effects are
required only for Options granted after December 31, 1994. Therefore, the
full impact of calculating compensation cost for stock options under SFAS
No. 123 is not included because compensation cost is reflected over the
vesting period of five years and compensation cost for Options granted
prior to January 1, 1995 is not considered. Had the Company determined
compensation cost based upon the fair value at the grant date for these
Options under SFAS 123, the charge against the Company's net income would
have been $200, $113 and $57 for the years ended December 31, 1998, 1997
and 1996, respectively, or less than $0.01 per share in each of these
years.
The Trustees who are not members of management hold 19,640 Options.
At December 31, 1998, there were 298,834 vested Options held by employees
at a weighted average exercise price of $20.50 per share. Through
December 31, 1998, 1,666 Options have been exercised and none have expired.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Stock Option activity for employees during the years ended
December 31, 1998, 1997 and 1996 is as follows:
WEIGHTED
AVERAGE
NUMBER OF EXERCISE
SHARES PRICE
--------- ---------
Balance at December 31, 1995 499,500 $20.29
Granted 125,600 20.19
Cancelled (23,000) 20.46
--------- ------
Balance at December 31, 1996 602,100 20.21
Granted 310,000 22.96
Cancelled (10,434) 20.80
--------- ------
Balance at December 31, 1997 901,666 21.23
Granted 312,000 21.80
Cancelled (40,500) 21.33
Exercised (1,666) 20.50
--------- ------
Balance at December 31, 1998 1,171,500 $21.36
========= ======
At December 31, 1998, the range of exercise prices was $18.25 - $23.50
and the weighted average remaining contractual life of the outstanding
options was 7.4 years.
EXECUTIVE SHARE PURCHASE PLAN
At their 1996 Annual Meeting, the Company's shareholders approved the
AMLI Residential Properties Trust Executive Share Purchase Plan (the
"Purchase Plan"). Individuals eligible to participate in the Purchase Plan
currently include all nine Trustees (who may in any one year acquire newly-
issued common shares having a value as of the acquisition date of up to
$100) and 26 members of management (who may in any one year acquire newly-
issued common shares having a value as of the acquisition date of up to 50%
of their annual base compensation).
The common shares may be acquired at 85% of their then current value,
and the participants may elect to receive financing for up to 80% of their
acquisition cost. The 15% discount is taxable income to the participants
and expense for the Company's financial reporting purposes in the year in
which the common shares are issued.
During 1998 and 1997, Trustees and employees acquired a total of
43,153 and 36,310 common shares, respectively, pursuant to the Purchase
Plan. Related shareholder loans ($636 in 1998 and $526 in 1997) bear
interest at rates ranging from 6.91% to 8.23% and are fully amortizing over
a ten-year term. At December 31, 1998 and 1997, the outstanding balances
of these loans were $1,278 and $965, respectively, and are included in the
accompanying balance sheets as a reduction of shareholders' equity. Total
expense recorded in 1998 and 1997 for the 15% discount, including the
Service Companies' share, was $146 and $126, respectively.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
SHAREHOLDER LOANS TO OFFICERS/TRUSTEES
During 1998 and 1997, the Board of Trustees approved up to $3,550 and
$5,980, respectively, in recourse loans to the four Officers/Trustees and
eleven other officers to enable them to acquire on the open market
approximately 430,559 of the Company's common shares of beneficial
interest. These loans bear interest at rates ranging from 4.45% to 6.23%
and have terms of nine years. At December 31, 1998 and 1997, the balances
of these loans totalled $9,390 and $5,959, respectively, and are included
in the accompanying balance sheets as a reduction of shareholders' equity.
PURCHASE OBLIGATION
The limited partnership agreements of AMLI at Verandah L.P. and AMLI
on Timberglen, L.P. provide for the redemption (at an amount determined by
formula) by the partnerships of the limited partners' entire interests, in
their sole discretion, at any time after March 25, 2002 and December 16,
2003, respectively, or at any time that there is a designated event of
default on related indebtedness of the partnerships, which event of default
remains uncured and unwaived to the time of notice of redemption election.
The redemption amount may be paid in cash or Company common shares of
beneficial interest, or any combination thereof, in the sole discretion of
the Company.
LETTERS OF CREDIT
At December 31, 1998, the Company is contingently liable on $6,100 in
bank letters of credit issued to secure commitments made in the ordinary
course of business by the Company and its co-investment partnerships.
LEGAL ACTIONS
The Company is a party to several legal actions which arose in the
normal course of business. In the opinion of management, there will be no
adverse consequences from these actions which would be material to the
Company's financial position or results of operations.
FUTURE PROPERTY ACQUISITIONS
In connection with the acquisition of certain properties and a portion
of the assets and operations of Trammell Crow Residential Midwest, the
Company agreed to acquire, assuming certain conditions are met, the general
partnership interest in a partnership owning 400 apartment homes. The
general partnership interest is anticipated to be acquired in 1999 for an
aggregate of $1,500 pursuant to the terms of the purchase agreement.
9. SEGMENT REPORTING
During 1998, the Company adopted SFAS No. 131, "Disclosures About
Segments of an Enterprise and Related Information," which establishes
standards for the way that public business enterprises report information
about operating segments in financial statements, as well as related
disclosures about products and services, geographic areas and major
customers.
The accounting policies of the segments are the same as those
described in Note 2.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
The Company defines each of its multifamily communities as an
individual operating segment. It has also determined that all communities
have similar economic characteristics and also meet the other criteria
which permit the communities to be aggregated into one reportable segment,
that being the development, acquisition, operation and ownership of
multifamily communities in its target markets throughout the Southeast,
Southwest, and Midwest. The Company's chief operating decision maker
assesses and measures segment operating results based on a performance
measure referred to as net operating income at the individual operating
segment and FFO at the aggregated segment level. The National Association
of Real Estate Investment Trusts defines FFO as net income (computed in
accordance with generally accepted accounting principles), excluding gains
(losses) from debt restructuring and sales of property, plus depreciation
and amortization, and after adjustments for unconsolidated partnerships,
joint ventures, and other affiliates. FFO is not a measure of operating
results or cash flows from operating activities as measured by generally
accepted accounting principles, is not necessarily indicative of cash
available to fund cash needs, and should not be considered an alternative
to cash flows as a measure of liquidity.
The revenues, net operating income, FFO, assets, investments in
partnerships and total expenditures for property additions for the
Company's reportable segment for the years ended December 31, 1998, 1997
and 1996 are summarized as follows:
1998 1997 1996
---------- ---------- ----------
Multifamily segment revenues (1) . . $ 172,582 130,135 101,408
Reconciling items:
Reduce co-investment revenues
to Company's share (2) . . . . . (62,584) (44,392) (25,707)
Interest income and share of
income (loss) from Service
Companies. . . . . . . . . . . . 2,760 1,151 632
Other interest income. . . . . . . 1,272 521 224
Other revenues . . . . . . . . . . 3,323 2,658 1,714
---------- ---------- ----------
Consolidated revenues. . . . . . . . $ 117,353 90,073 78,271
========== ========== ==========
Multifamily segment net operating
income (1). . . . . . . . . . . . . $ 103,043 76,633 58,614
Reconciling items to FFO:
Reduce co-investment net
operating income to Company's
share (3) . . . . . . . . . . . . (32,845) (23,350) (13,536)
Interest income and share of
income (loss) from Service
Companies. . . . . . . . . . . . 3,160 1,151 632
Other interest income. . . . . . . 1,272 521 224
Other revenues . . . . . . . . . . 3,323 2,658 1,714
General and administrative
expenses . . . . . . . . . . . . (3,993) (2,850) (2,353)
Interest expense and loan cost
amortization . . . . . . . . . . (20,728) (12,591) (13,286)
---------- ---------- ----------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
1998 1997 1996
---------- ---------- ----------
Consolidated FFO before minority
interest . . . . . . . . . . . . . 53,232 42,172 32,009
---------- ---------- ----------
Reconciling items to net income:
Depreciation - wholly owned
Properties . . . . . . . . . . . (17,963) (13,220) (11,321)
Depreciation - share of
co-investment Properties . . . . (3,793) (2,483) (1,323)
Share of Service Company's
goodwill amortization. . . . . . (400) -- --
Gains on sales of residential
properties . . . . . . . . . . . 3,621 2,457 --
Gain resulting from interest
rate cap contracts . . . . . . . -- -- 584
---------- ---------- ----------
Income before minority interest
and extraordinary items. . . . . . 34,697 28,926 19,949
Minority interest. . . . . . . . . . 4,997 4,378 3,581
---------- ---------- ----------
Income before extraordinary
items. . . . . . . . . . . . . . . $ 29,700 24,548 16,368
========== ========== ==========
1998 1997
---------- ----------
Segment assets (1) (4) . . . . . . . $1,281,291 1,061,378
Reconciling items:
Subsequent capital expenditures
(1) . . . . . . . . . . . . . . . 21,239 13,154
Reduce co-investment Properties
to Company's share (5) . . . . . (490,616) (369,856)
Accumulated depreciation . . . . . (78,143) (62,641)
Other assets (6) . . . . . . . . . 51,821 37,943
---------- ----------
Total assets . . . . . . . . . . . . $ 785,592 679,978
========== ==========
Investments in partnerships. . . . . $ 72,150 50,729
========== ==========
Total expenditures for property
additions (1) . . . . . . . . . . . $ 201,058 285,058
========== ==========
(1) Represents all Properties in which the Company has an ownership
interest.
(2) Represents amount required to reduce co-investment Properties'
revenues to the Company's share of net income from partnerships.
(3) Represents amount required to reduce co-investment Properties' net
operating income to the Company's share of net operating income from
partnerships.
(4) Represents original acquisition costs of Properties in which the
Company has an ownership interest.
(5) Represents amount required to reduce co-investment Properties' assets
to the Company's investments in partnerships.
(6) Non segment assets consist primarily of cash and cash equivalents,
deferred expenses, security deposits, notes receivable from Service
Companies and other assets.
The Company does not derive any of its consolidated revenues from
foreign countries and does not have any major customers that individually
account for 10% or more of the Company's consolidated revenues.
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
10. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
<CAPTION>
YEAR ENDED DECEMBER 31, 1998
-------------------------------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
<S> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $26,662 29,309 30,155 31,227
Income before minority interest
and extraordinary item . . . . . . . . . . . . . . . . . . . . . . 6,259 7,690 8,302 12,446
Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . 933 1,109 1,129 1,826
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,722 5,623 5,750 8,730
Earnings per common share - basic:
Income before extraordinary item . . . . . . . . . . . . . . . . . 0.28 0.34 0.35 0.52
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 0.34 0.35 0.52
Earnings per common share - diluted:
Income before extraordinary item . . . . . . . . . . . . . . . . . 0.28 0.34 0.35 0.52
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.28 0.34 0.34 0.52
YEAR ENDED DECEMBER 31, 1997
-------------------------------------
FIRST SECOND THIRD FOURTH
----- ------ ----- ------
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,850 21,313 22,982 24,928
Income before minority interest
and extraordinary item . . . . . . . . . . . . . . . . . . . . . . 6,076 6,038 7,229 9,583
Minority interest. . . . . . . . . . . . . . . . . . . . . . . . . . 953 958 1,062 1,405
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,650 4,430 5,675 7,694
Earnings per common share (basic and diluted):
Income before extraordinary item . . . . . . . . . . . . . . . . . 0.31 0.31 0.35 0.46
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.31 0.30 0.35 0.46
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
(Dollars in thousands)
<CAPTION>
GROSS AMOUNT AT WHICH
INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B)
-------------------------------------- -------------------------------------
COSTS
RELATED BUILDINGS CAPITALIZED BUILDINGS
ENCUM- AND SUBSEQUENT TO AND
PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---------- --------- ------------ ------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
DALLAS/FT. WORTH TX
AMLI:
at AutumnChase. . . . . $ -- 2,991 16,884 381 2,993 17,263 20,256
at Bent Tree. . . . . . -- 2,854 16,173 203 2,856 16,374 19,230
at Bishop's Gate. . . . 15,072 3,659 20,708 (108) 3,616 20,643 24,259
at Chase Oaks . . . . . -- 1,003 9,513 415 1,003 9,928 10,931
at Gleneagles . . . . . -- 3,178 22,723 386 3,182 23,105 26,287
on the Green. . . . . . 12,205 1,693 17,007 391 1,693 17,398 19,091
at Nantucket. . . . . . 7,683 1,931 6,817 276 1,931 7,093 9,024
of North Dallas . . . . 29,573 7,278 37,204 1,777 7,278 38,981 46,259
on Rosemeade. . . . . . -- 1,534 9,182 364 1,534 9,546 11,080
at Valley Ranch . . . . 10,470 3,139 16,199 927 3,139 17,126 20,265
------- ------ ------- ----- ------ ------- -------
Subtotal - Dallas/
Ft. Worth, TX. . . . . 75,003 29,260 172,410 5,012 29,225 177,457 206,682
------- ------ ------- ----- ------ ------- -------
AUSTIN, TX
AMLI:
at the Arboretum. . . . -- 1,664 9,480 393 1,664 9,873 11,537
in Great Hills. . . . . 10,593 3,228 14,304 562 3,228 14,866 18,094
at Martha's
Vineyard. . . . . . . -- 2,154 13,216 435 2,154 13,651 15,805
at Lantana Ridge. . . . -- 3,582 20,299 139 3,585 20,435 24,020
------- ------ ------- ----- ------ ------- -------
Subtotal - Austin, TX. . 10,593 10,628 57,299 1,529 10,631 58,825 69,456
------- ------ ------- ----- ------ ------- -------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III - CONTINUED
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION>
DATE DEPRECIABLE
ACCUMULATED COMPLETED/ LIVES
PROPERTIES DEPRECIATION ACQUIRED YEARS
- ---------- ------------ ---------- -----------
<S> <C> <C> <C>
DALLAS/FT. WORTH TX
AMLI:
at AutumnChase. . . . . . . 2,146 7/91-6/96 5 - 40 years
at Bent Tree. . . . . . . . 601 10/15/97 5 - 40 years
at Bishop's Gate. . . . . . 764 10/17/97 5 - 40 years
at Chase Oaks . . . . . . . 1,481 06/02/94 5 - 40 years
at Gleneagles . . . . . . . 4,481 7/88-11/96 5 - 40 years
on the Green. . . . . . . . 2,713 02/16/94 5 - 40 years
at Nantucket. . . . . . . . 2,552 12/16/88 5 - 40 years
of North Dallas . . . . . . 5,527 7/89-7/90 5 - 40 years
on Rosemeade. . . . . . . . 1,432 12/28/90 5 - 40 years
at Valley Ranch . . . . . . 2,522 05/25/90 5 - 40 years
------
Subtotal - Dallas/
Ft. Worth, TX. . . . . . 24,219
------
AUSTIN, TX
AMLI:
at the Arboretum. . . . . . 2,524 06/04/86 5 - 40 years
in Great Hills. . . . . . . 2,211 01/18/91 5 - 40 years
at Martha's
Vineyard. . . . . . . . . 1,961 10/09/92 5 - 40 years
at Lantana Ridge. . . . . . 822 09/30/97 5 - 40 years
------
Subtotal -
Austin, TX . . . . . . . 7,518
------
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III - CONTINUED
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION> GROSS AMOUNT AT WHICH
INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B)
-------------------------------------- ----------------------------------
COSTS
RELATED BUILDINGS CAPITALIZED BUILDINGS
ENCUM- AND SUBSEQUENT TO AND
PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---------- --------- ------------ ------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ATLANTA, GA
AMLI:
at Paces North. . . . . . . -- 916 8,019 331 916 8,350 9,266
at Sope Creek . . . . . . . -- 3,347 22,817 1,313 3,378 24,099 27,477
at Killian Creek. . . . . . -- 320 1,812 106 320 1,918 2,238
at Spring Creek . . . . . . 40,750 8,579 45,971 1,531 8,579 47,502 56,081
at Vinings. . . . . . . . . -- 1,490 9,576 239 1,490 9,815 11,305
at West Paces . . . . . . . -- 2,160 20,595 291 2,160 20,886 23,046
at Park Creek . . . . . . . 9,038 1,207 10,052 1 1,208 10,052 11,260
at Peachtree City . . . . . -- 2,870 16,955 206 3,001 17,030 20,031
at Clairmont. . . . . . . . 12,880 2,791 15,640 487 2,791 16,127 18,918
------- ------ ------- ------ ------ ------- -------
Subtotal - Atlanta, GA . . . 62,668 23,680 151,437 4,505 23,843 155,779 179,622
------- ------ ------- ------ ------ ------- -------
EASTERN KANSAS
AMLI:
at Alvamar. . . . . . . . . -- 727 6,983 283 727 7,266 7,993
at Crown Colony . . . . . . -- 977 8,548 591 978 9,138 10,116
at Regents Center . . . . . 19,649 2,260 22,397 803 2,265 23,195 25,460
at Sherwood . . . . . . . . 6,621 1,281 12,430 367 1,281 12,797 14,078
at Town Center. . . . . . . -- 1,231 11,837 440 1,350 12,158 13,508
at Centennial Park. . . . . -- 2,445 13,855 6 2,445 13,861 16,306
at Lexington Farms. . . . . -- 4,776 27,060 119 4,776 27,179 31,955
------- ------ ------- ------ ------ ------- -------
Subtotal - Overland, KS. . . 26,270 13,697 103,110 2,609 13,822 105,594 119,416
------- ------ ------- ------ ------ ------- -------
INDIANAPOLIS, IN
AMLI:
at Riverbend. . . . . . . . 29,847 5,184 33,209 1,343 5,184 34,552 39,736
at Conner Farms . . . . . . 12,739 3,262 18,484 401 3,262 18,885 22,147
at Eagle Creek. . . . . . . -- 2,477 14,038 7 2,478 14,044 16,522
------- ------ ------- ------ ------ ------- -------
Subtotal - Indianapolis, IN. 42,586 10,923 65,731 1,751 10,924 67,481 78,405
------- ------ ------- ------ ------ ------- -------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B)
-------------------------------------- ----------------------------------
COSTS
RELATED BUILDINGS CAPITALIZED BUILDINGS
ENCUM- AND SUBSEQUENT TO AND
PROPERTIES BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL
- ---------- ---------- --------- ------------ ------------- ---------- ------------ ----------
CHICAGO, IL
AMLI:
at Park Sheridan. . . . . . -- 1,101 9,458 496 1,101 9,954 11,055
at Poplar Creek . . . . . . 9,500 1,878 10,643 453 1,885 11,089 12,974
------- ------ ------- ------ ------ ------- -------
Subtotal - Chicago, IL . . . 9,500 2,979 20,101 949 2,986 21,043 24,029
------- ------ ------- ------ ------ ------- -------
TOTAL PROPERTIES. . . . . 226,620 91,167 570,088 16,355 91,431 586,179 677,610
======= ====== ======= ====== ====== ======= =======
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III - CONTINUED
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION>
DATE DEPRECIABLE
ACCUMULATED COMPLETED/ LIVES
PROPERTIES DEPRECIATION ACQUIRED YEARS
- ---------- ------------ ---------- -----------
<S> <C> <C> <C>
ATLANTA, GA
AMLI:
at Paces North. . . . . . . . 410 06/11/97 5 - 40 years
at Sope Creek . . . . . . . . 7,622 7/82 -12/95 5 - 40 years
at Killian Creek. . . . . . . 101 03/13/97 5 - 40 years
at Spring Creek . . . . . . . 15,165 5/85 - 5/89 5 - 40 years
at Vinings. . . . . . . . . . 1,595 06/19/92 5 - 40 years
at West Paces . . . . . . . . 2,917 11/15/93 5 - 40 years
at Park Creek . . . . . . . . 273 07/31/98 5 - 40 years
at Peachtree City . . . . . . 721 04/30/98 5 - 40 years
at Clairmont. . . . . . . . . 474 01/21/98 5 - 40 years
-------
Subtotal - Atlanta, GA . . . 29,278
-------
EASTERN KANSAS
AMLI:
at Alvamar. . . . . . . . . . 919 10/18/94 5 - 40 years
at Crown Colony . . . . . . . 926 10/94-6/97 5 - 40 years
at Regents Center . . . . . . 2,768 10/94-12/96 5 - 40 years
at Sherwood . . . . . . . . . 1,629 10/18/94 5 - 40 years
at Town Center. . . . . . . . 789 12/22/97 5 - 40 years
at Centennial Park. . . . . . 80 12/28/98 5 - 40 years
at Lexington Farms. . . . . . 159 10/27/98 5 - 40 years
-------
Subtotal - Overland, KS. . . 7,270
-------
INDIANAPOLIS, IN
AMLI:
at Riverbend. . . . . . . . . 5,316 12/12/92 5 - 40 years
at Conner Farms . . . . . . . 608 12/22/97 5 - 40 years
at Eagle Creek. . . . . . . . 81 12/27/98 5 - 40 years
-------
Subtotal - Indianapolis, IN. . 6,005
------
<PAGE>
SCHEDULE III - CONTINUED
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
DATE DEPRECIABLE
ACCUMULATED COMPLETED/ LIVES
PROPERTIES DEPRECIATION ACQUIRED YEARS
- ---------- ------------ ---------- -----------
CHICAGO, IL
AMLI:
at Park Sheridan. . . . . . . 3,053 08/31/89 5 - 40 years
at Poplar Creek . . . . . . . 365 12/18/97 5 - 40 years
-------
Subtotal - Chicago, IL . . . . 3,418
-------
TOTAL PROPERTIES. . . . . . 77,708
=======
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III - CONTINUED
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION>
GROSS AMOUNT AT WHICH
INITIAL COSTS (A) CARRIED AT CLOSE OF PERIOD (B)
------------------------- -------------------------------------
COSTS
RELATED BUILDINGS CAPITALIZED BUILDINGS
ENCUM- AND SUBSEQUENT TO AND
DESCRIPTION BRANCES(C) LAND IMPROVEMENTS ACQUISITION LAND IMPROVEMENTS TOTAL
- ----------- ---------- --------- ------------ ------------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
LAND PARCELS
AND OTHER
AMLI:
at AutumnChase III. . . -- 1,323 -- 12,618 1,454 12,487 13,941
at Mesa Ridge . . . . . -- 3,070 -- 639 3,100 609 3,709
at Bent Tree II . . . . -- 1,615 -- 454 1,615 454 2,069
at Killian Creek. . . . -- 1,726 -- 8,758 1,726 8,758 10,484
at Kings Harbor . . . . -- 1,765 -- 322 1,802 285 2,087
at Park Bridge. . . . . -- 3,312 -- 681 3,407 586 3,993
at St. Charles. . . . . -- 5,100 -- 3,613 5,326 3,387 8,713
at Fossil Lake. . . . . -- 2,439 -- 405 2,722 122 2,844
at Summit Ridge . . . . -- 1,500 -- 246 1,513 233 1,746
at Prairie Lakes I. . . -- 730 -- 105 753 82 835
at Prairie Lakes II-VI -- 3,595 -- 426 3,706 315 4,021
at Monterey Oaks. . . . -- 4,050 -- 942 4,235 757 4,992
at Champions II . . . . -- 2,343 -- 21 2,348 16 2,364
Other . . . . . . . . . -- 28 248 80 28 328 356
--------- -------- -------- -------- -------- -------- --------
TOTAL LAND PARCELS
AND OTHER. . . . . . -- 32,596 248 29,310 33,735 28,419 62,154
--------- -------- -------- -------- -------- -------- --------
TOTAL. . . . . . . . .$ 226,620 123,763 570,336 45,665 125,166 614,598 739,764
========= ======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III - CONTINUED
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION>
DATE DEPRECIABLE
ACCUMULATED COMPLETED/ LIVES
PROPERTIES DEPRECIATION ACQUIRED YEARS
- ---------- ------------ ---------- -----------
<S> <C> <C> <C>
LAND PARCELS
AND OTHER
AMLI:
at AutumnChase III. . . . . 317 08/31/95 5 - 40 years
at Mesa Ridge . . . . . . . -- 12/23/96
at Bent Tree II . . . . . . -- 12/08/97
at Killian Creek. . . . . . 21 03/13/97 5 - 40 years
at Kings Harbor . . . . . . -- 03/03/98
at Park Bridge. . . . . . . -- 04/30/98
at St. Charles. . . . . . . -- 06/08/98
at Fossil Lake. . . . . . . -- 06/26/98
at Summit Ridge . . . . . . -- 07/15/98
at Prairie Lakes I. . . . . -- 07/22/98
at Prairie Lakes II-VI. . . -- 07/22/98
at Monterey Oaks. . . . . . -- 08/07/98
at Champions II . . . . . . -- 12/01/98
Other . . . . . . . . . . . 97 5 - 40 years
---------
TOTAL LAND PARCELS
AND OTHER. . . . . . . . 435
---------
TOTAL. . . . . . . . . . . $ 78,143
=========
<FN>
NOTES:
(A) The initial costs represents the original development costs or original purchase price
of the properties to the Company, including closing costs.
(B) The aggregate cost of real estate owned at December 31, 1998 for Federal income tax purposes
was $705,991.
(C) Amounts disclosed exclude current accrued interest and debt not secured by properties.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE III - CONTINUED
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED
<CAPTION>
(D) Reconciliation of real estate owned:
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Balance at beginning of period . . . . . . . . . . . $653,947 495,519 442,865
Additions during period. . . . . . . . . . . . . . . 190,810 189,939 66,700
Contributions to Joint Venture . . . . . . . . . . . (96,095) (19,516) (14,046)
Sale of property . . . . . . . . . . . . . . . . . . (7,737) (11,995) --
Other. . . . . . . . . . . . . . . . . . . . . . . . (1,161) -- --
-------- -------- --------
$739,764 653,947 495,519
======== ======== ========
(E) Reconciliation of accumulated depreciation:
Balance at beginning of period . . . . . . . . . . . $ 62,641 50,478 39,157
Additions during period. . . . . . . . . . . . . . . 17,963 13,220 11,321
Sale of property . . . . . . . . . . . . . . . . . . (2,461) (1,057) --
-------- -------- --------
Balance at end of period . . . . . . . . . . . . . . $ 78,143 62,641 50,478
======== ======== ========
</TABLE>
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes or disagreements with the accountants on
accounting and financial disclosures.
PART III
ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is hereby incorporated by
reference to the materials appearing in the Company's Proxy Statement for
the annual meeting of shareholders to be held on May 3, 1999 (the "Proxy
Statement"), under the captions "Election of Trustees," "Management -
Trustees and Executive Officers" and "Section 16(A) Beneficial Ownership
Reporting Compliance."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is hereby incorporated by
reference to the materials appearing in the Proxy Statement under the
captions "Election of Trustees" and "Executive Compensation."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is hereby incorporated by
reference to the materials appearing in the Proxy Statement under the
caption "Security Ownership."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is hereby incorporated by
reference to the materials appearing in the Proxy Statement under the
caption "Certain Relationships and Related Transactions."
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Independent Auditors' Report. . . . . . . . . . . . . . 46
Consolidated Balance Sheets, December 31, 1998
and 1997. . . . . . . . . . . . . . . . . . . . . . . 47
Consolidated Statements of Operations,
years ended December 31, 1998, 1997 and 1996. . . . . 49
Consolidated Statements of Shareholders' Equity,
years ended December 31, 1998, 1997 and 1996. . . . . 51
Consolidated Statements of Cash Flows,
years ended December 31, 1998, 1997 and 1996. . . . . 53
Notes to Consolidated Financial Statements. . . . . . . 55
(2) Financial Statement Schedule and Independent Auditors'
Report
TITLE SCHEDULE
Consolidated Real Estate and
Accumulated Depreciation. . . . . . . . . . . . . . III
The independent auditors' report with respect to the
financial statement schedule is on page 46.
(3) Exhibits
3.1 Amended and Restated Declaration of Trust of the
Registrant (Incorporated by reference to exhibit 3.1 to Registration
Statement No. 33-71566).
3.2 Amended and Restated By-laws of the Registrant
(Incorporated by reference to exhibit 3.2 to Registration Statement No. 33-
71566).
4.1 Form of Share Certificate for Common Shares of
Beneficial Interest (Incorporated by reference to exhibit 4.1 to the
Registration Statement No. 33-71566).
4.2 Form of Share Certificate for Series A Cumulative
Convertible Preferred Shares of Beneficial Interest (Incorporated by
reference to exhibit 4.5 to the Registrant's Form 8-K dated January 18,
1996).
4.3 Articles Supplementary Classifying and Designating
a Series of Preferred Shares as Series A Cumulative Convertible Preferred
Shares of Beneficial Interest (Incorporated by reference to exhibit 4.9 to
the Registrant's Form 8-K dated January 30, 1996).
4.4 Articles Supplementary Classifying and Designating
a Series of Preferred Shares as Series B Cumulative Convertible Preferred
Shares of Beneficial Interest (Incorporated by reference to exhibit 4 to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended March
31, 1998).
<PAGE>
4.5 Rights Agreement, dated as of November 2, 1998,
between AMLI Residential Properties Trust and Harris Trust and Savings
Bank, as Rights Agent, including Exhibit A thereto (Form of Articles
Supplementary relating to the Series C Junior Participating Preferred
Shares) and Exhibit B thereto (Form of Right Certificate) (Incorporated by
reference to exhibit 4 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998).
10.1 Amended and Restated Agreement of Limited
Partnership of AMLI Residential Properties, L.P. (Incorporated by reference
to exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994).
10.1(a) First Amendment to Amended and Restated Agreement
of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated
by reference to exhibit 10.1(a) to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1995).
10.1(b) Second Amendment to Amended and Restated Agreement
of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated
by reference to exhibit 10.1(b) to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1995).
10.1(c) Third Amendment to Amended and Restated Agreement
of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated
by reference to exhibit 10.1(c) to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1996).
10.1(d) Fourth Amendment to Amended and Restated Agreement
of Limited Partnership of AMLI Residential Properties, L.P. (Incorporated
by reference to exhibit 10.1 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended March 31, 1998).
10.2 Registration Rights and Lock-Up Agreement between
the Company and certain Original Investors (Incorporated by reference to
exhibit 10.8 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994).
10.3 Corporate Services Agreement among the Registrant,
AMLI Residential Properties L.P., AMLI Management Company and AMLI
Institutional Advisors, Inc. (Incorporated by reference to exhibit 10.2 to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994).
10.4 Administrative Services Agreement between AMLI
Management Company and AMLI Realty Co. (Incorporated by reference to
exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994).
10.5 Non-Competition Agreement between the Registrant
and Amli Realty Co. (Incorporated by reference to exhibit 10.4 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1994).
<PAGE>
10.6 Non-Competition Agreement between the Registrant
and Gregory T. Mutz (Incorporated by reference to exhibit 10.5 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1994).
10.7 Non-Competition Agreement between the Registrant
and John E. Allen (Incorporated by reference to exhibit 10.6 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1994).
10.8 Non-Competition Agreement between the Registrant
and Allan J. Sweet (Incorporated by reference to exhibit 10.7 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1994).
10.9 Management Agreement between AMLI Residential
Properties, L.P. and Amli Management Company (Incorporated by reference to
exhibit 10.10 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1994).
10.10 Performance Incentive Plan (Incorporated by
reference to exhibit 10 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995).
10.11 Amli Residential Properties Trust Option Plan
(Incorporated by reference to exhibit 10.8 to the Registration Statement
No. 33-71566).
10.11(a) First Amendment to AMLI Residential Properties
Option Plan (Incorporated by reference to exhibit 10 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1995).
10.11(b) Second Amendment to AMLI Residential Properties
Option Plan (Incorporated by reference to exhibit 10.2 to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998).
10.12 AMLI Residential Properties Trust Executive Share
Purchase Plan (Incorporated by reference to exhibit 10.1 to the
Registration Statement No. 333-8813).
10.13 Registration Rights Agreement dated March 9, 1998
between AMLI Residential Properties Trust and Security Capital Preferred
Growth Incorporated (Incorporated by reference to exhibit 10.3 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998).
10.14 Employment Agreement between the Registrant and
Gregory T. Mutz (Incorporated by reference to exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
10.15 Employment Agreement between the Registrant and
John E. Allen (Incorporated by reference to exhibit 10.2 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
10.16 Employment Agreement between the Registrant and
Allan J. Sweet (Incorporated by reference to exhibit 10.3 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
<PAGE>
10.17 Employment Agreement between the Registrant and
Philip N. Tague (Incorporated by reference to exhibit 10.4 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
10.18 Employment Agreement between the Registrant and
Robert S. Aisner (Incorporated by reference to exhibit 10.5 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
10.19 Employment Agreement between the Registrant and
Robert J. Chapman (Incorporated by reference to exhibit 10.6 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30,
1998).
10.20 $200,000 Amended and Restated Credit Agreement
dated as of July 27, 1998 among AMLI Residential Properties, L.P., the
banks listed herein, Wachovia Bank, N.A., as Agent and The First National
Bank of Chicago, as Documentation Agent and Dresdner Bank, A.G., New York
and Grand Cayman Branches, as Co-Agent (Incorporated by reference to
exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998).
21.1 Subsidiaries of the Registrant.
23.1 Consent of KPMG LLP.
27 Financial Data Schedule.
99.1 Operating and Financial Data furnished to
Shareholders and Analysts.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed for the year ended
December 31, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AMLI RESIDENTIAL PROPERTIES TRUST
Date: March 19, 1999 By: /S/ ALLAN J. SWEET
Allan J. Sweet
President and Trustee
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: March 19, 1999 By: /S/ GREGORY T. MUTZ
Gregory T. Mutz
Chairman of the Board of Trustees
Date: March 19, 1999 By: /S/ JOHN E. ALLEN
John E. Allen
Vice-Chairman of the Board of Trustees
Date: March 19, 1999 By: /S/ ALLAN J. SWEET
Allan J. Sweet
President and Trustee
Date: March 19, 1999 By: /S/ PHILIP N. TAGUE
Philip N. Tague
Executive Vice President and Trustee
Date: March 19, 1999 By: /S/ LAURA D. GATES
Laura D. Gates
Trustee
Date: March 19, 1999 By: /S/ MARC S. HEILWEIL
Marc S. Heilweil
Trustee
Date: March 19, 1999 By: /S/ STEPHEN G. MCCONAHEY
Stephen G. McConahey
Trustee
Date: March 19, 1999 By: /S/ QUINTIN E. PRIMO III
Quintin E. Primo III
Trustee
Date: March 19, 1999 By: /S/ JOHN G. SCHREIBER
John G. Schreiber
Trustee
Date: March 19, 1999 By: /S/ ROBERT J. CHAPMAN
Robert J. Chapman
Chief Financial Officer
Date: March 19, 1999 By: /S/ CHARLES C. KRAFT
Charles C. Kraft
Principal Accounting Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Document Description
- ----------- --------------------
21.1 Subsidiaries of the Registrant
23.1 Consent of KPMG LLP
27 Financial Data Schedule
99.1 Operating and Financial Data furnished to
Shareholders and Analysts
EXHIBIT 21.1
- ------------
SUBSIDIARIES OF THE COMPANY
COMPANY'S
JURISDICTION PERCENTAGE
NAME OF SUBSIDIARY OF INCORPORATION OWNERSHIP
- ------------------ ---------------- ----------
AMLI Residential Properties, L.P.. . . . . . . Delaware 85%
A. AMLI Residential Construction, Inc. . . Delaware 95%
B. AMLI Institutional Advisors, Inc. . . . Illinois 95%
C. AMLI Management Company . . . . . . . . Delaware 95%
D. Laurel Park Venture . . . . . . . . . . Georgia 100%
E. Pleasant Hill Joint Venture . . . . . . Georgia 40%
F. AMLI Foundation Co-Investors, L.P. . . Delaware 25%
G. AMLI Foundation Co-Investors-II,
L. P. . . . . . . . . . . . . . . . . Delaware 15%
H. AMLI at Champions, L.P. . . . . . . . . Texas 15%
I. AMLI at Windbrooke, L.P. . . . . . . . Illinois 15%
J. AMLI at Willeo Creek, L.P. . . . . . . Georgia 30%
K. Barrett Lakes, L.L.C. . . . . . . . . . Delaware 35%
L. AMLI at Chevy Chase, L.P. . . . . . . . Illinois 33%
M. AMLI at Willowbrook, L.P. . . . . . . . Illinois 40%
N. AMLI at River Exchange, L.L.C.. . . . . Delaware 40%
O. Acquiport/Aurora Crossing, L.P. . . . . Delaware 25%
P. Acquiport/Fossil Creek, L.P.. . . . . . Delaware 25%
Q. AMLI at Danada, L.L.C.. . . . . . . . . Illinois 10%
R. AMLI at Verandah, L.P.. . . . . . . . . Delaware 35%
S. Gardner Drive Limited Liability
Company . . . . . . . . . . . . . . . . Delaware 35%
T. AMLI at Regents Crest, L.P. . . . . . . Delaware 25%
U. Park Creek-Gainsville, L.L.C. . . . . . Georgia 100%
V. Timberglen, L.P.. . . . . . . . . . . . Delaware 40%
W. AMLI Partners Ltd. 85-IV. . . . . . . . Illinois 1%
X. AMLI Towne Creek Crossing L.P.. . . . . Georgia 1%
Y. Lantana Apartments, Ltd.. . . . . . . . Texas 100%
Z. Windsor Plano Partners, Ltd.. . . . . . Texas 100%
AA. AMLI at Conner Farms, L.P.. . . . . . . Delaware 100%
AB. Clairmont, L.P. . . . . . . . . . . . . Delaware 100%
AC. Wells Oakhurst, L.P.. . . . . . . . . . Delaware 25%
AD. AMLI Parkway, L.P.. . . . . . . . . . . Texas 25%
AE. AMLI Castle Creek, L.P. . . . . . . . . Delaware 40%
AF. Acquiport/Clearwater, L.P.. . . . . . . Delaware 25%
AG. AMLI Creekside, L.P.. . . . . . . . . . Delaware 25%
AH. AMLI Deerfield, L.P.. . . . . . . . . . Texas 25%
AI. Acquiport/Wynnewood, L.P. . . . . . . . Delaware 25%
EXHIBIT 23.1
- ------------
CONSENT OF KPMG LLP
The Board of Trustees
AMLI Residential Properties Trust:
We consent to incorporation by reference in the registration statements
(Nos. 333-65503 and 33-57327) on Form S-3 of AMLI Residential Properties
Trust of our report dated February 23, 1999, relating to the consolidated
balance sheets of AMLI Residential Properties Trust as of December 31, 1998
and 1997, and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1998, and the related schedule, which report
appears in the December 31, 1998 annual report on Form 10-K of AMLI
Residential Properties Trust.
KPMG LLP
Chicago, Illinois
March 19, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 4,546
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 739,764
<DEPRECIATION> 78,143
<TOTAL-ASSETS> 785,592
<CURRENT-LIABILITIES> 0
<BONDS> 367,370
<COMMON> 167
0
42
<OTHER-SE> 342,645
<TOTAL-LIABILITY-AND-EQUITY> 785,592
<SALES> 0
<TOTAL-REVENUES> 117,353
<CGS> 0
<TOTAL-COSTS> 86,277
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,263
<INCOME-PRETAX> 29,700
<INCOME-TAX> 0
<INCOME-CONTINUING> 29,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,700
<EPS-PRIMARY> 1.49
<EPS-DILUTED> 1.49
</TABLE>
EXHIBIT 99.1
- ------------
AMLI RESIDENTIAL PROPERTIES TRUST
FINANCIAL AND OPERATING DATA
December 31, 1998
1. Funds from Operations
2. Statements of Operations
3. Balance Sheets
4. Selected Financial Information
5. Debt
6. Debt Maturities
7. Same Community Comparison - Wholly-Owned - three months
ended December 31, 1998 and 1997
8. Same Community Comparison - Wholly-Owned - year ended
December 31, 1998 and 1997
9. Same Community Comparison - Wholly-Owned & Co-Invest-
ments - three months ended December 31, 1998
and 1997
10. Same Community Comparison - Wholly-Owned & Co-Invest-
ments - year ended December 31, 1998 and 1997
11. Property Information
12. Property EBITDA
13. Development Activities
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
FUNDS FROM OPERATIONS
Unaudited - Dollars in thousands except per share data
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
1998 1997 1998 1997
-------- -------- ------- --------
<S> <C> <C> <C> <C>
REVENUES
- --------
Property revenues:
Rental . . . . . . . . . . . . . . . . . . . . . . . $ 26,877 $ 22,483 $101,892 $ 80,479
Other. . . . . . . . . . . . . . . . . . . . . . . . 1,583 1,178 5,937 4,339
-------- -------- -------- --------
Total Property Revenues. . . . . . . . . . . . . 28,460 23,661 107,829 84,818
-------- -------- -------- --------
Property operating expenses. . . . . . . . . . . . . . (10,412) (8,861) (40,895) (32,796)
Property management fees . . . . . . . . . . . . . . . (711) (600) (2,698) (2,147)
-------- -------- -------- --------
Property expenses. . . . . . . . . . . . . . . . (11,123) (9,461) (43,593) (34,943)
Operating expense ratio. . . . . . . . . . . . . 39.1% 40.0% 40.4% 41.2%
-------- -------- -------- --------
Net operating income . . . . . . . . . . . . . . 17,337 14,200 64,236 49,875
-------- -------- -------- --------
OTHER INCOME
- ------------
Share of Service Cos. FFO (1). . . . . . . . . . . . 145 (156) 267 104
Interest from Service Companies (2). . . . . . . . . 892 318 2,893 1,047
Other interest . . . . . . . . . . . . . . . . . . . 428 122 1,272 521
Share of partnerships FFO (3). . . . . . . . . . . . 1,814 1,017 5,962 3,408
Fee income - financing, acquisitions and
dispositions . . . . . . . . . . . . . . . . . . . 81 144 81 281
Fee income - developments. . . . . . . . . . . . . . 507 277 2,526 1,451
Fee income - asset management. . . . . . . . . . . . 151 151 603 606
Other. . . . . . . . . . . . . . . . . . . . . . . . 2 43 113 320
-------- -------- -------- --------
Total other income . . . . . . . . . . . . . . . 4,020 1,916 13,717 7,738
General and administrative (4) . . . . . . . . . . . . (1,190) (697) (3,993) (2,850)
-------- -------- -------- --------
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . 20,167 15,419 73,960 54,763
-------- -------- -------- --------
Interest expense . . . . . . . . . . . . . . . . . . . (5,270) (3,844) (20,263) (11,995)
Amortization of deferred costs . . . . . . . . . . . . (101) (161) (465) (596)
-------- -------- -------- --------
Funds from operations (FFO). . . . . . . . . . . . $14,796 11,414 53,232 42,172
-------- -------- -------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
FUNDS FROM OPERATIONS - CONTINUED
Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
1998 1997 1998 1997
-------- -------- ------- --------
Capital expenditures paid from FFO (5) . . . . . . . . (962) (618) (3,991) (3,323)
Other - share of Co-Investments Cap Exp. . . . . . . . (62) (44) (330) (198)
-------- -------- -------- --------
Funds available for distribution (FAD) . . . . . . $ 13,772 $ 10,752 $ 48,911 $ 38,651
======== ======== ======== ========
FFO per share. . . . . . . . . . . . . . . . . . . . . $ 0.61 $ 0.55 $ 2.34 $ 2.13
FAD per share. . . . . . . . . . . . . . . . . . . . . $ 0.56 $ 0.52 $ 2.15 $ 1.95
Dividend per share . . . . . . . . . . . . . . . . . . $ 0.45 $ 0.44 $ 1.77 $ 1.74
======== ======== ======== ========
Dividend as a % of FFO . . . . . . . . . . . . . . . . 74.2% 80.1% 75.7% 81.8%
Dividend as a % of FAD . . . . . . . . . . . . . . . . 79.7% 85.1% 82.4% 89.3%
======== ======== ======== ========
<FN>
NOTES:
(1) Includes shares of income (before amortization of goodwill of $400 in each of the years ended
December 31, 1998 and 1997).
(2) Interest on 13% notes receivable and working capital advances.
(3) Includes share of income and share of depreciation of $3,793 and $2,483 for the years ended December 31,
1998 and 1997, respectively.
(4) Includes dead deal costs of $292 and $91 for the three months, and $422 and $159 for the years ended
December 31, 1998 and 1997, respectively.
(5) Excludes rehabilitation costs paid from FFO of $377 for the three months and year ended December 31,
1998.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
STATEMENTS OF OPERATIONS
Unaudited - Dollars in thousands except per share data
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
1998 1997 1998 1997
-------- -------- ------- --------
<S> <C> <C> <C> <C>
REVENUES:
- --------
Property revenues:
Rental . . . . . . . . . . . . . . . . . . . . . . $ 26,877 $ 22,483 $101,892 $ 80,479
Other. . . . . . . . . . . . . . . . . . . . . . . 1,583 1,178 5,937 4,339
Interest and share of income (loss) from
Service Companies. . . . . . . . . . . . . . . . . 937 162 2,760 1,151
Other interest . . . . . . . . . . . . . . . . . . . 428 122 1,272 521
Share of income from co-investment partnerships. . . 661 368 2,169 925
Fees from co-investment partnerships . . . . . . . . 741 615 3,323 2,658
-------- -------- -------- --------
Total Revenues . . . . . . . . . . . . . . . . . 31,227 24,928 117,353 90,073
-------- -------- -------- --------
EXPENSES:
- --------
Personnel. . . . . . . . . . . . . . . . . . . . . . 2,662 2,150 10,073 7,648
Advertising and promotion. . . . . . . . . . . . . . 804 599 2,982 2,147
Utilities. . . . . . . . . . . . . . . . . . . . . . 869 1,056 4,272 4,087
Building repairs and maintenance . . . . . . . . . . 1,885 1,323 6,378 5,592
Landscaping and grounds maintenance. . . . . . . . . 599 443 2,298 1,796
Real estate taxes. . . . . . . . . . . . . . . . . . 3,045 2,675 12,539 9,476
Insurance. . . . . . . . . . . . . . . . . . . . . . 137 217 841 858
Other operating expenses . . . . . . . . . . . . . . 411 398 1,512 1,192
Property management fees . . . . . . . . . . . . . . 711 600 2,698 2,147
Interest, net of capitalized . . . . . . . . . . . . 5,270 3,844 20,263 11,995
Amortization of deferred costs . . . . . . . . . . . 101 161 465 596
Depreciation of real property. . . . . . . . . . . . 3,471 2,727 13,132 9,875
Depreciation of personal property. . . . . . . . . . 1,247 912 4,831 3,345
General and administrative . . . . . . . . . . . . . 1,190 697 3,993 2,850
-------- -------- -------- --------
Total expenses . . . . . . . . . . . . . . . . . 22,402 17,802 86,277 63,604
-------- -------- -------- --------
Non-recurring item - gain on sale of
properties . . . . . . . . . . . . . . . . . . . . . 3,621 2,457 3,621 2,457
-------- -------- -------- --------
Income before taxes, minority interest
and extraordinary item . . . . . . . . . . . . . . . 12,446 9,583 34,697 28,926
-------- -------- -------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
1998 1997 1998 1997
-------- -------- ------- --------
Minority interest. . . . . . . . . . . . . . . . . . . 1,826 1,405 4,997 4,378
-------- -------- -------- --------
Income before and extraordinary items. . . . . . . . . 10,620 8,178 29,700 24,548
Extraordinary items, net of minority interest. . . . . -- -- -- (196)
-------- -------- -------- --------
Net income . . . . . . . . . . . . . . . . . . . . . . 10,620 8,178 29,700 24,352
Net income allocable to preferred shares . . . . . . . 1,890 484 4,875 1,903
-------- -------- -------- --------
Net income allocable to common shares. . . . . . . . . $ 8,730 $ 7,694 $ 24,825 $ 22,449
======== ======== ======== ========
INCOME PER COMMON SHARE:
- -----------------------
Before extraordinary items . . . . . . . . . . . . . $ 0.52 $ 0.46 $ 1.49 $ 1.44
Extraordinary item . . . . . . . . . . . . . . . . . $ 0.00 $ 0.00 $ 0.00 $ (0.01)
Income per common share. . . . . . . . . . . . . . . $ 0.52 $ 0.46 $ 1.49 $ 1.43
======== ======== ======== ========
FUNDS FROM OPERATIONS:
- ---------------------
Income before taxes, minority interest
and extraordinary item . . . . . . . . . . . . . . $ 12,446 9,583 $ 34,697 $ 28,926
Depreciation of real property. . . . . . . . . . . . 3,471 2,727 13,132 9,875
Depreciation of personal property. . . . . . . . . . 1,247 912 4,831 3,345
Non-recurring items - gain on sale of properties . . (3,621) (2,457) (3,621) (2,457)
Share of Co-investments depreciation . . . . . . . . 1,153 649 3,793 2,483
Share of Service Company amortization of goodwill. . 100 -- 400 --
-------- -------- -------- --------
Funds from operations (FFO). . . . . . . . . . . . $ 14,796 11,414 $ 53,232 $ 42,172
======== ======== ======== ========
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
----------------------- -----------------------
1998 1997 1998 1997
-------- -------- ------- --------
FFO per share. . . . . . . . . . . . . . . . . . . . . $ 0.61 $ 0.55 $ 2.34 $ 2.13
======== ======== ======== ========
Capital expenditures paid from FFO . . . . . . . . . . $ (962) $ (618) $ (3,991) $ (3,323)
Other - share of Co-investments Cap exp. . . . . . . . (62) (44) (330) (198)
-------- -------- -------- --------
Funds available for distribution (FAD) . . . . . . . . $ 13,772 $ 10,752 $ 48,911 $ 38,651
======== ======== ======== ========
FAD per share. . . . . . . . . . . . . . . . . . . . . $ 0.56 $ 0.52 $ 2.15 $ 1.95
======== ======== ======== ========
Dividends per share. . . . . . . . . . . . . . . . . . $ 0.45 $ 0.44 $ 1.77 $ 1.74
======== ======== ======== ========
Dividends as a % of FFO. . . . . . . . . . . . . . . . 74.2% 80.1% 75.7% 81.8%
Dividends as a % of FAD. . . . . . . . . . . . . . . . 79.7% 85.1% 82.4% 89.3%
======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONDENSED BALANCE SHEETS
Unaudited - Dollars in thousands except per share data
<CAPTION>
DEC. 31, DEC. 31,
1998 1997
-------- --------
<S> <C> <C>
ASSETS
- ------
Rental apartments
Land. . . . . . . . . . . . . . . . . . . $ 91,459 $ 78,476
Depreciable property. . . . . . . . . . . 586,297 496,747
-------- --------
677,756 575,223
Less accumulated depreciation . . . . . . (77,930) (62,641)
-------- --------
599,826 512,582
Properties under development . . . . . . . 61,765 78,724
Investments in partnerships. . . . . . . . 72,150 50,729
Cash and cash equivalents. . . . . . . . . 4,546 5,676
Security deposits. . . . . . . . . . . . . 1,684 1,821
Deferred costs, net. . . . . . . . . . . . 2,972 3,140
Notes receivable and advances to
Service Companies. . . . . . . . . . . . 31,277 18,356
Other assets . . . . . . . . . . . . . . . 11,372 8,950
-------- --------
Total assets . . . . . . . . . . . . . . . $785,592 $679,978
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Debt . . . . . . . . . . . . . . . . . . . $367,370 $333,250
Accrued interest payable . . . . . . . . . 2,170 1,389
Accrued real estate taxes. . . . . . . . . 10,141 9,334
Construction costs payable . . . . . . . . 3,420 8,403
Security deposits and prepaid rents. . . . 1,967 2,722
Other liabilities. . . . . . . . . . . . . 3,096 2,978
-------- --------
Total liabilities. . . . . . . . . . . . . 388,164 358,076
-------- --------
Minority interest. . . . . . . . . . . . . 54,574 51,463
-------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONDENSED BALANCE SHEETS - CONTINUED
DEC. 31, DEC. 31,
1998 1997
-------- --------
Shareholders' equity
Preferred shares, $.01 par value. . . . . 42 11
Shares of beneficial interest,
$.01 par value. . . . . . . . . . . . . 167 166
Additional paid-in capital. . . . . . . . 420,303 341,148
Employees and trustees notes. . . . . . . (10,668) (6,924)
Dividends paid in excess of earnings. . . (66,990) (63,962)
-------- --------
Total shareholders' equity. . . . . . . 342,854 270,439
-------- --------
Total liabilities and
shareholders' equity . . . . . . . . . $785,592 $679,978
======== ========
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
SELECTED QUARTERLY FINANCIAL INFORMATION
December 31, 1998
(dollars in thousands except for share data)
<CAPTION>
QUARTER ENDING
-----------------------------------------------------------------------
DEC. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
1998 1998 1998 1998 1997
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Debt $367,370 $336,190 $337,108 $361,305 $333,250
Debt including share of
Co-investment debt $439,172 $402,972 $400,485 $422,393 $392,295
Total Shares and
Units Outstanding (1) 24,445,827 24,130,128 23,085,101 22,028,680 20,958,523
Value per Common Share
- end of quarter $ 22.25 $ 21.3125 $ 21.4375 $22.9375 $22.250
Total Equity (Market
Value) - end of quarter $543,920 $514,273 $494,887 $505,283 $466,327
Market Capitalization $911,290 $850,463 $831,995 $866,588 $799,577
Market Capitalization including
share of Co-investment debt $983,092 $917,245 $895,372 $927,676 $858,622
Market Capitalization including
Co-investment at cost $1,455,887 $1,313,940 $1,279,707 $1,252,510 $1,183,456
========== ========== ========== ========== ==========
Total Revenues (2) $ 31,227 $ 30,155 $ 29,309 $ 26,662 $ 24,928
EBITDA (3) $ 20,167 $ 19,213 $ 18,048 $ 16,532 $ 15,420
FFO $ 14,796 $ 13,842 $ 13,130 $ 11,464 $ 11,414
FAD $ 14,772 $ 12,546 $ 11,965 $ 10,628 $ 10,752
Dividends Paid $ 10,323 $ 9,719 $ 9,356 $ 9,224 $ 9,037
Debt Service (net of
capitalized interest) $ 5,924 $ 5,932 $ 5,441 $ 5,571 $ 4,340
Interest Expense $ 5,270 $ 5,255 $ 4,800 $ 4,938 $ 3,844
G & A Expense $ 1,190 $ 837 $ 1,112 $ 854 $ 697
Total Shares and
Units Outstanding
- Wtd. Avg. 24,355,803 23,097,922 22,050,967 21,238,186 20,714,889
========== ========== ========== ========== ==========
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
SELECTED QUARTERLY FINANCIAL INFORMATION - CONTINUED
December 31, 1998
QUARTER ENDING
-----------------------------------------------------------------------
DEC. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
1998 1998 1998 1998 1997
-------- -------- -------- -------- --------
Interest Coverage Ratio 3.83 3.66 3.76 3.35 4.01
Debt as % of Market
Capitalization 40.31% 39.53% 40.52% 41.69% 41.68%
Debt (including Share
of Co-investment debt)
as % of Market Capitalization 44.67% 43.93% 44.73% 45.53% 45.69%
EBITDA as % of
Market Capitalization 8.85% 9.04% 8.68% 7.63% 7.71%
FFO as % of Market Equity 10.88% 10.77% 10.61% 9.08% 9.79%
G&A as % of Market
Capitalization 0.52% 0.39% 0.53% 0.39% 0.35%
G&A as % of Total Revenues 3.81% 2.78% 3.79% 3.20% 2.80%
Dividends as % of FFO (4) 74.2% 73.6% 74.1% 81.9% 80.1%
Dividends as % of FAD (4) 79.7% 81.2% 81.3% 88.3% 85.1%
========== ========== ========== ========== ==========
Apartment Units - In Operation
Wholly Owned 12,792 12,250 12,250 11,938 11,650
Co-investments 6,767 6,123 6,123 5,851 5,851
---------- ---------- ---------- ---------- ----------
19,559 18,373 18,373 17,789 17,501
---------- ---------- ---------- ---------- ----------
Apartments Units -
Under Development
Wholly Owned 1,486 2,352 2,100 2,488 2,488
Co-investments 3,376 2,464 2,224 1,456 1,456
---------- ---------- ---------- ---------- ----------
4,862 4,816 4,324 3,944 3,944
---------- ---------- ---------- ---------- ----------
Total Units 24,421 23,189 22,697 21,733 21,445
========== ========== ========== ========== ==========
<FN>
(1) End of the quarter - At December 31, 1998, includes 4,225,000 preferred shares convertible to common
shares.
(2) Excluding non-recurring gain of $3,621 in 1998 and $2,457 in 1997.
(3) Includes other income, net of G & A expenses.
(4) Based on per share amounts.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
PORTFOLIO INDEBTEDNESS SUMMARY
December 31, 1998
(Dollars in thousands)
<CAPTION>
Weighted
Avg.
Percent of Interest Years to
Type of Indebtedness Balance Total Interest Rate Maturity
- -------------------- -------- ----------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
Conventional Fixed Rate $176,370 48.0% Fixed 7.63% 7.8
Tax-exempt Variable Rate (1) 50,250 13.7% Variable 5.44% 3.8
Credit Facilities (2) 135,000 36.7% Variable 6.49% 2.5
Service Companies 5,750 1.6% Fixed 9.22% 3.5
-------- ------ ----- ---
Total $367,370 100.0% 6.94% 5.2
======== ====== ===== ===
Balance Weighted
including Avg.
share of Co- Percent of Interest Years to
Type of Indebtedness investment debt (3) Total Interest Rate Maturity
- -------------------- ------------------- ---------- ---------- ---------- --------
Conventional Fixed Rate $248,172 56.6% Fixed 7.68% 7.4
Tax-exempt Variable Rate (1) 50,250 11.4% Variable 5.44% 3.8
Credit Facilities (2) 135,000 30.7% Variable 6.49% 2.5
Service Companies 5,750 1.3% Fixed 9.22% 3.5
-------- ----- ----- ---
Total $439,172 100.0% 7.08% 5.4
======== ===== ===== ===
<FN>
(1) Maturity Date shown is expiration date of Credit Enhancement. Bonds mature in 2024.
(2) $50,000 has been swapped to a fixed rate ($20,000 maturing in November 2002 and $30,000 maturing
in February 2003). Effective interest rate includes swap costs.
(3) Co-Investment debt represents Amli Residential's pro rata share of debt. Interest rate and maturity
reflect average numbers based on Amli's pro rata share.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
DEBT MATURITIES
December 31, 1998
Unaudited - Dollars in thousands
<CAPTION>
There- % to
1999 2000 2001 2002 2003 after Total Total
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed Rate Mortgages $ 2,683 $ 3,033 $ 3,282 $ 3,534 $ 65,785 $ 98,053 $176,370 48.0%
Tax Exempt Bonds* 50,250 50,250 13.7%
Wachovia/First Chicago
Line of Credit 135,000 135,000 36.7%
Other 750 5,000 5,750 1.6%
-------- -------- -------- -------- -------- -------- -------- --------
Total Loans $ 3,433 $ 3,033 $138,282 $ 53,784 $ 70,785 $ 98,053 $367,370 100.0%
======== ======== ======== ======== ======== ======== ======== ========
Percent to Total 0.9% 0.8% 37.6% 14.6% 19.3% 26.8% 100.0% 83.7%
======== ======== ======== ======== ======== ======== ======== ========
SHARE OF CO-INVESTMENT DEBT
- ---------------------------
Prudential Ins. -
Park Place (25%) $ 3,054 -- -- -- -- -- 3,054 4.3%
Nationwide Life Ins. -
Greenwood Forest (15%) 17 19 20 1,679 -- -- 1,735 2.4%
Lincoln National Ins. -
Champions Park (15%) 21 22 24 1,259 -- -- 1,326 1.8%
Prudential Ins. -
Champions Centre (15%) 10 11 12 955 -- -- 988 1.4%
Allstate Life Ins. -
Windbrooke (15%) 16 18 20 1,659 -- -- 1,713 2.4%
CIGNA -
Chevy Chase (33%) 177 189 202 216 8,770 -- 9,554 13.3%
Northwestern Mutual Life Ins. -
Willowbrook (40%) 150 162 175 189 8,909 -- 9,585 13.3%
Phoenix Mutual -
Willeo Creek (30%) 53 57 61 65 2,687 -- 2,923 4.1%
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
DEBT MATURITIES - CONTINUED
There- % to
1999 2000 2001 2002 2003 after Total Total
------- ------- ------- ------- ------- -------- -------- ------
Northwestern Mutual Life Ins. -
Pleasant Hill (40%) 80 88 96 106 116 5,586 6,072 8.5%
Northwestern Mutual Life Ins. -
Barrett Lakes (35%) 71 77 84 91 99 5,416 5,838 8.1%
Erie Insurance -
River Park (40%) 20 50 54 59 63 3,219 3,465 4.8%
Prudential Ins - AMLI at
Danada (10%) 17 25 27 29 31 2,321 2,450 3.4%
Phoenix Home Life -
AMLI at Verandah (35%) 55 88 94 102 110 5,480 5,929 8.2%
Northwestern Mutual Life Ins. -
Northwinds (35%) -- 15 95 103 112 6,783 7,108 9.9%
Northwestern Mutual Life Ins. -
Regents Creek (25%) 65 70 76 82 3,710 -- 4,003 5.6%
Northwestern Mutual Life Ins. -
Parkway (25%) 39 46 49 52 56 2,458 2,700 3.8%
Jackson National Life Ins. -
Timberglen (40%) 39 42 45 49 52 2,463 2,690 3.7%
Amli Residential -
Deerfield (25%) 546 -- -- -- -- -- 546 0.8%
Central Bank, Trustee -
Prairie Court (1%) 73 -- -- -- -- -- 73 0.1%
Erie Insurance -
Towne Creek (1%) 50 -- -- -- -- -- 50 0.1%
-------- -------- -------- -------- -------- -------- -------- --------
Total Share of
Co-Investment Loans $ 4,553 $ 979 $ 1,134 $ 6,695 $ 24,715 $ 33,726 $ 71,802 100.0%
======== ======== ======== ======== ======== ======== ======== ========
Percent to Total 6.3% 1.4% 1.6% 9.3% 34.4% 47.0% 100.0% 16.3%
======== ======== ======== ======== ======== ======== ======== ========
Total Including Share
of Co-Investments Debt $ 7,986 $ 4,012 $139,416 $ 60,479 $ 95,500 $131,779 $439,172 100.0%
======== ======== ======== ======== ======== ======== ======== ========
Percent to Total 1.8% 0.9% 31.7% 13.8% 21.7% 30.1% 100.0% 100.0%
======== ======== ======== ======== ======== ======== ======== ========
<FN>
* The Spring Creek Bonds mature in October 2024, but the credit enhancement expires on October 15, 2002.
* The Poplar Creek Bonds mature in February 2024, but the credit enhancement expires December 18, 2002.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES)
THREE MONTHS ENDED DECEMBER 31, 1998 VERSUS THREE MONTHS ENDED DECEMBER 31, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
10/1/98-12/31/98 10/1/97-12/31/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG. OCCUPANCY
- -----------------------
Dallas 3,966 90.9% -4.9% 95.6%
Atlanta 2,420 94.5% 2.0% 92.6%
Austin 935 94.4% -1.4% 95.8%
Indianapolis 996 91.4% 4.3% 87.7%
Kansas 908 92.7% 0.9% 91.8%
Chicago 253 96.6% -0.7% 97.2%
----- ----- ----- -----
Weighted Average 92.5% -1.3% 93.7%
===== ===== =====
Total 9,478
=====
WEIGHTED AVG. RENTAL RATE
- -------------------------
Dallas $ 652 -2.4% $ 668
Atlanta 756 2.9% 734
Austin 674 4.3% 646
Indianapolis 605 3.9% 582
Kansas 660 1.8% 648
Chicago 970 4.1% 932
------ ---- ------
Weighted Average $ 684 0.8% $ 679
====== ==== ======
TOTAL PROPERTY REVENUES Per Month Per Month
- ----------------------- ---------- ----------
Dallas $ 7,920,310 $ 666 $0.79 -0.8% $ 7,981,689 $ 671 $0.80
Atlanta 5,408,264 745 0.80 5.0% 5,150,852 709 0.76
Austin 1,870,297 667 0.91 2.6% 1,823,404 650 0.88
Indianapolis 1,745,631 584 0.71 10.0% 1,587,514 531 0.64
Kansas 1,737,389 638 0.74 2.0% 1,703,636 625 0.73
Chicago 814,494 1,073 1.26 5.3% 773,792 1,019 1.19
------------ ------ ----- ----- ----------- ------ -----
Total $ 19,496,385 $ 686 $0.80 2.5% $19,020,887 $ 669 $0.78
============ ====== ===== ===== =========== ====== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97)
10/1/98-12/31/98 10/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- --------------------------- ------------ ------------
Dallas $ 3,538,751 3,569 $4.24 7.7% $ 3,285,579 $ 3,314 $3.94
Atlanta 1,942,871 3,211 3.44 5.0% 1,850,565 3,059 3.28
Austin 769,927 3,294 4.47 -5.3% 812,834 3,477 4.72
Indianapolis 737,312 2,961 3.59 -0.2% 738,836 2,967 3.60
Kansas 590,539 2,601 3.02 25.2% 471,614 2,078 2.41
Chicago 475,915 7,524 8.80 16.4% 408,893 6,465 7.56
------------ ------ ----- ----- ----------- ------- -----
Total $ 8,055,315 $3,400 $3.98 6.4% $ 7,568,322 $ 3,194 $3.74
============ ====== ===== ===== =========== ======= =====
Operating Efficiency 41.3% 39.8%
============ ===========
NOI 1998 % 1997 % PER MONTH PER MONTH
- --- ------ ------ --------- ----------
Dallas 55.3% 58.8% $ 4,381,559 $ 368 $0.44 -6.7% $ 4,696,110 $ 395 $0.47
Atlanta 64.1% 64.1% 3,465,393 477 0.51 5.0% 3,300,287 455 0.49
Austin 58.8% 55.4% 1,100,370 392 0.53 8.9% 1,010,570 360 0.49
Indianapolis 57.8% 53.5% 1,008,319 337 0.41 18.8% 848,678 284 0.34
Kansas 66.0% 72.3% 1,146,850 421 0.49 -6.9% 1,232,021 452 0.53
Chicago 41.6% 47.2% 338,580 446 0.52 -7.2% 364,899 481 0.56
------ ----- ------------ ------ ----- ----- ----------- ------ -----
Total 58.7% 60.2% $11,441,070 $ 402 $0.47 -0.1% $11,452,566 $ 403 $0.47
====== ===== ============ ====== ===== ===== =========== ====== =====
Operating Margin 58.7% 60.2%
============ ===========
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- -------------------- ------------ ------------
Dallas $ 311,687 $ 314 $0.37 81.7% $ 171,493 $ 173 $0.21
Atlanta 181,081 299 0.32 -13.7% 209,901 347 0.37
Austin 206,506 883 1.20 173.8% 75,436 323 0.44
Indianapolis (33,664) (135) (0.16) -187.0% 38,688 155 0.19
Kansas 131,858 581 0.68 60.3% 82,278 362 0.42
Chicago 45,562 720 0.84 655.7% 6,029 95 0.11
----------- ------ ----- ------ --------- ------ -----
Total $ 843,030 $ 356 $0.42 44.4% 583,826 $ 246 $0.29
=========== ====== ===== ====== ========= ====== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97)
10/1/98-12/31/98 10/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- ----------------------- ------------ ------------
Dallas $ 594,085 $ 599 $0.71 41.8% $ 418,816 $ 422 $0.50
Atlanta 331,341 548 0.59 28.0% 258,809 428 0.46
Austin 116,784 500 0.68 -5.6% 123,707 529 0.72
Indianapolis 171,459 689 0.84 -1.0% 173,220 696 0.84
Kansas 175,003 771 0.90 103.6% 85,962 379 0.44
Chicago 115,528 1,827 2.14 62.8% 70,970 1,122 1.31
---------- ------ ----- ------ ---------- ------ -----
Total $1,504,200 $ 635 $0.74 32.9% $1,131,483 $ 478 $0.56
========== ====== ===== ====== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- ----------------- ------------ ------------
Dallas $1,058,715 $1,068 $1.27 -6.0% $1,125,841 $1,135 $1.35
Atlanta 430,260 711 0.76 11.1% 387,321 640 0.69
Austin 263,435 1,127 1.53 12.7% 233,778 1,000 1.36
Indianapolis 136,024 546 0.66 -38.6% 221,708 890 1.08
Kansas 72,762 321 0.37 230.3% 22,028 97 0.11
Chicago 153,047 2,420 2.83 2.5% 149,372 2,362 2.76
---------- ------ ----- ----- ---------- ------ -----
Total $2,114,243 $ 892 $1.04 -1.2% $2,140,048 $ 903 $1.06
========== ====== ===== ===== ========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES)
YEAR ENDED DECEMBER 31, 1998 VERSUS YEAR ENDED DECEMBER 31, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
1/1/98-12/31/98 1/1/97-12/31/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
------ -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG. OCCUPANCY
- -----------------------
Dallas 3,966 93.7% -1.0% 94.6%
Atlanta 2,420 94.1% 0.7% 93.4%
Austin 935 95.6% 1.2% 94.5%
Indianapolis 996 92.6% 1.9% 90.9%
Kansas 908 92.5% 0.5% 92.1%
Chicago 253 97.0% 3.1% 94.1%
----- ----- ----- -----
Weighted Average 93.9% 0.2% 93.7%
===== ===== =====
Total 9,478
=====
WEIGHTED AVG. RENTAL RATE
- -------------------------
Dallas $ 663 0.9% $ 657
Atlanta 743 2.0% 728
Austin 659 2.3% 644
Indianapolis 587 2.2% 574
Kansas 654 1.1% 647
Chicago 945 2.7% 920
------ ---- ------
Weighted Average $ 681 1.5% $ 671
====== ==== ======
TOTAL PROPERTY REVENUES PER MONTH PER MONTH
- ----------------------- --------- ---------
Dallas $31,750,576 $ 667 $0.79 2.3% $ 31,046,230 $ 652 $0.78
Atlanta 21,297,808 733 0.79 3.1% 20,666,484 712 0.76
Austin 7,435,714 663 0.90 3.4% 7,194,329 641 0.87
Indianapolis 6,882,159 576 0.70 4.1% 6,613,512 553 0.67
Kansas 6,948,411 638 0.74 1.2% 6,863,533 630 0.73
Chicago 3,191,724 1,051 1.23 9.1% 2,925,225 964 1.13
----------- ------ ----- ---- ----------- ------ -----
Total $77,506,391 $ 681 $0.80 2.9% $75,309,312 $ 662 $0.77
=========== ====== ===== ==== =========== ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-12/31/98 1/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- --------------------------- ------------ -----------
Dallas $ 13,978,529 $3,525 $4.19 7.3% $13,032,812 $3,286 $3.91
Atlanta 7,615,699 3,147 3.37 3.0% 7,392,753 3,055 3.28
Austin 3,116,322 3,333 4.53 -5.7% 3,304,241 3,534 4.80
Indianapolis 2,633,914 2,644 3.21 -0.9% 2,658,522 2,669 3.24
Kansas 2,606,404 2,870 3.34 5.5% 2,471,118 2,721 3.16
Chicago 1,730,294 6,839 8.00 3.1% 1,678,714 6,635 7.76
------------ ------ ----- ---- ----------- ------ -----
Total $ 31,681,163 $3,343 $3.91 3.7% $30,538,160 $3,222 $3.77
============ ====== ===== ==== =========== ==== =====
Operating efficiency 40.9% 40.6%
============ ===========
NOI 1998 % 1997 % PER MONTH PER MONTH
- --- ------ ------ --------- ----------
Dallas 56.0% 58.0% $17,772,047 $ 373 $0.44 -1.3% $18,013,418 $ 378 $0.45
Atlanta 64.2% 64.2% 13,682,108 471 0.51 3.1% 13,273,731 457 0.49
Austin 58.1% 54.1% 4,319,392 385 0.52 11.0% 3,890,087 347 0.47
Indianapolis 61.7% 59.8% 4,248,245 355 0.43 7.4% 3,954,991 331 0.40
Kansas 62.5% 64.0% 4,342,007 398 0.46 -1.1% 4,392,415 403 0.47
Chicago 45.8% 42.6% 1,461,430 481 0.56 17.2% 1,246,511 411 0.48
----- ----- ----------- ------ ----- ----- ----------- ------ -----
Total 59.1% 59.4% $45,825,229 $ 403 $0.47 2.4% $44,771,152 $ 394 $0.46
===== ===== =========== ====== ===== ===== =========== ====== =====
Operating Margin 59.1% 59.4%
=========== ===========
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- -------------------- ------------- ------------
Dallas $1,413,650 $ 356 $0.42 4.7% $1,350,616 $ 341 $0.40
Atlanta 783,182 324 0.35 1.1% 774,749 320 0.34
Austin 480,105 513 0.70 27.6% 376,314 402 0.55
Indianapolis 262,993 264 0.32 35.8% 193,697 194 0.24
Kansas 431,478 475 0.55 72.9% 249,509 275 0.32
Chicago 108,341 428 1.00 1.6% 106,593 421 0.49
---------- ------ ----- ------ ---------- ------ -----
Total $3,479,748 $ 367 $0.43 14.0% $3,051,477 $ 322 $0.38
========== ==== ===== ====== ========== ====== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-12/31/98 1/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- ----------------------- ------------ ------------
Dallas $2,194,573 $ 553 $0.66 11.6% $1,966,295 $ 496 $0.59
Atlanta 1,165,811 482 0.52 1.8% 1,145,185 473 0.51
Austin 451,222 483 0.66 -20.2% 565,731 605 0.82
Indianapolis 538,943 541 0.66 -8.5% 589,329 592 0.72
Kansas 457,875 504 0.59 26.1% 363,079 400 0.46
Chicago 377,587 1,492 1.75 13.2% 333,615 1,319 1.54
---------- ------ ----- ----- ---------- ------ -----
Total $5,186,011 $ 547 $0.64 4.5% $4,963,234 $ 524 $0.61
========== ====== ===== ===== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- ----------------- ------------ ------------
Dallas $4,548,928 $1,147 $1.36 11.3% $4,088,319 $1,031 $1.23
Atlanta 1,613,467 667 0.71 9.4% 1,475,365 610 0.65
Austin 983,129 1,051 1.43 11.7% 879,996 941 1.28
Indianapolis 523,957 526 0.64 -29.4% 742,334 745 0.90
Kansas 626,348 690 0.80 -5.1% 660,029 727 0.84
Chicago 552,400 2,183 2.55 -2.6% 566,942 2,241 2.62
---------- ------ ----- ----- ---------- ------ -----
Total $8,848,230 $ 934 $1.09 5.2% $8,412,985 $ 888 $1.04
========== ====== ===== ===== ========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES)
THREE MONTHS ENDED DECEMBER 31, 1998 VERSUS THREE MONTHS ENDED DECEMBER 31, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
10/1/98-12/31/98 10/1/97-12/31/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
------ -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG. OCCUPANCY
- -----------------------
Dallas 4,226 92.6% -2.8% 95.4%
Atlanta 3,314 93.7% 1.0% 92.8%
Austin 1,523 94.7% 0.0% 94.7%
Houston 754 94.7% -1.4% 96.0%
Indianapolis 996 91.4% 0.7% 90.8%
Kansas 908 92.7% 1.7% 91.1%
Chicago 1,694 95.8% 0.7% 95.1%
------ ----- ----- ------
Weighted Average 93.6% -0.5% 94.0%
===== ===== ======
Total 13,415
======
WEIGHTED AVG. RENTAL RATE
- -------------------------
Dallas $ 641 -2.2% $ 656
Atlanta 763 3.0% 740
Austin 645 4.4% 618
Houston 768 6.4% 721
Indianapolis 605 6.1% 570
Kansas 660 1.5% 650
Chicago 984 6.4% 925
------ ----- ------
Weighted Average $ 721 2.5% $ 703
====== ===== ======
TOTAL PROPERTY REVENUES PER MONTH PER MONTH
- ----------------------- ---------- ---------
Dallas $ 8,395,025 $ 662 $0.79 -0.6% $ 8,446,369 $ 666 $0.79
Atlanta 7,471,666 752 0.78 4.4% 7,158,638 720 0.75
Austin 2,921,693 639 0.90 1.6% 2,876,365 630 0.88
Houston 1,747,688 773 0.84 3.2% 1,693,623 749 0.81
Indianapolis 1,745,631 584 0.71 10.0% 1,587,514 531 0.64
Kansas 1,737,389 638 0.74 2.0% 1,703,636 625 0.73
Chicago 5,099,746 1,003 1.19 6.1% 4,807,503 946 1.12
----------- ------ ----- ----- ----------- ---- -----
Total $29,118,838 $ 724 $0.84 3.0% $28,273,648 $703 $0.82
=========== ====== ===== ===== =========== ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT.
(Excludes all properties acquired or stabilized after 1/1/97)
10/1/98-12/31/98 10/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- --------------------------- ------------ ------------
Dallas $ 3,765,287 $3,564 $4.25 7.9% $ 3,489,162 $3,303 $3.94
Atlanta 2,697,645 3,256 3.40 2.0% 2,645,270 3,193 3.33
Austin 1,210,671 3,180 4.46 -6.8% 1,299,014 3,412 4.78
Houston 792,236 4,203 4.54 14.2% 693,644 3,680 3.98
Indianapolis 737,312 2,961 3.59 -0.2% 738,836 2,967 3.60
Kansas 590,539 2,601 3.02 25.2% 471,614 2,078 2.41
Chicago 2,148,082 5,072 5.99 6.8% 2,010,925 4,748 5.61
----------- ------ ----- ----- ----------- ------ -----
Total $11,941,773 $3,561 $4.14 5.2% $11,348,465 $3,384 $3.93
=========== ====== ===== ===== =========== ====== =====
Operating Efficiency 41.0% 40.1%
=========== ===========
NOI 1998 % 1997 % PER MONTH PER MONTH
- --- ------ ------ --------- ----------
Dallas 55.1% 58.7% $ 4,629,738 $ 365 $0.44 -6.6% $ 4,957,207 $ 391 $0.47
Atlanta 63.9% 63.0% 4,774,020 480 0.50 5.8% 4,513,368 454 0.47
Austin 58.6% 54.8% 1,711,022 374 0.53 8.5% 1,577,351 345 0.48
Houston 54.7% 59.0% 955,451 422 0.46 -4.5% 999,979 442 0.48
Indianapolis 57.8% 53.5% 1,008,319 337 0.41 18.8% 848,678 284 0.34
Kansas 66.0% 72.3% 1,146,850 421 0.49 -6.9% 1,232,021 452 0.53
Chicago 57.9% 58.2% 2,951,664 581 0.69 5.5% 2,796,578 550 0.65
----- ----- ----------- ------ ----- ----- ----------- ------ -----
Total 59.0% 59.9% $17,177,064 $ 427 $0.50 1.5% $16,925,182 $ 421 $0.49
===== ===== =========== ====== ===== ===== =========== ====== =====
Operating Margin 59.0% 59.9%
=========== ===========
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- -------------------- ------------ ------------
Dallas $ 340,684 $ 322 $0.38 89.3% $ 179,977 $ 170 $0.20
Atlanta 226,516 273 0.29 -4.5% 237,309 286 0.30
Austin 225,540 592 0.83 86.8% 120,716 317 0.44
Houston 16,050 85 0.09 -3.4% 16,608 88 0.10
Indianapolis (33,664) (135) (0.16) -187.0% 38,688 155 0.19
Kansas 131,858 581 0.68 60.3% 82,278 362 0.42
Chicago 147,876 349 0.41 214.4% 47,028 111 0.13
----------- ------ ----- ------ --------- ------ -----
Total $ 1,054,860 $ 315 $0.37 46.0% $ 722,604 $ 215 $0.25
=========== ====== ===== ====== ========= ====== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT.
(Excludes all properties acquired or stabilized after 1/1/97)
10/1/98-12/31/98 10/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- ----------------------- ------------ ------------
Dallas $ 628,806 $ 595 $0.71 42.3% $ 441,768 $ 418 $0.50
Atlanta 434,908 525 0.55 20.1% 362,193 437 0.46
Austin 182,551 479 0.67 -3.2% 188,599 495 0.69
Houston 110,696 587 0.63 148.0% 44,636 237 0.26
Indianapolis 171,459 689 0.84 -1.0% 173,220 696 0.84
Kansas 175,003 771 0.90 103.6% 85,962 379 0.44
Chicago 398,497 941 1.11 39.1% 286,477 676 0.80
----------- ------ ----- ----- ---------- ------ -----
Total $ 2,101,921 $ 627 $0.73 32.8% $1,582,856 $ 472 $0.55
=========== ====== ===== ===== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- ----------------- ------------ ------------
Dallas $ 1,118,274 $1,058 $1.26 -5.4% $1,181,776 $1,119 $1.33
Atlanta 604,923 730 0.76 13.1% 534,782 645 0.67
Austin 366,915 964 1.35 -2.0% 374,523 984 1.38
Houston 283,854 1,506 1.63 5.4% 269,353 1,429 1.55
Indianapolis 136,024 546 0.66 -38.6% 221,708 890 1.08
Kansas 72,762 321 0.37 230.3% 22,028 97 0.11
Chicago 731,577 1,727 2.04 -0.1% 732,174 1,729 2.04
----------- ------ ----- ----- ---------- ------ -----
Total $ 3,314,329 $ 988 $1.15 -0.7% $3,336,344 $ 995 $1.16
=========== ====== ===== ===== ========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES)
YEAR ENDED DECEMBER 31, 1998 VERSUS YEAR ENDED DECEMBER 31, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
1/1/98-12/31/98 1/1/97-12/31/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
------ -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG. OCCUPANCY
- -----------------------
Dallas 4,226 94.2% -0.5% 94.6%
Atlanta 3,314 93.6% 0.5% 93.2%
Austin 1,523 95.5% 0.8% 94.7%
Houston 754 95.4% 0.5% 94.9%
Indianapolis 996 92.6% 1.9% 90.9%
Kansas 908 92.5% 0.5% 92.1%
Chicago 1,694 96.1% 1.9% 94.3%
------ ----- ----- -----
Weighted Average 94.3% 0.5% 93.8%
===== ===== =====
Total 13,415
======
WEIGHTED AVG. RENTAL RATE
- -------------------------
Dallas $ 671 2.9% $ 652
Atlanta 751 1.3% 742
Austin 632 1.7% 621
Houston 755 5.7% 714
Indianapolis 587 2.3% 574
Kansas 654 1.1% 646
Chicago 960 4.1% 922
------ ---- ------
Weighted Average $ 720 2.6% $ 702
====== ==== ======
TOTAL PROPERTY REVENUES PER MONTH PER MONTH
- ----------------------- --------- ---------
Dallas $ 33,639,890 $ 663 $0.79 2.3% $ 32,885,663 $ 648 $0.77
Atlanta 29,482,215 741 0.77 2.1% 28,885,399 726 0.76
Austin 11,591,978 634 0.89 2.7% 11,285,286 617 0.87
Houston 6,910,481 764 0.83 6.6% 6,481,106 716 0.77
Indianapolis 6,882,159 576 0.70 4.1% 6,613,512 553 0.67
Kansas 6,948,411 638 0.74 1.2% 6,863,533 630 0.73
Chicago 20,009,186 984 1.16 6.1% 18,851,211 927 1.10
------------ ------ ----- ----- ------------ ---- -----
Total $115,464,321 $ 717 $0.83 3.2% $111,865,710 $695 $0.81
============ ====== ===== ===== ============ ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT.
(Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-12/31/98 1/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- --------------------------- ------------ ------------
Dallas $14,869,049 $3,518 $4.19 6.9% $13,907,829 $3,291 $3.92
Atlanta 10,785,689 3,255 3.39 2.4% 10,535,616 3,179 3.32
Austin 5,061,978 3,324 4.66 -3.4% 5,238,012 3,439 4.82
Houston 2,875,015 3,813 4.12 7.4% 2,675,963 3,549 3.84
Indianapolis 2,633,914 2,644 3.21 -0.9% 2,658,522 2,669 3.24
Kansas 2,606,404 2,870 3.34 5.5% 2,471,118 2,721 3.16
Chicago 8,086,446 4,774 5.64 3.7% 7,800,718 4,605 5.44
----------- ------ ----- ------ ----------- ------ -----
Total $46,918,495 $3,497 $4.06 3.6% $45,287,778 $3,376 $3.92
=========== ====== ===== ====== =========== ====== =====
Operating Efficiency 40.6% 40.5%
=========== ===========
NOI 1998 % 1997 % PER MONTH PER MONTH
- --- ------ ------ --------- ----------
Dallas 55.8% 57.7% $18,770,841 $ 370 $0.44 -1.1% $18,977,834 $ 374 $0.45
Atlanta 63.4% 63.5% 18,696,527 470 0.49 1.9% 18,349,783 461 0.48
Austin 56.3% 53.6% 6,530,001 357 0.50 8.0% 6,047,274 331 0.46
Houston 58.4% 58.7% 4,035,467 446 0.48 6.1% 3,805,142 421 0.45
Indianapolis 61.7% 59.8% 4,248,245 $355 0.43 7.4% 3,954,991 331 0.40
Kansas 62.5% 64.0% 4,342,007 398 0.46 -1.1% 4,392,415 403 0.47
Chicago 59.6% 58.6% 11,922,740 587 0.69 7.9% 11,050,493 544 0.64
----- ----- ----------- ------ ----- ----- ----------- ------ -----
Total 59.4% 59.5% $68,545,826 $ 426 $0.49 3.0% $66,577,932 $ 414 $0.48
===== ===== =========== ====== ===== ===== =========== ====== =====
Operating Margin 59.4% 59.5%
=========== ===========
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- -------------------- ----------- ------------
Dallas $ 1,541,355 $ 365 $0.43 7.2% $1,437,488 $ 340 $0.41
Atlanta 918,387 277 0.29 -3.1% 947,944 286 0.30
Austin 689,679 453 0.63 30.5% 528,566 347 0.49
Houston 107,216 142 0.15 40.0% 76,559 102 0.11
Indianapolis 262,993 264 0.32 35.8% 193,697 194 0.24
Kansas 431,478 475 0.55 72.9% 249,509 275 0.32
Chicago 592,450 350 0.41 87.0% 316,877 187 0.22
----------- ------ ----- ------ ---------- ------ -----
Total $ 4,543,558 $ 339 $0.39 21.1% $3,750,640 $ 280 $0.32
=========== ====== ===== ====== ========== ====== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) - CONT.
(Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-12/31/98 1/1/97-12/31/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- ----------------------- ------------ ------------
Dallas $2,327,146 $ 551 $0.66 9.4% $2,127,761 $ 503 $0.60
Atlanta 1,586,619 479 0.50 3.0% 1,540,199 465 0.48
Austin 770,126 506 0.71 -11.6% 871,548 572 0.80
Houston 244,816 325 0.35 40.6% 174,181 231 0.25
Indianapolis 538,943 541 0.66 -8.5% 589,329 592 0.72
Kansas 457,875 504 0.59 26.1% 363,079 400 0.46
Chicago 1,308,036 772 0.91 16.4% 1,123,803 663 0.78
---------- ------ ----- ----- ---------- ------ -----
Total $7,233,562 $ 539 $0.63 6.5% $6,789,901 $ 506 $0.59
========== ====== ===== ===== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- ----------------- ------------ ------------
Dallas $ 4,795,939 $1,135 $1.35 11.0% $ 4,321,023 $1,022 $1.22
Atlanta 2,302,482 695 0.72 8.0% 2,132,577 644 0.67
Austin 1,529,292 1,004 1.41 7.7% 1,420,611 933 1.31
Houston 1,101,791 1,461 1.58 13.9% 967,755 1,283 1.39
Indianapolis 523,957 526 0.64 -29.4% 742,334 745 0.90
Kansas 626,348 690 0.80 -5.1% 660,029 727 0.84
Chicago 2,700,416 1,594 1.88 3.5% 2,609,534 1,540 1.82
----------- ------ ----- ----- ----------- ------ -----
Total $13,580,226 $1,012 $1.18 5.7% $12,853,862 $ 958 $1.11
=========== ====== ===== ===== =========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
PROPERTY INFORMATION
As of December 31, 1998
<CAPTION>
Approximate
Rentable Average
Year Year Number Area Unit Size
Location Acquired Completed of Units (Sq Ft) (Sq ft)
-------- -------- --------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
WHOLLY OWNED
PROPERTIES
- ------------
DALLAS/FT. WORTH
- ----------------
AMLI:
at Autumn Chase Carrollton, TX 1991 1987/1996 450 374,288 832
at Bent Tree Dallas, TX 1997 1996 300 282,774 943
at Bishop's Gate West Plano, TX 1997 1997 266 292,092 1,098
at Chase Oaks Plano, TX 1994 1986 250 193,736 775
at Gleneagles Dallas, TX 1988 1987/1997 590 521,302 884
on the Green Ft. Worth, TX 1994 1990/1993 424 358,560 846
at Nantucket Dallas, TX 1988 1986 312 222,208 712
of North Dallas Dallas, TX 1989/1990 1985/1986 1,032 905,590 878
on Rosemeade Dallas, TX 1990 1987 236 205,382 870
at Valley Ranch Irving, TX 1990 1985 460 389,940 848
------ --------- -------
Subtotal - Dallas/Ft. Worth, TX 4,320 3,745,872 867
------ --------- -------
ATLANTA, GA
- -----------
AMLI:
at Sope Creek Marietta, GA 82/83/95 695 632,393 910
at Spring Creek Dunwoody, GA 85/86/87/89 1,180 1,080,560 916
at Vinings Atlanta, GA 1992 1985 208 229,708 1,104
at Vinings-Phase II Atlanta, GA 1997 1985 152 144,532 951
at West Paces Atlanta, GA 1993 1992 337 314,707 934
at Peachtree City Atlanta, GA 1998 312 305,756 980
at Park Creek Atlanta, GA 1998 200 194,792 974
at Clairmont Atlanta, GA 1998 1988 288 229,335 796
------ --------- ------
Subtotal - Atlanta, GA 3,372 3,131,783 929
------ --------- ------
<PAGE>
Approximate
Rentable Average
Year Year Number Area Unit Size
Location Acquired Completed of Units (Sq Ft) (Sq ft)
-------- -------- --------- -------- ----------- ---------
AUSTIN, TX
- ----------
AMLI:
at the Arboretum Austin, TX 1986 1983 231 178,116 771
in Great Hills Austin, TX 1991 1985 344 256,892 747
at Lantana Ridge Austin, TX 1997 1997 354 311,808 881
at Martha's
Vineyard Austin, TX 1992 1986 360 253,328 704
------ ---------- -----
Subtotal - Austin, TX 1,289 1,000,144 776
------ ---------- -----
EASTERN KANSAS
- --------------
AMLI:
at Alvamar Lawrence, KS 1994 1989 152 125,800 828
at Centennial Overland Park, KS 1998 1998 170 204,855 1,205
at Crown Colony Topeka, KS 1994 1986 156 120,984 776
at Crown Colony II Topeka, KS 1997 64 51,292 801
at Lexington Farms Overland Park, KS 1998 1998 404 390,000 965
at Regents Center Overland Park, KS 1994 1991/1995 300 274,170 914
at Regents Center
III Overland Park, KS 1997 124 123,728 998
at Sherwood Topeka, KS 1994 1993 300 260,340 868
at Town Center Overland Park, KS 1997 1997 156 176,994 1,135
------ ---------- -----
Subtotal - Eastern Kansas 1,826 1,728,163 946
------ ---------- -----
INDIANAPOLIS, IN
- ----------------
AMLI:
at Riverbend Indianapolis, IN 1992/1993 1983/1985 996 820,712 824
at Conner Farms Indianapolis, IN 1997 1993 300 324,636 1,082
at Eagle Creek Indianapolis, IN 1998 1996 240 215,512 898
------ ---------- -----
Subtotal - Indianapolis, IN 1,536 1,360,860 886
------ ---------- -----
<PAGE>
Approximate
Rentable Average
Year Year Number Area Unit Size
Location Acquired Completed of Units (Sq Ft) (Sq ft)
-------- -------- --------- -------- ----------- ---------
CHICAGO, IL
- -----------
AMLI:
at Park Sheridan Chicago, IL 1989 1986 253 216,315 855
at Poplar Creek Chicago, IL 1997 1985 196 178,490 911
------ ---------- -----
Subtotal - Chicago, IL 449 394,805 879
------ ---------- -----
TOTAL WHOLLY OWNED PROPERTIES 12,792 11,361,627 888
====== ========== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
PROPERTY INFORMATION - CONTINUED
<CAPTION>
Quarter Ended Year Ended
December 31, 1998 Quarter Ended December 31, 1998 Year Ended
Average Rental Rates Dec 31, 1998 Average Rental Rates Dec 31, 1998
------------------------- Ave. ------------------------ Ave.
Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy
-------- ----------- ------------ -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
WHOLLY OWNED
PROPERTIES
- ------------
DALLAS/FT. WORTH
- ----------------
AMLI:
at Autumn Chase 710 $0.85 92.6% 695 $0.84 94.0%
at Bent Tree 835 0.89 92.4% 832 0.88 93.4%
at Bishop's Gate 1,048 0.95 92.4% 1,040 0.95 93.6%
at Chase Oaks 690 0.89 92.4% 679 0.88 94.4%
at Gleneagles 716 0.81 93.2% 719 0.81 94.6%
on the Green 689 0.81 91.4% 682 0.81 92.8%
at Nantucket 560 0.79 92.8% 556 0.78 95.6%
of North Dallas 659 0.75 92.2% 652 0.74 93.0%
on Rosemeade 677 0.78 93.8% 665 0.76 94.7%
at Valley Ranch 714 0.84 92.3% 703 0.83 95.2%
----- ----- ----- ----- ----- -----
Subtotal -
Dallas/Ft. Worth, TX 713 $0.82 92.5% 706 $0.81 94.0%
----- ----- ----- ----- ----- -----
ATLANTA, GA
- -----------
AMLI:
at Sope Creek 696 $0.77 96.1% 691 $0.76 95.0%
at Spring Creek 737 0.81 93.6% 723 0.79 93.1%
at Vinings 836 0.76 91.1% 804 0.73 93.3%
at Vinings-Phase II 764 0.80 95.8% 746 0.78 95.9%
at West Paces 895 0.96 96.5% 882 0.94 96.2%
at Peachtree City 883 0.90 93.6% 846 0.86 94.1%
at Park Creek 673 0.69 92.7% 664 0.68 51.0%
at Clairmont 786 0.99 95.1% 736 0.92 95.0%
----- ----- ----- ----- ----- -----
Subtotal -
Atlanta, GA 766 $0.82 94.4% 747 $0.80 91.7%
----- ----- ----- ----- ----- -----
<PAGE>
Quarter Ended Year Ended
December 31, 1998 Quarter Ended December 31, 1998 Year Ended
Average Rental Rates Dec 31, 1998 Average Rental Rates Dec 31, 1998
------------------------- Ave. ------------------------ Ave.
Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy
-------- ----------- ------------ -------- ----------- ------------
AUSTIN, TX
- ----------
AMLI:
at the Arboretum 698 $0.90 95.0% 688 $0.89 95.4%
in Great Hills 708 0.95 94.1% 690 0.92 95.8%
at Lantana Ridge 824 0.93 91.2% 809 0.92 91.1%
at Martha's 627 0.89 94.4% 611 0.87 95.6%
Vineyard
----- ----- ----- ----- ----- -----
Subtotal - Austin, TX 715 $0.92 93.6% 700 $0.90 94.4%
----- ----- ----- ----- ----- -----
EASTERN KANSAS
- --------------
AMLI:
at Alvamar 668 $0.81 94.5% 664 $0.80 92.3%
at Centennial 975 0.81 90.3% 974 0.81 90.3%
at Crown Colony 590 0.76 88.3% 579 0.75 92.1%
at Crown Colony II 651 0.81 96.4% 641 0.80 93.0%
at Lexington Farms 782 0.81 79.1% 782 0.81 79.1%
at Regents Center 726 0.79 94.6% 715 0.78 93.0%
at Regents Center III 768 0.77 91.1% 764 0.77 90.9%
at Sherwood 625 0.72 92.1% 626 0.72 92.4%
at Town Center 942 0.83 94.9% 973 0.86 93.1%
----- ----- ----- ----- ----- -----
Subtotal -
Eastern Kansas 747 $0.79 89.7% 746 $0.79 89.3%
----- ----- ----- ----- ----- -----
INDIANAPOLIS, IN
- ----------------
AMLI:
at Riverbend 605 $0.73 91.4% 587 $0.71 92.6%
at Conner Farms 790 0.73 91.1% 782 0.72 90.6%
at Eagle Creek 753 0.84 86.0% 753 0.84 90.6%
----- ----- ----- ----- ----- -----
Subtotal -
Indianapolis, IN 664 $0.75 90.5% 651 $0.73 91.9%
----- ----- ----- ----- ----- -----
<PAGE>
Quarter Ended Year Ended
December 31, 1998 Quarter Ended December 31, 1998 Year Ended
Average Rental Rates Dec 31, 1998 Average Rental Rates Dec 31, 1998
------------------------- Ave. ------------------------ Ave.
Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy
-------- ----------- ------------ -------- ----------- ------------
CHICAGO, IL
- -----------
AMLI:
at Park Sheridan 970 $1.13 96.6% 945 $1.11 97.0%
at Poplar Creek 944 1.04 94.4% 954 1.05 94.6%
----- ----- ----- ----- ----- -----
Subtotal -
Chicago, IL 959 $1.09 95.6% 949 $1.08 96.0%
----- ----- ----- ----- ----- -----
TOTAL WHOLLY OWNED
PROPERTIES 735 $0.83 92.6% 724 $0.82 92.6%
===== ===== ===== ===== ===== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
PROPERTY INFORMATION - CONTINUED
As of December 31, 1998
<CAPTION>
Approximate
Rentable Average
Year Year Number Area Unit Size
Location Acquired Completed of Units (Sq Ft) (Sq ft)
-------- -------- --------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
CO-INVESTMENT
PROPERTIES
- ------------
ATLANTA, GA
- -----------
AMLI:
at Pleasant Hill Atlanta, GA 1996 502 501,816 1,000
at Barrett Lakes Atlanta, GA 1997 446 460,150 1,032
at River Park Atlanta, GA 1997 222 225,892 1,018
at Towne Creek Gainesville, GA 1989 150 121,722 811
at Willeo Creek Roswell, GA 1995 1989 242 297,302 1,229
------ --------- ------
Subtotal -
Atlanta, GA 1,562 1,606,882 1,029
------ --------- ------
CHICAGO, IL
- -----------
AMLI:
at Prairie Court Oak Park, IL 1987 125 105,578 845
at Windbrooke Buffalo Grove, IL 1995 1987 236 213,160 903
at Chevy Chase Buffalo Grove, IL 1996 1988 592 480,676 812
at Danada Wheaton, IL 1997 1989/1991 600 521,500 869
at Fox Valley Aurora, IL 1998 272 269,093 989
at Willowbrook Willowbrook, IL 1996 1987 488 418,404 857
------ --------- ------
Subtotal -
Chicago, IL 2,313 2,008,411 868
------ --------- ------
EASTERN KANSAS
- --------------
AMLI:
at Regents Crest Overland Park, KS 1997 1997 368 346,488 942
------ --------- ------
<PAGE>
Approximate
Rentable Average
Year Year Number Area Unit Size
Location Acquired Completed of Units (Sq Ft) (Sq ft)
-------- -------- --------- -------- ----------- ---------
DALLAS/FT. WORTH
- ----------------
AMLI:
at Fossil Creek Fort Worth, TX 1997 384 384,358 1,001
on Timberglen Dallas, TX 1990 1985 260 201,198 774
at Verandah Arlington, TX 1997 1986/1991 538 394,504 733
------ ---------- ------
Subtotal -
Dallas/Ft. Worth 1,182 980,060 829
------ ---------- ------
AUSTIN, TX
- ----------
AMLI:
at Park Place Austin, TX 1994 1985 588 397,968 677
------ ---------- ------
HOUSTON, TX
- -----------
AMLI:
at Champions
Centre Houston, TX 1994 1994 192 164,480 857
at Champions
Park Houston, TX 1994 1991 246 221,646 901
at Greenwood
Forest Houston, TX 1995 1995 316 310,844 984
------ ---------- ------
754 696,970 924
------ ---------- ------
TOTAL CO-INVESTMENT
PROPERTIES 6,767 6,036,779 892
====== ========== ======
TOTAL WHOLLY OWNED AND
CO-INVESTMENT
PROPERTIES 19,559 17,398,406 890
====== ========== ======
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
PROPERTY INFORMATION - CONTINUED
As of December 31, 1998
<CAPTION>
Quarter Ended Year Ended
December 31, 1998 Quarter Ended December 31, 1998 Year Ended
Average Rental Rates Dec 31, 1998 Average Rental Rates Dec 31, 1998
------------------------- Ave. ------------------------ Ave.
Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy
-------- ----------- ------------ -------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
CO-INVESTMENT
PROPERTIES
- ------------
ATLANTA, GA
- -----------
AMLI:
at Pleasant Hill 803 $0.80 93.9% 797 $0.80 92.8%
at Barrett Lakes 853 0.83 92.5% 842 0.82 93.5%
at River Park 872 0.86 95.2% 855 0.84 94.9%
at Towne Creek 613 0.76 85.1% 617 0.76 90.0%
at Willeo Creek 836 0.68 91.2% 821 0.67 92.9%
------ ----- ------ ------ ----- ------
Subtotal -
Atlanta, GA 814 $0.79 92.4% 805 $0.78 93.1%
------ ----- ------ ------ ----- ------
CHICAGO, IL
- -----------
AMLI:
at Prarie Court 1,099 $1.30 93.6% 1,080 $1.28 95.7%
at Windbrooke 990 1.10 98.2% 975 1.08 97.8%
at Chevy Chase 980 1.21 95.2% 956 1.18 95.9%
at Danada 932 1.07 94.5% 920 1.06 94.8%
at Fox Valley 967 0.98 88.4% 934 0.94 76.3%
at Willowbrook 964 1.12 95.5% 934 1.09 95.1%
------ ----- ------ ------ ----- ------
Subtotal -
Chicago, IL 970 $1.12 94.5% 948 $1.09 93.3%
------ ----- ------ ------ ----- ------
EASTERN KANSAS
- --------------
AMLI:
at Regents Crest 763 $0.81 94.7% 738 $0.78 94.1%
------ ----- ------ ------ ----- ------
<PAGE>
Quarter Ended Year Ended
December 31, 1998 Quarter Ended December 31, 1998 Year Ended
Average Rental Rates Dec 31, 1998 Average Rental Rates Dec 31, 1998
------------------------- Ave. ------------------------ Ave.
Per Unit Per Sq. Ft. Occupancy Per Unit Per Sq. Ft. Occupancy
-------- ----------- ------------ -------- ----------- ------------
DALLAS/FT. WORTH
- ----------------
AMLI:
at Fossil Creek 826 0.83 88.5% 788 $0.79 72.0%
on Timberglen 618 0.80 94.0% 636 0.82 94.9%
at Verandah 666 0.91 94.9% 670 0.91 95.1%
------ ----- ------ ------ ----- ------
Subtotal -
Dallas/Ft. Worth 708 0.85 92.7% 701 $0.85 87.6%
------ ----- ------ ------ ----- ------
AUSTIN, TX
- ----------
AMLI:
at Park Place 599 $0.88 95.1% 588 $0.87 95.3%
------ ----- ------ ------ ----- ------
HOUSTON, TX
- -----------
AMLI:
at Champions Centre 757 $0.88 93.6% 747 $0.87 95.3%
at Champions Park 744 0.83 94.9% 728 0.81 96.0%
at Greenwood Forest 792 0.81 95.2% 780 0.79 94.9%
------ ----- ------ ------ ----- ------
Subtotal -
Houston, TX 768 $0.83 94.7% 755 $0.82 95.4%
------ ----- ------ ------ ----- ------
TOTAL CO-INVESTMENT
PROPERTIES 822 $0.92 93.8% 808 $0.91 92.7%
====== ===== ====== ====== ===== ======
TOTAL WHOLLY OWNED AND
CO-INVESTMENT
PROPERTIES 765 $0.86 93.0% 753 $0.85 92.6%
====== ===== ====== ====== ===== ======
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
COMPONENTS OF PROPERTY EBITDA
Unaudited - Dollars in thousands except per share data
<CAPTION>
WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100%
----------------------------- ----------------------------- -----------------------------
Year Ended December 31, Year Ended December 31, Year Ended December 31,
----------------------------- ----------------------------- -----------------------------
% % %
1998 1997 Change 1998 1997 Change 1998 1997 Change
------- ------- ------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PROPERTY REVENUES
- -----------------
RENTAL INCOME
- -------------
Same Store
Communities (1) $73,223 71,435 2.5% 34,243 33,003 3.8% 109,268 106,204 2.9%
New Communities (2) 3,206 1,813 76.8% 6,355 3,469 83.2% 9,562 5,282 81.0%
Development
and/or Lease-up
Communities (3) 4,923 596 725.8% 9,967 1,166 754.6% 14,889 1,762 744.8%
Acquisition
Communities (4) 18,561 2,764 571.5% 13,403 8,242 62.6% 31,965 11,006 190.4%
Communities Sold/
Contributed to
Ventures (5) 1,978 3,871 -48.9% 71 2,049 3,871 -47.1%
-------- ------- ------ -------- ------- ------ -------- ------- ------
Total $101,892 80,479 26.6% 64,039 45,879 39.6% 167,732 128,125 30.9%
======== ======= ====== ======== ======== ====== ======== ======= ======
OTHER REVENUES
- --------------
Same Store
Communities $ 4,283 3,874 10.5% 1,826 1,714 6.5% 6,196 5,662 9.4%
New Communities 163 111 46.7% 351 198 77.1% 515 310 66.2%
Development
and/or Lease-up
Communities 369 68 440.9% 867 158 447.8% 1,235 226 445.7%
Acquisition
Communities 988 96 926.6% 928 539 72.3% 1,917 635 201.9%
Communities Sold/
Contributed to
Ventures 134 189 -29.0% 134 189 -29.0%
-------- ------- ------ -------- ------- ------ -------- ------- ------
Total $ 5,937 4,339 36.8% 3,972 2,610 52.2% 9,997 7,022 42.4%
======== ======= ====== ======== ======== ====== ======== ======= ======
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
COMPONENTS OF PROPERTY EBITDA - CONTINUED
Unaudited - Dollars in thousands except per share data
WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100%
----------------------------- ----------------------------- -----------------------------
Year Ended December 31, Year Ended December 31, Year Ended December 31,
----------------------------- ----------------------------- -----------------------------
% % %
1998 1997 Change 1998 1997 Change 1998 1997 Change
------- ------- ------- -------- ------- ------- ------- ------- -------
TOTAL PROPERTY
REVENUES
- --------------
Same Store
Communities $ 77,506 75,309 2.9% 36,069 34,717 3.9% 115,464 111,866 3.2%
New Communities 3,370 1,924 75.1% 6,707 3,667 82.9% 10,076 5,591 80.2%
Development
and/or Lease-up
Communities 5,291 664 696.6% 10,834 1,325 717.9% 16,125 1,989 710.8%
Acquisition
Communities 19,549 2,860 583.4% 14,331 8,781 63.2% 33,881 11,641 191.0%
Communities Sold/
Contributed to
Ventures 2,112 4,060 -48.0% 71 -- 2,183 4,060 -46.2%
-------- ------- ------ -------- ------- ------ -------- ------- ------
Total $107,828 84,818 27.1% 68,011 48,489 40.3% 177,730 135,147 31.5%
======== ======= ====== ======== ======== ====== ======== ======= ======
TOTAL OPERATING
EXPENSES
- ---------------
Same Store
Communities $ 31,681 30,538 3.7% 14,347 13,875 3.4% 46,918 45,288 3.6%
New Communities 1,183 1,027 15.2% 2,137 1,600 33.6% 3,321 2,627 26.4%
Development
and/or Lease-up
Communities 1,906 336 467.5% 5,051 998 406.4% 6,958 1,333 421.8%
Acquisition
Communities 7,524 995 656.3% 5,767 3,392 70.0% 13,291 4,387 203.0%
Communities Sold/
Contributed to
Ventures 1,298 2,048 -36.6% 25 1,323 2,048 -35.4%
-------- ------- ------ -------- ------- ------ -------- ------- ------
Total $ 43,593 34,943 24.8% 27,328 19,864 37.6% 71,811 55,682 29.0%
======== ======= ====== ======== ======== ====== ======== ======= ======
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
COMPONENTS OF PROPERTY EBITDA - CONTINUED
Unaudited - Dollars in thousands except per share data
WHOLLY-OWNED CO-INVESTMENTS AT 100% COMBINED AT 100%
----------------------------- ----------------------------- -----------------------------
Year Ended December 31, Year Ended December 31, Year Ended December 31,
----------------------------- ----------------------------- -----------------------------
% % %
1998 1997 Change 1998 1997 Change 1998 1997 Change
------- ------- ------- -------- ------- ------- ------- ------- -------
PROPERTY EBITDA
- ---------------
Same Store
Communities $ 45,825 44,771 2.4% 21,722 20,842 4.2% 68,546 66,578 3.0%
New Communities 2,186 897 143.6% 4,569 2,067 121.0% 6,755 2,964 127.9%
Development
and/or Lease-Up
Communities 3,385 328 930.9% 5,782 327 1668.3% 9,167 655 1298.8%
Acquisition
Communities 12,026 1,866 544.6% 8,564 5,390 58.9% 20,590 7,255 183.8%
Communities Sold/
Contributed to
Ventures 814 2,012 -59.6% 46 860 2,012 -57.3%
-------- ------- ------ -------- ------- ------ -------- ------- ------
Total $ 64,236 49,875 28.8% 40,684 28,626 42.1% 105,918 79,465 33.3%
======== ======= ====== ======== ======== ====== ======== ======= ======
Company's share of
Co-investment EBITDA
(incl. share of cash
flow in excess of
ownership %) 11,153 7,491 48.9% 11,153 7,491 48.9%
======== ======== ====== ======== ======= ======
Percent of Co-investment
EBITDA 27% 26% 11% 9%
======== ======== ======== =======
<FN>
(1) Stabilized Communities at 1/1/97.
(2) Development Communities stabilized after 1/1/97 but before 1/1/98.
(3) Development Communities not yet stabilized.
(4) Stabilized Communities acquired after 1/1/97.
(5) Communities sold or contributed to co-investment ventures.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
DEVELOPMENT ACTIVITIES
FOURTH QUARTER 1998
<CAPTION>
UNDER CONSTRUCTION AND/OR IN INITIAL LEASE UP
Construc- Percent Percent
Number Percent tion First Stabili- Construc- Leased
of Costs Owner- Start Units Completion zation tion as of
Community Name Units (millions) ship Date Occupied Date Date Complete 1/24/99
- -------------- ------- ---------- ------- --------- -------- ---------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ATLANTA,
GEORGIA
- -------
AMLI at:
Killian Creek 216 $13.9 100% 4Q/97 4Q/98 2Q/99 3Q/99 74% 24%
(formerly
Killian Farms)
Northwinds* 800 $54.4 35% 3Q/96 3Q/97 3Q/99 2Q/00 81% 71%
DALLAS/FORT WORTH,
TEXAS
- ------------------
AMLI at:
Deerfield 240 $17.5 25% 4Q/97 1Q/99 3Q/99 1Q/00 42% 4%
Autumn Chase III 240 $14.2 100% 3Q/96 4Q/97 3Q/98 1Q/99 100% 92%
on the Parkway 240 $16.2 25% 1Q/97 2Q/98 4Q/98 1Q/99 100% 93%
at Bent Tree II 200 $14.2 100% 4Q/98 4Q/99 1Q/00 3Q/00 1% n/a
AUSTIN, TEXAS
- -------------
AMLI at:
Wells Branch 576 $35.1 25% 1Q/97 1Q/98 1Q/99 4Q/99 95% 79%
Monterey Oaks 430 $30.9 100% 4Q/98 4Q/99 3Q/00 3Q/01 1% n/a
CHICAGO (METRO),
ILLINOIS
- ----------------
AMLI at:
Oakhurst North 464 $44.3 25% 1Q/97 2Q/98 3Q/99 2Q/00 91% 43%
at St. Charles 400 $41.9 100% 3Q/98 3Q/99 2Q/00 2Q/01 6% n/a
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
DEVELOPMENT ACTIVITIES - CONTINUED
UNDER CONSTRUCTION AND/OR IN INITIAL LEASE UP
Construc- Percent Percent
Number Percent tion First Stabili- Construc- Leased
of Costs Owner- Start Units Completion zation tion as of
Community Name Units (millions) ship Date Occupied Date Date Complete 1/24/99
- -------------- ------- ---------- ------- --------- -------- ---------- -------- --------- ---------
OVERLAND PARK,
KANSAS
- --------------
AMLI at:
Wynnewood Farms 232 $17.6 25% 2Q/98 3Q/99 1Q/00 3Q/00 4% n/a
Regents Crest II 108 $7.8 25% 2Q/98 3Q/99 4Q/99 1Q/00 8% n/a
Creekside 224 $16.2 25% 2Q/98 4Q/99 2Q/00 3Q/00 3% n/a
INDIANAPOLIS,
INDIANA
- -------------
AMLI at:
Lake Clearwater 216 $16.7 25% 3Q/98 3Q/99 1Q/00 3Q/00 9% n/a
Castle Creek 276 $20.7 40% 3Q/98 4Q/99 2Q/00 4Q/00 3% n/a
----- ------
TOTAL 4,862 $361.6
===== ======
<FN>
* Percent leased is based on the combined 800 units of both phases.
All the above properties other than Killian Creek, Bent Tree II, and Autumn Chase III are being developed,
or are anticipated to be developed as co-investments.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
DEVELOPMENT ACTIVITIES - CONTINUED
PLANNING STAGES
- ---------------
Number
of
Community Name Units
- -------------- ------
ATLANTA,
GEORGIA
- --------
AMLI at:
Park Bridge 352
INDIANAPOLIS,
INDIANA
- ------------
AMLI at:
Prairie Lakes 228
Prarie Lakes
(phases II-VI) 1,100
DALLAS/FORT WORTH,
TEXAS
- ------------------
AMLI at
Mesa Ridge
(Fossil Creek II) 520
Fossil Lake 324
HOUSTON, TEXAS
- --------------
AMLI at:
King's Harbour 300
Champions II 288
LEE'S SUMMIT
MISSOURI
- ------------
AMLI at
Lee's Summit 410
- --------------------
The following is a "Safe Harbor" Statement under the Private
Securities Litigation Reform Act of 1995 and Section 21E of the Securities
Exchange Act of 1934. The projections contained in the table above that
are not historical facts are forward-looking statements. Risks associated
with the Company's development, construction and lease-up activities, which
could impact the forward-looking statements may include: development
opportunities may be abandoned; construction costs of a community may
exceed original estimates, possibly making the community uneconomical;
construction and lease-up may not be completed on schedule, resulting in
increased debt service and construction costs; estimates of the costs of
improvements to bring an acquired property up to the standards established
for the market position intended for that property may prove inaccurate.
