<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
Transition pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
COMMISSION FILE NUMBER 333-2522-01
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in its Charter)
Michigan 38-3144240
(State of Organization) (I.R.S. Employer Identification No.)
31700 Middlebelt Road
Suite 145
Farmington Hills, Michigan 48334
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (248) 932-3100
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
1 of 15
<PAGE> 2
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
INDEX
___________
PAGES
-----
PART I
Item 1. Financial Statements:
Consolidated Balance Sheets as of September 30, 1997 and
December 31, 1996 3
Consolidated Statements of Income for the Periods
Ended September 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II
Item 5. Ratios of Earnings to Fixed Charges 13
Item 6.(a) Exhibits required by Item 601 of Regulation S-K 13
Item 6.(b) Reports on Form 8-K 13
Signatures 14
2
<PAGE> 3
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(IN THOUSANDS)
__________
<TABLE>
<CAPTION>
ASSETS 1997 1996
------------ -----------
<S> <C> <C>
Investment in rental property, net $ 586,342 $ 558,278
Cash and cash equivalents 1,730 9,236
Investment in Sun Home Services, Inc. ("SHS") 18,030 5,103
Notes receivable 20,518 4,176
Other assets 14,324 8,263
------------ -----------
Total assets $ 640,944 $ 585,056
============ ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Line of credit $ 20,000 $ --
Debt 195,000 185,000
Accounts payable and accrued expenses 13,230 7,718
Deposits and other liabilities 7,990 9,123
Distributions payable 9,393 --
------------ -----------
Total liabilities 245,613 201,841
------------ -----------
Partners' Capital:
Preferred Operating Partnership Units ("POP Units"),
unlimited authorized, 1,325 issued and
outstanding in 1997 and 1996 35,783 35,783
Operating Partnership Units ("OP Units"), unlimited
authorized 18,652 and 17,751 issued and
outstanding in 1997 and 1996, respectively
General partner 314,798 300,932
Limited partners 44,750 46,500
------------ -----------
Total partners' capital 395,331 383,215
------------ -----------
Total liabilities and partners' capital $ 640,944 $ 585,056
============ ===========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
3
<PAGE> 4
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)
__________
<TABLE>
<CAPTION>
FOR THE NINE FOR THE THREE
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------ -----------------------
1997 1996 1997 1996
---------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Income from property $ 68,632 $ 50,128 $ 23,177 $ 20,279
Interest and other income 2,111 1,325 940 583
---------- ---------- --------- ---------
Total revenues 70,743 51,453 24,117 20,862
---------- ---------- --------- ---------
Expenses:
Property operating and maintenance 15,620 11,204 5,423 4,721
Real estate taxes 5,578 3,987 1,838 1,721
General and administrative 3,312 2,407 1,116 882
Depreciation and amortization 14,927 10,530 5,150 4,020
Interest 10,397 7,944 3,598 3,240
---------- ---------- --------- ---------
Total expenses 49,834 36,072 17,125 14,584
---------- ---------- --------- ---------
Income before extraordinary item 20,909 15,381 6,992 6,278
Extraordinary item, early extinguishment
of debt -- (6,896) -- --
---------- ---------- --------- ---------
Net income 20,909 8,485 6,992 6,278
Less distribution to Preferred OP Units 1,879 1,043 627 626
---------- ---------- --------- ---------
Earnings attributable to OP Units $ 19,030 $ 7,442 $ 6,365 $ 5,652
========== ========== ========= =========
Net income attributed to:
General Partner $ 16,588 $ 6,474 $ 5,573 $ 5,012
Limited Partners 2,442 968 792 640
---------- ---------- --------- ---------
$ 19,030 $ 7,442 $ 6,365 $ 5,652
========== ========== ========= =========
Earnings per OP unit:
Income before extraordinary item $ 1.04 $ .95 $ .34 $ .33
Extraordinary item -- (.46) -- --
---------- ---------- --------- ---------
Net income $ 1.04 $ .49 $ .34 $ .33
========== ========== ========= =========
Weighted average OP units outstanding 18,296 15,049 18,602 17,018
========== ========== ========= =========
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements.
4
<PAGE> 5
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)
__________
<TABLE>
<CAPTION>
1997 1996
---------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 19,030 $ 7,442
Adjustments to reconcile net income to net
cash provided by operating activities:
Extraordinary item, net of prepayment penalties -- 1,390
Depreciation and amortization costs 14,927 10,530
Deferred financing costs 116 195
(Increase) decrease in prepaid expenses and other assets (4,599) 402
Increase in accounts payable and other liabilities 5,025 7,907
---------- -----------
Net cash provided by operating activities 34,499 27,866
---------- -----------
Cash flows from investing activities:
Investment in rental properties (42,214) (67,265)
Investment in affiliates (12,927) (366)
Notes receivable (16,342) --
---------- -----------
Net cash used in investing activities (71,483) (67,631)
---------- -----------
Cash flows from financing activities:
Distributions (24,982) (18,206)
Proceeds from borrowings 30,000 180,000
Repayments on borrowings -- (238,490)
Payments for deferred financing costs (2,355) (209)
Capital contribution 26,815 126,254
----------- -----------
Net cash provided by financing activities 29,478 49,349
----------- -----------
Net increase (decrease) in cash and cash equivalents (7,506) 9,584
Cash and cash equivalents, beginning of period 9,236 121
----------- -----------
Cash and cash equivalents, end of period $ 1,730 $ 9,705
=========== ===========
Supplemental information:
OP units issued for rental properties -- $ 39,959
Debt assumed for rental properties -- $ 131,435
</TABLE>
The accompanying notes are an integral part
of the consolidated financial statements
5
<PAGE> 6
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________
1. BASIS OF PRESENTATION:
These unaudited condensed consolidated financial statements of Sun Communities
Operating Limited Partnership, (the "Company"), have been prepared pursuant to
the Securities and Exchange Commission ("SEC") rules and regulations and should
be read in conjunction with the financial statements and notes thereto of the
Company as of December 31, 1996. The following notes to consolidated financial
statements present interim disclosures as required by the SEC. The
accompanying consolidated financial statements reflect, in the opinion of
management, all adjustments necessary for a fair presentation of the interim
financial statements. All such adjustments are of a normal and recurring
nature. Certain reclassifications have been made to the prior period financial
statements to conform with current period presentation.
Sun Communities, Inc. ("Sun"), a self-administered and self-managed Real
Estate Investment Trust with no independent operations of its own, is the sole
general partner of the Company. As general partner, Sun has unilateral control
and complete responsibility for management of the Company. Pursuant to the
terms of the Company's partnership agreement, the Company is required to
reimburse Sun for the net expenses incurred by Sun. Amounts paid on behalf of
Sun by the Company are reflected in the statement of operations as general and
administrative expenses. The balance sheet of Sun as of September 30, 1997 is
identical to the accompanying Company balance sheet, except as follows:
<TABLE>
<CAPTION>
AS PRESENTED
HEREIN SUN COMMUNITIES, INC.
SEPTEMBER 30, 1997 ADJUSTMENTS SEPTEMBER 30, 1997
------------------- ------------- ---------------------
(IN THOUSANDS)
<S> <C> <C> <C>
Notes receivable . . . . . . . . . $ 20,518 $ (2,600) $ 17,918
============== ============= =====================
Total assets . . . . . . . . . . . $ 640,944 $ (2,600) $ 638,344
============== ============= =====================
Minority interests . . . . . . . . -- $ 80,533 $ 80,533
=====================
Preferred OP Units . . . . . . . . $ 35,783 (35,783)
General partner . . . . . . . . . . 314,798 (314,798)
Limited partners . . . . . . . . . 44,750 (44,750)
Common stock . . . . . . . . . . . 163 $ 163
Additional paid-in capital . . . . 355,127 355,127
Distributions in excess of
accumulated earnings . . . . . (31,319) (31,319)
Officers' notes . . . . . . . . . . (11,773) (11,773)
-------------- ------------- ---------------------
Partners' capital/Stockholders'
equity . . . . . . . . . $ 395,331 $ (2,600) $ 312,198
============== ============= =====================
Total liabilities and partners'
capital/stockholders' equity . $ 640,944 $ (2,600) $ 638,344
============== ============= =====================
</TABLE>
6
<PAGE> 7
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________
2. PORTFOLIO GROWTH:
As of September 30, 1997, the Company has acquired or financed 8 communities
comprising 2,948 developed sites and 338 development sites for $41.2 million.
3. RENTAL PROPERTY:
The following summarizes rental property (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
--------------- --------------
<S> <C> <C>
Land $ 62,481 $ 58,943
Land improvements and buildings 546,005 510,726
Furniture, fixtures, equipment 11,463 9,826
Property under development 11,078 9,318
--------------- --------------
631,027 588,813
Accumulated depreciation (44,685) (30,535)
--------------- --------------
Rental property, net $ 586,342 $ 558,278
=============== ==============
</TABLE>
4. DEBT:
The following table sets forth certain information regarding debt (in
thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------ ------------
<S> <C> <C>
Secured term loan, interest at 7.01%
due November 10, 2007 $ 45,000 $ --
Secured term loan, interest at LIBOR
plus 1.50%, due November 1, 1997 -- 35,000
Senior notes, interest at 7.375%, due
May 1, 2001 65,000 65,000
Senior notes, interest at 7.625%, due
May 1, 2003 85,000 85,000
----------- ------------
$ 195,000 $ 185,000
=========== ============
</TABLE>
The Company had $55 million available borrowings under its $75 million line of
credit at September 30, 1997.
7
<PAGE> 8
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. NOTES RECEIVABLE:
Notes receivable consist of the following (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
Mortgage notes receivable with minimum
monthly interest payments at 7%,
maturing June 30, 2012, collateralized by
manufactured housing/recreational vehicle
communities located in Dover, DE (a) $ 13,742 $ --
Second mortgage and third shared appreciation
mortgage notes with monthly interest
payments at an average rate of 17 percent
and excess interest as defined, collateralized
by manufactured housing communities
located in Alberta, Canada 4,176 4,176
10 year note to an officer of the general partner
bearing interest at LIBOR + 1.75%
collateralized by 80,000 shares of Sun
Communities, Inc. common stock with
personal liability up to $1.3 million 2,600 --
----------- ------------
$ 20,518 $ 4,176
=========== ============
</TABLE>
(a) The stated interest rate is capped at 12%. The excess of the stated rate
over the pay rate is added to the principal balance and will also accrue
interest at the stated rate.
6. OTHER INCOME:
The components of interest and other income are as follows (in thousands):
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1997 1996 1997 1996
----- ------ ----- -----
<S> <C> <C> <C> <C>
Interest $ 1,027 $ 1,095 $ 328 $ 383
Equity earnings:
Sun Home Services, Inc. ("SHS") 875 230 493 200
Bingham Financial
Services Corporation,
a subsidiary of SHS 209 -- 119 --
-------- -------- -------- --------
$ 2,111 $ 1,325 $ 940 $ 583
======== ======== ======== ========
</TABLE>
8
<PAGE> 9
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
OVERVIEW
The following discussion and analysis of the consolidated financial condition
and results of operations should be read in conjunction with the consolidated
financial statements and Notes thereto. Capitalized terms are used as defined
elsewhere in this Form 10-Q.
RESULTS OF OPERATIONS
Comparison of the nine months ended September 30, 1997 and 1996
For the nine months ended September 30, 1997, net income before extraordinary
item and distribution to Preferred OP Units increased 35.9 percent from $15.4
million to $20.9 million, when compared to the nine months ended September 30,
1996. The increase was due to increased revenues of $19.3 million while
expenses increased by $13.8 million.
Income from property increased by $18.5 million from $50.1 million to $68.6
million or 36.9 percent, due to acquisitions ($15.4 million), lease up of sites
($1.1 million) and increases in rents and other community revenues ($2.0
million).
Interest and other income increased by $.8 million from $1.3 million to $2.1
million or 59.3 percent due primarily to improved results of SHS and the
inception of operations at Bingham Financial Services Corporation.
Property operating and maintenance increased by $4.4 million from $11.2 million
to $15.6 million or 39.4 percent due primarily to acquisitions ($3.6 million).
Real estate taxes increased by $1.6 million from $4.0 million to $5.6 million
or 39.9 percent due primarily to acquisitions ($1.4 million).
General and administrative expenses increased by $.9 million from $2.4 million
to $3.3 million or 37.6 percent due primarily to increased staffing to manage
the growth of the company. General and administrative expenses as a percentage
of total revenues remained constant at 4.7 percent.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $12.3 million from $33.9 million to $46.2 million or 36.6 percent.
EBITDA declined as a percentage of revenues from 65.8 percent to 65.4 percent,
primarily due to increased real estate taxes as a percentage of total revenues.
Depreciation and amortization increased by $4.4 million from $10.5 million to
$14.9 million or 41.8 percent due primarily to acquisitions.
Interest expense increased by $2.5 million from $7.9 million to $10.4 million
or 30.9 percent primarily due to increased average debt outstanding.
The extraordinary item in the nine months ended September 30, 1996 results from
the early extinguishment of debt and includes prepayment penalties and related
deferred financing costs.
9
<PAGE> 10
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
Comparison of the Three Months Ended September 30, 1997 and 1996
Income from property increased by $2.9 million from $20.3 million to $23.2
million or 14.3 percent, due to acquisitions ($1.7 million), lease up of sites
($.4 million) and increases in rents and other community revenues ($.8
million).
Interest and other income increased by $.3 million from $.6 million to $.9
million or 61.2 percent due primarily to improved results at SHS and the
inception of operations at Bingham Financial Services Corporation.
Property operating and maintenance increased by $.7 million from $4.7 million
to $5.4 million or 14.9 percent, due primarily to acquisitions ($.5 million).
Real estate taxes increased by $.1 million from $1.7 million to $1.8 million or
6.8 percent due to acquisitions.
General and administrative expenses increased by $.2 million from $.9 million
to $1.1 million or 26.5 percent, due primarily to increased staffing to manage
the growth of the company. General and administrative expenses as a percentage
of total revenues increased from 4.2 percent to 4.6 percent.
Earnings before interest, taxes, depreciation and amortization ("EBITDA")
increased by $2.2 million from $13.5 million to $15.7 million or 16.3 percent.
EBITDA increased as a percentage of revenues from 64.9 percent to 65.3 percent.
Depreciation and amortization increased by $1.1 million from $4.0 million to
$5.1 million or 28.1 percent due primarily to acquisitions.
Interest expense increased by $.4 million from $3.2 million to $3.6 million or
11.0 percent due to increased debt outstanding.
10
<PAGE> 11
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
SAME PROPERTY INFORMATION
The following table reflects property-level financial information as of and for
the nine months ended September 30, 1997 and 1996. The "Same Property" data
represents information regarding the operation of communities owned as of
January 1, 1996. Site, occupancy, and rent data for those communities is
presented as of the last day of each period presented. The table includes
sites where the Company's interest is in the form of shared appreciation notes
or where the Company is providing financing and managing the properties. Such
amounts relate to 1,243 sites in 1996 and 2,040 sites in 1997 and were formerly
classified in other income.
<TABLE>
<CAPTION>
SAME PROPERTY TOTAL PORTFOLIO
----------------------- ------------------------
1997 1996 1997 1996
--------- ------ ------ -------
<S> <C> <C> <C> <C>
Income from property $ 37,911 $35,618 $ 68,632 $ 50,128
--------- ------- --------- --------
Property operating expenses:
Property operating and maintenance 7,569 7,183 15,620 11,204
Real estate taxes 2,893 2,696 5,578 3,987
--------- ------- ---------- --------
Property operating expenses 10,462 9,879 21,198 15,191
--------- ------- ---------- --------
Property EBITDA $ 27,449 $25,739 $ 47,434 $ 34,937
========= ======= ========= ========
Number of properties 54 54 95 79
Developed sites 18,744 18,351 33,326 28,777
Occupied sites 17,786 17,256 30,965 26,867
Occupancy % 94.9%(1) 94.0%(1) 95.2%(1) 94.8%(1)
Weighted average monthly rent per site $ 249 (1) $ 239 (1) $ 256 (1) $ 248 (1)
Sites available for development 1,728 2,277 3,288 3,461
Sites in development 319 681 762 662
</TABLE>
(1) Occupancy % and weighted average rent relates to manufactured housing sites,
excluding recreational vehicle sites.
On a same property basis, property revenues increased by $2.3 million from
$35.6 million to $37.9 million, or 6.4 percent, due primarily to increases in
rents and occupancy related charges including water and property tax pass
throughs. Also contributing to revenue growth was the increase of 530 leased
sites at September 30, 1997 compared to September 30, 1996.
Property operating expenses increased by $.6 million from $9.9 million to $10.5
million, or 5.9 percent, due to increased occupancies and costs and increases
in assessments and millage rates by local taxing authorities. Property EBITDA
increased by $1.7 million from $25.7 million to $27.4 million, or 6.6 percent.
11
<PAGE> 12
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
________
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $7.5 million to $1.7 million at
September 30, 1997 compared to $9.2 million at December 31, 1996 primarily
because cash used in investing activities exceeded cash provided by operating
activities and financing activities.
Net cash provided by operating activities increased by $6.6 million to $34.5
million for the nine months ended September 30, 1997 compared to $27.9 million
for the same period in 1996. Net income before depreciation and amortization
and extraordinary item increased by $14.6 million which was offset by $8.0
million due to changes in other assets and liabilities.
Net cash used in investing activities increased by $3.9 million to $71.5
million from $67.6 million due to reduced investment in rental properties more
than offset by increased investment in affiliates and mortgage and officer
notes.
Net cash provided by financing activities was $29.5 million for the nine months
ended September 30, 1997 primarily due to $27.6 million of proceeds received
from debt borrowings, net of financing costs, and $26.8 million of capital
contributions exceeding $25.0 million of distributions paid. For the same
period in 1996, net cash provided by financing activities was $49.3 million due
to increased net borrowings offset by proceeds from capital contributions.
The Company expects to meet its short-term liquidity requirements generally
through its working capital provided by operating activities and additional
capital contributions. The Company considers these sources to be adequate and
anticipates they will continue to be adequate to meet operating requirements,
capital improvements, investment in site development, and payment of
distributions by the Company in accordance with Sun's REIT requirements in both
the short and long term.
The Company expects to meet certain long-term liquidity requirements such as
scheduled debt maturities and property acquisitions through the issuance of
equity or debt securities. The Company can also meet these requirements by
utilizing its $75 million line of credit which bears interest at LIBOR plus
1.25% and is due November 1, 1999.
At September 30, 1997, the Company's debt to total market capitalization
approximated 23% percent (assuming conversion of all Common and Preferred OP
Units to shares of common stock), with a weighted average maturity of
approximately 5.9 years and a weighted average interest rate of 7.4 percent.
Recurring capital expenditures approximated $3.8 million, including $.4 million
for corporate office expansion, for the nine months ended September 30, 1997.
12
<PAGE> 13
PART II
ITEM 5. - RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratios of earnings to fixed charges for the years December 31,
1992, 1993, 1994, 1995 and 1996, and the nine months ended September 30, 1997
were 1.05:1, 1.05:1, 2.79:1, 3.03:1, 2.49:1, and 2.46:1, respectively.
ITEM 6.(A) - EXHIBITS REQUIRED BY ITEM 601 OF REGULATION S-K
EXHIBIT NO. DESCRIPTION
----------- -----------
12.1 Ratios of Earnings to Fixed Charges
27 Financial Data Schedule
ITEM 6.(B) - REPORTS ON FORM 8-K
The Company filed the following reports on Form 8-K during the period covered
by the Form 10-Q:
(a) Report on Form 8-K dated August 20, 1997 filed with the Securities
and Exchange Commission (the "SEC") on August 21, 1997, to report
the establishment of its Medium Term Note program.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: November 12, 1997
SUN COMMUNITIES OPERATING
LIMITED PARTNERSHIP
By: Sun Communities, Inc., General Partner
BY: /s/ Gary A. Shiffman
-----------------------------------------------
Gary A. Shiffman, President
BY: /s/ Jeffrey P. Jorissen
-----------------------------------------------
Jeffrey P. Jorissen, Chief
Financial Officer and Secretary
14
<PAGE> 15
EXHIBIT INDEX
PAGE
FILED NUMBER
EXHIBIT NO. DESCRIPTION HEREWITH HEREIN
- ----------- ----------- -------- ------
12.1 Ratio of Earnings to Fixed Charges X
27 Financial Data Schedule X
15
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
The ratio of earnings to fixed charges for the Company (including its
predecessor-in-interest, Sundance Enterprises, Inc., the partnerships
affiliated with Sundance Enterprises, Inc., and the Company's subsidiaries and
majority-owned partnerships) presents the relationship of the Company's
earnings to its fixed charges. "Earnings" as used in the computation, is based
on net income (loss) from continuing operations (which includes a charge to
income for depreciation and amortization expense) before income taxes, plus
fixed charges. "Fixed charges" is comprised of (i) interest charges, whether
expensed or capitalized, and (ii) amortization of loan costs and discounts or
premiums relating to indebtedness of the Company and its subsidiaries and
majority-owned partnerships, excluding in all cases items which would be or are
eliminated in consolidation.
<TABLE>
<CAPTION>
YEAR ENDED
9 MONTHS DECEMBER 31,
ENDED --------------------------------------------------------------------
9/30/97 1996 1995 1994 1993 1992
--------- ---------- --------- ----------- --------- ------------
(UNAUDITED, IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Net income $ 20,909 $ 21,953(1) $ 13,591 $ 8,924 $ 288 $ 272
Add fixed charges other
than capitalized interest 10,397 11,277 6,420 4,894 5,280 5,522
----------- ---------- --------- ---------- --------- ------------
$ 31,306 $ 33,230 $ 20,011 $ 13,818 $ 5,568 $ 5,794
=========== ========== ========= ========== ========= ============
Fixed Charges:
Interest expense $ 10,397 $ 11,277 $ 6,420 $ 4,894 $ 5,280 $ 5,522
Preferred OP distribution 1,879 1,670 -- -- -- --
Capitalized interest 445 380 192 58 -- --
----------- ---------- --------- ---------- --------- ------------
Total fixed charges $ 12,721 $ 13,327 $ 6,612 $ 4,952 $ 5,280 $ 5,522
=========== ========== ========= ========== ========= ============
Ratio of Earnings to
Fixed Charges: 2.46:1 2.49:1 3.03:1 2.79:1 1.05:1 1.05:1
</TABLE>
(1) Before extraordinary item
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,730
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 631,027
<DEPRECIATION> 44,685
<TOTAL-ASSETS> 640,944
<CURRENT-LIABILITIES> 20,000
<BONDS> 195,000
0
0
<COMMON> 0
<OTHER-SE> 395,331
<TOTAL-LIABILITY-AND-EQUITY> 640,944
<SALES> 0
<TOTAL-REVENUES> 70,743
<CGS> 0
<TOTAL-COSTS> 21,198
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,397
<INCOME-PRETAX> 20,909
<INCOME-TAX> 0
<INCOME-CONTINUING> 20,909
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,030
<EPS-PRIMARY> 1.04
<EPS-DILUTED> 1.04
</TABLE>
